Document:

exv4w4

 

Exhibit 4.4

 

INDENTURE

among

SLM STUDENT LOAN TRUST 2005-9,

as the Issuer,

CHASE BANK USA, NATIONAL ASSOCIATION,

not in its individual capacity but

solely as the Eligible Lender Trustee

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

not in its individual capacity but

solely as the Indenture Trustee

Dated as of November 1, 2005

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 

	 	ARTICLE I	 	 	 	 
	 

	 	Definitions and Usage	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 1.1

	 	Definitions and Usage
	 	 	2	 
	SECTION 1.2

	 	Incorporation by Reference of Trust Indenture Act
	 	 	2	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE II	 	 	 	 
	 

	 	The Notes	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 2.1

	 	Form
	 	 	3	 
	SECTION 2.2

	 	Execution, Authentication and Delivery
	 	 	4	 
	SECTION 2.3

	 	Temporary Notes
	 	 	4	 
	SECTION 2.4

	 	Registration; Registration of Transfer and Exchange
	 	 	5	 
	SECTION 2.5

	 	Mutilated, Destroyed, Lost or Stolen Notes
	 	 	6	 
	SECTION 2.6

	 	Persons Deemed Owner
	 	 	7	 
	SECTION 2.7

	 	Payment of Principal and Interest; Note Interest Shortfall
	 	 	7	 
	SECTION 2.8

	 	Cancellation
	 	 	8	 
	SECTION 2.9

	 	Release of Collateral
	 	 	8	 
	SECTION 2.10

	 	Book-Entry Notes
	 	 	9	 
	SECTION 2.11

	 	Notices to Clearing Agency
	 	 	9	 
	SECTION 2.12

	 	Definitive Notes
	 	 	10	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE III	 	 	 	 
	 

	 	Covenants	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 3.1

	 	Payments to Noteholders and each Swap Counterparty
	 	 	10	 
	SECTION 3.1A

	 	Collateral Account
	 	 	11	 
	SECTION 3.2

	 	Maintenance of Office or Agency
	 	 	11	 
	SECTION 3.3

	 	Money for Payments to be Held in Trust
	 	 	12	 
	SECTION 3.4

	 	Existence
	 	 	13	 
	SECTION 3.5

	 	Protection of Indenture Trust Estate
	 	 	13	 
	SECTION 3.6

	 	Opinions as to Indenture Trust Estate
	 	 	14	 
	SECTION 3.7

	 	Performance of Obligations; Servicing of Trust Student Loans
	 	 	14	 
	SECTION 3.8

	 	Negative Covenants
	 	 	17	 
	SECTION 3.10

	 	Annual Statement as to Compliance
	 	 	18	 
	SECTION 3.11

	 	Issuer May Consolidate, etc., Only on Certain Terms
	 	 	18	 
	SECTION 3.12

	 	Successor or Transferee
	 	 	20	 
	SECTION 3.13

	 	No Other Business
	 	 	20	 
	SECTION 3.14

	 	No Borrowing
	 	 	20	 
	SECTION 3.15

	 	Obligations of Servicer and Administrator
	 	 	20	 
	SECTION 3.16

	 	Guarantees, Loans, Advances and Other Liabilities
	 	 	20	 
	SECTION 3.17

	 	Capital Expenditures
	 	 	20	 
	SECTION 3.18

	 	Restricted Payments
	 	 	20	 

i

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 3.19

	 	Notice of Events of Default
	 	 	21	 
	SECTION 3.20

	 	Further Instruments and Acts
	 	 	21	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE IV	 	 	 	 
	 

	 	Satisfaction and Discharge	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 4.1

	 	Satisfaction and Discharge of Indenture
	 	 	21	 
	SECTION 4.2

	 	Application of Trust Money
	 	 	22	 
	SECTION 4.3

	 	Repayment of Moneys Held by Paying Agent
	 	 	22	 
	SECTION 4.4

	 	Auction of Trust Student Loans
	 	 	23	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE V	 	 	 	 
	 

	 	Remedies	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 5.1

	 	Events of Default
	 	 	23	 
	SECTION 5.2

	 	Acceleration of Maturity; Rescission and Annulment
	 	 	24	 
	SECTION 5.3

	 	Collection of Indebtedness and Suits for Enforcement by Indenture Trustee
	 	 	25	 
	SECTION 5.4

	 	Remedies; Priorities
	 	 	27	 
	SECTION 5.5

	 	Optional Preservation of the Trust Student Loans
	 	 	31	 
	SECTION 5.6

	 	Limitation of Suits
	 	 	31	 
	SECTION 5.7

	 	Unconditional Rights of Noteholders to Receive Principal and Interest
	 	 	32	 
	SECTION 5.8

	 	Restoration of Rights and Remedies
	 	 	32	 
	SECTION 5.9

	 	Rights and Remedies Cumulative
	 	 	32	 
	SECTION 5.10

	 	Delay or Omission Not a Waiver
	 	 	32	 
	SECTION 5.11

	 	Control by Noteholders
	 	 	32	 
	SECTION 5.12

	 	Waiver of Past Defaults
	 	 	33	 
	SECTION 5.13

	 	Undertaking for Costs
	 	 	33	 
	SECTION 5.14

	 	Waiver of Stay or Extension Laws
	 	 	33	 
	SECTION 5.15

	 	Action on Notes
	 	 	34	 
	SECTION 5.16

	 	Performance and Enforcement of Certain Obligations
	 	 	34	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE VI	 	 	 	 
	 

	 	The Indenture Trustee	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 6.1

	 	Duties of Indenture Trustee
	 	 	35	 
	SECTION 6.2

	 	Rights of Indenture Trustee
	 	 	36	 
	SECTION 6.3

	 	Individual Rights of Indenture Trustee
	 	 	36	 
	SECTION 6.4

	 	Indenture Trustee’s Disclaimer
	 	 	36	 
	SECTION 6.5

	 	Notice of Defaults
	 	 	37	 
	SECTION 6.6

	 	Reports by Indenture Trustee to Noteholders
	 	 	37	 
	SECTION 6.7

	 	Compensation and Indemnity
	 	 	37	 
	SECTION 6.8

	 	Replacement of Indenture Trustee
	 	 	38	 
	SECTION 6.9

	 	Successor Indenture Trustee by Merger
	 	 	39	 
	SECTION 6.10

	 	Appointment of Co-Trustee or Separate Trustee
	 	 	39	 
	SECTION 6.11

	 	Eligibility; Disqualification
	 	 	40	 

ii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 6.12

	 	Preferential Collection of Claims Against the Issuer
	 	 	40	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE VII	 	 	 	 
	 

	 	Noteholders’ Lists and Reports	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 7.1

	 	Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders
	 	 	41	 
	SECTION 7.2

	 	Preservation of Information; Communications to Noteholders
	 	 	41	 
	SECTION 7.3

	 	Reports by Issuer
	 	 	42	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE VIII	 	 	 	 
	 

	 	Accounts, Disbursements and Releases	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 8.1

	 	Collection of Money
	 	 	42	 
	SECTION 8.2

	 	Trust Accounts
	 	 	42	 
	SECTION 8.3

	 	General Provisions Regarding Accounts
	 	 	43	 
	SECTION 8.4

	 	Release of Indenture Trust Estate
	 	 	44	 
	SECTION 8.5

	 	Opinion of Counsel
	 	 	44	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE IX	 	 	 	 
	 

	 	Supplemental Indentures	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 9.1

	 	Supplemental Indentures Without Consent of Noteholders
	 	 	45	 
	SECTION 9.2

	 	Supplemental Indentures with Consent of Noteholders
	 	 	46	 
	SECTION 9.3

	 	Execution of Supplemental Indentures
	 	 	47	 
	SECTION 9.4

	 	Effect of Supplemental Indenture
	 	 	48	 
	SECTION 9.5

	 	Conformity with Trust Indenture Act
	 	 	48	 
	SECTION 9.6

	 	Reference in Notes to Supplemental Indentures
	 	 	48	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE X	 	 	 	 
	 

	 	Redemption of Notes	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 10.1

	 	Redemption
	 	 	48	 
	SECTION 10.2

	 	Form of Redemption Notice
	 	 	48	 
	SECTION 10.3

	 	Notes Payable on Redemption Date
	 	 	49	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE XI	 	 	 	 
	 

	 	Miscellaneous	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 11.1

	 	Compliance Certificates and Opinions, etc
	 	 	49	 
	SECTION 11.2

	 	Form of Documents Delivered to Indenture Trustee
	 	 	51	 
	SECTION 11.3

	 	Acts of Noteholders
	 	 	52	 
	SECTION 11.4

	 	Notices, etc., to Indenture Trustee, Issuer and Rating Agencies
	 	 	52	 
	SECTION 11.5

	 	Notices to Noteholders; Waiver
	 	 	53	 
	SECTION 11.6

	 	Alternate Payment and Notice Provisions
	 	 	53	 
	SECTION 11.7

	 	Conflict with Trust Indenture Act
	 	 	54	 
	SECTION 11.8

	 	Effect of Headings and Table of Contents
	 	 	54	 
	SECTION 11.9

	 	Successors and Assigns
	 	 	54	 

iii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 11.10

	 	Separability
	 	 	54	 
	SECTION 11.11

	 	Benefits of Indenture
	 	 	54	 
	SECTION 11.12

	 	Legal Holidays
	 	 	54	 
	SECTION 11.13

	 	Governing Law
	 	 	55	 
	SECTION 11.14

	 	Counterparts
	 	 	55	 
	SECTION 11.15

	 	Recording of Indenture
	 	 	55	 
	SECTION 11.16

	 	Trust Obligations
	 	 	55	 
	SECTION 11.17

	 	No Petition
	 	 	55	 
	SECTION 11.18

	 	Inspection
	 	 	56	 
	SECTION 11.19

	 	Subordination
	 	 	56	 

iv

 

APPENDICES, SCHEDULES AND EXHIBITS

	 	 	 
	APPENDIX A-1

	 	Definitions and Usage
	APPENDIX A-2

	 	Reset Rate Note Procedures
	 
	 	 
	SCHEDULE A

	 	Schedule of Trust Student Loans
	SCHEDULE B

	 	Location of Trust Student Loan Files
	 
	 	 
	EXHIBIT A

	 	Forms of Notes
	EXHIBIT B

	 	Form of Note Depository Agreement for U.S. Dollar Denominated Notes
	EXHIBIT C

	 	Form of Note Depository Agreement for Notes Denominated in a Currency Other than U.S.
Dollars

v

 

          INDENTURE, dated as of November 1, 2005, among SLM STUDENT LOAN TRUST 2005-9, a Delaware
statutory trust (the “Issuer”), CHASE BANK USA, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity but solely as eligible lender trustee on behalf of the
Issuer (in such capacity, the “Eligible Lender Trustee”), and DEUTSCHE BANK TRUST COMPANY AMERICAS,
a New York banking corporation, not in its individual capacity but solely as indenture trustee (in
such capacity, the “Indenture Trustee”).

          Each party agrees as follows for the benefit of the other party and for the equal and ratable
benefit of the holders of the Issuer’s Student Loan-Backed Notes (the “Notes”) and, after the Notes
have been paid in full, for the benefit of any Currency Swap Counterparty:

GRANTING CLAUSE

          The Issuer and, with respect to the Trust Student Loans, the Eligible Lender Trustee hereby
Grant to the Indenture Trustee, as trustee for the benefit of the Noteholders and, subject to the
provisions of Section 11.19, any Currency Swap Counterparty, effective as of the Closing Date all
of their right, title and interest in and to the following:

     (a)   the Trust Student Loans, and all obligations of the Obligors thereunder including all
moneys accrued and paid thereunder on or after the applicable Cutoff Date and all guaranties and
other rights relating to the Trust Student Loans;

     (b)   the Servicing Agreement, including the right of the Issuer to cause the Servicer to
purchase Trust Student Loans from the Issuer under circumstances described therein;

     (c)   the related Sale Agreement, including the right of the Issuer to cause the Depositor to
repurchase Trust Student Loans from the Issuer under the circumstances described therein and
including the rights of the Depositor under the Purchase Agreements;

     (d)   the SLM ECFC Purchase Agreement and the VG Funding Purchase Agreement, to the extent
that the rights of the Depositor thereunder have been assigned to the Issuer pursuant to the Sale
Agreement, including the right of the Depositor to cause SLM ECFC or VG Funding, as the case may
be, to repurchase Trust Student Loans from the Depositor under the circumstances described in the
applicable Purchase Agreement;

     (e)   the Administration Agreement, the Remarketing Agreement, any Swap Agreements to be
entered into from time to time (including the Initial Currency Swap Agreements), including the
security interest in any collateral delivered by the counterparty in connection with these
agreements, and any agreement representing Eligible Repurchase Obligations between the Trust and an
Eligible Repo Counterparty to be entered into from time to time;

     (f)   each Guarantee Agreement, including the right of the Issuer to cause the related
Guarantor to make Guarantee Payments in respect of the Trust Student Loans;

1

 

     (g)   the Trust Accounts and all funds on deposit from time to time in the Trust Accounts,
including the Reserve Account Initial Deposit, the Capitalized Interest Account Initial Deposit,
the Supplemental Purchase Account Initial Deposit, the Add-On Consolidation Loan Account Initial
Deposit and the Collection Account Initial Deposit, if any, and all investments and proceeds
thereof (including all income thereon); and

     (h)   all present and future claims, demands, causes and choses in action in respect of any or
all of the foregoing and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion,
voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, general intangibles, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind and
other forms of obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the foregoing (collectively,
the “Collateral”).

          The foregoing Grant is made in trust to secure the payment of principal of and interest on,
and any other amounts owing in respect of, the Notes, equally and ratably without prejudice,
priority or distinction, to secure compliance with the provisions of this Indenture and, subject to
the provisions of Section 11.19, to secure amounts owing to any Currency Swap Counterparty under
the related Currency Swap Agreement, all as provided in this Indenture.

          The Indenture Trustee, as indenture trustee on behalf of the Noteholders and each Currency
Swap Counterparty, acknowledges such Grant, accepts the trusts under this Indenture in accordance
with the provisions of this Indenture and agrees to perform its duties required in this Indenture
to the best of its ability to the end that the interests of the Noteholders and each Currency Swap
Counterparty under the related Currency Swap Agreement may be adequately and effectively protected.

ARTICLE I

Definitions and Usage

          SECTION 1.1   Definitions and Usage. Except as otherwise specified herein or as the
context may otherwise require, capitalized terms used but not otherwise defined herein are defined
in Appendix A-1 to this Indenture, which also contains rules as to usage that shall be applicable
herein.

          SECTION 1.2   Incorporation by Reference of Trust Indenture Act. Whenever this
Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made
a part of this Indenture. The following TIA terms used in this Indenture have the following
meanings:

          “Commission” means the Securities and Exchange Commission.

          “indenture securities” means the Notes.

          “indenture security holder” means a Noteholder.

2

 

          “indenture to be qualified” means this Indenture.

          “indenture trustee” or “institutional trustee” means the Indenture Trustee.

          “obligor” on the indenture securities means the Issuer and any other obligor on the indenture
securities.

          All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by Commission rule have the meaning assigned to them by
such definitions.

ARTICLE II

The Notes

          SECTION 2.1   Form. The Notes, together with the Indenture Trustee’s certificate of
authentication, shall be in substantially the forms set forth in Exhibit A, with such appropriate
insertions, omissions, substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the officers executing
the Notes, as evidenced by their execution of the Notes. Any portion of the text of any Note may
be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.

          The Definitive Notes shall be typewritten, printed, lithographed or engraved or produced by
any combination of these methods (with or without steel engraved borders), all as determined by the
officers executing such Notes, as evidenced by their execution of such Notes.

          The terms of the Notes set forth in Exhibit A are part of the terms of this Indenture.

          Each class of Notes (other than the Reset Rate Notes will be represented by a book-entry note
certificate (“U.S. Note Certificate”) deposited on the Closing Date with Deutsche Bank Trust
Company Americas, as custodian for DTC (the “DTC Custodian”), and registered in the name of Cede &
Co. as initial nominee for DTC.

          Each class of Reset Rate Notes will be represented by a book-entry note certificate (“Non-U.S.
Note Certificate”) deposited on the Closing Date with Deutsche Bank Trust Company Americas, as
custodian for Euroclear and Clearstream (“Non-U.S. Note Certificate Custodian”), and registered in
the name of Deutsche Bank AG London as initial joint nominee for Euroclear and Clearstream.

     At all times during any Reset Period when a class of Reset Rate Notes is to be denominated in
U.S. Dollars, the aggregate Outstanding Amount of such class of Reset Rate Notes will be allocated
to the U.S. Note Certificate, which will represent 100% of the Outstanding Amount of such class of
Reset Rate Notes.

3

 

          SECTION 2.2   Execution, Authentication and Delivery. The Notes shall be executed on
behalf of the Issuer by any of its Authorized Officers. The signature of any such Authorized
Officer on the Notes may be manual or facsimile.

          Notes bearing the manual or facsimile signature of individuals who were at any time Authorized
Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes.

          The Indenture Trustee shall upon Issuer Order authenticate and deliver the U.S. Dollar
denominated Notes in an aggregate principal amount of $2,234,343,000, and the London Paying Agent,
which is hereby appointed as authenticating agent (the “Authenticating Agent”), shall upon Issuer
order authenticate and deliver the Non-U.S. Dollar denominated Notes Note Certificate in the
aggregate principal amount of €735,000,000. The aggregate principal amount of Notes Outstanding
at any time may not exceed such amount except as provided in Section 2.5. On each Spread
Determination Date, upon receipt of an Issuer Order, the Indenture Trustee shall deliver a revised
Schedule A for the Reset Rate Notes to the Custodians.

          Each Note shall be dated the date of its authentication. The Floating Rate Notes shall be
issuable as registered notes in minimum denominations of $100,000 and additional increments of
$1,000, and the Reset Rate Notes shall be issuable as registered
notes in minimum denominations of €50,000 and additional increments of €1,000.

          During any Reset Period when a class of the Reset Rate Notes is denominated in U.S. Dollars,
such Reset Rate Notes shall be issued in minimum denominations of $100,000, and additional
increments of $1,000. During any Reset Period when a class of Reset Rate Notes is denominated in a
currency other than U.S. Dollars, such Reset Rate Notes shall be issued in minimum denominations of
the applicable currency equivalent (approximately) of $100,000 and additional increments of the
applicable currency equivalent of $1,000 (which shall be determined by reference to the exchange
rate to be set forth in the related Currency Swap Agreement); provided, that during any
Reset Period when a class of Reset Rate Notes is denominated in Pounds Sterling, such Reset Rate
Notes shall be issued in minimum denominations of £100,000 and additional increments of £1,000 and
provided further, that during any Reset Period when a class of Reset Rate Notes is
denominated in Euros, such Reset Rate Notes shall be issued in minimum denominations of €50,000
and additional increments of €1,000.

          No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for
any purpose, unless there appears on such Note a certificate of authentication substantially in the
form provided for herein executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the
only evidence, that such Note has been duly authenticated and delivered hereunder.

          SECTION 2.3   Temporary Notes. Pending the preparation of Definitive Notes, the
Issuer may execute, and upon receipt of an Issuer Order the Indenture Trustee shall authenticate
and deliver, temporary Notes which are printed, lithographed, typewritten, mimeographed or
otherwise produced, of the tenor of the Definitive Notes in lieu of which they

4

 

are issued and with such variations not inconsistent with the terms of this Indenture
determined to be appropriate by the Responsible Officer of the Issuer executing the temporary
Notes, as evidenced by his or her execution of such temporary Notes.

          If temporary Notes are issued, the Issuer will cause Definitive Notes to be prepared without
unreasonable delay. After the preparation of Definitive Notes, the temporary Notes shall be
exchangeable for Definitive Notes upon surrender of the temporary Notes at the office or agency of
the Issuer to be maintained as provided in Section 3.2, without charge to the Noteholder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall execute and the
Indenture Trustee shall authenticate and deliver in exchange therefor a like principal amount of
Definitive Notes of authorized denominations. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as Definitive Notes.

          SECTION 2.4   Registration; Registration of Transfer and Exchange. The Issuer shall
cause to be kept a register (the “Note Register”) in which, subject to such reasonable regulations
as it may prescribe, the Issuer shall provide for the registration of Notes and the registration of
transfers of Notes. The Indenture Trustee shall be “Note Registrar” for the purpose of registering
Notes and transfers of Notes as herein provided. Upon any resignation of any Note Registrar, the
Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume
the duties of Note Registrar.

          If a Person other than the Indenture Trustee is appointed by the Issuer as Note Registrar, the
Issuer shall give the Indenture Trustee prompt written notice of the appointment of such Note
Registrar and of the location, and any change in the location, of the Note Register, and the
Indenture Trustee shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely upon a certificate
executed on behalf of the Note Registrar by an Executive Officer thereof as to the names and
addresses of the Noteholders and the principal amounts and number of such Notes.

          Upon surrender for registration of transfer of any Note at the office or agency of the Issuer
to be maintained as provided in Section 3.2 or, with respect to the Reset Rate Notes, to the Note
Registrar or any transfer agent, as applicable, if the requirements of Section 8-401(1) of the UCC
are met, the Issuer shall execute, and the Indenture Trustee shall authenticate and the Noteholder
shall obtain from the Indenture Trustee, in the name of the designated transferee or transferees,
one or more new Notes in any authorized denominations and a like aggregate principal amount.

          On each Reset Date on which either the All Hold Rate is not applicable or fewer than 100% of a
class of Reset Rate Noteholders permissibly elect to hold their Reset Rate Notes, the Indenture
Trustee shall allocate the aggregate Outstanding Amount of such class of Reset Rate Notes, if such
class of Reset Rate Notes is to be denominated in U.S. Dollars during the immediately following
Reset Period, to the U.S. Note Certificate, which will, during the related Reset Period, represent
100% of the Outstanding Amount of such Reset Rate Notes. On any Reset Date when a class of Reset
Rate Notes is to be denominated in a currency other than U.S. Dollars during the immediately
following Reset Period, the Outstanding Amount of such class of Reset Rate Notes shall be allocated
entirely to the Non-U.S. Note Certificate.

5

 

          At the option of the Noteholder, Notes may be exchanged for other Notes in any authorized
denominations and a like aggregate principal amount, upon surrender of the Notes to be exchanged at
such office or agency. Whenever any Notes are so surrendered for exchange, the Issuer shall
execute, and the Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, the Notes which the Noteholder making the exchange is entitled to receive.

          All Notes issued upon any registration of transfer or exchange of Notes shall be the valid
obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Notes surrendered upon such registration of transfer or exchange.

          Every Note presented or surrendered for registration of transfer or exchange shall be duly
endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by the Noteholder thereof or such Noteholder’s attorney duly
authorized in writing, with such signature guaranteed by an “eligible guarantor institution”
meeting the requirements of the Note Registrar, which requirements include membership or
participation in Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature
guarantee program” as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Exchange Act.

          No service charge shall be made to a Noteholder for any registration of transfer or exchange
of Notes, but the Indenture Trustee may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.3 or 9.6 not involving any transfer.

          The preceding provisions of this Section notwithstanding, the Issuer shall not be required to
make and the Note Registrar need not register transfers or exchanges of Notes selected for
redemption or of any Note for a period of 15 days preceding the due date for any payment with
respect to the Note.

          Any transfer or assignment of any Note or any interest in any Note that is not effected
pursuant to the provisions of this Indenture (including, without limitation, this Section 2.4 and
Section 2.13), such as a transfer or assignment not reflected on the Note Register, shall be null
and void and shall not be taken into account by, or be binding upon, the Indenture Trustee or any
other party.

          SECTION 2.5   Mutilated, Destroyed, Lost or Stolen Notes. If (i) any mutilated Note
is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its
satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the
Issuer and the Indenture Trustee such security or indemnity as may be required by each of them to
hold the Issuer and the Indenture Trustee harmless, then, in the absence of notice to the Issuer,
the Note Registrar or the Indenture Trustee that such Note has been acquired by a bona fide
purchaser, and provided that the requirements of Section 8-405 of the UCC are met, the Issuer shall
execute and upon its request the Indenture Trustee shall authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note;
provided, however, that if any such destroyed, lost or stolen Note, but not a
mutilated Note, shall

6

 

have become or within 15 days shall be due and payable, or shall have been called for
redemption, instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or
stolen Note when so due or payable or upon the Redemption Date without surrender thereof. If,
after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note pursuant
to the proviso to the preceding sentence, a bona fide purchaser of the original Note in lieu of
which such replacement Note was issued presents for payment such original Note, the Issuer and the
Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the
Person to whom it was delivered or any Person taking such replacement Note from such Person to whom
such replacement Note was delivered or any assignee of such Person, except a bona fide purchaser,
and shall be entitled to recover upon the security or indemnity provided therefor to the extent of
any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.

          Upon the issuance of any replacement Note under this Section, the Issuer may require the
payment by the Noteholder thereof of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.

          Every replacement Note issued pursuant to this Section in replacement of any mutilated,
destroyed, lost or stolen Note shall constitute an original additional contractual obligation of
the Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

          The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost
or stolen Notes.

          SECTION 2.6   Persons Deemed Owner. Prior to due presentment for registration of
transfer of any Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name any Note is registered (as of the day of
determination) as the owner of such Note for the purpose of receiving payments of principal of,
interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and neither the Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture
Trustee shall be affected by notice to the contrary.

          SECTION 2.7   Payment of Principal and Interest; Note Interest Shortfall. (a) The
Notes shall accrue interest as provided in the forms of Notes in Exhibit A and such interest shall
be payable on each applicable Distribution Date as specified therein, subject to Section 3.1. Any
installment of interest or principal, if any, payable on any Note which is punctually paid or duly
provided for by the Issuer on the applicable Distribution Date shall be paid to the Person in whose
name such Note (or one or more Predecessor Notes) is registered on the applicable Record Date by
check mailed first-class, postage prepaid to such Person’s address as it appears on the Note
Register on such Record Date, except that, unless Definitive Notes have been issued pursuant to
Section 2.12, with respect to Notes registered on the Record Date in the name of the nominee of the
applicable Clearing Agency, for the Notes, payment shall be made by wire transfer in immediately
available funds to the account designated by such nominee and except

7

 

for the final installment of principal payable with respect to such Note on a
Distribution Date or on the Note Final Maturity Date for such Note which shall be payable as
provided below. The funds represented by any such checks returned undelivered shall be held in
accordance with Section 3.3.

     (b)   The principal amount of each class of Floating Rate Notes shall be payable in
installments on each applicable Distribution Date as provided in the forms of Notes set forth in
Exhibit A and the principal amount of each class of Reset Rate Notes shall be payable on each
applicable Distribution Date as set forth in the forms of Notes set forth in Exhibit A and in
Appendix A-2. Notwithstanding the foregoing, the entire unpaid principal amount of each class of
the Notes shall be due and payable, if not previously paid, on the Note Final Maturity Date for
such class of Notes and on the date on which an Event of Default shall have occurred and be
continuing if the Indenture Trustee or the Noteholders of the Notes representing at least a
majority of the Outstanding Amount of the Notes have declared the Notes to be immediately due and
payable in the manner provided in Section 5.2. All principal payments on the Notes shall be made
pro rata to the specific class of Noteholders entitled thereto. The Indenture Trustee shall notify
the Person in whose name a Note is registered at the close of business on the Record Date preceding
the Distribution Date on which the Issuer expects that the final installment of principal of and
interest on such Note will be paid. Such notice shall be mailed or transmitted by facsimile prior
to such final Distribution Date and shall specify that such final installment will be payable only
upon presentation and surrender of such Note and shall specify the place where such Note may be
presented and surrendered for payment of such installment. Notices in connection with redemptions
of Notes shall be mailed to Noteholders as provided in Section 10.2.

     (c)   If the Issuer defaults in a payment of interest at the applicable Note Rate on the
Notes, the Issuer shall pay the resulting Note Interest Shortfall on the following Distribution
Date as provided in the Administration Agreement.

          SECTION 2.8   Cancellation. All Notes surrendered for payment, registration of
transfer, exchange or redemption shall, if surrendered to any Person other than the Indenture
Trustee, be delivered to the Indenture Trustee and shall be promptly cancelled by the Indenture
Trustee. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have acquired in any manner
whatsoever and all Notes so delivered shall be promptly cancelled by the Indenture Trustee. No
Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided in this
Section, except as expressly permitted by this Indenture. All canceled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time, unless the Issuer shall direct by an Issuer Order that they be returned
to it and so long as such Issuer Order is timely and the Notes have not been previously disposed of
by the Indenture Trustee.

          SECTION 2.9   Release of Collateral. Subject to Sections 11.1 and 11.19 and the
terms of the Basic Documents, the Indenture Trustee shall release property from the lien of this
Indenture only upon receipt of an Issuer Request accompanied by an Officers’ Certificate of the
Issuer, an Opinion of Counsel and Independent Certificates in accordance with TIA §§ 314(c) and
314(d)(1) or an Opinion of Counsel in lieu of such Independent Certificates to the effect that the
TIA does not require any such Independent Certificates.

8

 

          SECTION 2.10   Book-Entry Notes. The Notes, upon original issuance, will be issued in
the form of typewritten Notes representing the Book-Entry Notes, to be delivered to applicable
initial Clearing Agency, by the Issuer, or on behalf of the Issuer. Such Notes shall initially be
registered on the Note Register in the name of the nominee of each initial Clearing Agency, and no
Note Owner shall receive a definitive, fully registered note (a “Definitive Note”) representing
such Note Owner’s interest in such Note, except as provided in Section 2.12. Unless and until
Definitive Notes have been issued to Note Owners pursuant to Section 2.12:

          (i)   the provisions of this Section shall be in full force and effect;

          (ii)   the Note Registrar and the Indenture Trustee, and their respective directors, officers,
employees and agents, may deal with the applicable Clearing Agency for all purposes (including the
payment of principal of and interest and other amounts on the Notes) as the authorized
representative of the Note Owners;

          (iii)   to the extent that the provisions of this Section conflict with any other provisions
of this Indenture, the provisions of this Section shall control;

          (iv)   the rights of Note Owners shall be exercised only through the applicable Clearing
Agency and shall be limited to those established by law and agreements between such Note Owners and
the applicable Clearing Agency and/or the applicable Clearing Agency Participants pursuant to the
Note Depository Agreements; and unless and until Definitive Notes are issued pursuant to Section
2.12, the initial Clearing Agency will make book-entry transfers among the applicable Clearing
Agency Participants and receive and transmit payments of principal of and interest and other
amounts on the Notes to such applicable Clearing Agency Participants;

          (v)   whenever this Indenture requires or permits actions to be taken based upon instructions
or directions of Noteholders of Notes evidencing a specified percentage of the Outstanding Amount
of the Notes, the applicable Clearing Agency shall be deemed to represent such percentage only to
the extent that it has received instructions to such effect from Note Owners and/or applicable
Clearing Agency Participants owning or representing, respectively, such required percentage of the
beneficial interest in the Notes and has delivered such instructions to the Indenture Trustee; and

          (vi)   upon acquisition or transfer of a beneficial interest in any Book-Entry Note by, for or
with the assets of, a Benefit Plan, such Note Owner shall be deemed to have represented that such
acquisition or purchase will not constitute or otherwise result in: (i) in the case of a Benefit
Plan subject to Title I of ERISA or Section 4975 of the Code, a non-exempt prohibited transaction
in violation of Section 406 of ERISA or Section 4975 of the Code which is not covered by a class or
other applicable exemption and (ii) in the case of a Benefit Plan subject to a substantially
similar federal, state, local or foreign law, a non-exempt violation of such substantially similar
law. Any transfer found to have been made in violation of such deemed representation shall be null
and void and of no effect.

          SECTION 2.11   Notices to Clearing Agency. Whenever a notice or other communication
is required under this Indenture to be given to Noteholders, unless and until

9

 

Definitive Notes shall have been issued to Note Owners pursuant to Section 2.12, the Indenture
Trustee shall give all such notices and communications specified herein to the applicable Clearing
Agency.

          SECTION 2.12   Definitive Notes. If (i) the Administrator advises the Indenture
Trustee in writing that a Clearing Agency (a) is closed for business for a continuous period of 14
days (other than by reason of holiday, statutory or otherwise), (b) announces an intention to cease
business permanently (or does so and no alternative clearing system acceptable to the Indenture
Trustee is then available), or (c) at any time, is unwilling or unable to continue as, or ceases to
be, a clearing agency registered under all applicable laws, and a successor clearing agency which
is registered as a clearing agency under all applicable laws is not appointed by the Administrator
within 90 days of such event, (ii) the Administrator at its option advises the Indenture Trustee in
writing that it elects to terminate the book-entry system through that Clearing Agency or (iii)
after the occurrence of an Event of Default, a Servicer Default or an Administrator Default, Note
Owners representing beneficial interests aggregating at least a majority of the Outstanding Amount
of the applicable Notes advise the applicable Clearing Agency (which shall then notify the
Indenture Trustee) in writing that the continuation of a book-entry system through such Clearing
Agency is no longer in the best interests of such Note Owners, then the Indenture Trustee shall
cause such Clearing Agency to notify all Note Owners cleared, through such Clearing Agency, of the
occurrence of any such event and of the availability of Definitive Notes to Note Owners requesting
the same. Upon surrender to the Indenture Trustee of the typewritten Notes representing the
Book-Entry Notes by a Clearing Agency, accompanied by registration instructions, the Issuer shall
execute and the Indenture Trustee shall authenticate the Definitive Notes in accordance with the
instructions of such Clearing Agency, which shall include, without limitation, the identity and
payment instructions for all Noteholders of the applicable Notes. None of the Issuer, the Note
Registrar or the Indenture Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Notes, the Indenture Trustee shall recognize the holders of the Definitive
Notes as Noteholders.

          Upon acquisition or transfer of a Definitive Note by, for or with the assets of, a Benefit
Plan, such Note Owner shall be deemed to have represented that such acquisition or purchase will
not constitute or otherwise result in: (i) in the case of a Benefit Plan subject to Title I of
ERISA or Section 4975 of the Code, a non-exempt prohibited transaction in violation of Section 406
of ERISA or Section 4975 of the Code which is not covered by a class or other applicable exemption
and (ii) in the case of a Benefit Plan subject to a substantially similar law, a non-exempt
violation of such substantially similar law. Any transfer found to have been made in violation of
such deemed representation shall be null and void and of no effect.

ARTICLE III

Covenants

          SECTION 3.1   Payments to Noteholders and each Swap Counterparty. The Issuer shall
duly and punctually pay the principal and interest, if any, with respect to the Notes in accordance
with the terms of the Notes and this Indenture and shall duly and punctually pay

10

 

amounts, if any, owing to each Swap Counterparty in accordance with the terms of this
Indenture and the related Swap Agreement. Without limiting the foregoing, the Issuer shall cause
to be distributed to Noteholders and each Swap Counterparty in accordance with the Administration
Agreement that portion of the amounts on deposit in the Trust Accounts on a Distribution Date
(other than any Eligible Investments deposited therein that will mature on the Business Day
preceding a subsequent Distribution Date) or with respect to any Swap Counterparty amounts on
deposit in the relevant Trust Accounts on the date such payment is due under the related Swap
Agreement, which the Noteholders and any Swap Counterparty are entitled to receive pursuant to
Sections 2.7 and 2.8 of the Administration Agreement. Amounts properly withheld under the Code by
any Person from a payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this Indenture.

          SECTION 3.1A Collateral Account. In the event that pursuant to the terms of any
applicable Swap Agreement, a related Swap Counterparty (or its credit support provider) is required
to deposit cash or securities as collateral to secure its obligations (“Swap Collateral”), the
Indenture Trustee shall establish and maintain one or more Eligible Deposit Accounts, including any
sub-accounts thereto, in the name of the Indenture Trustee for the benefit of the Issuer and the
related Reset Rate Noteholders (each a “Swap Agreement Collateral Account”) upon written notice
from the Issuer. All sums on deposit and securities held in any Swap Agreement Collateral Account
shall be used only for the purposes set forth in the related credit support agreement to be entered
into between the Trust and the related Swap Counterparty (a “Credit Support Agreement”). Amounts
on deposit in any Swap Agreement Collateral Account may be invested in Eligible Investments at the
written direction of the related Swap Counterparty and on each Distribution Date, all Investment
Earnings actually received by the Indenture Trustee on amounts on deposit in a Swap Agreement
Collateral Account or on securities held by the Indenture Trustee as Swap Collateral shall be paid
directly to the related Swap Counterparty and not become part of Available Funds in accordance with
the terms of the Credit Support Agreement. All amounts deposited in a Swap Agreement Collateral
Account shall be paid to the Issuer (and become part of Available Funds on the related Distribution
Date) or returned to the related Swap Counterparty, from time to time, in accordance with the
provisions set forth in the related Credit Support Agreement.

          SECTION 3.2   Maintenance of Office or Agency. The Issuer shall maintain in the
Borough of Manhattan, The City of New York and in Luxembourg, so long as any of the Notes are
listed on the Luxembourg Stock Exchange and the rules of such exchange so require, or in such other
jurisdiction if any of the Notes are listed on another stock exchange of international standing and
the rules of such other exchange so require, an office or agency where Notes may be surrendered for
registration of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby initially appoints the
Indenture Trustee to serve as its agent for the foregoing purposes. The Issuer shall give prompt
written notice to the Indenture Trustee of the location, and of any change in the location, of any
such office or agency. If at any time the Issuer shall fail to maintain any such office or agency
or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders, notices
and demands may be made or served at the Corporate Trust Office, and the Issuer hereby appoints the
Indenture Trustee as its agent to receive all such surrenders, notices and demands.

11

 

          SECTION 3.3   Money for Payments to be Held in Trust. As provided in Section 8.2(a)
and (b), all payments of amounts due and payable with respect to any Notes or any Swap Agreement
that are to be made from amounts distributed from the Collection Account, or deposited into the
Collection Account from the Supplemental Purchase Account, the Add-On Consolidation Loan Account,
the Capitalized Interest Account or the Reserve Account, pursuant to Sections 2.7 and 2.8 of the
Administration Agreement shall be made on behalf of the Issuer by the Indenture Trustee or by
another Paying Agent, and no amounts so distributed from the Collection Account for payments to
Noteholders or any Swap Counterparty shall be paid over to the Issuer except as provided in this
Section.

          On or before the Business Day next preceding each Distribution Date and Redemption Date, the
Issuer shall distribute or cause to be distributed to the Indenture Trustee (or any other Paying
Agent) an aggregate sum sufficient to pay the amounts then becoming due under the Notes or any Swap
Agreement, such sum to be held in trust for the benefit of the Persons entitled thereto and (unless
the Paying Agent is the Indenture Trustee) shall promptly notify the Indenture Trustee of its
action or failure so to act.

          The Issuer shall cause each Paying Agent other than the Indenture Trustee to execute and
deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the
Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject
to the provisions of this Section, that such Paying Agent will:

          (i)   hold all sums held by it for the payment of amounts due with respect to the Notes or any
Swap Agreement in trust for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons
as herein provided;

          (ii)   give the Indenture Trustee notice of any default by the Issuer of which it has actual
knowledge (or any other obligor upon the Notes) in the making of any payment required to be made
with respect to the Notes or any Swap Agreement;

          (iii)   at any time during the continuance of any such default, upon the written request of
the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such
Paying Agent;

          (iv)   immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all
sums held by it in trust for the payments due under the Notes or any Swap Agreement if at any time
it ceases to meet the standards required to be met by a Paying Agent at the time of its
appointment; and

          (v)   comply with all requirements of the Code with respect to the withholding from any
payments made by it on any Notes of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith.

          The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, by Issuer Order direct any Paying Agent to pay to the
Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by

12

 

the Indenture Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent
shall be released from all further liability with respect to such money.

          Subject to applicable laws with respect to escheat of funds, any money held by the Indenture
Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and
remaining unclaimed for two years after such amount has become due and payable shall be discharged
from such trust and be paid to the Issuer on Issuer Request or if the Issuer has been terminated to
the Depositor upon its written request; and the Noteholder thereof shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of
the amounts so paid to the Issuer), and all liability of the Indenture Trustee or such Paying Agent
with respect to such trust money shall thereupon cease; provided, however, that the
Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at
the expense and direction of the Issuer cause to be published once, in a newspaper published in the
English language, customarily published on each Business Day and of general circulation in The City
of New York and in Luxembourg, so long as any of the Notes are listed on the Luxembourg Stock
Exchange and the rules of such Exchange so require, or in such other jurisdiction if any of the
Notes are listed on another stock exchange of international standing and the rules of such other
exchange so require, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer. The Indenture Trustee shall
also adopt and employ, at the expense of the Issuer, any other reasonable means of notification of
such repayment (including mailing notice of such repayment to Noteholders whose Notes have been
called but have not been surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying
Agent, at the last address of record for each such Noteholder).

          SECTION 3.4   Existence. The Issuer shall keep in full effect its existence, rights
and franchises as a statutory trust under the laws of the State of Delaware (unless it becomes, or
any successor Issuer hereunder is or becomes, organized under the laws of any other State or of the
United States of America, in which case the Issuer shall keep in full effect its existence, rights
and franchises under the laws of such other jurisdiction) and shall obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the Notes, the Collateral
and each other instrument or agreement included in the Indenture Trust Estate.

          SECTION 3.5   Protection of Indenture Trust Estate. The Issuer will from time to time
execute and deliver all such supplements and amendments hereto, all such financing statements and
continuation statements and will take such other action necessary or advisable to:

          (i)   maintain or preserve the lien and security interest (and the priority thereof) of this
Indenture or carry out more effectively the purposes hereof;

          (ii)   perfect, publish notice of or protect the validity of any grant made or to be made by
this Indenture;

13

 

          (iii)   enforce any of the Collateral; or

          (iv)   preserve and defend title to the Indenture Trust Estate and the rights of the Indenture
Trustee, the Noteholders and each Swap Counterparty in such Indenture Trust Estate against the
claims of all persons and parties.

          The Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to execute
any financing statement, continuation statement or other instrument required to be executed
pursuant to this Section.

          SECTION 3.6   Opinions as to Indenture Trust Estate. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the recording and filing of
this Indenture as is necessary to perfect and make effective the lien and security interest of this
Indenture and reciting the details of such action, or stating that, in the opinion of such counsel,
no such action is necessary to make such lien and security interest effective.

     (b)   On or before December 31 in each calendar year, beginning in 2005, the Issuer shall
furnish to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording, filing, re-recording and
refiling of this Indenture and any indentures supplemental hereto as is necessary to maintain the
lien and security interest created by this Indenture and relating the details of such action or
stating that in the opinion of such counsel no such action is necessary to maintain such lien and
security interest. Such Opinion of Counsel shall also describe the recording, filing, recording
and refiling of this Indenture and any indentures supplemental hereto that will, in the opinion of
such counsel, be required to maintain the lien and security interest of this Indenture until
December 31 in the following calendar year.

          SECTION
3.7   Performance of Obligations; Servicing of Trust Student Loans. (a) The
Issuer will not take any action and will use its best efforts not to permit any action to be taken
by others that would release any Person from any of such Person’s material covenants or obligations
under any instrument or agreement included in the Indenture Trust Estate or that would result in
the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or
effectiveness of, any such instrument or agreement, except as expressly provided in this Indenture,
any other Basic Document or such other instrument or agreement.

     (b)   The Issuer may contract with other Persons to assist it in performing its duties under
this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee
in an Officers’ Certificate of the Issuer shall be deemed to be action taken by the Issuer;
provided, however, the Issuer shall not be liable for any acts of Persons with whom
the Issuer has contracted with reasonable care. Initially, the Issuer has contracted with the
Servicer and the Administrator to assist the Issuer in performing its duties under this Indenture.
The Issuer shall give written notice to the Indenture Trustee and each Rating Agency of any such
contract with any other Person.

     (c)   The Issuer shall punctually perform and observe all of its obligations and agreements
contained in this Indenture, the other Basic Documents and the instruments and

14

 

agreements included
in the Indenture Trust Estate, including filing or causing to be filed all UCC financing statements
and continuation statements prepared by the Issuer and required to be filed by the terms of this
Indenture and the Administration Agreement in accordance with and within the time periods provided
for herein and therein. Except as otherwise expressly provided therein, the Issuer shall not
waive, amend, modify, supplement or terminate any Basic Document or any provision thereof without
the consent of the Indenture Trustee or the Noteholders of at least a majority of the Outstanding
Amount of the Notes; provided, for the avoidance of doubt, that a transfer or assignment by
a Swap Counterparty of any of its interests or obligations in accordance with the requirements of
any applicable Swap Agreement (including the requirement that each Rating Agency then rating the
Notes issue written acknowledgment that, notwithstanding such transfer or assignment, the
then-current rating of the Notes will not be downgraded) shall not constitute a waiver, amendment,
modification, supplement or termination of the applicable Swap Agreement or any provision thereof
and shall not require the consent of the Indenture Trustee or the Noteholders of at least a
majority of the Outstanding Amount of the Notes. The Issuer shall give written notice to each
Rating Agency or any such waiver, amendment, modification, supplement or termination that requires
the consent of the Indenture Trustee or the Noteholders of at least a majority of the Outstanding
Amount of the Notes.

     (d)   If a Responsible Officer of the Issuer shall have knowledge of the occurrence of a
Servicer Default or an Administrator Default under the Servicing Agreement or the Administration
Agreement, respectively, the Issuer shall promptly notify the Indenture Trustee and the Rating
Agencies thereof, and shall specify in such notice the action, if any, the Issuer is taking with
respect to such default. If a Servicer Default shall arise from the failure of the Servicer to
perform any of its duties or obligations under the Servicing Agreement, or an Administrator Default
shall arise from the failure of the Administrator to perform any of its duties or obligations under
the Administration Agreement, as the case may be, with respect to the Trust Student Loans, the
Issuer shall take all reasonable steps available to it to enforce its rights under the Basic
Documents in respect of such failure.

     (e)   As promptly as possible after the giving of notice of termination to the Servicer of the
Servicer’s rights and powers, pursuant to Section 5.1 of the Servicing Agreement, or to the
Administrator of the Administrator’s rights and powers, pursuant to Section 5.1 of the
Administration Agreement, the Issuer shall appoint a successor servicer (the “Successor Servicer”)
or a successor administrator (the “Successor Administrator”), respectively, and such Successor
Servicer or Successor Administrator, as the case may be, shall accept its appointment by a written
assumption in a form acceptable to the Indenture Trustee. In the event that a Successor Servicer
or Successor Administrator has not been appointed and accepted its appointment at the time when the
Servicer or Administrator, as the case may be, ceases to act as Servicer or Administrator,
respectively, the Indenture Trustee without further action shall automatically be appointed the
Successor Servicer or Successor Administrator, as the case may be. The Indenture Trustee may
resign as the Successor Servicer or the Successor Administrator by giving written notice of
resignation to the Issuer and in such event will be released from such duties and obligations, such
release not to be effective until the date a new servicer or a new administrator enters into an
agreement with the Issuer as provided below; provided, however, that nothing herein
shall require or permit the Indenture Trustee to act as Servicer, or otherwise
service the Trust Student Loans, in violation of the Higher Education Act. Upon delivery of
any such notice to the Issuer, the Issuer shall obtain a new servicer as the Successor Servicer
under

15

 

the Servicing Agreement or a new administrator as the Successor Administrator under the
Administration Agreement, as the case may be. Any Successor Servicer or Successor Administrator,
other than the Indenture Trustee, shall (i) be an established institution (A) that satisfies any
requirements of the Higher Education Act applicable to servicers and (B) whose regular business
includes the servicing or administration of student loans and (ii) enter into a servicing agreement
or an administration agreement, respectively, with the Issuer having substantially the same
provisions as the provisions of the Servicing Agreement and the Administration Agreement, as
applicable. If within 30 days after the delivery of the notice referred to above, the Issuer shall
not have obtained such a new servicer or new administrator, as the case may be, the Indenture
Trustee may appoint, or may petition a court of competent jurisdiction to appoint, a Successor
Servicer or Successor Administrator; provided, however, that such right to appoint
or to petition for the appointment of any such successor shall in no event relieve the Indenture
Trustee from any obligations otherwise imposed on it under the Basic Documents until such successor
has in fact assumed such appointment. In connection with any such appointment, the Indenture
Trustee may make such arrangements for the compensation of such successor as it and such successor
shall agree, subject to the limitations set forth below and in the Servicing Agreement or
Administration Agreement, as applicable, and in accordance with Section 5.2 of the Servicing
Agreement and Section 5.2 of the Administration Agreement, the Issuer shall enter into an agreement
with such successor for the servicing or administration of the Trust Student Loans (such agreement
to be in form and substance satisfactory to the Indenture Trustee). If the Indenture Trustee shall
succeed as provided herein to the Servicer’s duties as Servicer with respect to the Trust Student
Loans, or the Administrator’s duties with respect to the Issuer and the Trust Student Loans, as the
case may be, it shall do so in its individual capacity and not in its capacity as Indenture Trustee
and, accordingly, the provisions of Article VI hereof shall be inapplicable to the Indenture
Trustee in its duties as the successor to the Servicer or the Administrator, as the case may be,
and the servicing or administration of the Trust Student Loans. In case the Indenture Trustee
shall become successor to the Servicer or the Administrator, the Indenture Trustee shall be
entitled to appoint as Servicer or as Administrator, as the case may be, any one of its Affiliates,
provided that such appointment shall not affect or alter in any way the liability of the Indenture
Trustee as Successor Servicer or Successor Administrator, respectively, in accordance with the
terms hereof.

     (f)   Upon any termination of the Servicer’s rights and powers pursuant to the Servicing
Agreement, or any termination of the Administrator’s rights and powers pursuant to the
Administration Agreement, as the case may be, the Issuer shall promptly notify the Indenture
Trustee and each Rating Agency. As soon as a Successor Servicer or a Successor Administrator is
appointed, the Issuer shall notify the Indenture Trustee and each Rating Agency of such
appointment, specifying in such notice the name and address of such Successor Servicer or such
Successor Administrator.

     (g)   As promptly as possible upon the occurrence of an Event of Default or Termination Event
under any Swap Agreement, the Issuer shall hire or appoint a Broker in order to obtain a
Replacement Transaction or a Letter of Credit Transaction according to the terms of the related
Swap Agreement, and such Broker shall accept its appointment by a written assumption in a form
acceptable to the Issuer. In connection with any such appointment, the
Issuer may make such arrangements for the compensation of such Broker as it and such Broker

16

 

shall agree, and the Issuer shall be entitled to reimbursement in full for such expenses as
provided in Section 6.7 hereof.

     (h)   Without derogating from the absolute nature of the assignment granted to the Indenture
Trustee under this Indenture or the rights of the Indenture Trustee hereunder, the Issuer agrees
that it will not, without the prior written consent of the Indenture Trustee or the Noteholders of
at least a majority in Outstanding Amount of the Notes, amend, modify, waive, supplement, terminate
or surrender, or agree to any amendment, modification, supplement, termination, waiver or surrender
of, the terms of any Collateral or the Basic Documents, except to the extent otherwise provided in
the Basic Documents, or waive timely performance or observance by the Servicer, the Administrator,
the Depositor, any Excess Distribution Certificateholder, SLM ECFC, VG Funding, the Issuer, the
Eligible Lender Trustee or any Swap Counterparty under the Basic Documents; provided,
however, that no such amendment shall (i) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, distributions that are required to be made for the benefit of
the Noteholders or any Swap Counterparty, or (ii) reduce the aforesaid percentage of the Notes
which are required to consent to any such amendment, without the consent of the Noteholders of all
the Outstanding Notes. If any such amendment, modification, supplement or waiver shall be so
consented to by the Indenture Trustee or such Noteholders, the Issuer shall give written notice
thereof to each Rating Agency and agrees, promptly following a request by the Indenture Trustee to
do so, to execute and deliver, in its own name and at its own expense, such agreements,
instruments, consents and other documents as the Indenture Trustee may deem necessary or
appropriate in the circumstances.

          SECTION 3.8   Negative Covenants. So long as any Notes are Outstanding, the Issuer
shall not:

          (i)   except as expressly permitted by this Indenture or any other Basic Document, sell,
transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including
those included in the Indenture Trust Estate, unless directed to do so by the Indenture Trustee;

          (ii)   claim any credit on, or make any deduction from the principal or interest payable in
respect of, the Notes (other than amounts properly withheld from such payments under the Code or
applicable state law) or assert any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Indenture Trust Estate;

          (iii)   (A) permit the validity or effectiveness of this Indenture to be impaired, or permit
the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations with respect to the Notes under
this Indenture except as may be expressly permitted hereby, (B) permit any lien, charge, excise,
claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to
be created on or extend to or otherwise arise upon or burden the Indenture Trust Estate or any part
thereof or any interest therein or the proceeds thereof (other than tax liens and other liens that
arise by operation of law, and other than as expressly permitted
by the Basic Documents) or (C) permit the lien of this Indenture not to constitute a valid first

17

 

priority (other than with respect to any such tax or other lien) security interest in the
Indenture Trust Estate; or

          (iv)   enter into any amendment to any Swap Agreement to cure any ambiguity in, or to correct
or supplement any provision of any Swap Agreement, unless the Issuer has determined, and the
Indenture Trustee has agreed in writing at the written direction of the Issuer, that the amendment
will not materially adversely affect the interests of the Noteholders and provided that the Issuer
has provided reasonable notice to the Rating Agencies of such amendment and the Rating Agency
Condition is satisfied.

