Document:

Exhibit 10.39

 

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. 
Asterisks denote omissions.

 

LOAN PROGRAM AGREEMENT

 

This Loan Program Agreement (the “Agreement”) is entered into
this 20th day of April, 2010 (the “Execution Date”), 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”).  FMER, FMC and SunTrust are hereinafter
collectively referred to as the “Parties” and each individually as a “Party”.

 

WHEREAS, FMER and/or FMC are in the business of providing
private student loan outsourcing solutions, such as program design, marketing,
processing, underwriting, origination and/or portfolio administration services,
to banks and other financial institutions;

 

WHEREAS, FMC desires to provide certain credit enhancement
with respect to Loans (as defined below) originated under this Agreement;

 

WHEREAS, SunTrust desires to retain FMER to provide the
student loan outsourcing solutions as set forth in this Agreement; and

 

WHEREAS, the Parties will enter into a Servicing Agreement
executed and effective in 2010, with the Pennsylvania Higher Education Assistance
Agency (the “Servicing Agreement”).

 

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:

 

ARTICLE 1.          DEFINITIONS; RULES OF
CONSTRUCTION

 

1.1           Definitions.  Capitalized terms used in this Agreement have
the meanings set forth below.

 

“Additional Institution” means a post-secondary educational
institution located in a SunTrust Sales State that has a cumulative cohort
default rate of over [**]% in the past two cohort years, as reported by the
U.S. Department of Education, but which shall nevertheless be treated as an
Eligible Institution under this Agreement, under the terms set forth in Section 2.8.1.  The list of Additional Institutions as of the
Execution Date is set forth in the Program Guidelines.

 

“Advertising Firms” has the meaning set forth in Section 2.7.1
herein.

 

“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.

 

“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 complete.

 

 

“Applicant Information” has the meaning set forth in Section 3.8.5.2
herein.

 

“Application” means a consumer’s application, whether in whole
or in part, for a Loan under this Program and originated via FMC’s or FMER’s
URI/URL or the SunTrust URI/URL.

 

“Application and Solicitation Disclosure” means the disclosure
required by 12 C.F.R. § 226.47(a) and Section 128(e)(1) of the
federal Truth-in-Lending Act.

 

“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.

 

“Approved Collectors” means a subcontracted collection agency
used by FMER and identified on Schedule 2 to Exhibit D.

 

“Article 9” has the meaning set forth in Section 7.1.10
herein.

 

“Average Daily Balance” means the average daily principal
(including financed fees) and accrued interest balance of all Loans in a Pool
during a given calendar month, as reported by the Servicer as of the last day
of such month.

 

“Books and Records” means all books and records necessary to
service and collect the Loans and specifically relating to the Loans,
including:  Applications, statements,
credit and collection files, file maintenance data, Credit Agreements,
disclosure statements, credit information files, correspondence, whether in
documentary form or on magnetic tape, computer disk or other form, and any
other records that evidence ownership or relate to servicing, administering or
enforcing the Loans.  “Books and
Records” shall not include general corporate financial and other records,
income tax returns, specific files of individual employees or other corporate
records not specifically relating to the Loans or which relate to the Loans
with respect to which information relating to the Loans cannot reasonably be
extracted.

 

“Borrower” means the individual person, or all individual
persons collectively, including all Student Borrowers and Cosigners, who
execute a Credit Agreement individually or, in the case of multiple Borrowers,
severally and jointly, for the purpose of obtaining a Loan from SunTrust under
the Program, and who have proceeds disbursed under the Credit Agreement.

 

“Business Day” means any day other than (a) a Saturday or a
Sunday, or (b) a day on which banking institutions in the State of Georgia
are authorized or obligated by law or executive order to be closed.

 

“CDAs” has the meaning set forth in Section 3.6.3.3 herein.

 

“Change in Control” means any of the following with respect to
any of the Parties:  (1) the
acquisition or a series of acquisitions within six (6) months of each
other by any other entity, individual or group (within the meaning of Sections
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) of beneficial ownership (as defined in Rule 13d-3
promulgated under the Exchange Act) of more than fifty percent (50%) of the
common stock and/or other securities which have more than fifty percent (50%)
of the combined voting power of the securities entitled to vote in the election
of directors of such Party; or (2) the sale of all or substantially all of
the assets of such Party to any other entity, individual or group; or (3) the
reorganization, merger or consolidation of such Party in which the shareholders
of such Party immediately before such event will not immediately thereafter own
more than fifty percent (50%) of the combined voting power entitled to vote in
the election of directors of the reorganized, merged or consolidated Party’s
voting securities.  A “Change in Control”
shall not include any transactions with an entity that is an Affiliate of such
Party immediately prior to such transaction.

 

2

 

“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 an event of default, as set forth in the
Program Guidelines.

 

“Collegiate Custom Choice” means the product sourced through the
FMC URI/URL.

 

“Combination Program” means a private student loan program that
offers [**] to Applicant(s) simultaneously
when the Applicant(s) is/are configuring a loan by selecting specific loan
terms and parameters.

 

“Commodity Vendors” has the meaning set forth in Section 2.7.3
herein.

 

“Compensation Schedule” means the schedule attached hereto as Exhibit B,
showing FMC’s compensation for each Pricing Segment.

 

“Confidential Business Information” has the meaning set forth in
Section 14.2.3 herein.

 

“Consumer Information” means (a) “nonpublic personal
information” as such term is defined by the Privacy Requirements; and (b) any
personally identifiable information or records in any form (oral, written,
graphic, electronic, machine-readable, or otherwise) relating to a consumer,
including a consumer’s name, address, telephone number, Social Security number,
e-mail address, account number, loan payment or transactional account history,
account status; and the fact that the consumer has a relationship with
SunTrust.

 

“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.

 

“Costs and Fees” has the meaning set forth in Section 17.3
herein.

 

“Credit Agreement” means the loan request and credit agreement,
or other form of consumer debt instrument, evidencing a Borrower’s obligation
to repay the Loan, in the form attached to the Program Guidelines.

 

“Damages” has the meaning set forth in Section 16.1 herein.

 

“Default Prevention Services” means the services described in Section 4.6
herein.

 

“Delinquent Loan” means any Loan other than a Charged Off Loan
with respect to which any payment is [**] days or more past due.

 

“Disbursed Loan Amount” means the total principal balance
(including financed fees) of Loans actually disbursed to the Borrower’s
Eligible Institution, by means of electronic transfer or paper check, net of
post-disbursement cancellations whether in whole or part, and subject to the
Program Guidelines.

 

“Disbursement Date” means the date or dates on which Loan funds
are transmitted to the Student Borrower’s Eligible Institution or to the CDA,
which date shall be no earlier than the end of the cancellation period set
forth in the Final Disclosure in accordance with the Requirements of Law.

 

“Disclosing Party” has the meaning set forth in Section 14.2.5
herein.

 

“Early Awareness Services” means the services described in Section 4.5
herein.

 

“Effective Date” means the date established in the Effective
Date Communication pursuant to Section 18.1.1 of this Agreement.

 

“Effective Date Communication” has the meaning set forth in Section 18.1.1
herein.

 

“Effectiveness Conditions” has the meaning set forth in Section 18.1.1
herein.

 

3

 

“Eligible Institution” means a post secondary educational
institution approved by SunTrust for receipt of Loan funds in conformity with
Program Guidelines and included in the list of Eligible Institutions adopted as
of the Execution Date in Section 2.8 and set forth in the Program
Guidelines.

 

“Execution Date” has the meaning set forth in the first
paragraph of this Agreement.

 

“Expected Charged Off Loan Volume” means, as established by the
Parties from time to time, (a) initially, the Expected Loan Volume that is
expected to become a Charged Off Loan, and (b) for each calendar quarter
after Loan origination begins, the total principal (including financed fees)
and accrued interest on the Disbursed Loan Amount that is expected to default
(within the meaning set forth in the Program Guidelines).  The Expected Charged Off Loan Volume shall
change each quarter during the Term to reflect the distribution of the
Disbursed Loan Amount in Loan pricing tiers.

 

“Expected Loan Volume” means the total principal amount
(including financed fees) of Loans expected to be funded by SunTrust for the
related Pool during each 12-month period subsequent to the Effective Date of
this Agreement.

 

“Final Disclosure” means the disclosure required by 12 C.F.R. §
226.47(c) and Section 128(e)(4) of the federal Truth-in-Lending
Act.

 

“Final Services Termination Period” has the meaning set forth in
Section 18.1.2.

 

“Fixed Rate Loan” means any Loan with respect to which the
interest rate for such Loan is determined in relation to a specific fixed rate
for the term of the Loan.

 

“FM Indemnified Party” means FMC, FMER, each Affiliate of FMC,
each Affiliate of FMER, and each of the respective current, former and future
officers, directors and employees of any of the foregoing.

 

“FMC Custom Model Property” means, for the purposes of this
Agreement, FMC’s custom and proprietary score model and all deliverables,
materials, software, flowcharts, ideas, concepts, designs, and reports or other
analyses which relate to FMC’s custom and proprietary score model including any
modifications, enhancements or derivative works thereof.

 

“FMC Intellectual Property”, as used in Section 16.2 and Section 16.3
only, has the meaning set forth in Section 16.2 herein.

 

“FMC Materials” means all promotional material prepared by FMC
in providing Production Support Services, including responses to Eligible
Institutions’ requests for proposals, printed materials, brochures, email
content, television and radio content, telemarketing scripts, fliers, inserts
and any web sites or web pages promoting Program Loans.

 

“FMC Production Support Services Activities” has the meaning set
forth in Section 2.3.

 

“FMC Production Support Services Work Product” has the meaning
set forth in Section 2.3.

 

“FMC
Sales States” has the meaning set forth in Section 2.2.1 and listed in
Schedule 1 to Exhibit E hereto.

 

“FMC Share of Portfolio Yield” means, for any given month, the
aggregate total for all Pricing Segments of the amount to be earned by FMC for
the Loans in each Pricing Segment, calculated as (a) the amount of the
margin earned by FMC for the Loans in each Pricing Segment as shown on the
Compensation Schedule, divided by the Borrower margin in each such Pricing
Segment, multiplied by (b) the Monthly Accrued Interest less, with respect
to Variable Rate Loans, interest accrued attributable to the LIBOR index.

 

4

 

“FMC URI/URL” means a dedicated web link obtained and maintained
by FMC which tracks consumer traffic and loan application requests resulting
from FMC’s marketing efforts in connection with the Program.

 

“FMC Website” means the FMC-created and managed website separate
and apart from the SunTrust Website used to direct potential Borrowers to the
Program online application.

 

“FMER Funding Account” means an account in FMER’s name
maintained at a FDIC-insured depository institution, into which FMER will
deposit Loan funds for disbursement after receiving them from the SunTrust
Disbursement Account via automated clearinghouse debit.

 

“Force Majeure Event” has the meaning given such term in Section 19.11
herein.

 

“Forward Looking Materials” has the meaning set forth in Section 4.1.3.

 

“Fraud Database Data” has the meaning set forth in Section 3.10.2.

 

“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.

 

“Indemnified Party” means a SunTrust Indemnified Party or a FM
Indemnified Party, as applicable.

 

“Indemnifying Party” means a Party that is obligated to
indemnify an Indemnified Party pursuant to the provisions of Section 16
herein.

 

“Information Security Program” means the written policies and
procedures adopted and maintained to (a) ensure the security and
confidentiality of Consumer Information; (b) protect against any
anticipated threats or hazards to the security or integrity of Consumer
Information; and (c) protect against unauthorized access to or use of
Consumer Information that could result in substantial harm or inconvenience to
SunTrust or any consumer.

 

“Initial Participation Account Deposit” means [**] percent
([**]%) of the product of the Expected Loan Volume for the Pool, multiplied by
the Participation Percentage.

 

“Initial Vendors” means the vendors shown on Schedule 4 to Exhibit D.

 

“Insurance Requirements” has the meaning set forth in Section 10.1
herein.

 

“Intellectual Property” has the meaning set forth in Section 11.1
herein.

 

“Interagency Guidelines” means the
applicable Interagency Guidelines Establishing Information Security Standards
and codified at 12 C.F.R. Parts 30, 208, 211, 225, 263, 308, 364, 568, and 570.

 

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

 

“Loan Origination Fee” means a fee that is:  (i) charged by SunTrust to the Borrower
of a Loan; (ii) equal to the amount set forth in the Pricing Schedule; and
(iii) financed as a part of the Loan amount.

 

“Loan Processing Fees” means that fee set forth in Section 6.3.1
herein.

 

“Loan Processing Services” means those services set forth in Article 3
herein.

 

“Marketers” has the meaning set forth in Section 2.7.1
herein.

 

“MG Private Student Loan Trust 2010-1” means the trust to be
established by FMC to purchase and hold Charged Off Loans.

 

5

 

“Monthly Accrued Interest” means, for each calendar month, the
amount of interest that accrues on all outstanding Loans in a given Pricing
Segment during such month.

 

“Notice” has the meaning set forth in Section 17.1 herein.

 

“NPPI” has the meaning set forth in Section 14.2.4 herein.

 

“OFAC” has the meaning set forth in Section 3.8.1 herein.

 

“Online Application System” means the internet-based system used
by FMER for the (a) intake of Application information from Applicants, (b) rendering
and reporting of credit decisions on Applications, (c) delivery of Credit
Agreements and disclosures required by Requirements of Law, including
Truth-in-Lending Disclosures, and (d) loan status information and details.

 

“Outstanding Loan Volume” means, with respect to any Pool, the
amount of Loan volume that remains outstanding to SunTrust, and is not a
Charged Off Loan for which a payment from the Participation Account has
previously been made, as reflected on the Servicer’s servicing system and
reported by the Servicer to SunTrust and FMC on a monthly basis.

 

“Participation Account” means an interest-bearing account held
by SunTrust for the benefit of FMC and SunTrust at SunTrust, which account
shall hold Participation Account Deposits made by FMC and shall be subject to
the terms of this Agreement.

 

“Participation Account Administrative Fee” for each month during
the Term, means [**]% multiplied by the Average Daily Balance, divided by
[**].  During the Term, the Participation
Account Administrative Fee shall be modified quarterly as set forth in Section 7.1.5
of the Agreement to reflect the extent to which the distribution of the
Disbursed Loan Amount among pricing tiers changes the Projected Default Rate
for the Pool.

 

“Participation Account Deposits” has the meaning set forth in Section 7.1.1
herein.

 

“Participation Account Excess Percentage” has the meaning set
forth in Section 7.1.6 herein.

 

“Participation Account Payment” means the payments which are
made by SunTrust to FMC from the Participation Account pursuant to Section 7.1.6.

 

“Participation Cap” shall mean [**] dollars ($[**]), inclusive
of the amount of the Initial Participation Account Deposit for each Pool, plus
any amount over [**] dollars ($[**]) associated with the credit enhancement of
Loans funded pursuant to Sections 7.1.11 and 18.4.

 

“Participation Interest” means the Participation Percentage
multiplied by Expected Loan Volume. During the Term, the Participation Interest
shall be modified quarterly as set forth in Sections 7.1.1 and 7.1.3 of the
Agreement to reflect the extent to which the distribution of the Disbursed Loan
Amount among Borrower pricing tiers changes the Projected Default Rate for the
Pool.

 

“Participation Percentage” means an amount equal to [**] times
the Projected Default Rate.

 

“Person” means a natural person, a partnership, a corporation, a
limited liability company, a joint stock company, a business trust or other
entity or association.

 

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

 

“Pool” means Loans funded during a 12-month period commencing on
the Effective Date of this Agreement or any anniversary thereof.

 

“Portfolio Management Services” means Default Prevention
Services and Early Awareness Services and all other services to be provided
pursuant to Sections 4.4 through and including 4.8 herein.

 

6

 

“Portfolio Yield” means the sum of Monthly Accrued Interest for
all Loans for which are not Charged Off Loans.

 

“Pricing Schedule” means the loan pricing for each Pricing
Segment set forth in the Program Guidelines, including the Borrower loan
pricing portion which SunTrust may modify from time to time, subject to the
provisions of Section 3.7.

 

“Pricing Segment” means each of the [**] discrete interest rate
and fee combinations shown in the Pricing Schedule, with, as of the Execution
Date, [**] discrete interest rate and fee combinations for Fixed Rate Loans and
[**] discrete interest rate and fee combinations for Variable Rate Loans, along
with each discrete interest rate and fee combination shown in the Pricing Schedules
adopted after the Execution Date.

 

“Privacy Notice” means SunTrust’s privacy policy adopted
pursuant to Regulation P.

 

“Privacy Requirements” means (a) Title
V of the Gramm-Leach-Bliley Act, 15 U.S.C. 6801 et seq.; (b) federal
regulations implementing such act and codified at 12 C.F.R. Parts 40, 216, 332,
and 573; (c) Interagency Guidelines; and (d) other applicable federal
and state laws, rules, regulations, and orders relating to the privacy and
security of Consumer Information.

 

“Production Support Plan” means the FMC plan for selling the
Program to Eligible Institutions in the FMC Sales States, as set forth in
Schedule 2 to Exhibit E attached hereto, as modified by written agreement
of SunTrust and FMC from time to time.

 

“Production Support Reports” has the meaning set forth in Section 2.5
herein.

 

“Production Support Services” means the support services to be
provided pursuant to Article 2 herein.

 

“Program” means SunTrust’s loan program as described in the
Program Guidelines.

 

“Program Administration Services” means Program analytics and
development, administration of post-disbursement loan servicing, and
Participation Account administration services to be provided pursuant to
Sections 4.1, 4.2, and Article 7 of the Agreement.

 

“Program Administration Services Fee” means the fee paid to FMC
pursuant to Section 6.5 hereof calculated as the FMC Share of Portfolio
Yield, less the Program Support Services Fee, less the Participation Account
Administration Fee.

 

“Program Guidelines” means the Program Guidelines attached to
the Agreement as Exhibit F, which include loan origination guidelines,
underwriting guidelines, product terms and features, Borrower fees, Borrower
Credit Agreements, Servicing Guidelines, Applicant disclosures and forms of
Truth-in-Lending Disclosure Statements and other disclosures required by
Requirements of Law.

 

“Program Support Services” means those services set forth in Article 4
herein.

 

“Program Support Services Fee” means the fee paid to FMC
pursuant to Section 6.4.1 hereof.

 

“Projected Default Rate” means a percentage, the numerator of
which shall be the Expected Charged Off Loan Volume and the denominator of
which shall initially be the Expected Loan Volume. Each calendar quarter during
the Term, the Projected Default Rate shall be modified by using as the
denominator Disbursed Loan Amount as of quarter-end.

 

“Proprietary Information” has the meaning set forth in Section 14.2.1
herein.

 

“Purchase Price” has the meaning set forth in Section 5.2
herein.

 

“Purchased Loan” has the meaning set forth in Section 5.1
herein.

 

7

 

“Receiving Party” has the meaning set forth in Section 14.2.6
herein.

 

“Recoveries”
shall mean amounts received by FMC, FMER, or any of their Affiliates from or on
behalf of Borrowers in payment of principal of, interest on, and late fees with
respect to, Charged Off Loans with respect to which SunTrust has received funds
from the Participation Account, net of collection fees and attorneys’ fees.

 

“Regulation P” means such regulation as is set forth at 12 C.F.R
Part 216.

 

“Requirements of Law” means, with respect to any Party, any
certificate of incorporation, articles of association and, as applicable,
by-laws or other organizational or governing documents of such Party, and each
of the following, in each case to the extent applicable to and binding on such
Party, its property or, in connection with this Agreement, its agents: (a) any
federal, state, county or local law, ordinance, statute, rule, regulation,
judgment, order, decree, injunction, permit, issuance or other determination or
finding of any Governmental Authority or self-regulatory organization or final
and binding determination of any arbitrator applicable to or binding upon such
Party or to which such Party is subject, and (b) any treaty, rule or
regulation, regulatory guidance or determination of (or agreement with) an
arbitrator or Governmental Authority (including usury laws, the Federal Truth
in Lending Act; Regulation B and Regulation Z of the Board of Governors of the
Federal Reserve System; the Equal Credit Opportunity Act; the Privacy
Requirements; the Fair Credit Reporting Act; the Fair and Accurate Credit
Transactions Act; the federal Fair Debt Collections Practices Act; the USA
PATRIOT Act; the Bank Secrecy Act and other state and federal laws or
regulations relating to anti-money laundering compliance; federal and state and
local tax laws, rules and regulations; and rules and regulations
relating to consumer protection, installment sales, telemarketing, unfair and
deceptive trade practices and collections, as each is amended from time to
time).

 

“Roster Date” means, for any particular Loan, the date that is
at least one Business Day prior to a scheduled Disbursement Date for such Loan,
and shall be the date on which FMER provides to SunTrust a disbursement roster
listing the Disbursement Date and disbursement amount for such Loan.

 

“Sanctions” has the meaning set forth in Section 3.8.1
herein.

 

“Security Systems” has the meaning set forth in Section 15.3.1
herein.

 

“Servicer” means 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, 1200 North Seventh Street, Harrisburg, Pennsylvania 17102, or
another loan servicer mutually acceptable to SunTrust and FMC.

 

“Services” means Production Support Services, Loan Processing
Services and Program Support Services, as well as any additional services
agreed to by the Parties in writing to be performed under the Agreement.

 

“Servicing Agreement” refers to the Servicing Agreement that
will be entered into or to be entered into by and among Servicer, SunTrust and
FMC with respect to servicing of Loans, as amended from time to time.

 

“Servicing Guidelines” means the document by that name included
as part of the Servicing Agreement among the Parties and the Servicer.

 

“Student Borrower” means the individual person who is enrolled
at an Eligible Institution at the time of Application, executes a Credit
Agreement for the purpose of obtaining a Loan from SunTrust under the Program,
and who has proceeds disbursed under the Credit Agreement.

 

8

 

“Subcontractor” means any third party retained by FMC and/or
FMER, as applicable, and approved by SunTrust in conformity with the
requirements of this Agreement to perform part of the Services.

 

“SunTrust Disbursement Account” means an account maintained at
SunTrust into which SunTrust deposits Loan funds for disbursement.

 

“SunTrust Indemnified Party” means SunTrust and its Affiliates,
and each of their respective current, former and future officers, directors and
employees.

 

“SunTrust
Marks” means the trade names, trademarks, logos or service marks of
SunTrust and its Affiliates set forth in Exhibit G, any trade names,
trademarks, logos or service marks used by SunTrust or any of its Affiliates in
connection with its full-service retail banking business, and any other trade
names, trademarks, logos or service marks that are used by SunTrust or any of
its Affiliates to identify itself to the public in connection with educational
loans, including the “Custom Choice” mark.

 

“SunTrust
Materials” means all promotional materials that include SunTrust Marks and
subject to SunTrust written approval, including responses to Eligible
Institutions’ requests for proposals, printed materials, brochures, email
content, television and radio content, telemarketing scripts, fliers, inserts
and any web sites or web pages promoting Loans.

 

“SunTrust Portfolio Income” means the portion of the Portfolio
Yield due to SunTrust, which shall be equal to the Portfolio Yield, less the
FMC Share of Portfolio Yield.

 

“SunTrust Sales States” has the meaning set forth in Section 2.2.1
herein and listed in Schedule 1 of Exhibit E hereto.

 

“SunTrust URI/URL” means a SunTrust dedicated web link obtained
and maintained by SunTrust which tracks consumer traffic and loan application
requests resulting from SunTrust’s marketing efforts in connection with the
Program.

 

“SunTrust Website” means the SunTrust-created and managed
website used to direct potential Borrowers to the Program online application.

 

“Term” has the meaning set forth in Section 18.1.2 herein.

 

“Third-Party Offers” has the meaning set forth in Section 4.3.1
herein.

 

“Title X” means Title X of the Higher Education Opportunity Act
of 2008, P.L. 110-315, 122 Stat. 3478, and its implementing regulations duly
adopted by federal regulatory agencies, including but not limited to the
Federal Reserve Board’s Regulation Z.

 

“Trade Secrets” has the meaning set forth in Section 14.2.2
herein.

 

“Transition Period” has the meaning set forth in Section 18.3.2
herein.

 

“Truth-in-Lending Disclosure Statements” shall mean the forms of
private student loan application and solicitation disclosures, approval
disclosures, and final disclosures required by Title X, as approved by
SunTrust.

 

“USA Patriot Act” has the meaning set forth in Section 3.8.4
herein.

 

“Variable Rate Loan” means any Loan with respect to which the
interest rate for such Loan is determined in relation to a published rate index
and changes on a monthly basis in accordance with the terms of the Program
Guidelines and the Credit Agreements.

 

“Volume Threshold” has the meaning set forth in Section 2.8.1.

 

1.2           Certain Rules of
Construction.  Except as
otherwise explicitly specified to the contrary,

 

9

 

1.2.1        References to a
Section, Exhibit or Schedule means a Section of, or Schedule or Exhibit to,
this Agreement,

 

1.2.2        The words “including,”
“include” and “includes” will be construed as “including without limitation,” “include
without limitation” or “includes without limitation,” as applicable,

 

1.2.3        References to a
particular statute or regulation include all rules and regulations
promulgated thereunder and any applicable predecessor or successor statute or
regulation, in each case as amended or otherwise modified from time to time,

 

1.2.4        Words in the
singular or plural form include the plural and singular form, respectively,

 

1.2.5        Where specific
language is used to clarify or illustrate by example a general statement
contained herein, such specific language shall not be deemed to modify, limit
or restrict the construction of the general statement which is being clarified
or illustrated,

 

1.2.6        Any article,
section, subsection, paragraph or subparagraph headings contained in this
Agreement and the recitals at the beginning of this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement (other than with respect to any defined terms contained in the
recitals),

 

1.2.7        The word “or”
whenever used in this Agreement is used in the inclusive sense of “and/or” and
not the exclusive sense of “either/or,”

 

1.2.8        All references
to “the Agreement” or “this Agreement” in this Agreement shall mean “this
Agreement as amended,”

 

1.2.9        Whenever the
words “herein,” “hereto,” “hereof” or “hereunder” or “this Agreement” are used
in this Agreement, they shall be deemed to refer to this Agreement as a whole
including Exhibits and Schedules hereto, and not to any specific section nor to
exclude any Exhibits or Schedules hereto, and

 

1.2.10      Any reference
made in this Agreement to a statute or statutory provision shall mean such
statute or statutory provision as it has been amended through the date as of
which the particular portion of the Agreement is to take effect, or to any
successor statute or statutory provision relating to the same subject as the
statutory provision so referred to in this Agreement, and to any
then-applicable rules or regulations promulgated thereunder, unless
otherwise provided.

