/FIRST AND FINAL ADD -- NEM087 -- J.C. FLOWERS COURT DOCUMENTS/

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY

  SLM CORPORATION,
     Plaintiff,

   v.

  J.C. FLOWERS II L.P., JPMORGAN CHASE
  BANK, N.A., BANK OF AMERICA, N.A.,
  MUSTANG HOLDING COMPANY, INC. and
  MUSTANG MERGER SUB, INC.,

       Defendants.                              Civil Action No. 3279-VCS

 J.C. FLOWERS II L.P., JPMORGAN CHASE
 BANK, N.A., BANK OF AMERICA, N.A.,            ANSWER AND COUNTERCLAIMS
 MUSTANG HOLDING COMPANY, INC. and
 MUSTANG MERGER SUB, INC.,

       Counterclaim-Plaintiffs,

   v.

  SLM CORPORATION,

       Counterclaim-Defendant.




Defendants-Counterclaim Plaintiffs J.C. Flowers II, L.P. ("Flowers"), JPMorgan Chase Bank, N.A. ("JPMorgan Chase"), Bank of America, N.A. ("Bank of America"), Mustang Holding Company ("Buyer") and Mustang Merger Sub, Inc. ("Subsidiary") (Buyer and Subsidiary, collectively, "Mustang") for their answer to the Complaint of Plaintiff-Counterclaim Defendant SLM Corporation ("Sallie Mae" or the "Company") respond as follows:

                           NATURE OF THE ACTION

  1.   Deny the allegations of paragraph 1 of the Complaint, except admit
       that on April 15, 2007, Mustang and Sallie Mae entered into an
       Agreement and Plan of Merger (the "Merger Agreement" or "Agreement"),
       which provided for the acquisition of Sallie Mae by Mustang at $60
       cash per share provided certain conditions were met (the
       "Transaction"); admit that the merger transaction was valued at
       approximately $26 billion; and admit that the Merger Agreement
       provided for a $900,000,000 termination fee under certain conditions
       described in Section 11.05 of the Merger Agreement.
  2.   Deny the allegations of paragraph 2 of the Complaint, except admit
       that in the latter half of July 2007 there was a liquidity crisis in
       the credit markets; and admit that on September 26, 2007, Defendants,
       in an update to an early July statement in which Defendants indicated
       that "the current legislative proposals pending before the House and
       Senate could result in a failure of the conditions to the closing of
       the merger to be satisfied," issued a statement indicating, inter
       alia, that Defendants had informed Sallie Mae that "the conditions to
       closing under the Merger Agreement, if the closing were to occur
       today, would not be satisfied as a result of changes in the
       legislative and economic environment."
  3.   Deny the allegations of paragraph 3 of the Complaint, except admit
       that on October 2, 2007, Defendants issued a press release indicating
       that Defendants had that day sent a proposal to the Board of
       Directors of Sallie Mae (the "Sallie Mae Board") "to buy [Sallie Mae]
       at a price that appropriately and fairly reflects the new economic
       and legislative environment that faces [Sallie Mae]"; and aver that
       this proposal consisted of up to $60 per Sallie Mae share, composed
       of $50 in cash plus warrants with a payout of up to an additional $10
       per share in five years; and admit that attached to the press release
       was a four-page exhibit, and respectfully refer the Court to the
       press release and attachments thereto for the full contents thereof.
  4.   Deny the allegations of paragraph 4 of the Complaint, except admit
       that the definition of Material Adverse Effect contained in Section
       1.01(a) of the Merger Agreement excludes effects resulting from (i)
       "changes in Applicable Law (provided that . . . 'changes in
       Applicable Law' shall not include any changes in Applicable Law
       relating specifically to the education finance industry that are in
       the aggregate more adverse to the Company and its Subsidiaries, taken
       as a whole, than the legislative and budget proposals described under
       the heading 'Recent Developments' in the Company 10-K, in each case
       in the form proposed publicly as of the date of the Company 10-K" and
       (ii) changes in "general economic, business, regulatory, political
       or market conditions or in national or global financial markets;
       provided that such changes do not disproportionately affect the
       Company relative to similarly sized financial services companies";
       and admit that the College Cost Reduction and Access Act of 2007 (the
       "College Cost Reduction Act") was signed into law on September 27,
       2007.

                               THE PARTIES

  5.   Admit the allegations of paragraph 5 of the Complaint.
  6.   Admit the allegations of paragraph 6 of the Complaint, and aver that
       the Limited Guarantee dated April 15, 2007 and signed by a
       representative of Flowers is expressly limited to $451,800,000.
  7.   Deny the allegations of paragraph 7 of the Complaint, except admit
       that the Limited Guarantee dated April 15, 2007 and signed by a
       representative of JPMorgan Chase is expressly limited to $224,100,000
       and that Defendant JPMorgan Chase is a national bank with its main
       office, as designated in its Articles of Association, in Columbus,
       Ohio.
  8.   Admit the allegations of paragraph 8 of the Complaint, and aver that
       the Limited Guarantee dated April 15, 2007 and signed by a
       representative of Bank of America is expressly limited to
       $224,100,000.
  9.   Admit the allegations of paragraph 9 of the Complaint.
  10.  Admit the allegations of paragraph 10 of the Complaint.