          SECTION 3.9   Annual Statement as to Compliance. The Issuer will deliver to the
Indenture Trustee and each Rating Agency, within 90 days after the end of each fiscal year of the
Issuer (commencing with the fiscal year ending December 31, 2005), an Officers’ Certificate of the
Issuer stating that:

          (i)   a review of the activities of the Issuer during such year and of performance under this
Indenture has been made under such Authorized Officers’ supervision; and

          (ii)   to the best of such Authorized Officers’ knowledge, based on such review, the Issuer
has complied with all conditions and covenants under this Indenture throughout such year, or, if
there has been a default in the compliance of any such condition or covenant, specifying each such
default known to such Authorized Officers and the nature and status thereof.

          SECTION 3.10   Issuer May Consolidate, etc., Only on Certain Terms.

     (a)   The Issuer shall not consolidate or merge with or into any other Person, unless:

          (i)   the Person (if other than the Issuer) formed by or surviving such consolidation or
merger shall be a Person organized and existing under the laws of the United States of America or
any State and shall expressly assume, by an indenture supplemental hereto, executed and delivered
to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of, and interest, if any, on all Notes and the performance or observance
of every agreement and covenant of this Indenture and the other Basic Documents on the part of the
Issuer to be performed or observed, all as provided herein;

          (ii)   immediately after giving effect to such transaction, no Default shall have occurred and
be continuing;

          (iii)   the Rating Agency Condition shall have been satisfied with respect to such
transaction;

          (iv)   the Issuer shall have received an Opinion of Counsel (and shall have delivered copies
thereof to the Indenture Trustee) to the effect that such transaction will not have any material
adverse Federal or Delaware state tax consequence to the Issuer or any Noteholder or any Swap
Counterparty;

18

 

          (v)   any action as is necessary to maintain the lien and security interest created by this
Indenture shall have been taken; and

          (vi)   the Issuer shall have delivered to the Indenture Trustee an Officers’ Certificate of
the Issuer and an Opinion of Counsel each stating that such consolidation or merger and such
supplemental indenture comply with this Article III and that all conditions precedent herein
provided for relating to such transaction have been complied with (including any filing required by
the Exchange Act).

     (b)   The Issuer shall not convey or transfer all or substantially all of its properties or
assets, including those included in the Indenture Trust Estate, to any Person, unless:

          (i)   the Person that acquires by conveyance or transfer the properties and assets of the
Issuer the conveyance or transfer of which is hereby restricted shall (A) be a United States
citizen or a Person organized and existing under the laws of the United States of America or any
State, (B) expressly assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of
the principal of, and interest, if any, on all Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all
as provided herein, (C) expressly agree by means of such supplemental indenture that all right,
title and interest so conveyed or transferred shall be subject and subordinate to the rights of
Noteholders and any Currency Swap Counterparty, (D) unless otherwise provided in such supplemental
indenture, expressly agree to indemnify, defend and hold harmless the Issuer against and from any
loss, liability or expense arising under or related to this Indenture and the Notes and (E)
expressly agree by means of such supplemental indenture that such Person (or if a group of Persons,
then one specified Person) shall make all filings with the Commission (and any other appropriate
Person) required by the Exchange Act in connection with the Notes;

          (ii)   immediately after giving effect to such transaction, no Default shall have occurred and
be continuing;

          (iii)   the Rating Agency Condition shall have been satisfied with respect to such
transaction;

          (iv)   the Issuer shall have received an Opinion of Counsel (and shall have delivered copies
thereof to the Indenture Trustee) to the effect that such transaction will not have any material
adverse Federal or Delaware state tax consequence to the Issuer or any Noteholder;

          (v)   any action as is necessary to maintain the lien and security interest created by this
Indenture shall have been taken; and

          (vi)   the Issuer shall have delivered to the Indenture Trustee an Officers’ Certificate of
the Issuer and an Opinion of Counsel each stating that such conveyance or transfer and such
supplemental indenture comply with this Article III and that all conditions precedent herein
provided for relating to such transaction have been complied with (including any filing required by
the Exchange Act).

19

 

          SECTION 3.11   Successor or Transferee. (a) Upon any consolidation or merger of the
Issuer in accordance with Section 3.10(a), the Person formed by or surviving such consolidation or
merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every
right and power of, the Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.

     (b)   Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to
Section 3.10(b), SLM Student Loan Trust 2005-9 will be released from every covenant and agreement
of this Indenture to be observed or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery by the Issuer of written notice to the Indenture Trustee stating that
SLM Student Loan Trust 2005-9 is to be so released.

          SECTION 3.12   No Other Business. The Issuer shall not engage in any business other
than financing, purchasing, owning, selling and managing the Trust Student Loans and the other
assets of the Issuer and related proceeds thereof in addition to entering into the Initial Currency
Swap Agreements on the Closing Date and any other Swap Agreements, as applicable, from time to time
on the related Reset Date, in the manner contemplated by this Indenture and the other Basic
Documents and activities incidental thereto.

          SECTION 3.13   No Borrowing. The Issuer shall not issue, incur, assume, guarantee or
otherwise become liable, directly or indirectly, for any indebtedness except for the Notes.

          SECTION 3.14   Obligations of Servicer and Administrator. The Issuer shall cause the
Servicer to comply with Sections 3.1, 3.2 and 3.3 of the Administration Agreement and Section 3.7
of the Servicing Agreement and the Administrator to comply with Sections 2.11, 3.1, 3.2 and 3.3 of
the Administration Agreement.

          SECTION 3.15   Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by this Indenture and the other Basic Documents, the Issuer shall not make any loan or
advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of
assuring another’s payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection
with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any other interest in,
or make any capital contribution to, any other Person.

          SECTION 3.16   Capital Expenditures. The Issuer shall not make any expenditure (by
long-term or operating lease or otherwise) for capital assets (either realty or personalty).

          SECTION 3.17   Restricted Payments. The Issuer shall not, directly or indirectly, (i)
pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash,
property, securities or a combination thereof, to the Eligible Lender Trustee or any owner of a
beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer or the Administrator, (ii) redeem, purchase, retire
or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside

20

 

or otherwise segregate any amounts for any such purpose; provided, however,
that the Issuer may make, or cause to be made, distributions to the Servicer, the Eligible Lender
Trustee, the Indenture Trustee, the Noteholders, any Swap Counterparty, any Remarketing Agent, the
Administrator, the Depositor and the Excess Distribution Certificateholder as contemplated by, and
to the extent funds are available for such purpose under, this Indenture and the other Basic
Documents. The Issuer will not, directly or indirectly, make payments to or distributions from the
Collection Account except in accordance with this Indenture and the other Basic Documents.

          SECTION 3.18   Notice of Events of Default. The Issuer shall give the Indenture
Trustee, the Rating Agencies and each Swap Counterparty prompt written notice of each Event of
Default hereunder. The Issuer shall give the Indenture Trustee, the Rating Agencies and each Swap
Counterparty prompt written notice of each default on the part of (i) the Depositor of its
obligations under the Sale Agreement, (ii) SLM ECFC of its obligations under the SLM ECFC Purchase
Agreement, (iii) VG Funding of its obligations under the VG Funding Purchase Agreement, (iv) the
Servicer of its obligations under the Servicing Agreement, or (v) the Administrator of its
obligations under the Administration Agreement. In addition, the Issuer shall deliver to the
Indenture Trustee, each Rating Agency and each Swap Counterparty, within five days after the
occurrence thereof, written notice in the form of an Officers’ Certificate of the Issuer of any
event which with the giving of notice and the lapse of time would become an Event of Default under
Section 5.1(iii), its status and what action the Issuer is taking or proposes to take with respect
thereto.

          SECTION 3.19   Further Instruments and Acts. Upon request of the Indenture Trustee,
the Issuer will execute and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

ARTICLE IV

Satisfaction and Discharge

          SECTION 4.1   Satisfaction and Discharge of Indenture. This Indenture shall cease to
be of further effect with respect to the Notes except as to (i) rights of registration of transfer
and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of
Noteholders to receive payments of principal thereof and interest thereon, (iv) Sections 3.3, 3.4,
3.5, 3.8, 3.10, 3.12 and 3.13, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including, without limitation, the rights of the Indenture Trustee under Section 6.7 and
the obligations of the Indenture Trustee under Section 4.2) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the Indenture Trustee payable
to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuer,
shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when:

     (a)   either

          (1) all Notes theretofore authenticated and delivered (other than (i) Notes that have been
destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.5

21

 

and (ii) Notes for whose payment money has theretofore been deposited in trust or segregated
and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust,
as provided in Section 3.3) have been delivered to the Indenture Trustee for cancellation; or

          (2) all Notes not theretofore delivered to the Indenture Trustee for cancellation:

               (i) have become due and payable,

               (ii) will become due and payable at their respective Note Final Maturity Date, within one
year, or

               (iii) are to be called for redemption within one year under arrangements satisfactory to the
Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and
at the expense, of the Issuer, and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the Indenture Trustee cash or
direct obligations of or obligations guaranteed by the United States of America (which will mature
prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to
pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Indenture
Trustee for cancellation when due to the Note Final Maturity Date;

     (b)   the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer;
and

     (c)   the Issuer has delivered to the Indenture Trustee an Officers’ Certificate of the
Issuer, an Opinion of Counsel and (if required by the TIA or the Indenture Trustee) an Independent
Certificate from a firm of certified public accountants, each meeting the applicable requirements
of Section 11.1(a) and, subject to Section 11.2, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have been complied with.

          SECTION 4.2   Application of Trust Money. All moneys deposited with the Indenture
Trustee pursuant to Section 4.1 hereof shall be held in trust and applied by it, in accordance with
the provisions of the Notes and this Indenture, to the payment, either directly or through any
Paying Agent, as the Indenture Trustee may determine, to the Noteholders of the particular Notes or
to any Swap Counterparty, as applicable, for the payment or redemption of which such moneys have
been deposited with the Indenture Trustee, of all sums due and to become due thereon for principal
and interest; but such moneys need not be segregated from other funds except to the extent required
herein or in the Administration Agreement or required by law.

          SECTION 4.3   Repayment of Moneys Held by Paying Agent. In connection with the
satisfaction and discharge of this Indenture with respect to the Notes, all moneys then held by any
Paying Agent other than the Indenture Trustee under the provisions of this Indenture with respect
to such Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held and
applied according to Section 3.3 and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.

22

 

          SECTION 4.4   Auction of Trust Student Loans. On the date (the “Trust Auction Date”)
that is three Business Days prior to the Distribution Date immediately following the end of the
first Collection Period when the Pool Balance is equal to 10% or less of the Initial Pool Balance,
any Trust Student Loans remaining in the Trust shall be offered for sale by the Indenture Trustee
unless the Servicer has exercised its option to purchase the Trust Estate as described in Section
6.1(a) of the Administration Agreement with respect to such Distribution Date. The Servicer will
be deemed to have waived such option if it fails to notify the Eligible Lender Trustee and the
Indenture Trustee of its exercise thereof in writing prior to the Indenture Trustee’s acceptance of
a bid to purchase such Trust Student Loans; provided, however, that there shall be
no such offer for sale if the Indenture Trustee fails to provide notice to the Servicer in
accordance with this Section 4.4. The Indenture Trustee shall provide written notice to the
Servicer of any such offer for sale at least 5 Business Days in advance of the Trust Auction Date.
The Indenture Trustee shall permit the Depositor or any of its Affiliates, including SLM ECFC, VG
Funding and the Servicer, to offer bids only if the Pool Balance as of the applicable Trust Auction
Date is equal to 10% or less of the Initial Pool Balance, and such bid does not exceed the fair
market value of the Trust Student Loans as of the Trust Auction Date. If at least two bids are
received, the Indenture Trustee shall solicit and resolicit new bids from all participating bidders
until only one bid remains or the remaining bidders decline to resubmit bids. The Indenture
Trustee shall accept the highest of such remaining bids if it is equal to or in excess of both (i)
the Minimum Purchase Amount plus any amounts owed to any Swap Counterparty for Swap Payments and
Swap Termination Payments and amounts to any Remarketing Agent for any unpaid remarketing fees and
expenses, and any Carryover Servicing Fees and (ii) the fair market value of such Trust Student
Loans as of the end of the Collection Period immediately preceding the Trust Auction Date. If at
least two bids are not received or the highest bid after the resolicitation process is completed is
not equal to or in excess of the higher of (i) the Minimum Purchase Amount plus any amounts owed to
any Swap Counterparty for Swap Payments and Swap Termination Payments and amounts to any
Remarketing Agent for any unpaid remarketing fees and expenses, and any Carryover Servicing Fees
and (ii) the fair market value of the Trust Student Loans, the Indenture Trustee shall not
consummate such sale. The Indenture Trustee may consult, and, at the direction of the Depositor,
shall consult, with a financial advisor, including an Underwriter of the Notes or the
Administrator, to determine if the fair market value of the Trust Student Loans has been offered.
The proceeds of any such sale will be paid at the time set forth in Section 2.6 of the
Administration Agreement and applied in the order of priority set forth in Section 5.4(b). If the
sale is not consummated in accordance with the foregoing, the Indenture Trustee may, but shall not
be under any obligation to, solicit bids for sale of the Trust Student Loans with respect to future
Distribution Dates upon terms similar to those described above, including the Servicer’s waiver of
its option to purchase the Trust Estate in accordance with Section 6.1(a) of the Administration
Agreement with respect to each such future Distribution Date.

ARTICLE V

Remedies

          SECTION 5.1   Events of Default. “Event of Default,” wherever used herein, means any
one of the following events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any

23

 

judgment, decree or order of any court or any order, rule or regulation of any administrative
or governmental body):

          (i)   default in the payment of any interest on any Note when the same becomes due and
payable, and such default shall continue for a period of five days; or

          (ii)   default in the payment of the principal of any Note when the same becomes due and
payable on the related Note Final Maturity Date; or

          (iii)   default in the observance or performance of any covenant or agreement of the Issuer
made in this Indenture (other than a covenant or agreement, a default in the observance or
performance of which is elsewhere in this Section specifically dealt with), or any representation
or warranty of the Issuer made in this Indenture or in any certificate or other writing having been
incorrect in any material respect as of the time when made, such default or breach having a
material adverse effect on the holders of the Notes, and such default or breach shall continue or
not be cured, or the circumstance or condition in respect of which such misrepresentation or
warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days
after there shall have been given, by registered or certified mail, to the Issuer by the Indenture
Trustee or to the Issuer and the Indenture Trustee by the Noteholders of at least 25% of the
Outstanding Amount of the Notes, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that such notice is a notice
of Default hereunder; or

          (iv)   the filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of the Issuer or any substantial part of the Indenture Trust Estate in an
involuntary case under any applicable Federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial part of the Indenture Trust
Estate, or ordering the winding-up or liquidation of the Issuer’s affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or

          (v)   the commencement by the Issuer of a voluntary case under any applicable Federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the
Issuer to the entry of an order for relief in an involuntary case under any such law, or the
consent by the Issuer to the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of
the Indenture Trust Estate, or the making by the Issuer of any general assignment for the benefit
of creditors, or the failure by the Issuer generally to pay its debts as such debts become due, or
the taking of action by the Issuer in furtherance of any of the foregoing.

          SECTION 5.2   Acceleration of Maturity; Rescission and Annulment. If an Event of
Default should occur and be continuing, then and in every such case the Indenture Trustee or the
Noteholders representing at least a majority of the Outstanding Amount of the Notes may declare all
the Notes to be immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by Noteholders), and upon any such declaration the unpaid principal
amount of such Notes, together with accrued and unpaid interest thereon through the

24

 

date of acceleration, shall become immediately due and payable, subject, however, to Section
5.4 of this Indenture.

          At any time after such declaration of acceleration of maturity has been made and before a
judgment or decree for payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, the Noteholders of Notes representing at least a majority
of the Outstanding Amount of the Notes, by written notice to the Issuer and the Indenture Trustee,
may rescind and annul such declaration and its consequences if:

          (i)   the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:

     (a) all payments of principal of and interest on all Notes and all other
amounts that would then be due hereunder or upon such Notes if the Event of Default
giving rise to such acceleration had not occurred; and

     (b) all sums paid or advanced by the Indenture Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel; and

          (ii)   all Events of Default, other than the nonpayment of the principal of the Notes that has
become due solely by such acceleration, have been cured or waived as provided in Section 5.12.

          No such rescission shall affect any subsequent default or impair any right consequent thereto.

          SECTION 5.3   Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee. The Issuer covenants that if (i) default is made in the payment of any interest on
any Note when the same becomes due and payable, and such default continues for a period of five
days, or (ii) default is made in the payment of the principal of any Note when the same becomes due
and payable at the related Note Final Maturity Date, the Issuer shall, upon demand of the Indenture
Trustee, pay to it, for the benefit of the Noteholders, the whole amount then due and payable on
such Notes for principal and interest, with interest upon the overdue principal, and, to the extent
payment at such rate of interest shall be legally enforceable, upon overdue installments of
interest, at the rate specified in Section 2.7 and in addition thereto such further amount as shall
be sufficient to cover the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents and counsel.

     (a)   In case the Issuer shall fail forthwith to pay such amounts upon such demand, the
Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding
for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or
final decree, and may enforce the same against the Issuer or other obligor upon such Notes and
collect in the manner provided by law out of the property of the Issuer or other obligor upon such
Notes, wherever situated, the moneys adjudged or decreed to be payable.

25

 

     (b)   If an Event of Default occurs and is continuing, the Indenture Trustee may, as more
particularly provided in Section 5.4, in its discretion, proceed to protect and enforce its rights
and the rights of the Noteholders and any Currency Swap Counterparty by such appropriate
Proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.

     (c)   In case there shall be pending, relative to the Issuer or any other obligor upon the
Notes or any Person having or claiming an ownership interest in the Indenture Trust Estate,
Proceedings under Title 11 of the United States Code or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other obligor or Person, or
in case of any other, comparable judicial Proceedings relative to the Issuer or other obligor upon
the Notes, or to the creditors or property of the Issuer or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Notes shall then be due and payable, as
therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee
shall have made any demand pursuant to the provisions of this Section, shall be entitled and
empowered, by intervention in such proceedings or otherwise:

          (i)   to file and prove a claim or claims for the whole amount of principal and interest owing
and unpaid in respect of the Notes and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee,
except as a result of negligence or bad faith) and of the Noteholders allowed in such Proceedings;

          (ii)   unless prohibited by applicable law and regulations, to vote on behalf of the
Noteholders (and, if applicable, any Currency Swap Counterparty) in any election of a trustee, a
standby trustee or Person performing similar functions in any such Proceedings;

          (iii)   to collect and receive any moneys or other property payable or deliverable on any such
claims and to distribute all amounts received with respect to the claims of the Noteholders, any
Currency Swap Counterparty and the Indenture Trustee on their behalf; and

          (iv)   to file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee, any Currency Swap Counterparty or
the Noteholders allowed in any judicial Proceedings relative to the Issuer, its creditors and its
property;

          and any trustee, receiver, liquidator, custodian or other similar official in any such
Proceeding is hereby authorized by each of such Noteholders and any Currency Swap

26

 

Counterparty to make payments to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Noteholders and any Currency Swap
Counterparty to pay to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their
respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result
of negligence or bad faith.

     (d)   Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize
or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any
Noteholder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.

     (e)   All rights of action and of asserting claims under this Indenture, or under any of the
Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes or the
production thereof in any trial or other Proceedings relative thereto, and any such action or
Proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements
and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Noteholders, and after the Notes have
been paid in full, and subject to the provisions of Section 11.19, any Currency Swap Counterparty.

     (f)   In any Proceedings brought by the Indenture Trustee (and also any Proceedings involving
the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a
party), the Indenture Trustee shall be held to represent all the Noteholders and each Currency Swap
Counterparty, and it shall not be necessary to make any Noteholder or any Currency Swap
Counterparty a party to any such Proceedings.

          SECTION 5.4   Remedies; Priorities. If an Event of Default shall have occurred and
be continuing, the Indenture Trustee may do one or more of the following (subject to Section 5.5):

     (a)   (i)   institute Proceedings in its own name and as trustee of an express trust for the
collection of all amounts then payable on the Notes or under this Indenture with respect thereto,
whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuer and
any other obligor upon such Notes moneys adjudged due;

          (ii)   institute Proceedings from time to time for the complete or partial foreclosure of this
Indenture, with respect to the Indenture Trust Estate;

          (iii)   exercise any remedies of a secured party under the UCC with respect to the Trust
Estate and take any other appropriate action to protect and enforce the rights and remedies of the
Indenture Trustee, any Currency Swap Counterparty and the Noteholders;

27

 

          (iv)   sell the Indenture Trust Estate or any portion thereof or rights or interest therein,
at one or more public or private sales called and conducted in any manner permitted by law; and/or

          (v)   elect to have the Eligible Lender Trustee maintain ownership of the Trust Student Loans
and continue to apply collections with respect to the Trust Student Loans as if there had been no
declaration of acceleration;

provided, however, that the Indenture Trustee may not sell or otherwise liquidate
the Indenture Trust Estate following an Event of Default, other than an Event of Default described
in Section 5.1(i) or (ii) with respect to the Class A Notes, unless (A) the Noteholders of 100% of
the Outstanding Amount of the Class A Notes consent thereto, (B) the proceeds of such sale or
liquidation distributable to the Class A Noteholders are sufficient to discharge in full all
amounts then due and unpaid upon such Class A Notes for principal and interest or (C) the Indenture
Trustee determines that the Indenture Trust Estate will not continue to provide sufficient funds
for the payment of principal of and interest on the Class A Notes as would have become due if the
Class A Notes had not been declared due and payable, and the Indenture Trustee obtains the consent
of Noteholders of 66-2/3% of the Outstanding Amount of the Class A Notes; provided,
further, that the Indenture Trustee may not sell or otherwise liquidate the Indenture Trust
Estate following an Event of Default, other than an Event of Default described in Section 5.1(i) or
(ii) with respect to the Class A Notes, unless (D) the proceeds of such sale or liquidation
distributable to the Class B Noteholders plus the proceeds of the sale or liquidation of the Trust
Estate distributable to the Class B Noteholders are sufficient to pay to the Class B Noteholders
the Outstanding Amount of the Class B Notes plus accrued and unpaid interest thereon or (E) after
receipt of notice from the Eligible Lender Trustee that the proceeds of such sale or liquidation
distributable to the Class B Noteholders plus the proceeds of the sale or liquidation of the Trust
Estate distributable to the Class B Noteholders would not be sufficient to pay to the Class B
Noteholders the outstanding principal plus accrued and unpaid interest thereon, the Class B
Noteholders of at least a majority of the Outstanding Amount of the Class B Notes consent thereto.
In determining such sufficiency or insufficiency with respect to clauses (B), (C), (D) and (E), the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such proposed action and
as to the sufficiency of the Indenture Trust Estate and/or Trust Estate, as applicable, for such
purpose.

     (b)   Notwithstanding the provisions of Section 8.2, following the occurrence and during the
continuation of an Event of Default which has resulted in an acceleration of the Notes, if the
Indenture Trustee collects any money or property, it shall pay out the money or property (and other
amounts including amounts, if any, held on deposit in each of the Trust Accounts) held as
Collateral for the benefit of the Noteholders, net of liquidation costs associated with the sale of
the assets of the Trust, in the following order:

          FIRST:

	 	 	 	 	 
	 

	 	A:  
	 	to the applicable Noteholders of each class of Reset Rate Notes
then denominated in U.S. Dollars and then structured not to receive a payment
of principal until the end of its related Reset Period, the amount, if any, on

28

 

deposit in the related Accumulation Account for such Reset Rate Notes
(excluding any Investment Earnings thereon) in reduction of the Outstanding
Amount of such Reset Rate Notes until they are paid in full; and/or

	 	 	 	 	 
	 

	 	   B:
	 	to the related Currency Swap Counterparty if any class of Reset
Rate Notes is then in Foreign Exchange Mode and is then structured not to
receive a payment of principal until the end of its related Reset Period, the
amount, if any, on deposit in the related Accumulation Account for such Reset
Rate Notes (excluding any Investment Earnings thereon) in reduction of the
Outstanding Amount of such Reset Rate Notes until they are paid in full;

          SECOND: pro rata, to the Indenture Trustee for amounts due under Section 6.7 and to the
Eligible Lender Trustee for amounts due under Section 8.1 of the Trust Agreement;

          THIRD: to the Servicer for due and unpaid Primary Servicing Fees;

          FOURTH: to the Administrator, any due and unpaid Administration Fees;

          FIFTH: pro rata, based on amounts due and owing:

	 	 	 	 	 
	 

	 	A:
	 	to the Class A Noteholders (other than the noteholders of any
class of Reset Rate Notes if a Swap Agreement with respect to interest payments
to be made to such noteholders is then in effect), for amounts due and unpaid
on the Class A Notes for interest at the applicable Note Rate, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Class A Notes for such interest;
	 
	 

	 	B:
	 	if a Swap Agreement is then in effect for any class of Reset
Rate Noteholders with respect to interest payments to be made to such
noteholders, to each Swap Counterparty, the amount of any Swap Interest
Payments due and payable by the Issuer (other than as paid to that Swap
Counterparty under clause FIRST); and
	 
	 

	 	C:
	 	if any Swap Agreement with respect to any class of Reset Rate
Notes has been terminated, to the related Swap Counterparty, the amount of any
Swap Termination Payments due to such Swap Counterparty due to a Termination
Event or Event of Default (as defined in the related Swap Agreement) resulting
from a “Failure to Pay or Deliver” by the Trust under Section 5(a)(i) of the
related Swap Agreement, a “Cross Default” as such term applies to the Trust
under Section 5(a)(vi) of the related Swap Agreement or a “Bankruptcy” of the
Trust under Section 5(a)(vii) of the related Swap Agreement, (as each such term
is defined in the Swap Agreement);

29

 

          SIXTH:

	 	 	 	 	 
	 

	 	A:
	 	If any class of Reset Rate Notes is in Foreign Exchange Mode,
pro rata (1) to the Class A Noteholders (other than the holders of any such
class of Reset Rate Notes then in Foreign Exchange Mode), ratably, an amount
sufficient to reduce the respective principal balance of those Class A Notes to
zero, and (2) to the applicable Currency Swap Counterparties an amount
sufficient to reduce the U.S. Dollar Equivalent Principal Amount of each class
of Reset Rate Notes then in Foreign Exchange Mode to zero; or
	 
	 

	 	B:
	 	if all classes of Reset Rate Notes are then denominated in U.S.
Dollars, pro rata to the Class A Noteholders, ratably, an amount sufficient to
reduce the respective principal balance of those Class A Notes to zero;

          SEVENTH: to the Class B Noteholders for amounts due and unpaid on the Class B Notes for
interest at the Class B Note Rate;

          EIGHTH: to the Class B Noteholders, an amount sufficient to reduce the Outstanding Amount of
the Class B Notes to zero;

          NINTH: to the Servicer, for any unpaid Carryover Servicing Fees;

          TENTH: to any Swap Counterparties, pro rata, the amount of any Swap Termination Payments due
to such Swap Counterparties by the Issuer and not payable in Clause FIFTH (C);

          ELEVENTH: to the Remarketing Agents, any due and unpaid Remarketing Fees payable by the Issuer
to the extent not previously paid from amounts on deposit in the Remarketing Fee Account;

          TWELFTH: sequentially, first to the Remarketing Agents, and second to the Administrator for
any advances made on behalf of the Issuer, in each case, for payment of certain costs and expenses
as set forth in Section 3 of the Remarketing Agreement in connection with the remarketing of any
class of Reset Rate Notes not previously reimbursed by the Issuer; and

          THIRTEENTH: to the Excess Distribution Certificateholder, any remaining funds.

          If the Trust has entered into a Currency Swap Agreement and such Currency Swap Agreement
terminates, amounts that would have otherwise been paid to the related Currency Swap Counterparty
(other than amounts payable as a Termination Payment thereunder) will be used to make payments to
the related class of Reset Rate Noteholders in an amount in the applicable non-U.S. Dollar
currency, equal to the payment that the related Currency Swap Counterparty would have made. If
this occurs, the Trust will exchange U.S. Dollars for the applicable non-U.S. Dollar currency in
order to make distributions on the applicable class of Reset Rate Notes.

30

 

          The Indenture Trustee may fix a record date and payment date for any payment to Noteholders
pursuant to this Section. At least 15 days before such record date, the Indenture Trustee shall
mail to each Noteholder and the Issuer a notice that states the record date, the payment date and
the amount to be paid.

          SECTION 5.5   Optional Preservation of the Trust Student Loans. If the Notes have
been declared to be due and payable under Section 5.2 following an Event of Default and such
declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may,
but need not, elect to maintain possession of the Indenture Trust Estate. It is the desire of the
parties hereto and the Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Notes, and the Indenture Trustee shall take such desire into
account when determining whether or not to maintain possession of the Indenture Trust Estate. In
determining whether to maintain possession of the Indenture Trust Estate, the Indenture Trustee
may, but need not, obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed action and as to the
sufficiency of the Indenture Trust Estate for such purpose.

          SECTION 5.6   Limitation of Suits. No Noteholder shall have any right to institute
any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:

          (i)   such Noteholder has previously given written notice to the Indenture Trustee of a
continuing Event of Default;

          (ii)   the Noteholders of not less than 25% of the Outstanding Amount of the Notes have made
written request to the Indenture Trustee to institute such Proceeding in respect of such Event of
Default in its own name as Indenture Trustee hereunder;

          (iii)   such Noteholder or Noteholders have offered to the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in complying with such
request;

          (iv)   the Indenture Trustee for 60 days after its receipt of such notice, request and offer
of indemnity has failed to institute such Proceeding; and

          (v)   no direction inconsistent with such written request has been given to the Indenture
Trustee during such 60-day period by the Noteholders of at least a majority of the Outstanding
Amount of the Notes;

          it being understood and intended that no one or more Noteholders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this indenture to affect, disturb
or prejudice the rights of any other Noteholders or to obtain or to seek to obtain priority or
preference over any other Noteholders or to enforce any right under this Indenture, except in the
manner herein provided.

          In the event the Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Noteholders, each representing less than a majority of the
Outstanding Amount of the Notes, the Indenture Trustee in its sole discretion

31

 

may determine what action, if any, shall be taken, notwithstanding any other provisions of
this Indenture.

          SECTION 5.7   Unconditional Rights of Noteholders to Receive Principal and Interest.
Notwithstanding any other provisions in this Indenture, each Noteholder shall have the right, which
is absolute and unconditional, to receive payment of the principal of and interest on its Note on
or after the respective due dates thereof expressed in such Note or in this Indenture (or, in the
case of redemption, on or after the Redemption Date) and to institute suit for the enforcement of
any such payment, and such right shall not be impaired without the consent of such Noteholder.

          SECTION 5.8   Restoration of Rights and Remedies. If the Indenture Trustee or any
Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and
such Proceeding has been discontinued or abandoned for any reason or has been determined adversely
to the Indenture Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Indenture Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.

          SECTION 5.9   Rights and Remedies Cumulative. No right or remedy herein conferred
upon or reserved to the Indenture Trustee, any Swap Counterparty or to the Noteholders is intended
to be exclusive of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment
of any other appropriate right or remedy.

          SECTION 5.10   Delay or Omission Not a Waiver. No delay or omission of the Indenture
Trustee, any Swap Counterparty or any Noteholder to exercise any right or remedy accruing upon any
Default shall impair any such right or remedy or constitute a waiver of any such Default or an
acquiescence therein. Every right and remedy given by this Article V or by law to the Indenture
Trustee, any Swap Counterparty or to the Noteholders may be exercised from time to time, and as
often as may be deemed expedient, by the Indenture Trustee, any Swap Counterparty or by the
Noteholders, as the case may be.

          SECTION 5.11   Control by Noteholders. The Noteholders of at least a majority of the
Outstanding Amount of the Notes shall have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the
Notes or exercising any trust or power conferred on the Indenture Trustee; provided that

          (i)   such direction shall not be in conflict with any rule of law or with this Indenture;

          (ii)   subject to the express terms of Section 5.4, any direction to the Indenture Trustee to
sell or liquidate the Indenture Trust Estate shall be by the Noteholders of not less than 100% of
the Outstanding Amount of the Notes;

32

 

          (iii)   if the conditions set forth in Section 5.5 have been satisfied and the Indenture
Trustee elects to retain the Indenture Trust Estate pursuant to such Section, then any direction to
the Indenture Trustee by Noteholders of less than 100% of the Outstanding Amount of the Notes to
sell or liquidate the Indenture Trust Estate shall be of no force and effect; and

          (iv)   the Indenture Trustee may take any other action deemed proper by the Indenture Trustee
that is not inconsistent with such direction;

provided, however, that, subject to Section 6.1, the Indenture Trustee need not
take any action that it determines might involve it in liability or might materially adversely
affect the rights of any Noteholders not consenting to such action.

          SECTION 5.12   Waiver of Past Defaults. Prior to the time a judgment or decree for
payment of money due has been obtained as described in Section 5.2, the Noteholders of at least a
majority of the Outstanding Amount of the Notes may waive any past Default and its consequences
except a Default (a) in payment when due of principal of or interest on any of the Notes or (b) in
respect of a covenant or provision hereof which cannot be modified or amended without the consent
of each Noteholder. In the case of any such waiver, the Issuer, the Indenture Trustee and the
Noteholders shall be restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.

          Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and
not to have occurred for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereto.

          SECTION 5.13   Undertaking for Costs. All parties to this Indenture agree, and each
Noteholder by such Noteholder’s acceptance of any Note shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking
to pay the costs of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant; but the provisions
of this Section shall not apply to (a) any suit instituted by the Indenture Trustee, (b) any suit
instituted by any Noteholder, or group of Noteholders, in each case holding in the aggregate more
than 10% of the Outstanding Amount of the Notes or (c) any suit Instituted by any Noteholder for
the enforcement of the payment of principal of or interest on any Note on or after the respective
due dates expressed in such Note and in this Indenture (or, in the case of redemption, on or after
the Redemption Date).

          SECTION 5.14   Waiver of Stay or Extension Laws. The Issuer covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner
whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,

33

 

delay or impede the execution of any power herein granted to the Indenture Trustee, but will
suffer and permit the execution of every such power as though no such law had been enacted.

          SECTION 5.15   Action on Notes. The Indenture Trustee’s right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to this Indenture. Neither the lien of this
Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired
by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Indenture Trust Estate or upon any of the
assets of the Issuer. Any money or property collected by the Indenture Trustee shall be applied in
accordance with Section 5.4(b).

          SECTION 5.16   Performance and Enforcement of Certain Obligations.

     (a)   Promptly following a request from the Indenture Trustee to do so and at the
Administrator’s expense, the Issuer shall take all such lawful action as the Indenture Trustee may
request to compel or secure the performance and observance by the Depositor, SLM ECFC, VG Funding,
the Administrator and the Servicer, as applicable, of each of their respective obligations to the
Issuer, whether directly or by assignment, under or in connection with the Sale Agreement, the SLM
ECFC Purchase Agreement, the VG Funding Purchase Agreement, the Administration Agreement and the
Servicing Agreement, respectively, in accordance with the terms thereof, and to exercise any and
all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection
with the Sale Agreement, the SLM ECFC Purchase Agreement, the VG Funding Purchase Agreement, the
Administration Agreement and the Servicing Agreement, as the case may be, to the extent and in the
manner directed by the Indenture Trustee, including the transmission of notices of default on the
part of the Depositor, SLM ECFC, VG Funding, the Administrator or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or secure performance by
the Depositor, SLM ECFC, VG Funding, the Administrator or the Servicer of each of their obligations
under the Sale Agreement, the SLM ECFC Purchase Agreement, the VG Funding Purchase Agreement, the
Administration Agreement and the Servicing Agreement, respectively.

     (b)   If an Event of Default has occurred and is continuing, the Indenture Trustee may, and at
the written direction of the Noteholders of 66-2/3% of the Outstanding Amount of the Notes shall,
exercise all rights, remedies, powers, privileges and claims of the Issuer against the Depositor,
SLM ECFC, VG Funding, the Administrator or the Servicer under or in connection with the Sale
Agreement, the SLM ECFC Purchase Agreement, the VG Funding Purchase Agreement, the Administration
Agreement and the Servicing Agreement, respectively, including the right or power to take any
action to compel or secure performance or observance by the Depositor, SLM ECFC, VG Funding, the
Administrator or the Servicer of each of their obligations to the Issuer thereunder, whether
directly or by assignment, and to give any consent, request, notice, direction, approval, extension
or waiver under the Sale Agreement, the SLM ECFC Purchase Agreement, the VG Funding Purchase
Agreement, the Administration Agreement and the Servicing Agreement, respectively, and any right of
the Issuer to take such action shall be suspended.

34

 

ARTICLE VI

The Indenture Trustee

          SECTION 6.1   Duties of Indenture Trustee. (a)  If an Event of Default has occurred
and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person’s own affairs.

     (b)   Except during the continuance of an Event of Default:

          (i)   the Indenture Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations shall be read into
this Indenture against the Indenture Trustee; and

          (ii)   in the absence of bad faith on its part, the Indenture Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of
this Indenture; provided, however, that the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they conform to the requirements of this
Indenture.

     (c)   The Indenture Trustee may not be relieved from liability for its own negligent action,
its own negligent failure to act or its own willful misconduct, except that:

          (i)   this paragraph does not limit the effect of paragraph (b) of this Section;

          (ii)   the Indenture Trustee shall not be liable for any error of judgment made in good faith
by a Responsible Officer unless it is proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts; and

          (iii)   the Indenture Trustee shall not be liable with respect to any action it takes or omits
to take in good faith in accordance with a direction received by it pursuant to Section 5.11.

     (d)   The Indenture Trustee shall not be liable for interest on any money received by it
except as the Indenture Trustee may agree in writing with the Issuer.

     (e)   Money held in trust by the Indenture Trustee need not be segregated from other funds
except to the extent required by law or the terms of this Indenture or the other Basic Documents.

     (f)   No provision of this Indenture shall require the Indenture Trustee to expend or risk its
own funds or otherwise incur financial liability in the performance of any of its duties hereunder
or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe
that repayments of such funds or adequate indemnity satisfactory to it against any loss, liability
or expense is not reasonably assured to it.

35

 

     (g)   Except as expressly provided in the Basic Documents, the Indenture Trustee shall have no
obligation to administer, service or collect the Trust Student Loans or to maintain, monitor or
otherwise supervise the administration, servicing or collection of the Trust Student Loans.

     (h)   In the event that the Indenture Trustee is the Paying Agent or the Note Registrar, the
rights and protections afforded to the Indenture Trustee pursuant to this Indenture shall also be
afforded to the Indenture Trustee in its capacity as Paying Agent or Note Registrar.

     (i)   Every provision of this Indenture relating to the conduct or affecting the liability of
or affording protection to the Indenture Trustee shall be subject to the provisions of this Section
and to the provisions of the TIA.

          SECTION 6.2   Rights of Indenture Trustee. (a)  The Indenture Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by the proper Person.
The Indenture Trustee need not investigate any fact or matter stated in such document.

     (b)   Before the Indenture Trustee acts or refrains from acting, it may require and shall be
entitled to receive an Officers’ Certificate of the Issuer and/or an Opinion of Counsel. The
Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers’ Certificate or Opinion of Counsel.

     (c)   The Indenture Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or a custodian or nominee,
and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of,
or for the supervision of, any such agent, attorney, custodian or nominee appointed with due care
by it hereunder.

     (d)   The Indenture Trustee shall not be liable for any action it takes or omits to take in
good faith which it believes to be authorized or within its rights or powers; provided,
however, that the Indenture Trustee’s conduct does not constitute willful misconduct,
negligence or bad faith.

     (e)   The Indenture Trustee may consult with counsel, and the advice or opinion of counsel
with respect to legal matters relating to this Indenture and the Notes shall be full and complete
authorization and protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such counsel.

          SECTION 6.3   Individual Rights of Indenture Trustee. The Indenture Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal
with the Issuer or its Affiliates with the same rights it would have if it were not Indenture
Trustee. Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same with
like rights. However, the Indenture Trustee must comply with Sections 6.11 and 6.12.

          SECTION 6.4   Indenture Trustee’s Disclaimer. The Indenture Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of this Indenture or

36

 

the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes,
and it shall not be responsible for any statement of the Issuer in the Indenture or in any document
issued in connection with the sale of the Notes or in the Notes other than the Indenture Trustee’s
certificate of authentication.

          SECTION 6.5   Notice of Defaults. If a Default occurs and is continuing and if it is
either actually known or written notice of the existence thereof has been delivered to a
Responsible Officer of the Indenture Trustee, the Indenture Trustee shall mail notice of the
Default to each Noteholder and any Swap Counterparty within 90 days and to each Rating Agency as
soon as practicable within 30 days after it occurs. Except in the case of a Default in payment of
principal of or interest on any Note (including payments pursuant to the mandatory redemption
provisions of such Note), the Indenture Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding the notice is in
the interests of Noteholders and any Swap Counterparty. Except as provided in the first sentence
of this Section 6.5, in no event shall the Indenture Trustee be deemed to have knowledge of a
Default or an Event of Default.

          SECTION 6.6   Reports by Indenture Trustee to Noteholders. The Indenture Trustee
shall deliver to each Noteholder (and to each Person who was a Noteholder at any time during the
applicable calendar year) such information as may be required to enable such holder to prepare its
Federal and state income tax returns. Within 60 days after each December 31 beginning with the
December 31 following the date of this Indenture, the Indenture Trustee shall mail to each
Noteholder a brief report as of such December 31 that complies with TIA § 313(a) if required by
said section. The Indenture Trustee shall also comply with TIA § 313(b). A copy of each such
report required pursuant to TIA § 313(a) or (b) shall, at the time of such transaction to
Noteholders, be filed by the Indenture Trustee with the Commission and with each securities
exchange, if any, upon which the Notes are listed, provided that the Issuer has previously notified
the Indenture Trustee of such listing.

          SECTION 6.7   Compensation and Indemnity. The Issuer shall cause the Depositor to pay
to the Indenture Trustee reasonable compensation for its services in accordance with a separate
agreement between the Depositor and the Indenture Trustee and shall cause the Depositor to
reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it as
provided in such separate agreement. The Indenture Trustee’s compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Issuer shall cause the Administrator
to indemnify the Indenture Trustee and its directors, officers, employees and agents against any
and all loss, liability or expense (including attorneys’ fees) incurred by it in connection with
the administration of this trust and the performance of its duties hereunder and under the other
Basic Documents. The Indenture Trustee shall notify the Issuer and the Administrator promptly of
any claim for which it may seek indemnity. Failure by the Indenture Trustee to so notify the
Issuer and the Administrator shall not relieve the Issuer or the Administrator of its obligations
hereunder and under the other Basic Documents. The Issuer shall cause the Administrator to defend
the claim and the Administrator shall not be liable for the legal fees and expenses of the
Indenture Trustee after it has assumed such defense; provided, however, that, in
the event that there may be a conflict between the positions of the Indenture Trustee and the
Administrator in conducting the defense of such claim, the Indenture Trustee shall be entitled to
separate counsel acceptable to it in its sole discretion the reasonable fees and

37

 

expenses of which shall be paid by the Administrator on behalf of the Issuer. Neither the
Issuer nor the Administrator need reimburse any expense or indemnify against any loss, liability or
expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful misconduct,
negligence or bad faith.

          The Issuer’s payment obligations to the Indenture Trustee pursuant to this Section shall
survive the discharge of this Indenture. When the Indenture Trustee incurs expenses after the
occurrence of a Default specified in Section 5.1(iv) or (v) with respect to the Issuer, the
expenses are intended to constitute expenses of administration under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or similar law.

          SECTION 6.8   Replacement of Indenture Trustee. No resignation or removal of the
Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until
the acceptance of appointment by the successor Indenture Trustee pursuant to this Section 6.8. The
Indenture Trustee may resign at any time by so notifying the Issuer. The Noteholders of at least a
majority in Outstanding Amount of the Notes may remove the Indenture Trustee by so notifying the
Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer shall remove the
Indenture Trustee if:

          (i)   the Indenture Trustee fails to comply with Section 6.11;

          (ii)   an Insolvency Event occurs with respect to the Indenture Trustee;

          (iii)   a receiver or other public officer takes charge of the Indenture Trustee or its
property; or

          (iv)   the Indenture Trustee otherwise becomes incapable of acting.

          If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of
Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as
the retiring Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee.

          A successor Indenture Trustee shall deliver a written acceptance of its appointment to the
retiring Indenture Trustee and to the Issuer. Thereupon the resignation or removal of the retiring
Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture. The successor Indenture
Trustee shall mail a notice of its succession to Noteholders. The retiring Indenture Trustee shall
promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.

          If a successor Indenture Trustee does not take office within 60 days after the retiring
Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or the
Noteholders of at least a majority in Outstanding Amount of the Notes may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee. The successor
Indenture Trustee shall give notice of its appointment as successor Indenture Trustee to the Rating
Agencies.

38

 

          If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may petition any
court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee.

          Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the
Issuer’s and the Administrator’s obligations under Section 6.7 shall continue for the benefit of
the retiring Indenture Trustee.

          SECTION 6.9   Successor Indenture Trustee by Merger. If the Indenture Trustee
consolidates with, merges or converts into, or transfers all or substantially all of its corporate
trust business or assets to, another corporation or banking association, the resulting, surviving
or transferee corporation without any further act shall be the successor Indenture Trustee,
provided that such corporation or banking association shall be otherwise qualified and eligible
under Section 6.11. The Indenture Trustee shall provide the Rating Agencies prior written notice
of any such transaction.

          In case at the time such successor or successors by merger, conversion or consolidation to the
Indenture Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have
been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated;
and in case at that time any of the Notes shall not have been authenticated, any successor to the
Indenture Trustee may authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Notes or in this Indenture provided that the
certificate of the Indenture Trustee shall have.

          SECTION 6.10   Appointment of Co-Trustee or Separate Trustee.

     (a)   Notwithstanding any other provisions of this Indenture, at any time, for the purpose of
meeting any legal requirement of any jurisdiction in which any part of the Indenture Trust Estate
may at the time be located, the Indenture Trustee shall have the power and may execute and deliver
all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Indenture Trust Estate, and to vest in such
Person or Persons, in such capacity and for the benefit of the Noteholders, such title to the
Indenture Trust Estate, or any part hereof, and, subject to the other provisions of this Section,
such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary
or desirable. No such appointment shall relieve the Indenture Trustee of its obligations
hereunder. No co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under Section 6.8 hereof.

     (b)   Every separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and conditions:

          (i)   all rights, powers, duties and obligations conferred or imposed upon the Indenture
Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and
such separate trustee or co-trustee jointly (it being understood that such

39

 

separate trustee or co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Indenture Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Indenture Trustee;

          (ii)   no trustee hereunder shall be personally liable by reason of any act or omission of any
other trustee hereunder; and

          (iii)   the Indenture Trustee may at any time accept the resignation of or remove any separate
trustee or co-trustee.

     (c)   Any notice, request or other writing given to the Indenture Trustee shall be deemed to
have been given to each of the then separate trustees and co-trustees, as effectively as if given
to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to
this Indenture and the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be
provided therein, subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.

     (d)   Any separate trustee or co-trustee may at any time constitute the Indenture Trustee, its
agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do
any lawful act under or in respect of this Indenture on its behalf and in its name. If any
separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be exercised by the
Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor
trustee.

          SECTION 6.11   Eligibility; Disqualification. The Indenture Trustee shall at all
times satisfy the requirements of TIA § 310(a), the requirements of an “eligible lender” under 20
USC § 1085(d) and the requirements of Rule 3a-7(4)(i) of the General Rules and Regulations under
the Investment Company Act of 1940, as amended. The Indenture Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent published annual report
of condition and it shall have a long-term senior unsecured debt rating of not less than investment
grade by each of the Rating Agencies. The Indenture Trustee shall comply with TIA § 310(b),
including the optional provision permitted by the second sentence of TIA § 310(b)(9);
provided, however, that there shall be excluded from the operation of TIA §
310(b)(1) any indenture or indentures under which other securities of the Issuer are outstanding if
the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

          SECTION 6.12   Preferential Collection of Claims Against the Issuer. The Indenture
Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in

40

 

TIA § 311(b). An Indenture Trustee who has resigned or been removed shall be subject to TIA §
311(a) to the extent indicated.

ARTICLE VII

Noteholders’ Lists and Reports

          SECTION 7.1   Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders.
The Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not more than five
days after the earlier of (i) each Record Date and (ii) three months after the last Record Date, a
list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of
the Noteholders as of such Record Date, and (b) at such other times as the Indenture Trustee may
request in writing, within 30 days after receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished.

          SECTION 7.2   Preservation of Information; Communications to Noteholders. The
Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and
addresses of the Noteholders contained in the most recent list furnished to the Indenture Trustee
as provided in Section 7.1 and the names and addresses of Noteholders received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to
it as provided in such Section 7.1 upon receipt of a new list so furnished.

     (a)   Noteholders may communicate pursuant to TIA § 312(b) with other Noteholders with respect
to their rights under this Indenture or under the Notes. Upon receipt by the Indenture Trustee of
any request by three or more Noteholders or by one or more holders of Notes evidencing not less
than 25% of the Outstanding Amount of the Notes to receive a copy of the current list of
Noteholders (whether or not made pursuant to TIA § 312(b)), the Indenture Trustee shall promptly
notify the Administrator thereof by providing to the Administrator a copy of such request and a
copy of the list of Noteholders produced in response thereto.

     (b)   The Issuer, the Indenture Trustee and the Note Registrar shall have the protection of
TIA § 312(c).

     (c)   On each Distribution Date the Indenture Trustee shall provide to each Noteholder of
record as of the related Record Date the information provided by the Administrator to the Indenture
Trustee on the related Determination Date pursuant to Section 2.11 of the Administration Agreement.

     (d)   The Indenture Trustee shall furnish to the Noteholders promptly upon receipt of a
written request therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the Indenture Trustee
under the Basic Documents. The Indenture Trustee shall furnish to the Noteholders promptly upon
receipt thereof from the Eligible Lender Trustee notice of any amendment of the Administration
Agreement pursuant to Section 8.5 of the Administration Agreement.

41

 

          SECTION 7.3   Reports by Issuer.

     (a)   The Issuer shall:

          (i)   file with the Indenture Trustee, within 15 days after the Issuer is required to file the
same with the Commission, copies of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the Commission may from time to time
by rules and regulations prescribe) which the Issuer may be required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act;

          (ii)   file with the Indenture Trustee and the Commission in accordance with rules and
regulations prescribed from time to time by the Commission such additional information, documents
and reports with respect to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and regulations; and

          (iii)   supply to the Indenture Trustee (and the Indenture Trustee shall transmit by mail to
all Noteholders described in TIA § 313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a) as may
be required by rules and regulations prescribed from time to time by the Commission.

     (b)   Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on
December 31 of each year.

ARTICLE VIII

Accounts, Disbursements and Releases

          SECTION 8.1   Collection of Money. Except as otherwise expressly provided herein, the
Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall apply all such money received by it on behalf of Noteholders, any Swap
Counterparty or the Trust pursuant to the Administration Agreement as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs in the making of
any payment or performance under any agreement or instrument that is part of the Indenture Trust
Estate, the Indenture Trustee may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate Proceedings. Any such action
shall be without prejudice to any right to claim a Default under this Indenture and any right to
proceed thereafter as provided in Article V.

          SECTION 8.2   Trust Accounts. (a)  On or prior to the Closing Date, the Issuer shall
cause the Administrator to establish and maintain, in the name of the Indenture Trustee, for the
benefit of the Noteholders, any Swap Counterparty and the Trust, the Trust Accounts as provided in
Section 2.3 of the Administration Agreement.

42

 

     (b)   On or before the Business Day immediately preceding each Distribution Date, all
Available Funds and amounts set forth in paragraph (a)(2) of the definition of Available Funds with
respect to the preceding Collection Period will be deposited in the Collection Account as provided
in Section 2.4 of the Administration Agreement. On or before each Distribution Date, the Indenture
Trustee (or any other Paying Agent) shall make the required deposits and distributions as provided
in Sections 2.7 and 2.8 of the Administration Agreement.