 

ARTICLE 2.          PRODUCTION SUPPORT SERVICES.

 

2.1           Use of SunTrust Marks.  SunTrust hereby grants to each of FMC and
FMER a limited, royalty-free, nonexclusive license to use the SunTrust Marks
during the Term as necessary to solicit Loans until the termination date of
this Agreement and pursuant to the provisions of this Agreement, to use the
SunTrust Marks on and in connection with SunTrust Materials and in connection
with the ongoing origination services. 
Each of FMC and FMER acknowledges and agrees that (i) it is not
acquiring any right, title or interest in the SunTrust Marks and that the
SunTrust Marks, all rights therein, and the goodwill associated therewith, are,
and shall remain, the exclusive property of SunTrust; (ii) it shall take
no action that would reasonably be expected to adversely affect SunTrust’s
exclusive ownership of the SunTrust Marks or the goodwill associated with the
SunTrust Marks; and (iii) any and all goodwill arising from use of the
SunTrust Marks by FMC and/or FMER shall inure to the benefit of SunTrust.  Nothing herein shall give FMC or FMER any
right, title, or interest of any kind in or to the SunTrust 

 

10

 

Marks,
except the right to use the SunTrust Marks in accordance with this Agreement,
and neither FMC nor FMER shall contest the validity of, or SunTrust’s title in
and to, the SunTrust Marks.  In the event
of any changes to the SunTrust Marks, FMC and/or FMER shall promptly make
necessary changes to the SunTrust Materials. 
Except as expressly permitted by this Agreement, neither FMC nor FMER
shall have the right to, and nothing in this Agreement or any other signed and
written agreement among the Parties shall be construed to give FMC or FMER the
right to, and FMC and FMER shall not, other than the use of the SunTrust Marks
in the specific manner as approved pursuant to the terms of this Agreement, use
any marks, symbols, copyrights, logos, designs, representations, ideas or other
proprietary designations or properties owned, developed, created by or licensed
to SunTrust or any Affiliates of SunTrust, including the use of SunTrust Marks
on or in conjunction with any goods or products of FMC or FMER not related to
the Program or this Agreement.  FMC shall
bear the costs of all FMC Materials, whether or not such FMC Materials use SunTrust
Marks.  Neither of FMC nor FMER shall
authorize use of, transfer, assign, lease or sub-license in whole or in part
any SunTrust Marks without SunTrust’s prior written consent.

 

2.2           Sales Support and
Restrictions on Marketing of the Program.

 

2.2.1        FMC shall
develop and implement a strategy and plan to generate interest among Eligible
Institutions in the FMC Sales States (as defined below) to participate in the
Program.  FMC and SunTrust agree that,
except as otherwise approved by the other Party, such Party shall solicit
interest from Eligible Institutions with respect to the Program only in the
respective states set forth with respect to such Party on Schedule 1 to Exhibit E
attached hereto (“FMC Sales States” and “SunTrust Sales States,”
respectively). Each Party may solicit potential Applicants via direct mail,
telephone solicitation, and the internet, but shall do so with respect to the
Program only in the FMC Sales States and SunTrust Sales States, respectively,
provided, however, that (a) with respect to solicitation through the
internet, FMC and SunTrust may each satisfy its respective obligations pursuant
to this subsection by using its commercially reasonable efforts to geoblock
potential Applicants with Internet Protocol (IP) addresses associated with a
location outside of their respective sales states, in each case to the extent
that geoblocking is available with respect to IP addresses associated with such
locations through the exercise of the commercially reasonable efforts of such
Party, and (b) unsolicited Applicants may apply for Loans through either
the FMC URI/URL or the SunTrust URI/URL. 
Notwithstanding the foregoing, each of the Parties may solicit potential
Applicants with respect to the Program through the use of direct mail, telephone
solicitation or internet to existing customers as of the Execution Date of such
Party or an Affiliate thereof regardless of where such customers of such Party
or its Affiliates may be located. 
Nothing in this Agreement shall be construed to restrict in any way any
Party’s marketing and sales of other financial or educational loan products
other than the Program.

 

In FMC Sales States, FMC shall interact directly with Eligible
Institutions as set forth in Production Support Plan. FMC shall also:

 

(i) Where the “SunTrust” name is to be used in FMC Materials
promoting the Program, consult with SunTrust on the preparation of such
materials (including brochures, advertisements, mailings, announcements, and
web site content) and comply with the provisions of Section 2.6 applicable
to the approval of such materials by SunTrust and the preparation and use of
such materials by FMC;

 

(ii) Submit a monthly status report that details FMC’s progress at
Eligible Institutions;

 

(iii) Submit standardized request for proposals template language
(and any changes to previously approved template language) to SunTrust for
approval; and

 

(iv) Provide daily processing support for SunTrust staff and
Eligible Institution support staff via a toll-free telephone number generally
from 9:00 am to 8:00 pm EST or EDT, as applicable.

 

2.2.2.       With respect to
sales and promotional activities in SunTrust Sales States, FMC shall:

 

(i) Participate in meetings with Eligible Institutions as
requested by SunTrust;

 

11

 

(ii) Contact Eligible Institutions to capture processing preferences
upon request from SunTrust;

 

(iii) Handle Eligible Institution contacts with respect to product
set-up, product detail, and time frames, as requested by SunTrust;

 

(iv) Attend internal SunTrust meetings as requested to conduct product
training for SunTrust staff; and

 

(v) Where the “SunTrust” name is to be used in SunTrust Materials
promoting the Program, if requested by SunTrust, consult with SunTrust on the
preparation of such materials (including brochures, advertisements, mailings,
announcements, and web site content).

 

2.2.3        With respect to
national conferences (e.g., NASFAA) during the Term, FMC shall exhibit under
its own name, and offer Collegiate Custom Choice materials at its booth at such
conferences.  In the event that a
financial aid officer from an Eligible Institution located in a SunTrust Sales
State requests information from a representative of FMC at FMC’s booth at such
a conference, FMC will direct such request to SunTrust.  If a financial aid officer from an Eligible
Institution located in a FMC Sales State requests information from SunTrust,
SunTrust will direct such request to FMC.

 

2.2.4        If during the
Term FMC exhibits at a state specific conference in a SunTrust School Sales
State or the regional SASFAA conference, FMC will not offer Collegiate Custom
Choice materials at its booth, provided, however, that at EASFAA conferences,
FMC shall offer Collegiate Custom Choice materials regardless of the state in
which such EASFAA conferences are held.

 

2.2.5        With respect to
the Program, FMC and SunTrust shall each respond to requests for proposals only
from Eligible Institutions in the FMC Sales States and the SunTrust Sales
States, respectively; provided, however, that with respect to requests for
proposals received by any Party from any and all Eligible Institutions outside
the FMC Sales States and the SunTrust Sales States, FMC or SunTrust may respond
to such requests for proposals as mutually agreed by the Parties on a case-by-case
basis.  If the Parties cannot reach
agreement about which Party will respond to such a request for proposal, then
no Party shall respond to that request for proposal.

 

2.3           FMC Production Support
Services Research; Ownership.

 

FMC may use the data collected in activities conducted pursuant to
Section 2.2.1 (“FMC Production Support Services Activities”) to prepare
deliverables, materials, ad copy, software, flowcharts, ideas, concepts,
designs, and reports or other analyses with respect to the results of those FMC
Production Support Services Activities (“FMC Production Support Services
Work Product”), including reports or studies regarding marketing trends,
the effectiveness of content and media and of techniques for utilizing each of
these, provided, however, that such FMC Production Support Services Work
Product does not include Consumer Information, which may be used to perform
analysis but shall not be included in reports or studies except on an
aggregated and de-identified basis.  Such
reports or studies may include comparative analyses of the capacity of
experimental marketing techniques to reach customers not found through
customary means (e.g., compare online responders to purchased target marketing
direct mail lists).  FMC may use FMC
Production Support Services Work Product for any lawful purpose, including in
support of other loan programs, during the Term and following termination of
the Agreement.  FMC may disclose FMC
Production Support Services Work Product to SunTrust and SunTrust may use any
FMC Production Support Services Work Product disclosed to it for any lawful
purpose during the Term and following termination of the Agreement.

 

2.4           Ownership.  All Applications and related Credit
Agreements created under the Program and this Agreement for Applicants and
Borrowers through the SunTrust URI/URL shall be owned by SunTrust and shall not
constitute property of FMC.  SunTrust
hereby authorizes FMC as its agent, to the extent permitted by Requirements of
Law, to use data collected from Applications and Loan inquiries to conduct
activities under this Article 2, including, with respect to Applications and
Loan inquiries received through 

 

12

 

the
FMC URI/URL, retaining sources of customer lists and comparing such lists with
data obtained from partial or completed Applications, subject in all cases to
the confidentiality and information security provisions of this Agreement and
Requirements of Law; provided, however, FMC shall not use information obtained
or derived from Applications through the FMC URI/URL to solicit individuals for
financial services other than Loans under the Program Guidelines.  It shall not be deemed to be a breach of the
foregoing prohibition for FMC to undertake marketing and solicitation
activities for any product or service directed to the general public or based
on marketing lists derived from generally available data (such as credit bureau
reporting data) or from any source other than SunTrust; provided, however, that
during the Term and for three (3) years following the termination of this
Agreement FMC shall not: (a) use such marketing lists obtained by FMC in
performance of its obligations pursuant to this Agreement that are based on or
derived from Applications sourced through the SunTrust URI/URL or
(b) undertake marketing activities specifically or primarily targeted to
Applicants in SunTrust Sales States.

 

2.5           Production Support Reports.  In connection with the activities of SunTrust
under this Agreement, SunTrust may provide to FMC quarterly, a report and
analysis of the nature and effectiveness of its marketing activities under the
Production Support Plan (the “Production Support Reports”).  SunTrust may also develop from time to time
various reports which may contain detailed metrics, including, those set forth
in the Production Support Plan, analyses, studies and summaries of marketing
results relating to its activities under the Production Support Plan.

 

2.6           FMC Materials.  FMC covenants that it will cause all FMC
Materials to comply with Requirements of Law and to fairly and accurately
present Loans and the Program.  FMC shall
submit all FMC Materials to SunTrust for written approval prior to FMC’s use of
the FMC Materials.  SunTrust shall
provide comments or approval on FMC Materials submitted to it within ten (10)
Business Days of submission.  To the
extent that content templates are prepared, FMC may submit templates of FMC
Materials to SunTrust for written approval, provided, however, FMC shall not
use any final FMC Materials based on SunTrust-approved templates without
SunTrust’s prior written consent. 
SunTrust shall be responsible for the compliance of FMC Materials with
Requirements of Law to the extent, and only to the extent, of changes to such
FMC Materials required by SunTrust. 
SunTrust may use FMC Materials upon FMC’s prior written consent.

 

2.7                                 Retention of Vendors by FMC
and FMER.

 

2.7.1        In furtherance of its
efforts to locate effective marketing channels for Loans, SunTrust may, by its
prior written approval, authorize and direct FMC and/or FMER to select and
retain one or more marketing firms to: 
(i)  prepare content and
strategies for mass marketing (such as television and radio) and direct
marketing (such as telemarketing and web-based marketing) with respect to the
Program (such vendors collectively “Advertising Firms”) and (ii)
implement and administer all consumer contact in accordance with such content
and strategies and applicable Requirements of Law (such vendors collectively, “Marketers”).  Neither FMC nor FMER shall engage such
Advertising Firms or Marketers as remarketers or as marketers of the Program
under any product or brand name.  FMC
and/or FMER may enter into appropriate contracts with all Advertising Firms and
Marketers; provided, however, FMC and/or FMER provide copies of such contracts
to SunTrust within three (3) Business Days of receiving SunTrust’s written
request.  All marketing contracts shall
comply with the Production Support Plan.

 

2.7.2        FMC and/or FMER shall not
retain any Advertising Firm or Marketer, other than any Initial Vendors,
without first providing to SunTrust at least ten (10) Business Days advance
written notice of the identity, qualifications, and general proposed activities
of such Advertising Firm or Marketer. 
SunTrust may reasonably object to the selection or continued use of any
Advertising Firm or Marketer by providing written notice of SunTrust’s
reasonable objection, in which case FMC and/or FMER shall be prohibited from
using the proposed Advertising Firm or Marketer; provided, however, that if
SunTrust objects to the continued use of any Advertising Firm or Marketer, FMC
and/or FMER shall use 

 

13

 

commercially
reasonable efforts to use a different, previously approved Advertising Firm or
Marketer to perform the work. If FMC and/or FMER is not able to use of a
different, previously approved Advertising Firm or Marketer to perform the
work, despite commercially reasonable efforts, FMC and/or FMER shall be required
to terminate the use of any such Advertising Firm or Marketer only when
permitted by the contract between such Advertising Firm or Marketer and FMC
and/or FMER and only after the Parties have identified and mutually agreed upon
a successor Advertising Firm or Marketer. 
If SunTrust does not respond to the notice from FMC or FMER with respect
to such proposed Advertising Firm or Marketer within ten (10) Business Days,
then contracting with such firm by FMC and/or FMER, directly or through
subcontract, shall be deemed to have been approved by SunTrust.

 

2.7.3        In addition,
subject to the next sentence of this Section 2.7.3, SunTrust authorizes FMC
and/or FMER to retain from time to time one or more firms, directly or through
subcontract, to provide ministerial services and production commodities in
connection with services received from Advertising Firms and Marketers under
this Agreement (“Commodity Vendors”), including the provision of media
commodities, electronic provision of a web-hosting environment, printing,
letter shop, data processing, broadcast production and editing services.  Neither FMC nor FMER will retain, either
directly or through subcontract, any Commodity Vendor to perform any of the
Services hereunder who will receive Consumer Information without obtaining
SunTrust’s approval pursuant to the requirements of this Section 2.7 above.

 

2.8           Eligible Institutions;
Promotion of Program.

 

2.8.1        SunTrust and
FMC shall on the Effective Date adopt the lists of post-secondary educational
institutions in the Program Guidelines as Eligible Institutions.  Additions to and removals from such lists
shall be performed as set forth in the Program Guidelines.  Loans made to Student Borrowers attending
Additional Institutions shall not exceed [**] dollars ($[**]) in Disbursed Loan
Amount (the “Volume Threshold”) unless, after the Volume Threshold is
exceeded, Loans made to Student Borrowers attending Additional Institutions
remain less than [**] percent ([**]%) of the Disbursed Loan Amount for the
Program.  On a monthly basis, FMC and
Program Lender shall monitor the Disbursed Loan Amount to Student Borrowers
attending Additional Institutions and if the Disbursed Loan Amount for Student
Borrowers attending the Additional Institutions reaches [**] dollars ($[**]),
the Parties shall confer in good faith regarding an adjustment to the
Compensation Schedule with respect to Loans to be made in excess of the Volume
Threshold to students enrolled at the Additional Institutions.  If the Disbursed Loan Amount to Student Borrowers
attending Additional Institutions exceeds the Volume Threshold and is greater
than [**] percent ([**]%) of the Disbursed Loan Amount for the Program, and no
agreement pursuant to the preceding sentence has been reached, then after such
date such Applications will not be covered by the credit enhancement the
provisions of Article 7.  All
Applications submitted for a credit inquiry by such date shall be processed in
accordance with Section 18.4 of this Agreement notwithstanding the Volume
Threshold.

 

2.8.2        FMC agrees that
it shall not encourage consumers to apply for a Loan before exhausting other
available forms of aid, including grants, scholarships and federally insured
education loans recommended by the Eligible Institution, as applicable.  FMC also shall use commercially reasonable
efforts to ensure that Eligible Institutions do not encourage consumers to
apply for a Loan before exhausting other available forms of aid, including
grants, scholarships and federally insured education loans recommended by the
Eligible Institution.  FMC agrees and
understands SunTrust will also promote all other available private student loan
products and options offered by SunTrust in the SunTrust Sales States;
provided, however, that SunTrust shall not present the Program as a loan
program for borrowers with poor credit or those with no other loan
options.  Without limiting the foregoing,
FMC acknowledges and understands that (i) SunTrust does not control which, if
any, private student loan product offered by SunTrust is chosen by any Eligible
Institution for inclusion on a preferred lender list, and (ii) Eligible
Institutions may decide to choose only one SunTrust private student loan
product for inclusion on a 

 

14

 

preferred
lender list in order to create a preferred lender list with at least the number
of unaffiliated programs required by the Higher Education Opportunity Act of
2008 and its implementing regulations and other Requirements of Law.

 

2.9           Exclusivity.  FMC agrees that, for the Term of this
Agreement, it shall not design, facilitate or otherwise provide services for,
or offer to design, facilitate or otherwise provide services for a Combination
Program, except for the Program offered through this Agreement.

 

ARTICLE
3.  LOAN PROCESSING SERVICES

 

3.1                                 Web Application; Credit
Agreement.

 

3.1.1        FMER will use the forms of
Credit Agreements approved by SunTrust and included in the Program
Guidelines.  SunTrust and FMER shall
notify each other from time to time of recommended changes to the Credit
Agreements, and each shall respond promptly to such notifications, noting the
feasibility and desirability of such changes, as well as the implementation
time needed to make such changes.  After
SunTrust and FMER have reviewed and negotiated the proposed changes to the
Credit Agreements, the Parties shall agree on the written version of such
negotiated changes, and FMER shall revise the Credit Agreement in accordance
therewith.  SunTrust represents and
warrants that the forms of Credit Agreement comply, and as they may be modified
from time to time with SunTrust’s approval for inclusion in the Program
Guidelines, will comply, with the Program Guidelines and Requirements of
Law.  FMER represents that its use of
such forms shall comply with this Agreement, the Program Guidelines and
Requirements of Law.

 

3.1.2        FMER will use the Online
Application System approved in writing by SunTrust. FMER represents, warrants
and covenants that the content and operation of its Online Application System
complies with this Agreement, the Program Guidelines and Requirements of Law;
provided, however, that SunTrust represents, warrants and covenants that the
content of the Online Application System complies with the Program Guidelines
and Requirements of Law to the extent, and only to the extent, of content in
such Online Application System that is specifically required by SunTrust.  FMER shall accept Applications via both the
SunTrust Website and the FMC Website. 
The FMC Website is the responsibility of FMC subject to the conditions
set forth in this Agreement.  The FMC
Website shall comply with any requirements specified in this Section 3, the
Program Guidelines, and Requirements of Law, and shall be subject to SunTrust’s
approval.  SunTrust represents, warrants
and covenants that the content of the FMC Website complies with the Program
Guidelines and Requirements of Law to the extent, and only to the extent, of
content in such FMC Website that is specifically required by SunTrust.

 

3.2           Disclosures.  The forms of state and federal disclosures,
including application and solicitation disclosures, approval disclosures, final
disclosures, and adverse action notices, must be approved in writing by
SunTrust as set forth in the Program Guidelines.  FMER represents, warrants and covenants that
its use of such forms and disclosures, including mathematic calculations
contained therein, shall comply with the Agreement, the Program Guidelines and
all Requirements of Law.  Notwithstanding
anything in this Agreement or the Program Guidelines, FMC shall make the
Application and Solicitation Disclosure available to potential Borrowers at the
beginning of and during the entire Application process as directed by
SunTrust.  It is understood and agreed
that the Application and Solicitation Disclosure must be viewed and
acknowledged by potential Borrowers prior to the time such Borrower provides
application information.

 

3.3           Privacy Notice.  SunTrust will provide FMER and FMC with a web
link to its online Privacy Notice which FMC will make available on both the FMC
Website and each page of the Online Application System accessed via the FMC
URI/URL; provided, however, that neither FMC nor FMER is responsible for the
content of SunTrust’s Privacy Notice or its compliance with the requirements of
any Requirements of Law, including the Gramm-Leach-Bliley Act or Regulation
P.  FMER shall include its 

 

15

 

privacy
statement in the Online Application System, and shall mail SunTrust’s initial
privacy policy to each Borrower on the first Disbursement Date for such
Borrower.

 

3.4           Additional Forms, Documents
and Disclosures; Changes.  Any
documentation not set forth in this Section 3 or the Program Guidelines that
SunTrust requires for the origination and processing of Applications will be
identified and provided by SunTrust to FMC for FMER and/or FMC’s use.  SunTrust represents, warrants and covenants
that any such form provided to FMC and/or FMER and any instructions with
respect thereto shall comply with the Agreement, the Program Guidelines and
Requirements of Law.  In the event FMER
and/or FMC determines changes should be made to the Program Guidelines or any
documentation contained therein, FMER and/or FMC, as applicable, shall not implement
such changes without SunTrust’s prior written consent.  If SunTrust agrees with FMC’s
recommendations, they shall be acknowledged by each of the Parties in writing
approving such recommendations, and they shall be implemented as soon as
reasonably practicable.  Within twenty
(20) Business Days of receiving a request from SunTrust to make changes to
either the Program Guidelines or the documentation contained therein (other
than changes to the Pricing Schedule, which shall instead be subject to Section
3.7 of this Agreement), FMER and/or FMC will provide in writing a response with
a statement of FMER’s and/or FMC’s ability to implement the change to deliver
the requested services and the terms and conditions on which FMER and/or FMC
would be willing to do so.  In the event
SunTrust elects to authorize such services on the terms and conditions set
forth in FMER’s and/or FMC’s response, SunTrust will, within twenty (20)
Business Days of its receipt of FMER’s and/or FMC’s response, respond to FMC
and/or FMER by executing and returning a change order to FMER and/or FMC
reflecting the agreed upon terms and conditions relating to such Services.  Such change in Services as agreed to by the
Parties shall be incorporated into a new or restated Exhibit to this Agreement
or as an addendum to the Program Guidelines, which shall be signed by duly
authorized representatives of the applicable Parties.

 

3.5           Credit Bureau Requests.  Simultaneously with the execution of and as a
condition of FMC’s and FMER’s obligations under this Agreement, SunTrust shall
execute a TransUnion Addendum in the form substantially similar to the attached
Exhibit C hereto authorizing FMER to make credit inquiries on SunTrust’s behalf
solely for purposes of this Program as permitted by Requirements of Law and the
Program Guidelines.

 

3.6           Application Receipt and
Review.

 

3.6.1        Upon receipt of
an Application for review from an Applicant, FMER will review the data for
completeness according to the eligibility standards in the Program
Guidelines.  If any necessary data are
outstanding, FMER will use commercially reasonable efforts to secure such data
from the Applicant on behalf of SunTrust as required by the Program
Guidelines.  After receipt of complete
data relating to a particular Applicant, FMER will review such data and, on a
preliminary basis, apply the standards in the Program Guidelines with respect
to loan underwriting and determine whether the Applicant is credit approved for
a Loan in accordance with the Program Guidelines.  FMER shall adhere to minimum custom credit
and FICO scores and credit tiers as set forth in the Program Guidelines.

 

Application review shall initially be conducted using FMER’s automated
Online Application System.  If any part
of the Application process cannot be conducted on an automated basis by the
Online Application System, but instead must be performed manually, such manual
performance shall not cause unnecessary delay and the performance of any such
manual process shall be completed in accordance with the service standards set
forth in the Program Guidelines.

 

3.6.1.1                     Applicant
Liaison.  FMER will respond promptly to
all inquiries that it or SunTrust may receive from any Applicant concerning the
status of an Application.  SunTrust will
promptly forward to FMER Application status inquiries from Applicants that
SunTrust receives.

 

16

 

3.6.1.2                     Rejection of an
Application.  If an
Application is rejected or denied by FMER on behalf of SunTrust, FMER will so
notify the Applicant in accordance with Requirements of Law and the Program
Guidelines.

 

3.6.1.3                     Credit Approval
of an Application; Preliminary Approval; Approval Disclosure.  If an Application is credit approved by FMER
on behalf of SunTrust, FMER will provide the Applicant one or more repayment
schedules, interest rates, or other Loan options dependent on the Applicant’s
eligibility.  After the Applicant has
selected a Loan option, FMER will generate and provide a Credit Agreement to
the Applicant, along with a notice that the Applicant has passed the credit
check, and (b) appropriate instructions for completion of the Application
process.  Credit Agreements and
instructions will be provided to the Applicant by access to a secure internet
site or by U.S. mail.  To the extent
authorized by the Program Guidelines, FMER will provide the Applicant the
ability to electronically review, sign and return the Credit Agreement to
FMER.  To the extent required by the
Program Guidelines, FMER will communicate with the applicable Eligible
Institution in order to obtain the Eligible Institution’s certification of
enrollment and financial need.

 

3.6.2        Final Approval
of an Application.  Upon
receipt of the Credit Agreement and other requested information from an
Applicant who has received credit approval under Section 3.6.1, FMER will
perform the following functions and SunTrust will assist as indicated:

 

3.6.2.1                     Document Review.  FMER will review the Credit Agreement and any
supporting documentation required by the Program Guidelines and ensure that the
Credit Agreement has been executed in the name of all Applicants.  If any necessary data, signature(s), forms or
other information are outstanding, FMER will use commercially reasonable
efforts to secure such missing data, signatures, forms or other information on
behalf of SunTrust from the Applicant or the applicable Eligible Institution as
required.  FMER will use commercially
reasonable efforts to inquire of the Applicant as to all missing data promptly
after receipt of the incomplete Application. 
In processing Applications, FMER’s policies will comply with SunTrust’s
Customer Identification Program, Red Flags Program, OFAC Program, and Address
Mismatch Program and any other regulatory programs as required under this
Agreement and the Requirements of Law. 
Upon receipt of complete Application data, including certification of
enrollment and need by the Eligible Institution, FMER will continue processing
the Application hereunder.

 

3.6.2.2                     Final Review.  When FMER has possession of all necessary
data and documentation relating to particular Applicant(s), FMER will conduct a
final review to confirm that the Applicant(s) is approved for a Loan in
accordance with the standards and processes contained in the Program
Guidelines.