                           FACTUAL ALLEGATIONS

  11.  Deny the allegations of paragraph 11 of the Complaint, except admit
       the first, second, and fourth sentences thereof; and admit that, in
       or about February 2007, Sallie Mae met with Defendants Flowers,
       JPMorgan Chase, and Bank of America to discuss certain aspects of
       Sallie Mae's business, including certain aspects of the legislative
       environment for the student loan industry.
  12.  Admit the allegations of paragraph 12 of the Complaint.
  13.  Deny the allegations of paragraph 13 of the Complaint, except admit
       that there were legislative and budget proposals each of which
       potentially could have had an adverse impact on Sallie Mae's
       business, and respectfully refer the Court to the "Recent
       Developments" section of the Form 10-K filed by Sallie Mae with the
       SEC on March 1, 2007 (the "Sallie Mae 10-K") for a description of
       some of these proposals.
  14.  Deny the allegations of paragraph 14 of the Complaint, except admit
       that, depending on the terms of any new legislation that was actually
       enacted, Sallie Mae was potentially an attractive investment at an
       appropriate price.
  15.  Deny the allegations of paragraph 15 of the Complaint, except admit
       that Sallie Mae filed a Form 10-K with the SEC on March 1, 2007 that
       contained a section called "Recent Developments" that described
       certain legislative and budget proposals, and respectfully refer the
       Court to the "Recent Developments" section of the Sallie Mae 10-K for
       the contents thereof.
  16.  Admit the allegations of paragraph 16 of the Complaint.
  17.  Admit that the Sallie Mae 10-K described certain features of the
       President's 2008 Budget Proposals (the "Bush Budget Proposal") and
       contained the language quoted in paragraph 17.
  18.  Deny the allegations of paragraph 18 of the Complaint, and aver that
       the Bush Budget Proposal, if enacted, would have had a significant
       adverse effect on Sallie Mae, including decreased interest rate
       subsidies received by Sallie Mae from the federal government and
       increased fees and credit risk for Sallie Mae on its FFELP loans.
  19.  Deny knowledge or information sufficient to form a belief as to the
       truth of the allegations of paragraph 19 of the Complaint.
  20.  Deny the allegations of paragraph 20 of the Complaint, except admit
       the first sentence thereof; admit that, as part of their bid,
       Flowers, JPMorgan Chase, and Bank of America proposed a form of
       limited guarantees by which these entities would guarantee payment of
       their respective shares of a termination fee under certain
       conditions; and deny knowledge or information sufficient to form a
       belief as to the truth of the third sentence.
  21.  Admit the allegations of paragraph 21 of the Complaint, except deny
       knowledge or information sufficient to form a belief as to the truth
       of whether there was another potential bidder to acquire Sallie Mae
       (the "Other Bidder"), whether, on or about April 13, 2007,
       discussions with the Other Bidder were still ongoing, whether Sallie
       Mae engaged in negotiations with the Other Bidder regarding any
       potential issues in any merger agreement, including the definition of
       "Material Adverse Change," and whether that same day Sallie Mae
       requested a "best and final" offer from the Other Bidder by April 14,
       2007.
  22.  Admit the allegations of paragraph 22 of the Complaint, except deny
       knowledge or information sufficient to form a belief as to the truth
       of the first sentence thereof.
  23.  Deny the allegations of paragraph 23 of the Complaint, except admit
       the first sentence thereof; admit that the Merger Agreement provides
       that the merger cannot be consummated until 30 calendar days after a
       debt marketing period (the "Marketing Period") has commenced; and
       aver that the Marketing Period cannot commence until all other
       conditions to the consummation of the merger (except for receipt of a
       certificate signed by an officer of Sallie Mae) are satisfied or
       waived, including, among other things, a condition that the
       representations and warranties of Sallie Mae (including the
       representation in Section 4.10 of the Merger Agreement that "there
       has not been any event, occurrence, development or state of
       circumstances or facts that has had or would be reasonably expected
       to have, individually or in the aggregate, a Material Adverse
       Effect") shall be true and correct; and aver that, pursuant to the
       Agreement, Subsidiary would merge with and into Sallie Mae, which
       would survive as a subsidiary of Buyer, owned by Defendants Flowers,
       JPMorgan Chase, and Bank of America, and that holders of Sallie Mae
       stock would receive $60 in cash per share, subject to all conditions
       of the merger being satisfied or waived.
  24.  Admit the allegations of paragraph 24 of the Complaint.
  25.  Deny the allegations of paragraph 25 of the Complaint, except admit
       that Article 4 of the Merger Agreement contains a preamble, and
       respectfully refer the Court to Article 4 of the Merger Agreement for
       the complete terms thereof.
  26.  Deny the allegations of paragraph 26 of the Complaint, except admit
       that Section 1.01(a) of the Merger Agreement contains the definition
       of Material Adverse Effect quoted in paragraph 26 but without the
       added emphases.
  27.  Deny the allegations of paragraph 27 of the Complaint, except admit
       that the Merger Agreement's definition of Material Adverse Effect
       contains several exclusions; that the exclusion for changes in
       "general economic, business, regulatory, political or market
       conditions" is subject to an exception for changes that
       "disproportionately affect the Company relative to similarly sized
       financial services companies"; and that the exclusion for "changes in
       Applicable Law" is subject to an exception for "changes in Applicable
       Law relating specifically to the education finance industry that are
       in the aggregate more adverse to the Company and its Subsidiaries,
       taken as a whole, than the legislative and budget proposals described
       under the heading 'Recent Developments' in the Company 10-K, in each
       case in the form proposed publicly as of the date of the Company 10-
       K."
  28.  Deny the allegations of paragraph 28 of the Complaint, except admit
       that effects on Sallie Mae resulting from changes in Applicable Law,
       as defined in the Merger Agreement, are excluded from consideration
       as a Material Adverse Effect unless such changes in Applicable Law
       "are in the aggregate more adverse to the Company and its
       Subsidiaries, taken as a whole, than the legislative and budget
       proposals" described in the Sallie Mae 10-K, "in each case in the
       form proposed publicly as of the date of [the Sallie Mae] 10-K."
  29.  Deny the allegations of paragraph 29 of the Complaint, except admit
       that Defendants were aware of the legislative and budget proposals
       described in the Sallie Mae 10-K.
  30.  Deny the allegations of paragraph 30 of the Complaint, except admit
       that, during the course of the negotiation of the Merger Agreement,
       Sallie Mae provided Defendants with an initial draft of the merger
       agreement that excluded all "changes in Applicable Law" from the
       definition of Material Adverse Effect, and that Defendants
       subsequently proposed a draft that carved out from that exclusion
       "any change in Applicable Law relating specifically to the education
       finance industry other than changes in Applicable Law that are within
       the scope of the legislative and budget proposals described under the
       heading 'Recent Developments' in the Company 10-K, in each case in
       the form proposed publicly as of the date hereof."
  31.  Deny the allegations of paragraph 31 of the Complaint, except admit
       that on or about May 31, 2007, J. Christopher Flowers made a
       presentation to potential co-investors and that one page of a
       presentation document dated May 2007, states, in part, that
       "[l]egislation enacted by Congress that would be materially adverse
       to Sallie Mae as compared to the proposed legislation disclosed in
       the SLM 2006 10-K is one of the developments that could trigger a
       'Material Adverse Effect'"; and aver that this statement does not
       indicate that only the incremental adverse impact of any enacted
       legislation over and above the impact of the legislative and budget
       proposals described in the Sallie Mae 10-K may be considered in
       determining whether a Material Adverse Effect has occurred; and
       further aver that the same document also states that "the effects of
       changes in education finance laws that are in aggregate more adverse
       to [Sallie Mae] than the currently proposed bills and budget
       proposals (as described in [Sallie Mae's] current 10-K, in the form
       publicly proposed as of the date of the 10-K, which included
       descriptions of both H.R. 5 and the 2008 Bush Budget, but not the
       Kennedy proposal) would count towards determining whether there is a
       MAE"; and respectfully refer the Court to the document for the full
       contents thereof.
  32.  Deny the allegations of paragraph 32 of the Complaint, except admit
       that Sections 7.01 and 7.02 of the Merger Agreement contain the
       language quoted in paragraph 32, and respectfully refer the Court to
       Sections 7.01 and 7.02 of the Merger Agreement for the complete terms
       thereof.
  33.  Deny the allegations of paragraph 33 of the Complaint, except admit
       that the Merger Agreement states that "[s]ubject to the terms and
       conditions of this Agreement, [Sallie Mae] and [Buyer] shall use
       their reasonable best efforts to take, or cause to be taken, all
       actions and to do, or cause to be done, all things proper or
       advisable under Applicable Law to consummate the transactions
       contemplated by this Agreement," and respectfully refer the Court to
       Section 8.01 of the Merger Agreement for the complete terms thereof.
  34.  Deny the allegations of paragraph 34 of the Complaint, except admit
       that the Merger Agreement provides for payment of a termination fee
       under certain conditions, and respectfully refer the Court to Section
       11.05(c) of the Merger Agreement for the complete terms thereof.
  35.  Deny the allegations of paragraph 35 of the Complaint, except admit
       that Limited Guarantees were executed by Flowers, JPMorgan Chase, and
       Bank of America; and aver that the Limited Guarantee, dated April 15,
       2007, executed by Flowers is expressly limited to $451,800,000, the
       Limited Guarantee, dated April 15, 2007, executed by JPMorgan Chase
       is expressly limited to $224,100,000, and the Limited Guarantee,
       dated April 15, 2007, executed by Bank of America is expressly
       limited to $224,100,000.
  36.  Deny the allegations of paragraph 36 of the Complaint, except admit
       the first sentence thereof; and admit that the Merger Agreement does
       not contain a financing condition.
  37.  Deny the allegations of paragraph 37 of the Complaint, except admit
       that, on July 10, 2007, in order to satisfy a comment by the SEC on
       the draft merger proxy statement, Defendants provided language to
       Sallie Mae for inclusion in the proxy statement stating that "the
       current legislative proposals pending before the House and Senate
       could result in a failure of the conditions to the closing of the
       merger to be satisfied"; and aver that this language was provided in
       response to the imminent passage of a House of Representatives bill
       cutting subsidies to the student loan industry, which was in fact
       passed the next day, July 11, 2007, and predated the credit crisis,
       which started in the latter half of July 2007.
  38.  Deny the allegations of paragraph 38 of the Complaint, except admit
       that Sallie Mae's stock price declined from a closing price of $57.80
       on July 10, 2007, to a closing price of $52.15 on July 11, 2007, and
       aver that, on July 11, 2007, the House of Representatives passed a
       bill that cut government subsidies to the student loan industry.
  39.  Deny the allegations of paragraph 39 of the Complaint.
  40.  Deny the allegations of paragraph 40 of the Complaint, except admit
       that, as a result of the proposed merger, Defendants would acquire
       control of Sallie Mae Bank, an industrial bank in Utah that
       originates loans for Sallie Mae, that this portion of the Transaction
       required FDIC approval, and that the FDIC has yet to approve the
       transfer of Sallie Mae Bank; and aver that the Merger Agreement
       required the Buyer to hold separate or divest any of the businesses
       or properties or assets of Sallie Mae or its subsidiaries, if and as
       may be required by any Governmental Authority, as defined in the
       Agreement, to resolve its objections to the transactions contemplated
       by the Merger Agreement, including the "prompt divestiture,
       liquidation, sale or other disposition" of Sallie Mae Bank or "other
       appropriate action" if the Buyer is "unable to obtain the requisite
       regulatory approvals relating to [Sallie Mae Bank] in a reasonably
       timely manner customary for other transactions of a similar nature";
       and aver that it is not the case that Defendants have been "unable to
       obtain the requisite regulatory approvals relating to [Sallie Mae
       Bank] in a reasonably timely manner customary for other transactions
       of a similar nature" because a reasonable time period for obtaining
       those approvals has not yet elapsed.
  41.  Deny the allegations of paragraph 41 of the Complaint, except admit
       that Defendants have consistently taken the position that Sallie Mae
       has not provided Defendants with projections of the type required to
       consummate the debt financing for the Transaction, including
       information and realistic projections relating to the impact of the
       credit crisis and the College Cost Reduction Act on Sallie Mae; and
       aver that Sallie Mae has not provided the required information under
       Section 8.09(b) of the Merger Agreement (the "Required Information"),
       and, in particular, Sallie Mae has failed to provide updated pro
       forma financial statements, management discussion and analysis, risk
       factor disclosure, and updated projections based on reasonable
       assumptions regarding the impact of the credit crisis and the College
       Cost Reduction Act on Sallie Mae.
  42.  Deny the allegations of paragraph 42 of the Complaint.
  43.  Deny the allegations of paragraph 43 of the Complaint, except admit
       that, on September 27, 2007, President Bush signed the College Cost
       Reduction Act into law, and that the College Cost Reduction Act's
       provisions included a reduction in direct subsidies to FFELP lenders,
       a reduction in the federal guarantee of FFELP loans, and an increase
       in FFELP lender origination fees; and aver that the impact of the
       College Cost Reduction Act on Sallie Mae is in the aggregate more
       adverse to Sallie Mae than the potential impact of any of the
       legislative and budget proposals described in the Sallie Mae 10-K in
       each case in the form proposed publicly as of the date of the Sallie
       Mae 10-K.
  44.  Deny the allegations of paragraph 44 of the Complaint.
  45.  Deny the allegations of paragraph 45 of the Complaint, except admit
       that a representative of the Defendants met with representatives of
       Sallie Mae on September 26, 2007 to discuss the status of the merger
       and advised the Sallie Mae representatives that, if the conditions to
       the closing of the Merger Agreement were required to be measured at
       that time, the conditions to closing would not be satisfied; and
       admit that Defendants released a statement on September 26, 2007 that
       contained the language quoted in the last sentence of paragraph 45 of
       the Complaint.
  46.  Deny the allegations of paragraph 46 of the Complaint, except admit
       that on October 2, 2007 the Defendants made a public proposal to the
       Sallie Mae Board, and respectfully refer the Court to the proposal,
       described in a letter to the Sallie Mae Board and a press release,
       both dated October 2, 2007, and attachments thereto for the complete
       terms of the proposal.
  47.  Deny the allegations of paragraph 47, except admit that Flowers
       issued a press release on behalf of Defendants on October 2, 2007 and
       attached Defendants' proposal to the Sallie Mae Board, and
       respectfully refer the Court to the press release and attachments
       thereto for the contents thereof.
  48.  Deny the allegations of paragraph 48 of the Complaint, except admit
       that Sallie Mae sent a letter to the Defendants dated October 3, 2007
       that unilaterally declared that the Marketing Period must begin no
       later than October 4, 2007 and purported to unilaterally set a
       closing date of November 5, 2007, and respectfully refer the Court to
       the letter for the complete contents thereof; and admit that
       Defendants sent a letter to Sallie Mae on October 8, 2007, stating,
       among other things, that Sallie Mae "has suffered a Material Adverse
       Effect within the meaning of the Merger Agreement" and that Sallie
       Mae therefore could not satisfy the conditions to Defendants'
       obligation to consummate the Transaction, and respectfully refer the
       Court to the letter for the complete contents thereof.
  49.  Deny the allegations of paragraph 49 of the Complaint.
  50.  Deny the allegations of paragraph 50 of the Complaint.
  51.  Deny the allegations of paragraph 51 of the Complaint.


