Exhibit 10.40


 


Confidential Materials omitted and filed
separately with the


Securities and Exchange Commission.  Asterisks denote omissions.


 


CERTIFICATE OF
SATISFACTION and


FIRST AMENDMENT TO LOAN
PROGRAM AGREEMENT


 


This Certificate of Satisfaction and First Amendment
to Loan Program Agreement (the “Certificate and Amendment”) is entered
into this 15th day of July, 2010, by and among First
Marblehead Education Resources, Inc., a Delaware corporation having its
principal offices at One Cabot Road, Medford, Massachusetts 02155 (“FMER”),
The First Marblehead Corporation, a Delaware corporation having its principal
offices at 800 Boylston Street, 34th Floor,
Boston, Massachusetts 02199 (“FMC”), and SunTrust Bank, a Georgia
state-chartered banking corporation having an office located at 1001 Semmes
Avenue, Richmond, Virginia 23224 (“SunTrust”).  Capitalized terms used in this Certificate
and Amendment without definition have the meanings assigned to them in the Loan
Program Agreement (as defined below).


 


WHEREAS, FMER, FMC, and SunTrust executed the Loan Program
Agreement by and among the Parties dated as of April 20, 2010 (the “Loan
Program Agreement”); and


 


WHEREAS, pursuant to Section 18.1.1 of the Loan Program
Agreement, the Parties agreed to the Effectiveness Conditions, the satisfaction
or waiver of which was required prior to the establishment of the Effective
Date of the Loan Program Agreement; and


 


WHEREAS, the Parties agree that each of the Effectiveness
Conditions has been satisfied or waived, as more fully set forth in this
Certificate and Amendment; and


 


WHEREAS, the Parties desire to execute this Certificate and
Amendment as the Effective Date Communication contemplated by Section 18.1.1 of
the Loan Program Agreement, and hereby to establish the Effective Date as July
15, 2010; and


 


WHEREAS, the Parties desire to amend the Loan Program
Agreement as set forth in this Certificate and Amendment.


 


NOW THEREFORE, in consideration of the promises and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:


 


1.                                       Satisfaction or
Waiver of Effectiveness Conditions. The Parties agree that, as
of July 15, 2010:


 


(a) Each of SunTrust, FMC, and the Servicer has
executed the Servicing Agreement, a copy of which is attached hereto as Exhibit
A;


 


(b) SunTrust, FMC and FMER have agreed to amend the
Loan Program Agreement in lieu of entering into a Participation Account Deposit
Agreement, and accordingly each of them hereby (i) waives the Effectiveness
Condition with respect to a Participation Account Deposit Agreement set forth
in Section 18.1.1(b) of the Loan Program Agreement, and (ii) agrees to amend
the Loan Program Agreement as set forth in Section 3 of this Certificate and
Amendment;


 


(c) Except for items identified by SunTrust prior to
the date hereof as items to be addressed by the Parties after the Effective
Date, the Program Guidelines attached to this Certificate and Amendment as Exhibit
B are hereby approved and adopted by the Parties, including the Servicing
Guidelines, the forms of Credit Agreements and Truth-in-Lending Disclosures
contained therein;


 


(d) Documents attached hereto as Exhibits C1, C2,
and C3 establishing and governing the purchase of Charged Off Loans by MG
Student Loan Trust 2010-1 are hereby approved by FMC and SunTrust in
substantially the form attached hereto;


 

















 


(e) Except for items identified by SunTrust prior to
the date hereof as items to be addressed by the Parties after the Effective
Date, SunTrust hereby approves the Online Application System, including
processes for complying with Title X, as set forth in the Program Guidelines;


 


(f) Except for items identified by SunTrust prior to
the date hereof as items to be addressed by the Parties after the Effective
Date, SunTrust hereby approves the FMC Website and FMC Materials, as provided
to SunTrust prior to the Effective Date; and


 


(g) The TransUnion Addenda (TransUnion Master
Services and FICO Score Services) required by TransUnion LLC have been
executed, copies of which are attached to this Certificate and Amendment as Exhibits
D1 and D2, and the Agreement for Fair Isaac Score Services entered among
TransUnion, Fair Isaac Corporation, and SunTrust has been executed as of the
date of this Certificate and Amendment.


 


2.                                       Effective Date
Communication; Establishment of Effective Date. The Parties agree that:


 


(a) this Certificate and Amendment shall and hereby
does constitute the Effective Date Communication required pursuant to Section
18.1.1 of the Loan Program Agreement; and


 


(b) the Effective Date is hereby established as July
15, 2010.


 


3.                                       Amendments to
Loan Program Agreement Related to Participation Account. The Parties
hereby agree to amend the Loan Program Agreement, effective immediately, to:


 


(a) delete the first paragraph of Section 7.1, prior
to the beginning of Section 7.1.1, in its entirety and insert in place thereof
and in substitution therefor the following:


 


“7.1                           Participation by FMC.  In connection with
Loans originated and funded under the terms of this Agreement, FMC agrees to
fund the Participation Account for charge off coverage and credit enhancement
purposes.  The Participation Account
shall be governed by this Article VII and the other provisions of this
Agreement relating to the Participation Account (including, for example,
Section 18.3.1) or otherwise necessary for the interpretation of this Article
VII or any such provisions, including any definitions or other provisions set
forth in Article I.  SunTrust agrees to
compensate FMC, by paying to FMC an undivided fractional interest in the
Portfolio Yield from its portfolio of such Loans, in addition to the other fees
and amounts payable to FMC pursuant to Article VI and this Article VII.”


 


(b) add the following sentence as the new final
sentence of Section 7.1.6:


 


“SunTrust shall be required to withdraw the amount
of each such Participation Account Payment from the Participation Account and
make each such Participation Account Payment to FMC no later than thirty (30)
days after receipt of monthly reporting from the Servicer for the month in
question.”


 


(c) delete Section 7.1.8 in its entirety and insert
in place thereof and in substitution therefor the following:


 


“7.1.8                Monthly Statement; Review of Participation
Reporting.  For so long
as there are any funds in the Participation Account, SunTrust shall deliver to
FMC, at its address provided pursuant to Section 19.1, no later than fifteen
(15) days following the end of any calendar month, a written statement for the
previous calendar month setting forth the balance of the Participation Account
as of the last date of such month and all transactions with respect to funds in
the Participation Account during such month, including all deposits, withdrawals,
payments 


 


2

















 


of interest (and the associated Effective Interest
Rate during such period) and any other changes in the balance of the
Participation Account, and the corresponding dates thereof within the
period.  FMC shall review such monthly
Participation Account statement during the first ten (10) days after receiving
it and shall notify the SunTrust in writing (which may be in the form of an
email communication) if it in good faith disputes any items in such report
during such 10-day period.  If FMC
disputes any item in the statement, the payments required in Section 7.1.4
relating to a disputed item shall be withheld until such dispute is resolved to
the satisfaction of FMER, SunTrust and FMC. 
If, within thirty (30) days of receiving a notice of dispute, the
Parties are unable to resolve the dispute, any Party may invoke the dispute
resolution procedures of this Agreement.”


 


(d)  delete
the third and fourth sentences of Section 7.1.10 in their entirety;


 


(e)  add the
following paragraphs as a new Sections 7.1.12, 7.1.13 and 7.1.14, respectively,
of the Agreement:


 


“7.1.12            Interest on the Participation Account.  For so long as any funds or other amounts
remain in the Participation Account, all such amounts shall bear interest on a
monthly variable rate. The rate for each month shall be no less than the
three-month London interbank offered rate, as published in the “Money Rates”
table of The Wall Street Journal Eastern Edition
(“LIBOR”) on a particular calendar day of the previous month, as
established by SunTrust from time to time with prior notice to FMC, [**] basis
points ([**]%) (the “Effective Interest Rate”). If The Wall
Street Journal Eastern Edition is no longer available, FMC and
SunTrust shall mutually adopt an alternate source for the three-month LIBOR
index.


 


7.1.13                  Additional Provisions
Related to the Participation Agreement.  SunTrust acknowledges and agrees that the
Participation Account shall be a restricted account to be used solely for the
purposes described in this Agreement. 
SunTrust further agrees that it shall not, and has no right to pursuant
to this Agreement or otherwise, to withdraw, release, assign or otherwise
transfer any funds, accrued interest, or other amounts or assets contained in
the Participation Account (any of the foregoing, “Participation Account
Assets”) for any purpose or to pay any funds or other amounts from the
Participation Account to SunTrust or to any other Person except as and to the
extent specifically authorized by this Article VII.  Except with respect to withdrawals, releases,
payments and the enforcement of its security interest specifically authorized
by this Agreement, SunTrust further acknowledges and agrees that it shall not
transfer, assign or grant any control over the Participation Account or any
Participation Account Assets to any other financial institution or other
Person, including any Affiliate of SunTrust, without the prior written consent
of FMC.  In the event that SunTrust
desires to request such consent of FMC, SunTrust acknowledges and agrees that
FMC shall be entitled to require that an agreement among FMC, SunTrust and such
other Person regarding deposits, withdrawals, procedures and other matters with
respect to the Participation Account and this Agreement be entered into prior
to any such movement or transfer of the Participation Account or any
Participation Account Assets, such agreement to be reasonably satisfactory to
FMC.


 


7.1.14                  Additional Representations,
Warranties and Covenants of SunTrust Related to Participation Account.  SunTrust hereby represents, warrants and
covenants to FMC and FMER that, as of the Effective Date, throughout the Term
of this Agreement and until such time as no Participation Account Assets remain
in the Participation Account:


 


(a) it is an organization
engaged in the business of banking and is acting in such capacity in
maintaining the Participation Account at SunTrust hereunder;


 


3

















 


(b) it has established the
Participation Account as set forth in this Agreement, and will maintain it in
the manner set forth herein until such time as no funds remain in the
Participation Account;


 


(c) it has not entered into
any currently effective agreement with any Person under which SunTrust may be
obligated to comply with any instructions with respect to the Participation
Account or any Participation Account Assets originated by a Person other than
SunTrust or FMC; and SunTrust will not enter into any agreement with any Person
under which SunTrust may be obligated to comply with any such instructions
originated by a Person other than SunTrust or FMC;


 


(d) except for the claims
and interests of SunTrust and FMC, SunTrust does not know or have notice of any
claim to, or interest in, the Participation Account; SunTrust will keep the
Participation Account and the Participation Account Assets free from all other
security interests and all liens, encumbrances, garnishments, attachments,
executions, levies and rights of any Person other than SunTrust or FMC;


 


(e) if SunTrust obtains any
knowledge of any Person asserting any lien, encumbrance or adverse claim
(including any writ, garnishment, judgment, warrant of attachment, execution or
similar process) against the Participation Account, SunTrust will promptly
notify FMC thereof;


 


(f) all cash and money
delivered to SunTrust by FMC pursuant to this Agreement for deposit in the
Participation Account will be promptly credited to the Participation Account;


 


(g) it shall not change a
name, account number or designation of the Participation Account without the
prior written consent of FMC.


 


4.                                       Amendments to
Loan Program Agreement Related to Compensation Schedule. In addition,
the Parties hereby agree to amend the Loan Program Agreement to delete that
portion of the Compensation Schedule (Exhibit B to the Loan Program Agreement)
labeled “FMC Variable Rate Compensation” and adopt in place thereof and in
substitution therefor the Compensation Schedule labeled “Amended FMC Variable
Rate Compensation” and attached to this Certificate and Amendment as Exhibit
E.


 


5.                                       Multiple
Counterparts.  This
Certificate and Amendment may be executed in multiple counterparts, each of
which shall be deemed an original for all purposes and all of which shall be deemed,
collectively, one agreement.


 


6.                                       GOVERNING LAW.  THIS CERTFICIATE AND AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF GEORGIA, WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR
RULE THAT WOULD CAUSE THE APPLICATION OF LAWS OF ANY JURISDICTION OTHER THAN TO
THOSE OF THE STATE OF GEORGIA.  EACH
PARTY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS CERTIFICATE AND AMENDMENT,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY SUCH RIGHTS OR
OBLIGATIONS.


 


7.                                       Permitted
Filing.  Each Party may file this
Certificate and Amendment (with redactions as permitted by Requirements of Law)
with the appropriate state or federal regulators, including the Securities and
Exchange Commission, as required by such regulators.


 


8.                                       Full Force and
Effect. As amended in this Certificate and Amendment, the Loan Program
Agreement remains in full force and effect according to its terms.


 


[Signatures appear on next page]


 


4

















 


IN WITNESS WHEREOF, the parties hereto have caused this
Certificate and Amendment to be executed by their respective officers, being
first duly authorized, as of the day and year first above written.


 


	
  SUNTRUST
  BANK

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ W. Mark Smith

  	
   

  
	
  Name:

  	
  W. Mark Smith

  	
   

  
	
  Title:

  	
  Executive Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  THE FIRST MARBLEHEAD
  CORPORATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Daniel Maxwell Meyers

  	
   

  
	
  Name:

  	
  Daniel Maxwell Meyers

  	
   

  
	
  Title:

  	
  President and CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  FIRST MARBLEHEAD EDUCATION
  RESOURCES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael Plunkett

  	
   

  
	
  Name:

  	
  Michael Plunkett

  	
   

  
	
  Title:

  	
  President

  	
   

  



 

















 


TABLE OF EXHIBITS


 


Exhibit A—Servicing Agreement


 


Exhibit B—Program Guidelines**


 


with Servicing Guidelines, Forms of Credit
Agreements and Truth-in-Lending Disclosures


 


Exhibit C1—Trust Agreement for MG Student Loan Trust 2010-1


 


Exhibit C2—Administration Agreement


 


Exhibit C3—Special Servicing Agreement


 


Exhibit D1—TransUnion Addendum


 


Exhibit D2—TransUnion FICO Addendum


 


Exhibit E—Amended Compensation Schedule for Variable Rate Loans**


 






**Confidential treatment has
been requested for this exhibit in its entirety.


 

















 


EXHIBIT A


 


Servicing Agreement


 

















 


PRIVATE STUDENT LOAN SERVICING AGREEMENT


FOR THE CUSTOM CHOICE PROGRAM


AMONG


PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY,


SUNTRUST BANK


AND


THE FIRST
MARBLEHEAD CORPORATION


 


THIS PRIVATE STUDENT LOAN SERVICING AGREEMENT FOR
THE CUSTOM CHOICE PROGRAM (this “Agreement”) is made and dated as of July 15,
2010 (the “Effective Date”) , by and among the Pennsylvania Higher Education
Assistance Agency (d/b/a American Education Services), a public corporation and
governmental instrumentality organized under the laws of the Commonwealth of
Pennsylvania, having an address at 1200 North Seventh Street, Harrisburg,
Pennsylvania 17102 (“Servicer”), SunTrust Bank, a Georgia State Bank, having an
address at 1001 Semmes Avenue, Richmond Virginia 23224 (“Lender”) and The First
Marblehead Corporation, a Delaware corporation, having an address at 800
Boylston Street, 34th Floor, Boston, Massachusetts 02199 (“FMC”).


 


RECITALS


 


WHEREAS, Servicer was created by the Commonwealth of
Pennsylvania by the Act of August 7, 1963, P.L. 549 for the purpose of
improving higher educational opportunities and to that end Servicer is
empowered to make, guarantee, undertake commitments to make or acquire and
participate with lending or postsecondary institutions in the making of loans,
servicing of loans, or otherwise providing loans of money to students; and


 


WHEREAS, Servicer has developed its loan servicing system
(the “Loan Servicing System”) for the purpose of servicing Loans (as defined
herein); and


 


WHEREAS, Servicer has developed various web-based products
(“PHEAA Web-based Products”), which provide on-line automated capabilities to
enhance services rendered to student borrowers; and


 


WHEREAS, Servicer has developed support services (“Support
Services”) to enhance the Loan Servicing System and the PHEAA Web-based
Products (collectively the “PHEAA System”), to include technical support, help
desk, communications support, and information technology staff time; and


 


WHEREAS, the Servicer has expertise in the business of
servicing private student loans and other education loans for lenders; and


 


WHEREAS,  Lender and
FMC have created the Custom Choice education loan program (“Program”),which is described
in the Program Guidelines (defined below), and FMC and Lender are responsible
for structuring and assisting in implementing the Program; and


 


WHEREAS, Servicer, Lender and FMC will work collaboratively
on future refinements and enhancements to the servicing procedures for the
Programs; and


 


WHEREAS, the Lender desires to have FMC and/or one or more
of its Affiliates provide Administrator Services (as defined below) in
connection with this Agreement; and


 


WHEREAS, Lender and FMC desire to utilize the expertise of
the Servicer to service such education loans in the Program consistent with
this Agreement on behalf of FMC and Lender;


 


NOW, THEREFORE, in consideration of the mutual covenants
and promises contained in this Agreement and other valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound, Servicer, Lender and FMC (hereinafter, collectively, the “Parties”
and each, individually, a Party) do hereby agree to the following:


 


1

















 


SECTION 1. 
DEFINITIONS


 


1.01                           “Account” means
the Loans collectively of an individual Borrower owned by Lender and for which
FMC (and its Affiliates) serves as Program Administrator, which are serviced
pursuant to this Agreement.


 


1.02                           “Additional Deferment for Re-enrollment” has the meaning given to it in
Section F.4 of the Servicing Guidelines.


 


1.03                           “Adequately
Protected” has the meaning given to it in Section 11.14.


 


1.04                           “Administrator
Services” means the services provided by FMC or its Affiliates, and includes,
but is not limited to post-disbursement portfolio administration, as further
described in Section 2.03 of this Agreement.


 


1.05                           “Affiliate”
means, with respect to an entity, another entity that at the time in question,
directly or indirectly, owns or controls, is owned or controlled by, or is
under common ownership or common control with the first entity.  For purposes of this Agreement, “control”
shall mean the power to direct the management or affairs of an entity, the
terms “common control” and “controlled by” shall have meanings correlative to
the foregoing, and “ownership” shall mean the beneficial ownership of more than
fifty per cent (50%) of the equity securities of the entity.


 


1.06                           “Agreement”
means this Private Student Loan Servicing Agreement, including each Schedule
and Exhibit provided for herein and each amendment hereafter adopted.


 


1.07                           “Applicant”
means all co-applicants for a Loan under the Program Guidelines, including any
proposed Borrower and any proposed Cosigner who begins an Application,
regardless of whether the Application is completed.


 


1.08                           “Application”
means a consumer’s application, whether in whole or in part, for a Loan under
this Program.


 


1.09                           “Approval Disclosure” means the disclosure required by 12 C.F.R. §
226.47(b) and Section 128(e)(2) of the federal Truth-in-Lending Act, provided
to the Borrower(s) by FMER, a copy of which FMER forwards to Servicer as part
of the Loan file.


 


1.10                           “Approved School” means an institution of higher education eligible for
participation in programs under Title IV of the Higher Education Act of 1965,
as amended.


 


1.11                           “Armed Forces
Forbearance” has the meaning given to it in Section G.8 of the Servicing
Guidelines.


 


1.12                           “Borrower”
means an individual who is the maker of a Credit Agreement and who obtains a
Loan. “Borrower” includes both the primary obligor and any Cosigner.


 


1.13                           “Breach”, for
purposes of Section 11.20, has the meaning given to it in Section 11.20.


 


1.14                           “Business Days”
means any day other than a Saturday or Sunday, or a day on which the Servicer,
Lender, or FMC is required or authorized by law to remain closed and on which
any such Party does remain closed.


 


1.15                           “Cancellation Window” has the meaning given to it in Section D.1 of the
Servicing Guidelines.


 


1.16                           “Change of
Control” means, with respect to Servicer, the sale to any entity, individual or
group of all or substantially all of Servicer’s assets used to perform the
Services or the reorganization, merger or consolidation of Servicer with or
into another entity.


 


1.17                           “Charged Off
Loan” means a Loan that is at least [**] days delinquent in principal and
interest or interest only or partial interest payments or that has experienced
a “Charge Off”, as set forth in Section L.1 of the Servicing 


 


2

















 


Guidelines.


 


1.18                           “Charged Off Loan Roster” has the meaning given to it in Section L.2 of
the Servicing Guidelines.


 


1.19                           “Clearinghouse” has the meaning given to it in Section F.1 of the
Servicing Guidelines.


 


1.20                           “Confidential
Business Information” has the meaning assigned to it in Section 11.02(c).


 


1.21                           “Cosigner”
means a person other than the Student Borrower who executes a Credit Agreement
with a Student Borrower and thereby assumes joint and several liability for the
Loan.


 


1.22                           “Cosigner
Release” has the meaning given to it in Section E.7.b of the Servicing
Guidelines.


 


1.23                           “Credit
Agreement” shall mean the promissory note or credit agreement executed by a
Borrower or a Cosigner evidencing a Loan.


 


1.24                           “Custom Choice”
means the Program.


 


1.25                           “Default
Prevention Vendor” has the meaning given to it in Section 4.20.


 


1.26                           “Delinquency
Guidelines” has the meaning given to it in Section 4.20.


 


1.27                           “Disclosing
Party” has the meaning given to it in Section 11.02(e).


 


1.28                            “Early
Termination Fees” shall mean the fees for early termination set forth in the
Fee Schedule.


 


1.29                           “Effective Date”
means the date this Agreement has been executed by all Parties and is approved
as to form and legality by the Office of Attorney General of the Commonwealth
of Pennsylvania.


 


1.30                           “Existing
Servicing Agreement” means, together (i) as to FMC, the Amended and Restated
Private Loan Servicing Agreement between FMC and Servicer dated as of September
28, 2006, as amended and (ii) as to Lender, any servicing agreement between
Lender and Servicer which predates the Effective Date.


 


1.31                           “Fee Schedule”
means the Schedule C attached hereto, as such schedule may be amended, modified
or supplemented by the Parties from time to time pursuant to the terms and
provisions hereof.


 


1.32                           “FMC” means The
First Marblehead Corporation in its capacities as “FMC” and “Program
Administrator” (as defined herein).


 


1.33                           “FMC
Administrator Loans” shall have the meaning assigned to it in Section 2.03.


 


1.34                           “FMER” means
First Marblehead Education Resources, Inc., an Affiliate of FMC.


 


1.35                           “Force Majeure”
has the meaning given to it in Section 10.01.


 


1.36                           “Full Deferment” has the meaning given to it in Section E.2.b of the
Servicing Guidelines.


 


1.37                           “Governmental
Authority” means the federal government of the United States, any state
government, or any political subdivision of either, or any agency, court or
body of the federal government of the United States, of any state, or of any
other political subdivision of either, exercising executive, legislative,
judicial, regulatory or administrative functions.


 


1.38                           “Graduation Benefit” has the meaning given to it in Section E.7.d of the
Servicing Guidelines.


 


3














 


1.39                           “Identity Theft
Procedures” means the Procedures for Fraud Notification set forth in Section I
of the Servicing Guidelines and as may be amended by agreement of the Parties
pursuant to the terms thereof.


 


1.40                           “Immediate Repayment” has the meaning given to it in Section E.2.a
of the Servicing Guidelines.


 


1.41                           “Interest Only” has the meaning given to it in Section E.2.c of the
Servicing Guidelines.


 


1.42                           “In-School Deferment” has the meaning given to it in Section F.1 of
the Servicing Guidelines.


 


1.43                           “Late Fees” has
the meaning given to it in Section 4.13.


 


1.44                           “Late School
Notification Forbearance” has the meaning given to it in Section G.5 of
the Servicing Guidelines.


 


1.45                           “Lender” means
SunTrust Bank.


 


1.46                           “Loan” means a
loan of funds, including all disbursements thereof and financed fees, made by
Lender to a Borrower under the Program.


 


1.47                           “Loan File”
means Loan documentation and records required to be maintained by the Servicer
pursuant to the Servicing Guidelines.


 


1.48                           “Loan Origination Fee” means a fee that is:  (i) charged by Lender to the Borrower of
a Loan; (ii); and (ii) financed as a part of the Loan amount.


 


1.49                           “Loan Program
Agreement” means that certain Loan Program Agreement, executed as of April 20,
2010, between Lender and FMC.


 


1.50                           “Loss” has the
meaning given to it in Section 9.


 


1.51                           “Material
Adverse Change” means, with respect to
the Servicer, Lender or FMC, any condition or event that is reasonably likely
to have a material adverse effect on (i) the business operations, property
or condition (financial or otherwise) or prospects of the Party or (ii) the
validity or enforceability of this Agreement or any of the Schedules or
Exhibits hereunder.


 


1.52                           “Milestone” shall have the meaning given to it in Section 4.02(d).


 


1.53                           “Natural Disaster Forbearance” has the meaning given to
it in Section G.7 of the Servicing Guidelines.


 


1.54                           “Notice” has
the meaning assigned to it in Section 12.01.


 


1.55                           “NPPI” has the
meaning given to it in Section 11.02(d).


 


1.56                           “Operational
Audit” has the meaning given to it in Section 7.01.


 


1.57                           “Original
Credit Agreement” means the signed first or first two pages of the Credit
Agreement (beginning with the Borrower and Lender name and ending with a
signature or signatures).


 


1.58                           “Outsourced
Loan” has the meaning given to it in Section 4.20.


 


1.59                           “Partial Interest Payment” has the meaning given to it in Section E.2.d
of the Servicing Guidelines.


 


1.60                           “Person” means
a natural person, limited or unlimited liability corporation, limited liability
company, limited liability partnership, partnership, association, trust or any
other legal entity having the capacity to contract.


 


4

















 


1.61                           “Personnel”
means the employees, contractors, subcontractors, and agents of the specified
Party.


 


1.62                           “PHEAA System”
means the Loan Servicing System, the Web-Based Products and the Support
Services developed and maintained by Servicer for the Servicing of Loans.


 


1.63                           “Program
Guidelines” means, solely for the purpose of identifying Loans to be Serviced
under the Agreement, the Servicing Guidelines for the Program as they may be
modified from time to time by a writing signed by the Parties.


 


1.64                           “Program
Administrator” means FMC (and its Affiliate FMER) in its performance of
Administrator Services as set forth in this Agreement.


 


1.65                           “Proprietary
Information” has the meaning given to it in Section 11.02(a).


 


1.66                           “Receiving
Party” has the meaning given to it in Section 11.02(f).


 


1.67                           “Remedial
Action Plan” has the meaning given to it in Section 4.02(d).


 


1.68                           “Repayment Date” has the meaning given to it in Section E.1 of the
Servicing Guidelines.


 


1.69                           “Repayment Option” has the meaning given to it in Section E.2 of the
Servicing Guidelines.


 


1.70                           “Required
Reports Schedule” means the Schedule A attached hereto, as such schedule may be
amended, modified or supplemented by the Parties from time to time pursuant to
the terms and provisions hereof.


 


1.71


 


1.72                           “Sarbanes-Oxley”
has the meaning given to it in Section 7.02.


 


1.73                           “Sensitive
Customer Information” has the meaning given to it in Section 11.20.


 


1.74                           “Service”, “Services”,
“Serviced”, “Servicing” shall mean to perform, in full compliance with terms
and conditions of the Credit Agreements, the Servicing Guidelines, and the
terms and conditions of this Agreement including, but not limited to, all
duties, obligations, and procedures that are required of Servicer hereunder in
connection with Loans.


 


1.75                           “Servicing
Guidelines” means the Servicing Guidelines for the Program and approved by FMC
and Servicer attached hereto as Exhibit A and as may amended by the
Parties pursuant to the terms thereof.


 


1.76                           “Student Borrower” means the individual person who is enrolled
at an institution of higher education eligible for the Program at the time of
Application, executes a Credit Agreement for the purpose of obtaining a Loan
from Lender under the Program, and who has proceeds disbursed under the Credit
Agreement.


 


1.77                           “Subject
Delinquency Period” has the meaning given to it in Section 4.20.


 


1.78                           “System Access
Schedule” means the Schedule B attached hereto, as such schedule may be
amended, modified or supplemented by the Parties from time to time pursuant to
the terms and provisions hereof.


 


1.79                           “Third Party
Service Provider” has the meaning given to it in Section 11.21.


 


1.80                           “Trade Secrets”
has the meaning given to it in Section 11.02(b).


 


5

















 


SECTION 2. 
SCOPE OF AGREEMENT


 


2.01                        Existing
Servicing Agreement.  The
Parties hereby agree that, this Agreement shall not supersede or replace any
Existing Servicing Agreement between Lender and Servicer and any such Existing
Servicing Agreement remains in full force and effect in accordance with its
terms.


 


2.02                        Services.  The Servicer agrees, in consideration of
certain fees, to perform the Services set forth in this Agreement, including
the Services set forth on each Schedule and Exhibit hereto, and any
additional Services which Lender requests and the Servicer agrees to provide
with respect to the Servicing of Loans in accordance with the Servicing
Guidelines, for which account information and/or documentation shall be
delivered to the Servicer.


 


2.03                        Role
of FMC as Program Administrator.  Lender hereby appoints FMC (including its
Affiliate FMER), as Program Administrator with respect to the Loans.
Accordingly, Servicer shall (a) perform all services set forth in this
Agreement for the Loans originated by the Lender and identified (at the loan
program level) by FMC and Lender in product set-up and conversion (the “FMC
Administrator Loans”), and (b) where appropriate, communicate with Program
Administrator on behalf of the Lender for the Loans so originated and
identified. All actions of the Program Administrator shall be made on behalf of
Lender.   Directives provided by the
Program Administrator to the Servicer and all modifications to this Agreement
or the Servicing Guidelines shall be subject to Lender’s prior written
approval, which shall not be unreasonably withheld. Program Administrator, and
not Servicer, shall be required to obtain Lender’s written approval in all
cases prior to providing such directive to Servicer. Without limiting the
foregoing, Servicer shall provide the Services (as set forth in this Agreement
and/or required by the Servicing Guidelines) to Program Administrator on behalf
of Lender, including but not limited to:


 


i.                                          product set-up
and conversion (as set forth in further detail in Section 4.02);


ii.                                       loan document
custodial services;


iii.                                    remote system
access;


iv.                                   reports,
records, and other documents and data;


v.                                      customer
service;


vi.                                   borrower
billing and correspondence;


vii.                                collection of
borrower payments;


viii.                             privacy policy
distribution;


ix.                                     due diligence
and default prevention (except as set forth in Section 4.20);


x.                                        governmental
reporting and reporting to consumer reporting agencies; and


xi.                                     copies of
required notices, including but not limited to notices of failed standards,
security breaches, and OFAC violations.


 


Notwithstanding the foregoing, Lender shall (a) have
direct, view-only system access to the PHEAA System as set forth in Schedule B,
(b) contact Servicer directly in the event of escalated customer service
issues that require Lender’s prompt attention for regulatory, accounting, or
other reasons, and (c) have the right to audit Servicer directly as set
forth in Section 7.


 


SECTION 3.                            TERM OF AGREEMENT


 


This Agreement shall commence on the Effective Date
and shall continue until such time as the principal of and interest on the
Loans which are the subject of this Agreement are paid in full, unless earlier
terminated by any Party pursuant to Section 14. With respect to product
set-up and conversion services (as set forth in further detail in Section 4.02),
this Agreement shall continue for a period of two (2) years from the
Effective Date, unless earlier terminated by any Party pursuant to the
provisions of this Agreement, and shall automatically renew for an additional
one (1) year period, unless terminated by any Party by written notice of
non-renewal to the other Parties given at least one hundred and eighty (180)
days prior to the end of the then current term.


 


6

















 


SECTION 4. 
Servicing Duties


 


4.01                        Servicing
Duties.  Servicer shall provide and perform the
Services in full compliance with: the terms of this Agreement; the Servicing Guidelines; and the
terms and conditions of the Credit Agreements. Lender shall be responsible for
the compliance of the Servicing Guidelines, Credit Agreements, privacy policies
and disclosures and notices required with all federal and state laws and
regulations.


 


4.02                        Product
Set-up and Conversion.   Servicer
agrees to perform product set-up and conversion Services with respect to the
Loans which shall include, without limitation, the following:


 


(a)                                  Credit Agreement Forms.  Servicer shall promptly review Credit
Agreement forms that are proposed by Program Administrator and, after mutual
resolution of any comments thereon that affect the Servicing of Loans in
connection with such forms, accept such forms for purposes of product set-up
and conversion. The Parties may propose changes to the Credit Agreement forms
from time to time. After mutual resolution of any comments thereon by the
Parties, the Parties shall accept such forms for the origination (by FMER) and
Servicing (by Servicer) for new Loans.


 


(b)                                 Servicing System Adaptation.  Servicer shall promptly review the Program
product terms and pricing matrices proposed by Program Administrator for the
Program launch and shall establish appropriate Servicing matrices and programs
to support such product terms and pricing as of a mutually agreed Program
launch date. The Parties shall publish a mutually agreeable launch date for the
Program. Where changes do not require system changes other than table set-up,
Servicer shall use commercially reasonable efforts to meet live Program dates
requested by FMC, which date shall be no less than thirty (30) days, but not
more than sixty (60) days from the date Servicer accepts (such acceptance not
to be unreasonably withheld) the product and pricing matrix (or similar
document containing the same information) for the Program; provided, however,
that the Servicer agrees to use commercially reasonable efforts to complete the
set-up process in a shorter time frame on a case-by-case basis in order to
accommodate the business needs of Lender.  
All changes or modifications must be provided to Servicer in writing,
and formal amendments or addenda shall be signed prior to implementation.


 


It is understood and
agreed by the Parties that Program Loans have both a fixed rate and variable
rate option. The fixed rate for each Borrower who chooses the fixed rate option
shall be provided by FMER to the Servicer in the servicer disbursement file at
the Loan level. Program Administrator shall provide Servicer with updated
pricing matrices (or similar document containing the same information)
reflecting (i) changes to variable rate tiers, and, notwithstanding the
time frames set forth in the previous paragraph, such changes shall be
effective in the PHEAA System no less than fourteen (14) days, but not more
than thirty (30) days from the date Servicer receives the updated pricing
matrix (or similar document containing the same information), and (ii) changes
to fixed rate tiers, and, notwithstanding the time frames set forth in the
previous paragraph, such changes shall be effective in the PHEAA System not
more than fourteen (14) days from the date Servicer receives the updated
pricing matrix (or similar document containing the same information).