 

3.6.2.3                     Approval; Denial.  After completion of the final review, FMER
will, on behalf of SunTrust, approve or deny the Application.  Such decision will be made solely in
accordance with the Program Guidelines and any other SunTrust instructions that
are not inconsistent therewith and comply with Requirements of Law.  SunTrust covenants, represents, and warrants
that such instructions comply with this Agreement, the Program Guidelines, and
Requirements of Law.  For approved
Applications, FMER shall prepare and provide an Approval Disclosure to the
Applicant(s).  After delivery of the
Approval Disclosure, FMER shall not make any changes to the Application or
proposed Loan terms, except as permitted by Requirements of Law or the Program
Guidelines, and shall allow the Applicant to accept the Loan within the time
period prescribed under Requirements of Law and the Program Guidelines.  After the Applicant(s) have accepted the
Approval Disclosure using one of the methods set forth therein, FMER, on behalf
of SunTrust, will notify and send to the Applicant the Final Disclosure in
accordance with all Requirements of Law. 
FMER shall not disburse funds until the expiration of the right to
cancel, 

 

17

 

as required under Requirements of Law. 
Cancellation shall be effective as set forth in the Program
Guidelines.  In the case of denial of an
Application, FMER will so notify the Applicant in accordance with Requirements
of Law (which, for the avoidance of doubt, shall include the Equal Credit Opportunity
Act and the Fair Credit Reporting Act).

 

3.6.3        Fulfillment and
Disbursement of Approved Loans.

 

3.6.3.1                     FMER shall
populate and distribute the Truth-in-Lending Disclosure Statements in
accordance with Requirements of Law and the Program Guidelines.

 

3.6.3.2                     By 12:00 p.m.
eastern standard or daylight time, as applicable, on the Roster Date for each
Loan, FMER will provide SunTrust with a disbursement roster detailing all Loans
scheduled for disbursement.  SunTrust
will fund each Loan on the disbursement roster by depositing in the SunTrust
Disbursement Account by no later than 11:59 p.m. eastern standard or daylight
time, as applicable, on the Roster Date, an amount equal to the sum to be
disbursed for the Loans on the disbursement roster.  SunTrust hereby authorizes FMER to access
such account by automated clearinghouse (“ACH”) debit to transfer the
disbursement funds to the FMER Funding Account and complete the disbursement of
the Loan on the Disbursement Date. 
SunTrust understands that FMER intends to disburse Loan proceeds from
the FMER Funding Account as frequently as necessary to accommodate the funding
needs of Borrowers and Eligible Institutions, including as frequently as
daily.  SunTrust agrees to fund the
SunTrust Disbursement Account as often as necessary to facilitate such frequent
disbursements.  Provided that adequate
funds are transferred by SunTrust to the SunTrust Disbursement Account, FMER
will complete disbursement of the Loans on the Disbursement Date by electronic
funds transfer to the applicable Eligible Institution or by check written in
accordance with the Program Guidelines. 
If the Borrower cancels or withdraws his or her Application or cancels
the Loan within the time permitted for cancellation under the Program
Guidelines, Requirements of Law or the Credit Agreement, FMER, as SunTrust’s
agent, will immediately process the cancellation by (a) requesting repayment of
any funds disbursed on the canceled Loan from the Borrower and the applicable
Eligible Institution, and (b) remitting such collected amounts to the Servicer
for the benefit of SunTrust.  In the
event the Borrower or Eligible Institution returns the funds to FMER, FMER
shall remit the funds to Servicer to process the cancellation for the benefit
of SunTrust.  Subsequent disbursements
with respect to any Loan may be canceled as set forth in the Program
Guidelines.

 

3.6.3.3                     FMER shall
provide online and facsimile methods of certification for Eligible
Institutions.  SunTrust hereby authorizes
FMER, on SunTrust’s behalf and as SunTrust’s agent, to disburse funds under
this Agreement utilizing the systems operated by the ELM National Disbursement
Network, Great Lakes Central Disbursing System, disbursement services offered
by Texas Guaranteed Student Loan Corporation, Pennsylvania Higher Education
Assistance Authority / American Education Services or any other funds
disbursement agent as the Parties may agree to from time to time (collectively,
the “CDAs”).  As SunTrust’s agent, FMER
shall operate pursuant to future agreements and/or amendments to existing
agreements between SunTrust and the CDAs, copies of which shall be provided to
FMER no more than ten (10) Business Days after execution.  FMER is authorized to follow all rules and
procedures required by the CDA systems. 
Any action undertaken by FMER in conformity with the CDA systems will be
deemed to be in accordance with the Program Guidelines and the Agreement to the
extent set forth therein.  The Parties
agree to share equally and pay equal amounts required to pay the disbursement
charges and any other charges associated with the CDAs as the CDAs set those
fees on a monthly basis based on SunTrust’s membership status.

 

3.7           Pricing Schedule.  SunTrust may revise the Pricing Schedule set
forth in the Program Guidelines from time to time upon [**] Business Days prior
written notice to FMC; provided, however, that 

 

18

 

SunTrust
agrees that any such change made by it shall be commercially reasonable, in
accordance with the representation and warranty made in Section 8.2.3 of this
Agreement, and with respect to Fixed Rate Loans, based on market conditions or
fluctuations in the cost of certain financial instruments.  Unless otherwise agreed by SunTrust and FMC
in writing, changes in the Pricing Schedule shall be effective for and applied
only to Applications submitted for a credit check after the effective date of
such changes, and not to Applications for which a credit check has already been
completed.

 

3.8           Performance of Regulatory
Programs.

 

3.8.1        OFAC Check.  FMER agrees that, in regards to all Services
provided to SunTrust, it will perform all necessary actions to ensure that FMER
and SunTrust are both in, and remain in, compliance with all applicable
Executive Orders, laws, rules, regulations and sanctions administered, enforced
or implemented by the United States Treasury Department’s Office of Foreign
Assets Control (“OFAC”) or any other Governmental Authority’s rules,
regulations and sanctions related to foreign asset control (collectively, the “Sanctions”).  As part of its obligations, FMER will
perform, prior to originating any Loan, all necessary reviewing and scanning of
an Applicant against the List of Specially Designated Nationals and Blocked
Persons administered by OFAC.  If
originating a Loan would violate any of the Sanctions, FMER agrees to not
originate any such Loan.  If FMER becomes
aware that the name of an Applicant is potentially or actually the subject of
one or more Sanctions, FMER will promptly notify SunTrust of such a fact by
following the notification provisions provided in Section 19.1 below, the
Program Guidelines, and the Servicing Guidelines, and FMER will provide
SunTrust with any requested information and documentation related to any such
violation or potential violation.  At the
request of SunTrust, FMER shall provide SunTrust with a data file or report
with information regarding all or a selected group of Loans that have been
applied for or established, as well as any other data and information
reasonably requested by SunTrust.  Such a
data file or report will contain the requested information in a form, format
and at intervals reasonably requested by SunTrust.

 

3.8.2        Employee Check.  All FMER employees performing services or
supporting FMER activities under this Agreement, regardless of their location,
shall be validated by FMER 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.

 

FMER shall conduct periodic
reviews, no less frequently than quarterly, of the lists mentioned above.  FMER shall report to SunTrust immediately if
the name of any FMER employee performing 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.  FMER shall mandate that each Subcontractor
shall validate that its own employees are not on the lists referred to above.

 

3.8.3        FACT Act.  Subject to Sections 3.6.2.1 and 3.8.5 of this
Agreement, FMER shall perform its obligations under this Agreement in
conformity with the requirements imposed on SunTrust as a user and furnisher of
consumer report information under the Fair and Accurate Credit Transactions Act
of 

 

19

 

2003 and all regulations
issued pursuant thereto, including proper responses to fraud alerts, active
duty alerts, red flags, and address mismatch notices that are included in any
consumer report obtained in connection with the origination of a Loan and
timely and lawful forwarding to SunTrust of any identity theft report received
from any Applicant.

 

3.8.4        Suspicious Activity
Reporting.  FMER agrees
that on behalf of SunTrust, it will monitor for any potential or actual
suspicious activity detected regarding any Services that FMER performs on
behalf of SunTrust, including any potential or actual suspicious activity which
is committed by Applicants or Borrowers. 
Such suspicious activity includes any potential or actual activity or
transaction that would require SunTrust to file a Suspicious Activity Report as
described in the USA PATRIOT Act or 12 C.F.R. § 208.62 (“USA PATRIOT Act”)
or other activity which involves fraud, violations of federal, state or local
law or which appears to have no legitimate purpose.  If FMER becomes aware of any potential or
actual suspicious activity, FMER will promptly, and in all cases within
seventy-two (72) hours, notify SunTrust’s Consumer Lending Operations
Department of the precise nature of any such activity and provide SunTrust with
any information and documents concerning the matter.  Further, FMER agrees to reasonably cooperate
with SunTrust and to provide SunTrust with any additional information and
documentation requested regarding any investigation of potential or actual
suspicious activity.  The contact in the
SunTrust’s Consumer Lending Operations Department is Ms. Debra Hendricks, whose
contact information is:  Telephone: (804)
319-1533, Fax: (877) 862-8494, E-Mail: debra.hendricks@suntrust.com.  SunTrust may change its contact in its
Consumer Lending Operations Department at any time by written notice to FMC and
FMER that meets the requirements of Section 19.1.

 

3.8.5        Customer Identification
Program.  FMER agrees that prior to
establishing any Loan in the name of SunTrust, it will perform all aspects of
SunTrust’s Customer Identification Program, as indicated below, and which may
be amended from time to time by SunTrust on thirty (30) days written notice to
FMER.

 

3.8.5.1                     Applicant
Notice.  FMER agrees that Applicants
will be provided notice that FMER is requesting information about them on
behalf of SunTrust to verify their identities as required by Federal law.  FMER may use any verbal or written means of
such notification which is reasonably designed to provide such notice to
Applicants before the issuance of a Loan, including, but not limited to, one or
more of the following:

 

·                  Verbal
notification to the Applicant

 

·                  Notice on
Application form or other documents being provided to an Applicant

 

·                  Notice on a
website or other promotional items or SunTrust Materials

 

Upon request by SunTrust,
FMER will provide SunTrust with a copy and description of any methods of notice
used.

 

3.8.5.2                     Collection of
Applicant Information.  FMER
will collect and record the following information from each Applicant prior to
the initial disbursement of any Loan (the “Applicant Information”):

 

·                  Name

 

·                  Date of Birth

 

·                  Physical
Address (which includes a residential or business street address or if the
individual does not have such an address, an Army Post Office (APO) or Fleet
Post Office (FPO) box number, the residential or business street address of
next of kin or of another contact individual, or a description of the customer’s
physical location)

 

20

 

·                  For a United
States person, a Taxpayer Identification Number (or evidence of application for
one) and for a non-United States person, one or more of the following:  a Taxpayer Identification Number, a passport
number and country of issuance, an alien identification card number, or a
number and country of issuance of any other unexpired government-issued
document evidencing nationality or residence which bears a photograph or
similar safeguard

 

3.8.5.3                     Applicant
Identity Verification and Recordation.  FMER will verify the accuracy of the
Applicant Information through either a documentary method or a non-documentary
method.  Under either method, FMER will
record how such verification was done and the results of such verification.

 

·                  Documentary
methods of verifying the Applicant Information include reviewing and recording
one or more of the following types of unexpired identification: driver’s
license; passport; state identification card; armed forced identification card;
alien identification card; marticula consular card; instituto federal electoral
identification; cedula de identidad identification; diplomatic identification;
or diplomatic driver’s license.  The
recording of such verification will include recording the type of
identification reviewed, the number of such identification, the place of
issuance, the date of issuance and the date of expiration (if any) of such
identification.

 

·                  Non-documentary
methods of verifying the Applicant Information include comparing the
information with information obtained in advance from a consumer or credit
reporting agency, Lexis/Nexis, TrustedID, or if verification cannot be obtained
through those methods, verification may be obtained from the certification of
the Loan by the Eligible Institution.

 

3.8.5.4                     Addressing
Inconsistencies.  After
collecting and attempting to verify the Applicant Information, FMER will
attempt to resolve any inconsistencies in information.  If any such inconsistencies cannot be resolved
with a reasonable explanation and verification, FMER will not further process
or close any Loan for the Applicant. 
Further, FMER will notify SunTrust of the inconsistency for possible
further investigation.  FMER agrees to
fully cooperate with SunTrust in any such investigation.

 

3.8.5.5                     Comparison with
Government Lists.  As required
by the USA PATRIOT Act and its implementing regulations, FMER will verify that
an Applicant is not included on any lists of known or suspected terrorists or
terrorist organizations issued by the United States government.  If an Applicant is included on any such
lists, FMER will not establish a Loan for the Applicant and will immediately
notify SunTrust of such a fact.

 

3.8.5.6                     Access to and
Maintaining of Records.  FMER
agrees to allow SunTrust access to any records maintained regarding the
Applicant Information and its verification. 
Such access will include allowing access at SunTrust’s request and
direction to any individual or entity that is performing tests, audits or exams
of, for or on behalf of SunTrust.  FMER
agrees to maintain all records of Applicant Information along with any Loan
documentation it retains (or any copies thereof) for at least seven (7) years
from either the time the Loan is repaid and closed or the Loan is sold by
SunTrust to a third party and to keep records of the verification of the
Applicant Information for at least seven (7) years from the date of such
verification.

 

3.9           Transfer to Servicing System.  Within [**] Business Days following the first
disbursement of each Loan, FMER will forward to the Servicer a copy of the
original Credit Agreement, along with a complete copy of the Truth in Lending
Disclosure Statements (other than the Application and Solicitation Disclosure),
Student Borrower self-certification, income verification, enrollment verification/certification

 

21

 

by
the Eligible Institution, missing information notices, and correspondence and
information received from the Applicant(s) except for verification
documentation received pursuant to Section 3.8.5.  FMER will cooperate with SunTrust or Servicer
in transferring all additional information necessary to service such Loan.  FMER will be responsible for the safe
maintenance of Loan documentation as set forth in Section 12.2 of this
Agreement.

 

3.10         Loan Origination Data.

 

3.10.1      Notwithstanding
any other provision of the Agreement, SunTrust hereby authorizes FMER to retain
and use records of applicable data and information relating to Borrowers
received under this Agreement, in identified form, for the limited purpose of
calculating cumulative education debt, annual loan limits and Program limits
with respect to the Borrower, and to provide Program Support Services set forth
in this Agreement.

 

3.10.2      Notwithstanding the
foregoing or any other provision of this Agreement to the contrary, FMER may
retain and use records of data and information relating to Applicants and
Borrowers received under this Agreement, in identified form, for the limited
purpose of identifying red flags or indications of identity theft or other
fraud (“Fraud Database Data”).  If
SunTrust’s education loan applications have previously been processed by FMER
prior to the date of this Agreement (in FMER’s capacity as either agent for
SunTrust or subcontractor of SunTrust’s agent), SunTrust hereby authorizes the
use of historic records of application data and information relating to
applicants and borrowers received under such agreement, in identified form, by
FMER for the limited purposes set forth in the preceding sentence.  SunTrust hereby authorizes FMER to disclose
the Fraud Database Data to its Affiliates, and to use records of application
data and information in FMER’s possession relating to any of SunTrust’s
historic education loan applications, for the limited purposes set forth above.

 

3.11         Reports.  FMER will provide to SunTrust the “Datamart”
report as set forth in Exhibit A on each Business Day.  All such reports, transmittals, records or
data files required, maintained or provided by FMER hereunder shall be accurate
in all material respects, and SunTrust shall have the right to rely
thereon.  Additional reports, including
reports for SunTrust’s use in connection with regulatory matters, may be
prepared by FMER as may be mutually agreed by the Parties.

 

3.12         Subcontractors.  FMER or FMC may retain Subcontractors to
provide customer service and ministerial services in connection with its
performance of Loan Processing Services, provided, however, that any such
Subcontractors other than the Initial Vendors must be approved by SunTrust in
accordance with the procedure set forth for Advertising Firms and Marketers in Section 2.7.2.

 

ARTICLE 4.          PROGRAM SUPPORT SERVICES

 

4.1           Program Analytics and
Development.

 

4.1.1        No later than
fifteen (15) days after the end of each calendar month, FMC shall review the
Pools on an aggregate basis and present such findings to SunTrust regarding
product reconfigurations including, but not limited to, the following
categories:  pricing, tier construction,
repayment options, repayment terms, and the list of Eligible Institutions in
the Program Guidelines.  The Parties may
recommend changes to the Program based on such review.  If the Parties agree with the other Party’s
recommendations and proposed changes to the Program, each Party shall approve
such recommendations by executing revised Program Guidelines or another revised
Exhibit hereto, as appropriate, which revised Exhibit shall be deemed
to be a part of this Agreement upon execution, and any changes pursuant to such
revised Exhibit shall be implemented as soon as reasonably practicable, or
upon the effective date provided in the applicable revised Exhibit.  If the Parties do not agree on the
recommended changes within ten (10) Business Days of the applicable
request, the Parties shall confer in good faith about the proposed
changes.  If the Parties cannot agree on
such changes within thirty (30) days after the date a Party first delivered
recommendations to the other Parties, then any Party may, by notice to the
other 

 

22

 

Parties
delivered no later than thirty (30) days after the expiration of such thirty
(30) day period during which changes could not be agreed, terminate this
Agreement on fifteen (15) days’ written notice to the other Parties, subject to
Section 18.1 and Section 18.3 hereof. Notwithstanding the foregoing,
changes to the Pricing Schedule shall be subject to Section 3.7 and not to
this Section 4.1.1.

 

4.1.2        FMC shall
assist SunTrust with the initial and ongoing administration of the Program by
providing Program analytics and portfolio performance reporting on the
Pools.  FMC shall provide a key metrics
report monthly, containing the information set forth in Schedule 1 to Exhibit D
or as otherwise agreed to in writing by the Parties; provided however, that FMC
shall not be required to deliver such report more frequently than weekly.  To support this service, SunTrust will provide or cause to be provided to
FMC accurate and complete origination and servicing information periodically as
reasonably requested by FMC, including the amount of paid and unpaid principal
and accrued interest with respect to each Loan, and payment status, together
with the information contained in the data requirements set forth in this
Agreement.  FMC may create, use
and disclose, in any manner reasonably necessary, any data, or statistical
abstracts of data, from Borrowers as long as all information which identifies,
or which reasonably could be used to identify Borrowers has been removed.  FMC and
SunTrust shall participate in monthly conference calls to review portfolio
performance, and the Parties shall discuss whether to implement changes to the
Program Guidelines.  As a result of its
analysis of Loan data and performance metrics, FMC may also provide SunTrust
additional services such as Borrower retention strategies and prepayment
mitigation strategies, as agreed to in writing from time to time.

 

4.1.3        FMC
shall provide Services under this Section 4.1 in good faith and in
accordance with the same standard of care, judgment and conduct as would be
used by a reasonable and prudent professional providing such Services.  FMC EXPRESSLY DISCLAIMS ALL WARRANTIES,
EXPRESS OR IMPLIED, REGARDING OR RELATING TO FORWARD-LOOKING PORTFOLIO METRICS
AND OTHER PREDICTIVE MEASURES, DOCUMENTS, MATERIALS, ANALYSES, AND STATEMENTS
IT PROVIDES TO SUNTRUST (COLLECTIVELY, “FORWARD-LOOKING MATERIALS”).  WITH RESPECT TO THE FORWARD-LOOKING
MATERIALS, FMC (A) SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND ANY WARRANTY ARISING
UNDER STATUTE OR OTHERWISE IN LAW OR FROM A COURSE OF DEALING, COURSE OF
PERFORMANCE, USAGE OR TRADE PRACTICE; AND (B) DOES NOT WARRANT, GUARANTEE,
OR MAKE ANY REPRESENTATIONS REGARDING THE USE OF, OR THE RESULTS OF THE USE OF
THE FORWARD-LOOKING MATERIALS IN TERMS OF CORRECTNESS, QUALITY, ACCURACY OR
RELIABILITY.

 

4.2           Post-Disbursement Loan
Servicing.  FMC shall
perform its obligations to SunTrust as Portfolio Administrator, as defined and
more fully set forth in the Servicing Agreement.

 

4.3           Loan Sale; Right of First
Refusal.

 

4.3.1        SunTrust
agrees, in consideration of FMC’s undertakings pursuant to this Agreement, that
if SunTrust seeks or offers to sell, transfer, or assign one or more Loans to
any Person other than one of its Affiliates, SunTrust shall notify FMC of any
such proposed sale, transfer, or assignment, and invite FMC and its Affiliates
to participate as a potential purchaser in any bid process in connection
therewith.  If SunTrust receives any bona
fide third-party written offer to purchase such Loan(s) outside of a bid
process initiated by SunTrust (“Third-Party Offers”), SunTrust shall,
prior to accepting any Third-Party Offer, provide a copy of same to FMC, and
FMC (or an entity affiliated with or sponsored by FMC) shall have the sole and
exclusive right to notify SunTrust within [**] Business Days that it will
purchase such Loan(s) on the terms of the Third-Party Offer.  If, within [**] Business Days after receipt
of the Third-Party Offer from SunTrust, FMC (or an entity affiliated with or
sponsored by FMC) notifies SunTrust that it declines to purchase, or fails to
notify SunTrust that it (or an entity affiliated with or sponsored by it) will
purchase such Loan(s) on the terms of the Third-Party Offer, SunTrust
shall within its sole discretion 

 

23

 

be
entitled to sell such Loan(s) to that third party, in whole or in part,
for its own account on the terms of the Third-Party Offer free and clear of any
claim under this Agreement.

 

4.3.2        SunTrust shall
not, without the express written consent of FMC, transfer, sell, or assign any
Loan to an entity that has no function other than to hold the Loans, or a “variable
interest entity”, within the meaning of Accounting Standards Codification,
810-10, Consolidation (ASC 810-10).

 

4.3.3        The funds in
the Participation Account (including ongoing rights and obligations related to
Recoveries) shall accompany any transfer, sale or securitization of Loans and
be available for the transferee under the terms of this Agreement if the rights
of FMC and FMER to perform Services related to such Loans and receive
compensation for such Services under the terms of this Agreement are also
transferred.

 

4.4           Portfolio Management
Services Generally.

 

4.4.1        SunTrust hereby
retains FMER to perform Portfolio Management Services.  FMER shall develop default prevention and
collection strategies and customized Borrower treatment streams to minimize
credit losses.  Upon SunTrust’s written request and approval, activities
may include:

 

(a)  education of Borrower and Cosigner about Loan
responsibilities both in writing and through calls in preparation for
repayment;

 

(b)  multi-channel (mail and outbound calling) contact strategies;
or

 

(c)  development and optimization of tools (payment plans,
forbearance, payment vehicles, etc.) tailored to SunTrust needs.

 

In
carrying out its duties with respect to the Portfolio Management Services and
subject to Section 4.6 and FMER’s indemnification obligations set forth
herein, FMER may retain and employ Subcontractors as provided herein.

 

4.4.2        Nothing in this
Agreement shall be construed to require or permit FMER to undertake direct or
indirect collection activities with respect to Borrowers or other consumer
obligors, it being the intent of the Parties that consumer-facing collection
activities be conducted by Subcontractors primarily engaged in the business of
collecting consumer debts for third parties.

 

4.4.3        SunTrust shall
cause Servicer to provide to FMER (a) consumer file data in the manner and
form described in Section 4.9.1, and (b) view-only access to Borrower
Loan accounts on Servicer’s system.

 

4.5           Early Awareness Services.  FMER shall perform the early awareness
services as described in this Section (“Early Awareness Services”).

 

4.5.1        Early Awareness
Services consist of activities intended to alert Borrowers who are approaching
the end of their Eligible Institution enrollment, or are no longer enrolled but
not yet in repayment, to their repayment obligations, available borrower
benefits (such as ACH automatic payments) and contact information for
Servicer.  An additional objective of the
Early Awareness Services shall be to educate Borrowers of upcoming payment
requirements and advise Borrowers, if appropriate under the circumstances, of
the existence of deferment, forbearance and modified graduated repayments
(MGRS) alternatives under Program Guidelines then in effect, to reduce the
number and percentage of Borrowers becoming subsequently delinquent in the
repayment process.  Early Awareness
Services include both telephonic and mail contacts, as well as address
verification and skip tracing; provided, however, Early Awareness Services
shall not include any activity that is prohibited by Requirements of Law, as
determined by SunTrust in its sole discretion.

 

4.5.2        Subject to Section 4.6
and FMER’s indemnification obligations set forth herein, FMER may retain the
Servicer and licensed, third party Subcontractors to perform Early Awareness
Services as 

 

24

 

described in this Section. 
Subcontractors shall perform Early Awareness Services in compliance with
all Requirements of Law and this Agreement.

 

4.5.3        FMER shall
oversee the results of operations of Subcontractors and shall be responsible
for all activities performed by Subcontractors.

 

4.6           Default Prevention Services.  FMER shall provide Default Prevention
Services as described in this Section 4.6 (“Default Prevention Services”).

 

4.6.1  FMER shall
retain and be responsible for licensed, third party Subcontractors who are
Approved Collectors to perform Default Prevention Services.  FMER shall ensure Subcontractors perform
Default Prevention Services in compliance with all Requirements of Law and this
Agreement.  FMER shall manage
Subcontractors in order to minimize losses from those categories of Delinquent
Loans for which SunTrust and FMER agree from time to time that Default
Prevention Services will be performed (i.e., Loans at or beyond a specified
stage of delinquency).  Such tactics
shall be undertaken in order to incent Borrowers who are past due but with
respect to whom Servicer has not yet submitted a “Default Notification”
(as defined in the Servicing Guidelines) to SunTrust to become current.  FMER shall require Subcontractors to provide
dedicated staff to make outbound calls related to past due accounts referred by
FMER and receive inbound calls resulting from Subcontractor’s efforts.  FMER also shall require Subcontractors to
draft and mail letters and conduct other activities reasonably calculated to
minimize losses from Delinquent Loans. 
Default Prevention Services include both telephonic and mail contacts,
as well as address verification and skip tracing; provided, however, Default Prevention
Services shall not include any activity that is prohibited by Requirements of
Law, as determined by SunTrust in its sole discretion.

 

4.6.2  FMER shall use commercially reasonable
efforts to maximize collections in connection with the operations of
Subcontractors.

 

4.6.3  Notwithstanding anything to the contrary
herein or in the Program Guidelines or Servicing Agreement, and regardless of
the length of the delinquency of any Loan, in no event shall FMER and the
applicable Subcontractors continue the Default Prevention Services with respect
to each applicable Loan past the date a default notification is submitted with
respect to such Loan in accordance with the Servicing Guidelines.

