Document:

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                                                                    Exhibit 10.4

STATE OF NORTH CAROLINA
COUNTY OF HENDERSON

                                                            EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
April 1, 2000, by and between MOUNTAINBANK (hereinafter referred to as the
"Bank") and Greg Gibson (hereinafter referred to as the "Officer").

                              W I T N E S S E T H :

     WHEREAS, the Bank desires to retain the Officer's services as an executive
employee of the Bank for the Term (as defined below), and the Officer is willing
to serve as an executive employee of the Bank for such period; and

     WHEREAS, the parties desire to enter into this Agreement to set forth the
terms and conditions of the Officer's employment with the Bank.

     NOW, THEREFORE, for and in consideration of the promises and the mutual
promises, covenants and conditions hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the Bank and the Officer hereby agree as follows:

          1. Employment. The Bank hereby agrees to employ the Officer, and the
Officer hereby agrees to serve as an executive employee of the Bank, upon the
terms and conditions stated herein. The Officer will (i) serve as the Senior
Vice President, Chief Financial Officer with such duties, responsibility and
authority as are generally associated with such executive office, and (ii) have
such other duties, responsibilities and authority, and render to the Bank such
other management services, as are customary for a person having such an
executive office with a commercial bank and as are reasonable assigned to him
from time to time by the Board of Directors of the Bank (the "Board") or the
Bank's Chief Executive Officer (the "CEO"). He shall be provided with such
office, working facilities and staff at the offices of the Bank in
Hendersonville, North Carolina as are necessary for the Officer to perform his
obligations under this Agreement.

          The Officer shall faithfully and diligently discharge his duties and
responsibilities under this Agreement and shall use his best effort to implement
the policies established by the Board or the CEO. Officer, in the execution of
his duties under this Agreement, shall comply in all material respects with
personnel policies or any code of conduct adopted by the Board of Directors and
generally applicable to Officers and employees as the same shall be in effect,
amended or supplemented from time to time, and with all applicable federal and
state statutes applicable to Officer and all rules, regulations, administrative
orders, statements of policy and other pronouncements or standards promulgated
thereunder.

          The Officer hereby agrees to devote such number of hours of his
working time and endeavors to his duties and responsibilities hereunder as the
Officer and the CEO shall deem to be reasonably necessary to discharge such
duties and responsibilities. Except with prior consent of the Board, the Officer
shall not engage in any other occupation which requires a significant amount of
the Officer's personal attention during the Bank's regular business hours or
which otherwise interferes with the Officer's attention to or performance of his
duties and responsibilities under this Agreement. However, nothing herein
contained shall restrict or prevent the Officer from personally, and for the
Officer's own account or for the account of the Officer's immediate family,
trading in stocks, bonds, securities, real estate or other forms of investment
so long as such investment activities do not interfere with the Officer's
attention to or performance of his duties and responsibilities under this
Agreement.

          2. Compensation. For all services rendered by the Officer to the Bank
under this Agreement, the Bank shall pay the Officer a base salary of no less
than Seventy Thousand Dollars ($70,000.00) per annum ("Base Salary"), payable in
cash not less frequently than monthly; provided, however,

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that the amount of the Base Salary shall be reviewed by the CEO not less often
than annually for the purpose of considering such increases therein as are
appropriate to reflect the duties, responsibilities and performance of the
Officer. Such Base Salary shall be subject to customary withholding taxes and
such other employment taxes as are required by law. The Officer's Base Salary
may be increased by the CEO, and all reference to Base Salary herein shall mean
his Base Salary as so increased.

          In reviewing the Officer's Base Salary, the CEO shall consider the
employee compensation policies established by the Executive Committee of the
Board for application to the employees of the Bank, the duties and
responsibilities of the Officer, and the overall performances of the Officer and
the Bank, compensation paid to officers in comparable positions at comparable
financial institutions, as well as increases in the cost of living, and may also
consider the appropriateness of performance or merit increases. Neither
participation in, or receipt of payment from, any other benefits plan granted to
the Officer ("Fringe Benefits") shall reduce, or be deemed an offset against the
Base Salary to the Officer.