                                 COUNT I
                               REPUDIATION

  52.  Defendants incorporate their responses to the allegations contained
       in paragraphs 1 through 51 as if fully set forth herein.
  53.  Deny the allegations of paragraph 53 of the Complaint, except admit
       the Merger Agreement is a valid contract, and that Mustang and Sallie
       Mae executed it and are bound by all of its terms and conditions; and
       aver that, since the conditions to closing have not occurred, those
       conditions including but not limited to provision of the Required
       Information, the continued accuracy of the representation by Sallie
       Mae in Section 4.10 of the Merger Agreement that there has not been
       any event, occurrence, development or state of circumstances or facts
       that has had or would be reasonably expected to have, individually or
       in the aggregate, a Material Adverse Effect, and FDIC approval of
       Mustang's acquisition of Sallie Mae Bank, Mustang is not in a
       position to perform any obligations that may remain under the Merger
       Agreement.
  54.  Deny the allegations of paragraph 54 of the Complaint.
  55.  Deny the allegations of paragraph 55 of the Complaint.
  56.  Deny the allegations of paragraph 56 of the Complaint.
  57.  Deny the allegations of paragraph 57 of the Complaint.
  58.  Admit that Sallie Mae seeks damages in the amount not less than
       $900,000,000, but deny that Sallie Mae is entitled to such relief.


                           AFFIRMATIVE DEFENSES

  59.  First Affirmative Defense:  The Complaint fails to state a claim upon
       which relief may be granted.
  60.  Second Affirmative Defense:  Sallie Mae has materially breached the
       terms of the Merger Agreement, and, as a result, Mustang has no
       obligation to perform thereunder.
  61.  Third Affirmative Defense:  A number of events, including the
       enactment of the College Cost Reduction Act and the disruptions in
       the markets for asset-backed securities and asset-backed commercial
       paper will have, or will reasonably be expected to have, individually
       or in the aggregate, a Material Adverse Effect on Sallie Mae within
       the meaning of the Merger Agreement as of the Effective Time, as
       defined in the Merger Agreement.
  62.  Fourth Affirmative Defense:  Mustang has not repudiated or otherwise
       breached the Merger Agreement.
  63.  Fifth Affirmative Defense:  Mustang's obligations to perform under
       the Merger Agreement are excused by reason of the failure of
       conditions precedent because, among other things: (i) Sallie Mae has
       failed to provide the Required Information, (ii) the Marketing Period
       has not taken place, (iii) the College Cost Reduction Act and the
       credit crisis will have or will reasonably be expected to have a
       Material Adverse Effect on Sallie Mae as of the Effective Time, and
       (iv) the FDIC has not approved Mustang's acquisition of Sallie Mae
       Bank.
  64.  Sixth Affirmative Defense:  Flowers, JPMorgan Chase and Bank of
       America have no obligation to Sallie Mae under their Limited
       Guarantees.

                              COUNTERCLAIMS



Defendants-Counterclaim Plaintiffs Flowers, JPMorgan Chase, Bank of America and Mustang for their Counterclaims against Plaintiff-Counterclaim Defendant Sallie Mae, upon knowledge as to themselves and their conduct and upon information and belief as to all other matters, allege as follows:

                           NATURE OF THE CLAIMS

  1.   As alleged in detail below, on April 15, 2007, Mustang and Sallie Mae
       entered into the Merger Agreement, pursuant to which Mustang agreed
       to acquire Sallie Mae at a price of $60 per share provided certain
       conditions were met.  Since that time, there have been a number of
       events that have had and will continue to have a dramatic adverse
       impact on Sallie Mae's business and prospects, including the
       following:
       a.  the enactment of the College Cost Reduction and Access Act of
           2007 (the "College Cost Reduction Act"), an Act that the
           Congressional Budget Office estimates will cut subsidies to the
           student loan industry by $22.32 billion over the next five years
           on a present discounted value basis, and that will cut Sallie
           Mae's core net income by approximately $316 million, or 15.2%, in
           2009, rising to a reduction of approximately $595 million, or
           23.5%, in 2012, as compared to reasonable projections of Sallie
           Mae's core net income if the new legislation had not been
           enacted; and
      b.  the collapse in the market for asset-backed securities, including
          the market for the sale of securitized student loans, as well as
          substantial disruption in the market for asset-backed commercial
          paper, events that disproportionately affect Sallie Mae as
          compared to similarly sized financial services companies.



Together, these two events will reduce Sallie Mae's core net income by an estimated $402 million, or 19.4%, in 2009, and by $719 million, or 28.4%, in 2012.

  2.   As a result, Mustang and Sallie Mae are engaged in a dispute as to
       whether, under the specifically negotiated definition of "Material
       Adverse Effect" in the Merger Agreement, Sallie Mae will have
       suffered, or will reasonably be expected to suffer, a Material
       Adverse Effect as of the Effective Time and, therefore, whether or
       not Mustang has any obligation to consummate the merger (assuming all
       other conditions to closing have been satisfied, which they have not
       been) or to pay a $900 million "reverse break-up" fee.  A core issue
       in that dispute is how the definition of Material Adverse Effect
       treats "changes in Applicable Law," i.e., legislative changes that
       affect the student lending industry.
  3.   Under the unambiguous terms of the "Material Adverse Effect"
       definition, if Congress enacts any change in law with respect to the
       student lending industry "more adverse" to Sallie Mae than the
       legislative proposals described under the "Recent Developments"
       heading in its 10-K for the year ending December 31, 2006 (the
       "Sallie Mae 10-K") "in each case in the form proposed publicly as of
       the date of the [10-K, i.e., March 1, 2007]," then the entire impact
       of that new law must be considered in evaluating whether there has
       been a Material Adverse Effect.  Since the College Cost Reduction Act
       is indisputably "more adverse" to the Company than the proposals
       described in the Sallie Mae 10-K "in the form proposed publicly as
       of" March 1, 2007, and since the College Cost Reduction Act will
       materially reduce Sallie Mae's income for a durationally significant
       period, as of the Effective Time of the merger, the College Cost
       Reduction Act will have, or will reasonably be expected to have, a
       Material Adverse Effect on Sallie Mae.
  4.   Sallie Mae disputes this.  It claims that in evaluating whether there
       has been a Material Adverse Effect, the only relevant consideration
       is whether the incremental impact of the College Cost Reduction Act
       over and above the impact of the legislative proposals described in
       the Sallie Mae 10-K has a material adverse effect on the Company.
       Sallie Mae's claims simply cannot be reconciled with the plain,
       unambiguous language of the "Material Adverse Effect" definition in
       the Merger Agreement.
  5.   The operation of that language is clear.  Under the contract:
  a.   "Material Adverse Effect" is defined as "a material adverse effect on
       the financial condition, business or results of operations of the
       Company and its Subsidiaries, taken as a whole."
  b.   The definition then specifies a number of events that cannot
       constitute a Material Adverse Effect.  It does so by providing that a
       Material Adverse Effect means a material adverse effect on Sallie
       Mae's financial condition, business or results of operations "except
       to the extent any such effect results from" one of a series of
       specified events.
  c.   One such exception is contained in subsection (b) of the definition,
       which begins by providing that "changes in Applicable Law" --
       elsewhere defined to include federal law -- cannot result in a
       Material Adverse Effect.
  d.   Subsection (b) then goes on to provide, however, that if there are
       "changes in Applicable Law relating specifically to the education
       finance industry that are in the aggregate more adverse to the
       Company" than the proposals described in the Sallie Mae 10-K, then
       those "changes in Applicable Law" are not included in the general
       exclusion of "changes in Applicable Law" from the definition of
       Material Adverse Effect.  Accordingly, any "changes in Applicable
       Law" that are in the aggregate more adverse to the Company than the
       proposals described in the Sallie Mae 10-K must be counted in
       determining whether there has been a Material Adverse Effect.
  6.   As a result, the definition is clear that the impact of a new law
       that is "more adverse" to the Company than the proposals described in
       the Sallie Mae 10-K - as is the College Cost Reduction Act - has to
       be counted in evaluating whether there has been a Material Adverse
       Effect.  The definition is equally clear that the impact of that new
       law must be considered in its entirety.
  7.   Although it would have been a simple matter to state that only the
       incremental impact of the new law over the impact of the proposals
       described in the Sallie Mae 10-K may be considered, as Sallie Mae
       contends, nothing in the definition so provides.  Moreover, while the
       plain language of the contract is unambiguous, obviating any need for
       parol evidence, the negotiating history of the provision also
       confirms the parties' intent.
  8.   As alleged in detail below, the parties are in dispute on a number of
       additional issues including, for example:  (a) whether, assuming that
       Sallie Mae is correct in its interpretation of the Material Adverse
       Effect definition, as of the Effective Time, Sallie Mae will have
       suffered, or will be reasonably be expected to suffer, a Material
       Adverse Effect in its business as a result of the adoption of the
       College Cost Reduction Act and the changes in the credit markets; and
       (b) whether the conditions to closing have been satisfied, and
       whether Mustang is in breach of any obligation to close the merger.

