Document:

exhibit106_1.htm

    AMENDMENT
NO. 1 TO AMENDED AND RESTATED

    AGREEMENT
FOR EDUCATION LOAN SERVICING

    

    This Amendment No. 1 to Amended and
Restated Agreement for Education Loan Servicing dated as of January 1, 2009
among Citibank (South Dakota), N.A., a national banking association (the
“Service Provider”), and The Student Loan Corporation, a Delaware corporation
(“Customer”) and Citibank, N.A., as trustee for The Student Loan Corporation, a
national banking association (“Citibank”).

    

    BACKGROUND:

    

    WHEREAS,
the Service Provider, Customer and Citibank entered into an Amended and Restated
Agreement for Education Loan Servicing dated as of January 1, 2008 (the
“Agreement”); and

    

    WHEREAS,
Service Provider, Customer and Citibank desire to amend the Agreement as
provided herein; and

    

    WHEREAS,
all terms used herein and not otherwise defined shall have the meaning set forth
in the Agreement.

    

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

    

    AGREEMENTS:

    

    1. Section
12 of the Agreement shall be deleted in its entirety and replaced with the
following:

    

    “Section
12.  Notices.

    
      	
               
      

            	
              All
      notices and other communications under this Agreement, (including any
      invoices) shall be sent prepaid to the appropriate party at the following
      address via overnight delivery service, inter-office courier, United
      States Postal Service, or by facsimile or other electronic mail if the
      party includes its facsimile or electronic mail address
    below:

            

    

    

    SERVICE
PROVIDER:

    Citibank,
(South Dakota), N.A.

    701 E.
60th
Street North

    Sioux
Falls SD  57104

    

    Fax
Number:  605-330-6701

    Attention:   President

    

    CITIBANK:

    Citibank,
N.A., as eligible lender

    trustee
for The Student Loan Corporation

    c/o The
Student Loan Corporation 

    99
Garnsey Road

    Pittsford,
New York 14534

    

    Fax
Number:  585-248-7515

    Attention:   Christeen
Rahmlow

     

    With a
copy to: 

    The
Student Loan Corporation

    750 Washington
Blvd., 9th Floor

    Stamford,
CT 06901 

     

    Fax:
203-975-6724

    Attention: 
President and Chief Executive Officer

     

    CUSTOMER:

    The
Student Loan Corporation

    99
Garnsey Road

    Pittsford,
NY 14534

    

    Fax
Number:  585-248-7515

    Attention:   Christeen
Rahmlow

     

    With a
copy to: 

    The
Student Loan Corporation

    750 Washington
Blvd., 9th Floor

    Stamford,
CT 06901 

     

    Fax:
203-975-6724

    Attention: 
President and Chief Executive Officer

    

    

    2. Exhibit A
to the Agreement shall be deleted in its entirety and replaced with the attached
Exhibit A.

    

    3. Exhibit C
to the Agreement shall be deleted in its entirety and replaced with the attached
Exhibit C.

    
 

    4. Except as
otherwise modified herein, all terms and conditions of the Agreement shall
remain in full force and effect.

    

    
      
        
          

           

        

         

      

      
         

        
        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have entered into this Amendment No. 1 as of
the date first set forth above.

    

    CITIBANK
(SOUTH DAKOTA), N.A.

    

    
      
        
          
            
              
                
                  
                    	 
	
                            By: 
      /s/Kendall E. Stork

                          
	
                            Name:
      Kendall E. Stork

                          
	
                            Title: 
      President 

                          

                  

                

              

            

          

        

      

    

    THE
STUDENT LOAN CORPORATION

     

    
      
        	
              
	
                By: 
      /s/Michael J. Reardon

              
	
                Name:
      Michael J. Reardon

              
	
                Title: 
      Chief Executive Officer

              

      

    

    CITIBANK,
N.A., AS TRUSTEE FOR

    THE
STUDENT LOAN CORPORATION

     

    
      
        	
              
	
                By: 
      /s/Valerie Delgado

              
	
                Name:
      Valerie Delgado

              
	
                Title: 
      Vice President 

              

      

    

    
      
        
          

           

        

         

      

      
         

        
        

      

      
         

      

    

    

    EXHIBIT
A

    SERVICES
TO BE PROVIDED

    

    SCHEDULE
1

    SERVICES
TO BE PROVIDED

    

    

    ORIGINATIONS
AND CASH DISBURSEMENTS

    Management
of all student loan origination processes.  These processes include,
but are not limited to:  1) the receipt and processing of written,
faxed and electronically submitted applications, 2) communication of the
approval or denial of the loan application(s), 3) underwriting of credit based
loans, 4) exception processing of incomplete applications (arising from missing
information or documents) and other problem resolution, 5) management and
control of the various transmissions of information and loan proceeds
disbursement, 6)  guarantor reporting, and 7) loan refund and
cancellation processes.   It is understood that the student loan
origination processes include current and future multiple channels and multiple
products as well as all processes involved in the processing of these
products.  Project support in the form of testing, business analysis
and project management will be provided as required by the
Customer.

    

    

    CUSTOMER
SERVICE

    All
traditional student loan servicing after loan origination, originating support /
fulfillment, and retention processes.  Service Provider to provide the
management and handling of incoming telephone calls, correspondence (written and
electronic) for all products, current and future, and accompanying paper defined
as requests for service (whether from students, parents, schools, guarantor
agencies, the federal Department of Education, or others in the ordinary course
of the student lending business) including, for example and without limitation,
deferments, change of addresses, notices of graduation date changes, NIVR
management, credit bureau reporting, and servicing calls for all channels and
loan products offered including new channels and products mandated by law or
regulation or developed by Customer.  From time to time, the
Servicer’s phone unit may be utilized for marketing campaigns.  These
campaigns will be mutually agreed to at the time of inception and charged back
with the same methodology as any other service.  An appropriate
secured storage location will be provided for the storing and oversight of paper
documents related to student loans (e.g., Promissory Note
vault).  Provide workforce management support for volume forecasting,
capacity planning, staffing planning and ongoing monitoring of performance
levels.  Project support in the form of testing, business analysis and
project management will be provided as required by the Customer.

    

    

    

    
      
        
          

           

        

         

      

      
         

        
        

      

      
         

      

    

    EXHIBIT
A

    

    SERVICES
TO BE PROVIDED

    

    

    

    DEFAULT
MANAGEMENT

    All the
servicing related to the handling and management of delinquent accounts together
with compliance with all the due diligence in collection requirements for the
FFEL and private loan products. In addition to collection management, Service
Provider will provide management and handling of recoveries, litigation
coordination, pre-repayment calling, and the handling, and filing of all default
claims to FFEL guarantor agencies or private insurers   The level
of servicing provided shall be no less than that required by applicable law,
regulation, or insurance agreement, but emphasis shall be placed upon managing
the portfolio such that underlying causes of delinquency are minimized to the
extent possible.  Strategies to achieve maximum performance of the
portfolio must be mutually agreed upon by the Service Provider and
Customer.  Project support in the form of testing, business analysis
and project management will be provided as required by the
Customer.

    

    PRIORITY
SERVICES

    All of
the servicing related to the handling and management of Financial Aid
Administrator (FAA) and Sales Account Manager operational
processes.  These processes include, but may not be limited
to:  1) Inbound FAA phone calls to be supported by Customer Service,
and 2) FAA or Sales Account Manager email and correspondence.  Other
special processes related to FAA servicing may be added, provided Customer and
Service Provider concur. Project support in the form of testing, business
analysis and project management will be provided as required by the
Customer.

    

    

    HUMAN
RESOURCES

    Provide
human resource generalist and employee relations support.

    
      
        
          

           

        

         

      

      
         

        
        

      

      
         

      

    

    EXHIBIT
A

    

    SERVICES
TO BE PROVIDED

    

    SCHEDULE
2

    SERVICES
TO CUSTOMER FOR OUTSOURCED THIRD PARTY VENDORS

    

    Service
Provider may provide services to Customer with respect to processes that
Customer outsources to third party vendors.  Processes shall include
but are not limited to:

    

    
      	
              1.  

            	
              Default
      management:  Pre-repay, pre-delinquency, and early low-risk
      delinquency  calls to FFELP and CitiAssist borrowers and
      co-signers

            

    

    
      	
              2.  

            	
              Customer
      Service:  Email management, Credit Disputes, Address Changes,
      Indexing, CAM and Phone Referrals, Enrollment and Non-Enrollment deferment
      and forbearance processing, and Inbound servicing and origination phone
      calls

            

    

    
      	
              3.  

            	
              Origination
      data entry and application
processing.

            

    

    

    Other
processes may be added to this list, provided both parties concur on process and
selection of third party vendor.  Priority Services processing not to
be considered for movement to any outsourced third party vendor.

    

    Services
shall include:

    1.  Monitoring
and evaluation for quality standards

    2.  MIS
collection and distribution

    3.  Periodic
process improvement reviews

    4.  Risk
Control Self Assessment

    

    Evaluation/management
tools required by Service Provider shall be provided by Customer at its
cost.  Service Provider will evaluate the services being provided by
third-party vendors to Customer against established
standards.  Reports of these evaluations will be sent to Customer on a
periodic basis.  Major issues will be sent to Customer as soon as they
are identified.

    

    
      
        
           

        

         

      

      
         

        
        

      

      
         

      

    

    EXHIBIT
C

    

    SERVICE
QUALITY AND TIMELINESS STANDARDS REQUIRED OF SERVICE PROVIDER

    

    
      	
              PROCESS

            	
              STANDARD

            	
              %
      IN STD

            	
              QUALITY
      FACTOR

            
	
              ORIGINATION

            
	
              Origination
      Document on system (Data Entry)

            	
              2
      business days

            	
              95%

            	
              97%

            
	
              Non
      Origination Documents on the System (Data Entry)

            	
              Indexing
      8 business days

              References
      8 business days

            	
              95%

            	
              97%

            
	
              CitiAssist
      Applications

            	
              5
      days

            	
              95%

            	
              97%

            
	
              FFELP
      (Stafford and Plus)

            	
              10
      days

            	
              100%

            	
              97%

            
	
              FFELP
      Plus Pre Screen

            	
              1
      hour

            	
              95%

            	
              97%

            
	
              Document
      Control

            	
              Quality
      Only - Timeliness included in DE Standard

            	
              N/A

            	
              97%

            
	
              Problem
      Applications

            	
              5
      business days

            	
              95%

            	
              97%

            
	
              Loan
      Consolidation – Outgoing Lender Verification Certificates
      (LVCs)

            	
              10
      business days

            	
              100%

            	
              97%

            
	
              Underwriting
      Credit Review – Manual

            	
              3
      business days

            	
              95%

            	
              97%

            
	
              Underwriting
      Correspondence Inquiries

            	
              5
      business days

            	
              95%

            	
              97%

            
	
              Underwriting
      Verifications

            	
              3
      business days

            	
              95%

            	
              97%

            
	
              Loan
      Consolidation – CLASS Application Review

            	
              5
      business  days

            	
              95%

            	
              97%

            
	
              Investigations

            	
              10
      days

            	
              90%

            	
              97%

            
	
              Cash
      Disbursement - Check and Mastercheck Disbursements sent (includes
      reconcilements)

            	
              End
      of next business day

            	
              98%

            	
              N/A

            
	
              EFT
      Disbursements

            	
              End
      of next business day

            	
              98%

            	
              N/A

            
	
              Cancellations
      / Refunds

            	
              1
      business day

            	
              99%

            	
              98%

            
	
              CUSTOMER
      SERVICE PHONES

            
	
              Customer
      Service Service Level

            	
              Answered
      in 25 seconds

            	
              75%

            	
              96%

            
	
              Abandoned
      Calls

            	
              2%

            	
              N/A

            	
              N/A

            
	
              Average
      Seconds to Answer (ASA)

            	
              25
      seconds

            	
              N/A

            	
              N/A

            

    

    
      
        
           

        

         

      

      
         

        
        

      

      
         

      

    

    EXHIBIT
C

    

    SERVICE
QUALITY STANDARDS REQUIRED OF SERVICE PROVIDER

    

    
      	
              PROCESS

            	
              STANDARD

            	
              %
      IN STD

            	
              ACCURACY
      STANDARD

            
	
              CUSTOMER
      SERVICE PAPER

            
	
              Service
      Inquiries (Correspondence and Address Changes)

            	
              7
      days

            	
              95%

            	
              97%

            
	
              Internet
      Correspondence Response – Front End

            	
              2
      days

            	
              95%

            	
              97%

            
	
              Internet
      Correspondence Response – Back End

            	
              5
      days

            	
              95%

            	
              97%

            
	
              Investigations
      (Levels I, II, III, V, and VI)

            	
              10
      days

            	
              90%

            	
              97%

            
	
              SSCRs
      processed – Manual

            	
              25
      days

            	
              95%

            	
              97%

            
	
              Grad
      Date Rejects – Borrower initiated

            	
              7
      days

            	
              95%

            	
              97%

            
	
              Grad
      Date Rejects – Non Borrower initiated

            	
              25
      days

            	
              95%

            	
              97%

            
	
              Manifest
      Rejects

            	
              25
      days

            	
              95%

            	
              97%

            
	
              Credit
      Disputes / Appeals

            	
              7
      days

            	
              95%

            	
              97%

            
	
              Deferment
      Processing

            	
              8
      days

            	
              95%

            	
              97%

               

            
	
              Pre-claim
      Rejects

            	
              30
      days

            	
              98%

            	
              97%

            
	
              Delinquent
      Claim Review

            	
              330
      days

            	
              98%

            	
              97%

            
	
              Death
      and Disability Claims

            	
              45
      days

            	
              98%

            	
              97%

            
	 
      	 
      	 
      	 
      
	
              Claims
      Payments

            	
              15
      days

            	
               95%

            	
              97%

            
	
              Bankruptcy
      Claims

            	
              30
      days

            	
               100%

            	
              97%

            
	 
      	 
      	 
      	 
      
	
              Return
      Claims- Non Bankruptcy

            	
              30
      days

            	
              95%

            	
              97%

            
	
              Return
      Claims – Bankruptcy

            	
              30
      days

            	
              100%

            	
              97%

            
	
              Proof
      of Claim – BK Claims

            	
              30
      days

            	
              100%

            	
              97%

            
	
              Supplemental
      Claims

            	
              60
      days

            	
               95%

            	
              97%

            
	
              Private
      Loan Delinquent Claim Review

            	
              180
      days

            	
              98%

            	
              97%

            
	
              RISK

            
	
              Outbound
      Collection Calls

            	
              Minimum
      of 1 call per bucket if contact, 2 calls per bucket if no
      contact.

            	
              100%

            	
              97%

            
	
              Inbound
      Collection Calls – Service Level

            	
              Answered
      in 20 seconds

            	
              80%

            	
              97%

            
	
              Average
      Seconds to Answer (ASA)

            	
              20
      seconds

            	
              N/A

            	
              N/A

            
	
              Skip
      Trace

            	
              10
      days from notification

            	
              100%

            	
              97%

            
	
              Recovery
      Cure Process

            	
              150
      days

            	
              100%

            	
              97%

            
	
              PRIORITY
      SERVICES

            
	
              PS
      – Service Level

            	
              Answered
      in 25 seconds

            	
              75%

            	
              97%

            
	
              Average
      Seconds to Answer (ASA)

            	
              25
      seconds

            	
              N/A

            	
              N/A

            
	
              Abandoned
      Calls

            	
              2%

            	
              N/A

            	
              N/A

            
	
              Email

            	
              1
      business day

            	
              95%

            	
              97%

            
	
              Correspondence

            	
              5
      days

            	
              95%

            	
              97%

            
	
              Investigations

            	
              10
      days

            	
              95%

            	
              97%

            

    

    

    All days
in calendar days unless otherwise noted.exhibit10_7.htm

    

    

    

    

    MASTER PARTICIPATION AGREEMENT

     

     

     

     

    

    

    

    

    

    UNITED STATES DEPARTMENT OF EDUCATION

     

     

    

    

    

    

    JULY 25, 2008

     

     

     

     

     

    

    

    

    

    

    

    

    PARTICIPATION INTERESTS IN ELIGIBLE LOANS MADE PURSUANT TO THE

    FEDERAL FAMILY EDUCATION LOAN PROGRAM

    

    

    

    

    

    
 

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    TABLE
OF CONTENTS

    

    

                 Page

     

    
      
        
          
            
              
                	 Section
      1.	 Terms
    	 2
	 Section
      2.	 Commitment to
      Lend Under the FFEL Program	 3
	
                         Section
      3.

                      	 Definitions	 3
	 Section
      4.	 Delivery of
      Loans to Custodian; Purchase and Sale of Participation Interests   	15
	 Section
      5.	 Participation
      Certificates; Loan Schedule and Custodial Certifications    	16
	 Section
      6.	 Security
      Interest	18
	 Section 7.
      	 Subsequent
      Disbursements 	19
	 Section 8.
      	 Reporting; Due
      Diligence	20
	 Section 9.
      	 Conditions
      Precedent	22
	 Section
      10.	 Representations
      and Warranties of the Sponsor, the Eligible Lender Trustee and
      Custodian  	24 
	 Section 11.
      	 Collections;
      Distributions	32
	 Section
      12.	 Servicing of
      Eligible Loans	33
	 Section
      13.	 Enforcement of
      the Servicing Agreements	34
	 Section 14.
      	 Liability of
      the Sponsor and the Custodian; Indemnities	35
	 Section
      15.	 Redemption;
      Put Option; Termination  	36
	 Section 16.
      	 Sponsor Events
      of Default; Remedies   	38
	 Section
      17.	 Custodian
      Events of Default; Removal of Custodian	38
	 Section
      18.	 Delegation of
      Duties by the Custodian	39
	 Section
      19.	 Custodian Not
      to Resign	39
	 Section
      20.	 Merger of the
      Custodian	39
	 Section 21.
      	 No Transfer of
      Participation Certificates or Participation Interests	40
	 Section
      22.	 Fees and
      Expenses	40
	 Section 23.
      	 Tax
      Matters	40
	 Section 24.
      	 Set-off    	41
	 Section
      25.	 Survival of
      Covenants 	42
	 Section
      26.	 Communication
      and Notice Requirements  	42
	 Section 27.
      	 Form of
      Instruments	43
	 Section 28.
      	 Amendment;
      Waiver 	43
	 Section 29.
      	 Severability
      Clause	43
	 Section 30.
      	 Governing
      Law	43
	 Section 31.
      	 Exhibits   	43
	 Section 32.
      	 General
      Interpretive Principles 	43
	 Section 33.
      	 Reproduction
      of Documents	44
	 Section 34.
      	 Further
      Agreements	44
	 Section 35.
      	 Other
      Department Program  	44
	 Section 36.
      	 Adoption	44
	 Section
      37.	 Integration	45
	 	 	 

              

            

          

        

      

    

     

    

    - i
-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    

    EXHIBITS

    

    Exhibit
A FORM OF ADOPTION AGREEMENT

     

    Exhibit
B  FORM OF PARTICIPATION PURCHASE REQUEST

     

    Exhibit
C  FORM OF CLASS A PARTICIPATION CERTIFICATE

     

    Exhibit
D  FORM OF CLASS B PARTICIPATION CERTIFICATE

     

    Exhibit
E  FORM OF OFFICER’S CERTIFICATE

     

    Exhibit
F  FORM OF OPINION OF COUNSEL TO THE SPONSOR

     

    Exhibit
G  FORM OF SECURITY RELEASE CERTIFICATION

     

    Exhibit
H  FORM OF NOTICE OF INTENT TO PARTICIPATE

    

    

    

    
      - ii
-

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    
 

    MASTER
PARTICIPATION AGREEMENT

    

    This is a
Master Participation Agreement, dated as of July 25, 2008 (“Master

    Participation
Agreement”), among the United States Department of Education (“Department”),an
individual Eligible Lender or the holder of beneficial interests in Loans (such
entity,“Sponsor”), and if the latter, the related Eligible Lender Trustee, each
made party to this Master Participation Agreement by executing an Adoption
Agreement in the form attached hereto as Exhibit A (“Adoption Agreement”), and
the Sponsor’s Custodian made party to this Master Participation Agreement by
executing the Adoption Agreement (“Custodian”).