     (c)   During the Supplemental Purchase Period, the Indenture Trustee shall withdraw funds as
directed by the Administrator pursuant to Section 2.10(k) of the Administration Agreement for the
purchase of Additional Trust Student Loans.

     (d)   During the Consolidation Loan Add-On Period, the Indenture Trustee shall withdraw funds
as directed by the Administrator pursuant to 2.10(l) of the Administration Agreement for the
funding of Add-On Consolidation Loans.

     (e)   On the Business Day immediately following the end of the Supplemental Purchase Period,
the Indenture Trustee shall transfer any amounts remaining in the Supplemental Purchase Account at
the end of the Supplemental Purchase Period into the Collection Account, as directed by the
Administrator.

     (f)   On the Business Day immediately following the end of the Consolidation Loan Add-On
Period, the Indenture Trustee shall transfer any amounts remaining in the Add-On Consolidation Loan
Account into the Collection Account, as directed by the Administrator.

          SECTION 8.3   General Provisions Regarding Accounts. (a)  So long as no Default shall
have occurred and be continuing, all or a portion of the funds in the Trust Accounts shall be
invested in Eligible Investments and reinvested by the Indenture Trustee upon Issuer Order, subject
to the provisions of Section 2.3(b) of the Administration Agreement. All income or other gain from
investments of moneys deposited in the Trust Accounts shall be deposited by the Indenture Trustee
in the Collection Account, and any loss resulting from such investments shall be charged to such
Trust Account. The Issuer will not direct the Indenture Trustee to make any investment of any
funds or to sell any investment held in any of the Trust Accounts unless the security interest
granted and perfected in such account will continue to be perfected in such investment or the
proceeds of such sale, in either case without any further action by any Person, and, in connection
with any direction to the Indenture Trustee to make any such investment or sale, if requested by
the Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of Counsel,
acceptable to the Indenture Trustee, to such effect.

     (b)   Subject to Section 6.1(c), the Indenture Trustee shall not in any way be held liable for
the selection of Eligible Investments or by reason of any insufficiency in any of the Trust
Accounts resulting from any loss on any Eligible Investment included therein except for losses
attributable to the Indenture Trustee’s failure to make payments on such Eligible Investments
issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as
trustee, in accordance with their terms.

     (c)   If (i) the Issuer shall have failed to give investment directions for any funds on
deposit in the Trust Accounts to the Indenture Trustee by 10:00 a.m. Eastern Time (or such

43

 

other time as may be agreed by the Issuer and Indenture Trustee) on any Business Day; or (ii)
a Default shall have occurred and be continuing with respect to the Notes but the Notes shall not
have been declared due and payable pursuant to Section 5.2, or, if such Notes shall have been
declared due and payable following an Event of Default, amounts collected or receivable from the
Indenture Trust Estate are being applied in accordance with Section 5.5 as if there had not been
such a declaration; then the Indenture Trustee shall invest and reinvest funds in the Trust
Accounts in the Eligible Investments described in clause (d) of the definition thereof.

          SECTION 8.4   Release of Indenture Trust Estate. (a)  Subject to the payment of its
fees and expenses pursuant to Section 6.7, the Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property from the lien of this
Indenture, or convey the Indenture Trustee’s interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture. No party relying
upon an instrument executed by the Indenture Trustee as provided in this Article VIII shall be
bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.

     (b)   The Indenture Trustee shall, at such time as there are no Notes Outstanding and all sums
due the Indenture Trustee pursuant to Section 6.7 have been paid, subject to the interest therein
of any Swap Counterparty, release any remaining portion of the Indenture Trust Estate that secured
the Notes from the lien of this Indenture and release to the Issuer or any other Person entitled
thereto any funds then on deposit in the Trust Accounts. The Indenture Trustee shall release
property from the lien of this Indenture pursuant to this Section 8.4(b) only upon receipt of an
Issuer Request accompanied by an Officers’ Certificate of the Issuer, an Opinion of Counsel and (if
required by the TIA) Independent Certificates in accordance with TIA §§ 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.1.

     (c)   Each Noteholder, by the acceptance of a Note, acknowledges that from time to time the
Indenture Trustee shall release the lien of this Indenture on any Trust Student Loan to be sold (i)
to the Depositor in accordance with Section 6 of the Sale Agreement, (ii) to the Servicer in
accordance with Section 3.5 of the Servicing Agreement, (iii) to VG Funding (or the seller from
which VG Funding originally purchased such Trust Student Loan), to SLM ECFC or to another Affiliate
of SLM Corporation in accordance with Section 3.11F. of the Servicing Agreement, (iv) to another
eligible lender holding one or more Serial Loans with respect to such Trust Student Loan, (v) to VG
Funding in accordance with Section 6 of the VG Funding Purchase Agreement or (vi) to SLM ECFC in
accordance with Section 6 of the SLM ECFC Purchase Agreement, and each Noteholder, by the
acceptance of a Note, consents to any such release.

          SECTION 8.5   Opinion of Counsel. The Indenture Trustee shall receive at least seven
days’ notice when requested by the Issuer to take any action pursuant to Section 8.4(a),
accompanied by copies of any instruments involved, and the Indenture Trustee shall also require,
except in connection with any action contemplated by Section 8.4(c), as a condition to such action,
an Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee, stating the
legal effect of any such action, outlining the steps required to complete the same, and concluding
that all conditions precedent to the taking of such action have been complied with and such action
will not materially and adversely impair the security for the Notes or the rights

44

 

of the Noteholders or any Swap Counterparty in contravention of the provisions of this
Indenture; provided, however, that such Opinion of Counsel shall not be required to
express an opinion as to the fair value of the Indenture Trust Estate. Counsel rendering any such
opinion may rely, without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in connection with any such
action.

ARTICLE IX

Supplemental Indentures

     SECTION 9.1   Supplemental Indentures Without Consent of Noteholders.

     (a)   Without the consent of any Noteholders but with prior notice to the Rating Agencies, the
Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to
time, may enter into one or more indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:

          (i)   to correct or amplify the description of any property at any time subject to the lien of
this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property
subject or required to be subjected to the lien of this Indenture, or to subject to the lien of
this Indenture additional property;

          (ii)   to evidence the succession, in compliance with the applicable provisions hereof, of
another person to the Issuer, and the assumption by any such successor of the covenants of the
Issuer herein and in the Notes contained;

          (iii)   to add to the covenants of the Issuer, for the benefit of the Noteholders and, any
Swap Counterparty, as applicable, or to surrender any right or power herein conferred upon the
Issuer;

          (iv)   to convey, transfer, assign, mortgage or pledge any property to the Indenture Trustee;

          (v)   to cure any ambiguity, to correct or supplement any provision herein or in any
supplemental indenture which may be inconsistent with any other provision herein or in any
supplemental indenture or to make any other provisions with respect to matters or questions arising
under this Indenture or in any supplemental indenture; provided that such action shall not
materially adversely affect the interests of the Noteholders or any Swap Counterparty;

          (vi)   to evidence and provide for the acceptance of the appointment hereunder by a successor
trustee with respect to the Notes and to add to or change any of the provisions of this Indenture
as shall be necessary to facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or

          (vii)   to modify, eliminate or add to the provisions of this Indenture to such extent as
shall be necessary to effect the qualification of this Indenture under the TIA or under

45

 

any similar Federal statute hereafter enacted and to add to this Indenture such other
provisions as may be expressly required by the TIA.

          The Indenture Trustee is hereby authorized to join in the execution of any such supplemental
indenture and to make any further appropriate agreements and stipulations that may be therein
contained.

     (b)   The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also
without the consent of any of the Noteholders but with prior notice to any Swap Counterparty and
the Rating Agencies, enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the provisions of, this
Indenture or of modifying in any manner the rights of the Noteholders or any Swap Counterparty
under this Indenture; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel, adversely affect in any material respect the interests of any Noteholder
or any Swap Counterparty.

          SECTION 9.2   Supplemental Indentures with Consent of Noteholders.

     (a)   The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may, with
prior notice to any Swap Counterparty and the Rating Agencies and with the consent of the
Noteholders of at least a majority of the Outstanding Amount of the Notes, by Act of such
Noteholders delivered to the Issuer and the Indenture Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the
rights of the Noteholders under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Noteholder of each Outstanding Note
affected thereby:

          (i)   change the date of payment of any installment of principal of or interest on any Note,
or reduce the principal amount thereof, the interest rate thereon or the Redemption Price with
respect thereto, change the provisions of this Indenture relating to the application of collections
on, or the proceeds of the sale of, the Indenture Trust Estate to payment of principal of or
interest on the Notes, or change any place of payment where, or the coin or currency in which, any
Note or the interest thereon is payable (other than pursuant to the terms and conditions of the
Reset Rate Notes or pursuant to the Reset Rate Note Procedures set forth in Appendix A-2 to this
Indenture) or impair the right to institute suit for the enforcement of the provisions of this
Indenture requiring the application of funds available therefor, as provided in Article V, to the
payment of any such amount due on the Notes on or after the respective due dates thereof (or, in
the case of redemption, on or after the Redemption Date);

          (ii)   reduce the percentage of the Outstanding Amount of the Notes, the consent of the
Noteholders of which is required for any such supplemental indenture, or the consent of the
Noteholders of which is required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided for in this Indenture;

46

 

          (iii)   modify or alter the provisions of the proviso to the definition of the term
“Outstanding”;

          (iv)   reduce the percentage of the Outstanding Amount of the Notes required to direct the
Indenture Trustee to direct the Issuer to sell or liquidate the Indenture Trust Estate pursuant to
Section 5.4;

          (v)   modify any provision of this Section except to increase any percentage specified herein
or to provide that certain additional provisions of this Indenture or the other Basic Documents
cannot be modified or waived without the consent of the Noteholder of each Outstanding Note
affected thereby;

          (vi)   modify any of the provisions of this Indenture in such manner as to affect the
calculation of the amount of any payment of interest or principal due on any Note on any
Distribution Date (including the calculation of any of the individual components of such
calculation) or to affect the rights of the Noteholders to the benefit of any provisions for the
mandatory redemption of the Notes contained herein; or

          (vii)   permit the creation of any lien ranking prior to or on a parity with the lien of this
Indenture with respect to any part of the Indenture Trust Estate or, except as otherwise permitted
or contemplated herein, terminate the lien of this Indenture on any property at any time subject
hereto or deprive any Noteholder of any Note of the security provided by the lien of this
Indenture;

provided, however, that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any Swap Counterparty.

          It shall not be necessary for any Act of Noteholders under this Section to approve the
particular form of any proposed supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof.

          Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental
indenture pursuant to this Section, the Indenture Trustee shall mail to the Noteholders of the
Notes to which such amendment or supplemental indenture relates a notice setting forth in general
terms the substance of such supplemental indenture. Any failure of the Indenture Trustee to mail
such notice, or any defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.

          SECTION 9.3   Execution of Supplemental Indentures. In executing, or permitting the
additional trusts created by, any supplemental indenture permitted by this Article IX or the
modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be
entitled to receive, and subject to Sections 6.1 and 6.2, shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Indenture Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Indenture Trustee’s own rights, duties,
liabilities or immunities under this Indenture or otherwise.

47

 

          SECTION 9.4   Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to
be modified and amended in accordance therewith with respect to the Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Noteholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all purposes.

          SECTION 9.5   Conformity with Trust Indenture Act. Every amendment of this Indenture
and every supplemental indenture executed pursuant to this Article IX shall conform to the
requirements of the Trust Indenture Act as then in effect so long as this Indenture shall then be
qualified under the Trust Indenture Act.

          SECTION 9.6   Reference in Notes to Supplemental Indentures. Notes authenticated and
delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if
required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee
as to any matter provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Indenture
Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the
Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.

ARTICLE X

Redemption of Notes

          SECTION 10.1   Redemption. The Indenture Trustee shall, upon receipt of written
notice from the Servicer pursuant to Section 6.1(b) of the Administration Agreement, give prompt
written notice to the Noteholders of the occurrence of such event. In the event that the assets of
the Trust are sold pursuant to Section 6.1(a) of the Administration Agreement, that portion of the
amounts on deposit in the Trust Accounts to be distributed to the Noteholders shall be paid to the
Noteholders as provided in Sections 2.7 and 2.8 of the Administration Agreement. If amounts are to
be paid to Noteholders pursuant to this Section 10.1, the notice of such event from the Indenture
Trustee to the Noteholders shall include notice of the redemption of Notes by application of such
amounts on the next Distribution Date which is not sooner than 15 days after the date of such
notice (the “Redemption Date”), whereupon all such amounts shall be payable on the Redemption Date.

          SECTION 10.2   Form of Redemption Notice. Notice of redemption under Section 10.1
shall be given by the Indenture Trustee by first-class mail, postage prepaid, or by facsimile,
mailed or transmitted on or prior to the applicable Redemption Date to each Noteholder, as of the
close of business on the Record Date preceding the applicable Redemption Date, at such Noteholder’s
address or facsimile number appearing in the Note Register.

          All notices of redemption shall state:

48

 

          (i)   the Redemption Date;

          (ii)   the Redemption Price; and

          (iii)   the place where such Notes are to be surrendered for payment of the Redemption Price
(which shall be the office or agency of the Issuer to be maintained as provided in Section 3.2).

          Notice of redemption of the Notes shall be given by the Indenture Trustee in the name and at
the expense of the Issuer. Failure to give notice of redemption, or any defect therein, to any
Noteholder of any Note shall not impair or affect the validity of the redemption of any other Note.

          SECTION 10.3   Notes Payable on Redemption Date. The Notes or portions thereof to be
redeemed shall on the Redemption Date become due and payable at the Redemption Price and (unless
the Issuer shall default in the payment of the Redemption Price) no interest shall accrue on the
Redemption Price for any period after the date to which accrued interest is calculated for purposes
of calculating the Redemption Price.

ARTICLE XI

Miscellaneous

          SECTION 11.1   Compliance Certificates and Opinions, etc. (a)  Upon any application
or request by the Issuer to the Indenture Trustee to take any action under any provision of this
Indenture, the Issuer shall furnish to the Indenture Trustee and the Rating Agencies (i) an
Officers’ Certificate of the Issuer stating that all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied with, (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from a firm of
certified public accountants meeting the applicable requirements of this Section, except that, in
the case of any such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional certificate or opinion need
be furnished.

          Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this indenture shall include:

          (i)   a statement that each signatory of such certificate or opinion has read or has caused to
be read such covenant or condition and the definitions herein relating thereto;

          (ii)   a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;

          (iii)   a statement that, in the opinion of each such signatory, such signatory has made such
examination or investigation as is necessary to enable such signatory to express

49

 

an informed opinion as to whether or not such covenant or condition has been complied with;
and

          (iv)   a statement as to whether, in the opinion of each such signatory, such condition or
covenant has been complied with.

     (b)   (i)   Prior to the deposit of any Collateral or other property or securities with the
Indenture Trustee that is to be made the basis for the release of any property or securities
subject to the lien of this Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.1(a) or elsewhere in this Indenture, furnish to the Indenture Trustee and the Rating
Agencies an Officers’ Certificate of the Issuer certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days of such deposit) to the Issuer of the
Collateral or other property or securities to be so deposited.

          (ii)   Whenever the Issuer is required to furnish to the Indenture Trustee and the Rating
Agencies an Officers’ Certificate of the Issuer certifying or stating the opinion of any signer
thereof as to the matters described in clause (i) above, the Issuer shall also deliver to the
Indenture Trustee an Independent Certificate as to the same matters, if the fair value to the
Issuer of the securities to be so deposited and of all other such securities made the basis of any
such withdrawal or release since the commencement of the then-current fiscal year of the Issuer, as
set forth in the certificates delivered pursuant to clause (i) above and this clause (ii), is 10%
or more of the Outstanding Amount of the Notes, but such a certificate need not be furnished with
respect to any securities so deposited, if the fair value thereof to the Issuer as set forth in the
related Officers’ Certificate is less than $25,000 or less than one percent of the Outstanding
Amount of the Notes.

          (iii)   Other than any property released as contemplated by clause (v) below, whenever any
property or securities are to be released from the lien of this Indenture, the Issuer shall also
furnish to the Indenture Trustee an Officers’ Certificate of the Issuer certifying or stating the
opinion of each person signing such certificate as to the fair value (within 90 days of such
release) of the property or securities proposed to be released and stating that in the opinion of
such person the proposed release will not impair the security under this Indenture in contravention
of the provisions hereof.

          (iv)   Whenever the Issuer is required to furnish to the Indenture Trustee an Officers’
Certificate of the Issuer certifying or stating the opinion of any signer thereof as to the matters
described in clause (iii) above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the property or securities and
of all other property, other than property as contemplated by clause (v) below, or securities
released from the lien of this Indenture since the commencement of the then-current calendar year,
as set forth in the certificates required by clause (iii) above and this clause (iv), equals 10% or
more of the Outstanding Amount of the Notes, but such certificate need not be furnished in the case
of any release of property or securities if the fair value thereof as set forth in the related
Officers’ Certificate is less than $25,000 or less than one percent of the then Outstanding Amount
of the Notes.

50

 

          (v)   Notwithstanding Section 2.9 or any other provision of this Section, the Issuer may,
without compliance with the requirements of the other provisions of this Section, (A) collect,
liquidate, sell or otherwise dispose of Trust Student Loans as and to the extent permitted or
required by the Basic Documents, (B) make cash payments out of the Trust Accounts as and to the
extent permitted or required by the Basic Documents and (C) convey to the Depositor, the Servicer
or another eligible lender those specified Trust Student Loans as and to the extent permitted or
required by and in accordance with Section 8.4(c) hereof and Section 6 of the Sale Agreement,
Section 3.5 of the Servicing Agreement or Section 3.11E of the Servicing Agreement, respectively,
so long as the Issuer shall deliver to the Indenture Trustee every six months, commencing December
31, 2005, an Officers’ Certificate of the Issuer stating that all the dispositions of Collateral
described in clauses (A), (B) or (C) above that occurred during the immediately preceding six
calendar months were in the ordinary course of the Issuer’s business and that the proceeds thereof
were applied in accordance with the Basic Documents.

          SECTION 11.2   Form of Documents Delivered to Indenture Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or covered by the opinion of, only one
such Person, or that they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters, and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such matters in one or
several documents.

          Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the matters upon which his certificate or opinion is
based are erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Servicer, the Depositor, the Issuer or the
Administrator, stating that the information with respect to such factual matters is in the
possession of the Servicer, the Depositor, the Issuer or the Administrator, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

          Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may,
but need not, be consolidated and form one instrument.

          Whenever in this Indenture, in connection with any application or certificate or report to the
Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the
granting of such application, or as evidence of the Issuer’s compliance with any term hereof, it is
intended that the truth and accuracy, at the time of the granting of such application or at the
effective date of such certificate or report (as the case may be), of the facts and opinions stated
in such document shall in such case be conditions precedent to the right of the Issuer to have such
application granted or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee’s right to rely upon the

51

 

truth and accuracy of any statement or opinion contained in any such document as provided in
Article VI.

          SECTION 11.3   Acts of Noteholders. (a)  Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to
the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section.

     (b)   The fact and date of the execution by any person of any such instrument or writing may
be proved in any manner that the Indenture Trustee deems sufficient.

     (c)   The ownership of Notes shall be proved by the Note Register.

     (d)   Any request, demand, authorization, direction, notice, consent, waiver or other action
by any Noteholder shall bind the Noteholder of every Note issued upon registration of transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.

          SECTION 11.4   Notices, etc., to Indenture Trustee, Issuer and Rating Agencies. Any
request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other
documents provided or permitted by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or Act of Noteholders is to be made upon, given
or furnished to or filed with:

     (a)   The Indenture Trustee by any Noteholder, the Servicer, the Administrator or by the
Issuer shall be sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee at its Corporate Trust Office with a copy to: Deutsche
Bank Trust Company Americas, 60 Wall Street, 26th Floor, Mailstop NYC 60-2606, New York,
New York 10005, Attention: Trust & Securities Services/Structured Finance Services.

     (b)   The Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for every
purpose hereunder if in writing and mailed, first-class, postage prepaid, to the Issuer addressed
to: SLM Student Loan Trust 2005-9, in care of Chase Bank USA, National Association, Christiana
Center/OPS4, 500 Stanton Christiana Road, Newark, Delaware 19713, Attention: Corporate Trust
Department; with copies to JPMorgan Chase Bank, National Association, 450 West 33rd Street 15th
Fl., New York, New York 10001, Attention: Structured Finance Services; and the Administrator,
12061 Bluemont Way, V3419, Reston, Virginia, 20190, Attention: ABS Trust Administration, or any
other address previously furnished in

52

 

writing to the Indenture Trustee by the Issuer or the Administrator. The Issuer shall
promptly transmit any notice received by it from the Noteholders to the Indenture Trustee.

          Notices required to be given to the Rating Agencies by the Issuer, the Indenture Trustee or
the Eligible Lender Trustee shall be in writing, personally delivered or mailed by certified mail,
return receipt requested, to (i) in the case of Moody’s, at the following address: ABS Monitoring
Department, 99 Church Street, New York, New York 10007, (ii) in the case of S&P, at the following
address: 55 Water Street, New York, New York 10041-0003, Attention: Asset Backed Surveillance
Department, 32nd Floor, and (iii) in the case of Fitch, at the following address: One State Street
Plaza, New York, New York 10004, Attention: Municipal Structured Finance Group; or as to each of
the foregoing, at such other address as shall be designated by written notice to the other parties.

          Notices to any Swap Counterparty shall be sent to the addresses set forth in the related Swap
Agreement, respectively or such other addresses as may be designated by written notice to the
parties to this Indenture.

          SECTION 11.5   Notices to Noteholders; Waiver. Where this Indenture provides for
notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class, postage prepaid to each
Noteholder affected by such event, at his address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Noteholders is given by mail, neither the failure to mail such
notice nor any defect in any notice so mailed to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any notice that is mailed in the
manner herein provided shall conclusively be presumed to have been duly given.

          Where this Indenture provides for notice in any manner, such notice may be waived in writing
by any Person entitled to receive such notice, either before or after the event, and such waiver
shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the
Indenture Trustee but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.

          In case, by reason of the suspension of regular mail service as a result of a strike, work
stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders
when such notice is required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.

          Where this Indenture provides for notice to the Rating Agencies, failure to give such notice
shall not affect any other rights or obligations created hereunder, and shall not under any
circumstance constitute a Default.

          SECTION 11.6   Alternate Payment and Notice Provisions. Notwithstanding any provision
of this Indenture or any of the Notes to the contrary, the Issuer may enter into any agreement with
any Noteholder providing for a method of payment, or notice by the Indenture Trustee or any Paying
Agent to such Noteholder, that is different from the methods provided for

53

 

in this Indenture for such payments or notices. The Issuer will furnish to the Indenture
Trustee a copy of each such agreement and the Indenture Trustee will cause payments to be made and
notices to be given in accordance with such agreements.

          SECTION 11.7   Conflict with Trust Indenture Act. If any provision hereof limits,
qualifies or conflicts with another provision hereof that is required to be included in this
Indenture by any of the provisions of the Trust Indenture Act, such required provision shall
control.

          The provisions of TIA §§ 310 through 317 that impose duties on any Person (including the
provisions automatically deemed included herein unless expressly excluded by this Indenture) are a
part of and govern this Indenture, whether or not physically contained herein.

          SECTION 11.8   Effect of Headings and Table of Contents. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not affect the
construction hereof.

          SECTION 11.9   Successors and Assigns. All covenants and agreements in this Indenture
and the Notes by the Issuer shall bind its successor and assigns, whether so expressed or not. All
agreements of the Indenture Trustee in this Indenture shall bind the successors, co-trustees and
agents (excluding any legal representatives or accountants) of the Indenture Trustee.

          SECTION 11.10   Separability. In case any provision in this Indenture or in the Notes
shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

          SECTION 11.11   Benefits of Indenture. (a)  Except as set forth in paragraphs (b) and
(c) below, nothing in this Indenture or in the Notes, express or implied shall give to any person,
other than the parties hereto and their successors hereunder, the Noteholders, any other party
secured hereunder, and any other Person with an ownership interest in any part of the Indenture
Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture.

     (b)   The parties to this Indenture acknowledge and agree that each Swap Counterparty is an
intended third party beneficiary of this Indenture to the extent of its rights hereunder and under
the related Swap Agreement entered into by the Issuer from time to time and shall be entitled to
enforce such rights.

     (c)   The parties to this Indenture acknowledge and agree that SLM Corporation, and any
permitted transferee, if applicable, is an intended third party beneficiary of this Indenture to
the extent of its rights with respect to the Call Option as set forth in Section 7 of Appendix A-2
hereto and shall be entitled to enforce such rights.

          SECTION 11.12   Legal Holidays. In any case where the date on which any payment is
due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this
Indenture) payment need not be made on such date, but may be made on the next

54

 

succeeding Business Day with the same force and effect as if made on the date on which
nominally due, and no interest shall accrue for the period from and after any such nominal date.

          SECTION 11.13   GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN
§5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

          SECTION 11.14   Counterparts. This Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

          SECTION 11.15   Recording of Indenture. If this Indenture is subject to recording in
any appropriate public recording offices, such recording is to be effected by the Issuer and at its
expense accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any
other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person secured hereunder or for
the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

          SECTION 11.16   Trust Obligations. No recourse may be taken, directly or indirectly,
with respect to the obligations of the Issuer, the Depositor, the Administrator, the Servicer, the
Eligible Lender Trustee or the Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Eligible Lender Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Indenture Trustee or the Eligible Lender Trustee in its individual
capacity, any holder or owner of a beneficial interest in the Issuer, the Eligible Lender Trustee
or the Indenture Trustee or of any successor or assign thereof in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the Indenture Trustee and
the Eligible Lender Trustee have no such obligations in their individual capacity) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity. For all purposes of this Indenture, in the performance
of any duties or obligations of the Issuer hereunder, the Eligible Lender Trustee shall be subject
to, and entitled to the benefits of, the terms and provisions of Articles VI, VII and VIII of the
Trust Agreement.

          SECTION 11.17   No Petition. The Indenture Trustee, by entering into this Indenture,
and each Noteholder, by accepting a Note, hereby covenant and agree that they shall not at any time
institute against the Depositor or the Issuer, or join in any institution against the Depositor or
the Issuer of, any bankruptcy, reorganization, arrangement, insolvency, receivership or liquidation
proceedings, or other proceedings under any United States Federal or state bankruptcy or similar
law in connection with any obligations relating to the Notes, this Indenture or any of the other
Basic Documents. The foregoing shall not limit the rights of the Indenture

55

 

Trustee to file any claim in, or otherwise take any action with respect to, any insolvency
proceeding that was instituted against the Issuer by any Person other than the Indenture Trustee.

          SECTION 11.18   Inspection. The Issuer agrees that, on reasonable prior notice, it
shall permit any representative of the Indenture Trustee, during the Issuer’s normal business
hours, to examine all the books of account, records, reports, and other papers of the Issuer, to
make copies and extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s
officers, employees, and Independent certified public accountants, all at such reasonable times and
as often as may be reasonably requested. The Indenture Trustee shall and shall cause its
representatives to hold in confidence all such information obtained from such examination or
inspection except to the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may
reasonably determine that such disclosure is consistent with its obligations hereunder.

          SECTION 11.19   Subordination. All rights and interest of any Currency Swap
Counterparty in the security interest granted to the Indenture Trustee under this Indenture shall
be fully subordinated to the interests of the Noteholders. No Currency Swap Counterparty shall
have any rights, implied or otherwise, in the Collateral until after the Outstanding Amount of the
Notes has been reduced to zero and the Noteholders have been paid all amounts owed to them under
this Indenture. Notwithstanding the foregoing, the provisions of this Section 11.19 shall not
modify or otherwise affect the contractual priority of payments set forth in Section 5.4(b) hereof
or Section 2.8 of the Administration Agreement. More specifically, no Currency Swap Counterparty
shall have any voting rights or rights to exercise any remedies under this Indenture until after
the Outstanding Amount of the Notes has been reduced to zero and the Noteholders have been paid all
amounts owed to them under this Indenture. After the Outstanding Amount of the Notes has been
reduced to zero and the Noteholders have been paid all amounts owed to them under this Indenture,
each Currency Swap Counterparty shall have all of the rights and obligations, including all voting
rights, of the Noteholders set forth in this Indenture.

56

 

          IN WITNESS WHEREOF, the Issuer, the Eligible Lender Trustee and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers, thereunto duly authorized
and duly attested, all as of the day and year first above written.

	 	 	 	 	 
	 	 	SLM STUDENT LOAN TRUST 2005-9
	 
	 	 	 	 
	 	 	By: CHASE BANK USA, NATIONAL ASSOCIATION,

not in its individual capacity but solely as Eligible Lender

Trustee
	 
	 	 	 	 
	 

	 	By:
	 	          /S/ JOHN J. CASHIN
	 

	 	 	 	Name:     John J. Cashin

	 

	 	 	 	Title:
      Vice President
	 
	 	 	 	 
	 	 	CHASE BANK USA, NATIONAL ASSOCIATION, not 

in its individual capacity but solely as Eligible Lender

Trustee
	 
	 	 	 	 
	 

	 	By:
	 	          /S/ JOHN J. CASHIN
	 

	 	 	 	Name:     John J. Cashin
	 

	 	 	 	Title:
      Vice President
	 
	 	 	 	 
	 	 	DEUTSCHE BANK TRUST COMPANY AMERICAS,

not in its individual capacity but solely

as Indenture Trustee
	 
	 	 	 	 
	 

	 	By:
	 	          /S/ MICHELE H.Y. VOON
	 

	 	 	 	Name:     Michele H.Y. Voon

	 

	 	 	 	Title:
      Assistant Vice President

57

 

APPENDIX A-1

DEFINITIONS AND USAGE

Series 2005-9

Usage

     The following rules of construction and usage shall be applicable to any instrument that is
governed by this appendix (this “Appendix”):

     (a) All terms defined in this Appendix shall have the defined meanings when used in any
instrument governed hereby and in any certificate or other document made or delivered pursuant
thereto unless otherwise defined therein.

     (b) As used herein, in any instrument governed hereby and in any certificate or other document
made or delivered pursuant thereto, accounting terms not defined in this Appendix or in any such
instrument, certificate or other document, and accounting terms partly defined in this Appendix or
in any such instrument, certificate or other document, to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting principles as in effect on
the date of such instrument. To the extent that the definitions of accounting terms in this
Appendix or in any such instrument, certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the definitions contained in
this Appendix or in any such instrument, certificate or other document shall control.

     (c) The words “hereof,” “herein,” “hereunder” and words of similar import when used in an
instrument refer to such instrument as a whole and not to any particular provision or subdivision
thereof; references in an instrument to “Article,” “Section” or another subdivision or to an
attachment are, unless the context otherwise requires, to an article, section or subdivision of or
an attachment to such instrument; and the term “including” means “including without limitation.”

     (d) The definitions contained in this Appendix are equally applicable to both the singular and
plural forms of such terms and to the masculine as well as to the feminine and neuter genders of
such terms.

     (e) Any agreement, instrument or statute defined or referred to below or any agreement or
instrument that is governed by this Appendix means such agreement or instrument or statute as from
time to time amended, modified or supplemented, including (in the case of agreements or
instruments) by assignment, assumption, waiver or consent and (in the case of statutes) by
succession of comparable successor statutes and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein. References to a Person
are also to its permitted successors and assigns.

     (f) All dollar amounts calculated hereunder shall be rounded to the nearest penny with
one-half of one penny, pence, cent, or other equivalent currency unit.

Appendix A-1-1

 

Definitions

     “30/360” means that interest is calculated on the basis of a 360-day year consisting
of twelve 30-day months.

     “91-day Treasury Bill Rate” means, for any relevant Interest Rate Determination Date,
prior to each Interest Rate Change Date, the rate equal to the weighted average per annum discount
rate (expressed as a bond equivalent yield and applied on a daily basis) for direct obligations of
the United States with a maturity of thirteen weeks (“91-day Treasury Bills”) sold at the
applicable 91-day Treasury Bill auction, as published in H.15(519) or otherwise or as reported by
the U.S. Department of the Treasury. In the event that the results of the auctions of 91-day
Treasury Bills cease to be published or reported as provided above, or that no 91-day Treasury Bill
auction is held in a particular week, then the 91-day Treasury Bill Rate in effect as a result of
the last such publication or report will remain in effect until such time, if any, as the results
of auctions of 91-day Treasury Bills will again be so published or reported or such auction is
held, as the case may be. The 91-day Treasury Bill Rate will be subject to a Lock-In Period of six
Business Days.

     “Accrual Period” means, with respect to a Distribution Date and (i) each class of
Notes bearing a floating rate of interest (including, without limitation, the Floating Rate Notes
and any class of Reset Rate Notes that bears interest at a floating rate), the period from and
including the immediately preceding Distribution Date for such class of Notes to but excluding the
then-current Distribution Date, or in the case of the initial such period for such class of Notes,
the period from and including the Closing Date to and including January 24, 2006; provided
that if more than one Interest Rate Change Date occurs for any class of Reset Rate Notes while
bearing a floating rate of interest within any given Accrual Period, the rate of interest for the
entire Accrual Period shall be as specified in the relevant Remarketing Terms Notice; and (ii) any
class of Reset Rate Notes bearing a fixed rate of interest and (x) denominated in U.S. Dollars, the
period from and including the 25th day of the month of the last applicable Distribution Date, to
and including the 24th day of the month of the then-current applicable Distribution Date for such
class of Reset Rate Notes, or (y) denominated in a currency other than U.S. Dollars, (A) the period
from and including the 25th day of the month of the last applicable Distribution Date, to and
including the 24th day of the month of the then-current applicable Distribution Date or (B) as
otherwise specified on the Schedule A for the Reset Rate Notes.

     “Accumulation Account” means each account designated as such, established and
maintained pursuant to Section 2.3(j) of the Administration Agreement.

     “Act” means the Securities Act of 1933, as amended.

     “Actual/360” means that interest is calculated on the basis of the actual number of
days elapsed in a year of 360 days.

     “Actual/365 (fixed)” means that interest is calculated on the basis of the actual
number of days elapsed in a year of 365 days, regardless of whether accrual or payment occurs in a
leap year.

Appendix A-1-2

 

     “Actual/Actual (accrual basis)” means that interest is calculated on the basis of the
actual number of days elapsed in a year of 365 days, or 366 days for every day in a leap year.

     “Actual/Actual (ISMA)” means a calculation in accordance with the definition of
“Actual/Actual” adopted by the International Securities Market Association (“ISMA”), which means
that interest is calculated on the following basis:

     (1) where the number of days in the relevant Accrual Period is equal to or shorter than
the Determination Period during which such Accrual Period ends, the number of days in such
Accrual Period divided by the product of (A) the number of days in such Determination Period
and (B) the number of Distribution Dates that would occur in one calendar year; or

     (2) where the Accrual Period is longer than the Determination Period during which the
Accrual Period ends, the sum of:

     (A) the number of days in such Accrual Period falling in the Determination
Period in which the Accrual Period begins divided by the product of (x) the number
of days in such Determination Period and (y) the number of Distribution Dates that
would occur in one calendar year; and

     (B) the number of days in such Accrual Period falling in the next Determination
Period divided by the product of (x) the number of days in such Determination Period
and (y) the number of Distribution Dates that would occur in one calendar year;

     where “Determination Period” means the period from and including one Calculation Date
to but excluding the next Calculation Date and “Calculation Date” means, in each year, each of
those days in the calendar year that are specified herein as being the scheduled Distribution
Dates.

     “Actual/Actual (payment basis)” means that interest is calculated on the basis of the
actual number of days elapsed in a year of 365 days if the interest period ends in a non-leap year,
or 366 days if the interest period ends in a leap year, as the case may be.

     “Add-On Consolidation Loan” means an eligible education loan, which, pursuant to the
Higher Education Act and at the election of the borrower, is added to such borrower’s existing
Consolidation Loan.

     “Add-On Consolidation Loan Account” means an account designated as such, established
and maintained pursuant to Section 2.3(r) of the Administration Agreement.

     “Add-On Consolidation Loan Account Initial Deposit” means $20,000,000.

     “Additional Bill of Sale” has the meaning specified in each of the Purchase Agreements
or the Sale Agreement, as applicable.

Appendix A-1-3

 

     “Additional Purchase Agreement” has the meaning specified in each of the Purchase
Agreements, as applicable.

     “Additional Sale Agreement” has the meaning specified in the Sale Agreement.

     “Additional Trust Student Loan” means each Eligible Loan purchased by the Trust during
the Supplemental Purchase Period from the Depositor pursuant to Section 3.2 of the Sale Agreement
and each related Additional Sale Agreement.

     “Adjusted Pool Balance” means, for any Distribution Date, (a) if the Pool Balance as
of the last day of the related Collection Period is greater than 40% of the Initial Pool Balance,
the sum of that Pool Balance, Capitalized Interest, the amount, if any, on deposit in the Add-On
Consolidation Loan Account (excluding amounts in such account that will become Available Funds on
the next Distribution Date) and the Specified Reserve Account Balance for that Distribution Date,
or (b) if the Pool Balance as of the last day of the related Collection Period is less than or
equal to 40% of the Initial Pool Balance, the sum of that Pool Balance and Capitalized Interest.

     “Administration Agreement” means the Administration Agreement, dated as of November
15, 2005, among the Administrator, the Servicer, the Depositor, the Trust and the Eligible Lender
Trustee.

     “Administration Fees” has the meaning specified in Section 2.14 of the Administration
Agreement.

     “Administrator” means Sallie Mae, Inc., in its capacity as administrator of the Trust
in accordance with the Administration Agreement.

     “Administrator Default” has the meaning specified in Section 5.1 of the Administration
Agreement.

     “Administrator’s Certificate” means an Officers’ Certificate of the Administrator
delivered pursuant to Section 3.1(c) of the Administration Agreement.

     “Administrator’s Officers’ Certificate” means any Officers’ Certificate of the
Administrator delivered pursuant to Section 3.1(b) of the Administration Agreement.

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

     “All-Hold Rate” means, if an applicable class of Reset Rate Notes is denominated in
U.S. Dollars during the then-current Reset Period and the immediately following Reset Period, the
applicable Index plus or minus the applicable Spread (if such class of Reset Rate Notes is in
floating rate mode) or the applicable fixed rate, which may be expressed as the fixed rate pricing

Appendix A-1-4

 

benchmark plus or minus a spread (if such class of Reset Rate Notes is in fixed rate mode),
that the Remarketing Agents, in consultation with the Administrator, determine will be effective,
unless the related Call Option is exercised, in the event that 100% of the holders of the
applicable class of Reset Rate Notes choose to hold their class of Reset Rate Notes for the
upcoming Reset Period. The All-Hold Rate shall be a rate that the Remarketing Agents, in
consultation with the Administrator, determine based upon then-existing market conditions.

     “Authenticating Agents” means any agent subsequently appointed with respect to the
Reset Rate Notes and/or JPMorgan Chase Bank National Association, in respect of the Excess
Distribution Certificate.

     “Authorized Officer” means (i) with respect to the Trust, any officer of the Eligible
Lender Trustee who is authorized to act for the Eligible Lender Trustee in matters relating to the
Trust pursuant to the Basic Documents and who is identified on the list of Authorized Officers
delivered by the Eligible Lender Trustee to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter), (ii) with respect to the
Administrator, any officer of the Administrator or any of its Affiliates who is authorized to act
for the Administrator in matters relating to itself or to the Trust and to be acted upon by the
Administrator pursuant to the Basic Documents and who is identified on the list of Authorized
Officers delivered by the Administrator to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter), (iii) with respect to the Depositor,
any officer of the Depositor or any of its Affiliates who is authorized to act for the Depositor in
matters relating to or to be acted upon by the Depositor pursuant to the Basic Documents and who is
identified on the list of Authorized Officers delivered by the Depositor to the Indenture Trustee
on the Closing Date (as such list may be modified or supplemented from time to time thereafter) and
(iv) with respect to the Servicer, any officer of the Servicer who is authorized to act for the
Servicer in matters relating to or to be acted upon by the Servicer pursuant to the Basic Documents
and who is identified on the list of Authorized Officers delivered by the Servicer to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from time to time
thereafter).

     “Available Funds” means, as to a Distribution Date or any related Monthly Servicing
Payment Date, the sum of the following amounts received with respect to the related Collection
Period or, in the case of a Monthly Servicing Payment Date, the applicable portion of these
amounts:

	 	(a)	 	all collections received by the Servicer on the Trust Student Loans, including any
Guarantee Payments received on the Trust Student Loans, but net of:

     (1) any collections in respect of principal on the Trust Student Loans applied by the
Trust to repurchase guaranteed loans from the Guarantors under the Guarantee Agreements, and

     (2) amounts required by the Higher Education Act to be paid to the Department or to be
repaid to borrowers, whether or not in the form of a principal reduction of the applicable
Trust Student Loan, on the Trust Student Loans for that Collection Period, including
Consolidation Loan rebate fees, if any;

Appendix A-1-5

 

     (b) any Interest Subsidy Payments and Special Allowance Payments with respect to the Trust
Student Loans during that Collection Period;

     (c) all Liquidation Proceeds from any Trust Student Loans which became Liquidated Student
Loans during that Collection Period in accordance with the Servicer’s customary servicing
procedures, net of expenses incurred by the Servicer related to their liquidation and any amounts
required by law to be remitted to the borrowers on the Liquidated Student Loans, and all Recoveries
on Liquidated Student Loans which were written off in prior Collection Periods or during that
Collection Period;

     (d) the aggregate Purchase Amounts received during that Collection Period for those Trust
Student Loans repurchased by the Depositor or purchased by the Servicer or for Trust Student Loans
sold to another eligible lender pursuant to Section 3.11E of the Servicing Agreement;

     (e) the aggregate Purchase Amounts received during that Collection Period for those Trust
Student Loans repurchased by either of SLM ECFC or VG Funding;

     (f) the aggregate amounts, if any, received from any of SLM ECFC, VG Funding, the Depositor or
the Servicer, as the case may be, as reimbursement of non-guaranteed interest amounts, or lost
Interest Subsidy Payments and Special Allowance Payments, on the Trust Student Loans pursuant to
the Sale Agreement or Section 3.5 of the Servicing Agreement, respectively;

     (g) amounts received by the Trust pursuant to Sections 3.1 and 3.12 of the Servicing Agreement
during that Collection Period as to yield or principal adjustments;

     (h) any interest remitted by the Administrator to the Collection Account prior to such
Distribution Date or Monthly Servicing Payment Date;

     (i) Investment Earnings for that Distribution Date earned on amounts on deposit in each Trust
Account (other than any Accumulation Account, any Euro Account, any Pounds Sterling Account or any
Other Currency Account);

     (j) Investment Earnings actually received by the Trust for that Distribution Date, earned on
amounts on deposit in any Accumulation Account;

     (k) amounts transferred from the Remarketing Fee Account in excess of the sum of the Reset
Period Target Amount for that Distribution Date;

     (l) amounts transferred from any Investment Premium Purchase Account in excess of the amount
required to be on deposit therein pursuant to Section 2.10 (e)(ii) of the Administration Agreement;

     (m) all amounts on deposit in any Investment Reserve Account not transferred to the
Accumulation Account to offset realized losses on Eligible Investments as of that Distribution
Date;

Appendix A-1-6

 

     (n) all amounts on deposit in any Supplemental Interest Account;

     (o) all amounts received by the Trust from any Swap Counterparty, or otherwise under any Swap
Agreement, for deposit into the Collection Account, but only to the extent paid in U.S. Dollars,
for that Distribution Date;

     (p) on the initial Distribution Date, the Collection Account Initial Deposit and any amounts
transferred into the Collection Account from the Supplemental Purchase Account following the end of
the Supplemental Purchase Period;

     (q) on the April 2006 Distribution Date, any amounts transferred into the Collection Account
from the Add-On Consolidation Loan Account following the end of the Consolidation Loan Add-On
Period;

     (r) amounts transferred from the Reserve Account in excess of the Specified Reserve Account
Balance for that Distribution Date; and

     (s) on the January 2007 Distribution Date, all funds then remaining on deposit in the
Capitalized Interest Account that are transferred into the Collection Account on that Distribution
Date;

provided that if on any Distribution Date there would not be sufficient funds, after
application of Available Funds, as defined above, and application of amounts available from the
Capitalized Interest Account and the Reserve Account to pay any of the items specified in clauses
(a) through (e) of Section 2.8 of the Administration Agreement (but excluding clause (e), and
including clauses (f) and (g) thereof, in the event that a condition exists as described in either
clause (i) or (ii) of the last paragraph of Section 2.8 of the Administration Agreement), as set
forth in Sections 2.9 and 2.10(a) of the Administration Agreement, relating to such allocations and
distributions, then Available Funds for that Distribution Date will include, in addition to the
Available Funds as defined above, amounts on deposit in the Collection Account, or amounts held by
the Administrator, or which the Administrator reasonably estimates to be held by the Administrator,
for deposit into the Collection Account on the related Determination Date which would have
constituted Available Funds for the Distribution Date succeeding that Distribution Date, up to the
amount necessary to pay such items, and the Available Funds for the succeeding Distribution Date
will be adjusted accordingly.

     “Basic Documents” means the Trust Agreement, the Indenture, the Servicing Agreement,
the Administration Agreement, the Sale Agreement, the SLM ECFC Purchase Agreement, the VG Funding
Purchase Agreement, the Guarantee Agreements, the Note Depository Agreements, the Remarketing
Agreement, any Swap Agreements (including the Initial Currency Swap Agreements) and other documents
and certificates delivered in connection with any such documents.

     “Benefit Plan” means (i) an employee benefit plan (as defined in Section 3(3) of
ERISA), whether or not subject to the provisions of Title I of ERISA, (ii) a plan described in
Section 4975(e)(1) of the Code, whether or not subject to Section 4975 of the Code or (iii) any
entity whose underlying assets include plan assets by reason of a plan’s investment in the entity.

Appendix A-1-7

 

     “Bill of Sale” has the meaning specified in each of the Purchase Agreements or the
Sale Agreement, as applicable.

     “Book-Entry Note” means a beneficial interest in the Notes, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in Section 2.10 of the
Indenture.

     “Broker” means a broker, which may be an Affiliate of the Administrator, that is
engaged in the business of procuring or writing derivative instruments.

     “Business Day” means (i) with respect to calculating LIBOR of a specified maturity or
GBP-LIBOR of a specified maturity, any day on which banks in New York, New York and London, England
are open for the transaction of international business and making payments in respect of any class
of Reset Rate Notes denominated in a currency other than U.S. Dollars; (ii) with respect to
calculating EURIBOR of a specified maturity, any day on which TARGET, and banks in New York, New
York and London, England, are open for the transaction of international business and making
payments in respect of any class of Reset Rate Notes denominated in a currency other than U.S.
Dollars; and (iii) for all other purposes, any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in New York, New York or Wilmington, Delaware are
authorized or obligated by law, regulation or executive order to remain closed.

     “Call Option” means, the option assigned by the Depositor to SLM Corporation which may
be further assigned by SLM Corporation to one of its subsidiaries as a permitted transferee
(provided, that no such subsidiary shall possess the Call Option if it at any time owned an
interest in any of the Trust Student Loans) to purchase 100% of a class of Reset Rate Notes in its
entirety as of its related Reset Date, exercisable at a price equal to 100% of the Outstanding
Amount of such class of Reset Rate Notes, less all amounts distributed to the related Reset Rate
Noteholders as a payment of principal in respect of the related Distribution Date, plus any accrued
and unpaid interest not paid by the Trust in respect of the related Distribution Date, and pursuant
to the terms and conditions set forth in the Reset Rate Note Procedures.

     “Call Option Notice” means a written notice from the holder of the Call Option or the
Administrator, as applicable, stating its desire to exercise the Call Option on the related Reset
Date, delivered to each Clearing Agency, the Indenture Trustee, the Remarketing Agents, the Rating
Agencies and, if the related class of Reset Rate Notes is then listed on the Luxembourg Stock
Exchange, the Administrator will forward a copy to the Luxembourg Listing Agent (the contents of
which are to be published in a leading newspaper having general circulation in Luxembourg).

     “Call Rate” means, if a Call Option has been exercised with respect to a class of
Reset Rate Notes, the rate of interest that is either (1) if that class of Reset Rate Notes did not
have at least one related Swap Agreement in effect during the previous Reset Period, the floating
rate applicable for the most recent Reset Period during which the Failed Remarketing Rate was not
in effect; or (2) if that class of Reset Rate Notes had one or more related Swap Agreements in
effect during the previous Reset Period, the weighted average of the floating rates of interest
that were due to the related Interest Rate Swap Counterparties from the Trust during the previous
Reset

Appendix A-1-8

 

Period. The Call Rate will continue to apply for each Reset Period while the holder of the
Call Option retains that class of Reset Rate Notes.

     “Capitalized Interest” means for any Distribution Date through and including the
January 2007 Distribution Date:

     (a) if neither of the conditions set forth in Section 2.10(a) of the Administration Agreement
are in effect, the amount on deposit in the Capitalized Interest Account on the Distribution Date
following distributions with respect to clauses (d)(1), (d)(2) and (e) of Section 2.8 of the
Administration Agreement, or

     (b) if either of the conditions set forth in Section 2.10(a) of the Administration Agreement
is in effect, the excess, if any, of (x) the amount on deposit in the Capitalized Interest Account
on the Distribution Date following distributions with respect to clauses (d)(1) and (d)(2) of
Section 2.8 of the Administration Agreement over (y) the Class B Noteholders’ Interest Distribution
Amount.

     “Capitalized Interest Account” means the account designated as such, established and
maintained pursuant to Section 2.3(h) of the Administration Agreement.

     “Capitalized Interest Account Balance” means as of any date of determination, the
amount on deposit in the Capitalized Interest Account (exclusive of Investment Earnings).

     “Capitalized Interest Account Initial Deposit” means $87,000,000.

     “Carryover Servicing Fee” has the meaning specified in Attachment A to the Servicing
Agreement.

     “Class A Note” means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note, a
Class A-4 Note, a Class A-5 Note, a Class A-6 Note, a Class A-7A Note or a Class A-7B Note.

     “Class A Note Interest Shortfall” means, for any Distribution Date, the excess of (x)
the Class A Noteholders’ Interest Distribution Amount on the preceding Distribution Date, over (y)
the amount of interest actually distributed to the Class A Noteholders or any Currency Swap
Counterparty, as applicable, on the preceding Distribution Date, plus interest on the amount of
that excess, to the extent permitted by law, at the interest rate applicable for each such class of
Notes from the preceding Distribution Date to the current Distribution Date.

     “Class A Note Principal Shortfall” means, as of the close of any Distribution Date,
the excess of (i) the Class A Noteholders’ Principal Distribution Amount on that Distribution Date,
over (ii) the amount of principal actually distributed or allocated to the Class A Noteholders or
deposited into any Accumulation Account on such Distribution Date.

     “Class A Noteholder” means the Person in whose name a Class A Note is registered in
the Note Register.

Appendix A-1-9

 

     “Class A Noteholders’ Distribution Amount” means, for any Distribution Date, the sum
of the Class A Noteholders’ Interest Distribution Amount and the Class A Noteholders’ Principal
Distribution Amount for that Distribution Date.

     “Class A Noteholders’ Interest Distribution Amount” means, for any Distribution Date,
the sum of: (1) the amount of interest accrued at the Class A-1 Rate, the Class A-2 Rate, the Class
A-3 Rate, the Class A-4 Rate, the Class A-5 Rate, the Class A-6 Rate, the Class A-7A Rate or the
Class A-7B Rate as applicable, for the related Accrual Period on the Outstanding Amount of all
classes of Class A Notes on the immediately preceding Distribution Date(s) after giving effect to
all principal distributions to Class A Noteholders on that preceding Distribution Date or, in the
case of the first Distribution Date, on the Closing Date, and (2) the Class A Note Interest
Shortfall for that Distribution Date.

     “Class A Noteholders’ Principal Distribution Amount” means, for any Distribution Date,
the Principal Distribution Amount times the Class A Percentage for that Distribution Date, plus any
Class A Note Principal Shortfall as of the close of business on the preceding Distribution Date;
provided that the Class A Noteholders’ Principal Distribution Amount will not exceed the
Outstanding Amount of the Class A Notes (less all amounts, other than Investment Earnings, on
deposit in any related Accumulation Account). In addition, on the Maturity Date for any of the
Class A Notes, the principal required to be distributed to the related Class A Noteholders will
include the amount required to reduce the Outstanding Amount of that class to zero.

     “Class A Notes” means the Floating Rate Class A Notes and the Reset Rate Notes.

     “Class A Percentage” means 100% minus the Class B Percentage.

