exv10w28



 







Exhibit 10.28



EXECUTION COPY




PARTICIPATION PURCHASE AND SECURITY AGREEMENT




by and among




MUSTANG FUNDING I, LLC

as Transferor,




THE CONDUIT PURCHASERS PARTY HERETO,

as Conduit Purchasers,




CERTAIN FINANCIAL INSTITUTIONS PARTIES HERETO,

as Alternate Purchasers,




BANK OF AMERICA, N.A.,

as Administrative Agent,




BANK OF AMERICA, N.A., and

JPMORGAN CHASE BANK, N.A.

as Managing Agents,




CHASE BANK USA, NATIONAL ASSOCIATION

as Eligible Lender Trustee,




and




SALLIE MAE, INC.,

as Administrator




April 30, 2007




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	 	 
	Section 1.01
	 	Certain Defined Terms	 	 	2	 
	Section 1.02
	 	Other Terms	 	 	42	 
	Section 1.03
	 	Computation of Time Periods	 	 	42	 
	Section 1.04
	 	Calculation of Yield Rate and Certain Fees	 	 	42	 
	 
	 	 	 	 	 	 
	ARTICLE II THE FACILITY
	 	 	 	 
	Section 2.01
	 	Issuance and Purchase of Participation Interests; Making of Purchases	 	 	42	 
	Section 2.02
	 	The Initial Purchase and Subsequent Purchases	 	 	44	 
	Section 2.03
	 	Reduction or Termination of the Maximum Aggregate Purchase Amount	 	 	46	 
	Section 2.04
	 	The Accounts	 	 	46	 
	Section 2.05
	 	Transfers from Collection Account	 	 	51	 
	Section 2.06
	 	Capitalized Interest Account and Reserve Account	 	 	55	 
	Section 2.07
	 	Transfers from the Capitalized Interest Account and Reserve Account	 	 	56	 
	Section 2.08
	 	Management of Collection Account, Borrower Benefit Account, Clearing Account, Student Loan ABS Proceeds Account, the Floor Income Rebate
 Account, Disbursement Account, Capitalized Interest Account, Reserve Account, Capital Payment Account and Release Proceeds Account	 	 	57	 
	Section 2.09
	 	[Reserved]	 	 	60	 
	Section 2.10
	 	Characterization; Collateral Assignment of Transaction Documents; Grant of a Security Interest	 	 	60	 
	Section 2.11
	 	[Evidence of Purchases	 	 	62	 
	Section 2.12
	 	Payments by the Transferor	 	 	63	 
	Section 2.13
	 	Payment of Stamp Taxes, Etc.	 	 	63	 
	Section 2.14
	 	Sharing of Payments, Etc.	 	 	63	 
	Section 2.15
	 	Yield Protection	 	 	64	 
	Section 2.16
	 	[Reserved]	 	 	65	 
	Section 2.17
	 	Servicer Advances	 	 	65	 
	Section 2.18
	 	Release of Participation Interests and Pledged Collateral	 	 	65	 
	Section 2.19
	 	Effect of Release	 	 	67	 
	Section 2.20
	 	Taxes	 	 	67	 
	Section 2.21
	 	[Reserved]	 	 	70	 
	Section 2.22
	 	Notice of Amendments to Program Support Agreements	 	 	71	 






i









 






	 	 	 	 	 	 	 
	Section 2.23
	 	Change in Commercial Paper Dealers	 	 	71	 
	Section 2.24
	 	Deliveries by Administrative Agent	 	 	71	 
	Section 2.25
	 	Priority	 	 	71	 
	 
	 	 	 	 	 	 
	ARTICLE III SECURITIES LAW CONSIDERATIONS
	 	 	 	 
	Section 3.01
	 	Investor Status	 	 	71	 
	Section 3.02
	 	No Public Offering	 	 	72	 
	Section 3.03
	 	No General Solicitation	 	 	72	 
	Section 3.04
	 	Investment Intent	 	 	72	 
	Section 3.05
	 	Notice on Transferability	 	 	72	 
	 
	 	 	 	 	 	 
	ARTICLE IV CONDITIONS TO PARTICIPATION PURCHASES
	 	 	 	 
	Section 4.01
	 	Conditions Precedent to Participation Purchases	 	 	72	 
	Section 4.02
	 	Conditions Precedent to All Purchases	 	 	72	 
	Section 4.03
	 	Condition Subsequent to Purchases (other than the Initial Purchase)	 	 	74	 
	Section 4.04
	 	Conditions Precedent to Addition of New Seller	 	 	75	 
	 
	 	 	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES
	 	 	 	 
	Section 5.01
	 	General Representations and Warranties of the Transferor	 	 	76	 
	Section 5.02
	 	Representations and Warranties of the Transferor Regarding the Administrative Agent’s Security Interest	 	 	79	 
	Section 5.03
	 	Particular Representations and Warranties of the Transferor	 	 	80	 
	Section 5.04
	 	Repurchase of Participated Loans and Participated Student Loan ABS; Reimbursement	 	 	81	 
	Section 5.05
	 	Administrator Actions Attributable to Transferor	 	 	82	 
	 
	 	 	 	 	 	 
	ARTICLE VI COVENANTS OF THE TRANSFEROR
	 	 	 	 
	Section 6.01
	 	Preservation of Separate Existence	 	 	83	 
	Section 6.02
	 	Notice of Termination Event, Potential Termination Event or Servicer Default	 	 	83	 
	Section 6.03
	 	Notice of Material Adverse Change	 	 	83	 
	Section 6.04
	 	Compliance with Laws; Preservation of Corporate Existence	 	 	83	 
	Section 6.05
	 	Enforcement of Obligations	 	 	83	 
	Section 6.06
	 	Maintenance of Books and Records	 	 	85	 
	Section 6.07
	 	Fulfillment of Obligations	 	 	85	 
	Section 6.08
	 	Notice of Material Litigation	 	 	85	 
	Section 6.09
	 	Notice of Relocation	 	 	85	 






ii









 






	 	 	 	 	 	 	 
	Section 6.10
	 	Rescission or Modification of Transferor Student Loans, Transferor Student Loan ABS and Transaction Documents	 	 	85	 
	Section 6.11
	 	Liens	 	 	86	 
	Section 6.12
	 	Sales of Assets; Consolidation/Merger	 	 	88	 
	Section 6.13
	 	Change in Business	 	 	88	 
	Section 6.14
	 	Capital Stock	 	 	88	 
	Section 6.15
	 	General Reporting Requirements	 	 	88	 
	Section 6.16
	 	Inspections	 	 	90	 
	Section 6.17
	 	ERISA	 	 	90	 
	Section 6.18
	 	Servicers	 	 	90	 
	Section 6.19
	 	Acquisition, Participation, Collection and Assignment of Student Loans and Student Loan ABS	 	 	90	 
	Section 6.20
	 	Administration and Collection of Transferor Student Loans	 	 	91	 
	Section 6.21
	 	Obligations of the Transferor With Respect to Pledged Collateral	 	 	91	 
	Section 6.22
	 	Asset Coverage Requirement	 	 	91	 
	Section 6.23
	 	Amendment of Organizational Documents	 	 	91	 
	Section 6.24
	 	Amendment of Underwriting Guidelines or Servicing Policies	 	 	91	 
	Section 6.25
	 	No Payments on Membership Interests	 	 	92	 
	Section 6.26
	 	Reduced Rate Programs	 	 	92	 
	 
	 	 	 	 	 	 
	ARTICLE VII TERMINATION EVENTS; TERMINATION DATE
	 	 	 	 
	Section 7.01
	 	Termination Events	 	 	92	 
	Section 7.02
	 	Termination Date	 	 	94	 
	Section 7.03
	 	Sales of Transferor Student Loan ABS	 	 	95	 
	Section 7.04
	 	Setoff	 	 	96	 
	Section 7.05
	 	Failure to Maintain Participation Interest or Security Interest	 	 	96	 
	 
	 	 	 	 	 	 
	ARTICLE VIII INDEMNIFICATION
	 	 	 	 
	 
	 	 	 	 	 	 
	ARTICLE IX ADMINISTRATIVE AGENT AND MANAGING AGENTS
	 	 	 	 
	Section 9.01
	 	Authorization and Action of Administrative Agent	 	 	97	 
	Section 9.02
	 	Authorization and Action of Managing Agents	 	 	98	 
	Section 9.03
	 	Agency Termination	 	 	98	 
	Section 9.04
	 	Administrative Agent’s and Managing Agent’s Reliance, Etc	 	 	98	 
	Section 9.05
	 	Administrative Agent, Managing Agents and Affiliates	 	 	99	 
	Section 9.06
	 	Decision to Make Purchases	 	 	99	 






iii









 






	 	 	 	 	 	 	 
	Section 9.07
	 	Successor Administrative Agent	 	 	100	 
	Section 9.08
	 	Successor Managing Agents	 	 	100	 
	Section 9.09
	 	Reimbursement	 	 	101	 
	Section 9.10
	 	Notice of Termination Event, Potential Termination Event or Servicer Default	 	 	101	 
	 
	 	 	 	 	 	 
	ARTICLE X MISCELLANEOUS
	 	 	 	 
	Section 10.01
	 	Amendments, Etc.	 	 	102	 
	Section 10.02
	 	Notices, Etc.	 	 	102	 
	Section 10.03
	 	No Waiver; Remedies	 	 	103	 
	Section 10.04
	 	Successors and Assigns; Binding Effect	 	 	103	 
	Section 10.05
	 	Survival	 	 	107	 
	Section 10.06
	 	Governing Law	 	 	107	 
	Section 10.07
	 	Submission to Jurisdiction; Waiver of Jury Trial; Appointment of Service Agent	 	 	107	 
	Section 10.08
	 	Costs and Expenses	 	 	108	 
	Section 10.09
	 	Recourse Against Certain Parties	 	 	109	 
	Section 10.10
	 	Execution in Counterparts; Severability; Integration	 	 	110	 
	Section 10.11
	 	Confidentiality	 	 	110	 
	Section 10.12
	 	Section Titles	 	 	111	 
	Section 10.13
	 	Entire Agreement	 	 	111	 
	Section 10.14
	 	No Petition	 	 	111	 
	Section 10.15
	 	Excess Funds	 	 	112	 
	Section 10.16
	 	Agreed Tax Treatment	 	 	112	 






iv









 






	 	 	 	 	 	 	 
	EXHIBIT A-1
	 	FORM OF PURCHASE AGREEMENT (SLM EDUCATION CREDIT FINANCE CORPORATION)	 	 	 	 
	EXHIBIT A-2
	 	FORM OF PURCHASE AGREEMENT (VG FUNDING I, LLC)	 	 	 	 
	EXHIBIT B
	 	[RESERVED]	 	 	 	 
	EXHIBIT C
	 	FORM OF MONTHLY REPORT	 	 	 	 
	EXHIBIT D
	 	FORM OF VALUATION AGENT AGREEMENT	 	 	 	 
	EXHIBIT E
	 	FORM OF PURCHASE REQUEST	 	 	 	 
	EXHIBIT F
	 	FORM OF MONTHLY ADMINISTRATIVE AGENT’S REPORT	 	 	 	 
	EXHIBIT G
	 	FORM OF NOTICE OF RELEASE	 	 	 	 
	EXHIBIT H
	 	FORM OF PRO FORMA REPORT (SECTION 2.18(a)(ii))	 	 	 	 
	EXHIBIT I
	 	FORM OF RELEASE RECONCILIATION STATEMENT	 	 	 	 
	EXHIBIT J
	 	FORM OF 2.20(d) CERTIFICATE	 	 	 	 
	EXHIBIT K
	 	[RESERVED]	 	 	 	 
	EXHIBIT L
	 	CONDITIONS TO PARTICIPATION PURCHASE	 	 	 	 
	EXHIBIT M
	 	FORM OF PRO FORMA CALCULATION AND CERTIFICATION (SECTION 4.02(b))	 	 	 	 
	EXHIBIT N
	 	FORM OF PURCHASE RECONCILIATION STATEMENT	 	 	 	 
	EXHIBIT O
	 	NOTICE ADDRESSES	 	 	 	 
	EXHIBIT P
	 	COMMITMENTS	 	 	 	 
	EXHIBIT Q-1
	 	FORM OF HOLDING SPE PURCHASE AGREEMENT	 	 	 	 
	EXHIBIT Q-2
	 	FORM OF HOLDING SPE SALE AGREEMENT	 	 	 	 
	EXHIBIT R
	 	LIST OF APPROVED GUARANTORS	 	 	 	 






v









 






PARTICIPATION PURCHASE AND SECURITY AGREEMENT



THIS PARTICIPATION PURCHASE AND SECURITY AGREEMENT (this “Agreement”) is made as of April 30, 2007,
among MUSTANG FUNDING I, LLC, a limited liability company organized under the laws of the State of
Delaware, as the transferor hereunder (the “Transferor”), SALLIE MAE, INC., a Delaware corporation,
as administrator (the “Administrator”), CHASE BANK USA, NATIONAL ASSOCIATION, a national banking
association, as the eligible lender trustee hereunder (the “Eligible Lender Trustee”), KITTY HAWK
FUNDING CORPORATION, a Delaware corporation, RANGER FUNDING COMPANY LLC, a Delaware limited
liability company, and YC SUSI TRUST, a Delaware statutory trust, as Conduit Purchasers hereunder
(the “Bank of America Conduit Purchasers”), BANK OF AMERICA, N.A., a national banking association,
as an Alternate Purchaser hereunder (the “Bank of America Alternate Purchaser”), BANK OF AMERICA,
N.A., a national banking association, as the agent of the Bank of America Conduit Purchasers and
the Bank of America Alternate Purchaser hereunder and the herein defined Bank of America Program
Support Providers (the “Bank of America Managing Agent”), CHARIOT FUNDING LLC, a Delaware limited
liability company, FALCON ASSET SECURITIZATION COMPANY LLC, a Delaware limited liability company,
JUPITER SECURITIZATION COMPANY LLC, a Delaware limited liability company, and PARK AVENUE
RECEIVABLES COMPANY, LLC, a Delaware limited liability company (the “JPMorgan Conduit Purchasers”),
JPMORGAN CHASE BANK, N.A., a national banking association, as an Alternate Purchaser hereunder (the
“JPMorgan Alternate Purchaser”) and JPMORGAN CHASE BANK, N.A., a national banking association, as
the agent of the JPMorgan Conduit Purchasers and the JPMorgan Alternate Purchaser and the herein
defined JPMorgan Program Support Providers (the “JPMorgan Managing Agent”), and BANK OF AMERICA,
N.A., a national banking association, as the administrative agent for the herein defined Conduit
Purchasers, Alternate Purchasers and Managing Agents (in such capacity, the “Administrative
Agent”).




PRELIMINARY STATEMENTS




     WHEREAS, the Bank of America Conduit Purchasers and the JPMorgan Conduit Purchasers
(collectively, the “Conduit Purchasers”) are special purpose entities engaged in the business of
obtaining funding (directly or indirectly) in the commercial paper market and using the proceeds
from such funding to acquire interests in financial assets from various sellers from time to time;
and



     WHEREAS, the Transferor expects to purchase from time to time certain Eligible Loans and
Eligible Student Loan ABS (as hereinafter defined) in accordance with the Purchase Agreements (as
hereinafter defined) (such purchases constituting the “Transactions”); and



     WHEREAS, the Eligible Lender Trustee will maintain legal title of the Eligible Loans on behalf
of the Transferor; and



     WHEREAS, the Transferor desires to fund the Transactions through the sale of Participation
Interests to the Conduit Purchasers and the Bank of America Alternate Purchaser



 









 







and the JPMorgan Alternate Purchaser (collectively, the “Alternate Purchasers”) on the terms
and conditions set forth herein; and



     WHEREAS, the Conduit Purchasers may, from time to time, assign all or a part of such
Participation Interests or assign interests therein or commitments to purchase such Participation
Interests to certain Program Support Providers (as hereinafter defined) pursuant to the terms of
the Program Support Agreements (as hereinafter defined); and



     WHEREAS, each of the Bank of America Managing Agent and the JPMorgan Managing Agent
(collectively, the “Managing Agents”) is willing to act as the agent on behalf of each of its
related Conduit Purchasers, Alternate Purchasers and the Program Support Providers pursuant to this
Agreement and the corresponding Program Support Agreements.



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



ARTICLE I




DEFINITIONS




     Section 1.01 Certain Defined Terms. Certain capitalized terms used throughout this Agreement
are defined above or in this Section.



     As used in this Agreement and its exhibits, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural forms of the terms
defined).



     “Additional Student Loan” means any Student Loan that becomes a Participated Loan after the
Closing Date.



     “Adjusted Pool Balance” means, as of any date:



     (I) the sum of (i) the Applicable Percentage for each Transferor Student Loan multiplied by
the outstanding Principal Balance of such Transferor Student Loan and (ii) the Applicable
Percentage for each Transferor Student Loan ABS multiplied by the Market Value (determined as of
the most recent Valuation Date) of such Transferor Student Loan ABS minus



     (II) Excess Concentration Amounts, in each case multiplied by the Applicable Percentage that
would have been applicable to such Transferor Student Loans and Transferor Student Loan ABS if they
were Eligible Loans and Eligible Student Loan ABS (to the extent not previously multiplied by the
Applicable Percentage) calculated so as to include Transferor Student Loans or Transferor Student
Loan ABS in the Excess Concentration Amounts in the same proportions as such Transferor Student
Loans and Transferor Student Loan ABS are owned by the Transferor plus



     (III) for purposes other than when calculating the Adjusted Pool Balance in connection with an
Excess Capital Purchase or calculating the Capital Distribution Amount, the product of 90 percent
times the sum of (i) the aggregate outstanding Principal Balance of Proprietary Loans



2









 







that are also FFELP Loans which exceeds 20% of the aggregate outstanding Principal Balance of
Transferor Student Loans that are Eligible Loans and (ii) the aggregate outstanding Principal
Balance of Transferor Student Loans that are FFELP Loans which bear interest or have Special
Allowance Payments related thereto calculated at a rate determined by reference to United States
Treasury bills which exceeds 30% of the outstanding Principal Balance of Transferor Student Loans
that are Eligible Loans.



     “Administrative Agent” means Bank of America, N.A., a national banking association, and its
successors and assigns, in its capacity as agent of the Conduit Purchasers, the Managing Agents and
the Alternate Purchasers hereunder and also in its capacity as “Paying Agent” pursuant to
Section 2.05(b).



     “Administrative Agent Fees” means the fees, reasonable expenses and charges of the
Administrative Agent, including reasonable legal fees and expenses, as set forth in the fee letter
between the Transferor and the Administrative Agent dated as of the Closing Date.



     “Administration Agreement” means the Administration Agreement, dated as of April 30, 2007,
among the Transferor, the Eligible Lender Trustee, the Servicer, the Administrator and the
Administrative Agent, as amended and supplemented pursuant to the terms thereof.



     “Administrator Fee” means, for each Settlement Period, a fee payable to the Administrator
monthly in arrears equal to $10,000.



     “Administrator” means Sallie Mae, Inc., a Delaware corporation and a subsidiary of SLM
Corporation, and its successors and assigns, in its capacity as administrator of the Transferor in
accordance with the Administration Agreement.



     “Administrator Default” has the meaning assigned in Section 5.1 of the Administration
Agreement.



     “Adverse Claim” means a lien, security interest, charge, encumbrance or other right or claim
or restriction in favor of any Person (including any UCC financing statement or similar instrument
filed against the assets of that Person) other than, with respect to the Participated Loans,
Participated Student Loan ABS and the other Pledged Collateral, any lien, security interest,
charge, encumbrance or other right or claim or restriction in favor of the Administrative Agent for
the benefit of the Purchasers and the other Secured Creditors.



     “Affected Party” means the Administrative Agent, each Conduit Purchaser, each Managing Agent,
each Alternate Purchaser, each Program Support Provider and any assignee or participant of any
Conduit Purchaser, any Managing Agent, any Alternate Purchaser or any Program Support Provider.



     “Affiliate” when used with respect to a Person means any other Person controlling, controlled
by or under common control with such Person. A Person shall be deemed to control another person if
the controlling Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of the other Person, whether through the ownership of
voting securities, membership interests, by contract or otherwise.



3









 





     “Aggregate Capital” means, as of any date of determination, the aggregate Capital of all
Participation Interests Outstanding at the date of determination after giving effect to all funds
on deposit in the Capital Payment Account and Release Proceeds Account and to all distributions and
Purchases made on such date of determination plus any accrued but unpaid Purchaser Costs on the
Participation Interests.



     “Agreement” means this Participation Purchase and Security Agreement, together with all
exhibits and appendices attached hereto as the same may be amended, restated, supplemented or
otherwise modified from time to time hereafter.



     “Alternate Purchaser” means each of the Bank of America Alternate Purchaser and the JPMorgan
Alternate Purchaser.



     “Applicable Percentage” means (a) with respect to the acquisition of Eligible Loans or
Eligible Student Loan ABS under a Purchase Agreement and with respect to the acquisition of
Participation Interests in Eligible Loans or Eligible Student Loan ABS under this Agreement on any
Purchase Date, the percentage set forth in the Side Letter executed by the Transferor, the
Administrator, the Administrative Agent and the Managing Agents as of the Closing Date, as the same
may be amended, restated, supplemented or otherwise modified from time to time and (b) with
respect to determination of the value of Transferor Student Loans or Transferor Student Loan ABS
within the Participated Loans, Participated ABS and Pledged Collateral, the percentage set forth in
the Side Letter executed by the Transferor, the Administrator, the Administrative Agent and the
Managing Agents as of the Closing Date, as the same may be amended, restated, supplemented or
otherwise modified from time to time.



     “Asset Coverage Ratio” means, on the last day of each month, and as of any other date of
determination, the ratio (expressed as a percentage) of (a) the sum of (i) the Adjusted Pool
Balance as of such date plus (ii) any accrued and unpaid interest thereon and any accrued and
unpaid Special Allowance Payments and Interest Subsidy Payments on the Transferor Student Loans as
of such date plus (iii) funds (including Eligible Investments but less investment earnings thereon)
on deposit in the Collection Account, Borrower Benefit Account, Disbursement Account, Reserve
Account and Capitalized Interest Account, if any, as of such date, to (b) the Reported Liabilities
as of such date and rounding to the nearest second decimal place.



     “Assignment Amount” means, with respect to an Alternate Purchaser at the time of any
assignment pursuant to Section 10.04, an amount equal to the lesser of (a) such Alternate
Purchaser’s Capital of the Participation Interests requested by the related Conduit Purchaser to be
assigned at such time plus the applicable Interest Component and (b) such Alternate Purchaser’s
unused Assignment Commitment (minus the unrecovered Capital of such Alternate Purchaser’s
investments pursuant to the Program Support Agreement to which it is a party).



     “Assignment Commitment” means, with respect to an Alternate Purchaser, such Alternate
Purchaser’s Commitment multiplied by 1.02.



     “Authorized Officer” means (i) with respect to the Transferor, any officer of the Eligible
Lender Trustee or the Transferor who is authorized to act for the Eligible Lender Trustee or the



4









 







Transferor in matters relating to the Transferor pursuant to the Transaction Documents and who
is identified on the list of Authorized Officers delivered by the Eligible Lender Trustee or the
Transferor to the Administrative Agent on the Closing Date (as such list may be modified or
supplemented by the Eligible Lender Trustee or the Transferor from time to time thereafter and
delivered to the Administrative Agent), (ii) with respect to the Administrator, any officer of the
Administrator who is authorized to act for the Administrator in matters relating to itself or to
the Transferor and to be acted upon by the Administrator pursuant to the Transaction Documents and
who is identified on the list of Authorized Officers delivered by the Administrator to the
Administrative Agent on the Closing Date (as such list may be modified or supplemented by the
Administrator from time to time thereafter and delivered to the Administrative Agent), (iii) with
respect to the Servicer, any officer of the Servicer who is authorized to act for the Servicer in
matters relating to or to be acted upon by the Servicer pursuant to the Transaction Documents and
who is identified on the list of Authorized Officers delivered by the Servicer to the
Administrative Agent on the Closing Date (as such list may be modified or supplemented by the
Servicer from time to time thereafter and delivered to the Administrative Agent) and (iv) with
respect to SLM Corporation, any officer of SLM Corporation who is authorized to act for SLM
Corporation in matters relating to or to be acted upon by SLM Corporation pursuant to the
Transaction Documents and who is identified on the list of Authorized Officers delivered by SLM
Corporation to the Administrative Agent on the Closing Date (as such list may be modified or
supplemented by SLM Corporation from time to time thereafter and delivered to the Administrative
Agent).



     “Available Funds” means, with respect to a Settlement Date, the sum of the following amounts
received into the Collection Account with respect to the related Settlement Period:



     (a) all collections of principal and interest on the Transferor Student Loans, including any
Guarantee Payments received on the Transferor Student Loans but net of (i) any collections in
respect of principal on the Transferor Student Loans applied by the Transferor to repurchase
guaranteed loans from the Guarantors under the Guarantee Agreements, (ii) amounts required by the
Higher Education Act to be paid or rebated to the Department or to be repaid to borrowers (whether
or not in the form of a principal reduction of the applicable Transferor Student Loan) on the
Transferor Student Loans for that Settlement Period including Consolidation Loan rebate fees and
(iii) amounts deposited into the Floor Income Rebate Account during the related Settlement Period;



     (b) any Interest Subsidy Payments and Special Allowance Payments with respect to the
Transferor Student Loans received during that Settlement Period for the Transferor Student Loans;



     (c) all Liquidation Proceeds from any Transferor Student Loans which became Liquidated Student
Loans during that Settlement 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 borrowers on Liquidated Student Loans, and all Recoveries on
Liquidated Student Loans which were written off in prior Settlement Periods or during that
Settlement Period;



5









 





     (d) the aggregate Purchase Amounts received during that Settlement Period for those
Transferor Student Loans repurchased by the applicable Seller or purchased by the Servicer or for
Transferor Student Loans sold to another eligible lender pursuant to Section 3.11E of the Servicing
Agreement;



     (e) the aggregate amounts, if any, received from the applicable Seller 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 Transferor Student Loans pursuant to the Purchase
Agreements or Section 3.5 of the Servicing Agreement, respectively;



     (f) amounts received by the Transferor pursuant to Sections 3.1 and 3.12 of the Servicing
Agreement during that Settlement Period as to yield or principal adjustments other than deposits
into the Borrower Benefit Account;



     (g) all collections on and proceeds of the Transferor Student Loan ABS;



     (h) investment earnings for that Settlement Date earned on investments in the Collection
Account, Borrower Benefit Account, Disbursement Account, Floor Income Rebate Account, Capitalized
Interest Account, Reserve Account, the Capital Payment Account and the Release Proceeds Account
during such Settlement Period;



     (i) all amounts received by the Transferor from the Hedging Counterparty;



     (j) if applicable, amounts transferred from the Capitalized Interest Account in excess of the
Capitalized Interest Account Specified Balance, calculated as of the end of the Settlement Period
related to that Settlement Date;



     (k) if applicable, amounts transferred from the Reserve Account in excess of the Specified
Reserve Account Balance, calculated as of the end of the Settlement Period related to that
Settlement Date;



     (l) all other Collections or other amounts deposited into the Collection Account for
application pursuant to Section 2.05 on the applicable Settlement Date;



     (m) amounts on deposit in the Floor Income Rebate Account that no longer need to be held in
connection with floor income payment obligations; and



     (n) amounts transferred into the Collection Account from the Borrower Benefit Account.



     provided that if (i) on any Settlement Date, there would not be sufficient funds,
after application of Available Funds, as defined above, and application of amounts available from
the Capitalized Interest Account and the Reserve Account, in that order, to pay certain of the
items specified in clauses (b)(ii) through (v) of Section 2.05, then Available Funds for that
Settlement Date will include, in addition to the Available Funds as defined above, amounts on
deposit in the Collection Account, or amounts held by the Administrative Agent for deposit into the
Collection Account which would have constituted Available Funds for the Settlement Date immediately



6









 







succeeding that Settlement Date, up to the amount necessary to pay such items, and the
Available Funds for the immediately succeeding Settlement Date will be adjusted accordingly.



     “Bank of America Alternate Purchaser” means Bank of America, N.A., a national banking
association, each Person who accepts an assignment of Bank of America, N.A.’s rights and
obligations hereunder pursuant to Section 10.04, and the successors and assigns of any of
them. The Bank of America Alternate Purchasers may include one or more Persons following an
assignment pursuant to Section 10.04, and if more than one Person, each Person who is a
Bank of America Alternate Purchaser will have the rights and obligations with respect to
Participation Interests in the respective percentages specified in the agreement(s) governing such
assignment(s).



     “Bank of America Conduit Purchasers” means Kitty Hawk Funding Corporation, a Delaware
corporation, Ranger Funding Company LLC, a Delaware limited liability company, and YC SUSI Trust, a
Delaware statutory trust, and their successors and assigns.



     “Bank of America Facility Group” means the Bank of America Conduit Purchasers, the Bank of
America Managing Agent, the Bank of America Alternate Purchasers and each Bank of America Program
Support Provider.



     “Bank of America Managing Agent” means Bank of America, N.A., a national banking association,
and its successors and assigns.



     “Bank of America Program Support Provider” means any Program Support Provider which is a party
to a Program Support Agreement with (or benefiting) the Bank of America Managing Agent, the Bank of
America Conduit Purchaser and/or the Bank of America Alternate Purchaser.



     “Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. Section 101 et seq.), as
amended from time to time, and any successor statute.



     “Base Rate” means, for any day, a rate per annum determined by the Administrative Agent equal
to the higher of (a) the Prime Rate for such day and (b) the sum of 0.50% plus the Federal Funds
Rate for such day.



     “Base Rate Purchase” means a Purchase funded with reference to the Base Rate.



     “basis point” or “bp” means one one-hundredth of a percent (0.01%).




     “Benefit Plan” means any employee benefit plan as defined in Section 3(3) of ERISA in respect
of which the Transferor or any ERISA Affiliate of the Transferor is, or at any time during the
immediately preceding six years was, an “employer” as defined in Section 3(5) of ERISA.



     “Borrower Benefit Account” means the special account created pursuant to Section 2.04
(h).



     “Business Day” means a day of the year other than a Saturday or a Sunday on which (a) banks
are not authorized or required to close in Charlotte, North Carolina and New York, New



7









 







York and (b) trust companies are not authorized or required to close in Wilmington, Delaware;
provided, however, if the term “Business Day” is used in connection with the LIBOR Rate, it means
any day of the year on which dealings in dollar deposits are carried on in the London interbank
market.



     “Capital” of any Participation Interest held by any Purchaser means, at any time, (A) the
aggregate purchase price originally paid to the Transferor for such Participation Interest by such
Purchaser (or, if such Participation Interest has been assigned, by the original Purchaser), minus
(B) the sum of the aggregate amount of Collections remitted on the Transferor Student Loans or
Transferor Student Loan ABS and in each case applied to reduce the amount of such Participation
Interest in accordance with the terms and conditions of this Agreement; provided that such Capital
shall be restored in the amount of any Collections or other payments so received and applied if at
any time the distribution of such Collections or payments are rescinded, returned or refunded for
any reason.



     “Capital Distribution Amount” means the positive difference, if any, between (a) the Aggregate
Capital as of the last day of the related Settlement Period and (b) the Adjusted Pool Balance as of
the last day of the related Settlement Period.



     “Capital Payment Account” means the account of the Administrative Agent established to hold
principal payments pursuant to Section 2.05.



     “Capitalized Interest Account” means the special account created pursuant to Section
2.06(a).



     “Capitalized Interest Account Funding Event” means, as of any date:




     (a) any of (i) the long-term senior unsecured debt of SLM Corporation is not rated
greater than or equal to BBB+ by S&P and Baa1 by Moody’s or (ii) (A) an Event of Bankruptcy
shall have occurred with respect to the Liquidity Lender, (B) the Liquidity Advance
Agreement shall have been terminated following any Liquidity Advance Agreement Default or
(C) for any reason, the Liquidity Advance Agreement shall not be in full force and effect,
and




     (b) at any time while an event set forth in clause (a) above has occurred and is
continuing, (i) the outstanding Principal Balance of Transferor Student Loans with respect
to which Obligors are not currently required to pay interest, as of such date, is greater
than 25% of the outstanding Principal Balance of Transferor Student Loans that are Eligible
Loans and (ii)(A) the Aggregate Capital is greater than 97% of the Maximum Aggregate
Purchase Amount or (B) the Aggregate Capital is less than or equal to 97% of the Maximum
Aggregate Purchase Amount and after giving effect to any Excess Capital Purchase proposed to
be made on such date and assuming all amounts due and payable under Section
2.05(b)(i) through 2.05(b)(iv) have been paid on such date, the Asset Coverage
Ratio would be less than 100%.



     “Capitalized Interest Account Specified Balance” means, (a) as of the Closing Date, $0 and (b)
as of any date of determination, the product of (i) the outstanding Principal Balance of Transferor
Student Loans that are Eligible Loans with respect to which the Obligor is not



8









 







required to pay interest as of the end of the preceding Settlement Period (or, if the
outstanding Principal Balance of Transferor Student Loans that are Eligible Loans with respect to
which the Obligor is not currently required to pay interest, as of the end of the preceding
Settlement Period, is less than or equal to 75% of the outstanding Principal Balance of all
Transferor Student Loans that are Eligible Loans, then the Capitalized Interest Account Specified
Balance shall be calculated by reference to the outstanding Principal Balance of such Transferor
Student Loans which exceeds 25% of the outstanding Principal Balance of all Transferor Student
Loans that are Eligible Loans) and (ii) a rate determined by the Administrative Agent to be the
composite rate covering Purchaser Costs (other than amounts with respect to Yield Protection) and
the Primary Servicing Fees described in clause (v) of Section 2.05(b) and (iii) 90 divided
by 360.



     “Carryover Servicing Fee” has the meaning specified in Attachment A to the Servicing
Agreement.



     “Clearing Account” means the clearing account described in Section 2.04.



     “Closing Date” means April 30, 2007.



     “Code” means the Internal Revenue Code of 1986, as amended, or any successor statute and the
regulations promulgated and rulings issued thereunder.



     “Collection Account” means the special account created pursuant to Section 2.04,
including any subaccounts thereof.



     “Collections” means (a) all revenue and recoveries of principal and interest and other
proceeds, payments and reimbursements of principal and interest received with respect to any
Transferor Student Loan and any other collection of cash with respect to such Transferor Student
Loan; (b) all payments, distributions or other proceeds with respect to any Transferor Student Loan
ABS, whether constituting interest, principal, premium or otherwise; and (c) all other cash
collections and other cash proceeds of the Participated Loans, Participated Student Loan ABS and
other Pledged Collateral (including without limitation in each of clauses (a), (b) and (c) above
each of the items enumerated in the definition of Available Funds with respect to any Settlement
Period).



     “Commitment” means (i) with respect to a Purchaser, the obligation, if any, of such Purchaser
to fund Purchases pursuant to this Agreement in the amount stated to be such Purchaser’s
“Commitment” on Exhibit P attached hereto and (ii) with respect to a Facility Group, the aggregate
Commitments of the Purchasers within such Facility Group.



     “Conduit Assignee” means any special purpose entity that finances its activities directly or
indirectly through asset backed commercial paper and is administered by a Managing Agent or any
Affiliate of a Managing Agent and designated by such Managing Agent from time to time to accept an
assignment from such Managing Agent’s related Conduit Purchaser of outstanding Participation
Interests; provided, however, that with respect to any Conduit Purchaser with a Commitment
hereunder, such Conduit Assignee must be an assignee with respect to such Commitment.



9









 





     “Conduit Purchaser” means each of the Bank of America Conduit Purchasers and the JPMorgan
Conduit Purchasers and any successors or assigns (subject to Section 10.04) that are
special purpose entities that become parties to this Agreement and which obtain funds to purchase
financial assets (directly or indirectly) from the issuance of promissory notes.



     “Consolidation Loan” means a loan made to a borrower which loan consolidates such borrower’s
PLUS/SLS Loans, direct loans made by the Department of Education, Stafford Loans in accordance with
the Higher Education Act or loans made under the Federal Health Education Assistance Loan Program
authorized under Sections 701 through 720 of the Public Health Services Act.



     “CP” means the commercial paper notes issued from time to time in the United States commercial
paper market (or in such other commercial paper markets identified in writing in advance to the
Transferor and the Administrator by a Managing Agent or the Administrative Agent) by means of which
a Conduit Purchaser (directly or indirectly) obtains financing.



     “CP Purchase” means a Purchase made through the issuance of CP.



     “CP Rate” means, for any period for any Conduit Purchaser, for the portion of the Aggregate
Capital funded by such Conduit Purchaser directly or indirectly with CP, either (i) for
match-funded Purchases, the rate equivalent to the rate (or if more than one rate, the weighted
average of the rates) at which CP having a term equal to such period may be sold by any applicable
placement agent or commercial paper dealer (which shall include Dealer Fees, incremental carrying
costs incurred with respect to CP maturing on dates other than those on which corresponding funds
are received by the Conduit Purchaser, other borrowings by the Conduit Purchaser (other than under
any Program Support Agreement to fund any Purchases hereunder), costs of swapping foreign
currencies into dollars to the extent the CP is issued in a market outside the U.S. and any other
costs associated with the issuance of CP), or (ii) for pool-funded Purchases, the rate equivalent
to the weighted average cost (as determined by the applicable Managing Agent and which shall
include commissions of placement agents and dealers, incremental carrying costs incurred with
respect to CP maturing on dates other than those on which corresponding funds are received by the
Conduit Purchaser, other borrowings by the Conduit Purchaser to fund any Purchases hereunder or its
related commercial paper issuer if the Conduit Purchaser does not itself issue commercial paper
(other than under any Program Support Agreement), costs of swapping foreign currencies into dollars
to the extent the CP is issued in a market outside the U.S. and any other costs associated with the
issuance of CP) of or related to the issuance of CP that are allocated, in whole or in part, by the
Conduit Purchaser or the applicable Managing Agent to fund or maintain such portion of the
Aggregate Capital (and which may be also allocated in part to the funding of other assets of the
Conduit Purchaser); provided, however, that if the rate (or rates) is a discount rate, then the
rate (or if more than one rate, the weighted average of the rates) shall be the rate resulting from
converting such discount rate (or rates) to an interest-bearing equivalent rate per annum. On or
before the fifth Business Day after the last day of any Settlement Period, if Yield for any portion
of any Purchase for any related Yield Period is determined by reference to the CP Rate, the
applicable related Managing Agent shall notify the Administrator of the applicable CP Rate for such
Yield Period for the applicable Conduit Purchaser.



10









 





     “Cutoff Date” means the Initial Cutoff Date or any Subsequent Cutoff Date, as applicable.



     “Dealer Fees” means a commercial paper dealer fee, payable to each Conduit Purchaser, of not
greater than 5 basis points per annum on the amount of CP Purchases made by such Conduit Purchaser.



     “Debt” of any Person means (a) indebtedness of such Person for borrowed money; (b) obligations
of such Person evidenced by bonds, debentures, notes, letters of credit, interest rate and currency
swaps or other similar instruments; (c) obligations of such Person to pay the deferred purchase
price of property or services; (d) obligations of such Person as lessee under leases which shall
have been or should be, in accordance with GAAP, recorded as capital leases; (e) obligations
secured by an Adverse Claim upon property or assets owned by such Person, even though such Person
has not assumed or become liable for the payment of such obligations; and (f) obligations of such
Person under direct or indirect guaranties in respect of, and obligations (contingent or otherwise)
to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of other Persons of the kinds referred to in clauses (a) through (e)
above.



     “Defaulted Student Loan” means any Student Loan (a) as to which any payment, or portion
thereof, with respect to a FFELP Loan, is more than the number of days past due from the original
due date thereof that would permit the Eligible Lender Trustee to submit a default claim to the
applicable Guarantor under the terms of the Higher Education Act (which number of days, as of the
Closing Date, is 270) and with respect to a Private Credit Loan is more than 180 days past due from
the original due date thereof, (b) the Obligor of which is the subject of an Event of Bankruptcy
(without giving effect to any cure or 60 day continuance period) or is deceased or disabled, or (c)
as to which a continuing condition that, with notice or the lapse of time or both, would constitute
a default, breach, violation or event permitting acceleration under the terms of such Student Loan
(other than payment defaults continuing for a period of not more than the number of days past due
from the original due date thereof that would permit the Eligible Lender Trustee to submit a
default claim to the applicable Guarantor under the terms of the Higher Education Act).



     “Defaulted Student Loan ABS” means any Student Loan ABS which is rated equal to or less than
“C” by S&P and “C1” by Moody’s.



     “Defaulting Purchaser” has the meaning assigned in Section 2.01(d).



     “Delinquent Student Loan” means any Private Credit Loan as to which any payment, or portion
thereof, is 60 days past due from the original due date thereof.



     “Department of Education” or “Department” means the United States Department of Education, or
any other officer, board, body, commission or agency succeeding to the functions thereof under the
Higher Education Act.



     “Disbursement Account” means an account of the Administrative Agent, for the benefit of the
Transferor, established at the Administrative Agent or any Qualified Institution.



11









 





     “Eligible Borrower” means a borrower who is eligible under the Higher Education Act to be the
obligor of a loan for financing a program of education at an Eligible Institution, including a
borrower who is eligible under the Higher Education Act to be an obligor of a loan made pursuant to
Section 428A, 428B and 428C of the Higher Education Act.



     “Eligible FFELP Loan” means a Student Loan which (1) meets the following criteria:




     (i) is owned by the Transferor and is fully disbursed;




     (ii) is a Stafford Loan, a SLS Loan, a PLUS Loan or a Consolidation Loan and
the borrower thereof is an Eligible Borrower;




     (iii) is a U.S. Dollar denominated obligation payable in the United States;




     (iv) at least 97% of the principal of and interest on which is guaranteed by
the applicable Guarantor and eligible for reinsurance under the Higher Education
Act;




     (v) provides that periodic payments must be made in order to fully amortize the
amount financed over its term to maturity (exclusive of any deferral or forbearance
periods);




     (vi) if the Student Loan is serviced by a Subservicer, it pays into a Permitted
Lockbox;




     (vii) bears interest at a stated rate of not less than the maximum rate
permitted under the Higher Education Act for such Student Loan (before giving effect
to any borrower benefit programs);




     (viii) is eligible for the payment of quarterly Special Allowance Payments at a
rate established under the formula set forth in the Higher Education Act for such
Student Loan;




     (ix) if not yet in repayment status, is eligible for the payment of Interest
Subsidy Payments by the U.S. Department of Education or, if not so eligible, is a
Student Loan for which interest either is billed quarterly to the borrower or
deferred until commencement of the repayment period, in which case such accrued
interest is subject to capitalization to the full extent permitted by the applicable
Guarantor;




     (x) is not a Defaulted Student Loan;




     (xi) is supported by the following documentation:




     1. loan application, and any supplement thereto;



12









 






     2. original Student Loan Note and any addendum thereto (or a certified
copy thereof if more than one Student Loan is represented by a single
Student Loan Note and all Student Loans represented thereby are not being
sold);




     3. evidence of Guarantee;




     4. any other document and/or record which the Transferor or its
servicer or other agent may be required to retain pursuant to the Higher
Education Act;




     5. if applicable, payment history (or similar document) including (i)
an indication of the Principal Balance and the date through which interest
has been paid, each as of the related date of determination and (ii) an
accounting of the allocation of all payments by the borrower or on
borrower’s behalf to principal and interest on the Loan;




     6. if applicable, documentation which supports periods of current or
past deferment or past forbearance;




     7. if applicable, a collection history, if the Student Loan was ever in
a delinquent status, including detailed summaries of contacts and including
the addresses or telephone numbers used in contacting or attempting to
contact borrower and any endorser and, if required by the Guarantor, copies
of all letters and other correspondence relating to due diligence
processing;




     8. if applicable, evidence of all requests for skip-tracing assistance
and current address of borrower, if located;




     9. if applicable, evidence of requests for pre-claims assistance, and
evidence that the borrower’s school(s) have been notified; and




     10. if applicable, a record of any event resulting in a change to or
confirmation of any data in the Student Loan file;




     (xii) was originated and has been serviced in compliance with all requirements
of applicable law, including the Higher Education Act and all origination fees
authorized to be collected pursuant to Section 438 of the Higher Education Act have
been paid to the Secretary;




     (xiii) is evidenced by a promissory note (whether e-signed or otherwise),
containing terms in accordance with those required by the FFELP Program, the
applicable Guarantee Agreements and other applicable requirements and which does not
require the obligor to consent to the transfer, sale or assignment of the rights and
duties of the applicable Seller and does not contain any provision that



13









 







restricts the ability of the Administrative Agent, on behalf of the Secured
Creditors, to exercise its rights under the Transaction Documents;




     (xiv) the Transferor has good and marketable title to such Student Loan free
and clear of any encumbrance, lien or security interest or any other prior
commitment other than granted in favor of the Administrative Agent, on behalf of the
Secured Creditors, and in relation to which a participation can be granted therein
and the other interests and transfers contemplated herein with respect to such
Student Loan will be given full effect;




     (xv) has not been modified, extended or renegotiated in any way not provided
for in the Transaction Documents, as permitted under the Higher Education Act or
applicable Servicing Policies;




     (xvi) constitutes a legal, valid and binding obligation to pay on the part of
the related Obligor enforceable in accordance with its terms and is not noted on the
appropriate Servicer’s books and records as being subject to a current bankruptcy
proceeding;




     (xvii) constitutes an instrument, account or a general intangible as defined in
the Uniform Commercial Code as in effect in the jurisdiction that governs the
perfection of the interests of Transferor therein and the perfection of the
Purchasers’ and Secured Creditors’ interest therein;




     (xviii) the sale or assignment of which to the Transferor or the Eligible
Lender Trustee on its behalf pursuant to the Purchase Agreements, and the sale of a
participation interest therein to the Purchasers and granting of a security interest
therein to the Administrative Agent pursuant to this Agreement does not contravene
or conflict with any law or regulation, or require the consent or approval of, or
notice to, any Person; and




     (xix) if the Seller with respect to such Student Loan is a Holding SPE, such
Student Loan was acquired by such Holding SPE pursuant to a Holding SPE Sale
Agreement;


and (2) with respect to each Additional Student Loan, meets the criteria set forth in (1) above,
and meets the following criteria, in each case as of the date specified as the “Sale Date” in the
related Additional Bill of Sale:





     (xx) the purchase price for such Additional Student Loan does not exceed the
sum of (A) the Applicable Percentage applicable to such Additional Student Loan
times the Principal Balance of such Additional Student Loan and (B) any related
increase in the value of the Membership Interests or the amount drawn under the
Revolving Credit Agreement to fund such purchase and (y) the aggregate purchase
price (including any related increase in the value of the Membership Interests or
any amount drawn under the Revolving Credit Agreement) is reasonably equal to the
fair market value thereof; and



14









 






     (xxi) the purchase of such Additional Student Loan is not reasonably likely to
result in the imposition of a Termination Event or increase any Excess Concentration
Amounts.