 


(c)                                Conversion.  Servicer agrees to accurately convert all
Loan origination data provided by Program Administrator, which is necessary for
servicing hereunder onto the PHEAA System. Servicer shall also, in a timely
manner, return to the Program Administrator all Loan Files sent to the Servicer
in error. Upon the identification of files which were sent in error, Servicer
shall have no responsibility for such files other than the return of such files
to Program Administrator or Lender.


 


(d)                                 Periodic Audit. Servicer
agrees that no more than twice a year, upon no less than thirty (30) days after
receipt of written notice, it shall cooperate with audits by Program
Administrator of the  product set-up and conversion
services and communication and other
protocols necessary for the efficient  and
accurate performance thereof. If any audit reveals any failure to
adequately perform any such matter, Servicer shall within thirty (30)
days of its receipt of the results of such audit, publish a remedial action
plan that includes a schedule of tasks and objectives to be completed (each
such task or objective, a “Milestone”) and provides for reports to Program
Administrator or Lender with respect to each Milestone (“Remedial Action Plan”).
Upon completion of the Remedial Action Plan, Program Administrator may, at a
time mutually agreeable to the Parties, perform an additional audit to validate
successful completion of the 


 


7

















 


Remedial
Action Plan.


 


4.03                        Service Levels. Servicer agrees that, with respect to the Program, it shall adhere to the
Service Level Agreement and customer service schedule set forth in the Private
Student Loan Program Agreement between Servicer and Program Administrator dated
as of February 5, 2010.


 


4.04                        Custody Procedure.  If an applicable document has been forwarded
to the Servicer, the Servicer shall hold all Original Credit Agreements and
related documents Serviced hereunder on behalf of the Lender and shall retain
each such Credit Agreement and Loan File until seven (7) years after the
earlier of (a) the date upon which the Loan evidenced by such Credit
Agreement and related documents is paid in full or (b) the date upon which
the Loan is removed from Servicer’s Loan Servicing System.  The Servicer shall maintain all Original
Credit Agreements that have an original, wet signature in a fire resistant
vault equipped with a fire suppression system which is connected to an alarm
and a security locking system.  Servicer
shall create electronic records of all Original Credit Agreements and related
documents at no additional cost to Lender and shall maintain such electronic
records on-site at the Servicer’s Servicing center at Harrisburg, PA and at an
off-site facility, including but not limited to copies of electronic records of
Credit Agreements, and related documents. Upon request by the Lender, the
Servicer shall supply Lender electronic copies of Original Credit Agreements
and all related documents.  Lender or its
designated agent shall have the right to inspect all security procedures during
Servicer’s regular business
hours.  The Servicer shall provide Lender
with sixty (60) days advance notice of any change in the physical location of
the Original Credit Agreements and related documents or any relocation of the
Servicer’s Servicing center.  All
Original Credit Agreements at all times shall be stored in a state other than
the State of Louisiana.


 


4.05                        Lost or Damaged Records.  In the event that records or other data
submitted to the Servicer in connection with the Servicing is lost or damaged
while in the possession, control or custody of the Servicer or its agents, such
lost or damaged records or data shall be reproduced by the Servicer at the
Servicer’s own cost and expense from image
duplicates in the Servicer’s possession or under the Servicer’s control
and the Servicer shall pay all liabilities, damages, costs, losses, fees and
expenses, incurred by Lender as a result of such lost or damaged records or
data, including but not limited to reasonable attorney’s fees.  If a Loan becomes uncollectible or
unenforceable due to loss or destruction of the Credit Agreement or
Truth-in-Lending Disclosure Statements in the possession, control or custody of
the Servicer (including the loss of the signature page of any Borrower on
a Credit Agreement) or its agents the Servicer shall, on demand, pay to the
Lender, the principal balance (including capitalized interest) plus any unpaid
interest due on any such Loan and the Lender shall thereupon assign all of its
right, title and interest in any such loan to the Servicer.


 


4.06                        System Changes.  The
Servicer has the right to change any part or all of its equipment, the PHEAA
System, computer programs, and its procedures relating to the manner of or the
methodology used in servicing the Loans, subject to the following:


 


(a)                                  In no event
shall such change abrogate or in any way modify the obligations of the Servicer
to Service the Loans in full compliance with the terms and conditions of the
Credit Agreements, the Servicing Guidelines, or this Agreement.


 


(b)                                 The Parties
agree that they shall make reasonable efforts to provide information about the
nature and effect of changes that the Parties reasonably believe may affect the
operations or processes of the other Parties and shall determine the extent to
which the other Parties need to be involved in the testing of changes to its
own system.  The Parties shall discuss
proposed implementation dates for system changes and shall make best efforts to
avoid implementation dates that will have a material adverse impact on the
operations of any other Party.


 


(c)                                  Collaborative
Efforts for Refinements and Enhancements and Statements of Work.


 


(i)                                     Servicer and
FMC shall meet, not less than quarterly, for the purpose of discussing future
enhancements to the functions performed by Servicer consistent with the Program
Guidelines.


 


8

















 


(ii)                                  Servicer and
FMC shall negotiate and execute a Statement of Work to outline the requirements,
expectations and fees relating to any enhancement, modification, or change to
the PHEAA System or to the procedures necessary for the Servicer to fulfill its
obligations under this Agreement.


 


4.07                        System
Access.   Servicer shall, at
the direction of Lender, provide to the Program Administrator or its Affiliates
as requested by Program Administrator, web-based access to Loan Files, or
portions thereof, in accordance with the terms of the System Access Schedule,
which shall set forth, without limitation, the type of access and/or online
services that must be available to each type of user and the minimum user
access security requirements that must be implemented on Servicer’s PHEAA
System.   Servicer shall at all times
maintain the security of user access to the PHEAA System in conformity with the
security provisions of the System Access Schedule, which shall include, without
limitation, Servicer’s review of the individual user access rights of Servicer
employees and other users no less frequently than every six months.


 


4.08                        System
Parameters.  The Servicer shall design, implement and
maintain the PHEAA System in order to remain in compliance with the
requirements of this Agreement.


 


4.09                        Training.  Servicer shall assume
responsibility, at its expense, for training of its staff to meet the
requirements of this Agreement, including all Schedules and Exhibits hereto.


 


4.10                        Customer
Service.  Servicer
shall implement, maintain and monitor all Services which interface with
Borrowers in accordance with the Customer Service Schedule, which shall include
without limitation:


 


(a)                                  Minimum
customer service hours of operation;


 


(b)                                 Call monitoring
and quality control; and,


 


(c)                                  Borrower
customer satisfaction surveys.


 


4.11                        Borrower Correspondence.  Lender shall have the right to request
changes to, and approve the form and substance of, all correspondence sent to
Borrowers that is customizable by the Servicer at the Lender level, including
but not limited to pre-repayment letters and collection correspondence that
Servicer is required to send to Borrowers pursuant to the Servicing Guidelines
or any federal or state regulation. Servicer’s inability to customize at the
Lender level shall not excuse its obligation to comply with all applicable
laws. Lender shall bear all compliance responsibility for the language of
correspondence changes requested by Lender and implemented by Servicer.
Requested changes to letters shall be completed within a timely manner in
accordance with a schedule adopted by mutual agreement of the Parties.


 


Program Administrator and Servicer have instituted
the functionality to identify specific loans for which correspondence with
Borrowers may be enhanced.  From time to
time, Program Administrator, on behalf of Lender, shall designate those borrower
segments that will receive enhanced correspondence. Fees for such
correspondence shall be paid by Program Administrator.


 


4.12                        Payment Collections.  All sums received by the Servicer with
respect to any Loans, whether attributable to principal, interest, or late fees
shall be received in trust for the benefit of the Lender.  All funds received by or on behalf of
Borrowers shall be deposited in a Servicer-owned and maintained clearing
account.  Within an average of [**]
Business Days, all cleared,
identified, and available funds from Loans shall be electronically transmitted
to an account designated by Lender. Lender authorizes Servicer to withdraw
monies from Servicer-owned clearing accounts to refund overpayments made by a
Borrower or to correct monies deposited therein in error. Servicer shall obtain
Lender’s authorization prior to making any withdrawals made necessary by
circumstances that are not enumerated in this Section 4.12.


 


9

















 


4.13                        Late
Fees.  Lender and
Servicer agree that a Borrower in repayment status (which refers to a Borrower’s
Loan(s) Serviced under the terms of this Agreement for which, under the
terms of the Borrower’s Credit Agreement(s), the repayment period has
commenced, and includes Accounts in post-grace period deferment or forbearance)
may be assessed late fees when principal and interest payments (and not
interest only payments, partial interest payments, or payments in any reduced
payment plan) are overdue, to the extent allowed by applicable law and the
terms of the Credit Agreement(s) (herein referred to as “Late Fees”).    Any application of Late Fees is subject to
Program Administrator’s approval of the Late Fee system, and in accordance with
this section.  At the direction of Lender,
the Program Administrator shall notify Servicer, in writing, of the Late Fees
criteria which Lender desires the Servicer to apply to each Loan type.  Such criteria shall include, but not be
limited to, Late Fee amounts, time period and applicable state law in which
Late Fees will be assessed to Loan Accounts. 
At Lender’s direction, Program Administrator on behalf of Lender shall
establish different Late Fee criteria for Loans having different Lender
codes.  Directions as to Late Fee
criteria shall apply to all loans for the Lender code in question.  Late Fee criteria for some product types may
include “no late fee.”  The Servicer
reserves the right to submit questions pertaining to the requirements regarding
the assessment of Late Fees to a particular Loan portfolio and Program
Administrator shall respond to Servicer’s questions within thirty (30) days.
Late Fees shall be deducted from any payment(s) received from Borrowers as
directed by Program Administrator.  The
Parties agree that no late fees charged on any Loan shall be included in any
settlement between Servicer and Lender related to such Loan.


 


4.14                        Reports and Forms. During the term of this
Agreement, the Servicer shall promptly and routinely furnish to Lender and
Program Administrator, on behalf of Lender, copies of all material reports,
records, and other documents and data as required by the Servicing Guidelines
or as otherwise required by this Agreement, including the reports set forth on
the Required Reports Schedule.  All
monthly reports shall be delivered in accordance with (a) the data
security requirements of a secure communication protocol developed by the
Parties from time to time, and (b) the Required Reports Schedule, unless
otherwise expressly provided for herein. The Servicer shall furnish to Lender
and Program Administrator, on behalf of Lender, in good condition all forms and
supplies necessary or appropriate to perform the Services, including, but not
limited to, letters, invoices, and forbearance applications, as specified in the
Schedules hereto and any written and signed amendments thereto.  In addition, Servicer shall provide Program
Administrator with additional reporting as reasonably requested from time to
time, upon the express direction and authorization by Lender.  In the event that any reports are not
delivered as provided for by the Servicing Guidelines or as otherwise required
by this Agreement, including the reports set forth on the Required Reports
Schedule, all fees due and owing the Servicer under this Agreement may be
withheld until such reports are received by the Lender and the Program
Administrator.  The Servicer shall not
have failed this standard if reports are delayed for any reason beyond its
control. The Servicer shall furnish in good condition all forms and supplies
necessary or appropriate to perform the Services, including, but not limited
to, letters, invoices, and forbearance applications, as specified in the
Schedule(s) and any written and signed amendments thereto.


 


4.15                        Governmental Reporting.  The preparation and submission of any and all
governmental reports or requests for data shall be the responsibility of
Lender.  The Servicer shall, however,
supply supporting data and reports as required by this Agreement, including all
Schedules and Exhibits hereto, without additional charge. Subject to Servicer’s
reasonable charges, Servicer shall also provide such other information (not
otherwise required hereunder) as may be requested by Lender which may be
required under applicable law or this Agreement to enable Lender to fulfill any
governmental reporting requirements.


 


4.16                      Tax
Reporting. Servicer shall provide tax information reporting
on IRS Form 1098 and IRS Form 1099 to Borrowers and the U.S. Internal
Revenue Service.  If applicable, the
Servicer will be responsible for remittances to the Federal government of these
tax returns.


 


4.17                        Reports
to Consumer Reporting Agencies. The Servicer shall provide
any and all reports on Accounts serviced hereunder required by this Agreement
to the appropriate consumer reporting agencies or credit information service
and shall correct any errors caused by the incorrect reporting of information
as set forth in Section M.1 of the Servicing Guidelines. If Lender (or
Program Administrator on behalf of Lender) directs Servicer to make a report or
change of credit information which had been reported to a consumer reporting
agency, and such report or change is outside the Servicer’s customary
practices, including but not limited to as part of a legal settlement 


 


10

















 


with a Borrower, then the Servicer may condition
making such report or change on the completion of an acceptable writing that
allocates the compliance, regulatory, and legal risk of making the requested
report or correction.


 


4.18                        Data Error Correction; Account Adjustment.  In the event that any data file transmitted
to Lender and/or Program Administrator contains a material error, Servicer
shall, within [**] Business Day of discovery of such error, notify Program Administrator
and/or Lender, as applicable, of such error. Servicer shall use best efforts to
provide a corrected file as soon as possible but no later than [**] Business
Days. For purposes of this Section 4.18, a material error includes,
without limitation:


 


(a)                                  Failure to
follow data format requirements or file naming conventions established by the
Parties;


 


(b)                                 Data corruption;


 


(c)                                  More than [**]
percent ([**]%) of the entries in the file are substantively incorrect (e.g.,
misposting);


 


(d)                                 Failure of the file properly
to link data to other files delivered by Servicer; or


 


(e)                                  Any systemic error in the
file (e.g., failure to update LIBOR Index).


 


In addition, notwithstanding Section 9 of this
Agreement, if Servicer or Lender (or Program Administrator on behalf of Lender)
becomes aware of any material error in any Account, and Lender (or Program
Administrator on behalf of Lender) requests that the Servicer make any
correction or adjustment to such Account, the Servicer shall make such
correction or adjustment as promptly as practicable and, upon request, provide
written confirmation that the correction or adjustment has been made. The
Servicer shall make such corrections and adjustments without charge to the
extent that the error was a result of its action or omission.


 


4.19                        Identity
Theft Procedures. The Parties hereby adopt the Identity Theft
Procedures, as set forth in the Servicing Guidelines attached hereto and as
amended from time to time by agreement of the Parties.  Program Administrator, Lender, and the
Servicer may suggest changes to the Identity Theft Procedures from time to
time.


 


4.20                        Outsourced
Default Prevention; Modification of Responsibilities. Lender and the
Servicer acknowledge and agree that due diligence and skip tracing activities
contemplated by the Delinquency section of the Servicing Guidelines (the “Delinquency
Guidelines”) during the [**] through [**] day of delinquency (the “Subject
Delinquency Period”) for Loans may, at the option of the Lender, be performed
by a vendor approved by the Parties in writing and managed by Program
Administrator or its Affiliates (each, a “Default Prevention Vendor”) for all
or part of such period and not by Servicer (each such loan, for that time
period, and for the purpose of due diligence activities only, an “Outsourced
Loan”). All Parties acknowledge the transmission of information to and from
Default Prevention Vendors will require programming by Servicer, and therefore,
reasonable notice is necessary before any such activity can commence or
terminate.  Lender hereby authorizes, as
of the Effective Date, the use of Default Prevention Vendors as contemplated in
this Section 4.20 and authorizes the Servicer to provide loan-level data
on a daily basis to FMER and the Default Prevention Vendors as necessary for
performing default prevention activities for Outsourced Loans. Any reversal of
or modification to an outsourcing program will require reasonable notice, and
may require programming changes to allow Servicer to resume Servicing of such
loans. More specifically:


 


(a)                                  For any
Outsourced Loan, Servicer shall not be responsible for performing the
Delinquency Guidelines for the Subject Delinquency Period.


 


(b)                                 For any Loan not
outsourced to a Default Prevention Vendor, Servicer will be responsible for
delinquency servicing and skip tracing requirement for loans not in the Subject
Delinquency Period.


 


(c)                                  Servicer shall
maintain responsibility for filing for pre-claim assistance in accordance with
the Servicing Guidelines, with the information that exists on the Servicer’s
system.


 


(d)                                 For any
Outsourced Loan, Servicer will not be responsible for initiating skip-tracing
activities during the Subject Delinquency Period.  Servicer shall update contact information
within its system, if in the normal course of business Servicer or Default
Prevention Vendor obtains or receives new contact information.


 


11

















 


(e)                                  For any
Outsourced Loan, Servicer will remain responsible for all loan servicing
activities other than the Delinquency Guidelines, including but not limited to,
the processing of deferments, forbearance, and MGRS forms, general
correspondence, and borrower payments.


 


(f)                                    For rolling
delinquent accounts, i.e., Outsourced Loans which have Borrower payments
applied that result in the account falling into the prior delinquency bucket or
being brought current, Servicer will follow the Servicing Guidelines, which
state that in the event of a rolling account, the servicer will resume
scheduled delinquency servicing activities at the point in which the
delinquency rolls into the previous delinquency bucket.  Servicer will not be required to make up
missed due diligence activities in the bucket the delinquency rolls into if the
day delinquent on which the servicing resumes is after the first scheduled
activity.


 


(g)                                 Servicer shall
remain responsible for the reporting of loan information to the credit bureaus
for all Loans in compliance with the Servicing Guidelines, with the information
that exists on the Servicer’s system as of the day of reporting.


 


(h)                                 For all Loans,
Servicer shall remain responsible for sending final demand letters for the
amount delinquent on the loan at the appropriate day of delinquency to both the
primary Borrower and the Cosigner, if any.


 


(i)                                     Program Administrator,
and not Servicer, shall be responsible to Lender for the actions of Default
Prevention Vendors. In all situations where the Default Prevention Vendor
performed or performs activities which include procedures not in compliance
with the Remote Access, Confidentiality and Indemnification Agreement, and such
activities have an impact on Servicer’s due diligence obligations or cause
incorrect information to exist on the PHEAA System, Program Administrator shall
be responsible to Lender, and Lender waives any and all noncompliance by
Servicer which may result.


 


SECTION 5. 
AFFIRMATIVE COVENANTS


 


From
the date hereof, Servicer covenants and agrees to the following:


 


5.01                      Government Approvals.  The Servicer shall maintain all licenses,
permits, approvals and qualifications necessary to carry out its obligations
under this Agreement.


 


5.02                        Insurance.  Servicer and
subcontractors engaged by Servicer to provide Services under this Agreement
(which shall not include the Default Prevention Vendors) shall also be required
to maintain the insurance described herein at limits acceptable to Servicer and
Lender:


 


(a)                                  Commercial
General Liability insurance on an occurrence basis, on Insurance Services
Office (“I.S.O.”) form CG 00 01 or its equivalent, at a limit not less than
$1,000,000 per occurrence/$2,000,000 aggregate. 
The required limits may be arranged through a combination of primary and
excess policies, as needed.


 


(b)                                 Automobile
Liability insurance for any vehicles operated by the Servicer or its employees
in connection with work or Services performed under this Agreement, including
owned, non-owned, borrowed, and hired autos, at limits not less than $1,000,000
per accident.


 


(c)                                  For contracts
where Servicer’s Personnel will have access to or control over physical or
electronic property of Lender and/or their customers and/or clients, Employee
Dishonesty coverage (also known as a Fidelity Bond), covering all employees and
agents of the Servicer, at a limit not less than $10,000,000 for each
occurrence. This policy shall extend to the misappropriation of physical or
electronic property of others in the possession or control of Servicer
Personnel.


 


All coverage shall be maintained with insurers
licensed to transact insurance business in the state(s) where Servicer
maintains offices or operations. The Insurers shall have an A. M. Best rating
of A1 or better; deviations from that standard are subject to review and
written approval by Lender. All certificates of insurance shall include


 


12

















 


an undertaking by the insurer to provide 30 days
prior written notice of cancellation or material change in coverage(s).


 


Upon Lender’s request, Servicer shall provide Lender
or FMC with a copy of the certificate of insurance. Regardless of any
limitations to any indemnification by Servicer as may be stated elsewhere in
this Agreement, Servicer expressly understands and agrees that if Servicer
fails to maintain any of the required insurance coverages, Servicer shall be
directly liable for claims that would otherwise be covered by the insurance
required of Servicer, its vendors and/or subcontractors. Servicer shall also be
responsible for the payment of any applicable deductibles.


 


Insurance requirements for Default Prevention Vendors
and the Program Administrator shall be as set forth in the Loan Program
Agreement.


 


5.03                        Notification. 
Servicer shall promptly notify Lender in writing within five (5) Business
Days after its General Counsel has knowledge of (a) the occurrence of any
event which, if it had existed on the date of this Agreement, would have
required qualification of the representations and warranties set forth in Section 6
(Representations and Warranties) herein; (b) a Material Adverse Change, including but not limited to, material
financial difficulty, other catastrophic event, material change in strategic
goals, or significant staffing changes; or (c) any litigation which
if adversely determined would cause a Material Adverse Change.


 


5.04                        Accuracy of Reports.  All reports, transmittals, records or data
files required, maintained or provided by Servicer hereunder shall be accurate
in all material respects, and Lender shall have the right to rely thereon.


 


5.05                        Work
Performed in United States.  Unless this Agreement specifically provides
otherwise, all Services must be performed in the United States and all
Proprietary Information and NPPI must be stored, maintained, accessed from, and
utilized only by employees and sub-contractors in the United States.


 


5.06                        No
Subcontractors. With the exception of skip tracing and collection
or default prevention services (with respect to the latter, in accordance with
the parameters set forth in this Agreement and/or the Servicing Guidelines),
the Servicer shall not utilize or engage a subcontractor to perform any
Services under this Agreement without the prior written consent of Lender.  To the extent subcontractors perform any
services under this Agreement, the Servicer shall be liable for the performance
of such subcontractors.  The Servicer
shall cause each subcontractor agreement or agreement relating to skip tracing
services to contain terms at least as restrictive as Section 11 hereof
with respect to confidentially and privacy and security obligations. Servicer
shall advise Lender upon periodic request of the entities to which it has
subcontracted skip tracing services.


 


5.07                        OFAC Check.  All
Servicer employees performing services or supporting Servicer activities under
this Agreement, regardless of their location, shall be validated by Servicer to
not be on any list published and maintained by the United States government of
Persons with whom any U.S. Person is prohibited from conducting business.  Currently, the lists of such Persons can be
found on the following web sites:


 


(i)                                     Denied Persons List on the
Bureau of Industry and Security at


http://www.bis.doc.gov/dpl/Default.shtm.


 


(ii)                                  The Specially
Designated Nationals and Blocked Persons List of the Office of Foreign Assets
Control — Department of Treasury at


http://www.treas.gov/offices/enforcement/ofac/sdn/.


 


(iii)                               Office of Foreign Assets
Control — Recent OFAC Actions


http://www.treas.gov/offices/enforcement/ofac/actions/.


 


(iv)                              Palestinian Legislative
Council (PLC) List
http://www.treas.gov/offices/enforcement/ofac/programs/terror/ns/index.shtml.


 


Servicer shall conduct periodic reviews, no less
frequently than annually, of the lists mentioned above.  Servicer shall report to Lender and Program
Administrator immediately if the name of any Servicer employee performing 


 


13

















 


the services matches with the name of any Person
listed on any list published by the United States government of Persons with
whom any U.S. Person is prohibited from doing business.


 


5.08                        FACT
Act.  Servicer’s performance of its
Servicing obligations under this Agreement shall include, without limitation,
compliance with the requirements imposed on Lender, as identified by Lender and
as included in this Agreement or the Servicing Guidelines, as a user and
furnisher of consumer report information under the Fair and Accurate Credit
Transactions Act of 2003 and all regulations issued pursuant thereto,
including, without limitation, timely and lawful response to any identity theft
report received from any Borrower or consumer reporting agency and the
obligation to respond to a credit report reinvestigation request in accordance
with the Identity Theft Procedures. 
Servicer shall notify Lender if it becomes aware that any Borrower is on
any list published and maintained by the government of the United States of
America of persons or entities with whom the Lender’s transaction of business
is restricted, as those lists are currently set forth in Section 5.07
above.


 


5.09                        Further Assurances.  At any time, upon the reasonable request of
Lender (or the Program Administrator on its behalf) and subject to Servicer’s
reasonable charges and reimbursement of any out-of-pocket expenses, Servicer
shall execute and deliver to such requesting Party or its designee such other
certificates, agreements and instruments and take such actions as such
requesting Party or its designee may reasonably request in connection with the
requesting party’s compliance with any legal or regulatory requirements,
including, without limitation, any certifications required to be delivered by
such requesting Party under any Securities and Exchange Commission or other
securities requirement or in connection with the Sarbanes-Oxley Act of 2002.


 


5.10                        Change
of Control. Servicer shall provide
Lender and Program Administrator written notice within five (5) Business
Days after a public announcement that a Change of Control transaction involving
Servicer is pending.


 


SECTION 6. 
REPRESENTATIONS AND WARRANTIES.   Each Party is bound by the representations and
warranties specifically designated to it within this Agreement and any Exhibit attached
hereto.


 


Servicer Representations and Warranties.  The Servicer represents and warrants to
Lender and Program Administrator (and these warranties and representations
shall be deemed continuing and repeated as of the date each Loan shall become
subject to this Agreement) as follows:


 


6.01                        Existence.  The Servicer is a public
corporation duly organized and validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania, and is duly qualified to do business
in all jurisdictions where its failure to so qualify would materially impair
its ability to perform its obligations under this Agreement.


 


6.02                        Right
to Act.  No registration with or
approval of any governmental agency (except for approval as to form and
legality by the Attorney General for the Commonwealth of Pennsylvania) is
required for the due execution and delivery or enforceability of this
Agreement. The Servicer has legal power to execute and deliver this Agreement
under the laws of Pennsylvania and to perform such Services and observe the
provisions herein under the laws of Pennsylvania. By executing and delivering
this Agreement, and by performing and observing the provisions of this
Agreement, the Servicer will not violate any existing provision of its Articles
of Incorporation or its bylaws or any applicable law or violate or otherwise
become in default under any existing contract or other obligation binding upon
the Servicer. The officers executing and delivering this Agreement have been
duly authorized to do so, and this Agreement is legally binding upon the
Servicer and enforceable against the Servicer in every respect.


 


6.03                        Intellectual Property and Software Rights.   Servicer’s performance of
its obligations under this Agreement will not infringe any patent, trademark,
copyright, or any trade secret or other proprietary right of any third party.
Servicer is the lawful owner or licensee of any software programs or other
materials used by Servicer in the performance of the Services called for in
this Agreement.


 


6.04                        Accuracy and Continued Validity of Servicer’s Financial Status.   The Servicer has published on
its web site financial reports, which in the reasonable opinion of the Servicer
fairly and accurately reflect the financial operations of the Servicer and that
there has been no Material Adverse Change with respect to the Servicer since
the date the report was provided which would require revision of the same.  No representation or warranty made by the
Servicer under this Agreement and no statement made by the Servicer in any
financial statement, 


 


14

















 


certification, report, exhibit or document furnished
by the Servicer to Lender pursuant to or in connection with this Agreement is
false or misleading in any material respect (including by omission of material
information necessary to make such representation, statement or warranty not
misleading) as of the date given or made.


 


6.05                        OFAC Check. 
Neither Servicer, nor any of its subsidiaries, Affiliates, directors,
officers, agents, or employees is:


 


(a)                                  an individual
or entity that is listed in the annex to, or is otherwise subject to the
prohibitions contained in, Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001 or the Office of Foreign Asset Control (“OFAC”)
regulations;


 


(b)                                 an individual
or entity with whom Lender is prohibited from dealing or otherwise engaging in
business under any U.S. law, regulation, executive order and/or lists published
by OFAC (including those executive orders and lists published by OFAC);


 


(c)                                  an individual
or entity that is named on the most current list of “Specially Designated
Nationals and Blocked Persons” published by OFAC on its official website or any
replacement website or other replacement official publication of such list; or


 


(d)                                 an individual
or entity with which any financial institution is prohibited from dealing or
otherwise engaging in any transaction under any laws or regulations related to
terrorism or money laundering.


 


6.06                        Litigation.  There is no action, order, writ, injunction,
judgment or decree outstanding or claim, suit, litigation, proceeding, labor
dispute, arbitral action or investigation pending, or to the actual knowledge
of the Servicer threatened, against or relating to the Servicer that would
likely have a material adverse effect on this Agreement or on its business or
financial condition, its ability to consummate the transactions contemplated
hereby or perform its obligations hereunder, or which could materially impair
the enforceability of the Loans.


 


6.07                        No
Conflicts or Consents.  The Servicer is not a party to or bound by
any agreement or instrument or subject to any charter or other restriction or
any judgment, order, writ, injunction, decree, law or regulation which now or
in the future may substantially and adversely affect the ability of the
Servicer to perform its obligations under this Agreement or which requires the
consent of any third person, other than the Office of the Pennsylvania Attorney
General, to the execution of this Agreement or the consummation of the
transactions contemplated herein.


 


6.08                        True
Statements.   No information, certificate of an officer of
Servicer, statement furnished in writing, or report required hereunder
delivered to the Lender or FMC will, to the knowledge of Servicer, contain any
untrue statement of a material fact or omit a material fact necessary to make
the information, certificate, statement or report not misleading.


 


6.09                        Compliance with Laws.   Notwithstanding
the language set forth in Section 4.01, in performing the Services
hereunder, Servicer will comply with: 
the Fair Debt Collection Practices Act, as amended; the Fair Credit
Reporting Act, as amended; and the consumer protection laws created by the
Federal Trade Commission, pursuant to the FTC Act, as amended.  Servicer further agrees in performing
services hereunder, it shall not, directly or indirectly knowingly,
discriminate against a consumer on the basis of gender, age, race, color,
religion, national origin, childbearing or familial status, marital status,
ethnic group, veteran status, disability, receipt of income from any public
assistance program, or any classification protected by applicable federal law.
Servicer shall use reasonable commercial efforts to comply with other
applicable state or federal laws or regulations relating to the administering,
communicating, servicing, and collection of educational loans, which have been
identified by Lender or FMC to Servicer. 
In the event Servicer has not violated any applicable provisions of the
Fair Debt Collection Practices Act and Servicer must engage in a legal
proceeding solely as a result of the mini-Miranda contained in a letter
received by a party to a lawsuit, Lender will indemnify Servicer for such
litigation costs; provided, however, such indemnification would not apply where
the mini-Miranda is required under applicable state law as identified by
Lender.


 


15














 


6.10                        Ongoing
Obligation.  If at any
time during the term of this Agreement, any of the representations contained in
this Section 6 are no longer true, Servicer will immediately notify Lender
and Lender shall have the right to terminate this Agreement pursuant to Section 14.02.


 


Representations And Warranties of Lender and First Marblehead. Lender and
Program Administrator represent and warrant to each other and to Servicer (and
these warranties and representations shall be deemed continuing and repeated as
of the date each Loan shall become subject to this Agreement) as follows:


 


6.11                        Organization.  It is duly organized, validly existing and in
good standing under the laws of its state of organization and/or the United
States, and has full power and authority to conduct its business as it is
presently being conducted.


 


6.12                        Authorization.  It has all necessary authority and has taken
all necessary action to enter into this Agreement, to consummate the
transactions contemplated hereby and to perform its obligations hereunder.  This Agreement has been duly executed and
delivered by each of FMC and Lender and is a legal, valid and binding
obligation of each Party, enforceable against it in accordance with its terms,
except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, rearrangement, reorganization or similar debtor relief legislation
affecting the rights of creditors generally from time to time in effect and by
general principles of equity (regardless of whether such enforcement is sought
in a proceeding at law or in equity) and the discretion of the court before
which any such proceeding may be brought.


 


6.13                        Absence
of Conflicts.  Neither the
execution and delivery of this Agreement by either FMC or Lender nor the
performance by either Party of its obligations hereunder will result in (i) a
violation of the articles of incorporation or charter documents of such Party,
or (ii) a breach of, or a default under any contract, agreement,
instrument, lease, commitment, franchise, license, permit or authorization to
which such Party is a party or by which it or its assets are bound, which
breach or default would have a material adverse effect on its business or
financial condition or its ability to consummate the transactions contemplated
hereby, or (iii) a violation by such Party of any Requirements of Law,
which violation would have a material adverse effect on such Party’s business
or financial condition, its ability to consummate the transactions contemplated
hereby or perform its obligations hereunder, or which could materially impair
the enforceability of the Loans.


 


6.14                        Consents
and Approvals.  Each of FMC
and Lender has obtained any and all consents, approvals or authorizations of,
and made any and all declarations, filings or registrations with, any
governmental authority, or any other Person, required to be obtained or made by
such Party in order to execute, deliver and perform its obligations under this
Agreement or consummate the transactions contemplated hereby, except where the
failure to do so would not have a material adverse effect on its business or
financial condition, its ability to consummate the transactions contemplated
hereby or perform its obligations hereunder, or which would not materially
impair the enforceability of the Loans.


 


6.15                        Litigation.  There is no action, order, writ, injunction,
judgment or decree outstanding or claim, suit, litigation, proceeding, labor
dispute, arbitral action or investigation pending, or to the actual knowledge
of either FMC or Lender threatened, against or relating to such Party that
would likely have a material adverse effect on this Agreement or on its
business or financial condition, its ability to consummate the transactions
contemplated hereby or perform its obligations hereunder, or which could
materially impair the enforceability of the Loans.


 


6.16                        Compliance
with Law.  It does and
will at all times comply with all applicable Requirements of Law, in all
material respects including the provisions of Title X and the marketing and
conduct requirements of Section 1011 thereof, 15 U.S.C. § 1650, and its
implementing regulations set forth in 34 C.F.R. § 601.21, as applicable to
activities conducted in connection with the Program.