    

    WHEREAS,
pursuant to Section 459A of the Higher Education Act of 1965, as amended by the
Ensuring Continued Access to Student Loans Act of 2008 (Pub. L. No. 110-227)
(“Higher Education Act”), the Department has the authority to purchase Stafford
Loans and PLUS Loans, on such terms as the Secretary of Education, the Secretary
of the Treasury, and the Director of the Office of Management and Budget jointly
determine are in the best interest of the United States to encourage Eligible
Lenders to provide students and parents access to Stafford Loans and PLUS Loans
made under the Federal Family Education Loan Program for the 2008-2009 academic
year;

    

    WHEREAS,
the Sponsor has an ownership interest in certain Stafford Loans and PLUS Loans
guaranteed under the Higher Education Act; 

     

    WHEREAS,
the Sponsor may desire to sell Participation Interests (as defined below) in
such loans from time to time and the Department may desire to purchase such
Participation Interests from the Sponsor;

    

    WHEREAS,
to the extent that the Department, the Sponsor, the Eligible Lender Trustee (if
applicable) and the Custodian enter into an Adoption Agreement, this Master
Participation Agreement shall provide for the Sponsor to sell to the Department
certain Participation Interests in such loans by transfer to the Custodian as
trustee for the benefit of the Department and the Sponsor, as applicable, of all
of the Sponsor’s right, title and interest in, to and under such loans
(including the right to service such loans) and by the creation and conveyance
to the Department and the Sponsor of the Participation Interests, all on the
terms and conditions set forth below;

    

    WHEREAS,
upon the execution of the Adoption Agreement, the Custodian shall be appointed
by the Sponsor and the Department to hold legal title to each such loan and to
hold in its physical possession (either directly or through a delegee) the
related promissory note and all documents and records related to each such loan
and the Custodian shall agree, in its capacity as trustee, to accept the
transfer of legal title to such loans from time to time, to hold such loans
(including the right to service such loans) and such documents and records in
trust for the benefit of the Sponsor or the Department, as applicable, and to
issue the Participation Interests in such loans as provided herein; and

     

    WHEREAS,
by its execution of an Adoption Agreement to this Master Participation
Agreement,
and upon each transfer of Participation Interests to the Department hereunder,
the Sponsor shall represent to the Department that it or the entities on whose
behalf it holds FFELP loans as an aggregator of FFELP loans, shall continue to
participate in the Federal Family Education Loan Program and that at such
time as funds become reasonably available to it or to those entities from
private sources on affordable terms, it will originate new FFELP loans or
acquire FFELP loans made by other lenders after the Department’s purchases of
Participation Interests in Loans from the Sponsor.

    

    NOW,
THEREFORE, in connection with the mutual promises contained herein, the parties
hereto agree as follows:

    

     Section
1. Terms. This Master Participation Agreement establishes the terms under which
the Sponsor, together with any Eligible Lender Trustee that holds legal title to
Eligible Loans on behalf of that Sponsor and that is authorized on behalf of
that Sponsor to sell Eligible Loans, may sell, and the Department shall
purchase, Participation Interests in the Eligible Loans specified on each Loan
Schedule attached to each Participation Purchase Request as the parties may
execute from time to time pursuant to this Master Participation Agreement,
subject to the terms of this Master Participation Agreement. Each such
Participation Purchase Request shall be substantially in the form of Exhibit B,
attached hereto, incorporating by reference the terms of this Master
Participation Agreement, and shall be a separate agreement among the Sponsor, an
Eligible Lender Trustee (if applicable), the Custodian and the Department with
respect to the Participation Interests covered by the terms of such
Participation Purchase Request and the Eligible Loans underlying such
Participation Interests covered by the terms of such Participation Purchase
Request for all purposes.

    
      
        
        

      

      
        1

        
        

      

      
        
        

      

    

    If the
terms of a Participation Purchase Request conflict with the terms of this Master
Participation Agreement, the terms of this Master Participation Agreement shall
supersede and govern except to the extent that such conflict is specifically
noted in the Participation Purchase Request and the parties acknowledge and
agree that notwithstanding such conflict, the terms of the Participation
Purchase Request shall govern.

     

          The
Department will not execute an Adoption Agreement to enter into a Master
Participation
Agreement with any Sponsor after July 1, 2009. Further, in  order
to sell any Participation
Interests pursuant to this Master Participation Agreement, the Sponsor must
notify the Department no later than July 1, 2009 that it will sell such
Participation Interests, and must exercise the option to sell Participation
Interests in Eligible Loans on or before August 1, 2009. The Sponsor may sell a
Participation Interest after August 1, 2009 only if that interest is in a Loan
that is a Purchased Eligible Loan and the following conditions are met: (a) the
first disbursement on the Purchased Eligible Loan was made by July 1, 2009, (b)
such Loan became subject to a Participation Interest by August 1, 2009, (c) the
final disbursement on such Loan is made no later than September 30, 2009, (d)
the Sponsor notifies the Department that the Sponsor intends to redeem the
Participation Interest in the fully-disbursed Loan and sell the loan to the
Department under the Put Option, and (e) the Sponsor completes the sale of the
Participation Interest
in the fully-disbursed Loan no later than thirty (30) calendar days after the
second disbursement.
If a Sponsor fails to meet these deadlines, as applicable, the right to sell
Participation
Interests hereunder shall terminate and the Department will not honor any
commitment
to purchase Participation Interests.

    
       

    

    No Loan
will be eligible to become subject to a Participation Interest for sale
hereunder to the Department if the first disbursement was made prior to the date
on which the Department  received the Notice of Intent to Participate
from the Sponsor, except that, in the event that the Department receives such
Notice of Intent to Participate on or before July 31, 2008, the related Eligible
Lender shall be permitted to sell to the Department Participation Interests in
Eligible Loans that were originated on or after May 1, 2008. In addition, no
Loan will be eligible hereunder unless the Sponsor, and, if the Loan was made by
a lender other than the Sponsor, that lender, each provided timely and
appropriate notice to the Department of its intention to enter into the Master
Loan Sale Agreement.

    

    Any
Eligible Lender that claims Special Allowance Payments at the rate payable for
eligible not-for-profit holders of loans and that seeks to aggregate Eligible
Loans to become subject to Participation Interests hereunder must do so through
a Sponsor that aggregates only loans that qualify for Special Allowance Payments
at that rate.

     

    Section 2. Commitment to Lend Under the FFEL
Program.
By its execution of an
Adoption Agreement, and upon each sale hereunder, the Sponsor represents to the
Department:

    

    (a) If
the Sponsor acts on its own behalf, that it shall continue to participate in the
FFELP
(either itself or through an Eligible Lender Trustee) and that at such
time as
funds become
reasonably available to it from private sources, it will originate new FFELP
loans or acquire FFELP loans made by other lenders after the date of the sale of
the Participation Interests to the Department hereunder, and

    

    (b) If
the Sponsor acts on behalf of any other entity as an aggregator of FFELP loans,
that it is authorized to represent, and has received written assurance from each
such entity, which assurance will be provided to the Department upon request,
that at such time as funds become reasonably available to them from private
sources, each of these entities will continue, as applicable, to originate or
finance the origination of FFELP loans, or to acquire or finance the acquisition
of FFELP loans made by other lenders, after the date of the sale of the
Participation Interests to the Department hereunder.

    
      
        
        

      

      
        2

        
        

      

      
        
        

      

    

    Section
3. Definitions. For purposes of
this Master Participation Agreement the following
capitalized terms shall have the respective meanings set forth
below:

    

    “Adoption Agreement” means an Adoption
Agreement, substantially in the form of Exhibit A, attached hereto, of which
this Master Participation Agreement forms a part by reference, by and among the
Department, a Sponsor, an Eligible Lender Trustee (if applicable), and a
Custodian obligating each of the parties thereto the terms of this Master
Participation Agreement.

     

     “Adverse Event” shall mean the
occurrence of any of the following with respect to a Person:

    

    (i) a
decree or order of a court or agency or supervisory authority having
jurisdiction
for the appointment of a conservator or receiver or liquidator or other similar
official in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against such Person and such decree or order
shall have remained in force, undischarged
or unstayed for a period of sixty (60) days; or

     

    (ii) such
Person shall consent to the appointment of a conservator or receiver
or
liquidator or other similar official in any 

    insolvency,
readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating
to such Person or relating to 

    all or
substantially all of such Person's
property; or

    

    (iii)
such Person shall admit in writing its inability to pay its debts as they become
due, file a petition to take advantage

     of
any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors, or
voluntarily suspend 

    payment
of its obligations.

    

     “Agreement” shall
mean, collectively, this Master Participation Agreement and the related Adoption
Agreement 

    and all
amendments thereto. 

    

    “Borrower” means the
student or parent obligor on a Loan.

    

    “Business Day” means
any day other than (i) a Federal holiday, (ii) a Saturday or Sunday,
or (iii) any other day on which 

    banking
institutions or trust companies,
operating in the state(s) or jurisdiction(s) where either the Custodian or the
Servicer 

    are
headquartered, are authorized or obligated by law, regulation
or executive order to remain closed.

    

    “Capital Account” has
the meaning set forth in Section 23(c) hereof.

    

    “Class A Participation
Certificate” has the meaning set forth in Section 5(b)
hereof.

    

    “Class A Participation
Interest” means a participation interest in one or more Eligible Loans,
which consists 

    of (A) a
100% beneficial ownership interest in the principal
portion of such Eligible Loans, and (B) the 

    right to
receive the Participant’s Yield in respect of such Eligible Loans.

    

    “Class B Participation
Certificate” has the meaning set forth in Section 5(b)
hereof.

    

    “Class B Participation
Interest” means a participation interest in one or more Eligible Loans
which consists of (A) the

     right
to either redeem such Eligible Loans or to exercise
the Put Option pursuant to Section 15 hereof and (B) 

    the right
to receive all Collections on such Eligible Loans other than (1)
the Participant’s Yield, and (2)

    principal
collections on such Eligible Loans.  

    

    “Code” means the
United States Internal Revenue Code of 1986, as amended from time to time, or
any successor statute thereto.

    

    “Collateral” has the
meaning set forth in Section 6(a) hereof.

    

    “Collection Account”
shall mean the segregated account established pursuant to Section
11(a) hereof.

    
      
        
        

      

      
        3

        
        

      

      
        
        

      

    

    “Collections” has the
meaning set forth in Section 11(a) hereof.

    

    “Commercial Paper
Rate” means the commercial paper rate determined by the Department on a
quarterly basis and published

     pursuant to Section 438(b)(2)(I)(i)(I) of the Higher Education
Act.

    

    “Custodian” means the
custodian of Eligible Loans designated by the Sponsor (or a successor custodian
appointed pursuant 

    to
Section 17 hereof), which is a party hereto
pursuant to an Adoption Agreement executed and delivered pursuant to the terms

    hereof,
and (i) which is a National or State-chartered bank, (ii) which is an
Eligible Lender, and (iii) as to which the representations

     and
warranties set forth in Section 10(c) of this Agreement are true and
correct.

    

    “Custodian Event of
Default” means one or more of the following shall occur and be continuing
with respect to the Custodian:

    

    (i)     if for any
reason the Custodian is no longer an Eligible Lender; or

    

    (ii)    any failure
by the Custodian to remit to the Department or the Sponsor, as applicable, any
Collections pursuant to 

    Section
11 hereof; or

    

    (iii)   any failure by the
Custodian to duly observe or perform, in any material respect, any other
covenants, obligations 

    or
agreements of the Custodian
as set
forth in the Agreement, which failure continues unremedied for a period of
thirty (30) 

    days
after the earlier
of the date
on which
(x) the Custodian shall have actual knowledge of such failure, or
(y) written notice

    of such
failure, requiring the same to be remedied, shall have been given to the
Custodian by the Sponsor or the Department; or

    

    (iv)   an Adverse Event
with respect to the Custodian shall have occurred and be continuing beyond the
expiration of any

    applicable
grace period; or

     

    (v)    the Custodian
attempts to sell or otherwise dispose of all or substantially all of its
property or assets, or to assign 

    any of
its obligations hereunder or all or
any portion of the Eligible Loans subject to a Participation Interest
hereunder.

    

    
      
        
        

      

      
        4

        
        

      

      
        
        

      

    

    “Department” has the
meaning set forth in the preamble hereto.

    

    “Eligible Borrower
Benefits” means only those borrower benefits for a Loan that are (i)
unconditional upfront fee reductions which 

    are
accrued and paid or made prior to the date
on which a Participation Interest is sold hereunder, or (ii) permitted
reductions in 

    interest  rates
of not more than 0.25 percent that are contingent on the use
of an automatic payment process by the Borrower for

     any
payments due. 

     

    “Eligible Lender” means any entity
that is an eligible lender under Section 435(d) 

    of the
Higher
Education Act.

    
       

    

    “Eligible Lender
Trustee” means an Eligible Lender that holds legal title to an Eligible
Loan for the benefit or on behalf 

    of the
Sponsor which
holds the related  beneficial
ownership interest in such Eligible Loan, that is authorized to sell

    Eligible
Loans on behalf of the Sponsor, and that
executes an Adoption Agreement together
with such Sponsor. 

    

    “Eligible Loan” means
a Loan that meets the following criteria as of the applicable Purchase
Date:

     

    (i) the
Loan was made for a loan period that includes, or begins on or after, July 1,
2008 and on which the first disbursement is made on or after May1, 2008 but no
later than July 1, 2009 and, if not fully disbursed on the Purchase Date, is
scheduled to be fully disbursed no later than September
30, 2009;

    

    (ii) the
Loan has been originated and serviced in compliance with all  requirements
of applicable law, including the Higher

     Education
Act and
the implementing
regulations, the Equal Credit Opportunity Act, Regulation
B and other 

    applicable
consumer credit
laws and equal credit opportunity
laws, as
applicable to such Loan;

    

    (iii) at
least one disbursement has been made on the Loan;

    

    (iv) the
Loan is guaranteed at least 97% as to principal and interest by the applicable
Guarantor and eligible for reinsurance 

    by the
Department in accordance
with the Higher Education Act;

    

    (v) the
Loan bears interest at a stated rate equal to the maximum rate permitted
under the Higher Education 

    Act for
such loan;

    

    (vi) the
Loan is eligible for the payment of quarterly Special Allowance Payments;

     

    (vii) if
the Loan is not yet in repayment status, the Loan is eligible for payment of
Interest Subsidy Payments, or if not eligible, has interest either billed
quarterly to the Borrower or capitalized to the extent permitted by the
applicable Guarantor;

    

    (viii)
the Loan is evidenced by a signed Promissory Note and any addendum thereto or
the electronic records evidencing the same, containing terms in accordance with
those required by the Higher Education Act, the applicable Guarantee Agreement
and other applicable requirements, and which does not require the Borrower to
consent to the transfer, sale or assignment of the rights and duties of the
Sponsor and does not contain any provision that restricts the ability of the
Department to exercise its rights under this Agreement or any rights the
Department may have under the related documents;

    
      
        
        

      

      
        5

        
        

      

      
        
        

      

    

    (ix)
immediately prior to the transfer of title to the Custodian, the Sponsor,
together with the Eligible Lender Trustee (if applicable), had good and
marketable title to, and was the sole owner of, the Loan, free and clear of all
security interests, liens, charges, claims, offsets, defenses, counterclaims or
encumbrances of any nature (other than an interest or lien that will be released
simultaneously with the purchase of the related Class A Participation Interest
pursuant to a Security Release Certification) and no
right of rescission, offsets, defenses or counterclaims have been asserted or
threatened with respect to the Loan;

     

    (x) the
Loan has not been modified, extended or renegotiated in any way, except as
required under the Higher Education Act or other applicable

    laws,
rules and regulations, and the applicable Guarantee Agreement;

    

    (xi) the
Loan constitutes a legal, valid and binding obligation to pay on the part of the
related Borrower enforceable in accordance with its terms and is notsubject to a
current bankruptcy proceeding;

    

    (xii) the
Loan has no borrower benefits or other incentive programs other than Eligible
Borrower Benefits;

     

    (xiii) if
the Loan is subject to a servicing agreement, such servicing agreement is an
Eligible Servicing Agreement and is terminable upon thirty (30) days notice
without any liability on the part of the Department;

    

    (xiv) the
sale or assignment of the Loan to the Custodian does not conflict with law or
require notice to or consent, except for such consent,
approval,

    authorizations
or orders, if any, that have been obtained prior to the related Purchase
Date, and for any notices to
Borrowers and Guarantors required
by the
Higher Education Act;

    

    (xv) if
the Loan is made under Section 428 (Subsidized Stafford Loans) or Section
428H (Unsubsidized Stafford Loans) 

    of the
Higher
Education Act, Participation
Interests in such Loan shall have been sold to the Department together
with 

    Participation
Interests  in
all of the Borrower’s other Subsidized
Stafford Loans and Unsubsidized Stafford Loans that 

    are
Eligible Loans
and that are held by or on behalf of the
Sponsor; and

    

    (xvi) the
Loan is eligible to be sold to the Department under the Put Option, or, if not
fully disbursed on the applicable Purchase Date, is scheduled to be fully
disbursed by September 30, 2009 and upon such final disbursement eligible to be
sold to the Department under the Put Option.

               

    
      
        
        

      

      
        6

        
        

      

      
        
        

      

    

               Without limitation, the
following loans shall not be eligible for sale to the Department pursuant to the
terms of this

                 
 Agreement:

    

    (i) loans
which do not comply with the representations and warranties set forth in Section
10(b) of this Master Participation Agreement;

     

    (ii)
FFELP consolidation loans or any other types of loans not specifically
described
in this Master Participation Agreement;

    

    (iii)
loans disbursed for academic years other than the 2008-2009 academic
year;

    

    (iv)
loans that will not have at least one disbursement as of July 1,
2009;

    

    (v) loans
in which the Department has previously purchased a Participation Interest,
whether or not that interest has been redeemed;

    

    (vi)
loans on which the lender has committed to providing the Borrower with any
borrower benefits other than Eligible Borrower Benefits;

    

    (vii)
loans on which a default claim or other claim for payment on the loan has been
filed with the related Guarantor; and

    

    (viii)
loans made by a guarantor or other lender as a Lender of Last Resort,
pursuant
to HEA Section 428(j), 

    20 U.S.C.
Section 1078(j), whether
made with
Federal advances or other funds.

    

    
      
        
        

      

      
        7

        
        

      

      
        
        

      

    

    “Eligible Servicing
Agreement” means a servicing agreement that meets the criteria set forth
in Section 12(c) hereof.

    

    “Equal Credit Opportunity
Act” means the Equal Credit Opportunity Act (15 U.S.C. Section 1691 et
seq.) as amended.

    

    “Exception Report”
has the meaning set forth in Section 5(d) hereof.

    

    “FFELP” means the
Federal Family Education Loan Program authorized under title IV, Part B of the
Higher Education Act.

    

    “Guarantee Agreement”
means an agreement between a Guarantor and the Sponsor or the Eligible Lender
Trustee (if applicable), 

    that
provides for the
payment by such
Guarantor of amounts authorized to be paid pursuant to the Higher Education Act
to holders

     of
qualifying FFELP loans
guaranteed in accordance with the
Higher Education Act.

    

    “Guarantor” means any
FFELP guaranty agency with which the Sponsor or the Eligible Lender
Trustee (if applicable) has in 

    place a
Guarantee  Agreement,
and which guarantor is reinsured by the Department of Education for a percentage
of claims 

    paid for a
given federal fiscal year.

    

    “Higher Education
Act” means the Higher Education Act of 1965, as amended, 20 U.S.C.
§ 1001 et
seq.

    

    “Interest Subsidy
Payments” means the interest subsidy payments on certain FFELP loans
authorized to be made by the 

    Department
pursuant to Section
428 of the Higher Education Act. 

    
      
        
        

      

      
        8

        
        

      

      
        
        

      

    

    “Loan” means a FFELP
Subsidized Stafford Loan or Unsubsidized Stafford Loan or  FFELP PLUS
Loan made

     to
a student (or in the case of
a parent
PLUS loan, made to a
parent of a dependent student) evidenced by 

    a
Promissory Note and all related Loan Documents together with any
guarantees
and other rights relating

    thereto
including, without limitation, Interest Subsidy Payments and Special Allowance
Payments, together
with the

     servicing
rights related thereto.

    

    “Loan Documents”
means with respect to each Loan, the following documents:

    

    (i) a
copy of the loan application if a separate application was provided to the
Sponsor;

    

    (ii) a
copy of the signed Promissory Note;

    

    (iii) the
repayment schedule;

    

    (iv) a
record of each disbursement;

    

    (v)
notices of changes in a Borrower's address and status as at least a half-time
student;

    

    (vi)
evidence of the Borrower's eligibility for a deferment;

    

    (vii) the
documents required for the exercise of forbearance;

    

    (viii)
documentation of the assignment of the loan, if any;

    

    (ix) a
payment history showing the date and amount of each payment received
from or
on behalf of the Borrower, and the amount

     of
each payment that was
attributed to principal, interest, late charges, and other costs;

    

    (x) a
collection history showing the date and subject of each communication
between the
Sponsor and the Borrower or endorser

     relating to
collection of a
delinquent Loan, each communication other than regular reports by the
Sponsor
showing that an

     account
is current, between
the Sponsor and a credit
bureau regarding the loan, each effort to locate a Borrower whose

     address
is unknown at any time, and each
request
by the Sponsor for default
aversion assistance on the Loan;

    

    (xi)
documentation of any master promissory note confirmation process or processes;

    

    (xii) any
additional records that are necessary to document the validity of a claim
against the guarantee or the accuracy of reports

     submitted
by the Sponsor;
and

    
      
        
        

      

      
        9

        
        

      

      
        
        

      

    

    (xiii) a
statement identifying the name and location of the entity in possession of
the
original electronic promissory note and, if

     different,
the name,
company,
address and contact information of the person who is able to provide
the affidavit or certification

     described
in 34 C.F.R.
Section
 682.414(a)(6)(i),  including
any necessary supporting documentation.