     “Class A-1 Maturity Date” means the January 2013 Distribution Date.

     “Class A-2 Maturity Date” means the April 2017 Distribution Date.

     “Class A-3 Maturity Date” means the January 2019 Distribution Date.

     “Class A-4 Maturity Date” means the January 2023 Distribution Date.

     “Class A-5 Maturity Date” means the January 2025 Distribution Date.

     “Class A-6 Maturity Date” means the October 2026 Distribution Date.

     “Class A-7A Maturity Date” means the January 2041 Distribution Date.

     “Class A-7B Maturity Date” means the January 2041 Distribution Date.

     “Class A-1 Noteholder” means a Person in whose name a Class A-1 Note is registered in
the Note Register.

     “Class A-2 Noteholder” means a Person in whose name a Class A-2 Note is registered in
the Note Register.

Appendix A-1-10

 

     “Class A-3 Noteholder” means a Person in whose name a Class A-3 Note is registered in
the Note Register.

     “Class A-4 Noteholder” means a Person in whose name a Class A-4 Note is registered in
the Note Register.

     “Class A-5 Noteholder” means a Person in whose name a Class A-5 Note is registered in
the Note Register.

     “Class A-6 Noteholder” means a Person in whose name a Class A-6 Note is registered in
the Note Register.

     “Class A-7A Noteholder” means a Person in whose name a Class A-7A Note is registered
in the Note Register.

     “Class A-7B Noteholder” means a Person in whose name a Class A-7B Note is registered
in the Note Register.

     “Class A-1 Notes” means the $233,000,000 Floating Rate Class A-1 Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-1
thereto.

     “Class A-2 Notes” means the $446,000,000 Floating Rate Class A-2 Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-2
thereto.

     “Class A-3 Notes” means the $240,000,000 Floating Rate Class A-3 Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-3
thereto.

     “Class A-4 Notes” means the $563,000,000 Floating Rate Class A-4 Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-4
thereto.

     “Class A-5 Notes” means the $278,962,000 Floating Rate Class A-5 Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-5
thereto.

     “Class A-6
Notes” means the €235,000,000 Reset Rate Class A-6 Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-6
thereto.

     “Class A-7A Notes” means the €500,000,000 Reset Rate Class A-7A Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-7
thereto.

Appendix A-1-11

 

     “Class A-7B Notes” means the $380,000,000 Floating Rate Class A-7B Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-8
thereto.

     “Class A-1 Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the second Business Day before the beginning of the applicable
Accrual Period, minus 0.03%, based on an Actual/360 accrual method. For the initial Accrual
Period, the Class A-1 Rate shall mean the Initial Accrual Rate minus 0.03%, based on an Actual/360
accrual method.

     “Class A-2 Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the second Business Day before the beginning of the applicable
Accrual Period, plus 0.00%, based on an Actual/360 accrual method. For the initial Accrual Period,
the Class A-2 Rate shall mean the Initial Accrual Rate plus 0.00%, based on an Actual/360 accrual
method.

     “Class A-3 Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the second Business Day before the beginning of the applicable
Accrual Period, plus 0.05%, based on an Actual/360 accrual method. For the initial Accrual Period,
the Class A-3 Rate shall mean the Initial Accrual Rate plus 0.05%, based on an Actual/360 accrual
method.

     “Class A-4 Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the second Business Day before the beginning of the applicable
Accrual Period, plus 0.10%, based on an Actual/360 accrual method. For the initial Accrual Period,
the Class A-4 Rate shall mean the Initial Accrual Rate plus 0.10%, based on an Actual/360 accrual
method.

     “Class A-5 Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the second Business Day before the beginning of the applicable
Accrual Period, plus 0.12%, based on an Actual/360 accrual method. For the initial Accrual Period,
the Class A-5 Rate shall mean the Initial Accrual Rate plus 0.12%, based on an Actual/360 accrual
method.

     “Class A-6 Rate” means, for any Accrual Period (other than the initial Accrual Period)
until and including the Initial Reset Date for the Class A-6 Notes, Three-Month EURIBOR, as
determined on the second Business Day before the beginning of the applicable Accrual Period, plus
0.07%, based on an Actual/360 accrual method. For the initial Accrual Period, the Class A-6 Rate
shall mean the Initial Accrual Rate plus 0.07%, based on an Actual/360 accrual method.

     “Class A-7A Rate” means, for any Accrual Period (other than the initial Accrual
Period) until and including the Initial Reset Date for the Class A-7A Notes, Three-Month EURIBOR,
as determined on the second Business Day before the beginning of the applicable Accrual Period,
plus 0.10%, based on an Actual/360 accrual method. For the initial Accrual Period, the Class A-7A
Rate shall mean the Initial Accrual Rate plus 0.10%, based on an Actual/360 accrual method.

     “Class A-7B Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the second Business Day before the beginning of the applicable

Appendix A-1-12

 

Accrual Period, plus 0.16%, based on an Actual/360 accrual method. For the initial Accrual
Period, the Class A-7B Rate shall mean the Initial Accrual Rate plus 0.16%, based on an Actual/360
accrual method.

     “Class B Maturity Date” means the January 2041 Distribution Date.

     “Class B Note Interest Shortfall” means, with respect to any Distribution Date, (1)
the excess of (i) the Class B Noteholders’ Interest Distribution Amount on the preceding
Distribution Date, over (ii) the amount of interest actually distributed to the Class B Noteholders
on such preceding Distribution Date, plus (2) interest on the amount of such excess interest due to
the Class B Noteholders, to the extent permitted by law, at the Class B Rate from such preceding
Distribution Date to the current Distribution Date.

     “Class B Note Principal Shortfall” means, as of the close of any Distribution Date,
the excess of (i) the Class B Noteholders’ Principal Distribution Amount on such Distribution Date
over (ii) the amount of principal actually distributed to the Class B Noteholders on such
Distribution Date.

     “Class B Noteholder” means the Person in whose name a Class B Note is registered in
the Note Register.

     “Class B Noteholders’ Distribution Amount” means, for any Distribution Date, the sum
of the Class B Noteholders’ Interest Distribution Amount and the Class B Noteholders’ Principal
Distribution Amount for that Distribution Date.

     “Class B Noteholders’ Interest Distribution Amount” means, for any Distribution Date,
the sum of (1) the amount of interest accrued at the Class B Rate for the related Accrual Period on
the Outstanding Amount of the Class B Notes on the immediately preceding Distribution Date(s) (or,
in the case of the first Distribution Date, the Closing Date), after giving effect to all principal
distributions to Class B Noteholders on that preceding Distribution Date, and (2) the Class B Note
Interest Shortfall for that Distribution Date.

     “Class B Noteholders’ Principal Distribution Amount” means, for any Distribution Date,
the Principal Distribution Amount times the Class B Percentage for that Distribution Date, plus any
Class B Note Principal Shortfall as of the close of business on the preceding Distribution Date;
provided that the Class B Noteholders’ Principal Distribution Amount will not exceed the
Outstanding Amount of the Class B Notes. In addition, on the Class B Maturity Date, the principal
required to be distributed to the Class B Noteholders will include the amount required to reduce
the Outstanding Amount of the Class B Notes to zero.

     “Class B Notes” means the $93,381,000 Floating Rate Class B Student Loan-Backed Notes
issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-9 thereto.

     “Class B Percentage” with respect to any Distribution Date, means (1) prior to the
Stepdown Date or with respect to any Distribution Date on which a Trigger Event is in effect, zero;
and (2) on and after the Stepdown Date and provided that no Trigger Event is in effect, a fraction
expressed as a percentage, the numerator of which is the aggregate principal balance of

Appendix A-1-13

 

the Class B Notes immediately prior to that Distribution Date and the denominator of which is
the Outstanding Amount of the Notes, less all amounts (other than Investment Earnings) on deposit
in any Accumulation Account, immediately prior to that Distribution Date.

     “Class B Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the second Business Day before the beginning of the applicable
Accrual Period, plus 0.30%, based on an Actual/360 accrual method. For the initial Accrual Period,
the Class B Rate shall mean the Initial Accrual Rate plus 0.30%, based on an Actual/360 accrual
method.

     “Clearing Agency” means DTC, Euroclear or Clearstream, as applicable, or another
organization registered as a “clearing agency” pursuant to applicable law. The initial
Clearing Agency for the Floating Rate Notes shall be DTC and the nominee for such Clearing Agency
shall be Cede & Co. The initial Clearing Agencies for a class of Reset Rate Notes (i) for any
Reset Period (including the initial Reset Period) when it is denominated in a currency other than
U.S. Dollars shall be Euroclear and Clearstream and the initial joint nominee for such Clearing
Agencies shall be Deutsche Bank AG, London Branch, and (ii) for any Reset Period when it is
denominated in U.S. Dollars shall be DTC and the initial nominee for such Clearing Agency shall be
Cede & Co.

     “Clearing Agency Participant” means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing Agency.

     “Clearstream” means Clearstream Banking, société anonyme, Luxembourg.

     “Closing Date” means November 15, 2005.

     “CMT Rate” means, for any relevant Interest Rate Determination Date prior to each
Interest Rate Change Date, the rate displayed on the applicable Designated CMT Moneyline Telerate
Page shown below by 3:00 p.m., New York City time, on that Interest Rate Determination Date under
the caption “. . . Treasury Constant Maturities . . . Federal Reserve Board Release H.15 . . . Mondays Approximately 3:45 p.m.,” under the column for: (i) if the Designated CMT Moneyline
Telerate Page is 7051, the rate on that Interest Rate Determination Date; or (ii) if the Designated
CMT Moneyline Telerate Page is 7052, the average for the week, the month or the quarter, as
specified on the Remarketing Terms Determination Date, ended immediately before the week in which
the Interest Rate Determination Date occurs. The following procedures will apply if the CMT Rate
cannot be determined as described above: (i) if the rate described above is not displayed on the
relevant page by 3:00 p.m., New York City time on that Interest Rate Determination Date, unless the
calculation is made earlier and the rate is available from that source at that time on that
Interest Rate Determination Date, then the CMT Rate will be the Treasury constant maturity rate
having the designated index maturity, as published in H.15(519) or another recognized electronic
source for displaying the rate, (ii) if the applicable rate described above is not published in
H.15(519) or another recognized electronic source for displaying such rate by 3:00 p.m., New York
City time on that Interest Rate Determination Date, unless the calculation is made earlier and the
rate is available from one of those sources at that time, then the CMT Rate will be the Treasury
constant maturity rate, or

Appendix A-1-14

 

other United States Treasury rate, for the index maturity and with reference to the relevant
Interest Rate Determination Date, that is published by either the Board of Governors of the Federal
Reserve System or the United States Department of the Treasury and that the Administrator
determines to be comparable to the rate formerly displayed on the Designated CMT Moneyline Telerate
Page shown above and published in H.15(519), (iii) if the rate described in the prior paragraph
cannot be determined, then the Administrator will determine the CMT Rate to be a yield to maturity
based on the average of the secondary market closing offered rates as of approximately 3:30 p.m.,
New York City time, on the relevant Interest Rate Determination Date reported, according to their
written records, by leading primary United States government securities dealers in New York City.
The Administrator will select five such securities dealers and will eliminate the highest and
lowest quotations or, in the event of equality, one of the highest and lowest quotations, for the
most recently issued direct noncallable fixed rate obligations of the United States Treasury
(“Treasury Notes”) with an original maturity of approximately the designated index maturity and a
remaining term to maturity of not less than the designated index maturity minus one year in a
representative amount, (iv) if the Administrator cannot obtain three Treasury Note quotations of
the kind described above in (iii), the Administrator will determine the CMT Rate to be the yield to
maturity based on the average of the secondary market bid rates for Treasury Notes with an original
maturity longer than the designated CMT index maturity which have a remaining term to maturity
closest to the designated CMT index maturity and in a representative amount, as of approximately
3:30 p.m., New York City time, on the relevant Interest Rate Determination Date of leading primary
United States government securities dealers in New York City. In selecting these offered rates,
the Administrator will request quotations from at least five such securities dealers and will
disregard the highest quotation (or if there is equality, one of the highest) and the lowest
quotation (or if there is equality, one of the lowest). If two Treasury Notes with an original
maturity longer than the designated CMT index maturity have remaining terms to maturity that are
equally close to the designated CMT index maturity, the Administrator will obtain quotations for
the Treasury Note with the shorter remaining term to maturity, (v) if three or four but not five
leading primary United States government securities dealers are quoting as described in the prior
paragraph, then the CMT Rate for the relevant Interest Rate Determination Date will be based on the
average of the bid rates obtained and neither the highest nor the lowest of those quotations will
be eliminated, or (vi) if fewer than three leading primary United States government securities
dealers selected by the Administrator are quoting as described in (v) above, the CMT Rate will
remain the CMT Rate then in effect on that Interest Rate Determination Date.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time, and
Treasury Regulations promulgated thereunder.

     “Collateral” has the meaning specified in the Granting Clause of the Indenture.

     “Collection Account” means the account designated as such, established and maintained
pursuant to Section 2.3(f) of the Administration Agreement.

     “Collection Account Initial Deposit” means $4,235,175 plus $0, which is the excess of
the Pool Balance as of the Statistical Cutoff Date over the Pool Balance as of the Closing Date, to
the extent such excess amount is excluded from the Supplemental Purchase Account Initial Deposit
due to the application of the proviso contained in the definition thereof.

Appendix A-1-15

 

     “Collection Period” means, with respect to the first Distribution Date, the period
beginning on the Closing Date and ending on December 31, 2005; and with respect to each subsequent
Distribution Date, the Collection Period means the three calendar months immediately following the
end of the previous Collection Period.

     “Commercial Paper Rate” means, for any relevant Interest Rate Determination Date prior
to each Interest Rate Change Date, the Bond Equivalent Yield shown below of the rate for 90-day
commercial paper, as published in H.15(519) prior to 3:00 p.m., New York City time, on that
Interest Rate Determination Date under the heading “Commercial Paper—Financial”. If the rate
described above is not published in H.15(519) by 3:00 p.m., New York City time, on that Interest
Rate Determination Date, unless the calculation is made earlier and the rate was available from
that source at that time, then the Commercial Paper Rate will be the Bond Equivalent Yield of the
rate on the relevant Interest Rate Determination Date, for commercial paper having the index
maturity specified on the Remarketing Terms Determination Date, as published in H.15 Daily Update
or any other recognized electronic source used for displaying that rate under the heading
“Commercial Paper—Financial”. For purposes of the definition of “Commercial Paper Rate”, the “Bond
Equivalent Yield” equals [(NxD)/360(Dx90)] times 100, where “D” refers to the per annum rate
determined as set forth above, quoted on a bank discount basis and expressed as a decimal and “N”
refers to 365 or 366, as the case may be. If the rate described above cannot be determined, the
Commercial Paper Rate will remain the commercial paper rate then in effect on that Interest Rate
Determination Date. Unless otherwise specified on the Remarketing Terms Determination Date, the
Commercial Paper Rate will be subject to a Lock-In Period of six Business Days.

     “Commission” means the Securities and Exchange Commission.

     “Consolidation Loans” means Student Loans made in accordance with the Section 428C of
the Higher Education Act.

     “Consolidation Loan Add-On Period” means the period during which the Trust will be
able to purchase Add-On Consolidation Loans with funds on deposit in the Add-On Consolidation Loan
Account, beginning on the Closing Date and ending on March 31, 2006.

     “Control Agreement” means any Control Agreement entered into between the Trust and The
Bank of New York in connection with the related Swap Agreement.

     “Corporate Trust Office” means (i) with respect to the Indenture Trustee, the
principal office of the Indenture Trustee at which at any particular time its corporate trust
business shall be administered, which office at the Closing Date is located at 60 Wall Street 26th
Floor, Mailstop NYC60-2606, New York, New York 10005, Attention: Trust & Securities
Services/Structured Finance Services, telephone: (212) 250-8454, facsimile: (212) 797-8606 or at
such other address as the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Depositor, or the principal corporate trust office of any successor Indenture
Trustee (the address of which the successor Indenture Trustee will notify the Noteholders, the
Administrator and the Depositor) and (ii) with respect to the Eligible Lender Trustee, the
principal corporate trust office of the Eligible Lender Trustee located at Christiana Center/OPS4,
500 Stanton Christiana Road, Newark, Delaware 19713, Attention: Corporate Trust Department
(telephone: (302) 552-6279;

Appendix A-1-16

 

facsimile: (302) 552-6280); or at such other address as the Eligible Lender Trustee may
designate by notice to the Depositor, or the principal corporate trust office of any successor
Eligible Lender Trustee (the address of which the successor Eligible Lender Trustee will notify the
Administrator and the Depositor).

     “Credit Support Amount” has the meaning specified in the related Swap Agreement.

     “Currency Swap Agreement” means with respect to any class of Reset Rate Notes in
Foreign Exchange Mode, each Swap Agreement between the Trust and the related Currency Swap
Counterparty which (i) converts the secondary market trade proceeds into U.S. Dollars received on
the effective date of such Swap Agreement (or, with respect to the Initial Currency Swap
Agreements, converts all proceeds (net of underwriting discount) on the Closing Date from the sale
of each class of Reset Rate Notes to U.S. Dollars); (ii) converts all principal payments in U.S.
Dollars by the Trust to the related class of Reset Rate Noteholders into the applicable currency;
(iii) converts the interest rate on any class of Reset Rate Notes from a LIBOR-based rate to a
fixed or floating rate payable in the applicable currency; (iv) converts the U.S. Dollar equivalent
of all secondary market trade proceeds received on the related Reset Date resulting in the
successful remarketing of a class of Reset Rate Notes or the exercise of a Call Option into the
applicable currency for the payment of principal to the tendering Reset Rate Noteholders; and (v)
pays to the Paying Agent, on behalf of the Trust, for the benefit of the tendering Reset Rate
Noteholders, the required amount of additional interest at the interest rate applicable to the
tendered Reset Rate Notes resulting from any required delay in Reset Date payments through
Euroclear and Clearstream.

     “Currency Swap Counterparty” means each Eligible Swap Counterparty that is a party, in
its capacity as swap counterparty, to the related Currency Swap Agreement.

     “Custodian” means the DTC Custodian and/or the Non-U.S. Note Certificate Custodian,
which have the meanings specified in Section 2.1 of the Indenture.

     “Custody Account” means any account including any sub-accounts thereto, designated as
such, established and maintained pursuant to Section 2.12 of the Administration Agreement.

     “Custody Agreement” means any Custody Agreement entered into between the Trust and The
Bank of New York in connection with the related Swap Agreement.

     “Cutoff Date” means (a) the Initial Cutoff Date with respect to the Initial Trust
Student Loans and (b) the applicable Subsequent Cutoff Date with respect to the related Additional
Trust Student Loan or Substituted Trust Student Loan.

     “Day Count Basis” means 30/360, Actual/360, Actual/365 (Fixed), Actual/Actual (accrual
basis), Actual/Actual (ISMA) or Actual/Actual (payment basis), as applicable, or any other day
count basis set forth in the Remarketing Terms Notice.

     “Default” means any occurrence that is, or with notice or the lapse of time or both
would become, an Event of Default.

     “Definitive Notes” has the meaning specified in Section 2.10 of the Indenture.

Appendix A-1-17

 

     “Delaware Statutory Trust Act” means Chapter 38 of Title 12, Part V of the Delaware
Code, entitled “Treatment of Delaware Statutory Trusts.”

     “Delivery” when used with respect to Trust Account Property means:

     (a) with respect to bankers’ acceptances, commercial paper, negotiable certificates of deposit
and other obligations that constitute “instruments” within the meaning of Section 9-102(a)(47) of
the UCC and are susceptible of physical delivery, transfer thereof to the Indenture Trustee or its
nominee or custodian by physical delivery to the Indenture Trustee or its nominee or custodian
endorsed to, or registered in the name of, the Indenture Trustee or its nominee or custodian or
endorsed in blank, and, with respect to a certificated security (as defined in Section 8-102(a)(3)
of the UCC) transfer thereof (i) by delivery of such certificated security endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or custodian or endorsed in blank
to a securities intermediary (as defined in Section 8-102(a)(14) of the UCC) and the making by such
securities intermediary of entries on its books and records identifying such certificated
securities as belonging to the Indenture Trustee or its nominee or custodian and the sending by
such securities intermediary of a confirmation of the purchase of such certificated security by the
Indenture Trustee or its nominee or custodian, or (ii) by delivery thereof to a “clearing
corporation” (as defined in Section 8-102(a)(5) of the UCC) and the making by such clearing
corporation of appropriate entries on its books reducing the appropriate securities account of the
transferor and increasing the appropriate securities account of a securities intermediary by the
amount of such certificated security, the identification by the clearing corporation of the
certificated securities for the sole and exclusive account of the securities intermediary, the
maintenance of such certificated securities by such clearing corporation or the nominee of either
subject to the clearing corporation’s exclusive control, the sending of a confirmation by the
securities intermediary of the purchase by the Indenture Trustee or its nominee or custodian of
such securities and the making by such securities intermediary of entries on its books and records
identifying such certificated securities as belonging to the Indenture Trustee or its nominee or
custodian (all of the foregoing, but not including Trust Student Loans, “Physical Property”); and
such additional or alternative procedures as may hereafter become appropriate to effect the
complete transfer of ownership of any such Trust Account Property to the Indenture Trustee or its
nominee or custodian, consistent with changes in applicable law or regulations or the
interpretation thereof;

     (b) with respect to any security issued by the U.S. Treasury, the Government National Mortgage
Association, the Federal Home Loan Mortgage Corporation or the Federal National Mortgage
Association that is a book-entry security held at a Federal Reserve Bank pursuant to Federal
book-entry regulations, the following procedures, all in accordance with applicable law, including
applicable Federal regulations and Articles 8 and 9 of the UCC: the crediting of such book-entry
security to an appropriate book-entry account of the Indenture Trustee or its nominee or the
custodian or securities intermediary at a Federal Reserve Bank, causing the custodian to
continuously indicate by book-entry such book-entry security as credited to the relevant book-entry
account, the continuous crediting of such book-entry security to a securities account of the
custodian at such Federal Reserve Bank and the continuous identification of such book-entry
security by the custodian as credited to the appropriate book-entry account; and

Appendix A-1-18

 

     (c) with respect to any item of Trust Account Property that is an uncertificated security
under Article 8 of the UCC and that is not governed by clause (b) above, registration on the books
and records of the issuer thereof in the name of the securities intermediary, the sending of a
confirmation by the securities intermediary of the purchase by the Indenture Trustee or its nominee
or custodian of such uncertificated security, the making by such securities intermediary of entries
on its books and records identifying such uncertificated certificates as belonging to the Indenture
Trustee or its nominee or custodian.

     “Department” means the United States Department of Education, an agency of the Federal
government.

     “Depositor” means SLM Funding LLC, a Delaware limited liability company, and its
successors and assigns, including, for such purpose, a permitted transferee of all of SLM Funding
LLC’s right, title and interest in the Excess Distribution Certificate.

     “Depository Agreements” means the Note Depository Agreements.

     “Determination Date” means, with respect to the Collection Period preceding any
Distribution Date, the first Business Day preceding such Distribution Date.

     “Distribution Date” means for any class of Notes, the 25th day of each of January,
April, July and October, or, if such day is not a Business Day, the immediately following Business
Day, commencing January 25, 2006.

     “DTC” means The Depository Trust Company, or any successor thereto.

     “Eligible Deposit Account” means (i) with respect to the Trust Accounts other than any
Euro Account, any Pounds Sterling Account or any Other Currency Account, either (a) a segregated
account with an Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United States of America or
any one of the States or the District of Columbia (or any domestic branch of a foreign bank),
having corporate trust powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution have a credit rating from Moody’s, S&P, and,
if such institution is rated by Fitch, Fitch, in one of their generic rating categories which
signifies investment grade and (ii) with respect to any Euro Account, any Pounds Sterling Account
or any Other Currency Account, a segregated account with the London Paying Agent.

     “Eligible Institution” means a depository institution organized under the laws of the
United States of America or any one of the States or the District of Columbia (or any domestic
branch of a foreign bank) (i) which has (A) either a long-term senior unsecured debt rating of
“AAA” or a short-term senior unsecured debt or certificate of deposit rating of “A-1+” or better by
S&P and (B)(1) a long-term senior unsecured debt rating of “A1” or better and (2) a short-term
senior unsecured debt rating of “P-1” or better by Moody’s, and (C) if such institution is rated by
Fitch, a long-term senior unsecured debt rating of “AA” or a short-term senior unsecured debt
rating of “F1+,” or any other long-term, short-term or certificate of deposit rating with respect
to which the Rating Agency Condition has been satisfied and (ii) whose deposits are

Appendix A-1-19

 

insured by the FDIC. If so qualified, the Eligible Lender Trustee or the Indenture Trustee
may be considered an Eligible Institution.

     “Eligible Investments” means book-entry securities, negotiable instruments or
securities represented by instruments in bearer or registered form which evidence:

     (a) direct obligations of, and obligations fully guaranteed as to timely payment by, the
United States of America, the Government National Mortgage Association, the Federal Home Loan
Mortgage Corporation, the Federal National Mortgage Association, or any agency or instrumentality
of the United States of America the obligations of which are backed by the full faith and credit of
the United States of America; provided that obligations of, or guaranteed by, the
Government National Mortgage Association (GNMA), the Federal Home Loan Mortgage Corporation
(Freddie Mac) or the Federal National Mortgage Association (Fannie Mae) shall be Eligible
Investments only if, at the time of investment, they meet the criteria of each of the Rating
Agencies for collateral for securities having ratings equivalent to the respective ratings of the
Notes in effect at the Closing Date;

     (b) demand deposits, time deposits or certificates of deposit of any depository institution or
trust company incorporated under the laws of the United States of America or any State (or any
domestic branch of a foreign bank) and subject to supervision and examination by Federal or state
banking or depository institution authorities (including depository receipts issued by any such
institution or trust company as custodian with respect to any obligation referred to in clause (a)
above or portion of such obligation for the benefit of the holders of such depository receipts);
provided that at the time of the investment or contractual commitment to invest therein
(which shall be deemed to be made again each time funds are reinvested following each Distribution
Date), the commercial paper or other short-term senior unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person other than such depository
institution or trust company) thereof shall have a credit rating from each of the Rating Agencies
in the highest investment category granted thereby;

     (c) commercial paper having, at the time of the investment, a rating from each of the Rating
Agencies in the highest investment category granted thereby;

     (d) investments in money market funds having a rating from each of the Rating Agencies in the
highest investment category granted thereby (including funds for which the Indenture Trustee, the
Administrator or the Eligible Lender Trustee or any of their respective Affiliates is investment
manager or advisor);

     (e) bankers’ acceptances issued by any depository institution or trust company referred to in
clause (b) above;

     (f) repurchase obligations with respect to any security that is a direct obligation of, or
fully guaranteed by, the United States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the United States of America, in
either case entered into with a depository institution or trust company (acting as principal)
described in clause (b) above;

Appendix A-1-20

 

     (g) asset-backed securities, including asset-backed securities issued by Affiliates, or
entities formed by Affiliates, of SLM Corporation, but excluding mortgage-backed securities, that
at the time of investment have a rating in the highest investment category granted by each of the
Rating Agencies, but not at a purchase price in excess of par;

     (h) Eligible Repurchase Obligations; and

     (i) any other investment which would not result in the downgrading or withdrawal of any rating
of the Notes by any of the Rating Agencies as affirmed in writing delivered to the Indenture
Trustee.

     For purposes of the definition of “Eligible Investments” the phrase “highest investment
category” means (i) in the case of Fitch, “AAA” for long-term investments (or the equivalent) and
“F-1+” for short-term investments (or the equivalent), (ii) in the case of Moody’s, “Aaa” for
long-term investments (or the equivalent) and “P-1” for short-term investments (or the equivalent),
and (iii) in the case of S&P, “AAA” for long-term investments (or the equivalent) and “A-1+” for
short-term investments (or the equivalent). A proposed investment not rated by Fitch but rated in
the highest investment category by Moody’s and S&P shall be considered to be rated by each of the
Rating Agencies in the highest investment category granted thereby.

     “Eligible Lender Trustee” means Chase Bank USA, National Association, a national
banking association, not in its individual capacity but solely as Eligible Lender Trustee under the
Trust Agreement. “Eligible Lender Trustee” shall also mean each successor Eligible Lender Trustee
as of the qualification of such successor as Eligible Lender Trustee under the Trust Agreement.

     “Eligible Loans” has the meaning specified in any of the Purchase Agreements or the
Sale Agreement, as applicable.

     “Eligible Repo Counterparty” means an institution that is an eligible lender (under
the Federal Family Education Loan Program) or that holds Student Loans through an eligible lender
trustee and whose short-term debt ratings are not less than “P-1” by Moody’s, “A-1” by S&P and “F1”
by Fitch, if rated by Fitch.

     “Eligible Repurchase Obligations” means repurchase obligations with respect to Student
Loans serviced by the Servicer or an Affiliate thereof, entered into with an Eligible Repo
Counterparty, provided that the applicable repurchase date shall occur no later than the Business
Day prior to the next Distribution Date.

     “Eligible Swap Counterparty” means an entity, which may be an affiliate of a
Remarketing Agent, engaged in the business of entering into derivative instrument contracts that
satisfies the Rating Agency Condition.

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

     “EURIBOR” means Three-Month EURIBOR or Two-Month EURIBOR, as applicable.

Appendix A-1-21

 

     “EURIBOR Determination Date” means, for each Accrual Period, the day that is two
EURIBOR Settlement Days before the beginning of that Accrual Period.

     “EURIBOR Settlement Day” means any day on which TARGET is open which is also a day on
which banks in New York, New York and London, England are open for business.

     “Euro Account” means any account designated as such, established and maintained
pursuant to Section 2.3(o) of the Administration Agreement.

     “Euroclear” means the Euroclear System, or any successor thereto.

     “European Clearing Systems” means Euroclear or Clearstream.

     “Event of Default” has the meaning specified in Section 5.1 of the Indenture.

     “Excess Distribution Certificate” means the certificate, substantially in the form of
Exhibit A to the Trust Agreement, evidencing the right to receive payments thereon as set forth in
Sections 2.8(p) and 2.9(f) of the Administration Agreement.

     “Excess Distribution Certificate Paying Agent” means any paying agent or co-paying
agent appointed pursuant to Section 3.3(g) of the Trust Agreement, which paying agent shall
initially be the Indenture Trustee.

     “Excess Distribution Certificate Register” and “Excess Distribution Certificate
Registrar” mean the register mentioned and the registrar appointed pursuant to Section 3.3(c)
of the Trust Agreement.

     “Excess Distribution Certificateholder” means the person in whose name an Excess
Distribution Certificate is registered in the Excess Distribution Certificate Register.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Executive Officer” means, with respect to any corporation, the Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer, President, any Executive Vice President,
any Senior Vice President, any Vice President, the Secretary or the Treasurer of such corporation;
and with respect to any partnership, any general partner thereof.

     “Expenses” means any and all liabilities, obligations, losses, damages, taxes, claims,
actions and suits, and any and all reasonable costs, expenses and disbursements (including
reasonable legal fees and expenses) of any kind and nature whatsoever which may at any time be
imposed on, incurred by, or asserted against the Eligible Lender Trustee or any of its officers,
directors or agents in any way relating to or arising out of the Trust Agreement, the other Basic
Documents, the Trust Estate, the administration of the Trust Estate or the action or inaction of
the Eligible Lender Trustee under the Trust Agreement or the other Basic Documents.

     “Exposure” has the meaning specified in the related Swap Agreement.

Appendix A-1-22

 

     “Extension Rate” means, for each Distribution Date following a Failed Remarketing if a
class of Reset Rate Notes is then in Foreign Exchange Mode, the rate of interest payable to each
related Currency Swap Counterparty, not to exceed Three-Month LIBOR plus 0.75%, unless the
Remarketing Agents, in consultation with the Administrator, determine that market conditions or
some other benefit to the Trust requires a higher rate; provided that in such case the
Rating Agency Condition is satisfied. The initial Extension Rate for the Class A-6 Notes and the
Class A-7A Notes under each related Initial Currency Swap Agreement is Three-Month LIBOR plus
0.75%.

     “Failed Remarketing” means, on any Reset Date for a class of Reset Rate Notes, the
situation where:

     (a) the Remarketing Agents, in consultation with the Administrator, cannot establish one or
more of the terms required to be set on the Remarketing Terms Determination Date;

     (b) the Remarketing Agents are unable to establish the Spread or fixed rate on the Spread
Determination Date;

     (c) either the Remarketing Agents are unable to remarket all or some of the tendered Reset
Rate Notes at the Spread or fixed rate established on the Spread Determination Date, or any
committed purchasers default on their purchase obligations and in their sole discretion, the
Remarketing Agents elect not to purchase those Reset Rate Notes themselves;

     (d) the Remarketing Agents, in consultation with the Administrator, are unable to obtain one
or more Swap Agreements meeting the required criteria, if applicable;

     (e) any applicable Rating Agency Condition has not been satisfied; or

     (f) any of the conditions specified in Section 8 of the Remarketing Agreement are not
satisfied.

     “Failed Remarketing Rate” means, for any Reset Period and any class of Reset Rate
Notes then denominated in U.S. Dollars, Three-Month LIBOR plus 0.75%; and for any Reset Period and
any class of Reset Rate Notes then in Foreign Exchange Mode, as will be determined on the related
Spread Determination Date pursuant to the terms of the related Currency Swap Agreement. For each
initial Reset Period, the Failed Remarketing Rate for the Class A-6 Notes and for the Class A-7A
Notes will be Three-Month EURIBOR plus 0.55%.

     “FDIC” means the Federal Deposit Insurance Corporation.

     “Federal Funds Rate” means the rate set forth for such day opposite the caption
“Federal Funds (effective)” in the weekly statistical release designated H.15(519), or any
successor publication, published by the Board of Governors of the Federal Reserve System. If such
rate is not published in the relevant H.15(519) for any day, the rate for such day shall be the
arithmetic mean of the rates for the last transaction in overnight Federal Funds arranged prior to
9:00 a.m. New York City time on that day by each of four leading brokers in such transactions
located in New York City selected by the Administrator. The Federal Funds rate for each Saturday
and

Appendix A-1-23

 

Sunday and for any other that is not a Business Day shall be the Federal Funds Rate for the
preceding Business Day as determined above.

     “Fitch” means Fitch Inc., also known as Fitch Ratings, or any successor Rating Agency.

     “Floating Rate Class A Notes” means the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes, the Class A-4 Notes, the Class A-5 Notes and the Class A-7B Notes.

     “Floating Rate Noteholder” means the Person in whose name a Floating Rate Note is
registered in the Note Register.

     “Floating Rate Notes” means the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes, the Class A-5 Notes, the Class A-7B Notes and the Class B Notes.

     “Foreign Exchange Mode” means that a class of Reset Rate Notes is then denominated in
a currency other than U.S. Dollars during the related Reset Period.

     “Funding Interim Trust Agreement” means the Interim Trust Agreement, dated as of
November 1, 2005, between the Depositor and the Interim Eligible Lender Trustee.

     “GBP-LIBOR” means, with respect to any Accrual Period, the London interbank offered
rate for deposits in Pounds Sterling having a maturity of three months, commencing on the first day
of the Accrual Period, which appears on Telerate Page 3750 as of 11:00 a.m. London time, on the
related GBP-LIBOR Determination Date. If an applicable rate does not appear on Telerate Page 3750,
the rate for that day will be determined on the basis of the rates at which deposits in Pounds
Sterling, having the specified maturity and in a principal amount of not less than £1,000,000, are
offered at approximately 11:00 a.m., London time, on that GBP-LIBOR Determination Date, to prime
banks in the London interbank market by the Reference Banks. The Administrator will request the
principal London office of each Reference Bank to provide a quotation of its rate. If the
Reference Banks provide at least two quotations, the rate for that day will be the arithmetic mean
of the quotations. If the Reference Banks provide fewer than two quotations, the rate for that day
will be the arithmetic mean of the rates quoted by prime banks in London, selected by the
Administrator, at approximately 11:00 a.m. London time, on that GBP-LIBOR Determination Date, for
loans in Pounds Sterling to leading European banks having the specified maturity and in a principal
amount of not less than £1,000,000. If the banks selected as described above are not providing
quotations, GBP-LIBOR in effect for the applicable Accrual Period will be GBP-LIBOR for the
specified maturity in effect for the previous Accrual Period. For any GBP-LIBOR-based notes,
interest due for any Accrual Period always will be determined based on the actual number of days
elapsed in the Accrual Period over a 365-day year.

     “GBP-LIBOR Determination Date” means, for each Accrual Period, the day that is two
GBP-LIBOR Settlement Days before the beginning of that Accrual Period.

     “GBP-LIBOR Settlement Day” means any day on which banks in both London and New York
City are open for business.

     “GLB Regulations” means the Joint Banking Agencies’ Privacy of Consumer Financial
Information, Final Rule (12 CFR Parts 40, 216, 332 and 573) or the Federal Trade Commission’s

Appendix A-1-24

 

Privacy of Consumer Financial Information, Final Rule (16 CFR Part 313), as applicable,
implementing Title V of the Gramm-Leach-Bliley Act, Public Law 106-102, as amended.

     “Grant” means mortgage, pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create and grant a lien upon and a security interest in and right of
set-off against, deposit, set over and confirm pursuant to the Indenture. A Grant of the
Collateral or of any other agreement or instrument shall include all rights, powers and options
(but none of the obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal and interest
payments in respect of the Collateral and all other moneys payable thereunder, to give and receive
notices and other communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or receive thereunder or
with respect thereto.

     “Guarantee Agreement” means any agreement between any Guarantor and the Eligible
Lender Trustee providing for the payment by the Guarantor of amounts authorized to be paid pursuant
to the Higher Education Act to holders of qualifying Student Loans guaranteed in accordance with
the Higher Education Act by such Guarantor.

     “Guarantee Payment” means any payment made by a Guarantor pursuant to a Guarantee
Agreement in respect of a Trust Student Loan.

     “Guarantor” means any entity listed on Attachment B (as amended from time to time) to
the Sale Agreement, the Purchase Agreements, any Additional Purchase Agreement or any Additional
Sale Agreement, as applicable.

     “H.15(519)” means the weekly statistical release designated as such, or any successor
publication, published by the Board of Governors of the United States Federal Reserve System.

     “H.15 Daily Update” means the daily update for H.15(519), available through the world
wide web site of the Board of Governors of the Federal Reserve System at
http://www.federalreserve.gov/releases/h15/update, or any successor site or publications.

     “Higher Education Act” means the Higher Education Act of 1965, as amended, together
with any rules, regulations and interpretations thereunder.

     “Hold Notice” means a written statement (or an oral statement confirmed in writing,
which may be by e-mail) from a holder or beneficial owner of Reset Rate Notes denominated in U.S.
Dollars during the then-current and immediately following Reset Periods, delivered to a Remarketing
Agent that such holder or beneficial owner desires to hold its Reset Rate Notes for the upcoming
Reset Period and affirmatively agrees to receive a rate of interest of not less than the applicable
All Hold Rate during that Reset Period.

     “Indenture” means the Indenture, dated as of November 1, 2005, among the Eligible
Lender Trustee on behalf of the Trust, the Trust and the Indenture Trustee.

     “Indenture Trust Estate” means all money, instruments, rights and other property that
are subject or intended to be subject to the lien and security interest of the Indenture for the
benefit

Appendix A-1-25

 

of the Noteholders and, as applicable, each Swap Counterparty (including all Collateral
Granted to the Indenture Trustee), including all proceeds thereof.

     “Indenture Trustee” means Deutsche Bank Trust Company Americas, a New York banking
corporation, not in its individual capacity but solely as trustee under the Indenture.

     “Independent” means, when used with respect to any specified Person, that the Person
(a) is in fact independent of the Trust, any other obligor upon the Notes, the Depositor and any
Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Trust, any such other obligor, the Depositor or any
Affiliate of any of the foregoing Persons and (c) is not connected with the Trust, any such other
obligor, the Depositor or any Affiliate of any of the foregoing Persons as an officer, employee,
promoter, underwriter, placement agent, trustee, partner, director or person performing similar
functions.

     “Independent Certificate” means a certificate or opinion to be delivered to the
Indenture Trustee under the circumstances described in, and otherwise complying with, the
applicable requirements of Section 11.1 of the Indenture, made by an Independent appraiser or other
expert appointed by an Issuer Order and approved by the Indenture Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer has read the
definition of “Independent” in the Indenture and that the signer is Independent within the
meaning thereof.

     “Index” or “Indices” means LIBOR, EURIBOR, GBP-LIBOR, a Commercial Paper Rate,
the CMT Rate, the Federal Funds Rate, the 91-day Treasury Bill Rate, the Prime Rate or any other
interest rate index specified in Schedule A to the Reset Rate Notes.

     “Index Maturity” means, with respect to any Accrual Period, the interval between
Interest Rate Change Dates for each applicable Index during such Accrual Period, commencing on the
first day of that Accrual Period.

     “Initial Accrual Rate” means for each class of Notes and the Accrual Period commencing
on the Closing Date to, but excluding, the first Distribution Date for that class of Notes, the
rate per annum as determined on the related Determination Date, as follows:

X + [8 / 29 * (Y — X)]

     where:

X = Two-Month LIBOR or Two-Month EURIBOR, and

Y = Three-Month LIBOR or Three-Month EURIBOR, as applicable.

     “Initial Class A-6 Currency Swap Agreement” means the initial Currency Swap Agreement
relating to the Class A-6 Notes, dated as of November 15, 2005 between the Trust and the related
Initial Currency Swap Counterparty.

     “Initial Class A-7A Currency Swap Agreement” means the initial Currency Swap Agreement
relating to the Class A-7A Notes, dated as of November 15, 2005 between the Trust and the related
Initial Currency Swap Counterparty.

Appendix A-1-26

 

     “Initial Currency Swap Agreements” means the initial Currency Swap Agreements, the
first relating to the Class A-6 Notes, dated as of November 15, 2005, and the second relating to
the Class A-7A Notes, dated as of November 15, 2005 and each between the Trust and the related
Initial Currency Swap Counterparty.

     “Initial Currency Swap Counterparty” means either Credit Suisse First Boston
International or Deutsche Bank AG, New York Branch, as applicable.

     “Initial Cutoff Date” means November 15, 2005.

     “Initial Cutoff Date Pool Balance” means, as of the Initial Cutoff Date and with
respect to the Initial Trust Student Loans, $3,001,136,238.

     “Initial
Euro Exchange Rate” means an exchange rate of $1.1950 equal
to €1.00.

     “Initial Pool Balance” means the sum of the Pool Balance of the Initial Trust Student
Loans as of the Closing Date and all amounts deposited into the Supplemental Purchase Account and
the Add-On Consolidation Loan Account on the Closing Date.

     “Initial Remarketing Agency Agreement” means each agreement, substantially in the form
of Appendix B to the Remarketing Agreement to be entered into on each Remarketing Terms
Determination Date (unless a Call Option has been exercised) among the Remarketing Agents, the
Administrator and the Trust.

     “Initial Reset Date” means, for the Class A-6 Notes, the October 2012 Distribution
Date and, for the Class A-7A Notes, the January 2016 Distribution Date.

     “Initial Reset Date Notice” means the written notice delivered pursuant to Section
3(a) of the Reset Rate Note Procedures.

     “Initial Trust Student Loans” means the Trust Student Loans purchased by the Trust on
the Closing Date pursuant to the Sale Agreement.

     “Insolvency Event” means, with respect to a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in the premises in respect of such Person
or any substantial part of its property in an involuntary case under any applicable Federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such
Person or for any substantial part of its property, or ordering the winding-up or liquidation of
such Person’s affairs, which decree or order remains unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case under any applicable
Federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief in an involuntary case under any such
law, or the consent by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for
any substantial part of its property, or the making by such Person of any general assignment for
the benefit of creditors, or the failure by such Person generally to pay its debts as such debts
become due, or the taking of action by such Person in furtherance of any of the foregoing.

Appendix A-1-27

 

     “Interest Rate Change Date” means for each Accrual Period, the date or dates, based on
the applicable Index, on which the rate of interest for a class of Reset Rate Notes bearing
interest at a floating rate, is to be reset.

     “Interest Rate Determination Date” means, for each Accrual Period, and (i) for the
Reset Rate Notes that bear interest at a LIBOR-, GBP-LIBOR- or EURIBOR-based rate, the related
LIBOR or EURIBOR Determination Date, as applicable, or (ii) for the Reset Rate Notes that bear
interest at a floating rate that is not LIBOR-, GBP-LIBOR- or EURIBOR-based, the applicable date or
dates set forth in the Remarketing Terms Notice, on which the applicable rate of interest to be in
effect as of the next Interest Rate Change Date will be determined by the Administrator.

     “Interest Rate Swap Agreement” means, with respect to any class of Reset Rate Notes
during any Reset Period when it is denominated in U.S. Dollars and (i) bears a fixed rate of
interest (or bears interest based on LIBOR or a U.S. Commercial Paper Rate, if a Swap Agreement is
to be entered into pursuant to the Reset Rate Note Procedures), or (ii) bears interest based on an
index other than LIBOR or a U.S. Commercial Paper Rate, any Swap Agreement between the Trust and an
Eligible Swap Counterparty, to hedge the basis risk during the related Reset Period.

     “Interest Subsidy Payments” means payments, designated as such, consisting of interest
subsidies by the Department in respect of the Trust Student Loans to the Eligible Lender Trustee on
behalf of the Trust in accordance with the Higher Education Act.

     “Interim Eligible Lender Trustee” means Chase Bank USA, National Association, a
national banking association, not in its individual capacity but solely as Interim Eligible Lender
Trustee under the Interim Trust Agreement. “Interim Eligible Lender Trustee” shall also mean each
successor Interim Eligible Lender Trustee as of the qualification of such Interim Eligible Lender
Trustee under the Interim Trust Agreement.

     “Interim Trust Agreement” means the Funding Interim Trust Agreement and the VG Funding
Interim Trust Agreement.

     “Interim Trust Loans” has the meaning set forth in the Interim Trust Agreement.

     “Investment Earnings” means, with respect to any Distribution Date, the investment
earnings (net of losses and investment expenses) on amounts on deposit in the Trust Accounts to be
deposited into the Collection Account on or prior to such Distribution Date pursuant to Section
2.3(b) of the Administration Agreement.

     “Investment Premium Purchase Account” means each account designated as such,
established and maintained pursuant to Section 2.3(l) of the Administration Agreement.

     “Investment Premium Purchase Account Deposit Amount” means, with respect to each
Distribution Date when funds are deposited into an Accumulation Account, an amount equal to 1.0% of
the amount deposited into that Accumulation Account on such Distribution Date.

Appendix A-1-28

 

     “Investment Premium Purchase Account Release Amount” means, with respect to any
Distribution Date that is one year or less prior to a Reset Date relating to a class of Reset Rate
Notes for which funds are then on deposit in an Accumulation Account, the amount, if any, to be
withdrawn from the related Investment Premium Purchase Account so that the remaining funds on
deposit in such Investment Premium Purchase Account will be equal to the lesser of (a) 1.00% of the
amount on deposit in the related Accumulation Account, and (b) the amount then on deposit the
related Investment Premium Purchase Account; provided that on any Distribution Date that is
also a Reset Date for a class of Reset Rate Notes for which amounts are then on deposit in an
Accumulation Account, all Investment Premium Purchase Account Deposit Amounts relating to such
Accumulation Account that remain on deposit in the related Investment Premium Purchase Account will
become part of the related Investment Premium Purchase Account Release Amount on such Distribution
Date.

     “Investment Reserve Account” means each account designated as such, established and
maintained pursuant to Section 2.3(m) of the Administration Agreement.

     “Investment Reserve Account Required Amount” means, with respect to each Distribution
Date, immediately following the date when the ratings of any Eligible Investment in an Accumulation
Account has been downgraded by one or more Rating Agencies, an amount (to the extent of Available
Funds), to be set by each applicable Rating Agency in satisfaction of the Rating Agency Condition
(but not to exceed the amount of the unrealized loss on the related Eligible Investment).

     “Issuer” means the Trust and, for purposes of any provision contained in the Indenture
and required by the TIA, each other obligor on the Notes.

     “Issuer Order” and “Issuer Request” means a written order or request signed in
the name of the Issuer by any one of its Authorized Officers and delivered to the Indenture
Trustee.

     “Letter of Credit Transaction” has the meaning specified in the related Swap
Agreement.

     “LIBOR” means Three-Month LIBOR or Two-Month LIBOR, as applicable.

     “LIBOR Determination Date” means, for each Accrual Period, the second Business Day
before the beginning of that Accrual Period.

     “Lien” means a security interest, lien, charge, pledge, equity or encumbrance of any
kind, other than tax liens and any other liens, if any, which attach to the respective Trust
Student Loan by operation of law as a result of any act or omission by the related Obligor.

     “Liquidated Student Loan” means any defaulted Trust Student Loan liquidated by the
Servicer (which shall not include any Trust Student Loan on which Guarantee Payments are received)
or which the Servicer has, after using all reasonable efforts to realize upon such Trust Student
Loan, determined to charge off.

     “Liquidation Proceeds” means, with respect to any Liquidated Student Loan which became
a Liquidated Student Loan during the current Collection Period in accordance with the Servicer’s
customary servicing procedures, the moneys collected in respect of the liquidation

Appendix A-1-29

 

thereof from whatever source, other than Recoveries, net of the sum of any amounts expended by
the Servicer in connection with such liquidation and any amounts required by law to be remitted to
the Obligor on such Liquidated Student Loan.

     “Loan” has the meaning set forth in Section 2 of each of the Purchase Agreements, as
applicable, and each Additional Purchase Agreement.

     “Lock-In Period” means a period from the first day of such Lock-In Period (which may
be expressed as a number of Business Days prior to a Distribution Date) to the immediately
succeeding Interest Payment Date during which the interest rate, Index or other calculation in
effect on the first day of such Lock-In Period shall remain in effect for every day in such Lock-In
Period.

     “London Paying Agent” means, with respect to any class of Reset Rate Notes while in
Foreign Exchange Mode, the Indenture Trustee or any other Person that meets the eligibility
standards for the Indenture Trustee specified in Section 6.11 of the Indenture and is authorized by
the Eligible Lender Trustee on behalf of the Trust to make the payments to and distributions from
the Euro Account, the Pounds Sterling Account and any Other Currency Account, which authorized
Person shall initially be Deutsche Bank AG, London Branch.

     “Luxembourg Listing Agent” means, initially, Deutsche Bank Luxembourg SA.

     “Luxembourg Paying Agent” means, initially, Deutsche Bank Luxembourg SA.

     “Minimum Purchase Amount” means an amount that would be sufficient to (i) reduce the
Outstanding Amount of each class of Notes, less the amount on deposit in any Accumulation Account
with respect to the related class of Reset Rate Notes, on such Distribution Date to zero and (ii)
pay to the respective Noteholders the Class A Noteholders’ Interest Distribution Amount and the
Class B Noteholders’ Interest Distribution Amount payable on such Distribution Date.

     “Monthly Servicing Payment Date” means the 25th day of each calendar month or, if such
day is not a Business Day, the immediately following Business Day, commencing in December 2005.

     “Moody’s” means Moody’s Investors Service, Inc. or any successor Rating Agency.

     “Note” and “Notes” means any of the Floating Rate Notes and the Reset Rate
Notes.

     “Note Depository Agreements” means with respect to the Notes, the Letter of
Representations, dated November 15, 2005, among the Trust, the Eligible Lender Trustee and the
Indenture Trustee in favor of DTC, and with respect to the Reset Rate Notes, the Instruction Letter
from Issuer to Common Depositary, dated November 15, 2005, between the Trust and Deutsche Bank AG
London.

     “Note Final Maturity Date” for a class of Notes means the Class A-1 Maturity Date, the
Class A-2 Maturity Date, the Class A-3 Maturity Date, the Class A-4 Maturity Date, the Class A-5
Maturity Date, the Class A-6 Maturity Date, the Class A-7A Maturity Date, the Class A-7B Maturity
Date or the Class B Maturity Date, as applicable.

Appendix A-1-30

 

     “Note Interest Shortfall” means the Class A Note Interest Shortfall, if any, and/or
the Class B Note Interest Shortfall, if any, as applicable.

     “Note Owner” means, with respect to a Book-Entry Note, the Person who is the owner of
such Book-Entry Note, as reflected on the books of the applicable Clearing Agency, or on the books
of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the rules of such
Clearing Agency).

     “Note Pool Factor” means, as of the close of business on a Distribution Date, a
seven-digit decimal figure equal to the Outstanding Amount of a class of Notes divided by the
original Outstanding Amount of such class of Notes. The Note Pool Factor for each class will be
1.0000000 as of the Closing Date; thereafter, the Note Pool Factor for each class will decline to
reflect reductions in the Outstanding Amount of that class of Notes.