     “Eligible Institution” means (a) an institution of higher education, (b) a vocational school
or (c) any other institution which, in all of the above cases, has been approved by the Department
of Education and the applicable Guarantor.



     “Eligible Investments” means book-entry securities, negotiable instruments or securities
represented by instruments in bearer or registered form which evidence:




     (a) direct obligations of, and obligations fully guaranteed as to timely payment by,
the United States of America, the Government National Mortgage Association, the Federal Home
Loan Mortgage Corporation, the Federal National Mortgage Association or any agency or
instrumentality of the United States of America the obligations of which are backed by the
full faith and credit of the United States of America; provided that obligations of, or
guaranteed by, the Government National Mortgage Association, the Federal Home Loan Mortgage
Corporation, or the Federal National Mortgage Association shall be Eligible Investments only
if, at the time of investment, they have a rating from each of the Rating Agencies in the
highest investment category granted thereby;




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




     (c) commercial paper having, at the time of the investment, a rating from each of the
Rating Agencies then rating that commercial paper in the highest investment category granted
thereby;




     (d) investments in money market funds having a rating from each of the Rating Agencies
in the highest investment category granted thereby (including funds for which the
Administrative Agent, the Administrator or the Eligible Lender Trustee or any of their
respective Affiliates is investment manager or advisor);




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




15









 






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



     For purposes of the definition of “Eligible Investments” the phrase “highest investment
category” means (i) in the case of Fitch, “AAA” for long-term investments (or the equivalent) and
“F-1+” for short-term investments (or the equivalent), (ii) in the case of Moody’s, “Aaa” for
long-term investments and “P-1” for short-term investments, and (iii) in the case of S&P, “AAA” for
long-term investments and “A-1+” for short-term investments. A proposed investment not rated by
Fitch but rated in the highest investment category by Moody’s and S&P shall be considered to be
rated by each of the Rating Agencies in the highest investment category granted thereby.



     “Eligible Lender” means any “eligible lender,” as defined in the Higher Education Act, which
has received an eligible lender designation from the Department of Education or from a Guarantor
with respect to Student Loans.



     “Eligible Lender Trustee” means Chase Bank USA, National Association, a national banking
association, not in its individual capacity but solely as Eligible Lender Trustee under the Trust
Agreement and its successor or successors and any other corporation which may at any time be
substituted in its place pursuant to this Agreement.



     “Eligible Lender Trustee Fees” means the fees, reasonable expenses and charges of the Eligible
Lender Trustee, including reasonable legal fees and expenses, as agreed to in writing by the
Eligible Lender Trustee and the Administrator and consented to by the Administrative Agent.



     “Eligible Lender Trustee Guarantee Agreement” means any guarantee or agreement issued by any
Guarantor to the Eligible Lender Trustee, and any amendment thereto entered into in accordance with
the provisions thereof and hereof.



     “Eligible Loan” means an Eligible FFELP Loan and/or an Eligible Private Credit Loan.



     “Eligible Private Credit Loan” means a Student Loan which (1) meets the following criteria:




     (i) an unsecured loan originated under one of the private credit education loan
programs for which an Applicable Percentage greater than zero has been established
among the Transferor, the Managing Agents and the Administrative Agent;




     (ii) is owned by Transferor and is fully disbursed;




     (iii) a U.S. Dollar denominated obligation payable in the United States;



16









 






     (iv) provides that periodic payments must be made in order to fully amortize
the amount financed over its term to maturity (exclusive of any deferral or
forbearance periods);




     (v) if the Student Loan is serviced by a Subservicer, it pays into a Permitted
Lockbox;




     (vi) bears interest at a stated rate of not more than the maximum rate
permitted under applicable law;




     (vii) is supported by the following documentation:




     (1) loan application, and any supplement thereto,




     (2) original promissory note and any addendum thereto or the electronic
records therefore,




     (3) any other document and/or record which Transferor or its servicer
or agent may be required to retain pursuant to the program under which the
Loan was originated,




     (4) if applicable, payment history (or similar documentation) including
(i) an indication of the Principal Balance and the date through which
interest has been paid, each as of the Cutoff Date and (ii) an accounting of
the allocation of all payments by borrower or on borrower’s behalf to
principal and interest on the Student Loan,




     (5) if applicable, documentation which supports periods of current or
past deferment or past forbearance,




     (6) if applicable, a collection history, if the Student Loan was ever
in a delinquent status, including detailed summaries of contacts and
including the addresses or telephone numbers used in contacting or
attempting to contact borrower and any endorser,




     (7) if applicable, evidence of all requests for skip-tracing assistance
and current address of borrower, if located,




     (8) if applicable, evidence of requests for pre-claims assistance, if
any, and evidence that the borrower’s school(s) has/have been notified, and




     (9) if applicable, a record of any event resulting in a change to or
confirmation of any data in the Student Loan file;




     (viii) was originated and has been serviced in compliance with all requirements
of applicable law;



17









 






     (ix) is evidenced by a promissory note (whether e-signed or otherwise),
containing terms in accordance with those required by the applicable loan program
and other applicable requirements and which does not require the Obligor to consent
to the transfer, sale or assignment of the rights and duties of the applicable
Seller and does not contain any provision that restricts the ability of the
Administrative Agent, on behalf of the Secured Creditors, to exercise its rights
under the Transaction Documents;




     (x) is not a Defaulted Student Loan or, solely with respect to the conditions
precedent for Purchases set forth in Section 4.02, a Delinquent Student Loan;




     (xi) the Transferor has good and marketable title to such Student Loan free and
clear of any encumbrance, lien or security interest or any other prior commitment
other than as granted in favor of the Administrative Agent and the Secured Creditors
and in relation to which a participation can be granted therein and the other
interests and transfers contemplated herein with respect to such Student Loan will
be given full effect;




     (xii) has not been modified, extended or renegotiated in any way not provided
for in the Transaction Documents or under the applicable Underwriting Guidelines or
Servicing Policies;




     (xiii) constitutes a legal, valid and binding obligation to pay on the part of
the related Obligor enforceable in accordance with its terms and is not noted on the
appropriate Servicer’s books and records as being subject to a current bankruptcy
proceeding;




     (xiv) constitutes an instrument, account or a general intangible as defined in
the Uniform Commercial Code as in effect in the jurisdiction that governs the
perfection of the interests of Transferor therein and the perfection of the
Purchasers’ and Secured Creditors’ interest therein;




     (xv) the sale or assignment of which to the Transferor or the Eligible Lender
Trustee on its behalf pursuant to the Purchase Agreements, and the sale of a
Participation Interest therein to the Purchasers and granting of a security interest
therein to the Administrative Agent pursuant to this Agreement does not contravene
or conflict with any law or regulation, or require the consent or approval of, or
notice to, any Person;




     (xvi) that complies in all material respects with the guidelines of the Student
Loan Program under which it has been made and with all applicable Underwriting
Guidelines and Servicing Policies;




     (xvii) does not bear interest at a fixed rate per annum unless the Hedging
Counterparty has in effect a fixed rate to LIBOR hedge covering such rate under the
Hedging Agreement; and



18









 






     (xviii) if the Seller with respect to such Student Loan is a Holding SPE, such
Student Loan was acquired by such Holding SPE pursuant to a Holding SPE Sale
Agreement;


and (2) with respect to each Additional Student Loan, meets the criteria set forth in (1) above,
and meets the following criteria, in each case as of the date specified as the “sale date” in the
related Additional Bill of Sale:





     (i) the purchase price for such Additional Student Loan does not exceed the sum
of (A) the Applicable Percentage applicable to such Additional Student Loan times
the Principal Balance of such Additional Student Loan and (B) any related increase
in the value of the Membership Interests or the amount drawn under the Revolving
Credit Agreement to fund such purchase and (y) the aggregate purchase price
(including any related increase in the value of the Membership Interests or any
amount drawn under the Revolving Credit Agreement) is reasonably equal to the fair
market value thereof; and




     (ii) the purchase of such Additional Student Loan is not reasonably likely to
result in the imposition of a Termination Event or increase any Excess Concentration
Amounts.



     “Eligible Student Loan ABS” means (a) any publicly issued Student Loan ABS rated “A” or better
by S&P and “A2” or better by Moody’s and, if rated by Fitch, rated the equivalent by Fitch or (b)
any other Student Loan ABS issued by a trust sponsored by an affiliate of SLM Corporation consented
to by the Managing Agents with respect to which the Rating Agency Condition is satisfied which
meets the following criteria:




     (i) is a U.S. Dollar denominated obligation payable in the United States;




     (ii) was created in compliance with all requirements of applicable law;




     (iii) is evidenced by a security which does not require consent or registration
for its transfer, sale or assignment and does not contain any provision that
restricts the ability of the Administrative Agent, on behalf of the Secured
Creditors, to exercise its rights under the Transaction Documents;




     (iv) is not a Defaulted Student Loan ABS;




     (v) the Transferor has good and marketable title to the security free and clear
of any encumbrance, lien or security interest or any other prior commitment other
than as granted in favor of the Administrative Agent and the Secured Creditors, and
in relation to which a participation can be granted therein and the other interests
and transfers contemplated herein with respect to such Student Loan ABS will be
given full effect;



19









 






     (vi) constitutes a legal, valid and binding obligation to pay on the part of
the related issuer, enforceable in accordance with its terms, and with respect to
which the related issuer is not subject to a current bankruptcy proceeding;




     (vii) the purchase of such Student Loan ABS is not reasonably likely to result
in the imposition of a Termination Event or increase any Excess Concentration
Amounts;




     (viii) if the Seller with respect to such Student Loan ABS is a Holding SPE,
such Student Loan ABS was acquired by such Holding SPE pursuant to a Holding SPE
Sale Agreement; and




     (ix) with respect to each Additional Student Loan ABS, as of the date specified
as the “sale date” in the related Additional Bill of Sale, the purchase price for
such Additional Student Loan ABS does not exceed the sum of (A) the Applicable
Percentage applicable to such Additional Student Loan ABS times the Principal
Balance of such Additional Student Loan ABS and (B) any related increase in the
value of the Membership Interests or the amount drawn under the Revolving Credit
Agreement to fund such purchase and (y) the aggregate purchase price (including any
related increase in the value of the Membership Interests or any amount drawn under
the Revolving Credit Agreement) is reasonably equal to the fair market value
thereof.



     “ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.



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



     “Eurodollar Reserve Percentage” means, for any day during any period, the reserve percentage
(expressed as a decimal, rounded upward to the next 1/100th of 1%) in effect on such day, whether
or not applicable to any Purchaser, under regulations issued from time to time by the Board of
Governors of the Federal Reserve System for determining the maximum reserve requirement (including
any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as “eurocurrency liabilities”). The LIBOR Rate shall be adjusted
automatically as of the effective date of any change in the Eurodollar Reserve Percentage.



     “Event of Bankruptcy” means, with respect to a specified Person, (a) the filing of a decree or
order for relief by a court having jurisdiction in the premises in respect of such Person or any
substantial part of its property in an involuntary case under any applicable Federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for
any



20









 




substantial part of its property, or ordering the winding-up or liquidation of such Person’s
affairs, which decree or order remains unstayed and in effect for a period of 60 consecutive days;
or (b) the commencement by such Person of a voluntary case under any applicable Federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such
Person to the entry of an order for relief in an involuntary case under any such law, or the
consent by such Person to the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its debts as such debts become
due, or the taking of action by such Person in furtherance of any of the foregoing.




     “Excess Capital Purchase” means a Purchase made from the Transferor based on the value of
existing Participated Loans, Participated Student Loan ABS, and other Pledged Collateral.



     “Excess Concentration Amount”, as of any date, has the meaning assigned in the Side Letter
executed by the Transferor, the Administrator, the Administrative Agent and the Managing Agents as
of the Closing Date, as the same may be amended, restated, supplemented or otherwise modified from
time to time.



     “Excluded Taxes” has the meaning assigned in Section 2.20(a).



     “Expiry Date” means the specified expiry date of each Purchase, which, unless otherwise
extended by mutual agreement between the Managing Agents and the Transferor, shall be the last
Business Day of its respective Tranche Period or, if the Yield Rate for such Purchase is determined
based on the Base Rate, shall be the first Settlement Date after such Purchase is made.



     “Facility Group” means each of (a) the Bank of America Facility Group and (b) the JPMorgan
Facility Group.



     “Fair Market Auction” means (i) a commercially reasonable sale of Transferor Student Loans or
Transferor Student Loan ABS pursuant to an arms-length auction process with respect to which (a)
bids have been solicited from two or more potential bidders including at least two bidders that are
not Affiliates of SLM Corporation, (b) at least one bid is received from a bidder that is not an
Affiliate of SLM Corporation and (c) if an Affiliate of SLM Corporation submits the winning bid,
such bid is in an amount reasonably equal to the fair market value of the Transferor Student Loans
or Transferor Student Loan ABS being sold or (ii) with respect to Transferor Student Loan ABS, a
sale of any such Transferor Student Loan ABS to an unaffiliated third party at a price equal to or
greater than the Market Value of such Transferor Student Loan ABS.



     “Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the



21









 




Federal Funds Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to the Administrative Agent on such day on such transactions as determined by
it.




     “Federal Reimbursement Contracts” means any agreement between any Guarantor and the Department
of Education providing for the payment by the Department of Education of amounts authorized to be
paid pursuant to the Higher Education Act, including but not necessarily limited to reimbursement
of amounts paid or payable upon defaulted student loans Guaranteed by such Guarantor to holders of
qualifying student loans Guaranteed by any Guarantor.



     “FFELP Loan” means a Consolidation Loan, a PLUS Loan, a SLS Loan or a Stafford Loan.



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



     “FICO Score” means a statistical credit score with respect to Obligors at or near the date the
related Student Loan was originated generated by models developed by Fair Isaac and Company based
on an Obligor’s historical credit data, including, among other things, payment history,
delinquencies on accounts, levels of outstanding indebtedness, length of credit history, types of
credit and bankruptcy experience.



     “Fitch” means Fitch, Inc., also known as Fitch Ratings (or its predecessor or successors in
interest).



     “Floor Income Rebate Account” means the floor income rebate account described in Section
2.04(g).



     “GAAP” means generally accepted accounting principles as in effect from time to time in the
United States of America.



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



     “Grant” or “Granted” means to pledge, create and grant a security interest in and with regard
to property. A Grant of Transferor Student Loans, Transferor Student Loan ABS other assets or of
any other agreement includes all rights, powers and options (but none of the obligations) of the
granting party thereunder.



22









 





     “Guarantee” or “Guaranteed” means, with respect to a FFELP Loan, the insurance or guarantee by
the applicable Guarantor, in accordance with the terms and conditions of the Guarantee Agreement,
of some or all of the principal of and accrued interest on such FFELP Loan and the coverage of the
FFELP Loan by the Federal Reimbursement Contracts providing, among other things, for reimbursement
to the Guarantor for losses incurred by it on defaulted FFELP Loans insured or guaranteed by the
Guarantor.



     “Guarantee Agreements” means the Federal Reimbursement Contracts, the Eligible Lender Trustee
Guarantee Agreements and any other guarantee or agreement issued by a Guarantor to the Eligible
Lender Trustee, which pertain to Student Loans, providing for the payment by the Guarantor of
amounts authorized to be paid pursuant to the Higher Education Act to holders of qualifying Student
Loans guaranteed in accordance with the Higher Education Act by such Guarantor.



     “Guarantor” means any entity listed on Exhibit R (as amended from time to time) to this
Agreement authorized to guarantee Student Loans under the Higher Education Act and with which the
Eligible Lender Trustee maintains in effect a Guarantee Agreement.



     “Hedge Contract” has the meaning assigned in the Hedging Agreement.



     “Hedging Agreement” means the Hedging Agreement, dated as of April 30, 2007, among the
Transferor, the Administrator and the Hedging Counterparty, including the related term sheets,
providing for certain payments to or by the Transferor, in the amounts and under the conditions set
forth therein, as the same may be amended, restated, supplemented or otherwise modified from time
to time.



     “Hedging Agreement Default” means a “Termination Event” as defined in Article VI of the
Hedging Agreement.



     “Hedging Counterparty” means SLM Corporation and its successors and permitted assignees, or
such other hedging counterparty to the Transferor that has been approved by the each of the
Managing Agents in writing.



     “Hedging Counterparty Fees” means the fees of the Hedging Counterparty as set forth in the
Hedging Agreement.



     “Hedging Interest” means interest payable to the Hedging Counterparty by the Transferor
pursuant to the Hedging Agreement.



     “Higher Education Act” means the Higher Education Act of 1965, as amended or supplemented from
time to time, and all regulations and guidelines promulgated thereunder.



     “Holding SPE” means an indirect wholly-owned subsidiary of SLM Corporation (other than Mustang
Funding I, LLC) that (a) is a bankruptcy-remote special purpose corporation, limited liability
company or statutory trust formed and operated solely for the purpose of purchasing and selling
Student Loans and Student Loan ABS, (b) is organized pursuant to organizational documents similar
to those of SLM Funding LLC, (c) is operated at all times consistently with such organizational
documents and the separateness covenants and governance



23









 




restrictions set forth in Section 6.01 (as if such covenants and restrictions referred to such
Holding SPE rather than the Transferor) and (d) has no intercompany debt other than normal trade
payables and a revolving credit agreement with SLM Corporation.




     “Holding SPE Purchase Agreement” means a Purchase Agreement entered into between a Holding
SPE, as the seller, and Mustang Funding I, LLC, as the purchaser, in the form attached hereto as
Exhibit Q-1.



     “Holding SPE Sale Agreement” means a Sale Agreement entered into between a Holding SPE, as the
purchaser, and Mustang Funding I, LLC, as the seller, in the form attached hereto as Exhibit Q-2.



     “Indemnified Amounts” has the meaning assigned to that term in Article VIII, and shall
also include amounts due to the Valuation Agent pursuant to Article V of the Valuation Agent
Agreement.



     “Indemnity Agreement” means the Indemnity Agreement entered into by SLM Corporation, the
Transferor and the Administrative Agent dated as of April 30, 2007.



     “Independent Manager” means an individual who, for the three-year period prior to his or her
appointment as Independent Manager has not been, and is not at the time of such appointment or
during the continuation of his or her service as Independent Manager, any of the following: (i) an
employee, director, stockholder, member, partner, attorney or counsel, or officer of the SLM Corp.,
any Seller or any of their Affiliates (other than as an Independent Manager of the Transferor);
(ii) is not a customer or supplier or creditor or other person who derives any of its purchases or
revenues from its activities with SLM Corp., any Seller, or any of their Affiliates; or (iii) any
member of the immediate family of or Person controlling or under common control with any person
excluded from serving as Independent Manager in (i) or (ii). As used in this definition, the term
“control” means the possession, directly or indirectly, of the power of the manager to cause the
direction of management, policies, or activities of a Person, whether through ownership of voting
securities, by contract or otherwise. A natural person who satisfies the foregoing definition other
than in part (ii) above shall not be disqualified from serving as Independent Manager of the
Transferor if such individual is an independent director provided by a nationally recognized
company that provides professional independent directors and it also provides other corporate
services in the ordinary course of its business. A natural person who otherwise satisfies the
foregoing definition except for being the independent director of a “special purpose entity”
affiliated with SLM Corp. that does not own a direct or indirect equity interest in SLM Corp., any
Affiliate or any co-borrower shall not be disqualified from serving as an Independent Manager of
the Transferor if such individual is at the time of the initial appointment, or at any time while
serving as an Independent Manager of the Transferor, an independent manager or director of a
“special purpose entity” affiliated with the Transferor (other than any entity that owns a direct
or indirect interest in the Transferor or in any co-borrower) if such individual is an independent
manager or director provided by a nationally-recognized company that provides professional
independent directors or managers. For purposes of this paragraph, a “special purpose entity” is an
entity, whose organizational documents contain restrictions on its activities and impose
requirements intended to preserve that entity’s separateness that are substantially similar to
those of the Transferor or SLM Funding LLC, as



24









 




applicable, and provide, inter alia, that it: (a) is organized for the limited purpose of
owning and operating one or more trusts or of being the general partner or member of a special
purpose entity organized for the limited purpose of owning and operating one or more trusts; (b)
has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge
and/or sell assets; (c) may not file voluntarily a bankruptcy petition either on its own behalf or,
if it is a general partner or a member of a special purpose entity organized for the limited
purpose of owning or operating one or more trusts, on behalf of such entity, without the consent of
an independent manager or director and (d) shall conduct itself and, if it is a general partner or
member of a special purpose entity organized for the limited purpose of owning and operating one or
more trusts, cause such entity to conduct itself, in accordance with the certain “separateness
covenants”, including, but not limited to, the maintenance of its books, records, bank accounts and
assets separate from those of any other person or entity.




     “Initial Cutoff Date” has the meaning assigned in the Purchase Agreement.



     “Interest Component” means, at any time of determination with respect to a Conduit Purchaser
and any particular period of determination, the aggregate Yield accrued and to accrue through the
next Settlement Date for that portion of such Conduit Purchaser’s outstanding Participation
Interests accruing interest calculated by reference to the CP Rate at such time (determined by the
applicable Managing Agent in its discretion, which may be based upon the CP Rate most recently
determined by the applicable Managing Agent, multiplied by 1.5).



     “Interest Reserve Subaccount” means a subaccount established within the Collection Account
pursuant to Section 2.04.



     “Interest Subsidy Payments” means the interest subsidy payments on certain Student Loans
authorized to be made by the Department of Education pursuant to the Higher Education Act or
similar payments authorized by federal law or regulations.



     “Investment Deficit” has the meaning assigned in Section 2.01(d).



     “ISP/SAP Liquidity Loan” means a Liquidity Loan made under clause (B) of Section 2.1(a) of the
Liquidity Advance Agreement.



     “JPMorgan Alternate Purchaser” means JPMorgan Chase Bank, N.A., a national banking
association, each Person who accepts an assignment of JPMorgan Chase Bank, N.A.’s rights and
obligations hereunder pursuant to Section 10.04, and the successors and assigns of any of
them. The JPMorgan Alternate Purchaser may include one or more Persons following an assignment
pursuant to Section 10.04, and if more than one Person, each Person who is an JPMorgan
Alternate Purchaser will have the rights and obligations with respect to Participation Interests in
the respective percentages specified in the agreement(s) governing such assignment(s).



     “JPMorgan Conduit Purchasers” means Chariot Funding LLC, Falcon Asset Securitization Company
LLC, Jupiter Securitization Company LLC and Park Avenue Receivables Company, LLC, each a Delaware
limited liability company, and their successors and assigns.



25









 





     “JPMorgan Facility Group” means the JPMorgan Conduit Purchasers, the JPMorgan Managing Agent,
the JPMorgan Alternate Purchasers and each JPMorgan Program Support Provider.



     “JPMorgan Managing Agent” means JPMorgan Chase Bank, N.A., a national banking association, and
its successors and assigns.



     “JPMorgan Program Support Provider” means any Program Support Provider which is a party to a
Program Support Agreement with (or benefiting) the JPMorgan Managing Agent, the JPMorgan Conduit
Purchasers and/or the JPMorgan Alternate Purchaser.



     “Liabilities” means the sum of (a) the Aggregate Capital, (b) all accrued and unpaid Purchaser
Costs applicable thereto to the extent not included in the Aggregate Capital, (c) any accrued and
unpaid fees, including Servicing Fees, Hedging Counterparty Fees, Liquidity Lender Fees, Eligible
Lender Trustee Fees and any other fees or payment obligations payable by the Transferor pursuant to
the Transaction Documents, (d) any outstanding Servicer Advances and (e) any payment obligations of
the Transferor under the Hedging Agreement.



     “LIBOR Purchase” means a Purchase funded with reference to the LIBOR Rate.



     “LIBOR Base Rate” means, for any period:




     (a) the rate per annum (carried out to the fifth decimal place) equal to the rate
determined by the Administrative Agent to be the offered rate that appears on the page of
the Reuters Screen that displays an average British Bankers Association Interest Settlement
Rate (such page currently being LIBOR01) for deposits in United States dollars (for delivery
on the first day of such period) with a term equivalent to such period, determined as of
approximately 11:00 a.m. (London time) two Business Days prior to the first day of such
period, or




     (b) in the event the rate referenced in the preceding subsection (a) does not appear on
such page or service or such page or service shall cease to be available, the rate per annum
(carried to the fifth decimal place) equal to the rate determined by the Administrative
Agent to be the offered rate on such other page or other service that displays an average
British Bankers Association Interest Settlement Rate for deposits in United States dollars
(for delivery on the first day of such period) with a term equivalent to such period,
determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such period, or




     (c) in the event the rates referenced in the preceding subsections (a) and (b) are not
available, the rate per annum determined by the Administrative Agent as the rate of interest
at which Dollar deposits (for delivery on the first day of such period) in same day funds in
the approximate amount of the applicable investment to be funded by reference to the LIBOR
Rate and with a term equivalent to such period would be offered by its London Branch to
major banks in the offshore dollar market at their request at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such period.



26









 





     “LIBOR Rate” means for any period, a rate per annum determined by the Administrative Agent
pursuant to the following formula:



	 	 	 	 	 	 	 
	 

	 	LIBOR Rate
	 	=
	 	LIBOR Base Rate
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	1.00 — Eurodollar Reserve Percentage






     “Liquidated Student Loan” means any defaulted Transferor Student Loan liquidated by the
Servicer (which shall not include any Transferor Student Loan on which Guarantee Payments are
received) or which the Servicer has, after using all reasonable efforts to realize upon such
Transferor Student Loan, determined to charge off.



     “Liquidation Period” means the period commencing on the Termination Date and ending (a) on the
date all of the Capital with respect to the Participation Interests shall have been reduced to zero
and all Purchaser Costs and other Obligations under the Transaction Documents are paid in full or
(b) with regard to a Termination Date caused solely by the occurrence of a Program Support Provider
Termination Event with respect to some but not all of the Conduit Purchasers, on the date all of
the Capital with respect to the Participation Interests of such Conduit Purchaser have been reduced
to zero and all Purchaser Costs and other Obligations under the Transaction Documents are paid in
full; provided, however, that any Liquidation Period described in clause (b) above
will cease upon the occurrence of a Potential Termination Event or Termination Event.



     “Liquidation Proceeds” means, with respect to any Liquidated Student Loan which became a
Liquidated Student Loan during the current Settlement Period in accordance with the Servicer’s
customary servicing procedures, the moneys collected in respect of the liquidation thereof from
whatever source, other than Recoveries, net of the sum of any amounts expended by the Servicer in
connection with such liquidation and any amounts required by law to be remitted to the Obligor on
such Liquidated Student Loan.



     “Liquidity Advance Agreement” means the Liquidity Advance Agreement, dated as of April 30,
2007, among the Transferor, the Administrator and the Liquidity Lender, as the same may be amended,
restated, supplemented or otherwise modified from time to time.



     “Liquidity Advance Agreement Default” means a Liquidity Lender Termination Event as defined in
the Liquidity Advance Agreement.



     “Liquidity Lender” means SLM Corporation and its successors and permitted assignees.



     “Liquidity Lender Fees” means the fees of the Liquidity Lender as set forth in the Liquidity
Advance Agreement.



     “Liquidity Loan” means a loan made to the Transferor by the Liquidity Lender pursuant to the
Liquidity Advance Agreement.



     “Lockbox Bank” means a bank that maintains a lockbox to which a Subservicer deposits
Collections.



27









 





     “Lockbox Bank Fees” means fees, reasonable expenses and charges of a Lockbox Bank as may be
agreed to in writing by the Administrator and the Lockbox Bank.



     “Managing Agent” means each of the Bank of America Managing Agent and the JPMorgan Managing
Agent and any successors or assigns.



     “Market Value” means the market value of a Transferor Student Loan ABS as determined on any
Valuation Date pursuant to the Valuation Agent Agreement.



     “Master Servicer” means Sallie Mae, Inc., a Delaware corporation, and its successors and
permitted assigns.



     “Material Adverse Effect” means a material adverse effect on:




     (a) with respect to the Transferor, the status, existence, perfection, priority or
enforceability of any Participation Interest or the Administrative Agent’s interest in the
Pledged Collateral or the ability of the Transferor to perform its obligations under this
Agreement or any other Transaction Document or




     (b) with respect to any other Person, the ability of the applicable Person to perform
its obligations under this Agreement or any other Transaction Document.




     For the avoidance of doubt, a withdrawal of or downgrade to the credit ratings of any
Person, in and of itself, shall not be deemed to have a Material Adverse Effect on such
Person.



     “Material Subservicer” means a Subservicer which, as of any date of determination, is
servicing Transferor Student Loans having an aggregate outstanding Principal Balance in excess of
15% of the total aggregate outstanding Principal Balance of all Transferor Student Loans, as of
such date.



     “Maximum Aggregate Purchase Amount” means, at any time, $15,000,000,000, as such amount may be
adjusted from time to time pursuant to Section 2.03.



     “Maximum Purchase Amount” means, (i) for an Eligible Loan, an amount equal to the Applicable
Percentage multiplied by the aggregate outstanding Principal Balance of such Eligible Loan;
provided, however, that if the Private Credit Loan Default Ratio exceeds 2.25% as
of the date of the most recent Monthly Report, then the Maximum Purchase Amount with respect to
Private Credit Loans shall be the greater of (y) the amount, if any, agreed to by the Transferor
and the Managing Agents (so long as the Rating Agency Condition has been satisfied) and (z) zero;
(ii) for an Eligible Student Loan ABS rated by Moody’s and S&P, an amount equal to the product of
(a) the Market Value, as of the most recent Valuation Date, and (b) the Applicable Percentage
(determined as of the date of the Purchase); (iii) for an Eligible Student Loan ABS not rated by
Moody’s and S&P, the amount agreed to by the Transferor and the Managing Agents; and (iv) for a
Purchase Price Purchase, the sum of the Maximum Purchase Amounts determined pursuant to clauses (i)
through (iii) above for each Eligible Loan and Eligible Student Loan ABS related to such Purchase.



28









 





     “Membership Interests” means the membership interests in the Transferor, as more fully
described in the Transferor’s organizational documents.



     “Merger Agreement” means the Agreement and Plan of Merger dated as of April 15, 2007 among SLM
Corporation, Mustang Holding Company Inc. and Mustang Merger Sub, Inc., as the same may be amended
or modified from time to time.



     “Minimum Asset Coverage Requirement” means an Asset Coverage Ratio of greater than or equal to
100%.



     “Minimum Margin” means, for any Private Credit Loan that does not bear interest at a fixed
rate, a margin above the prime rate by which the interest rate on such Private Credit Loan adjusts,
and for any Private Credit Loan that bears interest at a fixed rate, a margin above the prime rate
that is payable pursuant to a Hedge Contract covering such rate, in each case as determined by the
following grid based upon the applicable Private Credit Loan program, the FICO Score of the related
Obligor and whether such Private Credit Loan is cosigned:



Signature, Law, MBA, MED & Private Consolidation Loans




	 	 	 	 	 	 	 	 	 
	 	 	Minimum Margin (bps) to Prime Rate
	FICO Bands	 	Non-cosigned	 	Cosigned
	< 640
	 	 	600.0	 	 	 	600.0	 
	640 — 659
	 	 	500.0	 	 	 	425.0	 
	660 — 679
	 	 	275.0	 	 	 	225.0	 
	680 — 699
	 	 	150.0	 	 	 	100.0	 
	700 — 739
	 	 	50.0	 	 	 	0.0	 
	> 740
	 	 	0.0	 	 	 	-50.0	 






Tuition Answer




	 	 	 	 	 	 	 	 	 
	 	 	Minimum Margin (bps) to Prime Rate
	FICO Bands	 	Non-cosigned	 	Cosigned
	< 640
	 	 	650.0	 	 	 	600.0	 
	640 — 659
	 	 	550.0	 	 	 	500.0	 
	660 — 679
	 	 	325.0	 	 	 	275.0	 
	680 — 699
	 	 	200.0	 	 	 	150.0	 
	700 — 739
	 	 	100.0	 	 	 	75.0	 
	> 740
	 	 	50.0	 	 	 	50.0	 






     With respect to the Minimum Margins as set forth in the charts above, if a Student Loan has
more than one Obligor, the highest FICO Score with respect to all Obligors shall be used for such
determination. If no Obligor has a FICO Score, the Student Loan shall be allocated to the 660-679
FICO Band.



     “Monthly Administrative Agent’s Report” means the report to be delivered by the Administrative
Agent pursuant to Section 2.05(a).



     “Monthly Rebate Fee” means the monthly rebate fee payable to the Department of Education on
the Transferor Student Loans which are Consolidation Loans.



     “Monthly Report” means a report, in substantially the form of Exhibit C hereto, prepared by
the Administrator and furnished to the Administrative Agent and the Eligible Lender Trustee.



     “Moody’s” means Moody’s Investors Service, Inc. (or its predecessor or successors in
interest).



29









 





     “Multiemployer Plan” means a ”multiemployer plan” as defined in Section 4001(a)(3) of ERISA
which is or was at any time during the current year or the immediately preceding five years
contributed to by the Transferor or any ERISA Affiliate on behalf of its employees.



     “New York UCC” has the meaning assigned in Section 2.08 (b).



     “Non-Defaulting Purchaser” has the meaning assigned in Section 2.01(d).



     “Non-Excluded Taxes” has the meaning assigned in Section 2.20(a).



     “Non-U.S. Purchaser” has the meaning assigned in Section 2.20(d).



     “Non-Use Fee” means, with respect to each Facility Group, a non-use fee, payable monthly to
the Managing Agents, for the account of their respective Facility Groups, as set forth in the fee
letter among the Transferor and each of the Managing Agents dated as of the Closing Date, as such
fee letter may be amended, restated, supplemented or otherwise modified from time to time.



     “Notice of Release” has the meaning assigned in Section 2.18.



     “Obligations” means the Capital and all other Liabilities and all present and future
liabilities and obligations (howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, or due or to become due) of the Transferor to the Administrative Agent and
the Secured Creditors, arising under or in connection with this Agreement or any other Transaction
Document or the transactions contemplated hereby or thereby and shall include, without limitation,
all liability for Capital of Outstanding Participation Interests and Purchaser Costs on the
Participation Interests, closing fees, unused line fees, audit fees, expense reimbursements,
indemnifications, and other amounts due or to become due under the Transaction Documents,
including, without limitation, interest, fees and other obligations that accrue after the
commencement of an insolvency proceeding (in each case whether or not allowed as a claim in such
insolvency proceeding).



     “Obligor” means the borrower or co-borrower or any other Person obligated to make payments
with respect to a Student Loan or Student Loan ABS.



     “Official Body” means any government or political subdivision or any agency, authority,
bureau, central bank, commission, department or instrumentality of any such government or political
subdivision, or any court, tribunal, grand jury or arbitrator, or any accounting board or authority
(whether or not a part of government) which is responsible for the establishment or interpretation
of national or international accounting principles, in each case whether foreign or domestic.



     “Opinion of Counsel” means an opinion in writing of outside legal counsel, who may be counsel
or special counsel to the Transferor, any Affiliate of the Transferor, the Eligible Lender Trustee,
the Administrator, the Administrative Agent, any Managing Agent or any Purchaser.



     “Other Applicable Taxes” has the meaning assigned in Section 2.13.



30









 





     “Other Taxes” has the meaning assigned in Section 2.20(b).



     “Outstanding” means, when used with respect to Participation Interests in existence at such
time, as of the date of determination, all Participation Interests in existence at such time under
this Agreement.



     “Participated Loans” means any Student Loans acquired by the Transferor with proceeds of
Purchases under this Agreement that were purchased by the Transferor (or the Eligible Lender
Trustee on behalf of the Transferor) from a Seller (or an eligible lender trustee on behalf of the
Seller) pursuant to a Purchase Agreement.



     “Participated Student Loan ABS” means any Student Loan ABS acquired by the Transferor with
proceeds of Purchases under this Agreement that were purchased by the Transferor (or the Eligible
Lender Trustee on behalf of the Transferor) from a Seller (or an eligible lender trustee on behalf
of the Seller) pursuant to a Purchase Agreement.



     “Participation Interest” means, (a) in respect of all Purchasers in the aggregate, at all
times during the period from the date of the initial Purchase hereunder until the date the
Aggregate Capital shall be reduced to zero, all Commitments shall be terminated and all Obligations
shall be indefeasibly paid in full, a 100% undivided participation interest in (i) all Transferor
Student Loans and all Transferor Student Loan ABS then existing, (ii) all instruments, documents
and agreements evidencing or supporting the payment obligations of any Obligor or Guarantor under
or in connection therewith, together with any and all rights and remedies in respect thereof
whether arising under contract, at law or in equity, and (iii) all Collections thereon and other
proceeds of any of the foregoing; (b) in respect of any Purchaser, its pro rata share of such
undivided participation interest as determined on the basis that its Capital represents of the
aggregate Capital of all Purchasers then outstanding; and (c) with respect to any Transferor
Student Loan or Transferor Student Loan ABS, a 100% unlimited participation interest in such
Transfer Student Loan or Transferor Student Loan ABS.



     “Participation Purchase” means the purchase of Participation Interests in Transferor Student
Loans and Transferor Student Loan ABS under this Agreement.



     “Permitted Lockbox” means a lockbox arrangement with a Lockbox Bank approved by the
Administrative Agent with respect to which Collections from Obligors whose Student Loans are
serviced by a Subservicer are sent to lockboxes and forwarded by the applicable Lockbox Bank to the
Collection Account (or if one has been established by the Transferor, the Clearing Account) within
two Business Days.



     “Permitted Release” means a release of Pledged Collateral in connection with (a) a Take Out
Securitization; (b) a Fair Market Auction; (c) a Permitted SPE Transfer; (d) a Permitted Seller
Buy-Back; or (e) any other transfer of Pledged Collateral with respect to which the Administrative
Agent has received a Required Legal Opinion.



     “Permitted Seller Buy-Back” means an arms-length transfer of Pledged Collateral by the
Transferor to the applicable Seller (other than a Holding SPE) so long as the aggregate original
principal amount of permitted Seller Buy-Backs for any Seller does not exceed ten percent of (a)



31









 




the aggregate principal amount of all Student Loans sold by such Seller to the Transferor and
(b) the aggregate principal amount of all Student Loan ABS sold by such Seller to the Transferor.




     “Permitted SPE Transfer” means an arms-length transfer of Pledged Collateral by the Transferor
to a Holding SPE pursuant to a Holding SPE Sale Agreement.



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



     “Pledged Collateral” has the meaning specified in Section 2.10.



     “PLUS Loan” means a student loan originated under the authority set forth in Section 428A or B
(or a predecessor section thereto) of the Higher Education Act and shall include student loans
designated as "PLUS Loans” as defined under the Higher Education Act (including, without
limitation, such student loans to a graduate or professional student or a parent of a dependent
student).



     “Pool Balance” means, as of any date of determination, the Student Loan Pool Balance plus the
aggregate Market Value of the Transferor Student Loan ABS.



     “Potential Termination Event” means an event which but for the lapse of time or the giving of
notice, or both, would constitute a Termination Event.



     “Primary Servicing Fee” for any Settlement Date has the meaning specified in Attachment A to
the Servicing Agreement, and shall include any such fees from prior Settlement Dates that remain
unpaid.



     “Prime Rate” means, for any day, a fluctuating rate per annum equal to the higher of (a) the
Federal Funds Rate for such day, plus 1.50% and (b) the rate of interest in effect for such day as
publicly announced from time to time by the Administrative Agent as its "prime rate". The “prime
rate” is a rate set by the Administrative Agent based upon various factors including the
Administrative Agent’s costs and desired return, general economic conditions and other factors, and
is used as a reference point for pricing some loans, which may be priced at, above, or below such
announced rate. Any change in the prime rate announced by the Administrative Agent shall take
effect at the opening of business on the day specified in the public announcement of such change.



     “Principal Balance” means, with respect to any Student Loan or Student Loan ABS and any
specified date, the outstanding principal amount of such Student Loan or Student Loan ABS, plus
unpaid interest thereon to be capitalized.



     “Private Credit Loan” means an education loan made to a student or parent of a dependent
student that is not a FFELP Loan.



     “Private Credit Loan Default Ratio” means, as of any date of determination, the ratio,
measured on an annualized basis, equal to the average of each of the previous twelve months of
“Gross Private Credit Student Loan Charge-Offs” divided by the “Average Managed Private



32









 




Credit Student Loans Outstanding,” for SLM Corporation on a managed basis, each as reported by
the Administrator and calculated in a consistent manner with the methodologies used by SLM
Corporation for calculating “Gross Private Credit Student Loan Charge-Offs” and “Average Managed
Private Credit Student Loans Outstanding” for purposes of its Form 10-K or Form 10-Q.




     “Program Support Agreement”, with respect to any Conduit Purchaser, means and includes any
agreement entered into by any Program Support Provider providing for the issuance of one or more
letters of credit for the account of such Conduit Purchaser (or any related commercial paper issuer
that finances the Conduit Purchaser), the issuance of one or more surety bonds for which such
Conduit Purchaser or such related issuer is obligated to reimburse the applicable Program Support
Provider for any drawings thereunder, the sale by the Conduit Purchaser or such related issuer to
any Program Support Provider of any interest in a Purchase (or portions thereof or participations
therein) and/or the making of loans and/or other extensions of liquidity or credit to the Conduit
Purchaser or such related issuer in connection with its commercial paper program, together with any
letter of credit, surety bond or other instrument issued thereunder.



     “Program Support Provider” means and includes any Person now or hereafter extending liquidity
or credit or having a commitment to extend liquidity or credit to or for the account of, or to make
purchases from, a Conduit Purchaser (or any related commercial paper issuer that finances the
Conduit Purchaser) in support of commercial paper issued, directly or indirectly, by such Conduit
Purchaser in order to fund Purchases made by such Conduit Purchaser hereunder or issuing a letter
of credit, surety bond or other instrument to support any obligations arising under or in
connection with the Conduit Purchaser’s or such related issuer’s commercial paper program, but only
to the extent that such letter of credit, surety bond, or other instrument supported either CP
issued to make Purchases hereunder or was dedicated to that Program Support Provider’s support of
the Conduit Purchaser as a whole rather than one particular issuer (other than the Transferor)
within such Conduit Purchaser’s commercial paper program.