    

    “Loan Schedule” means
the schedule (in the form provided by the Department) attached to each
Participation Purchase Request and completed by or on behalf of the Sponsor and
the Eligible Lender Trustee (if applicable) that lists, by Borrower, (i) the
Loans proposed to be subject to the related Participation Interests, (ii) the
name and address of the Borrower, the loan number, the qualifying institution
attended by the Borrower and the scheduled outstanding Principal Balance and
accrued interest thereon as of the related Purchase Date and (iii) any other
information the Department may require including but not limited to certain
identification numbers and dates relating to the Eligible Loans.

    

    “Loan Schedule and Custodial
Certification” means the Loan Schedule attached to each Participation
Certificate, and certified by the Custodian as a complete and accurate listing
of all of the Eligible Loans subject to Participation Interests evidenced by
each such Participation Certificate as to which the Custodian (i) holds legal
title and (ii) has physical possession (either directly or through its delegee)
of all required Loan Documents in trust for the benefit of holders of the
Participation Interests.

     

    “Master Loan Sale
Agreement” means the Master Loan Sale Agreement, dated July 25, 2008,
together with the related adoption agreement among the Department, the Sponsor,
and the Eligible Lender Trustee (if applicable).

    

    “Master Participation
Agreement” has the meaning set forth in the preamble hereto.

    

    “Notice of Intent to
Participate” means the notice provided to the Department by an Eligible
Lender or a lender other than an Eligible Lender, together with an Eligible
Lender Trustee, of its intent to become a Sponsor hereunder, which shall be in
the form attached hereto as Exhibit H.

    

    “Participant’s
Yield” means with respect
to each Participation Interest for each fiscal quarter during which the
Department holds the related Class A Participation Interest, an amount equal to
(a)(i) the daily average of the principal balance of such Class A Participation
Interest multiplied by (ii) the product of (x) the Commercial Paper Rate plus
the applicable Spread, and (y) the number of days in such fiscal quarter,
divided by (iii) 360, (b) reduced by any amount of such Participant’s Yield in
respect of such fiscal quarter previously paid to the Department pursuant to
Section 11(b) hereof, and (c) increased by the amount of Participant’s Yield
remaining unpaid with respect to any prior fiscal quarters.

    

    “Participation
Interest” means a Class A Participation Interest or a Class B
Participation Interest.

    

    
      
        
        

      

      
        10

        
        

      

      
        
        

      

    

        “Participation
Purchase Request” means a request substantially in the form of Exhibit
B

    attached
hereto, executed by authorized officers of each of the Sponsor, the Eligible
Lender Trustee (if applicable) and the Custodian and delivered to the
Department, which shall (i) set forth the Eligible Loans for which Class A
Participation Interests are offered for sale to the Department, (ii) certify
that the representations and warranties made by the Sponsor in Section 10(a),
and (b) of this Master Participation Agreement are true and correct, (iii)
certify that the Custodian holds legal title to each Eligible Loan for which the
Class A Participation Interests are offered for sale to the Department and (iv)
certify that the Custodian or its designee holds all required Loan Documents for
each Eligible Loan for which the Class A Participation Interests are offered for
sale to the Department.

     

    “Partner” has the
meaning set forth in Section 23(b) hereof.

    

    “Partnership” has the
meaning set forth in Section 23(a) hereof.

    

    “Permitted
Investments” means overnight or short-term U.S. Treasury securities that
will, in all cases, mature on or prior to the day immediately preceding the date
such funds are required to be disbursed.

    

    “Person” means an
individual, corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

     

    
      “PLUS Loan” means a
Loan described in Section 428B of the Higher Education Act and shall include
loans to parents, designated as “PLUS Loans” or loans to graduate or
professional students, designated “Grad PLUS Loans.”

      

      “Principal Balance”
means the outstanding principal amount of the Loan, plus
capitalized interest.

      

      “Promissory Note” means the master promissory note of the Borrower
and any amendment thereto evidencing the Borrower’s obligation with regard to a
student loan guaranteed under the Higher Education Act or the electronic records
evidencing the same.

      

      “Purchase Date” means the date on which the Custodian
receives payment from the Department of the Purchase Price for Class A
Participation Interests, which shall be as soon as practicable after the
Department receives the related Participation Purchase Request.

      

      “Purchase Price” has
the meaning set forth in Section 4(c) hereof.

      

      “Purchased Eligible
Loan” means an Eligible Loan in which a Participation Interest has been
purchased by the Department.

      

      
        
          
          

        

        
          11

          
          

        

        
          
          

        

      

      “Put Option” means,
with respect to a Purchased Eligible Loan, the right of the Sponsor, through the
Eligible Lender Trustee (if applicable), pursuant to Section 15, to sell such
Purchased Eligible Loan to the Department against the Department’s right to
receive all future Collections under such Eligible Loans.

      

      “Redemption Payment”
means, with respect to a Purchased Eligible Loan to be redeemed pursuant
to Section 15, an amount equal to the greater of (x) the proceeds of the sale or
other transfer of such Purchased Eligible Loan, if any, including proceeds
received subsequent to the redemption date, and (y) the Purchase Price paid by
the Department in exchange for the Class A

      

      Participation
Interest in such Purchased Eligible Loan together with any Participant’s Yield
on such Purchase Price calculated through the date of the next scheduled
distribution to the Department, less (with respect to (y)) any amount that the
Sponsor demonstrates to the satisfaction of the Department, in its sole
discretion, was received with respect to such Purchased Eligible Loan and
remitted to the Department pursuant to Section 11(b) in satisfaction of a
portion of the Participant’s Yield and Purchase Price with respect to such
Purchased Eligible Loan. 

       

      “Regulation B” means
the federal regulations governing the Equal Credit Opportunity Act as it appears
in Title 12, Code
of Federal Regulations, Part 202.

      

      “Reporting Date” has
the meaning set forth in Section 8(a) hereof. 

       

      “Responsible Officer” means any
director, vice president, assistant vice president, any associate
or any other officer of the Custodian or Sponsor, as applicable, customarily
performing functions similar to those performed by any of the above designated
officers and with respect to a particular matter, to whom such matter is
referred because of such officer’s knowledge of and familiarity with the
particular subject and having direct responsibility for the administration of
this Agreement.

      

      “Secretary” means the
Secretary of Education, and “Department” means the United States Department of
Education, and either term includes any official of the Department duly
authorized to perform any function with respect to the transactions under this
Agreement.

      

      “Security Release
Certification” means the certification executed by the Sponsor and a
lienholder with respect to one or more Loans substantially in the form of
Exhibit G hereto.

      

      “Servicer” means the
Sponsor in its capacity as servicer or another servicer of FFELP loans that will
service the Eligible Loans pursuant to an Eligible Servicing
Agreement.

      
        
          
          

        

        
          12

          
          

        

        
          
          

        

      

      “Servicer Event of
Default” means one or more of the following events that occurs and is
continuing with respect to the Servicer:

      

      
        	
                 
      

              	
                (i) 
      any failure by the Servicer to remit to the Custodian any Collections
      within two (2) Business Days following receipt, or any failure by the
      Servicer to pay any other amounts required to be paid by the Servicer
      hereunder or under any related Eligible Servicing Agreement, which failure
      continues unremedied for a period of one (1) Business Day following the
      Servicer becoming aware of such failure;
or

              

      

      

      
        	
                 
      

              	
                (ii) 
      any failure by the Servicer to duly observe or perform, in any material
      respect, any other covenants, obligations or agreements of the Servicer as
      set forth in this Master Participation Agreement or in any Eligible
      Servicing Agreement, which failure continues unremedied for a period of
      thirty (30) days after the date on which notice of such failure, requiring
      the same to be remedied, shall have been given to the Servicer by the
      Sponsor, the Custodian or the Department;
or

              

      

      
        
          	 	 
	
                   
      

                	
                  (iii) 
      a decree or order of a court or agency or supervisory authority having
      jurisdiction for the appointment of a conservator or receiver or
      liquidator or other similar official in any insolvency, readjustment of
      debt, marshalling of assets and liabilities or similar proceedings, or for
      the winding-up or liquidation of its affairs, shall have been entered
      against the Servicer and such decree or order shall have remained in
      force, undischarged or unstayed for a period of sixty (60) days;
      or

                

        

      

      

      
        	
                 
      

              	
                (iv)
       the Servicer shall consent to the appointment of a conservator or
      receiver or liquidator or other similar official in any insolvency,
      readjustment of debt, marshalling of assets and liabilities or similar
      proceedings of or relating to the Servicer or relating to all or
      substantially all of the Servicer's property;
or

              

      

      

      
        	
                 
      

              	
                (v) 
      the Servicer shall admit in writing its inability to pay its debts as they
      become due, file a petition to take advantage of any applicable insolvency
      or reorganization statute, make an assignment for the benefit of its
      creditors, or voluntarily suspend payment of its obligations;
      or

              

      

      
        
          	 	 
	
                   
      

                	
                  (vi)
       any representation or warranty made by the Servicer under any
      Eligible Servicing Agreement shall prove to be untrue or incomplete in any
      material respect, which failure shall continue unremedied for a period of
      thirty (30) days after the date on which written notice of such failure,
      requiring the same to be remedied, shall have been given to the Servicer
      by the Sponsor, the Custodian or the Department;
  or

                

        

      

      
        
          	 	 
	
                   
      

                	
                  (vii)
       the Servicer attempts to sell or otherwise dispose of all or
      substantially all of its property or assets, or to assign its servicing
      responsibilities with respect to any Eligible Loans or any portion
      thereof, except with the consent of the Sponsor;
  or

                

        

      

      

      
        	
                 

              	
                (viii) 
      the Servicer fails to maintain its license to do business or service the
      Eligible Loans, or for any reason the Servicer is not qualified or
      eligible to service Eligible Loans.

              

      

      

      
        
          
          

        

        
          13

          
          

        

        
          
          

        

      

      

      “Special Allowance
Payments” means special allowance payments on FFELP loans authorized to
be made by the Department

       pursuant
to Section
438 of the Higher
Education Act.

      

      “Sponsor” has the
meaning set forth in the preamble hereto.

      

      “Sponsor
Event of Default” means one or more of the following shall have occurred and is
continuing with respect to the Sponsor:

      

      (i) if
for any reason the Sponsor or the Eligible Lender Trustee (if applicable) is no
longer an Eligible Lender; or

       

      (ii) any
failure by the Sponsor to remit or cause to be remitted to the Custodian
any Collections with respect to Purchased Eligible Loans within two (2)
Business Days following receipt, or any failure by the Sponsor to pay when
due any other amounts required to be paid by the Sponsor under this
Agreement; or

      

      (iii) any
failure by the Sponsor to duly observe or perform, in any material respect, any
other covenant, obligation or agreement of the Sponsor as set forth in this
Master Participation Agreement or in any Eligible Servicing Agreement,
which failure continues unremedied for a period of thirty (30) days
after the earlier of the date on which (x) the Sponsor shall have actual
knowledge
of such failure, or (y) written notice of such failure, requiring the same
to be remedied, shall have been given to the Sponsor by the

      Department;
or

       

                             (iv)
an Adverse Event with respect to the Sponsor shall have occurred and be
continuing beyond the expiration of any applicable grace period; or

      

      (v) any
representation or warranty made by the Sponsor pursuant to Section
10(a) hereof shall prove to be untrue or incomplete in any material respect,
which failure shall continue unremedied for a period of thirty (30) days
after the earlier of the date on which (x) the Sponsor shall have actual
knowledge
of such failure, or (y) written notice of such failure, requiring the same
to be remedied, shall have been given to the Sponsor by the Department;
or

      
        
           

        

                   (vi) the Sponsor attempts
to sell or otherwise dispose of all or substantially all of its property or
assets.

      

      
        
        

      

      

      “Spread” means fifty
(50) basis points or, at the option of the Department following the occurrence
of a Sponsor Event of Default, three hundred (300) basis points.

      

      “Stafford Loan” means
a Subsidized Stafford Loan or an Unsubsidized Stafford Loan.

       

      “Subsidized Stafford
Loan” means a Loan described in Section 428(a) of the Higher Education
Act.

      

      “Tax Liability” has
the meaning set forth in Section 23(d) hereof.

      

      “Termination Date”
means earliest to occur of (i) the date on which the Sponsor notifies the
Department that it will no longer be a 

      participant
under the Agreement
and reduces the outstanding balance of the Class A Participation Interests to
zero, (ii) at the

       option
of the Department, upon the occurrence
of a Sponsor Event of Default, (iii) July 1, 2009, if the Sponsor shall not have

      entered
into a Master Loan Sale Agreement with the Department by such
date, and (iv)
September 30, 2009.

      
        
          
          

        

        
          14

          
          

        

        
          
          

        

      

      “Treasury
Regulations” means the regulations promulgated by the United States
Department
of the Treasury under the Code.

      

       “Unsubsidized Stafford
Loan” means a Loan described in Section 428H of the Higher Education
Act.

      

      Section
4. Delivery of Loans
to Custodian; Purchase and Sale of Participation Interests.

       

      (a) 
The Sponsor shall request that the Department purchase Class A
Participation

      Interests
by delivering to the Department (i) a Participation Purchase Request,
appropriately completed and executed by the Sponsor, the Eligible Lender Trustee
(if applicable) and the Custodian, and (ii) a Loan Schedule setting forth the
Eligible Loans proposed to be subject to such Class A Participation Interests
and the scheduled Principal Balance of such Eligible Loans as of the requested
Purchase Date. If the Department agrees that the Participation Purchase Request
satisfies the requirements of this Agreement, the Department shall execute such
Participation Purchase Request and return a copy to the Sponsor and the Eligible
Lender Trustee (if applicable). Any such Participation Purchase Request
delivered to the Department pursuant to this Section 4(a) shall be irrevocable
and shall bind the Sponsor and the Eligible Lender Trustee (if applicable) to
transfer the Eligible Loans set forth on the related Loan Schedule in
accordance
with Section 4(b) below. As a condition precedent to the Department’s purchase
of Participation Interests in Eligible Loans hereunder, both the originating
lender and, if different from the related Sponsor, the related Sponsor, must
each have provided to the Department timely Notice of Intent to Participate in
the Loan Purchase Commitment Program (as referred to therein).

      

      (b) With
respect to any Eligible Loan for which the Department has executed and returned
to the Sponsor and the Eligible Lender Trustee (if applicable) a Participation
Purchase Request pursuant to Section 4(a) hereof, prior to the Purchase Date
therefor, (i) if the Sponsor is an Eligible Lender, the Sponsor shall cause all
of its right, title and interests in and to the related Eligible Loans,
including the right to service such Eligible Loan, to be transferred to and held
in the name of the Custodian, who shall hold all such rights, title and
interests in trust for the Sponsor until the Purchase Date, or (ii) if the
Sponsor is not an Eligible Lender, the Eligible Lender Trustee shall cause all
of its right, title and interests in and to the related Eligible Loans, and the
Sponsor shall cause all of its beneficial interests in such Eligible Loans and
the right to service such Eligible Loan, to be transferred to and held in the
name of the Custodian, who shall hold all such rights, title and interests in
trust for the Sponsor, until the Purchase Date. The Sponsor shall cause all
related Loan Documents to be delivered to the Custodian or its designee.
From and
after the Purchase Date for such Eligible Loans, the Custodian shall hold all
such Eligible
Loans and all related Loan Documents in a secure place in trust for the holders
of the Participation Interests in accordance with the terms of this Master
Participation Agreement until the Class A Participation Interests are redeemed
in full; provided that if the Loan Documents relating to such Eligible Loans are
delivered to the Custodian’s designee, the Custodian shall cause such designee
to hold all such Loan Documents in trust for the holders of the Participation
Interests in accordance with the terms of this Master Participation Agreement.
The Custodian shall not release, nor shall it permit its designee to release,
any Loan Documents relating to Purchased Eligible Loans to any Person except (w)
to the Sponsor upon receipt of the related Redemption Payment by the Custodian
for the benefit of the Department, (x) to the Department upon the Sponsor’s
exercise of the Put Option with respect thereto, (y) in connection with
servicing-related functions as may be required or permitted under the Higher
Education Act, or (z) as
otherwise may be permitted in writing by the Department.  

      
        
          
          

        

        
          15

          
          

        

        
          
          

        

      

      (c) On
the related Purchase Date, provided that all conditions precedent set forth in
Section 9(a) and (b) hereof have been satisfied in the manner prescribed in this
Agreement and in accordance with any guidance interpreting the provisions of
this Agreement that the Department has published by November 1, 2008 (or if
unsatisfied, the Department has permitted in the Department’s sole discretion,
such unsatisfied conditions to be cured within an acceptable period of time
following the Purchase Date), the Department shall purchase the related Class A
Participation Interests from the Sponsor by remitting to the Custodian, who
shall in turn, simultaneously remit to the Sponsor a purchase price equal to the
Principal Balance of the related Eligible Loans to become subject to such Class
A Participation Interests on such Purchase Date (“Purchase Price”). All payments
hereunder shall be made by electronic funds transfer in accordance with the
Department’s standard payment process and instructions provided by the
recipient. Upon receipt of the Purchase Price, the Sponsor shall cause the
Custodian to deliver to the Department the Class A Participation Interests in
such Eligible Loans, and the related updated Loan Schedule and Custodial
Certification to be attached to the Class A anticipation Certificate. As of the
date of delivery of each Eligible Loan to the Custodian, the Sponsor hereby
sells and assigns its interest in such Eligible Loan in exchange for the
Participation Interests and the agreement of the Custodian to act as custodian
and trustee pursuant to the Agreement.

      

      (d)Any
Purchased Eligible Loans redeemed by the Sponsor pursuant to Section 15 shall
cease to be subject to the Participation Interests upon such
redemption.

      

      (e)  In
the case of a single Purchased Eligible Loan evidenced by a separate
Promissory
Note, each such Promissory Note will be held in the name of the Custodian. If a
Purchased Eligible Loan is evidenced together with other Loans that are not
Purchased Eligible Loans by a Master Promissory Note, the Custodian shall
indicate by book entry on its books and records that the Custodian, in its
capacity as trustee, is the legal owner of the Loan that was sold under this
Master Participation Agreement and that the Sponsor is the legal owner of those
Loans evidenced by the Promissory Note that have not been sold
hereunder.

      

      (f) The
Sponsor may not sell Class A Participation Interests to the Department more
frequently than weekly.

      

      (g)
 It is understood and agreed that a common law trust is hereby created into
which Eligible Loans are transferred on the related Purchase Date thereof, and
the Custodian shall hold legal title to such Eligible Loans, shall create the
Participation Certificates and shall issue and deliver the Participation
Interests, in each case as trustee for the benefit of the holders of the
Participation Interests.

      

      Section
5.  Participation
Certificates; Loan Schedule and Custodial Certifications.

      

      (a) On or
prior to the initial Purchase Date, the Custodian shall issue the Class A
Participation Certificate and the Class B Participation Certificate, and shall
deliver the same to the Department and the Sponsor, respectively. The Class A
Participation Certificate shall evidence all Class A Participation Interests
sold to the Department on a Purchase Date, and the  Class B
Participation Certificate shall evidence all Class B Participation Interests
delivered to the Sponsor on a Purchase Date.

      
        
          
          

        

        
          16

          
          

        

        
          
          

        

      

      (b) Each
Class A Participation Certificate shall be a definitive participation
certificate substantially in the form of Exhibit C hereto, to be issued in the
name of, or at the direction of, the Department (each, a “Class A Participation
Certificate”). Each Class B Participation Certificate shall be a definitive
participation certificate substantially in the form of Exhibit D hereto, to be
issued in the name of, or at the direction of, the Sponsor (each, a “Class B
Participation Certificate”). The Class B Participation Certificate, and the
Class B Participation Interests issued thereunder shall be subordinated to the
Class A Participation Certificate and the Class A Participation Interests issued
thereunder.

      

      (c) Each
Participation Certificate shall have attached thereto a Loan Schedule and
Custodial Certification listing each of the Purchased Eligible Loans evidenced
by such Participation Certificate and the current Principal Balance of each such
Purchased Eligible Loan. Each Participation Certificate shall be executed on
behalf of the Custodian, as trustee, by a Responsible Officer of the Custodian.
The signature of any such Responsible Officer on the Participation Certificates
may be manual or facsimile. Participation Certificates bearing the

      manual or
facsimile signatures of individuals who were at any time the Responsible
Officers of the Custodian shall bind the Custodian, notwithstanding the fact
that such individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such Participation Certificates or did not
hold such offices at the date of issuance of such Participation
Certificates.