     “Note Rates” means, with respect to any Accrual Period, the Class A-1 Rate, the Class
A-2 Rate, the Class A-3 Rate, the Class A-4 Rate, the Class A-5 Rate, the Class A-6 Rate, the Class
A-7A Rate, the Class A-7B Rate and the Class B Rate for such Accrual Period, collectively.

     “Note Register” and “Note Registrar” have the respective meanings specified in
Section 2.4 of the Indenture.

     “Noteholder” means a Floating Rate Noteholder, a Class A Noteholder, a Reset Rate
Noteholder or a Class B Noteholder, as the context requires.

     “Notes” means the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class
A-4 Notes, the Class A-5 Notes, the Class A-6 Notes, the Class A-7A Notes, the Class A-7B Notes and
the Class B Notes, collectively.

     “Notice Date” means, for each class of Reset Rate Notes, 12:00 p.m. (noon), New York
City time, on the sixth day prior to the Reset Date for that class.

     “Obligor” on a Trust Student Loan means the borrower or co-borrowers of such Trust
Student Loan and any other Person who owes payments in respect of such Trust Student Loan,
including the Guarantor thereof and, with respect to any Interest Subsidy Payment or Special
Allowance Payment, if any, thereon, the Department.

     “Officers’ Certificate” means (i) in the case of the Trust, a certificate signed by
any two Authorized Officers of the Eligible Lender Trustee, under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 11.1 of the Indenture, and
delivered to the Indenture Trustee, and (ii) in the case of the Depositor, the Administrator or the
Servicer, a certificate signed by any two Authorized Officers of the Depositor, the Administrator
or the Servicer, as applicable.

     “Opinion of Counsel” means (i) with respect to the Trust, one or more written opinions
of counsel who may, except as otherwise expressly provided in the Indenture, be employees of or
counsel to the Eligible Lender Trustee, the Trust, the Depositor or an Affiliate of the Depositor
and who shall be satisfactory to the Indenture Trustee, and which opinion or opinions shall be

Appendix A-1-31

 

addressed to the Indenture Trustee as Indenture Trustee, shall comply with any applicable
requirements of Section 11.1 of the Indenture and shall be in form and substance satisfactory to
the Indenture Trustee, and (ii) with respect to the Depositor, the Administrator or the Servicer,
one or more written opinions of counsel who may be an employee of or counsel to the Depositor, the
Administrator or the Servicer, which counsel shall be acceptable to the Indenture Trustee and the
Eligible Lender Trustee.

     “Origination Fee” means any origination fee payable to the Department by the lender
with respect to any Trust Student Loan.

     “Other Currency Account” means each account designated as such, established and
maintained pursuant to Section 2.3(n) of the Administration Agreement.

     “Outstanding” means, as of any date of determination, all Notes theretofore
authenticated and delivered under the Indenture except:

     (a) Notes theretofore cancelled by the Note Registrar or delivered to the Note Registrar for
cancellation;

     (b) Notes, or portions thereof, for which payment has been made to the applicable Noteholders
in reduction of the outstanding principal balance thereof or for which money in the necessary
amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for
the Noteholders thereof (excluding for such purpose any amounts on deposit in any Accumulation
Account); provided, however, that if such Notes are to be redeemed, notice of such redemption has
been duly given pursuant to the Indenture; and

     (c) Notes in exchange for or in lieu of other Notes which have been authenticated and
delivered pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is presented
that any such Notes are held by a bona fide purchaser; provided that in determining whether
the Noteholders of the requisite Outstanding Amount of the Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any other Basic Document,
Notes owned by the Trust, any other obligor upon the Notes, the Depositor or any Affiliate of any
of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes that a Responsible Officer
of the Indenture Trustee either actually knows to be so owned or has received written notice
thereof shall be so disregarded. Notes so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgee’s right so to act with respect to such Notes and that the pledgee is not the Trust, any
other obligor upon the Notes, the Depositor or any Affiliate of any of the foregoing Persons.

     “Outstanding Amount” means, as of any date of determination, the aggregate principal
balance of all the Notes or the applicable class or classes of Notes, as the case may be,
Outstanding at such date of determination; provided, however, that if any class of Reset Rate Notes
is then in Foreign Exchange Mode, the Outstanding Amount shall be based on the U.S. Dollar
Equivalent Principal Amount of that class of Reset Rate Notes.

Appendix A-1-32

 

     “Paying Agent” means, with respect to the Notes (other than any class of Reset Rate
Notes denominated in a currency other than U.S. Dollars), the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in Section 6.11 of the
Indenture and is authorized by the Eligible Lender Trustee, on behalf of the Trust, to make the
payments to and distributions from the Collection Account and payments of principal of and interest
and any other amounts owing on the Notes on behalf of the Trust. With respect to any class of
Reset Rate Notes denominated in a currency other than U.S. Dollars, Paying Agent means the London
Paying Agent and the Luxembourg Paying Agent.

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

     “Physical Property” has the meaning assigned to such terms in the definition of
“Delivery” above.

     “Pool Balance” for any date means the aggregate principal balance of the Trust Student
Loans on that date (including accrued interest that is expected to be capitalized) as such balance
has been reduced through such date by:

     (a) all payments received by the Trust through that date from borrowers, the Guarantors and
the Department;

     (b) all amounts received by the Trust through that date from repurchases of the Trust Student
Loans by SLM ECFC, VG Funding, or the Depositor, as applicable, or purchases by the Servicer;

     (c) all Liquidation Proceeds and Realized Losses on the Trust Student Loans liquidated through
that date;

     (d) the amount of any adjustments to the outstanding principal balances of the Trust Student
Loans that the Servicer makes under the Servicing Agreement through that date; and

     (e) the amount by which Guarantor reimbursements of principal on defaulted Trust Student Loans
through that date are reduced from 100% to 98%, or other applicable percentage, as required by the
risk sharing provisions of the Higher Education Act.

     “Posted Collateral” has the meaning specified in the related Swap Agreement.

     “Pounds Sterling Account” means any account designated as such, established and
maintained pursuant to Section 2.3(p) of the Administration Agreement.

     “Predecessor Note” means, with respect to any particular Note, every previous Note
evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for
the purpose of this definition, any Note authenticated and delivered under Section 2.5 of the
Indenture and in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence
the same debt as the mutilated, lost, destroyed or stolen Note.

Appendix A-1-33

 

     “Primary Servicing Fee” for any Monthly Servicing Payment Date has the meaning
specified in Attachment A to the Servicing Agreement, and shall include any such fees from prior
Monthly Servicing Payment Dates that remain unpaid.

     “Prime Rate” means, for any relevant Interest Rate Determination Date prior to each
Interest Rate Change Date, the prime rate or base lending rate on that date, as published in
H.15(519), prior to 3:00 p.m., New York City time, on that Interest Rate Determination Date under
the heading “Bank Prime Loan.” The Administrator will observe the following procedures if the
Prime Rate cannot be determined as described above: (i) if the rate described above is not
published in H.15(519) prior to 3:00 p.m., New York City time, on the relevant Interest Rate
Determination Date unless the calculation is made earlier and the rate was available from that
source at that time, then the Prime Rate will be the rate for that Interest Rate Determination
Date, as published in H.15 Daily Update or another recognized electronic source for displaying such
rate opposite the caption “Bank Prime Loan”, (ii) if the above rate is not published in either
H.15(519), H.15 Daily Update or another recognized electronic source for displaying such rate by
3:00 p.m., New York City time, on the relevant Interest Rate Determination Date, then the
Administrator will determine the Prime Rate to be the average of the rates of interest publicly
announced by each bank that appears on the Reuters screen designated as “USPRIME1” as that bank’s
prime rate or base lending rate as in effect on that Interest Rate Determination Date, (iii) if
fewer than four rates appear on the Reuters screen USPRIME1 page on the relevant Interest Rate
Determination Date, then the Prime Rate will be the average of the prime rates or base lending
rates quoted, on the basis of the actual number of days in the year divided by a 360-day year, as
of the close of business on that Interest Rate Determination Date by three major banks in New York
City selected by the Administrator, or (iv) if the banks selected by the Administrator are not
quoting as mentioned above, the Prime Rate will remain the prime rate then in effect on that
Interest Rate Determination Date.

     “Principal Distribution Amount” means, (i) with respect to the initial Distribution
Date, the amount by which the sum of the Outstanding Amount of the Notes exceeds the Adjusted Pool
Balance for that Distribution Date, and (ii) with respect to each subsequent Distribution Date, the
sum of the amount by which the Adjusted Pool Balance for the preceding Distribution Date exceeds
the Adjusted Pool Balance for that Distribution Date.

     “Proceeding” means any suit in equity, action at law or other judicial or
administrative proceeding.

     “Purchase Agreement” means either the SLM ECFC Purchase Agreement or the VG Funding
Purchase Agreement, each dated as of November 15, 2005.

     “Purchase Amount” with respect to any Trust Student Loan means the amount required to
prepay in full such Trust Student Loan under the terms thereof including all accrued and unpaid
interest thereon.

     “Purchased Student Loan” means a Trust Student Loan which is, as of the close of
business on the last day of a Collection Period, purchased by the Servicer pursuant to Section 3.5
of the Servicing Agreement or repurchased by the Depositor pursuant to Section 6 of the Sale
Agreement, repurchased by SLM ECFC pursuant to Section 6 of the SLM ECFC Purchase

Appendix A-1-34

 

Agreement, repurchased by VG Funding pursuant to Section 6 of the VG Funding Purchase
Agreement or sold to another eligible lender holding one or more Serial Loans with respect to such
Trust Student Loan pursuant to Section 3.11E of the Servicing Agreement.

     “QIB” means a “qualified institutional buyer” as defined in Rule 144A under the Act.

     “Quarterly Funding Amount” means, for each class of Reset Rate Notes, for any
Distribution Date that is (1) more than one year before the next related Reset Date, zero and (2)
one year or less before the next related Reset Date, an amount to be deposited into the Remarketing
Fee Account in respect of such class of Reset Rate Notes so that the amount therein in respect of
that class equals the Quarterly Required Amount for that class; provided, however, that if on any
Distribution Date that is not a Reset Date, the amount on deposit in the Remarketing Fee Account in
respect of that class is greater than the Quarterly Required Amount for that class, such excess
will be transferred to the Collection Account and included in Available Funds for that Distribution
Date.

     “Quarterly Required Amount” means, for each class of Reset Rate Notes, (1) on any
related Reset Date, the Reset Period Target Amount for that class or (2) on a Distribution Date
that is one year or less before the next related Reset Date (x) the Reset Period Target Amount for
that class multiplied by (y) five (5) minus the number of Distribution Dates remaining until the
next Reset Date for that class (excluding the current Distribution Date and including the next
Reset Date), divided by (z) five (5).

     “Rating Agency” means Moody’s, S&P and Fitch. If any such organization or successor
thereto is no longer in existence, “Rating Agency” with respect to such organization shall be a
nationally recognized statistical rating organization or other comparable Person designated by the
Administrator, notice of which designation shall be given to the Indenture Trustee, the Eligible
Lender Trustee and the Servicer.

     “Rating Agency Condition” means, with respect to any intended action, that each Rating
Agency then rating a class of Notes shall have been given 10 days’ prior written notice thereof and
that each such Rating Agency shall have notified the Administrator, the Servicer, the Eligible
Lender Trustee, the Indenture Trustee and the Remarketing Agents, if applicable, in writing that
such proposed action will not result in and of itself in the reduction or withdrawal of its
then-current rating of any class of Notes.

     “Realized Loss” means the excess of the principal balance, including any interest that
had been or had been expected to be capitalized, of any Liquidated Student Loan over Liquidation
Proceeds for that Liquidated Student Loan to the extent allocable to principal, including any
interest that had been or had been expected to be capitalized.

     “Record Date” means, with respect to a Distribution Date or Redemption Date and for
each class of Notes, the close of business on the day preceding such Distribution Date or
Redemption Date.

     “Recoveries” means moneys collected from whatever source with respect to any
Liquidated Student Loan which was written off in prior Collection Periods or during the current

Appendix A-1-35

 

Collection Period, net of the sum of any amounts expended by the Servicer for the account of
any Obligor and any amounts required by law to be remitted to any Obligor.

     “Redemption Date” means in the case of a payment to Noteholders pursuant to Section
10.1 of the Indenture, the Distribution Date specified pursuant to Section 10.1 of the Indenture.

     “Redemption Price” means an amount equal to the Outstanding Amount of the Notes, plus
accrued and unpaid interest thereon at the applicable Note Rates to but excluding the Redemption
Date.

     “Reference Banks” means, with respect to (i) LIBOR, four major banks in the London
interbank market for deposits in U.S. Dollars selected by the Administrator, (ii) EURIBOR, four
major banks in the Euro-zone interbank market for deposits in Euros selected by the Administrator
and (iii) GBP-LIBOR, four major banks in the London interbank market for deposits in Pounds
Sterling selected by the Administrator.

     “Registrar” means the Excess Distribution Certificate Registrar and/or the Note
Registrar, as applicable.

     “Remarketing Agency Agreement” means the collective reference to an Initial
Remarketing Agency Agreement and the Supplemental Remarketing Agency Agreement.

     “Remarketing Agent” means, initially, each of Credit Suisse First Boston LLC and
Deutsche Bank Securities Inc. The Administrator, in its sole discretion, may change any
Remarketing Agent for the Reset Rate Notes for any Reset Period at any time on or before a
Remarketing Terms Determination Date.

     “Remarketing Agreement” means the Remarketing Agreement dated as of November 15, 2005
among the Remarketing Agents, the Administrator and the Trust, as amended or supplemented from time
to time.

     “Remarketing Fee Account” means the account designated as such, established and
maintained pursuant to Section 2.3(i) of the Administration Agreement.

     “Remarketing Prospectus” as described in Section 7(e)(i) of the Remarketing Agreement.

     “Remarketing Terms Determination Date” means, for a class of Reset Rate Notes, not
later than 3:00 p.m., New York City time, on the eighth Business Day prior to the applicable Reset
Date.

     “Remarketing Terms Notice” means the notice delivered by the Remarketing Agents to a
the Reset Rate Noteholders, the Indenture Trustee, the Rating Agencies and the applicable Clearing
Agencies on each Remarketing Terms Determination Date containing the information set forth in the
Reset Rate Note Procedures (Appendix A-2 to the Indenture).

     “Replacement Transaction” has the meaning specified in the related Swap Agreement.

Appendix A-1-36

 

     “Reserve Account” means the account designated as such, established and maintained
pursuant to Section 2.3(g) of the Administration Agreement.

     “Reserve Account Initial Deposit” means $7,552,841.

     “Reset Date” means a Distribution Date on which certain terms for a class of Reset
Rate Notes may be changed in accordance with the Reset Rate Note Procedures (Appendix A-2 to the
Indenture).

     “Reset Period” means, with respect to any class of Reset Rate Notes, a period of at
least three months (or any other longer duration that is a multiple of three months) that will
always end on the day before a Distribution Date, which such Distribution Date will be the next
Reset Date; provided that no such Reset Period may end after the day before the related
Reset Rate Notes Maturity Date.

     “Reset Period Target Amount” means, for each class of Reset Rate Notes any
Distribution Date that is (1) more than one year before the next related Reset Date, zero, and (2)
one year or less before the next related Reset Date, the highest remarketing fee payable to the
Remarketing Agents for that class of Reset Rate Notes (not to exceed 0.35% of the maximum principal
balance of such class of Reset Rate Notes that could be remarketed) on the next related Reset Date
as determined by the Administrator based on the assumed weighted average life of such class of
Reset Rate Notes and the maximum remarketing fee set forth on a schedule attached to the
Remarketing Agreement, as such schedule may be amended from time to time.

     “Reset Rate Note” means any Class A-6 Note or Class A-7A Note.

     “Reset Rate Note Procedures” means Appendix A-2 to the Indenture.

     “Reset Rate Noteholder” means the Person in whose name a Reset Rate Note is registered
in the Note Register.

     “Reset Rate Notes” means the Class A-6 Notes and Class A-7A Notes.

     “Reset Rate Notes Maturity Date” means the Class A-6 Maturity Date or Class A-7A
Maturity Date, as applicable.

     “Responsible Officer” means, with respect to the Indenture Trustee, any officer within
the Corporate Trust Office of the Indenture Trustee, including any Vice President, Assistant Vice
President, Assistant Treasurer, Assistant Secretary, or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by any of the above designated
officers, with direct responsibility for the administration of the Indenture and the other Basic
Documents on behalf of the Indenture Trustee and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer’s knowledge of and
familiarity with the particular subject.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. or any successor Rating Agency.

Appendix A-1-37

 

     “Sale Agreement” means the Sale Agreement Master Securitization Terms Number 1000,
dated as of November 15, 2005, among the Eligible Lender Trustee on behalf of the Trust, the Trust,
the Interim Eligible Lender Trustee and the Depositor, and the sale agreement or agreements entered
into thereunder.

     “Schedule of Trust Student Loans” means the listing of the Trust Student Loans set
forth in Schedule A to the Indenture and the Bill of Sale (which Schedule may be in the form of
microfiche).

     “Schedule Replacement Order” means an Issuer Order replacing Schedule A to each class
of Reset Rate Notes to be delivered with respect to the related Reset Date.

     “Second Trigger” has the meaning specified in the related Swap Agreement.

     “Servicer” means Sallie Mae, Inc., in its capacity as servicer of the Trust Student
Loans.

     “Servicer Default” means an event specified in Section 5.1 of the Servicing Agreement.

     “Servicer Distribution Date” has the meaning specified in the Servicing Agreement.

     “Servicer’s Report” means any report of the Servicer delivered pursuant to Section
3.1(a) of the Administration Agreement, substantially in the form acceptable to the Administrator.

     “Servicing Agreement” means the Servicing Agreement, dated as of November 15, 2005,
among the Trust, the Eligible Lender Trustee, the Servicer, the Administrator and the Indenture
Trustee.

     “Servicing Fee” has the meaning specified in Attachment A to the Servicing Agreement.

     “SLM ECFC” means SLM Education Credit Finance Corporation.

     “SLM ECFC Purchase Agreement” means the Purchase Agreement Master Securitization Terms
Number 1000, dated as of November 15, 2005, among SLM ECFC, the Interim Eligible Lender Trustee and
the Depositor, as well as each purchase agreement entered into thereunder.

     “SLS Loan” means a Trust Student Loan designated as such that is made under the
Supplemental Loans for Students Program in accordance with the Higher Education Act.

     “Special Allowance Payments” means payments, designated as such, consisting of
effective interest subsidies by the Department in respect of the Trust Student Loans to the
Eligible Lender Trustee on behalf of the Trust in accordance with the Higher Education Act.

     “Specified Reserve Account Balance” means, for any Distribution Date, the greater of:

     (a) 0.25% of the sum of (i) the Pool Balance and (ii) the amount, if any, on deposit in the
Add-On Consolidation Loan Account (excluding amounts in such account that will become Available
Funds on the related Distribution Date), each as of the close of business on the last day of the
related Collection Period; and

Appendix A-1-38

 

     (b) $4,531,704;

     provided that in no event will that balance exceed the Outstanding Amount. For these
purposes, as to a class of Reset Rate Notes which then is structured not to receive a payment of
principal until the end of the related Reset Period, the Outstanding Amount, or the U.S. Dollar
Equivalent Principal Amount, as applicable, of that class of Reset Rate Notes will be reduced by
any amounts (less any Investment Earnings) on deposit in the related Accumulation Account for that
class of Reset Rate Notes.

     “Spread” means the percentage, determined by the Remarketing Agents on the Spread
Determination Date, with respect to a class of Reset Rate Notes that is to bear a floating rate of
interest, in excess of or below the applicable interest rate Index that will be applicable to that
class of Reset Rate Notes during any Reset Period after the initial Reset Period so as to result in
an interest rate that, in the reasonable opinion of the Remarketing Agents, will enable all of the
tendered Reset Rate Notes of that class to be remarketed by the Remarketing Agents at 100% of the
Outstanding Amount thereof.

     “Spread Determination Date” means, for any class of Reset Rate Notes, not later than
3:00 p.m., New York City time, on the third Business Day prior to the applicable Reset Date.

     “Spread Determination Notice” means the notice delivered by the Remarketing Agents to
the Noteholders of a class of Reset Rate Notes, the Indenture Trustee, the Rating Agencies, the
Clearing Agencies and, if such class of Reset Rate Notes is then listed on the Luxembourg Stock
Exchange, the Luxembourg Stock Exchange on each Spread Determination Date containing the
information set forth in the Reset Rate Note Procedures (Appendix A-2 to the Indenture).

     “Stafford Loan” means a Trust Student Loan designated as such that is made under the
Stafford Loan Program in accordance with the Higher Education Act.

     “State” means any one of the 50 States of the United States of America or the District
of Columbia.

     “Statistical Cutoff Date” means October 24, 2005.

     “Stepdown Date” means the earlier to occur of (i) the January 2011 Distribution Date
or (ii) the first date on which no Class A Notes remain Outstanding. For this purpose, the
Outstanding Principal Balance of a class of Reset Rate Notes will be deemed reduced by any amounts
(other than Investment Earnings) on deposit in any related Accumulation Account.

     “Student Loans” means education loans to students and parents of students under the
Federal Family Education Loan Program.

     “Subsequent Cutoff Date” with respect to each Additional Trust Student Loan or
Substituted Trust Student Loan has the meaning set forth in the related Additional Purchase
Agreement and Additional Sale Agreement.

     “Substituted Trust Student Loan” means each Eligible Loan substituted by the Depositor
pursuant to Section 6(B) of the Sale Agreement and each related Additional Sale Agreement.

Appendix A-1-39

 

     “Successor Administrator” has the meaning specified in Section 3.7(e) of the
Indenture.

     “Successor Servicer” has the meaning specified in Section 3.7(e) of the Indenture.

     “Supplemental Interest Account” means any account designated as such, established and
maintained pursuant to Section 2.3(k) of the Administration Agreement.

     “Supplemental Interest Account Deposit Amount” means, with respect to any Distribution
Date when a class of Reset Rate Notes is then structured not to receive a payment of principal
until the end of the related Reset Period, the lesser of:

(a) the product of:

     (1) the difference between (x) the weighted average of the LIBOR-based rates (as
determined on the LIBOR Determination Date immediately preceding that Distribution Date)
that will be payable by the Trust to any related Swap Counterparties on the next
Distribution Date, or the LIBOR-based rate (as determined on the LIBOR Determination Date
immediately preceding that Distribution Date) that will be payable by the Trust to the
related Noteholders on the next Distribution Date, as applicable, and (y) an assumed rate of
Investment Earnings that satisfies the Rating Agency Condition,

     (2) the amount on deposit in the related Accumulation Account immediately after that
Distribution Date, and

     (3) the actual number of days from that Distribution Date to the next Reset Date for
that class of Reset Rate Notes, divided by 360; and

     (b) an amount that satisfies the Rating Agency Condition.

     “Supplemental Purchase Account” means an account designated as such, established and
maintained pursuant to Section 2.3(q) of the Administration Agreement.

     “Supplemental Purchase Account Initial Deposit” means $9,818,772.66 which is equal to
the excess, if any, of (x) the Pool Balance as of the Statistical Cutoff Date over (y) the Initial
Cutoff Date Pool Balance; provided that such amount is not in excess of 5% of the Pool
Balance as of the Statistical Cutoff Date.

     “Supplemental Purchase Period” means the period beginning on the Closing Date and
ending ten (10) business days later on November 30, 2005.

     “Supplemental Remarketing Agency Agreement” means each agreement, substantially in the
form of Appendix C to the Remarketing Agreement to be entered into on each Spread Determination
Date (unless a Call Option has been exercised or a Failed Remarketing has been declared) among the
Remarketing Agents, the Administrator and the Trust.

     “Swap Agreement” means the applicable ISDA Master Agreement, and each related swap
schedule and/or Swap Confirmation with respect to each Initial Currency Swap Agreement and any
Currency Swap Agreement and/or Interest Rate Swap Agreement to be entered into from

Appendix A-1-40

 

time to time by the Administrator or the Eligible Lender Trustee in either case solely on
behalf of the Trust and an Eligible Swap Counterparty, pursuant to the terms and conditions set
forth in the Reset Rate Note Procedures.

     “Swap Confirmation” means each swap confirmation relating to a Swap Agreement.

     “Swap Counterparty” means each Eligible Swap Counterparty from time to time party to a
Swap Agreement including each Initial Currency Swap Counterparty (with respect to each Initial
Currency Swap Agreement).

     “Swap Interest Payments” means, with respect to each Distribution Date, the amount
payable to the related Swap Counterparty by the Trust as a quarterly premium payment pursuant to
the related Swap Agreement.

     “Swap Payments” means, with respect to each Distribution Date, the amount, if any,
payable to a Swap Counterparty by the Trust for such date, including amounts due and unpaid from
prior Distribution Dates (other than Swap Termination Payments), as specified in the applicable
Swap Agreement.

     “Swap Receipts” means, with respect to each Distribution Date, the amount required to
be received from the related Swap Counterparty by the Trust for such date (other than Swap
Termination Payments), as specified in the related Swap Agreement.

     “Swap Termination Date” means the date on which any Swap Agreement terminates in
accordance with its terms.

     “Swap Termination Payments” shall have the meaning set forth in each Swap Agreement.

     “TARGET” means the Trans-European Automated Real-time Gross Settlement Express
Transfer System.

     “Telerate Page 248” means the display page so designated on the Moneyline Telerate
Service (or such other page as may replace that page on that service for the purpose of displaying
comparable rates or prices).

     “Telerate Page 3750” means the display page so designated on the Moneyline Telerate
Service (or such other page as may replace that page on that service for the purpose of displaying
comparable rates or prices).

     “Telerate Page 7051” means the display page so designated on the Moneyline Telerate
Service (or such other page as may replace that page on that service for the purpose of displaying
comparable rates or prices).

     “Telerate Page 7052” means the display page so designated on the Moneyline Telerate
Service (or such other page as may replace that page on that service for the purpose of displaying
comparable rates or prices).

Appendix A-1-41

 

     “Three-Month EURIBOR” and “Two-Month EURIBOR” means, with respect to any
Accrual Period, the Euro-zone interbank offered rate for deposits in Euros having the specified
maturity commencing on the first day of the Accrual Period, which appears on Telerate Page 248 as
of 11:00 a.m. Brussels time, on the related EURIBOR Determination Date. If an applicable rate does
not appear on Telerate Page 248, the rate for that day will be determined on the basis of the rates
at which deposits in Euros having the specified maturity and in a principal amount of not less than
€1,000,000, are offered at approximately 11:00 a.m., Brussels time, on that EURIBOR
Determination Date, to prime banks in the Euro-zone interbank market by the Reference Banks. The
Administrator will request the principal Euro-zone office of each Reference Bank to provide a
quotation of its rate. If the Reference Banks provide at least two quotations, the rate for that
day will be the arithmetic mean of the quotations. If the Reference Banks provide fewer than two
quotations, the rate for that day will be the arithmetic mean of the rates quoted by major banks in
the Euro-zone, selected by the Administrator, at approximately 11:00 a.m. Brussels time, on that
EURIBOR Determination Date, for loans in Euros to leading European banks having the specified
maturity and in a principal amount of not less than €1,000,000. If the banks selected as
described above are not providing quotations, EURIBOR in effect for the applicable Accrual Period
will be EURIBOR for the specified maturity in effect for the previous Accrual Period.

     “Three-Month LIBOR” and “Two-Month LIBOR” means, with respect to any Accrual
Period, the London interbank offered rate for deposits in U.S. Dollars having the Index Maturity
which appears on Telerate Page 3750 as of 11:00 a.m. London time, on the related LIBOR
Determination Date. If this rate does not appear on Telerate Page 3750, the rate for that day will
be determined on the basis of the rates at which deposits in U.S. Dollars, having the Index
Maturity and in a principal amount of not less than U.S. $1,000,000, are offered at approximately
11:00 a.m., London time, on that LIBOR Determination Date, to prime banks in the London interbank
market by the Reference Banks. The Administrator will request the principal London office of each
Reference Bank to provide a quotation of its rate. If the Reference Banks provide at least two
quotations, the rate for that day will be the arithmetic mean of the quotations. If the Reference
Banks provide fewer than two quotations, the rate for that day will be the arithmetic mean of the
rates quoted by major banks in New York City, selected by the Administrator, at approximately 11:00
a.m., New York time, on that LIBOR Determination Date, for loans in U.S. Dollars to leading
European banks having the Index Maturity and in a principal amount of not less than U.S.
$1,000,000. If the banks selected as described above are not providing quotations, LIBOR in effect
for the applicable Accrual Period will be LIBOR for the specified maturity in effect for the
previous Accrual Period.

     “Transfer” an offer, sale, pledge, transfer or other disposition of a Note or any
interest therein.

     “Transfer Date” has the meaning specified in Section 5.2(a) of the Administration
Agreement.

     “Treasury Regulations” means regulations, including proposed or temporary regulations,
promulgated under the Code. References in any document or instrument to specific provisions of
proposed or temporary regulations shall include analogous provisions of final Treasury Regulations
or other successor Treasury Regulations.

Appendix A-1-42

 

     “Trigger Event” means, on any Distribution Date while any of the Class A Notes are
outstanding, the Outstanding Amount of the Notes, less any amounts on deposit in any Accumulation
Account (other than Investment Earnings), after giving effect to distributions to be made on that
Distribution Date, would exceed the Adjusted Pool Balance as of the end of the related Collection
Period.

     “Trust” means SLM Student Loan Trust 2005-9, a Delaware statutory trust established
pursuant to the Trust Agreement.

     “Trust Account Property” means the Trust Accounts, all cash and investments held from
time to time in any Trust Account (whether in the form of deposit accounts, Physical Property,
book-entry securities, uncertificated securities or otherwise), including the Reserve Account
Initial Deposit, the Capitalized Interest Account Initial Deposit, the Supplemental Purchase
Account Initial Deposit, the Add-On Consolidation Loan Account Initial Deposit, the Collection
Account Initial Deposit and all earnings on and proceeds of the foregoing.

     “Trust Accounts” has the meaning specified in Section 2.3(b) of the Administration
Agreement.

     “Trust Agreement” means the short-form trust agreement, dated as of October 25, 2005,
between the Depositor and the Eligible Lender Trustee, as amended and restated pursuant to an
Amended and Restated Trust Agreement, dated as of November 15, 2005 among the Depositor, the
Eligible Lender Trustee and the Indenture Trustee.

     “Trust Auction Date” has the meaning specified in Section 4.4 of the Indenture.

     “Trust Estate” means all right, title and interest of the Trust (or the Eligible
Lender Trustee on behalf of the Trust) in and to the property and rights sold, transferred and
assigned to the Trust pursuant to the Sale Agreement and any Additional Sale Agreement, all funds
on deposit from time to time in the Trust Accounts and all other property of the Trust from time to
time, including any rights of the Eligible Lender Trustee and the Trust pursuant to the Trust
Agreement, the Administration Agreement, the Servicing Agreement, any Swap Agreements (including
the security interest in any collateral delivered thereunder) and any Eligible Repurchase
Obligations.

     “Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.

     “Trust Student Loan” means any student loan that is listed on the Schedule of Initial
Trust Student Loans on the Closing Date, plus any Additional Trust Student Loan, plus any student
loan that is permissibly substituted for a Trust Student Loan by the Depositor pursuant to Section
6 of the Sale Agreement or pursuant to Section 6 of an Additional Sale Agreement, or by the
Servicer pursuant to Section 3.5 of the Servicing Agreement, but shall not include any Purchased
Student Loan following receipt by or on behalf of the Trust of the Purchase Amount with respect
thereto or any Liquidated Student Loan following receipt by or on behalf of the Trust of
Liquidation Proceeds with respect thereto or following such Liquidated Student Loan having
otherwise been written off by the Servicer.

Appendix A-1-43

 

     “Trust Student Loan Files” means the documents specified in Section 2.1 of the
Servicing Agreement.

     “Two-Month EURIBOR” see Three-Month EURIBOR.

     “Two-Month LIBOR” see Three-Month LIBOR.

     “UCC” means, unless the context otherwise requires, the Uniform Commercial Code, as in
effect in the relevant jurisdiction, as amended from time to time.

     “Underwriter” means each of Credit Suisse First Boston LLC, Deutsche Bank Securities
Inc., Banc of America Securities Limited, Banc of America Securities LLC, Credit Suisse First
Boston Europe Limited, Barclays Capital Inc., Merrill Lynch International, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, DEPFA BANK plc and Fortis Bank NV.

     “U.S. Dollar Equivalent Principal Amount” means, with respect to a class of Reset Rate
Notes while in Foreign Exchange Mode, the U.S. Dollar equivalent of the Outstanding Amount of such
class of Reset Rate Notes in Foreign Exchange Mode as of the date of determination based on the
exchange rate provided in the related Currency Swap Agreement.

     “Valuation Date” has the meaning specified in the related Swap Agreement.

     “VG Funding” means VG Funding, LLC.

     “VG Funding Eligible Lender Trustee” means Chase Bank USA, National Association, a
national banking association, not in its individual capacity but solely as interim eligible lender
trustee for the benefit of VG Funding under the VG Funding Interim Trust Agreement.

     “VG Funding Interim Trust Agreement” means the Interim Trust Agreement, dated as of
November 1, 2005, between VG Funding and the VG Funding Eligible Lender Trustee.

     “VG Funding Purchase Agreement” means the Purchase Agreement Master Securitization
Terms Number 1000, dated as of November 15, 2005 among VG Funding, the VG Funding Interim Eligible
Trustee, the Interim Eligible Lender Trustee and the Depositor, as well as each purchase agreement
entered into thereunder.

Appendix A-1-44

 

APPENDIX A-2

RESET RATE NOTE PROCEDURES

     Section 1. Definitions: All terms which are defined in Appendix A-1 shall
have the same meanings in this Appendix A-2.

     Section 2. Interest Rates; Principal Payments: (a) Each class of Reset Rate Notes
will bear interest for each related Reset Period at the rate set forth on Schedule A attached to
the related Reset Rate Note as determined in accordance with Section 2(b) below; provided
that during each initial Reset Period, each class of Reset Rate Notes will bear interest from the
Closing Date through and including the related Initial Reset Date at the rate set forth in the
first sentence of the definitions of “Class A-6 Rate,” and “Class A-7A Rate,” respectively.
Interest on each class of Reset Rate Notes shall be payable by the Trust with respect to each
Distribution Date at the priority level set forth in Section 2.8(d) of the Administration
Agreement; provided that if interest due to a class of Reset Rate Notes is payable through
a Swap Agreement, the related Swap Interest Payments will be payable by the Trust to the related
Swap Counterparty, and by the Swap Counterparty to the Trust (for payment to the related Reset Rate
Noteholders), as described in Section 10 below.

     (b) After each initial Reset Period, each class of Reset Rate Notes may be reset to bear
either a fixed or floating rate of interest at the option of the Remarketing Agents, in
consultation with the Administrator. The interest rate of each class of Reset Rate Notes will be
reset as of each related Reset Date as determined by (i) the Remarketing Agents, in consultation
with the Administrator, with respect to (A) the length of the related Reset Period, (B) whether the
rate is fixed or floating and (x) if floating, the applicable Index, or (y) if fixed, the
applicable pricing benchmark, (C) the applicable Day Count Basis, (D) the applicable currency
denomination, i.e., U.S. Dollars, Euros, Pounds Sterling or another non-U.S. Dollar currency, (E)
if in Foreign Exchange Mode, the applicable Distribution Dates on which interest will be paid to
the related Reset Rate Noteholders, if other than quarterly, (F) the applicable Interest Rate
Determination Dates within each Accrual Period, (G) the interval between Interest Rate Change Dates
during each Accrual Period and (H) if applicable, the related All Hold Rate, and (ii) the
Remarketing Agents (in their sole determination) with respect to the setting of the (A) fixed rate
of interest or (B) Spread to the chosen Index, as applicable.

     (c) In the event that any class of Reset Rate Notes is reset (i) to bear (or continue to bear)
interest at a floating rate, (ii) to bear (or continue to bear) a fixed rate of interest and/or
(iii) to be denominated (or continue to be denominated) in a currency other than U.S. Dollars, and
the Remarketing Agents, in consultation with the Administrator determine that it would be in the
best interest of the Trust based on existing market conditions to enter into one or more Swap
Agreements, the Administrator will be responsible for arranging, on behalf of the Trust, one or
more Swap Agreements to hedge the basis risk and/or currency exchange risk (as applicable) and,
together with the Remarketing Agents, for selecting the Swap Counterparties thereto in accordance
with the procedures set forth in Section 10(d) below. No class of Reset Rate Notes will be reset
(or continue) to bear interest at a floating rate that is not based on LIBOR or a Commercial Paper
Rate, at a fixed rate or to be denominated in a currency other than U.S. Dollars unless one or more
Swap Agreements are entered into as of the related Reset Date that

Appendix A-2-1

 

results in the Rating Agency Condition being satisfied. In connection with each Swap
Agreement, the Remarketing Agents shall solicit bids from Eligible Swap Counterparties in
accordance with the procedures set forth in Section 10(d) below.

     (d) Each class of Reset Rate Notes shall be entitled either (i) to receive payments of
principal in reduction of its Outstanding Amount on each Distribution Date at the priority level
set forth in Section 2.8(f) of the Administration Agreement or (ii) if such class is then
structured not to receive a payment of principal until the end of the related Reset Period, to
receive allocations of principal at the priority level set forth in Section 2.8(f) of the
Administration Agreement on each Distribution Date; provided, however, that such
amounts referred to in this clause (ii) shall not be paid in reduction of the Outstanding Amount of
such class of Reset Rate Notes, and instead all such amounts shall be deposited into the related
Accumulation Account for payment to the related Reset Rate Noteholders or the related Currency Swap
Counterparty, as applicable, on or about the next related Reset Date as set forth in Section 11(a)
below.

     Section 3. End of Reset Period Notice: (a) Unless the holder of the related Call
Option has delivered the related Call Option Notice, the Administrator, not less than fifteen nor
more than thirty calendar days prior to any Remarketing Terms Determination Date, will (i) give
written notice (including facsimile or other electronic transmission, if permitted pursuant to the
recipient’s standard procedures) to the applicable Clearing Agencies and the Luxembourg Stock
Exchange (for so long as the related class of Reset Rate Notes is listed on such exchange), with a
copy to the Indenture Trustee, notifying them of the upcoming Reset Date and the identities of the
related Remarketing Agents and stating whether tender is deemed mandatory or optional for the
applicable class of Reset Rate Notes on the related Reset Date (the “Initial Reset Date Notice”),
(ii) request that each Clearing Agency notify its participants of (1) the contents of the Initial
Reset Date Notice, (2) the Remarketing Terms Notice to be given on the Remarketing Terms
Determination Date pursuant to Section 4(d) below, (3) the Spread Determination Notice to be given
on the Spread Determination Date pursuant to Section 9(e) below, and (4) if applicable, the
procedures concerning the timely delivery of a Hold Notice pursuant to Section 8 below that must be
followed if any beneficial owner of a class of Reset Rate Notes wishes to retain its Reset Rate
Notes. For so long as the related class of Reset Rate Notes is listed on the Luxembourg Stock
Exchange, a copy of such notices will be sent to the Luxembourg Stock Exchange and each of the
Remarketing Terms Notice and the Spread Determination Notice will also be published in a leading
newspaper having general circulation in Luxembourg (which is expected to be d’Wort) and (iii)
provide representatives of the Luxembourg Stock Exchange with the Remarketing Prospectus as defined
in the Remarketing Agreement.

     (b) The Administrator will also include in each Initial Reset Date Notice the names and
contact information of the Luxembourg Listing Agent, if applicable, and any Remarketing Agents
confirmed or appointed by the Administrator, or if no Remarketing Agents have then been so chosen,
the Administrator will provide adequate contact information for Reset Rate Noteholders to receive
information regarding the upcoming Reset Date.

     (c) If the related Clearing Agency or its respective nominee, as applicable, is no longer the
holder of record of the related class of Reset Rate Notes, the Administrator, or the Remarketing
Agents on its behalf, will send the related Reset Rate Noteholders, with a copy to the Indenture
Trustee and the Luxembourg Listing Agent, as applicable, the required notices

Appendix A-2-2

 

setting forth the information in Sections 3(a) and 3(b) above not less than fifteen nor more
than thirty calendar days prior to any Remarketing Terms Determination Date. In addition, in the
event that Definitive Notes evidencing an interest in any class of Reset Rate Notes are issued, the
Administrator shall cause the Note Registrar to provide to the relevant Reset Rate Noteholders and
the Luxembourg Listing Agent, as applicable, any additional procedures applicable to such Reset
Rate Notes while in definitive form.

     Section 4. Remarketing Terms Determination Date: (a) Subject to the provisions of
the Remarketing Agreement, prior to the Remarketing Terms Determination Date, and unless the holder
of the related Call Option has delivered the related Call Option Notice, the Administrator shall
re-affirm the capability of the initial Remarketing Agents to perform under the Remarketing
Agreement, and/or enter into new remarketing agreements with other or additional remarketing
agents, who shall function as the Remarketing Agents with respect to the related Reset Date. On
each Remarketing Terms Determination Date, the Trust, the Administrator and the Remarketing Agents
will enter into a Remarketing Agency Agreement for the remarketing of the related class of Reset
Rate Notes.

     (b) If the Remarketing Agents, in consultation with the Administrator, determine prior to the
Remarketing Terms Determination Date that any Currency Swap Agreements required pursuant to Section
2(c)(iii) above will not be obtainable on the related Reset Date, the related class of Reset Rate
Notes must be denominated in U.S. Dollars during the next related Reset Period.

     (c) Unless the holder of the related Call Option has delivered the related Call Option Notice,
on or prior to the Remarketing Terms Determination Date the Remarketing Agents will notify the
related Reset Rate Noteholders whether tender is deemed mandatory or optional and, in consultation
with the Administrator, will establish the following terms for the related class of Reset Rate
Notes to be applicable during the immediately following related Reset Period:

     (i) the expected weighted average life of that class of Reset Rate Notes, based on
prepayment and other assumptions customary for comparable securities;

     (ii) the name and contact information of the Remarketing Agents;

     (iii) the next Reset Date and length of such Reset Period;

     (iv) the interest rate mode (i.e., fixed rate or floating rate);

     (v) the currency denomination;

     (vi) the applicable minimum denominations and additional increments for such class of
Reset Rate Notes;

     (vii) if in Foreign Exchange Mode, the identities of the Eligible Swap Counterparties
from which bids will be solicited;

Appendix A-2-3

 

     (viii) if in Foreign Exchange Mode, the applicable Distribution Dates on which interest
and principal will be paid to the related Reset Rate Noteholders, if other than quarterly;

     (ix) whether the applicable class will be structured to amortize periodically or to
receive a payment of principal only at the end of the related Reset Period;

     (x) if in floating rate mode, the applicable Index;

     (xi) if in floating rate mode, the interval between Interest Rate Change Dates;

     (xii) if in floating rate mode, the applicable Interest Rate Determination Date;

     (xiii) if in fixed rate mode, the applicable fixed rate pricing benchmark;

     (xiv) if in fixed rate mode, the identities of the Eligible Swap Counterparties from
which bids will be solicited;

     (xv) if in floating rate mode, whether there will be a related Swap Agreement and, if
so, the identities of the Eligible Swap Counterparties from which bids will be solicited;

     (xvi) the applicable Day Count Basis;

     (xvii) the related All Hold Rate, if applicable;

     (xviii) if Definitive Notes are to be issued, the procedures for delivery and exchange
of Definitive Notes and for dealing with lost or mutilated notes; and

     (xix) any other relevant terms incidental to the foregoing (other than the related
Spread or fixed rate of interest, as applicable) for the next Reset Period;

provided that any interest rate mode, other than a floating rate based on LIBOR or a
Commercial Paper Rate, will require that the Rating Agency Condition be satisfied prior to the
delivery of the related Remarketing Terms Notice.

     (d) The Remarketing Agents will communicate all of the information established in Section 4(c)
above in the Remarketing Terms Notice required to be given in writing (including facsimile or other
electronic transmission if in accordance with each Clearing Agency’s standard procedures) to each
Clearing Agency (and the Luxembourg Stock Exchange if the Reset Rate Notes are then listed on such
exchange) or to the related Reset Rate Noteholders if Definitive Notes have been issued, as
applicable, the Indenture Trustee and the Rating Agencies on the Remarketing Terms Determination
Date.

     (e) In addition, prior to the Remarketing Terms Determination Date, the Administrator shall
cause the Schedule Replacement Order with respect to the related Reset Rate Notes to be delivered
to the Indenture Trustee, the Clearing Agencies and, if the related class of Reset Rate Notes is
then listed on the Luxembourg Stock Exchange, the Luxembourg Listing

Appendix A-2-4

 

Agent. Furthermore, the Administrator shall also prepare, on behalf of the Trust, a
preliminary Remarketing Prospectus, dated as of the Remarketing Terms Determination Date, setting
forth the relevant terms for the next Reset Period in addition to current information regarding the
pool of Trust Student Loans.

     Section 5. All Hold Rate: (a) On each Remarketing Terms Determination Date for a
class of Reset Rate Notes which is denominated in U.S. Dollars during both the then-current Reset
Period and the immediately following Reset Period, the Remarketing Agents, in consultation with the
Administrator, will establish the related All Hold Rate for that class of Reset Rate Notes. With
respect to any class of Reset Rate Notes that is either in Foreign Exchange Mode during the
then-current Reset Period or will be reset into Foreign Exchange Mode on the immediately following
Reset Date, all related Reset Rate Noteholders will be deemed to have tendered their Notes on the
related Reset Date, regardless of any desire by such Reset Rate Noteholders to retain their
ownership thereof, and no All Hold Rate will be applicable.

     (b) The All Hold Rate will only be applicable if 100% of the Reset Rate Noteholders of a class
deliver timely Hold Notices wherein they elect to hold their Reset Rate Notes for the next related
Reset Period. If applicable, the related interest rate for that class of Reset Rate Notes during
the immediately following Reset Period will not be less than the All Hold Rate. If the rate of
interest using the Spread or fixed rate of interest established on the Spread Determination Date is
higher than the All Hold Rate, then upon a successful remarketing of the related class of Reset
Rate Notes, all related Reset Rate Noteholders who delivered a Hold Notice agreeing to be subject
to the All Hold Rate instead will be entitled to the higher rate of interest during the immediately
following Reset Period.

     Section 6. Failed Remarketing: (a) With respect to each Reset Date for which the
holder of the related Call Option does not deliver the related Call Option Notice, a Failed
Remarketing will be declared by the Remarketing Agents and the provisions of this Section 6 will
apply if any of the conditions set forth in the definition of “Failed Remarketing” are applicable.
In order to prevent the declaration of a Failed Remarketing, the Remarketing Agents will have the
option, but not the obligation, to purchase any Reset Rate Notes tendered that they are not
otherwise able to remarket or with respect to which a committed purchaser defaults on their
purchase obligations.

     (b) At any time a Failed Remarketing is declared: (i) all related Reset Rate Notes will be
retained by the related Reset Rate Noteholders on the related Reset Date, regardless of any deemed
mandatory or voluntary tenders made to the Remarketing Agents, (ii) the Failed Remarketing Rate for
such class of Reset Rate Notes will apply for the related Reset Period and (iii) a Reset Period of
three months will be established. In addition, if a class of Reset Rate Notes are in Foreign
Exchange Mode at the time a Failed Remarketing is declared, the provisions of Sections 10(a)(i) and
(ii) shall also apply.

     (c) If there is a Failed Remarketing of a class of Reset Rate Notes, the related Reset Rate
Noteholders shall not be entitled to exercise any remedies as a result of the failure of their
class of Reset Rate Notes to be remarketed on the related Reset Date.

Appendix A-2-5

 

     Section 7. Call Option: (a) With respect to each Reset Date, the Depositor, as the
initial holder of the Excess Distribution Certificate, is hereby granted a Call Option for the
purchase of not less than 100% of the related class of Reset Rate Notes, exercisable at a price
equal to 100% of the Outstanding Amount of that class of Reset Rate Notes, less all amounts
distributed to the related Reset Rate Noteholders as a payment of principal with respect to the
related Distribution Date(s), plus any accrued and unpaid interest not paid by the Trust with
respect to the applicable Reset Date.

     (b) The Depositor, as the initial holder of the Excess Distribution Certificate, effective as
of the Closing Date, hereby transfers all of its right, title and interest in and to each Call
Option to SLM Education Credit Finance Corporation and then SLM Education Credit Finance
Corporation shall transfer all of its right, title and interest therein to SLM Investment
Corporation, which upon receipt thereof will dividend all of its right, title and interest in and
to each Call Option to SLM Corporation, and in acceptance of such transfer SLM Corporation also
hereby agrees to abide by all terms and conditions hereunder with respect to each Call Option as
set forth in these Reset Rate Note Procedures.

     (c) SLM Corporation may further transfer ownership of either Call Option at any time to one of
its Affiliates; provided that such permitted transferee has at no time in the past owned,
and is not obligated under either the Purchase Agreements or the Sale Agreement to transfer, an
interest in any of the Trust Student Loans.

     (d) A Call Option may be exercised with respect to the related class of Reset Rate Notes at
any time on or prior to the determination of the related Spread or fixed rate or the declaration of
a Failed Remarketing, as applicable, on the related Spread Determination Date by delivery of a Call
Option Notice; provided that such Call Option may not be exercised before the day following
the last Distribution Date immediately preceding the next applicable Reset Date. In addition, for
so long as the related class of Reset Rate Notes is listed on the Luxembourg Stock Exchange, the
holder of the related Call Option shall cause a notice of the exercise of the related Call Option
to be published in a leading newspaper having general circulation in Luxembourg (which is expected
to be d’Wort). Once written notice of the exercise of a Call Option is given, such exercise may
not be rescinded.

     (e) All amounts due and owing to the related Reset Rate Noteholders shall be remitted on or
before the related Reset Date by the holder of the related Call Option in accordance with the
standard procedures established by the Clearing Agencies for transfer of securities to ensure
timely payment of principal to the related Reset Rate Noteholders on the related Reset Date.

     (f) In the event that a Call Option is exercised with respect to a class of Reset Rate Notes
then in Foreign Exchange Mode, the holder of such Call Option shall deliver the U.S. Dollar
Equivalent Principal Amount remaining after all payments of principal are made with respect to the
related Distribution Date, and interest (if applicable) owing to the Reset Rate Noteholders to the
Remarketing Agents for delivery to the Swap Counterparties to the related Currency Swap Agreements,
who shall exchange such amount into the applicable currency for delivery to the related Reset Rate
Noteholders; provided, however, that if there are no such Currency Swap Agreements
then in effect, the holder of such Call Option shall remit all amounts

Appendix A-2-6

 

due and owing to the Remarketing Agents for delivery to the Reset Rate Noteholders in the
applicable currency on or before the Reset Date in accordance with the standard procedures
established by the related Clearing Agencies for transfer of securities to ensure timely payment of
principal to the related Reset Rate Noteholders on the related Reset Date.

     (g) If a Call Option is exercised with respect to any class of Reset Rate Notes, (i) the
interest rate on that class of Reset Rate Notes will be the Call Rate, (ii) that class of Reset
Rate Notes will be denominated in U.S. Dollars and (iii) a Reset Period of three months will be
established. At the end of such three month Reset Period, the holder of the related Call Option
may either remarket the related class of Reset Rate Notes pursuant to the remarketing procedures
set forth herein and in the Remarketing Agreement, or retain that class of Reset Rate Notes for one
or more successive three-month Reset Periods at the then-current Call Rate. In the event the
holder of the related Call Option chooses to remarket any class of Reset Rate Notes, such holder
shall be solely responsible for all costs and expenses relating to the preparation of any new
offering document and any other related costs and expenses associated with such remarketing, other
than the fees of the Remarketing Agents, as more fully set forth in Section 3 of the Remarketing
Agreement.

     (h) Other than in connection with the exercise of a Call Option, neither SLM Corporation, SLM
ECFC, VG Funding, the Trust or any of their Affiliates shall have the ability to purchase any Reset
Rate Notes tendered to the Remarketing Agents.