 


6.17                        Intellectual
Property.  It owns, or has
the right to use under valid and enforceable agreements, all intellectual
property rights reasonably necessary for and related to its performance under
this Agreement and such performance will not infringe or violate any
intellectual property rights of any other Person.


 


SECTION 7. 
INSPECTIONS: AUDITS


 


7.01                        Audit
of Books and Records. Lender, its accountants, auditors,
representatives, Program Administrator on its behalf, and any Federal, state or
local governmental or quasi-governmental officials with regulatory authority
over 


 


16

















 


Lender shall have the absolute right, at Lender’s
expense, upon not less than thirty (30) days prior written notice (or such
shorter notice period as required by law), at any time during or after the term
hereof:


 


(i) to audit or examine all books, records,
documents, other writings, information, whether in hard copies, electronic form
or otherwise, relating to Services to be provided by Servicer under this
Agreement at the location(s) where Servicer maintains such books, records,
documents, writings and information;


 


(ii) to conduct such other examinations, tests
or investigations with respect to the Services to be provided under this
Agreement as Lender may deem necessary or desirable in Lender’s sole and
absolute discretion and at Lender’s expense, it being acknowledged and agreed
by Servicer that Lender shall have rights of access to books, records,
documents, other writings and information, whether in hard copies, electronic
form or otherwise, relating to the Services to be provided by Servicer under
this Agreement, at any time during normal business hours.


 


On-site examination of documents held in safekeeping
and imaged records or related documentation will be performed with as little
disruption as possible to Servicer’s normal operation.  All questions
arising during the course of the audit will be coordinated by the chief auditor
and directed to the individual(s) designated by Servicer.  Servicer
will designate a sufficient number of liaison personnel so as to be able to
respond timely to audit questions.  All Lender out-of-pocket expenses,
non-Servicer personnel costs and copying expenses relating to such review,
audit and copying shall be borne by Lender.


 


Notwithstanding the foregoing, Program Administrator
shall, on behalf of Lender, conduct each calendar quarter an operational audit
to test the Servicer’s compliance with the requirements of this Agreement and
the Servicing Guidelines (each, an “Operational Audit”). If in an Operational
Audit Program Administrator determines that Servicer has failed to adequately
and/or properly perform its obligations hereunder or under the Servicing
Guidelines, Program Administrator and Servicer shall work in good faith to
remedy the errors or inadequacies prior to the next Operational Audit, and
shall present to Lender for its approval recommended modifications to this
Agreement and/or the Servicing Guidelines designed to improve efficiency,
customer service, and/or loan performance.


 


7.02                      Sarbanes
Oxley Compliance.  If requested by Lender,
Servicer shall participate in Sarbanes-Oxley Act of 2002 (“Sarbanes Oxley”)
compliance testing conducted by Lender with respect to the Services on a
quarterly basis and shall provide documents and information as reasonably
requested by Lender to conduct such compliance testing. Servicer agrees to
provide any assistance reasonably requested by Lender to enable Lender to
comply with Sarbanes Oxley, the rules of the Public Company Accounting
Oversight Board and rules of the Securities and Exchange Commission
relating to disclosure controls and procedures and inquiries by the SEC or
other regulatory agency. Such assistance shall include but shall not be limited
to: (i) documenting Servicer’s controls and procedures relating to the
Services; (ii) cooperating with Lender’s auditors in connection with the
testing of such controls and procedures; (iii) making quarterly
representations or certifications to Lender regarding any material changes to
such controls and procedures; (iv) remediating any material weakness or
significant deficiency that would prevent Lender from complying with Sarbanes
Oxley or any rules or regulations promulgated thereunder; and (v) providing
an unqualified SAS 70 Type 2 Report issued by an independent certified public
accounting (CPA) firm in connection with its provision of the Services.


 


7.03                      SAS
70 Audit. Servicer will engage, at its expense, an
independent CPA firm that adheres to professional standards established by the
American Institute of Certified Public Accountants (AICPA) to conduct reviews
of Servicer’s general controls associated with Servicer’s facilities, as well
as the controls associated with the Services and the programs used to provide
the Services, including but not limited to controls over information technology
and related processes.  The scope of the
audit shall include all such matters as Servicer’s auditor deems necessary or
required to meet regulatory compliance standards, including but not limited to
an examination of the record keeping system and other equipment and software
used by Servicer. Such reviews shall be performed at such frequency and times
as Servicer shall determine, but shall be performed at least once annually.
Within thirty (30) days of the receipt by Servicer, Servicer shall provide
Lender with a copy of each report submitted by Servicer’s independent
accountants regarding any of the matters set forth in this paragraph. All such
reviews shall comply with AICPA Statement on Auditing Standards (SAS) No. 70,
and the reports obtained shall be of the type generally referred to (depending
on the publication) as either Type “II” or “B”. In a Type II report, the
Servicer’s auditor will express an opinion on (1) whether the Servicer’s
description of its controls presents 


 


17

















 


fairly, in all material respects, the relevant
aspects of the Servicer’s organizational controls that had been placed in
operation as of a specific date, and (2) whether the controls were suitably
designed to achieve specified control objectives, and (3) whether the
controls that were tested were operating with sufficient effectiveness to
provide reasonable, but not absolute, assurance that the control objectives
were achieved during the period specified. If the Servicer’s audit of
procedures reveals exceptions or control deficiencies, then Servicer shall take
steps to correct the control objective, at no cost to Lender.


 


7.04                        Operational
Audits. Upon thirty (30) days prior written notice from
Lender, and subject to Servicer’s reasonable security requirements, Servicer
shall provide to Lender (and Lender’s internal and external auditors,
inspectors, regulators and other representatives that Lender may designate from
time to time) access at reasonable hours to Servicer’s Personnel, to the
facilities at or from which Services are then being provided, and to Servicer’s
records and other pertinent information, all to the extent relevant to the
Services and Servicer’s obligations under this Agreement. Such access shall be
provided for the purpose of performing audits and inspections of Servicer and
its businesses and to examine Servicer’s performance of loan servicing under
this Agreement including (i) verifying the integrity of the Servicer data;
(ii) examining the controls (e.g., organizational controls, input/output
controls, system modification controls, system design controls and access
controls) and the security, disaster recovery and back-up practices and
procedures; (iii) examining Servicer’s measurement, monitoring and
management tools; and (iv) enabling Lender to meet applicable legal,
regulatory and contractual requirements. Servicer shall provide any assistance
reasonably requested by Lender or its designee in conducting any such audit.


 


7.05                        Regulatory
Audits. Within thirty (30) days of
its receipt, Servicer shall provide Lender with a summary of any audit results
performed by a federal or state regulator concerning the Services provided
under this Agreement, including but not limited to the Department of Education.
The content of any such summary shall be subject to Servicer’s reasonable
security requirements. When the regulatory auditor’s procedures reveal
exceptions or control deficiencies, then Servicer shall take steps to correct
the control design deficiency or operating effectiveness deficiency in all
material respects. If such audit reveals that the services provided by Servicer
do not cause Servicer’s operations to meet the auditor’s recommendation, then
Servicer shall provide such further services as are necessary to bring its
operations into conformance with the auditor’s recommendations to such level
and degree, at no cost to Lender.


 


7.06                        Financial
and Other Information. Servicer shall provide
Lender with the following:


 


(a)                                  Within forty-five
(45) days after the end of each of the first three quarters of each fiscal
year, unaudited financial statements of Servicer for such quarter, setting
forth the information called for as of the end of, and for such quarter as
described in paragraph (b) of this Section 7.06 will be posted to the
Servicer’s web site; and


 


(b)                                 Within one
hundred twenty (120) days after the close of each fiscal year of Servicer, a
copy of an annual report as to the obligations and activities of Servicer
during such fiscal year will be posted to Servicer’s web site, and financial
statements for such fiscal year, setting forth in reasonable detail:


 


(i)                                     the balance
sheet for Servicer and its programs showing the assets and liabilities of such
programs at the end of such fiscal year;


 


(ii)                                  a statement of
Servicer’s revenues and expenses in accordance with the categories or
classifications established by Servicer for its operating and program purposes
and showing the revenues and program expenses during such fiscal year; and


 


(iii)                               a statement of
changes in financial position, including changes in financial position of
Servicer’s programs, as of the end of such fiscal year.


 


The annual report shall be accompanied by a report
of an independent auditor stating that the financial statements present fairly,
in all material respects, the net assets of the Servicer as of the years
stated, and its changes in net assets and cash flows for the years then ended,
in conformity with accounting principles generally accepted in the United States
of America.


 


18

















 


7.07                      Annual
Statement as to Compliance.  Upon request, the Servicer shall deliver an
annual report to Lender on or prior to March 31 of each year commencing March 31
of the year following execution of this Agreement, signed by the Chief
Executive Officer (“CEO”) of the Servicer, stating that (a) a review of
the activities of the Servicer, and the Servicer’s performance under this
Agreement, for the previous twelve (12) months ending September 30 has
been made under such CEO’s supervision and (b) to the best of such CEO’s
knowledge, based on such review, the Servicer has or has caused to be performed
all of its obligations under this Agreement throughout such year and that no
default has occurred, or if such a default has occurred and is continuing,
specifying each such event, the nature and status thereof and the steps
necessary to remedy such affair. In the event that the Servicer has delegated
any servicing responsibilities with respect to the Loans to a subservicer or
subcontractor, the Servicer shall deliver a similar annual report by any such
subservicer or subcontractor as described above as and when required with
respect to the Servicer.


 


7.08                      Cooperation
with Audits; Follow-Up. Servicer shall fully
cooperate with any audit(s) conducted by either Lender, Lender’s agent, or
a U.S. federal agency pursuant to this Agreement. Servicer shall be entitled to
charge Lender for the management hours or fees with respect to the time spent
by Servicer’s management and employees reasonably necessary in providing
assistance to Lender, Lender’s internal and external auditors, or any
governmental authority performing any audits, compliance, security and control
testing. If any audit report establishes that Servicer’s performance of the
Services is not in compliance with the terms of this Agreement, Servicer shall
submit to Lender within thirty (30) days of its receipt of the relevant audit
report a plan to improve Servicer’s performance to the level required by this
Agreement.


 


7.09                        Accelerated
and Emergency Audits.  In
the event that Lender has the right to terminate this Agreement under Section 14
(Termination), whether or not such right is exercised, Lender shall have the
right to perform or cause to be performed any audit, examination or inspection
described in this Agreement, upon providing to the Servicer proof of the cause
for such right of termination, without any limitations or requirements as to
notice, frequency, duration, business interruption, or other such limitation or
requirement for the benefit of the Servicer. All costs of such an accelerated
or emergency audit shall be borne by Lender.


 


SECTION 8. 
CHARGES AND PAYMENTS.


 


8.01                        Fees. 
The Servicer shall provide all aspects of the
Services at its sole cost and expense, except as otherwise provided in this
Agreement, and shall be compensated by Lender as set forth in this Agreement
and in the Fee Schedule. The fee for the Services provided by
Servicer, together with services provided by FMC as Program Administrator, both
under this Agreement and the Loan Program Agreement between Lender and FMC,
shall be payable by the Lender to the Servicer, on a pro-rated monthly basis
and shall be equal to 100 basis points per annum based upon the ending principal
balance of the Student Loans at each month end, as reflected in the Servicer’s
monthly MR-53 report or any similar report that replaces such MR-53 report.


 


8.02                        Invoices.  Invoices for the Servicer’s Services and the Program
Administrator’s charges, including the collection of Late Fees collected on
behalf of Lender as set forth in
Section 4.13 herein and the
Fee Schedule, shall be rendered
by the Program Administrator after each month end with payment to be paid by
Lender to Servicer. All invoices are
payable net forty-five (45) days from the date of the invoice.  If
full payment is not received within sixty (60) days from date of invoice,
except as to amounts which are under dispute, such non-payment shall constitute
a default hereunder and, shall entitle Servicer at any time thereafter, to
notify Lender of such default and if such default is not cured within thirty
(30) days from the date of such written notice, Servicer at its option, may
immediately terminate this Agreement. Lender
shall report any disputes to the Program Administrator regarding an invoice
within sixty (60) days of the date of the invoice, and the Program
Administrator shall research the disputed item and respond to Lender.


 


8.03                        Adjustments to Programs.  Servicer, Lender and Program Administrator, on behalf of the Lender,
shall discuss future enhancements to the Services, the PHEAA System, and the
Servicing Guidelines as identified in Section 4.06(c).


 


19

















 


SECTION 9.  LIABILITY


 


Servicer agrees to pay Lender or FMC, as applicable,
for any claim, loss, liability or expense, including reasonable attorney’s fees
(collectively referred to herein as “Loss”), which arises out of or relates to
the Servicer’s acts or omissions with respect to the Services provided under
this Agreement, including but not limited to Losses (a) that arise from Servicer’s failure to perform its
obligations under this Agreement in compliance with the Servicing Guidelines,
or (b) related to the Servicer’s performance of its obligations under this
Agreement or the Servicing Guidelines, where the final determination of
liability on the part of the Servicer to Lender or FMC, as applicable, is
established by a court of law with competent jurisdiction over the Servicer, or
by way of settlement agreed to by the Servicer. Further, nothing herein shall
be read or construed as a waiver of the sovereign immunity of the Commonwealth
of Pennsylvania, except to the extent authorized by the laws of said
Commonwealth.


 


Lender and/or FMC, as applicable, agrees to pay
Servicer for any Loss arising out of or relating to Lender’s or FMC’s acts or
omissions with respect to the Loans covered by this Agreement, including but
not limited to a determination that the
procedures in the Servicing Guidelines are found to be in violation of a state
or federal law, where the final determination of liability on the part
of Lender and/or FMC, as applicable, is established by a court of law or by way
of settlement agreed to by Lender and/or FMC.


 


The maximum liability on
the part of Servicer under this Agreement for all Losses incurred by Lender on
Loans Serviced by the Servicer as a result of Servicing deficiencies shall not
exceed [**] percent ([**]%) of the total dollar value of the Loans
Serviced by Servicer for Lender under this Agreement.


 


This provision shall take effect as of the date on
which each individual Loan is converted to the Servicer’s Loan Servicing
System.


 


This provision shall not be construed to limit the
Servicer’s or Lender’s rights, obligations, liabilities, claims or defenses
which arise as a matter of law or pursuant to any other provision of this
Agreement.


 


SECTION 10. 
FORCE MAJEURE


 


10.01                 Neither Servicer nor Lender
shall be liable for any failure or delay in the performance of its obligations
under this Agreement to the extent such failure or delay is caused by any acts
of war, terrorism, civil riots or rebellions, fires, earthquakes, floods,
storms, lightning, epidemics, quarantines, embargoes and other similar unusual
governmental actions, extraordinary elements of nature or acts of God,
expropriation or confiscation or property, failure or delay by carriers,
judicial or governmental action, interference by civil and military authorities
whether by legal proceeding or in fact and whether purporting to act under some
constitution, decree, law, or otherwise, emergency regulation or labor dispute
or unrest, provided that and only to the extent that Servicer or Lender could
not reasonably circumvent the failure or delay through the use of commercially
reasonable alternate sources, workaround plans or other means (“Force Majeure”).
An event shall not be considered a Force Majeure event to the extent that
proper implementation of the Business Continuity Plan (as defined below) would have
enabled the Party to continue performance hereunder in a timely manner. The
occurrence of a Force Majeure event shall not excuse any Party from having in
place reasonable safeguarding plans and procedures adequate for protecting all
Proprietary Information and NPPI of Lender.


 


Notwithstanding any other
provision of this Section, a Force Majeure event shall obligate and require the
affected Party to commence its Disaster Recovery Plan (as defined below). If
any Force Majeure event prevents, hinders or delays performance of the critical
Services for more than three (3) Business Days or results in data loss in
excess of forty-eight (48) hours, Lender may procure any affected Services from
an alternate source at Lender’s cost and expense.  If the Force Majeure event continues to
prevent, hinder or delay performance of any Services which are of a critical
nature for an additional four (4) Business Days, Lender shall have the
right to terminate this Agreement on not less than fifteen (15) days prior
written notice to Servicer, provided that Servicer will be responsible to
continue Services up to the effective date of such termination.  Lender shall not be required to pay any Early
Termination or Record Return/Deconversion Fees for a termination of this
Agreement pursuant to this Section.


 


20

















 


SECTION 11. 
CONFIDENTIAL INFORMATION/PRIVACY/SECURITY


 


11.01                 Proprietary
Information Access or Exchange.  In the performance of this Agreement, each
Party may disclose to the other Parties certain Proprietary Information.


 


11.02                 Definitions.  For the purposes of this
Agreement, the following terms will have the definitions set forth below.


 


(a)                                “Proprietary Information” means Trade Secrets, Confidential
Business Information, and NPPI.


 


(b)                                 “Trade Secrets” will include without limitation and without regard
to form, technical or non-technical data, formulae, patterns, design, business
logic, presentation or strategy, new products, marketing plans, ideas,
know-how, inventions, compilations, programs, software programs, devices,
methods, techniques, drawings, processes, financial data, financial plans,
product plans, non-public forecasts, studies, projections, analyses, all
customer data of any kind, lists of actual or potential customers, business and
contractual relationships, literary, artistic, graphical or other works and
improvements, or any other information similar to the foregoing that: (a) derives
economic value, actual or potential, from not being generally known and not being
readily ascertainable by proper means to other persons who can obtain economic
value from its disclosure or use; and (b) is the subject of efforts that
are reasonable under the circumstances to maintain its secrecy.  In each case whether or not patentable,
copyrightable or otherwise subject to intellectual or industrial property
protection, and whether or not registrable or subject to any registrations or
applications therefore, and any of the same relating to or owned by any
subsidiary or affiliate of the Disclosing Party.  For the sake of clarity, “Trade Secrets” will
include information provided to any Party by any third parties, which such
Party is obligated to hold in confidence.


 


(c)                                  “Confidential Business Information” means any valuable, secret business
information, other than Trade Secrets, that is designated or identified as
confidential at the time of the disclosure or is by its nature clearly
recognizable as confidential information to a reasonably prudent person with
knowledge of the Disclosing Party’s business and industry.  Confidential Business Information includes
but is not limited to default and
recovery statistics, loan program parameters, risk management strategies,
recovery strategies,


 


(d)                                 “NPPI” means non-public, personally identifiable information of
Disclosing Party’s customers, Disclosing Party’s Personnel or other
individuals, which has been provided to Receiving Party by such persons or
their representatives.  More
specifically, records in any form (oral, written, graphic, electronic,
machine-readable, or otherwise) relating to a Borrower, such as a Borrower’s
name, address, telephone number combined with information including, but not
limited to, a social security number, loan payment or transactional account
history, account status, and the fact that the Borrower has a relationship with
Lender; other Borrower information; or other documentation received by Servicer
pursuant to the Agreement from FMC, or from the Borrower, or from the school
which Borrower attends, or information prepared and maintained by Servicer in
the course of its activities under this Agreement.


 


(e)                                  “Disclosing Party” means the Party disclosing any Proprietary
Information hereunder, whether such disclosure is directly from or through the
Disclosing Party’s Personnel.


 


(f)                                    “Receiving Party” means the Party receiving any Proprietary
Information hereunder, whether such disclosure is received directly from or
through the Receiving Party’s Personnel.


 


11.03                 Exclusions.  Notwithstanding the definition of
Proprietary Information above, Proprietary Information does not include any
information that: (a) was in the Receiving Party’s possession before being
disclosed to it by the Disclosing Party without a duty of confidentiality on
the Receiving Party; (b) is or becomes a matter of public knowledge
through no fault of the Receiving Party; (c) is rightfully received by the
Receiving Party from a third party without a duty of confidentiality; (d) is
disclosed by the Disclosing Party to a third party without a duty of confidentiality
on the third party; (e) is independently developed by the Receiving Party
without use of or reference to the Disclosing Party’s Proprietary Information;
or (f) is disclosed by the Receiving Party with the Disclosing Party’s
prior written approval without a duty of confidentiality on the Party making
such disclosure or 


 


21

















 


the third party to which
disclosure is authorized.  In addition,
notwithstanding anything else contained in this Section 11 or this
Agreement, nothing in this Section 11 will be construed to prohibit
disclosure of any information to regulatory agencies, attorneys, accountants,
who are obliged to respect the confidentiality thereof.  No such sharing with Recipient’s regulatory
agencies, accountants or attorneys, however, shall relieve Recipient from its
obligations or liability hereunder with respect to any unauthorized disclosure
of Proprietary Information, whether by its own actions or by the actions of its
regulators, accountants or attorneys.


 


11.04                 Ownership and Restrictions on Use.  The
Receiving Party acknowledges and agrees that except to the extent otherwise
expressly provided herein, the Proprietary Information of the Disclosing Party
will remain the sole and exclusive property of the Disclosing Party or a third
party providing such information to the Disclosing Party, and the disclosure of
such information to the Receiving Party does not confer upon it any license,
interest, or right of any kind in or to the Proprietary Information, except as
provided under this Agreement.  At all
times and notwithstanding any termination or expiration of this Agreement, the
Receiving Party agrees that it will:  (a) hold
in strict confidence and not disclose to any third party the Proprietary
Information of the Disclosing Party, except as approved in writing by the
Disclosing Party; (b) only permit access to the Proprietary Information of
the Disclosing Party to those of its Personnel who have a need to know and have
signed confidentiality agreements or are otherwise bound by confidentiality
obligations substantially similar to those contained in this Agreement; (c) be
responsible to the Disclosing Party for any third party’s use and disclosure of
the Proprietary Information provided to such third party by the Receiving
Party; (d) only use Proprietary Information that it receives to carry out
the purposes of the Agreement and for no other purpose whatsoever; and (e) use
at least the same degree of care it would use to protect its own Proprietary
Information of like importance, but in no event less than a reasonable degree
of care, including maintaining information security standards for such
Proprietary Information as are commercially reasonable and customary for the
type of information.  Specifically, with
regard to NPPI, Servicer will comply with the information security standards
specific to such information set forth in this Agreement.  No Party will communicate any information to
the other Party in violation of the proprietary rights of any third party.  All Parties agree not to disclose
Proprietary Information to any competitors of the Disclosing Party The Parties further agree the Disclosing Party retains
all right, title and interest in and to all of its Proprietary Information and
any intellectual property and industrial rights therein, including (without
limitation) any patents, copyrights and registrations thereof and applications
therefor, and the Disclosing Party will have all the rights and remedies
available to it as a result of such right, title and interest.  This Agreement does not grant or constitute
an assignment of or license in or to any such Proprietary Information or
intellectual or industrial property, including, without limitation, for the
development, manufacture or sale by Receiving Party of products or services
based on Proprietary Information or for any other use of Proprietary
Information by Receiving Party except as expressly provided herein.


 


11.05                 Required Disclosures. 
Receiving Party’s duty hereunder shall not extend to such Proprietary
Information which is compelled by a validly issued subpoena, court order,
governmental request or request of a law enforcement agency; provided, however,
if the Lender or FMC is required by a Governmental Authority or law to disclose
any of the Proprietary Information of the Disclosing Party, the Receiving Party
must, if legally permissible: (i) first give written notice of such
required disclosure to the Disclosing Party; (ii) make a reasonable effort
to obtain a protective order requiring that the Proprietary Information so
disclosed be used only for the purposes for which disclosure is required; (iii) take
reasonable steps to allow the Disclosing Party to seek to protect the
confidentiality of the Proprietary Information which, in the opinion of its
legal counsel, it is required to disclose. 
The foregoing requirements will not apply and are not intended to limit
any Party’s ability to fully comply with requests for information from
regulators of the Internal Revenue Services, as permitted by the last sentence
of Section 11.03.  FMC and Lender acknowledge,
understand, and agree that any information, proprietary or otherwise, which is
provided by FMC or Lender to Servicer and which qualifies as a “public record”
under Pennsylvania’s Right-to-Know Law, 65 P.S. §§67.101 et seq.,
as amended, and as may be further amended in the future, may be subject to
disclosure by Servicer.  FMC and Lender
accordingly waive and release Servicer from any actions at law or in equity
from compliance with any such disclosure. 
FMC and Lender further acknowledge, understand, and agree that any such
disclosure does not constitute breach of any confidentiality provision
otherwise provided for in this Agreement. 
In the event Servicer is required to make such disclosure, Servicer
shall make commercially reasonable effort to notify FMC or Lender in writing in
advance of any disclosure request or of other pending 


 


22

















 


legal action instituted to enforce disclosure of
this Agreement or any information, proprietary or otherwise, which is provided
by FMC or Lender to Servicer hereunder.


 


11.06                 Notice of Unauthorized Disclosures.  Each
Party to this Agreement will immediately notify the other Parties in writing
upon discovery of any loss or unauthorized disclosure of the Proprietary
Information of the other Parties.


 


11.07                 Limit on Reproductions.  The
Receiving Party will not reproduce the Disclosing Party’s Proprietary
Information in any form except as reasonably necessary to fulfill such Party’s
duties and obligations and otherwise comply with the agreements of such Party
under this Agreement.  Any reproduction
of any Proprietary Information by the Receiving Party will remain the property
of the Disclosing Party and will contain any and all confidential or
proprietary notices or legends that appear on the original, unless otherwise
authorized in writing by the Disclosing Party.


 


11.08                 Document Destruction — Information Erasure. 
Except as otherwise set forth in this Agreement, upon the earlier
of:  termination of this Agreement, the
written request of the Disclosing Party, or when no longer needed by any Party
for fulfillment of its obligations under this Agreement, each Receiving Party
will either: (a) promptly return to the Disclosing Party all documents and
other tangible (including electronic) materials containing the Disclosing Party’s
Proprietary Information, including all copies thereof in its possession or
control; or (b) erase or destroy all such materials by the following
methods.  If return, erasure, or
destruction is not feasible, then the Receiving Party may maintain the
Disclosing Party’s Proprietary Information in compliance with the requirements
of the confidentiality and information security provisions of this Agreement;
provided, however, that when the return, destruction, or erasure of any such
materials becomes feasible for the Receiving Party, the Receiving Party must
comply with the requirements of (a) or (b) above within sixty (60)
calendar days.  Upon request, Receiving
Party shall also provide to the Disclosing Party a written certification of
destruction signed by an officer of the Receiving Party duly authorized to
legally bind the Receiving Party certifying and warranting that no copies of the Proprietary Information have
been retained;


 


	
  TYPE OF PROPRIETARY INFORMATION 

  STORED OR USED

  	
   

  	
  DESTRUCTION
  METHOD

  
	
  Hard Copy

  	
   

  	
  Shredding, pulverizing, burning, or other suitable
  destruction method so that any Proprietary Information is not readable at all
  and cannot be reassembled or reconstructed in any way so that it is
  practicably readable.

  
	
   

  	
   

  	
   

  
	
  Electronic Tangible Media, such as CDs, Disks, Tapes

  	
   

  	
  Destruction or erasure of such media so that any
  Proprietary Information is not readable at all and cannot be reassembled or
  reconstructed in any way so that it is practicably readable.

  
	
   

  	
   

  	
   

  
	
  Hard Drive Storage or similar Computer or Device
  Storage

  	
   

  	
  Erasure or elimination of Proprietary Information
  from such device so that any Proprietary Information is not readable at all
  and cannot be reassembled or reconstructed in any way so that it is
  practicably readable.

  



 


11.09                 Equitable Relief.  If
any Party should breach or threaten to breach any provision of this Section 11
of the Agreement, the non-breaching Party, in addition to any other remedy it
may have at law or in equity, will be entitled to seek a restraining order,
injunction, or other similar remedy in order to specifically enforce the
provisions of this Section.  Each Party specifically
acknowledges that money damages alone may be an inadequate remedy for the
injuries and damages that would be suffered and incurred by the non-breaching
Party as a result of a breach of any provision of this Section.  In the event that any Party should seek an
injunction hereunder, the other Parties hereby waive any requirement for the
submission of proof of the economic value of any Proprietary Information or the
posting of a bond or any other security.


 


23

















 


11.10                 Survival.  The
obligations set forth in this Section 11 as they pertain to Proprietary
Information, shall survive termination of this Agreement and continue for so
long as the relevant information remains Proprietary Information.


 


11.11                 Prior Agreements.  The
provisions set forth in this Agreement are only relevant to the Program and
this Agreement and do not affect any Prior Agreement between the Parties.


 


11.12                 Information Related to Tax Structure and Treatment.  It
is the Parties’ mutual intent that the tax structure and tax treatment of the
transactions contemplated by this Agreement will not be confidential and, that
notwithstanding anything herein to the contrary, each Party and its Personnel
may disclose to any and all Persons of any kind, the tax structure and tax
treatment of the transactions contemplated herein such that the transactions
will be treated as not having been offered under conditions of confidentiality
for purposes of Section 1.6011-4(b)(3) (or any successor provision)
of the Treasury Regulations promulgated under Section 6011 of the Internal
Revenue Code of 1986, as amended, and any comparable provision in the law of
any other jurisdiction.


 


11.13                 General
Security Requirements.  All Parties
will provide information, data back-up procedures, and information security so
as to reasonably ensure that any Proprietary Information provided by another
Party is not lost, stolen, modified, disclosed to or accessed by any other
party (other than those permitted parties under Section 11 of this
Agreement) without the Disclosing Party’s prior written approval.  Such security measures will equal or exceed
standard industry practices for similar entities dealing with Proprietary
Information.  All Parties warrant to the
other Parties that it will reasonably monitor, evaluate and adjust its
information security systems and procedures, its data security systems, and its
processes in response to relevant changes in technology, changes in the
sensitivity of any Proprietary Information, and internal and external threats
to information security.  All Parties
will promptly notify the Disclosing Party of: (a) any unauthorized
possession, use, or knowledge or attempt thereof, of the data-processing files,
transmission messages, or other Lender Proprietary Information by any person or
entity that may become known; (b) the effect of such; and (c) the
corrective action the Receiving Party has taken in response thereto.


 


11.14                 Encryption.  All Parties represent and
warrant not to use, reproduce, transform or store any of the Proprietary Information
in any externally accessible computer or electronic information retrieval
system unless such system is adequately protected against unauthorized
access.  “Adequately Protected” means
whole disk encryption of all laptop computers maintaining Proprietary
Information on such devices; password protection on personal digital assistants
(PDAs) that do not contain or provide access to NPPI; encryption on other
portable devices and portable media including, but not limited to, thumb
drives, tapes, and CDs which maintain or have access to Proprietary
Information.  Servicer shall use a
digital certificate on the web server to enable the use of SSL and HTTPS
protocols. All internet transfers of Proprietary Information and screen images
of the same shall be encrypted.  All
encryption must meet a minimum standard of Advanced Encryption Standard
algorithm with a minimum key strength of 256 bit.  Notwithstanding the foregoing, one
product currently used by Servicer which allows third parties to access the
Servicer’s system is in the process of being increased to at least this minimum
standard.


 


11.15                 Information
Security Audits.  During the term
of this Agreement, and for one (1) year following termination Lender may
provide prior written notice to Servicer or the intent to review the summary of
the information security program, at Servicer’s Headquarters, upon reasonable
notice of not less than 30 days.


 


11.16                 Servicer
Firewall(s).


 


(a)                                Servicer will
create its firewall rules based on the principle of least access needed.  This means that the firewall(s) will
only pass the traffic necessary for the system applications utilized by
Servicer in providing Services hereunder to function to the backend servers,
and any unnecessary traffic will be blocked.


 


(b)                                 Servicer will
segregate the Internet environment used to provide service to its clients from
the intranet environment used by internal Servicer personnel.


 


(c)                                  An encrypted
session will be used for connectivity between Lender, FMC and Servicer over the
internet.


 


24

















 


11.17                 User
Authentication Processes. 
Servicer will follow its existing policies, procedures, and standards
for authentication.  Servicer will
provide Lender with access to such policies and procedures at Servicer’s place
of business.


 


11.18                 Intrusion
Detection.  Servicer will
maintain a current industry standard intrusion detection monitoring system that
protects its infrastructure against system risk from outside users and
vendors.  Servicer will actively monitor
the intrusion monitoring system and develop escalation procedures to notify
Lender personnel in the event of a security breach pursuant to Section 11.20.


 


11.19                 Risk
Assessment.  Servicer shall
comply with industry best practices and standards regarding information
security.  Servicer shall at a minimum
conduct external and internal scans and audits of the Servicer’s network. On an
on-going basis, Servicer shall scan and audit for any malicious code, viruses
or known threats so that Servicer may protect its network accordingly.  Additionally, on an annual basis, Servicer
shall engage external vendors to conduct blind intrusion testing to verify
Servicer’s then current information security, controls, standards, and
procedures.


 


11.20                 Procedures
for Security Breaches.  For purposes of
this Section, “Breach” is defined as an incident of unauthorized access by a
third party to Sensitive Customer Information maintained by Servicer.


 


“Sensitive Customer Information” shall mean a
Borrower’s first and last name, address or telephone number in conjunction with
the Borrower’s (a) social security number; (b) driver’s license
number; (c) financial account number (other than AES account number); or (d) credit
or debit card number, in conjunction with the personal identification number or
password that would permit access to the customer’s debit or credit card
account.


 


In the event Servicer knows or reasonably believes
that there has been a Breach, Servicer shall take the following actions:


 


(a)                                  immediately
notify Lender of such unauthorized access or attempted unauthorized access;


 


(b)                                 take reasonable
steps to remedy the circumstances that permitted any such unauthorized access
to occur;


 


(c)                                  take reasonable
steps to prohibit further disclosure of Proprietary Information or Consumer
Information;


 


(d)                                 upon request,
cooperate with Lender or its agents to investigate the scope and content of the
unauthorized access; and


 


(e)                                  Cooperate with
Lender as necessary to facilitate Lender’s compliance with any applicable
federal or state law regarding unauthorized access of customer personal
information.


 


Notwithstanding the foregoing, when the role of
Servicer in the Breach is unclear, Servicer will contact Owner for guidance on
a case by case basis.