      

      (d) On
the initial Purchase Date, in exchange for the payment of the Purchase Price by
the Department, the Custodian shall prepare and deliver to the Department (i) an
initial Loan Schedule and Custodial Certification that reflects the Eligible
Loans transferred to the Custodian as of such date, which shall be attached to
the Class A Participation Certificate, and (ii) a report listing all
discrepancies from the Loan Documents that are required to be delivered to the
Custodian or its designee with respect to such Eligible Loans (an “Exception
Report”). On each subsequent Purchase Date or on any date prior to the
Termination Date on which Eligible Loans are redeemed by the Sponsor or the Put
Option is exercised, the Custodian shall prepare and deliver
to the Sponsor and the Department an updated Loan Schedule and Custodial
Certification that reflects the addition or removal of any Eligible Loans as of
such date, to be attached to the Class A Participation Certificate. Each
subsequently delivered Loan Schedule and Custodial Certification shall replace
any previously delivered Loan Schedule and Custodial Certification, and any such
previously delivered Loan Schedule and Custodial Certification shall
automatically be cancelled. A copy of each Loan Schedule and Custodial
Certification shall be provided to the Sponsor.

      

      (e) In
connection with any delivery by the Custodian of a Loan Schedule and
Custodial
Certification, the Custodian shall be deemed to represent and warrant to the
Sponsor and the Department that (i) the information set forth on each such Loan
Schedule and Custodial Certification is complete, true and correct in all
respects as of the date of such delivery and at all times until such Loan
Schedule and Custodial Certification is canceled, (ii) legal title to each Loan
listed on the Loan Schedule and Custodial Certification is held by the Custodian
in trust for the benefit of holders of the Participation Interests, (iii) with
respect to each Loan listed on the Loan Schedule and Custodial Certification,
all related Loan Documents have been delivered to and are held by the Custodian
or its designee in trust for the holders of the Participation Interests,
and (iv)
with respect to each Loan listed on the Loan Schedule and Custodial
Certification, all Loan Documents delivered to the Custodian have been reviewed
by the Custodian and appear on their face to comply in all respects to the
requirements of the Agreement and customary custodial procedures with respect to
FFELP loans. Notwithstanding the foregoing, if the Custodian has delegated its
obligation hereunder to hold and review Loan Documents to another party pursuant
to Section 18 hereof, the Custodian shall be protected against its good faith
issuance of a Loan Schedule and Custodial Certification, and related Exception
Report that is in reliance on a certification from such delegee as to any
matters necessary for the Custodian to issue the Loan Schedule
and Custodial Certification and the Exception Report; provided that the
Custodian is in compliance with Section 18 hereof.

      

      
        
          
          

        

        
          17

          
          

        

        
          
          

        

      

      (f) In
the event that the Custodian receives evidence satisfactory to it that a
Participation
Certificate has been lost, mutilated, stolen or destroyed, the Custodian shall
issue and authenticate a new Participation Certificate and shall deliver a
replacement Participation Certificate of the same class, together with a
replacement Loan Schedule and Custodial Certification. Any subsequently
delivered Participation Certificate and Loan Schedule and Custodial
Certification shall replace any previously delivered Participation Certificate
and Loan Schedule and Custodial Certification and any replaced Participation
Certificate and Loan Schedule and Custodial Certification shall be automatically
cancelled. The applicant for any such new Participation Certificate may be
required to pay any taxes and governmental charges and all expenses and charges
of the Custodian in connection with the issuance of such Participation
Certificate. All Participation Certificates shall be held and owned upon the
express condition that, to the extent permitted by law, the foregoing conditions
are exclusive with respect to the replacement and payment of mutilated,
destroyed, stolen or lost Participation Certificates.

       

      (g)The
outstanding principal balance of the Class A Participation Interests evidenced
by the Class A Participation Certificate shall be equal to the aggregate
Purchase Price paid with respect to the related Purchased Eligible Loans
(including the Purchase Price for any related Subsequent Disbursement), reduced
by the amount of any Redemption Payments or other payments allocable to
principal received with respect to any such Loans that have been applied to the
outstanding principal balance of such Class A Participation Interest through the
end of the most recent calendar month. Upon the purchase by the Department of
additional Class A Participation Interests in Purchased Eligible Loans, the
aggregate outstanding principal balance of the Class A Participation Interests
evidenced by the Class A Participation Certificate shall be increased by the
Purchase Price with respect to each such additional Purchased Eligible Loans,
and any Subsequent Disbursements.

      

      Section
6. Security
Interest.

      

      (a) In
the event, for any reason, any transfer of title to Loans and purchase of
Participation
Interests hereunder is construed by any court or regulatory authority as a loan
rather than as a purchase, the Sponsor and the Eligible Lender Trustee (if
applicable) hereby grants to the Custodian, and the Custodian hereby assigns the
same to the Department, as security for the repayment of such loan and the
performance of all other obligations of the Sponsor hereunder, a first priority
security interest in all of their respective rights, title and interest in and
to the following property, whether now existing or hereafter acquired: (i) the
Purchased Eligible Loans; (ii) Collections and funds to be collected with
respect to such Purchased Eligible Loans; (iii) any monies on deposit in
accounts established hereunder (including the Collection Account), (iv) all
proceeds thereon and related thereto, and (v) all related tangible and
intangible rights and security
with respect thereto (collectively, “Collateral”). Subject to Section 15(f), the
lien on such Collateral granted hereunder shall be deemed to be released with
respect to any Purchased Eligible Loan by Custodian and the Department upon the
Sponsor’s remittance of the Redemption Payment with respect to such Loan to the
Department in accordance with Section 15 hereto, and the release of such Loan
from the related Class A Participation Interest. The Department has the right to
take all steps necessary to ensure perfection and priority in the Collateral,
including filing one or more Uniform Commercial Code financing statements with
the applicable filing office.

      

      (b) Each
of the Sponsor, the Eligible Lender Trustee (if applicable) and the Custodian
hereby authorize the Department, at the Sponsor’s expense, to perform all acts
which the Department deems appropriate to protect, preserve and realize upon the
Purchased Eligible Loans, including, but not limited to, the right to take
possession of and endorse and collect any checks, drafts, notes, acceptance or
other instruments for the payment of moneys due with respect to any Promissory
Note, complete blanks in documents, transfer servicing and execute assignments
and other instruments on behalf of the Sponsor as its attorney in fact. This
power of attorney is coupled with an interest and is irrevocable without
Department’s consent.

       

      
        	
                (c)

              	
                This
      Master Participation Agreement creates a valid and continuing interest (as
      defined in the applicable Uniform Commercial Code) in the Purchased
      Eligible Loans in favor of the Department, which security interest is
      prior to all other liens, charges, security interests, mortgages or other
      encumbrances, and is enforceable as such as against creditors of and
      purchasers from the Sponsor.

              

      

      

      
        
          
          

        

        
          18

          
          

        

        
          
          

        

      

      Pursuant
to the Higher Education Act, a security interest in student loans is perfected
in the same manner as “accounts” within the meaning of the applicable Uniform
Commercial Code.

      

      This
Master Participation Agreement constitutes a “financing statement” and a
“security agreement” under Article 9 of the applicable Uniform Commercial
Code.

      

      Section
7.Subsequent Disbursements. To the extent of funds made available by or received
from the Sponsor, the Custodian shall make any disbursements that are scheduled
and due after the initial disbursement on a Purchased Eligible Loan (each, a
“Subsequent Disbursement”), and shall issue to the Sponsor the related
Participation Interests in such subsequent Disbursements. The Sponsor shall
provide to or at the direction of the Custodian the funds necessary to make any
such Subsequent Disbursements, and the Sponsor, if requested by the Custodian,
hereby agrees to make such disbursements directly to the applicable educational
institution as the delegee of the Custodian. The Sponsor shall sell to the
Department Class A Participation Interests in the Purchased Eligible Loan with
respect to the initial disbursement and such Subsequent Disbursements.
Consistent with the terms of Section 4, the Department shall only purchase a
Class A Participation Interest in any Subsequent Disbursement of a
Purchased

      Eligible
Loan, if such Subsequent Disbursement shall have been made by the Custodian or
the Sponsor pursuant to the terms of  Section 7 prior to the related
Purchase Date, and notice thereof shall have been provided to the
Department.

      
        
          
          

        

        
          19

          
          

        

        
          
          

        

      

      Section
8. Reporting; Due
Diligence.

      

      (a) On a
monthly basis on the day of the month specified by the Department (“Reporting
Date”) or as otherwise specified below, the Sponsor shall provide or cause the
Custodian or the Servicer, as applicable, to provide to the Department, the
following:

      

       

      
        	 	 (1) on the
      date of execution of the Adoption Agreement and on eachReporting
      Date, a twelve (12) month rolling forecast, estimating the
      number of Loans and the Principal Balance thereof that the Sponsor
      reasonably believes, in good faith, that it will cause to
      become subject to Participation Interests and sold to the Department
      hereunder, and the number and Principal Balance of Purchased Eligible
      Loans that the Sponsor expects to redeem in each of the months following
      the date of such projection through September
  2009;

      

       

            

      
        	
                 
      

              	
                (2)
      a listing of all principal and interest payments received on each
      Purchased Eligible Loan subject to a Participation Interest during the
      previous calendar month and the current amount of principal and interest
      due and owing on such Purchased Eligible
Loans;

              

      

      

      
        	
                 
      

              	
                 (3) 
      information on Loans by schools, delinquencies, and other features as may
      be requested by the Department from the Sponsor or the
      Custodian;

              

      

      
        
          	 	 
	
                   
      

                	
                  (4)
      with respect to each Servicer, any audit reports or other annual
      compliance/operational audits performed on such Servicer relating to the
      servicing of FFELP loans;

                

        

      

      

      
        	
                 
      

              	
                (5)
      within 60 days following the consummation of the initial Participation
      Purchase Request hereunder and on any subsequent dates specified by the
      Department, the Sponsor shall and shall cause each Servicer to provide to
      the Department a statement of compliance with respect to this Agreement
      and any related documents, Eligible Servicing Agreements and applicable
      law, together with an agreed upon procedures letter delivered by an
      independent public accountant with respect to this Agreement, all in forms
      acceptable to the Department; and

              

      

      

      
        	
                 
      

              	
                (6)
      such other information as requested by the Department shall be delivered
      to the Department, which may include Redemption Payment calculations as
      defined in clause (y) of the definition of Redemption Payment, the
      calculation of other amounts due and owing to the Department or Sponsor
      upon exercise of the Put Option with respect to Purchased Eligible loans,
      and audited annual financial statements or unaudited quarterly financial
      statements of the Sponsor and any Servicer or their respective
      consolidated groups.

              

      

      

      
        
          
          

        

        
          20

          
          

        

        
          
          

        

      

             (b) On each Reporting Date, the
Custodian shall provide to the Department the following:

      

      
        	
                 
      

              	
                (1)
      a monthly settlement date report with respect to each Loan subject to a
      Class A Participation Interest, which shall include all loan activity for
      the prior calendar month including loan disbursements, and an aggregation
      of the Participant’s Yield and principal paid to the Department with
      respect to each Class A Participation Interest (a “Settlement Date
      Report”); and 

                 

                (2)
      prior to the later of (x) 90 days after the Termination Date, or (y) the
      date on which the Department publishes audit guidance, an audit of the
      Custodian’s activities under that Participation Interest conducted by an
      independent auditor selected by the Sponsor (which may be the same auditor
      that is performing audits on behalf of the Sponsor or the
      Servicer).

              

      

       

      (c)The
Sponsor shall ensure that at any time, the Department and its representatives
will have the right to request, schedule and conduct, during normal business
hours and upon reasonable prior notice, a due diligence/audit of the Servicer’s
operations, the Loan Documents, the Eligible Loans and the Settlement Date
Reports. At any time and from time to time during a calendar year, the
Department shall have the right to request, schedule and conduct, during normal
business hours and upon reasonable prior notice, additional due diligence of the
Sponsor and the Custodian. All expenses incurred as a result of such due
diligence shall be borne by the Sponsor.

      

      (d)Pursuant
to Section 432(f) of the Higher Education Act, the Sponsor, the Eligible Lender
Trustee (if applicable) and the Custodian each hereby grants the Department and
its agents (including but not limited to legal counsel and internal or external
auditors), the right at any time and from time to time during regular business
hours, (i) to examine and make copies of and abstracts from all books, records
and documents (including, without limitation, computer tapes and disks) in the
possession or under the control of the Sponsor, the Eligible Lender Trustee or
the Custodian relating to Participation Interests sold hereunder or the Loans
subject to such Participation Interests and (ii) to visit the offices of the
Sponsor, the Eligible Lender Trustee or the Custodian for the purpose of
examining such material described in clause (i) above, and to discuss matters
relating to such Participation Interests or Loans or the performance of the
Sponsor,
the Eligible Lender Trustee (if applicable) or the Custodian hereunder with any
of their respective officers and employees having knowledge of such
matters.

      

      (e)The
Custodian may, in good faith, prepare any of the reports, statements or other
information to be delivered by the Custodian to the Department hereunder in
reliance on information provided to it by the Servicer or any other delegee so
long as the Custodian is in compliance with Section 18 hereof with respect to
such delegee.

       

      
        
          
          

        

        
          21

          
          

        

        
          
          

        

      

      Section
9.  Conditions
Precedent.

      

      (a) On or
prior to the initial Purchase Date, the Sponsor shall deliver or cause to be
delivered the following documents to the Department:

      

      
        	
                 
      

              	
                (i)
      the Adoption Agreement, duly executed by the Sponsor, the Eligible Lender
      Trustee (if applicable) and the Custodian in four
      counterparts;

              

      

      

      
        	
                 
      

              	
                (ii)
      a duly executed officer’s certificate of the Sponsor, in substantially the
      form of Exhibit E hereto, together with all required attachments
      thereto;

              

      

      

      
        	
                 
      

              	
                (iii)
      an opinion of counsel to the Sponsor, in substantially the form of Exhibit
      F hereto;

              

      

      

            
 (iv) certified copies of all agreements of the Sponsor, if any, with
other

      Eligible
Lenders or holders of beneficial interests in FFELP loans, to aggregate,
transfer or cause the transfer of legal title to, and sell

      participation
interests in Eligible Loans under the Agreement;

      

      
        	
                 
      

              	
                (v)
      tax lien, Uniform Commercial Code lien and judgment search reports with
      respect to the Sponsor and the Eligible Lender Trustee (if applicable) in
      all relevant jurisdictions;

              

      

      

                    
(vi) certified copies of all related Eligible Servicing Agreements;

      

      
        	
                 
      

              	
                (vii)
      the Class A Participation Certificate representing the Class A
      Participation Interests purchased on such Purchase Date, which shall have
      attached thereto a Loan Schedule and Custodial Certification, certified by
      the Custodian as an accurate listing of all of the Eligible Loans as to
      which the Custodian (i) holds legal title and (ii) has physical possession
      (either directly or through its delegee) of all related Loan Documents in
      trust for the benefit of the holders of the Participation Interests;
      and

              

      

      

                    
(viii) such other documents as the Department may request.

      

      (b) 
On or prior to each Purchase Date (including the initial Purchase Date), the
Sponsor (or the Custodian, as applicable) shall be required to deliver each of
the following to the Department or the Custodian, as applicable:

      

      
        	
                 
      

              	
                (i)
      Activities Prior
      to the Related Purchase Date. The Sponsor shall have provided any
      assistance requested by the Department in determining that all required
      documentation on the related Eligible Loans is present and
      correct.

              

      

      

      
        
          
          

        

        
          22

          
          

        

        
          
          

        

      

      
        	
                 
      

              	
                (ii)
      Participation
      Purchase Request/Loan Schedule. The Sponsor shall deliver to the
      Department:

              

      

      

      
        	
                 
      

              	
                (1)A
      Participation Purchase Request that has been duly authorized and executed
      by an authorized officer of each of the Sponsor, the Eligible Lender
      Trustee (if applicable) and the Custodian;
and

              

      

       

      
        	 	(2)The Loan
      Schedule, attached to the Participation Purchase Request,
      identifying each of the Eligible Loans proposed to become
      subject to Participation
  Interests.

      

                

      
        	 	(iii) Loan Documents.
      The Sponsor shall deliver to the Custodian or its designee
      all Loan Documents related to each of the Eligible Loans proposed
      to become subject to Participation
Interests.

      

       

      
        	
                 
      

              	
                (iv)
      Loan Schedule
      and Custodial Certification. The Custodian shall have delivered to
      the Department an updated Loan Schedule and Custodial Certification
      reflecting each of the Eligible Loans proposed to become subject to
      Participation Interests and all other Eligible Loans then subject to
      Participation Interests hereunder, which shall replace the previous Loan
      Schedule and Custodial
Certification.

              

      

      

      
        	

              	
                (v) Exception
      Report. To the extent applicable, the Custodian shall have
      delivered to the Department (with a copy to the Sponsor) an Exception
      Report with respect to the Eligible Loans proposed to become subject to
      Participation Interests; provided that the Department shall not be
      obligated to purchase a Participation Interest in any Eligible Loan as to
      which a discrepancy shall be listed on such Exception Report unless in its
      sole discretion,
      the Department has either waived such discrepancy or given the Sponsor the
      opportunity to cure such discrepancy and the Sponsor shall have cured the
      same to the satisfaction of the
      Department.

              

      

       

      
        	
                 
      

              	
                (vi)
      Eligible Lender
      Trustee. The Eligible Lender Trustee (if applicable) shall have
      delivered to the Department such additional documents and information as
      the Department shall have requested to evidence that the Eligible Lender
      Trustee is fully authorized to transfer title to each Eligible Loan to the
      Custodian on behalf of the Sponsor.

              

      

      

      
        	
                 
      

              	
                (vii)
      Security Release
      Certification. If any of the Eligible Loans are subject to any
      security interest, pledge or hypothecation for the benefit of any Person,
      the Sponsor shall deliver to the Department a fully executed Security
      Release Certification with respect to such Eligible Loans.
    .

              

      

       

      
        	 	 (viii) List of Lockboxes. The Sponsor
      shall have delivered to the Department a list of lockboxes and copies of
      lockbox servicing instructions, to the extent not already
    provided

      

      
      

       

      
        	 	(ix) Additional
      Documents. The Sponsor shall have delivered to the Department
      such additional documents and information as the Department shall have
      requested, including any documents set forth under Section 9(a) not
      previously delivered to the
  Department

      

                    
.

      
        
          
          

        

        
          23

          
          

        

        
          
          
Section
10.  Representations and
Warranties of the Sponsor, the Eligible Lender Trustee and
Custodian.