 

4.6.4  Loan Payments.  Except as set forth in this Section 4.6.4,
neither FMER nor any Subcontractor shall solicit payments directly to FMER or
the Subcontractor from any Borrower or any other Person with respect to a
Delinquent Loan, or accept payments from any Borrower or any other Person with
respect to a Delinquent Loan. 
Subcontractors shall direct Borrowers and any other Persons making
payments on behalf of a Borrower with respect to a Loan to make such payments
directly to Servicer or may (i) receive payments by electronic check or
other electronic means and post such payments directly to Servicer’s payment
system of record, such that the Subcontractor shall have processed the payment
on behalf of SunTrust but will not itself have received the payment funds, or (ii) process
payments as an ACH transmission whereby entries are initiated by the
Subcontractor to the Automated Clearinghouse through the rules and
guidelines established by the National Automated Clearinghouse Association as
in effect from time to time.  The Parties
also acknowledge and agree that a Subcontractor may facilitate payments to
Servicer by taking information from a Borrower or other Person necessary to
effectuate such payments, and forwarding such information to Servicer.  This Section 4.6.4 shall not affect the
ability of Approved Collectors to forward Borrower payments.

 

4.7           Subcontractors.  FMC and/or FMER may utilize
the services of the Subcontractors listed in Schedule 2 to Exhibit D in
the performance of FMC’s and/or FMER’s Services, provided that:  (a) FMC and/or FMER take commercially
reasonable due diligence measures before engaging such Subcontractor, and on at
least an annual basis thereafter, (b) FMC and FMER will remain liable for
all responsibilities and obligations of FMC and/or FMER under the terms and
conditions of this Agreement, even if some of 

 

25

 

such
responsibilities and obligations are performed by FMC’s or FMER’s
Subcontractors; and (c) FMC and/or FMER enters into a written Agreement
with any such Subcontractor that requires the Subcontractor to abide by the
terms and conditions of this Agreement, including Requirements of Law, that are
applicable to FMC and/or FMER, as applicable. 
FMC and FMER will pay, and hereby accept full and exclusive liability
for the payment of, any and all contributions and taxes for unemployment
compensation, disability insurance, old age pension, or annuities, and all
similar provisions now or hereafter imposed by any Governmental Authority,
which are imposed with respect to or measured by wages, salaries, or other
compensation paid by FMC and/or FMER to its Personnel; provided, however, that
with respect to Subcontractors, the foregoing obligates FMC and/or FMER to
compensate Subcontractor Personnel only as between SunTrust, on the one hand,
and FMC and/or FMER, on the other hand. Nothing in this Agreement shall
obligate SunTrust to compensate Personnel, including Personnel of
Subcontractors.

 

4.8           Special Accounts.

 

4.8.1        Bankruptcy.  In the event any Borrower becomes a debtor
under the U.S. Bankruptcy Code, FMER shall accept from Servicer the
documentation specified under “Bankruptcy Notification” set forth in the
Servicing Guidelines and file necessary proofs of claim and other documents
required to preserve the SunTrust’s interests in the subject Loan.  FMER shall promptly forward to SunTrust any
notice of an adversary proceeding received by it with respect to any Loan other
than a Charged Off Loan, and SunTrust shall be responsible for the management
and defense of such proceeding.

 

4.8.2        Deceased.  With respect to any Loan other than a Charged
Off Loan, in the event any Borrower subject to the Portfolio Management
Services is deceased, FMER shall be obligated to perform the applicable
activities required under this Agreement, the Program Guidelines and the
Servicing Agreement related to such deceased person.

 

4.8.3        Fraud.  With respect to any Application or Loan for
which fraud or identity theft is alleged, FMER shall assist SunTrust by
promptly performing its obligations and services required under the terms of
this Agreement, the Program Guidelines and the Servicing Agreement.

 

4.8.4        Complaints and
Requests for Information.  In
addition to any requirements set forth in the Program Guidelines and the
Servicing Agreement, FMER will immediately notify SunTrust regarding any
written consumer complaint that it receives relating to the Services performed
under this Agreement, and shall forward a copy of the complaint to
SunTrust.  FMER shall not respond to any
complaint or request for information on SunTrust’s behalf without prior written
approval of such response and attachments, if any.

 

4.8.5        Court Orders
and Litigation.  In addition
to the requirements in the Program Guidelines and the Servicing Agreement, FMC
and/or FMER shall promptly notify SunTrust upon receipt of any subpoenas to
forward documents, testify in court proceedings or otherwise provide evidence
with respect to its performance of any Services hereunder, and respond to such
subpoenas.  FMC and/or FMER shall provide
a copy of such responses, if applicable and if permitted by Requirements of
Law, to SunTrust.  FMC and/or FMER shall
promptly notify SunTrust upon receipt of any subpoenas to forward documents,
testify in court proceedings or otherwise provide evidence where SunTrust is
the addressee or named recipient.

 

4.9           Servicer Data to be
Delivered for Program Support Services

 

4.9.1        Data Requirements:

 

4.9.1.1                     On a daily basis, SunTrust
shall, through the Servicer, provide the following data to FMC, along with
other data reasonably requested from time to time and necessary for the
performance of the Services:

 

·              Default
prevention data regarding Loans thirty-one (31) or more days past due

 

26

 

·              Default claims
data for Charged Off Loans

·              Loan level
Borrower communication details and call disposition data reflecting dates and
times of attempts and contacts, current principal balance, amounts outstanding
and past due, promise-to-pay dates and other results of calls

 

4.9.1.2                     On a weekly basis, SunTrust
shall, through the Servicer, provide the following data to FMC, along with
other data reasonably requested from time to time and necessary for the
performance of the Services:

 

·              Loan level
detail, including information on the following subjects:

 

·              Identifying
information, such as account ID, name, address, birth date, Social Security
number, and telephone number

·              Disbursement
dates and amounts

·              Loan type

·              Current
principal balance

·              Interest rate,
accrued interest, and capitalization

·              Current loan
status

·              Enrollment
status

·              Deferment and
forbearance

 

4.9.1.3                     On a monthly basis, SunTrust
shall, through the Servicer, provide the following data to FMC no later than
the third (3rd) Business Day
of each month, along with other data reasonably requested from time to time and
necessary for the performance of the Services:

 

·              Loan level
detail, including information on the following subjects:

 

·              Commonline data

·              Identifying
information, such as account ID, name, address, birth date, Social Security number,
and telephone number

·              Disbursement
dates and amounts

·              Loan type

·              Current
principal balance

·              Interest rate,
accrued interest, and capitalization

·              Current loan
status

·              Enrollment
status

·              Deferment and
forbearance

·              Pricing tier

·              Loan payments

·              Repayment
period

·              School identity
and type

 

·              Transaction
details for the month reflecting Borrower account activity

·              Data reflecting
eligibility for and usage of Borrower benefits

 

27

 

4.9.2        Data
Format:  File layouts must provide for “fixed-width” fields using the ASCII
character set.  Delimited data is also
acceptable, provided that FMC’s consent to the delimiter must be obtained.  If
comma-delimited fields are being submitted, then all text fields must be
enclosed in double quotes.

 

4.9.3        Data Transmission:  Files will need to be encrypted (PGP
preferred) and delivered to FMC via FTP.  The
filenames must include unique identifiers for servicer name, snapshot or
transaction file category, and contain a date-time-stamp.

 

Example filename for raw data file: xxxxSD00.csv_ccyymmddhhmmss.sfx

XXXX
= Client Abbreviation,

SD
= Transaction Detail (Monthly Loan Transaction),

00
= Tiebreaker

sfx=current file suffix as .pgp

 

Example filename for PGP-encrypted data file: xxxxTD00.csv_ccyymmddhhmmss.sfx

XXXX
= Client Abbreviation,

TD
= Transaction Detail (Monthly Loan Transaction),

00
= Tiebreaker

sfx=current
file suffix as .pgp

 

4.10         Portfolio
Management Transfer.  SunTrust reserves the right to perform all
Services set forth in Sections 4.4 through 4.8 upon [**] Business Days prior written notice to FMC if, after the full funding of
the Participation Account at the end of the Term and at the time SunTrust
delivers such notice, the amount of the balance in the Participation Account is
below [**] per cent ([**]%) of the Participation Percentage multiplied
by Outstanding Loan Volume.  For example,
if Outstanding Loan Volume is $[**], and the Participation Percentage is [**]%, then SunTrust may deliver to FMC its notice of its election to perform
all Services set forth in Sections 4.4 to 4.8 if the balance in the
Participation Account is less than $[**].  In the event SunTrust provides
such notice to FMC, and the Services provided in this Section 4 are
terminated, (a) the transition rules set forth in Section 18.3.2
shall apply, and (b) after the end of the Transition Period, SunTrust
shall no longer be obligated to pay to FMC the fee set forth in Section 6.4.1.

 

ARTICLE 5.  PURCHASE

 

5.1                                 FMC’s Purchase
Obligations.  SunTrust
shall be entitled to cause FMC (or its Affiliate designee) to purchase, subject
to the terms and conditions set forth in this Section 5, any Loan (each
such Loan purchased pursuant to this Section 5, a “Purchased Loan”).  Such right shall apply to any Loan that is
reasonably determined by SunTrust to be a Loan which should not have been
approved due to FMER’s or FMC’s failure to comply in any material respect with
the terms of this Agreement, the Program Guidelines or Requirements of Law, and
not due to any action or omission of SunTrust. 
In order to exercise such purchase right, SunTrust, pursuant to the
terms of and within the time limitation set forth in the Program Guidelines and
Servicing Agreement, shall make demand of FMC in writing that FMC purchase such
Loans as have been so determined for an amount equal to the Purchase Price,
calculated in the manner set forth below. 
If FMC objects to SunTrust’s characterization of any Loan as a Loan
which should not have been approved, the dispute resolution procedure set forth
in this Agreement shall apply; if FMC provides no such objection to SunTrust
within ten (10) Business Days of SunTrust’s written purchase demand, then
FMC shall pay SunTrust the Purchase Price in immediately available funds
(outside of funds in the Participation Account) within fifteen (15) Business
Days after receipt of SunTrust’s purchase notice.

 

5.2                                 Purchase Price.  The “Purchase Price” for each
Purchased Loan shall be an amount equal to the outstanding balance of the Loan,
including accrued and unpaid interest through the date the Loan is removed from
the Servicer’s system.

 

28

 

5.3                                 Conveyance.  Upon payment of the Purchase Price with
respect to such Loans which should not have been approved, SunTrust shall
convey to MG Private Student Loan Trust 2010-1, at FMC’s cost and expense, any
such Purchased Loan.  No later than the
time that is contemporaneous with the payment of the Purchase Price, SunTrust
shall deliver, or cause to be delivered, to MG Private Student Loan Trust
2010-1 (or its designee) the Credit Agreement, all related Loan documentation
and complete Loan file relating to such Purchased Loan and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse absent any violation by FMC or SunTrust of Requirements of Law or the
Credit Agreement, as shall be necessary to vest in FMC (or its Affiliate
designee) title to such Purchased Loan.

 

ARTICLE 6.  FEES

 

6.1           Invoices.  All fees will be invoiced to SunTrust by FMC
on behalf of itself and FMER at the following address:

 

SunTrust Bank

SunTrust Education Loans

1001 Semmes Avenue

Richmond, VA 23224

Attn: Marnie Crane

 

SunTrust
may change its designated address for invoices at any time by written notice to
FMC which meets the requirements of Section 19.1.

 

6.2           General.  All fees shall be paid by SunTrust within
sixty (60) days after SunTrust’s receipt of the invoice therefor, except fees
subject to good faith dispute between the Parties.  In the event any fees have been made for a
cancelled Disbursement, as defined by the cancellation window described in the
Servicing Guidelines, SunTrust shall offset future fees with any and all prior
fees paid for such cancelled Disbursement. 
Except as set forth in this Article 6, Section 18.1.2, Section 18.3.1,
or as otherwise set forth in this Agreement, no fees will be paid after the
termination of this Agreement, except for Applications which have already been
submitted and credit approved prior to the termination of this Agreement.  Except pursuant to an indemnity obligation or
as otherwise expressly stated in this Agreement, no other amounts shall be due
or payable by SunTrust.

 

6.3           Loan Processing Services
Fees.

 

6.3.1        For the Loan
Processing Services rendered during the Term of this Agreement, FMC shall
invoice to SunTrust on a monthly basis, and SunTrust shall pay to FMER fees
(the “Loan Processing Fees”)” equal to [**]% of the principal amount of
the Disbursed Loan Amount for the prior month.

 

6.3.2        Loan Processing
Fees shall be invoiced monthly as agreed by the Parties from time to time.  FMC’s invoice for FMER’s Loan Processing
Services will state the number and amount of Loans disbursed during the month
covered by the invoice.

 

6.4           Program Support
Services Fees.

 

6.4.1        For Program Support Services
rendered during the Term of this Agreement, other than Production Support
Services and Program Administration Services, SunTrust shall pay FMC an ongoing
monthly fee equal to [**]% multiplied by the Average Daily Balance, divided by
[**].  SunTrust shall be invoiced on a
monthly basis by the Servicer and shall remit payment to the Servicer for all
Program Support Services fees incurred hereunder.

 

6.4.2        For Production Support
Services rendered during the Term of this Agreement, FMC shall invoice SunTrust
for, and SunTrust shall pay FMC, a fee equal to [**]% of the Disbursed Loan
Amount 

 

29

 

in
the previous month for Loans sourced through the FMC URI/URL, payable monthly
in accordance with this Article 6.

 

6.5           Participation
Account Administrative Fee; Program Administration Services Fees.

 

6.5.1        For administration of the
Participation Account, SunTrust shall pay the monthly Participation Account
Administrative Fee as set forth in this Agreement.  For Program Administration Services, SunTrust
shall pay FMC the monthly Program Administration Services Fee.

 

6.5.2        SunTrust shall be invoiced
for this fee monthly by FMC.

 

6.5.3        Notwithstanding Section 6.5.1,
in the event the Program Administration Services Fee is less than $[**],
SunTrust shall offset the Participation Account Administrative Fee by an amount
equal to the amount the Program Administration Services Fee falls below $[**].

 

6.6           After termination of this
Agreement, SunTrust shall continue to pay FMC the Program Administration
Services Fee on a monthly basis.

 

6.7           For
example purposes only, with respect to the fees for Program Support Services,
Participation Account Administration, and Program Administration Services:

 

	
  Average
  Daily Balance

  	
   

  	
  $[**]

  	
   

  	
   

  
	
  Monthly
  Accrued Interest

  	
   

  	
  $[**]

  	
   

  	
   

  
	
  Sum
  of accrued interest due to FMC in each pricing segment

  	
   

  	
  $[**]

  	
   

  	
   

  
	
  Program
  Support Services Fee

  	
   

  	
  $[**]

  	
   

  	
  ([**]%
  * Average Daily Balance)/ [**]

  
	
  Participation
  Account Administrative Fee (monthly)

  	
   

  	
  $[**]

  	
   

  	
  ([**]%
  * Average Daily Balance)/ [**]

  
	
  Program
  Administration Services Fee (monthly)

  	
   

  	
  $[**]

  	
   

  	
  (FMC
  Share of Portfolio Yield, less the Program Support Services Fee, less the
  Participation Account Administrative Fee)

  

 

ARTICLE 7.          FMC CREDIT ENHANCEMENT

 

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 an agreement between FMC and
SunTrust regarding deposits, withdrawals, and procedures relating to the Participation
Account (the “Participation Account Deposit Agreement”).  SunTrust agrees to compensate FMC, by paying
to FMC an undivided fractional interest in the Portfolio Yield from its
portfolio of such Loans, on the following terms and conditions:

 

7.1.1        Initial Participation
Account Deposit; Quarterly Participation Account Deposits.  Prior to the commencement of the Loan
Processing Services, FMC shall deposit the Initial Participation Account
Deposit in a Participation Account for the initial Pool, which amount shall be
counted toward the Participation Cap. 
Not later than fifteen (15) days following the end of each calendar
quarter, FMC shall calculate the average of (i) the Participation Interest
on the initial Pool as of the end of such quarter and (ii) the
Participation Percentage multiplied by the Disbursed Loan Amount as of the end
of such quarter, in each case after giving effect to changes to the Projected
Default Rate as of quarter-end.  Not
later than fifteen (15) days following the end of the calendar quarter, and
subject to the Participation Cap, FMC shall deposit in the Participation
Account the amount, if any, by which the foregoing average exceeds the
cumulative previous deposits made by FMC to the Participation Account as of the
end of such quarter (each, a “Participation Account Deposit”).  The Parties intend that additional
Participation Account Deposits shall be made by FMC quarterly through the
expiration or termination of this Agreement, 

 

30

 

subject
to the Participation Cap, to the extent the distribution of the Disbursed Loan
Amount among pricing tiers changes the Projected Default Rate, and therefore,
the Participation Interest, for the Pools, taken together.

 

7.1.2        Initial Participation
Account Deposit Reconciliation.  On the last day of the month in which the
first anniversary of the Initial Participation Account Deposit by FMC occurs,
FMC shall be entitled to a payment from the Participation Account of any amount
by which the sum of Participation Account Deposits exceeds the Participation
Percentage multiplied by the Disbursed Loan Amount, including remaining
scheduled Loan disbursements, through the last day of such month (e.g., if Loan
volume is substantially below projections, the amount, if any, by which the
Initial Participation Account Deposit exceeded the required deposit for
Disbursed Loan Amount during the first year of the Agreement).  SunTrust agrees to withdraw and pay such
amounts to FMC within fifteen (15) days after the end of such month.

 

7.1.3        Participation Account
Deposits for Subsequent Pool; Reconciliation.  With respect to the second Pool during the
Term, subject to the Participation Cap, FMC shall deposit an Initial
Participation Account Deposit in the Participation Account prior to the
disbursement of the first Loan in such Pool. 
Not later than fifteen (15) days following the end of each calendar
quarter during the second year of the Term, FMC shall calculate the average of (i) the
Participation Interest on the Pools as of the end of such quarter and (ii) the
Participation Percentage multiplied by the Disbursed Loan Amount as of the end
of such quarter, in each case after giving effect to changes to the Projected
Default Rate as of quarter-end.  Not
later than fifteen (15) days following the end of the calendar quarter, FMC
shall deposit in the Participation Account the amount, if any, by which the
foregoing average exceeds the cumulative previous deposits in the Participation
Account as of the end of such quarter, minus amounts paid from the
Participation Account pursuant to Section 7.1.2. Not later than 270 days
following the end of the then-current Term (to allow for all final
disbursements and any cancellations thereof to be made), and subject to the
Participation Cap, (a) if the sum of previous deposits in the
Participation Account as of the end of the then-current Term is less than the
Participation Percentage for all Pools multiplied by the Disbursed Loan Amount
plus the amount of all remaining scheduled Loan disbursements, for all Pools as
of the end of the then-current Term, after giving effect to changes to the
Projected Default Rate as of the end of the Term, then FMC shall deposit a
final Participation Account Deposit into the Participation Account equal to the
amount of such difference, or (b) if the sum of all Participation Account
Deposits is greater than the Participation Percentage for all Pools multiplied
by the Disbursed Loan Amount plus the amount of all remaining scheduled Loan
disbursements for all Pools, then FMC shall be entitled to payments from the
Participation Account of any amount by which the sum of Participation Account
Deposits exceeds the Participation Percentage for all Pools as of the end of
the Term multiplied by the Disbursed Loan Amount plus the amount of all
remaining scheduled Loan disbursements for all Pools as of the end of the
Term.  SunTrust agrees to withdraw and
pay to FMC such amounts subject to subsection (b) above, if any, no later
than two hundred eighty-five (285) days after the end of the Term.

 

7.1.4        Charged Off Loan Payments.  Not later than thirty (30) days following the
end of each month, SunTrust shall withdraw on a monthly basis from the
Participation Account, to the extent of available funds, the outstanding
principal and accrued interest balance as of the date each Charged Off Loan is
moved from the Servicer’s system.  Upon
SunTrust’s withdrawal under this Section 7.1.4, SunTrust shall assign the
Charged Off Loan to FMC (or its Affiliate designee) by delivering, or causing
to be delivered, the Credit Agreement, all related Loan documentation and
complete Loan file relating to such Charged Off Loan and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse absent any violation by FMC or SunTrust of Requirements of Law or the
Credit Agreement, as shall be necessary to vest in FMC (or its Affiliate
designee) title to such Purchased Loan. 
On the date of any payment under this Section, SunTrust shall only be
entitled to withdraw a payment in an amount equal to the outstanding principal
and accrued interest balance as of the date each Charged Off Loan is moved from
the Servicer’s system.  Notwithstanding
any other provision in this Agreement to the 

 

31

 

contrary,
if the funds in the Participation Account are not sufficient to cover the
payment to SunTrust for any Charged Off Loan, the payment to SunTrust for such
Charged Off Loan will be made when funds become available through the deposit
of Recoveries in the Participation Account. 
Funds deposited in the Participation Account under Section 7.1.5
hereof shall not be available for withdrawal by SunTrust under this Section 7.1.4.

 

7.1.5        Participation Account
Administrative Fee.  Not later
than thirty (30) days following the end of each month, SunTrust shall deposit
the Participation Account Administrative Fee in the Participation Account.  Regardless of whether funds in the
Participation Account are sufficient to cover the payment to SunTrust for any
Charged Off Loan, the Participation Account Administrative Fee deposited by
SunTrust shall be released to FMC within two (2) Business Days of deposit
into the Participation Account.  During
the Term, the Participation Account Administrative Fee shall be modified
quarterly to reflect the extent to which the distribution of the Disbursed Loan
Amount among pricing tiers changes the Projected Default Rate for the
Pool.  FMC shall invoice SunTrust for the
amount of such fee as set forth in Section 6.2.

 

7.1.6        Participation Account
Payments.  In addition
to any payments set forth in Section 7.1.2, payments shall be made to FMC
monthly, after the date that is forty-eight (48) months after the Effective
Date, to the extent that funds in the Participation Account as of the end of
any month, as a percentage of Outstanding Loan Volume as of the end of such
month, exceed the ratio, expressed as a percentage, of the Participation
Percentage, after giving effect to changes to the Projected Default Rate as of
the end of the Term to Disbursed Loan Amount (such excess, the “Participation
Account Excess Percentage”).  Such
monthly payment to FMC at the end of any such month (the “Participation
Account Payment”) in which the Participation Account Excess Percentage is
positive shall equal the Participation Account Excess Percentage multiplied by
the Outstanding Loan Volume at the end of such month.

 

7.1.7        Recoveries.  After the payment to SunTrust with respect to
any Charged Off Loans under Section 7.1.4, and after SunTrust has assigned
the Charged Off Loan to FMC, Recoveries shall be deposited in the Participation
Account by MG Student Loan Trust 2010-1 and its agents.

 

7.1.8        Review of Participation
Reporting.  FMC and
SunTrust shall review the quarterly Participation Account report during the
first ten (10) days after receiving it and shall notify the other Party 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 either FMC or SunTrust disputes items in
the report, the payments required in Section 7.1.4 relating to such
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.

 

7.1.9        Account Access.  SunTrust agrees that it shall provide
view-only online access to the Participation Account to FMC and/or FMER
employees designated by FMC and/or FMER from time to time.

 

7.1.10      Security Interest in
Participation Account.  FMC
hereby grants SunTrust a security interest in the Participation Account
pursuant to Article 9 of the Georgia Uniform Commercial Code (“Article 9”).  SunTrust is responsible for perfecting this
security interest in accordance with Article 9.  FMC shall cooperate in good faith to enable
SunTrust to perfect its security interest in the Participation Account,
including, but not limited to, by entering into a mutually acceptable
Participation Account Deposit Agreement with SunTrust.  Any such Participation Account Deposit
Agreement or similar agreement, or other means of perfecting SunTrust’s
security interest, shall be consistent with the purpose and terms of this
Agreement.  SunTrust shall be entitled to
enforce its security interest in the Participation Account in accordance with Article 9,
subject to the terms of this Agreement, only upon the occurrence of

 

32

 

one or more events giving
SunTrust the right to terminate this Agreement pursuant to Section 18.2.1
hereof.

 

7.1.11      Participation Cap and
Transition.  At such
time as FMC has deposited, in the aggregate and inclusive of Initial
Participation Account Deposits, [**] dollars ($[**]) in the Participation
Account, FMC shall monitor the number and amount of pending Applications and
amount of potential Loan disbursements, and FMC and SunTrust shall confer and
mutually establish a date to cease accepting new Applications.  Such date shall reasonably approximate the
date on which cumulative deposits in the Participation Account, whether
previously made by FMC or which FMC will be obligated to make once Loan
disbursements are complete, are expected to equal or exceed [**] dollars
($[**]), after giving effect to estimated future Loan disbursements that will
be made for all Applications submitted for a credit inquiry on or before such
date.  All Applications submitted for a
credit inquiry by such date shall be processed in accordance with Section 18.4
of this Agreement, and FMC shall make Participation Account Deposits in
connection with any Loans made for such applications, regardless of whether the
total deposits ultimately made by FMC in the Participation Account are less
than or greater than [**] dollars ($[**]).

 

ARTICLE 8.  REPRESENTATIONS AND WARRANTIES

 

8.1           Representations and
Warranties of the Parties.  Each
Party hereby represents and warrants to the other Parties as of the Execution
Date and throughout the Term of this Agreement as follows:

 

8.1.1        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.

 

8.1.2        Authorization.  It has all necessary authority and has taken
all necessary action to enter into this Agreement, and subject to the
satisfaction or waiver of the Effectiveness Conditions, on the Effective Date,
to consummate the transactions contemplated hereby and to perform its
obligations hereunder.  This Agreement
has been duly executed and delivered by each Party 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.

 

8.1.3        Absence of Conflicts.  Neither the execution and delivery of this
Agreement by any Party nor the performance by any Party of its obligations
hereunder will result in (i) a violation of the articles of incorporation
or charter documents of such Party, (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.

 

8.1.4        Consents and Approvals.  Each Party 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.

 

33

 

8.1.5        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 any Party 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.

 

8.1.6        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.

 

8.1.7        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.

 

Each
Party is bound by the representations and warranties specifically designated to
it within this Agreement and any exhibit attached hereto.