     “Proprietary Institution” means a for-profit vocational school.



     “Proprietary Loan” means a loan made to or for the benefit of a student attending a
Proprietary Institution provided however that if a Student Loan that was initially a Proprietary
Loan is consolidated, that Student Loan shall no longer be a Proprietary Loan.



     “Pro Rata Share” means (a) with respect to the initial Participation Purchase and any
particular Facility Group, a fraction (expressed as a percentage) the numerator of which is the
Commitment of the Facility Group and the denominator of which is the Maximum Aggregate Purchase
Amount; (b) with respect to any Purchase by a Facility Group collectively or any Alternate
Purchaser individually, as the context requires, at any time, its Pro Rata Share set forth on
Exhibit P hereto as such Exhibit P may be amended, restated or otherwise revised from time to time;
and (c) with respect to any repayment of Purchases with respect to any Purchaser, a fraction
(expressed as a percentage) the numerator of which is the Capital of such Purchaser, and the
denominator of which is the Aggregate Capital.



     “Purchase” has the meaning specified in Section 2.01.



33









 





     “Purchase Account” has the meaning specified in Section 2.11.



     “Purchase Date” means, with respect to any Purchase, the date on which such Purchase is made.



     “Purchase Price Purchase” means a Purchase made to fund the purchase by the Transferor of
Eligible Loans or Eligible Student Loan ABS.



     “Purchase Reconciliation Statement” has the meaning assigned in Section 4.03.



     “Purchaser Costs” means an amount equal to the sum (without duplication) of the following: the
accrued Yield applicable to the Participation Interests for the preceding Yield Period; the Non-Use
Fee; the Used Fee; Hedging Interest; any past due Yield payable on the Participation Interests;
interest on any related loans or other disbursements payable by the Purchasers as a result of
unreimbursed draws on or under a Program Support Agreement supporting the Participation Interests;
and, with respect to the Participation Interests, increased costs of the Affected Parties resulting
from Yield Protection, if any.



     “Purchasers” means, collectively, the Conduit Purchasers and the Alternate Purchasers.



     “Qualified Institution” means the Administrative Agent or, with the written consent of the
Administrative Agent and the Transferor (or the Administrator on behalf of the Transferor), any
bank or trust company which has (a) a long-term unsecured debt rating of at least “A2” by Moody’s
and at least “A” by S&P and (b) a short-term rating of at least “P-1” by Moody’s and at least “A-1”
by S&P.



     “Rating Agency” means Moody’s, S&P and Fitch. If any such organization or successor thereto is
no longer in existence, “Rating Agency” with respect to such organization shall be a nationally
recognized statistical rating organization or other comparable Person which, as applicable,
provides ratings for the Student Loan ABS or which is designated by the Administrative Agent as
rating the commercial paper issued by or on behalf of any Conduit Purchaser.



     “Rating Agency Condition” means, with respect to a particular amendment to, change in or
condition in the Transaction Documents, that each Rating Agency rating the CP of any Conduit
Purchaser shall have provided a statement in writing that such amendment or change will not result
in a withdrawal or reduction of the ratings of such CP.



     “Records” means all documents, books, records, Student Loan Notes, Student Loan ABS
Certificates and other information (including without limitation, computer programs, tapes, disks,
punch cards, data processing software and related property and rights) maintained with respect to
Transferor Student Loans, Transferor Student Loan ABS or otherwise in respect of the Pledged
Collateral.



     “Recoveries” means moneys collected from whatever source with respect to any Liquidated
Student Loan which was written off in prior Settlement Periods or during the current Settlement
Period, net of the sum of any amounts expended by the Servicer for the account of any Obligor and
any amounts required by law to be remitted to any Obligor.



34









 





     “Register” means that register maintained by the Administrative Agent, pursuant to Section
10.04(i), on which it will record the Purchasers’ rights hereunder, and each assignment and
acceptance and participation.



     “Regulatory Change” means, relative to any Affected Party:




     (a) after the date of this Agreement, any change in or the adoption or implementation
of, any new (or any new interpretation or administration of any existing):




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




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




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




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



     “Release Proceeds Account” means the account of the Administrative Agent established to hold
proceeds of Released Interests and repurchase amounts pursuant to Section 2.04(d).



     “Release Reconciliation Statement” has the meaning assigned in Section 2.18.



     “Released Interests” means any Participation Interests and Pledged Collateral released
pursuant to Section 2.19.



     “Reported Liabilities” means, as of any date, the Liabilities of the Transferor reported to
the Transferor (or to the Administrator on behalf of the Transferor) or with respect to which the
Transferor (or the Administrator on behalf of the Transferor) has actual knowledge.



     “Reporting Date” means the twentieth (20th) day of each calendar month, beginning
May 20, 2007 or, if such day is not a Business Day, the following Business Day.



     “Requested Purchase Amount” means the amount of the Purchase that is requested by the
Transferor, not to exceed the Maximum Purchase Amount.



     “Required Legal Opinion” means an opinion of McKee Nelson LLP or such other outside counsel to
the Transferor reasonably acceptable to the Administrative Agent, with



35









 




respect to the true sale of Transferor Student Loans or Transferor Student Loan ABS and the
non-consolidation of Mustang Funding I, LLC with SLM Corporation or its Affiliates that (a)
describes the facts of the proposed transaction and (b) contains conclusions reasonably determined
by the Administrative Agent to be in form and substance similar to the conclusions contained in the
legal opinions previously delivered and accepted by the Administrative Agent in connection with the
Transaction Documents.




     “Required Managing Agents” means, subject to Section 2.01(d), at any time Managing
Agents representing Facility Groups then holding greater than 50% of the outstanding aggregate
amount of Purchases; provided that if there are no outstanding Purchases then “Required
Managing Agents” means at such time Managing Agents representing Facility Groups then holding
greater than 50% of the Commitments.



     “Reserve Account” means the special account created pursuant to Section 2.06(b).



     “Reserve Account Specified Balance” means, for each Settlement Period, one-quarter of one
percent (0.25%) of the Student Loan Pool Balance as of the last day of that Settlement Period and,
for each Purchase Date, one-quarter of one percent (0.25%) of the Principal Balance of the
Additional Student Loans being purchased by the Transferor with the Purchase to be made on such
Purchase Date; provided, however, that at any time the Transferor holds any
Transferor Student Loans the Reserve Account Specified Balance shall be not less than $500,000.



     “Restructuring Date” means the occurrence of the “Effective Time” as defined in the Merger
Agreement.



     “Revolving Credit Agreement” means the Revolving Credit Agreement dated as of April 30, 2007
between SLM Corporation and the Transferor as the same may be amended, restated, supplemented or
otherwise modified from time to time .



     “Revolving Period” means the period commencing on the Closing Date and terminating on the
Termination Date.



     “Rollover Capital Purchase” means a Purchase, the proceeds of which are used to maintain the
outstanding Capital of and, to the extent permitted by Section 2.01(b), accrued and unpaid
Purchaser Costs on one or more existing Purchases at the end of their Tranche Periods.



     “S&P” means Standard & Poor’s Ratings Service, a division of The McGraw-Hill Companies, Inc.
(or its predecessor or successors in interest).



     “Schedule of Participated Loans and Participated Student Loan ABS” means a listing of certain
Participated Loans and Participated Student Loan ABS of the Transferor delivered to and held by the
Administrative Agent pursuant to Section 4.02(b) (which Schedule of Participated Loans and
Participated Student Loan ABS may be in the form of microfiche, cd rom, electronic or magnetic data
file or other medium acceptable to the Administrative Agent).



     “Schedule of Transferor Student Loans and Transferor Student Loan ABS” means a listing of all
Transferor Student Loans and Transferor Student Loan ABS of the Transferor delivered to and held by
the Administrative Agent (which Schedule of Transferor Student Loans



36









 




and Transferor Student Loan ABS may be in the form of microfiche, cd rom, electronic or
magnetic data file or other medium acceptable to the Administrative Agent), as from time to time
amended, supplemented, or modified, which Schedule of Transferor Student Loans and Transferor
Student Loan ABS shall be the master list of all Transferor Student Loans and Transferor Student
Loan ABS then compromising a part of the Pledged Collateral pursuant to this Agreement.




     “Scheduled Call Date” means the earliest to occur of (a) February 15, 2008, (b) the
Restructuring Date, or (c) the date which is 90 calendar days after the termination of the Merger
Agreement or, if the Merger Agreement is terminated in connection with a third party having made a
“Superior Proposal” (as defined in the Merger Agreement), the date which is 15 days after the
termination of the Merger Agreement.



     “Secured Creditors” means the Administrative Agent, the Valuation Agent and the Affected
Parties.



     “Securities Act” has the meaning assigned to it in Section 7.03.



     “Sellers” means SLM Education Credit Finance Corporation, VG Funding, LLC and any other
wholly-owned direct or indirect subsidiary of SLM Corporation, including a Holding SPE that becomes
party to a Holding SPE Purchase Agreement, with respect to which the Transferor has satisfied the
requirements of Section 4.04.



     “Servicer” means the Master Servicer or a Subservicer.



     “Servicer Advances” means any Purchaser Costs advanced by the Master Servicer pursuant to
Section 2.17.



     “Servicer Default” means a “Servicer Default” as described in Section 5.1 of the
Servicing Agreement.



     “Servicing Agreement” means, individually or collectively, (a) the Servicing Agreement, dated
as of April 30, 2007, among the Transferor, the Master Servicer, the Eligible Lender Trustee, the
Administrator and the Administrative Agent and (b) any other servicing agreement between the
Transferor, the Master Servicer and any Subservicer under which the respective Subservicer agrees
to administer and collect the Transferor Student Loans, in each case as such agreement may be
amended, restated, supplemented or otherwise modified from time to time.



     “Servicing Fees” means the Primary Servicing Fee, the Carryover Servicing Fee and any other
fees payable by the Transferor to the Master Servicer and the Subservicers with respect of
servicing Transferor Student Loans pursuant to the provisions of any Servicing Agreement.



     “Servicing Policies” means the policies and procedures of the Master Servicer or any
Subservicer, as applicable, with respect to the servicing of Transferor Student Loans.



     “Settlement Date” means the twenty-fifth (25th) day of each calendar month, beginning May 25,
2007 or, if such day is not a Business Day, the following Business Day.



37









 





     “Settlement Period” means (i) initially the period commencing on the Closing Date and ending
on May 31, 2007, and (ii) thereafter, (a) each monthly period ending on (and inclusive of) the last
day of the calendar month and (b) during the Liquidation Period, such period as determined by the
Administrative Agent in its sole discretion (which may be a period as short as one Business Day).



     “SLS Loan” means a student loan originated under the authority set forth in Section 428A (or a
predecessor section thereto) of the Higher Education Act and shall include student loans designated
as “SLS Loans,” as defined, under the Higher Education Act.



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




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




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




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




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



     “Special Allowance Payments” means special allowance payments on Student Loans authorized to
be made by the Department of Education pursuant to the Higher Education Act, or similar allowances
authorized from time to time by federal law or regulation.



     “Stafford Loan” means a loan designated as such that is made under the Robert T. Stafford
Student Loan Program in accordance with the Higher Education Act.



     “Student Loan” means a FFELP Loan or a Private Credit Loan.



     “Student Loan ABS” means a student loan asset-backed security issued by a trust sponsored by
an affiliate of SLM Corporation.



     “Student Loan ABS Certificates” means a certificate, note or other item or instrument
representing Student Loan ABS, if any.



     “Student Loan ABS Proceeds Account” means the special account created pursuant to Section
2.04(e).



38









 





     “Student Loan Notes” means the promissory note or notes of an Obligor and any amendment
thereto evidencing each Obligor’s obligation with regard to a Student Loan or the electronic
records evidencing the same.



     “Student Loan Pool Balance” means, as of any date, the aggregate outstanding Principal Balance
(as reported by the Administrator on the last Monthly Report delivered to the Administrative Agent)
of the Transferor Student Loans.



     “Student Loan Purchase Agreement” or “Purchase Agreement” means, as applicable, (i) the
Purchase Agreement Master Securitization Terms Number 1000, dated as of April 30, 2007 among SLM
Education Credit Finance Corporation, as a Seller, Mustang Funding I, LLC, as Purchaser, and Chase
Bank USA, National Association, as Eligible Lender Trustee, a form of which is attached as Exhibit
A-1 hereto, together with all Purchase Agreements, Blanket Endorsements, and Bills of Sale executed
pursuant thereto, (ii) the Purchase Agreement Master Securitization Terms Number 1000, dated as of
April 30, 2007 among VG Funding, LLC, as a Seller, Mustang Funding I, LLC, as Purchaser, and Chase
Bank USA, National Association, as Eligible Lender Trustee, a form of which is attached as Exhibit
A-2 hereto, together with all Purchase Agreements, Blanket Endorsements, and Bills of Sale executed
pursuant thereto, and (iii) any Holding SPE Purchase Agreement.



     “Subsequent Cutoff Date” means, with respect to any Participated Loan, the “Purchase Date” for
such Participated Loan as such term is defined in the applicable Purchase Agreement and for any
Participated Student Loan ABS, the date that is three (3) Business Days prior to the “Purchase
Date” for such Participated Student Loan ABS as such term is defined in the applicable Purchase
Agreement.



     “Subservicer” means any subservicer appointed by the Master Servicer pursuant to the Servicing
Agreement of the Master Servicer; provided, that in the event that the Master Servicer does
not remain responsible for all obligations thereunder, the prior consent of the Administrative
Agent and each Managing Agent shall be required for such appointment; and provided,
further, that the Administrator shall give the Rating Agencies and the Administrative Agent
prior written notice of the appointment of any Subservicer.



     “Take Out Securitization” means a sale or transfer of any portion of the Transferor Student
Loans by the Transferor (directly or indirectly) to a trust sponsored by an Affiliate of the
Transferor or other unaffiliated special purpose entity as part of a publicly or privately traded,
rated or unrated student loan securitization, pass-through, pay through, secured note or similar
transaction.



     “Termination Date” means the earliest to occur of (a) the Scheduled Call Date; (b) any date
designated by the Transferor as the date for terminating the entire Maximum Aggregate Purchase
Amount pursuant to Section 2.03; and (c) the date of the declaration or automatic
occurrence of the Termination Date pursuant to Article VII.



     “Termination Event” has the meaning assigned to that term in Article VII.



     “Tranche Hedge Contract” has the meaning assigned in the Hedging Agreement.



39









 





     “Tranche Period” with respect to CP issued by a Conduit Purchaser (or its related commercial
paper issuer if the Conduit Investor does not itself issue commercial paper) means a tranche period
that ends on a Business Day which shall not exceed 180 days and with respect to LIBOR Purchases, a
tranche period of either one day, one week, one month, two months, three months or six months;
provided, however, that in no event shall any Tranche Period end after the
Scheduled Call Date.



     “Transaction Documents” means, collectively, this Agreement, the Valuation Agent Agreement,
the Trust Agreement, the Administration Agreement, all Servicing Agreements, each Purchase
Agreement, all Guarantee Agreements, the Liquidity Advance Agreement, the Hedging Agreement, each
Hedge Contract, the Indemnity Agreement and all other instruments, fee letters, documents and
agreements executed in connection with any of the foregoing.



     “Transferor” means Mustang Funding I, LLC, a Delaware limited liability company.



     “Transferor Call Right” has the meaning assigned in Section 7.02.



     “Transferor Student Loan” means any Student Loan held by the Transferor.



     “Transferor Student Loan ABS” means any Student Loan ABS held by the Transferor.



     “Treasury Regulations” means any regulations promulgated by the Internal Revenue Service
interpreting the provisions of the Code.



     “Trust Agreement” means the Eligible Lender Trustee Agreement, dated as of April 30, 2007,
between the Transferor and the Eligible Lender Trustee, as amended, restated, supplemented or
otherwise modified from time to time pursuant to the terms thereof.



     “UCC” means the Uniform Commercial Code as from time to time in effect in the specified
jurisdiction.



     “Underwriting Guidelines” means the policies and procedures of SLM Corporation and its
Affiliates with respect to the origination of loans under their private credit education loan
programs for which an Applicable Percentage greater than zero has been established.



     “Unguaranteed Defaulted Amount” means, as of any date, (a) with respect to any FFELP Loan that
is a Defaulted Student Loan, the Principal Balance of such Defaulted Student Loan that is not
guaranteed pursuant to the related Guarantee Agreement or that is not eligible for reinsurance by
the Department of Education or for which a claim was rejected; (b) with respect to any Private
Credit Loan that is a Defaulted Student Loan, the outstanding Principal Balance of such Private
Credit Loan; and (c) with respect to any Student Loan ABS that is a Defaulted Student Loan ABS, the
outstanding Principal Balance of such Student Loan ABS.



     “United States” means the United States of America.



     “Used Fee” means, with respect to each Facility Group, a used fee, payable monthly to the
Managing Agents, for the account of their respective Facility Groups, as set forth in the fee



40









 




letter among the Transferor and each of the Managing Agents dated as of the Closing Date, as
such fee letter may be amended, restated, supplemented or otherwise modified from time to time.




     “Valuation Agent” means Banc of America Securities LLC, or any other entity appointed as
Valuation Agent by the Administrative Agent and the Required Managing Agents and approved by the
Administrator.



     “Valuation Agent Agreement” means the Valuation Agent Agreement, dated as of the Closing Date,
among the Transferor, the Administrator, the Administrative Agent and the Valuation Agent and any
other valuation agent agreement in the form attached as Exhibit D hereto among the Transferor, the
Administrative Agent and the Valuation Agent, as any such agreement may be amended, restated,
supplemented or otherwise modified from time to time pursuant to the terms thereof.



     “Valuation Agent Fees” means the fees and charges, if any, of the Valuation Agent, including
reasonable legal fees and expenses, payable to the Valuation Agent pursuant to the Valuation Agent
Agreement.



     “Valuation Date” means the fifteenth (15th) day of each calendar month beginning
June 15, 2007 or, if such day is not a Business Day, the following Business Day.



     “Valuation Report” means a report furnished by the Valuation Agent to the Administrator, the
Administrative Agent, Managing Agents and the Transferor pursuant to Section 2.05, the form
of which is attached as Exhibit A to the Valuation Agent Agreement.



     “Valuation Report Date” means the eighteenth (18th) day of each calendar month
beginning June 18, 2007 or, if such day is not a Business Day, the following Business Day.



     “Weighted Average Margin” means, as of any date for any pool of Transferor Student Loans that
are Private Credit Loans, (I) the sum across such pool of, for each Private Credit Loan in such
pool, the product of (a) for any Private Credit Loan that does not bear interest at a fixed rate,
the actual margin above the prime rate by which the interest rate on such Private Credit Loan
adjusts, and for any Private Credit Loan that bears interest at a fixed rate, the actual margin
above the prime rate (taking into account the difference between the prime rate and LIBOR) that is
payable pursuant to a Hedge Contract covering such rate under the Hedging Agreement as of such date
multiplied by (b) the Principal Balance of such Private Credit Loan as of such date, divided by
(II) the aggregate Principal Balance of all of the Private Credit Loans in such pool.



     “Weighted Average Margin Threshold” means, as of any date for any pool of Transferor Student
Loans that are Private Credit Loans, (I) the sum across such pool of, for each Private Credit Loan
in such pool, the product of (a) the Minimum Margin for such Private Credit Loan as of such date
multiplied by (b) the Principal Balance of such Private Credit Loan as of such date, divided by
(II) the aggregate Principal Balance of all of the Private Credit Loans in such pool.



     “Yield” means, for each Facility Group’s Participation Interests and any Yield Period, the
applicable Yield Rate multiplied by the average outstanding Capital of such Facility Group’s
Participation Interests during such Yield Period; provided that for purposes of determining Yield,



41









 




the average outstanding Capital of all CP supporting match-funded CP Purchases and LIBOR
Purchases that have been repaid by depositing funds in the Capital Payment Account or Release
Proceeds Account shall be included in the average outstanding Capital of the Participation
Interests for purposes of calculating Yield.




     “Yield Period” means for a pool-funded CP Purchase or a Base Rate Purchase, each Settlement
Period and for a match-funded CP Purchase or a LIBOR Purchase, each Settlement Period occurring
within the related Tranche Period for such Purchase.



     “Yield Protection” means any Purchaser’s reasonable increased costs for taxes, reserves,
breakage costs, changes in regulatory capital requirements and certain reasonable expenses imposed
on such Purchaser.



     “Yield Rate” means, with respect to any Yield Period, (a) if a Conduit Purchaser funds
(directly or indirectly) its portion of the Aggregate Capital with CP, the CP Rate, (b) if an
Alternate Purchaser or a Conduit Purchaser (if funding its investment other than with CP) funds its
portion of the Aggregate Capital (except as set forth in clause (c) or (d) of this definition), the
applicable LIBOR Rate determined as set forth in Section 2.02 plus the LIBOR spread
described in the Side Letter executed by the Transferor, the Administrator, the Administrative
Agent and the Managing Agents as of the Closing Date, as the same may be amended, restated,
supplemented or otherwise modified from time to time, (c) on any day after a Termination Event or a
Potential Termination Event has occurred and shall be continuing, the Base Rate plus 2.00% and (d)
or at any time when LIBOR Rate is unavailable or cannot be determined, the Base Rate plus 1.00%.



     Section 1.02 Other Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York
and not specifically defined herein, are used herein as defined in such Article 9. Any reference to
an agreement herein shall be deemed to include a reference to such agreement as amended,
supplemented or otherwise modified from time to time.



     Section 1.03 Computation of Time Periods. Unless otherwise stated in this Agreement, in the
computation of a period of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each mean “to but excluding.”



     Section 1.04 Calculation of Yield Rate and Certain Fees. The Yield Rate on the Participation
Interests and all fees payable to the Purchasers, pursuant to this Agreement are calculated based
on the actual number of days divided by 360.



ARTICLE II




THE FACILITY




     Section 2.01 Issuance and Purchase of Participation Interests; Making of Purchases.




42









 






     (a) On the date of the initial Purchase hereunder, the Transferor shall sell,
assign and transfer the Participation Interests in respect of all Purchasers. At all times
thereafter, until the Aggregate Capital shall be reduced to zero, all Commitments shall be
terminated and all Purchaser Costs and other liabilities hereunder shall be paid by the
Transferor, the Participation Interests in respect of all Purchasers shall be and remain in
effect without diminution or reduction except as otherwise set forth herein.




     (b) On the terms and conditions hereinafter set forth, the Purchasers shall from time
to time make purchases (each, a “Purchase”) of Participation Interests, with the undivided
percentage interest of any Purchaser at any time being determined on the basis that the
Capital of such Purchaser bears to the Aggregate Capital of all Purchasers at such time.
Each Purchase shall be made by the Facility Groups, ratably in accordance with their
respective Pro Rata Shares, it being understood that (i) the purchase by any Conduit
Purchaser in a Facility Group shall be in the sole discretion of such Conduit Purchaser, and
(ii) in the event any Conduit Purchaser shall elect not to make any Purchase, the Alternate
Purchasers in such Conduit Purchaser’s Facility Group shall make such Purchase. The
Aggregate Capital outstanding at any one time shall not exceed the Maximum Aggregate
Purchase Amount in effect at the time of such Purchase; and no Facility Group shall be
required to make Purchases in a Capital amount of less than $1,000,000 and integral
multiples of $100,000 in excess thereof (other than Excess Capital Purchases made to fund
the items set forth in clauses (ii) through (v) of Section 2.05(b) or Yield due and
payable with respect to match-funded CP Purchases and LIBOR Purchases pursuant to
Section 2.05(i)), and that no Purchaser shall be required to make Purchases in an
amount in excess of such Purchaser’s Commitment. Within the limits set forth in this
Section and the other terms and conditions of this Agreement, during the Revolving Period,
the Transferor, acting through the Administrator, may request Purchases, repay Purchases and
request new Purchases under this Section. In addition, the Aggregate Capital of any
Purchase, which is not a Rollover Capital Purchase or an Excess Capital Purchase, shall not
exceed the aggregate Maximum Purchase Amounts of the Eligible Loans and Eligible Student
Loan ABS acquired by the Transferor with the proceeds of such Purchase. The Aggregate
Capital of any Rollover Capital Purchase shall not exceed the Aggregate Capital of and, to
the extent permitted by this Agreement, accrued and unpaid Purchaser Costs on, the Purchases
being maintained with such Rollover Capital Purchase. Prior to the Scheduled Call Date with
respect to a Facility Group and subject to the Maximum Aggregate Purchase Amount, the
Transferor shall have the right to request that the Aggregate Capital of a Rollover Capital
Purchase made by a Purchaser within such Facility Group shall include the accrued and unpaid
Purchaser Costs on the Purchases being maintained with the Rollover Capital Purchase. The
Aggregate Capital of any Excess Capital Purchase shall not exceed the positive difference,
if any, between (i) the Adjusted Pool Balance on such date and (ii) the Reported Liabilities
as set forth on such date. All Purchases made hereunder shall be denominated in and be
payable in United States dollars. The outstanding Capital of each Purchase shall be due and
payable on its respective Expiry Date. Yield (including Dealer Fees) on each pool-funded CP
Purchase and on each Base Rate Purchase shall be due and payable on each Settlement Date.
Yield (including Dealer Fees) on each match-funded CP Purchase and on each LIBOR Purchase
shall be due and payable on its respective Expiry Date. All other Obligations hereunder, if
not previously paid pursuant to Section 



43









 






2.05(b), shall be due and payable on the Termination Date or such earlier date
as provided in Article VII .




     (c) Each Purchaser’s obligations under this Section are several and the failure of any
Alternate Purchaser to make available its portion of any requested Purchase shall not
relieve any other Purchaser of its obligations hereunder or, except as provided in paragraph
(d) below, obligate any other Purchaser to honor the obligations of any defaulting
Purchasers. Notwithstanding anything contained in this Agreement to the contrary, (i) no
Alternate Purchaser shall be obligated to fund any portion of any Purchase in excess of its
Pro Rata Share thereof and (ii) no Alternate Purchaser shall be obligated to fund any
portion of any Purchase in an aggregate Capital amount in excess of its Commitment. The
Commitment of each Alternate Purchaser as of the Closing Date is set forth on Exhibit P.




     (d) If, by 2:00 p.m. Charlotte, North Carolina time, whether or not the Administrative
Agent has advanced the amount of the applicable Purchase, one or more Alternate Purchasers
(each, a “Defaulting Purchaser”, and each Alternate Purchaser which is not a Defaulting
Purchaser being referred to as a “Non-Defaulting Purchaser”) fails to make its Pro Rata
Share of any Purchase required to be made by such Purchaser available to the Administrative
Agent pursuant to this Agreement (the aggregate amount not so made available to the
Administrative Agent being herein called the “Investment Deficit”), then the Administrative
Agent shall, by no later than 2:30 p.m. Charlotte, North Carolina time on the applicable
Purchase date instruct each Non-Defaulting Purchaser to pay, by no later than 3:00 p.m.
Charlotte, North Carolina time, in immediately available funds, to the account designated by
the Administrative Agent, an amount equal to the lesser of (i) such Non-Defaulting
Purchaser’s proportionate share (based upon the relative Commitments of the Non-Defaulting
Purchasers) of the Investment Deficit and (ii) its unused Commitment. A Defaulting
Purchaser shall forthwith, upon demand, pay to the Administrative Agent for the ratable
benefit of the Non-Defaulting Purchasers all amounts paid by each Non-Defaulting Purchaser
on behalf of such Defaulting Purchaser.



      Section 2.02 The Initial Purchase and Subsequent Purchases.





     (a) Any Purchase made by the Purchasers during the Revolving Period will be made on any
Business Day at the request of the Transferor, acting through the Administrator, subject to
and in accordance with the terms and conditions of Section 2.01 and this Section.




     (b) Subject to the satisfaction of the conditions precedent set forth in this
Agreement, the Transferor, acting through the Administrator, may request a Rollover Capital
Purchase hereunder by giving written notice to the Administrative Agent, which the
Administrative Agent will forward to the Managing Agents, in the form of Exhibit E not later
than 4:00 p.m., Charlotte, North Carolina time, two (2) Business Days prior to such
Purchase. Subject to the satisfaction of the conditions precedent set forth in this
Agreement, the Transferor, acting through the Administrator, may request any other Purchase
hereunder by giving written notice to the Administrative Agent, which the



44









 






Administrative Agent will forward to the Managing Agents, in the form of Exhibit E not
later than 4:00 p.m., Charlotte, North Carolina time, two (2) Business Days prior to the
proposed Purchase Date. Each such notice shall specify (i) the Requested Purchase Amount,
which when allocated to each Facility Group in accordance with its Pro Rata Share shall be
in an amount equal to or greater than $1,000,000 with respect to such Facility Group (or,
with respect to an Excess Capital Purchase made to fund the items set forth in clauses (ii)
through (v) of Section 2.05(b) or Yield due and payable with respect to match-funded
CP Purchases and LIBOR Purchases pursuant to Section 2.05(i), which shall be in an
amount equal to such outstanding obligations after the application of Available Funds in the
Collection Account, funds in the Reserve Account and funds in the Capitalized Interest
Account); (ii) the Purchase Date; (iii) the Applicable Percentage applicable to the
Purchase; (iv) the proposed Tranche Period applicable to the Purchase to the extent such
Purchase is to be a CP Purchase or a LIBOR Purchase (provided, however, that
the Transferor shall not request a Tranche Period of over 90 days for any CP Tranche that
will not be covered by a Tranche Hedge Contract); (v) if such Purchase is a Rollover Capital
Purchase, a reference to the existing Purchase that is being maintained; (vi) if the
Purchase is a CP Purchase, whether such Purchase shall be match-funded or pool-funded; (vii)
if the Purchase is to be funded with amounts in the Capital Payment Account or the Release
Proceeds Account, the existing Tranche Period and Yield that shall be allocated to such
Purchase and (viii) if the Purchase is to fund Student Loan ABS, the lead underwriters or
lead managers for the transaction in which such Student Loan ABS were issued and the CUSIP
number and issuance amount of the applicable tranche with respect to such Student Loan ABS.
Each Conduit Purchaser which elects to make a match-funded CP Purchase shall use its best
efforts to match the Tranche Period requested by the Transferor. Each CP Purchase shall be
entirely pool-funded or entirely match-funded. Pool-funded CP Purchases and match-funded CP
Purchases may not be outstanding at the same time. On the Purchase Date and no later than
2:00 p.m., Charlotte, North Carolina time, the Conduit Purchasers in each Facility Group
may, each in its sole discretion, upon satisfaction of the applicable conditions set forth
in this Agreement, collectively make available to the Transferor in same day funds an amount
up to such Facility Group’s Pro Rata Share of the Requested Purchase Amount by payment to
the Disbursement Account. On the Purchase Date and no later than 2:00 p.m., Charlotte,
North Carolina time, each Managing Agent shall report to the Administrator the actual Yield
Rate and Tranche Periods applicable to each Purchase. If the Conduit Purchasers within a
Facility Group elect not to fund all or a portion of such Facility Group’s Pro Rata Share of
the Requested Purchase Amount, such Facility Group’s related Alternate Purchasers shall,
upon satisfaction of the applicable conditions set forth in this Agreement, make available
to the Transferor in same day funds, the remaining portion of such Facility Group’s Pro Rata
Share (proportioned ratably among such Alternate Purchasers in accordance with their
relative Pro Rata Shares) of the Requested Purchase Amount by payment to the Disbursement
Account. To the extent any Conduit Purchaser is unable or declines to fund a Requested
Purchase by issuing commercial paper or if any Conduit Purchaser’s Alternate Purchaser funds
any Requested Purchase, the applicable Conduit Purchaser shall promptly advise the
Administrative Agent and the Administrator, on behalf of the Transferor.



45









 






     (c) Any Capital in respect of the Participation Interests may be repurchased, and any
Purchaser Costs due or accrued on the Participation Interests may be prepaid in whole or in
part, on any Business Day upon two (2) Business Day’s prior written notice to each Managing
Agent indicating the amount of such repurchase or prepayment and the Business Day on which
such repurchase or prepayment shall be made. The Transferor shall pay the applicable
Managing Agent for the account of the Purchasers, as applicable, on demand, such amount or
amounts as shall compensate the Purchasers for any loss (including loss of profit), cost or
expense incurred by the Purchasers (as reasonably determined by the Purchasers) as a result
of payments with respect to the Purchases other than on a Settlement Date or Expiry Date, as
applicable, such compensation to be (i) limited to an amount equal to any loss or expense
suffered by the Purchasers during the period from the date of receipt of such repayment to
(but excluding) the applicable Settlement or Expiry Date and (ii) net of the income, if any,
received by the recipient of such reductions from investing the proceeds of such reductions.
The determination by the applicable Managing Agent of the amount of any such loss or
expense shall be set forth in a written notice to the Administrator, on behalf of the
Transferor including a statement as to such loss or expense (including calculation thereof
in reasonable detail), and shall be conclusive, absent manifest error.




     (d) Each Purchase request shall be irrevocable and binding on the Transferor, and the
Transferor shall indemnify each Purchaser against any loss or expense incurred by such
Purchaser, either directly or indirectly (including, in the case of a Conduit Purchaser,
through the applicable Program Support Agreement) as a result of any failure by the
Transferor to complete such Purchase, including any loss (including loss of profit) or
expense incurred by such Purchaser or such Purchaser’s Managing Agent, either directly or
indirectly (including, in the case of a Conduit Purchaser, pursuant to the applicable
Program Support Agreement) by reason of the liquidation or reemployment of funds acquired by
such Purchaser (or the applicable Program Support Provider(s)) (including funds obtained by
issuing commercial paper or promissory notes or obtaining deposits or loans from third
parties) in order to fund such Purchase. Any such amounts shall constitute “Yield
Protection” hereunder.



     Section 2.03 Reduction or Termination of the Maximum Aggregate Purchase Amount. The
Transferor, acting through the Administrator, may, upon at least five (5) Business Days’ written
notice to the Administrative Agent, (a) terminate the entire facility or (b) reduce in part the
portion of the Maximum Aggregate Purchase Amount that exceeds the Aggregate Capital. Any partial
reduction in the Maximum Aggregate Purchase Amount shall be in an amount equal to or greater than
$10,000,000 or any integral multiple of $1,000,000. Any such reduction in the Maximum Aggregate
Purchase Amount shall be allocated among the Facility Groups in accordance with their Pro Rata
Shares and shall be allocated within each Facility Group as determined by the appropriate Managing
Agent. The Transferor shall pay all outstanding Capital and Purchaser Costs on the Purchases owned
by any Purchaser upon the termination of its Commitment pursuant to this Section 2.03.



     Section 2.04 The Accounts.



46









 






     (a) Clearing Account, Collection Account and Interest Reserve Subaccount. On or prior
to the date hereof, the Transferor shall establish and maintain, or cause to be established
and maintained, the Collection Account. The Transferor may also establish and maintain a
Clearing Account with the Administrative Agent. On or prior to the date hereof, the
Transferor shall establish and maintain, or cause to be established and maintained, the
Interest Reserve Subaccount as a subaccount of the Collection Account. The Collection
Account and the Clearing Account shall be maintained as a segregated account at the
Administrative Agent, and shall be under the sole dominion and control of the Administrative
Agent, on behalf of the Secured Creditors. The Collection Account and the Clearing Account
shall be in the name of the Administrative Agent, on behalf of the Secured Creditors and the
Transferor. Neither the Transferor nor the Administrator shall have any withdrawal rights
from the Collection Account or the Clearing Account. Any Collections received by the
Transferor, the Administrator, the Eligible Lender Trustee, the Sellers, the Servicers, or
any agent thereof, as the case may be, are to be transmitted to the Collection Account (or,
if one has been established by the Transferor, the Clearing Account) within two Business
Days of receipt. Each of the Transferor and the Administrator represents and warrants as to
itself that each remittance of Collections to the Collection Account (or directly to the
Administrative Agent or any other Secured Creditor) hereunder will have been (i) in payment
of a debt incurred in the ordinary course of business or financial affairs and (ii) made in
the ordinary course of business or financial affairs. The Transferor shall direct each
Servicer, Seller, or agent thereof to transmit any Collections it receives with respect to
the Transferor Student Loans directly to the Administrative Agent for deposit to the
Collection Account (or, if one has been established by the Transferor, the Clearing Account)
within two Business Days of receipt. Funds on deposit in the Collection Account and Clearing
Account may be invested from time to time in Eligible Investments at the direction of the
Administrator in accordance with Section 2.08. Upon the reduction of the Aggregate
Capital to zero, payment in full of all Obligations hereunder and the termination of this
Agreement, the Administrative Agent agrees to send notice to the Master Servicer that this
Agreement has terminated and that Collections no longer are to be forwarded to the
Collection Account (or, if one has been established by the Transferor, the Clearing Account)
pursuant to this Agreement. All investment earnings on the funds on deposit in the
Collection Account and the Clearing Account during any Settlement Period shall be applied as
Available Funds for the applicable Settlement Period. The Administrative Agent shall apply
funds on deposit in the Collection Account as described in Section 2.05. Each of
the Transferor and the Administrator agree, by executing this Agreement, to hold any
Collections received in trust for the Administrative Agent and to comply with the remittance
procedures set forth in this Section 2.04.




     (b) Disbursement Account. On or prior to the date hereof, the Transferor shall
establish and maintain, or cause to be established and maintained, the Disbursement Account.
The Disbursement Account shall be maintained as a segregated account and shall be under the
sole dominion and control of the Administrative Agent, on behalf of the Secured Creditors.
Except for the right of the Administrator to withdraw funds as expressly set forth in this
Agreement, neither the Transferor nor the Administrator shall have any withdrawal rights
from the Disbursement Account. Any Purchases made by the Purchasers or made from funds on
deposit in the Capital Payment Account or the Release



47









 






Proceeds Account shall be deposited into the Disbursement Account and released by the
Administrative Agent to the Transferor (or the Administrator on behalf of the Transferor) to
finance the purchase of Eligible Loans or Eligible Student Loan ABS pursuant to Section
2.05(c). Funds on deposit in the Disbursement Account may be invested from time to time
in Eligible Investments at the direction of the Administrator in accordance with Section
2.08. All investment earnings on the funds on deposit in the Disbursement Account
during any Settlement Period shall be deposited into the Collection Account by the
Administrative Agent on or before the second Business Day after the end of that Settlement
Period and applied as Available Funds on the Settlement Date for the related Settlement
Period.




     (c) Capital Payment Account. The Administrative Agent shall establish and maintain the
Capital Payment Account. The Capital Payment Account shall be an account of the
Administrative Agent, for the benefit of the Purchasers, maintained at a Qualified
Institution. Funds on deposit in the Capital Payment Account may be invested from time to
time in Eligible Investments at the direction of the Administrative Agent in accordance with
Section 2.08 hereof. Prior to the Termination Date, all investment earnings on the
funds on deposit in the Capital Payment Account during any Settlement Period shall be
deposited into the Collection Account by the Administrative Agent on or before the second
Business Day after the end of that Settlement Period and applied as Available Funds on the
Settlement Date for the related Settlement Period. Other than the right to investment
earnings described in the previous sentence, the Transferor shall not have any right to the
Capital Payment Account or funds deposited therein. Prior to the Liquidation Period, funds
in the Capital Payment Account shall be applied to the following (in the order such events
occur for so long as funds are available in the Capital Payment Account): (i) to reduce
Capital on maturing CP supporting match-funded CP Purchases and to reduce Capital on
maturing LIBOR Purchases; (ii) to the Disbursement Account to increase or maintain the
Capital then outstanding by funding new Purchases; and (iii) if so requested by the
Administrator on behalf of the Transferor, as a repurchase of Capital on outstanding
Purchases. On the Termination Date, funds in the Capital Payment Account shall be released
to the Administrative Agent for the account of the applicable Purchasers to reduce the then
outstanding Capital. Any funds remaining in the Capital Payment Account after the reduction
to zero of the aggregate Capital and the payment in full of all other Obligations under the
Transaction Documents shall be paid to the holder of the Membership Interests or to the
Liquidity Lender as requested by the Administrator.




     (d) Release Proceeds Account. The Administrative Agent shall establish and maintain
the Release Proceeds Account. The Release Proceeds Account shall be a segregated account of
the Administrative Agent, for the benefit of the Purchasers, maintained at a Qualified
Institution. Funds in the Release Proceeds Account may be invested from time to time in
Eligible Investments at the direction of the Administrative Agent in accordance with
Section 2.08. Prior to the Termination Date, all investment earnings on the funds
on deposit in the Release Proceeds Account during any Settlement Period shall be deposited
into the Collection Account by the Administrative Agent on or before the second Business
Day after the end of that Settlement Period and applied as Available Funds on the Settlement
Date for the related Settlement Period. Other than the



48









 






right to investment earnings described in the previous sentence, the Transferor shall
not have any right to the Release Proceeds Account or funds deposited therein. Prior to the
Liquidation Period, funds in the Release Proceeds Account shall be applied to the following
(in the order such events occur for so long as funds are available in the Release Proceeds
Account): (i) to reduce the outstanding Capital of pool-funded Purchases and, on the
applicable maturity date, to reduce Capital on maturing CP supporting match-funded CP
Purchases and to reduce Capital on maturing LIBOR Purchases; (ii) to the Disbursement
Account to increase or maintain the Capital then outstanding by funding new Purchases; and
(iii) if so requested by the Administrator on behalf of the Transferor, as a repurchase of
Capital on outstanding Purchases. On the Termination Date, funds in the Release Proceeds
Account shall be paid to the Administrative Agent for the account of the applicable
Purchasers to reduce the outstanding Capital. Any funds remaining in the Capital Payment
Account after the reduction to zero of the Aggregate Capital and the payment in full of all
other Obligations under the Transaction Documents shall be paid to the holder of the
Membership Interests or to the Liquidity Lender as requested by the Administrator.




     (e) Student Loan ABS Proceeds Account. On or prior to the date hereof, the Transferor
shall establish and maintain, or cause to be established and maintained, the Student Loan
ABS Proceeds Account. The Student Loan ABS Proceeds Account shall be maintained as a
segregated account at the Administrative Agent, and shall be under the sole dominion and
control of the Administrative Agent, on behalf of the Secured Creditors. The Student Loan
ABS Proceeds Account shall be in the name of the Administrative Agent, on behalf of the
Secured Creditors and the Transferor. Neither the Transferor nor the Administrator shall
have any withdrawal rights from the Student Loan ABS Proceeds Account. Any Collections on
Transferor Student Loan ABS received by the Transferor, the Administrator, the Eligible
Lender Trustee, the Sellers, the Servicers, or any agent thereof, as the case may be, are to
be transmitted to the Student Loan ABS Proceeds Account within two Business Days of receipt.
The Transferor shall direct each Servicer, Seller, or agent thereof to transmit any
Collections it receives with respect to the Transferor Student Loan ABS directly to the
Administrative Agent for deposit to the Student Loan ABS Proceeds Account within two
Business Days of receipt. The Transferor shall further direct each paying agent for the
Transferor Student Loan ABS to make all payments under such Transferor Student Loan ABS by
wire transfer directly to the Student Loan ABS Proceeds Account. Funds on deposit in the
Student Loan ABS Proceeds Account may be invested from time to time in Eligible Investments
at the direction of the Administrator in accordance with Section 2.08. All
investment earnings on the funds on deposit in the Student Loan ABS Proceeds Account during
any Settlement Period shall be deposited into the Collection Account by the Administrative
Agent on or before the second Business Day after the end of that Settlement Period and
applied as Available Funds on the Settlement Date for the related Settlement Period. The
Administrative Agent promptly shall transfer funds on deposit in the Student Loan ABS
Proceeds Account to the Collection Account.




     (f) Clearing Account. If a Clearing Account is established by the Transferor, all
Collections shall be deposited into such Clearing Account within two (2) Business Days of
receipt. The Administrator shall direct the Administrative Agent to withdraw all



49









 






funds deposited into the Clearing Account which relate to the consolidation of Eligible
FFELP Loans and deposit them into the Release Proceeds Account. All other funds deposited
into the Clearing Account shall be deposited into the Collection Account within two (2)
Business Days of their deposit into the Clearing Account.