      

      

      (a)
Representations as to the Sponsor and the Eligible Lender Trustee. The Sponsor,
and to the extent expressly required below, the Eligible Lender Trustee (if
applicable), represents and warrants to the Department and the Custodian, as of
the date the Adoption Agreement is executed and as of each Purchase
Date:

      

      
        	
                 
      

              	
                (i)
      Each of the Sponsor and the Eligible Lender Trustee (if applicable) (1) is
      duly organized, validly existing and in good standing under the laws of
      the State of its formation or of the United States, as applicable, (2) has
      all licenses necessary to carry out its business as now being conducted or
      is otherwise exempt under applicable law from such licensing or
      qualification or is otherwise not required under applicable law to effect
      such licensing or qualification and no demand for such licensing or
      qualification has been made upon it by any such state, and (3) is in
      compliance with the laws of any such state to the extent necessary to
      ensure the enforceability of each Loan. No licenses or approvals obtained
      by it have been suspended or revoked by any
  court,

              

      

       administrative
agency, arbitrator or governmental body and no proceedings are pending which
might result in such suspension or revocation;

      

      
        	
                 
      

              	
                (ii)
      The Sponsor or the Eligible Lender Trustee (if applicable) is an “eligible
      lender” as such term is defined in Section 435(d) of the Higher Education
      Act, it has a lender identification number issued by the Department with
      respect to the Loans;

              

      

      

      
        	
                 
      

              	
                (iii)
      The Sponsor or the Eligible Lender Trustee (if applicable) has in effect a
      Guarantee Agreement with a Guarantor with respect to each of the
      Loans;

              

      

      

      
        	
                 
      

              	
                (iv)
      The Sponsor intends to sell to the Department during the term of this
      Agreement Class A Participation Interests in Eligible Loans, that it
      estimates, in good faith, will have an aggregate Principal Balance of not
      less than $50,000,000;

              

      

      

      
        	
                 
      

              	
                (v)
      With respect to each state or jurisdiction therein in which the Sponsor
      undertakes origination activities, Sponsor is in full compliance with such
      state’s or jurisdiction’s (as applicable) laws, rules, regulations,
      orders, settlement agreements and other standards and procedures,
      including those promulgated by agencies or officers thereof, applicable to
      it and pertaining to the conduct of participants in the student loan
      industry (including, without limitation, any applicable “code of conduct”
      for participants in the

              

      

      student
loan industry);

      

      
        	
                 
      

              	
                (vi)
      The Sponsor has administered, operated and maintained its student loan
      program in such a manner as to ensure that such program and the Loans will
      benefit, in all material respects, from the FFELP, the Guarantee
      Agreements related thereto and the federal program of reimbursement for
      FFELP loans pursuant to the Higher Education
  Act;

              

      

       

      
        	
                 
      

              	
                (vii)
      Neither the Sponsor nor the Eligible Lender Trustee (if applicable) has,
      with respect to any Purchased Eligible Loan, agreed to release any
      Guarantor from any of its contractual obligations as a guarantor of such
      Loan or agreed otherwise to alter, amend or renegotiate any material term
      or condition under which such Loan is guaranteed, except as required by
      law or rules and regulations issued pursuant to law, without the express
      prior written consent of the
department;

              

      

      

      
        	

              	
                (viii) Each of the
      Sponsor and the Eligible Lender Trustee (if applicable) (1) has, or, for
      Loans already transferred to the Custodian, had at the time of such
      transfer, all requisite power and authority to hold each Loan, to transfer
      each Loan, and to execute, deliver and perform, and to enter into and
      consummate, all transactions contemplated by this Agreement, (2) has duly
      authorized the execution, delivery and performance of this Agreement, and
      (3) has duly executed and delivered this Agreement. This Agreement,
      assuming due authorization, execution and delivery by the Department,
      constitutes a legal, valid and binding obligation of each of the Sponsor
      and the Eligible Lender Trustee (if applicable), enforceable against each
      of them in accordance with its terms except as the enforceability thereof
      may be limited by bankruptcy, insolvency, reorganization, moratorium or
      similar laws affecting the enforcement of rights of creditors generally,
      and to general principles of equity (regardless of whether such
      enforceability is considered in a proceeding in equity or law); provided,
      however, that
      if the Sponsor is not an Eligible Lender, the power and authority to hold
      and sell each Loan described in clause (1) shall
      refer, with respect to the Sponsor, to the beneficial interest of the
      Sponsor, and with respect to the Eligible Lender Trustee, to its interest
      as the legal title holder of the
  Loan;

              

      

       

      
        
          
          

        

        
          24

          
          

        

        
          
          

        

      

      
        	
                 
      

              	
                (ix)
      The execution and delivery of this Agreement by each of the Sponsor and
      the Eligible Lender Trustee (if applicable) and the performance of and
      compliance with the terms of this Agreement will not violate its formation
      documents or constitute a default under or result in a breach or
      acceleration of, any material contract, agreement or other instrument to
      which it is a party or which may be applicable to it or its
      assets;

              

      

       

      
        	
                 
      

              	
                (x)
      Neither the Sponsor nor the Eligible Lender Trustee (if applicable) is in
      violation of, and the execution and delivery of this Agreement by it and
      its performance and compliance with the terms of this Agreement will not
      constitute a violation with respect to, any order or decree of any court
      or any order or regulation of any federal, state, municipal or
      governmental agency having jurisdiction over it or its assets, which
      violation might have consequences that would materially and adversely
      affect the condition (financial or otherwise) or its operations or its
      assets or might have consequences that would materially and adversely
      affect the performance of its obligations and duties
      hereunder;

              

      

      

      
        	
                 
      

              	
                (xi)
      The Sponsor does not believe, nor does it have any reason or cause to
      believe, that it cannot perform each and every covenant contained in this
      Agreement;

              

      

      

      
        	
                 
      

              	
                (xii)
      There are no actions or proceedings against, or investigations of, the
      Sponsor or the Eligible Lender Trustee (if applicable) before any court,
      administrative agency or other tribunal (A) that might prohibit its
      entering into this Agreement, (B) that seeks to prevent the transfer of
      the Loans to the Custodian or the creation and sale of the Participation
      Interests or the consummation of the transactions contemplated by this
      Agreement, or (C) that might prohibit or materially and adversely affect
      the performance of its
      obligations under, or the validity or enforceability of, this
      Agreement;

              

      

      

      
        	
                 
      

              	
                (xiii)
      No consent, approval, authorization or order of any court or governmental
      agency or body is required for the execution, delivery and performance by
      the Sponsor or the Eligible Lender Trustee (if applicable) of, or
      compliance by it with, this Agreement or the consummation of the
      transactions contemplated by this Agreement, except for such consents,
      approvals, authorizations or orders, if any, that have been obtained prior
      to the related Purchase Date;

              

      

                 

      
        
          
          

        

        
          25

          
          

        

        
          
          

        

      

      
        
          	     	(xiv) The
      consideration received by the Sponsor upon the sale of the Participation
      Interests constitutes fair consideration
      and reasonably equivalent
      value for such Participation
Interests;

        

         

      

      
        	 	(xv) The Sponsor is
      solvent and will not be rendered insolvent by the consummation
      of the transactions contemplated hereby. The
      Sponsor is not
      transferring any Participation Interests with any intent to hinder, delay
      or defraud any of its creditors;

      

       

      
        	
                 
      

              	
                (xvi)
      The Sponsor has an internal quality control program that verifies, on a
      regular basis, the existence and accuracy of its legal documents, credit
      documents and underwriting decisions. The program shall include evaluating
      and monitoring the overall quality of the Sponsor’s loan production and
      the servicing of such loans. The program shall ensure that Loans are
      originated and serviced in accordance with applicable law; guard against
      Dishonest, fraudulent, or negligent acts; and guard against errors
      and omissions by officers, employees, or other authorized persons;
      and

              

      

       

      
        	
                 
      

              	
                (xvii)
      If the Sponsor is acting as an aggregator on behalf of any other entity,
      it has received a certification from such entity (which it will provide to
      the Department upon request) that such entity has agreed to continue to
      participate in the FFEL program and that at such time as funds become
      reasonably available to it from private sources, it will originate new
      FFELP loans after the Department’s purchases of Participation Interests
      from the Sponsor hereunder.

              

      

       

      
        
          
          

        

        
          26

          
          

        

        
          
          

        

      

      (b) Loan
Level Representations. The Sponsor, and to the extent expressly required below,
the Eligible Lender Trustee (if applicable), represents and warrants to the
Department as to the Eligible Loans subject to any Class A Participation
Interest as of each related Purchase Date and as of each date such Loans are
subject to a Class A Participation Interest:

      

      
        	
                 
      

              	
                (i)
      At the time of transfer of title to the Custodian, the Sponsor or the
      Eligible Lender Trustee (as applicable) has good and marketable title to,
      and the Sponsor and Eligible Lender Trustee together are the sole owners
      of, the Loans, free and clear of any security interest or lien (other than
      an interest or
      lien that will be released simultaneously with the purchase
      of  the related Class A Participation Interest pursuant to a
      Security Release Certification), charges, claims, offsets, defenses,
      counterclaims or encumbrances of any nature and no right of rescission,
      offsets, defenses or counterclaims have been
      asserted or threatened with respect to the
  Loans;

              

      

      
        
          	 	 
	
                   
      

                	
                  (ii)
      Each Loan is an Eligible Loan and the description of and information
      regarding the Loans set forth in the Participation Purchase Request and
      the Loan Schedule is true, complete and correct; 

                   

                  (iii)
      The Sponsor or the Eligible Lender Trustee (if applicable) is authorized
      to transfer the Loans to the Custodian, to cause the Participation
      Interests to be issued and to sell the Participation Interests to the
      Department; and the transfer of the Loans to the Custodian and issuance
      and sale of the

                

        

      

      Participation
Interests will be made pursuant to and consistent with the laws and regulations
under which the Sponsor or the Eligible Lender Trustee (if applicable) operates,
and will not violate any decree, judgment or order of any court or agency, or
conflict with or result in a breach of any of the terms, conditions or
provisions of any agreement or instrument to which
it is a party or by which it or its property is bound, or constitute a default
(or an event which could constitute a default with the passage of time or notice
or both) thereunder;

      

      
        	
                 
      

              	
                (iv)The
      Loans are each in full force and effect in accordance with their terms and
      are legal, valid and binding obligations of the respective Borrowers
      thereunder subject to no defenses;

              

      

      

      
        
          
          

        

        
          27

          
          

        

        
          
          

        

      

      
        	
                 
      

              	
                (v)
      No consents and approvals are required by the terms of the Loans for the
      consummation of the sale of the Participation Interests hereunder to the
      Department;

              

      

      

      
        	
                 
      

              	
                (vi)
      Each Loan has been duly made and serviced in accordance with the
      provisions of the FFELP established under the Higher Education Act, and
      has been duly guaranteed by a Guarantor; the Guarantee Agreement is in
      full force and effect and is freely transferable to the Custodian as
      trustee for the benefit of the Department as an incident to the purchase
      of each Participation Interest; and all premiums due and payable to such
      Guarantor

              

      

      as of the
related Purchase Date shall have been paid in full;

      

      
        	
                 
      

              	
                (vii)
      Each Loan provides or, when the payment schedule with respect thereto is
      determined, will provide for payments on a periodic basis that fully
      amortize the Principal Balance thereof by its maturity, as such maturity
      may be modified in accordance with any applicable deferral or forbearance
      periods granted in accordance with applicable laws, including, those of
      the Higher Education Act or any applicable Guarantee Agreement, as
      applicable;

              

      

      

      
        	
                 
      

              	
                (viii)
      Any payments on the Loans received by the Sponsor that have been allocated
      to the reduction of principal and interest on such Loans have been
      allocated on a simple interest
basis;

              

      

      

      
        	
                 
      

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

              

      

      

      
        	
                 
      

              	
                (x)
      Each Borrower is an eligible borrower under the terms of Section 428, 428B
      or 428H of the Higher Education Act, as
  applicable;

              

      

      

                      (xi)
All Borrower origination fees and loan fees required pursuant to Section
438 of the Higher Education Act

             
 have been  paid
to the Secretary
or
appropriately reserved by the Sponsor or the Eligible Lender
Trustee

                    
 (if applicable) for payment to the Secretary;

      
        
          	 	 
	
                   
      

                	
                  (xii)
      Each Loan is denominated and payable only in Dollars in the United States;
      

                   

                  (xiii)
      Sponsor has delivered or caused to be delivered to the Custodian as the
      legal owner of the Loan and trustee for the Department or to the designee
      of the Custodian, each of the Loan Documents with respect to such
      Loan;

                

        

      

      
        
          
          

        

        
          28

          
          

        

        
          
          

        

      

      
        	
                 
      

              	
                (xiv)
      The transfer and assignment herein contemplated constitute a valid sale of
      the Participation Interests from the Sponsor to the Department, and the
      beneficial interest in and title to such Participation Interests shall not
      be part of the Sponsor’s estate in the event of the bankruptcy of the
      Sponsor or the appointment of a receiver with respect to the
      Sponsor;

              

      

      
      

       

      
        	 	 (xv) Except
      for Loans executed electronically, there is only one original executed
      copy of the Promissory Note evidencing  each  Loan.  For  Loans  that  were executed
      electronically, the Sponsor of such Loan (or its designee) has possession
      of the electronic records evidencing the  Promissory Note,
      including all Loan Documents. The Promissory Notes that constitute or
      evidence the Loans do not have any marks or notations indicating
      that they  have been pledged, assigned or otherwise
      conveyed to any Person other than the
      Department;  

      

                    

      
        
          	 	 (xvi) To the
      extent any Loan is evidenced by an electronic Promissory Note or an
      electronic record, or to the extent the signature of the obligor on
      any   

                   Promissory
      Note is an  electronic signature, the Sponsor has complied (and
      has caused any originator or servicer of the Loan to comply) with all
      regulations and other requirements provided by the applicable
      Guarantor or the Department relating to the validity and enforceability of
      such Promissory
      Note;

                

        

         

      

      
      

      
        	
                 
      

              	
                (xvii)
      Neither the Sponsor nor the Eligible Lender Trustee (if applicable) has
      pledged, assigned, sold, granted a security interest in, or otherwise
      conveyed any of the Loans other than the conveyance to the Custodian as
      trustee for the benefit of the Department (other than (x) the transfer of
      legal title to the Eligible Lender Trustee (if applicable), or (y) a
      security interest or lien that will be released simultaneously with the
      purchase of the related Class A Participation Interest pursuant to a
      Security Release Certification). Neither the Sponsor nor the Eligible
      Lender Trustee (if applicable) has authorized the filing of or is aware of
      any financing statements against either party that includes a description
      of collateral covering the Purchased Eligible Loans hereunder or any other
      security interest that has not been terminated, or that will not be
      terminated upon purchase of the related Class A Participation Interest by
      the Department. Neither the Sponsor nor the Eligible Lender Trustee (if
      applicable) is aware of any judgment or tax lien filings against
      it;

              

      

      

      
        	
                 
      

              	
                (xviii)
      No Borrower of a Loan is noted in the related loan file as
      being  currently involved in a bankruptcy
      proceeding;

              

      

      

      
        	
                 
      

              	
                (xix)
      Each grant of the Purchased Eligible Loans by the Sponsor pursuant to this
      Master Participation Agreement is not subject to the bulk transfer act or
      any similar statutory provisions in effect in any applicable jurisdiction;
      and

              

      

      

      
        	
                 
      

              	
                (xx)
      Each grant of the Purchased Eligible Loans (including all payments due or
      to become due thereunder) by the Sponsor pursuant to this Master
      Participation Agreement is not subject to and will not result in any tax,
      fee or governmental charge payable by the Sponsor to any federal, state or
      local government.

              

      

       

      
        
          
          

        

        
          29

          
          

        

        
          
          

        

      

      (c)
Representations and Warranties of the Custodian. The Custodian represents and
warrants to the Department and the Sponsor, as of the date the Adoption
Agreement is executed and at all times thereafter:

      

      
        	
                 
      

              	
                (i)
      The Custodian is duly organized, validly existing and in good standing
      under the laws of the State of its formation. The Custodian has all
      licenses necessary to carry out its business as now being conducted or is
      otherwise exempt under applicable law from such licensing or qualification
      or is otherwise not required under applicable law to effect such licensing
      or qualification and no demand for such licensing or qualification has
      been made upon the Custodian by any such state. No licenses or approvals
      obtained by the Custodian have been suspended or revoked by any court,
      administrative
      agency, arbitrator or governmental body and no proceedings
      are pending which might result in such suspension or revocation;

              

      

       

      
        	 	
                 (ii) The
      Custodian is an “eligible lender” as such term is defined in Section
      435(d)(1)(A) of the Higher Education Act, and is a National
      or  State-chartered
      bank; 

                 

                (iii)
      The Custodian has a long-term senior unsecured debt rating of not less
      than investment grade by at least one of
      Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.,
      Moody’s Investors Service, Inc. or Fitch Ratings, or any of their
      successors in interest;

              

      

       

      
        	
                 
      

              	
                (iv)
      The Custodian has a combined capital and surplus of at least $50,000,000,
      as set forth in its most recent published annual report of condition;
      

                 

                (v)
      The Custodian has demonstrated, to the satisfaction of the Department,
      that it has the administrative capability and operating systems adequate
      to discharge faithfully the functions of the Custodian under this
      Agreement, and
      has allocated sufficient staff (including Responsible Officers of the
      corporation) to carry out such
duties;

              

      

       

      
        	
                 
      

              	
                (vi)
      The Custodian is not affiliated with the Sponsor or the Eligible Lender
      Trustee;

              

      

      

      
        	
                 
      

              	
                (vii)
      The Custodian is not aware of any liens in existence with respect to any
      Purchased Eligible Loan held by the Custodian, other than the lien of the
      Department and any interest or lien that will be released simultaneously
      with the purchase of the related Class A Participation Interest pursuant
      to a Security Release
Certification;

              

      

      

      
        
          
          

        

        
          30

          
          

        

        
          
          

        

      

      
        	
                 
      

              	
                (viii)
      The Custodian has all requisite power and authority to hold each Loan as
      trustee, and to execute, deliver and perform, and to enter into and
      consummate, all transactions contemplated by this Agreement. The Custodian
      has duly authorized the execution, delivery and performance of this
      Agreement, has duly executed and delivered the Adoption Agreement, and
      this Agreement, assuming due authorization, execution and
      delivery

              

      

      by each
of the Sponsor and the Department, constitutes a legal, valid and binding
obligation of the Custodian, enforceable against it in accordance with its terms
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of rights
of creditors generally, and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or
law);

      

      
        	
                 
      

              	
                (ix)
      The execution and delivery of the Adoption Agreement by the Custodian and
      the performance of and compliance with the terms of this Agreement will
      not violate the Custodian's formation documents or constitute a default
      under or result in a breach or acceleration of, any material contract,
      agreement or other instrument to which the Custodian is a party or which
      may
      be applicable to the Custodian or its
  assets;

              

      

      

      
        	
                 
      

              	
                (x)
      The Custodian is not in violation of, and the execution and delivery of
      this Agreement by the Custodian and its performance and compliance with
      the terms of this Agreement will not constitute a violation with respect
      to, any order or decree of any court or any order or regulation of any
      federal, state, municipal or governmental agency having jurisdiction over
      the Custodian or its assets, which violation might have consequences that
      would materially and adversely affect the condition (financial or
      otherwise) or the operation of the Custodian or its assets or might have
      consequences that would materially and adversely affect the performance of
      its obligations and duties
hereunder;

              

      

      

      
        	
                 
      

              	
                (xi)
      The Custodian does not believe, nor does it have any reason or cause to
      believe, that it cannot perform each and every covenant contained in this
      Agreement;

              

      

      

      
        	
                 
      

              	
                (xii)
      There are no actions or proceedings against, or investigations of, the
      Custodian before any court, administrative agency or other tribunal (A)
      that might prohibit its entering into this Agreement, (B) seeking to
      prevent the transfer of the Loans to the Custodian or the creation and
      sale of the Participation Interests or the consummation of the
      transactions contemplated by this Agreement or (C) that might prohibit or
      materially and adversely affect the performance by the Custodian of its
      obligations under, or the validity or enforceability of, this Agreement;
      and

              

      

      

      
        	
                 
      

              	
                (xiii)
      No consent, approval, authorization or order of any court or governmental
      agency or body is required for the execution, delivery and performance by
      the Custodian of, or compliance by the Custodian with, this Agreement or
      the consummation of the transactions contemplated by this Agreement,
      except for such consents, approvals, authorizations or orders, if any,
      that have been obtained.

              

      

       

      

      
        
          
          

        

        
          31

          
          

        

        
          
          

        

      

      Section
11. Collections;
Distributions.

      

      (a) The
Sponsor shall cause a Collection Account to be established at the Custodian for
the purpose of holding all payments and other proceeds of any kind received on
or with respect to the Purchased Eligible Loans and any funds received by reason
of a Borrower cancellation of a Purchased Eligible Loan or a return of Title IV,
HEA funds from the institution attended by such Borrower, and without the
netting of any amounts (“Collections”) for the benefit of the Department, as
holder of the Class A Participation Interests. The Sponsor shall cause the
Servicers, as defined below, to deposit all Collections as soon as possible, but
in no event later than two (2) Business Days after receipt of funds, into the
Collection Account. The Custodian hereby grants to the Department a first
priority precautionary security interest in the Collection Account, all
Collections at any time on deposit therein and all proceeds and products
thereof. Amounts on deposit in the Collection Account may be invested only in
Permitted Investments.

      

      (b) On
the first Business Day of each calendar month or such other date as agreed to
between the Custodian and the Department, the Custodian shall distribute all
funds then on deposit in the Collection Account to be applied in the following
order of priority:

       

      first,
to the Department to pay the aggregate outstanding Participant’s Yield
then due and owing to the Department (together with all outstanding
Participant’s Yield not paid to the Department on any previous distribution date
due to insufficient funds on deposit in the Collection Account);

      

      second, to the Department
to reduce the aggregate outstanding principal balance of the Class A
Participation Interests held by the Department (calculated pursuant to Section
5(g) through the end of the most recent calendar month), until such balance is
reduced to zero; and

      

      third,
to the Sponsor, any remaining amounts. 

      

      (c) Upon
the request of the Sponsor, the Custodian may distribute funds then on deposit
in the Collection Account to the Department on a regular basis, but not more
frequently than weekly.

      

      (d)
Following the Termination Date, but on or before October 20, 2009, the
Custodian
shall distribute any funds remaining on deposit in the Collection Account, in
the following order of priority:

      

      first,
to the Department, the aggregate outstanding Participant’s Yield then due and
owing;

      

      second,
to the Department to reduce the aggregate outstanding principal balance of the
Class A Participation Interests (calculated pursuant to Section 5(g) through the
end of the most recent calendar month) until such balance is reduced to zero;
and

      

      third,
to the Sponsor, any remaining amounts.

      

      (e) All
distributions by the Custodian hereunder shall be made by electronic transfer in
funds available on the next business day in accordance with the instructions
provided by the recipient.