          3. Participation in Benefit P1ans; Fringe Benefits. During the Term,
the Officer shall be entitled to participate in any and all Benefit Plans from
time to time maintained by the Bank in accordance with the terms and conditions
(including eligibility requirements) of such Benefit Plans and the policies
adopted by the Board in establishing such Benefit Plans. The Officer shall be
entitled to paid vacation leave in accordance with the Board's policy for the
senior executive employees of the Bank now or hereafter in effect.

          The Officer shall be entitled to such customary Fringe Benefits,
including such vacation and sick leave, as are consistent with the normal
practices and established policies of the Bank.

          In addition to the other compensation and other benefits described in
the Agreement, the Bank shall promptly reimburse the Officer for all reasonable
and duly documented expenses incurred by him in the performance of his duties
and responsibilities under this Agreement in accordance with the policies
established by the Board. The Bank shall pay the Officer's civic club dues.

          4. Term. Unless sooner terminated as provided in this Agreement and
except as otherwise provide in Paragraph 7, the term of this Agreement and the
Officer's employment hereunder ("Term") shall be for a period commencing on the
date hereof and continuing until the close of business as of the third
anniversary of such date; provided, however that unless the Bank or the Officer
gives written notice to the other of non-extension at least thirty (30) days
prior to any anniversary of the date hereof, the term of this Agreement shall be
extended for a one (1) year period on each such anniversary of the date hereof
(i.e., absent the giving of such notice, the remainder of the Term shall not be
less that two (2) nor more that three (3) years at any time).

          5. Non-Competition and Confidentiality.

               (a) Confidential Information. The Officer hereby acknowledges and
agrees that; (i) in the course of his service as an executive officer of the
Bank, he will gain substantial knowledge of and familiarity with the Bank's
customers and its dealings with them, and other Confidential Information (as
defined below) concerning the Bank's business, all of which constitute valuable
and privileged assets that are particularly sensitive due to the fiduciary
responsibilities inherent in the banking business; and (ii) in order to protect
the Bank's interest in and to assure the benefit of its business, it is
reasonable and necessary to place certain restriction on the Officer's ability
to Compete (as defined below) against the Bank and on his disclosure of
Confidential Information.

          All Confidential Information shall be considered and kept by the
Officer as the confidential, private and proprietary property of the Bank. At
all times during and following the term of this Agreement or his employment for
any reasons, and except as shall be required in the course of the performance by
the Officer of his duties on behalf of the Bank or permitted by a direct,
written authorization of the CEO or the Board, he will not divulge any such
Confidential Information to any Person (as defined below) not employed by the
Bank (except as required by applicable Laws (as defined below), remove any such
Confidential Information in written or other recorded form from the Bank's
premises, or make any use of any

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Confidential Information for his own purposes or for the benefit of any person
other than the Bank. The Officer may share confidential information in the
reasonable discharge of his responsibilities with Directors, vendors,
consultants, and regulatory agents. Following the termination of the Officer's
employment with the Bank, this Paragraph 5(a) shall not apply to any
Confidential Information which then is in the public domain (provided that the
Officer was not responsible, directly or indirectly, for permitting such
Confidential Information to enter the public domain without the Bank's consent)
or which was obtained by the Officer from a Person who is not obligated under an
agreement of confidentiality with respect to such information.

               (b) Noncompetition. In consideration of employment of the
Officer, during the Term and any subsequent Payment Period (as defined below),
the Officer agrees that Term (the "Market"), directly or indirectly, own,
manage, operate, join, control or participate in the management, operation or
control of, or be employed by or connected in any manner with, and any Person
who competes with the Bank, without the prior written consent of the Board;
provided however, that the provisions of this Paragraph 5(b) shall not apply
prospectively in the event this Agreement is terminated by the Bank without
Cause (as defined below); and, provided further, however, that if the Officer is
terminated for Cause under Paragraph 7(d), the period of noncompetition shall
extend until the first anniversary of the date of such termination.
Noncompetition provisions are void if there is a change in control.
Notwithstanding the foregoing, the Officer shall be free, without such consent,
to purchase or hold as an investment or otherwise up to five percent (5%) of the
outstanding stock or other securities of any Person which has its securities
listed on any national securities exchange or which has transactions in its
securities quoted on any level of The NASDAQ Stock Market, Inc. or other
over-the-counter market or inter-dealer quotation system.