                                 PARTIES
  9.   Counterclaim-Plaintiffs Mustang Holding Company Inc. and Mustang
       Merger Sub, Inc. are Delaware companies with their principal place of
       business in New York, New York.  Mustang was formed in April 2007 by
       Flowers, JPMorgan Chase and Bank of America to effect an acquisition
       of Sallie Mae.
  10.  Counterclaim-Plaintiff Flowers is a Cayman Islands limited
       partnership.
  11.  Counterclaim-Plaintiff JPMorgan Chase is a national bank with its
       main office, as designated in its Articles of Association, in
       Columbus, Ohio.
  12.  Counterclaim-Plaintiff Bank of America is a national bank with its
       principal place of business in Charlotte, North Carolina.
  13.  Plaintiff-Counterclaim Defendant SLM Corporation is a Delaware
       corporation with its principal place of business in Reston, Virginia.

                               JURISDICTION
  14.  Jurisdiction is proper because the parties agreed that Delaware has
       exclusive jurisdiction over all disputes relating to or arising out
       of the Merger Agreement.
  15.  Specifically, Section 11.09 of the Merger Agreement provides that:

       The parties hereto agree that any suit, action or proceeding seeking
       to enforce any provision of, or based on any matter arising out of or
       in connection with, this Agreement or the transactions contemplated
       hereby shall be brought in any federal court located in the State of
       Delaware or any Delaware state court, and each of the parties hereby
       irrevocably consents to the jurisdiction of such courts (and of the
       appropriate appellate courts therefrom) in any such suit, action or
       proceeding and irrevocably waives, to the fullest extent permitted by
       law, any objection that it may now or hereafter have to the laying of
       the venue of any such suit, action or proceeding in any such court or
       that any such suit, action or proceeding brought in any such court
       has been brought in an inconvenient forum.

                                BACKGROUND
  16.  Sallie Mae's primary business is to originate student loans through
       federally subsidized loan programs and then either to hold those
       loans in its portfolio or securitize them for sale in the asset-
       backed securities market.  Approximately 84% of Sallie Mae's loan
       portfolio consists of federally subsidized loans.  Sallie Mae
       historically has funded its operations through the issuance of
       student loan asset-backed securities (securitizations) and unsecured
       debt securities.  Sallie Mae's primary source of earnings has been
       the spread between the yield it receives, including government
       subsidies, on its portfolio of student loans (less provisions for
       loan losses), on the one hand, and the cost of funding those loans,
       on the other hand.
  17.  Prior to the recent enactment of the College Cost Reduction Act, the
       federal government subsidized student loans in at least three ways:
        (a) by paying interest for the student while he or she remained in
       school or qualified for other deferrals; (b) by providing "special
       allowance payments" to lenders that made up the difference between
       the interest rates charged to students and an indexed market interest
       rate (set annually at the commercial paper rate plus a certain
       percentage that varies with the type of loan); and (c) by
       guaranteeing the collection of 97% of the loan, a percentage that
       rose to 99% if the lender was designated an "exceptional performer"
       by the U.S. Department of Education.  In turn, lenders participating
       in the program paid a 0.5% origination fee to the federal government
       for each loan made.
  18.  Sallie Mae historically has been the single largest beneficiary of
       these federal subsidies.  According to the Sallie Mae 10-K, as of
       December 31, 2006, Sallie Mae owned and managed $119.5 billion of
       federally guaranteed loans to students and their parents.  The U.S.
       Department of Education has designated Sallie Mae's loan servicing
       division an "exceptional performer," which, prior to the passage of
       the College Cost Reduction Act, entitled it to the higher 99%
       guarantee rate.
  19.  Sallie Mae has traditionally funded its operations through the
       issuance of student loan asset-backed securities and unsecured debt.
       Sallie Mae has been particularly dependent on securitization:  in
       2006, Sallie Mae completed 13 securitizations for a total amount
       securitized of $31.6 billion.  In the Sallie Mae 10-K, the Company
       described securitization as "its principal source of financing."
       Company projections, prepared in March 2007, called for an increased
       use of securitization over the next several years.

                 THE NEGOTIATION OF THE MERGER AGREEMENT
  20.  While there is no need to resort to parol evidence, given the plain
       language of the contract, the negotiating history of the Material
       Adverse Effect definition confirms that Mustang's interpretation is
       the correct one.  Beginning in the Fall of 2006 and continuing
       through the Winter of 2007, Sallie Mae engaged in discussions with
       Flowers concerning a potential leveraged buyout of the Company.  In
       February 2007, Flowers requested the participation of JPMorgan Chase
       and Bank of America in the potential transaction.
  21.  At that time, two existing legislative proposals called for
       substantial subsidy cuts to the student loan industry:  the February
       5, 2007 Bush Budget Proposal and H.R. 5, which had been passed by the
       House on January 17, 2007.  Both proposals were described under the
       heading "Recent Developments" in the Sallie Mae 10-K, which was
       publicly filed on March 1, 2007.
  22.  The Bush Budget Proposal was the more severe of the two:  according
       to the Congressional Budget Office, on a present discounted value
       basis, the Bush Budget Proposal provided for subsidy cuts in the
       amount of $15.5 billion over the next five years, while H.R. 5
       provided for $10 billion in subsidy cuts on a present discounted
       value basis over the same period.  In the Sallie Mae 10-K, the
       Company admitted that if the Bush Budget Proposal were enacted into
       law and the Company took no remedial action, the cuts "could over
       time have a materially adverse affect on [Sallie Mae's] financial
       condition and results of operations, as new loans originated under
       the new proposal become a higher percentage of the portfolio."
  23.  During the course of due diligence, in early March 2007, Sallie Mae
       management provided Mustang with its projections for the Company.
       Those "midcase" projections assumed that the ultimate legislation
       would have a financial impact approximately halfway between that of
       the Bush Budget Proposal and that of H.R. 5.  (Those same projections
       were later included in the proxy statement that the Company sent to
       shareholders in order to secure their approval of the merger.)
       Sallie Mae estimated that even that hypothetical compromise
       legislation would reduce core net income by 8% in 2009, worsening to
       a 13.7% reduction in core net income by 2012 as the percentage of
       loans in the Company's portfolio made under the new legislation
       increase.  Although Mustang was aware that the actual legislative
       outcome could end up being better or worse than Sallie Mae's assumed
       "midcase" between the Bush Budget Proposal and H.R.5, Mustang and
       Sallie Mae believed Sallie Mae's scenario was reasonable and Mustang
       used it in pricing its bids for the Company.
  24.  Discussions proceeded.  On March 29, 2007, Sallie Mae provided
       Mustang with a draft merger agreement.  Mustang and Sallie Mae both
       recognized that, unless the Bush Budget Proposal was carved out of
       the Merger Agreement, its enactment would constitute a Material
       Adverse Effect as defined therein.  Sallie Mae's draft required
       Mustang to assume the risk of any and all changes in "Applicable Law"
       by carving out all such changes from the definition of Material
       Adverse Effect.  Thus, under Sallie Mae's draft, Mustang would have
       assumed the risk of subsidy cuts and other adverse legislative
       impacts of any magnitude, no matter how great.
  25.  On April 11, 2007, Mustang sent Sallie Mae its definitive bid, and
       included a mark-up of the draft merger agreement.  Mustang made clear
       to Sallie Mae that while it would accept the risk that the Bush
       Budget Proposal would become law, Mustang would not bear the risk of
       the enactment of even more adverse legislation.  Accordingly, Mustang
       revised the draft definition of Material Adverse Effect to provide
       that Mustang would accept the risk of enactment of only those
       proposals described under the heading "Recent Developments" in the
       Sallie Mae 10-K.
  26.  On April 12, 2007, the EFC Exchange, an education finance industry
       newsletter, published a summary of a new proposal by Senator Edward
       M. Kennedy that called for even deeper cuts than those proposed by
       President Bush (the "Kennedy Proposal").  The Kennedy Proposal called
       for cuts in subsidies to the student loan business totaling $22.3
       billion over the next five years on a present discounted value basis.
       According to the EFC Exchange, Senator Kennedy wanted to, among other
       measures, cut collection guarantees to 85%, reduce special allowance
       payments to lenders by 60 basis points and double the lender-paid
       origination fee for all loans.
  27.  Later that same day, April 12, 2007, Sallie Mae responded to
       Mustang's mark-up by sending back another mark-up of the Material
       Adverse Effect definition that once again sought to require Mustang
       to assume the risk of any and all changes in Applicable Law.  Sallie
       Mae's mark-up, as drafted, would have required Mustang to assume the
       risk that a proposal more adverse than proposals described in the
       Sallie Mae 10-K, including the Kennedy Proposal, would be enacted.
  28.  On April 14, 2007, after learning the published details of the
       Kennedy Proposal, Mustang again revised Sallie Mae's Material Adverse
       Effect definition, reiterating that Mustang would only accept the
       risk of enactment of those proposals that were described in the
       Sallie Mae 10-K, e.g., excluding the Kennedy Proposal, and that
       Mustang would not accept the risk of any legislation "more adverse"
       to the Company.  During discussions on April 14, 2007, the parties
       agreed that the Kennedy Proposal, if enacted, would not be subject to
       the "changes in Applicable Law" carveout from the definition of
       Material Adverse Effect.  The Material Adverse Effect language was
       finalized on April 15, 2007, with Mustang adding language to ensure
       that the carveout for the proposals in the Sallie Mae 10-K was for
       those proposals in the form proposed publicly "as of the date of the
       Company 10-K", i.e. March 1, 2007.
  29.  In this way, Mustang drew the line at the maximum amount of
       legislative impact it was willing to take.  It accepted the risk that
       the legislative outcome might be worse than Sallie Mae's assumed
       "midcase" scenario that Mustang had used to price the Company, and,
       indeed, as bad as the proposals described in the Sallie Mae 10-K "in
       each case in the form" proposed publicly as of March 1, 2007.  But it
       refused the risk of any legislation "more adverse" than the proposals
       in the Sallie Mae 10-K.
  30.  In sum, the parties agreed on a definition of Material Adverse Effect
       that provides that any legislative changes affecting the student loan
       industry "more adverse" to Sallie Mae than the proposals described in
       the Sallie Mae 10-K, "in each case in the form proposed publicly as
       of the date of the Company 10-K," would not be subject to the
       exception for "changes in Applicable Law."  Therefore, any such "more
       adverse" legislation would be considered in its entirety in
       determining whether there was a Material Adverse Effect.