 

8.2           Representations and
Warranties of SunTrust.  With
respect to Loan Processing Services and subject to FMER’s and FMC’s
representations, warranties and covenants regarding compliance with
Requirements of Law as expressly set forth in the Agreement, SunTrust
represents, warrants and covenants to FMC and FMER that it will at all times
comply with all Requirements of Law. 
Without limiting the generality of the foregoing, SunTrust represents,
warrants and covenants that:

 

8.2.1        all documents
and forms provided by SunTrust to FMC or FMER and all instructions with respect
thereto, including the forms of loan applications and Credit Agreements,  comply with all Requirements of Law;

 

8.2.2        SunTrust is a
federally-insured financial institution and 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 it in order to advertise, make, fund, hold or collect
Loans; and

 

8.2.3        the Program
Guidelines, including but not limited to the Pricing Schedule, all marketing
activities and SunTrust Materials with respect to the Program conform to all
Requirements of Law, including the Truth-in-Lending Act and Regulation Z, the
Federal Trade Commission Act and any interpretations issued by the Federal
Trade Commission and federal banking regulators, the Equal Credit Opportunity
Act, Higher Education Opportunity Act Title X, the Student Lending
Accountability, Transparency and Enforcement Act, all implementing regulations
and all similar state and/or federal laws that may be now in effect or
hereinafter enacted.

 

8.3           Representations and
Warranties of FMER.  With
respect to Loan Processing Services, FMER hereby represents and warrants to
SunTrust at the time of each Loan disbursement, subject to the exceptions noted
in subsection 8.3.12 below, as follows:

 

8.3.1        With respect to
each Loan originated hereunder, a Credit Agreement has been duly and properly
executed by the Borrower thereunder and is enforceable against such Borrower in
accordance with its terms except as enforceability may be affected by
bankruptcy, insolvency, moratorium or other similar laws affecting the rights
of creditors generally and by equitable principles.

 

8.3.2        Without limiting the
generality of the foregoing subsection 8.3.1, each Loan has been made to a
Borrower who, at the time of origination of the Loan:

 

34

 

(i)            had the legal capacity to
execute and deliver a Credit Agreement under Requirements of Law, including
attaining the age of majority;

 

(ii)           was not
deceased; and,

 

(iii)          was a United States citizen/national
or a permanent resident alien of the United States.

 

8.3.3        Except as
expressly otherwise approved in writing by SunTrust, each Loan has been
originated in the United States of America, its territories, its possessions or
other areas subject to its jurisdiction, by FMER in the ordinary course of its
business.

 

8.3.4        Each Loan has
been originated in conformity in all material respects with the Program
Guidelines and all Requirements of Law with respect to the origination thereof,
including the Equal Credit Opportunity Act and any applicable usury laws.  No Application for a Loan shall be, or has
been, rejected, approved or discouraged by FMER on behalf of SunTrust on the
basis of race, sex, color, religion, national origin, age (other than laws
limiting the capacity to enter a binding contract) or marital status, the fact
that all or a part of any Applicant’s income derives from any public assistance
program, or the fact that any Applicant has, in good faith, exercised any right
under the Consumer Credit Protection Act.

 

8.3.5        Each Loan has
been documented on forms set forth in the Program Guidelines, which forms,
except to the extent otherwise modified from time to time pursuant to Section 3.1.1,
(a) require interest accrual (whether or not such interest is being paid
currently or is being capitalized) and yield interest at the applicable rate
thereto, (b) provide or, when the payment schedule with respect thereto is
determined, will provide for payments on a periodic basis that fully amortize
the principal amount of the Loan by its maturity, as such maturity may be
modified in accordance with any applicable deferral or forbearance periods
granted in accordance with Requirements of Law and the Program Guidelines; and (c) contain
consumer loan terms in strict conformity with the Program Guidelines;

 

8.3.6        With respect to
each Loan (subject to SunTrust’s obligations above), FMER has provided or
caused to be provided, all notices, statements and disclosures required under
the Program Guidelines, Requirements of Law, and rules and regulations
with respect to the origination thereof, including but not limited to the
Truth-in-Lending Disclosure Statements, and each such notice, statement and
disclosure was true, correct and complete in all material respects when
provided;

 

8.3.7        Neither FMER
nor any of its Affiliates has received any notice or communication alleging
noncompliance with the Program Guidelines, or any applicable Requirement of Law
with regard to the origination of any Loan.

 

8.3.8        FMER has not
impaired, waived, altered or modified the terms of any Credit Agreement.

 

8.3.9        All data and
records provided by or on behalf of FMER to SunTrust (and the Servicer) with
respect to each Loan shall be true, correct and complete when provided in all
material respects.

 

8.3.10      At the time of
application, according to the credit bureau report or self-reported application
information, no Borrower was a debtor in a bankruptcy proceeding.

 

8.3.11      All agreements
with Subcontractors shall require the Subcontractors to perform in accordance
with the relevant portions of this Agreement, the Program Guidelines, the
Servicing Agreement, and Requirements of Law.

 

35

 

8.3.12                  All of FMC’s
and FMER’s representations, warranties and covenants hereunder are subject to
the following:

 

(i)                                     FMC’s and FMER’s
representations, warranties and covenants hereunder shall not be breached by
any occurrence or condition to the extent such occurrence or condition is
caused by a breach of one or more of SunTrust’s representations, warranties or
covenants regarding compliance with Requirements of Law or the failure of
SunTrust to perform any of its other agreements hereunder related to FMER’s or
FMC’s performance as expressly set forth in this Agreement.

 

(ii)                                  Execution of
Credit Agreements shall be deemed lawful and complete if: (A) an original
document received by U.S. mail contains original signatures purporting to be
the signatures of all Borrowers, (B) a copy received by fax contains
copies of signatures purporting to be signatures of all Borrowers, or (C) if
execution is by electronic signature, the Borrower who is electronically
signing has satisfied the authentication criteria set forth in the Program
Guidelines.

 

(iii)                               In performing
its obligations under this Agreement, FMC and FMER shall be entitled to rely on
the accuracy and completeness of all information provided to it by SunTrust,
any Borrower or any Eligible Institution.

 

(iv)                              To the extent
that FMER has followed the policies and procedures set forth in its Customer
Identification Program, Red Flags Program and Address Mismatch Program, neither
FMC nor FMER shall not be liable with respect to any Borrower fraud, identity
theft or defective execution with respect to any Applicant or Borrower (or
purported Applicant or Borrower).

 

8.4                                 Custom Scoring
Model.  FMC represents and warrants
that its custom and proprietary score model complies with Requirements of Law,
including that the model does not use (i) any of the following elements as
inputs or model variables: 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 good faith
exercise of any right under the federal Consumer Credit Protection Act, or any
other factor prohibited by Requirements of Law, or (ii) geographic
information in a way that would result in restricting credit from geographic
areas on any basis prohibited by Requirements of Law.

 

8.5                                 Performance of
FMER and FMC.  Each of
FMER and FMC acknowledge and agree with SunTrust that each of them shall be
jointly and severally liable to SunTrust for any failure of either of them to
perform as required by the terms of this Agreement.

 

8.6                                 Licensing.  Each Party warrants that it will maintain
during the effectiveness of this Agreement the legal authority to conduct all
of the activities required to be conducted by it pursuant to the terms of this
Agreement.  As of the Execution Date,
FMER has applied for the licenses set forth on Exhibit J (the “FMER
License Applications”).  If the FMER
License Application in Massachusetts has not been approved prior to the
Effective Date, FMER shall not charge SunTrust the fee set forth Section 6.3.1
for any Loan for which any Borrower is a resident of Massachusetts until FMER
obtains its Massachusetts license.  If
the FMER License Application in New Jersey has not been approved prior to the
Effective Date, FMER shall not accept any Applications for which any Applicant
is a resident of New Jersey, until FMER obtains its New Jersey license.

 

ARTICLE 9.     COMPLIANCE
WITH REQUIREMENTS OF LAW.  Each
Party shall comply with all applicable Requirements of Law in all material
respects in performing its respective obligations under this Agreement.  Notwithstanding the foregoing, the Parties
acknowledge and agree that unless expressly 

 

36

 

set
forth in the Agreement, neither FMER nor FMC makes any representation or
warranties regarding conformity of any loan servicing processes or loan product
terms or any forms, documents or disclosures with Requirements of Law.  With respect to all aspects of the Program
for which FMER and FMC make no express representations, including the Program
Guidelines, SunTrust shall be responsible for compliance of such aspect of the
Program with Requirements of Law.

 

ARTICLE 10.                      INSURANCE.

 

10.1                           FMC shall (on behalf of itself and its Affiliates)
at all times and at its sole cost and expense, keep in full force and effect
until one (1) year after termination of this Agreement, the insurance
coverage in amounts no less than what is specified on Exhibit H,
attached hereto and incorporated herein (“Insurance Requirements”).  All insurance policies or bonds required by
this Agreement will be issued by insurance companies with an A.M. Best
Rating of not less than “A1”, a Standard & Poor’s rating of not less
than “A-”, or a Moody’s rating of not less than “A3”.  Except as otherwise approved in writing by
SunTrust, FMC must also ensure that its Subcontractors comply with the
Insurance Requirements.  FMC shall also
maintain workers compensation insurance in compliance with all applicable
Requirements of Law.

 

10.2                           No insurance
policy shall be cancelled, amended or modified by FMC in any manner that
materially limits, restricts, or conditions the coverage provided, decreases
the amount of coverage or increases the deductible, or in any other way reduces
the coverage provided with the result that the Insurance Requirements are no
longer met, without the prior written consent of SunTrust, which shall not be
unreasonably withheld.  Cancellation,
amendment or modification of any insurance policy shall not relieve either FMC
of its continuing obligation to maintain insurance coverage in accordance with
the Insurance Requirements.

 

10.3                           FMC agrees to
waive, and will require its insurers to waive, all rights of subrogation
against SunTrust, its directors, officers, and Personnel as it relates to the
General Liability and Umbrella Liability policies required on Exhibit H.  On or
prior to the Effective Date, FMC will provide SunTrust with a certificate of
insurance evidencing such required coverage; provided that SunTrust reserves
the right to require FMC to deliver complete copies of FMC’s insurance policies
from time to time thereafter.  In
addition, SunTrust will be notified of any material change or cancellation of
such policies with at least thirty (30) days prior written notice.  Notwithstanding any other provision in this
Agreement, if FMC, at any time, neglects or refuses to maintain or
deliver evidence of the insurance required herein within a reasonable time
after SunTrust’s request, or should such insurance be canceled or materially
changed with the result that the Insurance Requirements are no longer met
without SunTrust’s consent, SunTrust will have the right to immediately
terminate this Agreement without penalty, subject to Section 18 hereof.

 

ARTICLE 11.                      INTELLECTUAL
PROPERTY.

 

11.1                           Except as
otherwise agreed to in writing by the Parties, in connection with the provision
of Services as specified in this Agreement, each Party shall retain all right,
title and interest in and to its intellectual property, Proprietary
Information, systems, software, programs, processes, technology, services,
methodologies, models, products, trademarks, service marks and any other
materials or rights, tangible or intangible (collectively, “Intellectual
Property”) and nothing shall or shall be construed to restrict, impair,
transfer, license, convey or otherwise alter or deprive either Party of any of
its rights or proprietary interests in its Intellectual Property, including any
modifications, enhancements or derivative works thereof.

 

11.2                           No Party may
use any other Party’s Intellectual Property for any purpose other than as
specified in this Agreement.  Upon
expiration or termination of this Agreement, all licenses granted by any Party
to the other shall immediately terminate without notice required, and each
Party shall return the other Party’s Intellectual Property and all copies or
derivative works made thereof, as specifically permitted hereunder.  

 

37

 

Each
Party shall have no further rights or licenses to use the other Party’s
Intellectual Property or any such copies or derivative works, except as
specifically agreed between the Parties in writing.

 

11.3                           Nothing
contained in this Agreement shall be construed as granting to any Party any
right or license under any of the other Parties’ present or future patent
rights or copyrights, or as granting to any Party any right or license to use
for any purpose other than those purposes expressly stated herein any of the
other Parties’ information or any other information, materials or results
received, discovered, or produced by any Party in connection with the Services
performed for SunTrust.

 

ARTICLE 12.                      BOOKS
AND RECORDS; AUDIT RIGHTS

 

12.1                           Maintenance of
Books and Records.  Each Party
will keep proper books and records reflecting all of its activities and
transactions under this Agreement so that its financial statements can be
maintained in accordance with generally acceptable accounting practices.  Each Party shall maintain its books and
records relating to activities under this Agreement throughout the term hereof
and thereafter for such periods as are required under applicable Requirements
of Law or such Party’s policy, whichever is longer.

 

12.2                           Recordkeeping
Requirements.  FMER shall
retain the original Credit Agreement for each Loan (or a copy thereof in the
case of execution by fax or electronic signature as permitted in the Program
Guidelines), along with a complete copy of the Truth in Lending Disclosure
Statements (other than the Application and Solicitation Disclosure), income
verification, enrollment verification/certification of the Loan by the Eligible
Institution, credit bureau report, missing information notices, correspondence
from the Applicant(s), and all other documents and data related to the Loan,
whether originally sent to SunTrust (and forwarded to FMER) or to FMER.  FMER shall also retain records of the time
and date each Applicant acknowledges the Application and Solicitation
Disclosure and records of the content of the Application and Solicitation
Disclosure that each Applicant viewed at such date and time.  FMER will be responsible for the safe
maintenance of such Loan documentation and all records of Applicant Information
for at least seven (7) years from either the time the Loan is fully repaid
or the Loan is sold by SunTrust to a third party.

 

12.3                           Audit Rights.

 

12.3.1                  General Audits.  SunTrust shall have the right to review,
inspect and audit, at SunTrust’s expense, at such reasonable times as mutually
agreed by the Parties, and upon at least ten (10) Business Days’ advance
notice, the books, records, documents, other writings, information, whether in
hard copies, electronic form or otherwise, of FMC or any Affiliate thereto
performing Services to the extent related to: (i) such Party’s activities
hereunder or (ii) conformance with such Party’s obligations
hereunder.  Upon at least ten (10) Business
Days’ advance written notice to FMC, and subject to FMC’s reasonable security
requirements, FMC shall provide to SunTrust (and SunTrust’s internal and
external auditors, inspectors, regulators and other representatives that
SunTrust may designate from time to time) access at reasonable hours to FMC’s
Personnel, to the facilities at or from which Services are then being provided,
and to FMC’s records and other pertinent information, all to the extent
relevant to FMC’s obligations under this Agreement.  Such access shall be provided for the purpose
of performing audits and inspections of FMC and its businesses and to examine
FMC’s performance under this Agreement, including: (a) verifying the
integrity of data related to or concerning systems in FMC’s possession and
control; (b) examining the systems that process, store, support and
transmit such data; (c) examining the controls (e.g., organizational
controls, input/output controls, system modification controls, processing
controls, system design controls and access controls) and the security,
disaster recovery and back-up practices and procedures; (d) examining FMC’s
measurement, monitoring and management tools; and (e) enabling SunTrust to
meet applicable legal, regulatory and contractual requirements.  FMC shall provide any assistance reasonably
requested by SunTrust or its designee, and at SunTrust’s expense, in conducting
any such audit.  Such audit and any
information obtained therefrom shall be subject to the confidentiality 

 

38

 

restrictions
contained in this Agreement and SunTrust shall be responsible for enforcing
such restrictions with respect to its internal and external auditors,
inspectors, regulators (to the extent permitted by Requirements of Law) and
other representatives.  SunTrust shall
also have the right to perform a monthly audit of Application and Loan files at
a time and using procedures mutually acceptable to FMER and SunTrust.

 

12.3.2                  Within five (5) Business
Days of receipt of any audit notice, FMC shall notify SunTrust, in writing, of
any objections to the scope of the review, inspection or audit or the
supporting documentation requested, it being understood that any objections
must be based upon a reasonable and documented belief that such review,
inspection, audit or documentation is not reasonably related to the obligations
of FMC or FMER under this Agreement or would require the disclosure of
Proprietary Information (other than information that is proprietary solely as a
result of this Agreement).  The Parties
shall cooperate in good faith to resolve objections with respect to any review,
inspection or audit proposed by SunTrust and such review, inspection or audit
shall not commence until such objections are resolved, unless sooner required
for compliance with a court order, civil investigation demand or other
Governmental Authority inquiry.  In the
event the Parties are not able to resolve such objections, the matter shall be
resolved in accordance with the procedures set forth in Article 17.

 

12.3.3                  Any review,
inspection or audit to be performed by SunTrust pursuant to this Section 12.3
shall be conducted only during normal business hours, using reasonable care not
to cause damage and not to interrupt the normal business operations of the
Party to be inspected.

 

12.4                           Regulatory
Agency Requirements.  FMC and
FMER understand and acknowledge that SunTrust is subject to examination by a
Governmental Authority with authority over SunTrust and its Affiliates.  FMC and FMER agree to cooperate fully with
any examination or inquiry by any such Governmental Authority at SunTrust’s
expense.  FMC and FMER further
acknowledge that SunTrust, as a regulated financial institution, is required to
engage in ongoing oversight of its relationship with FMC and FMER, including
reviewing such Parties’ compliance with Privacy Requirements, insurance
coverage, and performance under this Agreement. 
FMC and FMER agree to notify SunTrust promptly in writing in the event
it experiences any material adverse change, including material financial
difficulty, other catastrophic event, material change in strategic goals, or significant
staffing changes relative to its obligations under this Agreement.  With respect to audits and examinations
related to the Program to be performed on FMC and/or FMER by a Governmental
Authority with authority over SunTrust and its Affiliates, SunTrust shall
provide FMC with as much prior written notice as reasonably practicable;
provided, however, that the notice requirement of Section 12.3.1 shall not
apply to any such audit or examination.

 

12.5                           Regulatory
Audits.  Within ten (10) Business
Days of its receipt, FMC shall provide SunTrust with a copy of the final
written results of any audit performed by a Governmental Authority, unless such
results are confidential under Requirements of Law; it being understood that
FMC shall not be required to disclose the results of any examinations conducted
by, or correspondence with, the U.S. Office of Thrift Supervision (“OTS”) that
are deemed confidential by the OTS.  If
any audit results in FMC being notified that it is not in compliance with any
Requirements of Law, or relevant and generally accepted accounting principle or
other material audit requirement related to the Services, FMC shall immediately
notify SunTrust and confer with SunTrust to determine the merits of the alleged
violation and the appropriate response. 
In the event the Parties conclude that the auditor’s or regulator’s
notice of violation is accurate, in whole or in part, FMC shall promptly use
commercially reasonable efforts to comply with such audit to the extent that
the alleged violations are deemed accurate by the Parties at no cost to
SunTrust.

 

ARTICLE 13.                      PRIVACY
AND SECURITY POLICIES

 

13.1                           Privacy and
Security.                                FMC’s privacy
and security policies, as of the Execution Date, are attached hereto and
incorporated herein as Exhibit I. 
FMC reserves the right to modify its privacy and 

 

39

 

security
policies in its reasonable discretion from time to time by notice, in writing,
to SunTrust; provided, however, that any modifications that materially
adversely affect SunTrust’s rights or interests must be approved in advance and
in writing by SunTrust before FMC implements such modifications. Within ten (10) Business
Days after receipt of a modification notice from FMC, SunTrust shall notify FMC
as to whether it believes the proposed modifications will materially adversely
affect SunTrust’s rights or interests. 
If SunTrust notifies FMC that the proposed modifications will materially
adversely affect SunTrust’s rights or interests, SunTrust and FMC shall confer
regarding how such proposed modifications may be altered so that they would not
materially adversely affect SunTrust’s rights or interests.  In the event SunTrust and FMC are unable to
reach agreement on proposed modifications within sixty (60) days after the date
of FMC’s original notice, the dispute shall be resolved using the procedures
set forth in Article 17.

 

ARTICLE 14.                      CONFIDENTIALITY
OF PROPRIETARY INFORMATION.

 

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

 

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

 

14.2.1                “Proprietary
Information” means Trade Secrets, Confidential Business Information, and
NPPI.

 

14.2.2                  “Trade
Secrets” means trade secrets as defined under Georgia law, as amended from
time to time, and will include without limitation and without regard to form,
technical or non-technical data, formulae, patterns, 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, 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.  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.

 

14.2.3                  “Confidential
Business Information” means (a) 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, and (b) for purposes of this
Agreement, FMC Custom Model Property.

 

14.2.4                  “NPPI”
means non-public, personally identifiable information of SunTrust’s customers,
SunTrust Personnel or other individuals, which has been provided to SunTrust by
such persons or their representatives.

 

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

 

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

 

14.3                           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) 

 

40

 

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 the third party to which disclosure is
authorized.  In addition, notwithstanding
anything else contained in this Article 14 or this Agreement, nothing in
this Article 14 will be construed to prohibit disclosure of any
information to regulatory agencies, rating agencies, attorneys, accountants,
servicers and/or consultants of a Party, and/or the employees and agents of any
of the foregoing, who are obliged to respect the confidentiality thereof.

 

14.4                           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, FMC and FMER 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.

 

To
the extent FMC or FMER delivers or is required to deliver to SunTrust any FMC
Custom Model Property, FMC shall own all right, title and interest (including
all trademarks, trade secrets, copyrights, patents and any other intellectual
property rights) in such FMC Custom Model Property.  In addition, FMC may use the data collected
in activities conducted pursuant to this Agreement to prepare, develop, or
modify FMC Custom Model Property, provided, however, that such FMC Custom Model
Property does not include Consumer Information, which may be used to perform
analysis but shall not be included in reports, studies or other FMC Custom
Model Property except on an aggregated and de-identified basis.  In consideration of its obligations under
this Agreement, FMC shall own all right, title and interest in and to all FMC
Custom Model Property.  FMC Custom Model
Property shall not constitute a “work made for hire” as that term is defined in
the federal Copyright Act.  FMC may use
FMC Custom Model Property for any lawful purpose, including in support of other
loan programs, during the term of the Agreement and following termination of
the Agreement.

 

14.5                           Required Disclosures.  If the Receiving Party 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: (a) first
give written notice of such required disclosure to the Disclosing Party; (b) 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; (c) take reasonable steps to allow the Disclosing Party to seek
to protect the confidentiality of the Proprietary Information required to be
disclosed; and (d) disclose only that part of the Proprietary Information
which, in the opinion of its legal 

 

41

 

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 or the Internal Revenue Service, as permitted by
the last sentence of Section 14.3.

 

14.6                           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.

 

14.7                           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.

 

14.8                           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.  Notwithstanding
the foregoing, SunTrust understands and agrees that FMC or FMER shall maintain
encrypted, archived back-up tapes stored at a secure, offsite location that
include transaction history received in connection with the Services and this
Agreement and related documents and records for purposes of internal and
external auditing of controls and recordkeeping requirements.

 

	
  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.

  

 

14.9                           Equitable Relief.  If any Party should breach or threaten to
breach any provision of this Article  14 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 

 

42

 

specifically enforce the provisions of this
Agreement.  Each Party specifically
acknowledges that money damages alone would 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 Agreement.  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.

 

14.10                     Survival.  Notwithstanding any termination of this
Agreement, all of the Receiving Party’s nondisclosure and use obligations
pursuant to this Article 14 will survive:  (a) for three (3) years
after termination with respect to any Confidential Business Information
received prior to such termination, other than the FMC Custom Model Property,
for which the Receiving Party’s nondisclosure and non-use obligations pursuant
to this Article 14 will survive indefinitely;  (b) with respect
to Trade Secrets, for so long as such information continues to constitute a
trade secret under Requirements of Law; and (c) with respect to NPPI, for
so long as required by applicable state and federal laws.

 

14.11                     Prior Agreements.  The provisions set forth in this Agreement
supersede any previous agreement between the Parties relating to the protection
of any Proprietary Information.

 

14.12                     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.

 

ARTICLE 15.                      INFORMATION
SECURITY.

 

15.1                           General
Requirements.  FMC will
provide information, data back-up procedures, and information security so as to
reasonably ensure that any Proprietary Information provided by or for SunTrust
is not lost, stolen, modified, disclosed to or accessed by any other party
(other than those permitted parties under Article 14 of this Agreement)
without SunTrust’s prior written approval. 
Such security measures will equal or exceed standard industry practices
for similar entities dealing with Proprietary Information.  FMC warrants to SunTrust that FMC 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 SunTrust
Proprietary Information, as reasonably determined by SunTrust, and internal and
external threats to information security. 
FMC will promptly notify SunTrust of: (a) any unauthorized
possession, use, or knowledge or attempt thereof, of the data-processing files,
transmission messages, or other SunTrust Proprietary Information by any person
or entity that may become known; (b) the effect of such; and (c) the
corrective action FMC has taken in response thereto.

 

15.2                           FMC Encryption.  FMC represents and warrants that, to the
extent FMC will be placing, and retaining SunTrust Proprietary Information on
the following types of devices, FMC will encrypt with whole disk encryption all
laptop computers maintaining SunTrust Proprietary Information on such
devices.  To the extent personal digital assistants (PDAs) do not
contain or provide access to Consumer Information, PDAs may be
password-protected. Other portable devices (including, but not limited to,
thumb drives) must be encrypted and files on portable media (including, but not
limited to, tapes and CDs) must be encrypted.  All encryption must meet a
minimum standard of Advanced Encryption Standard (AES) algorithm with a minimum
key strength of 256-bit.