      

      
        
          
          

        

        
          32

          
          

        

        
          
          

        

      

      (f) The
Custodian shall calculate any amounts due to the Department or the Sponsor
hereunder and all such calculations shall be subject to verification by the
Department.

      

      Section
12.Servicing of Eligible Loans.

      

      (a) Each
Eligible Loan which is subject to a Participation Interest shall be serviced by
a Servicer (which may be the Sponsor) at the direction of the Custodian pursuant
to the terms of an Eligible Servicing Agreement, and in accordance with
Department regulations. No such Servicer shall be subject to sanction by the
Department.

      

      (b) The
Sponsor will be responsible for the payment of any servicing related fees and
expenses incurred in connection with the servicing of the related Eligible
Loans.

      

      (c) A
servicing agreement will be deemed to be an “Eligible Servicing Agreement” if
the agreement:

      

      
        	
                 
      

              	
                (i)
      contains customary terms and conditions that reflect a negotiated, arms
      length transaction;

              

      

      

                     
(ii) provides for not more than a fair market servicing fee;

      

      
        	
                 
      

              	
                (iii)
      includes usual and customary representations, warranties, covenants and
      events of default;

              

      

      

      
        	
                 
      

              	
                (iv)
      acknowledges or has been amended to acknowledge that the Department is an
      intended third-party beneficiary of such agreement entitling the
      Department to instruct the Servicer and exercise remedies with respect to
      the applicable Eligible Loans upon the occurrence of a Servicer Event of
      Default;

              

      

      

      
        	
                 
      

              	
                (v)
      provides that the Servicer will deposit all Collections into the
      Collection Account not later than two (2) Business Days after
      receipt;

              

      

       

      
        	 	 (vi) provides
      that upon notice of the exercise of the Put Option or other acquisition
      of an Eligible Loan by the Department, such agreement may be terminable by
      the Department, in its sole discretion, upon thirty (30) days’ notice and
      the Eligible Loans deconverted and transferred to a designee of the
      Department without the payment by the Department of any deboarding,
      deconversion or related costs, penalties or fees to the related Servicer
      and that the servicing shall be transferred as instructed by the
      Department; and

      

       

                    

      
        	
                 
      

              	
                (vii)
      provides that the Servicer shall deliver to the Custodian all documents
      and information necessary to enable the Custodian to oversee the Servicer
      as provided herein.

              

      

      

      (d) The
Custodian shall take all reasonable steps, actions and proceedings necessary to
ensure that each Servicer will manage, service, administer, make collections and
calculate any amounts owed to the Department with respect to the Eligible Loans
(including collection of any Interest Subsidy Payments and Special Allowance
Payments and calculate any negative Special Allowance Payments owing with
respect to the Eligible Loans) in compliance with all applicable Federal and
State laws, including all applicable rules, regulations and other requirements
of the Higher Education Act and the applicable Guarantee Agreement. The
Custodian shall ensure that each Servicer shall be responsible for segregating,
marking each Eligible Loan as owned by the Custodian and remitting to the
Custodian all payments received on the Eligible Loans for the benefit of the
Department as the holder of the Class A Participation Certificate, including but
not limited
to, physical or electronic marking of relevant computer
records.

      
        
          
          

        

        
          33

          
          

        

        
          
          

        

      

       Section
13.  Enforcement of the Servicing Agreements.

      

      (a)The
Custodian shall take all reasonable steps, actions and proceedings necessary to
enforce all terms, covenants and conditions of the Servicing Agreement, and
shall cause the Servicer to specify whether Collections received by it and
deposited into the Collection Account represent principal or
interest.

      

      (b) The
Custodian shall not permit the release of the obligations of the Servicer under
the Servicing Agreement except in conjunction with amendments or modifications
permitted by Section 13(f) below.

      

      (c) At
all times, to the extent permitted by law, cause to be defended, enforced,
preserved and protected the rights and privileges of the Custodian and the
Department under or with respect to the Servicing Agreement.

      

      (d) The
Custodian shall notify the Department in writing promptly upon becoming aware of
any default or failure to perform any obligations on the part of the Servicer
under the Servicing Agreement.

      

      (e) The
Custodian shall not waive any default by the Servicer under the Servicing
Agreement without the written consent of the Department.

      

      (f) The
Custodian shall not consent or agree to or permit any amendment or modification
of the Servicing Agreement which will in any manner materially adversely affect
the rights or security of the Department. Pursuant to the Servicing Agreement,
the Sponsor and the Custodian shall be entitled to receive and rely upon an
opinion of outside counsel that any such amendment or modification will not
materially adversely affect the rights or security of the Department.

      
        
          
          

        

        
          34

          
          

        

        
          
          

        

      

      Section
14. Liability of the Sponsor and the
Custodian; Indemnities.

      

      (a) The
Sponsor shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Sponsor under this Agreement, and to
the extent of any obligations delegated by the Custodian to the Sponsor pursuant
to the terms hereof.

      
        
          	 	 
	
                   
      

                	
                  (i)
      The Sponsor shall indemnify, defend and hold harmless the Department and
      its officers, directors, employees and agents in their individual capacity
      from and against any taxes that may at any time be asserted against any
      such person with respect to the transactions contemplated herein and in
      the other documents related hereto, including any sales, gross receipts,
      general corporation, tangible and intangible personal property, privilege
      or license taxes and costs and expenses in defending against the
      same.

                

        

      

      

      
        	
                 
      

              	
                (ii)
      The Sponsor shall indemnify, defend and hold harmless the Department and
      its officers, directors, employees and agents in their individual
      capacity, from and against any and all liability for any and all costs,
      expenses (including, without limitation, costs and expenses of litigation
      and of investigation counsel fees, damages, judgments and amounts paid in
      settlement), losses, claims, damages and liabilities that may be
      imposed

              

      

      on,
incurred by, or asserted against the Department in any way relating to or
arising out of this Agreement or, the Sponsor’s, the Eligible Lender Trustee’s
(if applicable), or the Servicer’s willful misfeasance, bad faith or negligence
in the performance of its respective duties under this Agreement or the
Servicing Agreement, as applicable, or by reason of a breach by
the Sponsor, the Eligible Lender Trustee or the Servicer of any of their
respective representations, warranties, covenants or other obligations or duties
under this Agreement or the Servicing Agreement, as applicable.

      

      
        	
                 
      

              	
                (iii)
      The Sponsor shall reimburse, indemnify, defend and hold harmless the
      Custodian and its directors, officers, agents and employees in their
      individual capacity from and against any and all liabilities, obligations,
      losses, damages, penalties, actions, judgments, suits, costs, or out-of
      pocket expenses of any kind or nature whatsoever, including reasonable
      attorney’s fees, that may be imposed on, incurred by, or asserted against
      it or them in any way relating to or arising out of this Agreement or the
      Custodian’s ownership of legal title to the Purchased Eligible
      Loans.

              

      

      

      (b) The
Custodian shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Custodian under this Agreement, and
with respect to those obligations delegated by it pursuant to the terms hereof,
only to the extent the Custodian shall not have complied with Section 18. The
Custodian shall indemnify, defend and hold harmless the Department and the
officials, employees and agents of the Department in their individual capacity
from and against liability for any and all costs, expenses (including, without
limitation, costs and expenses of litigation and of investigation counsel fees,
damages, judgments and amounts paid in settlement), losses, claims, damages and
liabilities that may be imposed on, incurred by, or asserted against the
Department in any way relating to or arising out of the Custodian’s
willful misfeasance, bad faith or negligence in the performance of its duties
under this Agreement, or by reason of its breach of any of its representations,
warranties, covenants or other obligations or duties under this Agreement.
Notwithstanding anything in this Agreement to the contrary, in no event shall
the Custodian be liable for any special, consequential, punitive or indirect
damages resulting from any action taken or omitted to be taken by it hereunder
or in connection herewith. The foregoing sentence shall survive the removal of
the Custodian and the termination of this Agreement. Except to the extent of
losses, claims, damages and liabilities that arise out of the Custodian’s
willful misfeasance, bad faith or negligence in the performance of its duties
under this Agreement, the amount of Custodian’s liabilities to the Department
and its officials, employees and agents under this Section 14(b) shall be
limited to the amount of the aggregate fees paid to it for its services
hereunder.

      

      (c) Indemnification under this
Section 14 shall survive the resignation or the termination
of this Agreement, and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Sponsor or Custodian, as applicable, shall have
made any indemnity payments pursuant to this Section and the person to or on
behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to the
Sponsor or Custodian, as applicable, without interest.

      
        
          
          

        

        
          35

          
          

        

        
          
          

        

      

      Section
15. Redemption; Put
Option; Termination.

      

      (a) On or
at any time before the Termination Date with respect to each Purchased Eligible
Loan, the Sponsor shall notify the Department and the Custodian of its election
to either (x) pay to the Custodian for the benefit of the Department the related
Redemption Payment, or (y) exercise the Put Option with respect thereto. Upon
receipt of such notification, the Custodian shall compute the calculation in
clause (y) of the definition of Redemption Payment based upon the data provided
by the Sponsor in such notification.

      

      (b) Upon
receipt of the Redemption Payment with respect to a Purchased Eligible Loan, the
Custodian shall promptly (i) remit such Redemption Payment to the Department,
(ii) transfer legal title and release all of its interests in and to such
Purchased Eligible Loan to the Sponsor or the Eligible Lender Trustee (if
applicable), (iii) deliver or cause to be delivered all related Loan Documents
to the Sponsor, and (iv) cancel the Class A Participation Interest and the Class
B Participation Interest with respect to such Purchased Eligible
Loan.

      

      (c) In
order to exercise the Put Option with respect to a Purchased Eligible Loan, the
Sponsor shall (1) together with its Eligible Lender Trustee, if applicable, have
entered into a Master Loan Sale Agreement (which may be done at any time on or
before July 1, 2009 notwithstanding any other document or agreement), (2) comply
with the requirements set forth in Sections 4A, 4D and 4F of the Master Loan
Sale Agreement, (3) comply with each of the conditions precedent set forth in
Sections 5A and 5B(i) of the Master Loan Sale Agreement; (4) prepare and deliver
to the Custodian for execution the documents set forth in Sections 5B(iii)
through (vii) and 5C of the Master Loan Sale Agreement; (5) make each of the
representations and warranties set forth in Section 6 of the Master Loan Sale
Agreement as they pertain to the Sponsor as of both the date of the Adoption
Agreement and the date the related Put Option is exercised, and as they pertain
to such Purchased Eligible Loan as of the Purchase Date under this Agreement and
as of the date the related Put Option is exercised, (6) ensure the delivery of
all related servicing rights with respect to such Purchased Eligible Loan to the
Department, and (7) cause the related Servicing Agreement with respect to such
Purchased Eligible Loan to be terminated.

      

              
(i) Upon the Custodian’s receipt of a request by the Sponsor to exercise the
Put
Option with respect to a Purchased Eligible Loan, the Custodian shall promptly
(1) transfer legal title and release all of its interests in and to such
Purchased Eligible Loan to the Department, (2) deliver or cause to be delivered
all related Loan Documents to the Department or its designee, and (3) cancel the
Class A Participation Interest and the Class B Participation Interest with
respect to such Purchased Eligible Loan.

      

      (ii) The
Sponsor and the Department may, at the discretion of the Department,
net
settle all amounts then due and owing to either party with respect to Purchased
Eligible Loans with respect to which the Put Option has been exercised, and the
Department will remit to the Custodian any net amount due to the Sponsor, which
the Custodian will deposit into the Collection Account and remit to the
Department or the Sponsor in accordance with the provisions of Section 11 of
this Agreement. The Department will credit in the foregoing settlement process
the amount of any Interest Subsidy Payments or Special Allowance Payments then
due, owing, and payable with respect to the Eligible Purchased Loans for the
most recently completed fiscal quarter, and deduct any negative Special
Allowance Payments due and owing with respect to the Eligible Purchased Loans
for the most recently completed fiscal quarter.

      

       (iii)
Following the exercise of the Put Option with respect to a Purchased
Eligible
Loan, such Loan shall immediately become subject to the Master Loan Sale
Agreement as though it had been sold thereunder and the Sponsor shall be bound
by the terms of the Master Loan Sale Agreement in all respects with respect to
such Loan.

      

      (iv)
Notwithstanding anything herein to the contrary, a lender providing interim
financing to the Sponsor for Loans prior to the related Purchase Date therefor
shall have the right to enforce the Sponsor’s obligations to exercise the Put
Option with respect to such Loans pursuant to this Section 15 if (x) such lender
presents to the Department and the Custodian of a power of attorney that is duly
executed by the Sponsor and the Eligible Lender Trustee (if applicable and to
the extent necessary) and is enforceable in each applicable jurisdiction, and
(y) the Loans are Eligible Loans. For the avoidance of doubt, such lender, in
exercising its rights under this Section 15(c)(iv), shall not be obligated to
perform any of the obligations of the Sponsor or the Eligible Lender Trustee (if
applicable) hereunder, including any obligation to file a Notice of Intent to
Participate with the Department, or to make Subsequent Disbursements with
respect to any Loan put to the Department by such lender.

      
        
          
          

        

        
          36

          
          

        

        
          
          

        

      

      (d)
Notwithstanding the foregoing, the following will apply with respect to the
Sponsor’s redemption or exercise of the Put Option with respect to Purchased
Eligible Loans:

      

      (1) any Purchased Eligible
Loan that becomes and remains delinquent must be
redeemed by the Sponsor not later than the 255th days of such
delinquency; and

       

                   
(2) any redemption
or exercise of the Put Option with respect to a particular Purchased Eligible
Loan that is a Stafford Loan shall require the redemption or 

                
exercise of the Put Option, as applicable, by the Sponsor, with respect to any
other Purchased Eligible Loan that is a Stafford Loan for which the

                         
Borrower is the same.

      
 

      (e) On the Termination Date, all Eligible Loans then subject to
Participation Interests, and the related servicing rights attributable to such
Eligible Loans, for which the Sponsor has not made the Redemption Payment shall
become the property of the Department without any further action by the
Department and the Participation Interests and the rights of the Department and
the Sponsor under this Agreement shall be automatically terminated. Upon the
termination of this Agreement, the Custodian shall remit to the Sponsor the
excess (if any) of the aggregate amount of any Redemption Payments made under
this Agreement over the obligations due and owing to the Department by the
Sponsor.

       

             
(f) In no event shall the Custodian permit any Purchased Eligible Loans to
bereleased
from a Class A Participation Interest if, after giving effect to such release,
theoutstanding
Principal Balance of the Purchased Eligible Loans that remain subject to the
Class A Participation Interests is less than the aggregate outstanding principal
balance of the Class A Participation Interests and Participant’s Yield then due
and owing to the Department.

      

      Section
16. Sponsor
Events of Default; Remedies. Upon the occurrence of any
Sponsor
Event of Default, the Department, at its sole option, shall have the right to
exercise any or all of the following rights and remedies:

      

      (a) The
Department may deem the Termination Date to immediately occur with respect to
this Agreement or all or any portion of the Purchased Eligible Loans as it may
determine in its sole discretion, whereupon the Sponsor shall remit the
Redemption Payment to the Department and/or exercise the Put Option in
accordance with Section 15 with respect to each Purchased Eligible Loan subject
to such termination;

      

      (b) The
Department may increase the Spread to three hundred (300) basis points;
and/or

      

      (c )The
Department may limit, suspend or terminate the eligibility of the Sponsor, if an
Eligible Lender, with respect to participation as a FFELP lender, pursuant to 34
C.F.R. part 682 subpart G, or may suspend or debar the Sponsor pursuant to 34
C.F.R. Part 85, or both.

      

      
        
          
          

        

        
          37

          
          

        

        
          
          

        

      

      Section
17. Custodian Events of Default;
Removal of Custodian.

      

      (a)Upon
the occurrence of any Custodian Event of Default, (i) either the Department or
the Sponsor, with the consent of the Department, upon at least thirty (30) days’
prior written notice to the Custodian, may remove and discharge the Custodian
from the performance of its obligations hereunder, and (ii) the Department shall
have the further right, exercisable at its sole discretion, to limit, suspend or
terminate the eligibility of the Custodian with respect to participation as a
FFELP lender, pursuant to 34 C.F.R. part 682 subpart G, or may suspend or debar
the Custodian pursuant to 34 C.F.R. Part 85, or both.

      

      (b)Promptly
after the giving of notice of removal of the Custodian, the Sponsor shall
appoint, by written instrument, a successor custodian that meets all of the
criteria of eligibility of a custodian under this Master Participation
Agreement, and the Sponsor shall cause such successor custodian to become a
party to this Master Participation Agreement by executing a counterpart of the
Adoption Agreement within thirty (30) days’ of notice of removal to the
Custodian.

      

      (c) In
the event of any removal of the Custodian pursuant to Section 17(a) hereof, the
Custodian shall promptly transfer to the successor custodian, as directed in
writing, legal title to all Eligible Loans and all Loan Documents being
administered under this Agreement, and shall cooperate and comply with all other
reasonable requests in connection with the transfer of the Purchased Eligible
Loans and the Collection Account to the successor custodian. Any cost of
shipment arising out of the removal of the Custodian shall be at the expense of
the Sponsor.

      

      (d) In
the event a Custodian (or successor custodian) is removed, by any Person or for
any reason permitted hereunder, such removal shall not become effective until
(a) in the case of removal by the Department, the Department by instrument or
concurrent instruments in writing (signed and acknowledged by an authorized
representative or an attorney-in-fact) filed with the Custodian removed have
appointed a successor custodian or otherwise the Sponsor shall have appointed a
successor, and (b) the successor custodian has accepted appointment as
such.

      
        
          38

          
          

        

        
          
          
    Section
18.  Delegation
of Duties by the Custodian. The Custodian may delegate to another
Eligible Lender (including the Sponsor) or to the related Servicer certain of
its obligations hereunder. Notwithstanding the foregoing, the Custodian must
perform and shall not delegate its obligations to do the following: (1) hold
legal title in its own name to each of the Purchased Eligible Loans, (2) issue
and authenticate the Participation Certificates, (3) issue the Participation
Interests, (4) create and deliver each Loan Schedule and Custodial Certification
and each of the reports required to be delivered by the Custodian under Section
8(b) hereof, and (5) hold and disburse all Collections, collect any Redemption
Payments in accordance with the terms hereof, net settle any exercise of the Put
Option, and perform any other collection and remittance functions ancillary to
the transactions contemplated herein between the Sponsor and the Department
(except as expressly permitted in Section 7 hereof). If the Custodian delegates
any of its obligations to a delegee as permitted in this Section 18: (i) the
Custodian shall exercise due care in
its appointment of such delegee, (ii) if the Custodian performs any of its
non-delegated obligations hereunder in reliance on such delegee’s performance of
delegated obligations, such reliance shall be reasonable under the
circumstances, (iii) the Custodian shall take those steps that are reasonable
under the circumstances to ascertain whether such delegee is properly performing
the delegated obligations, and (iv) if such delegee has failed to perform any of
its delegated obligations, the Custodian shall either assume the delegated
obligations or promptly appoint a successor delegee to perform such
obligations.

      

      

      Section
19.  Custodian
Not to Resign. The Custodian may not resign from its duties and
obligations as custodian hereunder unless such resignation is agreed to by the
Department and the Sponsor.

      

      Section
20.  Merger of
the Custodian. Any corporation into which the Custodian may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Custodian shall be a party, or any corporation
succeeding to all or substantially all of the custodial or trust business of the
Custodian, shall be the successor to the Custodian hereunder, provided that such
corporation shall be otherwise qualified and eligible under this Master
Participation Agreement, without the execution or filing of any paper or any
further act on the part of any other parties hereto.

      

      
        
          
          

        

        
          39

          
          

        

        
          
          

        

      

      Section
21.  No Transfer
of Participation Certificates or Participation Interests. None of the
Participation Certificates or any Participation Interest may be sold, assigned,
transferred, pledged, or hypothecated by any party hereto without the prior
written consent of each other party hereto; provided that the Sponsor may grant
a security interest in any of the Class B Participation Interests to any Person
providing interim financing to the Sponsor.

      

      Section
22.  Fees and
Expenses.

      

      (a) The
Sponsor shall be required to pay (i) all of the costs and expenses which are
incurred by it in connection with the negotiation, preparation, execution and
delivery of this Agreement and any other related documents, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for such
Sponsor, (ii) all costs and expenses of servicing the Eligible Loans, (iii) the
cost of audits and reports required to be delivered under this Agreement by the
Sponsor, the Custodian and the Servicer, (iv) all costs and expenses incurred in
connection with the transfer and delivery of the Eligible Loans to the Custodian
and (v) the fees of the Custodian and any fees and expenses incurred in
connection with transferring ownership of any Eligible Loans to the Custodian or
to the Department in connection with the exercise of the Put Option or any other
acquisition of ownership of the Eligible Loans by the Department. The Sponsor is
responsible for any fee or other charge owed to the Department or to the
guaranty agency on a Purchased Eligible Loan after such Purchased Eligible Loan
has been
transferred to the Custodian, including amounts owed to the Department as a
recapture of excess interest.