 


11.21                 Lender’s
Request for Disclosure of Proprietary Information.  Notwithstanding the
foregoing, in the event Lender desires to utilize data or account
aggregation/warehouse web sites or databases (for example, ELMNET), data or
account switches or exchanges (for example, METEOR), or other similar “single
inquiry” service provider or technology (hereinafter collectively “Third Party
Service Provider”) which requires Servicer to disclose (via data transmission
or some other similar methodology) Confidential Information of the Lender, the
Lender, or Program Administrator at Lender’s direction, shall:


 


(a)                                  provide
Servicer prior written notice of Lender’s desire to utilize such service and
provide to Servicer all information necessary for Servicer to effectuate such
transmission; and


 


(b)                                 in the event of
misappropriation of any nature whatsoever following transmission by Servicer,
indemnify, defend and hold Servicer harmless for any claim, loss, liability or
expense, including reasonable attorney’s fees and court costs, arising out of
or relating to the Lender’s or Third Party Service Provider’s acts or
omissions.  This provision shall not be
construed to limit the Lender’s or the Servicer’s rights, obligations,
liabilities, claims or defenses that arise as a matter of law or pursuant to
any other provision of this Agreement.


 


25














 


SECTION 12. 
DISPUTE RESOLUTION


 


12.01                 Except as otherwise
expressly set forth in this Agreement, the Parties agree that any dispute
arising in connection with the interpretation of this Agreement or the
performance of any Party under this Agreement or otherwise relating to this
Agreement will be treated in accordance with the procedures set forth in this Section 12,
prior to the resort by any Party to litigation in connection with such
dispute.  The dispute will be referred for resolution first to a Senior
Vice President for Lender, the General Counsel or Chief Financial Officer for
FMC, and General Counsel for Servicer.  Such procedure will be invoked by
any Party presenting to the other Parties a Notice of Request for Resolution of
Dispute (a “Notice”) identifying the issues in dispute sought to be
addressed hereunder.  A telephone or
personal conference of those executives will be held within fifteen (15) Business
Days after the delivery of the Notice.  In the event that the telephone or
personal conference between these executives does not take place or does not
resolve the dispute, any Party may proceed to litigation pursuant to section 9.


 


SECTION 13. ASSIGNMENT; SALE OF LOANS.


 


13.01                 Assignment by the Servicer, Lender or FMC.  This Agreement and all the
rights and obligations of any Party hereunder may not, without the prior
written consent of the other Parties,
which consent shall not be unreasonably withheld, be assigned or subcontracted
by any Party.  Any successor must acquire
all or substantially all of the assets
or business of the assigning Party, and have the ability to perform the duties
and obligations under the terms and conditions hereof.


 


13.02                 Assignment
of Loans from Lender to FMC. The Parties acknowledge
and agree that Lender shall assign Charged Off Loans to FMC (or an Affiliate
thereof) for collection under the terms and conditions of the Loan Program
Agreement and within the time frame set forth in the Servicing Guidelines and
that after the Servicer completes the processes required in the Servicing
Guidelines with respect to Charged Off Loans, such Loans shall no longer be
serviced by Servicer under this Agreement.


 


13.03                 Notice Requirement Prior to Sale of Loans.  Lender shall use best efforts
to notify the Servicer, in writing, sixty (60) days prior to any sale of Loans,
and shall notify Servicer, in writing, no less than forty-five (45) days prior
to any sale of Loan, currently housed on the Loan Servicing System as to (a) the
anticipated sale date and (b) the characteristics of the Loans to be sold.
The Lender will notify the Servicer of the sale date no later than five (5) days
prior to the sale. Within thirty (30) days of its receipt of the above initial
notice, the Servicer shall provide Lender with available transfer dates.  Actual transfer dates shall be mutually
agreed upon.


 


SECTION 14.       TERMINATION


 


14.01                 Borrower’s Loan.  This Agreement shall
terminate as to a specific Borrower’s Loan on the earliest of:


 


(a)                                the month following the
month during which (i) the principal, interest, Late Fees, and any other
fees, if any, have been fully paid and remitted to the Lender, and (ii) the
Borrower has been notified that the Loan has been paid in full;


 


(b)                               with respect to a Charged
Off Loan, the end of the month during which such Charged Off Loan is
transferred to FMC or its Affiliate for collection, as set forth in Section 13.02;
or


 


(c)                                the end of the month
following the month during which the sale or transfer of such Loan occurs where
Servicer does not continue Servicing such Loan, subject to the provisions set
forth in Section 13.03 (Notice Requirement Prior to Sale of Loans) hereof.


 


14.02.              Termination by Lender/Resignation by FMC.  This Agreement may be terminated at the
option of Lender upon the occurrence of any of the following:


 


(a)                                  Any of Servicer’s
representations or warranties made in or pursuant to this Agreement shall have
been incorrect or misleading in any material respect when made;


 


26

















 


(b)                                 The Servicer’s failure to perform
or observe any of the provisions or covenants of this Agreement and/or its
referenced Schedules and Exhibits, in any material respect (including, without
limitation, any breach of the provisions of Section 4.12 (Collections), all of which shall be deemed
material or Section 11.15(b));


 


(c)                                  If the Servicer
shall (i) discontinue business, or (ii) generally not pay its debts
as such debts become due, or (iii) make a general assignment for the
benefit of creditors, or (iv) admit by answer, default or otherwise the
material allegations of petitions filed against it in any bankruptcy,
reorganization, insolvency or other proceedings (whether federal or state),
relating to relief of debtors, or (v) suffer or permit to continue
unstayed and in effect for thirty (30) consecutive days, any judgment, decree or order, entered by
a court of competent jurisdiction, which approves a petition seeking its
reorganization or appoints a receiver, custodian, trustee, interim trustee or
liquidator for itself or all or a substantial part of its assets, or (vi) take
or omit any action in order thereby to effect any of the foregoing;


 


(d)                                 Change of Control.  Notwithstanding Section 13.01
(Assignment by Servicer), if Servicer is the subject of a Change of Control,
Lender and FMC shall have the right to terminate this Agreement upon a minimum
of thirty (30) Business Days prior written notice. Such right of termination
must be exercised within sixty (60) days of the date on which Lender received
notice of such Change of Control from the Servicer. Following Servicer’s
receipt of notice and information to support the termination hereunder from
Lender, Servicer shall work diligently with Lender and Program Administrator to
carry out the deconversion of the Loans off of the Servicer’s Loan Servicing
System within a timeframe reasonably agreeable to the Parties but in any event
shall be begun within ninety (90) Business Days from the Servicer’s receipt of
notice and the Parties shall use their best efforts to complete the
deconversion process within 24 months from the date it begins.  There will be a charge to Lender of Early
Termination Fees as detailed in the Fee Schedule attached hereto arising from
Lender’s termination of the Agreement pursuant to this Section. Lender shall be
responsible for any and all fees arising under this Agreement and the attached
Fee Schedule that are incurred by Lender hereunder prior to Lender’s
termination of this Agreement and complete deconversion pursuant to this
Section.


 


In
the event of an event of default as set forth in Section 14.02(a) or (b) above,
the Servicer shall have the right to cure any such breach or error to Lender
and FMC’s full satisfaction within thirty
(30) days of written notice from
Lender or FMC. Notwithstanding the foregoing, Servicer shall have the right to
cure any breach of Section 4.12 (Collections) within five (5) (not thirty (30)) days after written notice from
Lender or FMC. In the event that: (i)  Servicer fails to cure such default and the Agreement is terminated
pursuant to Section 14.02 (a) or (b) or (ii) this Agreement
is terminated pursuant to Section 14.01 or 14.02 (c), or Sections 4.02(d),
6.10, 10.01, there will be no
charge to Lender or FMC for Early Termination Fees or Record
Return/Deconversion Fees.  In the event
the Agreement is terminated prior to the end of the initial term for any reason
other than those stated in the foregoing sentence (including without limitation termination under Section 14.02(d)),
Lender shall be responsible for the payment of Early Termination Fees and Record Return/Deconversion Fees as
detailed in the Fee Schedule.


 


14.03.              Termination by the Servicer. This Agreement may be
terminated at the option of the Servicer upon the occurrence of any of the
following:


 


(a)                                  Lender or FMC’s
failure to perform or observe any of the provisions or covenants of this
Agreement and/or its referenced Schedules and Exhibits, in any material
respect; or


 


(b)                                 If Lender or
FMC shall (a) discontinue business, or (b) generally not pay its
debts as such debts become due, or (c) make a general assignment for the
benefit of creditors, or (d) admit by answer, default or otherwise the
material allegations of petitions filed against it in any bankruptcy,
reorganization, insolvency or other proceeding (whether federal or state)
relating to relief of debtors, or (e) suffer or permit to continue
unstayed and in effect for thirty (30) consecutive days, any judgment, decree or order, entered by
a court of competent jurisdiction, which approves a petition seeking its
reorganization or appoints a receiver, custodian, trustee, interim trustee or
liquidator for itself or all or a substantial part of its assets, or (f) take
or omit any action in order thereby to effect any of the foregoing;


 


27

















 


In the event of an event of default as set forth in Section 14.03(a) or
(b) above, Lender and FMC shall each have the right to cure any such
breach or error to Servicer’s
full satisfaction within thirty
(30) days of written notice from
Servicer.


 


In
the event Lender or FMC fails to
cure such default and the Agreement is terminated pursuant to Section 14.03(a) or
(b), Lender (or FMC, to the extent termination by Servicer is attributable to
the actions or omissions of FMC) shall pay Servicer the Early Termination Fees and Record Return/Deconversion Fees
set forth in the Fee Schedule.


 


14.04.              Record Return/Deconversion.  Upon termination of this Agreement in full or
in part with respect to any Loan or Loans whether by virtue of the passage of
time or otherwise, the Servicer shall, regardless of any Lender or FMC default
or any other reason, return to Lender all records, data processing records,
reports, documents and correspondence, including Original Credit Agreements,
Applications, payment histories, due diligence histories, and copies of
microfilm documents maintained by the Servicer in connection with the Servicing
of the Loans (or such Loans as applicable). Servicer shall maintain a copy of
all records and reports which related to the Servicing of Loans generally for
seven (7) years after any deconversion. 
Upon the return of the Loan records, Lender agrees to pay the Record
Return/Deconversion Fee, as set forth in the Fee Schedule, except under the
circumstances specifically set forth in this Agreement, and such records will
be returned to Lender by Servicer as
provided below or as otherwise mutually agreed in writing by the
Parties.  Upon any termination or expiration of this
Agreement, any deconversion and transfer of the Accounts to Lender or its new
servicer shall be on an orderly schedule reasonably determined by the Servicer,
with Lender’s approval.  To the extent
that the Servicer continues to provide Servicing for any Accounts after the
termination or expiration date pending such scheduled deconversion and
transfer, the terms of this Agreement shall remain in effect and the Servicer’s
fees shall continue to be paid hereunder with respect to such Accounts during
such period.


 


14.05                 Transition
Period Rights.  If this
Agreement is terminated pursuant to Sections 14.02, 4.02(d), 6.10, or 10.01,
upon demand by the Lender, Servicer shall continue to Service the Loans at
rates charged to the Program Administrator for Lender’s Program at the time of
such termination, until such time as all loans have been successfully
deconverted.  Lender shall have the right
to access the Servicer’s facilities and access to Loan data in the same manner
as was permitted during the term of this Agreement.  Servicer has the obligation upon termination
or expiration to provide, and Lender has the absolute right to obtain, all of
its Proprietary Information and NPPI at any time.


 


SECTION 15.  MISCELLANEOUS
PROVISIONS


 


15.01                   Notices.  All notices, approvals, consents, requests or
other written communications regarding this Agreement are to be addressed as
noted below.


 


	
  If
  to FMC:

  	
  General Counsel

  
	
   

  	
  The
  First Marblehead Corporation

  
	
   

  	
  The Prudential Tower

  
	
   

  	
  800 Boylston Street, 34th Floor

  
	
   

  	
  Boston, Mass. 02199-8157

  



 


28

















 


	
  If to Lender:

  	
  SunTrust
  Bank

  
	
   

  	
  Attn:
  W. Mark Smith

  
	
   

  	
  Executive
  Vice President

  
	
   

  	
  1001
  Semmes Avenue

  
	
   

  	
  Mail
  Code CS-RVW-7900

  
	
   

  	
  Richmond,
  VA 23224

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
  SunTrust
  Bank

  
	
   

  	
  Legal
  Department

  
	
   

  	
  303
  Peachtree Street, N.E., 36th Floor

  
	
   

  	
  Atlanta,
  GA 30308

  
	
   

  	
   

  
	
  If to Servicer:

  	
  General Counsel

  
	
   

  	
  Pennsylvania Higher Education Assistance Agency

  
	
   

  	
  1200 North Seventh Street

  
	
   

  	
  Harrisburg, Pennsylvania 17102

  



 


15.02                 Relationship.  The
Parties to this Agreement intend that the Servicer shall render the Services
contemplated by this Agreement as an independent contractor.  The Servicer and its employees, agents, and
servants are not to be considered agents or employees of Lender or FMC, for any
purpose whatsoever. Nothing herein contained, nor any action taken by the
Servicer under this Agreement, shall be deemed or construed to give the
Servicer any right, title or interest either in law or in equity in and to any
Loan being Serviced by Servicer.


 


15.03                 Non-Exclusive Agreement for FMC and Lender.  Nothing contained herein shall be construed
to create an exclusive arrangement as to Lender or FMC. The Servicer
understands and agrees that Lender and FMC may enter into other agreements for
the servicing of Private Loans in the future.


 


15.04                 Survival.  Any and all
provisions, promises, and warranties contained herein, which by their nature or
effect are required or intended to be observed, kept or performed after
expiration or termination of this Agreement (including , without limitation,
representations and warranties, confidentiality, information security, audit
rights, indemnification, limitation of liability, dispute resolution and
miscellaneous provisions), will survive the expiration or termination of this
Agreement and remain binding upon and for the benefit of the Parties hereto.


 


15.05                 Entire Understanding.  This Agreement, including without limitation
all Schedules and Exhibits attached hereto, represent the entire understanding
of the Parties with respect to their subject matter, and supersede all previous
discussions and correspondence with respect thereto, and no representations,
warranties or agreements, express or implied, of any kind with respect to such
subject matter have been made by any Party to the other Parties, except as
expressly set forth herein or in such other agreements.


 


15.06                 Interpretation of Documents.  In the event of a conflict between this
Agreement and a Schedule or Exhibit attached hereto, this Agreement shall
control.


 


15.07                 Cooperation.    Lender, FMC and the Servicer agree that they
will cooperate fully with one another in order to carry out the terms and
provisions of the Agreement during the term of this Agreement and during all
periods in which Loans are processed and Serviced by Servicer.  Cooperation under this Section shall
include, but not be limited to, each Party using reasonable means to ensure
successful, normal, daily processing of Loans and related operations and
functions.  Each Party agrees to support
the reasonable routine efforts of the other Party and to work to resolve any
disputes which may arise during such periods referenced above, and to continue
to work together in a professional, business-like manner during all phases,
functions and processes defined in this Agreement.


 


15.08                 Authorization.   Each of the undersigned
represent that he or she has the authority to execute this Agreement on behalf
of the respective Party.


 


15.09                 Amendments; Changes; Modifications.  This Agreement (a) may be amended,
supplemented, or modified only by written instrument duly executed by the
Parties; (b) such written instrument shall be incorporated into this 


 


29

















 


Agreement;
and (c) shall be binding upon and shall inure to the benefit of the
Parties hereto and their respective successors and assigns.  The Servicing Guidelines may be amended or
modified by addendum duly executed by the Parties outside this Agreement.


 


15.10                 No
Waiver.   Any failure by
Lender, FMC or the Servicer to insist upon the strict performance by the other
of any of the terms and provisions of this Agreement shall not be deemed to be
a continuing waiver of any such terms and provisions, and notwithstanding any
such failure, such Party shall have the right thereafter to insist upon the
resumption of strict performance by the other of any and all of the terms and
provisions hereof.  The rights and
remedies herein provided are cumulative and not exclusive of any rights or
remedies provided by law.


 


15.11                 Law
Governing.   This Agreement is being
delivered in and shall be construed in accordance with the laws of the
Commonwealth of Pennsylvania,
without regard to any principles of conflict of laws.


 


15.12                 Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which together shall be deemed to be one of
and the same document.


 


15.13                 Unenforceability.  If any provision of this Agreement shall be
held to be invalid or unenforceable, such invalidity or unenforceability shall
not affect or impair the validity or enforceability of the remaining provisions
of this Agreement, which shall remain in full force and effect, and the Parties
hereto shall continue to be bound thereby.


 


SECTION 16.  REMOVAL OF
PROGRAM ADMINISTRATOR


 


16.01                 Upon the
occurrence of any of the events set forth in Section 14.02(a) — (d),
FMC may at its option resign as Program Administrator upon thirty (30) days
written notice to Lender and Servicer. In addition, Lender may remove FMC as
Program Administrator upon the terms and conditions set forth in the Loan
Program Agreement. Upon the effective date of such resignation or removal,
Lender shall become Program Administrator hereunder without the taking of
further action by Lender, and Servicer’s fees for services provided hereunder
shall thereafter be only the Servicing fees previously charged by Servicer to
Program Administrator for Lender’s Program, unless otherwise agreed by Lender
and Servicer in writing. If additional Services are requested by Lender,
pricing for such services shall be negotiated between Servicer and Lender.


 


[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]


 


30

















 


IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed as of the month, day and the year first-above written.


 


	
  PENNSYLVANIA HIGHER EDUCATION

  	
   

  	
  THE FIRST MARBLEHEAD

  
	
  ASSISTANCE AGENCY

  	
   

  	
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  James L. Preston

  	
   

  	
   

  	
  /s/
  Michael Plunkett

  
	
  Name:

  	
  James
  L. Preston

  	
   

  	
  Name:

  	
  Michael
  Plunkett

  
	
  Title:

  	
  President
  and CEO

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SUNTRUST BANK

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  W. Mark Smith

  	
   

  	
   

  
	
  Name:

  	
  W.
  Mark Smith

  	
   

  	
   

  
	
  Title:

  	
  Executive
  Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Approved as to form and legality

  	
   

  	
  Approved as to form and legality

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Jason Swartley

  	
   

  	
   

  	
  /s/ Robert A. Mulle

  
	
  PHEAA General Counsel

  	
   

  	
  Deputy Attorney General

  



 


31

















 


INDEX TO SCHEDULES AND
EXHIBITS


 


	
  Schedule A

  	
  Required
  Reports Schedule

  
	
  Schedule B

  	
  System
  Access Schedule

  
	
  Schedule C

  	
  Fee
  Schedule

  
	
  Exhibit A

  	
  Servicing Guidelines

  



 


32

















 


Schedule
A


 


PRIVATE STUDENT LOAN SERVICING AGREEMENT


 


AMONG


PENNSYLVANIA HIGHER EDUCATION ASSISTANCE  AGENCY,


SUNTRUST BANK,


 


AND


 


THE FIRST
MARBLEHEAD CORPORATION


 


REQUIRED REPORTS SCHEDULE


 


Servicer
shall electronically deliver to Program Administrator and/or Lender (as
specified below), within the time periods specified below, the data elements
that are, as of the Effective Date, contained in the reports specified below:


 


1.                                       MR-01 Report,
delivered weekly to Program Administrator and Lender.


 


2.                                     MR-50 Report, delivered to
Program Administrator and Lender within five (5) Business Days after the
end of each calendar month.


 


3.                                       MR-53 Report,
delivered to Program Administrator and Lender within five (5) Business
Days after the end of each calendar month.


 


4.                                       Asset
Management Reports (AMR), delivered to Lender within five (5) Business
Days after the end of each calendar month.


 


5.                                       Such other
reports identified and mutually adopted.


 


33

















 


Schedule
B


 


PRIVATE STUDENT LOAN SERVICING AGREEMENT


 


AMONG


PENNSYLVANIA HIGHER EDUCATION ASSISTANCE  AGENCY,


SUNTRUST BANK,


 


AND


 


THE FIRST MARBLEHEAD CORPORATION


 


SYSTEM ACCESS SCHEDULE


 


All
system access shall be limited to view only option.


 


1.
LENDER AND PROGRAM ADMINISTRATOR.


 


Servicer
shall provide Lender and/or Program Administrator, upon approval by Lender,
with web-based, view-only Account access, which shall include the ability to
view loan servicing screens including but not limited to Borrower
information,  Account history and due
diligence records.


 


Individual
users shall obtain remote access within five (5) Business Days of receipt
of notice and additional necessary information from Lender and/or Program
Administrator, as applicable, that such individual requires remote access.


 


2.
BORROWERS.


 


Servicer
shall provide Borrowers and Cosigners with limited access to their Account
information through Servicer’s established borrower portal.  Access is limited to view-only, with the
ability to submit queries and request or print forms as necessary.


 


3.
FMC/FMER AND LENDER USER ACCESS SECURITY REQUIREMENTS


 


Upon
approval by Lender of the Program Administrator’s access, the Servicer
Operations Group of Program Administrator will be responsible for notifying the
Servicer to add and delete Program Administrator Personnel who need, or no
longer need, access as appropriate.  On a
quarterly basis, Servicer will provide Program Administrator with a report of
Program Administrator Personnel who have system access to Borrower
information.  Program Administrator shall
confirm the accuracy of such reports within ten (10) days of receipt
thereof and, to the extent notice of any inaccuracies is not provided to
Servicer by such time, Program Administrator shall be liable for the inaccuracy
thereof in accordance with Section 9 (Liability) of this Agreement.


 


Lender
will be responsible for notifying the Servicer to add and delete Lender
Personnel who need, or no longer need, access as appropriate.  On a quarterly basis, Servicer will provide
Lender with a report of Lender Personnel who have system access to Borrower
information.  Lender shall confirm the
accuracy of such reports within ten (10) days of receipt thereof and, to
the extent notice of any inaccuracies is not provided to Servicer by such time,
Lender shall be liable for the inaccuracy thereof in accordance with Section 9
(Liability) of this Agreement.


 














 


Schedule
C


 


PRIVATE STUDENT LOAN SERVICING AGREEMENT


 


AMONG


PENNSYLVANIA HIGHER EDUCATION ASSISTANCE  AGENCY,


SUNTRUST BANK,


 


AND


 


THE FIRST MARBLEHEAD CORPORATION


 


FEE SCHEDULE


 


	
  1.

  	
   

  	
  Deconversion
  to Lender

  	
   

  	
  $[**]
  per loan

  
	
  2.

  	
   

  	
  Record
  Return Fee to Lender

  	
   

  	
  $[**]
  per loan

  
	
  3.

  	
   

  	
  Reconversion
  Fee:

  	
   

  	
  $[**]
  per loan

  
	
  4.

  	
   

  	
  Early
  Termination Fee

  	
   

  	
  $[**]
  per Account

  
	
  5.

  	
   

  	
  Ad
  Hoc Projects/Reporting (fees to be pre-identified by the Servicer
  in a Statement of Work and billed to Program Administrator)

  
	
  6.

  	
   

  	
  Late
  Fees

  	
   

  	
  [**]%
  of all late fees collected on delinquent Loans

  



 

















 


Exhibit A —Servicing Guidelines


 


[**]


 


A
total of twenty-three pages were omitted pursuant to a request for
confidential treatment.


 

















 


EXHIBIT B


 


Program Guidelines


with Servicing Guidelines, Forms of Credit Agreements and
Truth-in-Lending Disclosures


 


[**]


 


A
total of two hundred thirty-four pages were omitted pursuant to a request
for confidential treatment.


 

















 


EXHIBIT C1


Trust Agreement


 
















 





 


 


MG STUDENT LOAN TRUST 2010-1


 


 


TRUST AGREEMENT


 


 


Among


 


 


[U.S. BANK NATIONAL ASSOCIATION]


as TRUSTEE


 


 


[U.S. BANK TRUST NATIONAL ASSOCIATION]


as RESIDENT TRUSTEE


 


 


THE NATIONAL COLLEGIATE FUNDING II, LLC


as OWNER


 


 


and


 


 


SUNTRUST BANK


with respect to Sections 2.03, 2.05(b), 4.02(d), 9.01, 9.06,


10.01(ii), 12.01 and 13.01 and Articles V and VI only


 


Dated as of


July     , 2010


 




 





 

















 


TABLE OF CONTENTS


 


 


	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
  1

  
	
   

  	
   

  
	
  Section 1.01

  	
  Capitalized Terms

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II ORGANIZATION

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Name

  	
  4

  
	
  Section 2.02

  	
  Office

  	
  4

  
	
  Section 2.03

  	
  Purposes and Powers

  	
  4

  
	
  Section 2.04

  	
  Appointment of the Trustees

  	
  5

  
	
  Section 2.05

  	
  Appointment of Special Servicer

  	
  5

  
	
  Section 2.06

  	
  Declaration of Trust

  	
  6

  
	
  Section 2.07

  	
  No Liability of Owners for Expenses or Obligations of Trust

  	
  6

  
	
  Section 2.08

  	
  Situs of Trust

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE III TRUST
  CERTIFICATES AND TRANSFER OF INTEREST

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Issuance of Trust Certificate

  	
  6

  
	
  Section 3.02

  	
  Registration and Transfer of Certificates

  	
  6

  
	
  Section 3.03

  	
  Lost, Stolen, Mutilated or Destroyed Certificates

  	
  7

  
	
  Section 3.04

  	
  Limitation on Transfer of Ownership Rights

  	
  7

  
	
  Section 3.05

  	
  Assignment of Right to Distributions

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV CONCERNING THE
  OWNERS

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Action by Owners with Respect to Certain Matters

  	
  8

  
	
  Section 4.02

  	
  Action Upon Instructions

  	
  9

  
	
  Section 4.03

  	
  Majority Control

  	
  9

  
	
  Section 4.04

  	
  Representations and Warranties of NCF II

  	
  10

  
	
  Section 4.05

  	
  Power of Attorney

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE V INVESTMENT,
  APPLICATION OF TRUST FUNDS

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Investment of Trust Funds

  	
  10

  
	
  Section 5.02

  	
  Application of Funds

  	
  11

  
	
  Section 5.03

  	
  Remittance of Recoveries to the Participation Account

  	
  11

  
	
  Section 5.04

  	
  Distribution Date Statement

  	
  11

  
	
  Section 5.05

  	
  Method of Payment

  	
  12

  
	
  Section 5.06

  	
  No Segregation of Funds; No Interest

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI TRUST LOANS

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Acquisition of Trust Loans

  	
  12

  
	
  Section 6.02

  	
  Application of Funds in the Participation Account

  	
  12

  



 


i

















 


	
  ARTICLE VII TAX
  CHARACTERIZATION

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Tax Characterization

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII FEDERAL INCOME
  TAX ALLOCATIONS

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Federal Income Tax Allocations

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX AUTHORITY AND
  DUTIES OF THE TRUSTEES

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  General Authority

  	
  13

  
	
  Section 9.02

  	
  Specific Authority

  	
  13

  
	
  Section 9.03

  	
  General Duties

  	
  13

  
	
  Section 9.04

  	
  Accounting and Reports to the Owners, the Internal Revenue
  Service and Others

  	
  13

  
	
  Section 9.05

  	
  Signature of Returns

  	
  14

  
	
  Section 9.06

  	
  Right to Receive and Rely Upon Instructions

  	
  14

  
	
  Section 9.07

  	
  No Duties Except as Specified in this Agreement or in
  Instructions

  	
  14

  
	
  Section 9.08

  	
  No Action Except Under Specified Documents or Instructions

  	
  14

  
	
  Section 9.09

  	
  Restriction

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE X CONCERNING THE
  TRUSTEES

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Acceptance of Trusts and Duties

  	
  15

  
	
  Section 10.02

  	
  Furnishing of Documents

  	
  15

  
	
  Section 10.03

  	
  Reliance; Advice of Counsel

  	
  16

  
	
  Section 10.04

  	
  Not Acting in Individual Capacity

  	
  16

  
	
  Section 10.05

  	
  Representations and Warranties of Resident Trustee

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI COMPENSATION OF
  TRUSTEES

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 11.01

  	
  Fees and Expenses of the Trustees

  	
  16

  
	
  Section 11.02

  	
  Indemnification

  	
  16

  
	
  Section 11.03

  	
  Payments to the Trustees

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII TERMINATION OF
  TRUST

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 12.01

  	
  Termination of Trust

  	
  17

  
	
  Section 12.02

  	
  Distribution of Assets

  	
  17

  
	
  Section 12.03

  	
  No Termination by Owners

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII SUCCESSOR
  TRUSTEES AND ADDITIONAL TRUSTEES

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 13.01

  	
  Resignation of Trustees; Appointment of Successor

  	
  18

  
	
  Section 13.02

  	
  Appointment of Additional Trustees

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV TAX MATTERS
  PARTNER

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 14.01

  	
  Tax Matters Partner

  	
  19

  
	
  Section 14.02

  	
  Notice of Tax Audit

  	
  19

  
	
  Section 14.03

  	
  Authority to Extend Period for Assessing Tax

  	
  19

  



 


ii

















 


	
  Section 14.04

  	
  Choice of Forum for Filing Petition for Readjustment

  	
  19

  
	
  Section 14.05

  	
  Authority to Bind Owners by Settlement Agreement

  	
  19

  
	
  Section 14.06

  	
  Notices Sent to the Internal Revenue Service

  	
  20

  
	
  Section 14.07

  	
  Indemnification of Tax Matters Partner

  	
  20

  
	
  Section 14.08

  	
  Approval of Tax Matters Partner’s Decisions

  	
  20

  
	
  Section 14.09

  	
  Participation by Owners in Internal Revenue Service
  Administrative Proceedings

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV MISCELLANEOUS

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 15.01

  	
  Supplements and Amendments

  	
  20

  
	
  Section 15.02

  	
  No Legal Title to Trust Property in Owner

  	
  20

  
	
  Section 15.03

  	
  Limitations on Rights of Others

  	
  21

  
	
  Section 15.04

  	
  Notices

  	
  21

  
	
  Section 15.05

  	
  Severability

  	
  21

  
	
  Section 15.06

  	
  Separate Counterparts

  	
  21

  
	
  Section 15.07

  	
  Successors and Assigns

  	
  21

  
	
  Section 15.08

  	
  Headings

  	
  21

  
	
  Section 15.09

  	
  Governing Law

  	
  21

  
	
  Section 15.10

  	
  Third Party Beneficiaries

  	
  22

  
	
  Section 15.11

  	
  General Interpretive Principles

  	
  22

  
	
   

  	
   

  
	
  SCHEDULE
  I

  	
  CAPITAL
  CONTRIBUTIONS AND PERCENTAGE INTERESTS

  
	
   

  	
   

  
	
  EXHIBIT A

  	
  FORM OF
  TRUST CERTIFICATE

  
	
  EXHIBIT B

  	
  FORM OF
  ACCESSION AGREEMENT

  
	
  EXHIBIT C
  

  	
  FORM OF
  CERTIFICATE OF TRUST

  



 


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TRUST
AGREEMENT, dated as of July     , 2010, among The
National Collegiate Funding II, LLC, a Delaware limited liability company (“NCF
II”), [U.S. Bank National Association], a national banking association (the
“Trustee”), [U.S. Bank Trust National Association], a national banking
association (the “Resident Trustee” and, together with the Trustee, the “Trustees”),
and, with respect to Sections 2.03, 2.05(b), 4.02(d), 9.01, 9.06, 10.01(ii),
12.01 and 13.01 and Articles V and VI only, SunTrust Bank, a Georgia
state-chartered banking corporation (“SunTrust”).


 


WHEREAS,
the trust created hereby shall be known as the “MG Student Loan Trust 2010-1”
(the “Trust”), in which name the Trustees may conduct the business of
the Trust, make and execute contracts, and sue and be sued; and


 


WHEREAS,
the Trust has been created to hold Trust Loans (as defined below) pursuant to
the terms and conditions of the Loan Program Agreement (as defined below) for
the benefit of SunTrust and The First Marblehead Corporation, a Delaware
corporation (“FMC”).


 


NOW
THEREFORE, in consideration of the premises and of the mutual agreements herein
contained and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:


 


ARTICLE I


DEFINITIONS


 


Section 1.01           Capitalized Terms.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Loan Program Agreement.  For all purposes
of this Agreement, the following terms shall have the meanings set forth below:


 


“Administration
Agreement” means the Administration Agreement, dated as of July    ,
2010, among the Trust, the Trustee, and First Marblehead Data Services, Inc.,
as Administrator, as it may be amended from time to time.


 


“Administrator”
means First Marblehead Data Services, Inc., a Massachusetts corporation,
as Administrator under the Administration Agreement, or any successor
Administrator as appointed pursuant to the terms of the Administration
Agreement.


 


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


 


“Agreement”
means this Trust Agreement, as it may be amended or restated from time to time.


 


“Authorized
Officer” means any officer of the Trustee or the Resident Trustee who is
authorized to act for the Trustee or the Resident Trustee, as the case may be,
in matters relating to, and binding upon, the Trust and whose name appears on a
list of such authorized officers furnished by the Trustee or the Resident
Trustee, as the case may be, as such list may be amended or supplemented from
time to time.


 


“Bankruptcy
Action” has the meaning set forth in Section 4.01(b)(iv).


 


“Beneficial
Interest” as to any Owner, means all or any part of the interest of that
Owner in the Trust, including without limitation its (a) right to a
distributive share of the assets of the Trust, and (b)


 

















 


right
to direct or consent to actions of the Trustee and otherwise participate in the
management of and control the affairs of the Trust.


 


“Business
Day” means any day that is not a Saturday, Sunday or any other day on which
commercial banking institutions in Delaware, Georgia or Massachusetts are
authorized or obligated by law or executive order to be closed.


 


“Capital
Contribution” means the amount of money contributed or deemed to have been
contributed by an Owner to the capital of the Trust, which shall be as set
forth on Schedule I to this Agreement.