 

15.3                           Information
Security Audits.  During the
term of this Agreement, and for one (1) year following termination:

 

43

 

15.3.1                  Audit Scope.  Solely with respect to SunTrust Proprietary
Information, to assess the effective protection of such information, SunTrust
will have the right to conduct remote or on-site audits of FMC, at SunTrust’s
discretion and expense (except as set forth below), to review the information
and data security systems and procedures and processes of FMC (collectively,
the “Security Systems”) at any time during FMC’s regular business hours,
upon no less than ten (10) Business Days prior written notice to
FMC.  Testing conducted will be performed only on ports of application
hosts, operating systems, and web server software utilized in the course of
performing Services for SunTrust. 
Testing will emulate tactics used by outside attackers with and without
knowledge of specific applications, and with malicious intent, however, no such
tactic shall interrupt services (e.g., denial of service attacks).  Testing will not include the following
actions or methods: changes to assigned user passwords; telephone modem probes
and scans (active and passive); intentional viewing of email content, internet
caches, and/or cookie files; or DoS attacks (smurf, land, SYN flood, etc.).  Such audits and reviews may be performed by
SunTrust, its agent, or an independent third party bound by a nondisclosure
provision substantially similar to that set forth above in this Agreement, and
may include reasonable testing of the Security Systems, including periodic
vulnerability scans.  Upon request, SunTrust shall provide to FMC the results
of, and any data obtained from, such vulnerability assessment. Any such
information security tests will be scheduled by mutual agreement of the
Parties.  FMC will provide SunTrust with such reasonable assistance and
information as may be necessary for the performance of such testing.  SunTrust will use reasonable,
industry-standard precautions to prevent or minimize any risks to FMC’s
Security Systems that may be associated with such testing, and the Parties will
cooperate in structuring the testing so as to avoid harming the rights and
interests of FMC or any third parties. 
FMC agrees to promptly grant reasonable access to logs, policies,
records, other materials, and FMC Personnel reasonably required for
SunTrust to perform the audit.  SunTrust will reasonably determine the
extent and methodology of the testing subject to the approval of FMC, such
approval not to be unreasonably withheld.  Further, FMC agrees to make
available to SunTrust the results of any third party’s or its own testing,
monitoring and auditing of such Security Systems; provided, however, that FMC
will not be required to make available any such results which would breach
confidentiality obligations between FMC and any third party.  To the extent that any system data or
information is obtained by SunTrust in the course of such assessment, such data
or information shall be Confidential Business Information of FMC and FMER, and
SunTrust shall treat it in accordance with Article 14.  In no event shall SunTrust retain any code
from FMC’s or FMER’s systems or decompile, disassemble, or reverse engineer any
such code, in whole or in part.  Neither
SunTrust nor its representatives shall introduce any malicious or unauthorized
code (virus, Trojans, worms, trap door, etc.) or undisclosed features into
FMC’s or FMER’s systems intending to disable, deactivate, interfere with or
otherwise harm such systems or data or provide access not authorized by FMC or
FMER.

 

15.3.2                  Audit Finding / Remediation.  Should such an audit, test or review reveal
that the Security Systems or the contemplated Services do not effectively
protect any SunTrust Proprietary Information, then FMC will prepare and present
to SunTrust within thirty (30) days of receipt of the relevant audit, test, or
review finding a remediation plan, including proposed modifications of the
Security Systems, the cost, proposed allocation of such costs among the
Parties, and deadlines to meet the information security requirements of
SunTrust, its regulators, and the provisions of Requirements of Law.  Should the Parties be unable to agree to a
remediation plan within thirty (30) days of FMC’s preparation and presentation
of such plan to SunTrust pursuant to the previous sentence, or shall FMC or
FMER, as applicable, be unable to complete and install adequate modifications
(as set forth in the plan of remediation)  within the
deadline set forth in any such plan of remediation, then any Party shall be
entitled to immediately terminate this Agreement for cause as provided in Section 18.2.7.

 

44

 

15.3.3                  Audit Costs.  Prior to the initiation of any audit or
review as permitted under this Agreement, the Parties will discuss and mutually
agree upon a reasonable estimate of the total costs of the audit, which Party
will bear these costs, and the payment schedule for such costs.  SunTrust
will reimburse FMC’s reasonable incremental direct expenses associated with the
audit (e.g., reasonable copy charges or other reasonable standard expenses),
but not any other expenses, such as a charge for access to FMC Personnel or
other sources of information.  It is the intent of the Parties that
SunTrust bear the agreed upon cost of any such audit as described in this Article 15,
unless a substantial and previously unknown security breach is identified as a
result of such audit.

 

15.4                           Procedures for
Security Breaches.  In the
event FMC and/or FMER, as applicable, knows or reasonably believes that there
has been any unauthorized access or attempted unauthorized access to Proprietary
Information of SunTrust or Consumer Information in the possession or control of
FMC or FMER, as applicable, that compromises the security, confidentiality or
integrity of such Proprietary Information or Consumer Information, FMC or FMER,
as applicable, shall take the following actions:

 

(a)               immediately notify SunTrust
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 SunTrust or its agents to investigate the scope and content of
the unauthorized access; and

 

(e)               take corrective
action as required by SunTrust in its sole discretion as related to SunTrust
Consumer Information.

 

ARTICLE 16.                      INDEMNIFICATION;
EXCLUSIONS FROM LIABILITY

 

16.1                           Mutual General
Indemnity.

 

Subject
to the conditions set forth in Section 16.4 and the limitations in Section 16.6,
each Party will indemnify, defend, and hold the applicable Indemnified Parties
harmless from and against any and all damages (including any and all third party claims against
such Indemnified Party and damages resulting therefrom, whether ordinary,
direct, indirect, incidental, special, consequential, or exemplary), judgments,
liabilities, fines, penalties, losses, claims, actions, demands, lawsuits,
costs, and expenses including reasonable attorneys’ fees (collectively, “Damages”)
incurred by such Indemnified Parties that arise out of or relate to any:

 

(a)                                  gross
negligence, willful misconduct or fraud of the Indemnifying Party;

 

(b)                                 breach of the
Indemnifying Party’s confidentiality or information security obligations under
this Agreement;

 

(c)                                  breach of the
Indemnifying Party’s representations or warranty obligations or covenants under
this Agreement; and

 

(d)                                 failure by the
Indemnifying Party to comply with Requirements of Law applicable to it or with
the Program Guidelines,

 

provided,
however, that in the case of any Damages resulting from a breach or failure
described in Section 16.1(b), Section 16.1(c) or Section 16.1(d),
no Indemnified Party shall be entitled to indemnification under this Article 16
to the extent that such breach or failure occurred as a result of or in 

 

45

 

connection
with the willful misconduct or fraud of an Indemnified Party, any failure of
any representation or warranty made by an Indemnified Party in or pursuant to
this Agreement to be true and correct, the non-fulfillment or non-performance
of any covenant or obligation of an Indemnified Party contained in this
Agreement, or the failure by an Indemnified Party to comply with Requirements
of Law applicable to it or with the Program Guidelines.

 

For
purposes of this Article 16, the acts or omissions of a Party’s Personnel
will be deemed the acts or omissions of such Party.

 

16.2                           FMC
Infringement Indemnity.

 

FMC,
at its expense, will defend, indemnify, and hold each SunTrust Indemnified
Party harmless from and against any and all Damages that arise out of or relate
to third party claims against a SunTrust Indemnified Party associated with
SunTrust’s use of any FMC Intellectual Property and the infringement by such
FMC Intellectual Property of such third party’s patent, trade secret,
copyright, or trademark or other intellectual property right.  For purposes of this Section 16.2 and Section 16.3
only, “FMC Intellectual Property” will include the following:  FMC’s custom and proprietary credit scoring
model and the Online Application System.

 

16.3                           Specific
Conditions and Additional Remedies Associated with FMC’s Infringement Indemnity.

 

16.3.1                  Additional
Remedies.                              In the event a
court of competent jurisdiction makes a determination that any FMC Intellectual
Property infringes or otherwise violates any third party intellectual property
right, or if FMC determines that any FMC Intellectual Property likely infringes
or otherwise violates such third party’s intellectual property right, FMC, at
its option and sole expense, in addition to the indemnification obligation set
forth above, will:

 

16.3.1.1
modify the infringing portion of any FMC Intellectual Property so as to make it
non-infringing and non-violating, while maintaining equivalent functionality
that is reasonably satisfactory to SunTrust;

 

16.3.1.2
replace the infringing portion of any FMC Intellectual Property with a
non-infringing and non-violating solution having equivalent functionality that
is reasonably satisfactory to SunTrust; or

 

16.3.1.3
obtain the right for SunTrust to continue using the infringing or violating
portion of FMC Intellectual Property.

 

16.3.2                  Conditions.                                  FMC’s
intellectual property infringement indemnity obligations will not apply to the
extent of any applicable third party claim resulting solely from:

 

16.3.2.1
modifications to any FMC Intellectual Property by any party other than FMC or
its authorized Personnel that are made without FMC’s written approval and only
to the extent such modifications caused the infringement or violation;

 

16.3.2.2
the combination of any FMC Intellectual Property with other products,
processes, or materials prohibited by FMC in the applicable specifications if,
but for such other products, processes, or materials, the infringement would
not have occurred; or

 

16.3.2.3
SunTrust’s use of any FMC Intellectual Property other than in accordance with
the terms and conditions of this Agreement or the applicable specifications
relating to such FMC Intellectual Property.

 

16.4                           General Conditions on Indemnity Obligations.  Each
potential Indemnifying Party’s obligations under this Agreement will be subject
to the Indemnified Party: (a) promptly, after receipt of
any written claim, notice of any action giving rise to a claim for indemnification
or the discovery by such Indemnified Party of any Damages that may give rise to
a claim for indemnification, providing the
Indemnifying Party 

 

46

 

notice of the claim, action or Damages (provided that failure to so notify the
potential Indemnifying Party will not relieve the potential Indemnifying
Party of its indemnification obligations, except to the extent that the
potential Indemnifying Party’s ability to defend against the claim or event
with respect to which indemnification is sought is adversely affected by the
failure of the potential Indemnified Party to give prompt notice as required by
this Section); (b) providing reasonable cooperation and assistance
in the defense or settlement of any claim; and (c) granting the
Indemnifying Party control over the
defense and settlement of the same (provided that any
Indemnified Party shall be entitled to participate in the defense and
settlement of the claim and to employ counsel at its own expense to assist in
the handling of the claim; and provided further that the Indemnified Party does
not invoke its retained right to defend as stated below).

 

The Indemnifying Party will not agree to any
settlement which results in an admission of liability by the Indemnified Party
without the Indemnified Party’s prior written consent.

 

16.5                           Reservation of
Right to Defend.  If either
SunTrust, on the one hand, or FMC or FMER, on the other hand, as an Indemnified
Party, reasonably determines that the Indemnifying Party has failed to
diligently assume and maintain a prompt and vigorous defense of any claim to
which Indemnified Party is entitled to indemnification hereunder and with
respect to which the conditions set forth in Section 16.4 have been
satisfied, either SunTrust, on the one hand, or FMC or FMER, on the other hand,
as an Indemnified Party, may, at its own expense, option and discretion, assume
sole control of the defense of any claim and all related settlement
negotiations with counsel of its own choosing and without waiving any other
rights to indemnification.  If SunTrust
or FMC and/or FMER, as applicable, provides sufficient evidence to support its
right to defend pursuant to this Section, the Indemnifying Party will pay all
costs and expenses (including reasonable attorneys’ fees) incurred by such
Indemnified Party in such defense. 
Notwithstanding anything to the contrary in the foregoing, SunTrust or
FMC and/or FMER, as applicable, will not accept any settlement on behalf of the
Indemnifying Party that results in an admission of liability by the
Indemnifying Party without the Indemnifying Party’s express written consent.

 

16.6                           Exclusions from
Liability.

 

16.6.1                  Except for each Party’s
respective indemnification obligations in respect of third party claims against
an Indemnified Party, in no event shall any Party be liable for indirect,
incidental, special, consequential, or exemplary or punitive damages (or any
comparable category or form of such damages, howsoever characterized in any
jurisdiction), regardless of the form of action, whether in contract, tort,
strict liability or otherwise, and even if foreseeable or if such Party has
been advised of the possibility of such damages.

 

16.6.2                  The limitation of liability
provisions of Section 16.6.1 do not apply to liability that is the result
of the Party seeking to limit its liability hereunder in connection with (i) a
breach of its confidentiality, privacy or security obligations contained in
this Agreement (including with respect to any Consumer Information or NPPI, or
any Intellectual Property or other Proprietary Information of another Party to
this Agreement), (ii) such Party’s violation of Requirements of Law or (iii) such
Party’s fraud or willful misconduct.

 

16.6.3                  SunTrust acknowledges and
agrees that any liability of FMC and/or FMER hereunder to SunTrust or any of
its Affiliates for Damages in any way related to a Loan that is purchased by
FMC pursuant to Section 5 shall be reduced in proportion to the Purchase
Price of any such Loan that is purchased by FMC or any of its Affiliates
pursuant to Section 5.

 

16.7                           Exclusive
Remedies.  EXCEPT IN
CONNECTION WITH (I) THE OTHER PARTY’S FRAUD, WILLFUL MISCONDUCT OR GROSS
NEGLIGENCE, (II) A PARTY’S EXERCISE OF EQUITABLE REMEDIES AVAILABLE TO IT,
(III) THE RIGHTS OF SUNTRUST PURSUANT TO SECTION 5 OR (IV) A
PARTY’S RIGHT TO SET OFF AMOUNTS PAYABLE TO THE OTHER PARTY AGAINST AMOUNTS
OWED TO IT BY SUCH OTHER PARTY, IT IS UNDERSTOOD 

 

47

 

AND
AGREED THAT THE INDEMNIFICATION OBLIGATIONS OF A PARTY SET FORTH IN THIS ARTICLE 16
CONSTITUTE THE SOLE AND EXCLUSIVE REMEDIES OF A PARTY AGAINST ANY OTHER PARTY
HERETO IN RESPECT OF THIS AGREEMENT OR THE SUBJECT MATTER HEREOF.

 

ARTICLE 17.                      DISPUTE
RESOLUTION

 

17.1                           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 either Party under this Agreement or otherwise relating to this
Agreement will be treated in accordance with the procedures set forth in this Article 17,
prior to the resort by either Party to arbitration or litigation in connection
with such dispute.  The dispute will be referred for resolution first to a
Senior Vice President for SunTrust, and the General Counsel or Chief Financial
Officer for FMC.  Such procedure will be invoked by either Party
presenting to the other Party 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 ten (10) 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,
either Party may refer the dispute to binding arbitration pursuant to the
arbitration provisions set forth below.

 

17.2
                        Except as
otherwise expressly set forth in this Agreement and except for actions for
equitable relief, all claims or disputes between the Parties arising out of or
relating to this Agreement will be decided by arbitration pursuant to the
Commercial Arbitration Rules of the American Arbitration Association in
effect at the time of the claim or dispute and in accordance with Title 9 of
the United States Code.  Notice of the demand for arbitration must be
provided in writing to the other Party and must be made within a reasonable
time after the dispute has arisen.  If the amount claimed to be in dispute
is equal to or greater than Two Hundred Fifty Thousand Dollars ($250,000), then
the arbitration will be decided by a panel of three (3) arbitrators
selected under the Commercial Arbitration Rules of the American
Arbitration Association.  If the amount
claimed to be in dispute is less than that amount, then the arbitration will be
decided by one (1) arbitrator selected pursuant to the same rules. 
Said arbitration will occur within sixty (60) calendar days after the Party
demanding arbitration delivers the written demand on the other Party, unless
the Parties mutually agree otherwise in writing.  The award rendered by
the arbitrators will be final and specifically enforceable under Requirements
of Law, and judgment may be entered upon it in any court having jurisdiction
thereof.  No arbitration arising out of or relating to this Agreement may
include, by consolidation, joinder or in any other manner, any Person not a
Party to this Agreement.  Neither Party will appeal such award nor seek
review, modification, or vacation of such award in any court or regulatory
agency.

 

17.3                           The arbitrators
will award to the prevailing Party, if any, as determined by the arbitrators,
all of its Costs and Fees.  “Costs and Fees” mean all reasonable
pre-award expenses of the arbitration, including the arbitrators’ fees,
administrative fees, travel expenses, and out-of-pocket expenses, such as
copying, telephone, court costs, witness fees and attorneys’ fees.

 

17.4                           No provision of
this Article 17 shall limit the right of any Party to this Agreement to
seek to exercise any equitable remedies available to it (whether available in a
court of law or a court of equity), exercise self-help remedies such as setoff,
or obtain provisional or ancillary remedies from a court of competent
jurisdiction before, after, or during the pendency of any arbitration or other
proceeding.  The exercise of a remedy
does not waive the right of either party to resort to arbitration.

 

17.5                           Permissible
Legal Proceedings. 
Notwithstanding anything contained in this Article 17, (a) a
Party may institute legal proceedings to seek a temporary restraining order or
other temporary or preliminary injunctive relief to prevent immediate and
irreparable harm to such Party, and for which monetary damages would be
inadequate, pending final resolution of the dispute, controversy or claim 

 

48

 

pursuant
to arbitration, and (b) a Party may institute legal proceedings if
necessary to preserve a superior position with respect to other creditors.  Such conduct shall not constitute a waiver of
the right of either party to resort to arbitration to obtain relief other than
that specified in this Section 17.5.

 

ARTICLE 18.                      TERM
AND TERMINATION

 

18.1.1                  Effective Date.  This Agreement shall be effective following
the satisfaction or waiver of each of the conditions set forth in this Section 18.1.1(a) through
(g) (the “Effectiveness Conditions”).  Each of the Parties covenants and agrees with
each other Party to act in good faith and use its best efforts to work
diligently to satisfy of all of the Effectiveness Conditions and thereafter
execute and deliver the Effective Date Communication at the earliest
practicable date.  Upon the satisfaction
or waiver of each and every Effectiveness Condition, the Parties shall establish
the Effective Date of this Agreement in a writing signed by all Parties (the “Effective
Date Communication”).  Until the
execution of the Effective Date Communication by each of the Parties, no Party
shall have any of the rights set forth in this Agreement or any obligation to
perform any of the duties, covenants or other agreements set forth in this
Agreement, or otherwise be subject to any of the restrictions contained herein,
other than (i) the obligations to act in good faith and use its best
efforts to work diligently to satisfy of all of the Effectiveness Conditions at
the earliest practicable date, and any other provisions of this Section 18.1.1,
(ii) all applicable obligations with respect to any Confidential Business
Information or Proprietary Information of the other Party or any Consumer
Information hereunder, including obligations and restrictions pursuant to
Articles 11, 13, 14, 15 and 19 with respect to any such information or other
materials that a Party is provided or to which it otherwise has access prior to
the Effective Date, (iii) the representations and warranties of the
Parties set forth in Section 8.1, and (iv) Article 16, in
connection with any Party’s breach of any of its respective representations or
warranties set forth in Section 8.1, or its failure to perform any
covenant or obligation, set forth in any of the Articles or Sections referenced
in Section 18.1.1(ii) above.

 

The Effectiveness Conditions are:

 

(a) Each of SunTrust, FMC, and the Servicer shall have executed
the Servicing Agreement, including Servicing Guidelines satisfactory to
SunTrust, FMC, and the Servicer;

 

(b) Each of SunTrust and FMC shall have executed the Participation
Account Deposit Agreement;

 

(c) The Parties’ written approval of the Program Guidelines,
including the forms of Credit Agreements and Truth-in-Lending Disclosures;

 

(d) The execution of documents establishing and governing the
purchase of Charged Off Loans by MG Student Loan Trust 2010-1;

 

(e) SunTrust’s written approval of the Online Application System,
including processes for complying with Title X;

 

(f) SunTrust’s written approval of the FMC Website and FMC
Materials; and

 

(g) Complete execution of the TransUnion Addendum in a form
substantially similar to attached Exhibit C.

 

If the Effectiveness Conditions are not satisfied or waived prior to September 1,
2010 as evidenced by the Parties’ execution of the Effective Date Communication
prior to such date, then this Agreement may be automatically terminated by any
Party on such date pursuant to this Section 18.1.1 and no Party shall have
any further obligation under this Agreement except for any such obligation
hereunder that is intended to survive the termination of this Agreement.  The provisions of Section 18.1.1(ii), (iii) and
(iv), to the extent applicable, and any other provisions hereof referenced
therein or otherwise necessary to the interpretation of any such provisions,
shall survive any termination of this Agreement as a result of the failure of
the Effectiveness Conditions to be satisfied or waived prior to September 1,
2010.

 

49

 

18.1.2                  Term of Agreement.  Subject to Section 18.1.1 and this Section 18.1.2,
this Agreement and the Services contemplated hereby shall commence on the
Effective Date and shall continue through the earlier of two (2) years
after the Effective Date or the date on which the Participation Cap is reached,
unless earlier terminated pursuant to the provisions of this Section (the “Term”);
provided, however, that notwithstanding the expiration of the Term or
termination of Loan Processing Services, the Program Administration Services
and Program Support Services set forth in Article 4 shall continue to be
provided, and the associated fees and compensation to FMC and/or FMER therefor
shall continue to accrue and become payable for such Services, for all periods
through the month following the month during which the principal and interest
of each Loan have been fully paid and remitted to SunTrust (the “Final
Services Termination Period”). 
Notwithstanding the foregoing, if the Agreement is terminated prior to
the Final Services Termination Period pursuant to Section 18.1.2, Program
Support Services shall no longer be performed by FMC and FMER and the Program
Support Services Fee due in Section 6.4.1 shall no longer by paid by
SunTrust to FMC.  In addition, in
connection with a breach that is not cured as permitted by Section 18.2.2,
a Force Majeure Event pursuant to Section 18.2.3, or a failure of audit
remediation of the scope and for the applicable period described in Section 15.3.2,
the Program Support Services may be terminated prior to the end of the Final
Services Termination Period to the extent that such uncured breach, Force
Majeure Event, or audit remediation failure, as applicable, is directly related
to the Services that a Party seeks to terminate, and the Party seeking to
terminate under such provisions timely gives the other Parties the notice of
termination specified in Section 18.2.2, 18.2.3 or 18.2.6, as applicable.  In the event of termination of Program
Support Services under the preceding sentence, the Program Support Services Fee
shall no longer be payable to FMC.  This
Agreement may be extended for an additional Term or Terms upon the terms and
conditions set forth in a mutual written agreement among the Parties.

 

If
FMC or SunTrust undergoes a Change in Control, the other Party may elect to
terminate Loan Processing Services upon sixty (60) Business Days prior written
notice; provided, however, that prior to delivering such notice, the Party
considering such termination shall meet with representatives of the successor
entity and engage in good faith negotiations for the continuation of this
Agreement upon mutually acceptable terms and conditions.

 

18.2                           Termination for
Cause.  From and after the Effective
Date, FMC and SunTrust may each terminate the Agreement, subject to Section 18.1.2
and Section 18.3, immediately (after giving effect to notice and cure
periods set forth in Sections 18.2.1 to 18.2.6, as applicable) by delivery of a
written notice of termination to the affected Party or Parties, if:

 

18.2.1                  Insolvency or
Reorganization.  The other
Party shall file a petition to take advantage of any applicable insolvency or
reorganization statute; or shall file a petition or answer seeking or shall
consent to the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to such Party or Parties or relating to all
or substantially all of its or their property; or a decree or order of a court
or agency or supervisory authority having jurisdiction in the premises for the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or the winding-up or liquidation of its affairs, shall have been
entered against such Party or Parties, which decree or order entered against
such Party or Parties shall have remained in force undischarged or unstayed for
a period of fifteen (15) days; or such Party or Parties shall be insolvent,
admit in writing its inability to pay its or their debts generally as they
become due, make an assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations; or

 

18.2.2                  Breach.  The other Party fails to perform any of its
obligations (including the failure to pay fees for Services when due and not
the subject of a good faith dispute) in any material respect, or shall breach
any of its or their representations, warranties or covenants in this Agreement,
in any material respect and such failure or breach continues unremedied after
the expiration of thirty (30) days following 

 

50

 

written
notice to such Party or Parties specifying the nature of such failure or breach
and stating the intention of the terminating Party to terminate this Agreement
absent a cure of such failure or breach in all material respects within such
thirty (30) day period; or

 

18.2.3                  Force Majeure
Event.  In the event that a Force
Majeure Event occurs, if any Party is prevented from performing or its
performance is rendered impracticable for a period of at least five (5) days
after notice of such event and inability to perform was provided to the other
Party or Parties, provided, however, that if the Party previously unable to
perform regains its ability to perform hereunder within five (5) days
after notice of the event and inability to perform, the notice of termination
must be delivered to the other Parties no later than thirty (30) days after the
Party regains such ability to perform and notifies the other Parties thereof;
or

 

18.2.4                  Failure to
Agree on Program Changes.  If
SunTrust and FMC cannot agree on Program changes (other than changes to the
Pricing Schedule) following full compliance with the procedures set forth in Section 4.1.1,
then any Party may terminate this Agreement on fifteen (15) days’ written
notice to the other Parties, provided, however, that such notice of termination
is delivered to the other Parties no later than thirty (30) days after the
expiration of the thirty (30) day period described in Section 4.1.1 during
which changes could not be agreed; or

 

18.2.5                  Governmental
Authority.  To the
extent required by Requirements of Law, a Governmental Authority with oversight
of SunTrust requires, in writing, termination of this Agreement because, among
other things, SunTrust is considered a “troubled” institution, which
termination shall be without penalty to SunTrust; provided, however, that such
termination shall be effective only to the extent of the Services required by
such Governmental Authority to be terminated; or

 

18.2.6                  Audit
Remediation Failure. As set forth in Section 15.3.2, if the
Parties are unable to agree to a remediation plan within thirty (30) days of
FMC’s preparation and presentation of such plan to SunTrust pursuant to the
first sentence of Section 15.3.2, or if FMC or FMER, as applicable, shall
be unable to complete and install adequate modifications (as set forth in the
plan of remediation) within the deadline set forth in any such plan of
remediation; provided, however, that if (i) subsequent to such thirty (30)
day period a remediation plan shall be agreed, or if subsequent to such other
deadline set forth in any such plan of remediation, FMC or FMER, as applicable,
is able to complete and install adequate modifications in accordance therewith,
as applicable, and (ii) the Agreement has not been effectively terminated prior
to such agreement or completion of modifications, then no Party may deliver a
notice of termination under this Section 18.2.6 thereafter in connection
with such subsequently remedied failure described in this subsection or Section 15.3.2.

 

18.3                           Rights and
Obligations Upon Notice of Termination.

 

18.3.1                  Requirements
Upon Termination.  As of the
effective date of termination of this Agreement, FMER shall (i) cease
accepting new applications for Loans and (ii) unless otherwise agreed by
the Parties in writing, process all Applications received prior to the
effective date of termination through disbursement or denial.  In addition, upon the termination of this
Agreement for any reason:

 

(A)                              FMC shall make
a final Participation Account Deposit in the Participation Account pursuant to Section 7.1.3
and shall thereafter not be required to make further Participation Account
Deposits;

 

(B)                                payments
pursuant to Section 6.5.1, Section 7.1.4, Section 7.1.5, and Section 7.1.7
shall continue notwithstanding such termination;

 

(C)                                releases from
the Participation Account pursuant to Section 7.1.6 shall continue
notwithstanding such termination.