                           THE MERGER AGREEMENT
  31.  On April 15, 2007, Mustang and Sallie Mae entered into a definitive
       merger agreement providing for the acquisition of Sallie Mae by
       Mustang at $60 per share if certain conditions were met.
  32.  In Section 4.10 of the Merger Agreement, Sallie Mae represents and
       warrants that, since December 31, 2006, there has not been any event,
       occurrence, development or state of circumstances or facts that has
       had or would be reasonably expected to have, individually or in the
       aggregate, a Material Adverse Effect.  In order to protect Mustang
       from open-ended exposure to adverse developments in the business of
       Sallie Mae in the period between signing and closing, Section
       9.02(a)(ii) of the Merger Agreement conditions Mustang's obligation
       to close on, among other factors, this representation and warranty
       being true both as of the date of the Merger Agreement and as of the
       Effective Time of the merger.
  33.  The definition of Material Adverse Effect is contained in Section
       1.01(a) of the Merger Agreement.  It provides as follows:

       "Material Adverse Effect" means a material adverse effect on the
       financial condition, business, or results of operations of the
       Company and its Subsidiaries, taken as a whole, except to the extent
       any such effect results from: (a) changes in GAAP or changes in
       regulatory accounting requirements applicable to any industry in
       which the Company or any of its Subsidiaries operate; (b) changes in
       Applicable Law (provided that, for purposes of this definition,
       "changes in Applicable Law" shall not include any changes in
       Applicable Law relating specifically to the education finance
       industry that are in the aggregate more adverse to the Company and
       its Subsidiaries, taken as a whole, than the legislative and budget
       proposals described under the heading "Recent Developments" in the
       Company 10-K, in each case in the form proposed publicly as of the
       date of the Company 10-K)  or interpretations thereof by any
       Governmental Authority; (c) changes in global, national or regional
       political conditions (including the outbreak of war or acts of
       terrorism) or in general economic, business, regulatory, political or
       market conditions or in national or global financial markets;
       provided that such changes do not disproportionately affect the
       Company relative to similarly sized financial services companies and
       provided that this exception shall not include changes excluded from
       clause (b) of this definition pursuant to the proviso contained
       therein; (d) any proposed law, rule or regulation, or any proposed
       amendment to any existing law, rule or regulation, in each case
       affecting the Company or any of its Subsidiaries and not enacted into
       law prior to the Closing Date; (e) changes affecting the financial
       services industry generally; provided that such changes do not
       disproportionately affect the Company relative to similarly sized
       financial services companies and provided that this exception shall
       not include changes excluded from clause (b) of this definition
       pursuant to the proviso contained therein; (f) public disclosure of
       this Agreement or the transactions contemplated hereby, including the
       initiation of litigation by any Person with respect to this
       Agreement; (g) any change in the debt ratings of the Company or any
       debt securities of the Company or any of its Subsidiaries in and of
       itself (it being agreed that this exception does not cover the
       underlying reason for such change, except to the extent such reason
       is within the scope of any other exception within this definition);
       (h) any actions taken (or omitted to be taken) at the written
       request of Parent; or (i) any action taken by the Company, or which
       the Company causes to be taken by any of its Subsidiaries, in each
       case which is required pursuant to this Agreement.  (Emphases added.)

  34.  The conclusion of the Marketing Period - the period during which,
       under the Merger Agreement, Mustang is required to use its reasonable
       best efforts to obtain the debt financing necessary to consummate the
       merger - is another prerequisite to closing the transaction.  Under
       the Merger Agreement.  Sallie Mae is required to provide certain
       information (the "Required Information") to enable Mustang to obtain
       that financing.  The Required Information that must be delivered to
       Mustang includes financial statements, management discussion &
       analysis, pro forma financial information, financial data, audit
       reports and other information of the type required by Regulation S-X
       and Regulation S-K and customarily included in a registration
       statement on Form S-1.  The "Marketing Period" is the first period of
       thirty consecutive calendar days, after all other conditions to the
       merger have been satisfied, throughout which Mustang has the Required
       Information.  The Merger Agreement does not give Sallie Mae any right
       to unilaterally decide when the Marketing Period has begun.
  35.  In addition, under the Merger Agreement, prior to closing, the FDIC
       must approve Mustang's acquisition of Sallie Mae's industrial bank
       subsidiary.  Section 8.01(a) provides that Mustang shall agree to
       liquidation or divestiture only if Mustang is unable to obtain
       regulatory approval in a "reasonably timely manner customary for
       other transactions of a similar nature . . . ."  In 2007, the
       processing period for industrial bank applications approved by the
       FDIC ranged from 7 months to 21 months from the time of filing.  The
       FDIC application for the acquisition of Sallie Mae's bank was filed
       on June 2, 2007, i.e., just 4 1/2 months ago.
  36.  The Merger Agreement, in Section 6.03, contains a no-shop provision
       pursuant to which Sallie Mae agreed that it would not solicit,
       initiate or knowingly take any action to facilitate or encourage the
       submission of any acquisition proposals from third parties.  Section
       6.03(c) specifies that if Sallie Mae receives an Acquisition
       Proposal, which is defined to include "any offer, proposal or
       inquiry" relating to the acquisition of the company, Sallie Mae must
       so inform Mustang within one business day.  Under Section 10.01(c)(i)
       of the Merger Agreement, if Sallie Mae breaches Section 6.03 "in any
       material respect," Mustang is entitled to terminate the Merger
       Agreement.  Section 11.05(b) of the Merger Agreement further provides
       that in the event that Mustang terminates the Merger Agreement
       because Sallie Mae has materially breached this no-shop provision,
       Sallie Mae will be obligated to pay Mustang a $900 million
       termination fee.
  37.  Under Section 2.01 of the Merger Agreement, the Effective Time - when
       the transaction is actually consummated and a certificate of merger
       is filed with the Delaware Secretary of State - is to be "[a]s soon
       as practicable (and in no event later than three Business Days) after
       satisfaction, or to the extent permitted . . . waiver of all
       conditions to the Merger."
  38.  If the transaction has not been consummated on or before February 15,
       2008, Section 10.01(b)(1) of the Merger Agreement gives either party
       the right to terminate the Merger Agreement.  That right is not
       available to any party whose breach of the Merger Agreement has
       caused the transaction not to be consummated by that time.
  39.  The Merger Agreement provides, in Section 11.14, that Sallie Mae is
       not entitled to injunctive relief "or any remedy to enforce
       specifically" the terms and provisions of the Merger Agreement.
       Under Section 10.02, Mustang's liability, in the event it breaches
       the Merger Agreement, is limited to the payment of Parent Termination
       Fee, a $900 million "reverse break-up" fee.
  40.  Section 11.12 of the Merger Agreement states:

       This Agreement and the Confidentiality Agreements constitutes the
       entire agreement between the parties with respect to the subject
       matter of this Agreement and supersedes all prior agreements and
       understandings, both oral and written, between the parties with
       respect to the subject matter of this Agreement.