 


“Certificate
of Trust” means the Certificate of Trust of the Trust filed with the
Secretary of State.


 


“Code”
means the Internal Revenue Code of 1986, as amended.


 


“Deemed
Distribution” shall have the meaning set forth in Section 5.03.


 


“Distribution”
means any money or other property distributed to an Owner with respect to its
Beneficial Interest; provided that any
money in the Participation Account shall not be eligible for Distribution to an
Owner.


 


“Distribution
Date” means the third Business Day following a day on which the Trustee
receives instructions from the Administrator pursuant to Section 5.02 (provided that the Administrator shall not deliver such
instructions more than three times in any calendar month), or such other
Business Day as the Administrator and Trustee shall agree in writing.


 


“Distribution
Date Statement” means the statement described as such in Section 5.04.


 


“Eligible
Investments” means those investments designated in writing from time to
time by the Administrator to the Trustee or, if no written directions are
given, shall mean [**].


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.


 


“Fiscal
Year” means the twelve-month period ending on June 30 each year or
such portion thereof as the Trust may be in existence.


 


“FMC”
means The First Marblehead Corporation, a Delaware corporation.


 


“FMC
Deemed Distribution” shall have the meaning set forth in Section 5.03.


 


“FMER”
means First Marblehead Education Resources, Inc., a Delaware corporation.


 


“Loan
Program Agreement” means the Loan Program Agreement, executed April 20,
2010, by and among FMER, FMC and SunTrust.


 


“Majority
Owners” shall have the meaning set forth in Section 4.03.


 


“1933
Act” has the meaning set forth in Section 3.02(a).


 


“Owner”
means NCF II and any other Person who becomes an owner of a Beneficial
Interest.


 


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“Participation
Account Deposit Agreement” means the Participation Account Deposit
Agreement, dated as of July
          , 2010 by and
between SunTrust and FMC.


 


“Percentage
Interest” means the initial undivided beneficial interest in the Trust
Property of an Owner expressed as a percentage of the total initial undivided
beneficial interests in the Trust Property. References to Percentage Interests
herein shall be solely for the purpose of certificating Owners’ interests
hereunder and for any other purpose specified in this Agreement.


 


“Periodic
Filings” means any filings or submissions that the Trust is required to
make with any state or federal regulatory agency or under the Code.


 


“Person”
means any individual, corporation, partnership, joint venture, limited
liability company, association, trust (including any beneficiary thereof),
estate, custodian, nominee, unincorporated organization or government or any
agency or political subdivision thereof.


 


“Plan”
has the meaning set forth in Section 3.04(b).


 


“Plan
Assets” has the meaning set forth in Section 3.04(b).


 


“Regulations”
means the federal income tax regulations promulgated by the United States
Treasury Department under the Code as such Regulations may be amended from time
to time.


 


“Resident
Trustee” means [U.S. Bank Trust National Association, a national banking
association with its principal place of business in the State of Delaware], not
in its individual capacity but solely as trustee, or any successor thereto,
duly appointed in accordance with Section 13.01 hereof.


 


“Secretary
of State” means the office of the Secretary of State of the State of
Delaware.


 


“Special
Servicer” means FMER as Special Servicer under the Special Servicing
Agreement, or any successor Special Servicer as appointed pursuant to the terms
of the Special Servicing Agreement.


 


“Special
Servicing Agreement” means the Special Servicing Agreement, dated as of July
    , 2010, between FMER, FMC, the Trust and, solely for
purposes of Sections 2(B)(v), 2(B)(vi), 5, 7, 18(A) and 18(G) only,
SunTrust.


 


“Statutory
Trust Statute” means the Delaware Statutory Trust Act, 12 Del. Code §3801 et seq.


 


“SunTrust”
means SunTrust Bank, a Georgia state-chartered banking corporation.


 


“Transfer”
means the sale, transfer or other assignment of all of an Owner’s right, title
and interest in all or a portion of such Owner’s Beneficial Interest.


 


“Trust”
means the MG Student Loan Trust 2010-1 established by this Agreement.


 


“Trust
Certificate” means a certificate evidencing the Beneficial Interest of an Owner
in substantially the form attached hereto as Exhibit A.


 


“Trust
Loan” means (i) any Charged Off Loan and (ii) any Purchased Loan,
in each case which has been assigned to the Trust from time to time pursuant to
the Loan Program Agreement.


 


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“Trust
Property” means all right, title and interest of the Trust or the Trustee
on behalf of the Trust in and to any property contributed to the Trust by the
Owners or otherwise acquired by the Trust.


 


“Trust
Related Agreements” means any instruments or agreements signed by the
Trustee on behalf of the Trust, including without limitation, the
Administration Agreement and the Special Servicing Agreement.


 


“Trustee”
means [U.S. Bank National Association], not in its individual capacity but
solely as trustee, or any successor thereto, duly appointed in accordance with Section 13.01
hereof.


 


“Trustees”
mean the Resident Trustee and the Trustee. 
For the avoidance of doubt, unless the context requires otherwise, the
singular term “Trustee” does not include the Resident Trustee.


 


ARTICLE II


ORGANIZATION


 


Section 2.01                                Name.  The Trust
continued hereby shall be known as the MG Student Loan Trust 2010-1, in which
name the Trustees may take any action as provided herein.


 


Section 2.02                                Office.  The
principal place of business and principal office of the Trust shall be in care
of the Resident Trustee, at the address set forth in Section 15.04.  The Trust shall also have an office at [One
Federal Street, Boston, Massachusetts 02110].


 


Section 2.03                                Purposes and Powers.


 


(a)                                  The purpose of the Trust is, and the Trust shall have power and authority
and is hereby authorized, and each of the Trustees in the name and on behalf of
the Trust is hereby authorized, to engage in the following activities and only
these activities:


 


(i)                                     To acquire and manage Trust Loans in accordance with the terms and
conditions of the Loan Program Agreement and the Special Servicing Agreement;


 


(ii)                                  To engage in those activities and to enter into such agreements that are
required in connection with the Participation Account, including distributions
made to the Participation Account pursuant to the Loan Program Agreement and
the Participation Account Deposit Agreement;


 


(iii)                               To enter into, execute, deliver and perform the Trust Related Agreements
and to provide for the administration of the Trust and the servicing and
management of Trust Loans;


 


(iv)                              To engage in those activities and to enter into such agreements that are
necessary, suitable or convenient to accomplish the foregoing or are incidental
thereto or connected therewith; and


 


(v)                                 To engage in such other activities as may be required in connection with
the acquisition, management or disposition of the Trust Property and
Distributions to Owners.


 


(b)                                 The operations of the Trust shall be conducted as follows:


 


(i)                                     The Trust will act solely in its own name and the Trustee or other agents
selected in accordance with this Agreement will act on behalf of the Trust
subject to direction by the 


 


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Owners
or SunTrust, as applicable, and as provided herein, but such action shall not
be in violation of the terms of this Agreement;


 


(ii)                                  The Trust shall ensure that all Recoveries on the Charged Off Loans shall
be deposited into the Participation Account in accordance with the terms and
conditions of the Loan Program Agreement and the Special Servicing Agreement;


 


(iii)                               The Trust shall ensure that all collections on the Purchased Loans shall
be deposited into the [NCF II Account] in accordance with the terms and
conditions of the Special Servicing Agreement;


 


(iv)                              The Trust’s funds and assets shall at all times be maintained separately
from those of the Owners and any of their respective Affiliates;


 


(v)                                 The Trust shall maintain complete and correct books, minutes of the
meetings and proceedings of the Owners, and records of accounts;


 


(vi)                              The Trust shall conduct its business at the office of the Resident
Trustee and will use stationery and other business forms of the Trust under its
own name and not that of the Owners or any of their respective Affiliates, and
will avoid the appearance (A) of conducting business on behalf of any
Owner or any Affiliate of an Owner or (B) that the assets of the Trust and
the Trust Loans are available to pay the creditors of the Trustees or any
Owner.  For the avoidance of doubt, the
assets of the Trust shall not include the Participation Account;


 


(vii)                           To the extent not otherwise paid by another Person, the Trust’s operating
expenses shall be paid out of its own funds, which shall not include any funds
in the Participation Account; and


 


(viii)                        The Trust shall not incur, guarantee or assume any debt nor hold itself
out as being liable for the debts of any entity, including any Owner or any Affiliates
of any Owner.


 


(c)                                  For the avoidance of doubt,
the Trust shall not have the power or authority to sell or otherwise dispose of
any Charged Off Loans except for depositing Recoveries in the Participation
Account in accordance with the terms and conditions of the Loan Program
Agreement and the Special Servicing Agreement.


 


Section 2.04                                Appointment of the Trustees.  NCF
II hereby appoints the Trustee and the Resident Trustee as trustees of the
Trust, to have all the rights, powers and authority set forth herein and in the
Statutory Trust Statute.  The Trustee
acknowledges receipt in trust from NCF II, of the sum of One Dollar ($1.00),
constituting the initial Trust Property.


 


Section 2.05                                Appointment of Special Servicer.


 


(a)                                  The Trust hereby hires, designates and appoints FMER as the Special
Servicer under the Special Servicing Agreement to perform the Special Services
(as defined in the Special Servicing Agreement), and the Special Servicer
accepts such appointment and agrees to perform such duties with respect to the
Trust Loans in accordance with the terms of this Agreement and the Special
Servicing Agreement.


 


(b)                                 In the event of the resignation or removal of the Special Servicer
pursuant to the Special Servicing Agreement, SunTrust shall, in accordance with
the terms and conditions of the Special 


 


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Servicing Agreement, appoint a successor to the
Special Servicer to perform the Special Services for the Charged Off Loans held
by the Trust.


 


Section 2.06                                Declaration of Trust.  The
Trustee hereby declares that it will hold the Trust Property in trust upon and
subject to the conditions set forth herein for the use and benefit of the
Owners, subject to the obligations of the Trustee under this Agreement.  It is the intention of the parties hereto
that the Trust constitute a statutory trust under the Statutory Trust Statute
and that this Agreement constitute the governing instrument of the Trust.  The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Secretary of State
in the form attached as Exhibit C hereto.


 


Section 2.07                                No Liability of Owners for Expenses or
Obligations of Trust.  No Owner shall be liable for any liability,
expense or other obligation of the Trust.


 


Section 2.08                                Situs of Trust.  The Trust
will be located in the State of Delaware. 
The Trust shall not have any employees in any state other than in the
State of Delaware and payments will be received by the Trustee on behalf of the
Trust only in the Commonwealth of Massachusetts, the State of Delaware or the
State of Georgia and payments will be made by the Trustee on behalf of the
Trust only from the Commonwealth of Massachusetts, the State of Delaware or the
State of Georgia.


 


ARTICLE III

TRUST CERTIFICATES AND TRANSFER OF INTEREST


 


Section 3.01                                Issuance of Trust Certificate.


 


(a)                                  As of the date hereof, as set forth on Schedule I attached hereto,
NCF II has been issued a Trust Certificate evidencing one hundred percent
(100%) of the Beneficial Interest in the Trust.


 


(b)                                 Each Trust Certificate shall be executed by manual signature on behalf of
the Resident Trustee by one of its Authorized Officers.  Trust Certificates bearing the manual
signature of an individual who was, at the time when such signature was
affixed, authorized to sign on behalf of the Resident Trustee shall bind the
Trust, notwithstanding that such individual has ceased to be so authorized
prior to the delivery of such Trust Certificate or does not hold such office at
the date of such Trust Certificate.  Each
Trust Certificate shall be dated the date of its issuance.


 


Section 3.02                                Registration and Transfer of Certificates.


 


(a)                                  The Resident Trustee shall maintain at its office referred to in Section 2.02,
or at the office of any agent appointed by it and approved in writing by the
Owners at the time of such appointment, a register for the registration and
Transfer of Trust Certificates.  No
Transfer of a Beneficial Interest shall be made unless such Transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the “1933 Act”), and state securities laws, or is
exempt from the registration requirements under the 1933 Act and state
securities laws.


 


(b)                                 The registered Owner of any Trust Certificate may Transfer all or any
portion of the Beneficial Interest evidenced by such Trust Certificate upon
surrender thereof to the Resident Trustee accompanied by the documents required
by Section 3.04.  Such Transfer may
be made by the registered Owner in person or by its attorney duly authorized in
writing upon surrender of the Trust Certificate to the Resident Trustee
accompanied by a written instrument of Transfer and with such signature
guarantees and evidence of authority of the Persons signing the instrument of
Transfer as the Resident Trustee may reasonably require.  Promptly upon the receipt of such documents
and receipt by the Resident Trustee of the transferor’s Trust Certificate, the
Resident Trustee shall (i) record the name of such transferee as an 


 


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Owner and its Percentage Interest in the Trust
Certificate register, (ii) in the name and on behalf of the Trust issue,
execute and deliver to such Owner a Trust Certificate evidencing such Percentage
Interest and (iii) notify the Trustee in writing of such transfer and the
details thereof.  In the event a
transferor Transfers only a portion of its Beneficial Interest, the Resident
Trustee shall register and issue to such transferor a new Trust Certificate
evidencing such transferor’s new Percentage Interest.  Subsequent to a Transfer and upon the
issuance of the new Trust Certificate or Trust Certificates, the Resident
Trustee shall cancel and destroy the Trust Certificate surrendered to it in connection
with such Transfer.  Each of the Trustees
may treat the Person in whose name any Trust Certificate is registered as the
sole Owner of the Beneficial Interest in the Trust evidenced by such Trust
Certificate.


 


(c)                                  As a condition precedent to any registration of Transfer, the Resident
Trustee may require the payment of a sum sufficient to cover the payment of any
tax or taxes or other governmental charges required to be paid in connection
with such Transfer and any other reasonable expenses connected therewith.


 


(d)                                 The Trust Certificates may not be acquired or held by or for the account
of a Plan, except as permitted under Section 3.04(b) herein.


 


Section 3.03                                Lost, Stolen, Mutilated or Destroyed
Certificates.  If (a) any mutilated Trust Certificate
is surrendered to the Resident Trustee, or (b) the Resident Trustee
receives evidence to its satisfaction that any Trust Certificate has been
destroyed, lost or stolen, and upon proof of ownership satisfactory to the
Resident Trustee together with such security or indemnity as may be requested
by the Resident Trustee to save it harmless, unless the Trust has notice that
the Trust Certificate has been acquired by a protected purchaser and the
Resident Trustee has actual knowledge or has received written notice thereof,
the Resident Trustee in the name and on behalf of the Trust shall execute and
deliver a new Trust Certificate for the same Percentage Interest as the Trust
Certificate so mutilated, destroyed, lost or stolen, of like tenor and bearing
a different issue number, with such notations, if any, as the Resident Trustee
shall determine.  In connection with the
issuance of any new Trust Certificate under this Section 3.03, the
Resident Trustee may require the payment by the registered Owner thereof of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the reasonable
fees and expenses of the Resident Trustee) connected therewith.  Any replacement Trust Certificate issued pursuant
to this Section 3.03 shall constitute complete and indefeasible evidence
of ownership of a Beneficial Interest, as if originally issued, whether or not
the lost, stolen or destroyed Trust Certificate shall be found at any time.


 


Section 3.04                                Limitation on Transfer of Ownership Rights.


 


(a)                                  No Transfer of all or any part of a Beneficial Interest after the date
hereof shall be made to any Person unless (i) such Person delivers to the
Resident Trustee an accession agreement substantially in the form of Exhibit B
hereof, and (ii) the Resident Trustee shall have received a written
opinion of counsel in form and substance satisfactory to the Resident Trustee
stating that such Transfer is exempt from the 1933 Act and any applicable state
securities laws.


 


(b)                                 No Transfer of all or any part of a Beneficial Interest shall be made to
any employee benefit plan or certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Keogh plans and bank
collective investment funds and insurance company general or separate accounts
in which such plans, accounts or arrangements are invested, that are subject to
ERISA or Section 4975 of the Code (collectively, “Plan”), nor to
any Person acting, directly or indirectly, on behalf of any such Plan or any
Person acquiring the Beneficial Interest with “plan assets” of a Plan within
the meaning of the ERISA and Department of Labor regulation promulgated at 29
C.F.R. § 2510.3-101 (“Plan Assets”) unless the Resident Trustee is
provided with an opinion of counsel which establishes to 


 


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the satisfaction of the
Resident Trustee that the purchase of the Beneficial Interest is permissible
under applicable law, will not constitute or result in any prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Owners, the Trustees or the Trust to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the Code) in
addition to that undertaken in this Agreement, which opinion of counsel shall
not be an expense of the Owners, the Trustees or the Trust.


 


(c)                                  No Transfer of all or any part of a Beneficial Interest shall be
permitted, and no such transfer shall be effective hereunder, if such transfer
would potentially cause the Trust to be classified as a publicly traded
partnership, taxable as a corporation for federal income tax purposes, by
causing the Trust to have more than 100 Owners at any time during any taxable
year of the Trust.


 


(d)                                 Notwithstanding any other provision herein or elsewhere, to the fullest
extent permitted by law, other than to receive and examine the same to
determine whether any accession agreement, opinion of counsel or other document
or instrument that is required to be and is delivered to the Resident Trustee
pursuant to this Section 3.04 substantially conforms on its face to the
requirements therefor set forth in this Section 3.04, the Resident Trustee
shall have no obligation or responsibility for determining or ensuring that any
issuance, Transfer, or exchange or proposed or purported issuance, Transfer or
exchange of all or any part of a Beneficial Interest or Trust Certificate is
permitted under or in accordance or compliance with this Agreement, the 1933
Act or any other applicable federal or state securities law, and neither of the
Trustees shall have any personal liability to any Person in connection with any
issuance, Transfer or exchange or proposed or purported issuance, Transfer or
exchange (and/or registration thereof) that is not permitted under or in
accordance or compliance with this Agreement, the 1933 Act or any other
applicable federal or state securities law.


 


Section 3.05                                Assignment of Right to Distributions.  An
Owner may assign all or any part of its right to receive Distributions
hereunder, but such assignment (in the absence of a permitted Transfer) shall
effect no change in the ownership of the Trust.


 


ARTICLE IV

CONCERNING THE OWNERS


 


Section 4.01                                Action by Owners with Respect to Certain Matters.


 


(a)                                  Each of the Trustees will take such action or refrain from taking such
action under this Agreement or any Trust Related Agreement as it shall be
directed in writing to take or refrain from taking pursuant to an express
provision of this Agreement or such Trust Related Agreement or, with respect to
nonministerial matters, as it shall be directed by the Majority Owners.


 


(b)                                 Without limiting the generality of the foregoing, in connection with the
following nonministerial matters, neither of the Trustees will take any action,
nor will they have authority to take any such action, unless they receive prior
written approval from the Majority Owners:


 


(i)                                     Initiate any claim or lawsuit by the Trust and compromise any claim or
lawsuit brought by or against the Trust, except for claims or lawsuits
initiated in the ordinary course of business by the Trust or its agents or
nominees for collection on the Trust Loans;


 


(ii)                                  Amend, change or modify this Agreement or any Trust Related Agreement;


 


(iii)                               To the fullest extent permitted by applicable law, file a voluntary
petition in bankruptcy for the Trust; and


 


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(iv)                              To the fullest extent permitted by applicable law, (A) institute
proceedings to have the Trust declared or adjudicated bankrupt or insolvent, (B) consent
to the institution of bankruptcy or insolvency proceedings against the Trust, (C) file
a petition or consent to a petition seeking reorganization or relief on behalf
of the Trust under any applicable federal or state law relating to bankruptcy, (D) consent
to the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or any similar official) of the Trust or a substantial portion of the property
of the Trust, (E) make any assignment for the benefit of the Trust’s
creditors, (F) cause the Trust to admit in writing its inability to pay
its debts generally as they become due, or (G) take any action, or cause
the Trust to take any action, in furtherance of any of the foregoing (any of
the above, a “Bankruptcy Action”). 
To the fullest extent permitted by applicable law, no Owner shall have
the power to take, and no Owner shall take, any Bankruptcy Action with respect
to the Trust or direct either of the Trustees to take any Bankruptcy Action
with respect to the Trust.


 


(c)                                  No Owner shall take any action to cause the filing of an involuntary
petition in bankruptcy against the Trust.


 


Section 4.02                                Action Upon Instructions.


 


(a)                                  The Trustees shall take such action or actions as may be specified in this
Agreement or in any instructions delivered in accordance with this Article IV
or Article IX; provided, however,
that neither of the Trustees shall be required to take any such action if it
shall have reasonably determined, or shall have been advised by counsel, that
such action (i) is contrary to the terms hereof or of any document
contemplated hereby to which the Trust or either of the Trustees is a party or
is otherwise contrary to law, (ii) is likely to result in personal
liability on the part of either of the Trustees, unless the Owners shall have
provided to the Trustees indemnification or security reasonably satisfactory to
the Trustees against all costs, expenses and liabilities arising from the
Trustees’ taking of such action, or (iii) would adversely affect the
status of the Trust for federal income tax purposes.


 


(b)                                 No Owner shall direct the Trustees to take or refrain from taking any
action contrary to this Agreement or any Trust Related Agreement, nor shall the
Trustees be obligated to follow any such direction, if given.


 


(c)                                  Notwithstanding anything contained herein or in any Trust Related
Agreement to the contrary, the Trustees shall not be required to take any
action in any jurisdiction other than in the State of Delaware if the taking of
such action will (i) require the consent or approval or authorization or
order from, or the giving of notice to, or the registration with or taking of
any action in respect of, any state or other governmental authority or agency
of any jurisdiction other than the State of Delaware; (ii) result in any
fee, tax or other governmental charge under the laws of any jurisdiction or any
political subdivision thereof in existence on the date hereof other than the
State of Delaware becoming payable by either of the Trustees; or (iii) subject
either of the Trustees to personal jurisdiction in any jurisdiction other than
the State of Delaware for causes of action arising from acts unrelated to the
consummation of the transactions by the Trustees contemplated hereby.


 


(d)                                 The Trustees shall not have the power to remove the Administrator under
the Administration Agreement or appoint a successor Administrator pursuant to
the Administration Agreement without written instruction by the Owners and
SunTrust.


 


Section 4.03                                Majority Control. 
Except as otherwise expressly provided in this Agreement, any action
which may be taken or consent or instructions which may be given by the Owners
under this Agreement may be taken by the Owners holding in the aggregate more
than fifty percent (50%) of the Percentage Interests at the time of such action
(the “Majority Owners”).  Any
written notice of the 


 


9

















 


Owners delivered
pursuant to this Agreement shall be effective only if signed by the Majority
Owners at the time of the delivery of such notice.


 


Section 4.04                                Representations and Warranties of NCF II.  NCF
II hereby represents and warrants to the Trustees as follows:


 


(a)                                  Upon the receipt of the Trust Property by the Trustees under this Agreement,
the Trustees on behalf of the Trust will have good title to the Trust Property
free and clear of any lien.


 


(b)                                 Except for the filing of the Certificate of Trust with the Secretary of
State, no consent, approval, authorization or order of, or filing with, any
court or regulatory, supervisory or governmental agency or body is required
under current law in connection with the execution, delivery or performance by
NCF II of this Agreement or the consummation of the transactions contemplated
hereby; provided, however, that no
representation or warranty is made herein as to compliance with federal
securities laws, the securities or “blue sky” laws of any state or any state
statute or regulation that requires licensure or registration of small loan
lenders, loan brokers or loan arrangers.


 


(c)                                  This Agreement has been duly and validly authorized, executed and
delivered by, and constitutes a valid and binding agreement of, NCF II,
enforceable in accordance with its terms.


 


Section 4.05                                Power of Attorney.


 


(a)                                  General.  Each Owner hereby irrevocably constitutes and
appoints the Administrator, with full power of substitution, such Owner’s true
and lawful attorney-in-fact, in such Owner’s name, place and stead, with full
power to act jointly and severally, to make, execute, sign, acknowledge, swear
to, verify, deliver, file, record and publish the following documents:


 


(i)                                     Any certificate, instrument or document to be filed by the Owners under
the laws of any state, or with any governmental agency in connection with this
Agreement;


 


(ii)                                  Any certificate, instrument or document which may be required to effect
the continuation or the termination of the Trust, including any amendments to
this Agreement; provided that such continuation
or termination is in accordance with the terms of this Agreement; and


 


(iii)                               Any written notice, instruction, instrument or document under Article XIII
of this Agreement.


 


(b)                                 Duration of Power of Attorney.  It is expressly intended by each of the
Owners that the Power of Attorney granted under this Section 4.05 is
coupled with an interest, and it is agreed that such Power of Attorney shall
survive (i) the dissolution, death or incompetency of any Owner and (ii) the
assignment by any Owner of the whole or any portion of such Owner’s Beneficial
Interest.


 


ARTICLE V

INVESTMENT, APPLICATION OF TRUST FUNDS


 


Section 5.01                                Investment of Trust Funds. 
Unless otherwise directed in writing by the Owners, income with respect
to and proceeds of the Trust Property which is received by the Trustee more than
one day prior to a Distribution Date shall be invested and reinvested by the
Trustee in Eligible Investments; provided,
however, that Recoveries shall,
at no time, be invested by the Trustee in Eligible Investments.  Interest earned from such investment and
reinvestment shall be credited to the Trust Property.


 


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Section 5.02                                Application of Funds. 
Income with respect to and proceeds of Trust Property (other than
Recoveries) held by the Trustee on a Distribution Date shall be applied by the
Trustee on such Distribution Date in accordance with written instructions of
the Administrator received by the Trustee not less than three Business Days
prior to such Distribution Date, in the following order:


 


(a)                                  First, to the extent
not paid by another Person, to pay any amounts due to the Trustee or the
Resident Trustee under this Agreement;


 


(b)                                 Second, to the extent
not paid by another Person, to pay any amounts due to the Administrator under
the Administration Agreement;


 


(c)                                  Third, to the extent
not paid by another Person, to pay any amounts then due to the Special Servicer
under the Special Servicing Agreement and to any other Person under the Trust
Related Agreements;


 


(d)                                 Fourth, to the extent
not paid by another Person, to pay any other expenses of the Trust; and


 


(e)                                  Fifth, to the Owners, pro rata
based upon their Percentage Interests.


 


All
payments to be made under this Agreement by the Trustee shall be made only from
the income and proceeds of the Trust Property (other than Recoveries) and only
to the extent that the Trustee has actually received such income or proceeds.


 


Section 5.03                                Remittance of Recoveries to the Participation
Account.  All Recoveries received by the Trustee or the
Trust (including any such amounts received by the Special Servicer and
deposited into the FMER Collection Account (as defined in the Special Servicing
Agreement)) shall be remitted to the Participation Account on a [weekly] basis
in accordance with the terms and conditions of the Special Servicing
Agreement.  Any amounts remitted to the
Participation Account by the Trustee or the Trust, including but not limited to
Recoveries, shall be deemed to be a distribution by the Trust to the Owners with
respect to their Beneficial Interest (each a “Deemed Distribution”); provided that, for so long as the sole
Owner of the Trust is NCF II, NCF II hereby agrees that any amounts remitted to
the Participation Account by the Trustee or the Trust and which is a Deemed
Distribution to the Owner shall further be deemed a distribution to FMC in its
capacity as the sole member of NCF II pursuant to and in accordance with the
terms and conditions of that certain Limited Liability Company Agreement of NCF
II effective as of April 13, 2009 (each, a “FMC Deemed Distribution”).  Notwithstanding the Deemed Distribution and
the FMC Deemed Distribution, once any amounts, including but not limited to
Recoveries, are remitted to the Participation Account by the Trustee or the
Trust, (a) such amounts shall be the property of FMC or SunTrust, as
determined in accordance with the Loan Program Agreement, (b) such amounts
shall be distributed pursuant to the terms and conditions of the Loan Program
Agreement, and (c) FMC’s rights to such amounts deposited into the Participation
Account shall be limited to those rights set forth in the Loan Program
Agreement and shall be subject to the rights of SunTrust pursuant to the Loan
Program Agreement.


 


Section 5.04                                Distribution Date Statement. 
Unless otherwise instructed in writing by the Administrator or the
Majority Owners, with each Distribution to an Owner pursuant to Section 5.02,
the Trustee shall deliver a “Distribution Date Statement” setting forth,
for the period since the preceding Distribution Date (or in the case of the
initial Distribution Date, since the formation of the Trust):


 


(a)                                  Income and proceeds received
by the Trustee with respect to the Trust Property (other than Recoveries);


 


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(b)                                 Amounts paid to the Trustee
and the Resident Trustee;


 


(c)                                  Amounts paid to any Person
pursuant to a Trust Related Agreement; and


 


(d)                                 Amounts paid for other
expenses of the Trust.


 


Section 5.05                                Method of Payment. 
Except as set for in Section 5.03, all amounts payable to an Owner
pursuant to this Agreement shall be paid by the Trustee to the Owner by check
payable to the Owner, mailed first class to the address of the Owner appearing
on the register maintained pursuant to Section 3.02, or by crediting the
amount to be distributed to the Owner to an account maintained by the Owner
with the Trustee or by transferring such amount by wire transfer in immediately
available funds to a banking institution with bank wire transfer facilities for
the account of the Owner, as instructed in writing from time to time by the
Owner.  The Trustee may require the Owner
to pay any wire transfer fees incurred in connection with any wire transfer
made to the Owner.


 


Section 5.06                                No Segregation of Funds; No Interest. 
Subject to Section 5.01 and except for funds to be deposited in the
Participation Account pursuant to the Loan Program Agreement, the Special
Servicing Agreement and the Participation Account Deposit Agreement, funds
received by the Trustee need not be segregated in any manner except to the
extent required by law and may be deposited under such general conditions as
may be prescribed by law, and the Trustee shall not be personally liable for
any interest thereon.


 


ARTICLE VI

TRUST LOANS


 


Section 6.01                                Acquisition of Trust Loans.  From
time to time the Trustee, on behalf of the Trust, shall accept Trust Loans as
are delivered to it pursuant to the Loan Program Agreement.  The Trustee, on behalf of the Trust, shall
not be allowed to transfer, sell, or otherwise dispose of one or more Charged Off Loans except for depositing Recoveries in the Participation
Account in accordance with the terms and conditions of the Loan Program
Agreement and the Special Servicing Agreement.


 


Section 6.02                                Application of Funds in the Participation
Account.  The Participation Account is not Trust
Property and any amounts deposited in the Participation Account, including, but
not limited to, Recoveries, shall be distributed pursuant to the terms and
conditions of the Loan Program Agreement and shall not be distributed pursuant
to this Agreement.


 


ARTICLE VII

TAX CHARACTERIZATION


 


Section 7.01                                Tax Characterization.  It is
the intention of the parties hereto that, solely for purposes of federal income
taxes, state and local income taxes, and any other taxes imposed on, measured
by or based upon gross or net income, (a) if there is only one Owner, the
Trust shall be treated as a disregarded entity of its owner pursuant to §
301.7701-2(c)(2) of the Regulations, (b) if there is more than one
Owner, the Trust shall be treated as a partnership, and (c) the provisions
of this Agreement shall be construed in accordance with such intent.  The parties hereto agree that, unless
otherwise required by appropriate tax authorities, the Trust will file or cause
to be filed annual or other necessary returns, reports and other forms
consistent with such characterization of the Trust.


 


12

















 


ARTICLE VIII

FEDERAL INCOME TAX ALLOCATIONS


 


Section 8.01                                Federal Income Tax Allocations.  Net
income of the Trust for any period as determined for federal income tax
purposes (and each item of income, gain, loss and deduction entering into the
computation thereof) shall be allocated to the Owners, pro rata based upon their Percentage Interests.


 


ARTICLE IX

AUTHORITY AND DUTIES OF THE TRUSTEES


 


Section 9.01                                General Authority.  The
Trustees are authorized to take all actions required or permitted to be taken
by them pursuant to the terms of this Agreement, the Trust Related Agreements
and the Statutory Trust Statute.  The
Trustees are further authorized from time to time to take such action as the
Administrator, the Special Servicer, or SunTrust, as the case may be, directs
in writing with respect to the Trust Related Agreements.


 


Section 9.01                                Specific Authority.  The
Trustees are hereby authorized and directed to take the following actions:


 


(a)                                  Execute the Certificate of Trust;


 


(b)                                 Execute and deliver each of the Trust Related Agreements and the Trust
Certificates on behalf of the Trust and any other document contemplated by the
foregoing, in each case in such form as the Administrator shall approve, as
evidenced conclusively by the Trustee’s or the Resident Trustee’s execution
thereof; and


 


(c)                                  Execute and deliver on behalf of the Trust any documents necessary or
appropriate, in such form as the Administrator shall approve, as evidenced
conclusively by the Trustee’s or the Resident Trustee’s execution thereof,
relating to the acquisition, servicing and management of Trust Loans.


 


Section 9.03                                General Duties.  It shall
be the duty of the Trustees to discharge (or cause to be discharged) all of
their respective responsibilities pursuant to the terms of this Agreement in
the interest of the Owners. 
Notwithstanding the foregoing, the Trustees shall be deemed to have
discharged their duties and responsibilities hereunder and under the Trust
Related Agreements to the extent (a) the Administrator has agreed herein
or in the Administration Agreement to perform such acts or to discharge such duties
of the Trustees hereunder or under any Trust Related Agreement, and the
Trustees shall not be held liable for the default or failure of the
Administrator to carry out its obligations hereunder or under the
Administration Agreement, and (b) the Special Servicer has agreed herein
or in the Special Servicing Agreement to perform such acts or to discharge such
duties of the Trustees hereunder or under any Trust Related Agreements, and the
Trustees shall not be held liable for the default or failure of the Special
Servicer to carry out its obligations hereunder or under the Special Servicing
Agreement.