     (g) Floor Income Rebate Account. On or prior to the date hereof, the Transferor shall
establish and maintain, or cause to be established and maintained, the Floor Income Rebate
Account. The Floor Income Rebate Account shall be maintained as a segregated account and
shall be under the sole dominion and control of the Administrative Agent, on behalf of the
Secured Creditors. Neither the Transferor nor the Administrator shall have any withdrawal
rights from the Floor Income Rebate Account. On or before each Settlement Date, the
Administrator will instruct the Administrative Agent to transfer from the Collection Account
to the Floor Income Rebate Account the estimated monthly accrual for the related Settlement
Period of interest paid by Obligors on Transferor Student Loans originated on or after April
1, 2006 that exceeds the Interest Subsidy Payments or Special Allowance Payments applicable
to such Transferor Student Loans for such month. These deposited amounts will be used to
offset the amount of floor income, if any, that is expected to be netted by the Department
against the Interest Subsidy Payments and/or Special Allowance Payments otherwise due to the
Transferor. On each Settlement Date, the Administrative Agent shall transfer from the Floor
Income Rebate Account to the Collection Account all amounts on deposit in the Floor Income
Rebate Account which relate to obligations owed to the Department during the related
Settlement Period or payments received from the Department during the related Settlement
Period, and apply such funds in accordance with Section 2.05(b). Funds on deposit
in the Floor Income Rebate Account may be invested from time to time in Eligible Investments
at the direction of the Administrator in accordance with Section 2.08. All
investment earnings on the funds on deposit in the Floor Income Rebate Account during any
Settlement Period shall be deposited into the Collection Account by the Administrative Agent
on or before the second Business Day after the end of that Settlement Period and applied as
Available Funds on the Settlement Date for the related Settlement Period.




     (h) Borrower Benefit Account. On or prior to the date hereof, the Transferor shall
establish and maintain, or cause to be established and maintained, the Borrower Benefit
Account. The Borrower Benefit Account shall be maintained as a segregated account and shall
be under the sole dominion and control of the Administrative Agent, on behalf of the Secured
Creditors. Neither the Transferor nor the Administrator shall have any withdrawal rights
from the Borrower Benefit Account. On or before each Settlement Date, the Administrator
will instruct the Administrative Agent to transfer from the Borrower Benefit Account to the
Collection Account all amounts on deposit in the Borrower Benefit Account which relate to
the related Settlement Period and apply such funds in accordance with Section
2.05(b). Funds on deposit in the Borrower Benefit Account may be invested from time to
time in Eligible Investments at the direction of the Administrator in accordance with
Section 2.08. All investment earnings on the funds on deposit in the Borrower
Benefit Account during any Settlement Period shall be deposited into the Collection Account
by the Administrative Agent on or before the second



50









 






Business Day after the end of that Settlement Period and applied as Available Funds on
the Settlement Date for the related Settlement Period.



     Section 2.05 Transfers from Collection Account.





     (a) On or prior to each Reporting Date, the Transferor shall cause the Administrator to
prepare the Monthly Report and shall provide or cause to be provided to the Administrator
all information necessary or appropriate to accurately prepare such Monthly Report, all
calculations, unless otherwise specified, to be made as of the end of the current Settlement
Period, and cause the Administrator to forward such Monthly Report to the Administrative
Agent and the Eligible Lender Trustee. The Administrative Agent shall promptly forward the
Monthly Report to the Managing Agents. No later than five Business Days prior to each
Reporting Date, the Administrative Agent shall provide to the Transferor and the
Administrator the Monthly Administrative Agent’s Report in the form attached as Exhibit F
hereto. Pursuant to the Valuation Agent Agreement, on each Valuation Report Date, the
Valuation Agent shall deliver to the Administrative Agent, the Managing Agents, the
Transferor and the Administrator a Valuation Report setting forth the Market Value of the
Transferor Student Loan ABS, calculated as of the preceding Valuation Date.




     (b) The Administrative Agent, on each Settlement Date (or earlier as provided in
paragraph (f) below), shall make the following deposits and distributions from Available
Funds in the Collection Account in the amount and in the order of priority as set forth
below as directed by the Administrator on behalf of the Transferor (or if the Administrator
fails to provide such direction, as provided by the Administrative Agent) pursuant to the
Monthly Report, on which the Administrative Agent may conclusively rely, on such Settlement
Date (or as otherwise provided in Article VII), in the following priority:




     (i) pay to the Liquidity Lender an amount equal to outstanding principal of all
ISP/SAP Liquidity Loans outstanding together with the interest thereon;
provided, however, that such payment to the Liquidity Lender shall
be made only if and then only to the extent Interest Subsidy and/or Special
Allowance Payments equal to such amounts have been deposited into the Collection
Account during that Settlement Period;




     (ii) pay to the Master Servicer an amount equal to its unreimbursed Servicer
Advances due and owing;




     (iii) pay to the Lockbox Banks, the Eligible Lender Trustee, the Administrative
Agent, the Administrator, the Liquidity Lender and the Hedging Counterparty as
appropriate and on a pro rata basis, an amount equal to the Lockbox Bank Fees, the
Eligible Lender Trustee Fees, the Administrative Agent Fees, the Valuation Agent
Fees, the Administrator Fees, the Liquidity Lender Fees and the Hedging Counterparty
Fees which are due and owing as of the close of business on the last day of the
immediately preceding Settlement Period;



51









 






     (iv) pay to the Master Servicer, for the benefit of the Master Servicer and any
Subservicers, an amount equal to the Primary Servicing Fees which are due and owing
as of the close of business on the last day of the immediately preceding Settlement
Period;




     (v) on a pari passu basis, (a) pay to the Administrative Agent, Yield as
follows: first to the Administrative Agent, for the benefit of the Purchasers, in
accordance with their pro rata shares in an amount equal to the amount of Yield due
on pool-funded CP Purchases and Base Rate Purchases and second to the Administrative
Agent for deposit into the Interest Reserve Subaccount (or, if required by
Section 2.05(f), directly to the Administrative Agent for the benefit of the
Purchasers) in an amount equal to the sum of (i) accrued Yield applicable to the
match-funded CP Purchases and LIBOR Purchases for the previous Yield Period to the
extent such Yield is not payable by the Hedging Counterparty under a Tranche Hedge
Contract, net of any Yield for the related Yield Period that has already been paid
and (ii) if any Tranche exceeds 90 days and a Tranche Hedge Contract exists with
respect to such Tranche, the LIBOR rate payable to the Hedging Counterparty under
that Hedge Contract; (b) pay to the Administrative Agent and each Managing Agent for
the account of the Purchasers within such Managing Agent’s Funding Group as
appropriate, an amount equal to all other Purchaser Costs (other than amounts owed
with respect to Yield Protection and amounts previously paid pursuant to Section
2.05(d)), and (c) pay to the Liquidity Lender all interest on any Liquidity
Loans made under the Liquidity Advance Agreement (to the extent not previously paid
pursuant to clause (i) above) and pay to the Hedging Counterparty all amounts due as
payments on outstanding Hedging Contracts to the extent not subordinated in
accordance with Section 2.1(a)(iii) of the Hedging Agreement) which are due and
owing as of the close of business on the last day of the immediately preceding
Settlement Period;




     (vi) following the replacement of the Master Servicer, pay to the replacement
Master Servicer to pay reasonable expenses and charges resulting from the transition
in servicing, to the extent such costs have not been paid by the predecessor Master
Servicer;




     (vii) prior to the commencement of the Liquidation Period on a pari passu
basis, subject to the availability of funds, (y) deposit into the Reserve Account
any amount required to cause the amount on deposit in the Reserve Account to equal
the Reserve Account Specified Balance and (z) deposit into the Capitalized Interest
Account any amount required to cause the amount on deposit in the Capitalized
Interest Account to equal the Capitalized Interest Account Specified Balance;




     (viii) to the Liquidity Lender (to the extent not previously paid pursuant to
clause (i) above) an amount equal to any outstanding principal on the Liquidity
Loans made under the Liquidity Purchase Agreement which are outstanding as of the
close of business on the last day of the immediately preceding Settlement Period;



52









 






     (ix) pay to the Administrative Agent the Capital Distribution Amount as
follows: first, to the Administrative Agent for the benefit of the Purchasers in
accordance with their pro rata share in an amount equal to the Aggregate Capital
with respect to outstanding pool-funded CP Purchases and Base Rate Purchases and
second, to the Administrative Agent for deposit into the Capital Payment Account for
the account of the applicable Purchasers in an amount equal to the remaining
portion, if any, of the Capital Distribution Amount;




     (x) pay to the Administrative Agent, for the benefit of the Purchasers, on a
pro rata basis if necessary, any Yield Protection due and owing pursuant to this
Agreement as of the close of business on the last day of the immediately preceding
Settlement Period;




     (xi) pay to Eligible Lender Trustee, the Administrative Agent, the Valuation
Agent, the Conduit Purchasers, the Managing Agents, the Alternate Purchasers, the
Program Support Providers and any Affected Party, on a pro rata basis if necessary,
any Indemnified Amounts due and owing pursuant to this Agreement or any other
Transaction Document as of such Settlement Date;




     (xii) to the Administrative Agent for the benefit of the Purchasers, the
Administrative Agent, the Managing Agents and the Program Support Providers, an
amount equal to any other Obligations (other than Capital or Yield of any Purchase)
which are accrued and owing as of the close of business on the last day of the
immediately preceding Settlement Period;




     (xiii) to the Master Servicer, for the benefit of the Master Servicer and any
Subservicers, an amount equal to any other obligations including Carryover Servicing
Fees, if any, which are accrued an unpaid as of the close of business on the last
day of the immediately preceding Settlement Period;




     (xiv) to the Hedging Counterparty, any breakage costs or termination payments
due under the Hedging Agreement and not previously paid;




     (xv) prior to the commencement of the Liquidation Period, solely to the extent
requested by the Administrator, to the Administrative Agent for the account of the
applicable Purchasers as a reduction in the Capital of the Outstanding Participation
Interests, in an amount determined by the Administrator, as follows: first, to the
Administrative Agent for the benefit of the Purchasers in accordance with their pro
rata shares in an amount equal to the Aggregate Capital with respect to outstanding
pool-funded CP Purchases and Base Rate Purchases and second, to the Administrative
Agent for deposit into the Capital Payment Account for the account of the applicable
Purchasers in an amount equal to the remaining portion, if any, of the Capital to be
repurchased;




     (xvi) during the Liquidation Period to the Administrative Agent for the account
of the applicable Purchasers, any remaining funds to reduce the Capital of the
Outstanding Participation Interests as follows: first, to the Administrative



53









 






Agent for the benefit of the Purchasers in accordance with their pro rata share
in an amount equal to the Aggregate Capital with respect to outstanding pool-funded
CP Purchases and Base Rate Purchases and second, to the Administrative Agent for
deposit into the Capital Payment Account for the account of the applicable
Purchasers in an amount equal to the remaining portion, if any, of the Capital to be
repurchased);




     (xvii) to the Hedging Counterparty, any amounts owed by the Transferor with
respect to payments under any Hedge Contracts which are subordinated in accordance
with Section 2.1(a)(iii) of the Hedging Agreement;




     (xviii) if so requested by the Administrator and so long as no Termination
Event has occurred and is continuing and no Potential Termination Event described in
Section 7.01(g) has occurred and is continuing, to the Paying Agent for
payment of principal and interest on the Revolving Line of Credit; and




     (xix) if so requested by the Administrator and so long as no Termination Event
has occurred and is continuing and no Potential Termination Event described in
Section 7.01(g) has occurred and is continuing, to the Paying Agent for
payment to the holder of the Membership Interests, any Available Funds remaining
after the payment in full of each of the foregoing items.


Notwithstanding anything else in this Agreement, the failure to make a deposit into the Interest
Reserve Subaccount pursuant to Section 2.05(b)(v) due to insufficiency of Available Funds
shall not constitute a failure to make a payment, transfer or deposit on the due date thereof
pursuant to Section 7.01(a).





     (c) Any funds deposited to the Disbursement Account shall be disbursed pursuant to a
written direction of the Administrator, on behalf of the Transferor, to the Administrative
Agent for the purpose of increasing or maintaining outstanding Capital hereunder.




     (d) In addition to the foregoing, on the Expiry Date of each Purchase, the
Administrative Agent shall, as directed by the Administrator on behalf of the Transferor (or
if the Administrator fails to provide such direction, as provided by the Administrative
Agent) pursuant to the most recent Monthly Report on which the Administrative Agent may
conclusively rely, but only to the extent of sufficient funds on deposit in the Collection
Account on such date, withdraw (i) from the Collection Account, all Dealer Fees not
previously paid and (ii) from the Interest Reserve Subaccount (or, if funds are not
available, in order from the Capitalized Interest Account, the Collection Account and the
Reserve Account,) Yield with respect to such Purchase due on such Expiry Date and pay such
amounts to each applicable Conduit Purchaser.




     (e) In the event that the long term unsecured debt of SLM Corporation is rated less
than BBB- by S&P or is rated less than Baa3 by Moody’s, then the Administrative Agent may,
and at the request of the Required Managing Agents shall, (i) remove all funds on deposit in
the Interest Reserve Subaccount and pay them to the Purchasers to



54









 






reduce outstanding Yield and (ii) require that all Yield be paid to the Administrative
Agent, for the benefit of the Purchasers, rather than being deposited into the Interest
Reserve Subaccount.




     (f) Hedge Contract payments by the Transferor and the Hedging Counterparty will be made
on a net basis on or prior to each Settlement Date, subject to the existence of sufficient
Available Funds. At least one Business Day prior to due date for the Hedge Contract
payments described in the foregoing sentence, the Administrator will deliver to the
Administrative Agent a statement establishing that there will be sufficient Available Funds
on the applicable Settlement Date to pay each of the items listed in Section
2.05(b)(i) through Section 2.05(b)(v) above (or, if payments under any Hedge
Contracts which are subordinated in accordance with Section 2.1(a)(iii) of the Hedging
Agreement are to be included, through Section 2.05(b)(xvii)).




     (g) In the event that a termination payment is owed by the Transferor to the Hedging
Counterparty and a transaction with a replacement counterparty who agrees to assume, at no
cost to the Transferor, the Hedging Counterparty’s position with respect to the Hedging
Agreement and each Hedge Contract, on the same terms and conditions other than the option to
make liquidity advances thereunder (a “Replacement Swap Transaction”) is procured by the
Transferor under which the replacement swap counterparty makes an initial payment to the
Transferor, the Transferor will pay that amount directly to the original Hedging
Counterparty to the extent that a payment is owed by the Transferor to the Hedging
Counterparty. If after making that payment, the original Hedging Counterparty is still
owed a payment, then the remaining amount will be paid as set forth in clause (xiv) above.




     (h) In the event that a termination payment is paid by the Hedging Counterparty to the
Transferor, that termination payment shall either be paid directly to the replacement
counterparty who is entering into the Replacement Swap Transaction or deposited into the
Interest Reserve Subaccount and utilized to pay shortfalls in Yield, if any, in future
Settlement Periods. If a Replacement Swap Transaction is entered into by the Transferor and
the entire termination payment paid by the Hedging Counterparty to the Transferor, is not
paid directly to the replacement counterparty, any excess shall be deposited into the
Interest Reserve Subaccount for use as set forth in the immediately preceding sentence.




     (i) In the event that there are insufficient Available Funds to pay for the amounts set
forth in clauses (i) through (v) of Section 2.05(b) due and payable on such date or
to pay for Yield due and payable on such date with respect to match-funded CP Purchases and
LIBOR Purchases, then the Transferor shall request an Excess Capital Purchase in the amount
necessary to pay such amounts.



     Section 2.06 Capitalized Interest Account and Reserve Account.





     (a) On or prior to the date hereof, the Transferor shall establish and maintain, or
cause to be established and maintained, the Capitalized Interest Account. The Capitalized
Interest Account shall be maintained in a segregated account at the



55









 






Administrative Agent and shall be under the sole dominion and control of the
Administrative Agent on behalf of the Secured Creditors. The Capitalized Interest Account
shall be in the name of the Administrative Agent, on behalf of the Secured Creditors and the
Transferor. Neither the Transferor nor the Administrator shall have any withdrawal rights
from the Capitalized Interest Account If at any time a Capitalized Interest Account Funding
Event occurs, the Transferor shall deposit the Capitalized Interest Account Specified
Balance into the Capitalized Interest Account. Thereafter, on each Settlement Date, the
Administrator shall cause to be deposited into the Capitalized Interest Account from
Available Funds pursuant to Section 2.05(b)(vii) such additional amounts as are
necessary to cause the amount on deposit in the Capitalized Interest Account to be at least
equal to the Capitalized Interest Account Specified Balance calculated as of the last day of
the related Settlement Period. Funds on deposit in the Capitalized Interest Account may be
invested from time to time in Eligible Investments in accordance with Section 2.08.
The Administrative Agent shall apply funds on deposit in the Capitalized Interest Account as
described in Section 2.07(a).




     (b) On or prior to the date hereof, the Administrator shall establish and maintain, or
cause to be established and maintained, the Reserve Account by depositing into the Reserve
Account cash or Eligible Investments equal to the Reserve Account Specified Balance as of
the date of the initial Purchase hereunder. The Reserve Account shall be maintained in a
segregated account at the Administrative Agent, and shall be under the sole dominion and
control of the Administrative Agent on behalf of the Secured Creditors. The Reserve
Account shall be in the name of the Administrative Agent, on behalf of the Secured Creditors
and the Transferor. Neither the Transferor nor the Administrator shall have any withdrawal
rights from the Reserve Account. The Reserve Account Specified Balance shall be deposited
into the Reserve Account by the Administrator from proceeds of each Purchase and additional
amounts shall be deposited to the Reserve Account pursuant to Section 2.05(b).
Funds on deposit in the Reserve Account may be invested from time to time in Eligible
Investments in accordance with Section 2.08. The Administrative Agent shall apply
funds on deposit in the Reserve Account as described in Section 2.07(b).



     Section 2.07 Transfers from the Capitalized Interest Account and Reserve Account.





     (a) To the extent there are insufficient Available Funds in the Collection Account to
pay the amounts set forth in clauses (b)(ii) through (v) of Section 2.05 in
accordance with the provisions of Section 2.05 on any Settlement Date, the
Administrative Agent shall transfer to the Collection Account moneys held by the
Administrative Agent in the Capitalized Interest Account, to the extent available for
distribution on the specified day, to pay the amounts set forth in clauses (b)(ii) through
(v) of Section 2.05 in the priority set forth in Section 2.05.




     (b) To the extent there are insufficient Available Funds in the Collection Account to
pay the amounts set forth in clauses (b)(ii) through (v) of Section 2.05 (or, during
the Liquidation Period, clauses (b)(ii) through (b)(xviii)) in accordance with the
provisions of Section 2.05 on any Settlement Date, the Administrative Agent shall
transfer to the Collection Account moneys held by the Administrative Agent in the



56









 






Reserve Account, to the extent available for distribution on the specified day, to pay
the amounts set forth in clauses (b)(ii) through (v) (or, during the Liquidation Period,
clauses (b)(ii) through (b)(xviii)) of Section 2.05 in the priority set forth in
Section 2.05.




     (c) To the extent, as of the end of any Settlement Period, there are on deposit in the
Reserve Account funds in excess of the Reserve Account Specified Balance calculated as of
the end of such Settlement Period (giving effect to any purchase of additional Participated
Loans between the end of such Settlement Period and the related Settlement Date) or there
are on deposit in the Capitalized Interest Account funds in excess of the Capitalized
Interest Account Specified Balance calculated as of the end of such Settlement Period, then
the Administrative Agent shall withdraw such excess from the relevant account and deposit it
into the Collection Account to be used as Available Funds on the related Settlement Date.



     Section 2.08 Management of Collection Account, Borrower Benefit Account, Clearing Account,
Student Loan ABS Proceeds Account, the Floor Income Rebate Account, Disbursement Account,
Capitalized Interest Account, Reserve Account, Capital Payment Account and Release Proceeds
Account.




     (a) All funds held in the Collection Account, Borrower Benefit Account, Clearing
Account, Student Loan ABS Proceeds Account, the Floor Income Rebate Account and Disbursement
Account (or any subaccount thereof), including investment earnings thereon, shall be
invested at the direction of the Administrator in Eligible Investments having a maturity
date not later than the next Business Day, unless consented to by the Administrative Agent.
All funds held in the Capitalized Interest Account and the Reserve Account (or any
subaccount thereof), including investment earnings thereon, shall be invested at the
direction of the Administrator in Eligible Investments having a maturity date not later than
the next date on which any distributions are to be made from funds on deposit in the
Capitalized Interest Account and/or the Reserve Account; provided, however, that from and
after the Termination Date, the Administrative Agent shall have the sole right to restrict
the maturities of any investments held in the Collection Account, Borrower Benefit Account,
Clearing Account, Student Loan ABS Proceeds Account, the Floor Income Rebate Account,
Disbursement Account, Capitalized Interest Account and/or the Reserve Account and to direct
the withdrawal of any such investments for the purposes of paying the amounts described in
Section 2.05(b), including any outstanding Capital and Purchaser Costs on the
Purchases. All funds held in the Capital Payment Account and the Release Proceeds Account,
including investment earnings thereon, shall be invested at the direction of the
Administrative Agent in Eligible Investments having a maturity date not later than the next
Business Day. All investment earnings (net of losses) on such Eligible Investments shall be
credited to the Collection Account, the Borrower Benefit Account, the Clearing Account, the
Student Loan ABS Proceeds Account, the Floor Income Rebate Account, the Disbursement
Account, the Capitalized Interest Account, the Reserve Account, the Capital Payment Account
and the Release Proceeds Account, as the case may be. In the event that the Administrator
shall have failed to give investment directions to the Administrative Agent by 11:00 a.m.,
Charlotte, North Carolina time, on any Business Day on which there may be uninvested cash
deposited in the Collection Account, the Borrower Benefit Account, the Clearing



57









 






Account, the Student Loan ABS Proceeds Account, the Floor Income Rebate Account, the
Disbursement Account, the Capitalized Interest Account or the Reserve Account, the
Administrative Agent shall have no obligation to invest such funds and shall not be liable
for any lost potential investment earnings.




     (b) Bank of America, N.A., in its capacity as securities intermediary or depositary
bank (“Bank of America”) with respect to the Collection Account, the Borrower Benefit
Account, the Clearing Account, the Student Loan ABS Proceeds Account, the Floor Income
Rebate Account, the Disbursement Account (if such account is maintained at the
Administrative Agent), the Capitalized Interest Account and the Reserve Account, hereby
agrees with the Transferor and the Administrative Agent that (i) each of the Collection
Account, the Borrower Benefit Account, the Clearing Account, the Student Loan ABS Proceeds
Account, the Floor Income Rebate Account, the Disbursement Account (if such account is
maintained at the Administrative Agent), the Capitalized Interest Account and the Reserve
Account shall be either securities accounts or deposit accounts maintained at the
Administrative Agent, (ii) all property credited to the Collection Account, the Borrower
Benefit Account, the Clearing Account, the Student Loan ABS Proceeds Account, the Floor
Income Rebate Account, the Disbursement Account (if such account is maintained at the
Administrative Agent), the Capitalized Interest Account or the Reserve Account shall be
treated as a financial asset while any such account is a securities account, (iii) Bank of
America shall treat the Administrative Agent as entitled to exercise the rights that
comprise each financial asset credited to the Collection Account, the Borrower Benefit
Account, the Clearing Account, the Student Loan ABS Proceeds Account, the Floor Income
Rebate Account, the Disbursement Account (if such account is maintained at the
Administrative Agent), the Capitalized Interest Account or the Reserve Account, (iv) the
Securities Intermediary shall comply with entitlement orders originated by the
Administrative Agent with respect to any of the foregoing accounts that is a securities
account and shall comply with instructions directing the disposition of funds originated by
the Administrative Agent with respect to any of the foregoing accounts that is a deposit
account, in each case without the further consent of any other person or entity, (v) except
as otherwise provided in subsection (a) of this Section, Bank of America shall not agree to
comply with entitlement orders or instructions directing the disposition of funds originated
by any person or entity other than the Administrative Agent, (vi) the Collection Account,
the Borrower Benefit Account, the Clearing Account, the Student Loan ABS Proceeds Account,
the Floor Income Rebate Account, the Disbursement Account (if such account is maintained at
the Administrative Agent), the Capitalized Interest Account, the Reserve Account and all
property credited to either such account shall not be subject to any lien, security
interest, right of set-off or encumbrance in favor of Bank of America in its capacity as
securities intermediary or depositary bank or anyone claiming through Bank of America as
securities intermediary or depositary bank (other than the Administrative Agent), and (vii)
the agreement herein between Bank of America and the Administrative Agent shall be governed
by the laws of the State of New York. Each term used in this Section 2.08(b) and in
Section 2.08(c) and defined in the New York Uniform
Commercial Code (the “New York
UCC”) shall have the meaning set forth in the New York UCC. If the Disbursement Account is
not maintained at the Administrative Agent, then the Transferor shall obtain a control
agreement from the Qualified Institution at which the Disbursement



58









 






Account is held in form and substance acceptable to the Administrative Agent in order
to perfect the security interest of the Administrative Agent in the Disbursement Account.




     (c) No Eligible Investment held in the Collection Account, the Borrower Benefit
Account, the Clearing Account, the Student Loan ABS Proceeds Account, the Floor Income
Rebate Account, the Disbursement Account, the Reserve Account or the Capitalized Interest
Account in the form of an instrument or certificated security as defined in the New York UCC
in the possession of the Administrative Agent (i) shall be subject to any other security
interest or (ii) shall constitute proceeds of any property subject to such third party’s
security interest.




     (d) The Transferor agrees to report as its income for financial reporting and tax
purposes (to the extent reportable) all investment earnings on amounts in the Collection
Account, Borrower Benefit Account, Clearing Account, Student Loan ABS Proceeds Account, the
Floor Income Rebate Account, Disbursement Account, Capitalized Interest Account, Reserve
Account, Capital Payment Account and Release Proceeds Account.




     (e) Any investment of any funds in the Collection Account, Borrower Benefit Account,
Clearing Account, Student Loan ABS Proceeds Account, the Floor Income Rebate Account,
Disbursement Account, Capitalized Interest Account, Reserve Account, Capital Payment Account
and Release Proceeds Account shall be made under the following terms and conditions:




     (i) any such investment of funds shall be made in Eligible Investments which
Eligible Investment will mature no later than the date which is 30 days after the
purchase date therefor;




     (ii) with respect to investments credited to the Collection Account, Borrower
Benefit Account, Clearing Account, Student Loan ABS Proceeds Account, the Floor
Income Rebate Account, Disbursement Account, Capitalized Interest Account and
Reserve Account, each such investment shall be made in the name of the
Administrative Agent, for the benefit of Transferor and the Secured Creditors (to
the extent of their respective interests therein), or in the name of a nominee of
the Administrative Agent and with respect to investments credited to the Capital
Payment Account and Release Proceeds Account, each such investment shall be made in
the name of the Administrative Agent for the benefit of the Purchasers (to the
extent of their respective interests therein), or in the name of a nominee of the
Administrative Agent;




     (iii) any certificate or other instrument evidencing such investment shall be
delivered directly to the Administrative Agent (and endorsed to the Administrative
Agent or in blank), and the Administrative Agent shall have sole possession of such
instrument, and all income on such investment; and




     (iv) with respect to investments credited to the Collection Account, Borrower
Benefit Account, Clearing Account, Student Loan ABS Proceeds



59









 






Account, the Floor Income Rebate Account, Disbursement Account, Capitalized
Interest Account and Reserve Account, the Administrative Agent for the benefit of
the Secured Creditors shall have a first priority perfected security interest in
such investment, perfected by control to the extent permitted under Article 9 of the
UCC and with respect to investments credited to the Capital Payment Account and the
Release Proceeds Account, the Administrative Agent for the benefit of the Purchasers
shall have a first priority ownership interest in such investment.




     (f) The Administrative Agent shall not in any way be held liable by reason of any
insufficiency in the Collection Account, Borrower Benefit Account, Clearing Account, Student
Loan ABS Proceeds Account, the Floor Income Rebate Account, Disbursement Account,
Capitalized Interest Account, Reserve Account, Capital Payment Account or Release Proceeds
Account resulting from losses on investments made in accordance with the provisions of this
Agreement (but the institution serving as Administrative Agent shall at all times remain
liable for its own debt obligations, if any, constituting part of such investments).



     Section 2.09 [Reserved] .




     Section 2.10 Characterization; Collateral Assignment of Transaction Documents; Grant of a
Security Interest. Each of the parties hereto intends that each Purchase shall have the effect of
assigning, conveying and otherwise transferring to the Purchasers a property interest in the nature
of a participation, vesting in each Purchaser a beneficial interest in the assets and properties
subject to, and to the extent of, the Aggregate Capital outstanding, with the Transferor (or the
Eligible Lender Trustee on its behalf) continuing to hold legal title in such assets and
properties. The Purchase of the Participation Interest is not intended to constitute a secured
financing. If for any reason any court shall determine that the Purchases constitute loans to the
Transferor, and to secure any and all of the Obligations of the Transferor hereunder and under the
other Transaction Documents, including the prompt and complete payment when due of the Obligations
and the performance by the Transferor of all of the covenants and obligations to be performed by it
pursuant to this Agreement and each other Transaction Document:




     (a) the Transferor (and the Eligible Lender Trustee, in its capacity as titleholder to
the Transferor Student Loans and Transferor Student Loan ABS) hereby assigns to the
Administrative Agent, and Grants to the Administrative Agent a security interest, in each
case, for the benefit of the Secured Creditors in accordance with their interests, in all of
the Transferor’s (and the Eligible Lender Trustee’s, in its capacity as titleholder to the
Transferor Student Loans and Transferor Student Loan ABS) right and title to and interest in
(but not the obligations of) the Transaction Documents. The Transferor confirms and agrees
that the Administrative Agent shall have, following a Termination Event and during the
continuation thereof, the sole right to enforce the Transferor’s rights and remedies under
the Transaction Documents with respect to the Pledged Collateral for the benefit of the
Secured Creditors, but without any obligation on the part of the Administrative Agent or any
other Secured Creditor or any of their respective Affiliates, to perform any of the
obligations of the Transferor under the Transaction Documents; and




60










 






     (b) the Transferor (and the Eligible Lender Trustee, in its capacity as
titleholder to the Transferor Student Loans and Transferor Student Loan ABS) hereby Grants
to the Administrative Agent on behalf of the Secured Creditors (and their respective
successors and assigns), a security interest in all of the Transferor’s and the Eligible
Lender Trustee’s, on behalf of the Transferor, right, title and interest in:




     (i) all Transferor Student Loans and Transferor Student Loan ABS;




     (ii) all Collections from Transferor Student Loans and Transferor Student Loan
ABS, including all Interest Subsidy Payments, Special Allowance Payments, borrower
payments and reimbursements of principal and accrued interest on default claims
received and to be received from any Guarantor;




     (iii) any other Collections, Eligible Investments, funds and accrued earnings
thereon held in the various funds and accounts created under this Agreement,
including the Collection Account, the Borrower Benefit Account, the Clearing
Account, the Student Loan ABS Proceeds Account, the Floor Income Rebate Account, the
Disbursement Account, the Capitalized Interest Account and the Reserve Account;




     (iv) all rights and remedies (but none of the obligations) under each of the
Transaction Documents;




     (v) all Records relating to such Transferor Student Loans and Transferor
Student Loan ABS and the foregoing items;




     (vi) all accounts, general intangibles, payment intangibles, instruments,
investment property, documents, chattel paper, goods, moneys, letters of credit,
letter of credit rights, certificates of deposit, deposit accounts and all other
property and interests in property of the Transferor or the Eligible Lender Trustee
(solely in its capacity as titleholder to the Transferor Student Loans and
Transferor Student Loan ABS), on behalf of the Transferor, whether tangible or
intangible and whether now owned or existing or hereafter arising or acquired and
wheresoever located; and




     (vii) all proceeds of any of the foregoing (collectively, along with the right
and title to and interest of the Transferor (and the Eligible Lender Trustee, in its
capacity as titleholder to the Transferor Student Loans and Transferor Student Loan
ABS) in the Transaction Documents pursuant to Section 2.09 and all proceeds
thereof, the “Pledged Collateral”).


The Transferor and the Eligible Lender Trustee agree that this Section is intended to grant in
favor of the Administrative Agent, on behalf of the Secured Creditors, a first priority, continuing
lien and security interest in all of the Transferor’s (and the Eligible Lender Trustee’s, but
solely in its capacity as titleholder to the Transferor Student Loans and certain of the Transferor
Student Loan ABS) personal property. Each of the Transferor and the Eligible Lender Trustee
authorizes the Administrative Agent and its counsel to file Uniform Commercial Code Financing
Statements describing the collateral as all personal property of the Transferor. In addition, at
the


61









 






request of the Administrative Agent, the Transferor shall file or cause to be filed, and authorizes
the Administrative Agent to file, UCC financing statement assignments assigning to the
Administrative Agent any financing statement showing the Transferor as secured party with respect
to the Pledged Collateral. Each of the Transferor and the Administrator further agrees that it
will take all steps necessary to make the Administrative Agent or its nominee, acting as a
securities intermediary on behalf of the Transferor and the Secured Creditors, the registered owner
of all Transferor Student Loan ABS and to ensure that each Transferor Student Loan ABS which is in
book entry form is maintained in the Administrative Agent’s name or its nominee on the books and
records of the DTC, or with another securities intermediary acceptable to the Administrative Agent.



Each of the Transferor and the Administrator further agrees that, with respect to each Transferor
Student Loan ABS in certificated form, it will take all steps necessary to deliver to the
Administrative Agent or its nominee possession of such Transferor Student Loan ABS indorsed to the
Administrative Agent or in blank by an effective indorsement or registered in the name of the
Administrative Agent or its designee. Upon termination of the security interest of the
Administrative Agent (on behalf of the Secured Creditors) in the Transferor Student Loan ABS, the
Administrative Agent agrees that it will take all steps necessary to make the Transferor the
registered owner of all Transferor Student Loan ABS and to ensure that each Transferor Student Loan
ABS which is in book entry form is maintained in the Transferor’s name on the books and records of
the Depository Trust Company, or with another securities intermediary acceptable to the Transferor,
except that in the case of all Transferor Student Loan ABS in certificated form, the Administrative
Agent will take all steps necessary to deliver to the Transferor possession of all Transferor
Student Loan ABS in certificated form indorsed to the Transferor or in blank by an effective
indorsement or registered in the name of the Transferor or its designee.




          Notwithstanding the foregoing, it is understood by each of the parties hereto that they do not
have recourse to the assets of the Eligible Lender Trustee in its individual capacity in respect of
the obligations of the Transferor hereunder. In addition, Chase Bank USA, National Association and
any successor eligible lender trustee is entering into this Agreement solely in its capacity as
Eligible Lender Trustee, and not in its individual capacity, and in no case shall Chase Bank USA,
National Association (or any person acting as successor eligible lender trustee) be personally
liable for or on account of any of the statements, representations, warranties, covenants or
obligations stated to be those of the Transferor hereunder, all such liability, if any, being
expressly waived by the parties hereto, any person claiming by, through, or under such party.




     Section 2.11 Evidence of Purchases. Each Managing Agent shall maintain a Purchase Account
(the “Purchase Account”) on its books in which shall be recorded (a) all Purchases made by each
related Purchaser in its related Facility Group pursuant to this Agreement, (b) whether such
Purchases are match-funded or pool-funded, (c) the outstanding Capital of Purchases then funded by
or on behalf of its related Facility Group, (d) all payments of Capital and Purchaser Costs made by
the Transferor on all such Purchases, and (e) all appropriate debits and credits with respect to
its related Facility Group as provided in this Agreement including, without limitation, all fees,
charges, expenses and interest. All entries in each Managing Agent’s Purchase Account shall be
made in accordance with such Purchaser’s customary accounting practices as in effect from time to
time. The entries in the Purchase Account shall be conclusive



62









 







and binding for all purposes, absent manifest error. Any failure to so record or any errors
in doing so shall not, however, limit or otherwise affect the obligation of the Transferor to pay
any amount owing with respect to the Purchases or any of the other Obligations.



     Section 2.12 Payments by the Transferor. All payments to be made by the Transferor shall be
made without set-off, recoupment or counterclaim. Except as otherwise expressly provided herein,
all payments by, or on behalf of, the Transferor for the account of a Conduit Purchaser, an
Alternate Purchaser or a Program Support Provider, as the case may be, shall be made to the
Administrative Agent, for further credit to an account designated by such Conduit Purchaser,
Alternate Purchaser or Program Support Provider, in United States dollars. Such payments (other
than amounts already on deposit in the Collection Account) shall be made in immediately available
funds to the Administrative Agent no later than 12:00 p.m., Charlotte, North Carolina time, on the
date specified herein and the Administrative Agent shall forward such amounts to such Conduit
Purchaser, Alternate Purchaser or Program Support Provider no later than 1:00 p.m., Charlotte,
North Carolina time, on the date specified herein. Payments shall be applied in the order of
priority specified in Section 2.05(b). Any payment which is received later than 1:00 p.m.
Charlotte, North Carolina time, (other than payments from amounts already on deposit in the
Collection Account) shall be deemed to have been received on the following Business Day and any
applicable interest or fee shall continue to accrue.



     Section 2.13 Payment of Stamp Taxes, Etc. Subject to any limitations set forth in
Section 2.20, the Transferor agrees to pay any present or future stamp, mortgage,
value-added, court or documentary taxes or any other excise or property taxes, charges or similar
levies imposed by any federal, state or local governmental body, agency or instrumentality
(hereinafter referred to as “Other Applicable Taxes”) relating to this Agreement, any of the other
Transaction Documents or any recordings or filings made pursuant hereto and thereto.



     Section 2.14 Sharing of Payments, Etc. If, other than as expressly provided elsewhere
herein, any Purchaser shall obtain on account of the Participation Interests owned by it any
payment (whether voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its Pro Rata Share (or other share contemplated hereunder), such Purchaser
shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the other
Purchasers such participations made by them as shall be necessary to cause such purchasing
Purchaser to share the excess payment pro rata (based on the Pro Rata Share of each Purchaser) with
each of them; provided, however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Purchaser, such purchase shall to that extent be rescinded and each
other Purchaser shall repay to the purchasing Purchaser the purchase price paid therefor, together
with an amount equal to such paying Purchaser’s ratable share (according to the proportion of (i)
the amount of such paying Purchaser’s required repayment to (ii) the total amount so recovered from
the purchasing Purchaser) of any interest or other amount paid or payable by the purchasing
Purchaser in respect of the total amount so recovered. The Transferor agrees that any Purchaser so
purchasing a participation from another Purchaser may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Purchaser purchased a Participation Interest directly from the
Transferor in the amount of such participation. The Administrative Agent will keep records (which
shall be conclusive and binding in the absence of manifest error) of



63









 







participations purchased under this Section and will in each case notify each Managing Agent
following any such purchases or repayments.



     Section 2.15 Yield Protection.




     (a) If any Regulatory Change (including a change to Regulation D under the Securities
Exchange Act of 1933, as amended):




     (i) shall impose, modify or deem applicable any reserve (including, without
limitation, any reserve imposed by the Federal Reserve Board), special deposit or
similar requirement against assets of any Affected Party, deposits or obligations
with or for the account of any Affected Party or with or for the account of any
Affiliate (or entity deemed by the Federal Reserve Board to be an affiliate) of an
Affected Party, or credit extended to any Affected Party;




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




     (iii) shall impose any other condition or expense affecting any portion of the
Obligations owned or funded in whole or in part by any Affected Party, or its
obligations or rights, if any, to pay any portion of the unused Commitment or to
provide funding therefor (other than any condition or expense resulting from the
gross negligence or willful misconduct of such Affected Party); or




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




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




     (A) to increase the cost to or to impose a cost in any material amount on an
Affected Party funding or making or maintaining any portion of the Obligations, or
any purchases, reinvestments or loans or other extensions of credit under the
Program Support Agreement or any Transaction Document or any commitment of such
Affected Party with respect to the foregoing;




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




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




then within 30 days after demand by such Affected Party (which demand shall be accompanied
by a statement setting forth in reasonable detail the basis of such demand),



64









 







the Transferor shall pay directly to such Affected Party such additional amount or amounts
as will compensate such Affected Party for such additional or increased cost or such
reduction; provided (y) such additional amount or amounts shall not be payable with respect
to any period in excess of 180 days prior to the date of demand by the Affected Party (or,
if less than 180 days have passed since the Closing Date, with respect to any period prior
to the Closing Date) unless (1) the effect of the Regulatory Change is retroactive by its
terms to a period prior to the date of the Regulatory Change, in which case any additional
amount or amounts shall be payable for the retroactive period but only if the Affected Party
provides its written demand not later than 180 days after the Regulatory Change; or (2) the
Affected Party reasonably and in good faith did not believe the Regulatory Change resulted
in such an additional or increased cost or such a reduction during such prior period and (z)
the Affected Party shall allocate such additional or increased cost or reduction among all
similarly situated program participants.




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




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



     Section 2.16 [Reserved]



     Section 2.17 Servicer Advances. In the event that, on the Settlement Date relating to any
Settlement Period, the amount on deposit in the Collection Account and the Clearing Account which
is allocable to the payment of Purchaser Costs (other than amounts owed with respect to Yield
Protection) due and payable on such Settlement Date is not sufficient to pay such Purchaser Costs,
the Master Servicer may, if permitted pursuant to its Servicing Agreement, make an advance in an
amount equal to such insufficiency to the extent it believes such Servicer Advance will be
recoverable.



     Section 2.18 Release of Participation Interests and Pledged Collateral.




     (a) Each Purchaser agrees to sell, reconvey, assign and release its Participation
Interests and the Administrative Agent hereby agrees to release its lien on Participated
Loans, Participated Student Loan ABS and all other Pledged Collateral transferred from the
Transferor or the Servicer as a result of purchases or repurchases of Transferor Student
Loans or Transferor Student Loan ABS pursuant to the Purchase



65









 







Agreements or the Servicing Agreement; provided; however; that with
respect to a repurchase of Student Loans or Student Loan ABS pursuant to the applicable
Purchase Agreement that is not a Permitted Release covered by Section 2.18(b), the
Administrative Agent has received cash into the Release Proceeds Account in an amount equal
to (y) for Student Loans, the product of the Applicable Percentage (determined as if each
Student Loan were an Eligible Loan) multiplied by the outstanding Principal Balance of such
Student Loans and (z) for Student Loan ABS, the product of the Applicable Percentage
(determined as if each Student Loan ABS were an Eligible Student Loan ABS) multiplied by the
Market Value with respect to such Student Loan ABS (using the most recent Market Value
reported on a date when the Asset Coverage Ratio was greater than or equal to the Minimum
Asset Coverage Ratio); and provided further that with respect to purchases
of Student Loans by the Servicer required or expressly permitted as a result of the
Servicing Agreement that is not a Permitted Release covered by Section 2.18(b), the
Administrative Agent has received cash into the Release Proceeds Account in an amount equal
to that set forth in Section 3.5A of the Servicing Agreement.




     (b) In addition, each Purchaser hereby further agrees to sell, reconvey, assign and
release its Participation Interest in and the Administrative Agent hereby further agrees to
release its lien on the Participated Loans, Participated Student Loan ABS and all other
Pledged Collateral transferred from the Transferor to the Seller as a result of a Permitted
Release. The release of the Purchasers’ Participation Interests and the Administrative
Agent’s security interest in any Released Interests pursuant to this Section 2.18(b)
shall be subject to the following conditions precedent (and by transferring the Pledged
Collateral the Transferor shall be deemed to have certified that all such conditions
precedent are satisfied):




     (i) such release shall be a Permitted Release;




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




	 	(A)	 	there shall not exist any
Termination Event or, to the best of the Transferor’s or the
Administrator’s knowledge, Potential Termination Event; and
	 
	 	(B)	 	the Minimum Asset Coverage Requirement is met;






     (iii) three Business Days prior to any such release that is a Take Out
Securitization, a Fair Market Auction or a Permitted Seller Buy-Back the Transferor,
acting through the Administrator, shall have delivered a notice describing the
Transferor Student Loans and Transferor Student Loan ABS substantially in the form
and substance of Exhibit G attached hereto (a “Notice of Release”) to the
Administrative Agent, certifying that the foregoing conditions described in clause
(ii) above shall have been satisfied in connection therewith, together with a pro
forma report in the form attached as Exhibit H demonstrating compliance of the
condition described in clause (B) above; and



66









 






     (iv) on or prior to such Permitted Release, the Transferor shall have deposited
into the Release Proceeds Account cash in an amount equal to (y) for Student Loans,
the product of the Applicable Percentage (determined as if each Student Loan were an
Eligible Loan) multiplied by the outstanding Principal Balance of such Student Loans
and (z) for Student Loan ABS, the product of the Applicable Percentage (determined
as if each Student Loan ABS were an Eligible Student Loan ABS) multiplied by the
most recently reported Market Value with respect to such Student Loan ABS.