                      THE EFFECT OF THE COLLEGE COST
                       REDUCTION ACT ON SALLIE MAE
  41.  Following the execution of the Merger Agreement on April 15, 2007,
       Congress proceeded to consider legislation cutting student loan
       subsidies.  On June 12, 2007, the bill that would ultimately become
       the College Cost Reduction Act was introduced in the House; that bill
       proposed cutting subsidies in an amount greater than the cuts
       proposed by either the Bush Budget Proposal or H.R. 5.  Sallie Mae
       lobbied vigorously against the proposed legislation, as it had
       against the earlier proposals; Bloomberg News reported that Sallie
       Mae's lobbying expenses for the first half of 2007 were the most ever
       by the Company in a six-month period.  In June 2007, Sallie Mae told
       members of Congress that if subsidies were cut by $20 billion or
       more, cuts of that magnitude could "mov[e] the earnings on [federal
       loans] into the red."  Sallie Mae further stated that lenders would
       "lose money under the proposals" even if they took remedial steps
       such as cutting borrower benefits.
  42.  In a letter to Sallie Mae dated July 6, 2007, the SEC requested that
       Sallie Mae revise its draft proxy statement to summarize the recent
       legislative proposals and "how they would impact [Sallie Mae]."  In
       an email on July 8, 2007, Sallie Mae indicated that it planned to
       address this comment by adding a short paragraph to the proxy that
       stated "[i]f all or any portion of these proposals are enacted, the
       Company's ability to sustain its current level of profitability and
       growth may be negatively impacted."  In response to Sallie Mae's
       planned revision, and in an effort to ensure that the proxy fully and
       accurately addressed the SEC's comment, on July 10, 2007, Mustang
       provided Sallie Mae with language for the proxy statement that stated
       "the current legislative proposals pending before the House and
       Senate could result in a failure of the conditions to the closing of
       the merger to be satisfied."
  43.  Mustang's action was taken in response to the SEC's comment and the
       imminent passage of the House bill, which was in fact passed the next
       day, July 11, 2007.  It thus predated the disruption in the credit
       markets, which began in the latter half of July 2007.
  44.  Congressional deliberations continued and, on September 7, 2007, the
       Senate and the House both passed the final version of the College
       Cost Reduction Act by wide majorities.  The College Cost Reduction
       Act was transmitted to the White House on September 19, and signed
       into law by President Bush on September 27, 2007.
  45.  Effective as of October 1, 2007, the College Cost Reduction Act
       sharply cuts subsidies to the student loan programs that make up the
       core of Sallie Mae's business.  According to the Congressional Budget
       Office, the present discounted value of the reduction in government
       subsidies to the industry over the next five years under the College
       Cost Reduction Act is estimated to be $22.32 billion.  The cuts
       imposed by College Cost Reduction Act are thus materially more severe
       than the cuts proposed in the Bush Budget Proposal (a total of $15.5
       billion) and in H.R. 5 (a total of $10 billion).
  46.  In order to achieve this reduction, the College Cost Reduction Act
       cuts the special allowance payment rate by 55 basis points on all
       federally guaranteed student loans made after October 1, 2007 by for-
       profit lenders such as Sallie Mae.  As the special allowance payment
       rate was only 1.02% as of September 30, 2007, the 55 basis point cut
       reduces this subsidy by over 50%.  Sallie Mae's "midcase" management
       projections had assumed that the special allowance payment rate would
       be cut by only 25 basis points, while the Bush Budget Proposal, the
       most draconian of the proposals described in the Sallie Mae 10-K,
       only called for a 50 basis point reduction in this rate on existing
       loans.
  47.  The College Cost Reduction Act also eliminates the "exceptional
       performer" provision in effect at the time the Merger Agreement was
       signed, under which the federal government guaranteed the collection
       of 99% of the value of the student loans Sallie Mae originated;
       beginning on October 1, 2007, collection guarantees have been reduced
       to 97% of the value of the loan.  Moreover, as of October 1, 2012,
       the guarantee rate will be further reduced to 95%.  In other words,
       the new legislation triples Sallie Mae's loan losses on federally
       guaranteed student loans and will quintuple those losses as of
       October 1, 2012.  In Sallie Mae's third-quarter 2007 earnings
       release, dated October 11, 2007, the Company disclosed that it had
       already taken a $28 million charge to reflect the impact of the
       reduction in the guarantee rate on existing loans.  (The change in
       the guarantee rate will have additional impact on all future loans).
  48.  Other provisions of the College Cost Reduction Act also impact Sallie
       Mae more negatively than the Bush Budget Proposal would have.  For
       example, the fee that Sallie Mae pays to the government for each loan
       that it originates on or after October 1, 2007 has doubled from 0.5%
       to 1%.  The Bush Budget Proposal, on the other hand, would have
       doubled this fee only for the much smaller pool of consolidation
       loans.
  49.  Still other provisions of the College Cost Reduction Act that were
       not included in the Bush Budget Proposal create new competitive
       hurdles for Sallie Mae.  For example, under the College Cost
       Reduction Act, non-profit lenders will receive 15 basis points more
       interest from the federal government than will for-profit lenders.
       This extra subsidy will enable non-profit lenders to offer more
       benefits to prospective borrowers, thereby giving them a competitive
       edge over Sallie Mae and other for-profit lenders.  Under the prior
       law, as well as the Bush Budget Proposal and H.R.5, non-profit
       lenders and for-profit lenders were treated equally.
  50.  In addition, starting in July 2009, there will be an auction in each
       state granting the exclusive right to market Parent Plus loans (a
       type of federally subsidized education loan that is made directly to
       parents) to the two lowest bidders in each state.  After the
       auctions, all other lenders will be entirely shut out from providing
       Parent Plus loans.  This provision was a feature of the Kennedy
       Proposal that Mustang refused to accept, and it was not included in
       the Bush Budget Proposal or H.R.5.  When Sallie Mae lobbied against
       the inclusion of this proposal in the College Cost Reduction Act, it
       pointed out that the auctions would create uncertainty in the
       marketplace that could eliminate investment and cause higher default
       rates.
  51.  The Senate Budget Committee has estimated that this auction provision
       will reduce government spending on student loans by $2 billion over
       five years.  One of Sallie Mae's largest shareholders, International
       Specialty Proceeds, has estimated that the auction provision alone
       will cost Sallie Mae some $24 million in 2009, rising to a cost to
       Sallie Mae of $132 million in 2012.
  52.  The College Cost Reduction Act creates still another competitive
       disadvantage for Sallie Mae by providing for total forgiveness of
       direct government loans after 10 years for students who go into a
       wide variety of public service-oriented professions, including
       teaching and nursing, thereby giving students considering those
       professions a significant incentive to choose a direct government
       loan rather than a loan from a private lender like Sallie Mae.  These
       provisions are indisputably adverse to Sallie Mae, and were not
       contained in the Bush Budget Proposal.
  53.  The net result is that the College Cost Reduction Act will cause
       Sallie Mae to suffer a material reduction in its future income over a
       durationally significant period, whether income is compared to what
       it would have been if no legislation had been enacted, to what it
       would have been under Sallie Mae's "midcase" between H.R.5 and the
       Bush Budge Proposal or to what it would have been if the Bush Budget
       Proposal had been enacted.  Sallie Mae itself, in a letter to lenders
       dated September 10, 2007, admitted that the new legislation will
       "impose an adverse economic impact on Sallie Mae," and its Complaint
       in this action admitted that that adverse impact was worse than that
       of the Bush Budget Proposal.  And indeed, the College Cost Reduction
       Act will reduce Sallie Mae's net income by approximately $316
       million, or 15.2%, in 2009, as compared to reasonable projections of
       Sallie Mae's core net income if the new legislation had not been
       enacted, growing to a reduction of approximately $595 million, or
       23.5%, by 2012, as the percentage of Sallie Mae's loan portfolio made
       under the new law increases.
  54.  Under the unambiguous terms of the Merger Agreement, because the
       College Cost Reduction Act is "in the aggregate more adverse" to
       Sallie Mae and its subsidiaries than any of "the legislative and
       budget proposals described . . . in the Company 10-K," the exception
       in the definition of Material Adverse Effect for "changes in
       Applicable Law" does not apply.  The entire impact of the College
       Cost Reduction Act must therefore be considered in determining
       whether a Material Adverse Effect has occurred.
  55.  The College Cost Reduction Act will materially reduce, for a
       durationally significant period, Sallie Mae's future income.  As a
       result, as of the Effective Time, the College Cost Reduction Act will
       have, or will reasonably be expected to have, a Material Adverse
       Effect on the financial condition, business and results of operations
       of Sallie Mae within the meaning of the Merger Agreement.

                   THE EFFECT OF THE DISRUPTIONS IN THE
           MARKETS FOR ASSET-BACKED SECURITIES AND ASSET-BACKED
                           COMMERCIAL PAPER ON
                                SALLIE MAE


  56.  Sallie Mae's primary source of operating financing is the issuance of
       student loan asset-backed securities.  In the Sallie Mae 10-K, the
       Company predicted that approximately 75% of its 2007 funding needs
       would be satisfied by securitizing loan assets and issuing asset-
       backed securities.  The Company's own March 2007 projections called
       for an even greater use of securitization in the future with
       securitization providing 79% (or $49 billion) of financing in 2008, a
       figure that was projected to rise to 80% (some $97 billion) by 2011.
  57.  However, in the latter half of July 2007, the sub-prime mortgage
       crisis triggered an unprecedented collapse in the markets for asset-
       backed securities and significant disruption in the market for asset-
       backed commercial paper.  The market for new securitizations has been
       extremely inactive, while the asset-backed commercial paper market
       has contracted significantly.
  58.  As a result of this market disruption, Sallie Mae has not sold asset-
       backed securities since July 19, 2007.  Because Sallie Mae has
       operating funding needs of, on average, $6 billion a month, Sallie
       Mae's management, rather than attempt to sell asset-backed securities
       on commercially unfavorable terms, decided to draw down a $30 billion
       credit facility that Bank of America and JPMorgan Chase had provided
       Sallie Mae - at Sallie Mae's request - in conjunction with the
       acquisition in order to provide liquidity in the event that Sallie
       Mae experienced a temporary lack of access to the financing markets
       in reaction to the announcement of the transaction.  This credit
       facility was never intended to provide an ongoing source of operating
       financing to Sallie Mae.  Indeed, in April 2007, Sallie Mae's
       management expressed its belief that it would never need to draw upon
       the facility.  As of October 10, 2007, Sallie Mae had already drawn
       down all but $915 million of that $30 billion.
  59.  The current adverse conditions in the credit markets are expected to
       be of a sustained duration.  Moreover, when the credit markets
       recover, Sallie Mae's cost of funds is reasonably expected to be
       higher than it was on December 31, 2006.  This higher cost of funds
       will directly and materially reduce Sallie Mae's earnings in a
       durationally significant manner.
  60.  While current market conditions have had a negative effect on most
       financial institutions, the collapse of the securitization market and
       disruption of the commercial paper market have "disproportionately
       affect[ed]" Sallie Mae "relative to similarly sized financial
       services companies" and thus are not excluded from the Merger
       Agreement's definition of Material Adverse Effect.  The vast majority
       of similarly sized financial services companies are insurance
       companies that collect premiums or banks that can rely on deposits as
       a source of funding; Sallie Mae is not an insurance company or a bank
       (apart from one tiny bank subsidiary) and cannot collect premiums or
       accept deposits.  Sallie Mae's business therefore is acutely
       dependent on the financing it receives from asset-backed commercial
       paper and asset-backed securities.  Moreover, Sallie Mae's business
       is not as diversified as many similarly sized financial services
       companies.
  61.  The changed financing conditions standing alone will significantly
       reduce Sallie Mae's core net income for years to come.  Due to more
       unfavorable terms going forward, even in 2012, Sallie Mae's net
       income will still be some 4.9% lower than it would have been had the
       credit crisis not occurred.  Accordingly, as of the Effective Time,
       the adverse conditions in the credit markets independently will have,
       or will reasonably be expected to have, a Material Adverse Effect on
       Sallie Mae within the meaning of the Merger Agreement.