 


Section 9.04                                Accounting and Reports to the Owners, the
Internal Revenue Service and Others.  The
Administrator shall (a) maintain or cause to be maintained the books of
the Trust on a fiscal year basis using the accrual method of accounting, (b) deliver
to each Owner, within 90 days of the end of each Fiscal Year, or more often, as
may be required by the Code and the Regulations thereunder, a copy of the annual
financial statement of the Trust for such Fiscal Year and a statement in such
form and containing such information as may be required by such Regulations,
and as is necessary and appropriate to enable each Owner to prepare its federal
and state income tax returns, (c) prepare (or cause to be prepared) and
file such tax returns and reports relating to the Trust, and make such
elections, as may from 


 


13

















 


time to time be required
under any applicable state or federal statute or rule or regulation
thereunder, (d) cause such tax returns to be signed in the manner required
by law, (e) collect or cause to be collected any withholding tax required
by the Code to be withheld by the Trust with respect to Distributions to Owners
who are nonresident aliens or foreign corporations, and (f) cause to be
mailed to each Owner copies of all such reports and tax returns of the Trust.


 


Section 9.05                                Signature of Returns.  The
Trustee shall sign on behalf of the Trust, as the same are presented to the
Trustee for execution, the tax returns and other Periodic Filings of the Trust,
unless applicable law requires an Owner to sign such documents, in which case,
so long as NCF II is an Owner and applicable law allows NCF II to sign any such
document, NCF II shall sign such document and such document shall not be
presented to either of the Trustees for signature.  At any time that NCF II is not an Owner, or
is otherwise not allowed by law to sign any such document, then the Owner
required by law to sign such document shall sign and such document shall not be
presented to either of the Trustees for signature.


 


Section 9.06                                Right to Receive and Rely Upon Instructions.  In
the event that either of the Trustees is unable to decide between alternative
courses of action, or is unsure as to the application of any provision of this
Agreement or any Trust Related Agreement, or such provision is ambiguous as to
its application, or is or appears to be in conflict with any other applicable
provision, or in the event that this Agreement or any Trust Related Agreement
permits any determination by the Trustees or is silent or is incomplete as to
the course of action which either of the Trustees is required to take with
respect to a particular set of facts, the Trustees may give notice (in such
form as shall be appropriate under the circumstances) to the Owners or
SunTrust, as applicable, requesting instructions and, to the extent that the
Trustees shall have acted or refrained from acting in good faith in accordance
with any instructions received from the Owners or SunTrust, as applicable, the
Trustees shall not be liable to any Person on account of such action or
inaction.  If the Trustees shall not have
received appropriate instructions within ten days of such notice (or within
such shorter period of time as may be specified in such notice) the Trustees
may, but shall be under no duty to, take or refrain from taking such action,
not inconsistent with this Agreement or the Trust Related Agreements, as either
of the Trustees shall deem to be in the best interests of the Owners, and the
Trustees shall have no liability to any Person for such action or inaction.


 


Section 9.07                                No Duties Except as Specified in this
Agreement or in Instructions.  The
Trustees shall not have any duty or obligation to manage, make any payment in
respect of, register, record, sell, dispose of or otherwise deal with the Trust
Property or to otherwise take or refrain from taking any action under, or in
connection with, this Agreement or any document contemplated hereby to which
either of the Trustees or the Trust is a party, except as expressly provided by
the terms of this Agreement, and no implied duties or obligations (including
without limitation fiduciary duties) shall be read into this Agreement against
the Trustees, and no authority or authorization of either of the Trustees shall
be construed as a duty.  Each of the
Trustees nevertheless agrees that it will, at its own cost and expense, promptly
take all action as may be necessary to discharge any liens on any part of the
Trust Property, which result from claims against the Trustees personally that
are not related to the ownership or the administration of the Trust Property or
the transactions contemplated by the Trust Related Agreements.


 


Section 9.08                                No Action Except Under Specified Documents or
Instructions.  The Trustees shall not manage, control, use,
sell, dispose of or otherwise deal with any part of the Trust Property except (a) in
accordance with the powers granted to and the authority conferred upon the
Trustees pursuant to this Agreement, and (b) in accordance with
instructions delivered to the Trustees pursuant to Section 9.06 and Article IV
hereof.


 


Section 9.09                                Restriction. 
Notwithstanding anything herein to the contrary, the Trustees shall not
take any action (a) that is inconsistent with the purposes of the Trust or
(b) that to the actual 


 


14

















 


knowledge of the Trustees
would result in the Trust being treated as an association taxable as a
corporation for federal income tax purposes.


 


ARTICLE X

CONCERNING THE TRUSTEES


 


Section 10.01                          Acceptance of Trusts and Duties.  Each
of the Trustees accepts the trusts hereby created and agrees to perform its
duties hereunder with respect to the same but only upon the terms of this
Agreement.  Neither of the Trustees shall
be personally liable under any circumstances, except (a) for its own
willful misconduct, bad faith or gross negligence, (b) for liabilities
arising from its failure to perform obligations expressly undertaken by it in
the last sentence of Section 9.07, (c) for the inaccuracy of its
representations and warranties contained in Section 10.05, or (d) for
taxes, fees or other charges on, based on or measured by any fees, commissions
or compensation received by it in connection with any of the transactions
contemplated by this Agreement or the Trust Related Agreements.  In particular, but not by way of limitation:


 


(i)                                     Neither of the
Trustees shall be personally liable for any error of judgment made in good
faith by any of its Authorized Officers;


 


(ii)                                  Neither of the
Trustees shall be personally liable with respect to any action taken or omitted
to be taken by it in good faith in accordance with the written instructions of
the Administrator, the Special Servicer, the Owners or SunTrust, as applicable;


 


(iii)                               No provision of
this Agreement shall require either of the Trustees to expend or risk its
personal funds or otherwise incur any financial liability in the performance of
any of its rights or powers hereunder if the Trustee or the Resident Trustee
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured or
provided to it;


 


(iv)                              Under no
circumstance shall the Trustees be personally liable for any indebtedness of
the Trust hereunder or under any Trust Related Agreement;


 


(v)                                 The Trustees
shall not be personally responsible for or in respect of the validity or
sufficiency of this Agreement or for the due execution hereof by NCF II, or for
the form, character, genuineness, sufficiency, value or validity of any Trust
Loan or Trust Certificate (other than with respect to the due execution thereby
by an Authorized Officer of the Resident Trustee on behalf of the Trust), or
for or in respect of the validity or sufficiency of the Administration
Agreement or the Trust Related Agreements; and


 


(vi)                              The Trustees
shall have no duty to monitor or supervise the Administrator or the Special
Servicer and shall not be liable for the default or misconduct of the
Administrator or the Special Servicer under any of the Trust Related Agreements
or otherwise and the Trustees shall have no obligation or liability to perform
the obligations of the Trust hereunder or under any Trust Related Agreement
that are required to be performed by the Administrator under the Administration
Agreement or by the Special Servicer under the Special Servicing Agreement.


 


Section 10.02                          Furnishing of Documents.  The
Trustee shall furnish to the Owners, promptly upon receipt thereof, duplicates
or copies of all material reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Trustee
hereunder (other than documents originated by or otherwise furnished to such
Owners).


 


15

















 


Section 10.03                          Reliance; Advice of Counsel.


 


(a)                                  The Trustees shall incur no liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, note or other document or paper believed by it to
be genuine and believed by it to be signed by a proper Person.  The Trustees may accept a certified copy of a
resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect.  As to any fact or matter the manner of
ascertainment of which is not specifically prescribed herein, the Trustees may
for all purposes hereof require and rely on a certificate, signed by the
president or any vice president or by the treasurer or any assistant treasurer
or the secretary of the relevant party or other appropriate Person, as to such
fact or matter, and such certificate shall constitute full protection to the
Trustees for any action taken or omitted to be taken by it in good faith in
reliance thereon.


 


(b)                                 In the exercise, performance or administration of its powers and duties hereunder
and in the performance of its duties and obligations under any of the Trust
Related Agreements, the Trustees (i) may act directly or, at the expense
of the Trust, through agents or attorneys pursuant to agreements entered into
with any of them, and the Trustees shall not be liable for the default or
misconduct of such agents or attorneys if such agents or attorneys shall have
been selected by either of the Trustees with reasonable care; and (ii) may,
at the expense of the Trust, consult with counsel, accountants and other
skilled persons to be selected with reasonable care and employed by it, and the
Trustees shall not be liable for anything done, suffered or omitted in good
faith by them in accordance with the advice or opinion of any such counsel,
accountants or other skilled persons.


 


Section 10.04                          Not Acting in Individual Capacity. 
Except as expressly provided in this Article X, in accepting the
trusts hereby created, each of the Trustees acts solely as trustee hereunder
and not in its individual capacity, and all Persons having any claim against
the Trustees by reason of the transactions contemplated by this Agreement or
the Trust Related Agreements shall look only to the Trust Property (other than
Recoveries) for payment or satisfaction thereof.


 


Section 10.05                          Representations and Warranties of Resident
Trustee.  The Resident Trustee represents and warrants
to NCF II that it meets the requirements of section 3807(a) of the
Statutory Trust Statute.


 


ARTICLE XI

COMPENSATION OF TRUSTEES


 


Section 11.01                          Fees and Expenses of the Trustees.  The
Trustees shall be entitled to compensation for their services hereunder from
the Trust and, to the extent not paid by the Administrator on behalf of the
Trust, each of the Trustees shall receive such compensation from FMC, as set
forth in a separate fee agreement with FMC and NCF II.  Each of the Trustees shall be entitled to be
reimbursed by the Trust for its reasonable expenses hereunder and, to the
extent not paid by the Administrator on behalf of the Trust, the Trustees shall
receive such reimbursement from FMC, including the reasonable compensation,
expenses and disbursements of such agents, representatives, experts and counsel
as the Trustees may employ in connection with the exercise and performance of
their rights and duties under this Agreement and the Trust Related Agreements.


 


Section 11.02                          Indemnification.  The Owners
shall be jointly and severally liable for, and hereby agree to, indemnify [U.S.
Bank National Association], individually and as Trustee, [U.S. Bank Trust
National Association], individually and as Resident Trustee, and their
respective Affiliates, successors, assigns, agents and servants, from and
against any and all liabilities, obligations, losses, damages, taxes 


 


16

















 


(other than taxes
incurred as the result of the payment of fees and expenses pursuant to Section 11.01),
claims, actions, suits, costs, expenses and disbursements (including legal fees
and expenses) of any kind and nature whatsoever which may be imposed on,
incurred by or asserted at any time against the Trustee or the Resident Trustee
(whether or not indemnified against by other parties) in any way relating to or
arising out of this Agreement, any Trust Related Agreement, the Trust, the
administration of the Trust Property, the management of the Trust Loans or the
action or inaction of the Trustee or the Resident Trustee hereunder, except
only that the Owners shall not be required to indemnify the Trustee or the
Resident Trustee for expenses arising or resulting from any of the matters
described in clauses (a) through (d) of the second sentence of Section 10.01.  The indemnities contained in this Section 11.02
and all other rights, benefits, protections, privileges, immunities, and
indemnities of the Trustees shall survive the resignation or removal of either
of the Trustees and termination of this Agreement.  The obligations of the Owners pursuant to
this Section 11.02 shall be borne in proportion to their respective
Percentage Interests.


 


Section 11.03                          Payments to the Trustees.  Any
amounts paid to the Trustees from the Trust Property pursuant to this Article XI
shall be deemed not to be part of the Trust Property immediately after such
payment.


 


ARTICLE XII

TERMINATION OF TRUST


 


Section 12.01                          Termination of Trust.


 


(a)                                  The Trust created hereby shall dissolve upon the last day of the month
following (a) the month during which the principal and interest balance of
each Trust Loan has been fully paid or otherwise discharged, whether by
settlement or other means, pursuant to the Special Servicing Agreement  and (b) the final Distribution by the
Trustee of all funds or other property or proceeds of the Trust Property in
accordance with the terms of this Agreement and the Trust Related Agreements.


 


(b)                                 The bankruptcy, death, incapacity, dissolution or termination of any
Owner shall not operate to dissolve the Trust or terminate this Agreement, nor
entitle such Owner’s legal representatives or heirs to claim an accounting or
to take any action or proceeding in any court for a partition or winding up of
the Trust Property, nor otherwise affect the rights, obligations and
liabilities of the parties hereto.


 


(c)                                  Upon completion of the winding up of the Trust following the dissolution
of the Trust pursuant to this Article XII, the Resident Trustee shall
cause a Certificate of Termination to be filed with the Secretary of State,
whereupon, except as otherwise provided in this Agreement, this Agreement shall
be of no further force or effect and the Trust shall terminate.


 


Section 12.02                          Distribution of Assets.  Upon
dissolution of the Trust, the Trustee shall take full account of the Trust
assets (which shall not include any funds in the Participation Account) and
liabilities, shall liquidate the assets as promptly as is consistent with
obtaining the fair value thereof, and shall apply and distribute the proceeds
therefrom, in accordance with written instructions of the Administrator, in the
following order:


 


(a)                                  To the payment of the expenses of liquidation and the debts and
liabilities of the Trust;


 


(b)                                 To the setting up of reserves which may be necessary or appropriate for
anticipated obligations or contingencies of the Trust arising out of or in
connection with the operation of the Trust. 
Such reserves may be paid over by the Trustee to an escrow agent or
trustee selected by the Administrator to be disbursed by such escrow agent or
trustee in payment of any of such obligations or contingencies 


 


17

















 


and, if any balance
remains at the expiration of such period as the Administrator shall deem
advisable, to be distributed by such escrow agent or trustee in the manner
hereinafter provided; and


 


(c)                                  To each of the Owners, pro rata
in accordance with its Percentage Interest.


 


If, at the time of liquidation, the Administrator
shall determine that an immediate sale of some or all of the assets would cause
undue loss to the Owners, the Administrator may, in order to avoid such loss
and with the consent of the Owners, direct the Trustee to defer liquidation.


 


Section 12.03                          No Termination by Owners.  The
Owners shall not be entitled to terminate or revoke the Trust established
hereunder.


 


ARTICLE XIII

SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES


 


Section 13.01                          Resignation of Trustees; Appointment of
Successor.


 


(a)                                  Either of the Trustees may resign at any time without cause by giving at
least 60 days’ prior written notice to the Administrator, the Owners and
SunTrust, such resignation to be effective upon the acceptance of appointment
by a successor Trustee or Resident Trustee, as applicable, under Section 13.01(b).  In addition, the Majority Owners may at any
time remove either of the Trustees without cause by an instrument in writing
delivered to the Trustee or Resident Trustee, as applicable, the Administrator
and SunTrust, such removal to be effective upon the acceptance of appointment
by a successor Trustee or Resident Trustee, as applicable, under Section 13.01(b).  In case of the resignation or removal of
either of the Trustees, the Owners may appoint a successor Trustee or Resident
Trustee, as applicable, by an instrument signed by the Owners.  If a successor Trustee or Resident Trustee,
as applicable, shall not have been appointed within 30 days after the giving of
written notice of such resignation or the delivery of the written instrument
with respect to such removal, the Trustee or Resident Trustee, as applicable,
or the Owners may, at the expense of the Trust, apply to any court of competent
jurisdiction to appoint a successor Trustee or Resident Trustee, as applicable,
to act until such time, if any, as a successor Trustee or Resident Trustee, as
applicable, shall have been appointed as provided above.  Any successor Trustee or Resident Trustee, as
applicable, so appointed by such court shall immediately and without further
act be superseded by any successor Trustee or Resident Trustee, as applicable,
appointed as above provided within one year from the date of the appointment by
such court.


 


(b)                                 Any successor Trustee or Resident Trustee, as applicable, however
appointed, shall execute and deliver to the predecessor Trustee or Resident
Trustee, as applicable, an instrument accepting such appointment, and thereupon
such successor Trustee or Resident Trustee, as applicable, without further act
(except for the filing required under Section 13.01(e) below), shall become
vested with all the estates, properties, rights, powers, duties and trust of
the predecessor Trustee or Resident Trustee, as applicable, in the trusts
hereunder with like effect as if originally named the Trustee or Resident
Trustee, as applicable, herein; but nevertheless, upon the written request of
such successor Trustee or Resident Trustee, as applicable, and the payment of
all fees and indemnities or other amounts due the predecessor Trustee or
Resident Trustee, as applicable, such predecessor Trustee or Resident Trustee,
as applicable, shall execute and deliver an instrument transferring to such
successor Trustee or Resident Trustee, as applicable, upon the trusts herein
expressed, all the estates, properties, rights, powers, duties and trusts of
such predecessor Trustee or Resident Trustee, as applicable, and such
predecessor Trustee or Resident Trustee, as applicable, shall duly assign,
transfer, deliver and pay over to such successor Trustee or Resident Trustee,
as applicable, all funds or other property then held or subsequently received
by such predecessor Trustee or Resident Trustee, as applicable, upon the trusts
herein expressed.


 


18

















 


(c)                                  Any successor Trustee, however appointed, shall be a national bank and
any Resident Trustee, however, appointed, shall meet the requirements of
section 3807(a) of the Statutory Trust Statute.


 


(d)                                 Any Person into which the Trustee or Resident Trustee, as applicable, may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Trustee or
Resident Trustee, as applicable, shall be a party, or any Person to which
substantially all the corporate trust business of the Trustee or Resident
Trustee, as applicable, may be transferred, shall, subject to the terms of Section 13.01(c),
be the Trustee or Resident Trustee, as applicable, under this Agreement without
further act.


 


(e)                                  Any successor Resident Trustee appointed pursuant to this Article XIII
shall file an amendment to the Certificate of Trust with the Secretary of State
reflecting the name and principal place of business of such successor Resident
Trustee.


 


Section 13.02                          Appointment of Additional Trustees.  At
any time or times for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust Property may at the time be
located, the Trustee and the Administrator, acting jointly, by an instrument in
writing, may appoint one or more individuals or other Persons approved by the
Administrator and the Trustee to act as separate trustee or separate trustees
of all or any part of the Trust Property to the full extent that local law
makes it necessary or appropriate for such separate trustee or separate
trustees to act alone.  If the
Administrator shall not have joined in such appointment within 15 days after
the receipt of such request, the Trustee, acting alone, shall have the power to
make such appointment.


 


ARTICLE XIV

TAX MATTERS PARTNER


 


Section 14.01                          Tax Matters Partner.  The
tax matters partner (within the meaning of section 6231(a)(7) of the Code
and applicable Regulations) of the Trust for all federal income tax purposes
set forth in the Code shall be NCF II, provided
that the Trust is treated as a partnership for federal income tax
purposes.  Subject to Section 14.08,
the tax matters partner shall have the authority to represent the Trust and
perform the duties imposed on the tax matters partner under the Code, and as
set forth in this Article XIV.


 


Section 14.02                          Notice of Tax Audit.  The
tax matters partner shall give prompt notice to the Owners upon receipt of
advice that the Internal Revenue Service intends to examine Trust income tax
returns for any year.


 


Section 14.03                          Authority to Extend Period for Assessing Tax. 
Subject to Section 14.08, the tax matters partner shall have the
authority to extend the period for assessing any tax imposed on any Owner under
the Code by any agreement as provided for under section 6229(b)(1)(B) of
the Code.


 


Section 14.04                          Choice of Forum for Filing Petition for
Readjustment.  Any petition for readjustment may, but is not
required to, be filed by the tax matters partner in accordance with section
6226(a) of the Code in the United States District Court for the district
in which the Trust’s principal place of business is located, or the United
States Claims Court.


 


Section 14.05                          Authority to Bind Owners by Settlement Agreement. 
Subject to Section 14.08, the tax matters partner shall enter into
a settlement agreement in accordance with section 6224(c)(3) of the Code
as directed by the Owners.


 


19

















 


Section 14.06                          Notices Sent to the Internal Revenue Service.  The
tax matters partner shall use its best efforts to furnish to the Internal
Revenue Service the name, address, profits interest and taxpayer identification
number of each Owner and any additional information it receives from each Owner
regarding any change in that Owner’s name, address, profits interest and
taxpayer identification number.  In no
event shall the tax matters partner be liable, responsible or accountable in
damages or otherwise to the Owner for any loss in connection with furnishing
such information to the Internal Revenue Service if the tax matters partner
acts in good faith and is not guilty of fraud or gross negligence.


 


Section 14.07                          Indemnification of Tax Matters Partner.  The
Trust shall indemnify and save harmless the tax matters partner against any
loss, damage, cost or expense (including attorneys’ fees) incurred by it as a
result of any act performed or omitted on behalf of the Trust or any Owner or
in furtherance of the Trust’s interests or the interests of the Owner, in its
capacity as tax matters partner, without, however, relieving the tax matters
partner of liability for bad faith, fraud or gross negligence.


 


Section 14.08                          Approval of Tax Matters Partner’s Decisions.  The
tax matters partner shall call a meeting of the Owners at any time in order to
discuss any decisions the tax matters partner may propose to make, notice of
which shall be included in the notice of such meeting.  The tax matters partner shall make no
decision and take no action with respect to the determination, assessment or
collection of any tax imposed by the Code on the Owners unless and until such
decision has been approved by the Owners.


 


Section 14.09                          Participation by Owners in Internal Revenue
Service Administrative Proceedings.  Nothing
contained in this Article XIV shall be construed to take away from any
Owner any right granted to such person by the Code to participate in any manner
in administrative proceedings of the Internal Revenue Service.


 


ARTICLE XV

MISCELLANEOUS


 


Section 15.01                          Supplements and Amendments.  This
Agreement may be amended only by a written instrument signed by the Trustees
and the Majority Owners at the time of such amendment; provided, however, that Sections 2.03,
2.05(b), 4.02(d), 9.01, 9.06, 10.01(ii), 12.01 and 13.01 and Articles V and VI
of this Agreement may be amended only by a written instrument signed by the
Trustees, the Majority Owners at the time of such amendment, and SunTrust; provided further that if, in the opinion
of either of the Trustees, any instrument required to be so executed adversely
affects any right, duty or liability of, or benefit, protection, privilege,
immunity or indemnity in favor of, either of the Trustees under this Agreement
or any of the documents contemplated hereby to which either of the Trustees or
the Trust is a party, or would cause or result in any conflict with or breach
of any terms, conditions or provisions of, or default under, the charter
documents or by-laws of either of the Trustees or any document contemplated
hereby to which either of the Trustees is a party, either of the Trustees may
in its sole discretion decline to execute such instrument.


 


Section 15.02                          No Legal Title to Trust Property in Owner.  Legal
title to all Trust Property shall be vested at all times in the Trust as a
separate legal entity, except where the laws of any jurisdiction require title
to be vested in a trustee in which case legal title shall be vested in the
Trustee on behalf of the Trust.  The
Trustee shall have no duty or obligation to independently investigate whether
legal title to any Trust Property is deemed vested in the Trustee.  The Owners shall not have legal title to any
part of the Trust Property and shall only have an undivided beneficial interest
therein.  No transfer, by operation of
law or otherwise, of any right, title and interest of the Owners in and to
their undivided Beneficial Interests in the Trust Property hereunder shall
operate to terminate this Agreement or the trusts hereunder or entitle any
successor transferee to an accounting or to the transfer to it of legal title
to any part of the Trust Property.


 


20














 


Section 15.03                          Limitations on Rights of Others. 
Nothing in this Agreement, whether express or implied, shall be
construed to give to any Person other than the Trust, the Trustees, SunTrust,
FMC, the Administrator and the Owners any legal or equitable right, remedy or
claim in the Trust Property under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.


 


Section 15.04                          Notices.  Unless
otherwise expressly specified or permitted by the terms hereof, all notices
shall be in writing and delivered by hand or mailed by certified mail, postage
prepaid, if to the Trustee, addressed to: [U.S. Bank National Association, One
Federal Street, Boston, Massachusetts 02110, Attention: Corporate Trust
Administration], or to such other address as the Trustee may have set forth in
a written notice to the Owners; and if the Resident Trustee, addressed to:
[U.S. Bank Trust National Association, 300 Delaware Avenue, 9th Floor, Wilmington, Delaware 19801, Attention:
Corporate Trust Administration]; if to an Owner, addressed to it at the address
provided to the Resident Trustee by such Owner and set forth for such Owner in
the register maintained by the Resident Trustee, and if to SunTrust, addressed
to: SunTrust Bank, 1001 Semmes Avenue, Mail Code CS-RVW-7900, Richmond,
Virginia 23224, Attention: W. Mark Smith, with a copy to: SunTrust Bank, 303
Peachtree Street, N.E., 36th Floor,
Atlanta, Georgia 30308, Attention: Legal Department.  Whenever any notice in writing is required to
be given by either of the Trustees hereunder, such notice shall be deemed given
and such requirement satisfied 72 hours after such notice is mailed by
certified mail, postage prepaid, addressed as provided above; any notice given
by an Owner to either of the Trustees shall be effective upon receipt by an
Authorized Officer of the Trustee or Resident Trustee, as applicable.  A copy of any notice delivered to either of
the Trustees shall also be delivered by the Person giving such notice to the
Administrator, addressed to: First Marblehead Data Services, Inc., The
Prudential Tower, 800 Boylston Street - 34th Floor, Boston, Massachusetts
02199-8157, Attention: Ms. Rosalyn Bonaventure, with a copy to The First
Marblehead Corporation, The Prudential Tower, 800 Boylston Street - 34th Floor,
Boston, Massachusetts 02199-8157, Attention: Corporate Law Department, or to
such other addresses as the Administrator may have set forth in a written
notice to the Trustees.


 


Section 15.05                          Severability.  Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.


 


Section 15.06                          Separate Counterparts.  This
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.


 


Section 15.07                          Successors and Assigns.  All
covenants and agreements contained herein shall be binding upon, and inure to
the benefit of, the Trustees and their respective successors and assigns and
each Owner and its successors and permitted assigns, all as herein
provided.  Any request, notice,
direction, consent, waiver or other instrument or action by an Owner shall bind
the successors and assigns of such Owner.


 


Section 15.08                          Headings.  The
headings of the various Articles and Sections herein are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.


 


Section 15.09                          Governing Law.  This
Agreement shall in all respects be governed by, and construed in accordance
with, the laws of the State of Delaware (excluding conflict of law rules),
including all matters of construction, validity and performance.


 


21

















 


Section 15.10                          Third Party Beneficiaries.  This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns. 
FMC shall be a third party beneficiary to this Agreement for purposes of
Section 2.03(c), Section 5.03 and Article VI and shall be
entitled to enforce such provisions against NCF II and the Trust as if it was a
party hereto.


 


Section 15.11                          General Interpretive Principles.  For
purposes of this Agreement, except as otherwise expressly provided or unless
the context otherwise requires:


 


(a)                                  The defined terms in this Agreement include the plural as well as the
singular, and the use of any gender herein shall be deemed to include any other
gender;


 


(b)                                 Accounting terms not otherwise defined herein have the meanings assigned
to them in accordance with generally accepted accounting principles as in
effect on the date hereof;


 


(c)                                  References herein to “Articles,” “Sections,” “paragraphs” and other
subdivisions without reference to a document are to designated Articles,
Sections, paragraphs and other subdivisions of this Agreement;


 


(d)                                 A reference to a paragraph without further reference to a Section is
a reference to such paragraph as contained in the same Section in which
the reference appears, and this rule shall also apply to subparagraphs and
other subdivisions;


 


(e)                                  The words “herein,” “hereof,” “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular provision;
and


 


(f)                                    The term “include” or “including” shall mean without limitation by reason
of enumeration.


 


[Remainder of page intentionally blank]


 


22

















 


IN
WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to the
duly executed by their respective officers hereunto duly authorized, as of the
day and year first above written.


 


 


	
   

  	
  [U.S.
  BANK NATIONAL ASSOCIATION], not in its

  individual capacity except as expressly provided herein,

  but
  solely as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  [U.S.
  BANK TRUST NATIONAL ASSOCIATION],

  not in its individual capacity except as expressly

  provided herein, but solely as Resident Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  NATIONAL COLLEGIATE FUNDING II, LLC,

  as Owner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Gary
  F. Santo, Jr.

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  



 


 


[Signatures continue]


 


 


Trust
Agreement


 

















 


With
respect to Sections 2.03, 2.05(b), 4.02(d), 9.01, 9.06, 10.01(ii), 12.01 and
13.01 and Articles V and VI only:


 


	
   

  	
  SUNTRUST
  BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


[Signatures continue]


 


 


Trust
Agreement


 

















 


	
  ACKNOWLEDGED
  AND AGREED AS TO

  SECTION 2.03, ARTICLE V AND

  ARTICLE VI ONLY

  	
   

  
	
   

  	
   

  
	
  THE
  FIRST MARBLEHEAD CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


 


[Signatures continue]


 


 


Trust
Agreement


 

















 


	
  ACKNOWLEDGED AND AGREED

  	
   

  
	
   

  	
   

  
	
  FIRST MARBLEHEAD DATA SERVICES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:  Rosalyn Bonaventure

  	
   

  
	
   

  	
  Title:  President

  	
   

  



 


 


[End signatures]


 


 


Trust
Agreement


 

















 


SCHEDULE I


 


CAPITAL CONTRIBUTIONS AND PERCENTAGE INTERESTS


 


	
  Owner

  	
   

  	
  Capital Contribution

  	
   

  	
  Percentage Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The
  National Collegiate Funding II, LLC

  	
   

  	
  $

  	
  1.00

  	
   

  	
  100

  	
  %

  
							



 

















 


EXHIBIT A


 


MG STUDENT LOAN TRUST 2010-1


 


TRUST CERTIFICATE

UNDER THE TRUST AGREEMENT, DATED

as of July     , 2010


 


Certificate
No.                        


 


THE BENEFICIAL INTEREST IN THE TRUST REPRESENTED BY THIS
TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT BE
DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING
PLEDGED) BY THE HOLDER HEREOF UNLESS IN THE OPINION OF COUNSEL SATISFACTORY TO
THE RESIDENT TRUSTEE, SUCH TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE
ACT AND STATE SECURITIES LAWS.  THE
TRANSFER OF THIS TRUST CERTIFICATE WILL NOT BE EFFECTIVE UNLESS THE TRANSFEREE
HAS DELIVERED TO THE RESIDENT TRUSTEE A LETTER IN THE FORM REQUIRED BY SECTION 3.04(a) OF
THE TRUST AGREEMENT.


 


NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PLAN
SUBJECT TO ERISA OR SECTION 4975 OF THE CODE OR ANY PERSON ACTING ON
BEHALF OF SUCH A PLAN EXCEPT IN ACCORDANCE WITH SECTION 3.04(b) OF
THE TRUST AGREEMENT.


 


[U.S.
Bank Trust National Association], not in its individual capacity, but solely as
resident trustee (the “Resident Trustee”) under the Trust Agreement,
dated as of July        , 2010 (the “Trust
Agreement”), with [U.S. Bank National Association], not in its individual
capacity but solely as trustee (the “Trustee” and together with the
Resident Trustee, the “Trustees”), The National Collegiate Funding II,
LLC, as owner (the “Owner”) of beneficial interests in the trust created
thereby, and, with respect to Sections 2.03, 2.05(b), 4.02(d), 9.01, 9.06,
10.01(ii), 12.01 and 13.01 and Articles V and VI only, SunTrust Bank, hereby
certifies on behalf of the MG Student Loan Trust 2010-1 (the “Trust”)
that                                 
is the owner of an undivided beneficial interest equal to the percentage listed
on Schedule I to the Trust Agreement in the Trust Property provided for
and created by the Trust Agreement.  This
Trust Certificate is issued pursuant to and is entitled to the benefits of the
Trust Agreement, and each Owner by acceptance hereof shall be bound by the
terms of the Trust Agreement.  Reference
is hereby made to the Trust Agreement for a statement of the rights and
obligations of the Owner hereof.  The
Trustees may treat the person shown on the register maintained by the Resident
Trustee pursuant to Section 3.02 of the Trust Agreement as the absolute
Owner hereof for all purposes.


 


Capitalized
terms used herein without definition have the meanings ascribed to them in or
by reference in the Trust Agreement.


 


TRANSFER
OF THIS TRUST CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS AND LIMITATIONS
SET FORTH IN THE TRUST AGREEMENT.  In the
manner more fully set forth in, and as limited by, the Trust Agreement, this
Trust Certificate may be transferred upon the books of the Trust maintained by
the Resident Trustee by the registered Owner in person or by his attorney duly
authorized in writing upon surrender of this Trust Certificate to the Resident
Trustee accompanied by a written instrument of transfer and with such signature
guarantees and evidence of authority of the Persons signing the instrument of
transfer as the Resident Trustee may reasonably require, whereupon the Resident
Trustee shall issue in the name of the transferee a Trust Certificate or Trust
Certificates 


 

















 


evidencing
the amount and extent of interest of the transferee.  The Owner hereof, by its acceptance of this
Trust Certificate, warrants and represents to the Resident Trustee, the Trustee
and to the Owners of the other Trust Certificates issued under the Trust
Agreement and agrees not to transfer this Trust Certificate except in
accordance with the Trust Agreement.


 


This
Trust Certificate may not be acquired or held by a Plan.  By accepting and holding this Trust
Certificate, the Owner hereof shall be deemed to have represented and warranted
that it is not a Plan, unless it has provided the opinion of counsel described
in Section 3.04(b) of the Trust Agreement.


 


This
Trust Certificate and the Trust Agreement shall in all respects be governed by,
and construed in accordance with, the laws of the State of Delaware (excluding
conflict of law rules), including all matters of construction, validity and
performance.


 


IN
WITNESS WHEREOF, the Resident Trustee, pursuant to the Trust Agreement, has
caused this Trust Certificate to be issued in the name and on behalf of the
Trust as of the date hereof.