       

      (b)The
Custodian shall be required to pay all of the costs and expenses which are
incurred by it in connection with the negotiation, preparation, execution and
delivery of this Agreement and any or any other related documents, including,
without limitation, the reasonable fees and out-of-pocket expenses of its
counsel.

      

      (c) The
Department shall be required to pay all of the costs and expenses which are
incurred by it in connection with the negotiation, preparation, execution and
delivery of this Agreement and any or any other related documents, including,
without limitation, the reasonable fees and out-of-pocket expenses of its
counsel.

      
         

      

      Section
23.  Tax
Matters.

      

      (a) The
parties hereto understand and agree that the economic arrangement related to the
distribution provisions of Section 11, are intended to be treated as a
partnership (the “Partnership”) for tax purposes, and that the income, gain,
loss, credit and expenses attributable to such arrangement shall be treated as
items of income, gain, loss, credit and expenses of the Partnership. The parties
agree to treat the Partnership as a partnership for tax purposes.

      

       (b)
The Partnership’s fiscal year shall end on December 31 of each year unless
otherwise required by Section 706 of the Code and the Treasury Regulations. As
soon as practicable after the end of each fiscal year (but no later than six (6)
months after the end of each fiscal year), the Custodian will prepare and mail,
or cause to be prepared and mailed, to the Department and the Sponsor (each, a
“Partner”, and together, the “Partners”) information on Schedule K-1 to Form
1065 and such additional information as shall enable each Partner to prepare its
federal, state and local income tax returns in accordance with the laws then
prevailing.

      

      (c) The
Custodian shall establish and maintain a separate capital account (a “Capital
Account”) for each Partner in accordance with the Treasury Regulations
promulgated under Section 704(b) of the Code. The Capital Accounts of the
Partners shall be adjusted and maintained in a manner that as closely as
possible gives economic effect to the provisions of this Agreement. No later
than as of the end of each fiscal year of the Partnership, the Partnership’s
income, gains, losses and expenses for U.S. federal, state and local income tax
purposes shall be allocated among the Capital Accounts in a manner that as
closely as possible gives economic effect to the provisions of this Agreement.
With respect to any fiscal period during which any Partner’s economic interest
in the Partnership changes by reason of any event described in Section 706(d)(1)
of the Code and Treasury Regulations issued thereunder, allocations of the
Partnership’s income, gain, loss and expense shall be adjusted appropriately to
take into account the
varying interests of the Partners during such period. The Partnership shall
select the method of making such adjustments, which method shall be used
consistently thereafter. Items of income, gain, loss, deduction and credit, as
determined for U.S. federal income tax purposes shall be allocated in a manner
consistent with the requirements of Section 704(c) of the Code.

      

      (d) If
the Partnership incurs any obligation to pay directly any amount in respect of
taxes, including but not limited to withholding taxes imposed on any Partner’s
share of the Partnership gross or net income and gains (or items thereof),
income taxes, and any interest, penalties or additions to tax (“Tax Liability”),
or the amount of cash or other property to which the Partnership otherwise would
be entitled is reduced as a result of withholding by other parties in
satisfaction of any such Tax Liability, all payments by the Partnership in
satisfaction of that Tax Liability and all reductions in the amount of cash or
fair market value of property to which – but for such Tax Liability – the
Partnership would have been entitled shall be treated, pursuant to this
Agreement, as distributed to those Partners or former Partners to which the
related Tax Liability is attributable. Notwithstanding any other provision of
this Agreement, subsequent

      distributions
to the Partners shall be adjusted by the Partnership in an equitable manner so
that, after all such adjustments have been made and to the extent feasible, the
burden of taxes withheld at the source or paid by the Partnership is borne by
those Partners to which such tax obligations are attributable. The Partnership
shall determine the amount (if any) of any Tax Liability attributable to any
Partner taking into account any differences in the Partner’s status, nationality
or other characteristics.

      
        
          
          

        

        
          40

          
          

        

        
          
          

        

      

      Section
24.  Set-off.  In
addition to any rights and remedies of the Department

      provided
in this Agreement and by law, the Department shall have the right, without prior
notice to the Sponsor, any such notice being expressly waived by the Sponsor to
the extent permitted by applicable law, upon any amount becoming due and payable
to the Department by the Sponsor hereunder with respect to any Purchased
Eligible Loan or otherwise, to set-off and appropriate and apply against such
amount any and all Collections then on deposit in the Collection Account. The
Department agrees to notify promptly the Sponsor after any such set-off and
application made by the Department, and to provide, upon objection by the
Sponsor, such review as may be required by applicable law regarding objections
to the existence and amount of the claim enforced by such set-off. The review is
to be conducted on written submissions, and failure to give such notice shall
not affect the validity of such set-off and application.

      
        
          
          

        

        
          41

          
          

        

        
          
          

        

      

      Section
25.  Survival of
Covenants. All covenants, agreements, representations and warranties made
herein and in or pursuant to any related documents or agreements executed
pursuant to this Agreement shall survive the consummation of the acquisition of
the Participation Interests by the Department. All covenants, agreements,
representations and warranties made or furnished pursuant hereto by or on behalf
of the Sponsor shall bind and inure to the benefit of any successors or assigns
of the Department and shall survive with respect to each Participation Interest
and each Loan subject to a Participation Interest.

      

      Section
26.  Communication and Notice
Requirements. All communications, notices and approvals provided for
hereunder shall be in writing and mailed or delivered to the Sponsor, the
Custodian or the Department, as the case may be, at such address as either party
may hereafter designate by notice to the other party. All demands, notices and
communications hereunder shall be in writing and shall be deemed to have been
duly given if mailed, by registered or certified mail, return receipt requested,
or, if by other means, when received by the other party at the address as
follows:

      

      If to the
Department:

      

      By U.S.
Postal Service mail:

      

      United
States Department of Education

      400
Maryland Avenue, SW

      UCP, Room
111G3

      Washington,
DC 20202-5402

      Attention:
FFEL Agreement Process Team

      

      By
courier or express mail:

      

      United
States Department of Education

      830 First
Street, N.E.

      Room
111G3

      Washington,
DC 20202-5402

      Attention:
FFEL Agreement Process Team

      

      If to the
Sponsor or the Eligible Lender Trustee:

      

      The
address designated in the Adoption Agreement.

      

      If to the
Custodian:

      

      The
address designated in the Adoption Agreement.

      
        
          
          

        

        
          42

          
          

        

        
          
          

        

      

      Section
27.  Form of
Instruments. All instruments and documents delivered in connection
with this Agreement and any Class A Participation Certificate, and all
proceedings to be taken in connection with this Agreement and any Class A
Participation Certificate and the transactions contemplated herein and therein,
shall be in a form as set forth in the attachments hereto, and the Department
shall have received copies of such documents as it or its counsel shall
reasonably request in connection therewith. Any instrument or document which is
substantially in the same form as an attachment hereto or a recital herein will
be deemed to be satisfactory as to form.

      

      Section
28.  Amendment;
Waiver. This Agreement, any Class A Participation Certificate
and any document or instrument delivered in accordance herewith or therewith may
be amended by the parties hereto and thereto with the written consent of all
parties hereto or thereto. No term or provision of this Agreement may be waived
or modified unless such waiver or modification is consistent with the
requirements of Section 459A of the Higher Education Act, is in writing and is
signed by the party against whom such waiver or modification is sought to be
enforced.

      

      Section
29.  Severability
Clause. Any part, provision, representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Loan shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by applicable law,
the parties hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof. If the invalidity of any part, provision,
representation or warranty of this Agreement shall deprive any party of the
economic benefit intended to be conferred by this Agreement, the parties shall
negotiate in good-faith, to develop a structure the economic effect of which is
nearly as possible the same as the economic effect of this Agreement without
regard to such invalidity.

          

             
Section 30.  Governing Law. This
Agreement and any Class A Participation   Certificate
and the rights and obligations of the parties thereto shall be governed by and
construed
in accordance with Federal law. To the extent there may be no applicable Federal
law, the internal laws of the State of New York (without giving regard to
conflicts of laws principles other than Sections 5-1401 and 5-1402 of the New
York General Obligations Law) shall be deemed reflective of Federal law to the
extent that to do so would not frustrate the purposes of any provision of the
Agreement or the transactions governed thereby.

      

      Section
31.  Exhibits. The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.

      
         

      

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

      

      
        	
                 
      

              	
                (1)
      the terms defined in this Agreement have the meanings assigned to them in
      this Agreement and include the plural as well as the singular, and the use
      of any gender herein shall be deemed to include the other
      gender;

              

      

      
 

      
        	
                 
      

              	
                (2)accounting
      terms not otherwise defined herein have the meanings assigned to them in
      accordance with generally accepted accounting
  principles;

              

      

      

      
        	
                 
      

              	
                (3)
      references herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,”
      and other Subdivisions without reference to a document are to
      designated

              

      

      Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;

      

      
        	
                 
      

              	
                (4)
      reference to a Subsection without further reference to a Section is a
      reference to such Subsection as contained in the same Section in which the
      reference appears, and this rule shall also apply to Paragraphs and other
      subdivisions;

              

      

      

      
        	
                 
      

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

              

      

      

      
        	
                 
      

              	
                (6)
      the word “day” or “days” shall mean calendar day(s) unless expressly
      stated otherwise; and

              

      

      

      
        	
                 
      

              	
                (7)
      the term “include” or “including” shall mean without limitation by reason
      of enumeration.

              

      

      

      
        
          
          

        

        
          43

          
          

        

        
          
          

        

      

      Section
33.  Reproduction
of Documents. This Agreement and all documents relating hereto,
including, without limitation, (a) consents, waivers and modifications which may
hereafter be executed, (b) documents received by any party at the closing, and
(c) financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photo static,
microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.

      

      Section
34.   Further Agreements.
Each of the Sponsor and the Eligible Lender Trustee (if applicable) agrees to
execute and deliver to the other such reasonable and appropriate additional
documents, instruments or agreements as may be necessary or appropriate to
effectuate the purposes of this Agreement.

      

      Section
35.  Other
Department Program.
Separately, the Department is offering a Loan Purchase Commitment Program
(as referred to in the Notice of Intent to Participate) for eligible FFELP
loans. This Agreement does not require, nor does it preclude, the participation
of an Eligible Lender in that separate program except to the extent specified in
Section 15 hereof.

      

      Section
36.  Adoption. This
Agreement shall be effective with respect to the Sponsor, the Eligible Lender
Trustee (if applicable) and the Custodian as of the day and year on which an
Adoption Agreement, in the form attached hereto as Exhibit A, is entered into by
and among the Sponsor, the Eligible Lender Trustee (if applicable), the
Custodian and the Department.

      
        
          
          

        

        
          44

          
          

        

        
          
          
     
Section 37.  Integration. The
Master Participation Agreement, together with the related
Adoption Agreement and any guidance interpreting the provisions of this
Agreement published by, and binding on, the Department prior to November 1,
2008, embodies the entire agreement and understanding of the parties hereto and
thereto and supersedes any and all prior agreements, arrangements and
understandings relating to the matters provided for herein and
therein.

      

      
        
          
          

        

        
          45

          
          

        

        
          
          

        

      

       

      Exhibit
A

      

      FORM
OF ADOPTION AGREEMENT

      

      This
Adoption Agreement, dated as of the date set forth on the signature page, among
the United States Department of Education (“Department”), the Sponsor (as listed
in Section 1 hereof) (“Sponsor”)[, the Eligible Lender Trustee (as listed in
Section 1A hereof) (“Eligible Lender Trustee”)] and the Custodian (as listed in
Section 2 hereof) (“Custodian”) is made pursuant to the Master Participation
Agreement, dated as of July 25, 2008, published by the Department (“Master
Participation Agreement”). Capitalized terms used but not otherwise defined
herein, shall have the meanings set forth in the Master Participation
Agreement.

      

      a) The
Department desires to purchase from the Sponsor, and the Sponsor desires
to sell to the Department, in each case through the Custodian, certain
Participation

      Interests
in Eligible Loans from time to time pursuant to the terms and conditions set
forth in the Master Participation Agreement.

      

      b) The
Department and the Sponsor desire to set forth herein the terms and conditions
of such purchase and sale arrangements. 

       

      c) [Each
of] [T]he Sponsor [and the Eligible Lender Trustee] desires to transfer title to
the Eligible Loans to the Custodian, and the Custodian hereby accepts such
delivery and agrees to hold such Eligible Loans and all supporting documentation
delivered in connection with such Eligible Loans in trust for the benefit of the
holders of the Participation Interests.

      

      d) This
Adoption Agreement shall supersede and replace all prior agreements among the
parties regarding the sale of Participation Interests in Eligible Loans by the
Sponsor to the Department.

      

      NOW,
THEREFORE, in consideration of the above recitals and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Department and the Sponsor hereby agree as
follows:

      

      Section
1.“Sponsor”
shall mean: 

      

      [NAME OF
SPONSOR]

      [ADDRESS]

      [LENDER
ID]

      

      The above
address shall be the Sponsor’s address for the purpose of receiving
notices pursuant
to the Master Participation Agreement.

      

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

       

      [Section
1A. “Eligible Lender Trustee” shall mean:

      

      [NAME OF
ELIGIBLE LENDER TRUSTEE]

      [ADDRESS]

      [LENDER
ID]

      

      The above
address shall be the Eligible Lender Trustee’s address for the purpose of
receiving notices pursuant to the Master Participation Agreement.]

      

      Section
2. “Custodian” shall mean:

      [NAME OF
CUSTODIAN]

      [ADDRESS]

      

      The above
address shall be the Custodian’s address for the purpose of receiving
notices
pursuant to the Master Participation Agreement.

      

      Section
3.  Purchase and
Sale of Participation Interests. Following the date of this Adoption
Agreement, [each of] the Sponsor [and the Eligible Lender Trustee] agrees to
participate in the Department's Participation Purchase Program for Participation
Interests in Eligible Loans made pursuant to the Federal Family Education Loan
Program under the Master Participation Agreement and to deliver to the
Department such Participation Interests in the aggregate principal amounts as
evidenced by Participation Purchase Requests and related attachments entered
into among the Sponsor, [the Eligible Lender Trustee], the Custodian holding
legal title to the Eligible Loans in trust for the holders of the Participation
Interests pursuant to the Master Participation Agreement. The Sponsor agrees to
sell to the Department, and the Department agrees to purchase from the Sponsor
such Participation Interests on the terms and subject to the conditions of the
Master Participation Agreement as the same may be supplemented or amended from
time to time. The Custodian agrees to hold each Eligible Loan and, either
directly or through its designee, all supporting documentation and records in
trust for the benefit of the holders of the Participation Interests, and to
issue the Participation Interests

      pursuant
to the terms and conditions of the Master Participation Agreement as the same
may be supplemented or amended from time to time. Each of the Sponsor, [the
Eligible Lender Trustee], the Department and the Custodian hereby acknowledges
and agrees to all terms and provisions of the Master Participation Agreement
which relate to the creation of and selling of Participation Interests which are
incorporated herein in their entirety as if such had been set forth herein, as
the same may be supplemented or amended from time to time.

      

      Section
4.   Incorporation of Master
Participation Agreement. Each of the Sponsor, [the Eligible Lender
Trustee], the Department and the Custodian hereby acknowledges and agrees to all
terms and provisions of the Master Participation Agreement which are
incorporated herein in their entirety as if such had been set forth herein in
their entirety, as the same may be supplemented or amended from time to
time.

      

      Section
5.  Governing
Law. This Adoption Agreement and the rights and obligations of the
parties hereto shall be governed by and construed in accordance with Federal
law. To the extent that there may be no applicable Federal law, the internal
laws of the State of New York (without giving regard to conflicts of laws
principles other than Sections 5-1401 and 5-1402 of  the New York
General Obligations Law) shall be deemed reflective of Federal law to the extent
that to do so would not frustrate the purposes of any provision of this Adoption
Agreement.                                         

         [Signature
Page Follows]

      

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

       

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

      

      United
States Department of Education

      

      

      By:____________________________

      Name:

      Title:

      

      Date
of Adoption Agreement: __________

      (to be
inserted by the Department)

      

      

      [NAME OF
SPONSOR], as Sponsor

      

      By:_____________________________

      Name:

      Title:

      

      

      [[NAME OF
ELIGIBLE LENDER TRUSTEE], as

      Eligible
Lender Trustee

      

      By:______________________________

      Name:

      Title:

      

      

      [NAME OF
CUSTODIAN], as Custodian

      

      By:______________________________

      Name:

      Title:

      

      

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

       

      Exhibit
B

      

      

      FORM
OF PARTICIPATION PURCHASE REQUEST

      

      [insert
date]

      

      United
States Department of Education

      400
Maryland Avenue, SW

      Washington,
DC 20202

      Attention:
_______________________

      

      Participation
Purchase Request Reference:_____________________

      Ladies/Gentlemen:

       

              
Reference is made to the Master Participation Agreement, dated as of July 25,
2008
(“Master Participation Agreement”; capitalized terms used but not otherwise
defined herein shall have the meanings given them in the Master Participation
Agreement), among the United States Department of Education (“Department”), the
undersigned Sponsor (“Sponsor”), [the undersigned Eligible Lender Trustee
(“Eligible Lender Trustee”),] and the undersigned Custodian (“Custodian”), each
of which have been made party to the Master Participation Agreement by executing
the Adoption Agreement (“Adoption Agreement”).

       

            
In accordance with Section 4(a) of the Master Participation Agreement, the
Sponsor hereby requests that you, the Department, agree to purchase
participation interests that consist of (a) a 100% beneficial ownership interest
in the principal portion of each Eligible Loan listed on the Loan Schedule
attached hereto and (b) the right to receive the Participant’s Yield in respect
of such Eligible Loans (“Class A Participation Interests”), in connection with
which we shall sell to you the Class A Participation Certificate representing
such Class A Participation Interests.
The Purchase Price shall be ______ [insert applicable Purchase Price pursuant to
the terms of the Master Participation Agreement]. The Purchase Date shall be the
date on which the Custodian receives payment of the Purchase Price from the
Department in exchange for the Class A Participation Interests. The Sponsor
hereby certifies to the Department and the Custodian that, as of the date
hereof, it is in compliance with all of the representations and warranties set
forth in Section 10(a) of the Master Participation Agreement.

      

      The
Custodian hereby certifies that upon the delivery of each Loan Schedule and
Custodial
Certification and the receipt of the Purchase Price from the Department, the
Custodian shall hold the Loan Documents (either directly or indirectly through
its designee) and legal title with respect to each such Eligible Loan
continuously in trust for the benefit of the holders of the Participation
Interests until such time as all Participation Interests in such Eligible Loans
are redeemed or the Put Option is exercised and the Class A Participation
Interests are terminated.

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

      

      Sincerely,

      

      

      [SPONSOR],
as Sponsor

      

      

      By:____________________

      Name:

      Title:

      

      

      [[ELIGIBLE
LENDER TRUSTEE], as Eligible Lender Trustee

      

      By:______________________

          Name:

          Title:

      

      

      [CUSTODIAN],
as Custodian

      

      By:_______________________

      Name:

      Title:

      

      Acknowledged

      

      UNITED
STATES DEPARTMENT OF EDUCATION

      

      By:___________________________

      Name:

      Title:

      

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

      

      
 

      [LOAN
SCHEDULE TO BE ATTACHED]

      

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

      

       

      Exhibit
C

      

      

      

      FORM
OF CLASS A PARTICIPATION CERTIFICATE

      

      

      Date:____________,
200_

      

      

      Reference
is made to (i) the Master Participation Agreement, dated as of July 25, 2008,
and (ii) the Adoption Agreement, dated as of [___] by and among [____] as
Sponsor (“Sponsor”), [[____] as Eligible Lender Trustee (“Eligible Lender
Trustee”),] [____] as Custodian (“Custodian”) and the Department of Education
(“Department”) pursuant to which the Sponsor[, the Eligible Lender Trustee] and
the Custodian became parties to the Master Participation Agreement. Capitalized
terms used but not defined herein shall have the respective meanings assigned to
such terms in the Master Participation Agreement.

      

      This
Class A Participation Certificate evidences the ownership of the Department of
the Class A Participation Interests in the Eligible Loans listed on Schedule A
hereto having an aggregate Principal Balance as set forth on Schedule A
hereto.

      

      The
Custodian shall, and is hereby authorized to, record in accordance with its
usual practice, the amount of additional Eligible Loan that becomes subject to
the Class A Participation Interests represented by this Class A Participation
Certificate, and the related Purchase Date, and the date and amount of each
principal payment received hereunder on the schedule annexed hereto and any such
recordation shall constitute prima facie evidence of the accuracy of the amount
so recorded; provided, that the failure of the Custodian to make such
recordation (or any error in such recordation) shall not affect the obligations
of the Sponsor hereunder or under the Master Participation
Agreement.