     Section 8. Hold Notice: For a class of Reset Rate Notes that is denominated in U.S.
Dollars during both the then-current Reset Period and the immediately following Reset Period, the
related Reset Rate Noteholders will have the option to deliver a Hold Notice to any Remarketing
Agent setting forth their desire to hold their Reset Rate Notes for the next Reset Period at a rate
of interest not less than the All Hold Rate and on the terms set forth in the related Remarketing
Terms Notice, at any time on or after the Remarketing Terms Determination Date until the Notice
Date. Such Hold Notice may be delivered as an oral statement to a Remarketing Agent, if
subsequently confirmed in writing within 24 hours, which confirmation may be in the form of an
e-mail if timely received by the Remarketing Agent. If a Reset Rate Noteholder does not timely
deliver a Hold Notice to a Remarketing Agent (such Hold Notice not to be considered delivered until
actually received by such Remarketing Agent), that Reset Rate Noteholder will be deemed to have
tendered for remarketing 100% of the Outstanding Amount of its related class of Reset Rate Notes.
Any duly delivered Hold Notice will be irrevocable, but will be subject to a mandatory tender of
the applicable Reset Rate Notes pursuant to any exercise of the related Call Option. All of the
Reset Rate Notes of an applicable class, whether tendered or not, will bear interest during any
related Reset Period on the same terms.

     Section 9. Spread Determination Date: (a) On each Spread Determination Date, unless
a Failed Remarketing has been declared or the holder of the related Call Option has delivered the
related Call Option Notice, the Administrator, the Trust and the Remarketing Agents will enter into
a Supplemental Remarketing Agency Agreement.

     (b) If pursuant to the Remarketing Terms Notice, the Remarketing Agents, in consultation with
the Administrator, have determined that a class of Reset Rate Notes is to be reset to bear a fixed
rate of interest, then the applicable fixed rate of interest for the

Appendix A-2-7

 

corresponding Reset Period will be determined on the Spread Determination Date by adding (i)
the applicable spread as determined by the Remarketing Agents on the Spread Determination Date and
(ii) the yield to maturity on the Spread Determination Date of the applicable fixed rate pricing
benchmark, selected by the Remarketing Agents, as having an expected weighted average life based on
a scheduled maturity at the next Reset Date, which would be used in accordance with customary
financial practice in pricing new issues of asset-backed securities of comparable average life;
provided that such fixed rate of interest will in no event be lower than the related All
Hold Rate, if applicable. The Remarketing Agents shall determine the applicable fixed rate of
interest for such class of Reset Rate Notes (by reference to the applicable fixed rate pricing
benchmark plus or minus the spread determined on the Remarketing Terms Determination Date) on each
Spread Determination Date irrespective of whether no remarketing will occur as the result of the
application of the All Hold Rate, if applicable. In addition, on the related Spread Determination
Date, the Remarketing Agents, in consultation with the Administrator, shall determine the
Supplemental Interest Account Deposit Amount, if any, for that class of Reset Rate Notes.

     (c) If pursuant to the Remarketing Terms Notice, the Remarketing Agents, in consultation with
the Administrator, have determined that a class of Reset Rate Notes is to be reset to bear a
floating rate of interest, then, on the related Spread Determination Date, the Remarketing Agents
will establish the applicable Spread to be added or subtracted from the applicable Index;
provided that such floating rate of interest will in no event be lower than the related All
Hold Rate, if applicable. In addition, on the related Spread Determination Date, the Remarketing
Agents, in consultation with the Administrator, shall determine the Supplemental Interest Account
Deposit Amount, if any, for that class of Reset Rate Notes.

     (d) If required pursuant to Section 2(c) above, on the related Reset Date the Trust shall
enter into either (i) one or more Currency Swap Agreements, if the related class of Reset Rate
Notes is to be reset in Foreign Exchange Mode, or (ii) one or more Interest Rate Swap Agreements if
the related class of Reset Rate Notes is to be reset in U.S. Dollars and to bear interest at a
fixed rate or at a floating rate other than one based on LIBOR or a Commercial Paper Rate, with an
Eligible Swap Counterparty.

     (e) On or immediately following the Spread Determination Date, the Remarketing Agents will
communicate in writing (including facsimile or other electronic transmission if in accordance with
each Clearing Agency’s standard procedures) the contents of the Spread Determination Notice to each
Clearing Agency (and the Luxembourg Stock Exchange if the related class of Reset Rate Notes is then
listed on such exchange) or the Reset Rate Noteholders if Definitive Notes have been issued, as
applicable, with instructions to distribute such notices to its related participants, or to the
related Reset Rate Noteholders, as applicable, the Indenture Trustee and the Rating Agencies. The
Spread Determination Date Notice will contain: (i) the determined Spread or fixed rate of interest,
as the case may be, or, if applicable, a statement that the All Hold Rate or the Failed Remarketing
Rate will be in effect for the immediately following Reset Period, (ii) any applicable currency
exchange rate, (iii) the identity of any selected Swap Counterparty or Counterparties, if
applicable, (iv) if applicable, the floating rate (or rates) of interest to be due to each selected
Swap Counterparty with respect to each Distribution Date during the immediately following Reset
Period and (v) any other information that the Administrator or the Remarketing Agents deem
applicable. Furthermore, for each class of Reset

Appendix A-2-8

 

Rate Notes to be reset in Foreign Exchange Mode, the currency exchange rate, the Extension
Rate due to each related Currency Swap Counterparty and the Failed Remarketing Rate applicable to
such class for the immediately following Reset Period will be determined pursuant to the terms of
the related Currency Swap Agreement and contained in the Spread Determination Notice. In addition,
if required for the immediately following Reset Period, on or before the related Spread
Determination Date the Administrator will arrange for new or additional securities identification
codes to be obtained as required. Furthermore, the Administrator, on behalf of the Trust, will
prepare the final Remarketing Prospectus, dated the Spread Determination Date, setting forth the
terms of the Reset Rate Notes for the upcoming Reset Period.

     Section 10. Swap Agreements:

     (a) If a class of Reset Rate Notes is to be reset in Foreign Exchange Mode, on the related
Reset Date, the Administrator will enter into (not in its individual capacity, but solely as
Administrator on behalf of the Trust) or will instruct the Eligible Lender Trustee to enter into
(not in its individual capacity, but solely as Eligible Lender Trustee) one or more Currency Swap
Agreements for the related Reset Period.

     (i) Each Currency Swap Counterparty which is party to a related Currency Swap Agreement
will be entitled to receive: (A) on the effective date of such Currency Swap Agreement, all
secondary market trade proceeds received from purchasers of the related class of Reset Rate
Notes in the applicable currency, (B) with respect to each applicable Distribution Date, (x)
an interest rate of Three-Month LIBOR, plus or minus a spread, as determined from the
bidding process described in Section 10(d) below (other than as may be interpolated for an
initial or final calculation period under that Currency Swap Agreement), multiplied by the
U.S. Dollar Equivalent Principal Amount of the related class of Reset Rate Notes, and
multiplied by a fraction determined by the number of days in the applicable Accrual Period
and the applicable Day Count Basis and (y) all payments of principal in U.S. Dollars that
are allocated to the related class of Reset Rate Notes; provided that if the related
class of Reset Rate Notes is then structured not to receive a payment of principal until the
end of the related Reset Period, all principal payments allocated to the Reset Rate Notes on
any Distribution Date will be deposited into the related Accumulation Account and paid to
the related Swap Counterparties on or about the next Reset Date as set forth in the related
Currency Swap Agreements (including all sums required to be deposited therein on the Reset
Date), but excluding all Investment Earnings thereon, and (C) on a Reset Date corresponding
to a successful remarketing or an exercise of the related Call Option, all U.S. Dollar
currency equivalent of all secondary market trade proceeds or proceeds from the exercise of
the related Call Option, as applicable, received from the Remarketing Agents directly from
purchasers of the related class of Reset Rate Notes (if in U.S. Dollars), from the new
Currency Swap Counterparty or Counterparties, as applicable (if in non-U.S. Dollar currency)
or from the holder of the related Call Option, as applicable. With respect to the Initial
Currency Swap Agreements, each applicable Initial Currency Swap Counterparty shall be
entitled to receive on the Closing Date in lieu of secondary market proceeds described in
clause (A) above, all applicable non-U.S. Dollar currency proceeds received by the Trust
from purchasers of the related Reset Rate Notes (which shall be net of any applicable
underwriting commission).

Appendix A-2-9

 

     (ii) In addition, each related Currency Swap Counterparty will be obligated to pay to
the Trust (for payment to the related Reset Rate Noteholders, if applicable): (A) on the
effective date of such Currency Swap Agreement, the U.S. Dollar equivalent of all secondary
market trade proceeds received from purchasers of the related Reset Rate Notes, (B) with
respect to each applicable Distribution Date, (x) their applicable percentage of the
applicable rate of interest on the related class of Reset Rate Notes multiplied by the U.S.
Dollar Equivalent Principal Amount of the related class of Reset Rate Notes and multiplied
by a fraction determined by the number of days in the applicable Accrual Period and the
applicable Day Count Basis, and (y) the applicable non-U.S. Dollar currency equivalent of
the U.S. Dollars such Swap Counterparty concurrently receives from the Trust as a payment of
principal allocated to the related class of Reset Rate Noteholders (including, on the
related Maturity Date for such class of Reset Rate Notes, if a Currency Swap Agreement is
then in effect, the remaining Outstanding Amount of such class of Reset Rate Notes) but only
to the extent that the required U.S. Dollar Equivalent Principal Amount is received from the
Trust on such date, at an exchange rate to be set on the effective date of and set forth in
the related Currency Swap Agreement, (C) on the second Business Day following a Distribution
Date that is also a Reset Date (other than for any Reset Period following a Reset Date upon
which a Failed Remarketing has occurred, up to and including the Reset Date resulting in a
successful remarketing or an exercise of the related Call Option) their applicable
percentage of interest at the interest rate from and including the related Reset Date to,
but excluding, the second Business Day following such Reset Date, and (D) on a related Reset
Date corresponding to a successful remarketing or an exercise of the related Call Option,
the applicable currency equivalent of all U.S. Dollar secondary market trade proceeds
received by the Trust from the purchasers of the related Reset Rate Notes or proceeds
received by the Trust from the exercise of the related Call Option, as applicable, at an
exchange rate to be set on the effective date of and set forth in the related Currency Swap
Agreement. With respect to each Initial Currency Swap Agreement, the related Initial
Currency Swap Counterparty shall be obligated to pay to the Trust on the Closing Date, in
lieu of the payments described in clause (A) above, the U.S. Dollar Equivalent Principal
Amount of the applicable non-U.S. Dollar currency received by the Trust from the sale of the
applicable class of Reset Rate Notes. For any Reset Period following a Reset Date upon
which a Failed Remarketing has occurred, up to any including the Reset Date resulting in a
successful remarketing or an exercise of the related Call Option for that class of Reset
Rate Notes, payments of interest and principal to that class of Reset Rate Noteholders will
be made on the second Business Day following the related Reset Date without the payment of
any additional interest.

     (b) [Reserved.]

     (c) On each Reset Date if a class of Reset Rate Notes is to be reset in U.S. Dollars, and a
Swap Agreement is required pursuant to Sections 2(c) and 9(d) above, then the Administrator will
enter into (not in its individual capacity, but solely as Administrator on behalf of the Trust) or
will instruct the Eligible Lender Trustee to enter into (not in its individual capacity, but solely
as Eligible Lender Trustee), one or more Interest Rate Swap Agreements for the next Reset Period to
facilitate the Trust’s ability to pay applicable interest at the related interest rate.

Appendix A-2-10

 

     (i) Each Swap Counterparty which is party to a related Interest Rate Swap Agreement
will be entitled to receive on each Distribution Date an interest rate of Three-Month LIBOR,
plus or minus a spread, as determined from the bidding process described in Section 10(d)
below, multiplied by the Outstanding Amount of the related class of Reset Rate Notes and
multiplied by a fraction determined by the number of days in the applicable Accrual Period
and the applicable Day Count Basis.

     (ii) In addition, each related Swap Counterparty which is a party to a related Interest
Rate Swap Agreement will be obligated to pay to the Trust on each Distribution Date, the
applicable rate of interest on the related class of Reset Rate Notes multiplied by the
Outstanding Amount of the related class of Reset Rate Notes and multiplied by a fraction
determined by the number of days in the applicable Accrual Period and the applicable Day
Count Basis.

     (d) Other than with respect to the Initial Currency Swap Agreements, the Remarketing Agents,
in consultation with the Administrator, in determining the Swap Counterparty to each required Swap
Agreement, will solicit bids from at least three Eligible Swap Counterparties and will select the
lowest of these bids to provide the interest rate swap and/or currency exchange swap(s). If the
lowest bidder specifies a notional amount that is less than the Outstanding Amount of the related
class of Reset Rate Notes, the Remarketing Agents, in consultation with the Administrator, may
select more than one Eligible Swap Counterparty, but only to the extent that such additional
Eligible Swap Counterparties have provided the next lowest received bid or bids, and enter into
more than one Swap Agreement that result in the Rating Agency Condition being satisfied.

     (e) Other than with respect to the Initial Currency Swap Agreements, it is a condition
precedent to the entering into of any Swap Agreement and the setting of the amount to be paid to
the related Swap Counterparty that the Rating Agency Condition is satisfied. No Swap Agreement
will be entered into or caused to be entered into by the Trust, the Administrator on its behalf or
the Remarketing Agents, for any Reset Period where either the related Call Option has been
exercised or a Failed Remarketing has been declared.

     (f) Each Currency Swap Agreement will terminate at the earliest to occur of (i) the next
succeeding Reset Date for which there is a successful remarketing, (ii) the Reset Date for which
the related Call Option is exercised, (iii) the Distribution Date on which the Outstanding Amount
of the related class of Reset Rate Notes is reduced to zero (including as the result of the
optional purchase of the remaining Trust Student Loans by the Servicer or an auction of the Trust
Student Loans by the Indenture Trustee) or (iv) the Maturity Date of the related class of Reset
Rate Notes. No Currency Swap Agreement will terminate solely due to the declaration of a Failed
Remarketing. Each Interest Rate Swap Agreement will terminate on the earliest to occur of the next
Reset Date, or the occurrence of an event specified in clause (iii) or (iv) above.

     (g) With respect to each Currency Swap Agreement, and in the event that a Failed Remarketing
is declared, the rate of interest due to each related Currency Swap Counterparty from the Trust on
each Distribution Date will be increased to the Extension Rate and the rate due to the Trust from
each related Currency Swap Counterparty will change to equal the Failed Remarketing Rate.

Appendix A-2-11

 

     Section 11. Accumulation Accounts; Supplemental Interest Accounts: (a) If, on any
Distribution Date, principal would be payable to a class of Reset Rate Notes which is then
structured not to receive a payment of principal until the end of the related Reset Period, that
principal (subject to sufficient Available Funds therefor) will be allocated to that class of Reset
Rate Notes and deposited into the related Accumulation Account, where it will remain until the next
Reset Date for that class (except that if a class of Reset Rate Notes is in Foreign Exchange Mode,
principal will be paid according to the provisions of Sections 10(a)(i) and (a)(ii) above), unless
an Event of Default under the Indenture or a sale of the Trust Estate pursuant to Section 6.1 of
the Administration Agreement has occurred (in which case the Indenture Trustee will distribute all
sums on deposit therein (exclusive of Investment Earnings) to the related Reset Rate Noteholders in
accordance with the provisions of Section 5.4(b) of the Indenture or Section 6.1 of the
Administration Agreement, as applicable).

     (b) On each Reset Date, for a class of Reset Rate Notes that was structured during the
preceding Reset Period not to receive a payment of principal until the end of the related Reset
Period, all sums, if any, then on deposit in the related Accumulation Account, including any
allocation of principal made on the same date, but less any Investment Earnings, will be
distributed by the Indenture Trustee, at the direction of the Administrator, as set forth in
Section 2.8 of the Administration Agreement, (x) to the holders of that class of Reset Rate Notes,
as of the related Record Date, or (y) if a class of Reset Rate Notes is then in Foreign Exchange
Mode (including during the related initial Reset Period), to the related Currency Swap Counterparty
or Counterparties for the benefit of such Reset Rate Noteholders as of the Record Date pursuant to
the provisions of Section 10(a)(i) and (a)(ii) above, in reduction of principal of such Reset Rate
Notes; provided that in the event on any Distribution Date the amount on deposit in the
related Accumulation Account (excluding any Investment Earnings) would equal the Outstanding Amount
of that class of Reset Rate Notes, no additional amounts will be deposited into the related
Accumulation Account and all amounts therein, less any Investment Earnings, will be distributed by
the Indenture Trustee, at the direction of the Administrator, as set forth in Section 2.8 of the
Administration Agreement, on the next related Reset Date to the related Reset Rate Noteholders or
the related Currency Swap Counterparty or Counterparties (as applicable), and on such Reset Date
that class of Reset Rate Notes will no longer be Outstanding. Amounts on deposit in an
Accumulation Account (exclusive of Investment Earnings) may be used only to pay principal on the
related class of Reset Rate Notes (or to the related Currency Swap Counterparty or Counterparties)
and for no other purpose. On each Distribution Date, all Investment Earnings on deposit in an
Accumulation Account will be withdrawn by the Indenture Trustee, at the direction of the
Administrator and deposited into the Collection Account.

     (c) The Indenture Trustee, subject to sufficient available funds therefor, at the direction of
the Administrator and pursuant to Section 2.10(d)(ii) of the Administration Agreement, will deposit
into a Supplemental Interest Account, the related Supplemental Interest Account Deposit Amount. On
each Distribution Date, all sums (which shall include Investment Earnings) on deposit in each
Supplemental Interest Account will be withdrawn by the Indenture Trustee, at the direction of the
Administrator, as set forth in Section 2.10(d)(iii) of the Administration Agreement, and deposited
into the Collection Account.

     Section 12. Remarketing Agents; Remarketing Fee Account: (a)The initial Remarketing
Agents, appointed pursuant to the terms of the Remarketing Agreement, are Credit

Appendix A-2-12

 

Suisse First Boston LLC and Deutsche Bank Securities Inc. The terms and conditions of the
Remarketing Agreement will govern the duties and obligations of the Remarketing Agents. The
Administrator, the Trust and the Remarketing Agents will enter into on each (A) related Remarketing
Terms Determination Date and a related Remarketing Agency Agreement, in form and substance
substantially the same as Appendix B to the Remarketing Agreement, unless (i) a Failed Remarketing
is declared, or (ii) the holder of the related Call Option has delivered the related Call Option
Notice on or prior to such date; and (B) related Spread Determination Date, a Supplemental
Remarketing Agency Agreement, in form and substance substantially the same as Appendix C to the
Remarketing Agreement, unless (i) a Failed Remarketing is declared, (ii) the holder of the related
Call Option has delivered the related Call Option Notice on or prior to such date, or (iii) if
applicable, 100% of the related Reset Rate Noteholders have timely delivered a Hold Notice and the
All Hold Rate will apply for the next related Reset Period.

     (b) [Reserved.]

     (c) Excluding all Reset Rate Notes of a class for which a Remarketing Agent has received a
timely delivered Hold Notice, if applicable (or if the holder of the related Call Option has
delivered the related Call Option Notice), on the Reset Date that commences each Reset Period, each
related Reset Rate Note will be automatically tendered, or deemed tendered, to the relevant
Remarketing Agent for remarketing by such Remarketing Agent on the Reset Date at 100% of its
Outstanding Amount. If the related class of Reset Rate Notes is held in book-entry form, 100% of
the Outstanding Amount of such Reset Rate Notes will be paid by the Remarketing Agents in
accordance with the standard procedures of the applicable Clearing Agencies.

     (d) The Remarketing Agents will attempt, on a reasonable efforts basis and in accordance with
the terms and conditions of the Remarketing Agreement and the related Remarketing Agency Agreement,
to remarket the tendered Reset Rate Notes of the applicable class at a price equal to 100% of the
Outstanding Amount of the related class of Reset Rate Notes so tendered.

     (e) Purchasers of the related class of Reset Rate Notes will be credited with their positions
on the applicable Reset Date with respect to positions held through DTC or on the next Business Day
with respect to positions held through the European Clearing Systems. No payment delay to existing
Reset Rate Noteholders holding U.S. Dollar-denominated Reset Rate Notes through DTC will occur on
the related Reset Date for any class of Reset Rate Notes denominated in U.S. Dollars during the
immediately following Reset Period.

     (f) Each of the Remarketing Agents, in its individual or any other capacity, may buy, sell,
hold and deal in any class of Reset Rate Notes, including, but not limited to, purchasing any
tendered Reset Rate Notes as part of the remarketing process. Any Remarketing Agent that owns a
Reset Rate Note may exercise any vote or join in any action which any beneficial owner of such
class of Reset Rate Notes may be entitled to exercise or take with like effect as if it did not act
in any capacity under the Remarketing Agreement or Remarketing Agency Agreement. Any Remarketing
Agent, in its individual capacity, either as principal or agent, may also engage in or have an
interest in any financial or other transaction with the Trust, the Depositor, the Servicer, the
Indenture Trustee (in its individual capacity), the Eligible Lender Trustee (in its

Appendix A-2-13

 

individual capacity) or the Administrator as freely as if it did not act in any capacity under
the Remarketing Agreement or any Remarketing Agency Agreement. No Reset Rate Noteholder or
beneficial owner of any Reset Rate Note will have any rights or claims against any Remarketing
Agent as a result of such Remarketing Agent’s not purchasing any tendered Reset Rate Note, which
results in the declaration of a Failed Remarketing.

     (g) Each of the Remarketing Agents will be entitled to receive a fee in connection with their
services rendered for each successful remarketing of a class of Reset Rate Notes in the amount set
forth in the Remarketing Agreement and the related Remarketing Agency Agreement. Subject to the
terms and conditions set forth in the Remarketing Agreement, the Administrator, in its sole
discretion, may change the Remarketing Agents for any class of Reset Rate Notes for any Reset
Period at any time on or before the related Remarketing Terms Determination Date. In addition, the
Administrator will appoint one or more additional Remarketing Agents, if necessary, for a Reset
Date when the related class of Reset Rate Notes will be remarketed in a non-U.S. Dollar currency.
Furthermore, a Remarketing Agent may resign at any time; provided that no resignation may
become effective on a date that is later than 15 Business Days prior to a Remarketing Terms
Determination Date.

     (h) In accordance with Section 2.3(i) of the Administration Agreement, on the Closing Date,
the Trust will establish the Remarketing Fee Account as an asset of the Trust in the name of the
Indenture Trustee, for the benefit of the Remarketing Agents and the Reset Rate Noteholders. The
fees associated with each successful remarketing will be payable directly to the Remarketing Agents
from amounts on deposit from time to time in the Remarketing Fee Account. On each applicable
Distribution Date, Available Funds will be deposited into the Remarketing Fee Account, in the
priority set forth in Section 2.8(c) of the Administration Agreement, in an amount up to the
Quarterly Funding Amount; provided that if the amount on deposit in the Remarketing Fee
Account, after the payment of any remarketing fees therefrom, exceeds the sum of the Reset Period
Target Amount for all classes of Reset Rate Notes, such excess will be withdrawn on the related
Distribution Date, deposited into the Collection Account and included in Available Funds for that
Distribution Date. All Investment Earnings on deposit in the Remarketing Fee Account will be
withdrawn on the next Distribution Date, deposited into the Collection Account and included in
Available Funds for that Distribution Date. In the event that the fees owed to any Remarketing
Agent on a Reset Date exceeds the amount then on deposit in the Remarketing Fee Account, such
shortfall shall be paid from Available Funds on future Distribution Dates in the priority set forth
in Section 2.8(n) of the Administration Agreement. The Trust shall also be responsible for certain
remarketing costs and expenses to the extent set forth in Section 3 of the Remarketing Agreement,
which shall be paid on each Distribution Date, to the extent of Available Funds, at the priority
set forth in Section 2.8(o) of the Administration Agreement.

     Section 13. Eligible Lender Trustee: The Eligible Lender Trustee is hereby authorized
and directed to execute and deliver, not in its individual capacity, but solely as Eligible Lender
Trustee on behalf of the Trust, the Remarketing Agreement, any Swap Agreements (including the
Initial Currency Swap Agreements) and any required supplement, amendment or replacement thereof,
and all Remarketing Agency Agreements and Supplemental Remarketing Agency Agreements as the
Administrator, in writing and from time to time, shall instruct the Eligible Lender Trustee to
execute. The Eligible Lender Trustee shall not be liable to any party, any third

Appendix A-2-14

 

party or any Noteholder for any such actions taken at the written instruction of the
Administrator. Notwithstanding the foregoing, in the event that the Eligible Lender Trustee
declines or fails to execute or deliver any such document, instrument, certificate or agreement as
instructed by the Administrator, the Administrator is hereby authorized, in its sole discretion, to
execute and deliver, not in its individual capacity but solely as Administrator on behalf of the
Trust, all such required documents, instruments, certificates and agreements. The foregoing
authorization shall represent a limited power of attorney granted by the Trust to the Administrator
to act on its behalf, and the Administrator shall not be liable to any party, any third party or
any Noteholder for any such actions taken in good faith and in accordance with these Reset Rate
Note Procedures.

Appendix A-2-15

 

SCHEDULE A

Schedule of Trust Student Loans

[See Schedule A to the Bill of Sale

(Attachment C to the Sale Agreement)]

Schedule A

 

 

SCHEDULE B

Location of Trust Student Loan Files

(See Attachment B to the Servicing Agreement)

 Schedule B

 

 

EXHIBIT A

Forms of Notes

Exhibit A

 

 

EXHIBIT B

Form of Note Depository Agreement for U.S. Dollar Denominated Notes

Exhibit B

 

 

EXHIBIT C

Form of Note Depository Agreement for Notes Denominated in a

Currency Other than U.S. Dollars

Exhibit Cexv10w1

 

Exhibit 10.1

 

Eagle Materials Inc.

$40,000,000 5.25% Series 2005A Senior Notes, Tranche A

due November 15, 2012

$80,000,000 5.38% Series 2005A Senior Notes, Tranche B

due November 15, 2015

$80,000,000 5.48% Series 2005A Senior Notes, Tranche C

due November 15, 2017

 

Note Purchase Agreement

 

Dated as of November 15, 2005

 

 

 

Table of Contents

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page	 
	Section 1.	 	Authorization of Notes
	 	 	 1	 
	 	 	 
	 	 	 	 
	     Section 1.1.	 	Description of Notes
	 	 	1	 
	     Section 1.2.	 	Interest Rate
	 	 	2	 
	 	 	 
	 	 	 	 
	Section 2.	 	Sale and Purchase of Notes
	 	 	 2	 
	 	 	 
	 	 	 	 
	     Section 2.1.	 	Series 2005A Notes
	 	 	2	 
	     Section 2.1.	 	Additional Series of Notes
	 	 	2	 
	     Section 2.3.	 	Subsidiary Guaranty
	 	 	4	 
	 	 	 
	 	 	 	 
	Section 3.	 	Closing
	 	 	 4	 
	 	 	 
	 	 	 	 
	Section 4.	 	Conditions to Closing
	 	 	 5	 
	 	 	 
	 	 	 	 
	     Section 4.1.	 	Representations and Warranties
	 	 	5	 
	     Section 4.2.	 	Performance; No Default
	 	 	5	 
	     Section 4.3.	 	Compliance Certificates
	 	 	5	 
	     Section 4.4.	 	Opinions of Counsel
	 	 	6	 
	     Section 4.5.	 	Purchase Permitted By Applicable Law, Etc
	 	 	6	 
	     Section 4.6.	 	Sale of Other Notes
	 	 	6	 
	     Section 4.7.	 	Payment of Special Counsel Fees
	 	 	6	 
	     Section 4.8.	 	Private Placement Number
	 	 	7	 
	     Section 4.9.	 	Changes in Corporate Structure
	 	 	7	 
	     Section 4.10.	 	Subsidiary Guaranty
	 	 	7	 
	     Section 4.11.	 	Funding Instructions
	 	 	7	 
	     Section 4.12.	 	Proceedings and Documents
	 	 	7	 
	 	 	 
	 	 	 	 
	Section 5.	 	Representations and Warranties of the Company
	 	 	 7	 
	 	 	 
	 	 	 	 
	     Section 5.1.	 	Organization; Power and Authority
	 	 	7	 
	     Section 5.2.	 	Authorization, Etc
	 	 	8	 
	     Section 5.3.	 	Disclosure
	 	 	8	 
	     Section 5.4.	 	Organization and Ownership of Shares of Subsidiaries; Affiliates
	 	 	8	 
	     Section 5.5.	 	Financial Statements; Material Liabilities
	 	 	9	 
	     Section 5.6.	 	Compliance with Laws, Other Instruments, Etc
	 	 	9	 
	     Section 5.7.	 	Governmental Authorizations, Etc
	 	 	9	 
	     Section 5.8.	 	Litigation; Observance of Agreements, Statutes and Orders
	 	 	9	 
	     Section 5.9.	 	Taxes
	 	 	10	 
	     Section 5.10.	 	Title to Property; Leases
	 	 	10	 
	     Section 5.11.	 	Licenses, Permits, Etc
	 	 	10	 
	     Section 5.12.	 	Compliance with ERISA
	 	 	11	 

-i-

 

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page	 
	     Section 5.13.	 	Private Offering by the Company
	 	 	11	 
	     Section 5.14.	 	Use of Proceeds; Margin Regulations
	 	 	12	 
	     Section 5.15.	 	Existing Debt; Future Liens
	 	 	12	 
	     Section 5.16.	 	Foreign Assets Control Regulations, Etc
	 	 	13	 
	     Section 5.17.	 	Status under Certain Statutes
	 	 	13	 
	     Section 5.18.	 	Environmental Matters
	 	 	13	 
	     Section 5.19.	 	Notes Rank Pari Passu
	 	 	14	 
	 	 	 
	 	 	 	 
	Section 6.	 	Representations of the Purchaser
	 	 	14	 
	 	 	 
	 	 	 	 
	     Section 6.1.	 	Purchase for Investment
	 	 	14	 
	     Section 6.2.	 	Accredited Investor
	 	 	14	 
	     Section 6.3.	 	Source of Funds
	 	 	14	 
	 	 	 
	 	 	 	 
	Section 7.	 	Information as to Company
	 	 	16	 
	 	 	 
	 	 	 	 
	     Section 7.1.	 	Financial and Business Information
	 	 	16	 
	     Section 7.2.	 	Officer’s Certificate
	 	 	19	 
	     Section 7.3.	 	Visitation
	 	 	19	 
	 	 	 
	 	 	 	 
	Section 8.	 	Payment of the Notes
	 	 	20	 
	 	 	 
	 	 	 	 
	     Section 8.1.	 	Required Prepayments
	 	 	20	 
	     Section 8.2.	 	Optional Prepayments with Make-Whole Amount
	 	 	20	 
	     Section 8.3.	 	Allocation of Partial Prepayments
	 	 	20	 
	     Section 8.4.	 	Maturity; Surrender, Etc.
	 	 	20	 
	     Section 8.5.	 	Purchase of Notes
	 	 	21	 
	     Section 8.6.	 	Make-Whole Amount for the Series 2005A Notes
	 	 	21	 
	 	 	 
	 	 	 	 
	Section 9.	 	Affirmative Covenants
	 	 	22	 
	 	 	 
	 	 	 	 
	     Section 9.1.	 	Compliance with Law
	 	 	22	 
	     Section 9.2.	 	Insurance
	 	 	23	 
	     Section 9.3.	 	Maintenance of Properties
	 	 	23	 
	     Section 9.4.	 	Payment of Taxes and Claims
	 	 	23	 
	     Section 9.5.	 	Corporate Existence, Etc
	 	 	23	 
	     Section 9.6.	 	Designation of Subsidiaries
	 	 	24	 
	     Section 9.7.	 	Notes to Rank Pari Passu
	 	 	24	 
	     Section 9.8.	 	Additional Subsidiary Guarantors
	 	 	24	 
	     Section 9.9.	 	Books and Records
	 	 	25	 
	 	 	 
	 	 	 	 
	Section 10.	 	Negative Covenants
	 	 	25	 
	 	 	 
	 	 	 	 
	     Section 10.1.	 	Consolidated Debt to Consolidated EBITDA
	 	 	25	 
	     Section 10.2.	 	Priority Debt
	 	 	25	 
	     Section 10.3.	 	Limitation on Liens
	 	 	25	 
	     Section 10.4.	 	Sales of Assets
	 	 	27	 
	     Section 10.5.	 	Merger and Consolidation
	 	 	28	 
	     Section 10.6.	 	Transactions with Affiliates
	 	 	29	 

-ii-

 

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page	 
	     Section 10.7.	 	Terrorism Sanctions Regulations
	 	 	29	 
	 	 	 
	 	 	 	 
	Section 11.	 	Events of Default
	 	 	29	 
	 	 	 
	 	 	 	 
	Section 12.	 	Remedies on Default, Etc
	 	 	32	 
	 	 	 
	 	 	 	 
	     Section 12.1.	 	Acceleration
	 	 	32	 
	     Section 12.2.	 	Other Remedies
	 	 	32	 
	     Section 12.3.	 	Rescission
	 	 	32	 
	     Section 12.4.	 	No Waivers or Election of Remedies, Expenses, Etc
	 	 	33	 
	 	 	 
	 	 	 	 
	Section 13.	 	Registration; Exchange; Substitution of Notes
	 	 	33	 
	 	 	 
	 	 	 	 
	     Section 13.1.	 	Registration of Notes
	 	 	33	 
	     Section 13.2.	 	Transfer and Exchange of Notes
	 	 	33	 
	     Section 13.3.	 	Replacement of Notes
	 	 	34	 
	 	 	 
	 	 	 	 
	Section 14.	 	Payments on Notes
	 	 	34	 
	 	 	 
	 	 	 	 
	     Section 14.1.	 	Place of Payment
	 	 	34	 
	     Section 14.2.	 	Home Office Payment
	 	 	34	 
	 	 	 
	 	 	 	 
	Section 15.	 	Expenses, Etc
	 	 	35	 
	 	 	 
	 	 	 	 
	     Section 15.1.	 	Transaction Expenses
	 	 	35	 
	     Section 15.2.	 	Survival
	 	 	35	 
	 	 	 
	 	 	 	 
	Section 16.	 	Survival of Representations and Warranties; Entire Agreement
	 	 	36	 
	 	 	 
	 	 	 	 
	Section 17.	 	Amendment and Waiver
	 	 	36	 
	 	 	 
	 	 	 	 
	     Section 17.1.	 	Requirements
	 	 	36	 
	     Section 17.2.	 	Solicitation of Holders of Notes
	 	 	36	 
	     Section 17.3.	 	Binding Effect, Etc
	 	 	37	 
	     Section 17.4.	 	Notes Held by Company, Etc
	 	 	37	 
	 	 	 
	 	 	 	 
	Section 18.	 	Notices
	 	 	38	 
	 	 	 
	 	 	 	 
	Section 19.	 	Reproduction of Documents
	 	 	38	 
	 	 	 
	 	 	 	 
	Section 20.	 	Confidential Information
	 	 	39	 
	 	 	 
	 	 	 	 
	Section 21.	 	Substitution of Purchaser
	 	 	40	 
	 	 	 
	 	 	 	 
	Section 22.	 	Miscellaneous
	 	 	40	 
	 	 	 
	 	 	 	 

-iii-

 

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page	 
	     Section 22.1.	 	Successors and Assigns
	 	 	40	 
	     Section 22.2.	 	Payments Due on Non-Business Days
	 	 	40	 
	     Section 22.3.	 	Accounting Terms
	 	 	41	 
	     Section 22.4.	 	Severability
	 	 	41	 
	     Section 22.5.	 	Construction
	 	 	41	 
	     Section 22.6.	 	Counterparts
	 	 	41	 
	     Section 22.7.	 	Governing Law
	 	 	41	 
	     Section 22.8.	 	Jurisdiction and Process; Waiver of Jury Trial
	 	 	41	 

-iv-

 

	 	 	 	 	 
	Schedule A	 	—	 	Information Relating to Purchasers

	 	 	 	 	 

	Schedule B	 	—	 	Defined Terms

	 	 	 	 	 

	Schedule 4.9	 	—	 	Changes in Corporate Structure

	 	 	 	 	 

	Schedule 5.4	 	—	 	Subsidiaries of the Company, Ownership of Subsidiary Stock, Affiliates

	 	 	 	 	 

	Schedule 5.5	 	—	 	Financial Statements

	 	 	 	 	 

	Schedule 5.11	 	—	 	Licenses, Permits, Etc.

	 	 	 	 	 

	Schedule 5.15	 	—	 	Existing Debt; Future Liens

	 	 	 	 	 

	Schedule 10.3	 	—	 	Existing Liens

	 	 	 	 	 

	Exhibit 1(a)	 	—	 	Form of 5.25% Series 2005A Senior Notes, Tranche A, due November 15, 2012

	 	 	 	 	 

	Exhibit 1(b)	 	—	 	Form of 5.38% Series 2005A Senior Notes, Tranche B, due November 15, 2015

	 	 	 	 	 

	Exhibit 1(c)	 	—	 	Form of 5.48% Series 2005A Senior Notes, Tranche C, due November 15, 2017

	 	 	 	 	 

	Exhibit 2.3	 	—	 	Form of Subsidiary Guaranty

	 	 	 	 	 

	Exhibit 4.4(a)	 	—	 	Form of Opinion of General Counsel to the Company

	 	 	 	 	 

	Exhibit 4.4(b)	 	—	 	Form of Opinion of Special Counsel to the Company

	 	 	 	 	 

	Exhibit 4.4(c)	 	—	 	Form of Opinion of Special Counsel to the Purchasers

	 	 	 	 	 

	Exhibit S	 	—	 	Form of Supplement to Note Purchase Agreement

-v-

 

Eagle Materials Inc.

3811 Turtle Creek Blvd., Suite 1100

Dallas, Texas 75219

$40,000,000 5.25% Series 2005A Senior Notes, Tranche A,

due November 15, 2012

$80,000,000 5.38% Series 2005A Senior Notes, Tranche B,

due November 15, 2015

$80,000,000 5.48% Series 2005A Senior Notes, Tranche C,

due November 15, 2017

Dated as of

November 15, 2005

To the Purchasers listed in

     the attached Schedule A:

Ladies and Gentlemen:

     Eagle Materials Inc., a Delaware corporation (the “Company”), agrees with the
Purchasers listed in the attached Schedule A (the “Purchasers”) to this Note Purchase Agreement
(this “Agreement”) as follows:

Section 1. Authorization of Notes.

     Section 1.1. Description of Notes. The Company will authorize the issue and sale of the
following Senior Notes:

	 	 	 	 	 	 	 	 	 
	 	 	Series and/or	 	Aggregate Principal	 	 	 	 
	Issue	 	Tranche	 	Amount	 	Interest Rate	 	Maturity Date
	Senior Notes
	 	Series 2005A, Tranche A	 	$40,000,000	 	5.25%	 	November 15, 2012
	Senior Notes
	 	Series 2005A, Tranche B	 	$80,000,000	 	5.38%	 	November 15, 2015
	Senior Notes
	 	Series 2005A, Tranche C	 	$80,000,000	 	5.48%	 	November 15, 2017

Schedule A

(to Note Purchase Agreement)

 

 

     The Senior Notes described above are individually referred to respectively as the “Tranche A
Notes”, the “Tranche B Notes”, and the “Tranche C Notes”, and are collectively referred to as the
“Series 2005A Notes”. The Series 2005 A Notes, together with each Series of Additional Notes which
may from time to time be issued pursuant to the provisions of Section 2.2, are collectively
referred to as the “Notes” (such term shall also include any such notes issued in substitution
therefor pursuant to Section 13 of this Agreement). The Tranche A Notes, the Tranche B Notes, and
the Tranche C Notes shall be substantially in the form set out in Exhibit 1(a), Exhibit 1(b), and
Exhibit 1(c), respectively, with such changes therefrom, if any, as may be approved by the
Purchasers and the Company. Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement.

     Section 1.2. Interest Rate. (a) The Series 2005A Notes shall bear interest (computed on the
basis of a 360-day year of twelve 30-day months) on the unpaid principal thereof from the date of
issuance at their respective stated rate of interest payable semi-annually in arrears on the 15th
day of May and November and at maturity commencing on May 15, 2006, until such principal sum shall
have become due and payable (whether at maturity, upon notice of prepayment or otherwise) and
interest (so computed) on any overdue principal, interest or Make-Whole Amount from the due date
thereof (whether by acceleration or otherwise) at the applicable Default Rate until paid.

Section 2. Sale and Purchase of Notes.

     Section 2.1. Series 2005A Notes. Subject to the terms and conditions of this Agreement, the
Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at
the Closing provided for in Section 3, the Series 2005A Notes of the tranches and in the respective
principal amounts specified opposite such Purchaser’s name in Schedule A at the purchase price of
100% of the principal amount thereof. The obligations of each Purchaser hereunder are several and
not joint obligations and each Purchaser shall have no obligation and no liability to any Person
for the performance or nonperformance by any other Purchaser hereunder.

     Section 2.2. Additional Series of Notes. The Company may, from time to time, in its sole
discretion but subject to the terms hereof, issue and sell one or more additional Series of its
unsecured promissory notes under the provisions of this Agreement pursuant to a supplement (a
“Supplement”) substantially in the form of Exhibit S, provided that the aggregate principal amount
of Notes of all Series issued pursuant to all Supplements in accordance with the terms of this
Section 2.2 shall not exceed $500,000,000. Each additional Series of Notes (the “Additional
Notes”) issued pursuant to a Supplement shall be subject to the following terms and conditions:

     (i) each Series of Additional Notes, when so issued, shall be differentiated from all
previous Series by sequential yearly and alphabetical designation inscribed thereon;

 

 

     (ii) Additional Notes of the same Series may consist of more than one different and
separate tranches and may differ with respect to outstanding principal amounts, maturity
dates, interest rates and premiums, if any, and price and terms of redemption or payment
prior to maturity, but all such different and separate tranches of the same Series shall
vote as a single class and constitute one Series;

     (iii) each Series of Additional Notes shall be dated the date of issue, bear interest
at such rate or rates, mature on such date or dates, be subject to such mandatory and
optional prepayment on the dates and at the premiums, if any, have such additional or
different conditions precedent to closing, such representations and warranties and such
additional covenants as shall be specified in the Supplement under which such Additional
Notes are issued and upon execution of any such Supplement, this Agreement shall be amended
(a) to reflect such additional covenants without further action on the part of the holders
of the Notes outstanding under this Agreement, provided, that any such additional covenants
shall inure to the benefit of all holders of Notes so long as any Additional Notes issued
pursuant to such Supplement remain outstanding, and (b) to reflect such representations and
warranties as are contained in such Supplement for the benefit of the holders of such
Additional Notes in accordance with the provisions of Section 16;

     (iv) each Series of Additional Notes issued under this Agreement shall be in
substantially the form of Exhibit 1 to Exhibit S hereto with such variations, omissions and
insertions as are necessary or permitted hereunder;

     (v) the minimum principal amount of any Note issued under a Supplement shall be
$100,000, except as may be necessary to evidence the outstanding amount of any Note
originally issued in a denomination of $100,000 or more;

     (vi) all Additional Notes shall constitute Senior Debt of the Company and shall rank
pari passu with all other outstanding Notes; and

     (vii) no Additional Notes shall be issued hereunder if at the time of issuance thereof
and after giving effect to the application of the proceeds thereof, any Default or Event of
Default shall have occurred and be continuing.

     The obligations of the Additional Purchasers to purchase any Additional Notes shall be subject
to the following conditions precedent, in addition to the conditions specified in the Supplement
pursuant to which such Additional Notes may be issued:

     (a) Compliance Certificate. A duly authorized Senior Financial Officer shall execute
and deliver to each Additional Purchaser and each holder of Notes an Officer’s Certificate
dated the date of issue of such Series of Additional Notes stating that such officer has
reviewed the provisions of this Agreement (including any Supplements hereto)
and setting forth the information and computations (in sufficient detail) required in order
to establish whether after giving effect to the issuance of the Additional Notes and after
giving effect to the application of the proceeds thereof, the Company is in compliance

 

 

with
the requirements of Section 10.1 on such date (based upon the financial statements for the
most recent fiscal quarter ended prior to the date of such certificate).

     (b) Execution and Delivery of Supplement. The Company and each such Additional
Purchaser shall execute and deliver a Supplement substantially in the form of Exhibit S
hereto.

     (c) Representations of Additional Purchasers. Each Additional Purchaser shall have
confirmed in the Supplement that the representations set forth in Section 6 are true with
respect to such Additional Purchaser on and as of the date of issue of the Additional Notes.

     (d) Execution and Delivery of Guaranty Ratification. Provided a Guaranty Release shall
not have occurred, each Subsidiary Guarantor shall execute and deliver a Guaranty
Ratification in the form attached to the Subsidiary Guaranty.

     Section 2.3. Subsidiary Guaranty. (a) The payment by the Company of all amounts due with
respect to the Notes and the performance by the Company of its obligations under this Agreement
will be absolutely and unconditionally guaranteed by the Subsidiary Guarantors pursuant to the
Subsidiary Guaranty Agreement dated as of even date herewith, which shall be substantially in the
form of Exhibit 2.3 attached hereto, and otherwise in accordance with the provisions of Section 9.6
hereof (the “Subsidiary Guaranty”).

     (b) The holders of the Notes agree to discharge and release any Subsidiary Guarantor from the
Subsidiary Guaranty upon receipt of written notification of the Company, provided that (i) such
Subsidiary Guarantor has been released and discharged (or will be released and discharged
concurrently with the release of such Subsidiary Guarantor under the Subsidiary Guaranty) as an
obligor and guarantor under and in respect of the Bank Credit Agreement and the Company so
certifies to the holders of the Notes in a certificate of a Responsible Officer, (ii) at the time
of such release and discharge, the Company shall deliver a certificate of a Responsible Officer to
the holders of the Notes stating that no Default or Event of Default exists, and (iii) if any fee
or other form of consideration is given to any holder of Debt of the Company expressly for the
purpose of such release, holders of the Notes shall receive equivalent consideration (a “Guaranty
Release”).

Section 3. Closing.

     The sale and purchase of the Series 2005A Notes to be purchased by each Purchaser shall occur
at the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603 at 10:00
a.m. Central time, at a closing (the “Closing”) on November 15, 2005 or on such other Business Day
thereafter on or prior to November 30, 2005 as may be agreed upon by the Company and the Purchasers
(the “Closing Date”). On the Closing Date, the Company will
deliver to each Purchaser the Series 2005A Notes to be purchased by such Purchaser in the form
of a single Series 2005A Note (or such greater number of Series 2005A Notes in denominations of at
least $100,000 as such Purchaser may request) dated the date of the Closing Date and registered in
such Purchaser’s name (or in the name of such Purchaser’s nominee), against

 

 

delivery by such
Purchaser to the Company or its order of immediately available funds in the amount of the purchase
price therefor by wire transfer of immediately available funds for the account of the Company to
Account Number
          , at Wells Fargo, Dallas, Texas 75283-2406, ABA Number           , in
the Account Name of “Eagle Materials Inc.” If, on the Closing Date, the Company shall fail to
tender such Series 2005A Notes to any Purchaser as provided above in this Section 3, or any of the
conditions specified in Section 4 shall not have been fulfilled to any Purchaser’s satisfaction,
such Purchaser shall, at such Purchaser’s election, be relieved of all further obligations under
this Agreement, without thereby waiving any rights such Purchaser may have by reason of such
failure or such nonfulfillment.

Section 4. Conditions to Closing.

     Each Purchaser’s obligation to purchase and pay for the Series 2005A Notes to be sold to such
Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to
or at the Closing, of the following conditions applicable to the Closing Date:

     Section 4.1. Representations and Warranties.

     (a) Representations and Warranties of the Company. The representations and warranties of the
Company in this Agreement shall be correct when made and at the time of the Closing.

     (b) Representations and Warranties of the Subsidiary Guarantors. The representations and
warranties of the Subsidiary Guarantors in the Subsidiary Guaranty shall be correct when made and
at the time of the Closing.

     Section 4.2. Performance; No Default.  The Company and each Subsidiary Guarantor
shall have performed and complied with all agreements and conditions contained in this Agreement
and the Subsidiary Guaranty required to be performed or complied with by the Company and each such
Subsidiary Guarantor prior to or at the Closing, and after giving effect to the issue and sale of
the Series 2005A Notes (and the application of the proceeds thereof as contemplated by Section
5.14), no Default or Event of Default shall have occurred and be continuing. Neither the Company
nor any Subsidiary shall have entered into any transaction since the date of the Memorandum that
would have been prohibited by Section 10 hereof had such Sections applied since such date.

     Section 4.3. Compliance Certificates.

     (a) Officer’s Certificate of the Company. The Company shall have delivered to such Purchaser
an Officer’s Certificate, dated the Closing Date, certifying that the conditions specified in
Sections 4.1, 4.2 and 4.9 have been fulfilled.

     (b) Secretary’s Certificate of the Company. The Company shall have delivered to such
Purchaser a certificate, dated the Closing Date, certifying as to the resolutions attached thereto
and other corporate proceedings relating to the authorization, execution and delivery of the Series
2005A Notes and this Agreement.

 

 

     (c) Officer’s Certificate of the Subsidiary Guarantors. Each Subsidiary Guarantor shall have
delivered to such Purchaser an Officer’s Certificate, dated the Closing Date, certifying that the
conditions specified in Sections 4.1(b), 4.2 and 4.9 have been fulfilled.

     (d) Secretary’s Certificate of the Subsidiary Guarantors. Each Subsidiary Guarantor shall
have delivered to such Purchaser a certificate, dated the Closing Date, certifying as to the
resolutions attached thereto and other corporate proceedings relating to the authorization,
execution and delivery of the Subsidiary Guaranty.

     Section 4.4. Opinions of Counsel. Such Purchaser shall have received opinions in
form and substance satisfactory to such Purchaser, dated the Closing Date (a) from James H. Graass,
General Counsel of the Company, covering the matters set forth in Exhibit 4.4(a) and covering such
other matters incident to the transactions contemplated hereby as such Purchaser or its counsel may
reasonably request (and the Company hereby instructs its counsel to deliver such opinion to the
Purchasers), (b) from Baker Botts L.L.P., special counsel for the Company, covering the matters set
forth in Exhibit 4.4(b) and covering such other matters incident to the transactions contemplated
hereby as such Purchaser or its counsel may reasonably request (and the Company hereby instructs
its counsel to deliver such opinion to the Purchasers), and (c) from Chapman and Cutler LLP, the
Purchasers’ special counsel, in connection with such transactions, substantially in the form set
forth in Exhibit 4.4(c) and covering such other matters incident to such transactions as such
Purchaser may reasonably request.

     Section 4.5. Purchase Permitted By Applicable Law, Etc. On the date of the Closing
such Purchaser’s purchase of Series 2005A Notes shall (a) be permitted by the laws and regulations
of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as
section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance
companies without restriction as to the character of the particular investment, (b) not violate any
applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or
liability under or pursuant to any applicable law or regulation, which law or regulation was not in
effect on the date hereof. If requested by such Purchaser, such Purchaser shall have received an
Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably
specify to enable such Purchaser to determine whether such purchase is so permitted.

     Section 4.6. Sale of Other Notes.  Contemporaneously with the Closing the Company
shall sell to each other Purchaser and each other Purchaser shall purchase the Series 2005A Notes
to be purchased by it at the Closing as specified in Schedule A.

     Section 4.7. Payment of Special Counsel Fees. Without limiting the provisions of Section
15.1, the Company shall have paid on or before the Closing Date, the reasonable fees, reasonable
charges and reasonable disbursements of the Purchasers’ special counsel referred to in Section 4.4
to the extent reflected in a statement of such counsel rendered to the Company at least one
Business Day prior to the Closing Date.

 

 

     Section 4.8. Private Placement Number. A Private Placement Number issued by Standard
& Poor’s CUSIP Service Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for each tranche of the Series
2005A Notes.

     Section 4.9. Changes in Corporate Structure.  Neither the Company nor any Subsidiary
Guarantor shall have changed its jurisdiction of organization or, except as reflected in Schedule
4.9, been a party to any merger or consolidation, or shall have succeeded to all or any substantial
part of the liabilities of any other entity, at any time following the date of the most recent
financial statements referred to in Schedule 5.5.

     Section 4.10. Subsidiary Guaranty. The Subsidiary Guaranty shall have been duly authorized,
executed and delivered by each Subsidiary Guarantor, shall constitute the legal, valid and binding
contract and agreement of each Subsidiary Guarantor and such Purchaser shall have received a true,
correct and complete copy thereof.

     Section 4.11. Funding Instructions. At least three Business Days prior to the date
of the Closing, each Purchaser shall have received written instructions signed by a Responsible
Officer on letterhead of the Company confirming the information specified in Section 3 including
(i) the name and address of the transferee bank, (ii) such transferee bank’s ABA number and (iii)
the account name and number into which the purchase price for the Series 2005A Notes is to be
deposited.

     Section 4.12. Proceedings and Documents. All corporate and other organizational
proceedings in connection with the transactions contemplated by this Agreement and all documents
and instruments incident to such transactions shall be satisfactory to such Purchaser and its
special counsel, and such Purchaser and its special counsel shall have received all such
counterpart originals or certified or other copies of such documents as such Purchaser or such
special counsel may reasonably request.