 


 


	
   

  	
  MG STUDENT LOAN TRUST 2010-1 

   

  By:
  [U.S. BANK TRUST NATIONAL

  ASSOCIATION], not in its individual capacity, but 

  solely as Resident Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
				



 


A-2














 


EXHIBIT B


 


FORM OF ACCESSION AGREEMENT


 


[Date]


[Name]

[Address]

Attention:


 


Dear
Sirs:


 


We
refer to the Trust Agreement, dated as of July      ,
2010 (the “Trust Agreement”), among The National Collegiate Funding II,
LLC (the “Company”), [U.S. Bank National Association] (in its capacity
as trustee thereunder, the “Trustee”), [U.S. Bank Trust National
Association] (in its capacity as resident trustee thereunder, the “Resident
Trustee”), and, with respect to Sections 2.03, 2.05(b), 4.02(d), 9.01,
9.06, 10.01(ii), 12.01 and 13.01 and Articles V and VI only, SunTrust
Bank.  We propose to purchase a
beneficial interest in the MG Student Loan Trust 2010-1, a Delaware statutory
trust (the “Trust”) formed pursuant to the Trust Agreement.  Capitalized terms used herein without
definition have the meanings given them in the Trust Agreement.


 


1.                                       We understand
that our Trust Certificate is not being registered under the Securities Act of
1933, as amended (the “1933 Act”), or any state securities or “Blue Sky”
law and is being sold to us in a transaction that is exempt from the
registration requirements of the 1933 Act and any applicable state laws.


 


2.                                       We have
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of an investment in the Trust, we are able to
bear the economic risk of investment in the Trust and we are an “accredited
investor” as defined in Regulation D under the 1933 Act.


 


3.                                       We acknowledge
that none of the Trust, the Company, the Trustee or the Resident Trustee has
advised us concerning the federal or state income tax consequences of owning a
beneficial interest in the Trust, including the tax status of the Trust or the
likelihood that distributions from the Trust would be characterized as “unrelated
business income” for federal tax purposes, and we have consulted with our own
tax advisor with respect to such matters.


 


4.                                       We are
acquiring our Trust Certificate for our own account and not for the benefit of
any other person and not with a view to any distribution of our Beneficial
Interest in the Trust subject, nevertheless, to the understanding that
disposition of our property shall at all times be and remain within our
control.


 


5.                                       We agree that
our Beneficial Interest in the Trust must be held indefinitely by us unless
subsequently registered under the 1933 Act and any applicable state securities
or “Blue Sky” law or unless exemptions from the registration requirements of
the 1933 Act and applicable state laws are available.


 


6.                                       We agree that
in the event that at some future time we wish to dispose of or exchange any of
our Beneficial Interest in the Trust, we will not transfer or exchange any of
our Beneficial Interest in the Trust unless we have satisfied the requirements
set forth in Section 3.04 of the Trust Agreement, and either:


 

















 


(A)                              (1) the
transfer or exchange is made to an Eligible Purchaser (as defined below), (2) a
letter to substantially the same effect as this letter is executed promptly by
such Eligible Purchaser, and (3) all offers or solicitations in connection
with the sale (if a sale), whether made directly or through any agent acting on
our behalf, are limited only to Eligible Purchasers and are not made by means
of any form of general solicitation or general advertising whatsoever; or


 


(B)                                our Beneficial
Interest in the Trust is sold in a transaction that does not require
registration under the 1933 Act and any applicable State “Blue Sky” law.


 


“Eligible
Purchaser” means a corporation, partnership or other entity which we have
reasonable grounds to believe and do believe can make representations with
respect to itself to substantially the same effect as the representations set
forth herein.


 


7.                                       We understand
that our Trust Certificate bears a legend to substantially the following effect:


 


THE
BENEFICIAL INTEREST IN THE TRUST REPRESENTED BY THIS TRUST CERTIFICATE HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR ANY STATE SECURITIES LAW, AND MAY NOT BE DIRECTLY OR INDIRECTLY OFFERED
OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER HEREOF
UNLESS IN THE OPINION OF COUNSEL SATISFACTORY TO THE RESIDENT TRUSTEE SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE ACT AND STATE SECURITIES
LAWS. THE TRANSFER OF THIS TRUST CERTIFICATE WILL NOT BE EFFECTIVE UNLESS THE
TRANSFEREE HAS DELIVERED TO THE RESIDENT TRUSTEE A LETTER IN THE FORM REQUIRED
BY SECTION 3.04(a) OF THE TRUST AGREEMENT.


 


NO
TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PLAN SUBJECT TO ERISA OR SECTION 4975
OF THE CODE OR ANY PERSON ACTING ON BEHALF OF SUCH A PLAN EXCEPT IN ACCORDANCE
WITH SECTION 3.04(b) OF THE TRUST AGREEMENT.


 


8.                                       We agree to be
bound by all terms and conditions of our Trust Certificate and the Trust
Agreement.


 


[Remainder of page intentionally left blank]


 


B-2

















 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  [PURCHASER]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Accepted
  and Acknowledged this          th day of 

                              ,
                 .

  
	
   

  
	
  MG STUDENT LOAN TRUST
  2010-1   

   

  By: [U.S. BANK TRUST NATIONAL  

  ASSOCIATION], not in its individual capacity, but  

  solely as Resident Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 

















 


EXHIBIT C


 


FORM OF 

CERTIFICATE OF TRUST

OF

MG STUDENT LOAN TRUST 2010-1


 


This
Certificate of Trust of the MG Student Loan Trust 2010-1 (the “Trust”),
is being duly executed and filed on behalf of the Trust by the undersigned, as
trustees, to form a statutory trust under the Delaware Statutory Trust Act (12
Del. C. § 3801 et seq.) (the “Act”).


 


(i)            Name.  The name of the statutory trust formed hereby
is the MG Student Loan Trust 2010-1.


 


(ii)           Delaware Trustee.  The name and business address of a trustee of
the Trust which has its principal place of business in the State of Delaware
are [U.S. Bank Trust National Association, 300 Delaware Avenue, 9th Floor, Wilmington, Delaware 19801, Attention:
Corporate Trust Administration].


 


(iii)          Effective Date.  This Certificate of Trust shall be effective
upon filing.


 


IN
WITNESS WHEREOF, the undersigned have duly executed this Certificate of Trust
in accordance with § 3811(a)(1) of the Act.


 


 


	
   

  	
  [U.S.
  BANK TRUST NATIONAL ASSOCIATION], not in its 

  individual capacity but solely as Resident Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [U.S.
  BANK NATIONAL ASSOCIATION], not in its 

  individual capacity but solely as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


EXHIBIT C2


Administration Agreement


 

















 


ADMINISTRATION AGREEMENT


 


ADMINISTRATION
AGREEMENT, dated as of July     , 2010 (as amended
from time to time, this “Agreement”), among MG STUDENT LOAN TRUST
2010-1, a Delaware statutory trust (the “Trust”), [U.S. BANK NATIONAL
ASSOCIATION], not in its individual capacity but solely as a trustee of the
Trust (the “Trustee”), and FIRST MARBLEHEAD DATA SERVICES, INC., a
Massachusetts corporation having a place of business at 800 Boylston St., 34th Floor, Boston, MA 02199 (the “Administrator”).
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to such terms in the Trust Agreement or the Loan Program Agreement
(each as defined below), as applicable.


 


WHEREAS,
the Trust (a) will be assigned (i) Charged Off Loans and (ii) Purchased
Loans (collectively, the “Trust Loans”) from time to time pursuant to
that certain Loan Program Agreement executed April 20, 2010 (the “Loan
Program Agreement”), by and among First Marblehead Education Resources, Inc.,
The First Marblehead Corporation, and SunTrust Bank, a Georgia state-chartered
banking corporation (“SunTrust”); and (b) has issued a trust
certificate (the “Trust Certificate”) pursuant to a Trust Agreement
dated as of July     , 2010 (the “Trust Agreement”)
among the Trustee, The National Collegiate Funding II, LLC (the “Owner”
and together with any other beneficial
owner of the Trust, the “Owners”), a resident trustee (together
with the Trustee, the “Trustees”) and, with respect to Sections 2.03,
2.05(b), 4.02(d), 9.01, 9.06, 10.01(ii), 12.01 and 13.01 and Articles V and VI
only, SunTrust;


 


WHEREAS,
pursuant to the Trust Agreement, the Trust, the Trustee, and one or more Owners
are required to perform certain duties in connection with the Trust Loans;


 


WHEREAS,
the Trust, the Trustee, and the Owners desire to have the Administrator perform
certain of the duties of the Trust and the Trustee referred to in the Trust
Agreement and the Trust Related Agreements and to provide such additional
services consistent with the terms of this Agreement and the Trust Related
Agreements as the Trust, the Trustee, and the Owners may from time to time
request; and


 


WHEREAS,
the Administrator has the capacity to provide the services required hereby and
is willing to perform such services for the Trust, the Trustee, and the Owners
on the terms set forth herein.


 


NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:


 


1.             Duties of the Administrator.


 


(a)           Duties with Respect to the Trust
Related Agreements.  The Administrator
agrees to perform all its duties as Administrator and the duties of the Trust
under the Trust Related Agreements.  In
addition, the Administrator shall consult with the Trustee regarding the duties
of the Trust under the Trust Related Agreements.  The Administrator shall monitor the
performance of the Trust under the Trust Related Agreements and shall advise
the Trustee when action is necessary to comply with the Trust’s duties under
the Trust Related Agreements.  The
Administrator shall prepare for execution by the Trust, or shall cause the
preparation by other appropriate persons or entities of, all such documents,
reports, filings, instruments, certificates and opinions that it shall be the
duty of the Trust to prepare, file or deliver pursuant to the Trust Related
Agreements.


 

















 


(b)           Additional Duties.


 


(i)            In
addition to the duties of the Administrator set forth above, the Administrator
shall perform, or cause to be performed, its duties and obligations and the
duties and obligations of the Trust, and the Trustee on behalf of the Trust,
under the Trust Agreement including, without limitation, those duties and
obligations set forth on Schedule A hereto.  In furtherance thereof, the Trust shall
execute and deliver to the Administrator and to each successor Administrator
appointed pursuant to the terms hereof, one or more powers of attorney
substantially in the form of Exhibit A hereto, appointing the
Administrator as the attorney-in-fact of the Trust, for the purpose of
executing on behalf of the Trust all such documents, reports, filings,
instruments, certificates and opinions as are required to be executed by the
Trust pursuant to such agreements. 
Subject to Section 5 of this Agreement, and in accordance with the
written instructions of the Trust, the Owners, or the Trustee, the
Administrator shall administer, perform or supervise the performance of such
other activities in connection with the Trust Loans as are not covered by any
of the foregoing provisions and as are expressly requested by the Trust, the
Trustee, or the Owners and are
reasonably within the capability of the Administrator.  The Administrator agrees to perform such
obligations and deliver such notices as are specified as to be performed or
delivered by the Administrator under the Trust Agreement.


 


(ii)           In
carrying out the foregoing duties or any of its other obligations under this
Agreement, the Administrator may enter into transactions or otherwise deal with
any of its Affiliates.


 


(iii)          In
carrying out any of its obligations under this Agreement, the Administrator may
act either directly or through agents, attorneys, accountants, independent
contractors and auditors and may enter into agreements with any of them.


 


(iv)          In
carrying out its duties under this Agreement with respect to delinquent or
defaulted Trust Loans, the Administrator may retain and employ agents to
service, manage, enforce, collect or dispose of such Trust Loans and to
commence any actions or proceedings the agents deem necessary, appropriate or
desirable in connection therewith.


 


(c)           Non-Ministerial Matters.


 


(1)           With
respect to matters that in the reasonable judgment of the Administrator are
non-ministerial, the Administrator shall not be under any obligation to take
any action, and in any event shall not take any action unless the Administrator
shall have received instructions from the Trustee or the Owners in accordance
with the Trust Agreement.  For the
purpose of the preceding sentence, “non-ministerial matters” shall include,
without limitation:


 


(A)          The amendment of or any supplement to the Trust Related
Agreements; and


 


(B)           The
initiation of any claim or lawsuit by the Trust and the compromise of any
action, claim or lawsuit brought by or against the Trust, except for claims or
lawsuits in the ordinary course of business brought by or against the Trust, or
by its agents or nominees, relating to the enforcement or collection of the
Trust Loans owned by the Trust.


 


(ii)           Notwithstanding
anything to the contrary in this Agreement, the Administrator shall not be
obligated to, and shall not, take any action that the Trustee or any Owner
directs the Administrator not to take on behalf of the Trust.


 


2

















 


(d)           Actions on behalf of the Owners.  Pursuant to Section 4.05 of the Trust
Agreement, the initial Owner has appointed the Administrator as its true and
lawful attorney-in-fact with respect to certain matters described in such Section
4.05.


 


2.             Records. 
The Administrator shall maintain appropriate books of account and
records relating to services performed hereunder, which books of account and
records shall be accessible for inspection by the Trustee and the Owners at any
time during normal business hours. The Administrator shall maintain or cause to
be maintained the books of the Trust on the basis of a fiscal year ending June 30,
using the accrual method of accounting, in accordance with generally accepted
accounting principles, and shall comply with the other requirements set forth
in Section 9.04 of the Trust Agreement.


 


3.             Compensation.  As compensation for the performance of the
Administrator’s obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to reimbursement
for all its expenses incurred in performing its obligations hereunder and any
other expenses incurred by the Administrator on behalf of the Trust by the
Trust in accordance with the terms and conditions of the Trust Agreement.  For the avoidance of doubt, Recoveries shall
not be available to reimburse the Administrator for its expenses hereunder.


 


4.             Additional Information to be Furnished.  The Administrator shall furnish to the
Trustee and the Owners from time to time such additional information regarding
the Trust Loans as the Trustee or the Owners shall reasonably request.


 


5.             Independence of the Administrator.  For all purposes of this Agreement, the
Administrator shall be an independent contractor and shall not be subject to
the supervision of the Trust, the Trustees, or the Owners with respect to the
manner in which it accomplishes the performance of its obligations
hereunder.  Unless expressly authorized
by the Trust, the Trustees, or the Owners, the Administrator shall have no
authority to act for or represent the Trust, the Trustees, or the Owners,
respectively, in any way other than as specified hereunder and shall not
otherwise be deemed an agent of the Trust, the Trustees, or the Owners.


 


6.             No Joint Venture. 
Nothing contained in this Agreement (a) shall constitute the
Administrator and any of the Trust, the Trustees, or any Owner as members of
any partnership, joint venture, association, syndicate, unincorporated business
or other separate entity, (b) shall be construed to impose any liability
as such on any of them, or (c) shall be deemed to confer on any of them
any express, implied or apparent authority to incur any obligation or liability
on behalf of the others.


 


7.             Other Activities of the Administrator.  Nothing herein shall prevent the
Administrator or its Affiliates from engaging in other businesses or, in its or
their sole discretion, from acting in a similar capacity as an administrator
for any other person or entity even though such person or entity may engage in
business activities similar to those of the Trust, the Trustees, or the Owners.


 


8.             Term of Agreement; Resignation and Removal of
Administrator.


 


(a)           This Agreement shall continue in
force until the termination of the Trust, upon which event this Agreement shall
automatically terminate.


 


(b)           Subject to Section 8(d) of
this Agreement, the Owners may remove the Administrator without cause by
providing the Administrator with at least 15 days’ prior written notice;
provided that the Owners simultaneously provide SunTrust with a copy of any
such notice under this Section 8(b).


 


3

















 


(c)           Subject to Section 8(d) of
this Agreement, the Owners may remove the Administrator immediately upon
written notice of termination if any of the following events shall occur:


 


(i)            The
Administrator shall default in the performance of any of its duties under this
Agreement and, after written notice of such default, shall not cure such
default within ten days (or, if such default cannot be cured in such time, the
Administrator shall not give within ten days such assurance of cure as shall be
reasonably satisfactory to the Trustee);


 


(ii)           A
court having jurisdiction in the premises shall enter a decree or order for
relief, and such decree or order shall not have been vacated within 60 days,
with respect to any involuntary case commenced against the Administrator under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect or shall appoint a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for the Administrator or any substantial part
of its property or order the winding-up or liquidation of its affairs; or


 


(iii)          The
Administrator shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, shall consent to
the entry of an order for relief in an involuntary case under any such law, or
shall consent to the appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator or similar official for it or any substantial part of
its property, shall consent to the taking of possession by any such official of
any substantial part of its property, shall make any general assignment for the
benefit of its creditors or shall fail generally to pay its debts as they
become due;


 


provided that the Owners simultaneously provide SunTrust with a copy of any such
notice under this Section 8(c).  The
Administrator agrees that if any of the events specified in clauses (ii) or
(iii) of this Section 8(c) shall occur, it shall give written
notice thereof to the Trustee within two Business Days after the happening of
such event.


 


(d)           No removal of the Administrator
pursuant to this Section 8 shall be effective until (i) a successor
Administrator shall have been appointed by the Owners, on behalf of the Trust
and (ii) such successor Administrator shall have agreed in writing to be
bound by the terms of this Agreement in the same manner as the Administrator is
bound hereunder.


 


9.             Action upon Termination or Removal.  Promptly upon the effective date of
termination of this Agreement or the removal of the Administrator pursuant to Section 8
of this Agreement, the Administrator shall (a) be entitled to be paid by
the Trust in accordance with the terms and conditions of the Trust Agreement
all reimbursable expenses accruing to it to the date of such termination or
removal and (b) deliver to the successor Administrator all property and
documents of or relating to the Trust Loans then in the custody of the
Administrator.  In the event of the
removal of the Administrator pursuant to Sections 8(b) or (c) of this
Agreement, the Administrator, for a period of not less than 120 days following
notice of such removal, shall cooperate with the Trust and take all reasonable
steps requested to assist the Trust in making an orderly transfer of the duties
of the Administrator.


 


10.           Limitation of Liability of Trustee.  Notwithstanding anything contained herein to
the contrary, this Agreement has been executed by [U.S. Bank National
Association], not in its individual capacity but solely in its capacity as
Trustee of the Trust, and in no event shall [U.S. Bank National Association] in
its individual capacity or any Owner of the Trust have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Trust hereunder, as to all of which recourse shall be had solely to the assets
of the Trust.  For all purposes of this
Agreement, in the performance of any duties or obligations of the Trustee or the
Trust hereunder, the Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles IX, X and XI of the Trust Agreement.


 


4














 


11.           Indemnification.  The Administrator shall indemnify the Trust
and the Trustees (as such and in their individual capacities) and their
respective agents (each, an “Indemnified Person”) for, and hold them
harmless against, any losses, liability or expense, including reasonable
attorneys fees’ and expenses, obligations, damages, claims, actions, and suits
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted at any time against the Indemnified Person in the absence of willful misconduct,
negligence or bad faith on the part of the Indemnified Person, arising out of
the willful misconduct, negligence or bad faith of the Administrator in the
performance of the Administrator’s duties contemplated by this Agreement; provided, however, that the Administrator shall not be required to indemnify an
Indemnified Person so long as the Administrator has acted pursuant to the
instructions of the Trust, the Trustee, or the Owners in accordance with
Sections 1(b) or 1(c) of this Agreement.


 


12.           Miscellaneous.


 


(a)           Amendments. This Agreement may
be amended only by a written instrument signed by the parties hereto; provided
that any amendment must be accompanied by the written consent of the Trustee
and the Owners.


 


(b)           Successors and Assigns.  This Agreement may be assigned by the
Administrator, without the consent of the Trustee or the Owners, to a
corporation or other organization that is a successor (by merger, consolidation
or purchase of assets) to the Administrator; provided that such successor
organization executes and delivers to the Trustee and the Owners an agreement
in which such corporation or other organization agrees to be bound hereunder in
the same manner as the Administrator is bound hereunder.  Subject to the foregoing, this Agreement
shall bind any such permitted successors or assigns of the parties hereto.


 


(c)           Notices.  Any notice, report or other communication
given hereunder shall be in writing and addressed as follows:


 


(i)                                     If to the Trust, to:


 


MG Student Loan Trust 2010-1

[c/o U.S. Bank National Association, as Trustee

One Federal Street


Boston, MA 02110

Attention: Corporate Trust Administration]


 


(ii)                                  If to the Administrator, to:


 


First Marblehead Data Services, Inc.

The Prudential Tower

800 Boylston Street, 34th Floor

Boston, MA 02199-8157

Attention:  Ms. Rosalyn Bonaventure


 


with a copy to:


 


The First Marblehead Corporation

The Prudential Tower

800 Boylston Street, 34th Floor


 


5

















 


Boston, MA 02199-8157

Attention: Corporate Law Department


 


(iii)                               If to the Trustee, to:


 


[U.S. Bank National Association, as Trustee

One Federal Street


Boston,
MA 02110

Attention: Corporate Trust Administration]


 


If to the Owner, to:


 


The National Collegiate Funding II, LLC

c/o The First Marblehead Corporation

The Prudential Tower

800 Boylston Street, 34th Floor

Boston, MA 02199-8157

Attention: Corporate Law Department


 


or
to such other address as any party shall have provided to the other parties in
writing.  Any notice required to be in
writing hereunder shall be deemed given if such notice is mailed by certified
mail, postage prepaid, or hand-delivered to the address of such party as
provided above.


 


(d)           Governing
Law.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to conflicts of laws provisions thereof.


 


(e)           Headings.  The section headings hereof have been
inserted for convenience of reference only and shall not be construed to affect
the meaning, construction or effect of this Agreement.


 


(f)            Counterparts.  This Agreement may be executed in
counterparts, each of which when so executed shall together constitute but one
and the same agreement.


 


(g)           Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.


 


(h)           No
Petition.  The parties hereto will
not at any time institute against the Trust any bankruptcy proceeding under any
United States federal or state bankruptcy or similar law in connection with any
obligations of the Trust under any Trust Related Agreement.


 


[Remainder of page intentionally blank]


 


6

















 


IN WITNESS WHEREOF, the parties have caused this Administration
Agreement to be duly executed and delivered as of the day and year first above
written.


 


	
   

  	
  MG STUDENT LOAN TRUST 2010-1

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  [U.S. Bank National Association], not in its individual 

  capacity but solely as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [U.S. BANK NATIONAL ASSOCIATION],

  
	
   

  	
  not in its individual capacity but solely as

  
	
   

  	
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FIRST MARBLEHEAD DATA SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Rosalyn Bonaventure

  
	
   

  	
   

  	
  President

  



 


Administration Agreement


 

















 


EXHIBIT A

POWER OF ATTORNEY


 


	
  STATE
  OF DELAWARE

  	
  )

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
   

  	
   

  	
   

  
	
  COUNTY
  OF NEW CASTLE 

  	
  )

  	
   

  	
   

  	
   

  	
   

  



 


KNOW
ALL MEN BY THESE PRESENTS, that MG Student Loan Trust 2010-1 (the “Trust”),
does hereby make, constitute and appoint First Marblehead Data Services, Inc.
as administrator under the Administration Agreement dated as of July     ,
2010 (the “Administration Agreement”), among the Trust; [U.S. Bank
National Association], as Trustee; and First Marblehead Data Services, Inc.,
as Administrator, as the same may be amended from time to time, as well as its
agents and attorneys, as Attorney-in-Fact to execute on behalf of the Trust all
such documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Trust to prepare, file or deliver pursuant to the
Trust Related Agreements, including, without limitation, in connection with the
acquisition, servicing, management,
enforcement, collection or disposition of the Trust Loans and the
preparation, filing and audit of federal, state and local tax returns
pertaining to the Trust, and with full power to perform any and all acts
associated with such matters that the Trust could perform, including without
limitation, the right to distribute and receive confidential information,
defend and assert positions in response to audits, initiate and defend
litigation, and to execute waivers of restrictions on assessments of
deficiencies, consents to the extension of any statutory or regulatory time
limit, and settlements.


 


All
powers of attorney for these purposes heretofore filed or executed by the Trust
are hereby revoked.


 


Capitalized
terms that are used and not otherwise defined herein shall have the meanings
ascribed thereto in the Administration Agreement.


 


EXECUTED
as of July     , 2010.


 


	
   

  	
  MG STUDENT LOAN TRUST 2010-1

  
	
   

  	
   

  	
   

  
	
   

  	
  By:    [U.S. Bank National
  Association], not in its 

  individual capacity but solely as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


SCHEDULE A


 


Duties of the Trust or Trustee

Performed by the Administrator under the Trust Agreement


 


(A)                              Paying
to the Trustee its fees and expenses as are set forth in Section 11.01.


 


(B)                                Furnishing
documents to the Owners under Section 10.02.


 


(C)                                Filing a
Certificate of Termination of the Trust upon termination pursuant to
Section 12.01.


 


(D)                               Appointing
separate trustees under Section 13.02.


 


(E)                                 Obtaining
execution by the Owners of any amendment to the Trust Agreement thereunder.


 


(F)                                 To engage in
such activities as may be required for the acquisition, management, collection
or disposition of Trust Property.


 


(G)                                To open one or more bank
accounts on behalf of the Trust, to fund such accounts and to disburse amounts
from such accounts.


 


Duties of the Administrator under the Trust Agreement


 


(A)                              Providing for the
acquisition, management, collection or disposition of Trust Property.


 


(B)                                Providing written
instructions to the Trustee as required under Section 5.02.


 


(C)                                Filing tax returns, reports
and forms under Section 9.04.


 


(D)                               Interpreting
and applying the provisions set forth in Articles V, VII, VIII and XII
regarding application of funds, allocations of profit and loss and
distributions of Trust assets, to resolve any ambiguities that may result from
such application and to provide the Trustee, and the Owners with clarification
of any provision as may be necessary or appropriate.


 

















 


EXHIBIT C3


Special Servicing Agreement


 

















 


SPECIAL SERVICING AGREEMENT


 


This
Special Servicing Agreement, dated as of July        ,
2010 (this “Agreement”), is entered into by and among First Marblehead
Education Resources, Inc., a Delaware corporation having a place of
business at 800 Boylston St., 34th Floor,
Boston, Massachusetts 02199 (“FMER”), as the Special Servicer (together
with its successors and assigns, the “Special Servicer”); MG Student
Loan Trust 2010-1, a Delaware statutory trust (the “Trust”); and solely
for purposes of Sections 2(B)(v), 2(B)(vi), 5, 7, 18(A) and 18(G),
SunTrust Bank, a Georgia state-chartered banking corporation having an office
located at 1001 Semmes Avenue, Richmond, Virginia 23224 (“SunTrust Bank”).


 


WHEREAS,
the Special Servicer, and other subservicing agents appointed from time to time
by the Special Servicer, as provided herein, are experts in the management of
student loan collections; and


 


WHEREAS,
the Trust is appointing the Special Servicer as a servicer under the Trust
Agreement (as defined below), to perform certain limited duties with respect to
student loans owned by the Trust (“Trust Loans”).


 


NOW,
THEREFORE, in consideration of the promises and the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:


 


Section 1.               Definitions.  Capitalized terms used and not
otherwise defined herein shall have the meanings assigned to such terms in the
Loan Program Agreement (as defined below) or Trust Agreement, as applicable.
For purposes of this Agreement, the following capitalized terms shall have the
respective meanings set forth below:


 


“Loan
Program Agreement” means that certain Loan Program Agreement executed April 20,
2010, by and among FMER, The First Marblehead Corporation, and SunTrust Bank.


 


“Trust
Agreement” means that certain Trust Agreement dated as of July       ,
2010 by and among The National Collegiate Funding II, LLC, [U.S. Bank National
Association], as Trustee, [U.S. Bank Trust National Association], as Resident
Trustee, and, with respect to Sections 2.03, 2.05(b), 4.02(d), 9.01, 9.06,
10.01(ii), 12.01 and 13.01 and Articles V and VI only, SunTrust Bank.


 


“Trust
Loan” means (i) any Charged Off Loan and (ii) any Purchased Loan,
in each case which has been assigned to the Trust from time to time pursuant to
the Loan Program Agreement.


 


Section 2.               Appointment;
Special Servicing Duties.


 


A.            Appointment.  The Trust hereby hires, designates and
appoints the Special Servicer to perform the Special Services (as defined
below), and the Special Servicer accepts such appointment and agrees to perform
the Special Services with respect to the Trust Loans, in accordance with the
terms of this Agreement and the Trust Agreement.


 


B.            Special Services.  The Special Servicer shall take such actions
as it shall deem reasonably necessary or appropriate to administer and oversee
the enforcement and collection of Trust Loans to maximize the collection of amounts
payable on the Trust Loans (collectively, the “Special Services”),
including without limitation:


 


(i)                                     Retaining and entering into agreements with licensed collection agencies
and other legally authorized persons (the “Subservicers”) engaged in
providing 


 

















 


default collection
services, in form and substance satisfactory to the Special Servicer, pursuant
to which the Subservicers, for and on behalf of the Trust, will contact
borrowers with respect to the Trust Loans, and seek enforcement and collection
of such Trust Loans;


 


(ii)                                  At the sole discretion of the Special Servicer, (a) performing
periodic audits of Subservicers for compliance and performance reviews and (b) providing
oversight of the activities of Subservicers with regard to account management,
litigation assistance, and/or settlement strategies;


 


(iii)                               Replacing any Subservicer who, in the sole judgment of the Special
Servicer, is deemed to be deficient or negligent in performing the duties
outlined in its subservicing agreement with the Special Servicer;


 


(iv)                              Requiring, in the applicable subservicing agreement, the Subservicers to
provide certain monthly reports to the Special Servicer with respect to Trust
Loans serviced by such Subservicer, in each case, in form and substance
satisfactory to the Special Servicer;


 


(v)                                 Remitting and causing each Subservicer to remit weekly to the FMER
Collection Account (as defined below), Recoveries collected on all Charged Off
Loans serviced by such Subservicer for the Trust;


 


(vi)                              Establishing and maintaining an account or accounts (“FMER Collection
Account”) for the deposit by each Subservicer of Recoveries on all Charged
Off Loans serviced by each Subservicer and depositing on a [weekly] basis in
the Participation Account all Recoveries so deposited in the FMER Collection
Account;


 


(vii)                           Remitting and causing each Subservicer to remit weekly to the Purchased
Loan Collection Account (as defined below), net collections collected on all
Purchased Loans serviced by such Subservicer for the Trust;


 


(viii)                        Maintaining the [“Third Party” account currently at U.S. Bank] (“Purchased
Loan Collection Account”) for the deposit by each Subservicer of net
collections on all Purchased Loans serviced by each Subservicer and depositing
on a [monthly] basis in the [NCF II Account] all net collections so deposited
in the Purchased Loan Collection Account;


 


(ix)                                Reviewing default notification packages (which packages shall contain the
information, reports and documents required in the Servicing Guidelines)
prepared by the Servicer with respect to Trust Loans to confirm, on the basis
of such review, that the Servicer has complied with the Servicing Guidelines in
servicing the Trust Loans;


 


(x)                                   Receiving reports from Subservicers related to payments with respect to
Trust Loans and updating records with respect to Trust Loans as interest and
other charges accrue and amounts are collected;


 


(xi)                                Transferring all collection activities to Subservicers, provided that the Special Servicer shall not be required to
transfer such collection activities if the 


 


2

















 


Administrator determines
that it is likely that collections would not be maximized on such Trust Loans
if the collection activities were transferred to Subservicers;


 


(xii)                             Retaining counsel on behalf of the Trust (whether directly or through
collection agencies) to further pursue enforcement and collection of Trust
Loans, including through litigation and bankruptcy or probate proceedings; and


 


(xiii)                          Negotiating any settlement or compromise of any claim with respect to a
Trust Loan, which in the reasonable judgment of the Special Servicer or the
applicable Subservicer is more likely to produce greater proceeds of collection
than by virtue of a forbearance, payment arrangement or other accommodation
with the Borrower.


 


Section 3.               Subservicers.    In
carrying out its duties under this Agreement, the Special Servicer may retain
and employ Subservicers to perform any of the Special Services, and to commence
any actions or proceedings the Subservicers deem necessary or appropriate in
connection with such enforcement or collection efforts on Trust Loans.


 


Section 4.               Servicing
Fee.  As compensation for the performance of the Special Servicer’s obligations
under this Agreement and as reimbursement for its expenses related thereto, the
Special Servicer shall not receive any fee under this Agreement, but rather
shall receive only the fee set forth in Section 6.4.1 of the Loan Program
Agreement, paid to the Servicer and then remitted to FMER by the Servicer.


 


Section 5.               Term of Agreement; Resignation and Removal of
Special Servicer.


 


A.            This Agreement shall continue in
force until the principal and interest balance of each Trust Loan has been
fully paid or otherwise discharged, whether by settlement or other means, upon
which event this Agreement shall automatically terminate.


 


B.            Subject to Section 5(C) of
this Agreement, the Trustee shall remove the Special Servicer by delivering to
the Special Servicer written notice of termination if any of the following
events shall occur:


 


(i)                                     The Special Servicer shall default in the performance of any of its
duties under this Agreement and, after written notice of such default, shall
not cure such default within 45 days (or such longer period as shall be reasonably
satisfactory to the Trustee);


 


(ii)                                  A court of competent jurisdiction shall enter a decree or order for
relief, and such decree or order shall not have been vacated within 60 days,
with respect to any involuntary case commenced against the Special Servicer
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect or shall appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for the Special Servicer
or any substantial part of its property or order the winding-up or liquidation
of its affairs; or


 


(iii)                               The Special Servicer shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under any
such 


 


3

















 


law, or shall consent to
the appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator or similar official for it or any substantial part of its
property, shall consent to the taking of possession by any such official of any
substantial part of its property, shall make any general assignment for the
benefit of its creditors or shall fail generally to pay its debts as they become
due.


 


The Special Servicer agrees that if any of the
events specified in clauses (ii) or (iii) of this Section 5(B) shall
occur, it shall give written notice thereof to the Trustee, within five (5) Business
Days after the happening of such event.


 


C.            No removal of the Special Servicer
pursuant to this Section 5 shall be effective until a Successor Special
Servicer (as defined below) shall have agreed in writing to be bound by the
terms of this Agreement or a substantially similar agreement providing for the
collection of Trust Loans.