               (c) Remedies for Breaches. The Officer understands and agrees
that a breach by him of the covenants contained in Paragraphs 5(a) or 5(b) of
this Agreement will be deemed a material breach of this Agreement and will cause
irreparable injury to the Bank, and that it would be difficult to ascertain the
amount of monetary damages that would result from any such breach. In the event
of the officer's actual or threatened breach of the covenants contained in
Paragraphs 5(a) or 5(b), the Bank shall be entitled to bring a civil action
seeking an injunction restraining the Officer from breaching or continuing to
breach those covenants or from any threatened breach thereof, or any other legal
or equitable relief relating to the breach of such covenants. The Officer agrees
that, if the Bank institutes any action or proceeding against him seeking to
enforce any of such covenants or to recover other relief relating to an actual
or threatened breach of any of such covenants, he shall be deemed to have waived
any claim or defense that the Bank has an adequate remedy at law and shall not
urge in any such action or proceeding the claim or defense that such a remedy at
law exists. The exercise by the Bank of any such right, remedy, power, or
privilege, however, shall not preclude the Bank from pursuing any other remedy
or exercising any other right, power or privilege available to it for any such
breach, whether at law or in equity, including the recovery of damages, all of
which shall be cumulative and in addition to all other rights, remedies, powers
or privileges of the Bank.

          Notwithstanding anything contained herein to the contrary, the Officer
agrees that the provisions of Paragraphs 5(a) and 5(b) above and the remedies
provided in this Paragraph 5(c) for a breach shall be in addition to, and shall
not be deemed to supersede or to otherwise restrict, limit, or impair the rights
of the Bank under the Trade Secrets Protection Act contained in "Article 24,
Chapter 66 of the North Carolina General Statutes, or any other state of federal
law or regulation dealing with or providing a remedy for this wrongful
disclosure, misuse or misappropriation of trade secrets or other proprietary or
confidential information.

               (d) Survival of Covenants. The Officer's covenants and agreements
and the Bank's rights and remedies provided for in this Paragraph 5 shall
survive any termination of this Agreement or the officer's employment with the
Bank.

               (e) Definitions. For purposes of this Agreement:

                    (i) "Confidential Information" means any and all data,
                    figures, projections, estimates, lists, files, records,
                    documents, manuals or other such materials or information,
                    (financial or otherwise) relating to the Bank and its

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                    banking business, regulatory examination, financial results
                    and condition, lending and deposit operations, customers
                    (including lists of customers and information regarding
                    their accounts and business dealings with the Bank),
                    policies and procedures, computer system and software,
                    shareholders, employees, officers and directors.

                    (ii) A Person that "Competes" means a person that (A)
                    solicits or secures deposits from any Person, (B) solicits
                    or makes loans to any Person, (C) induces or attempts to
                    induce any Person who was a customer of the Bank at the time
                    of the termination of the Officer's employment to change the
                    customer's depository, loan, or other banking relationship
                    from the Bank to another financial institution, or (E)
                    otherwise provides any type of commercial banking services,
                    in each case from banking offices located with, the Market.

                    (iii) "Person" means (A) an individual or a corporation,
                    partnership (limited or general), trust, limited liability
                    company, business trust, association (mutual or stock,
                    including a mutual holding company), joint venture, pool,
                    syndicate, unincorporated organization or any other form of
                    entity; and (B) any Affiliate (as defined below) of any
                    individual or entity listed in item (A). "Affiliate" means
                    any person who controls, is under common control with, or is
                    controlled by the Person to whom reference is being made;
                    and for the purposes of the definition of Affiliate, control
                    shall be deemed to exist in a Person who beneficially owns
                    ten percent (10%) or more of the outstanding equity
                    interests (or options, warrants or other rights to acquire
                    such, equity interests) of another Person.

                    (iv) "Payment Period" means the period of time following the
                    end of the Term during which the Officer receives payments
                    of money, participates in Benefit Plans and/or receives
                    Fringe Benefits under Paragraph 7(b), 7(c), 7(f), or 7(g),
                    as applicable.

          6. Standards. The Officer, in the execution of his duties and
responsibilities under this Agreement, shall at all times and in all respects
comply in all material respects with the policies of the Board, including any
code of business conduct or code of ethics adopted by the Board for application
to the Bank's employees, and with all applicable statutes and with all Laws as
defined below.