     (c) Within five (5) Business Days after each release of collateral hereunder in
connection with a Take Out Securitization, the Transferor, acting through the Administrator,
shall deliver to the Administrative Agent a reconciliation statement (the “Release
Reconciliation Statement“) which shall include an updated calculation, based on actual
figures, in the form attached as Exhibit I, confirming that the Minimum Asset Coverage
Requirement was satisfied before and after giving effect to the related release. If the
Release Reconciliation Statement shows that the value of the released Transferor Student
Loans and Transferor Student Loan ABS was greater than the value provided on the Notice of
Release, then the Transferor shall deposit such difference into the Release Proceeds
Account. If the Release Reconciliation Statement shows that the value of the released
Transferor Student Loans and Transferor Student Loan ABS was less than the value provided on
the Notice of Release, then the Administrative Agent shall release to the Transferor such
difference from the Release Proceeds Account or, if funds are not available in the Release
Proceeds Account, from the Collection Account.



     Section 2.19 Effect of Release. Upon the satisfaction of the foregoing conditions in
accordance with Section 2.18, all right, title and interest of the Purchasers and the
Administrative Agent in, to and under any Participation Interests or Pledged Collateral released
pursuant to Section 2.18 (“Released Interests”) shall terminate and revert to the Transferor, its
successors and assigns, and the right, title and interest of the Purchasers and the Administrative
Agent in such Released Interests shall thereupon cease, terminate and become void; and, upon the
written request of the Transferor, acting through its Administrator, its successors or assigns, and
at the cost and expense of Transferor, the Administrative Agent, acting through the Administrator,
shall deliver and, if necessary, execute such UCC-3 financing statements and releases prepared by
and submitted to the Administrative Agent for authorization or execution, as applicable, as are
necessary or reasonably requested in writing by Transferor, acting through the Administrator, to
terminate and remove of record any documents constituting public notice of the security interest in
such Released Interests granted hereunder being released and shall return the Student Loan ABS
Certificates, if any, representing Released Interests to the Transferor or its designee.



     Section 2.20 Taxes.




     (a) All payments made by the Transferor under this Agreement shall be made free and
clear of, and without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding any U.S. Federal taxes (other than Federal withholding
taxes on interest), net income taxes and franchise taxes or branch profit taxes



67









 







(imposed in lieu of net income taxes) imposed on the Administrative Agent, any Managing
Agent or any Purchaser as a result of a present or former connection between the
Administrative Agent, any Managing Agent or such Purchaser and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the Administrative
Agent, any Managing Agent or such Purchaser having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any other Loan
Document) (collectively, the “Excluded Taxes”). If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) are
required to be withheld from any amounts payable to the Administrative Agent, any Managing
Agent or any Purchaser hereunder, the amounts so payable to the Administrative Agent, any
Managing Agent or such Purchaser shall be increased to the extent necessary to yield to the
Administrative Agent, any Managing Agent or such Purchaser (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement; provided, however, that the
Transferor shall not be required to increase any such amounts payable to any Purchaser with
respect to any Non-Excluded Taxes that are United States withholding taxes imposed on
amounts payable to such Purchaser at the time such Purchaser becomes a party to this
Agreement, except to the extent that such Purchaser’s assignor (if any) was entitled, at the
time of the assignment, to receive additional amounts from the Transferor with respect to
such Non-Excluded Taxes pursuant to this paragraph.




     (b) In addition, the Transferor shall pay to the relevant Governmental Authority in
accordance with applicable law all taxes, levies, imposts, deductions, charges, assessments
or fees of any kind (including but not limited to any current or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies, but excluding
Excluded Taxes) imposed upon the Administrative Agent, any Managing Agent or such Purchaser
that arises from any payment made hereunder or from the execution, delivery, or registration
of or otherwise similarly with respect to, this Agreement (“Other Taxes”).




     (c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Transferor, the
Administrative Agent or the applicable Managing Agent shall promptly notify the Transferor
in writing and within thirty (30) days thereafter the Transferor shall send to the
Administrative Agent for its own account or for the account of the Administrative Agent, any
Managing Agent or relevant Purchaser, as the case may be, a certified copy of an original
official receipt received by the Transferor showing payment thereof. The Transferor agrees
to indemnify the Administrative Agent, any Managing Agent and each Purchaser from and
against the full amount of the Non-Excluded Taxes and Other Taxes arising out of this
Agreement (whether directly or indirectly) imposed upon or paid by the Administrative Agent,
any Managing Agent or such Purchaser and any liability (including penalties, interest, and
expenses arising with respect thereto), whether or not such Non-Excluded Taxes or Other
Taxes were correctly or legally asserted by the relevant Governmental Authority; provided
that such Purchaser shall have provided the Transferor with evidence, reasonably
satisfactory to the Transferor, of payment of such Non-Excluded Taxes or Other Taxes, as the
case may be.



68









 






     (d) Each Purchaser (or transferee) that is not a “U.S. Person” as defined in section
7701(a)(30) of the Code (a “Non-U.S. Purchaser”) shall deliver to the Transferor and the
Administrative Agent and its Managing Agent two copies of either U.S. Internal Revenue
Service form W-8BEN or form W-8ECI, or, in the case of a Non-U.S. Purchaser claiming
exemption from the withholding of U.S. federal income tax under Section 871(h) or 881(c) of
the Code with respect to payments of “portfolio interest”, both a form W-8BEN and a
certificate substantially in the form of Exhibit J (a “2.20(d) Certificate”) or any
subsequent versions thereof or successors thereto, in all cases properly completed and duly
executed by such Non-U.S. Purchaser, claiming complete exemption from withholding of U.S.
federal income tax on all payments by the Transferor under this Agreement. Such forms shall
be delivered by each Non-U.S. Purchaser at least (5) five Business Days before the date of
the initial payment to be made pursuant to this Agreement by the Transferor to such
Purchaser. In addition, each Non-U.S. Purchaser shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S. Purchaser.
Each Non-U.S. Purchaser shall promptly notify the Transferor at any time it determines that
it is no longer in a position to provide any previously delivered certificate to the
Transferor (or any other form of certification adopted by the U.S. taxing authorities for
such purpose). Notwithstanding any other provision in this paragraph, a Non-U.S. Purchaser
shall not be required to deliver any subsequent form pursuant to this paragraph that such
Non-U.S. Purchaser is not legally able to deliver.




     (e) For any period with respect to which the Purchaser has failed to provide the
Transferor, the Administrative Agent or its Managing Agent with the appropriate form,
certificate or other document described in Section 2.20(d) (unless such failure is due to a
change in treaty, law or regulation, or any interpretation or administration thereof by any
governmental authority, occurring after the date on which a form, certificate or other
document originally was required to be provided), such Purchaser shall not be entitled to
indemnification of additional amounts under Section 2.20 with respect to Taxes by reason of
such failure; provided, however, that should a Purchaser, which is otherwise exempt from or
subject to a reduced rate of withholding tax, become subject to Taxes because of its failure
to deliver a form required hereunder, the Transferor shall take such steps as such Purchaser
shall reasonably request to recover such Taxes.




     (f) A Purchaser which is entitled to an exemption from or reduction of non-U.S.
withholding tax under the law of the jurisdiction in which the Transferor is located, or any
treaty to which such jurisdiction is a party, with respect to payments under this Agreement
shall deliver to the Transferor (with a copy to the Administrative Agent), at the time or
times prescribed by the applicable law or reasonably requested by the Transferor, such
properly completed and executed documentation prescribed by applicable law as will permit
such payments to be made without withholding or at a reduced rate, provided that such
Purchaser is legally entitled to complete, execute and deliver such documentation and in
such Purchaser’s judgment such completion, execution or submission would not materially
prejudice the legal position of such Purchaser.



69









 






     (g) In cases in which an Transferor makes a payment under this Agreement to a U.S.
Person with knowledge that such U.S. Person is acting as an agent for a foreign person, the
Transferor will not treat such payment as being made to a U.S. Person for purposes of Treas.
Reg. § 1.1441-1(b)(2)(ii) (or a successor provision) without the express written consent of
such U.S. Person.




     (h) Each Purchaser hereby agrees that, upon the occurrence of any circumstances
entitling such Purchaser to indemnification or additional amounts pursuant to this Section
2.20, such Purchaser shall use reasonable efforts to designate a different lending office if
the making of such a change would avoid the need for, or materially reduce the amount of,
any such additional amounts that may thereafter accrue and would not, in the reasonable
judgment of such Purchaser, be materially disadvantageous to such Purchaser.




     (i) If a Purchaser receives a refund or realizes the benefit of a credit or reduction
in respect of any Other Taxes as to which the Purchaser has been indemnified by the
Transferor, or with respect to which the Transferor has paid an additional amount hereunder,
the Purchaser shall within 30 days after the date of such receipt or realization pay over
the amount of such refund or credit (to the extent so attributable) to the Transferor, net
of all reasonable out-of-pocket expenses of such Purchaser related to claiming such refund
or credit; provided, however, that (i) the Purchaser, acting in good faith, will be the sole
judge of the amount of any such refund, credit or reduction and of the date on which such
refund, credit or reduction is received, (ii) the Purchaser, acting in good faith, shall
have absolute discretion as to the order and manner in which it employs or claims tax
refunds, credits, reductions and allowances available to it and (iii) the Transferor agrees
to repay the Purchaser, upon written request from the Purchaser, as the case may be, the
amount of such refund, credit or reduction received by the Transferor, in the event and to
the extent, the Purchaser is required to repay such refund, credit or reduction to any
relevant Governmental Authority.




     (j) Notwithstanding any other provision of this Agreement, in the event that a
Purchaser is party to a merger or consolidation pursuant to which such Purchaser no longer
exists or is not the surviving entity (but excluding any change in the ownership of such
Purchaser), any taxes payable under applicable law as a result of such change shall be
considered excluded from taxes to the extent such taxes are in excess of the taxes that
would have been payable had such change not occurred.




     (k) Within thirty (30) days of the written request of the Transferor therefor, the
Purchaser shall execute and deliver to such Transferor such certificates, forms or other
documents which can be furnished consistent with the facts and which are reasonably
necessary to assist the Transferor in applying for refunds of Taxes remitted hereunder.




     (l) The agreements in this Section shall survive the termination of this Agreement and
the payment of all amounts payable hereunder.



     Section 2.21 [Reserved].



70









 





     Section 2.22 Notice of Amendments to Program Support Agreements. Each Managing Agent shall
provide the Transferor and the Administrator with written notice of any amendment to the Program
Support Agreements executed in connection with this Agreement if such amendment is reasonably
expected by such Managing Agent to materially impact the Transferor.



     Section 2.23 Change in Commercial Paper Dealers. At the request of the Transferor or the
Administrator, each Managing Agent shall provide the Transferor and the Administrator with
information regarding any changes in the list of CP dealers or placement agents used by the Conduit
Purchasers in such Managing Agent’s Facility Group.



     Section 2.24 Deliveries by Administrative Agent. The Administrative Agent agrees that it
will forward to the Managing Agents each of the following, promptly after receipt thereof: (a) the
Annual Administrator’s Statement delivered to the Administrative Agent pursuant to Section
3.2(a) of the Administration Agreement and (b) any notice of a change in the location of a
Servicer delivered to the Administrative Agent pursuant to Section 2.3 of the Servicing
Agreement.



     Section 2.25 Priority. Except as permitted by Section 7.02(b), all Participation
Interests issued under this Agreement shall be in all respects equally and ratably entitled to the
benefits hereof and supported by the Participated Loans and Participated Student Loan ABS and
secured by the Pledged Collateral without preference, priority or distinction on account of the
actual time or times of Purchase, all in accordance with the terms and provisions of this
Agreement. Payments of Purchaser Costs on the Participation Interests shall be made pro rata among
all Outstanding Participation Interests based on the amount of Purchaser Costs owed on such
Participation Interests, without preference or priority of any kind. Reductions in Capital on the
Participation Interests shall be made pro rata among all Outstanding Participation Interests,
without preference or priority of any kind.



ARTICLE III




SECURITIES LAW CONSIDERATIONS




     Section 3.01 Investor Status. Each Purchaser represents that it is (a)(i) a qualified
institutional buyer (within the meaning of Rule 144A under the Securities Act), acquiring the
Participation Interests for its own account, (ii) aware that the sale of the Participation
Interests to it may be being made in reliance on the exemption from registration provided by Rule
144A under the Securities Act and (iii) acquiring the Participation Interests in a Capital amount
of not less than the minimum denomination of the Participation Interests for its own account or
(b)(i) an Accredited Investor (within the meaning of Rule 501(a)(1),(2),(3) or (7) of Regulation D
under the Securities Act), acquiring the Participation Interests for its own account, (ii) aware
that the sale of the Participation Interests to it may be being made in reliance on the exemption
from registration provided by Section 4(2) of the Securities Act and (iii) acquiring the
Participation Interests in a Capital amount of not less than the minimum denomination of the
Participation Interests for its own account and (c) a qualified purchaser as defined in Section
2(a)(51)(A) of the Investment Company Act of 1940.



71









 





     Section 3.02 No Public Offering. Each Purchaser understands that the Participation Interests
are being offered only in a transaction not involving any public offering in the United States
within the meaning of the Securities Act, the Participation Interests have not been and will not be
registered under the Securities Act, and, if in the future the Purchaser decides to offer, resell,
pledge or otherwise transfer the Participation Interests, such Participation Interests may be
offered, resold, pledged or otherwise transferred only in accordance with the terms hereof. Each
Purchaser acknowledges that no representation is made by the Transferor, the Administrator, the
Administrative Agent or any Managing Agent or any other Purchaser as to the availability of any
exemption under the Securities Act or any state securities laws for resale of the Participation
Interests.



     Section 3.03 No General Solicitation. Each Purchaser agrees that it will not at any time,
offer to buy or offer to sell the Participation Interests by any form of general solicitation or
advertising, including, but not limited to, any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or broadcast over television
or radio or seminar or meeting whose attendees have been invited by general solicitation or
advertising.



     Section 3.04 Investment Intent. Each Purchaser agrees that it is not purchasing the
Participation Interests with a view to the resale, distribution or other disposition thereof in
violation of the Securities Act.



     Section 3.05 Notice on Transferability. Each Purchaser will provide notice to each Person to
whom it proposes to transfer any interest in the Participation Interests of the transfer
restrictions and representations set forth herein.



ARTICLE IV




CONDITIONS TO PARTICIPATION PURCHASES




     Section 4.01 Conditions Precedent to Participation Purchases. The Purchases hereunder are
subject to the condition precedent that the Administrative Agent shall have received on or before
the Closing Date the documents and opinions listed in Exhibit L hereto, in form and substance
satisfactory to each Managing Agent. By accepting the proceeds of the initial Purchase, the
Transferor shall be deemed to have certified that all such conditions precedent are satisfied on
the Closing Date.



     Section 4.02 Conditions Precedent to All Purchases. Each Purchase (including the initial
Purchase) shall be subject to the further conditions precedent that on the date of such Purchase
(and the Transferor, by accepting the proceeds of such Purchase, shall be deemed to have certified
that all such conditions are satisfied on the date of such Purchase):




     (a) With respect to any Purchase Price Purchase, the Eligible Loans and Eligible
Student Loan ABS are purchased by the Transferor from a Seller pursuant to a Purchase
Agreement;




     (b) With respect to any Purchase Price Purchase, on or prior to the Purchase Date, the
Transferor shall cause to be delivered to the Administrative Agent copies of the



72









 







relevant Student Loan Purchase Agreement, Bills of Sale, and Blanket Endorsements,
together with a Schedule of Participated Loans and Participated Student Loan ABS and copies
of all schedules, financing statements and other documents required to be delivered by the
applicable Seller as a condition of purchase thereunder. With respect to any Purchase, on or
prior to the Purchase Date, the Transferor shall cause to be delivered to the Administrative
Agent a request for a Purchase in the form and at the time required in Section
2.02(b) (which request shall include a pro forma calculation and certification in the
form attached hereto as Exhibit M establishing that the Minimum Asset Coverage Requirement
will be satisfied after giving effect to such Purchase);




     (c) on the Purchase Date, the following statements shall be true, and the Transferor by
accepting the amount of such Purchase shall be deemed to have certified that:




     (i) the representations and warranties contained in Article V are
correct on and as of such day as though made on and as of such date (or, to the
extent such representations and warranties speak as of a specific date, were true
and correct on and as of such date);




     (ii) no event has occurred and is continuing, or would result from such
Purchase, which constitutes a Termination Event or, to the best of the Transferor’s
or the Administrator’s knowledge, a Potential Termination Event;




     (iii) on and as of such day, the amount of such Purchase will not exceed the
aggregate Maximum Purchase Amounts of all Eligible Loans and Eligible Student Loan
ABS to be acquired with the proceeds of such Purchase and, after giving effect to
such Purchase, the Aggregate Capital will not exceed the Maximum Aggregate Purchase
Amount;




     (iv) there has occurred no event which could reasonably be determined to have a
Material Adverse Effect with respect to the Transferor and, if the Purchase will be
made to finance the purchase of Private Credit Loans, there has occurred no change
in the origination and pricing of the applicable Private Credit Loan Program which
could reasonably be determined to have a Material Adverse Effect with respect to the
Private Credit Loans that are part of such Private Credit Loan Program, and there
has occurred no material adverse change in federal law that materially impairs the
marketability or value of the Student Loans or Student Loan ABS related to such
Purchase including any reauthorization or amendment of the Higher Education Act the
impact of which makes the economic characteristics of any Eligible FFELP Loan
materially different from similar Student Loans that are eligible for sale to the
Transferor and to be participated under this Agreement prior to such reauthorization
or amendment;




     (v) no law or regulation shall prohibit, and no order, judgment or decree of
any Official Body shall prohibit or enjoin, the making of such Purchases in
accordance with the provisions hereof; and



73









 






     (vi) the amount of money equal to any shortfall in the Reserve Account
Specified Balance on such date is deposited in the Reserve Account, and, if the
amount on deposit in the Capitalized Interest Account as of the last day of the
preceding Settlement Period was less than the Capitalized Interest Account Specified
Balance for such day, unless the Liquidity Lender is obligated to fund Liquidity
Purchases as of such date, the amount of money equal to such shortfall in the
Capitalized Interest Account Specified Balance is deposited into the Capitalized
Interest Account, as the case may be, on such date from the proceeds of such
Purchase;




     (d) the Termination Date shall not have occurred;




     (e) with respect to any Purchase Price Purchase, the Servicer, as bailee for the
Administrative Agent for the benefit of the Secured Creditors, shall be in possession of the
original Student Loan Notes (or with respect to FFELP Loans certified copies thereof, to the
extent more than one loan is evidenced by such Student Loan Note) and the Administrative
Agent shall have received the Student Loan ABS Certificates, if any, in each case,
representing the Student Loans and Student Loan ABS being participated with the proceeds of
such Purchase and any such Student Loan ABS Certificates shall be indorsed to the
Administrative Agent or its nominee or in blank and the Administrative Agent shall have sole
possession of such Student Loan ABS Certificates;




     (f) with respect to any Purchase Price Purchase, all conditions precedent to the
Transferor’s acquisition of the Student Loans and Student Loan ABS to be participated with
the proceeds of such Purchase (other than the payment of the purchase price therefor) shall
have been satisfied;




     (g) no suit, action or other proceeding, investigation or injunction, or final judgment
relating thereto, shall be pending or threatened before any court or governmental agency,
seeking to restrain or prohibit or to obtain damages or other relief in connection with any
of the Transaction Documents or the consummation of the transactions contemplated hereby;




     (h) no statute, rule, regulation or order shall have been enacted, entered or deemed
applicable by any government or governmental or administrative agency or court that would
make the transactions contemplated by any of the Transaction Documents illegal or otherwise
prevent the consummation thereof; and




     (i) except with respect to any Rollover Capital Purchase, the Asset Coverage Ratio
before and after giving effect to such Purchase shall be greater than or equal to the
Minimum Asset Coverage Requirement.



     Section 4.03 Condition Subsequent to Purchases (other than the Initial Purchase). Within
five (5) Business Days after each Purchase other than the initial Purchase or a Rollover Capital
Purchase, the Transferor shall cause to be delivered to the Administrative Agent a reconciliation
statement (the “Purchase Reconciliation Statement”) which shall include an updated calculation,
based on actual figures, and certification in the form attached as Exhibit N



74









 







confirming that the Minimum Asset Coverage Requirement was satisfied after giving effect to
the related Purchase. If the Purchase Reconciliation Statement shows that the actual value of the
Transferor Student Loans was less than the value provided on the pro forma certification or that
the Minimum Asset Coverage Requirement was not satisfied as of the Purchase Date, then the
Transferor shall deposit into the Capital Payment Account an amount for each Transferor Student
Loan equal to the product of (a) the Applicable Percentage for such Transferor Student Loan
multiplied by (b) such difference in value. If the Purchase Reconciliation Statement shows that
the value of the Transferor Student Loans was greater than the value provided on the pro forma
certification, then the Administrative Agent shall withdraw funds in an amount, for each Transferor
Student Loan, equal to the product of (a) the Applicable Percentage for such Transferor Student
Loan multiplied by (b) such difference in value from the following accounts in order and to the
extent available: first; from the Release Proceeds Account; second; from the Capital Payment
Account and lastly, from the Collection Account and the Clearing Account. Before funds from the
Collection Account and the Clearing Account may be used for this purpose, the Administrator must
determine that the amounts on deposit in Collection Account and the Clearing Account as of the date
of payment (excluding any Special Allowance Payments or Interest Subsidy Payments received during
the current Settlement Period) after any withdrawal for this purpose are sufficient to pay items
(ii) through (v) in Section 2.05(b) of this Agreement due and payable on the next
Settlement Date. All amounts not paid pursuant to the preceding sentence will be paid on the next
Settlement Date together with interest thereon at the CP Rate in accordance with Section
2.05(b)(xvii) of this Agreement.



     Section 4.04 Conditions Precedent to Addition of New Seller. The addition of any new Seller
to a Purchase Agreement shall be subject to the further conditions precedent that at least five (5)
Business Days prior to the first transfer of Eligible Loans or Eligible Student Loan ABS from such
Seller, the Transferor or the Administrator shall have delivered copies of the following documents
to the Administrative Agent and the Managing Agents in form acceptable to the Administrative Agent
and the Required Managing Agents and at least three (3) Business Days prior to the first transfer
of Eligible Loans or Eligible Student Loan ABS from such Seller, the Managing Agents shall have
delivered notice of the proposed addition of such new Seller to the Rating Agencies:




     (a) executed agreements adding the Seller (and, if applicable, the eligible lender
trustee for such Seller) to the Purchase Agreement;




     (b) if applicable, an executed trust agreement with respect to the Seller and the
Seller’s eligible lender trustee, to the extent the Seller will be transferring Student
Loans or Student Loan ABS with respect to which legal title is held by an eligible lender
trustee;




     (c) UCC, tax lien, pending suit and judgment searches against the Seller in the
appropriate jurisdictions;




     (d) a good standing certificate and organizational documents certified by the Secretary
of State of such Seller’s jurisdiction of organization, together with an officer’s
certificate with respect to such Seller’s organizational documents and incumbency of
officers in the form prepared for the initial Sellers;



75









 






     (e) evidence of filing of UCC financing statements reflecting the Seller and, to the
extent applicable, its eligible lender trustee, in the form prepared for the initial Sellers
in the appropriate jurisdictions; and




     (f) to the extent not already covered by a legal opinion of outside legal counsel given
to the Administrative Agent, a legal opinion in form reasonably acceptable to the
Administrative Agent with respect to true sale, non-consolidation and security interest
issues.



ARTICLE V




REPRESENTATIONS AND WARRANTIES




     Section 5.01 General Representations and Warranties of the Transferor. The Administrator (on
behalf of the Transferor) represents and warrants for the benefit of the Administrative Agent, the
Purchasers and the other Secured Creditors as follows on the Closing Date, on the date of each
Purchase and on each Reporting Date:




     (a) The Transferor is a limited liability company duly organized, validly existing and
in good standing solely under the laws of the State of Delaware and is duly qualified to do
business, and is in good standing, in every jurisdiction in which the nature of its business
requires it to be so qualified.




     (b) The execution, delivery and performance by the Transferor of this Agreement and all
Transaction Documents to be delivered by it in connection herewith or therewith, including
the Transferor’s use of the proceeds of Purchases, are within the Transferor’s
organizational powers, (i) have been duly authorized by all necessary organizational action,
(ii) do not contravene (A) the Transferor’s organizational documents; (B) any law, rule or
regulation applicable to the Transferor; (C) any contractual restriction binding on or
affecting the Transferor or its property; or (D) any order, writ, judgment, award,
injunction or decree binding on or affecting the Transferor or its property, (iii) do not
result in a breach of or constitute a default under any indenture, agreement, lease or other
instrument to which the Transferor is a party, and (iv) do not result in or require the
creation of any lien, security interest or other charge or encumbrance upon or with respect
to any of its properties (other than in favor of the Administrative Agent, for the benefit
of the Secured Creditors, with respect to the Pledged Collateral); and no transaction
contemplated hereby or by the other Transaction Documents to which it is a party requires
compliance with any bulk sales act or similar law. This Agreement and the other Transaction
Documents to which it is named as a party have each been duly executed and delivered by the
Eligible Lender Trustee, on behalf of the Transferor.




     (c) No permit, authorization, consent, license or approval or other action by, and no
notice to or filing with, any Official Body is required for the due execution, delivery and
performance by the Transferor of this Agreement or any other Transaction Document to which
it is a party, except for the filing of the UCC financing statements listed on Exhibit L
hereto and such other consents as may have been obtained.



76









 






     (d) This Agreement and each other Transaction Document to which the Transferor is a
party constitute the legal, valid and binding obligations of the Transferor, enforceable
against the Transferor in accordance with their respective terms, subject to (i) applicable
bankruptcy, insolvency, moratorium, or other similar laws affecting the rights of creditors
and (ii) general principles of equity, whether such enforceability is considered in a
proceeding in equity or at law.




     (e) No Termination Event or, to the best of the Transferor’s knowledge, Potential
Termination Event has occurred and is continuing.




     (f) No Monthly Report, Valuation Report (but only to the extent that information
contained therein is supplied by the Administrator on behalf of the Transferor or by the
Transferor), information, exhibit, financial statement, document, book, record or report
furnished or to be furnished by or on behalf of the Transferor to the Affected Parties in
connection with this Agreement is or will be incorrect in any material respect as of the
date it is or shall be dated.




     (g) The Participation Interests will be characterized as debt for federal income tax
purposes. The Transferor has or has caused to be (i) timely filed all tax returns (federal,
state and local) required to be filed, (ii) paid or made adequate provision for the payment
of all taxes, assessments and other governmental charges and (iii) accounted for the sale,
participation and pledge of the Transferor Student Loans and Transferor Student Loan ABS in
its books consistent with GAAP.




     (h) There is no action, suit, proceeding, inquiry or investigation at law or in equity
or before or by any court, public board or body pending or, to the knowledge of Transferor,
overtly threatened in writing against or affecting the Transferor (x) asserting the
invalidity of this Agreement or any other Transaction Document, (y) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement and the other
Transaction Documents, or (z) wherein an unfavorable decision, ruling or finding would have
a Material Adverse Effect on the Transferor or which affects, or purports to affect, the
validity or enforceability against Transferor of any Transaction Document.




     (i) The Transferor is not an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940, as amended.
The Transferor is not a “holding company,” or a subsidiary or affiliate of a “holding
company,” within the meaning of the Public Utility Holding Company Act of 1935.




     (j) The Transferor is Solvent at the time of (and immediately after) each Purchase and
each purchase of Eligible Loans made by the Transferor. The Transferor has given reasonably
equivalent value to the applicable Seller in consideration for the transfer to it of the
Transferor Student Loans and Transferor Student Loan ABS from such Seller and each such
transfer shall not have been made for or on account of an antecedent debt owed by such
Seller to it.




77









 






     (k) The Transferor has in place adequate insurance to carry on its business as
contemplated by this Agreement and the other Transaction Documents.




     (l) The principal place of business and chief executive office of the Transferor and
the office where the Transferor keeps any Records in its possession are located at the
addresses of the Transferor referred to in Section 10.02 or such other location as
the Transferor shall have given notice of to the Administrative Agent pursuant to this
Agreement.




     (m) The Transferor has no trade names, fictitious names, assumed names or “doing
business as” names or other names under which it has done or is doing business.




     (n) All representations and warranties of the Transferor set forth in the Transaction
Documents to which it is a party are true and correct in all material respects as of the
date made the Transferor is hereby deemed to have made each such representation and
warranty, as of the date made, to, and for the benefit of, the Secured Creditors as if the
same were set forth in full herein.




     (o) The Transferor is not in violation of, or default under, any material law, rule,
regulation, order, writ, judgment, award, injunction or decree binding upon it or affecting
the Transferor or its property or any indenture, agreement, lease or instrument.




     (p) The Transferor has incurred no Debt and has no other obligation or liability, other
than normal trade payables, the Liabilities, Servicer Advances, obligations under the
Hedging Agreement and advances under the Liquidity Advance Agreement and Revolving Credit
Agreement.




     (q) The sale of Participation Interests pursuant to this Agreement will be exempt from
registration under the Securities Act of 1933, as amended.




     (r) No steps have been taken by any Person to terminate any Benefit Plan under Title IV
of ERISA the assets of which are not sufficient to satisfy all of its benefit liabilities
(as determined under Title IV of ERISA) if such insufficiency is likely to result in a
Material Adverse Effect on the Transferor, no contribution failure has occurred with respect
to any Benefit Plan sufficient to give rise to a lien on the assets of the Transferor under
Section 302(f) of ERISA, and each Benefit Plan of the Transferor has been administered in
all material respects in compliance with its terms and applicable provision of ERISA and the
Code (or, to the extent such Benefit Plan has not been administered in compliance with such
terms and provisions, such noncompliance is not likely to result in a Material Adverse
Effect on the Transferor.




     (s) No proceeds of any Purchases will be used by the Transferor for any purpose that
violates applicable law, including Regulation U of the Federal Reserve Board.




     (t) Each Student Loan and Student Loan ABS to be participated with the proceeds of any
Purchase constitutes an Eligible Loan or an Eligible Student Loan ABS, as applicable, as of
the date of such Purchase and is purchased, or was previously



78









 






purchased by the Transferor, from a Seller pursuant to a Purchase Agreement. Each
Transferor Student Loan and Transferor Student Loan ABS represented as an Eligible Loan or
Eligible Student Loan ABS, as applicable, in a Monthly Report, in fact satisfied as of the
last day of the related Settlement Period the definition of “Eligible Loan” or “Eligible
Student Loan ABS”, as applicable. Each Transferor Student Loan and Transferor Student Loan
ABS represented to be an Eligible Loan or Eligible Student Loan ABS on any other date or
included in the calculation of Asset Coverage Ratio on any other date in fact satisfied as
of such date the definition of “Eligible Loan” or “Eligible Student Loan ABS”, as
applicable.



     Section 5.02 Representations and Warranties of the Transferor Regarding the Administrative
Agent’s Security Interest. The Administrator (on behalf of the Transferor) hereby represents and
warrants for the benefit of the Administrative Agent, the Purchasers and the other Secured
Creditors as follows:




     (a) This Agreement creates valid Participation Interests in the Participated Loans and
Participated Student Loan ABS and a valid and continuing perfected security interest (as
defined in the applicable Uniform Commercial Code in effect in the State of New York) in the
Pledged Collateral in favor of the Administrative Agent, which security interest is prior to
all other liens, charges, security interests, mortgages or other encumbrances, and is
enforceable as such as against creditors of and purchasers from the Transferor.




     (b) The Transferor, by and through the Eligible Lender Trustee as its Eligible Lender,
owns and has good and marketable title to the Transferor Student Loans, Transferor Student
Loan ABS and other Pledged Collateral free and clear of any Adverse Claim.




     (c) No filing is required to perfect the sale of the Participation Interests hereunder.
The Transferor has caused the filing of all appropriate financing statements in the proper
filing office in the appropriate jurisdictions under applicable law in order to perfect the
security interest in the Pledged Collateral granted to the Administrative Agent hereunder.




     (d) All executed originals (or with respect to FFELP Loans certified copies thereof, to
the extent more than one loan is evidenced thereby) of each Student Loan Note that
constitute or evidence the Transferor Student Loans have been delivered to the Servicer, as
bailee for the Administrative Agent for the benefit of the Secured Creditors and all Student
Loan ABS Certificates, if any, have been delivered to the Administrative Agent.




     (e) Other than the Participation Interests sold to the Purchasers and the security
interest granted to the Administrative Agent pursuant to this Agreement, the Transferor has
not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of
the Pledged Collateral. The Transferor has not authorized the filing of and is not aware of
any financing statements against the Transferor that include a description of collateral
covering the Pledged Collateral other than any financing



79









 






statement relating to the security interest granted to the Administrative Agent
hereunder or that has been terminated. There are no judgments or tax lien filings against
the Transferor.




     (f) The Transferor is a “registered organization” (as defined in § 9-102(a)(70) of the
UCC) organized exclusively under the laws of the State of Delaware and, for purposes of
Article 9 of the UCC, the Transferor is located in the State of Delaware.




     (g) The Transferor’s exact legal name is the name set forth for it on the signature
page hereto.



     Section 5.03 Particular Representations and Warranties of the Transferor. The Administrator
(on behalf of the Transferor) further represents and warrants to each of the parties hereto with
respect to each of the Transferor Student Loans and Transferor Student Loan ABS included in the
Pledged Collateral:




     (a) Such Transferor Student Loans constitute “accounts”, “promissory notes” or “payment
intangibles” within the meaning of the applicable UCC and such Transferor Student Loan ABS
constitute investment property or promissory notes and, with respect to such Student Loans
which are FFELP Loans, are within the coverage of Sections 432(m)(1)(E) and 439(d)(3) of the
Higher Education Act.




     (b) Such Transferor Student Loans are Eligible Loans and such Transferor Student Loan
ABS are Eligible Student Loan ABS as of the date they become Pledged Collateral and as of
any other date upon which they are declared by the Transferor or the Administrator to be
Eligible Loans or Eligible Student Loan ABS, as applicable, and the description of such
Eligible Loans and Eligible Student Loan ABS set forth in the Transaction Documents, the
Schedule of Participated Loans and Participated Student Loan ABS or the Schedule of
Transferor Student Loans and Transferor Student Loan ABS, as applicable, and in any other
documents or written information provided to any of the parties hereunder (other than
documents or information stated to be preliminary which has subsequently been replaced by
definitive documents or information), as applicable, is true and correct in all material
respects.




     (c) The Transferor is authorized to sell participation interests in and to pledge such
Transferor Student Loans and Transferor Student Loan ABS and the other Pledged Collateral;
and the participation, sale, assignment and transfer of such Transferor Student Loans and
Transferor Student Loan ABS is or, in the case of any such Transferor Student Loan or
Transferor Student Loan ABS repurchased by the Transferor, will be made pursuant to and
consistent with the laws and regulations under which the Transferor operates, and will not
violate any decree, judgment or order of any court or agency, or conflict with or result in
a breach of any of the terms, conditions or provisions of any agreement or instrument to
which the Transferor is a party or by which the Transferor or its property is bound, or
constitute a default (or an event which could constitute a default with the passage of time
or notice or both) thereunder.



80









 






     (d) Except as have been obtained, no consents and approvals are required for the
consummation of the sales to the Purchasers of Participation Interests and the pledge of the
Pledged Collateral hereunder to the Administrative Agent for the benefit of the Secured
Creditors.




     (e) Any payments on such Transferor Student Loans and Transferor Student Loan ABS
received by the Transferor which have been allocated to the reduction of principal and
interest on such Transferor Student Loans and Transferor Student Loans ABS have been
allocated on a simple interest basis.




     (f) Due diligence and reasonable care have been exercised in making, administering,
servicing and collecting such Transferor Student Loans and Transferor Student Loan ABS and,
with respect to any Transferor Student Loan for which repayment terms have been established,
all disclosures of information required to be made pursuant to the Higher Education Act have
been made.




     (g) Except for Transferor Student Loans executed electronically or Transferor Student
Loans evidenced by a master promissory note, there is only one original executed copy of the
Student Loan Note evidencing each such Transferor Student Loan. For such Transferor Student
Loans that were executed electronically, the Master Servicer has possession of the
electronic records evidencing the Student Loan Note. The Eligible Lender Trustee or the
Servicer has in its possession a copy of the endorsement and each Loan Transmittal Summary
Form identifying the Student Loan Notes that constitute or evidence the Transferor Student
Loans. The Student Loan Notes that constitute or evidence such Transferor Student Loans do
not have any marks or notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person other than the Administrative Agent. All financing
statements filed or to be filed against the Eligible Lender Trustee and the Transferor in
favor of the Administrative Agent in connection herewith describing the Pledged Collateral
contain a statement to the following effect: “A purchase of or security interest in any
collateral described in this financing statement will violate the rights of the
Administrative Agent”.




     (h) The applicable parties shall have performed, satisfied and complied with the
conditions set forth in Section 3 of the applicable Purchase Agreement as of the date of the
related Bill of Sale.



     Section 5.04 Repurchase of Participated Loans and Participated Student Loan ABS;
Reimbursement. The Transferor shall cause the obligations of the Servicers and Sellers to
purchase, repurchase, make reimbursement or substitute Transferor Student Loans and Transferor
Student Loan ABS to be enforced to the extent such obligations are set forth in the applicable
Purchase Agreement and the Servicing Agreement. The Transferor shall cause any such repurchase
amount or reimbursement to be remitted to the Release Proceeds Account. Any substitute Transferor
Student Loan or Transferor Student Loan ABS obtained by the Transferor from a Servicer or Seller
shall constitute a Participated Loan or Participated Student Loan ABS, as applicable, and Pledged
Collateral hereunder.



81









 





     Section 5.05 Administrator Actions Attributable to Transferor. Any action required to be
taken by the Transferor hereunder may be taken by the Administrator on behalf of the Transferor, to
the extent permitted under the Administration Agreement. The Transferor shall be fully responsible
for each of the representations, warranties, certifications and other statements made herein, in
any other Transaction Document, any Purchase Request, any Notice of Release or any other
communication hereunder or thereunder by the Administrator on its behalf as if such
representations, warranties, certifications or statements had been made directly by the Transferor.
In addition, the Transferor shall be fully responsible for all actions of the Administrator taken
on its behalf under this Agreement or any other Transaction Document as if such actions had been
taken directly by the Transferor. Nothing in this section shall limit the responsibility of the
Administrator.



ARTICLE II




COVENANTS OF THE TRANSFEROR



From the date hereof until all of the Obligations hereunder and under the other Transaction
Documents have been satisfied in full:




     Section 6.01 Preservation of Separate Existence.




     (a) Nature of Business. The Transferor will engage in no business other than (i)
purchases, sales, sales of Participation Interests and financings of Eligible Loans and
Eligible Student Loan ABS, (ii) the other transactions permitted or contemplated by this
Agreement and the other Transaction Documents, and (iii) any other transactions permitted or
contemplated by its organizational documents as they exist on the Closing Date, or as
amended as such amendments may be permitted pursuant to the terms of this Agreement.




     (b) Maintenance of Separate Existence. The Transferor will do all things necessary to
maintain its existence as a Delaware limited liability company separate and apart from all
Affiliates of the Transferor, including complying with the provisions described in Section
9(j)(iv) of the Limited Liability Company Agreement of the Transferor.




     (c) Transactions with Affiliates. The Transferor will not enter into, or be a party
to, any transaction with any of its respective Affiliates, except (i) the transactions
permitted or contemplated by this Agreement (including the Liquidity Advance Agreement, the
Hedging Agreement, the Revolving Credit Agreement and the sale and purchase of Eligible
Loans to or from Affiliates) or the other Transaction Documents; and (ii) other transactions
(including, without limitation, the lease of office space or computer equipment or software
by the Transferor to or from an Affiliate) (A) in the ordinary course of business, (B)
pursuant to the reasonable requirements of the Transferor’s business, (C) upon fair and
reasonable terms that are no less favorable to the Transferor than could be obtained in a
comparable arm’s-length transaction with a Person not an Affiliate of the Transferor, and
(D) not inconsistent with the factual assumptions set forth in the opinion letter issued as
of the Closing Date by McKee Nelson LLP to the



82









 






Administrative Agent and the Secured Creditors relating to the issues of substantive
consolidation.



     Section 6.02 Notice of Termination Event, Potential Termination Event or Servicer Default. As
soon as possible and in any event within three Business Days after the occurrence of each
Termination Event, each Potential Termination Event and each Servicer Default (or, to the extent
the Transferor does not have knowledge of a Termination Event, Potential Termination Event or
Servicer Default, promptly upon obtaining such knowledge), the Transferor will provide (or shall
cause the Administrator to provide) to the Administrative Agent a statement setting forth details
of such Termination Event, Potential Termination Event or Servicer Default and the action which the
Transferor has taken or proposes to take with respect thereto. The Administrative Agent shall
promptly forward such notice to the Managing Agents. The Managing Agents shall promptly provide
written notice of any Termination Event, Potential Termination Event or Servicer Default to the
Rating Agencies.



     Section 6.03 Notice of Material Adverse Change. Immediately upon becoming aware of an event
which could reasonably be expected to have a Material Adverse Effect on the Transferor, the
Transferor will provide to the Administrative Agent written notice thereof.



     Section 6.04 Compliance with Laws; Preservation of Corporate Existence. The Transferor will
comply in all material respects with all applicable laws, rules, regulations and orders and
preserve and maintain its legal existence, and will preserve and maintain its rights, franchises,
qualifications and privileges in all material respects.



     Section 6.05 Enforcement of Obligations.





     (a) Enforcement of Transferor Student Loans and Transferor Student Loan ABS. The
Transferor shall cause to be diligently enforced and taken all steps, actions and
proceedings reasonably necessary for the enforcement of all terms, covenants and conditions
of all Transferor Student Loans and Transferor Student Loan ABS and agreements in connection
therewith (except as otherwise permitted pursuant to the Transaction Documents), including
the prompt payment of all principal and interest payments and all other amounts due the
Transferor or the Eligible Lender Trustee, as applicable thereunder.




     (b) Enforcement of Servicing Agreements and Administration Agreement. The Transferor
shall cause to be diligently enforced and taken all reasonable steps, actions and
proceedings necessary for the enforcement of all terms, covenants and conditions of all
Servicing Agreements and the Administration Agreement, including all grants, subsidies,
donations, Interest Subsidy Payments, Special Allowance Payments and all defaulted payments
Guaranteed by any Guarantor and/or by the Department of Education which relate to any
Transferor Student Loans. Except as otherwise permitted under any Transaction Document, the
Transferor shall not permit the release of the obligations of any Servicer under any
Servicing Agreement or of the Administrator under the Administration Agreement and shall at
all times, to the extent permitted by law, cause to be defended, enforced, preserved and
protected the rights and privileges of the Transferor, the Eligible Lender Trustee, the
Administrative Agent and the Secured



83









 






Creditors under or with respect to each Servicing Agreement and the Administration
Agreement. The Transferor shall not consent or agree to or permit any amendment or
modification of any Servicing Agreement or of the Administration Agreement, except (a) as
required by the Higher Education Act; (b) solely for the purpose of extending the term
thereof; and/or (c) in any other manner, if such modification, amendment or supplement is
made with the prior written consent of the Administrative Agent or is otherwise permitted
pursuant to the terms of that agreement. Upon the occurrence of a Servicer Default and
during the continuation thereof, the Transferor shall replace the Servicer subject to such
Servicer Default if instructed to do so by the Administrative Agent. Upon the occurrence of
an Administrator Default and during the continuation thereof, the Transferor shall replace
the Administrator if instructed to do so by the Administrative Agent.