 


Section 6.               Action
upon Termination or Removal. 
Promptly upon the effective date of termination of this Agreement or
removal of the Special Servicer pursuant to Section 5 of this Agreement,
the Special Servicer shall forthwith upon such termination pursuant to Section 5
of this Agreement deliver to the Trust or its designee, all property and
documents of or relating to the Trust Loans then in the custody of the Special
Servicer pursuant to this Agreement.  In
the event of the removal of the Special Servicer pursuant to Section 5 of
this Agreement, the Special Servicer, for a period of not less than 120 days
following notice of such removal, shall cooperate with the Trust and take all
reasonable steps requested to assist the Trust in making an orderly transfer of
the duties of the Special Servicer to the applicable Successor Special
Servicer, including, without limitation, remitting or causing the Subservicers
to remit net collections received on Trust Loans to the FMER Collection Account
or the Purchased Loan Collection Account, as applicable.


 


Section 7.               Successor
Special Servicer.


 


A.            In the event of the removal of the
Special Servicer pursuant to Section 5 of this Agreement, SunTrust Bank
shall have the right in its discretion to appoint a successor Special Servicer
(“Charged Off Loans Successor Special Servicer”) to assume the rights,
duties and obligations of the Special Servicer and/or the Subservicers solely
related to the Charged Off Loans under this Agreement.


 


B.            In the event of the removal of the
Special Servicer pursuant to Section 5 of this Agreement, the Trustee, at
the direction of the Owners, shall have the right in its discretion to appoint
a successor Special Servicer (“Purchased Loans Successor Special Servicer”
and together with the Charged Off Loans Successor Special Servicer, the “Successor
Special Servicer”) to assume the rights, duties and obligations of the
Special Servicer and/or the Subservicers solely related to the Purchased Loans
under this Agreement; provided that the Purchased Loans Successor Special
Servicer and the Trust shall enter into a new agreement for the servicing of
the Purchased Loans, which such agreement shall contain terms no less favorable
to the Trust than those contained in this Agreement (the “Purchased Loans
Servicing Agreement”).


 


C.            In order to facilitate the
performance of the applicable Successor Special Servicer’s duties under this
Agreement or the Purchased Loans Servicing Agreement, as the case may be, for a
period of not less than 120 days following the removal of the Special Servicer
pursuant to Section 5 of this Agreement the Special Servicer will provide
to the applicable Successor Special Servicer reasonable access, during normal
business hours and upon reasonable prior notice (and subject to standard
confidentiality restrictions), to all files, systems and employees of the
Special Servicer then used in the provision of the Special Services with
respect to the Trust Loans.  Without
limiting the generality of the foregoing, the Special Servicer agrees to
cooperate with the applicable Successor Special Servicer (or its 


 


4

















 


designee) to facilitate
the orderly transfer of its duties under this Agreement, including without
limitation, notifying the Subservicers, collection agents and other appropriate
parties of the transfer of the Special Servicer function and providing (or
causing the Subservicers to provide) the applicable Successor Special Servicer
with all documents and records in electronic or other form reasonably requested
by the applicable Successor Special Servicer to enable the applicable Successor
Special Servicer or its designee to assume the Special Servicer’s functions
under this Agreement and shall, as applicable, (i) deposit into the
Participation Account all Recoveries deposited into the FMER Collection Account
during such period and (ii) deposit into the [NCF II Account] all net
collections deposited into the Purchased Loan Collection Account during such
period.


 


D.            In the event that a Successor
Special Servicer begins performing the Special Services, it shall be authorized
to accept and rely on all of the accounting, records (including computer
records) and work of the Special Servicer or any Subservicer (collectively, the
“Predecessor Work Product”) without any audit or other examination
thereof, and it shall have no duty, responsibility, obligation or liability for
the acts and omissions of the Special Servicer or of Subservicers.  If any error, inaccuracy, omission or
incorrect or non-standard practice or procedure (collectively, “Errors”)
exist in any Predecessor Work Product and such Errors make it materially more
difficult to service or would cause or materially contribute to the Successor
Special Servicer making or continuing any Errors (collectively, “Continued
Errors”), the Successor Special Servicer shall have no duty,
responsibility, obligation or liability for such Continued Errors, which shall
be the responsibility of Special Servicer. 
In performing the obligations of the Special Servicer under this
Agreement, the Successor Special Servicer shall be entitled to rely
conclusively on the reports and other information which it may receive from a
Subservicer, including as to the accuracy and completeness thereof.


 


E.             Out of pocket costs and expenses
(including the fees of its counsel and agents) incurred by the Successor
Special Servicer in connection with the transition of services hereunder during
the 120 day period following notice of the removal of FMER as Special Servicer
shall be borne by FMER.  To the extent
that such expenses are not paid by FMER (but without limiting or discharging
its liability therefor), such expenses shall be paid by FMDS, as Administrator,
who may seek reimbursement from the Trust.


 


Section 8.               Representations
and Warranties.


 


A.            The Special Servicer hereby makes
the following representations and warranties to the Trust:


 


(i)                                     Organization and Good Standing.  The Special Servicer is an entity duly
organized, validly existing, and in good standing under the laws of its state
of incorporation or formation or the laws of the United States, and is in
compliance with the laws of each state in which any of its property is located
to the extent necessary to perform its obligations hereunder.


 


(ii)                                  No Violation.  Neither the execution and delivery by the
Special Servicer of this Agreement, nor the consummation by it of the
transactions contemplated hereby, nor the performance of and compliance by the
Special Servicer with the provisions hereof, will conflict with or result in a
breach or violation of, or constitute a default (or an event which, with notice
or the lapse of time, or both, would constitute a default) under, the
organizational documents (its articles of incorporation or charter or by-laws)
of the Special Servicer, any of the provisions of any judgment, decree, demand,
or order of any federal, state, or local court binding on the Special Servicer,
or any of the provisions of any indenture, mortgage, contract, instrument, or
other document to which the Special Servicer 


 


5

















 


is a party or by which it
is bound, or result in the creation or imposition of any lien, charge, or
encumbrance upon any of its properties pursuant to the terms of any indenture,
mortgage, contract, instrument, or other document. Neither the execution and
delivery by the Special Servicer of this Agreement, nor the consummation by it
of the transactions contemplated hereby, nor the performance of and compliance
by the Special Servicer with the provisions hereof, will, to its knowledge,
result in a breach of any law, rule or regulation of any federal, state or
local governmental or regulatory authority binding on the Special
Servicer.  The Special Servicer is not
otherwise in violation of any law, rule, regulation, judgment, decree, demand,
or order (of any federal, state or local governmental or regulatory authority
or court), which violation, in the Special Servicer’s good faith and reasonable
judgment, is likely to affect materially and adversely either its ability to
perform its obligations hereunder, or the financial condition of the Special
Servicer.


 


(iii)                               Authorization and Enforceability.  The execution and delivery by the Special
Servicer of this Agreement, the consummation of the transactions contemplated
hereby, and the performance and compliance by the Special Servicer with the
terms hereof are within the powers of the Special Servicer, and have been duly
authorized by all necessary action on the part of the Special Servicer. All
organizational resolutions and consents necessary for the Special Servicer to
enter into and consummate all transactions contemplated hereby have been
obtained. This Agreement has been duly executed and delivered by the Special
Servicer and constitutes the legal, valid and binding obligation of the Special
Servicer, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, and other
similar laws affecting creditors’ rights generally, and to general principles
of equity, regardless of whether such enforcement is considered in a proceeding
in equity or at law. The Special Servicer has not failed to obtain any consent,
approval, authorization, or order of, or failed to cause any registration or
qualification with, any court or regulatory authority or other governmental
body having jurisdiction over the Special Servicer, which consent, approval,
authorization, order, registration, or qualification is required for, and the
absence of which would materially adversely affect, the legal and valid
execution, delivery, and performance of this Agreement by the Special Servicer.


 


(iv)                              Approvals and Permits.  The Special Servicer possesses such
certificates, authorizations, licenses, and permits issued by the appropriate
state, federal, and foreign regulatory agencies or bodies necessary to conduct
the business now operated by it, and it has not received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization, or permit which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling, or finding, would materially and adversely
affect the ability of the Special Servicer to perform its obligations
hereunder.


 


(v)                                 No Litigation.  No litigation is pending or, to the best of
the Special Servicer’s knowledge, threatened against it, which, if determined
adversely to the Special Servicer would prohibit the Special Servicer from
entering into this Agreement or, in the good faith and reasonable judgment of
the Special Servicer, is likely to materially and adversely affect either its
ability to perform its obligations hereunder or the financial condition of the
Special Servicer.


 


6














 


Section 9.               Indemnification.  The Special Servicer will indemnify the
Trust, the Trustee, and their respective officers, directors, employees and
agents for, and hold them harmless against, any losses, liability or expense,
including reasonable attorneys’ fees and expenses, incurred in the absence of
willful misconduct, negligence or bad faith on the part of the Trust, the
Trustee and their respective agents, arising out of the willful misconduct,
negligence or bad faith of the Special Servicer (or its agents) in the
performance of the Special Servicer’s duties contemplated by this Agreement; provided that neither the Special Servicer nor any of its
directors, officers, employees or agents shall be liable for any action taken
or for refraining from the taking of any action pursuant to instructions or
directions from the Administrator or the Trustee or in accordance with this
Agreement.


 


Section 10.             Records;
Inspection.  The Special Servicer shall maintain appropriate books of account and
records relating to services performed hereunder, which books of account and
records shall be accessible for inspection by the Trustee at any time during
normal business hours.  The Special
Servicer hereby grants the Trustee the right to perform ongoing due diligence
review of the Special Servicer’s activities hereunder at the sole cost and
expense of the Special Servicer; provided that
such due diligence be conducted in a reasonable manner, convenient to the
Special Servicer.


 


Section 11.             Reporting;
Additional Information to be Furnished. 
On the tenth (10th) Business Day
after the end of each calendar month, the Special Servicer shall furnish the
Administrator on behalf of the Trust, an electronically transferred data file
containing a monthly collection report regarding
the Trust Loans in a form
satisfactory to the Administrator.  The
Special Servicer shall furnish to the Administrator on behalf of the Trust from
time to time such additional information regarding the Trust Loans as the
Administrator on behalf of the Trust shall reasonably request.


 


Section 12.             Subservicing
Agreements.  The Special Servicer
will cause each subservicing agreement with a Subservicer to contain provisions
consistent with this Agreement, including provisions requiring the applicable
Subservicer to maintain adequate records and procedures with respect to a Trust
Loan and its performance.  Each
subservicing agreement shall be terminable by the Special Servicer (including
for the avoidance of doubt, the Successor Special Servicer acting as successor
Special Servicer) upon 30 days written notice, and shall provide that any
Successor Special Servicer shall succeed to the Special Servicer
thereunder.  The Special Servicer shall
promptly provide the Trustee copies of all existing subservicing agreements
with a Subservicer upon written request.


 


Section 13.             Amendments.  This
Agreement may be amended from time to time by the parties hereto, provided that
any amendment must be accompanied by the written consent of the Administrator.


 


Section 14.             Independence of the Special Servicer.  For
all purposes of this Agreement, the Special Servicer shall be an independent
contractor and shall not be subject to the supervision of the Trust with
respect to the manner in which it accomplishes the performance of its obligations
hereunder.  Unless expressly authorized
by the Trust, the Special Servicer shall have no authority to act for or
represent the Trust in any way other than as specified hereunder.


 


Section 15.             No Joint Venture. 
Nothing contained in this Agreement (A) shall constitute the Special
Servicer and the Trust as members of any partnership, joint venture,
association, syndicate, unincorporated business or other separate entity, (B)
shall be construed to impose any liability as such on any of them, or (C) shall
be deemed to confer on any of them any express, implied or apparent authority
to incur any obligation or liability on behalf of the other.


 


Section 16.             Other Activities of the Special Servicer. 
Nothing herein shall prevent the Special Servicer or its Affiliates from
engaging in other businesses or, in its or their sole discretion, from acting
in 


 


7

















 


a similar capacity as servicer for any other person
or entity even though such person or entity may engage in business activities
similar to those of the Trust.


 


Section 17.             Notices.  Any notice, report or other communication
given hereunder shall be in writing and addressed as follows:


 


If to the Special
Servicer, to:


 


First
Marblehead Education Resources, Inc.


The
Prudential Tower


800
Boylston Street – 34th Floor


Boston, MA 02199-8157


Attention: Ms. Rosalyn Bonaventure


 


With
a copy to:


 


The
First Marblehead Corporation


The
Prudential Tower


800
Boylston Street - 34th Floor


Boston,
MA 02199-8157


Attention:
Corporate Law Department


 


If to the Trust to:


 


MG
Student Loan Trust 2010-1


[c/o
U.S. Bank National Association, as Trustee


One
Federal Street


Boston,
MA 02110


Attention:
Corporate Trust Administration]


 


With
a copy to:


 


First
Marblehead Data Services, Inc.

The Prudential Tower

800 Boylston Street - 34th Floor

Boston, MA 02199-8157

Attention:  Ms. Rosalyn Bonaventure


 


Or
to such other address as any party shall have provided to the other parties in
writing.  Any notice required to be in
writing hereunder shall be deemed given if such notice is mailed by certified
mail, postage prepaid, sent by overnight courier for next-day delivery or
hand-delivered to the address of such party as provided above.


 


Section 18.             Miscellaneous.


 


A.            Successors and Assigns.  This Agreement may not be assigned by the
Special Servicer unless such assignment is previously consented to in writing
by the Trustee and SunTrust Bank; provided that, if the assignment of this
Agreement relates solely to matters related to Purchased Loans, the consent of
SunTrust Bank shall not be required.  An
assignment with such consent, if accepted by the assignee, shall bind the
assignee hereunder in the same manner as the Special Servicer is bound
hereunder.  Notwithstanding the
foregoing, this Agreement may be assigned by the Special Servicer, without the 


 


8

















 


consent of the Trustee or SunTrust Bank to a
corporation or other organization that is a successor (by merger, consolidation
or purchase of assets) to the Special Servicer; provided that such successor organization executes
and delivers to the Trustee and the other parties hereto an agreement in which
such corporation or other organization agrees to be bound hereunder in the same
manner as the Special Servicer is bound hereunder.  Subject to the foregoing, this Agreement
shall bind any such permitted successors or assigns of the parties hereto.


 


B.            Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to conflicts of laws provisions thereof.


 


C.            Headings.  The section headings hereof have been
inserted for convenience of reference only and shall not be construed to affect
the meaning, construction or effect of this Agreement.


 


D.            Counterparts.  This Agreement may be executed in
counterparts, each of which when so executed shall together constitute but one
and the same agreement.


 


E.             Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.


 


F.             Limitation of Liability of
Trustee.  Notwithstanding anything
contained herein to the contrary, this instrument has been executed by [U.S.
Bank National Association], not in its individual capacity but solely in its capacity
as Trustee of the Trust, and in no event shall [U.S. Bank National Association]
in its individual capacity or any Owner of the Trust have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Trust hereunder, as to all of which recourse shall be had solely to the assets
of the Trust.  For all purposes of this
Agreement, in the performance of any duties or obligations of the Trust
hereunder, the Trustee shall be subject to, and entitled to the benefits of,
the terms and provisions of Articles IX and X of the Trust Agreement.


 


G.            Third Party Beneficiary.  The parties hereto acknowledge that SunTrust
Bank is a third party beneficiary hereof and is entitled to enforce their
respective rights hereunder as if actually a party hereto.


 


H.            No Petition.  The parties hereto will not at any time
institute against the Trust any bankruptcy proceeding under any United States
federal or state bankruptcy or similar law in connection with any obligations
of the Trust.


 


[SIGNATURE PAGE FOLLOWS]


 


9

















 


IN
WITNESS WHEREOF, the parties hereto have caused this Special Servicing
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.


 


	
   

  	
  FIRST
  MARBLEHEAD EDUCATION 

  RESOURCES,
  INC., as the Special Servicer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MG
  STUDENT LOAN TRUST 2010-1

  
	
   

  	
   

  
	
   

  	
  By: [U.S. Bank National Association], not in its 

  individual capacity but solely as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FOR
  PURPOSES OF SECTIONS 2(B)(v), 

  2(B)(vi),
  5, 7, 18(A) and 18(G):

  
	
   

  	
   

  	
   

  
	
   

  	
  SUNTRUST
  BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ACKNOWLEDGED
  AND CONFIRMED:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIRST
  MARBLEHEAD DATA SERVICES, 

  INC., as Administrator

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


EXHIBIT D1


TransUnion Addendum


 

















 


TransUnion Addendum


 


AGENT ADDENDUM TO THE TRANSUNION
MASTER SERVICES


AGREEMENT FOR CONSUMER REPORTING
AND ANCILLARY SERVICES


 


This Agent Addendum (“Addendum”), effective the 15th day of July, 2010 (the “Effective Date”),
by and between Trans Union LLC, with its principal place of business located at
555 West Adams, Chicago, Illinois 60661 (“TransUnion”), SunTrust Bank,
with its principal place of business located at 303 Peachtree Street, Atlanta,
GA 30308 (“SUBSCRIBER”), and First Marblehead Education Resources, Inc.,
with its principal place of business located at One Cabot Road, Medford,
Massachusetts 02155 (“Agent”), is meant to modify the terms of the
Master Agreement for Consumer Reporting and Ancillary Services entered between
TransUnion and Subscriber on or about August 26, 2003 (the “MSA”).


 


RECITALS


 


WHEREAS, SUBSCRIBER has entered into an agreement with
Agent for the purpose of conducing the project indicated on the attached
Schedule A (the “Project”);


 


WHEREAS, the Project requires TransUnion to disclose
Services and Services Information directly to Agent on behalf of SUBSCRIBER;


 


WHEREAS, SUBSCRIBER desires TransUnion disclose such
Services and Services Information directly to Agent, and TransUnion has agreed
to such disclosure, subject to the terms contained in both the MSA and this
Addendum; and,


 


WHEREAS, SUBSCRIBER desires that TransUnion invoice Agent
for the Services and Services Information disclosed to Agent as more fully
explained herein.


 


NOW, THEREFORE, in exchange for the mutual promises and
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto agree
as follows:


 


1.               The forgoing Recitals are
hereby incorporated by reference as a material part of this Agreement.


 


2.               Capitalized terms not
defined herein shall have the definition ascribed in the MSA.


 


3.               SUBSCRIBER hereby appoints
Agent its agent with all necessary authority to disclose to, and, request and
receive from, TransUnion, Services or Services Information.  Moreover, SUBSCRIBER hereby authorizes
TransUnion to disclose Services and Services information to Agent.


 


4.               SUBSCRIBER hereby represents
to TransUnion that it has entered into a written agreement with Agent
containing obligations and restrictions consistent with its obligations and
restrictions under the MSA.  SUBSCRIBER
further agrees to enforce such obligations and restrictions against Agent to
the satisfaction of TransUnion, and to immediately notify TransUnion upon the
discovery of any violation of such obligations and restrictions by Agent.  In the event SUBSCRIBER fails to enforce said
obligations and restrictions to TransUnion’s satisfaction, SUBSCRIBER hereby
agrees to assign to TransUnion all such enforcement rights against Agent.


 


5.               TransUnion, subject to the
terms of the MSA and this Addendum, agrees to: 1) disclose Services and
Services Information to Agent on behalf of SUBSCRIBER; and, 2) allow Agent to
access Services and Services Information on behalf of Subscriber.


 

















 


6.               Agent certifies that it will
request and use any information provided as part of the TransUnion services
pursuant to this Addendum in compliance with the terms and conditions of the
MSA and only on behalf of SUBSCRIBER one-time and only for the specific
permissible purpose certified by SUBSCRIBER at the time of its request.  Agent further certifies that it will limit the
disclosure of Services and Services Information to those individuals inside its
organization with a “need to know”, and that it will not disclose such
information to any third party other than the SUBSCRIBER.


 


7.               SUBSCRIBER and Agent shall
at all times be responsible for compliance with, and any violation of, the
terms, certifications, obligations and restrictions as set forth in the MSA
with respect to Services and/or Services Information disclosed to Agent,
including, but not limited to, those terms related to compliance with laws and
security.  Moreover, and without regard
to any cap on liability set forth in the MSA, SUBSCRIBER and Agent shall
jointly and severally defend, indemnify and hold TransUnion harmless from and
against any and all claims, expenses, costs, damages, settlements, judgments or
awards, including attorney’s fees, directly or indirectly resulting from, or
alleged to have directly or indirectly resulted from, disclosure hereunder.


 


8.               SUBSCRIBER authorizes, and
TransUnion agrees, that for any Services and/or Services Information accessed
by its Agent, TransUnion will invoice SUBSCRIBER care-of
Agent, at a rate previously agreed upon by TransUnion and Agent, at the
following address One Cabot Road , Medford, Massachusetts 02155, which may be
changed upon written notice to TransUnion in accordance with Paragraph 11.  Agent shall remit to TransUnion payment to
TransUnion Invoice within thirty (30) days of the invoice date, regardless
whether or not it has collected such payment from SUBSCRIBER.  Without limiting any of TransUnion’s remedies
for non payment or late payment of invoices, invoices which are not paid by
Agent within sixty (60) days of the invoice date shall be subject to a late
charge of one and one-half percent (1.5%) per month (18% per year) or the
maximum allowed by law, whichever is less. 
If collection efforts are required, Agent shall pay all costs of
collection, including reasonable attorneys’ fees.


 


9.               Notwithstanding the
forgoing, SUBSCRIBER, in accordance with the terms of the MSA, shall remain
responsible for payment of any unpaid or untimely paid invoices, as well as any
fees associated therewith, submitted to SUBSCRIBER care-of
Agent.


 


10.         Agent recognizes the
confidential nature of the information contained in the TransUnion
invoice(s).  Agent shall keep all
information in any way related to the TransUnion invoice(s), whether received
from either TransUnion or SUBSCRIBER, in confidence and shall not use such
information except for purposes of this Addendum, nor disclose such information
to any person or persons outside of its organization.  Moreover, Agent shall limit the disclosure of
such information inside its organization to employees having a need to know who
are subject to written obligations of confidentiality substantially similar to
those contained herein.  Furthermore, no
information related to the TransUnion invoice(s), whether received from
TransUnion or SUBSCRIBER, shall be copied or duplicated in any form or manner
except as necessary to carry out the purpose of this Addendum.


 


11.         All notices and
correspondence required under the Addendum shall be sent to the Parties at the
following addresses.  Either party may
change such name and address by notice to the other in accordance herewith.  Any such change shall take effect immediately
upon receipt of such notice.


 


2

















 


	
  If to TransUnion:

  TransUnion LLC

  555 West Adams

  Chicago, IL 60661

  Attn:
  General Counsel

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If to SunTrust:

  SunTrust Bank

  1001 Semmes Avenue

  Mail Code CS-RVW-7900

  Richmond, VA 23224

  Attn:  Mark Smith, Executive
  Vice President

  	
   

  	
  With a copy to:

  SunTrust Bank

  Legal Department

  303 Peachtree St., NE – 36th Floor

  Atlanta,
  GA 30308

  
	
   

  	
   

  	
   

  
	
  If to FMER:

  First Marblehead Education Resources, Inc.

  One Cabot Road

  Medford, MA 02155

  Attn:  Managing Director

  	
   

  	
  With a copy to:

  The First Marblehead Corporation

  Legal Department

  800 Boylston Street, 34th Floor

  Boston,
  MA 02199-8157

  



 


12.         All terms of the MSA are
incorporated into this Addendum and are expressly applicable to all orders and
payments hereunder.  In the event of a
conflict between any of the terms of this Addendum and those of the MSA, the
terms of this Addendum shall govern.  The
remaining terms of the MSA shall at all times remain in full force and effect.


 


13.         This Addendum shall be
coterminous with the MSA unless earlier terminated by SUBSCRIBER in accordance
with the termination provisions contained in the MSA or by TransUnion upon
written notice to SUBSCRIBER.


 


[Signatures appear on next page]


 


3

















 


IN WITNESS WHEREOF, the parties, intending to
be legally bound, have caused this Addendum to be executed by their duly
authorized representatives as of the Effective Date.


 


 


	
  TransUnion LLC

  	
   

  	
  SunTrust
  Bank

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Steve Sassaman

  	
   

  	
  By:

  	
  /s/
  Joe McDonald

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Steve
  Sassaman, Executive Vice President

  	
   

  	
   

  	
  Joe
  McDonald, First Vice-President

  
	
   

  	
  Name
  and Title of Signer

  	
   

  	
   

  	
  Name
  and Title of Signer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  As
  of 7/15/10

  	
   

  	
   

  	
  July
  15, 2010

  
	
   

  	
  Date
  Signed

  	
   

  	
   

  	
  Date
  Signed

  



 


	
   

  	
   

  	
   

  
	
  First Marblehead Education Resources,
  Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Michael Plunkett

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Michael
  Plunkett, Managing Director

  	
   

  	
   

  
	
   

  	
  Name
  and Title of Signer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  28
  July 2010

  	
   

  	
   

  
	
   

  	
  Date
  Signed

  	
   

  	
   

  



 


4

















 


Schedule A


 


Project
Description: Custom Choice Loansm Student Loan
Origination


 


All
SUBSCRIBER orders placed hereunder shall be made under the following TransUnion
Subscriber Code: [**].


 


5














 


EXHIBIT D2


TransUnion FICO Addendum


 

















 


AGENT ADDENDUM


 


AGENT SERVICE ADDENDUM TO THE
FICO SCORE SERVICES AGREEMENT


 


This Agent Service Addendum (the “Addendum”), effective the 15th day of July, 2010 (the “Effective Date”),
by and between Trans Union LLC, with its principal place of business located at
555 West Adams, Chicago, Illinois 60661 (“TransUnion”), Fair Isaac
Corporation, with its principal place of business located at 901 Marquette
Avenue Suite 3200 Minneapolis, MN 55402 (“FICO”), SunTrust Bank, with
a place of business located at 1001 Semmes Avenue, Richmond, Virginia 23224 (“SUBSCRIBER”),
and First Marblehead Education Resources, Inc. with its principal place of
business located at One Cabot Road, Medford, Massachusetts 02155 (“Agent”),
and is intended to modify the terms of the Agreement for Fair Isaac Score
Services entered between TransUnion, FICO and SUBSCRIBER on or about July 15th, 2010 (the “FICO
Agreement”) as more fully explained herein.


 


RECITALS


 


WHEREAS, SUBSCRIBER has entered into an agreement with
Agent for the purpose of conducing the project indicated on the attached
Schedule A (the “Project”);


 


WHEREAS, the Project requires TransUnion to disclose FICO
Score Services directly to Agent on behalf of SUBSCRIBER;


 


WHEREAS, SUBSCRIBER desires TransUnion disclose such FICO
Score Services directly to Agent, and TransUnion and FICO have agreed to such
disclosure, subject to the terms contained in both the FICO Agreement and this
Addendum; and,


 


WHEREAS, SUBSCRIBER desires that TransUnion invoice Agent
for the FICO Score Services disclosed to Agent as more fully explained herein.


 


NOW, THEREFORE, in exchange for the mutual promises and
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:


 


1.               The forgoing Recitals are
hereby incorporated by reference as a material part of this Agreement.


 


2.               Capitalized terms not
defined herein shall have the definition ascribed in the FICO AGREEMENT.


 


3.               SUBSCRIBER hereby appoints
Agent its agent with all necessary authority to request and receive from
TransUnion, FICO Score Services. Moreover, SUBSCRIBER hereby authorizes
TransUnion to disclose FICO Score Services to Agent.


 


4.               SUBSCRIBER shall at all
times be responsible and ensure Agent’s compliance with the terms and
conditions of the FICO AGREEMENT. Additionally SUBSCRIBER hereby represents to
TransUnion and FICO that it has entered into a written agreement with Agent
containing obligations and restrictions consistent with its obligations and
restrictions under the FICO AGREEMENT. SUBSCRIBER further agrees to enforce
such obligations and restrictions against Agent to the satisfaction of
TransUnion and FICO, and to immediately notify TransUnion and FICO upon the
discovery of any 


 


1

















 


violation
of such obligations and restrictions by Agent. In the event SUBSCRIBER fails to
enforce said obligations and restrictions to TransUnion’s and/or FICO’s satisfaction,
SUBSCRIBER hereby agrees to assign to TransUnion and/or FICO, as the case may
be, all such enforcement rights against Agent.


 


5.               TransUnion and FICO, subject
to the terms of the FICO AGREEMENT and this Addendum, agrees to: 1) disclose
FICO Score Services to Agent on behalf of SUBSCRIBER.


 


6.               Agent certifies that it will
request and use any information provided as part of the FICO Score Services in
compliance with the terms and conditions of the FICO AGREEMENT and only on
behalf of SUBSCRIBER. Agent further certifies that it will limit the disclosure
of FICO Score Services to those individuals inside its organization with a “need
to know”, and that it will not disclose such information to any third party
other than the SUBSCRIBER.


 


7.               SUBSCRIBER and Agent shall
at all times be responsible for compliance with, and any violation of, the
terms, certifications, obligations and restrictions as set forth in the FICO
AGREEMENT with respect to the FICO Score Services disclosed to Agent,
including, but not limited to, those terms related to compliance with laws and
security. Moreover, and without regard to any cap on liability set forth in the
FICO Agreement, SUBSCRIBER and Agent shall jointly and severally defend,
indemnify and hold TransUnion and FICO harmless from and against any and all
claims, expenses, costs, damages, settlements, judgments or awards, including
attorney’s fees, directly or indirectly resulting from, or alleged to have
directly or indirectly resulted from, disclosure hereunder.


 


8.               SUBSCRIBER authorizes, and
TransUnion agrees, that for any Services and/or Services Information accessed
by its Agent, TransUnion will invoice SUBSCRIBER care-of Agent, at a rate
previously agreed upon by TransUnion and Agent, at the following address First
Marblehead Education Resources, Inc., Loan Origination, One Cabot Road,
Medford, MA 02155, which may be changed by SUBSCRIBER or Agent upon written
notice to TransUnion in accordance with paragraph 11. Notwithstanding the
forgoing, SUBSCRIBER, in accordance with the terms of the FICO Agreement, shall
remain responsible for payment of any unpaid or untimely paid invoices, as well
as any fees associated therewith, submitted to SUBSCRIBER care-of Agent.


 


9.               Notwithstanding the
forgoing, SUBSCRIBER, in accordance with the terms of the FICO AGREEMENT, shall
remain responsible for payment of any unpaid or untimely paid invoices, as well
as any fees associated therewith, submitted to SUBSCRIBER care-of
Agent.


 


10.         Agent recognizes the
confidential nature of the information contained in the TransUnion invoice(s).
Agent shall keep all information in any way related to the TransUnion
invoice(s), whether received from either TransUnion or SUBSCRIBER, in
confidence and shall not use such information except for purposes of this
Addendum, nor disclose such information to any person or persons outside of its
organization. Moreover, Agent shall limit the disclosure of such information
inside its organization to employees having a need to know who are subject to
written obligations of confidentiality substantially similar to those contained
herein. Furthermore, no information related to the TransUnion invoice(s),
whether received from TransUnion or SUBSCRIBER, shall be copied or 


 


2

















 


duplicated
in any form or manner except as necessary to carry out the purpose of this
Addendum.


 


11.         All notices and
correspondence required under the Addendum shall be sent to the Parties at the
following addresses. Either party may change such name and address by notice to
the other in accordance herewith. Any such change shall take effect immediately
upon receipt of such notice.


 


	
  TransUnion
  LLC

  	
  SunTrust
  Bank (Subscriber)

  
	
  555
  West Adams

  	
  1001
  Semmes Avenue

  
	
  Chicago, IL
  60661

  	
  Richmond,
  Virginia 23224

  
	
  Attn:
  General Counsel

  	
  Attn:
  W. Mark Smith

  
	
   

  	
  Executive
  Vice President

  
	
   

  	
   

  
	
  FMER
  Loan Originations (Agent)

  	
   

  
	
  One
  Cabot Road

  	
   

  
	
  Medford,
  Massachusetts 02155

  	
   

  
	
  Attn:
  Managing Director

  	
   

  



 


12.         All terms of the FICO
AGREEMENT are incorporated into this Addendum and are expressly applicable to
all orders and payments hereunder. In the event of a conflict between any of
the terms of this Addendum and those of the FICO AGREEMENT, the terms of this
Addendum shall govern. The remaining terms of the FICO AGREEMENT shall at all
times remain in full force and effect.


 


13.         This Addendum shall be
coterminous with the FICO AGREEMENT unless earlier terminated by SUBSCRIBER in
accordance with the termination provisions contained in the FICO AGREEMENT or
by TransUnion or FICO upon written notice to SUBSCRIBER.


 


[Signatures appear on next page.]


 


3

















 


IN
WITNESS WHEREOF, the parties, intending to be legally bound, have
caused this Addendum to be executed by their duly authorized representatives as
of the Effective Date.


 


 


	
  Trans Union LLC

  	
   

  	
  SunTrust
  Bank

  
	
  for itself and Fair Isaac
  Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Steve Sassaman

  	
   

  	
  By:

  	
  /s/
  Joe McDonald

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Steve
  Sassaman, EVP

  	
   

  	
   

  	
  Joe
  McDonald, First Vice-President

  
	
   

  	
  Name
  and Title of Signer

  	
   

  	
   

  	
  Name
  and Title of Signer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  As
  of 7/15/10

  	
   

  	
   

  	
  July 15,
  2010

  
	
   

  	
  Date
  Signed

  	
   

  	
   

  	
  Date
  Signed

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First Marblehead Education
  Resources, Inc.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Michael Plunkett

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Michael
  Plunkett, Managing Director

  	
   

  	
   

  	
   

  
	
   

  	
  Name
  and Title of Signer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  28
  July 2010

  	
   

  	
   

  	
   

  
	
   

  	
  Date
  Signed

  	
   

  	
   

  	
   

  



 


4

















 


Schedule A


 


Project
Name: Custom Choice LoanSM Student Loan Origination


 


Project
Description:


 


All
SUBSCRIBER orders placed hereunder shall be made under the following TransUnion
Subscriber Code(s): [**].


 


5

















 


EXHIBIT E


Amended FMC Variable Rate Compensation


 


[**]