                   MUSTANG SEEKS TO REVISE THE TERMS OF
                   THE MERGER AGREEMENT IN LIGHT OF THE
                     CHANGED LEGISLATIVE AND ECONOMIC
                  ENVIRONMENT AND SALLIE MAE FILES SUIT

  62.  In light of the developments described above, on September 26, 2007,
       a Mustang representative met with representatives of Sallie Mae to
       advise them that if the conditions to the closing of the Merger
       Agreement were required to be measured at that time, the conditions
       to closing would not be satisfied, but that Mustang would be willing
       to make an alternative proposal.  The Sallie Mae representatives
       refused to engage in any discussion concerning an alternative
       transaction.
  63.  Later that day, Sallie Mae issued a press release in which it
       asserted that Mustang had stated that it did not intend to consummate
       the merger.  Immediately thereafter, Mustang issued a press release
       correcting Sallie Mae's statement and reiterating that Mustang was
       open to discussing a revision of the transaction that reflected this
       new environment.
  64.  Instead of responding to any of Mustang's overtures, on September 28,
       2007, Sallie Mae's counsel sent a letter to Mustang's counsel
       asserting that Mustang had repudiated the Merger Agreement and that
       Sallie Mae therefore had no further obligations under that Agreement,
       including its no-shop provision.  Counsel for Mustang responded,
       stating that Mustang had not repudiated the Merger Agreement and that
       Mustang believed that the best course would be for both sides'
       principals to meet.
  65.  Nonetheless, Sallie Mae continued to refuse to meet with Mustang.
       Accordingly, on October 2, 2007, Mustang made a public proposal to
       the Sallie Mae Board.  Under the proposal, Mustang offered a price of
       up to $60 per Sallie Mae share, composed of $50 per share in cash
       plus warrants with a payout of up to an additional $10 per share.
       Mustang also expressed its willingness to adjust other terms of the
       Merger Agreement, including the no-shop provision, as part of an
       overall negotiation.
  66.  Also on October 2, 2007, Mustang advised Sallie Mae that the
       financial and other information that Sallie Mae had provided for
       inclusion in the materials to be given to prospective debt purchasers
       substantially understated the impact of both the College Cost
       Reduction Act and the ongoing credit crisis on Sallie Mae's business.
       Sallie Mae had therefore violated its obligation to provide Mustang
       with Required Information.
  67.  On October 3, 2007, Sallie Mae's Chairman, Albert Lord, sent Mustang
       a letter purporting to set a closing date for the transaction of
       November 5, 2007.  Mr. Lord asserted that the Required Information
       was complete and accurate, and unilaterally declared that the
       Marketing Period had therefore begun.  Mr. Lord also claimed that
       Mustang had failed to obtain FDIC approval for its acquisition of
       Sallie Mae's bank subsidiary in a reasonably timely fashion.
  68.  On October 8, 2007, Mustang replied to Mr. Lord stating that the
       prerequisites to closing had not been satisfied for at least three
       reasons:  (a) Sallie Mae had suffered a Material Adverse Effect; (b)
       Sallie Mae had failed to provide Mustang with the Required
       Information; and (c) FDIC approval of Mustang's acquisition of the
       Company Bank had not yet been obtained.  Mustang reiterated its
       desire to meet with Sallie Mae management.
  69.  Rather than responding to the invitation to meet, Sallie Mae filed
       suit that evening, October 8, 2007.
  70.  On October 11, 2007, Sallie Mae announced its third-quarter results.
       Sallie Mae reported a net loss of $344 million, or 85 cents per
       share.  Since the signing of the Merger Agreement, Sallie Mae has
       missed its forecasts for both the second and third quarters of 2007.
       In the third quarter, Sallie Mae reported only 59 cents per share of
       core net income - some 28% worse than forecasts the Company gave
       Mustang in May 2007.  In a meeting with shareholders on October 11,
       2007, Mr. Lord said Sallie Mae's "run rate" - the current annualized
       earnings per share - for 2007 had fallen to $2.80 per share.
       Moreover, Mr. Lord estimated that 2008 earnings per share would reach
       only $3.25 per share.  This represents a decrease in earnings of more
       than 11% compared to the $3.66 earnings per share Sallie Mae
       projected in the July 18, 2007 merger proxy.  Although Mr. Lord
       stated that the merger proxy was based on a "different operating
       model," in reality, the numbers in the merger proxy are based on the
       same model that underlies the current 2008 estimates.
  71.  Sallie Mae's deteriorating condition has been confirmed by Moody's
       and by Fitch Ratings, which have downgraded Sallie Mae's senior
       unsecured debt (on a stand-alone basis assuming the merger does not
       take place) from A2 to Baa1 (Moody's), and from A+ to BBB (Fitch).
       Other similarly sized financial institutions have not been similarly
       downgraded.
  72.  During the course of the October 11, 2007 shareholders' meeting, Mr.
       Lord, stated that he "get[s] calls" from other potential buyers of
       Sallie Mae and that, while the no-shop provision restricts him from
       negotiating, he "can listen" to these potential buyers.  Prior to
       these public statements, Sallie Mae had not given Mustang notice of
       these inquiries as required by Section 6.03(c) of the Merger
       Agreement.  By virtue of the foregoing, Sallie Mae has breached the
       no-shop provision of the Merger Agreement.

                          FIRST CAUSE OF ACTION
             (Declaration that the "Material Adverse Effect"
        definition requires consideration of the entire impact of
           any "change in Applicable Law" more adverse than the
               proposals described in the Sallie Mae 10-K)

  73.  Defendants-Counterclaim Plaintiffs repeat and reallege the
       allegations of paragraphs 1 through 72 as if fully set forth herein.
  74.  The definition of "Material Adverse Effect" in the Merger Agreement
       provides in relevant part:

       "Material Adverse Effect" means a material adverse effect on the
       financial condition, business, or results of operations of the
       Company and its Subsidiaries, taken as a whole, except to the extent
       any such effect results from:  . . . (b) changes in Applicable Law
        (provided that, for purposes of this definition, "changes in
       Applicable Law" shall not include any changes in Applicable Law
       relating specifically to the education finance industry that are in
       the aggregate more adverse to the Company and its Subsidiaries, taken
       as a whole, than the legislative and budget proposals described under
       the heading "Recent Developments" in the Company 10-K, in each case
       in the form proposed publicly as of the date of the Company 10-K)
       . . . .
  75.  This definition unambiguously provides that if the effect of the
       enactment of new legislation relating specifically to the student
       loan industry (here, the College Cost Reduction Act) is "in the
       aggregate more adverse" to Sallie Mae than the effect of the
       enactment of any of the proposals described in the Sallie Mae 10-K in
       the form proposed publicly as of March 1, 2007, then the exception
       that provides that "changes in Applicable Law" are not to be
       considered in evaluating whether the new legislation has a Material
       Adverse Effect on Sallie Mae does not apply.  The entire impact of
       "any changes in Applicable Law relating specifically to the education
       finance industry that are in the aggregate more adverse to the
       Company" must be considered in evaluating whether there has been a
       Material Adverse Effect.
  76.  Sallie Mae disputes this, and claims that only the incremental impact
       of the enactment of the new law over and above the impact of the
       legislative and budget proposals described in the Sallie Mae 10-K may
       be considered in determining whether a Material Adverse Effect has
       occurred or is likely to occur.
  77.  Sallie Mae is wrong.  Its position cannot be reconciled with the
       unambiguous language of the Material Adverse Effect definition.
       Under the definition:
  a.   "Material Adverse Effect" is first defined as "a material adverse
       effect on the financial condition, business or results of operations
       of the Company and its Subsidiaries, taken as a whole."
  b.   The definition of "Material Adverse Effect" then has an exception.
       Under that exception, "changes in Applicable Law" are not to be
       considered in evaluating whether there has been a Material Adverse
       Effect.
  c.   The exception is limited however.  If a "change in Applicable Law" is
       "in the aggregate more adverse" to Sallie Mae than the proposals
       described in the Sallie Mae 10-K, then that new legislation is not a
       "change in Applicable Law" that is excluded from consideration in
       evaluating whether there has been a Material Adverse Effect.
       Accordingly, "changes in Applicable Law" that are in the aggregate
       more adverse to the company than the proposals described in the
       Sallie Mae 10-K must be considered in determining whether there has
       been a Material Adverse Effect.
  d.   The entire impact of the new legislation "more adverse" to Sallie Mae
       than the changes described in the Sallie Mae 10-K must be counted in
       evaluating whether there has been a Material Adverse Effect.
  78.  There is nothing in the Material Adverse Effect definition or
       elsewhere in the Merger Agreement to the contrary.  Indeed, the
       entire structure of the Material Adverse Effect definition confirms
       that Sallie Mae is wrong.  In addition to the exception for "changes
       in Applicable Law," there are several other exceptions to the
       definition of Material Adverse Effect that are qualified with a
       proviso.  In each case, the definition is structured so that if the
       proviso applies, the entire impact of the enumerated event must be
       considered, not just the incremental impact over and above an
       excluded event.
  79.  Moreover, although the plain language of the contract obviates the
       need for parol evidence, the negotiation history of the provision
       further confirms the parties' intent.
  80.  As a result of the foregoing, there is an actual case or controversy
       ripe for judicial determination.
  81.  In light of all of the foregoing, Mustang requests that the Court
       enter a judgment declaring that the Material Adverse Effect
       definition requires the consideration of the entire impact of any
       change in Applicable Law specifically relating to the student loan
       industry if that change in Applicable Law is more adverse to Sallie
       Mae than the proposals described in the Sallie Mae 10-K, in each case
       in the form proposed as of the date of the 10-K.