     (c) Enforcement of Purchase Agreements. The Transferor shall cause to be diligently
enforced and taken all reasonable steps, actions and proceedings necessary for the
enforcement of all terms, covenants and conditions of each Purchase Agreement. Except as
otherwise permitted under any Transaction Document, the Transferor shall not permit the
release of the obligations of any Seller under any Purchase Agreement and shall at all
times, to the extent permitted by law, cause to be defended, enforced, preserved and
protected the rights and privileges of the Transferor, Seller, the Eligible Lender Trustee,
the Administrative Agent and the Secured Creditors under or with respect to each Purchase
Agreement. Except as otherwise permitted under any Transaction Document, the Transferor
shall not consent or agree to or permit any amendment or modification of any Purchase
Agreement which will in any manner materially adversely affect the rights or security of the
Administrative Agent, the Eligible Lender Trustee or the Secured Creditors. To the extent
such action is required under the terms of such Purchase Agreement, upon a determination
that a Transferor Student Loan or Transferor Student Loan ABS sold pursuant to a Purchase
Agreement was not an Eligible Loan or an Eligible Student Loan ABS, as applicable, at the
point it was represented to be as such, the Transferor shall require the applicable seller
thereof to repurchase such Transferor Student Loan or Transferor Student Loan ABS from the
applicable purchaser pursuant to its Purchase Agreement.




     (d) Enforcement and Amendment of Guarantee Agreements. So long as any Purchases are
Outstanding and any Transferor Student Loans are guaranteed by a Guarantee Agency, the
Transferor will (a) from and after the date on which the Eligible Lender Trustee on its
behalf shall have entered into any Guarantee Agreement covering Transferor Student Loans,
cause the Eligible Lender Trustee to maintain such Guarantee Agreement and diligently
enforce the Eligible Lender Trustee’s rights thereunder; (b) cause the Eligible Lender
Trustee to enter into such other similar or supplemental agreements as shall be required to
maintain benefits for all Transferor Student Loans covered thereby; and (c) not voluntarily
consent to or permit any rescission of or consent to any amendment to or otherwise take any
action under or in connection with any relevant Guarantee Agreement or any similar or
supplemental agreement in any manner which would materially and adversely affect the ability
of the Transferor to perform its obligations under this Agreement or cause a Material
Adverse Effect with respect to the Transferor without the prior written consent of the
Administrative Agent.



84









 





     Section 6.06 Maintenance of Books and Records. The Transferor shall maintain and implement or
cause to maintain and implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing the Pledged Collateral in the event of the
destruction of the originals thereof), and keep and maintain, or cause to be kept and maintained,
all documents, books, records and other information reasonably necessary or advisable for the
collection of all the Pledged Collateral.



     Section 6.07 Fulfillment of Obligations. The Transferor shall fulfill its obligations
pursuant to the Transaction Documents. The Transferor shall cause each of its Affiliates to
fulfill its respective obligations pursuant to the Transaction Documents.



     Section 6.08 Notice of Material Litigation. As soon as possible and in any event within three
Business Days of the Transferor’s actual knowledge thereof, the Transferor will cause the
Administrative Agent and the Managing Agents to be provided with written notice of (A) any
litigation, investigation or proceeding which may exist at any time which could have a Material
Adverse Effect on the Transferor; and (B) to the extent reasonably requested by the Administrative
Agent in connection with the delivery of each Monthly Report, a monthly update of material adverse
developments in previously disclosed litigation, including in each case, if known to the
Transferor, including any of the same against a Servicer or Material Subservicer;



     Section 6.09 Notice of Relocation. The Transferor will cause the Administrative Agent to be
provided notice of any change in the location of the Transferor’s principal offices or any change
in the location of the Transferor’s books and records within thirty days before any such change.



     Section 6.10 Rescission or Modification of Transferor Student Loans, Transferor Student Loan
ABS and Transaction Documents.




     (a) Except as expressly permitted in the Servicing Agreement, the Transferor shall not
permit the release of the obligations of any Obligor under any Transferor Student Loan or
Transferor Student Loan ABS and shall at all times, to the extent permitted by law, cause to
be defended, enforced, preserved and protected the rights and privileges of the Transferor,
the Administrative Agent and the Secured Creditors under or with respect to each Transferor
Student Loan and Transferor Student Loan ABS and agreement in connection therewith. The
Transferor shall not consent or agree to or permit any amendment or modification of any
Transferor Student Loan or Transferor Student Loan ABS or agreement in connection therewith
which will in any manner materially adversely affect the rights or security of the
Administrative Agent or the Secured Creditors. Nothing in this Agreement shall be construed
to prevent the Transferor, the Eligible Lender Trustee or the Administrative Agent, as
applicable, from offering any Obligor any borrower benefit to the extent permissible by this
Agreement or the Servicing Agreement or settling a default or curing a delinquency on any
Transferor Student Loan on such terms as shall be permitted by law and shall be consistent
with the applicable Underwriting Guidelines or Servicing Policies.




     (b) Unless otherwise specified pursuant to clause (a) above or in any Transaction
Document, without the written consent of the Required Managing Agents



85









 






(and the written consent of the Administrative Agent to the extent any of the following
would require the Administrative Agent to take any action or amend, modify or waive the
duties or responsibilities of the Administrative Agent hereunder), the Transferor will not
(nor will they permit any of its agents to):




     (i) cancel, terminate, extend, amend, modify or waive (or consent to or approve
any of the foregoing) any provision of any Transaction Document (other than any
cancellation or termination of a Guarantee Agreement that does not apply at such
time to any Participated Loans or any extension, amendment, modification or waiver
of a Guarantee Agreement that would not have a Material Adverse Effect on the
Transferor); or




     (ii) take or consent to any other action that may impair the rights of any
Secured Creditor to any Pledged Collateral or modify, in a manner adverse to any
Secured Creditor, the right of such Secured Creditor to demand or receive payment
under any of the Transaction Documents (other than any action with regard to a
Guarantee Agreement that does not apply at such time to any Participated Loans or
any extension, amendment, modification or waiver of a Guarantee Agreements that
would not have a Material Adverse Effect on the Transferor).



     Section 6.11 Liens.




     (a) Transaction Documents. The Transferor (i) will cause to be taken all action
necessary to perfect, protect and more fully evidence the Participation Interests in the
Participated Student Loans and Participated Student Loan ABS and the ownership interest of
the Transferor (or of the Eligible Lender Trustee, acting on behalf of the Transferor) and
the first priority perfected security interest of the Administrative Agent in favor of the
Secured Creditors in the Transferor Student Loans, Transferor Student Loan ABS, Collections
with respect thereto and in the other Pledged Collateral and the Transaction Documents
including, without limitation, (A) filing and maintaining effective financing statements
(Form UCC-1) in all necessary or appropriate filing offices; (B) filing continuation
statements, amendments or assignments with respect thereto in such filing offices; (C)
filing amendments, releases and terminations with respect to filed financing statements, as
necessary; and (D) executing or causing to be executed such other instruments or notices as
may be necessary or appropriate; and (ii) will cause to be taken all additional action to
perfect, protect and fully evidence the first priority security interest of the
Administrative Agent, for the benefit of the Secured Creditors, in the Transferor Student
Loans, Transferor Student Loan ABS, and other Pledged Collateral related thereto.




     (b) UCC Matters; Protection and Perfection of Pledged Collateral; Delivery of
Documents. Unless the Transferor has complied with Section 6.09, the Transferor
will keep its principal place of business and chief executive office, and the office where
it keeps any Records in its possession, at the address of the Transferor referred to in
Exhibit O. The Transferor will not make any change to its name unless prior to the
effective date of any such name change or use, the Transferor delivers to the Administrative
Agent such



86









 






financing statements necessary, or as the Administrative Agent may request, to reflect
such name change, together with such other documents and instruments as the Administrative
Agent may request in connection therewith. The Transferor will not change its jurisdiction
of formation or its corporate structure. The Transferor agrees that from time to time, at
its expense, it will promptly execute and deliver all further instruments and documents, and
take all further action necessary, or that the Administrative Agent may reasonably request,
in order to maintain the Administrative Agent’s first priority perfected security interest
in the Pledged Collateral for the benefit of the Secured Creditors, or to enable the
Administrative Agent or the Secured Creditors to exercise or enforce any of their respective
rights hereunder (provided, however, that the foregoing sentence shall not
be deemed to require the Transferor or the Master Servicer to relocate or deliver any
Student Loan Notes to or at the direction of the Administrative Agent prior to the
Termination Date). Without limiting the generality of the foregoing, the Transferor will:
(a) authorize and file such financing or continuation statements, or amendments thereto or
assignments thereof, and such other instruments or notices, as may be necessary or
appropriate (or as the Administrative Agent may request); and (b) mark their master data
processing records evidencing such Pledged Collateral with a legend or numeric code
acceptable to the Administrative Agent, evidencing that the Purchasers, with respect to the
Participation Interests, and the Administrative Agent, for the benefit of the Secured
Creditors, with respect to the security interest, have acquired an interest therein as
provided in this Agreement. The Transferor hereby authorizes the Administrative Agent, or
any Secured Creditor on behalf of the Transferor, to file one or more financing or
continuation statements, and amendments thereto and assignments thereof, relative to all or
any of the Pledged Collateral now existing or hereafter arising without the signature of the
Transferor where permitted by law. A carbon, photographic or other reproduction of this
Agreement or any financing statement covering the Pledged Collateral, or any part thereof
shall be sufficient as a financing statement. If the Transferor fails to perform any of its
agreements or obligations under this Section, the Administrative Agent or any Secured
Creditor may (but shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the expenses of the Administrative Agent or such Secured
Creditor incurred in connection therewith shall be payable by the Transferor upon the
Administrative Agent’s or such Secured Creditor’s demand therefor. For purposes of enabling
the Administrative Agent or any such Secured Creditor to exercise their respective rights
described in the preceding sentence and elsewhere in this Agreement, the Transferor and the
Eligible Lender Trustee hereby authorize, and irrevocably grant a power of attorney,
exercisable only after the occurrence and during the continuation of a Termination Event, to
the Administrative Agent and its respective successors and assigns to take any and all steps
in the Transferor’s and the Eligible Lender Trustee’s name and on behalf of the Transferor
and/or the Eligible Lender Trustee necessary or desirable, in the determination of the
Administrative Agent, as the case may be, to collect all amounts due under any and all
Transferor Student Loans, Transferor Student Loan ABS and other Pledged Collateral,
including, without limitation, endorsing the Transferor’s and/or the Eligible Lender
Trustee’s name on checks and other instruments representing Collections and enforcing such
Transferor Student Loans, Transferor Student Loan ABS and other Pledged Collateral.



87









 





     Section 6.12 Sales of Assets; Consolidation/Merger.




     (a) Sales, Liens, Etc. Except as otherwise provided herein or in any other Transaction
Document, the Transferor will not (nor will it permit the Eligible Lender Trustee to) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Adverse Claim upon or with respect to, any Pledged Collateral.




     (b) Merger, Etc. Except as permitted under this Agreement, the Transferor will not
merge or consolidate with, or convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions), all or substantially all of its assets
(whether now owned or hereafter acquired), or acquire all or substantially all of the assets
or capital stock or other ownership interest of any Person, other than, with respect to
asset dispositions, in connection herewith. The Transferor shall not form or create any
subsidiary without the consent of the Administrative Agent.



     Section 6.13 Change in Business. The Transferor will not make any change in the character of
its business, which change could reasonably be expected to impair the collectibility of any Pledged
Collateral or otherwise materially adversely affect the interests or remedies of the Administrative
Agent or the Purchasers under this Agreement or any other Transaction Document.



     Section 6.14 Capital Stock. The Transferor will not issue any Membership Interests to any
Person other than SLM Education Credit Finance Corporation.



     Section 6.15 General Reporting Requirements. The Transferor will provide to the
Administrative Agent (and, as applicable, will cause the Master Servicer to provide) the following:




     (a) as soon as available and in any event within 120 days after the end of each fiscal
year of the Transferor, the Sellers and the Master Servicer, an annual statement of
compliance with the Transaction Documents and applicable law together with an agreed upon
procedures letter delivered by the Independent Public Accountant with respect to the
Transaction Documents, all in form acceptable to the Managing Agents;




     (b) as soon as available and in any event within 120 days after the end of each fiscal
year of SLM Corporation, a copy of the balance sheet of SLM Corporation and the related
statements of income, stockholders’ equity and cash flows for such year, each prepared in
accordance with GAAP consistently applied and duly certified by nationally recognized
independent certified public accountants selected by SLM Corporation, together with a
certificate of an officer certifying that such financial statements fairly present in all
material respects the financial condition of SLM Corporation;




     (c) as soon as available and in any event within 45 days after the end of each fiscal
quarter of SLM Corporation, a copy of an unaudited balance sheet of SLM Corporation and the
related statements of income, stockholders’ equity and cash flows for such fiscal quarter,
each prepared in accordance with GAAP consistently applied,



88









 






together with a certificate of an officer certifying that such financial statements
fairly present in all material respects the financial condition of SLM Corporation;




     (d) promptly following the Administrative Agent’s request therefor, copies of all
financial statements, settlement statements, portfolio and other material reports, notices,
disclosures, certificates and other written material delivered or made available to the
Transferor by any Person pursuant to the terms of any Transaction Document;




     (e) promptly following the Administrative Agent’s request therefor, such other
information respecting the Transferor Student Loans, Transferor Student Loan ABS and the
other Pledged Collateral or the conditions or operations, financial or otherwise, of the
Transferor as the Administrative Agent may from time to time reasonably request;




     (f) with respect to each Guarantor, promptly after receipt thereof as made available to
the Transferor after request therefor, copies of any audited financial statements of such
Guarantor certified by an independent certified public accounting firm;




     (g) with respect to the Master Servicer and each Subservicer and promptly after receipt
thereof after a good faith effort to obtain such material is made by the Transferor, (A)
copies of any annual audited financial statements of such Servicer or Subservicer, to the
extent available, certified by an independent certified public accounting firm, (B) on an
annual basis within 30 days after receipt thereof, copies of SAS 70 reports for such
Servicer or Subservicer, or, if not available, the annual compliance audit for each Servicer
and Subservicer required by Section 428(b)(1)(4) of the Higher Education Act and (C) to the
extent not included in the financial information provided pursuant to clauses (A) and (B)
above and to the extent available, such Servicer’s or Subservicer’s net dollar loss for the
year due to servicing errors;




     (h) promptly following the Administrative Agent’s request therefor, a Schedule of
Transferor Student Loans and Transferor Student Loan ABS;




     (i) promptly after the filing or receiving thereof, copies of all reports and notices
with respect to any Reportable Event defined in Title IV of ERISA or with respect to the
termination of any Benefit Plan subject to Title IV of ERISA which the Transferor or any of
its ERISA Affiliates files under ERISA with the Internal Revenue Service, the Pension
Benefit Guarantee Corporation or the U.S. Department of Labor or which the Transferor or any
of its ERISA Affiliates receives from the Pension Benefit Guarantee Corporation but in each
case only if such Reportable Event or termination is likely to result in the occurrence of a
Material Adverse Effect on the Transferor;




     (j) promptly after the occurrence thereof, written notice of changes in the Higher
Education Act or any other law of the United States that could reasonably have a probability
of having a Material Adverse Effect on the Transferor or could materially and adversely
affect (A) the ability of a Servicer to perform its obligations under its Servicing
Agreement, (B) the ability of a Subservicer to perform its obligations under its Servicing
Agreement, or (C) the collectibility or enforceability of a material amount of the



89









 






Transferor Student Loans or Transferor Student Loan ABS, or any Guarantee Agreement or
Federal Reimbursement Contract with respect to a material amount of Transferor Student
Loans;




     (k) upon request, copies of the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act in order to permit compliance with Rule 144A in
connection with assignments of Participation Interests;




     (l) promptly, notice of any change in the accountants of the Transferor or SLM
Corporation; and




     (m) promptly, after the occurrence thereof or if sooner upon any executive officer of
the Administrator having direct or primary responsibility for ABS trust administration
obtaining knowledge of any pending change, notice of any change in the accounting policy of
the Transferor or SLM Corporation to the extent such change could reasonably be seen to have
a material and adverse impact on the transactions contemplated herein.



     Section 6.16 Inspections. The Transferor shall (and shall cause the Master Servicer and each
Seller, to the extent the Master Servicer or Seller conducts primary servicing or origination
duties with respect to the Participated Loans), upon reasonable notice and from time to time during
regular business hours, once per calendar year (or, after the occurrence and during the continuance
of a Termination Event, as frequently as requested by the Administrative Agent on behalf of any
Managing Agent) as requested in advance by the Administrative Agent, permit the Administrative
Agent and the Managing Agents, or their agents or representatives, (i) to examine and make copies
of and take abstracts from all books, records and documents (including computer tapes and disks)
relating to the Pledged Collateral and (ii) to visit the offices and properties of the Transferor
(or the Master Servicer or Seller, as applicable) for the purpose of examining such materials
described in clause (i) above, and to discuss matters relating to the Participated Loans,
Participated Student Loan ABS and Pledged Collateral or the Transferor’s (or the Master Servicer’s
or Seller’s) performance hereunder and under the other Transaction Documents with any of the
officers, directors, employees or independent public accountants of the Transferor, the Master
Servicer or the Seller having knowledge of such matters.



     Section 6.17 ERISA. The Transferor will not adopt, maintain, contribute to or incur or assume
any legal obligation with respect to any Benefit Plan or Multiemployer Plan.



     Section 6.18 Servicers. Except as permitted by any Servicing Agreement, the Transferor will
not permit any Person other than the Master Servicer or a Subservicer to collect, service or
administer the Transferor Student Loans.



     Section 6.19 Acquisition, Participation, Collection and Assignment of Student Loans and
Student Loan ABS. The Transferor shall acquire or participate only Eligible Loans and Eligible
Student Loan ABS (or beneficial interests therein) with proceeds of the Purchases and shall cause
to be collected all principal and interest payments on all the Transferor Student Loans and all
sums to which the Transferor or Administrative Agent is entitled pursuant to any Purchase
Agreement, and all grants, subsidies, donations, Interest Subsidy Payments, Special



90









 







Allowance Payments and all defaulted payments Guaranteed by any Guarantor which relate to such
Transferor Student Loans as more fully set forth in the Servicing Agreement. The Transferor will
assign or direct the assignment of such Transferor Student Loans for payment of guarantee benefits
as required by applicable law and regulations. The Transferor will comply in all material respects
with any Guarantor’s rules and regulations which apply to such Transferor Student Loans.



     Section 6.20 Administration and Collection of Transferor Student Loans. All Transferor
Student Loans shall be administered and collected either by the Transferor or by a Servicer or a
Subservicer in a competent, diligent and orderly fashion and in accordance in all material respects
with all applicable requirements of the Higher Education Act, the Department of Education, this
Agreement, the Federal Reinsurance Agreements, the Eligible Lender Trustee Guarantee Agreements and
any other guarantee agreement issued by any Guarantor to the Eligible Lender Trustee or the
Transferor.



     Section 6.21 Obligations of the Transferor With Respect to Pledged Collateral. The Transferor
will (a) at its expense, regardless of any exercise by any Secured Creditor of its rights
hereunder, timely and fully perform and comply with all provisions, covenants and other promises
required to be observed by it under the Transaction Documents included in the Pledged Collateral to
the same extent as if Pledged Collateral had not been participated or pledged hereunder; and (b)
pay when due any taxes, including without limitation, sales and excise taxes, payable in connection
with the Pledged Collateral. In no event shall any Secured Creditor have any obligation or
liability with respect to any Transferor Student Loans or Transferor Student Loan ABS or other
instrument document or agreement included in the Pledged Collateral, nor shall any of them be
obligated to perform any of the obligations of the Transferor or any of its Affiliates thereunder.
The Transferor will timely and fully comply in all respects with each Transaction Document.



     Section 6.22 Asset Coverage Requirement. The Transferor shall maintain at all times, to the
best of its actual knowledge, the Minimum Asset Coverage Requirement.



     Section 6.23 Amendment of Organizational Documents. The Transferor shall cause the
Administrative Agent to be notified in writing of any proposed amendments to the Transferor’s
organizational documents. No such amendment shall become effective unless and until the
Administrative Agent has consented in writing thereto, which consent shall not be unreasonably
withheld or delayed.



     Section 6.24 Amendment of Underwriting Guidelines or Servicing Policies. Promptly after the
occurrence thereof, the Transferor shall cause the Administrative Agent to be notified of any
material changes to the Underwriting Guidelines or Servicing Policies applicable to the private
credit education loan programs for which an Applicable Percentage greater than zero has been
established. The Transferor shall not permit or implement any change in the Underwriting
Guidelines or Servicing Policies applicable to any Transferor Student Loan which would materially
and adversely affect the collectibility of any Transferor Student Loan, the performance of the
portfolio of Transferor Student Loans or the Administrative Agent’s security interest in such
Transferor Student Loans without the prior written consent of the Required Managing Agents.




91










 





     Section 6.25 No Payments on Membership Interests. Except as expressly permitted by this
Agreement, the Transferor shall not make any payments or distributions with respect to the
Membership Interests without the prior written consent of the Managing Agents.



     Section 6.26 Reduced Rate Programs. The Transferor will not permit the Master Servicer to
apply any rate reduction programs with respect to the Transferor Student Loans unless there are on
deposit in, or the Master Servicer has deposited funds into, the Collection Account or the Borrower
Benefit Account in an amount sufficient to offset such effective yield reductions.



ARTICLE VII




TERMINATION EVENTS; TERMINATION DATE




     Section 7.01 Termination Events.



     Each of the following events (each “Termination Event”) shall be a Termination Event under
this Agreement:




     (a) the Transferor fails to reduce when required the Capital on the Participation
Interests or the Transferor, the Administrator, any Seller, any Servicer or the Eligible
Lender Trustee fails to make any payment, transfer or deposit within five Business Days of
the due date thereof (or, if the obligation in question arises under another Transaction
Document, within the cure period, if any, provided in such Transaction Document) with
respect to any of its Obligations under this Agreement or any of the other Transaction
Documents; or




     (b) any material representation, warranty, certification or statement made or deemed to
be made by the Transferor, the Administrator, the Eligible Lender Trustee, any Seller or any
Servicer under or in connection with this Agreement or any other Transaction Document, or
other information, report or document delivered pursuant hereto or thereto shall prove to
have been incorrect in any material respect when made, deemed made or delivered (except for
representations and warranties concerning Eligible Loans and Eligible Student Loan ABS with
respect to which the applicable Seller has repurchased the related Student Loans or Student
Loan ABS); or




     (c) the Transferor, the Administrator, the Eligible Lender Trustee, any Seller or any
Servicer shall default in the performance or observance of any term, covenant or undertaking
(other than those set forth in subsections (a), (b) or (k) of this Section) to be performed
or observed herein or in any other Transaction Document on its part and any such failure
shall remain unremedied (if such default can be remedied) for thirty (30) days after written
notice thereof (or, if the obligation in question arises under another Transaction Document,
within the cure period, if any, provided in such Transaction Document) shall have been
received by the Transferor; provided, however, such thirty (30) day cure
period shall not apply to defaults under Sections 6.01, 6.11, 6.12 or 6.25;
or




     (d) (i) a Servicer Default (other than an Event of Bankruptcy) shall have occurred with
respect to the Master Servicer or the Servicing Agreement of the Master



92









 







Servicer shall not be in full force and effect for any reason or (ii) a Servicer
Default (other than an Event of Bankruptcy) shall have occurred with respect to a Material
Subservicer and the Material Subservicer shall not have been replaced within 180 days or a
Servicing Agreement of a Material Subservicer shall not be in full force in effect and the
Subservicer shall not have been replaced within 180 days; or




     (e) an Event of Bankruptcy shall have occurred with respect to the Transferor, the
Eligible Lender Trustee, any Seller, the Master Servicer, any Material Subservicer or any
Affiliate of the Transferor or any Seller; or




     (f) at any time (i) after the occurrence of an Event of Bankruptcy with respect to the
Hedging Counterparty, (ii) during which the Hedging Agreement and each Hedge Contract shall
have been terminated following a Hedging Agreement Default or (iii) when the Hedging
Agreement shall not be in full force and effect for any other reason, the Hedging
Counterparty shall not have made all termination payments required under the Hedging
Agreement or any Hedge Contract at the times or within the grace periods provided for in the
Hedging Agreement or such Hedge Contract; or




     (g) at any time after the occurrence of a Capitalized Interest Account Funding Event,
(i) the Transferor shall fail to deposit into the Capitalized Interest Account the
Capitalized Interest Account Specified Balance calculated as of the date the Capitalized
Interest Account Funding Event has occurred and such failure shall continue for five
Business Days or during such five Business Day period, such Capitalized Interest Account
Funding Event shall no longer be in effect or (ii) the amount on deposit in the Capitalized
Interest Account shall be less than the Capitalized Interest Account Specified Balance as of
the end of three consecutive Settlement Periods; or




     (h) the Asset Coverage Ratio shall be less than the Minimum Asset Coverage Requirement
and shall not have been cured within thirty (30) days; or




     (i) the Transferor, any Seller, the Master Servicer, or any Affiliate thereof shall be
in default under an agreement with respect to financing arrangements in excess of
$50,000,000 and the result of such default is to cause the acceleration of such financing
arrangements; or




     (j) one or more judgments or orders for the payment of money or adverse rulings shall
be rendered against the Transferor, any Seller or the Master Servicer that could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect on such
Person and such judgment or ruling shall remain unsatisfied or unstayed for a period in
excess of thirty (30) days; or




     (k) the filing of any actions or proceedings against the Transferor, the Administrator,
any Seller or the Master Servicer that involves the Transaction Documents or any material
portion of the Pledged Collateral which the Administrative Agent reasonably believes is
likely to result in a Material Adverse Effect on the Transferor; or




     (l) the Purchasers shall, for any reason, cease to have a valid 100% undivided
participation interest in the Participated Loans and Participated Student Loan ABS or the



93









 







Administrative Agent, for the benefit of the Secured Creditors, shall, for any reason,
cease to have a valid and perfected first priority security interest in any material portion
of the Pledged Collateral or the Transferor shall, for any reason, cease to have a valid and
perfected first priority ownership interest in any material portion of the Transferor
Student Loans, Transferor Student Loan ABS and Collections with respect thereto; or




     (m) the Internal Revenue Service shall file notice of a lien involving a sum in excess
of $50,000,000 pursuant to Section 6321 of the Internal Revenue Code with regard to any
assets of Transferor and such lien shall not have been released within five Business Days or
any Person shall institute steps to terminate any Benefit Plan if the assets of such Benefit
Plan are insufficient to satisfy all of its benefit liabilities in excess of $50,000,000 (as
determined under Title IV of ERISA), or a contribution failure in excess of $50,000,000
occurs with respect to any Benefit Plan which is sufficient to give rise to a lien under
Section 302(f) of ERISA in each case where or the Pension Benefit Guaranty Corporation
shall, or shall indicate its intention to, file notice of a lien pursuant to Section 4608 of
ERISA with regard to any of the assets of the Transferor and such lien shall not have been
released within five (5) Business Days; or




     (n) any material provision of this Agreement or any other Transaction Document (other
than a Guarantee Agreement that does not apply at such time to any Participated Loans) to
which the Transferor, the Administrator, any Seller or any Servicer is a party shall cease
to be in full force and effect or the Transferor, the Administrator, any Seller or any
Servicer shall so state in writing; or




     (o) any amendment to the Higher Education Act or any other federal law becomes
effective that materially adversely affects the interests of the Administrative Agent, the
Managing Agents or the Purchasers in the Participated Loans, Participated Student Loan ABS
or other Pledged Collateral; or




     (p) any material adverse development in litigation, investigation or proceeding against
the Transferor, the Seller or the Master Servicer, including, but not limited to the
investigation by the office of the New York Attorney General that could reasonably be
expected to have a Material Adverse Effect on such Person; or




     (q) the Transferor shall fail to maintain its status as a limited purpose bankruptcy
remote limited liability company.



     Section 7.02 Termination Date




     (a) If any Termination Event occurs, then the Administrative Agent may, and shall at
the request of the Required Managing Agents, by notice to the Transferor, the Administrative
Agent and each Managing Agent, declare that a Termination Date shall have occurred (except
that, in the case of any event described in Section 7.01 (e), (h) or
(l) above, the Termination Date shall be deemed to have occurred automatically).




     (b) Upon the occurrence of the Termination Date, the Transferor shall have the right to
exercise a call (“Transferor Call Right”) and purchase the Outstanding Participation
Interests from the Purchasers for a purchase price equal to the Obligations.



94









 






If the Transferor fails to exercise the Transferor Call Right upon the occurrence of
the Termination Date (or, if such Termination Date results solely from the occurrence of
clause (a) of the definition of “Scheduled Call Date”, within 90 days after the Termination
Date), then the Purchasers may purchase the Participated Loans and Participated Student Loan
ABS for their own account without further consideration, in satisfaction of the Obligations,
by delivering a notice of transfer signed by the Administrative Agent and each Managing
Agent to the Administrator and the Eligible Lender Trustee. The Administrator and
Transferor agree to execute at the reasonable request of the Administrative Agent all
documents necessary to complete the transfer of the Participated Loans and Participated
Student Loan ABS.




     (c) Upon the occurrence of the Termination Date, no further Purchases will be made and
all of the Obligations due and owing to the Affected Parties shall become immediately due
and payable. Upon any such occurrence, the Administrative Agent (for the benefit of the
Secured Creditors) shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided to a secured party under the
UCC of the applicable jurisdiction and other applicable laws, which rights shall be
cumulative. The rights and remedies of a secured party which may be exercised by the
Administrative Agent pursuant to this Article shall include, without limitation, the right,
without notice except as specified below, to solicit and accept bids for and sell the
Pledged Collateral or any part thereof in one or more parcels at a public or private sale,
at any exchange, broker’s board or at any of the Administrative Agent’s offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms as the
Administrative Agent may deem commercially reasonable. Any sale or transfer by the
Administrative Agent of Transferor Student Loans that are FFELP Loans shall only be made to
an Eligible Lender. The Transferor agrees that, to the extent notice of sale shall be
required by law, 10 Business Days’ notice to the Transferor and the Administrator of the
time and place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification and that it shall be commercially reasonable for
the Administrative Agent to sell the Pledged Collateral to an Eligible Lender on an “as is”
basis, without representation or warranty of any kind. The proceeds of any such sale shall
be deposited to the Collection Account and shall be distributed pursuant to Section
2.05(b). The Administrative Agent shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given and may adjourn any public or
private sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it was so
adjourned. The Administrative Agent and the Managing Agents shall refrain from selling all
or any portion of the Pledged Collateral until on or after the date which is 90 days after
the occurrence of the Termination Date if such Termination Date results solely from the
occurrence of clause (a) of the definition of “Scheduled Call Date”.



     Section 7.03 Sales of Transferor Student Loan ABS. The Transferor hereby acknowledges that
the sale by the Administrative Agent of any Transferor Student Loan ABS pursuant to the terms
hereof in compliance with the Securities Act of 1933 as now in effect or as hereafter amended, or
any similar statute hereafter adopted with similar purpose or effect (the “Securities Act”), as
well as applicable “Blue Sky” or other state securities laws, may require



95









 







strict limitations as to the manner in which the Administrative Agent or any subsequent
transferee of the Transferor Student Loan ABS may dispose thereof. The Transferor acknowledges and
agrees that in order to protect the Administrative Agent’s interest it may be necessary to sell the
Transferor Student Loan ABS at a price less than the maximum price attainable if a sale were
delayed or were made in another manner, such as a public offering under the Securities Act. The
Transferor has no objection to sale in such a manner and agrees that the Administrative Agent shall
have no obligation to obtain the maximum possible price for the Transferor Student Loan ABS.
Without limiting the generality of the foregoing, Transferor agrees that, upon the occurrence and
during the continuation of a Termination Event, the Administrative Agent may, subject to applicable
law, from time to time attempt to sell all or any part of the Transferor Student Loan ABS by a
private placement, restricting the bidders and prospective purchasers to those who will represent
and agree that they are purchasing for investment only and not for distribution. In so doing, the
Administrative Agent may solicit offers to buy the Transferor Student Loan ABS or any part thereof
for cash, from a limited number of investors reasonably believed by the Administrative Agent to be
institutional investors or other accredited investors who might be interested in purchasing the
Transferor Student Loan ABS (including SLM Corporation or any Affiliate thereof other than a
Seller). If the Administrative Agent shall solicit such offers, then the acceptance by the
Administrative Agent of one of the offers shall be deemed to be a commercially reasonable method of
disposition of the Transferor Student Loan ABS.



     Section 7.04 Setoff. Each of the Administrative Agent and the Secured Creditors is hereby
authorized (in addition to any other rights it may have) at any time after the occurrence of the
Termination Date due to the occurrence of a Termination Event or during the continuance of a
Potential Termination Event to set off, appropriate and apply (without presentment, demand, protest
or other notice which are hereby expressly waived) any deposits and any other indebtedness held or
owing by the Administrative Agent or such Secured Creditor to, or for the account of, the
Transferor against the amount of the Outstandings owing by the Transferor to such Person or to the
Administrative Agent on behalf of such Person (even if contingent or unmatured).



     Section 7.05 Failure to Maintain Participation Interest or Security Interest.
Notwithstanding any other provision of this Agreement, all Obligations of the Transferor under this
Agreement shall immediately become due and payable if at any time the Purchasers shall cease to
have valid Participation Interests or the Administrative Agent, on behalf of the Secured Creditors,
shall cease to have a valid first priority perfected security interest in a material portion of the
Pledged Collateral free and clear of any Adverse Claim and the Transferor agrees to cause the
repayment of all the Liabilities, including the Aggregate Capital, within five Business Days after
notice to the Administrator by the Administrative Agent of the occurrence thereof.



ARTICLE VIII




INDEMNIFICATION




          Without limiting any other rights which the Administrative Agent, the Conduit Purchasers, the
Managing Agents, the Alternate Purchasers, the Affected Parties, the Program Support Providers or
any of their respective Affiliates may have hereunder or under applicable




96









 







law, the Transferor hereby agrees to indemnify the Administrative Agent, the Conduit
Purchasers, the Managing Agents, the Alternate Purchasers, the Affected Parties, the Program
Support Providers and each of their respective members, investors, officers, directors, employees,
agents, attorneys-in-fact and Affiliates from and against any and all damages, losses, claims,
liabilities and related costs and expenses, including reasonable attorneys’ fees and disbursements
except as may be expressly limited by Section 10.08 (all of the foregoing, together with any
amounts due to the Valuation Agent pursuant to Article V of the Valuation Agent Agreement, being
collectively referred to as “Indemnified Amounts”) awarded against or incurred by any of them
arising out of or as a result of the Participation Purchase, the funding of Purchases, this
Agreement, the Program Support Agreements, the other Transaction Documents or the Pledged
Collateral, excluding, however, Indemnified Amounts to the extent resulting from the gross
negligence or willful misconduct of the Person seeking indemnification.




ARTICLE IX




ADMINISTRATIVE AGENT AND MANAGING AGENTS




     Section 9.01 Authorization and Action of Administrative Agent. The Conduit Purchasers, the
Managing Agents and the Alternate Purchasers hereby accept the appointment of and authorize the
Administrative Agent to take such action as agent on their behalf and to exercise such powers as
are delegated to the Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. The Administrative Agent reserves the right, in its sole
discretion, to take any actions and exercise any rights or remedies under this Agreement and any
related agreements and documents. Notwithstanding any provision to the contrary contained
elsewhere in this Agreement or in any other Transaction Document, the Administrative Agent shall
not have any duties or responsibilities, except those expressly set forth in this Agreement, nor
shall the Administrative Agent have or be deemed to have any fiduciary relationship with any
Purchaser or Managing Agent, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Transaction Document or
otherwise exist against the Administrative Agent. Without limiting the generality of the foregoing
sentence, the use of the term “Administrative Agent” in this Agreement with reference to the
Administrative Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such term is used merely
as a matter of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties. The Administrative Agent may execute any of
its duties under this Agreement or any other Transaction Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining
to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects with reasonable care. The Administrative Agent
agrees to give the Managing Agents notice of each notice and determination and a copy of each
certificate and report (if such notice, report, determination, or certificate is not given by the
applicable Person to such Managing Agent) given to it by the Transferor, Administrator, any Seller,
any Servicer, the Valuation Agent or the Eligible Lender Trustee pursuant to the terms of the
Transaction Documents which the Administrative Agent deems material to the Managing Agents or
Purchasers within five (5) Business Days of receipt thereof by the Administrative Agent. Except
for actions which the Administrative Agent is expressly required to take pursuant to this
Agreement, as the case may



97









 




be, the Administrative Agent shall not be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to applicable law unless the
Administrative Agent shall receive further assurances to its satisfaction from the Managing Agents
that it will be indemnified against any and all liability and expense which may be incurred in
taking or continuing to take such action.




     Section 9.02 Authorization and Action of Managing Agents. Each Conduit Purchaser and
Alternate Purchaser hereby accepts the appointment of and authorizes its related Managing Agent to
take such action as agent on its behalf and to exercise such powers as are delegated to such
Managing Agent by the terms hereof, together with such powers as are reasonably incidental thereto.
Each Managing Agent reserves the right, in its sole discretion, to take any actions and exercise
any rights or remedies under this Agreement and any related agreements and documents.
Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other
Transaction Document, no Managing Agent shall have any duties or responsibilities, except those
expressly set forth in this Agreement, nor shall any Managing Agent have or be deemed to have any
fiduciary relationship with any Purchaser, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or any other Transaction
Document or otherwise exist against any Managing Agent. Without limiting the generality of the
foregoing sentence, the use of the term “Managing Agent” in this Agreement with reference to any
Managing Agent is not intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only an administrative relationship between
independent contracting parties. Each Managing Agent may execute any of its duties under this
Agreement or any other Transaction Document by or through agents, employees or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to such duties. No
Managing Agent shall be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care. Each Managing Agent agrees to give to its
related Conduit Purchaser and Alternate Purchasers prompt notice of each notice and determination
and a copy of each certificate and report (if such notice, report, determination, or certificate is
not given by the applicable Person to such Conduit Purchaser or the Alternate Purchaser) given to
it by the Administrative Agent, the Transferor, the Administrator, any Seller, any Servicer, the
Valuation Agent or the Eligible Lender Trustee, pursuant to the terms of this Agreement. Except
for actions which each Managing Agent is expressly required to take pursuant to this Agreement, as
the case may be, such Managing Agent shall not be required to take any action which exposes such
Managing Agent to personal liability or which is contrary to applicable law unless such Managing
Agent shall receive further assurances to its satisfaction from its related Conduit Purchaser and
Alternate Purchaser that it will be indemnified against any and all liability and expense which may
be incurred in taking or continuing to take such action.



     Section 9.03 Agency Termination. Subject to Sections 9.07 and 9.08, the
appointment and authority of the Administrative Agent and the Managing Agents hereunder shall
terminate upon the payment by the Transferor of all Obligations hereunder.



     Section 9.04 Administrative Agent’s and Managing Agent’s Reliance, Etc. None of the
Administrative Agent, any Managing Agent or any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it as Administrative



98









 







Agent or Managing Agent under or in connection with this Agreement or any related agreement or
document, except for its own gross negligence or willful misconduct. Without limiting the
foregoing, the Administrative Agent and each Managing Agent: (a) may consult with legal counsel
(including counsel for Transferor or any Affiliate of Transferor), independent public accountants
and other experts selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel, accountants or experts;
(b) makes no warranty or representation to any Conduit Purchaser, any Managing Agent, any Alternate
Purchaser or any Program Support Provider and shall not be responsible to any Conduit Purchaser,
any Managing Agent, any Alternate Purchaser or any Program Support Provider for any statements,
warranties or representations made by the Transferor, the Eligible Lender Trustee, any Seller, any
Servicer, any Guarantor or the Valuation Agent in connection with this Agreement or any other
Transaction Document; (c) shall not have any duty to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions of this Agreement or any other
Transaction Document on the part of the Transferor, the Eligible Lender Trustee, any Servicer, any
Seller, any Guarantor or the Valuation Agent or to inspect the property (including the books and
records) of the Transferor, the Eligible Lender Trustee, any Servicer, any Seller, any Guarantor or
the Valuation Agent; (d) shall not be responsible to any Conduit Purchaser, any Managing Agent, any
Alternate Purchaser or any Program Support Provider, as the case may be, for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any
Transaction Document or any other instrument or document furnished pursuant hereto; and (e) shall
incur no liability under or in respect of this Agreement by acting upon any notice (including
notice by telephone), consent, certificate or other instrument or writing (which may be by
facsimile or other electronic means) believed by it in good faith to be genuine and signed or sent
by the proper party or parties.



     Section 9.05 Administrative Agent, Managing Agents and Affiliates. The Administrative Agent,
the Managing Agents and their Affiliates may generally engage in any kind of business with the
Transferor, the Eligible Lender Trustee, any Servicer, any Guarantor, any Seller, any of their
respective Affiliates and any Person who may do business with or own securities of the Transferor,
the Eligible Lender Trustee, any Servicer, any Guarantor, any Seller, or any of their respective
Affiliates, all as if such entities were not the Administrative Agent or a Managing Agent and
without any duty to account therefor to any Conduit Purchaser, any Managing Agent, any Alternate
Purchaser or any Program Support Provider.



     Section 9.06 Decision to Make Purchases. The Conduit Purchasers and the Alternate Purchasers
acknowledge that each has, independently and without reliance upon the Administrative Agent, and
based on such documents and information as it has deemed appropriate, made its own evaluation and
decision to enter into this Agreement and to make Purchases hereunder. The Conduit Purchasers and
the Alternate Purchasers also acknowledge that each will, independently and without reliance upon
the Administrative Agent, the Managing Agent or any of their Affiliates, and based on such
documents and information as it shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under this Agreement or any related agreement, instrument
or other document. Furthermore, each of the Purchasers and Managing Agents acknowledges and agrees
that although it may have received modeling and other structural information (including cash flow
analysis) from the Administrative Agent, the Administrative Agent assumes no responsibility for the
accuracy or



99









 







completeness of such information and such information is not intended to be relied upon as a
prediction of performance or for any other reason.



     Section 9.07 Successor Administrative Agent.




     (a) The Administrative Agent may resign at any time by giving five days’ written notice
thereof to each Conduit Purchaser, each Managing Agent, each Alternate Purchaser, the
Transferor, the Administrator and the Eligible Lender Trustee. Upon any such resignation,
the Conduit Purchasers, the Managing Agents and the Alternate Purchasers shall have the
right to appoint a successor Administrative Agent approved by the Transferor (which approval
will not be unreasonably withheld or delayed and will not be required after the occurrence
and during the continuance of a Termination Event). If no successor Administrative Agent
shall have been so appointed and shall have accepted such appointment, within sixty days
after the retiring Administrative Agent’s giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Conduit Purchasers, the Managing Agents and the
Alternate Purchasers, appoint a successor Administrative Agent. If the successor
Administrative Agent is not an Affiliate of the resigning Administrative Agent or an
Alternate Purchaser, such successor Administrative Agent shall be subject to the
Transferor’s prior written approval (which approval will not be unreasonably withheld or
delayed). Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall thereupon succeed
to and become vested with all of the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was an
Administrative Agent under this Agreement.




     (b) The “Administrative Agent” shall include any successors to the Administrative Agent
as a result of a merger, consolidation, combination, conversion, reorganization or any other
transaction (or series of related transactions) in which shares of the Administrative
Agent’s capital stock are sold or exchanged for or converted or otherwise changed into other
stock or securities, cash and/or any other property, or the sale, lease, assignment,
transfer or other conveyance of a majority of the assets of the Administrative Agent in any
transaction (or series of related transactions). Notwithstanding anything to the contrary
in this Agreement, no consent of the Purchasers, the Managing Agents or the Transferor shall
be required in connection with the succession of the Administrative Agent as a result of any
of the foregoing transactions.



     Section 9.08 Successor Managing Agents. Any Managing Agent may resign at any time by giving
five days’ written notice thereof to its related Conduit Purchaser and Alternate Purchaser, the
Transferor, the Administrator, the Administrative Agent and the Eligible Lender Trustee. Upon any
such resignation, the related Conduit Purchaser and Alternate Purchaser shall have the right to
appoint a successor Managing Agent approved by the Transferor (which approval will not be
unreasonably withheld or delayed and will not be required after the



100









 







occurrence and during the continuance of a Termination Event). If no successor Managing Agent
shall have been so appointed and shall have accepted such appointment, within sixty days after the
retiring Managing Agent’s giving of notice of resignation, then the retiring Managing Agent may, on
behalf of the related Conduit Purchaser and Alternate Purchaser, appoint a successor Managing
Agent. If the successor Managing Agent is not an Affiliate of the resigning Managing Agent, such
successor Managing Agent shall be subject to the Transferor’s prior written approval (which
approval will not be unreasonably withheld or delayed). Upon the acceptance of any appointment as
a Managing Agent hereunder by a successor Managing Agent, such successor Managing Agent shall
thereupon succeed to and become vested with all of the rights, powers, privileges and duties of the
retiring Managing Agent, and the retiring Managing Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Managing Agent’s resignation hereunder as a
Managing Agent, the provisions of this Article shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was a Managing Agent under this Agreement.