          7. Termination and Termination Pay.

               (a) Termination by Death. This Agreement shall be terminated upon
the death of the Officer during the Term. Upon the Officer's death, the
Officer's estate shall be entitled to receive all compensation and benefits
payable to, or accruable or vested for the benefit of, the Officer under this
Agreement through the end of the calendar month in which the Officer's death
shall have occurred.

               (b) Termination by Total Disability. This Agreement shall be
terminated upon the total disability (as defined below) of the Officer during
the Term. In the event of his total Disability, the Officer shall receive all
compensation and benefits payable to, or accruable or vested for the benefit of,
the Officer under this Agreement through the date of the determination of his
Total disability and for a period of ninety (90) days thereafter. The Officer
shall be deemed to have suffered "Total disability" upon the determination of
his total permanent disability by the United States social Security
Administration or the Bank's receipt of a certification to such effect by the
Officer's regular physician, in each case such total permanent disability
meaning the Officer's loss of ability to perform at least the majority of his
then applicable duties hereunder.

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               (c) Termination by Officer. This Agreement may be terminated at
any time by the Officer upon sixty (60) days prior written notice to the Bank.
Unless the provisions of Paragraphs 7(f)(ii) or 7(g) are applicable and the
Officer elects to apply the applicable provisions, upon such termination, the
Officer shall be entitled to receive the compensation and benefits payable to,
or accruable or vested for the benefit of, the Officer under this Agreement
through the effective date of such termination.

               (d) Termination for Cause. The Board may terminate this Agreement
for Cause, in which event the Officer shall have no right to receive, or to have
accrued or vested for his benefit, compensation or other benefits hereunder for
any period after such termination. Termination for Cause shall mean termination
of this Agreement because of the Officer's (A) a willful and material breach of
fiduciary duty involving personal profit, (B) intentional and material failure
to perform stated duties (after written notice thereof), (C) conviction of a
crime of dishonesty or moral turpitude, (D) willful and material violation of
any law, statute, rule, regulation order, statement of policy or final
cease-and-desist order ("Laws") of any governmental agency or body having
regulatory authority over the Bank ("Regulatory Authorities") whether or not
resulting in criminal prosecution or conviction, or (E) a material and
continuing breach of any provision of this Agreement (after written notice
thereof) or (F) the occurrence of any event that shall result in the Officer
being excluded from coverage, or having coverage limited as to the Officer as
compared to other executives of the Bank, under the Bank's then current "blanket
bond" or other fidelity or insurance policy covering its directors, officers or
employees. With respect to the first occurrence of any instance listed above
specifically requiring written notice, the Bank shall give the Officer written
notice which describes the failure or breach, and the Officer shall have thirty
(30) days to cure such breach or failure to the reasonable satisfaction of the
board; provided, however, that no opportunity to cure shall be allowed for any
subsequent substantially similar failure or breach and termination for cause in
such circumstances shall be effective upon the giving of such written notice.

               (e) Termination Without Cause. The Board may terminate this
Agreement without cause at any time upon sixty (60) days prior written notice to
the Officer; provided, however, that in the event of such termination, unless
the provisions of Paragraph 7(f) or 7(g) are applicable, the Officer will
continue to receive his Base salary and all other benefits (including bonuses
and continuation of all Benefit Plans and Fringe Benefits except for qualified
retirement plans) for a period of one (1) year from the date of termination. At
the election of the officer, the Present Value of such Base Salary and bonuses,
determined as provided in Paragraph 7(g), shall be paid within sixty (60) days
of the date of termination. Termination without cause requires full board
approval and absence thereof voids this paragraph.

               (f) Unapproved Change in Control Termination. In the event of (i)
the termination of this Agreement without Cause or (ii) the voluntary
termination of this Agreement by the Officer, in each case in connection with,
or within one (1) year after, any Change in, Control (as defined below) which
has not been approved in advance by a formal resolution of two-thirds (2/3) of
the members of the Board who are not Affiliates of the Person effecting or
proposing to effect the Change in Control ("Independent Directors"), the Officer
shall be entitled at his election:

                    (A) to continue to receive his Base Salary and bonuses as
                    provided in this agreement for a period of two (2) years
                    subsequent to the effective date of such termination; and

                    (B) to continue to participate in all Benefit Plans and
                    Fringe Benefits, except qualified retirement p1ans or for
                    the period of two (2) years.