      

      This
Class A Participation Certificate is issued pursuant to, and is entitled to the
benefits of, the Master Participation Agreement, to which reference is hereby
made for a statement of the terms and conditions governing this Class A
Participation Certificate, including the terms and conditions under which this
Class A Participation Certificate may be prepaid or its maturity date
accelerated. Repayment of the Purchase Price for the Class A Participation
Interests is subject to the exercise of the Put Option as described in the
Master Participation Agreement. This Class A Participation Certificate and the
related Class A Participation Interests are secured by the Eligible Loans as
more particularly described in the Master Participation Agreement.

      

      THIS
CLASS A PARTICIPATION CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”), AND HAS
NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR
REGULATORY
AUTHORITY OF ANY STATE. THIS CLASS A PARTICIPATION CERTIFICATE
IS NON-TRANSFERABLE EXCEPT AS OTHERWISE EXPRESSLY PERMITTED
IN THE MASTER PARTICIPATION AGREEMENT.

      

            
No failure on the part of the Department to exercise, and no delay in
exercising, any right hereunder or under the Master Participation Agreement
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies available to the Department
hereunder and under the Master Participation Agreement are cumulative and not
exclusive of any remedies provided by law.

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

       

      THIS
CLASS A PARTICIPATION CERTIFICATE AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
FEDERAL LAW. TO THE EXTENT THAT THERE MAY
BE NO APPLICABLE FEDERAL LAW, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING REGARD TO CONFLICTS OF LAWS PRINCIPLES OTHER THAN SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) SHALL BE DEEMED
REFLECTIVE OF FEDERAL LAW INSOFAR AS TO DO SO WOULD NOT FRUSTRATE THE PURPOSES
OF ANY PROVISION OF THE MASTER PARTICIPATION AGREEMENT OR THE TRANSACTIONS
GOVERNED THEREBY.

      

      

      [CUSTODIAN],

      in its
capacity as trustee

      

      

      By:
_______________________________

      Name:

      Title:

      

      

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

      
 

      Schedule
A

      to Class A Participation
Certificate

      

      LOAN
SCHEDULE AND CUSTODIAL CERTIFICATION

      

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

       

       

      Exhibit
D

      

      

      FORM
OF CLASS B PARTICIPATION CERTIFICATE

      

      

      Date:____________,
200_

      

      Reference
is made to (i) the Master Participation Agreement, dated as of July 25, 2008,
and (ii) the Adoption Agreement, dated as of [___] by and among [____] as
Sponsor (“Sponsor”), [[____] as Eligible Lender Trustee (“Eligible Lender
Trustee”),] [____] as Custodian (“Custodian”) and the Department of Education
(“Department”) pursuant to which the Sponsor[, the Eligible Lender Trustee] and
the Custodian became parties to the Master Participation Agreement. Capitalized
terms used but not defined herein shall have the respective meanings assigned to
such terms in the Master Participation Agreement.

      

      This
Class B Participation Certificate evidences the ownership of the Sponsor of the
Class B Participation Interests in the Eligible Loans listed on Schedule A
hereto having an aggregate Principal Balance as set forth on Schedule A
hereto.

      

      The
Custodian shall, and is hereby authorized to, record in accordance with its
usual practice, the amount of additional Eligible Loan that becomes subject to
the Class B Participation Interests represented by this Class B Participation
Certificate, and the related Purchase Date, and the date and amount of each
principal payment received hereunder on the schedule annexed hereto and any such
recordation shall constitute prima facie evidence of the accuracy of the amount
so recorded; provided, that the failure of the Custodian to make such
recordation (or any error in such recordation) shall not affect the obligations
of the Sponsor hereunder or under the Master Participation
Agreement.

      

      This
Class B Participation Certificate is issued pursuant to, and is entitled to the
benefits of, the Master Participation Agreement, to which reference is hereby
made for a statement of the terms and conditions governing this Class B
Participation Certificate. This Class B Participation Certificate and the
related Class B Participation Interests are subordinated to the Class A
Participation Interests in Eligible Loans sold to the Department by the Sponsor
under the Master Participation Agreement. This Class B Participation Certificate
and the related Class B Participation Interests are secured by the Eligible
Loans as more particularly described in the Master Participation Agreement and
represent the right of the holder to either (i) redeem the Eligible Loans in
exchange for payment of the Redemption Payment to the Department or (ii)
exercise the Put Option with respect to the Eligible Loans, each as described in
the Master Participation Agreement.

      

      THIS
CLASS B PARTICIPATION CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND
HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR REGULATORY AUTHORITY OF ANY STATE. THIS CLASS B PARTICIPATION CERTIFICATE
IS NON-TRANSFERABLE EXCEPT AS OTHERWISE EXPRESSLY PERMITTED
IN THE MASTER PARTICIPATION AGREEMENT.

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

       

      No
failure on the part of the Sponsor to exercise, and no delay in exercising, any
right hereunder or under the Master Participation Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
or thereunder preclude any other or further exercise thereof or the exercise of
any other right. The remedies available to the Sponsor hereunder and under the
Master Participation Agreement are cumulative and not exclusive of any remedies
provided by law.

      

      THIS
CLASS B PARTICIPATION CERTIFICATE AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH FEDERAL LAW. TO THE EXTENT THAT THERE MAY
BE NO APPLICABLE FEDERAL LAW, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING REGARD TO CONFLICTS OF LAWS PRINCIPLES OTHER THAN SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) SHALL BE DEEMED
REFLECTIVE OF FEDERAL LAW INSOFAR AS TO DO SO WOULD NOT FRUSTRATE THE PURPOSES
OF ANY PROVISION OF THE MASTER PARTICIPATION  AGREEMENT OR THE
TRANSACTIONS GOVERNED THEREBY.

      

      

      [CUSTODIAN],

      in its
capacity as trustee

      

      

      By:
_______________________________

            Name:

            Title:

      

      

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

       

      Schedule
A

      to Class B Participation
Certificate

      

      LOAN
SCHEDULE AND CUSTODIAL CERTIFICATION

      

      [TO BE
PROVIDED BY THE DEPARTMENT]

      

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

      

       

      Exhibit
E

      

      

      FORM
OF OFFICER’S CERTIFICATE

      

      I,
________________________, hereby certify that I am the duly elected ______________
of [SPONSOR], a ______________ (“Sponsor”), and further certify, on behalf of
the Sponsor as follows:

             

              1.
Attached hereto as Attachment I are a true and correct copy of the [Certificate
of Incorporation and by-laws][Certificate of limited partnership
and limited partnership
agreement] of the Sponsor as are in full force and effect on the date
hereof.

      

      2. No
proceedings looking toward merger, liquidation, dissolution or bankruptcy
of the Sponsor are pending or contemplated.

      

      3. Each
person who, as an officer or attorney-in-fact of the Sponsor, signed
(a) the
Adoption Agreement dated as of ____________ between the Department[, the
Eligible Lender Trustee] and the Sponsor pursuant to the Master Participation
Agreement (“Agreement”), dated as of July 25, 2008, by the Department of
Education (“Department”) and (b) any other document delivered prior hereto or on
the date hereof in connection with the sale of the Participation Interests in
accordance with the Agreement was, at the time of such signing and delivery, and
is as of the date hereof, duly elected or appointed, qualified and acting as
such officer or attorney-in-fact, and the signatures of such persons appearing
on such documents are their genuine signatures.

      

      4.
Attached hereto as Attachment II is a true and correct copy of the resolutions
duly adopted by the board of directors of the Sponsor on ________________, 200_
(“Resolutions”) with respect to the authorization and approval of the sale of
the Participation Interests; said Resolutions have not been amended, modified,
annulled or revoked and are in full force and effect on the date
hereof.

      

      5.
Attached hereto as Attachment III is a Certificate of Good Standing of the
Sponsor
dated ______________, 200_. No event has occurred since ___________________,
200_ which has affected the good standing of the Sponsor under the laws of the
State of ___________.

      

      6. All of
the representations and warranties of the Sponsor contained in Section
10 of the Agreement were true and correct in all material respects as of the
date of the Agreement and are true and correct in all material respects as of
the date hereof.

       

              7.
[Each of] [T]he Sponsor [and the Eligible Lender Trustee] has performed
all of
its duties and has satisfied all the material conditions on its part to be
performed or satisfied prior to the related Purchase Date pursuant to the
Agreement.

      

      All
capitalized terms used herein and not otherwise defined shall have the
meaning
assigned to them in the Agreement.

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

      IN
WITNESS WHEREOF, I have hereunto signed my name and affixed the seal
of the
Sponsor.

      

      Dated:
_________________________

      [Seal]

      

      [SPONSOR
NAME]

      (Sponsor)

      

      By:
_____________________

      Name:

      Title:
[Responsible Officer]

      

      I,
_______________________, Secretary of the Sponsor, hereby certify that
_________________________
is the duly elected, qualified and acting [Responsible Officer] of the Sponsor
and that the signature appearing above is his/her genuine
signature.

      

      IN
WITNESS WHEREOF, I have hereunto signed my name.

      

      Dated:_________________________

      

      [Seal]

      

      [SPONSOR
NAME]

      (Sponsor)

      

      By:______________________

      Name:

      Title:
[Assistant] Secretary

      

      

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

      Exhibit
F

      

      FORM
OF OPINION OF COUNSEL TO THE SPONSOR

      

      ______________________________

                                            (Date)

      United
States Department of Education

      400
Maryland Avenue, SW

      Washington,
DC 20202

      Attention:
[_____________]

      

      [Custodian]

      [Address]

      Attention:
[_____________]

      

      Re:
Master Participation Agreement, dated as of July 25, 2008

      

      Ladies
and Gentlemen:

      

      I have
acted as counsel to [SPONSOR], a _________________ (“Sponsor”), in connection
with the sale of certain Participation Interests by the Sponsor to the
Department of Education (“Department”) pursuant to a Master Participation
Agreement, dated as of July 25, 2008, and the related Adoption Agreement dated
as of _____________, between the Sponsor, [the Eligible Lender Trustee] and the
Department (“Agreement”). Capitalized terms not otherwise defined herein have
the meanings set forth in the Agreement.

      

      In
connection with rendering this opinion letter, I, or attorneys working under my
direction, have examined, among other things, originals, certified copies or
copies otherwise identified to my satisfaction as being true copies of the
following:

      

      A. The
Agreement;

       

      B. The Sponsor's [Certificate of Incorporation and
by-laws][certificate of limited partnership and limited partnership agreement],
as amended to date;

      
        
        

      

      

      C.
Resolutions adopted by the Board of Directors of the Sponsor with specific
reference to actions relating to the transactions covered by this
opinion (“Board Resolutions”); and

      

      D. Such
other documents, records and papers as we have deemed necessary
and relevant as a basis for this opinion.

      

      For the
purpose of rendering this opinion, I have made such documentary, factual
and legal
examinations as I deemed necessary under the circumstances. As to factual
matters, I have relied upon statements, certificates and other assurances of
public officials and of officers and other representatives of the Sponsor, and
upon such other certificates as I deemed appropriate, which factual matters have
not been independently established or verified by me. I have also assumed, among
other things, the genuineness of all signatures, the legal capacity of all
natural persons, the authenticity of all documents submitted to me as originals,
and the conformity to original documents of all documents submitted to me as
copies and the authenticity of the originals of such copied documents.

       

      On the
basis of and subject to the foregoing examination, and in reliance thereon,
and
subject to the assumptions, qualifications, exceptions and limitations expressed
herein (if any), I am of the opinion that:

      

      1. The
Sponsor has been duly [incorporated][formed] and is validly existing
and in
good standing under the laws of the State of __________ with corporate power and
authority to own its properties and conduct its business as presently conducted
by it. The Sponsor has the corporate power and authority to service the Loans,
and to execute, deliver, and perform its obligations under the Agreement.

       

      2. The
Agreement has been duly and validly authorized, executed and delivered
by the Sponsor.

      

      3. The
Agreement constitutes valid the legal and binding obligation of the Sponsor,
enforceable against the Sponsor in accordance with its terms.

      

      4. No
consent, approval, authorization or order of any state or federal court
or
government agency or body is required for the execution, delivery and
performance by the Sponsor of the Agreement or the consummation of the
transactions contemplated by the Agreement, except for those consents,
approvals, authorizations or orders which previously have been
obtained.

      

      5. The
fulfillment of the terms of or the consummation of any other transactions
contemplated in the Agreement will not result in a breach of any term or
provision of the [certificate of incorporation or by-laws][certificate of
limited partnership or limited partnership agreement] of the Sponsor, or, to the
best of my knowledge, will not conflict with, result in a breach or violation
of, or constitute a default under, (i) the terms of any indenture or other
agreement or instrument known to me to which the Sponsor is a party or by which
it is bound, (ii) any State of ____________ or federal statute or regulation
applicable to the Sponsor, or (iii) any order of any State of ____________ or
federal court, regulatory body, administrative agency or governmental body
having jurisdiction over the Sponsor, except in any such case where the default,
breach or violation would not have a material adverse effect on the Sponsor or
its
ability to perform its obligations under the Agreement.

      

      6. There
is no action, suit, proceeding or investigation pending or, to the best of my
knowledge, threatened against the Sponsor which, in my judgment, either in any
one instance or in the aggregate, would draw into question the validity of the
Agreement or which would be likely to impair materially the ability of the
Sponsor to perform under the terms of the Agreement.

      

      7.The
sale of each Participation Interest as and in the manner contemplated
by the
Agreement is sufficient fully to transfer to the Department all right, title and
interest of the Sponsor thereto as the owner thereof.

       

      8.The
Agreement is effective to create, in favor of the Custodian and the Department,
a valid security interest under the Uniform Commercial Code in all of the right,
title and interest of the Sponsor in, to and under the Collateral. Upon the
filing of financing statements on Form UCC-1 naming Sponsor as “Debtor”,
Custodian as “Secured Party”, and the Department as “Assignee” describing the
Collateral, with the [Secretary of State of ___________], the security interests
in the Collateral above will constitute fully perfected security interests under
the Uniform Commercial Code in all right, title and interest of the Sponsor in,
to and under such of the Collateral that can be perfected by filing under the
Uniform Commercial Code.

      

      [Assumptions
and qualifications, if any]

       

      I am
admitted to practice law in the State of ___________, and I render no
opinion
herein as to matters involving the laws of any jurisdiction other than the
State
of_________
and the Federal laws of the United States of America.

      

      Very
truly yours,

      

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

      

       

      Exhibit
G

      

      FORM
OF SECURITY RELEASE CERTIFICATION

      

      I.
Release of Security Interest

      ___________________________,
hereby relinquishes any and all right, title and interest
it may have in and to the Loans described on the schedule attached hereto upon
purchase of a Participation Interest therein by the Department of Education from
the Sponsor named below pursuant to that certain Master Participation Agreement,
dated as of July 25, 2008, and the related Adoption Agreement between the
Sponsor, [the Eligible Lender Trustee] and the Department of Education dated as
of  _____________________, as of the date and time of receipt by
______________________________ of $__________ for such Participation Interests
in such Loans (“Date and Time of
Sale”), and certifies that, as of the Date and Time of Sale, (i) all
notes, assignments and other documents in its possession relating to such Loans
have been delivered and released to the Sponsor named below or its designees
other than copies thereof that are retained by the undersigned or its designee
(in electronic or paper medium), and (ii) all appropriate Uniform Commercial
Code termination statements have been filed evidencing the release of its lien
on the related Loans.

      

      Name and
Address of Financial Institution

      

      (Name)

      

      (Address)

      

      By:______________________________________

      

      

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

      

       

      II. Certification of Release

      

      The
Sponsor named below hereby certifies to the Department of Education that,
as of the
Date and Time of Sale of the Participation Interests in the above mentioned
Loans to the Department of Education, the security interests in the Loans
released by the above named corporation comprise all security interests relating
to or affecting any and all such Loans. The Sponsor warrants that, as of such
time, there are and will be no other security interests affecting any or all of
such Loans.

      

      Sponsor

      

      

      By:_________________________

      Name:_______________________

      Title:

       

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

       

      Exhibit
H

      

      FORM
OF NOTICE OF INTENT TO PARTICIPATE

      

      

      [__________,
200_]

      U.S.
Department of Education

      Washington,
D.C.

      By:
E-mail: ffel.agreementprocess@ed.gov

      

      Re:
Loan Purchase Commitment Program and/or Loan Participation Purchase Program for
Eligible
FFELP Loans

       

      Ladies
and Gentlemen:

      

      The
undersigned, an eligible Federal Family Education Loan Program (FFELP) lender
under Section
435(d)(1) of the Higher Education Act of 1965, as amended (HEA), eligible lender
trustee, or holder of beneficial interests in FFELP Loans (“Undersigned”),
hereby notifies the United States Department of Education that it intends to
participate in one or both of the following FFEL Loan Purchase programs for the
2008-2009 academic year. The Loan Purchase programs are authorized under Section
459A of the HEA, as amended by the Ensuring Continued Access to Student Loans
Act of 2009 (Pub. L. No. 110-227), and described in the Notice of Terms and
Conditions of Purchase of Loans under the Ensuring Continued Access to Student
Loans Act of 2008 (Register Notice) published in the Federal Register, Vol. 73,
No. 127, July 1, 2008. Signifying intent to participate in one or both of the
programs offered does not require actual participation in such
programs.

      

      

      CHECK THE
APPLICABLE BOX(ES):             □ Loan
Purchase Commitment Program

         
□ Loan Participation Purchase Program and the

         
   Loan Purchase Commitment Program

       

      By
signifying its intent to participate in such program(s), the Undersigned hereby
certifies and agrees that:

      

      If the
Undersigned participates in either of the programs, it will continue to
originate or acquire FFELP loans made to students and parents.

      

      If the
Undersigned participates in the Loan Participation Purchase Program, it will
sell, from time to time, participation interests in FFELP loans to the
Department of Education with an aggregate unpaid principal balance of not less
than $50,000,000 in loans either held by such eligible lender or aggregated with
other FFELP loans held by one or more eligible lenders. Note that there is no
minimum for the Loan Purchase Commitment Program.

      

      The
Undersigned acknowledges that it shall not be permitted to sell FFELP loans or
participation interests therein to the Department of Education with respect to
which the first disbursement was made prior to the date on which the Department
of Education receives this Notice of Intent to Participate, except that, if the
Department of Education receives this Notice of Intent to Participate by July
31, 2008 the Undersigned shall be permitted to sell to the Department of
Education FFELP loans or participation interests therein, as applicable, where
the first disbursement of the loan(s) was made on or after May 1,
2008.

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

      For the
purpose of item 3 above, the Department of Education will return to the
Undersigned, via electronic
mail (e-mail), information indicating the date the Notice of Intent to
Participate was received by the Department of Education. 

       

      The
Department of Education has provided that it will accept signed copies of this
Notice of Intent sent as a PDF attachment via e-mail at the address
below.

       

      The
Undersigned is aware that it must refer to the Federal Register Notice and to
the agreements referred to therein for a complete description of the terms and
conditions under which the Department of Education will administer the Loan
Purchase Programs. The Undersigned also is aware that in order to participate in
the Loan Purchase programs it must execute a Master Agreement for the respective
program. If the Undersigned is a beneficial holder of FFELP loans, include on
this form the LID(s) under which it operates. If the Undersigned, as an eligible
lender trustee, files this Notice on behalf of its beneficial holders of FFELP
loans, include the name and LID of each of those beneficial
holders.

      

      This
Notice of Intent to Participate is hereby executed and dated as of the date
first listed above. 

       

      By
executing this Notice of Intent, the Undersigned now possesses an option to
participate in the Loan Purchase Program or Programs indicated by the
Undersigned above.

      

      The
Undersigned asks that the Department of Education please direct all inquiries
and correspondence relating to these programs to:

      

      

      [UNDERSIGNED
NAME AND LENDER ID NUMBER]

      [ELIGIBLE
LENDER TRUSTEE NAME OR BENEFICIAL HOLDER

      NAME, IF
ANY AND LIDS]

      [STREET
ADDRESS]

      [CITY],
[STATE] [ZIP]

      Attention
of: [NAME], [TITLE]

      By Phone
- [XXX-XXX-XXXX]

      By Fax –
[XXX-XXX-XXXX]

      By E-mail
– [email address]

      

      [NAME OF
ENTITY]

      

      

      By:___________________________

      Name:

      Title:

      

      

      The
completed, signed, and dated Notice of Intent to Participate should be sent as a
PDF attachment to an e-mail message addressed to ffel.agreement process@ed.gov.
The e-mail message subject line should read “Submission of Notice of Intent to
Participate.”

      

      For
questions concerning the submission and receipt of the email please call (202)
377-4401.

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