                          SECOND CAUSE OF ACTION
     (Declaration that, as of the Effective Time, a Material Adverse
       Effect will have occurred or will be reasonably expected to
                                  occur)

  82.  Defendants-Counterclaim Plaintiffs repeat and reallege paragraphs 1
       through 81 as if fully set forth herein.
  83.  In Section 4.10 of the Merger Agreement, Sallie Mae represented and
       warranted to Mustang that since December 31, 2006, there has not been
       any event, occurrence, development or state of circumstances or facts
       that has had, or would be reasonably expected to have, individually
       or in the aggregate, a Material Adverse Effect.  In Section
       9.02(a)(ii) of the Merger Agreement, the obligation of Mustang to
       consummate the proposed merger is subject to, among other conditions,
       the representations and warranties of Sallie Mae - including the
       representation and warranty regarding the absence of any Material
       Adverse Effect - being true both as of the date of the Merger
       Agreement and as of the Effective Time of the merger.  Because the
       conditions to closing have not been satisfied, the Effective Time has
       not yet occurred.
  84.  As alleged in detail above, events, occurrences, developments,
       circumstances and facts have occurred since the signing of the Merger
       Agreement that, individually or in the aggregate, as of the Effective
       Time, will have, or will be reasonably expected to have, a Material
       Adverse Effect upon the financial condition, business, or results of
       operations of Sallie Mae.
  85.  The College Cost Reduction Act is more adverse to Sallie Mae than the
       legislative and budget proposals described in the Sallie Mae 10-K,
       and therefore must be considered in its entirety in determining
       whether there has been a Material Adverse Effect on Sallie Mae.  The
       College Cost Reduction Act will materially reduce Sallie Mae's
       income, as compared to what it would have been if no legislation had
       been adopted, for a durationally significant period:  Sallie Mae's
       core net income will be reduced by some 15.2% in 2009, 18.4% in 2010,
       21% in 2011, and 23.5% in 2012, as a growing percentage of Sallie
       Mae's loan portfolio is made under the new law.
  86.  Moreover, the recent collapse of the market for asset-backed
       securities and disruption in the asset-backed commercial paper market
       constitute changes in "general economic, business . . . or market
       conditions" and "changes affecting the financial services industry
       generally;" although the effects of these changes have been felt by
       many financial services companies, they have "disproportionately
       affect[ed] [Sallie Mae] relative to similarly sized financial
       services companies" because Sallie Mae is disproportionately
       dependent on asset-backed securities and asset-backed commercial
       paper to finance its operations.
  87.  The adoption of the College Cost Reduction Act and the changes in
       conditions in the credit markets that disproportionately affect
       Sallie Mae relative to similarly sized financial services companies
       will each independently give rise to a Material Adverse Effect within
       the meaning of the Merger Agreement at the Effective Time.  When all
       relevant events are considered, Sallie Mae will have suffered, or
       will reasonably be expected to suffer, an even larger Material
       Adverse Effect as of the Effective Time.
  88.  Even if Sallie Mae's construction of the Material Adverse Effect
       definition were accepted, which it should not be, the result would be
       the same.  At the Effective Time, the incremental impact of the
       College Cost Reduction Act over the Bush Budget Proposal and the
       changes in conditions in the debt markets that disproportionately
       affect Sallie Mae relative to similarly sized financial services
       companies will each independently give rise to a Material Adverse
       Effect.  When all relevant events are considered, they will have, or
       will reasonably be expected to have, an even larger Material Adverse
       Effect on Sallie Mae at the Effective Time.
  89.  Sallie Mae's Complaint alleges that neither the adoption of the
       College Cost Reduction Act nor the changes in the conditions in the
       credit markets constitute a Material Adverse Effect under the Merger
       Agreement.  As a result, there is an actual case or controversy ripe
       for judicial determination.
  90.  In light of all of the foregoing, Mustang requests that the Court
       enter a judgment declaring that, as of the Effective Time, Sallie Mae
       will have suffered, or will reasonably be expected to suffer, a
       Material Adverse Effect.

                          THIRD CAUSE OF ACTION
        (Declaration that the conditions to closing have not been
                                satisfied)

  91.  Defendants-Counterclaim Plaintiffs repeat and reallege the
       allegations of paragraphs 1 through 90 as if fully set forth herein.
  92.  Section 9.02 of the Merger Agreement conditions Mustang's obligation
       to close the merger upon:
  a.   the continued accuracy of the representation in Section 4.10 of the
       Merger Agreement that there has not been any event, occurrence,
       development or state of circumstances or facts that has had or would
       be reasonably expected to have, individually or in the aggregate, a
       Material Adverse Effect;
  b.   the conclusion of the Marketing Period, which cannot happen until 30
       days after the other substantive conditions to closing (including the
       conditions referred to in (a) above and (c) below) have been
       satisfied and Sallie Mae has provided Mustang with all of the
       Required Information that must be delivered to Mustang under Section
       8.09(b) of the Merger Agreement; and
  c.   FDIC approval of Mustang's acquisition of Sallie Mae's industrial
       bank subsidiary.
  93.  As of the present time, none of these conditions to closing have been
       satisfied.  In the absence of an obligation to close, Mustang's
       failure to consummate the merger cannot constitute a breach of the
       Merger Agreement, and its statement that if measured today, the
       conditions to closing would not be satisfied, cannot be considered a
       repudiation.
  94.  Sallie Mae claims that these conditions to closing do not have to be
       satisfied because Mustang has repudiated the Merger Agreement.
       Mustang denies this claim.  As a result, there is an actual case or
       controversy ripe for judicial determination.
  95.  In light of all of the foregoing, Mustang requests that the Court
       enter a judgment declaring that the conditions to closing the merger
       have not been satisfied and that Mustang therefore is not in breach
       or anticipatory breach of any obligation to consummate the merger.



WHEREFORE, Defendants-Counterclaim Plaintiffs request that this Court enter a judgment:

   A.  Dismissing the Complaint in its entirety and with prejudice;
   B.  Declaring that the Material Adverse Effect definition requires the
       consideration of the entire impact of any new legislation
       specifically relating to the student loan industry that is more
       adverse to Sallie Mae than the proposals described in the Sallie Mae
       10-K, in each case in the form proposed as of the date of the 10-K;
  C.   Declaring that, as of the Effective Time, Sallie Mae will have
       suffered, or will reasonably be expected to suffer, a Material
       Adverse Effect;
  D.   Declaring that the conditions to closing the merger have not been
       satisfied and that Mustang therefore is not in breach of any
       obligation to consummate the merger;
  E.   Declaring that Sallie Mae is not entitled to any relief under the
       Merger Agreement and may not seek any such remedy on behalf of its
       shareholders;
  F.   Declaring that Mustang has no further obligations to Sallie Mae under
       the Merger Agreement (except for those obligations enumerated in
       Section 10.02 as surviving termination);
  G.   Declaring that Flowers, JPMorgan Chase and Bank of America have no
       obligation to Sallie Mae under their Limited Guarantees;
  H.   Awarding Defendants-Counterclaim Plaintiffs their attorneys' fees and
       the costs of this action;
  I.   Granting Defendants-Counterclaim Plaintiffs such other and further
       relief as this Court may deem just and proper.


                                                YOUNG CONAWAY STARGATT &
                                                 TAYLOR, LLP



                                                David C. McBride
                                                Bruce Silverstein
                                                The Brandywine Building
                                                1000 West Street, 17th Floor
                                                P.O. Box 391
                                                Wilmington, DE  19899-0391
                                                [phone]

                                                Attorneys for Defendants-
                                                Counterclaim Plaintiffs

  OF COUNSEL:


  Bernard W. Nussbaum
  Eric M. Roth
  Marc Wolinsky
  Elaine P. Golin
  Carrie M. Reilly
  Lauren M. Kofke
  WACHTELL, LIPTON, ROSEN & KATZ
  51 West 52nd Street
  New York, New York  10019
  [phone]

  Attorneys for Defendants-Counterclaim Plaintiffs

  John L. Warden
  Steven L. Holley
  SULLIVAN & CROMWELL
  125 Broad Street
  New York, New York 10004
  [phone]

  Attorneys for Defendant-Counterclaim Plaintiff J.C. Flowers II L.P.

  Dated:  October 15, 2007


DATASOURCE: J.C. Flowers & Co. LLC

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