 

51

 

18.3.2                  Transition
Services.  Upon notice
of termination of this Agreement or any Services provided hereunder, the
Parties shall meet to develop a plan to wind down the affected Services and
transition for the terminated Services, to extend for a period not to exceed
ninety (90) days past the effective date of termination (the “Transition
Period”), unless mutually agreed by the Parties in writing to be longer
than ninety (90) days.  The fees paid for
Services provided during the Transition Period shall be in accordance with the
fees in effect at the expiration or termination of this Agreement.  Except as otherwise set forth in this
Agreement, upon the conclusion of the Transition Period for any specific
Services, each Party shall cease the affected Services and return to the other
Party or Parties, as applicable, or destroy all Proprietary Information and/or
Consumer Information in accordance with Section 14.8 of this Agreement,
except as necessary pursuant to any Requirements of Law.

 

18.4                           Requirements
Upon Termination.  In addition
to the requirements contained in Section 18.3.2 of the Agreement, (i) in
the event that less than all disbursements of a multi-disbursement Loan have
been made prior to the date of termination, the remaining disbursement(s) will
also be made pursuant to the terms of this Agreement, (ii) Loan
Applications will no longer be accepted by FMER as of the termination date, (iii) any
legal commitments already made to Borrowers shall be fulfilled and all
Applications received for a credit inquiry prior to termination shall be
processed through denial or final disbursement.

 

18.5                           Rights Upon
Termination.  With
respect to the termination of Portfolio Management Services, FMER shall provide
to SunTrust a final reconciliation of all amounts collected by Subcontractors,
collect all original files from Subcontractors, and transmit all such files to
SunTrust.

 

ARTICLE 19.                      MISCELLANEOUS

 

19.1                           Notice
Procedure; Addresses.  All
notices, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given and received at the time delivered by
hand, if personally delivered; when receipt is acknowledged, if mailed by
certified mail, postage prepaid, return receipt requested; the next Business
Day after timely delivery to the courier, if sent by overnight air courier
guaranteeing next-day delivery; and when received, if delivered by hand, as
follows:

 

	
  If
  to SunTrust:

  SunTrust
  Bank

  Attn:
  W. Mark Smith

  Executive
  Vice President

  1001
  Semmes Avenue

  Mail
  Code CS-RVW-7900

  Richmond,
  VA 23224

   

  	
   

  	
  If
  to FMC:

  The
  First Marblehead Corporation

  Attn:
  Chief Executive Officer

  800
  Boylston Street, 34th Floor

  Boston,
  MA 02199-8157

   

  If
  to FMER:

  First
  Marblehead Education Resources, Inc.

  Attn:
  Managing Director

  One
  Cabot Road

  Medford,
  MA 02155

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  SunTrust
  Bank

  Legal
  Department

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

  Atlanta,
  GA 30308

  	
   

  	
  For
  either FMC, FMER, as applicable,

  with
  a copy to:

  The
  First Marblehead Corporation

  Legal
  Department

  800
  Boylston Street, 34th Floor

  Boston,
  MA 02199-8157

  

 

52

 

The
Persons or addresses to which mailings or deliveries shall be made may be
changed from time to time by notice given pursuant to the provisions of this
Section.

 

19.2                           Press Releases;
Regulatory Reports.  No Party
shall issue any press release or other announcement regarding the subject
matter of this Agreement without the written consent of the other affected
Parties with respect to mutually acceptable language (which consent shall not
be unreasonably withheld), unless a Party refuses to consent and the Party desiring
to issue the release or other announcement is advised by its legal counsel that
the press release or other announcement is required in order to comply with
applicable Requirements of Law. 
Notwithstanding the foregoing, SunTrust acknowledges that FMC expects to
be required pursuant to Requirements of Law to file this Agreement and a report
regarding this Agreement with the Securities and Exchange Commission which FMC
shall provide to SunTrust at least three (3) Business Days prior to FMC
releasing such report to provide SunTrust a reasonable opportunity to review,
comment, and consent, which consent shall not be unreasonably withheld.

 

19.3                           Relationship of
the Parties.  The Parties
agree that in carrying out their responsibilities pursuant to this Agreement
they are in the position of independent contractors.  This Agreement is not intended to create, nor
does it create and shall not be construed to create, a relationship of partners
or joint venturers, fiduciaries or any association for profit between and among
the Parties or any of their respective Affiliates.

 

19.4                           Expenses.  Except as is otherwise specifically provided
in this Agreement, each Party shall pay its own costs and expenses in
connection with this Agreement and the transactions contemplated hereby,
including all regulatory fees, attorneys’ fees, accounting fees and other
expenses.

 

19.5                           Successors and
Assigns.  All terms and provisions of
this Agreement shall be binding upon and shall inure to the benefit of the
Parties, and each of their respective permitted transferees, successors and
assigns.  Neither Party may assign or
transfer any right or obligation under this Agreement without the prior written
consent of the other Party; provided, however, that (i) no prior written
consent of the other Party is required in the event that FMC or FMER assigns or
delegates any Services set forth in this Agreement to the other or to any other
Affiliate of FMC, including but not limited to First Marblehead Data Services, Inc.,
and such assignee or delegatee would be able to make the representations and
warranties of FMC or FMER, as applicable, herein, and comply with each of the
covenants and other agreements of FMC or FMER, as applicable, herein.  Notwithstanding the foregoing, neither
SunTrust, on the one hand, nor FMC and/or FMER, on the other hand, shall be
permitted to assign or otherwise transfer the rights and obligations of this
Agreement (including any transfer by operation of law) to any Person completing
a Change in Control of the assigning Party, without the written consent of the
other Party and the assumption by the Person completing such Change in Control
of all of the assigning or transferring Party’s obligations under this
Agreement.

 

19.6                           Multiple
Counterparts.  This
Agreement 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.

 

19.7                           Drafting;
Captions.  Each Party
acknowledges that its legal counsel participated in the drafting of this
Agreement.  The Parties hereby agree that
the rule of construction that ambiguities are to be resolved against the
drafting Party shall not be employed in the interpretation of this Agreement to
favor one Party over any other.  Further,
the captions, headings and arrangements used in this Agreement are for
convenience only and do not in any way affect, limit or amplify the terms and
provisions hereof.

 

53

 

19.8         Entire Agreement; Amendments.  The making, execution and delivery of this
Agreement by the Parties have been induced by no representations, warranties,
statements or agreements other than those herein expressed.  This Agreement, including the Schedules and
Exhibits attached hereto, embodies the entire understanding of the Parties, and
there are no further or other agreements or understandings, written or oral, in
effect among the Parties relating to the subject matter hereof.  This Agreement may be amended or modified
only by a written instrument signed by each of the Parties.

 

19.9         Waiver.  None of the Parties shall be deemed to have
waived any of its rights, powers or remedies under this Agreement unless such
waiver is approved in writing by an authorized representative of the waiving
Party.  No delay or failure by any Party
to exercise any right, power or remedy hereunder shall constitute a waiver
thereof by such Party, and no single or partial exercise by any Party of any
right, power or remedy shall preclude other or further exercise thereof or any
exercise of any other rights, powers or remedies.

 

19.10       Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
Requirements of Law, but if any provision of this Agreement is held to be
prohibited by or invalid under Requirements of Law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.

 

19.11       Disaster Recovery and Force Majeure.  Each of the Parties will timely implement, if
it has not already, and maintain a reasonable disaster recovery plan.  Upon request by SunTrust, FMC shall promptly provide
to SunTrust a description of and summary test results for FMC’s disaster
recovery plan, including such information as may reasonably be requested by
SunTrust to comply with Requirements of Law. 
Upon the occurrence of any disaster requiring use of FMC’s disaster
recovery plan, FMC shall promptly notify SunTrust of same, and FMC shall
provide to SunTrust access to services equal to services provided to other
clients.  Subject to the foregoing, no
Party hereto shall be responsible for, or in breach of, this Agreement if it is
unable to perform or its performance is rendered impracticable as a result of
delays or failures due to any cause beyond its control, howsoever arising, and
not due to its own act or negligence and that cannot be overcome by the exercise
of due diligence.  Such causes shall
include, but not be limited to, labor disturbances, riots, fires, earthquakes,
floods, storms, lightning, epidemics, terrorist attacks, wars, civil disorder,
hostilities, expropriation or confiscation of property, failure or delay by
carriers, interference by civil and military authorities whether by legal
proceeding or in fact and whether purporting to act under some constitution,
decree, law or otherwise, or acts of God (each such event, a “Force Majeure
Event”).  Upon the occurrence of a
Force Majeure Event, the Party declaring such event shall provide written
notice thereof to the other Party as soon as practicable.  Notwithstanding any other provision in this
Agreement, either SunTrust or FMC may immediately terminate this Agreement if
the other Party cannot perform the Services (in the case of FMC) or otherwise
perform their obligations hereunder for more than five (5) days, subject
to the provisions of Section 18.1 and Section 18.3, and provided,
however, that if the Party previously unable to perform regains its ability to
perform hereunder, the notice of termination must be delivered to the other
Parties no later than thirty (30) days after the Party regains such ability to
perform and notifies the other Parties thereof.

 

19.12       GOVERNING LAW.  THIS AGREEMENT 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 AGREEMENT, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THE PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS.

 

54

 

19.13       No Third Parties Benefitted.  This Agreement is made and entered into for
the protection and legal benefit of the Parties, and their permitted successors
and assigns, and each and every Indemnified Party (all of which shall be
entitled to enforce the indemnity contained herein), and no other Person shall
be a direct or indirect legal beneficiary of, or have any direct or indirect
cause of action or claim in connection with, this Agreement.

 

19.14       Permitted Filing.  Each Party may file this Agreement (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.

 

19.15       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 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.

 

[Signatures
appear on next page]

 

55

 

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

 

	
  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

  	
   

  

 

 

EXHIBIT A

 

Datamart Report

 

In
addition to the data set forth in the Program Guidelines and Servicing
Agreement, the report shall consist of loan level data and provide at least the
following information with respect to each Loan application:

 

·                  Identifying information and demographic
information

 

·                  Repayment option

 

·                  Enrollment status

 

·                  Grade level

 

·                  Applicable borrower benefits for which the
borrower may become eligible

 

·                  Missing information reasons, if any

 

·                  Decline reasons, if applicable

 

·                  Current application status

 

·                  Acquisition channel

 

·                  Residency status (own, rent, live with
parents)

 

·                  Credit score (including FMC custom credit
score)

 

i

 

EXHIBIT B

Compensation Schedule

 

[**]

 

i

 

EXHIBIT C

TransUnion Addendum

 

AGENT ADDENDUM TO THE TRANSUNION
MASTER SERVICES

AGREEMENT FOR CONSUMER REPORTING
AND ANCILLARY SERVICES

 

This Agent Addendum (“Addendum”), effective the      
day of              ,
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, with its principal place of business located at                                            
(“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 shall at all
times be responsible and ensure Agent’s compliance with the terms and
conditions of the MSA.  Additionally
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 

 

i

 

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                                                                                                    ,
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.

 

ii

 

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

  
	
  555
  West Adams

  	
   

  	
   

  
	
  Chicago, IL
  60661

  	
   

  	
   

  
	
  Attn:
  General Counsel

  	
   

  	
  Attn:
                                

  
	
   

  	
   

  	
   

  
	
  First
  Marblehead Education Resources

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attn:
                                

  	
   

  	
   

  

 

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]

 

iii

 

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:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name
  and Title of Signer

  	
   

  	
   

  	
  Name
  and Title of Signer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date
  Signed

  	
   

  	
   

  	
  Date
  Signed

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First Marblehead Education
  Resources

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
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  and Title of Signer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date
  Signed

  	
   

  	
   

  	
   

  

 

iv

 

Schedule A

 

Project
Description: Student Loan Originations

 

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

 

v

 

Exhibit D

 

Schedule
1             Key Metrics Report

Schedule
2             Approved Collectors

Schedule
3             Default Collection Reports

Schedule
4             Approved Initial Vendors

Schedule
5             Settlement Authority

 

 

Schedule 1 to Exhibit D

Key Metrics Report

 

The
report shall consist of aggregate program data and metrics and provide
information in at least the following categories:

 

·                  Application metrics

·                  Configuration and submission
rate

·                  Application status—pending
configuration; submitted, unbooked; missing information; in review; awaiting
certification; Approval Disclosure sent; Approval Disclosure accepted; closing;
Final Disclosure sent

·                  Cosign rate

·                  Booking rate

·                  Cancellation rate

·                  Grade-level and degree-level
breakout, if available

 

·                  Initial credit decisions

 

·                  Conditional approvals

·                  Declines and top decline
reasons

·                  Applications Pending Review

·                  Counteroffers—Accept/Decline/Pending

 

·                  Approvals by acquisition channel and
disbursement method

 

·                  Repayment option and repayment term
distribution

 

i

 

Schedule 2 to Exhibit D

Approved Collectors

 

NCO
Financials Systems, Inc.

 

Diversified
Collection Services, Inc.

 

Collection
Company of America

 

Simm
Associates, Inc.

 

American
Education Services

 

Estate
Information Services, Inc.

 

ii

 

Schedule 3 to Exhibit D

Default Collection Reports

 

On
a monthly basis, FMC shall provide reports containing at least the following
information:

 

· defaulted
Loans

· balances and
borrowers in each delinquency stage, including forbearance

· balances and
borrowers entering repayment next month

· # of cures by
type (re-enter deferment, forbearance, payment, etc.)

· # on loans on
automatic payment

· flow rates by
delinquency stage, compared to historical measures

· liquidation
rate

· # of right
party contacts made

 

iii

 

Schedule 4 to Exhibit D

Approved Initial Vendors

 

1.     Google

Cambridge,
MA

Services:  Online advertising tracking, optimization and
analysis.

 

2.     Interwoven

Sunnyvale, CA

Services: Content Management system provider

 

3.     Center Partners 

Fort Collins, CO

Services: Call center operations, including inbound customer service
calls, outbound customer service calls, outbound telemarketing

 

4.     JLS Mailing Services, Inc.

Brockton,
MA

Services:
Mail pick-up; folding and stuffing envelopes, mail processing, storage and
management of fulfillment materials and supplies

 

5.     National Student
Clearinghouse

Herndon, VA

Services: student enrollment verification

 

6.     Trans Union LLC

Chicago, IL

Services:
Consumer reports, Total ID, fraud readiness

 

7.     Nicholas Barone

Buffalo,
NY

Graphic
Designer:  Brand, website, advertising and collateral design.

 

8.     Patricia Lenz Bovie

Boston,
MA

Copywriter: 
Copy for website, advertising and collateral materials

 

9.     Matthew Mombrea

Buffalo,
NY

Programmer: 
Programming work to build and update FMC Website

 

iv

 

Schedule 5 to Exhibit D

Settlement Authority

 

FMER
and Approved Collectors may offer a settlement of the Loan obligation in full
for a payment of a percentage of the outstanding Loan balance, as follows:

 

	
  Days
  Delinquent

  	
   

  	
  Customer Contact Method

  	
   

  	
  Cash Settlement Offer

  (% of outstanding balance)

  
	
  [**]

  	
   

  	
  Email

  	
   

  	
  As low as [**]%

  
	
  [**]

  	
   

  	
  Settlement Letter

  	
   

  	
  As low as [**]%

  
	
  [**]

  	
   

  	
  Call Campaign

  	
   

  	
  As low as [**]%

  
	
  [**]

  	
   

  	
  Email

  	
   

  	
  As low as [**]%

  
	
  [**]

  	
   

  	
  Settlement Letter

  	
   

  	
  As low as [**]%

  
	
  [**]

  	
   

  	
  Call Campaign

  	
   

  	
  As low as [**]%

  

 

Communication
of the settlement offer shall be to both the Borrower and Cosigner (where
applicable).

 

iv

 

Exhibit E

Schedule 1

School Sales Activity States

 

Each
of FMC and SunTrust shall restrict in-person Eligible Institution sales
activities for the Program as listed below:

 

	
  SunTrust Sales States

  	
   

  	
  FMC Sales States

  
	
  Florida

  	
   

  	
  Arizona

  
	
  Georgia

  	
   

  	
  Arkansas

  
	
  Maryland

  	
   

  	
  California

  
	
  North
  Carolina

  	
   

  	
  Connecticut

  
	
  Pennsylvania

  	
   

  	
  Indiana

  
	
  South
  Carolina

  	
   

  	
  Kansas

  
	
  Tennessee

  	
   

  	
  Louisiana

  
	
  Virginia

  	
   

  	
  Maine

  
	
  District
  of Columbia

  	
   

  	
  Massachusetts

  
	
   

  	
   

  	
  Michigan

  
	
   

  	
   

  	
  Minnesota

  
	
   

  	
   

  	
  Mississippi

  
	
   

  	
   

  	
  Missouri

  
	
   

  	
   

  	
  Nebraska

  
	
   

  	
   

  	
  New
  Hampshire

  
	
   

  	
   

  	
  New
  Jersey

  
	
   

  	
   

  	
  Ohio

  
	
   

  	
   

  	
  Oklahoma

  
	
   

  	
   

  	
  Rhode
  Island

  
	
   

  	
   

  	
  Vermont

  
	
   

  	
   

  	
  West
  Virginia

  

 

v

 

Schedule 2

 

Production Support Plan

 

The
Program will be marketed by the FMC sales team directly to Eligible
Institutions within the FMC Sales States.  Within the FMC Sales States and
in accordance with the terms of the Agreement, the FMC sales team will leverage
various presentation materials to build awareness of the Program among
financial aid officers, present the Program to Eligible Institutions, respond to
requests for proposals and provide Eligible Institutions with regular updates
about the Program, and will conduct the following activities to support the
promotion of the student loan product:

 

·                  Onsite visits to targeted Eligible
Institutions in the FMC Sales States

·                  Webinars to key Eligible Institutions who
require application demonstrations or additional product training

·                  Attend and/or exhibit at state, regional and
national conferences to support FMC Sales States product sales, including
NASFAA

·                  Monthly email communications to Eligible
Institutions in FMC Sales States to highlight product features, interest rate
changes or pertinent information in the industry

·                  Provide training onsite or via webinar as
requested by Eligible Institutions on subjects including but not limited to:
the product, product processing, servicing, default management

·                  Conduct mailings to Eligible Institutions and
potential Applicants in accordance with Sections 2.2.1 and 2.2.5 of the
Agreement

 

In
addition, FMC will provide students in FMC Sales States with collateral
materials and a link to the FMC Website so they have easy access to get more
information about the Program.

 

FMC
will also market the program using open channel activities, including:
geo-targeted online advertising, and possibly email and/or direct mail prior to
future peak periods for customer retention purposes.

 

iv

 

EXHIBIT F

Program Guidelines

 

TO BE ADOPTED PRIOR TO THE
EFFECTIVE DATE

 

 

EXHIBIT G

SunTrust Service Marks

 

SunTrust

 

Custom
Choice

 

 

 

 

 

EXHIBIT H

 

INSURANCE REQUIREMENTS

 

WORKERS’
COMPENSATION:

	
  (A)

  	
  Workers’
  Compensation: Statutorily Required

  
	
  (B)

  	
  Employer’s
  Liability:

  
	
   

  	
  (1)

  	
  Bodily
  Injury by Accident, for Each Accident:

  	
  $ [**]

  
	
   

  	
  (2)

  	
  Bodily
  Injury for Each Employee by Disease:

  	
  $ [**]

  
	
   

  	
  (3)

  	
  Policy
  Limit for Bodily Injury by Disease:

  	
  $ [**]

  

 

COMMERCIAL
GENERAL LIABILITY:

	
  Written
  on a per occurrence basis to include coverage for: Broad Form Property
  Damage; Bodily Injury; Personal Injury; Blanket Contractual Liability;
  Products/Completed Operations.

  
	
  (A)

  	
  Combined
  Single Limit Per Occurrence:

  	
  $[**]

  
	
  (B)

  	
  General
  Aggregate:

  	
  $[**]

  
	
  (C)

  	
  Fire
  Legal Liability Per Occurrence:

  	
  $[**]

  
	
  (D)

  	
  Medical
  Expense Per Person per Occurrence:

  	
  $[**]

  
	
  SunTrust
  Banks, Inc., its subsidiaries, affiliate companies, its officers,
  directors and employees will be listed as additional insureds.  FMC’s insurance will be primary and
  non-contributory.

  

 

AUTOMOTIVE
LIABILITY:

	
  Such
  policy will include coverage for all vehicles owned, hired, non-hired,
  non-owned and borrowed by FMC in the performance of the Services covered by
  this Agreement.

  
	
  Combined
  Single Limit:

  	
  $[**]

  

 

UMBRELLA
LIABILITY:

	
  Combined
  Single Limit:

  	
  $[**]

  
	
  SunTrust
  Banks, Inc., its subsidiaries, affiliate companies, its officers,
  directors and employees will be listed as additional insureds.

  

 

ERRORS &
OMISSIONS LIABILITY (PROFESSIONAL LIABILITY):

	
  Such policy will include coverage for actual or
  alleged breach of duty, act, error, and omission, misstatement, misleading
  statement or neglect in the rendering of or failure to render the Services
  under this Agreement.

  
	
  Combined Single Limit:

  	
  $[**]

  

 

FIDELITY
BOND (CRIME INSURANCE):

	
  Including blanket employee dishonesty:

  	
  $[**]

  

 

CYBER /
PRIVACY LIABILITY:

 Such policy will include coverage
for first and third party legal liability as a result of a physical privacy
breach or breach of privacy regulations, as well as damages and claims for
expenses arising out of computer attacks  caused
by security failures.        $[**]

 

 

EXHIBIT I

FMC Privacy and Security Policies

 

 

[**]

 

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

 

 

The
First Marblehead Corporation

Employee
Code of Conduct

 

On
June 21, 2010, our board of directors approved our revised Code of
Conduct.

 

Letter
from the Chairman & Chief Executive Officer

 

Dear
Fellow Employees,

 

At
First Marblehead, integrity is a fundamental corporate value. We are strongly
committed to it, and to the ethical conduct, honesty and compliance with law
that underlie it. Integrity is vital to our long-term relationships with
clients, colleagues and investors, particularly at this time in the history of
our Company and industry.

 

Our
Code of Conduct outlines standards for employee conduct. It is intended to
raise your awareness about what is expected of each of us, to provide you with
guidance if you have questions about what is proper conduct for you or anyone
else, and to encourage you to report any ethical, accounting or legal problems
that you may confront. Given the variety of situations to which our standards
apply, the Code is not intended to provide you with a roadmap for every
question that you have or specific concern that may arise. Each of us is
expected to use our judgment and common sense in order to comply not only with
the letter of the Code but also with its spirit. 

Please
read the Code carefully and thoroughly, as it has been updated to clarify some
requirements as well as to reflect our growing and evolving businesses. You are
required to formally acknowledge that you have read the Code, understand it,
and agree to abide by it.

 

The
principles of the Code apply to everyone at First Marblehead regardless of job
function or seniority. Each of us must do our part to prevent or correct
violations and maintain a culture where absolutely nothing compromises our
commitment to integrity. I encourage you to discuss any questions or concerns
you may have about the Code or any activity at our Company with any member of
the Code of Conduct Committee.

 

Our
Code provides a foundation, but the value we get from it depends on your level
of dedication to upholding its principles. Please join me in renewing our
commitment to protecting and strengthening First Marblehead’s reputation for
integrity and the trust that our clients, colleagues and investors have placed
in each of us.

 

Daniel
Meyers

Chairman & Chief Executive Officer

 

Introduction

We are
all equal under the Code

 

At
The First Marblehead Corporation (Company), we are committed to upholding the
highest standards of honest, ethical conduct. Always. Without compromise. That
commitment also reflects our goals to meet and exceed the expectations of our
stakeholders — those groups of people with a vested interest in the success of
our Company.

 

Our
Code of Conduct (Code) summarizes the shared values and behaviors we must
exhibit in all of our business transactions and interactions with our key
stakeholders, including customers, fellow employees, business partners,
suppliers, shareholders, government regulators and communities.

 

Our
Code applies equally to all employees and officers. In addition, our vendors,
consultants and other business partners are expected to uphold our ethical
standards and values. Compliance with our Code, Company policies and
procedures, and applicable laws and regulations is a responsibility that we
take seriously, and we will hold each other accountable in meeting that
responsibility.

 

 

Our
leaders and managers are expected to serve as ethical role models.

 

They
are expected to be familiar with our Code and effectively communicate its
importance and guidelines and answer the questions of those who report to them.

 

Leaders
and managers also have an obligation to create a positive work environment in
which Company personnel feel comfortable asking questions or reporting concerns.

 

Leaders
and managers who fail to meet this responsibility or who do not act promptly to
report suspected misconduct will be subject to disciplinary action that may
include termination.

 

Raising
and Reporting Ethical Issues

 

What to
do when you think something is wrong

 

If
you believe that any employee, officer, director or anyone working on our
behalf may have engaged in ethical or legal misconduct, it is your
responsibility to promptly report the matter to your manager or any member of
the Code of Conduct Committee (see the list and contact information at the end
of this document or on our HR intranet). Doing so helps us to address issues
and prevent future misconduct. Suspected Code violations can be reported to
anyone on our Code of Conduct Committee, or call our toll-free HOTLINE,
866-709-9950, or e-mail CodeOfConduct@fmd.com, where you can leave a message
about any suspected violation. While we prefer that you identify yourself when
reporting suspected violations so that we may follow up with you, you may leave
messages anonymously.

 

We
will promptly and thoroughly investigate complaints to determine whether
violations have occurred and if so, how to effectively address them.
Disciplinary measures for violations may include, but are not limited to:

·                  reprimands

·                  warnings

·                  probation or suspension without pay

·                  demotions

·                  reductions in salary

·                  restitution

·                  termination of employment

 

Certain
violations may require external reporting

 

Certain
violations of our Code may require us to refer the matter to the appropriate
governmental or regulatory authorities for investigation or prosecution.

 

We
may also be required to report particular violations to clients, and the
clients may report the violation to appropriate regulators. Employees, officers
and directors are expected to cooperate fully with any inquiry or investigation
by the Company regarding an alleged violation of our Code. Failure to cooperate
with any such inquiry or investigation may result in disciplinary action up to
and including discharge.