          Upon written notice by the Officer to the Bank, in lieu of paying the
amount in item (A) above for a period of two (2) years in installments, the
Officer shall be paid the Present Value of such Base Salary and bonuses in a
lump sum within sixty (60) days of the termination of his employment. The
calculation of the amount due shall be made by the independent accounting firm
then performing the Bank's independent audit (the "Auditor") at the expense of
the Bank. If Officer does not agree with the calculation performed by the
Auditor, then Officer may choose an auditor to perform such calculation on his
behalf and at his expense. Following such calculation, if the auditor and the
auditor appointed by the officer are unable to

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agree on the calculation, the Bank and the officer shall agree on an independent
third-party auditor who shall be appointed to determine the calculation of the
amount due to Officer pursuant to this paragraph. The determination of such
third-party auditor shall be conclusive and binding on all parties hereunder. In
the event Officer elects such lump sum payment, the officer shall continue to
participate in the Benefit Plans and Fringe Benefits for the aforesaid two (2)
year period. The Officer shall also be entitled to a cash payment of an amount
equal to the amount of any and all excise tax liability incurred by Officer
pursuant to the Internal Revenue Code of 1986, as amended, in connection with
the payments and benefits compensation in Paragraph 7 (such amount to be
determined by the Auditor at the Bank's expense).

               (g) Approved Change in control Termination. Upon ten (l0) days
prior written notice, the Officer may declare this Agreement to have been
terminated without Cause by the Bank, upon the occurrence of any of the
following events, which have not been consented to in advance by the Officer in
writing, following a Change in Control approved in advance by a formal
resolution of at least two-thirds (2/3) of the Independent Directors: (i) if the
Officer is required to move his personal residence or perform his principal
executive function more than fifty (50) miles from the city limits of
Hendersonville, North Carolina; (ii) if the Bank should fail to maintain Salary
and Benefit Plans providing to him at least substantially the same level
afforded the officer as of the date of the change in control; or (iii) if the
Officer's responsibilities or authority in the capacity described in Paragraph 1
have been diminished materially.

          Upon such termination, or upon any other termination of this Agreement
without Cause by the Bank within one (1) year following an approved Change in
control, the Officer shall be entitled to receive the compensation and benefit
continuation when and as provided in Paragraph 7(f) above.

               (h) Definitions. A "Change in control" means a change in control
of the Bank of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities and
Exchange Act of 1934, as amended (the "1934 Act"), or the acquisition of
control, within the meaning of Section 2(a)(2) of the Bank Holding Act of 1956,
as amended, or Section 602 of the Change in Control Act of 1978, of the Bank by
any Person; provided that, without limitation, a Change in Control also shall be
deemed to have occurred if:

                    (i) Any Person is or becomes the "beneficial owner" (as
                    defined in Rule 13d-3 under the 1934 Act), directly or
                    indirectly, of securities of the Bank representing 30% or
                    more of the combined voting power of the Bank's then
                    outstanding securities; or

                    (ii) During any period of two (2) consecutive years,
                    individuals who at the beginning of the Term constitute the
                    Board cease for any reason to constitute at least a majority
                    thereof unless the election, or the nomination for election
                    by the Bank's shareholders, of each new director was
                    approved by a vote of at least two-thirds (2/3) of the
                    directors then still in office who were directors at the
                    beginning of the Term.

          8. Additional Regulatory Requirement. Notwithstanding anything
contained in this Agreement to the contrary, it is understood and agreed that
the Bank shall not be required to make any payment or take any action under this
Agreement if (a) such payment or action would be prohibited by or would violate
any law or (b) such payment or action otherwise would be prohibited by any
Regulatory Authority.

          9. Successors and Assigns.

               (a) This Agreement shall inure to the benefit of and be binding
upon any corporate or other successor of the Bank, including any Person
exchange, purchase or otherwise, all or substantially all of the capital stock
or assets of the Bank.

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               (b) The Bank is contracting for the unique and personal skill of
the Officer. Therefore, the Officer shall be precluded from assigning or
delegating his rights, duties or responsibilities hereunder.

          10. Modification: Waiver; Amendments. No provision of this Agreement
may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the parties hereto. No waiver by
either party hereto, at any time, of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provision or
conditions at the same or at any prior or subsequent time. No amendments or
additions to this Agreement shall be binding unless in writing and signed by
both parties, except as herein otherwise provided.

          11. Applicable Law. This Agreement shall be governed in all respects,
whether as to validity, construction, capacity, performance or otherwise, by the
laws of North Carolina.