Section 5. Representations and Warranties of the Company.

        The Company represents and warrants to each Purchaser that:

     Section 5.1. Organization; Power and Authority. The Company is a corporation duly organized,
validly existing and in
good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a
foreign corporation and is in good standing in each jurisdiction in which such qualification is
required by law, other than those jurisdictions as to which the failure to be so qualified or in
good standing would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Company has the corporate power and authority to own or hold under
lease the properties it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Series 2005A Notes and to
perform the provisions hereof and thereof.

 

 

     Section 5.2. Authorization, Etc. This Agreement and the Notes to be issued on the
Closing Date have been duly authorized by all necessary corporate action on the part of the
Company, and this Agreement constitutes, and upon execution and delivery thereof each such Note
will constitute, a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

     Section 5.3. Disclosure. The Company, through its agent, Banc of America Securities
LLC, has delivered to you and each Other Purchaser a copy of a Private Placement Memorandum, dated
September 2005 (the “Memorandum”), relating to the transactions contemplated hereby. The
Memorandum fairly describes, in all material respects, the general nature of the business and
principal properties of the Company and its Restricted Subsidiaries. This Agreement, the
Memorandum, the documents, certificates or other writings delivered to the Purchasers by or on
behalf of the Company in connection with the transactions contemplated hereby and the financial
statements listed in Schedule 5.5, in each case, delivered to the Purchasers prior to October 3,
2005 (this Agreement, the Memorandum and such documents, certificates or other writings and such
financial statements being referred to, collectively, as the “Disclosure Documents”), taken as a
whole, do not contain any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the circumstances under which
they were made. Except as disclosed in the Disclosure Documents, since March 31, 2005, there has
been no change in the financial condition, operations, business or properties of the Company or any
of its Restricted Subsidiaries except changes that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect. There is no fact known to the Company
that would reasonably be expected to have a Material Adverse Effect that has not been set forth
herein or in the Disclosure Documents.

     Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates. (a)
Schedule 5.4 contains (except as noted therein) complete and correct lists (i) of the Company’s
Restricted and Unrestricted Subsidiaries, showing, as to each Subsidiary, the correct name thereof,
the jurisdiction of its organization, and the percentage of shares of each class of its capital
stock or similar equity interests outstanding owned by the Company and each other Subsidiary, (ii)
of the Company’s Affiliates, other than Subsidiaries, and (iii) of the Company’s directors and
senior officers.

     (b) All of the outstanding shares of capital stock or similar equity interests of each
Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary
free and clear of any Lien (except as otherwise disclosed in Schedule 5.4).

     (c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal entity and is in good
standing in each jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing would not,
individually or in the

 

 

aggregate, reasonably be expected to have a Material Adverse Effect. Each
such Subsidiary has the corporate or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact the business it transacts and
proposes to transact.

     (d) No Subsidiary is a party to, or otherwise subject to, any legal restriction or any
agreement (other than this Agreement, the agreements listed on Schedule 5.4 and customary
limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay
dividends out of profits or make any other similar distributions of profits to the Company or any
of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of
such Subsidiary.

     Section 5.5. Financial Statements; Material Liabilities. The Company has delivered
to each Purchaser copies of the financial statements of the Company and its Subsidiaries listed on
Schedule 5.5. All of said financial statements (including in each case the related schedules and
notes) fairly present in all material respects the consolidated financial position of the Company
and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated
results of their operations and cash flows for the respective periods so specified and have been
prepared in accordance with GAAP consistently applied throughout the periods involved except as set
forth in the notes thereto (subject, in the case of any interim financial statements, to normal
year-end adjustments). The Company and its Subsidiaries do not have any Material liabilities that
are not disclosed on such financial statements or otherwise disclosed in the Disclosure Documents.

     Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution, delivery
and performance by the Company of this Agreement and the Series 2005A Notes will not (a)
contravene, result in any breach of, or constitute a default under, or result in the creation of
any Lien in respect of any property of the Company or any Subsidiary under, any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws,
or any other agreement or instrument to which the Company or any Subsidiary is bound or by which
the Company or any Subsidiary or any of their respective properties may be bound or affected, (b)
conflict with or result in a breach of any of the terms, conditions or provisions of any order,
judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary, or (c) violate any provision of any statute or other rule or regulation
of any Governmental Authority applicable to the Company or any Subsidiary.

     Section 5.7. Governmental Authorizations, Etc. No consent, approval or authorization
of, or registration, filing or declaration with, any Governmental Authority is required in
connection with the execution, delivery or performance by the Company of this Agreement or the
Series 2005A Notes.

     Section 5.8. Litigation; Observance of Agreements, Statutes and Orders. (a) There
are no actions, suits, investigations or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Restricted Subsidiary or any property of the
Company or any Restricted Subsidiary in any court or before any arbitrator of any kind or before or
by any Governmental Authority that, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect.

 

 

     (b) Neither the Company nor any Restricted Subsidiary is in default under any term of any
agreement or instrument to which it is a party or by which it is bound, or any order, judgment,
decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any
applicable law, ordinance, rule or regulation (including without limitation Environmental Laws or
the USA Patriot Act) of any Governmental Authority, which default or violation, individually or in
the aggregate, would reasonably be expected to have a Material Adverse Effect.

     Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax returns that
are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and
payable on such returns and all other taxes and assessments levied upon them or their properties,
assets, income or franchises, to the extent such taxes and assessments have become due and payable
and before they have become delinquent, except for any taxes and assessments (a) the amount of
which is not individually or in the aggregate Material or (b) the amount, applicability or validity
of which is currently being contested in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as the case may be, has established adequate reserves in
accordance with GAAP. The Company knows of no basis for any other tax or assessment that would
reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on
the books of the Company and its Subsidiaries in respect of federal, state or other taxes for all
fiscal periods are adequate. The federal income tax liabilities of the Company and its
Subsidiaries have been finally determined (whether by reason of completed audits or the statute of
limitations having run) for all fiscal years up to and including the fiscal year ended March 31,
2000.

     Section 5.10. Title to Property; Leases. The Company and its Restricted Subsidiaries
have good and sufficient title to their respective properties which the Company and its Restricted
Subsidiaries own or purport to own that individually or in the aggregate are Material, including
all such properties reflected in the most recent audited balance sheet referred to in Section 5.5
or purported to have been acquired by the Company or any Restricted Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business), in each case free and
clear of Liens prohibited by this Agreement. All leases that individually or in the aggregate are
Material are valid and subsisting and are in full force and effect in all material respects.

     Section 5.11. Licenses, Permits, Etc. Except as disclosed in Schedule 5.11,

     (a) the Company and its Restricted Subsidiaries own or possess all licenses, permits,
franchises, authorizations, patents, copyrights, proprietary software, service marks,
trademarks and trade names, or rights thereto, that individually or in the aggregate are
Material, without known conflict with the rights of others, except, in each case, as would
not reasonably be expected to result in a Material Adverse Effect;

     (b) to the best knowledge of the Company, no product of the Company or any of its
Restricted Subsidiaries infringes in any respect any license, permit, franchise,
authorization, patent, copyright, proprietary software, service mark, trademark, trade name
or other right owned by any other Person, except, in each case, as would not reasonably be
expected to result in a Material Adverse Effect; and

 

 

     (c) to the best knowledge of the Company, there is no violation by any Person of any
right of the Company or any of its Restricted Subsidiaries with respect to any patent,
copyright, proprietary software, service mark, trademark, trade name or other right owned or
used by the Company or any of its Restricted Subsidiaries, except, in each case, as would
not reasonably be expected to result in a Material Adverse Effect.

     Section 5.12. Compliance with ERISA. (a) The Company and each ERISA Affiliate have
operated and administered each Plan in compliance with all applicable laws except for such
instances of noncompliance as have not resulted in and would not reasonably be expected to result
in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or
condition has occurred or exists that would reasonably be expected to result in the incurrence of
any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any
of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant
to Title I or IV of ERISA or to such penalty or excise tax provisions or to section 401(a)(29) or
412 of the Code or section 4068 of ERISA, other than such liabilities or Liens as would not be
individually or in the aggregate Material.

     (b) The present value of the aggregate benefit liabilities under each of the Plans (other than
Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the
basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent
actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $5,000,000 in the aggregate for all Plans. The
term “benefit liabilities” has the meaning specified in section 4001 of ERISA and the terms
“current value” and “present value” have the meaning specified in section 3 of ERISA.

     (c) The Company and its ERISA Affiliates have not incurred any withdrawal liabilities (and are
not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.

     (d) The expected post-retirement benefit obligation (determined as of the last day of the
Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board
Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by
section 4980B of the Code) of the Company and its Subsidiaries is not Material.

     (e) The execution and delivery of this Agreement and the issuance and sale of the Series 2005A
Notes hereunder will not involve any transaction that is subject to the prohibitions of Section 406
of ERISA or in connection with which a tax would be imposed pursuant to Section 4975(c)(1)(A)-(D)
of the Code. The representation by the Company in the first sentence of this Section 5.12(e) is
made in reliance upon and subject to the accuracy of each Purchaser’s representation in Section 6.3
as to the sources of the funds to be used to pay the purchase price of the Series 2005A Notes to be
purchased by such Purchaser.

     Section 5.13. Private Offering by the Company. Neither the Company nor anyone acting
on the Company’s behalf has offered the Series 2005A Notes or any similar securities for sale to,

 

 

or solicited any offer to buy any of the same from, or otherwise approached or negotiated in
respect thereof with, any Person other than the Purchasers and not more than 2 other Institutional
Investors, each of which has been offered the Series 2005A Notes in connection with a private sale
for investment. Neither the Company nor anyone acting on its behalf has taken, or will take, any
action that would subject the issuance or sale of the Series 2005A Notes to the registration
requirements of Section 5 of the Securities Act or to the registration requirements of any
securities or blue sky laws of any applicable jurisdiction.

     Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply the
proceeds of the sale of the Series 2005A Notes to refinance existing indebtedness and for general
corporate purposes of the Company. No part of the proceeds from the sale of the Series 2005A Notes
hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin
stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224)
or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).
Margin stock does not constitute more than 5% of the value of the consolidated assets of the
Company and its Subsidiaries and the Company does not have any present intention that margin stock
will constitute more than 5% of the value of such assets. As used in this Section, the terms
“margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said
Regulation U.

     Section 5.15. Existing Debt; Future Liens. (a) Except as described therein, Schedule 5.15
sets forth a complete and correct list of all outstanding Debt of the Company and its Restricted
Subsidiaries as of September 30, 2005, since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of the Debt of the
Company or its Restricted Subsidiaries. Neither the Company nor any Restricted Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any principal or
interest on any Debt of the Company or such
Restricted Subsidiary, and no event or condition exists with respect to any Debt of the Company or
any Restricted Subsidiary, that would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Debt to become due and payable before its stated
maturity or before its regularly scheduled dates of payment.

     (b) Except as disclosed in Schedule 5.15, neither the Company nor any Restricted Subsidiary
has agreed or consented to cause or permit in the future (upon the happening of a contingency or
otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien
not permitted by Section 10.3.

     (c) Neither the Company nor any Subsidiary is a party to, or otherwise subject to any
provision contained in, any instrument evidencing Debt of the Company or such Subsidiary, any
agreement relating thereto or any other agreement (including, but not limited to, its charter or
other organizational document) which limits the amount of, or otherwise imposes restrictions on the
incurring of, Debt of the Company, except as specifically indicated in Schedule 5.15.

 

 

     Section 5.16. Foreign Assets Control Regulations, Etc. (a) Neither the sale of the
Series 2005A Notes by the Company hereunder nor its use of the proceeds thereof will violate the
Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.

     (b) Neither the Company nor any Subsidiary is a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or
in Section 1 of the Anti-Terrorism Order or, to the knowledge of the Company, engages in any
dealings or transactions with any such Person. The Company and its Subsidiaries are in compliance,
in all material respects, with the USA Patriot Act.

     (c) No part of the proceeds from the sale of the Series 2005A Notes hereunder will be used,
directly or indirectly, for any payments to any governmental official or employee, political party,
official of a political party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as amended, assuming in all
cases that such Act applies to the Company.

     Section 5.17. Status under Certain Statutes. Neither the Company nor any Restricted
Subsidiary is an “investment company” registered or required to be registered under the Investment
Company Act of 1940, as amended, or is subject to regulation under the Public Utility Holding
Company Act of 1935, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power
Act, as amended.

     Section 5.18. Environmental Matters. (a) Neither the Company nor any Restricted Subsidiary
has knowledge of any claim or has received any notice of any claim, and no proceeding has been
instituted raising any claim against the Company or any of its Restricted Subsidiaries or any of
their respective real properties now or
formerly owned, leased or operated by any of them, or other assets, alleging any damage to the
environment or violation of any Environmental Laws, except, in each case, such as would not
reasonably be expected to result in a Material Adverse Effect.

          (b) Neither the Company nor any Restricted Subsidiary has knowledge of any facts which would
give rise to any claim, public or private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to real properties now or formerly
owned, leased or operated by any of them or to other assets or their use, except, in each case,
such as would not reasonably be expected to result in a Material Adverse Effect.

          (c) Neither the Company nor any of its Restricted Subsidiaries has stored any Hazardous
Materials on real properties now or formerly owned, leased or operated by any of them or has
disposed of any Hazardous Materials in each case in a manner contrary to any Environmental Laws in
each case in any manner that would reasonably be expected to result in a Material Adverse Effect.

 

 

          (d) All buildings on all real properties now owned, leased or operated by the Company or any
of its Restricted Subsidiaries are in compliance with applicable Environmental Laws, except where
failure to comply would not reasonably be expected to result in a Material Adverse Effect.

     Section 5.19. Notes Rank Pari Passu. The obligations of the Company under this Agreement and
the Notes rank pari passu in right of payment with all other senior unsecured Debt (actual or
contingent) of the Company, including, without limitation, all senior unsecured Debt of the Company
described in Schedule 5.15 hereto. The obligations of each Subsidiary Guarantor under the
Subsidiary Guaranty rank pari passu in right of payment with all other senior unsecured Debt
(actual or contingent) of such Subsidiary Guarantor, including, without limitation, all senior
unsecured Debt of such Subsidiary Guarantor described in Schedule 5.15 hereto.

Section 6. Representations of the Purchaser.

     Section 6.1. Purchase for Investment. Each Purchaser severally represents that it is
purchasing the Series 2005A Notes for its own account or for one or more separate accounts
maintained by it or for the account of one or more pension or trust funds and not with a view to
the distribution thereof, provided that the disposition of such Purchaser’s or such pension or
trust funds’ property shall at all times be within such Purchaser’s or such pension or trust funds’
control. Each Purchaser understands that the Series 2005A Notes have not been registered under the
Securities Act and may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under circumstances where neither
such registration nor such an exemption is required by law, and that the Company is not required to
register the Series 2005A Notes.

     Section 6.2. Accredited Investor. Each Purchaser represents that it is an “accredited
investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act acting for its own account (and not for the account of
others) or as a fiduciary or agent for others (which others are also “accredited investors”).
Each Purchaser further represents that such Purchaser has had the opportunity to ask questions of
the Company and received answers concerning the terms and conditions of the sale of the Series
2005A Notes.

     Section 6.3. Source of Funds. Each Purchaser severally represents that at least one of the
following statements is an accurate representation as to each source of funds (a “Source”) to be
used by such Purchaser to pay the purchase price of the Series 2005A Notes to be purchased by such
Purchaser hereunder:

     (a) the Source is an “insurance company general account” (as the term is defined in the
United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in
respect of which the reserves and liabilities (as defined by the annual statement for life
insurance companies approved by the National Association of Insurance Commissioners (the
“NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any
employee benefit plan together with the amount of the reserves and liabilities for the
general account contract(s) held by or on behalf of any other employee

 

 

benefit plans
maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the
same employee organization in the general account do not exceed 10% of the total reserves
and liabilities of the general account (exclusive of separate account liabilities) plus
surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of
domicile; or

     (b) the Source is a separate account that is maintained solely in connection with such
Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to
any employee benefit plan (or its related trust) that has any interest in such separate
account (or to any participant or beneficiary of such plan (including any annuitant)) are
not affected in any manner by the investment performance of the separate account; or

     (c) the Source is either (i) an insurance company pooled separate account, within the
meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE
91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this
clause (c), no employee benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or

     (d) the Source constitutes assets of an “investment fund” (within the meaning of Part V
of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or
“QPAM” (within the meaning of Part V of the QPAM Exemption), no employee benefit plan’s
assets that are included in such investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same employer or by an affiliate
(within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of
Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person
controlling or controlled by the QPAM (applying the definition of “control” in Section V(e)
of the QPAM Exemption) owns a 5% or more interest in the Company and (i) the identity of
such QPAM and (ii) the names of all employee benefit plans whose assets are included in such
investment fund have been disclosed to the Company in writing pursuant to this clause (d);
or

     (e) the Source constitutes assets of a “plan(s)” (within the meaning of Section IV of
PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within
the meaning of Part IV of the INHAM exemption), the conditions of Part I(a), (g) and (h) of
the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled
by the INHAM (applying the definition of “control” in Section IV(d) of the INHAM Exemption)
owns a 5% or more interest in the Company and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have been
disclosed to the Company in writing pursuant to this clause (e); or

     (f) the Source is a governmental plan; or

 

 

     (g) the Source is one or more employee benefit plans, or a separate account or trust
fund comprised of one or more employee benefit plans, each of which has been identified to
the Company in writing pursuant to this clause (g); or

     (h) the Source does not include assets of any employee benefit plan, other than a plan
exempt from the coverage of ERISA.

As used in this Section 6.3, the terms “employee benefit plan,” “governmental plan,” and “separate
account” shall have the respective meanings assigned to such terms in section 3 of ERISA.

Section 7. Information as to Company.

     Section 7.1. Financial and Business Information. The Company shall deliver to each holder of
Notes that is an Institutional Investor:

     (a) Quarterly Statements — within 60 days after the end of each quarterly fiscal period
in each fiscal year of the Company (other than the last quarterly fiscal period of each such
fiscal year),

     (i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such quarter, and

     (ii) consolidated statements of income, changes in shareholders’ equity and
cash flows of the Company and its Subsidiaries, for such quarter and (in the
case of the second and third quarters) for the portion of the fiscal year ending
with such quarter,

setting forth in each case in comparative form the figures for the corresponding periods in
the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows, subject to
changes resulting from year-end adjustments, provided that filing with the Securities and
Exchange Commission within the time period specified above the Company’s Quarterly Report on
Form 10-Q prepared in compliance with the requirements therefor shall be deemed to satisfy
the requirements of this Section 7.1(a) and, provided, further, that the Company shall be
deemed to have made such delivery of such Form 10-Q if it shall have timely made such Form
10 Q available on “EDGAR” and on its home page on the worldwide web (at the date of this
Agreement located at: http//www.eaglematerials.com) and shall have given each Purchaser
prior notice of such availability on EDGAR and on its home page in connection with each
delivery (such availability and notice thereof being referred to as “Electronic Delivery”);

     (b) Annual Statements — within 105 days after the end of each fiscal year of the
Company,

 

 

     (i) a consolidated balance sheet of the Company and its Subsidiaries, as at the
end of such year, and

     (ii) consolidated statements of income, changes in shareholders’ equity and
cash flows of the Company and its Subsidiaries, for such year,

setting forth in each case in comparative form the figures for the previous fiscal year, all
in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion
thereon of independent certified public accountants of recognized national standing, which
opinion shall state that such financial statements present fairly, in all material respects,
the financial position of the companies being reported upon and their results of operations
and cash flows and have been prepared in conformity with GAAP, and that the examination of
such accountants in connection with such financial statements has been made in accordance
with generally accepted auditing standards, and that such audit provides a reasonable basis
for such opinion in the circumstances, provided that filing with the Securities and Exchange
Commission within the time period specified above of the Company’s Annual Report on Form
10-K for such fiscal year (together with the Company’s annual report to shareholders, if
any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the
requirements therefor shall be deemed to satisfy the requirements of this Section 7.1(b),
provided, further, that the Company shall be deemed to have made such delivery of such Form
10-K if it shall have timely made Electronic Delivery thereof;

     (c) SEC and Other Reports — except for filings referred to in Section 7.1(a) and (b)
above, promptly upon their becoming available and, to the extent applicable, one copy of (i)
each financial statement, report, notice or proxy statement sent by the Company or any
Subsidiary to public securities holders generally, and (ii) each regular or periodic report,
each registration statement (without exhibits except as expressly requested by such holder),
and each prospectus and all amendments thereto filed by the Company or any Subsidiary with
the Securities and Exchange Commission and of all press releases and other statements made
available generally by the Company or any Subsidiary to the public concerning developments
that are Material; provided, that the Company shall be deemed to have made such delivery of
any such information if it shall have timely made Electronic Delivery thereof;

     (d) Notice of Default or Event of Default — promptly, and in any event within five
Business Days after a Responsible Officer becomes aware of the existence of any Default or
Event of Default or that any Person has given any notice or taken any action with respect to
a claimed default hereunder or that any Person has given any notice or taken any action with
respect to a claimed default of the type referred to in Section 11(f), a written notice
specifying the nature and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;

     (e) ERISA Matters — promptly, and in any event within five Business Days after a
Responsible Officer becomes aware of any of the following, a written notice

 

 

setting forth
the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes
to take with respect thereto:

     (i) with respect to any Plan, any reportable event, as defined in Section 4043(c) of ERISA and the regulations thereunder, for which notice thereof
has not been waived pursuant to such regulations as in effect on the date thereof;
or

     (ii) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by the PBGC with respect to such Multiemployer Plan;
or

     (iii) any event, transaction or condition that would result in the incurrence
of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or the imposition of a penalty or excise tax under the provisions of the Code
relating to employee benefit plans, or the imposition of any Lien on any of the
rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title
I or IV of ERISA or such penalty or excise tax provisions, if such liability or
Lien, taken together with any other such liabilities or Liens then existing, would
reasonably be expected to have a Material Adverse Effect;

     (f) Notices from Governmental Authority — promptly, and in any event within 30 days of
receipt thereof, copies of any notice to the Company or any Subsidiary from any federal or
state Governmental Authority relating to any order, ruling, statute or other law or
regulation that would reasonably be expected to have a Material Adverse Effect;

     (g) Supplements — promptly and in any event within 10 Business Days after the
execution and delivery of any Supplement, a copy thereof; and

     (h) Requested Information — with reasonable promptness, such other data and information
relating to the business, operations, affairs, financial condition, assets or properties of
the Company or any of its Subsidiaries or relating to the ability of the Company to perform
its obligations hereunder and under the Notes as from time to time may be reasonably
requested by any such holder of Notes.

     Notwithstanding the foregoing, in the event that one or more Unrestricted Subsidiaries shall
either (i) own more than 10% of the total consolidated assets of the Company and its Subsidiaries,
or (ii) account for more than 10% of the consolidated gross revenues of the Company and its
Subsidiaries, determined in each case in accordance with GAAP, then, within the respective periods
provided in Section 7.1(a) and (b) above, the Company shall deliver to each holder of Notes that is
an Institutional Investor, unaudited financial statements of the

 

 

character and for the dates and
periods as in said Sections 7.1(a) and (b) covering such group of Unrestricted Subsidiaries (on a
consolidated basis), together with a consolidating statement reflecting eliminations or adjustments
required to reconcile the financial statements of such group of Unrestricted Subsidiaries to the
financial statements delivered pursuant to Sections 7.1(a) and (b).

     Section 7.2. Officer’s Certificate. Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a certificate of
a Senior Financial Officer setting forth (which, in the case of Electronic Delivery of any such
financial statements, shall be by separate concurrent delivery of such certificate to each holder
of Notes):

     (a) Covenant Compliance — the information required in order to establish whether the
Company was in compliance with the requirements of Section 10.1 through Section 10.5 hereof,
inclusive, during the quarterly or annual period covered by the statements then being
furnished (including with respect to each such Section, where applicable, the calculations
of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under
the terms of such Sections, and the calculation of the amount, ratio or percentage then in
existence); and

     (b) Event of Default — a statement that such officer has reviewed the relevant terms
hereof and such review shall not have disclosed the existence during the quarterly or annual
period covered by the statements then being furnished of any condition or event that
constitutes a Default or an Event of Default or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.

     Section 7.3. Visitation. The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor:

     (a) No Default — if no Default or Event of Default then exists, at the expense of such
holder and upon reasonable prior notice to the Company, to visit the principal executive
office of the Company, to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company’s officers, and (with the consent of the Company, which
consent will not be unreasonably withheld) its independent public accountants, and (with the
consent of the Company, which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Restricted Subsidiary, all at such reasonable
times and as often as may be reasonably requested in writing; and

     (b) Default — if a Default or Event of Default then exists, at the expense of the
Company, to visit and inspect any of the offices or properties of the Company or any
Restricted Subsidiary, to examine all their respective books of account, records, reports
and other papers, to make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and independent public
accountants (and by this provision the Company authorizes said accountants to discuss

 

 

the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and
as often as may be requested.

Section 8. Payment of the Notes.

     Section 8.1. Required Prepayments. (a) The entire unpaid principal amount of the Tranche A
Notes shall become due and payable on November 15, 2012.

     (b) The entire unpaid principal amount of the Tranche B Notes shall become due and payable on
November 15, 2015.

     (c) The entire unpaid principal amount of the Tranche C Notes shall become due and payable on
November 15, 2017.

     Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may, at its option,
upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes
of any Series in an amount not less than 10% of the original aggregate principal amount of the
Notes of such Series to be prepaid, in the case of a partial prepayment (or such lesser amount as
shall be required to effect a partial prepayment resulting from an offer of prepayment pursuant to
Section 10.4), at 100% of the principal amount so prepaid, together with interest accrued thereon
to the date of such prepayment, plus the Make-Whole Amount determined for the prepayment date with
respect to such principal amount of each Note then outstanding of the applicable Series to be
prepaid. The Company will give each holder of Notes written notice of each optional prepayment
under this Section 8.2 not less than 30 days and not more than 60 days prior to the date fixed for
such prepayment. Each such notice shall specify such date, the aggregate principal

 amount of the Notes of the applicable Series to be prepaid on such date, the principal amount of
each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the
interest to be paid on the prepayment date with respect to such principal amount being prepaid, and
shall be accompanied by a certificate of a Senior Financial Officer as to the estimated respective
Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice
were the date of the prepayment), setting forth the details of such computation. Two Business Days
prior to such prepayment, the Company shall deliver to each holder of Notes of the Series to be
prepaid a certificate of a Senior Financial Officer specifying the calculation of each such
Make-Whole Amount as of the specified prepayment date.

     Section 8.3. Allocation of Partial Prepayments. In the case of each partial prepayment of the
Notes pursuant to the provisions of Section 8.2, the principal amount of the Notes of the Series to
be prepaid shall be allocated among all of the Notes of such Series at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal amounts thereof. All
regularly scheduled partial prepayments made with respect to any Series of Additional Notes
pursuant to any Supplement shall be allocated as provided therein.

     Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of Notes pursuant to
this Section 8, the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such principal

 

 

amount
accrued to such date and the applicable Make-Whole Amount. From and after such date, unless the
Company shall fail to pay such principal amount when so due and payable, together with the interest
and Make-Whole Amount as aforesaid, interest on such principal amount shall cease to accrue. Any
Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

     Section 8.5. Purchase of Notes. The Company will not and will not permit any Affiliate to
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes
of any Series except (a) upon the payment or prepayment of all of the Notes of such Series in
accordance with the terms of this Agreement (including any Supplement hereto) and the Notes of such
Series or (b) pursuant to a written offer to purchase any outstanding Notes of such Series made by
the Company or an Affiliate pro rata to the holders of the Notes of such Series upon the same terms
and conditions (except that if such Series has more than one separate tranche, such written offer
shall be allocated among all of the separate tranches of such Series at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal amounts thereof but such
written offer may otherwise differ among such separate tranches and such written offer shall be
made pro rata to the holders of the same tranches of such Series upon the same terms and
conditions). The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement
(including any Supplement hereto) and no Notes may be issued in substitution or exchange for any
such Notes.

     Section 8.6. Make-Whole Amount for the Series 2005A Notes. The term “Make-Whole Amount” means
with respect to any Series 2005A Note an amount equal to the excess, if any, of the Discounted
Value of the Remaining Scheduled Payments with respect to the Called Principal of such Series 2005A
Note of the applicable tranche, minus the amount of such Called Principal, provided that the
Make-Whole Amount may in no event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings with respect to the Called
Principal of such Series 2005A Note:

     “Called Principal” means, the principal of the Series 2005A Note of the applicable
tranche that is to be prepaid pursuant to Section 8.2 or has become or is declared to be
immediately due and payable pursuant to Section 12.1, as the context requires.

     “Discounted Value” means, the amount obtained by discounting all Remaining Scheduled
Payments from their respective scheduled due dates to the Settlement Date with respect to
such Called Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on such Note is
payable) equal to the Reinvestment Yield.

     “Reinvestment Yield” means, 0.50% plus the yield to maturity calculated by using (i)
the yields reported, as of 10:00 A.M. (New York City time) on the second Business Day
preceding the Settlement Date on screen “PX-1” on the Bloomberg Financial Market Service (or
such other information service as may replace Bloomberg) for actively traded

 

 

U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such Called Principal as
of such Settlement Date, or (ii) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable (including by way of interpolation),
the Treasury Constant Maturity Series Yields reported, for the latest day for which such
yields have been so reported as of the second Business Day preceding the Settlement Date, in
Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date. In either case, the yield
will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice and (b) interpolating
linearly on a straight line basis between (1) the actively traded U.S. Treasury security
with the maturity closest to and greater than the Remaining Average Life and (2) the
actively traded U.S. Treasury security with the maturity closest to and less than the
Remaining Average Life.

     “Remaining Average Life” means, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the
products obtained by multiplying (a) the principal component of each Remaining Scheduled
Payment by (b) the number of years (calculated to the nearest one-twelfth year) that will
elapse between the Settlement Date and the scheduled due date of such Remaining Scheduled
Payment.

     “Remaining Scheduled Payments” means, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date if no payment of such
Called Principal were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be made under the terms
of such Note, then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.

     “Settlement Date” means, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.

Section 9. Affirmative Covenants.

     The Company covenants that so long as any of the Notes are outstanding:

     Section 9.1. Compliance with Law. Without limiting Section 10.7, the Company will, and will
cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation, ERISA, the USA Patriot
Act and Environmental Laws, and will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in each case to the extent
necessary to ensure that non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such licenses,

 

 

certificates, permits, franchises and other governmental authorizations would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

     Section 9.2. Insurance. The Company will, and will cause each of its Restricted Subsidiaries
to, maintain, with financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies, of such types, on
such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly situated except for
any non-maintenance that would not reasonably be expected to have a Material Adverse Effect.

     Section 9.3. Maintenance of Properties. The Company will, and will cause each of its
Restricted Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary wear and tear), so that
the business carried on in connection therewith may be properly conducted at all times, provided
that this Section shall not prevent the Company or any Restricted Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is desirable in the
conduct of its business and the Company has concluded that such discontinuance would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     Section 9.4. Payment of Taxes and Claims. The Company will, and will cause each of its
Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other taxes, assessments,
governmental charges, or levies imposed on them or any of their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and payable and before they
have become delinquent and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary not permitted by Section
10.3, provided that neither the Company nor any Subsidiary need pay any such tax or assessment or
claims if (i) the amount, applicability or validity thereof is contested by the Company or such
Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the
Company or such Subsidiary or (ii) the non-filing or nonpayment, as the case may be, of all such
taxes and assessments in the aggregate would not reasonably be expected to have a Material Adverse
Effect.

     Section 9.5. Corporate Existence, Etc. Subject to Sections 10.4 and 10.5, the Company will at
all times preserve and keep in full force and effect its corporate existence, and will at all times
preserve and keep in full force and effect the corporate existence of each of its Restricted
Subsidiaries (unless merged into the Company or a Restricted Subsidiary) and all rights and
franchises of the Company and its Restricted Subsidiaries unless, in the good faith judgment of the
Company, the termination of or failure to preserve and keep in full force and effect such corporate
existence, right or franchise would not, individually or in the aggregate, to have a Material
Adverse Effect.

 

 

     Section 9.6. Designation of Subsidiaries. The Company may from time to time cause any
Subsidiary (other than a Subsidiary Guarantor) to be designated as an Unrestricted Subsidiary or
any Unrestricted Subsidiary to be designated a Restricted Subsidiary; provided, however, that at
the time of such designation and immediately after giving effect thereto, (a) no Default or Event
of Default would exist under the terms of this Agreement, and (b) the Company and its Restricted
Subsidiaries would be in compliance with all of the covenants set forth in this Section 9 and
Section 10 if tested on the date of such action and provided, further, that once a Subsidiary has
been designated an Unrestricted Subsidiary, it shall not thereafter be redesignated as a Restricted
Subsidiary on more than one occasion and once a Subsidiary has been designated a Restricted
Subsidiary, it shall not thereafter be redesignated as an Unrestricted Subsidiary on more than one
occasion. Within ten (10) days following any designation described above, the Company will deliver
to each holder of Notes a notice of such designation accompanied by a certificate signed by a
Senior Financial Officer of the Company certifying compliance with all requirements of this Section
9.6 and setting forth all information required in order to establish such compliance.

     Section 9.7. Notes to Rank Pari Passu. The Notes and all other obligations under this
Agreement of the Company are and at all times shall remain direct and unsecured obligations of the
Company ranking pari passu as against the assets of the Company with all other Notes from time to
time issued and outstanding hereunder without any preference among themselves and pari passu with
the Debt outstanding
under the Bank Credit Agreement and all other present and future unsecured Debt (actual or
contingent) of the Company which is not expressed to be subordinate or junior in rank to any other
unsecured Debt of the Company. All obligations under the Subsidiary Guaranty of each Subsidiary
Guarantor in respect of the Notes, and all other obligations of such Subsidiary Guarantor under the
Subsidiary Guaranty, are and at all times shall remain direct and unsecured obligations of such
Subsidiary Guarantor ranking pari passu as against the assets of such Subsidiary Guarantor with all
obligations of such Subsidiary Guarantor under the Subsidiary Guaranty in respect of all other
Notes from time to time issued and outstanding hereunder and guarantied pursuant to the Subsidiary
Guaranty without any preference among themselves and pari passu with such Subsidiary Guarantor’s
Guaranty in respect of the Debt outstanding under the Bank Credit Agreement and all other present
and future unsecured Debt (actual or contingent) of such Subsidiary Guarantor which is not
expressed to be subordinate or junior in rank to any other unsecured Debt of such Subsidiary
Guarantor.

     Section 9.8. Additional Subsidiary Guarantors. The Company will cause any Subsidiary which is
required by the terms of the Bank Credit Agreement to become a party to, or otherwise guarantee,
Debt in respect of the Bank Credit Agreement, to enter into the Subsidiary Guaranty and deliver to
each of the holders of the Notes (concurrently with the incurrence of any such obligation pursuant
to the Bank Credit Agreement) the following items:

     (a) a joinder agreement in respect of the Subsidiary Guaranty;

     (b) a certificate signed by an authorized Responsible Officer of the Company making
representations and warranties to the effect of those contained in Sections 5.4, 5.6 and
5.7, with respect to such Subsidiary and the Subsidiary Guaranty, as applicable; and

 

 

     (c) an opinion of counsel (who may be in-house counsel for the Company) addressed to
each of the holders of the Notes and reasonably satisfactory to the Required Holders, to the
effect that the Subsidiary Guaranty by such Person has been duly authorized, executed and
delivered and that the Subsidiary Guaranty constitutes the legal, valid and binding
obligation of such Person enforceable in accordance with its terms, except as an enforcement
of such terms may be limited by bankruptcy, insolvency, fraudulent conveyance and similar
laws affecting the enforcement of creditors’ rights generally and by general equitable
principles.

     Section 9.9. Books and Records. The Company will, and will cause each of its Restricted
Subsidiaries to, maintain proper books of record and account in conformity with GAAP and all
applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over
the Company or such Restricted Subsidiary, as the case may be.

Section 10. Negative Covenants.

     The Company covenants that so long as any of the Notes are outstanding:

     Section 10.1. Consolidated Debt to Consolidated EBITDA. The Company will not at any time
permit the ratio of Consolidated Debt to Consolidated EBITDA (Consolidated EBITDA to be calculated
as at the end of each fiscal quarter for the four consecutive fiscal quarters then ended) to exceed
3.50 to 1.00.

     Section 10.2. Priority Debt. The Company will not at any time permit the aggregate amount of
all Priority Debt to exceed 20% of Consolidated Net Worth, determined as of the end of the then
most recently ended fiscal quarter of the Company.

     Section 10.3. Limitation on Liens. The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly create, incur, assume or permit to exist (upon
the happening of a contingency or otherwise) any Lien on or with respect to any property or asset
(including, without limitation, any document or instrument in respect of goods or accounts
receivable) of the Company or any such Restricted Subsidiary, whether now owned or held or
hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to
receive income or profits (unless it makes, or causes to be made, effective provision whereby the
Notes will be equally and ratably secured with any and all other obligations thereby secured, such
security to be pursuant to an agreement reasonably satisfactory to the Required Holders and, in any
such case, the Notes shall have the benefit, to the fullest extent that, and with such priority as,
the holders of the Notes may be entitled under applicable law, of an equitable Lien on such
property), except:

     (a) Liens for taxes, assessments or other governmental charges that are not yet due and
payable or the payment of which is not at the time required by Section 9.4;

     (b) any attachment or judgment Lien, unless the judgment it secures shall not, within
60 days after the entry thereof, have been satisfied, discharged or execution thereof

 

 

stayed pending appeal, or shall not have been discharged within 60 days after the expiration of any
such stay;

     (c) Liens incidental to the conduct of business or the ownership of properties and
assets (including landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s and other
similar Liens for sums not yet due and payable), Liens to secure the performance of bids,
tenders, leases, or trade contracts, or to secure statutory obligations (including
obligations under workers compensation, unemployment insurance and other social security
legislation), surety or appeal bonds or other Liens incurred in the ordinary course of
business and not in connection with the borrowing of money, Liens arising from UCC financing
statements filed for notice purposes in respect of operating leases and Liens in favor of
depositary banks or securities intermediaries incurred in the ordinary course of business
and not in connection with the incurrence of Debt;

     (d) leases or subleases granted to others, easements, rights-of-way, restrictions and
other similar charges or encumbrances, in each case incidental to the ownership of property
or assets or the ordinary conduct of the business of the Company or any of its
Restricted Subsidiaries, on Liens incidental to minor survey exceptions, zoning restrictions
and the like, provided that such Liens do not, in the aggregate, materially detract from the
value of such property;

     (e) Liens securing Debt of a Restricted Subsidiary to the Company or to a Restricted
Subsidiary;

     (f) Liens existing as of the Closing Date and reflected in Schedule 10.3;

     (g) Liens incurred after the Closing Date given to secure the payment of the purchase
price incurred in connection with the acquisition, construction or improvement of property
(other than accounts receivable or inventory) useful and intended to be used in carrying on
the business of the Company or a Restricted Subsidiary, including Liens existing on such
property at the time of acquisition or construction thereof or Liens incurred within 365
days of such acquisition or completion of such construction or improvement, provided that
(i) the Lien shall attach solely to the property acquired, purchased, constructed or
improved; (ii) at the time of acquisition, construction or improvement of such property (or,
in the case of any Lien incurred within 365 days of such acquisition or completion of such
construction or improvement, at the time of the incurrence of the Debt secured by such
Lien), the aggregate amount remaining unpaid on all Debt secured by Liens on such property,
whether or not assumed by the Company or a Restricted Subsidiary, shall not exceed the
lesser of (y) the cost of such acquisition, construction or improvement or (z) the Fair
Market Value of such property (as determined in good faith by one or more officers of the
Company to whom authority to enter into the transaction has been delegated by the board of
directors of the Company); and (iii) at the time of such incurrence and after giving effect
thereto, no Default or Event of Default would exist;

 

 

     (h) any Lien existing on property of a Person immediately prior to its being
consolidated with or merged into the Company or a Restricted Subsidiary after the Closing
Date or its becoming a Restricted Subsidiary after the Closing Date (other than after being
designated a Restricted Subsidiary pursuant to Section 9.6 hereof), or any Lien existing on
any property acquired after the Closing Date by the Company or any Restricted Subsidiary at
the time such property is so acquired (whether or not the Debt secured thereby shall have
been assumed), provided that (i) no such Lien shall have been created or assumed in
contemplation of such consolidation or merger or such Person’s becoming a Restricted
Subsidiary or such acquisition of property, (ii) each such Lien shall extend solely to the
item or items of property so acquired and, if required by the terms of the instrument
originally creating such Lien, other property which is an improvement to or is acquired for
specific use in connection with such acquired property, and (iii) at the time of such
incurrence and after giving effect thereto, no Default or Event of Default would exist;

     (i) any extensions, renewals or replacements of any Lien permitted by the preceding
subparagraphs (e), (f), (g) and (h) of this Section 10.3, provided that (i) no additional
property shall be encumbered by such Liens, (ii) the unpaid principal amount of
the Debt or other obligations secured thereby shall not be increased on or after the date of
any extension, renewal or replacement, and (iii) at such time and immediately after giving
effect thereto, no Default or Event of Default shall have occurred and be continuing;

     (j) Liens granted on accounts receivable and all Related Rights conveyed in connection
with Receivables Securitization Financings; and

     (k) Liens securing Priority Debt of the Company or any Restricted Subsidiary, provided
that the aggregate principal amount of any such Priority Debt shall be permitted by Section
10.2.

     Section 10.4. Sales of Assetss. Except as permitted by Section 10.5, the Company will not,
and will not permit any Restricted Subsidiary to, sell, lease or otherwise dispose of any
substantial part (as defined below) of the assets of the Company and its Restricted Subsidiaries;
provided, however, that the Company or any Restricted Subsidiary may sell, lease or otherwise
dispose of assets constituting a substantial part of the assets of the Company and its Restricted
Subsidiaries if such assets are sold in an arms length transaction and, at such time and
after giving effect thereto, no Default or Event of Default shall have occurred and be continuing
and an amount equal to the net proceeds received from such sale, lease or other disposition (but
only with respect to that portion of such assets that exceeds the definition of “substantial part”
set forth below) shall be used within 365 days of such sale, lease or disposition, in any
combination:

     (1) for working capital purposes (with respect to any Receivables Securitization
Financing), or to acquire assets used or useful in carrying on the business of the Company
and its Restricted Subsidiaries and having a value at least equal to the value of such
assets sold, leased or otherwise disposed of; and/or

 

 

     (2) to prepay or retire Senior Debt of the Company and/or its Restricted Subsidiaries,
provided that (i) the Company shall offer to prepay each outstanding Note ratably with all
such Senior Debt prepaid or retired, and (ii) any such prepayment of the Notes shall be made
in accordance with the terms of Section 8.2 (except at par and without the payment of any
Make-Whole Amount or any other premium).

     As used in this Section 10.4, a sale, lease or other disposition of assets shall be deemed to
be a “substantial part” of the assets of the Company and its Restricted Subsidiaries if the book
value of such assets, when added to the book value of all other assets sold, leased or otherwise
disposed of by the Company and its Restricted Subsidiaries during the period of 12 consecutive
months ending on the date of such sale, lease or other disposition, exceeds 10% of the book value
of Consolidated Total Assets, determined as of the end of the fiscal quarter immediately preceding
such sale, lease or other disposition; provided that there shall be excluded from any determination
of a “substantial part” any (i) sale or disposition of assets in the ordinary course of business of
the Company and its Restricted Subsidiaries, (ii) any transfer of assets from the Company to any
Restricted Subsidiary or from any Restricted Subsidiary to the Company or a Restricted Subsidiary,
(iii) sales of accounts receivable pursuant to one or more Receivables Securitization Financings
with respect to which the aggregate purchase commitments do not exceed

$75,000,000, and (iv) any sale or transfer of property acquired by the Company or any
Restricted Subsidiary after the date of this Agreement to any Person within 365 days following the
acquisition or construction of such property by the Company or any Restricted Subsidiary if the
Company or a Restricted Subsidiary shall concurrently with such sale or transfer, lease such
property, as lessee.

     Section 10.5. Merger and Consolidation. The Company will not, and will not permit any of its
Restricted Subsidiaries to, consolidate with or merge with any other Person or convey, transfer or
lease substantially all of its assets in a single transaction or series of transactions to any
Person; provided that:

     (1) any Restricted Subsidiary of the Company may (x) consolidate with or merge with, or
convey, transfer or lease substantially all of its assets in a single transaction or series
of transactions to, (i) the Company or a Restricted Subsidiary so long as in any merger or
consolidation involving the Company, the Company shall be the surviving or continuing
corporation or (ii) any other Person so long as the survivor is a Restricted Subsidiary, or
(y) convey, transfer or lease all of its assets in compliance with the provisions of Section
10.4; and

     (2) the foregoing restriction does not apply to the consolidation or merger of the
Company with, or the conveyance, transfer or lease of substantially all of the assets of the
Company in a single transaction or series of transactions to, any Person so long as:

     (a) the successor formed by such consolidation or the survivor of such merger
or the Person that acquires by conveyance, transfer or lease substantially all of
the assets of the Company as an entirety, as the case may be (the “Successor
Entity”), shall be a solvent entity organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia;

 

 

     (b) if the Company is not the Successor Entity, such Successor Entity shall
have executed and delivered to each holder of Notes its assumption of the due and
punctual performance and observance of each covenant and condition of this Agreement
(and each Supplement hereto) and the Notes (pursuant to such agreements and
instruments as shall be reasonably satisfactory to the Required Holders), and the
Successor Entity shall have caused to be delivered to each holder of Notes (A) an
opinion of nationally recognized independent counsel, to the effect that all
agreements or instruments effecting such assumption are enforceable in accordance
with their terms and (B) an acknowledgment from each Subsidiary Guarantor that the
Subsidiary Guaranty continues in full force and effect; and

     (c) immediately before and immediately after giving effect to such transaction
no Default or Event of Default would exist.

     Section 10.6. Transactions with Affiliates. The Company will not and will not permit any
Restricted Subsidiary to enter into directly or indirectly any Material transaction or Material
group of related transactions (including
without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering
of any service) with any Affiliate (other than the Company or another Restricted Subsidiary),
except in the ordinary course and upon fair and reasonable terms that are not materially less
favorable to the Company or such Restricted Subsidiary, taken as a whole, than would be obtainable
in a comparable arm’s-length transaction with a Person not an Affiliate.

     Section 10.7. Terrorism Sanctions Regulations. The Company will not and will not permit any
Subsidiary to (a) become a Person described or designated in the Specially Designated Nationals and
Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism
Order or (b) to the best of the Company’s knowledge after reasonable investigation, engage in any
dealings or transactions with any such Person.

Section 11. Events of Default.

     An “Event of Default” shall exist if any of the following conditions or events shall occur and
be continuing:

     (a) the Company defaults in the payment of any principal or Make-Whole Amount, if any,
on any Note when the same becomes due and payable, whether at maturity or at a date fixed
for prepayment or by declaration or otherwise; or

     (b) the Company defaults in the payment of any interest on any Note for more than five
Business Days after the same becomes due and payable; or

     (c) the Company defaults in the performance of or compliance with any term contained in
Section 10 or any covenant in a Supplement which specifically provides that it shall have
the benefit of this paragraph (c) or any Subsidiary Guarantor defaults in the

 

 

performance of
or compliance with any term of the Subsidiary Guaranty beyond any period of grace or cure
period (if any) provided with respect thereto; or

     (d) the Company defaults in the performance of or compliance with any term contained
herein or in any Supplement (other than those referred to in paragraphs (a), (b) and (c) of
this Section 11) and such default is not remedied within 30 days after the earlier of (i) a
Responsible Officer obtaining actual knowledge of such default or (ii) the Company receiving
written notice of such default from any holder of a Note (any such written notice to be
identified as a “notice of default” and to refer specifically to this paragraph (d) of
Section 11); or

     (e) any Subsidiary Guaranty ceases to be a legally valid, binding and enforceable
obligation or contract of a Subsidiary Guarantor (other than upon a release of any
Subsidiary Guarantor from a Subsidiary Guaranty in accordance with the terms of Section
2.3(b) hereof), or any Subsidiary Guarantor or any party by, through or on account of any
such Person, challenges in writing the validity, binding nature or enforceability of any
such Subsidiary Guaranty; or

     (f) any representation or warranty made in writing by or on behalf of the Company or
Subsidiary Guarantor in this Agreement or any Subsidiary Guaranty or by any officer of the
Company or any Subsidiary Guarantor in any writing furnished in connection with the
transactions contemplated hereby or by any Subsidiary Guaranty proves to have been false or
incorrect in any material respect on the date as of which made; or

     (g) (i) the Company or any Restricted Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or make-whole
amount or interest (in the payment amount of at least $100,000) on any Debt other than the
Notes that is outstanding in an aggregate principal amount of at least $10,000,000 beyond
any period of grace provided with respect thereto, or (ii) the Company or any Restricted
Subsidiary is in default in the performance of or compliance with any term of any
instrument, mortgage, indenture or other agreement relating to any Debt other than the Notes
in an aggregate principal amount of at least $10,000,000 or any other condition exists, and
as a consequence of such default or condition such Debt has become, or has been declared,
due and payable, or (iii) as a consequence of the occurrence or continuation of any event or
condition (other than the passage of time or the right of the holder of Debt to convert such
Debt into equity interests), the Company or any Restricted Subsidiary has become obligated
to purchase or repay Debt other than the Notes before its regular maturity or before its
regularly scheduled dates of payment in an aggregate outstanding principal amount of at
least $10,000,000; or

     (h) the Company or any Material Subsidiary (i) is generally not paying, or admits in
writing its inability to pay, its debts as they become due, (ii) files, or consents by
answer or otherwise to the filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of any

 

 

jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, (v) is adjudicated as insolvent or to
be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

     (i) a court or governmental authority of competent jurisdiction enters an order
appointing, without consent by the Company or any of its Material Subsidiaries, a custodian,
receiver, trustee or other officer with similar powers with respect to it or with respect to
any substantial part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of the Company or any of its Material
Subsidiaries, or any such petition shall be filed against the Company or any of its Material
Subsidiaries and such petition shall not be dismissed within 60 days; or

     (j) a final judgment or judgments at any one time outstanding for the payment of money
aggregating in excess of $10,000,000 (except to the extent covered by independent
third-party insurance as to which the insurer acknowledges in writing that
such judgment or judgments are covered by such insurance) are rendered against one or more
of the Company or any of its Restricted Subsidiaries and which judgments are not, within 60
days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged
within 60 days after the expiration of such stay; or

     (k) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the
Code for any plan year or part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under Section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected to be filed with the
PBGC or the PBGC shall have instituted proceedings under Section 4042 of ERISA to terminate
or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the
aggregate “amount of unfunded benefit liabilities” (within the meaning of Section
4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $10,000,000, (iv) the Company or any ERISA Affiliate shall have incurred or is
reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty
or excise tax provisions of the Code relating to employee benefit plans, (v) the Company or
any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any
Subsidiary establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the liability of the
Company or any Subsidiary thereunder; and any such event or events described in clauses (i)
through (vi) above, either individually or together with any other such event or events,
would reasonably be expected to have a Material Adverse Effect.

As used in Section 11(k), the terms “employee benefit plan” and “employee welfare benefit plan”
shall have the respective meanings assigned to such terms in Section 3 of ERISA.

 

 

     Section 12. Remedies on Default, Etc.

     Section 12.1. Acceleration. (a) If an Event of Default with respect to the Company described
in paragraph (h) or (i) of Section 11 (other than an Event of Default described in clause (i) of
paragraph (h) or described in clause (vi) of paragraph (h) by virtue of the fact that such clause
encompasses clause (i) of paragraph (h)) has occurred, all the Notes of every Series then
outstanding shall automatically become immediately due and payable.

     (b) If any other Event of Default has occurred and is continuing, any holder or holders of
more than 50% in aggregate principal amount of the Notes of any Series at the time outstanding may
at any time at its or their option, by notice or notices to the Company, declare all the Notes of
such Series then outstanding to be immediately due and payable.

     (c) If any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and
is continuing with respect to any Notes, any holder or holders of Notes at the time outstanding
affected by such Event of Default may at any time, at its or their option, by notice or
notices to the Company, declare all the Notes held by such holder or holders to be immediately due
and payable.