     Section 9.09 Reimbursement. Each Alternate Purchaser agrees to reimburse and indemnify the
Administrative Agent and its officers, directors, employees, representatives, counsel and agents
(to the extent the Administrative Agent is not paid or reimbursed by the Transferor, the Master
Servicer, or the Sellers), ratably according to the respective Capital of the Outstanding Purchases
then held by each of them (or if the Outstanding Purchases are equal to zero are such time, ratably
in accordance with their Pro Rata Shares), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by, or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement or any other Transaction Document or
any action taken or omitted by the Administrative Agent under this Agreement or any the Transaction
Document, provided that no Purchaser shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent’s gross negligence or willful misconduct.
Without limitation of the foregoing, each Alternate Purchaser agrees to reimburse the
Administrative Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by the Administrative Agent in connection with the due diligence,
negotiation, preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement or any other Transaction Document, to
the extent that the Administrative Agent is not reimbursed for such expenses by the Transferor, the
Master Servicer or the Sellers.



     Section 9.10 Notice of Termination Event, Potential Termination Event or Servicer Default.
The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of a
Potential Termination Event, a Termination Event or a Servicer Default, unless the Administrative
Agent has received written notice from a Purchaser, a Managing Agent or the Transferor referring to
this Agreement, describing such Potential Termination Event, Termination Event or Servicer Default
and stating that such notice is a “Notice of Termination Event or Potential Termination Event” or
“Notice of Servicer Default,” as applicable. The Administrative Agent will notify the Managing
Agents of its receipt of any such notice.



101









 





ARTICLE X




MISCELLANEOUS




     Section 10.01 Amendments, Etc. Unless otherwise specified herein, no amendment to or waiver
of any provision of this Agreement nor consent to any departure by Transferor or any other Person
therefrom shall in any event be effective unless the same shall be in writing and signed by the
Transferor, the Eligible Lender Trustee and the Required Managing Agents and then such waiver or
consent shall be effective only in the specific instance for the specific purpose for which given;
provided, however, that no such amendment, waiver or consent shall, without the
consent of the Administrative Agent, require the Administrative Agent to take any action or amend,
modify or waive the duties, responsibilities or rights of the Administrative Agent hereunder or
under any other Transaction Document; and provided further that no such amendment,
waiver or consent shall, without the consent of each affected Managing Agent, (a) amend the
definitions of Eligible Loan, Eligible FFELP Loan, Eligible Private Credit Loan, Eligible Student
Loan ABS, Applicable Percentage, Maximum Purchase Amount, Defaulted Student Loan, Defaulted Student
Loan ABS, or Required Managing Agents contained in this Agreement or modify the then existing
Excess Concentration Amounts; (b) amend, modify or waive any provision of this Agreement in any way
which would (i) reduce the Capital or Purchaser Costs payable on account of any Participation
Interest or delay any scheduled date for payment thereof; (ii) reduce fees payable by the
Transferor to the Administrative Agent, the Managing Agents or the Purchasers or delay the dates on
which such fees are payable; or (iii) modify any provisions relating to reserves so as to reduce
such reserves; (c) agree to the payment of a different rate of interest on the Participation
Interests pursuant to this Agreement; (d) amend or waive the Termination Event relating to the
bankruptcy of the Transferor in Article VII of this Agreement; (e) amend this Section
10.01 in any way other than expanding the list of amendments, waivers or consents that require
the consent of each Managing Agent or (f) release all or substantially all of the Pledged
Collateral except as expressly permitted by this Agreement; and provided further,
that the consent of an Alternate Purchaser shall be required to (a) increase the amount of its
Commitment and (b) extend the termination date of its Commitment. Any such amendment, waiver or
consent shall be effective only in the specific instance and for the specific purpose for which
given. To the extent the consent of any of the parties hereto (other than the Transferor) is
required under any of the Transaction Documents, the determination as to whether to grant or
withhold such consent shall be made by such party in its sole discretion without any implied duty
toward any other Person, except as otherwise expressly provided herein or therein. The parties
acknowledge that, before entering into such an amendment or granting such a waiver or consent,
Purchasers may also be required to obtain the approval of some or all of the Program Support
Providers or to obtain confirmation from certain Rating Agencies that such amendment, waiver or
consent will not result in a withdrawal or reduction of the ratings of the CP. If any Conduit
Purchaser is required pursuant to its program documents to provide notice of an amendment to the
Transaction Documents to any Rating Agency rating the CP of such Conduit Purchaser, such Conduit
Purchaser’s related Managing Agent shall provide such Rating Agency with notice of such amendment
to the Transaction Documents.



     Section 10.02 Notices, Etc. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including communication by facsimile copy or
other electronic means) and mailed, delivered by nationally recognized



102









 







overnight courier service, transmitted or delivered by hand, as to each party hereto, at its
address set forth on Exhibit O hereto or at such other address as shall be designated by such party
in a written notice to the other parties hereto. All such notices and communications shall be
effective, upon receipt, or in the case of (a) notice by mail, five days after being deposited in
the United States mails, first class postage prepaid or (b) notice by facsimile or other electronic
copy, when verbal communication of receipt is obtained, except that notices and communications
pursuant to Article II shall not be effective until received.



     Section 10.03 No Waiver; Remedies. No failure on the part of the Eligible Lender Trustee,
the Administrative Agent, any Managing Agent or the Secured Creditors to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.



     Section 10.04 Successors and Assigns; Binding Effect.




     (a) This Agreement shall be binding on the parties hereto and their respective
successors and permitted assigns; provided, however, that neither the
Transferor nor the Administrator may assign any of its rights or delegate any of its duties
hereunder or under any of the other Transaction Documents to which it is a party without the
prior written consent of the Administrative Agent. Except as provided in clause (b) below
and except as provided in Article III, no provision of this Agreement shall in any manner
restrict the ability of any Purchaser to assign, participate, grant security interests in,
or otherwise transfer any portion of the Participation Interests.




     (b) Any Alternate Purchaser may assign all or any portion of its Commitment and its
interest in the Participation Interests, the Pledged Collateral and its other rights and
obligations hereunder to any Person with the prior written approval of the Transferor and
the Administrator (which approval shall not be unreasonably withheld and shall not be
required after the occurrence and during the continuance of a Termination Event), the
Managing Agent for such Purchaser’s Facility Group and the Administrative Agent;
provided, however, such consent of the Transferor or the Administrator shall
not be required in the case of an assignment to any existing Alternate Purchaser or any
Affiliate of an existing Alternate Purchaser (or, for the avoidance of doubt, in the case of
a sale of a participation interest that does not affect the rights or obligations of such
Alternate Purchaser hereunder). In connection with any such assignment, the assignor shall
deliver to the assignee(s) an Assignment Agreement, duly executed, assigning to such
assignee a pro rata interest in such assignor’s Commitment and other obligations hereunder
and in the Participation Interests and Pledged Collateral and other rights hereunder, and
such assignor shall promptly execute and deliver all further instruments and documents, and
take all further action, that the assignee may reasonably request, in order to protect, or
more fully evidence the assignee’s right, title and interest in and to such interest and to
enable the Administrative Agent, on behalf of such assignee, to exercise or enforce any
rights hereunder and under the other Transaction Documents to which such assignor is or,
immediately prior to such assignment, was a party. Upon any such assignment, (i) the
assignee shall have all of the rights and obligations of the assignor hereunder and under



103









 







the other Transaction Documents to which such assignor is or, immediately prior to such
assignment, was a party with respect to such assignor’s Commitment and interest in the
Participation Interests and the Pledged Collateral for all purposes of this Agreement and
under the other Transaction Documents to which such assignor is or, immediately prior to
such assignment, was a party and (ii) the assignor shall have no further obligations with
respect to the portion of its Commitment which has been assigned and shall relinquish its
rights with respect to the portion of its interest in the Participation Interests and
Pledged Collateral which has been assigned for all purposes of this Agreement and under the
other Transaction Documents to which such assignor is or, immediately prior to such
assignment, was a party. No such assignment shall be effective unless a fully executed copy
of the related Assignment Agreement shall be delivered to the Administrative Agent, the
applicable Managing Agent and the Transferor. All costs and expenses of the Administrative
Agent incurred in connection with any assignment hereunder shall be borne by the Transferor.
No Alternate Purchaser shall assign any portion of its Commitment hereunder without also
simultaneously assigning an equal portion of its interest in the Program Support Agreement
to which it is a party or under which it has acquired a participation.




     (c) By executing and delivering an Assignment Agreement, the assignor and assignee
thereunder confirm to and agree with each other and the other parties hereto as follows: (i)
other than as provided in such Assignment Agreement, the assignor makes no representation or
warranty and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, the other Transaction
Documents or any other instrument or document furnished pursuant hereto or thereto or the
execution, legality, validity, enforceability, genuineness, sufficiency or value or this
Agreement, the other Transaction Documents or any such other instrument or document; (ii)
the assignor makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Transferor or any Affiliate of the Transferor or the
performance or observance by the Transferor or any Affiliate of the Transferor of any of
their respective obligations under this Agreement or the other Transaction Documents or any
other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it
has received a copy of this Agreement and each other Transaction Document and such other
instruments, documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment Agreement and to purchase such interest;
(iv) such assignee will, independently and without reliance upon the Administrative Agent,
or any of its Affiliates, or the assignor and based on such agreements, documents and
information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement and the other Transaction
Documents; (v) such assignee appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement, the other
Transaction Documents and any other instrument or document furnished pursuant hereto or
thereto as are delegated to the Administrative Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto and to enforce its respective
rights and interests in and under this Agreement, the other Transaction Documents and the
Pledged Collateral; (vi) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement and the other Transaction



104









 







Documents are required to be performed by it as the assignee of the assignor; and (vii)
such assignee agrees that it will not institute against the Conduit Purchasers any
proceeding of the type referred to in Section 10.14 prior to the date which is one
year and one day after the payment in full of all CP issued by the Conduit Purchaser (or any
related commercial paper issuer, if the Conduit Purchaser does not itself issue CP).




     (d) Without limiting the foregoing, each Conduit Purchaser may, from time to time, with
prior or concurrent notice to the Transferor, the Administrator, the Managing Agent for such
Conduit Purchaser’s Facility Group, and the Administrative Agent, in one transaction or a
series of transactions, assign all or a portion of its outstanding Participation Interests
and its rights and obligations under this Agreement and any other Transaction Documents to
which it is a party to a Conduit Assignee. Upon and to the extent of such assignment by a
Conduit Purchaser to a Conduit Assignee, (i) such Conduit Assignee shall be the owner of the
assigned portion of the Participation Interests, (ii) unless otherwise provided for in an
agreement among the Conduit Assignee, the Administrative Agent and the Transferor, the
Managing Agent for the Conduit Purchaser assignor will act as the Managing Agent for such
Conduit Assignee, with all corresponding rights and powers, express or implied, granted to
the Managing Agent hereunder or under the other Transaction Documents, (iii) such Conduit
Assignee (and any related commercial paper issuer, if such Conduit Assignee does not itself
issue commercial paper) and their respective Program Support Providers and other related
parties shall have the benefit of all the rights and protections provided to the Conduit
Purchaser and its Program Support Provider(s) herein and in the other Transaction Documents
(including any limitation on recourse against such Conduit Assignee or related parties, any
agreement not to file or join in the filing of a petition to commence an insolvency
proceeding against such Conduit Assignee, and the right to assign to another Conduit
Assignee as provided in this paragraph), (iv) such Conduit Assignee shall assume all (or the
assigned or assumed portion) of the Conduit Purchaser’s obligations, if any, hereunder or
any other Transaction Document, and the Conduit Purchaser shall be released from such
obligations, in each case to the extent of such assignment, and the obligations of the
Conduit Purchaser and such Conduit Assignee shall be several and not joint, (v) all
distributions in respect of the Participation Interests shall be made to the applicable
agent or Managing Agent, as applicable, on behalf of the Conduit Purchaser and such Conduit
Assignee on a pro rata basis according to their respective interests, (vi) the defined terms
and other terms and provisions of this Agreement and the other Transaction Documents shall
be interpreted in accordance with the foregoing, and (vii) if requested by the
Administrative Agent or the Managing Agent with respect to the Conduit Assignee, the parties
will execute and deliver such further agreements and documents and take such other actions
as the Administrative Agent or such Managing Agent may reasonably request to evidence and
give effect to the foregoing. No assignment by a Conduit Purchaser to a Conduit Assignee of
all or any portion of the Participation Interests shall in any way diminish its related
Alternate Investors’ obligation under this Agreement to fund any Participation Interests not
funded by the Conduit Purchaser or such Conduit Assignee.




     (e) In the event that a Conduit Purchaser makes an assignment to a Conduit Assignee in
accordance with clause (d) above, the Alternate Purchasers in such Conduit



105









 







Purchaser’s Facility Group: (i) if requested by the related Managing Agent, shall
terminate their participation in the applicable Program Support Agreement to the extent of
such assignment, (ii) if requested by the related Managing Agent, shall execute (either
directly or through a participation agreement, as determined by such Managing Agent) the
program support agreement related to such Conduit Purchaser, to the extent of such
assignment, the terms of which shall be substantially similar to those of the participation
or other agreement entered into by such Alternate Purchaser with respect to the applicable
Program Support Agreement (or which shall be otherwise reasonably satisfactory to the
related Managing Agent and the Alternate Purchasers), (iii) if requested by the Conduit
Purchaser, shall enter into such agreements as requested by the Conduit Purchaser pursuant
to which they shall be obligated to provide funding to the Conduit Assignee on substantially
the same terms and conditions as is provided for in this Agreement in respect of the Conduit
Purchaser (or which agreements shall be otherwise reasonably satisfactory to the Conduit
Purchaser and the Alternate Purchasers), and (iv) shall take such actions as the
Administrative Agent shall reasonably request in connection therewith.




     (f) The Transferor hereby agrees and consents to the assignment by the Conduit
Purchaser from time to time of all or any part of its rights under, interest in and title to
the Participation Interests, the Pledged Collateral, this Agreement, and the other
Transaction Documents to any Program Support Provider.




     (g) If its related Managing Agent so elects, a Conduit Purchaser shall assign (and the
Transferor consents to such assignment), effective on the Assignment Date referred to below,
all or such portions as may be elected by the Conduit Purchaser of its interest in the
Participation Interests at such time to its related Alternate Purchaser; provided,
however, that no such assignment shall take place pursuant to this paragraph at a
time when an Event of Bankruptcy with respect to such Conduit Purchaser exists. No further
documentation or action on the part of the Conduit Purchaser shall be required to exercise
the rights set forth in the immediately preceding sentence, other than the giving of notice
by its related Managing Agent on behalf of the Conduit Purchaser referred to above and the
delivery by such related Managing Agent of a copy of such notice to each related Alternate
Purchaser (the date of the receipt by the applicable Managing Agent of any such notice being
the “Assignment Date”). Each Alternate Purchaser hereby agrees, unconditionally and
irrevocably and under all circumstances, without setoff, counterclaim or defense of any
kind, to pay the full amount of its Assignment Amount on such Assignment Date to its related
Conduit Purchaser or Conduit Purchasers in immediately available funds to an account
designated by the related Managing Agent. Upon payment of its Assignment Amount, each
Alternate Purchaser shall acquire an interest in the Participation Interests equal to that
transferred by the Conduit Purchaser. In the event that the aggregate of the Assignment
Amounts paid by any Facility Group’s Alternate Purchasers pursuant to this paragraph on any
Assignment Date occurring is less than the Capital of the Participation Interests of the
applicable Conduit Purchaser on such Assignment Date, then to the extent payments are
therefore received by the applicable Managing Agent hereunder in respect of such
Participation Interest in excess of the aggregate of the unrecovered Assignment Amounts
funded by the related Alternate



106









 







Purchasers, such excess shall be remitted by the applicable Managing Agent to the
applicable Conduit Purchasers.




     (h) From and after the effective date specified in each assignment and acceptance the
assignee thereunder shall be a party hereto and, to the extent of the interest assigned by
such assignment and acceptance, have the rights and obligations of the Purchasers under this
Agreement. Any assignment or transfer by a Purchaser of rights or obligations under this
Agreement that does not comply with this Section 10.04 shall be treated for purposes
of this Agreement as a sale by such Purchaser of a participation in such rights and
obligations in accordance with the terms hereof.




     (i) The Administrative Agent shall maintain on behalf of the Transferor a register (the
“Register”) on which it will record the Purchasers’ rights hereunder, and each assignment
and acceptance and participation. The Register shall include the names and addresses of the
Purchasers (including all assignees, successors and participants). Absent manifest error,
the Register shall be conclusive as to the ownership of a Purchaser’s rights hereunder, but
failure to make any such recordation, or any error in such recordation shall not affect the
Purchasers’ obligations in respect of such rights. If a Purchaser assigns or sells a
participation in its rights hereunder, such assignment shall not be effective until it has
provided the Administrative Agent with the information described in this paragraph. The
Administrative Agent shall permit the Transferor to review such information as reasonably
needed for the Transferor to comply with its obligations under this Agreement or to maintain
the Obligations at all times in “registered form” within the meaning of Sections 163(f),
871(h)(2) and 881(c)(2) of the Code and any related regulations.



     Section 10.05 Survival. The rights and remedies with respect to any breach of a
representation and warranty made by or on behalf of the Transferor pursuant to Article V
and the indemnification and payment provisions of Articles VIII and IX and
Sections 2.14, 2.15, 2.20, 10.08, 10.09 and 10.14
shall be continuing and shall survive the termination of this Agreement and, with respect to the
Administrative Agent’s and the Eligible Lender Trustee’s rights under Articles VIII,
IX and X, the removal or resignation of the Administrative Agent or the Eligible
Lender Trustee.



     Section 10.06 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ALL RESPECTS IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES).



     Section 10.07 Submission to Jurisdiction; Waiver of Jury Trial; Appointment of Service Agent.




     (a) EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE
COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL



107









 







LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT
IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN THIS SECTION 10.07 SHALL AFFECT THE RIGHT OF
THE ADMINISTRATIVE AGENT, THE MANAGING AGENTS OR THE PURCHASERS TO BRING ANY ACTION OR
PROCEEDING AGAINST THE TRANSFEROR OR THE ADMINISTRATOR OR ANY OF THEIR RESPECTIVE PROPERTY
IN THE COURTS OF OTHER JURISDICTIONS.




     (b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG ANY OF THEM
ARISING OUT OF, CONNECTED WITH, RELATING TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM
IN CONNECTION WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.




     (c) The Transferor and the Administrator each hereby appoint CT Corporation located at
111 Eighth Avenue, New York, New York 10011 as the authorized agent upon whom process may be
served in any action arising out of or based upon this Agreement, the other Transaction
Documents to which such Person is a party or the transactions contemplated hereby or thereby
that may be instituted in the United States District Court for the Southern District of New
York and of any New York State court sitting in The City of New York by the Administrative
Agent or the Purchasers or any successor or assignee of any of them.



     Section 10.08 Costs and Expenses. In addition to the rights of indemnification granted under
Article IX, and notwithstanding any limitation on recourse set forth herein, the Transferor
agrees to pay on demand all reasonable costs, fees and expenses of the Eligible Lender Trustee, the
Administrative Agent, the Conduit Purchasers, the Managing Agents, the Alternate Purchasers or the
Program Support Providers incurred in connection with the due diligence, negotiation, preparation,
execution, delivery, renewal or any amendment or modification of, or any waiver or consent issued
in connection with, this Agreement, any Program Support Agreement or any other Transaction
Document, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Eligible Lender Trustee, the Administrative Agent, the Conduit Purchasers, the Managing
Agents, the Alternate Purchasers or the Program Support Providers with respect thereto and all
costs, fees and expenses, if any (including reasonable counsel fees and expenses), incurred by the
Eligible Lender Trustee, the Administrative Agent, the Conduit Purchasers, the Managing Agents, the
Alternate Purchasers or the Program Support Providers in connection with the enforcement of this
Agreement, any Program Support Agreement and the other Transaction Documents. Notwithstanding the
foregoing, each of the Conduit Purchasers, Managing Agents, Alternate Purchasers and Program
Support Providers agree that the Transferor shall only be required to pay amounts for legal fees
and expenses of a



108









 







single law firm engaged by the Administrative Agent on behalf of the Administrative Agent and
the Secured Creditors, unless otherwise agreed to by the Transferor in its sole discretion.



     Section 10.09 Recourse Against Certain Parties. No recourse under or with respect to any
obligation, covenant or agreement (including, without limitation, the payment of any fees or any
other obligations) of the Eligible Lender Trustee, the Administrative Agent, the Conduit
Purchasers, the Managing Agents, the Alternate Purchasers or the Program Support Providers as
contained in this Agreement or any other agreement, instrument or document entered into by it
pursuant hereto or in connection herewith shall be had against any administrator of the Eligible
Lender Trustee, the Administrative Agent, the Conduit Purchasers, the Managing Agents, the
Alternate Purchasers or the Program Support Providers or any incorporator, affiliate, stockholder,
officer, employee or director of the Eligible Lender Trustee, the Administrative Agent, the Conduit
Purchasers, the Managing Agents, the Alternate Purchasers or the Program Support Providers or of
any such administrator, as such, by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise; it being expressly agreed and understood that
the agreements of the Eligible Lender Trustee, the Administrative Agent, the Conduit Purchasers,
the Managing Agents, the Alternate Purchasers and the Program Support Providers contained in this
Agreement and all of the other agreements, instruments and documents entered into by the Eligible
Lender Trustee, the Administrative Agent, the Conduit Purchasers, the Managing Agents, the
Alternate Purchasers or the Program Support Providers pursuant hereto or in connection herewith
are, in each case, solely the corporate obligations of the Eligible Lender Trustee, the
Administrative Agent, the Conduit Purchasers, the Managing Agents, the Alternate Purchasers or the
Program Support Providers, as applicable. No personal liability whatsoever shall attach to or be
incurred by any administrator of the Eligible Lender Trustee, the Administrative Agent, the Conduit
Purchasers, the Managing Agents, the Alternate Purchasers or the Program Support Providers or any
incorporator, stockholder, affiliate, officer, employee or director of the Eligible Lender Trustee,
the Administrative Agent, the Conduit Purchasers, the Managing Agents, the Alternate Purchasers or
the Program Support Providers or of any such administrator, as such, or any other them, under or by
reason of any of the obligations, covenants or agreements of the Eligible Lender Trustee, the
Administrative Agent, the Conduit Purchasers, the Managing Agents, the Alternate Purchasers or the
Program Support Providers contained in this Agreement or in any other such instruments, documents
or agreements, or which are implied therefrom, and that any and all personal liability of every
such administrator of the Eligible Lender Trustee, the Administrative Agent, the Conduit
Purchasers, the Managing Agents, the Alternate Purchasers or the Program Support Providers and each
incorporator, stockholder, affiliate, officer, employee or director of the Eligible Lender Trustee,
the Administrative Agent, the Conduit Purchasers, the Managing Agents, the Alternate Purchasers or
the Program Support Providers or of any such administrator, or any of them, for breaches by the
Eligible Lender Trustee, the Administrative Agent, the Conduit Purchasers, the Managing Agents, the
Alternate Purchasers or the Program Support Providers of any such obligations, covenants or
agreements, which liability may arise either at common law or at equity, by statute or
constitution, or otherwise, is hereby expressly waived as a condition of and in consideration for
the execution of this Agreement. The provisions of this Section shall survive the termination of
this Agreement and, with respect to the rights of the Eligible Lender Trustee, the Administrative
Agent or the Managing Agents, the resignation or removal of the Eligible Lender Trustee, the
Administrative Agent or the Managing Agents.




109










 





     Section 10.10 Execution in Counterparts; Severability; Integration. This Agreement may
be executed in any number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement. Delivery by facsimile or electronic mail of
an executed signature page of this Agreement or any other Transaction Document shall be effective
as delivery of an executed counterpart hereof. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction, shall not in any way be affected or impaired thereby. This Agreement
contains the final and complete integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the entire agreement among the parties
hereto with respect to the subject matter hereof, superseding all prior oral or written
understandings.



     Section 10.11 Confidentiality.




     (a) Each of the Administrative Agent, the Managing Agents and the Purchasers agrees to
keep confidential and not disclose any non-public information or documents related to the
Transferor or any Affiliate of the Transferor delivered or provided to such Person in
connection with this Agreement, any other Transaction Document or the transactions
contemplated hereby or thereby and which are clearly identified in writing by the Transferor
or such Affiliate as being confidential; provided, however, that each of the
foregoing may disclose such information (a) to the extent required or deemed necessary
and/or advisable by such Person’s counsel in any judicial, regulatory, arbitration or
governmental proceeding or under any law, regulation, order, subpoena or decree; (b) to its
officers, directors, employees, accountants, auditors and outside counsel, in each case,
provided they are informed of the confidentiality thereof and agree to maintain such
confidentiality; (c) to any Program Support Provider for the Conduit Purchasers, any
potential Program Support Provider for the Conduit Purchasers, or any assignee or
participant or potential assignee or participant of any Program Support Provider for the
Conduit Purchasers, provided they are informed of the confidentiality thereof and agree to
maintain such confidentiality; (d) to any assignee, participant or potential assignee or
participant of or with any of the foregoing or any Program Support Provider, any such
liquidity or program support provider or assignee or participant is required by law,
regulation, decree or order to make such disclosure; (f) in connection with the enforcement
hereof or of any of the other Transaction Documents or any Program Support Agreement; (g) to
any rating agency rating the commercial paper notes of the Conduit Purchasers or rating SLM
Corporation; and (h) to such other Persons as may be approved by the Transferor.
Notwithstanding the foregoing, the foregoing obligations shall not apply to any such
information, documents or portions thereof that (i) were of public knowledge or literature
generally available to the public at the time of such disclosure; or (ii) have become part
of the public domain by publication or otherwise, other than as a result of the failure of
such party or any of its respective employees, directors, officers, advisors, accountants,
auditors, or legal counsel to preserve the confidentiality thereof.



110









 






     (b) Each of the Transferor and the Administrator hereby agrees that it will not
disclose the contents of this Agreement or any other Transaction Document or any other
proprietary or confidential information of or with respect to any Purchaser, the
Administrative Agent or any Program Support Provider to any other Person except (a) its
auditors and attorneys, employees or financial advisors (other than any commercial bank) and
any nationally recognized statistical rating organization, provided such auditors,
attorneys, employees, financial advisors or rating agencies are informed of the highly
confidential nature of such information or (b) as otherwise required by applicable law or
order of a court of competent jurisdiction.




     (c) Notwithstanding any other provision herein to the contrary, each of the parties
hereto (and each employee, representative or other agent of each such party) may disclose to
any and all persons, without limitation of any kind, any information with respect to the
United States federal, state and local “tax treatment” and “tax structure” (in each case,
within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated
by the Transaction Documents and all materials of any kind (including opinions or other tax
analyses) that are provided to such party or its representatives relating to such tax
treatment and tax structure; provided, that no person may disclose the name of or
identifying information with respect to any party identified in the Transaction Documents or
any pricing terms or other nonpublic business or financial information that is unrelated to
the United States federal, state and local tax treatment of the transaction and is not
relevant to understanding the United States federal, state and local tax treatment of the
transaction, without the prior consent of the Transferor; provided further, that with
respect to any document or similar item that in either case contains information concerning
the tax treatment or tax structure of the transaction as well as other information, this
sentence shall only apply to such portions of the document or similar item that relate to
the United States federal, state and local tax treatment or tax structure of the
transactions contemplated hereby.



     Section 10.12 Section Titles. The section titles contained in this Agreement shall be
without substantive meaning or content of any kind whatsoever and are not a part of the agreement
between the parties.



     Section 10.13 Entire Agreement. This Agreement, including all Exhibits, Schedules and
Appendices and other documents attached hereto or incorporated by reference herein, together with
the other Transaction Documents constitutes the entire agreement of the parties with respect to the
subject matter hereof and supersedes all other negotiations, understandings and representations,
oral or written, with respect to the subject matter hereof.



     Section 10.14 No Petition. Each of the Transferor, the Administrator, the Eligible Lender
Trustee, the Administrative Agent and the Managing Agents hereby covenants and agrees with respect
to each Conduit Purchaser that, prior to the date which is one year and one day after the payment
in full of all outstanding indebtedness of such Conduit Purchaser (or its related commercial paper
issuer), it will not institute against or join any other person or entity in instituting against
such Conduit Purchaser any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or any state of the
United States. The foregoing shall not limit the rights of the Transferor,



111









 







the Administrator, the Eligible Lender Trustee, the Administrative Agent or the Managing
Agents to file any claim in, or otherwise take any action with respect to, any insolvency
proceeding instituted against any Conduit Purchaser by a Person other than the Transferor, the
Administrator, the Eligible Lender Trustee, the Administrative Agent or the Managing Agents, as
applicable.



     Section 10.15 Excess Funds. Notwithstanding any provisions contained in this Agreement to
the contrary, no Conduit Purchaser shall, nor shall be obligated to, pay any amount pursuant to
this Agreement unless (i) such Conduit Purchaser has received funds which may be used to make such
payment and which funds are not required to repay its commercial paper notes when due and (ii)
after giving effect to such payment, either (x) such Conduit Purchaser could issue commercial paper
notes to refinance all of its outstanding commercial paper notes (assuming such outstanding
commercial paper notes matured at such time) in accordance with the program documents governing
such Conduit Purchaser’s securitization program or (y) all of such Conduit Purchaser’s commercial
paper notes are paid in full. Any amount which a Conduit Purchaser does not pay pursuant to the
operation of the preceding sentence shall not constitute a claim (as defined in §101 of the United
States Bankruptcy Code) against or corporate obligation of such Conduit Purchaser for any such
insufficiency unless and until such Conduit Purchaser satisfies the provisions of clauses (i) and
(ii) above. The provisions of this Section shall survive the termination of this Agreement.



     Section 10.16 Agreed Tax Treatment. The Transferor and, by its acceptance or acquisition of
a Participation Interest or a beneficial interest therein, each Purchaser of, and any Person that
acquires a direct or indirect beneficial interest in, such Participation Interest, intend and agree
to treat such Participation Interest as indebtedness of the Transferor or SLM Education Credit
Finance Corporation for United States federal, state and local tax purposes. The provisions of
this Agreement shall be interpreted to further this intention and agreement of the parties.



112









 





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



	 	 	 	 	 
	 	THE TRANSFEROR:



MUSTANG FUNDING I, LLC

 	 
	 	By:  	/s/
Mark L. Heleen	 
	 	 	Name:  	Mark L. Heleen	 
	 	 	Title:  	Vice
President	 
	 
	 	THE ADMINISTRATOR:



SALLIE MAE, INC.

 	 
	 	By:  	/s/
J. Lance Franke	 
	 	 	Name:  	J. Lance Franke	 
	 	 	Title:  	Senior
Vice President	 
	 



Signature Page

to

Mustang Funding I, LLC

Participation Purchase

and Security Agreement




 









 








	 	 	 	 	 
	 	THE BANK OF AMERICA CONDUIT PURCHASERS:



KITTY HAWK FUNDING CORPORATION

 	 
	 	By:  	/s/
Philip A. Martone	 
	 	 	Name:  	Philip A. Martone	 
	 	 	Title:  	Vice
President	 
	 
	 	RANGER FUNDING COMPANY LLC

 	 
	 	By:  	/s/
Doris J. Hearn	 
	 	 	Name:  	Doris J. Hearn	 
	 	 	Title:  	Vice
President	 
	 
	 	YC SUSI TRUST

 	 
	 	By:  	/s/
Margaux L. Karagosian	 
	 	 	Name:  	Margaux L. Karagosian	 
	 	 	Title:  	Vice
President	 
	 
	 	THE BANK OF AMERICA MANAGING AGENT:



BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/
Margaux L. Karagosian	 
	 	 	Name:  	Margaux L. Karagosian	 
	 	 	Title:  	Vice
President	 
	 
	 	THE BANK OF AMERICA ALTERNATE PURCHASER:



BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/
Margaux L. Karagosian	 
	 	 	Name:  	Margaux L. Karagosian	 
	 	 	Title:  	Vice
President	 
	 



Signature Page

to

Mustang Funding I, LLC

Participation Purchase

and Security Agreement





 









 








	 	 	 	 	 
	 	THE JPMORGAN CONDUIT PURCHASERS: 



CHARIOT FUNDING LLC

 	 
	 	By:  	/s/
GEORGE
S. WILKINS	 
	 	 	Name:  	George
S. Wilkins	 
	 	 	Title:  	Vice
President	 
	 
	 	FALCON ASSET SECURITIZATION COMPANY LLC

 	 
	 	By:  	/s/
GEORGE
S. WILKINS	 
	 	 	Name:  	George
S. Wilkins	 
	 	 	Title:  	Vice
President	 
	 
	 	JUPITER SECURITIZATION COMPANY LLC

 	 
	 	By:  	/s/
GEORGE
S. WILKINS	 
	 	 	Name:  	George
S. Wilkins	 
	 	 	Title:  	Vice
President	 
	 
	 	PARK AVENUE RECEIVABLES COMPANY, LLC

 	 
	 	By:  	/s/
GEORGE
S. WILKINS	 
	 	 	Name:  	George
S. Wilkins	 
	 	 	Title:  	Vice
President	 
	 
	 	THE JPMORGAN MANAGING AGENT:



JPMORGAN CHASE BANK, N.A.

 	 
	 	By:  	/s/
GEORGE
S. WILKINS	 
	 	 	Name:  	George
S. Wilkins	 
	 	 	Title:  	Vice
President	 



Signature Page

to

Mustang Funding I, LLC

Participation Purchase

and Security Agreement




 









 






	 	 	 	 	 



	 	 	 	 	 
	 	THE JPMORGAN ALTERNATE PURCHASER:



JPMORGAN CHASE BANK, N.A.

 	 
	 	By:  	/s/
GEORGE
S. WILKINS	 
	 	 	Name:  	George
S. Wilkins	 
	 	 	Title:  	Vice
President	 
	 



Signature Page

to

Mustang Funding I, LLC

Participation Purchase

and Security Agreement




 









 








	 	 	 	 	 
	 	THE ELIGIBLE LENDER TRUSTEE: 



CHASE BANK USA, NATIONAL ASSOCIATION, not in its individual
capacity but solely in its capacity as Eligible Lender Trustee
under the Eligible Lender Trustee Agreement dated as of April ___,
2007 by and between Mustang Funding I, LLC and the Eligible Lender
Trustee

 	 
	 	By:  	/s/
John J. Cashin	 
	 	 	Name:  	John J. Cashin	 	 
	 	 	Title:  	Vice
President	 	 
	 
	 	THE ADMINISTRATIVE AGENT:



BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/
Margaux L. Karagosian	 
	 	 	Name:  	Margaux L. Karagosian	 	 
	 	 	Title:  	Vice
President	 	 
	 
	 	BANK OF AMERICA, N.A., as securities intermediary and depositary
bank with respect to the Accounts

 	 
	 	By:  	/s/
Margaux L. Karagosian	 
	 	 	Name:  	Margaux L. Karagosian	 	 
	 	 	Title:  	Vice
President	 	 
	 



Signature Page

to

Mustang Funding I, LLC

Participation Purchase

and Security Agreement





 









 





EXHIBIT A-1




FORM OF PURCHASE AGREEMENT




(SLM EDUCATION CREDIT FINANCE CORPORATION)




 









 








EXHIBIT A-2




FORM OF PURCHASE AGREEMENT




(VG FUNDING, LLC)




 









 








EXHIBIT B




[RESERVED]




 









 





EXHIBIT C




FORM OF MONTHLY REPORT




SALLIE MAE, INC.




12061 Bluemont Way

Reston, Virginia 20190





	By facsimile: 	(704) 387-2828

(704) 409-0594





                          , 2007





	 	To: 	 	Bank of America, N.A., as Administrative Agent

Hearst Tower

214 N. Tryon Street

Charlotte, NC 28255

Attn: Ms. Camille Zerbinos (tel. 704.386.8361)

         Ms. Margaux Karagosian (tel. 704.387.7778)
	 
	 	 	 	REF: Mustang Funding I, LLC Monthly Report




Reference is made to the Participation Purchase and Security Agreement, dated as of April 30, 2007
among Mustang Funding I, LLC as Transferor, the conduit purchasers party thereto, the alternate
purchasers party thereto, Bank of America, N.A., as Administrative Agent, the managing agents party
thereto, Chase Bank USA, National Association, as Eligible Lender Trustee and Sallie Mae, Inc., as
Administrator (as amended, restated, supplemented or otherwise modified, the “Agreement”).
Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in
the Agreement.



The Administrator, on behalf of the Transferor, is delivering this Monthly Report pursuant to
Section 2.05(a) of the Agreement.




     I. The Administrator, on behalf of itself and the classes, hereby certifies as of _________
___,
2007 the Minimum Asset Coverage Requirement is met. The Asset Coverage Ratio as of the before
mentioned date is



Asset Coverage Ratio:           %



and the Private Credit Loan Default Ratio as of the before mentioned date is:




Private Credit Loan Default Ratio:           %




     II. The following Permitted Releases of Transferor Student Loans and Transferor Student Loan
ABS occurred during the Settlement Period listed below:



Settlement Period                           , 2007 to                           , 2007




	 	 	 	 	 
	A) Take Out Securitization
	 	$ 	—	 






 









 





                          , 2007

Page 2





	 	 	 	 	 
	B) Fair Market Auction
	 	$ 	—	 
	C) Permitted SPE Transfer
	 	$ 	—	 
	D) Permitted Seller Buy-Back
	 	$ 	—	 
	E) Other Transfers
	 	$ 	—	 






The Administrator, on behalf of itself and the Transferor, hereby certifies that (i) each of the
releases described above meets the requirements of a Permitted Release under and as defined in the
Agreement and (ii) a true, correct and complete schedule of each Transferor Student Loan and
Transferor Student Loan ABS that was released during the above-mentioned Settlement Period is
attached hereto.




     III. The Administrator, on behalf of the classes, hereby directs and authorizes the
Administrative Agent to make the following transfers from the Collection Account on _________
___, 2007 pursuant to Section 2.05(b) of the Agreement.




	 	A. Transfer:	 	From the Collection Account 1233056260

To the Capital Payment Account 1233056161

Amount:                    $  —
	 
	 	B. Transfer:	 	From the Collection Account 1233056260

To the Interest Reserve Subaccount 1233056203

Amount:                    $ —
	 
	 	C. Transfer:	 	From the Collection Account 1233056260

To Reserve Account 1233056265

Amount:                    $ —
	 
	 	D. Transfer:	 	From the Collection Account 1233056260

To Capitalized Interest Account 1233056185

Amount:                    $ —
	 
	 	E. Transfer:	 	From the Collection Account 1233056260

To Floor Income Rebate Account 1233056208

Amount:                    $ —
	 
	 	F. Transfer:	 	From the Collection Account 1233056260

To Borrower Benefit Account 1233056246

Amount:                    $ —





 









 





                          , 2007

Page 3




	 	G. Transfer:	 	From the Collection Account 1233056260

To Sallie Mae Inc.
	 
	 	 	 	ABA: 021000018

Bank: Bank of New York

AC#: [                    ]

Name: Sallie Mae Inc.

Ref: Monthly Servicing Fees

Amount:                    $ —
	 
	 	H. Transfer:	 	From the Collection Account 1233056260

To Sallie Mae Inc.
	 
	 	 	 	ABA: 021000018

Bank: Bank of New York

AC#: [___]

Name: Sallie Mae Inc.

Ref: ABCP Administrator Fee

Amount:                    $                    
	 
	 	I. Transfer:	 	From the Collection Account 1233056260

To Disbursement Account 1233056166

Amount:                    $ —
	 
	 	J. Transfer:	 	From Collection Account 1233056260

To Bank of America Intl, New York, NY
	 
	 	 	 	ABA: 026009593

AC#: 1093600656600

BNF Structured Finance Wire Clearing

Ref: SLM-Mustang I Admin Fee
	 
	 	K. Transfer:	 	From Collection Account 1233056260

To Purchasers
	 
	 	A)	 	Bank of America Funding Group
	 	B)	 	JP Morgan Funding Group

Ref: SLM-Mustang I Program Fee

Amount

Ref: SLM-Mustang I Liquidity Fee

Amount
	 
	 	L. Transfer:	 	From the Collection Account 1233056260

To SLM Corporation
	 
	 	 	 	ABA: 021000018




 









 





                          , 2007

Page 4





	 	 	 	Bank: Bank of New York

AC#: [                    ]

Name: SLM Corp

Ref: ABCP Hedge Counterparty Fees

Amount:                    $ —
	 
	 	M. Transfer:	 	From the Collection Account 1233056260

To SLM Corporation
	 
	 	 	 	ABA: 021000018

Bank: Bank of New York

AC#: [                    ]

Name: SLM Corp

Ref: ABCP Hedge Agreement Payment

Amount:                    $ —
	 
	 	N. Transfer:	 	From the Collection Account 1233056260

To SLM Education Credit Finance Corporation
	 
	 	 	 	ABA: 021000018

Bank: Bank of New York

AC#: [                    ]

Name: Mustang Funding I, LLC

Ref: Membership Interest

Amount:                    $ —




The Administrator, on behalf of itself and the Transferor, hereby certifies that (i) no Termination
Event or, to the best of its knowledge, Potential Termination Event has occurred and is continuing
and (ii) to the best of its knowledge and belief, the amounts provided above are accurate and
complete.




	 	 	 	 	 
	 	Sincerely, 



SALLIE MAE, INC., as 

Administrator

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 









 





EXHIBIT D




FORM OF VALUATION AGENT AGREEMENT




 









 





EXHIBIT E




FORM OF PURCHASE REQUEST




SALLIE MAE, INC.

12061 Bluemont Way

Reston, Virginia 20190





			
	By facsimile:	 	(704) 387-2828

(704) 409-0594





                    [Date]





			
	     To:	 	Bank of America, N.A., as Administrative Agent

Hearst Tower

214 N. Tryon Street

Charlotte, NC 28255

Attn: Ms. Camille Zerbinos (tel. 704.386.8361)

           Ms. Margaux Karagosian (tel. 704.387.7778)






Reference is made to the Participation Purchase and Security Agreement, dated as of April
30, 2007 among Mustang Funding I, LLC, as the Transferor, the conduit purchasers party
thereto, the alternate purchasers party thereto, Bank of America, N.A., as Administrative
Agent, Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Managing Agents, Chase Bank
USA, National Association, as Eligible Lender Trustee and Sallie Mae, Inc., as Administrator
(as amended, restated, supplemented or otherwise modified, the “Agreement”). Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to them in the
Agreement.