          12. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.

          13. Entire Agreement. This Agreement contains the entire agreement of
the parties with respect to the transactions described herein and supersedes any
and all other oral or written agreement(s) heretofore made, and there are no
representations or inducements by or to, or any agreements between and of the
parties hereto other than those contained herein in writing.

          14. Disputes. In the event any dispute shall arise between the Officer
and the Bank (or its Board) as to the terms or interpretation of this Agreement,
whether instituted by formal legal proceedings or otherwise, including any
action taken by the officer to enforce the terms of this Agreement or in
defending against any action taken by the Bank, unless the Officer shall have
received no recovery or other relief on his claims or shall have not prevailed
on his defenses, the Bank shall reimburse the Officer for all cost and expenses,
including reasonable attorneys' fees, incurred by him in such disputes or
proceedings.

          IN WITNESS WHEREOF, the parties have executed this Agreement under
seal to be effective as of the day and year first hereinabove written.

                                               MOUNTAINBANK

                                               By: /S/ Boyd L. Hyder
                                                   -----------------------------
                                                       Boyd L. Hyder
                                                       Chairman

[CORPORATE SEAL]

ATTEST:

/S/ J. W. Davis
-------------------------------
    President

                                               By: /S/ Gregory L. Gibson
                                                   -----------------------------
                                                       Gregory L. Gibson

                                       7<PAGE>

                                                                    EXHIBIT 10.5

                AMENDED AND RESTATED AFFILIATE SERVICING ADDENDUM

     THIS AMENDED AND RESTATED AFFILIATE SERVICING ADDENDUM is made as of the
1/st/ day of April, 2003 (the "Affiliate Servicing Addendum"), by and among ACS
EDUCATION SERVICES, INC. ("ACS"), EDUCATION LENDING SERVICES, INC. ("ELS"),
EDUCATION FUNDING CAPITAL TRUST II ("Affiliate") and FIFTH THIRD BANK as the
eligible lender trustee on behalf of the Affiliate ("Affiliate Eligible Lender
Trustee").

     This Amended and Restated Affiliate Servicing Addendum (this "Affiliate
Servicing Addendum") is an addendum to that certain Servicing Agreement among
ACS, ELS and Fifth Third Bank as eligible lender trustee on behalf of ELS (the
"ELS ELT") dated as of October 1, 2002, including all amendments, addenda,
attachments, exhibits and schedules thereto (herein the "Servicing Agreement").

     Capitalized terms used in this Affiliate Servicing Addendum without
definitions shall have the meanings ascribed to such terms in the Servicing
Agreement.

     WHEREAS, ACS, ELS, the Affiliate and the Affiliate Eligible Lender Trustee
previously entered into that certain Affiliate Servicing Addendum dated as of
March 19, 2003 (the "Original Addendum").

     WHEREAS, ACS, ELS, the Affiliate and the Affiliate Eligible Lender Trustee
have agreed to amend and restate the Original Addendum.

     WHEREAS, ELS desires ACS to provide the services set forth in the Servicing
Agreement for the Affiliate and the Affiliate Eligible Lender Trustee; and

     WHEREAS, ACS agrees to provide the services set forth in the Servicing
Agreement with respect to student loans owned by the Affiliate and held by the
Affiliate Eligible Lender Trustee acting on its behalf under the terms of the
Servicing Agreement and this Affiliate Servicing Addendum.

     NOW, THEREFORE, in consideration of the mutual promises contained herein
and other valuable consideration, and intending to be legally bound, ACS, ELS,
Affiliate and Affiliate Eligible Lender Trustee agree that the terms of the
Original Addendum are hereby amended and restated to replace the provisions
thereof in their entirety as follows:

     (1) ACS and ELS agree to amend the existing Servicing Agreement by adding
this Affiliate Servicing Addendum to the Agreement. For purposes of construing
the Servicing Agreement in order to carry out the intention of this Affiliate
Servicing Addendum, (i) each reference to LENDER in the Servicing Agreement
shall mean the Affiliate and; (ii) each

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reference to the Eligible Lender Trustee in the Servicing Agreement shall mean
the Affiliate Eligible Lender Trustee.