 

If
the alleged violation involves an executive officer, then the Board of
Directors and the Chief Executive Officer (but only to the extent that the CEO
is not involved in the alleged violation) will determine whether a violation of
our Code has occurred and, if so, will determine the disciplinary measures to
be taken.

 

While
we prefer to coordinate matters internally, nothing in our Code should
discourage you from reporting any illegal activity, including any violation of
securities laws or any other federal state or foreign law, rule or
regulation, to the appropriate regulatory authority.

 

You are
protected

 

Employees,
officers and directors will not fire, demote, suspend, threaten, harass or in
any other manner discriminate or retaliate against a person because he or she
reports a violation, unless it is determined that the report 

 

 

was
made with knowledge that it was false. Our Code does not prevent you from
testifying, participating or otherwise assisting in any state or federal
administrative, judicial or legislative proceeding or investigation.

 

Reporting
Process

 

You
have three options for reporting a violation:

 

 

If
the alleged violation involves a member of the Code of Conduct Committee, that
member will not participate in the investigative process.  In addition,
suspected violations involving a member of the Audit Committee may be reported
to WilmerHale LLP, our outside counsel.  All contact information is
included at the end of this Code.

 

Concerns
about Accounting or Auditing Matters

 

Reporting
your concerns

 

If
you become aware of an actual or potential problem with our accounting,
internal accountings controls or auditing matters, please raise your concerns
immediately, by using the reporting process on page 6, by contacting the 

 

 

Chairman
of the Audit Committee directly or by contacting Susan Murley at WilmerHale
LLP, our outside counsel, (617) 526-6000.

 

All
concerns of merit will be forwarded to the Audit Committee, and a record of all
complaints and concerns received by us will be provided to the Audit Committee
each quarter.  Again, you may report any concerns regarding accounting or
auditing matters confidentially and anonymously.

 

Working
with independent auditors or regulators

 

We
are expected to cooperate completely and provide all information requested in
any internal or external investigation, audit or regulatory inquiry. This
requires us to provide accurate and complete information to these parties when
requested.

·                  No one may directly or indirectly make or
cause to be made a false or misleading statement.

·                  No one may omit to state, or cause another
person to omit to state, any material fact in connection with any audit review,
examination or investigation.

·                  No one may directly, or indirectly, take any
action to coerce, manipulate, mislead or fraudulently influence any independent
public or certified public accountant engaged in the performance of an audit or
review of our financial statement.

 

Reporting
Company Information

 

Compliance
with all laws, rules and regulations is vital

 

We
report corporate and business data to a number of regulatory agencies,
including the Securities and Exchange Commission, the Internal Revenue Service
and the New York Stock Exchange, in addition to the financial and educational
institutions and other enterprises with which we do business. The accuracy and
integrity of this information is critical to maintain our marketplace
reputation and business model.

It
is the responsibility of each one of us to comply with all laws, rules and
regulations applicable to our business, as well as our Code and Company
policies.

 

You are
responsible for the accuracy of books, records and public reports

 

Because
our regulators, shareholders and other business partners rely on the detailed
information contained in our business records, we must make sure that the
information we provide is accurate, timely and complete. You are responsible
for the accuracy of the records and reports you create and/or review. Accurate
information is essential to our ability to meet our legal and regulatory
obligations.

All
of our books, records and accounts must be maintained in accordance with all
applicable regulations and standards and accurately reflect the true nature of
the transactions they record.

 

Financial
statements

 

Our
financial statements must conform to generally accepted accounting principles,
as well as our accounting policies and internal control procedures.

·                  No undisclosed or unrecorded account or fund
can be established for any purpose.

·                  No false or misleading entries can be made in
our books or records for any reason.

·                  No disbursement of corporate funds or other
corporate property can be made without adequate supporting documentation.

It
is our policy to provide full, fair, timely and understandable disclosure in
reports and documents filed with, or submitted to, our regulators and in other
public communications.

 

 

Protecting
Company Assets

 

Protection
of our company assets

 

We
are all trusted to respect and safeguard Company property, which includes both
physical and intangible assets. We must be diligent and work together to
prevent identity theft, destruction or misappropriation of Company property,
including our physical property, consumer information, proprietary client
information, confidential and proprietary internal information and intellectual
property.

 

Protecting
physical assets

 

At
all times we must protect and respect Company facilities, equipment and
supplies from theft, loss, damage or misuse. Company issued portable devices,
such as a BlackBerry or laptop, intended to promote work efficiency, should
always be used for acceptable work-related purposes.

 

Protecting
intellectual property

 

We
also have an obligation to protect our intangible assets. Intellectual property
refers to those intangible assets of the Company which include business
methods, inventions, publications, patents, copyrights and trademarks. We were
all asked to sign a non-disclosure agreement when we were hired. These signed agreements
are kept in Human Resources and represent each of our individual commitments to
protect our intellectual property. In addition, it is our policy to respect the
intellectual property of others and to adhere strictly to all relevant laws and
regulations regarding the patents, trademarks or copyrights owned by others.

 

Example:

 

Q. 
John & Joe are on the T after work discussing their day.  John
brings up comments made by management at a Town Hall meeting held earlier in
the week.  He is interested in knowing Joe’s thoughts on certain
statements about stock options and pending clients, which John names, that were
confidentially made to employees at the meeting.  How should Joe respond?

 

A. 
Without drawing further attention to John’s specific statements, Joe should
make clear to John that the timing and setting are inappropriate for the
conversation.  John’s public statements are in breach of his
confidentiality obligations under our Code and are especially inappropriate if
he is wearing anything identifying him with First Marblehead (fleece, name
badge, computer bag or other item).

 

Protecting
Information

 

Consumer
information

 

We
are all required to comply with the privacy policy applicable to the
applications and loans we facilitate. In addition, federal and state law and
contract requirements impose strict rules protecting information about
loan applicants and borrowers. 

All consumer data is confidential. Individual department policies define
personnel who are authorized to access consumer data, and only authorized
personnel with a need to know are permitted access.

 

Unauthorized
access to consumer data is prohibited. Consumer data may only be used and
disclosed to third parties in accordance with applicable law and applicable
contractual requirements and restrictions. 

 

All
consumer data, such as personal data provided to us by or about loan applicants
and borrowers, must be safeguarded against unauthorized access in accordance
with our Information Security Policy. If you have any questions concerning
access to, use of, or safeguarding of consumer data, contact our Chief Risk
Officer.

 

Company
information

 

Proprietary
and confidential information is generally not available to the public and
includes internal business information, such as contract documentation,
business processes, and corporate strategies and plans.

 

We
must maintain the confidentiality of proprietary and confidential information
entrusted to us by the Company or other companies, including our suppliers and
clients, except when disclosure is authorized by a manager or is legally
mandated.

 

 

Unauthorized
disclosure of any proprietary or confidential information is prohibited. In
addition, you should take appropriate precautions to ensure that confidential
or sensitive business information, whether it is proprietary to us or another
company, is not communicated within the Company except to authorized personnel
or outside parties who need this information for legitimate business purposes.

 

You
may find yourself in a position where a third party asks you for information
concerning the Company. You must not discuss internal Company matters with
anyone outside the Company, except as required in the performance of your
duties and after a confidentiality agreement is in place. You must use the
Company’s assets only for legitimate business purposes and not use them for any
personal benefit or for the benefit of any third party. 

 

If
you are unsure whether or not you should share information with a third party,
contact your manager or the General Counsel for guidance.

 

Client
information

 

We
are all responsible for protecting the confidentiality and security of our
clients’ proprietary and confidential information. Unauthorized disclosure of
client information to third parties, or internal parties not having a need to
know the information, is prohibited. We must take care to safeguard client
information and to ensure that client information is communicated within the
Company only to the extent that employees, officers or directors with a need to
know are able to perform their duties. This obligation continues even after our
employment with the Company ends.

 

Protecting
Information

 

Send
requests for company information to Investor Relations

 

To
further protect the Company’s information and make certain that it is released
to the public in a manner that is both accurate and consistent, only designated
spokespersons may communicate with the public on behalf of the Company. This
applies particularly to requests from the media, market professionals (including
securities analysts, institutional investors, investment advisors, brokers and
dealers) and security holders.

 

If
you receive any requests, you must decline to comment and refer the inquirer to
Investor Relations: 800-895-4283 or info@fmd.com

 

Our employees’
personal information deserves protection too

 

Just
as we are committed to maintaining the privacy and confidentiality of our
Company and client information, we are also committed to maintaining the
privacy and confidentiality of our employees’ personal information.

 

Employment
information or medical records must not be shared or discussed inside or
outside of the Company except as authorized by the employee or officer or as is
required by law. Within the Company access must be limited only to those who
have a substantial and legitimate need to know the information or who require
information due to legal process.

 

Gifts
and Entertainment

 

Before
accepting a gift, check the guidelines

 

In
the course of our work with clients and to build or strengthen good working
relationships, it may be acceptable to give gifts or entertainment to, or
accept gifts or entertainment from suppliers, vendors or business partners.
However, good judgment, discretion and moderation should always be guides in
these situations. We may never solicit, accept or give gifts or entertainment
that may influence or be perceived to influence business decisions.

 

You
must not accept, or permit any member of your immediate family to accept any
gifts or gratuities from any client, supplier, vendor or other person doing or
seeking to do business with the Company, other than items of insignificant
value (<$50 in total from anyone in any calendar year).

 

 

Any
gifts you receive that are of significant value (>$50) should be returned
immediately and reported to your manager and the General Counsel. If immediate
return is not practical, the gift should be given promptly to the Company for
charitable donation or such other disposition as the Company believes
appropriate.

 

If
you are unsure about whether a gift or specific event is in compliance, please
ask your manager or a member of the Code of Conduct Committee for guidance.

 

Example:

Q. A vendor has offered Tim two tickets to a Celtics playoff game.  The
vendor cannot make the game but told Tim to take a friend and enjoy
himself.  Can Tim accept the tickets?

 

A.
No.  Since the vendor is not accompanying Tim to the game, the tickets are
really a gift and not business entertainment.  The Company limit for
accepting gifts without approval is less than $50.  Tim cannot accept the
tickets.

 

Before
you give to others, consider how it may be perceived

 

Gifts,
gratuities or other favors from you to clients, suppliers, vendors or other
persons doing or seeking to do business with us that are of insignificant value
(<$50 in total to anyone in any calendar year) are permitted if made in
compliance with the terms of this paragraph.

 

All
gifts, gratuities or other favors of significant value (>$50 in total to any
party in any calendar year) from you to clients, suppliers, vendors or other
persons doing or seeking to do business with us are prohibited unless approved
in advance by the General Counsel.

 

Bribes
and kickbacks are criminal acts, prohibited by law. You must not offer, give,
solicit or receive any form of bribe or kickback anywhere in the world where we
conduct business.

 

All
gifts, gratuities or other favors, regardless of value, are prohibited if:

·                  not made in compliance with applicable law
and our Code or policies to which the recipient may be subject, or

·                  given in consideration or expectation of any
action by the recipient, or

·                  given to government officials. Requests for
exceptions should be submitted to the General Counsel.

 

What’s reasonable (<$50)

·                  A bottle of wine of reasonable value from a
client or vendor

·                  Tickets to a local sporting or cultural event
with a value of less than $50

·                  An unsolicited gift of modest value given by
a vendor

·                  Modest gifts of gratitude or to acknowledge
personal events such as weddings, births or anniversaries

 

What’s excessive (>$50)

·                  A case of fine wine

·                  Front row tickets to a professional sports
team playoff game

·                  A golf outing which includes tee time, hotel
and other accommodations

·                  Cash, gift cards or other stored value
products that are similar to cash

·                  A lavish gift, such as a leather briefcase,
fine jewelry or art

 

Fair
Dealing and Conflicts of Interest

 

We are
committed to dealing fairly with other businesses

Our actions in the student loan marketplace define who we are as a company. We
support vigorous yet fair competition. We not only have a responsibility to the
regulatory, client and shareholder communities, but we also have an obligation
to deal fairly and responsibly with our suppliers and competitors.

 

 

Fair
dealing requires that we recognize and strive for the highest standards of
honesty and integrity in the business community. We concentrate on anticipating
and satisfying the needs of our clients and customers. While we will vigorously
compete in our marketplace each and every day, we will not seek to restrict the
competitive opportunities of our rivals in any way that may be considered
deceitful or unethical.

 

Avoid
conflicts of interest

A “conflict of interest” is defined as engaging in an activity in which you
have a personal interest that intersects with or interferes with the interests
of the Company. A conflict of interest can arise whenever you take action or
have an interest that prevents you from performing your duties and
responsibilities honestly and objectively.

 

You
must act in the best interests of the Company and may not engage in any
activity or have a personal interest, like a substantial financial investment,
that presents a conflict of interest. For these reasons you may not perform
services as a consultant, employee, officer, advisor or in any other capacity
for, or have a financial interest in, a competitor of the Company, other than
services performed at our request, a financial interest representing less than
one percent (1%) of the outstanding shares of a publicly-held company or as may
otherwise be approved by our Board of Directors.

 

In
addition, no one may use his or her position with our Company to influence a
transaction with a supplier or client in which such a person, or an immediate
family member, has any personal interest, other than a financial interest
representing less than one percent (1%) of the outstanding shares of a
publicly-held company.

 

You
are responsible for immediately disclosing any material transaction, or
personal or financial relationship that might reasonably be expected to create
a conflict of interest to the General Counsel. If you are a senior manager, you
are also responsible for reporting such a transaction or relationship to the
Board of Directors, which will be responsible for determining whether the
transaction or relationship constitutes a conflict of interest.

 

Example:

 

Q. 
Mike runs a small home business selling magazine subscriptions.  He does
most of his work on weekends and it in no way conflicts with his performance at
work.  Recently, Mike has been eating lunch at his desk and using his
First Marblehead computer to process pending orders.  The Code says
limited personal use of Company equipment is OK.  Is this limited activity
acceptable?

 

A. 
No.  Under our Code, engaging in any activity which potentially interferes
with the interests of the Company presents a conflict of interest.  Our
Company’s digital resources are used for business purposes, and personal use,
especially in today’s resource and content rich website environment, does
strain the system.  Mike must run his “home” business from home.

 

Compliance
with the Law

 

In
addition to the regulatory requirements regarding the disclosure of Company
financial information, we are also subject to federal, state and local laws
that govern the way we do business. You are expected to use good judgment and
common sense in complying with all applicable laws, rules and regulations.
If you are in doubt, ask for advice and guidance from your manager, General
Counsel or the Chief Risk Officer. Inside information and insider trading In
the course of your employment with us, you may come into possession of inside
information. “Inside information” is non-public information about the Company
or other companies with which we have a relationship that, if publicly
disclosed, might be of use to our competitors, or otherwise harmful to us or
our clients. Material inside information about a company is inside information
that would be considered important by a reasonable investor in determining
whether to buy, sell or hold securities of that company. Information concerning
any of the following subjects, or our plans with respect to any of these
subjects could be considered to be material inside information:

·                  our revenues or earnings

·                  our capital markets activities

·                  a new loan program or a significant
development with regard to an existing one

·                  the establishment, modification or
termination of agreements with business partners or strategic partners

 

 

·                  the loss of, delay or gain of a significant
contract regarding our clients

·                  a merger or acquisition involving us

·                  a change in our control or a significant
change in our management

·                  a change in or dispute with our auditors

This
list is illustrative only. There are many other circumstances that could give
rise to material inside information.

 

Ask
before you trade

 

If
you have material inside information about us or other companies, including our
suppliers and clients, as a result of their relationship with us, you are
prohibited by law and Company policy from trading in our securities or those of
other such companies, as well as communicating such information to others who
might trade on the basis of that information. Buying, selling or tipping
(disclosing inside information to someone who trades a security based on the
information you provided) violates not only our policy but the laws of many
countries. Violations may carry both civil and criminal penalties for those
involved. If you are in doubt, ask for guidance from your manager, the General
Counsel or the Chief Risk Officer.

 

Example:

 

Q.
Stephen knows about a potential business development that will likely make our
Company’s stock price rise.  He knows that he cannot trade on this
information but wants to tell his friend this information and encourage him to
buy shares of the Company’s securities.  Can Stephen do this?

A. No.  The potential business development is considered material
nonpublic information.  If Stephen shares this information with his
friend, he would be engaging in tipping, which violates our Code and the
Company’s Insider Trading Policy.  Stephen and his friend might also be
subject to criminal penalties for violating insider trading laws.

 

Respect
for the Individual

 

We
should respect and value one another

We strive to maintain a workplace that allows everyone to contribute at the
highest level in an atmosphere that fosters growth and innovation. In our daily
decisions and actions, we should all be responsible for maintaining a workplace
that is free of harassment and discrimination and that promotes respect for
individuals.

 

We
make employment, pay and promotion decisions without regard to race, color,
religion, gender, age, national origin or ancestry, sexual orientation or other
protected class status. The Company is committed to full compliance with all
anti-discrimination laws, including state and federal laws against
discrimination and harassment in employment, the Americans with Disabilities
Act and the guidelines under the Massachusetts Commission Against
Discrimination and the Equal Employment Opportunity Commission. (Please refer
to the First Marblehead Employee Handbook for additional information on your
rights under these laws.)

 

Harassment
and discrimination are not tolerated

 

We
are committed to maintaining a workplace that is free of harassment and
discrimination. “Harassment” includes offensive behavior that interferes with
another individual’s work environment or that has the purpose or effect of
creating an intimidating or hostile work environment. Harassment may include
conduct done physically or verbally, or done in person or by other means. It
may also include conduct that is sexual in nature or otherwise inappropriate.
To that end, we are committed to upholding the existing laws regarding sexual
harassment and equality of employment opportunities. We will not tolerate
retaliation against an individual who reports sexual or other forms of
harassment or discrimination.  Retaliation is unlawful.

 

“Sexual
harassment” is defined by Massachusetts law as requests for sexual favors, and
other verbal or physical conduct of a sexual nature when submission to or
rejection of such advances, requests or conduct is made either explicitly or
implicitly a term or condition of employment or as a basis for employment
decisions; or when such advances, requests or conduct have the purpose or
effect of unreasonably interfering with an individual’s work 

 

 

performance
by creating an intimidating, hostile, humiliating, or sexually offensive work
environment. Discrimination on the basis of sex includes, but is not limited
to, sexual harassment.

 

We
will investigate all complaints of sexual or other harassment and take
appropriate disciplinary or corrective action when necessary. For further
information on how to initiate a complaint or investigation, please see the
First Marblehead Employee Handbook, or call the HOTLINE.

 

Example:

Q.  Linda feels harassed by her manager, Justin.  He frequently makes
improper comments about her appearance when alone, making her
uncomfortable.  Linda has told Justin his comments bother her on more than
one occasion, but he has not changed or stopped the behavior.  What should
she do?

A.  Linda should report Justin’s conduct to Human Resources or a member of
the Code of Conduct Committee immediately.  Justin’s actions are unwanted
and violate the Code and our Company’s policy against harassment.  The
harassing behavior will not be tolerated.

 

Workplace
Policies

 

Employee
safety and health

Our greatest asset is you, so we are committed to the highest standards of your
safety and protection. In addition to maintaining a harassment-free
environment, we are also committed to a drug- and violence-free workplace.

 

Workplace
violence includes intimidation, threats, physical attack or property damage
directed at a fellow employee, officer or director. Anyone who engages in these
behaviors may be subject to disciplinary action up to and including
termination.

 

No
illegal drugs or alcohol on the job. In addition, the Company is committed to
fostering the health and well-being of all of us. That commitment is
jeopardized when someone uses illegal drugs or alcohol on the job, comes to
work with these substances present in his or her body or possesses, sells or
distributes drugs in the workplace.

 

It
is a violation of our policy and our Code for anyone to possess, sell or trade
or offer for sale illegal drugs or otherwise engage in the illegal use of
drugs, intoxicants or alcohol on the job. Anyone who engages in the behaviors
outlined may be considered in violation and may be subject to disciplinary
action, up to and including termination.

 

Report violence promptly:

 

If
you know of actual or potential workplace violence, call or e-mail the HOTLINE.
If you believe someone is in immediate danger dial 911 and contact building
security:

Medford Security: (781) 396-2559 

Prudential Security: (617) 236-3114

 

Political
activities and contributions

 

You
are encouraged to exercise your rights as voters and citizens. However,
political activity must take place on your own time and you may not use Company
resources or assets directly or indirectly for any political activities, except
as otherwise approved by the Board of Directors or in connection with your job
responsibility. You may not allow your status as an employee or officer to be
used in support of a particular political candidate or issue, except if
approved by the Board of Directors or in connection with your job
responsibilities.

 

In
addition, you may not pressure, either directly, or indirectly, employees,
officers or directors to make political contributions or to participate in
support of a political party, issue or candidate. Finally, corporate funds or
assets 

 

 

may
not be used to support a political party, an elected official or the campaign
of any candidate for local, state or federal elected office.

 

Workplace
Policies

 

Responsible
use of e-mail and the internet at work

 

Systems
facilitating access to e-mail and the internet are Company resources that are
provided primarily for business use, so you need to exercise good judgment in
using these assets.  All e-mails and documents residing on Company systems
are the property of the Company and employees, officers and directors should
have no expectation of privacy.

 

Any
use of e-mail or internet access for inappropriate purposes, including gaining
access to pornographic or other unsuitable websites, is strictly
prohibited.  In addition, employees, officers and directors are legally
responsible for their blog and social network postings and may be subject to
liability if contents are found to be defamatory, harassing or in violation of
any applicable law.  It is expected that e-mail and internet usage is
business appropriate.

 

Example:

Q.  Samantha notices that several individuals who sit near her regularly
play games and watch movies on their Company computers.  She finds out
that some of the websites these individuals are accessing are restricted and
should be blocked by the Company’s internet filtering tools.  When testing
access to these websites from her work computer, Samantha was redirected and
received a message saying the websites were blocked.  What should Samantha
do?

A.  Samantha should report her concerns to her manager or any member of
the Code of Conduct Committee and she can choose to do so confidentially. 
The situation will be investigated.  If it is determined that individuals
intentionally bypassed security controls allowing them access, they will be
disciplined.  Further, any retaliation against Samantha for reporting this
information will not be tolerated.

 

Working
together to protect the environment

 

We
are firmly committed to protecting the environment. We comply with all
applicable environmental laws and regulations, as well as any guidelines set
forth by the Company. Our commitment means that we must operate with respect
for the environment by working to minimize environmental hazards, conserve and
protect natural resources, and manage our energy usage.

 

We
encourage individuals to do their part too. We should recycle, turn off lights
and computers when they are not in use, and take public transportation whenever
possible. If you have ideas, please share them with your manager or e-mail:
facilitiesdept@fmd.com.

 

Supporting
Our Code of Conduct

 

We have
to work together to uphold the Code

 

Our
Code not only outlines our operating responsibilities and guidelines, it is an
agreement that we share about the ethics and values which guide our business
actions and decisions. We are all responsible for upholding and enforcing it.

 

If
you develop any questions or concerns about ethical behavior in our workplace
we encourage you to raise them or report them.

 

Waivers
of the Code

 

While
most of the policies contained in our Code must be strictly adhered to, in some
cases exceptions may be possible. If you believe that an exception to any of
these policies may be appropriate, you should first contact your 

 

 

manager.
If your manager agrees that an exception is appropriate, the written approval
of the General Counsel must then be obtained. The General Counsel is
responsible for maintaining a record of all requests for exceptions to any of
these policies and the disposition of the requests.

 

Any
executive officer who seeks an exception to any of these policies should contact
the General Counsel. Any waiver of our Code for executive officers must be made
only by the Board of Directors of the Company and will be disclosed as required
by the law or regulation.

 

As
First Marblehead employees, we agree:

·                  To prepare and maintain accurate business and
financial reports

·                  Not to mislead or inappropriately influence
auditors or regulators

·                  To protect the confidential information and
intellectual property of our company, clients and partners and to keep private
consumer information secure

·                  Not to give or accept inappropriate gifts
(generally gifts of >$50 per year)

·                  To use company resources—especially e-mail
and internet—only for appropriate purposes

·                  To deal fairly with business partners,
vendors and competitors

·                  Not to engage in insider trading or any other
illegal activities

·                  To maintain a safe workplace

 

The
Code of Conduct is available online via the Human Resources Intranet page. Hard
copies of the Code are available in the mail room or by request from HR.

 

Contact
Information

Code
of Conduct Committee Member = (M)

 

Bill
Baumer (M)

Managing
Director & Chief Risk Officer

The
First Marblehead Corporation

800
Boylston Street, 34th Floor

Boston,
MA 02199-8157

(617)
638-2093

bbaumer@fmd.com

 

Greg
Woods (M)

Managing
Director & General Counsel

The
First Marblehead Corporation

800
Boylston Street, 34th Floor

Boston,
MA 02199-8157

(617)
638-2176

gwoods@fmd.com

 

Jo-Ann
Burnham (M)

Managing
Director, Human Resources

The
First Marblehead Corporation

800
Boylston Street, 34th Floor

Boston,
MA 02199-8157

(617)
638-2005

jburnham@fmd.com

 

Ken
Klipper (M)

Managing
Director & Chief Financial Officer

The
First Marblehead Corporation

800
Boylston Street, 29th Floor

Boston,
MA 02199-8157

(617)
638-2163

kklipper@fmd.com

 

Daniel
Meyers

Chairman &
Chief Executive Officer

The
First Marblehead Corporation

 

 

800
Boylston Street, 34th Floor

Boston,
MA 02199-8157

(617)
638-2001

dmeyers@fmd.com

 

Peter
Drotch

Chairman
– Audit Committee

The
First Marblehead Corporation Board of Directors

800
Boylston Street, 34th Floor

Boston,
MA 02199-8157

(508)
872-6647

 

Outside
Counsel

Wilmer
Cutler Pickering Hale and Dorr LLP

60
State Street 

Boston,
MA 02105 

(617)
526-6000

Attention:
Susan Murley, Esquire

 

Code
of Conduct HOTLINE: CodeOfConduct@fmd.com or 866.709.9950

 

 

EXHIBIT J

FMER License Applications

 

Massachusetts
– Small Loan Company license

New
Jersey – Consumer Lender licenseExhibit 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

  

 

iii

 

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.

 

2

 

“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.

 

3

 

“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 

 

4

 

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 

 

5

 

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 

 

6

 

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 

 

7

 

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

 

8

 

(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.

 

10

 

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);

 

11

 

(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

 

[**]

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