Pursuant to Section 2.02(b) of the Agreement, the Administrator, on behalf of the
Transferor, hereby requests that on [Date of Purchase]1 (the “Purchase Date”), a
Purchase (the “Requested Purchase”) be made in the aggregate amount of $[Amount of Purchase]
(the “Requested Purchase Amount”). The Requested Purchase is a (check one):




o Purchase Price Purchase, and the following applies:




The proceeds of the Requested Purchase will be used by the Transferor to acquire the Student
Loans and Student Loan ABS listed on the Schedule of Student Loans and Student Loan ABS that
accompanies this request, and the Requested Purchase Amount is calculated as follows based
upon the aggregate Maximum Purchase Amounts of such Student Loans and Student Loan ABS:



	 	 	 	 	 	 	 
	 	 	 	 	Weighted	 	 
	Type of Student Loan	 	 	 	Average	 	 
	or 	 	Aggregate Principal	 	Applicable	 	Maximum Purchase
	Student Loan ABS 	 	Balance	 	Percentage	 	Amount
	Eligible FFELP Loans
	 	 	 	 	 	 
	Eligible Private Credit Loans
	 	 	 	 	 	 
	Eligible Student Loan
ABS2
	 	 	 	 	 	 








 




			
	1	 	Must be at least two (2) Business Days after
the date of this request.
	 
	2	 	Include lead underwriters/managers, CUSIP
number, tranche issuance amount.




 









 










	 	 	 
	1. Requested Purchase Amount (Not to exceed the total
Maximum Purchase Amount for the Student Loans calculated above
plus the total Maximum Purchase Amount for Student Loan ABS
calculated above)

	 	$                                        
	 
	 	 
	2. CP Purchase/LIBOR Purchase/Base Rate Purchase
	 	 
	 
	 	 
	3. Requested Tranche Period (if a CP Purchase or LIBOR Purchase)
	 	 
	 
	 	 
	4. Matched Funded/Pool Funded (if a CP Purchase)
	 	 
	 
	 	 
	5. Requested Purchase to be funded with amount in the Principal
Payment Account or Release Proceeds Account?

	 	Yes/No
	 
	 	 
	If yes, existing Tranche Period to be allocated to
Requested Purchase
	 	 
	 
	 	 
	If yes, existing Yield to be allocated to Requested Purchase
	 	 
	 
	 	 
	6. Cutoff Date with respect to Student Loans and Student Loan ABS
	 	 





o Rollover Capital Purchase, and the following applies:




	 	 	 
	1. Purchase Date of Purchase being
refinanced (the “Existing Purchase”)
	 	 
	 
	 	 
	2. Tranche Period of Existing Purchase
	 	 
	 
	 	 
	3. Yield of Existing Purchase
	 	 
	 
	 	 
	4. Principal amount of Existing Purchase

	 	$                                        
	 
	 	 
	5. Accrued and unpaid Financing Costs
relating to the Existing Purchase, to the
extent permitted by Section 2.01(b) of
the Agreement

	 	$                                        
	 
	 	 
	6. Sum of Item 4 and item 5

	 	$                                        
	 
	 	 
	7. Requested Purchase Amount (Not to
exceed Item 6)

	 	$                                        
	 
	 	 
	8. CP Purchase/LIBOR Purchase/Base Rate
Purchase
	 	 
	 
	 	 
	9. Requested Tranche Period (if a CP
Purchase or a LIBOR Purchase)
	 	 
	 
	 	 
	10. Match-Funded/Pool-Funded (if a CP
Purchase)
	 	 
	 
	 	 
	11. Requested Purchase to be funded with
amount in the Principal Payment Account
or Release Proceeds Account?

	 	[Yes/No]
	 
	 	 
	If yes, existing Tranche Period to
be allocated to Requested Purchase
	 	 
	 
	 	 
	If yes, existing Yield to be
allocated to Requested Purchase
	 	 






 









 





o Excess Capital Purchase, and the following applies:




	 	 	 
	1. Adjusted Pool Balance (as
calculated on the attached schedule)

	 	$                                        
	 
	 	 
	2. Reported Liabilities (as
calculated on the attached schedule)

	 	$                                        
	 
	 	 
	3.
Item 1 minus Item 2

	 	$                                        
	 
	 	 
	4. Requested Purchase Amount (Not to
exceed Item 3)

	 	$                                        
	 
	 	 
	5. CP Purchase/LIBOR Purchase/ Base
Rate Purchase
	 	 
	 
	 	 
	6. Requested Tranche Period (if a CP
Purchase or LIBOR Purchase)
	 	 
	 
	 	 
	7. Match-Funded/Pool-Funded (if a CP
Purchase)
	 	 
	 
	 	 
	8. Requested Purchase to be funded
with amount in the Principal Payment
Account or Release Proceeds Account?

	 	[Yes/No]
	 
	 	 
	If yes, existing Tranche Period
to be allocated to Requested
Purchase
	 	 
	 
	 	 
	If yes, existing Yield to be
allocated to Requested Purchase
	 	 
	 
	 	 





 









 





Please consider this proper authorization to transfer the Requested Purchase Amount to the
Disbursement Account on the Purchase Date. The undersigned, on behalf of itself and the
Transferor, hereby certifies that each of the conditions precedent described in Section 4.01 and
4.02 of the Agreement has been satisfied and that no Termination Event or, to the best of its
knowledge, Potential Termination Event has occurred and is continuing. The undersigned, on behalf
of itself and the Transferor, further certifies that (i) to the best of its knowledge and belief,
the amounts provided above are accurate and complete and (ii) the Administrator, on behalf of the
Transferor, will, unless the Requested Purchase is the initial Purchase or a Rollover Capital
Purchase, deliver a Purchase Reconciliation Statement pursuant to Section 4.03 of the Agreement
within five (5) Business Days after the Purchase Date which shall include an updated calculation,
based upon actual figures as of the Purchase Date, of each of the items listed above and a
certification in the form of Exhibit N to the Agreement confirming that the Minimum Asset Coverage
Requirement was satisfied on the Purchase Date after giving effect to the Requested Purchase.




	 	 	 	 	 
	 	SALLIE MAE, INC., as Administrator 

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



EXHIBIT F




FORM OF MONTHLY ADMINISTRATIVE AGENT’S REPORT





 









 

r



EXHIBIT G




FORM OF NOTICE OF RELEASE




SALLIE MAE, INC.

12061 Bluemont Way

Reston, Virginia 20190





			
	By facsimile:	 	(704) 387-2828

(704) 409-0594





                     __, 2007




	 	 	 	 	 
	To:

	 	Bank of America, N.A., as Administrative Agent
	 

	 	Hearst Tower

	 

	 	214 N. Tryon Street

	 

	 	Charlotte, NC 28255

	 

	 	Attn:
	 	Ms. Camille Zerbinos (tel. 704.386.8361)
	 

	 	 
	 	Ms. Margaux Karagosian (tel. 704.387.7778)






     Reference is made to the Participation Purchase and Security Agreement, dated as of April 30,
2007 among Mustang Funding I, LLC as Transferor, the conduit purchasers party thereto, the
alternate purchasers party thereto, Bank of America, N.A., as Administrative Agent, the managing
agents party thereto, Chase Bank USA, National Association, as Eligible Lender Trustee and Sallie
Mae, Inc., as Administrator (as amended, restated, supplemented or otherwise modified, the
“Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Agreement.



     Pursuant to Section 2.18 of the Agreement, we hereby request that the Administrative Agent
release its security interest in the Transferor Student Loans and/or Transferor Student Loan ABS
(the “Released Collateral”) on the list that accompanies this notice (which list may be set forth
in a computer tape or other electronic medium) on [Date][such date as the Administrator, on behalf
of the Transferor, shall subsequently notify the Administrative Agent in writing at least two (2)
Business days prior thereto] (the “Release Date”).1



     With respect to the Released Collateral, the Administrator, on behalf of itself and the
Transferor, hereby certifies as follows:




	(A)	 	The Released Collateral shall be sold by the Transferor on the Release Date pursuant to a
[Take Out Securitization][Fair Market Auction][Permitted Seller Buy-Back]2;






	(B)	 	Both before and after giving effect to the release of the Released Collateral on the Release
Date, there shall not exist any Termination Event or, to the best of the Transferor’s and the
Administrator’s knowledge, Potential Termination Event;
	 
	(C)	 	Both before and after giving effect to the release of the Released Collateral on the Release
Date, the Minimum Asset Coverage Requirement will be met. (See the Pro Forma Report
accompanying this notice for details);
	 
	(D)	 	On or prior to the Release Date, the Transferor shall have deposited into the Release Proceeds
Account cash in an aggregate amount equal to (the “Released Collateral Amount”) (i) for each
Transferor Student Loan comprising part of the Released Collateral, the product of the
Applicable Percentage (determined as if such Transferor Student Loan was an Eligible







 




			
	1	 	The Release Date shall be at least three (3)
Business Days after the date of this notice.
	 
	2	 	Indicate one.




 









 











	 	 	Loan)
multiplied by the outstanding Principal Balance of such Transferor Student Loan, and (ii) for
each Transferor Student Loan ABS comprising part of the Released Collateral, the product of
the Applicable Percentage (determined as if such Transferor Student
Loan was an Eligible Student Loan ABS) multiplied by the Market Value with respect to such Student Loan ABS (using
the most recent Market Value reported on a date when the Asset Coverage Ratio was greater than
or equal to the Minimum Asset Coverage Ratio), which aggregate amount, as of the date hereof,
is estimated to be $[                    ] (as calculated on the attached schedule); and
	 
	(E)	 	Within five (5) Business Days after the Release Date, the Administrator, on behalf of the
Transferor, will deliver a reconciliation statement, which shall include an updated
calculation, based on actual figures as of the Release Date, in the form of Exhibit I to the
Agreement confirming that the Minimum Asset Coverage Requirement was satisfied before and
after giving effect to the release of the Released Collateral.





	 	 	 	 	 
	 	SALLIE MAE, INC., as Administrator

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



Released Collateral




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Type of Financed	 	 	 	 	 	Weighted Average	 	 	 	 
	Student Loan or	 	Aggregate 	 	 	Applicable	 	 	Total Released	 
	Student Loan ABS	 	Principal Balance	 	 	Percentage	 	 	Amount	 
	Eligible FFELP Loans
	 	 	 	 	 	 	 	 	 	 	 	 
	Eligible Private
Credit Loans
	 	 	 	 	 	 	 	 	 	 	 	 
	Eligible Student
Loan ABS
	 	 	 	 	 	 	 	 	 	 	 	 






 









 






EXHIBIT H




FORM OF PRO FORMA REPORT (SECTION 2.18(a)(ii))




SALLIE MAE, INC.

12061 Bluemont Way

Reston, Virginia 20190





			
	By facsimile:	 	(704) 387-2828

(704) 409-0954





                    
    , 2007





	 	 	 	 	 
	To:

	 	Bank of America, N.A., as Administrative Agent
	 

	 	Hearst Tower

	 

	 	214 N. Tryon Street

	 

	 	Charlotte, NC 28255

	 

	 	Attn:
	 	Ms. Camille Zerbinos (tel. 704.386.8361)
	 

	 	 
	 	Ms. Margaux Karagosian (tel. 704.387.7778)







Reference is made to the Participation Purchase and Security Agreement, dated as of April
30, 2007 among Mustang Funding I, LLC, as the Transferor, the conduit purchasers party
thereto, the alternate purchasers thereto, Bank of America, N.A., as Administrative Agent,
the managing agents party thereto, Chase Bank USA, National Association, as Eligible Lender
Trustee and Sallie Mae, Inc., as Administrator (as amended, restated, supplemented or
otherwise modified, the “Agreement”). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to them in the Agreement.




This report is delivered pursuant to Section 2.18(b)(iii) of the Agreement in conjunction
with the Notice of Release dated [Date of Notice of Release] delivered by the Administrator
to the Administrative Agent in connection with a [Take Out Securitization][Fair Market
Auction][Permitted Seller
Buy-Back]1 (the “Related Notice of Release”).




With respect to the Released Collateral specified in the Related Notice of Release, the
Administrator, on behalf of itself and the Transferor, hereby certifies that both before and
after giving effect to the release of the Released Collateral on the Release Date (as such
terms are defined in the Related Notice of Release), the Minimum Asset Coverage Requirement
will be met, as calculated below.




Asset Coverage Ratio Calculation before giving effect to the release of the Released
Collateral on the Release Date (calculated as of 2 Business Days prior to the Release Date):





 




			
	1	 	Indicate one.




 









 










	 	 	 	 	 
	Adjusted Pool Balance
	 	$	—	 
	Accrued and
Unpaid Interest, Special Allowance Payments and Interest Subsidy Payments
	 	$	—	 
	Collection Account Balance
	 	$	—	 
	Borrower Benefit Account Balance
	 	$	—	 
	Disbursement Account Balance
	 	$	—	 
	Reserve Account Balance
	 	$	—	 
	Capitalized Interest Account Balance
	 	$	—	 
	 
	Total Assets
	 	$	—	 
	 
	Aggregate Capital
	 	$	—	 
	Accrued and Unpaid Purchaser Costs
	 	$	—	 
	Accrued and Unpaid Servicing Fees
	 	$	—	 
	Accrued and Unpaid Hedging Counterparty Fees
	 	$	—	 
	Accrued and Unpaid Liquidity Lender Fees
	 	$	—	 
	Accrued and Unpaid Eligible Lender Trustee Fees
	 	$	—	 
	Any other Accrued and Unpaid fees or payment obligations
	 	$	—	 
	Outstanding Servicer Advances
	 	$	—	 
	Payment obligations under the Hedging Agreement
	 	$	—	 
	 
	Total Reported Liabilities
	 	 	 	 
	 
	Asset Coverage Ratio
	 	#DIV/0!
	Minimum Asset Coverage Ratio
	 	 	100.00	%





Asset Coverage Ratio Calculation after giving effect to the release of the Released
Collateral on the Release Date (calculated as of 2 Business Days prior to the Release Date):





 









 








	 	 	 	 	 
	Adjusted Pool Balance
	 	$	—	 
	Accrued and
Unpaid Interest, Special Allowance Payments and Interest Subsidy Payments
	 	$	—	 
	Collection Account Balance
	 	$	—	 
	Borrower Benefit Account Balance
	 	$	—	 
	Disbursement Account Balance
	 	$	—	 
	Reserve Account Balance
	 	$	—	 
	Capitalized Interest Account Balance
	 	$	—	 
	 
	Total Assets
	 	$	—	 
	 
	Aggregate Capital
	 	$	—	 
	Accrued and Unpaid Purchaser Costs
	 	$	—	 
	Accrued and Unpaid Servicing Fees
	 	$	—	 
	Accrued and Unpaid Hedging Counterparty Fees
	 	$	—	 
	Accrued and Unpaid Liquidity Lender Fees
	 	$	—	 
	Accrued and Unpaid Eligible Lender Trustee Fees
	 	$	—	 
	Any other Accrued and Unpaid fees or payment obligations
	 	$	—	 
	Outstanding Servicer Advances
	 	$	—	 
	Payment obligations under the Hedging Agreement
	 	$	—	 
	 
	Total Reported Liabilities
	 	$	—	 
	 
	Asset Coverage Ratio
	 	#DIV/0!
	Minimum Asset Coverage Ratio
	 	 	100.00	%






	 	 	 	 	 
	 	SALLIE MAE, INC., as Administrator 

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 









 





EXHIBIT I




FORM OF RELEASE RECONCILIATION STATEMENT




SALLIE MAE, INC.

12061 Bluemont Way

Reston, Virginia 20190




By facsimile: (704) 387-2828

                       (704) 409-0954




_____________ __, 2007





			
	      To:	 	Bank of America, N.A., as Administrative Agent

Hearst Tower

214 N. Tryon Street

Charlotte, NC 28255

Ms. Camille Zerbinos (tel. 704.386.8361)

Ms. Margaux Karagosian (tel. 704.387.7778)






Reference is made to the Participation Purchase and Security Agreement, dated as of April
30, 2007 among Mustang Funding I, LLC, as the Transferor, the conduit purchasers party
thereto, the alternate purchasers party thereto, Bank of America, N.A., as Administrative
Agent, the managing agents party thereto, Chase Bank USA, National Association, as Eligible
Lender Trustee and Sallie Mae, Inc., as Administrator (as amended, restated, supplemented or
otherwise modified, the “Agreement”). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to them in the Agreement.




This statement is delivered pursuant to Section 2.18(c) of the Agreement in conjunction with
the Notice of Release dated [Date of Notice of Release] delivered by the Administrator, on
behalf of the Transferor, to the Administrative Agent in connection with a [Take Out
Securitization][Fair Market Auction][Permitted Seller Buy-Back]1 and the pro
forma report dated [Date of pro forma report] delivered by Administrator, on behalf of the
Transferor, to the Administrative Agent in conjunction therewith (collectively, the “Related
Notice of Release”).




With respect to the Released Collateral specified in the Related Notice of Release, the
Administrator, on behalf of itself and the Transferor, hereby certifies that both before and
after giving effect to the release of the Released Collateral on the Release Date (as such
terms are defined in the Related Notice of Release), [the Minimum Asset Coverage Requirement
was met as of the Release Date specified in the Related Notice of Release, as calculated
below][the Minimum Asset Coverage Requirement was not met as of the Release Date specified
in the Related Notice of Release, and the Transferor has deposited cash in an amount equal
to $___ into the Release Proceeds Account, which amount, if added to assets of the
Transferor as of the Release Date, would have caused the Minimum Asset Coverage Requirement
to have been met as of the Release Date, as calculated below].2





 




			
	1	 	Indicate one.
	 
	2	 	Indicate one.




 









 









Asset Coverage Ratio Calculation as of the Release Date before giving effect to the
release on the Release Date:




	 	 	 	 	 	 	 	 	 
	Adjusted Pool Balance
	 	 	 	 	 	$	—	 
	Accrued and Unpaid Interest, Special Allowance Payments and
Interest Subsidy Payments
	 	 	 	 	 	$	—	 
	Collection Account Balance
	 	 	 	 	 	$	—	 
	Borrower Benefit Account Balance
	 	 	 	 	 	$	—	 
	Disbursement Account Balance
	 	 	 	 	 	$	—	 
	Reserve Account Balance
	 	 	 	 	 	$	—	 
	Capitalized Interest Account Balance
	 	 	 	 	 	$	—	 
	 
	Total Assets
	 	 	 	 	 	$	—	 
	 
	Aggregate Capital
	 	 	 	 	 	$	—	 
	Accrued and Unpaid Purchaser Costs
	 	 	 	 	 	$	—	 
	Accrued and Unpaid Servicing Fees
	 	 	 	 	 	$	—	 
	Accrued and Unpaid Hedging Counterparty Fees
	 	 	 	 	 	$	—	 
	Accrued and Unpaid Liquidity Lender Fees
	 	 	 	 	 	$	—	 
	Accrued and Unpaid Eligible Lender Trustee Fees
	 	 	 	 	 	$	—	 
	Any other Accrued and Unpaid fees or payment obligations
	 	 	 	 	 	$	—	 
	Outstanding Servicer Advances
	 	 	 	 	 	$	—	 
	Payment obligations under the Hedging Agreement
	 	 	 	 	 	$	—	 
	 
	Total Reported Liabilities
	 	 	 	 	 	 	 	 
	 
	Asset Coverage Ratio
	 	 	 	 	 	#DIV/0!
	Minimum Asset Coverage Ratio
	 	 	 	 	 	 	100.00	%






 









 





Asset Coverage Ratio Calculation as of the Release Date after giving effect to the release
on the Release Date:




	 	 	 	 	 	 	 	 	 
	Adjusted Pool Balance
	 	 	 	 	 	$	—	 
	Accrued and Unpaid Interest, Special Allowance Payments and
Interest Subsidy Payments
	 	 	 	 	 	$	—	 
	Collection Account Balance
	 	 	 	 	 	$	—	 
	Borrower Benefit Account Balance
	 	 	 	 	 	$	—	 
	Disbursement Account Balance
	 	 	 	 	 	$	—	 
	Reserve Account Balance
	 	 	 	 	 	$	—	 
	Capitalized Interest Account Balance
	 	 	 	 	 	$	—	 
	 
	Total Assets
	 	 	 	 	 	$	—	 
	 
	Aggregate Capital
	 	 	 	 	 	$	—	 
	Accrued and Unpaid Purchaser Costs
	 	 	 	 	 	$	—	 
	Accrued and Unpaid Servicing Fees
	 	 	 	 	 	$	—	 
	Accrued and Unpaid Hedging Counterparty Fees
	 	 	 	 	 	$	—	 
	Accrued and Unpaid Liquidity Lender Fees
	 	 	 	 	 	$	—	 
	Accrued and Unpaid Eligible Lender Trustee Fees
	 	 	 	 	 	$	—	 
	Any other Accrued and Unpaid fees or payment obligations
	 	 	 	 	 	$	—	 
	Outstanding Servicer Advances
	 	 	 	 	 	$	—	 
	Payment obligations under the Hedging Agreement
	 	 	 	 	 	$	—	 
	 
	Total Reported Liabilities
	 	 	 	 	 	 	 	 
	 
	Asset Coverage Ratio
	 	 	 	 	 	#DIV/0!
	Minimum Asset Coverage Ratio
	 	 	 	 	 	 	100.00	%






 









 







The Administrator, on behalf of itself and the Transferor, hereby further certifies that the
actual Released Collateral Amount of the Released Collateral as of the Release Date (as such terms
are defined in the Related Notice of Release) is $___, as indicated on the calculation that
accompanies this statement. [Such amount is $___ greater than the estimated Released Collateral
Amount specified in the Related Notice of Release, and pursuant to Section 2.18(c) of the
Agreement, the Transferor has deposited $___ into the
Release Proceeds Account.] [ Such amount is
$___ less than the estimated Released Collateral Amount specified in the Related Notice of
Release, and pursuant to Section 2.18(c) of the Agreement, the Administrator, on behalf of the
Transferor, hereby requests that the Administrative Agent withdraw
$___ from the Release
Proceeds Account [and $___ from the Collection Account] 3 , and release such
proceeds to the Transferor.]



	 	 	 	 	 
	 	SALLIE MAE, INC., as Administrator

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 





 




			
	3	 	Use only if there are insufficient funds in the Release Proceeds Account.




 









 










EXHIBIT J




FORM OF SECTION 2.20(d) CERTIFICATE





     Reference is hereby made to the Participation Purchase and Security Agreement dated as of
April 30, 2007 among Mustang Funding I, LLC, a Delaware limited liability company (the
“Transferor”), the conduit purchasers party thereto, the alternate purchasers party
thereto, Bank of America, N.A., as Administrative Agent, the managing agents party thereto, Chase
Bank USA, National Association, as Eligible Lender Trustee, and Sallie Mae, Inc., as Administrator.
Pursuant to the provisions of Section 2.20(d) of the Agreement, the undersigned purchaser hereby
certifies that:




	 	1.	 	It is a ___natural individual person,
___ treated as a corporation for
U.S. federal income tax purposes, ___ disregarded for federal income tax
purposes (in which case a copy of this Section 2.20(d) Certificate is attached
in respect of its sole beneficial owner), or ___ treated as a partnership for
U.S. federal income tax purposes (one must be checked).
	 
	 	2.	 	It is the beneficial owner of amounts received pursuant to the
Agreement.
	 
	 	3.	 	It is not a bank, as such term is used in section 881(c)(3)(A)
of the Internal Revenue Code of 1986, as amended (the “Code”),
or the Agreement is not, with respect to the undersigned, a loan
agreement entered into in the ordinary course of its trade or business, within
the meaning of such section.
	 
	 	4.	 	It is not a 10-percent shareholder of the Transferor within the
meaning of section 871(h)(3) or 881(c)(3)(B) of the Code.
	 
	 	5.	 	It is not a controlled foreign corporation that is related to
the Transferor within the meaning of section 881(c)(3)(C) of the Code.





	 	 	 	 	 
	 	[NAME OF PURCHASER]

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	Date:                      	 	Title:  	 	 
	 



 









 






	 	 	 	 	 



EXHIBIT K




[RESERVED]




 









 





EXHIBIT L




CONDITIONS TO PARTICIPATION PURCHASE




     1. Executed copies of this Agreement, the Valuation Agent Agreement, the Trust Agreement,
the Administration Agreement, each initial Purchase Agreement, each Servicing Agreement pursuant to
such Student Loans are to serviced, the Hedging Agreement, and each Eligible Lender Trustee
Guarantee Agreement, and the initial Purchase Request.



     2.
UCC-1 Financing Statements in form acceptable to the Administrative Agent.


     3.
Officers’ Certificates of the Transferor, the Eligible Lender Trustee, the Administrator,
the Master Servicer, each Seller and the Hedging Counterparty (including, in each case certified
articles of incorporation or the equivalent, by-laws or the equivalent, board resolutions, good
standing certificates and incumbency) (on which certificates the Administrative Agent, Managing
Agents and Purchasers may conclusively rely until such time as the Administrative Agent and the
Managing Agents shall receive from Transferor a revised certificate meeting the requirements of
this clause).



     4.
Officers’ Certificates of the Transferor and the Eligible Lender Trustee certifying that
each of the Guarantee Agreements that have been provided to the Administrative Agent are true and
correct copies thereof and remain in full force and effect.


     5.
Opinions of the Transferor and McKee Nelson LLP, counsel to the Transferor, each Seller,
the Administrator, the Master Servicer, and the Hedging Counterparty in forms acceptable to the
Administrative Agent.


     6.
A schedule of all Participated Student Loans and Participated Student Loan ABS as of the
Closing Date.



     7.
Payment of all fees due and payable to each Conduit Purchaser, each Managing Agent, each
Alternate Purchaser and the Administrative Agent on the Closing Date.



     8.
UCC search report results dated a date reasonably near the Closing Date listing all
effective financing statements which name the Transferor, any Seller, or the Eligible Lender
Trustee (under its present name or any previous names) in any jurisdictions where filings are to be
made under paragraph 2 above (or similar filings would have been made
in the past five years).



     9.
Financing Statement terminations on Form UCC-3, if necessary, to
release any liens.


     10
Evidence of establishment of the Collection Account, Borrower Benefit Account, the Student
Loan ABS Proceeds Account, the Floor Income Rebate Account, the Interest Reserve Subaccount, the
Reserve Account, the Disbursement Account, the Capital Payment Account and the Release Proceeds
Account.


 









 






     11.
Evidence of required certification from S&P and Moody’s with respect to
pre-review Conduit Purchasers.



     12.
Such powers of attorney as the Administrative Agent or any Managing Agent
shall reasonably request to enable the Administrative Agent to collect all amounts due under any
and all of the Pledged Collateral.



     13.
An Officer’s Certificate of the Transferor certifying that the Minimum Asset
Coverage Requirement shall be satisfied after giving effect to the
initial Purchase.



     14.
A list of any pre-approved Lockbox Bank arrangements and copies of all related
documentation.



     15.
All other items listed on the List of Closing Documents prepared in connection
with this Agreement.



     16.
Such other information, certificates, documents and actions as the Managing Agents and the
Administrative Agent may reasonably request.




 









 





EXHIBIT M




FORM OF PRO FORMA CALCULATION AND CERTIFICATION (SECTION 4.02(b))




SALLIE MAE, INC.

12061 Bluemont Way

Reston, Virginia 20190





			
	By facsimile:	 	(704) 387-2828

(704) 409-0954





	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	                          , 2007	 	 	 	 
	 
	 	To:	 	Bank of America, N.A., as Administrative Agent	 	 	 	 
	 
	 	 	 	Hearst Tower	 	 	 	 
	 
	 	 	 	214 N. Tryon Street	 	 	 	 
	 
	 	 	 	Charlotte, NC 28255	 	 	 	 
	 
	 	 	 	Attn:	 	Ms. Camille Zerbinos (tel. 704.386.8361)	 	 	 	 
	 
	 	 	 	 	 	Ms. Margaux Karagosian (tel. 704.387.7778)	 	 	 	 







	 	 	Reference is made to the Participation Purchase and Security Agreement, dated as of April
30, 2007 among Mustang Funding I, LLC, as the Transferor, the conduit purchasers party
thereto, the alternate purchasers party thereto, Bank of America, N.A., as Administrative
Agent, the managing agents party thereto, Chase Bank USA, National Association, as Eligible
Lender Trustee and Sallie Mae, Inc., as Administrator (as amended, restated, supplemented or
otherwise modified, the “Agreement”). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to them in the Agreement.
	 
	 	 	This report is delivered pursuant to Section 4.02(b) of the Agreement in conjunction with
the Purchase Request dated [Date of Purchase Request] delivered by the Administrator to the
Administrative Agent (the “Related Purchase Request”).
	 
	 	 	The Administrator, on behalf of itself and the Transferor, hereby certifies that both before
and after giving effect to the Requested Purchase requested on the Purchase Date (as such
terms are defined in the Related Purchase Request), the Minimum Asset Coverage Requirement
will be met, as calculated below.
	 
	 	 	Asset Coverage Ratio Calculation before giving effect to the Requested Purchase on the
Purchase Date (calculated as of 2 Business Days prior to the Purchase Date):




 









 













	 	 	 	 	 
	Adjusted Pool Balance
	 	$	—	 
	Accrued and Unpaid Interest, Special Allowance Payments and
Interest Subsidy Payments
	 	$	—	 
	Collection Account Balance
	 	$	—	 
	Borrower Benefit Account Balance
	 	$	—	 
	Disbursement Account Balance
	 	$	—	 
	Reserve Account Balance
	 	$	—	 
	Capitalized Interest Account Balance
	 	$	—	 
	 
	Total Assets
	 	$	—	 
	 
	Aggregate Capital
	 	$	—	 
	Accrued and Unpaid Purchaser Costs
	 	$	—	 
	Accrued and Unpaid Servicing Fees
	 	$	—	 
	Accrued and Unpaid Hedging Counterparty Fees
	 	$	—	 
	Accrued and Unpaid Liquidity Lender Fees
	 	$	—	 
	Accrued and Unpaid Eligible Lender Trustee Fees
	 	$	—	 
	Any other Accrued and Unpaid fees or payment obligations
	 	$	—	 
	Outstanding Servicer Advances
	 	$	—	 
	Payment obligations under the Hedging Agreement
	 	$	—	 
	 
	Total Reported Liabilities
	 	 	 	 
	 
	Asset Coverage Ratio
	 	#DIV/0!
	Minimum Asset Coverage Ratio
	 	 	100.00	%







	 	 	Asset Coverage Ratio Calculation after giving effect to the Requested Advance on the Advance
Date (calculated as of 2 Business Days prior to the Advance Date):






 









 










	 	 	 	 	 
	Adjusted Pool Balance
	 	$	—	 
	Accrued and Unpaid Interest, Special Allowance Payments and
Interest Subsidy Payments
	 	$	—	 
	Collection Account Balance
	 	$	—	 
	Borrower Benefit Account Balance
	 	$	—	 
	Disbursement Account Balance
	 	$	—	 
	Reserve Account Balance
	 	$	—	 
	Capitalized Interest Account Balance
	 	$	—	 
	 
	Total Assets
	 	$	—	 
	 
	Aggregate Capital
	 	$	—	 
	Accrued and Unpaid Purchaser Costs
	 	$	—	 
	Accrued and Unpaid Servicing Fees
	 	$	—	 
	Accrued and Unpaid Hedging Counterparty Fees
	 	$	—	 
	Accrued and Unpaid Liquidity Lender Fees
	 	$	—	 
	Accrued and Unpaid Eligible Lender Trustee Fees
	 	$	—	 
	Any other Accrued and Unpaid fees or payment obligations
	 	$	—	 
	Outstanding Servicer Advances
	 	$	—	 
	Payment obligations under the Hedging Agreement
	 	$	—	 
	 
	Total Reported Liabilities
	 	 	 	 
	 
	Asset Coverage Ratio
	 	#DIV/0!
	Minimum Asset Coverage Ratio
	 	 	100.00	%






	 	 	 	 	 
	 	SALLIE MAE, INC., as Administrator 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



EXHIBIT N




FORM OF PURCHASE RECONCILIATION STATEMENT




SALLIE MAE, INC.

12061 Bluemont Way

Reston, Virginia 20190





			
	By facsimile:	 	(704) 387-2828

(704) 409-0954





	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	                          , 2007	 	 	 	 
	 
	 	To:	 	Bank of America, N.A., as Administrative Agent	 	 	 	 
	 
	 	 	 	Hearst Tower	 	 	 	 
	 
	 	 	 	214 N. Tryon Street	 	 	 	 
	 
	 	 	 	Charlotte, NC 28255	 	 	 	 
	 
	 	 	 	Attn:	 	Ms. Camille Zerbinos (tel. 704.386.8361)	 	 	 	 
	 
	 	 	 	 	 	Ms. Margaux Karagosian (tel. 704.387.7778)	 	 	 	 







	 	 	Reference is made to the Participation Purchase and Security Agreement, dated as of April
30, 2007 among Mustang Funding I, LLC, as the Transferor, the conduit purchasers party
thereto, the alternate purchasers party thereto, Bank of America, N.A., as Administrative
Agent, the managing agents party thereto, Chase Bank USA, National Association, as Eligible
Lender Trustee and Sallie Mae, Inc., as Administrator (as amended, restated, supplemented or
otherwise modified, the “Agreement”). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to them in the Agreement.
	 
	 	 	This statement is delivered pursuant to Section 4.03 of the Agreement in conjunction with
the Purchase Request dated [Date of Purchase Request] delivered by the Administrator, on
behalf of the Transferor, to the Administrative Agent and the pro forma report dated [Date
of pro forma report] delivered by Administrator, on behalf of the Transferor, to the
Administrative Agent in conjunction therewith (collectively, the “Related Purchase
Request”).
	 
	 	 	With respect to the Requested Purchase specified in the Related Purchase Request, the
Administrator, on behalf of itself and the Transferor, hereby certifies that after giving
effect to the Requested Purchase on the Purchase Date (as such terms are defined in the
Related Purchase Request), [the Minimum Asset Coverage Requirement was met as of the
Purchase Date, as calculated below][the Minimum Asset Coverage Requirement was not met as of
the Purchase Date, and the Transferor has deposited cash in an amount equal to $_______ into
the Capital Payment Account, which amount, if added to assets of the Transferor as of the
Purchase Date, would have caused the Minimum Asset Coverage Requirement to have been met as
of the Purchase Date, as calculated below].1







 




			
	1	 	Indicate one.




 









 









Asset Coverage Ratio Calculation as of the Purchase Date after giving effect to the
Requested Purchase on the Purchase Date:





	 	 	 	 	 
	Adjusted Pool Balance
	 	$	—	 
	Accrued and Unpaid Interest, Special Allowance Payments and
Interest Subsidy Payments
	 	$	—	 
	Collection Account Balance
	 	$	—	 
	Borrower Benefit Account Balance
	 	$	—	 
	Disbursement Account Balance
	 	$	—	 
	Reserve Account Balance
	 	$	—	 
	Capitalized Interest Account Balance
	 	$	—	 
	 
	Total Assets
	 	$	—	 
	 
	Aggregate Capital
	 	$	—	 
	Accrued and Unpaid Purchaser Costs
	 	$	—	 
	Accrued and Unpaid Servicing Fees
	 	$	—	 
	Accrued and Unpaid Hedging Counterparty Fees
	 	$	—	 
	Accrued and Unpaid Liquidity Lender Fees
	 	$	—	 
	Accrued and Unpaid Eligible Lender Trustee Fees
	 	$	—	 
	Any other Accrued and Unpaid fees or payment obligations
	 	$	—	 
	Outstanding Servicer Advances
	 	$	—	 
	Payment obligations under the Hedging Agreement
	 	$	—	 
	 
	Total Reported Liabilities
	 	 	 	 
	 
	Asset Coverage Ratio
	 	#DIV/0!
	Minimum Asset Coverage Ratio
	 	 	100.00	%







	 	 	The Administrator, on behalf of itself and the Transferor, hereby further certifies that the
actual Maximum Capital Amount of the Transferor Student Loans acquired by the Transferor on
the Purchase Date is $_______, as calculated on the attached schedule. [Such amount is
$_______ less than the Requested Purchase specified for such Transferor Student Loans in the
Related Purchase Request, and pursuant to Section 4.03 of the Agreement, the Transferor has
deposited $_______ into the Capital Payment Account.] [Such amount is $_______ greater than
the Requested Purchase specified for such Transferor Student Loans in the Related Purchase
Request, and pursuant to Section 4.03 of the Agreement, the Administrator, on behalf of the
Transferor, hereby requests that the Administrative Agent withdraw $_______ from the Release
Proceeds Account[, $_______ from the Capital Payment Account]2 [and $_______ from
the Collection Account]3], in the manner described in Section 4.03 of the
Agreement. The Administrator hereby certifies that after giving effect to such withdrawal,
the amounts on deposit in the Collection Account are sufficient to pay items (ii) through
(v) in Section 2.05(b) of the Agreement due and payable on the next Settlement Date, as
demonstrated by the calculation which accompanies this statement.]







 




			
	2	 	Use only if there are insufficient funds in the Release Proceeds Account.
	 
	3	 	Use only if there are insufficient funds in the Release Proceeds Account and the Capital Payment Account.




 









 












	 	 	 	 	 
	 	SALLIE MAE, INC., as Administrator 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 







Released Collateral




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Type of Financed	 	 	 	 	 	 	 	 	 	 
	Student Loan	 	 	 	 	 	Weighted Average	 	 	 	 
	Or	 	Aggregate Principal	 	 	Applicable	 	 	Total Released	 
	Student Loan ABS	 	Balance	 	 	Percentage	 	 	Amount	 
	Eligible FFELP Loans
	 	 	 	 	 	 	 	 	 	 	 	 
	Eligible Private
Credit Loans
	 	 	 	 	 	 	 	 	 	 	 	 
	Eligible Student
Loan ABS
	 	 	 	 	 	 	 	 	 	 	 	 







 









 





EXHIBIT O




NOTICE ADDRESSES




Sallie Mae, Inc., as Administrator

12061 Bluemont Way

Reston, Virginia 20190

Attention: Mark Daly

Tel: 703.984.5294

Fax: 703.984.5761

mark.w.daly@slma.com




SLM Corporation, as Hedge Counterparty

12061 Bluemont Way

Reston, Virginia 20190

Attention: Mark Daly

Tel: 703.984.5294

Fax: 703.984.5761

mark.w.daly@slma.com




SLM Education Credit Finance Corporation

20 Hemingway Drive

East Providence, RI 02615

Attention: J. Lance Franke

Tel: 703.984.5724

Fax: 703.984.5761

lance.franke@slma.com




VG Funding, LLC

12061 Bluemont Way

Reston, Virginia 20190

Attention: Mark Daly

Tel: 703.984.5294

Fax: 703.984.5761

mark.w.daly@slma.com




Mustang Funding I, LLC, as Transferor

12061 Bluemont Way, V3419

Reston, Virginia 20190

Attention: Mark Daly

Tel: 703.984.5294

Fax: 703.984.5761

mark.w.daly@slma.com



Bank of America, N.A., as Administrative Agent, Securities Intermediary, a Managing Agent and an Alternate Purchaser




 









 





Hearst Tower

214 North Tryon Street

Charlotte, North Carolina 28255

Attention: Margaux Karagosian

Tel: 704.387.7778

Fax: 704.409.0594

margaux.karagosian@bankofamerica.com




Banc of America Securities LLC, as Valuation Agent

Banc of America Securities LLC

214 North Tyron Street

Charlotte, North Carolina 28255

Attention: Jim Mackey

Tel: 704.388.2308

Fax: 704.386.2731

jim.g.mackey@bankofamerica.com




with a copy to:




Bank of America, N.A., as Administrative Agent

214 North Tyron Street

Charlotte, North Carolina 28255

Attention: Margaux Karagosian

Tel: 704.387.7778

Fax: 704.409.0594

margaux.karagosian@bankofamerica.com




JPMorgan Chase Bank, N.A., as Administrative Agent, Securities Intermediary, a Managing Agent and an Alternate Purchaser

c/o JPMorgan Securities Inc.

Chase Tower

10 S. Dearborn Street

Chicago, IL 60603

Attention: George S. Wilkins

Telephone: (312) 732-5723

Facsimile: (312) 732-4487

george.s.wilkins@jpmorgan.com




Ranger Funding Company LLC, as a Conduit Purchaser

c/o AMACAR Group, L.L.C.

6525 Morrison Boulevard, Suite 318

Charlotte, North Carolina 28211

Attention: Doris Hearn

Tel: 704.365.0569 ext 14

Fax: 704.365.1362

djhearn@amacar.com




2









 





Kitty Hawk Funding Corporation, as a Conduit Purchaser

c/o Lord Securities Corporation

48 Wall Street

New York, New York 10005

Attention: Laura Calvaruso

Tel: 212.346.9867

Fax: 212.346.9012




With a copy to:




Phil Martone

Lord Securities Corporation

48 Wall Street

New York, New York 10005




YC SUSI Trust, as a Conduit Purchaser

c/o Bank of America, National Association, as SUSI Trustee

214 North Tryon Street

Charlotte, North Carolina 28255

Attention: Michelle Heath, Global Structured Finance

Telephone: 704.386.7922

Facsimile: 704.388.0827




With a copy to:

Deutsche Bank Trust Company Delaware, as Delaware Trustee

c/o Deutsche Bank Trust Company Americas

60 Wall Street

MS NYC60-2606

New York, New York 10005

Attention: Eileen Hughes

Telephone: 212.250.2273

Facsimile: 212.553.2461




Falcon Asset Securitization Company LLC, as a Conduit Purchaser:

c/o J.P. Morgan Securities Inc.

Chase Tower

10 S. Dearborn Street

Chicago, IL 60603

Attention: George S. Wilkins

Telephone: (312) 732-5723

Facsimile: (312) 732-4487

george.s.wilkins@jpmorgan.com




Park Avenue Receivables Company, LLC, as a Conduit Purchaser:

c/o J.P. Morgan Securities Inc.

Chase Tower




3









 





10 S. Dearborn Street

Chicago, IL 60603

Attention: George S. Wilkins

Telephone: (312) 732-5723

Facsimile: (312) 732-4487

george.s.wilkins@jpmorgan.com




Jupiter Securitization Company LLC, as a Conduit Purchaser

c/o J.P. Morgan Securities Inc.

Chase Tower

10 S. Dearborn Street

Chicago, IL 60603

Attention: George S. Wilkins

Telephone: (312) 732-5723

Facsimile: (312) 732-4487

george.s.wilkins@jpmorgan.com




Chariot Funding LLC, as a Conduit Purchaser

c/o J.P. Morgan Securities Inc.

Chase Tower

10 S. Dearborn Street

Chicago, IL 60603

Attention: George S. Wilkins

Telephone: (312) 732-5723

Facsimile: (312) 732-4487

george.s.wilkins@jpmorgan.com




Chase Bank USA, National Association, as Eligible Lender Trustee

Christiana Center/OPS4

500 Stanton Christiana Road

Newark, Delaware 19713

Attention: John Cashin

Tel: 302.552.6279

Fax: 302.552.6280

john.cashin@chase.com




4









 





EXHIBIT P




COMMITMENTS




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Facility	 	 	 	 	 	 
	 	 	Group Pro	 	 	 	Related Alternate	 	Related Alternate Purchasers
	Facility Group	 	Rata Share	 	Conduit Purchaser(s)1	 	Purchasers	 	Commitment	 	Pro Rata Share
	Bank of America
Facility Group

	 	 	50	%	 	Kitty Hawk Funding Corporation,
Ranger Funding Company LLC and
YC SUSI Trust
	 	Bank of America, N.A.
	 	$	7,500,000,000	 	 	 	50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	JPMorgan Facility 

Group

	 	 	50	%	 	Chariot Funding LLC, Falcon
Asset Securitization Company
LLC, Jupiter Securitization
Company LLC and Park Avenue
Receivables Company, LLC
	 	JPMorgan Chase Bank,
N.A.
	 	$	7,500,000,000	 	 	 	50	%








 




			
	1	 	The Managing Agent for any Facility Group with
more than one Conduit Purchaser may allocate Purchases made by the Conduit
Purchasers and Alternate Purchasers within its Facility Group among such
Conduit Purchasers in its discretion.




 









 










EXHIBIT Q-1




FORM OF HOLDING SPE PURCHASE AGREEMENT




 









 





EXHIBIT Q-2




FORM OF HOLDING SPE SALE AGREEMENT




 









 





EXHIBIT R




LIST OF APPROVED GUARANTORS




Guarantor



Board of Regents of Higher Education Montana University System




California Student Aid Commission




The Connecticut Student Loan Foundation




Educational Credit Management Corporation




Education Assistance Corporation




Finance Authority of Maine




Florida Department of Education Office of Student Financial Assistance Florida Guaranteed Loan Programs




Georgia Higher Education Assistance Corporation




Great Lakes Higher Education Corporation




Illinois Student Assistance Commission




Illinois Student Loan Commission




Iowa College Aid Commission




Kentucky Higher Education Assistance Authority




Louisiana Student Financial Assistance Commission




Massachusetts Higher Education Assistance Corporation doing business as American Student Assistance




Michigan Higher Education Assistance Authority




Missouri Coordinating Board for Higher Education




Nebraska Student Loan Program, Inc.




New Jersey Higher Education Assistance Authority




New York State Higher Education Services Corporation




Northstar Guarantee Inc.




Northwest Education Loan Association




Ohio Student Aid Commission




Oklahoma State Regents for Higher Education Oklahoma Guaranteed Student Loan Program




Oregon State Scholarship Commission




Pennsylvania Higher Education Assistance Agency




Rhode Island Higher Education Assistance Authority




State Education Assistance Authority (Commonwealth of Virginia)




Student Loan Division of the Colorado Department of Higher Education




Student Loan Guarantee Foundation of Arkansas, Inc.




Texas Guaranteed Student Loan Corporation




United Student Aid Funds, Inc.




Utah Higher Education Assistance Authority