     (2) ACS agrees to perform its duties and obligations for the Affiliate and
the Affiliate Eligible Lender Trustee in accordance with the terms and
conditions set forth in the Servicing Agreement, as amended, for student loans
owned by the Affiliate and held by the Affiliate Eligible Lender Trustee. ELS,
Affiliate and Affiliate's Eligible Lender Trustee agree to perform their
respective duties and obligations in accordance with the terms and conditions
set forth in the Servicing Agreement, as amended.

     (3) ELS shall be responsible for and agrees to pay all fees due to ACS for
services rendered to the Affiliate and the Affiliate Eligible Lender Trustee by
ACS under the Servicing Agreement with respect to the student loans owned by the
Affiliate. ACS shall not be required to separately bill Affiliate and Affiliate
Eligible Lender Trustee, but shall bill ELS directly for services provided
hereunder to Affiliate and Affiliate Eligible Lender Trustee. In addition, ELS
shall be responsible for all aspects of the relationship, support services, and
interface with Affiliate, it being understood that ACS shall have no obligation
to deal with Affiliate directly with respect to loan servicing or related
issues, and ACS shall be entitled to rely on any instructions given by ELS on
behalf of Affiliate.

     (4) Notwithstanding Section (1) above, ELS, rather than Affiliate or
Affiliate Eligible Lender Trustee, shall have the right to terminate the
Servicing Agreement with respect to the services provided to the Affiliate and
the Affiliate Eligible Lender Trustee on the terms and conditions set forth in
the Servicing Agreement.

     (5) All notices or other communications by one of the parties hereto to the
Affiliate shall be addressed as follows: Education Funding Capital Trust II c/o
Education Lending Group, Inc. 12760 High Bluff Drive, Suite 210, San Diego,
California 92130, Attention: Douglas L. Feist; and to the Affiliate Eligible
Lender Trustee as follows: Fifth Third Bank 38 Fountain Square Plaza, MD 10AT60,
Cincinnati, Ohio 45263 Attention: Brain Gardner, or such other address as may be
indicated from time to time by such party.

     (6) This Affiliate Servicing Addendum shall be effective as of the first
date written above.

     (7) This Affiliate Servicing Addendum may be simultaneously executed in
several counterparts, each of which shall be an original and all of which shall
constitute one and the same instrument.

     (8) By signing this Affiliate Servicing Addendum, each party certifies that
it has the power and authority to execute and deliver this Affiliate Servicing
Addendum and to carry out its terms and the terms of the Servicing Agreement,
and the execution, delivery and performance of this Affiliate Servicing Addendum
has been duly authorized by each respective entity.

     (9) ACS agrees to deliver, upon request of the Indenture Trustee (as
defined below), to the Indenture Trustee, any reports prepared by ACS pursuant
to the Servicing Agreement with respect to the Affiliate. For purposes of this
paragraph, "Indenture Trustee" shall mean Fifth Third Bank or any successor
Indenture Trustee under that certain Indenture of Trust dated April

<PAGE>

1, 2003 among the Affiliate, the Affiliate Eligible Lender Trustee and Fifth
Third Bank as Indenture Trustee.

     IN WITNESS WHEREOF, the parties hereto caused this instrument to be duly
executed as of the month, day and the year of this Affiliate Servicing Addendum.

                                      ACS EDUCATION SERVICES, INC.
                                      as Servicer

                                      By:    /s/Steven E. Snyder
                                         ---------------------------------------
                                      Name:  Steven E. Snyder
                                           -------------------------------------
                                      Title: Managing Director
                                            ------------------------------------

                                      EDUCATION LENDING SERVICES, INC.

                                      By:    /s/ Perry D. Moore
                                         ---------------------------------------
                                      Name:  Perry D. Moore
                                      Title: Senior Vice President - Finance

                                      EDUCATION FUNDING CAPITAL TRUST II
                                      by Fifth Third Bank, not in its individual
                                      capacity but solely as Co-Owner Trustee

                                      By:    /s/ Brian J. Gardner
                                          --------------------------------------
                                      Name:  Brian J. Gardner
                                      Title: Assistant Vice President and
                                             Senior Trust Officer

                                      FIFTH THIRD BANK, as Affiliate Eligible
                                      Lender Trustee

                                      By:    /s/ Brian J. Gardner
                                         ---------------------------------------
                                      Name:  Brian J. Gardner
                                      Title: Assistant Vice President and Senior
                                             Trust Officer

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