     Upon any Note’s becoming due and payable under this Section 12.1, whether automatically or by
declaration, such Note will forthwith mature and the entire unpaid principal amount of such Note,
plus (i) all accrued and unpaid interest thereon (including, but not limited to, interest accrued
thereon at the Default Rate) and (ii) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be immediately due and payable,
in each and every case without presentment, demand, protest or further notice, all of which are
hereby waived. The Company acknowledges, and the parties hereto agree, that each holder of a Note
has the right to maintain its investment in the Notes free from repayment by the Company (except as
herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the
Company in the event that the Notes are prepaid or are accelerated as a result of an Event of
Default, is intended to provide compensation for the deprivation of such right under such
circumstances.

     Section 12.2. Other Remedies. If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been declared immediately due
and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to
protect and enforce the rights of such holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement contained herein or
in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in
aid of the exercise of any power granted hereby or thereby or by law or otherwise.

     Section 12.3. Rescission. At any time after the Notes of any Series have been declared due
and payable pursuant to clause (b) or (c) of Section 12.1, the holders of not less than 51% in
aggregate principal amount of the Notes of such Series then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if (a) the Company has
paid all overdue interest on the Notes of such Series, all principal of and Make-Whole Amount on
any Notes of such Series that are due and payable and are unpaid other than by reason

 

 

of such declaration, and all interest on such overdue principal and Make-Whole Amount and (to the extent
permitted by applicable law) any overdue interest in respect of the Notes of such Series at the
Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have
become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such declaration, have been cured
or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the
payment of any monies due pursuant hereto or to any Notes of such Series. No rescission and
annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or
Default or impair any right consequent thereon.

     Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no
delay on the part of any holder of any Note in exercising any right, power or remedy shall operate
as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right,
power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter available at law, in
equity, by statute or otherwise. Without limiting the obligations of the Company under Section 15,
the Company will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection
under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and
disbursements.

Section 13. Registration; Exchange; Substitution of Notes.

     Section 13.1. Registration of Notes. The Company shall keep at its principal executive office
a register for the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address of each transferee
of one or more Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered shall be deemed and
treated as the owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy
of the names and addresses of all registered holders of Notes.

     Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note to the Company at
the address and to the attention of the designated officer (all as specified in Section 18(iii)),
for registration of transfer or exchange (and in the case of a surrender for registration of
transfer accompanied by a written instrument of transfer duly executed by the registered holder of
such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant
name, address and other information for notices of each transferee of such Note or part thereof),
within ten Business Days thereafter, the Company shall execute and deliver, at the Company’s
expense (except as provided below), one or more new Notes (as requested by the holder thereof) of
the same Series (and of the same tranche if such Series has separate tranches) in exchange
therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered
Note. Each such new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of the Note of such Series originally issued hereunder or pursuant to any
Supplement. Each such new Note shall be dated

 

 

and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no
interest shall have been paid thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $2,000,000, provided that if necessary to
enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in
a denomination of less than $2,000,000. Any transferee, by its acceptance of a Note registered in
its name (or the name of its nominee), shall be deemed to have made the representations set forth
in Sections 6.2 and 6.3.

     The Notes have not been registered under the Securities Act or under the securities laws of
any state and each holder agrees that such Notes shall not be transferred or resold unless
registered under the Securities Act and all applicable state securities laws or unless an exemption
from the requirement for such registration is available.

     Section 13.3. Replacement of Notes. Upon receipt by the Company at the address and to the
attention of the designated officer (all as specified in Section 18(iii)) of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation), and

     (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to
it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser
or another holder of a Note with a minimum net worth of at least $50,000,000 or a Qualified
Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to
be satisfactory), or

     (b) in the case of mutilation, upon surrender and cancellation thereof,

the Company at its own expense shall execute and deliver not more than 10 Business Days following
satisfaction of such conditions, in lieu thereof, a new Note of the same Series (and of the same
tranche if such Series has separate tranches), dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date
of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

Section 14. Payments on Notes.

     Section 14.1. Place of Payment. Subject to Section 14.2, payments of principal, Make-Whole
Amount and interest becoming due and payable on the Notes shall be made in New York, New York at
the principal office of Bank of America, N.A. in such jurisdiction. The Company may at any time,
by notice to each holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.

     Section 14.2. Home Office Payment. So long as any Purchaser or Additional Purchaser or such
Purchaser’s nominee or such Additional Purchaser’s nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the

 

 

Company will pay all sums becoming due on such Note for principal, Make-Whole Amount and interest by the
method and at the address specified for such purpose for such Purchaser on Schedule A hereto or, in
the case of any Additional Purchaser, Schedule A attached to any Supplement pursuant to which such
Additional Purchaser is a party, or by such other method or at such other address as such Purchaser
or Additional Purchaser shall have from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the making of any notation
thereon, except that upon written request of the Company made concurrently with or reasonably
promptly after payment or prepayment in full of any Note, such Purchaser or Additional Purchaser
shall surrender such Note for cancellation, reasonably promptly after any such request, to the
Company at its principal executive office or at the place of payment most recently designated by
the Company pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by
any Purchaser or Additional Purchaser or such Person’s nominee, such Person will, at its election,
either endorse thereon the amount of principal paid thereon and the last date to which interest has
been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes
pursuant to Section 13.2. The Company will afford the benefits of this Section 14.2 to any
Institutional Investor that is the direct or indirect transferee of any Note purchased by a
Purchaser under this Agreement and that has made the same agreement relating to such Note as the
Purchasers have made in this Section 14.2.

Section 15. Expenses, Etc.

     Section 15.1. Transaction Expenses. Whether or not the transactions contemplated hereby are
consummated, the Company will pay all reasonable actual out-of-pocket costs and expenses (including
reasonable attorneys’ fees of a special counsel for the Purchasers or any Additional Purchasers
and, if reasonably required by the Required Holders, local or other counsel) incurred by each
Purchaser and each Additional Purchaser and each other holder of a Note in connection with such
transactions and in connection with any amendments, waivers or consents under or in respect of this
Agreement (including any Supplement) or the Notes (whether or not such amendment, waiver or consent
becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing
or defending (or determining whether or how to enforce or defend) any rights under this Agreement
(including any Supplement) or the Notes or in responding to any subpoena or other legal process or
informal investigative demand issued in connection with this Agreement (including any Supplement)
or the Notes, or by reason of being a holder of any Note, and (b) the costs and expenses, including
financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company
or any Subsidiary or in connection with any work-out or restructuring of the transactions
contemplated hereby and by the Notes. The Company will pay, and will save each Purchaser, each
Additional Purchaser and each other holder of a Note harmless from, all claims in respect of any
fees, costs or expenses if any, of brokers and finders (other than those, if any, retained by a
Purchaser or other holder in connection with its purchase of the Notes).

     Section 15.2. Survival. The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this
Agreement, any Supplement or the Notes, and the termination of this Agreement or any Supplement.

 

 

Section 16. Survival of Representations and Warranties; Entire Agreement. 

     All representations and warranties contained herein or in any Supplement shall survive the
execution and delivery of this Agreement, such Supplement and the Notes, the purchase or transfer
by any Purchaser or any Additional Purchaser of any such Note or portion thereof or interest
therein and the payment of any Note may be relied upon by any subsequent holder of any such Note,
regardless of any investigation made at any time by or on behalf of any Purchaser or any Additional
Purchaser or any other holder of any such Note. All statements contained in any certificate or
other instrument delivered by or on behalf of the Company pursuant to this Agreement or any
Supplement shall be deemed representations and warranties of the Company under this Agreement;
provided, that the representations and warranties contained in any Supplement shall only be made
for the benefit of the Additional Purchasers which are party to such Supplement and the holders of
the Notes issued pursuant to such Supplement, including subsequent holders of any Note issued
pursuant to such Supplement, and shall not require the consent of the holders of existing Notes.
Subject to the preceding sentence, this Agreement (including every Supplement) and the Notes embody
the entire agreement and understanding between the Purchasers and the Additional Purchasers and the
Company and supersede all prior agreements and understandings relating to the subject matter
hereof.

Section 17. Amendment and Waiver.

     Section 17.1. Requirements. (a) This Agreement (including any Supplement) and the Notes may
be amended, and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (i) no amendment or waiver of any of the provisions of Section 1, 2,
3, 4, 5, 6 or 21 hereof or the corresponding provision of any Supplement, or any defined term (as
it is used in any such Section or such corresponding provision of any Supplement), will be
effective as to any holder of Notes unless consented to by such holder of Notes in writing, and
(ii) no such amendment or waiver may, without the written consent of all of the holders of Notes at
the time outstanding affected thereby, (A) subject to the provisions of Section 12 relating to
acceleration or rescission, change the amount or time of any prepayment or payment of principal of,
or reduce the rate or change the time of payment or method of computation of interest (if such
change results in a decrease in the interest rate) or of the Make-Whole Amount on, the Notes, (B)
change the percentage of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (C) amend any of Sections 8, 11(a), 11(b), 12, 17 or
20.

          (b) Supplements. Notwithstanding anything to the contrary contained herein, the Company may
enter into any Supplement providing for the issuance of one or more Series of Additional Notes
consistent with Section 2.2 hereof without obtaining the consent of any holder of any other Series
of Notes.

     Section 17.2. Solicitation of Holders of Notes.

     (a) Solicitation. The Company will provide each holder of the Notes (irrespective of the
amount of Notes then owned by it) with sufficient information, sufficiently far in advance of

 

 

the date a decision is required, to enable such holder to make an informed and considered decision with
respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof, of
any Supplement or of the Notes. The Company will deliver executed or true and correct copies of
each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each
holder of outstanding Notes promptly following the date on which it is executed and delivered by,
or receives the consent or approval of, the requisite holders of Notes.

     (b) Payment. The Company will not directly or indirectly pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any
security or provide other credit support, to any holder of Notes as consideration for or as an
inducement to the entering into by any holder of Notes of any waiver or amendment of any of the
terms and provisions hereof or of any Supplement unless such remuneration is concurrently paid, or
security is concurrently granted or other credit support is concurrently provided, on the same
terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such
waiver or amendment.

     (c) Consent in Contemplation of Transfer. Any consent made pursuant to this Section 17 by a
holder of Notes that has transferred or has agreed to transfer its Notes to the Company, any
Subsidiary or any Affiliate of the Company and has provided or has agreed to provide such written
consent as a condition to such transfer shall be void and of no force or effect except solely as to
such holder, and any amendments effected or waivers granted or to be effected or granted that would
not have been or would not be so effected or granted but for such consent (and the consents of all
other holders of Notes that were acquired under the same or similar conditions) shall be void and
of no force or effect except solely as to such holder.

     Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding upon them and upon each future
holder of any Note and upon the Company without regard to whether such Note has been marked to
indicate such amendment or waiver. No such amendment or waiver will extend to or affect any
obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or
impair any right consequent thereon. No course of dealing between the Company and the holder of
any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a
waiver of any rights of any holder of such Note. As used herein, the term “this Agreement” and
references thereto shall mean this Agreement as it may from time to time be amended or
supplemented.

     Section 17.4. Notes Held by Company, Etc. Solely for the purpose of determining whether the
holders of the requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this Agreement or the
Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon
the direction of
the holders of a specified percentage of the aggregate principal amount of Notes then outstanding,
Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.

 

 

Section 18. Notices.

     All notices and communications provided for hereunder shall be in writing and sent (a) by
telecopy if the sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), (b) by registered or certified mail with return
receipt requested (postage prepaid) or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:

     (i) if to a Purchaser or such Purchaser’s nominee, to such Purchaser or such
Purchaser’s nominee at the address specified for such communications in Schedule A to this
Agreement, or at such other address as such Purchaser or such Purchaser’s nominee shall have
specified to the Company in writing pursuant to this Section 18;

     (ii) if to an Additional Purchaser or such Additional Purchaser’s nominee, to such
Additional Purchaser or such Additional Purchaser’s nominee at the address specified for
such communications in Schedule A to any Supplement, or at such other address as such
Additional Purchaser or such Additional Purchaser’s nominee shall have specified to the
Company in writing,

     (iii) if to any other holder of any Note, to such holder at such address as such other
holder shall have specified to the Company in writing pursuant to this Section 18, or

     (iv) if to the Company, to the Company at its address set forth at the beginning hereof
to the attention of Chief Financial Officer, with a copy to the General Counsel, or at such
other address as the Company shall have specified to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

Section 19. Reproduction of Documents.

     This Agreement and all documents relating thereto, including, without limitation, (a)
consents, waivers and modifications that may hereafter be executed, (b) documents received by any
Purchaser at the Closing or by any Additional Purchaser (except the Notes themselves), and (c)
financial statements, certificates and other information previously or hereafter furnished to any
Purchaser or any Additional Purchaser, may be reproduced by such Purchaser or such Additional
Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such
Purchaser or such Additional Purchaser may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and whether or not such
reproduction was made by such Purchaser or such Additional Purchaser in the regular course of
business) and any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the Company or any other
holder of Notes from contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

 

 

Section 20. Confidential Information.

     For the purposes of this Section 20, “Confidential Information” means information delivered to
any Purchaser or any Additional Purchaser by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this Agreement that is
proprietary in nature and that was clearly marked or labeled or otherwise adequately identified
when received by such Purchaser or Additional Purchaser as being confidential information of the
Company or such Subsidiary, provided that such term does not include information that (a) was
publicly known or otherwise known to such Purchaser or such Additional Purchaser prior to the time
of such disclosure, (b) subsequently becomes publicly known through no act or omission by such
Purchaser or such Additional Purchaser or any Person acting on such Purchaser’s or such Additional
Purchaser’s behalf, (c) otherwise becomes known to such Purchaser or such Additional Purchaser
other than through disclosure by the Company or any Subsidiary, or through disclosure by any other
Person known by such Purchaser or Additional Purchaser to be subject to a confidentiality agreement
or undertaking, or (d) constitutes financial statements delivered to such Purchaser or such
Additional Purchaser under Section 7.1 that are otherwise publicly available. Each Purchaser and
each Additional Purchaser will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by such Purchaser or such Additional Purchaser in good faith to
protect confidential information of third parties delivered to such Purchaser or such Additional
Purchaser, provided that such Purchaser or such Additional Purchaser may deliver or disclose
Confidential Information to (i) such Purchaser’s or such Additional Purchaser’s directors,
trustees, officers, employees, agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment represented by such Purchaser’s or such
Additional Purchaser’s Notes), (ii) such Purchaser’s or such Additional Purchaser’s financial
advisors and other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20, (iii) any other holder
of any Note, (iv) any Institutional Investor to which such Purchaser or such Additional Purchaser
sells or offers to sell such Note or any part thereof or any participation therein (if such Person
has agreed in writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (v) any Person from which such Purchaser or such Additional
Purchaser offers to purchase any security of the Company (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound by the provisions of this Section
20), (vi) any federal or state regulatory authority having jurisdiction over such Purchaser or such
Additional Purchaser, (vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to information about
such Purchaser’s or such Additional Purchaser’s investment portfolio, or (viii) any other Person to
which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to such Purchaser or such Additional Purchaser, (x) in
response to any subpoena or other legal process,
(y) in connection with any litigation to which such Purchaser or such Additional Purchaser is
a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser
or such Additional Purchaser may reasonably determine such delivery and disclosure to be necessary
or appropriate in the enforcement or for the protection of the rights and remedies under such
Purchaser’s or such Additional Purchaser’s Notes, the Subsidiary Guaranty and this Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by

 

 

and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On
reasonable request by the Company in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or requested by such
holder (other than a holder that is a party to this Agreement or its nominee), such holder will
enter into an agreement with the Company embodying the provisions of this Section 20.

Section 21. Substitution of Purchaser.

     Each Purchaser and each Additional Purchaser shall have the right to substitute any one of its
Affiliates as the purchaser of the Notes that it has agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both such Purchaser or such Additional
Purchaser and such Affiliate, shall contain such Affiliate’s agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of
the representations set forth in Section 6. Upon receipt of such notice, any reference to such
Purchaser or such Additional Purchaser in this Agreement (other than in this Section 21), shall be
deemed to refer to such Affiliate in lieu of such original Purchaser or such original Additional
Purchaser. In the event that such Affiliate is so substituted as a Purchaser or an Additional
Purchaser hereunder and such Affiliate thereafter transfers to such original Purchaser or such
original Additional Purchaser all of the Notes then held by such Affiliate, upon receipt by the
Company of notice of such transfer, any reference to such Affiliate as a “Purchaser” or an
“Additional Purchaser” in this Agreement (other than in this Section 21), shall no longer be deemed
to refer to such Affiliate, but shall refer to such original Purchaser or such original Additional
Purchaser, and such original Purchaser or such original Additional Purchaser shall again have all
the rights of an original holder of the Notes under this Agreement.

Section 22. Miscellaneous.

     Section 22.1. Successors and Assigns. All covenants and other agreements contained in this
Agreement (including all covenants and other agreements contained in any Supplement) by or on
behalf of any of the parties hereto bind and inure to the benefit of their respective successors
and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed
or not.

     Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to
the contrary notwithstanding (but without limiting the requirement in Section 8.4 that the notice
of any optional prepayment specify a Business Day as the date fixed for such prepayment), any
payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other
than a Business Day shall be made on the next succeeding Business Day without including the
additional
days elapsed in the computation of the interest payable on such next succeeding Business Day;
provided that if the maturity date of any Note is a date other than a Business Day, the payment
otherwise due on such maturity date shall be made on the next succeeding Business Day and shall
include the additional days elapsed in the computation of interest payable on such next succeeding
Business Day.

 

 

     Section 22.3. Accounting Terms. All accounting terms used herein which are not expressly
defined in this Agreement have the meanings respectively given to them in accordance with GAAP.
Except as otherwise specifically provided herein, (i) all computations made pursuant to this
Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be
prepared in accordance with GAAP.

     Section 22.4. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by
law) not invalidate or render unenforceable such provision in any other jurisdiction.

     Section 22.5. Construction. Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained herein, so that
compliance with any one covenant shall not (absent such an express contrary provision) be deemed to
excuse compliance with any other covenant. Where any provision herein refers to action to be taken
by any Person, or which such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person.

     For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be
deemed to be a part hereof.

     Section 22.6. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each signed by less than all, but together
signed by all, of the parties hereto.

     Section 22.7. Governing Law. This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would permit the application of
the laws of a jurisdiction other than such State.

     Section 22.8. Jurisdiction and Process; Waiver of Jury Trial. (a) The Company irrevocably
submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the
Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or
relating to this Agreement or the Notes. To the fullest extent permitted by applicable law, the
Company
irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim
that it is not subject to the jurisdiction of any such court, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding brought in any
such court and any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.

     (b) The Company consents to process being served by or on behalf of any holder of Notes in any
suit, action or proceeding of the nature referred to in Section 22.8(a) by mailing a copy thereof
by registered or certified mail (or any substantially similar form of mail), postage prepaid,
return receipt requested, to it at its address specified in Section 18 or at such other

 

 

address of
which such holder shall then have been notified pursuant to said Section. The Company agrees that
such service upon receipt (i) shall be deemed in every respect effective service of process upon it
in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by
applicable law, be taken and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt
furnished by the United States Postal Service or any reputable commercial delivery service.

     (c) Nothing in this Section 22.8 shall affect the right of any holder of a Note to serve
process in any manner permitted by law, or limit any right that the holders of any of the Notes may
have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to
enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

     (d) The parties hereto to the fullest extent permitted by law hereby waive trial by jury
in any action brought on or with respect to this Agreement, the Notes or any other document
executed in connection herewith or therewith.

* * * * *

 

 

     The execution hereof by the Purchasers shall constitute a contract among the Company and the
Purchasers for the uses and purposes hereinabove set forth. This Agreement may be executed in any
number of counterparts, each executed counterpart constituting an original but all together only
one agreement.

	 	 	 	 	 
	 	Very truly yours,

Eagle Materials Inc.

 	 
	 	By:  	/s/ Arthur R. Zunker, Jr.
 	 
	 	 	Arthur R. Zunker, Jr. 	 
	 	 	Senior Vice President and Treasurer 	 
	 

 

 

Accepted as of the date first written above.

	 	 	 	 	 
	 	 	Metropolitan Life Insurance Company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Christopher D. Pahlke
	 

	 	 	 	 
	 

	 	 	 	Name: Christopher D. Pahlke
	 

	 	 	 	Title: Vice President

	 	 	 	 	 
	 	 	General American Life Insurance Company
	 
	 	 	 	 
	 

	 	By:
	 	Metropolitan Life Insurance Company, its

Investment Manager

	 	 	 	 	 	 	 
	 

	 	By
	 	/s/ Judith A. Gulotta
 

	 	 
	 

	 	 	 	Name: Judith A. Gulotta	 	 
	 

	 	 	 	Title: Director	 	 

	 	 	 	 	 
	 	 	The Travelers Insurance Company
	 
	 	 	 	 
	 

	 	By:
	 	Metropolitan Life Insurance Company, its

Investment Manager

	 	 	 	 	 	 	 
	 

	 	By
	 	/s/ Judith A. Gulotta
 

	 	 
	 

	 	 	 	Name: Judith A. Gulotta	 	 
	 

	 	 	 	Title: Director	 	 

 

 

	 	 	 	 	 
	 	Transamerica Occidental Life Insurance Company

 	 
	 	By:  	/s/ Christopher A. Pahlke
 	 
	 	 	Name:  	Christopher A. Pahlke 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	Transamerica Life Insurance Company

 	 
	 	By:  	/s/ Christopher A. Pahlke
 	 
	 	 	Name:  	Christopher A. Pahlke 	 
	 	 	Title:  	Vice President 	 
	 
	 	Monumental Life Insurance Company
	 	 	 	 
	 	By:
	/s/ Christopher A. Pahlke
	 	 	 
	 	 	Name: Christopher A. Pahlke
	 	 	Title: Vice President

 

 

	 	 	 	 	 
	 	 	The Lincoln National Life Insurance
Company
	 
	 	 	 	 
	 

	 	By:
	 	Delaware Investment Advisers, a series of
Delaware Management Business Trust,
Attorney-In-Fact

	 	 	 	 	 	 	 
	 

	 	By
	 	/s/ Bradley S. Ritter
 

	 	 
	 

	 	 	 	Name: Bradley S. Ritter	 	 
	 

	 	 	 	Title: Senior Vice President	 	 

	 	 	 	 	 
	 	 	Sons of Norway
	 
	 	 	 	 
	 

	 	By:
	 	Delaware Lincoln Investment Advisers, a
series of Delaware Management Business
Trust, Attorney-In-Fact

	 	 	 	 	 	 	 
	 

	 	By
	 	/s/ Bradley S. Ritter
 

	 	 
	 

	 	 	 	Name: Bradley S. Ritter	 	 
	 

	 	 	 	Title: Senior Vice President	 	 

	 	 	 	 	 
	 	 	First Penn-Pacific Life Insurance

Company
	 
	 	 	 	 
	 

	 	By:
	 	Delaware Investment Advisers, a series of
Delaware Management Business Trust,
Attorney-In-Fact

	 	 	 	 	 	 	 
	 

	 	By
	 	/s/ Bradley S. Ritter
 

	 	 
	 

	 	 	 	Name: Bradley S. Ritter	 	 
	 

	 	 	 	Title: Senior Vice President	 	 

	 	 	 	 	 
	 	 	Lincoln Life & Annuity Company of New
York
	 
	 	 	 	 
	 

	 	By:
	 	Delaware Investment Advisers, a series of
Delaware Management Business Trust,
Attorney-In-Fact

	 	 	 	 	 	 	 
	 

	 	By
	 	/s/ Bradley S. Ritter
 

Name: Bradley S. Ritter
	 	 
	 

	 	 	 	Title: Senior Vice President	 	 

 

 

	 	 	 	 	 
	 	 	Jackson National Life Insurance Company
	 
	 	 	 	 
	 

	 	By:
	 	PPM America, Inc., as attorney in fact,
on behalf of Jackson National Life Insurance
Company

	 	 	 	 	 	 	 
	 

	 	By
	 	/s/ Chris Kappas
 

Name: Chris Kappas
	 	 
	 

	 	 	 	Title: Managing Director	 	 

	 	 	 	 	 
	 	 	Jackson National Life Insurance Company of
New York
	 
	 	 	 	 
	 

	 	By:
	 	PPM America, Inc., as attorney in fact,
on behalf of Jackson National Life Insurance
Company of New York

	 	 	 	 	 	 	 
	 

	 	By
	 	/s/ Chris Kappas
 

	 	 
	 

	 	 	 	Name: Chris Kappas	 	 
	 

	 	 	 	Title: Managing Director	 	 

 

 

	 	 	 	 	 
	 	General Electric Capital Assurance Company

 	 
	 	By     /s/ Stephen R. De Motto
 	 
	 	Name:  	Stephen R. De Motto 	 
	 	Title:  	Investment Officer 	 
	 

	 	 	 	 	 
	 	GE Capital Life Assurance Company of New York

 	 
	 	By     /s/ Stephen R. De Moto
 	 
	 	Name:  	Stephen R. De Moto 	 
	 	Title:  	Investment Officer 	 

 

 

	 	 	 	 	 

Schedule A (to Note Purchase Agreement) intentionally omitted

 

 

Defined Terms

     As used herein, the following terms have the respective meanings set forth below or set forth
in the Section hereof following such term:

     “Additional Notes” is defined in Section 2.2.

     “Additional Purchasers” means purchasers of Additional Notes.

     “Affiliate” means, at any time, and with respect to any Person, (a) any other Person that at
such time directly or indirectly through one or more intermediaries Controls, or is Controlled by,
or is under common Control with, such first Person, and (b) any Person beneficially owning or
holding, directly or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any Person of which the Company and its Subsidiaries beneficially own
or hold, in the aggregate, directly or indirectly, 10% or more of any class of voting or equity
interests. As used in this definition, “Control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise. Unless the context otherwise
clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.

     “Anti-Terrorism Order” means Executive Order No. 13,224 of September 24, 2001, Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.

     “Bank Credit Agreement” means the Amended and Restated Credit Agreement dated as of December
16, 2004 by and among the Company, certain Subsidiaries of the Company named therein, JPMorgan
Chase Bank, N.A., as administrative agent, and the other financial institutions party thereto, as
amended, restated, joined, supplemented or otherwise modified from time to time, and any renewals,
extensions or replacements thereof, which constitute the primary bank credit facility of the
Company and its Subsidiaries.

     “Business Day” means any day other than a Saturday, a Sunday or a day on which commercial
banks in New York, New York or Dallas, Texas are required or authorized to be closed.

     “Capital Lease” means, at any time, a lease with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of a liability in
accordance with GAAP.

     “Capital Lease Obligation” means, with respect to any Person and a Capital Lease, the amount
of the obligation of such Person as the lessee under such Capital Lease which would, in accordance
with GAAP, appear as a liability on a balance sheet of such Person.

     “Closing” is defined in Section 3.

Schedule B

(to Note Purchase Agreement)

 

 

     “Closing Date” is defined in Section 3.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules
and regulations promulgated thereunder from time to time.

     “Company” means Eagle Materials Inc., a Delaware corporation, or any successor that becomes
such in the manner prescribed in Section 10.5.

     “Confidential Information” is defined in Section 20.

     “Consolidated Debt” means as of any date of determination the total amount of all Debt of the
Company and its Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP.

     “Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such period,
plus, to the extent deducted in computing such Consolidated Net Income and without duplication, (a)
depreciation, depletion, if any, and amortization expense for such period, (b) Consolidated
Interest Expense for such period, (c) income tax expense for such period, and (d) other non-cash
charges for such period, all as determined on a consolidated basis in accordance with GAAP. For
purposes of calculating Consolidated EBITDA for any period of four consecutive quarters, if during
such period the Company or any Restricted Subsidiary shall have acquired or disposed of any Person
or acquired or disposed of all or substantially all of the operating assets of any Person,
Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto as if
such transaction had occurred on the first day of such period.

     “Consolidated Interest Expense” shall mean, for any period, the aggregate of all interest
expense of the Company and its Restricted Subsidiaries deducted in the calculation of Consolidated
Net Income for such period, determined on a consolidated basis in accordance with GAAP.

     “Consolidated Net Income” shall mean, for any period, the consolidated net income (or loss) of
the Company and its Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP.

     “Consolidated Net Worth” shall mean the consolidated stockholder’s equity of the Company and
its Restricted Subsidiaries, as defined according to GAAP.

     “Consolidated Total Assets” means, as of any date of determination, the total amount of all
assets of the Company and its Restricted Subsidiaries, determined on a consolidated basis in
accordance with GAAP.

     “Debt” means, with respect to any Person, without duplication,

     (a) its liabilities for borrowed money;

B-2

 

     (b) its liabilities for the deferred purchase price of property acquired by such Person
(excluding accounts payable and other accrued liabilities arising in the ordinary course of
business but including, without limitation, all liabilities created or arising under any
conditional sale or other title retention agreement with respect to any such property);

     (c) its Capital Lease Obligations;

     (d) its liabilities for borrowed money secured by any Lien with respect to any property
owned by such Person (whether or not it has assumed or otherwise become liable for such
liabilities); and

     (e) Guarantees by such Person with respect to liabilities of a type described in any of
clauses (a) through (d) hereof.

     Debt of any Person shall include all obligations of such Person of the character described in
clauses (a) through (e) to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under GAAP.

     “Default” means an event or condition the occurrence or existence of which would, with the
lapse of time or the giving of notice or both, become an Event of Default.

     “Default Rate” means with respect to the Notes of any Series that rate of interest that is 2%
per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes of
such Series (and of such tranche if such Series has separate tranches).

     “Electronic Delivery” is defined in Section 7.1(a).

     “Environmental Laws” means any and all federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time in effect.

     “ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as
a single employer together with the Company under section 414 of the Code.

     “Event of Default” is defined in Section 11.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

B-3

 

     “Fair Market Value” means, at any time and with respect to any property, the sale value of
such property that would be realized in an arm’s-length sale at such time between an informed and
willing buyer and an informed and willing seller (neither being under a compulsion to buy or sell),
as reasonably determined in the good faith opinion of the Company’s board of directors.

     “GAAP” means those generally accepted accounting principles as in effect from time to time in
the United States of America.

     “Governmental Authority” means

     (a) the government of

     (i) the United States of America or any state or other political subdivision
thereof, or

     (ii) any jurisdiction in which the Company or any Restricted Subsidiary
conducts all or any part of its business, or which has jurisdiction over any
properties of the Company or any Restricted Subsidiary, or

     (b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

     “Guaranty” means, with respect to any Person, any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection) of such Person
guaranteeing or in effect guaranteeing any Debt, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including (without limitation) obligations incurred
through an agreement, contingent or otherwise, by such Person:

     (a) to purchase such Debt or obligation or any property constituting security therefor
primarily for the purpose of assuring the owner of such Debt or obligation of the ability of
any other Person to make payment of the Debt or obligation;

     (b) to advance or supply funds (i) for the purchase or payment of such Debt or
obligation, or (ii) to maintain any working capital or other balance sheet condition or any
income statement condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such Debt or obligation;

     (c) to lease properties or to purchase properties or services primarily for the purpose
of assuring the owner of such Debt or obligation of the ability of any other Person to make
payment of the Debt or obligation; or

     (d) otherwise to assure the owner of such Debt or obligation against loss in respect
thereof.

     In any computation of the Debt or other liabilities of the obligor under any Guaranty, the
Debt or other obligations that are the subject of such Guaranty shall be assumed to be direct

B-4

 

obligations of such obligor, provided that the amount of such Debt outstanding for purposes of
this Agreement shall not exceed the maximum amount of Debt that is the subject of such Guaranty.

     “Guaranty Release” is defined in Section 2.3.

     “Hazardous Material” means any and all pollutants, toxic or hazardous wastes or other
substances that might pose a hazard to health and safety, the removal of which may be required or
the generation, manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law including, but not
limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum,
petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized
substances.

     “holder” means, with respect to any Note, the Person in whose name such Note is registered in
the register maintained by the Company pursuant to Section 13.1.

     “Institutional Investor” means (a) any original purchaser of a Note, (b) any holder of more
than $2,000,000 of the aggregate principal amount of the Notes then outstanding, and (c) any bank,
trust company, savings and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other similar financial
institution or entity, regardless of legal form.

     “Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security
interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other title retention agreement
(other than an operating lease) or Capital Lease, upon or with respect to any property or asset of
such Person (including, in the case of stock, shareholder agreements, voting trust agreements and
all similar arrangements).

     “Make-Whole Amount” shall have the meaning (i) set forth in Section 8.6 with respect to any
Series 2005A Note and (ii) set forth in the applicable Supplement with respect to any other Series
of Notes.

     “Material” means material in relation to the business, operations, affairs, financial
condition, assets or properties of the Company and its Restricted Subsidiaries taken as a whole.

     “Material Adverse Effect” means a material adverse effect on (a) the business, operations,
affairs, financial condition, assets or properties of the Company and its Restricted Subsidiaries
taken as a whole, or (b) the ability of the Company to perform its obligations under this Agreement
(including any Supplement) and the Notes, (c) the ability of any Subsidiary Guarantor to perform
its obligations under the Subsidiary Guaranty or (d) the validity or enforceability of this
Agreement (including any Supplement), the Notes or the Subsidiary Guaranty.

B-5

 

     “Material Subsidiary” means, at any time, any Restricted Subsidiary of the Company which,
together with all other Restricted Subsidiaries of such Restricted Subsidiary, accounts for more
than (i) 5% of Consolidated Total Assets or (ii) 5% of consolidated revenue of the Company and its
Restricted Subsidiaries.

     “Memorandum” is defined in Section 5.3.

     “Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in
Section 4001(a)(3) of ERISA).

     “Notes” is defined in Section 1.

     “Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other
officer of the Company whose responsibilities extend to the subject matter of such certificate.

     “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any
successor thereto.

     “Person” means an individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization, or a government or agency or political subdivision
thereof.

     “Plan” means an “employee benefit plan” (as defined in Section 3(3) of ERISA) subject to Title
I of ERISA that is or, within the preceding five years, has been established or maintained, or to
which contributions are or, within the preceding five years, have been made or required to be made,
by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability.

     “Priority Debt” means (without duplication), as of the date of any determination thereof, the
sum of (i) all unsecured Debt of Restricted Subsidiaries (including all Guaranties of Debt of the
Company but excluding (x) Debt owing to the Company or any other Restricted Subsidiary, (y) Debt
outstanding at the time such Person became a Restricted Subsidiary (other than an Unrestricted
Subsidiary which is designated as a Restricted Subsidiary pursuant to Section 9.6 hereof), provided
that such Debt shall have not been incurred in contemplation of such person becoming a Restricted
Subsidiary, and (z) all Guaranties of Debt of the Company by any Restricted Subsidiary which has
also guaranteed the Notes and (ii) all Debt of the Company and its Restricted Subsidiaries secured
by Liens other than Debt secured by Liens permitted by subparagraphs (a) through (j), inclusive, of
Section 10.3.

     “property” or “properties” means, unless otherwise specifically limited, real or personal
property of any kind, tangible or intangible, choate or inchoate.

     “Purchasers” means the purchasers of the Notes named in Schedule A hereto.

     “QPAM Exemption” means Prohibited Transaction Class Exemption 84-14 issued by the United
States Department of Labor.

B-6

 

     “Qualified Institutional Buyer” means any Person who is a qualified institutional buyer within
the meaning of such term as set forth in Rule 144(a)(1) under the Securities Act.

     “Receivables Securitization Financing” means a transaction or group of transactions typically
referred to as a securitization in which a Person sells, directly or indirectly through another
Person, its accounts receivable on a non-recourse basis (other than for recourse relating to
certain bad acts or breaches of representations or warranties) in a transaction treated as a legal
true sale to a special purpose bankruptcy remote entity that obtains debt financing or sells
interests in such receivables to finance the purchase price and any further assignment by such
entity in connection therewith.

     “Related Rights” means, with respect to any account receivable that is conveyed pursuant to a
Receivables Securitization Financing (for purposes of this definition, each such account
receivable, is referred to as a “Subject Receivable” , and the Company, together with the
Subsidiaries of the Company which are party to the applicable Receivables Securitization Financing,
are referred to as the “Subject Parties”):

     (a) all of the Subject Parties’ interest in any goods (including returned goods), and
documentation of title evidencing the shipment or storage of any goods (including returned
goods), relating to any sale giving rise to such Subject Receivable,

     (b) all instruments and chattel paper that may evidence such Subject Receivable,

     (c) all other security interests or liens and property subject thereto from time to
time purporting to secure payment of such Subject Receivable, whether pursuant to the
contract or agreement evidencing such Subject Receivable or otherwise, together with all
uniform commercial code financing statements or similar filings related thereto,

     (d) all of the Subject Parties’ rights, interests and claims under the contracts or
agreements evidencing such Subject Receivable and all guaranties, indemnities, insurance and
other agreements or arrangements of whatever character from time to time supporting or
securing payment of such Subject Receivable or otherwise relating to such Subject
Receivable, whether pursuant to the contract or agreement evidencing such Subject Receivable
or otherwise;

     (e) all of the Subject Parties’ rights, interests and claims under the agreements
evidencing the applicable Receivables Securitization Financing, any contract or agreement
evidencing such Subject Receivable and any other agreement or document between the Subject
Party that originated such Subject Receivable and the account debtor with respect to such
Subject Receivable;

     (f) all collections and other proceeds of such Subject Receivable, and all deposit
accounts or securities accounts into which the account debtor with respect to such Subject
Receivable is directed to deposit the payments on such Subject Receivable or into which such
payments are regularly deposited;

B-7

 

     (g) all books and records of any Subject Party relating to such Subject Receivable or
any of the foregoing; and

     (h) all collections and other proceeds and products of, and all monies due or to become
due to any Subject Party with respect to, any of the foregoing that are received by any
Subject Party.

     “Required Holders” means, at any time, the holders of not less than 51% in principal amount of
the Notes of each Series at the time outstanding (exclusive of Notes then owned by the Company or
any of its Affiliates and any Notes held by parties who are contractually required to abstain from
voting with respect to matters affecting the holders of the Notes).

     “Responsible Officer” means any Senior Financial Officer and any other officer of the Company
with responsibility for the administration of the relevant portion of this Agreement.

     “Restricted Subsidiary” means any Subsidiary as to which: (i) at least a majority of the
voting securities are owned by the Company and/or one or more Restricted Subsidiaries and (ii) the
Company has not designated an Unrestricted Subsidiary by notice in writing given to the holders of
the Notes.

     “Securities Act” means the Securities Act of 1933, as amended from time to time.

     “Senior Debt” means, as of the date of any determination thereof, all Consolidated Debt, other
than Subordinated Debt.

     “Senior Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or comptroller of the Company.

     “Series” means any series of Notes issued pursuant to this Agreement or any Supplement hereto.

     “Series 2005A Notes” is defined in Section 1 of this Agreement.

     “Subordinated Debt” means all unsecured Debt of the Company which shall contain or have
applicable thereto subordination provisions providing for the subordination thereof to other Debt
of the Company (including, without limitation, the obligations of the Company under this Agreement,
any Supplement or the Notes).

     “Subsidiary” means, as to any Person, any corporation, association or other business entity in
which such Person or one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any partnership or joint venture if more than a
50% interest in the profits or capital thereof is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership can and
does ordinarily take major business actions without the prior approval of such Person or one or

B-8

 

more of its Subsidiaries). Unless the context otherwise clearly requires, any reference to a
“Subsidiary” is a reference to a Subsidiary of the Company.

     “Subsidiary Guarantor” means each Subsidiary which is party to the Subsidiary Guaranty.

     “Subsidiary Guaranty” is defined in Section 2.3.

     “Successor Entity” is defined in Section 10.5.

     “Supplement” is defined in Section 2.2.

     “tranche” means all Notes of a Series having the same maturity, interest rate and schedule for
mandatory prepayments.

     “Tranche A Notes” is defined in Section 1 of this Agreement.

     “Tranche B Notes” is defined in Section 1 of this Agreement.

     “Tranche C Notes” is defined in Section 1 of this Agreement.

     “Unrestricted Subsidiary” means any Subsidiary so designated by the Company in accordance with
the terms and provisions of this Agreement.

     “USA Patriot Act” means United States Public Law 107-56, Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of
2001, as amended from time to time, and the rules and regulations promulgated thereunder from time
to time in effect.

B-9

 

Schedules 4.9, 5.4, 5.5, 5.11, 5.15, and 10.3 to Note Purchase Agreement
 Intentionally Omitted

 

 

[Form of Tranche A Note]

Eagle Materials Inc.

5.25% Series 2005A Senior Note, Tranche A, due November 15, 2012

	 	 	 
	No.           [                     ]

	 	[Date]
	$[                                        ]

	 	PPN 26969P A* 9

     For Value Received, the undersigned, Eagle Materials Inc. (herein
called the “Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [                                                            ] or registered assigns, the principal
sum of [                                        ] Dollars (or so much thereof as shall not have been prepaid) on
November 15, 2012 with interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance hereof at the rate of 5.25% per annum from the date hereof, payable
semi-annually, on the 15th day of May and November in each year and at maturity, commencing on May
15, 2006, until the principal hereof shall have become due and payable, and (b) to the extent
permitted by law, at a rate per annum from time to time equal to 7.25%, on any overdue payment of
interest and, during the continuance of an Event of Default, on the unpaid balance hereof and on
any overdue payment of any Make-Whole Amount, payable semiannually as aforesaid (or, at the option
of the registered holder hereof, on demand).

     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at the principal office of Bank of
America, N.A. in New York, New York or at such other place as the Company shall have designated by
written notice to the holder of this Note as provided in the Note Purchase Agreement referred to
below.

     This Note is one of a series of Senior Notes (herein called the “Notes") issued pursuant to
the Note Purchase Agreement, dated as of November 15, 2005 (as from time to time amended,
supplemented or modified, the “Note Purchase Agreement"), between the Company and the respective
Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) made the representations set forth in Sections
6.2 and 6.3 of the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in
this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

     This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized
in writing, a new Note for a like principal amount will be issued to, and registered in the name
of, the transferee. Prior to due presentment for registration of transfer, the Company may treat
the person in whose name this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company will not be affected by any notice to the
contrary.

Exhibit 1(a)

(to Note Purchase Agreement)

 

 

     The Company will make required prepayments of principal on the date and in the amounts
specified in the Note Agreement. This Note is subject to optional prepayment, in whole or from
time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but
not otherwise.

     Pursuant to the Subsidiary Guaranty Agreement dated as of November 15, 2005 (as amended,
restated or otherwise modified from time to time, the “Subsidiary Guaranty"), certain Subsidiaries
of the Company have absolutely and unconditionally guaranteed payment in full of the principal of,
Make-Whole Amount, if any, and interest on this Note and the performance by the Company of its
obligations contained in the Note Purchase Agreement all as more fully set forth in said Subsidiary
Guaranty.

     If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable in the manner, at
the price (including any applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.

     This Note shall be construed and enforced in accordance with, and the rights of the issuer and
holder hereof shall be governed by, the law of the State of New York excluding choice-of-law
principles of the law of such State that would require the application of the laws of a
jurisdiction other than such State.

	 	 	 	 	 	 	 
	 	 	Eagle Materials Inc.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 

E-1-2

 

[Form of Tranche B Note]

Eagle Materials Inc.

5.38% Series 2005A Senior Note, Tranche B, due November 15, 2015

	 	 	 
	No.            [                    ]

	 	[Date]
	$[                                        ]

	 	PPN 26969P A@ 7

     For Value Received, the undersigned, Eagle Materials Inc. (herein called the
“Company”), a corporation organized and existing under the laws of the State of Delaware, hereby
promises to pay to [                                                            ] or registered assigns, the principal sum of
[                                        ] Dollars (or so much thereof as shall not have been prepaid) on November
15, 2015 with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance hereof at the rate of 5.38% per annum from the date hereof, payable semi-annually,
on the 15th day of May and November in each year and at maturity, commencing on May 15, 2006, until
the principal hereof shall have become due and payable, and (b) to the extent permitted by law, at
a rate per annum from time to time equal to 7.38%, on any overdue payment of interest and, during
the continuance of an Event of Default, on the unpaid balance hereof and on any overdue payment of
any Make-Whole Amount, payable semiannually as aforesaid (or, at the option of the registered
holder hereof, on demand).

     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at the principal office of Bank of
America, N.A. in New York, New York or at such other place as the Company shall have designated by
written notice to the holder of this Note as provided in the Note Purchase Agreement referred to
below.

     This
Note is one of a series of Senior Notes (herein called the
“Notes”) issued pursuant to
the Note Purchase Agreement, dated as of November 15, 2005 (as from time to time amended,
supplemented or modified, the “Note Purchase Agreement”), between the Company and the respective
Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) made the representations set forth in Sections
6.2 and 6.3 of the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in
this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

     This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized
in writing, a new Note for a like principal amount will be issued to, and registered in the name
of, the transferee. Prior to due presentment for registration of transfer, the Company may treat
the person in whose name this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company will not be affected by any notice to the
contrary.

Exhibit 1(b)

(to Note Purchase Agreement)

 

 

     The Company will make required prepayments of principal on the date and in the amounts
specified in the Note Agreement. This Note is subject to optional prepayment, in whole or from
time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but
not otherwise.

     Pursuant to the Subsidiary Guaranty Agreement dated as of November 15, 2005 (as amended,
restated or otherwise modified from time to time, the
“Subsidiary Guaranty”), certain Subsidiaries
of the Company have absolutely and unconditionally guaranteed payment in full of the principal of,
Make-Whole Amount, if any, and interest on this Note and the performance by the Company of its
obligations contained in the Note Purchase Agreement all as more fully set forth in said Subsidiary
Guaranty.

     If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable in the manner, at
the price (including any applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.

     This Note shall be construed and enforced in accordance with, and the rights of the issuer and
holder hereof shall be governed by, the law of the State of New York excluding choice-of-law
principles of the law of such State that would require the application of the laws of a
jurisdiction other than such State.

	 	 	 	 	 	 	 
	 	 	Eagle Materials Inc.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 

E-2-2

 

 

[Form of Tranche C Note]

Eagle Materials Inc.

5.48% Series 2005A Senior Note, Tranche C, due November 15, 2017

			
	No.               [                    ]

$[                                        ]
	 	[Date]

PPN 26969P A# 5

     For Value Received, the undersigned, Eagle Materials Inc. (herein called the
“Company”), a corporation organized and existing under the laws of the State of Delaware, hereby
promises to pay to [                                        ] or registered assigns, the principal sum of
[                    ] Dollars (or so much thereof as shall not have been prepaid) on November
15, 2017 with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance hereof at the rate of 5.48% per annum from the date hereof, payable semi-annually,
on the 15th day of May and November in each year and at maturity, commencing on May 15, 2006, until
the principal hereof shall have become due and payable, and (b) to the extent permitted by law, at
a rate per annum from time to time equal to 7.48%, on any overdue payment of interest and, during
the continuance of an Event of Default, on the unpaid balance hereof and on any overdue payment of
any Make-Whole Amount, payable semiannually as aforesaid (or, at the option of the registered
holder hereof, on demand).

     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at the principal office of Bank of
America, N.A. in New York, New York or at such other place as the Company shall have designated by
written notice to the holder of this Note as provided in the Note Purchase Agreement referred to
below.

     This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to
the Note Purchase Agreement, dated as of November 15, 2005 (as from time to time amended,
supplemented or modified, the “Note Purchase Agreement”), between the Company and the respective
Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) made the representations set forth in Sections
6.2 and 6.3 of the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in
this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

     This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized
in writing, a new Note for a like principal amount will be issued to, and registered in the name
of, the transferee. Prior to due presentment for registration of transfer, the Company may treat
the person in whose name this Note is registered as the owner hereof for the

Exhibit 1(c)

(to Note Purchase Agreement)

 

 

purpose of receiving payment and for all other purposes, and the Company will not be affected by any
notice to the contrary.

     The Company will make required prepayments of principal on the date and in the amounts
specified in the Note Agreement. This Note is subject to optional prepayment, in whole or from
time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but
not otherwise.

     Pursuant to the Subsidiary Guaranty Agreement dated as of November 15, 2005 (as amended,
restated or otherwise modified from time to time, the “Subsidiary Guaranty”), certain Subsidiaries
of the Company have absolutely and unconditionally guaranteed payment in full of the principal of,
Make-Whole Amount, if any, and interest on this Note and the performance by the Company of its
obligations contained in the Note Purchase Agreement all as more fully set forth in said Subsidiary
Guaranty.

     If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable in the manner, at
the price (including any applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.

     This Note shall be construed and enforced in accordance with, and the rights of the issuer and
holder hereof shall be governed by, the law of the State of New York excluding choice-of-law
principles of the law of such State that would require the application of the laws of a
jurisdiction other than such State.

	 	 	 	 	 	 	 	 	 
	 	 	Eagle Materials Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

E-4-2

 

Form of Subsidiary Guaranty

Subsidiary Guaranty — Eagle Materials Inc.

 

Subsidiary Guaranty Agreement

Dated as of November 15, 2005

from

The Subsidiary Guarantors Named Herein

for the benefit of

The Holders of the Notes

Re:

$40,000,000 5.25% Series 2005A Senior Notes, Tranche A

due November 15, 2012

$80,000,000 5.38% Series 2005A Senior Notes, Tranche B

due November 15, 2015

$80,000,000 5.48% Series 2005A Senior Notes, Tranche C

due November 15, 2017

of 

Eagle Materials Inc.

Exhibit 2.3

(to Note Purchase Agreement)

 

 

Table of Contents

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page
	Section 1.

	 	Guaranty
	 	 	2	 
	 
	 	 	 	 	 	 
	Section 2.

	 	Representations and Warranties
	 	 	3	 
	 
	 	 	 	 	 	 
	Section 3.

	 	Subsidiary Guarantor’s Obligations Unconditional
	 	 	5	 
	 
	 	 	 	 	 	 
	Section 4.

	 	Full Recourse Obligations; Pari Passu Ranking
	 	 	10	 
	 
	 	 	 	 	 	 
	Section 5.

	 	Waiver
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 6.

	 	Waiver of Subrogation
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 7.

	 	Subordination
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 8.

	 	Effect of Bankruptcy Proceedings, Etc
	 	 	13	 
	 
	 	 	 	 	 	 
	Section 9.

	 	Term of Guaranty
	 	 	13	 
	 
	 	 	 	 	 	 
	Section 10.

	 	Contribution
	 	 	14	 
	 
	 	 	 	 	 	 
	Section 11.

	 	Limitation of Liability
	 	 	14	 
	 
	 	 	 	 	 	 
	Section 12.

	 	Negative Pledge
	 	 	15	 
	 
	 	 	 	 	 	 
	Section 13.

	 	Supplemental Agreement
	 	 	15	 
	 
	 	 	 	 	 	 
	Section 14.

	 	Definitions and Terms Generally
	 	 	15	 
	 
	 	 	 	 	 	 
	Section 15.

	 	Notices
	 	 	16	 
	 
	 	 	 	 	 	 
	Section 16.

	 	Amendments, Etc
	 	 	17	 
	 
	 	 	 	 	 	 
	Section 17.

	 	Consent to Jurisdiction; Service of Process
	 	 	17	 

- i - 

 

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page
	Section 18.

	 	Waiver of Jury Trial
	 	 	18	 
	 
	 	 	 	 	 	 
	Section 19.

	 	Survival
	 	 	18	 
	 
	 	 	 	 	 	 
	Section 20.

	 	Severability
	 	 	18	 
	 
	 	 	 	 	 	 
	Section 21.

	 	Successors and Assigns
	 	 	19	 
	 
	 	 	 	 	 	 
	Section 22.

	 	Table of Contents; Headings
	 	 	19	 
	 
	 	 	 	 	 	 
	Section 23.

	 	Counterparts
	 	 	19	 
	 
	 	 	 	 	 	 
	Section 24.

	 	Governing Law
	 	 	19	 
	 
	 	 	 	 	 	 
	Section 25.

	 	Release
	 	 	19	 
	 
	 	 	 	 	 	 
	Section 26.

	 	Covenant Compliance
	 	 	19	 

- ii - 

 

     Subsidiary Guaranty Agreement, dated as of November 15, 2005 (the “Guaranty”), from
each of:

	 	(i)	 	American Gypsum Company,
	 
	 	(ii)	 	American Gypsum Marketing Company,
	 
	 	(iii)	 	CCP Cement Company,
	 
	 	(iv)	 	CCP Concrete/Aggregates LLC,
	 
	 	(v)	 	CCP Gypsum Company,
	 
	 	(vi)	 	CCP Land Company,
	 
	 	(vii)	 	Centex Cement Corporation,
	 
	 	(viii)	 	Hollis & Eastern Railroad Company LLC,
	 
	 	(ix)	 	Mathews Readymix LLC,
	 
	 	(x)	 	M&W Drywall Supply Company,
	 
	 	(xi)	 	Mountain Cement Company,
	 
	 	(xii)	 	Nevada Cement Company,
	 
	 	(xiii)	 	Republic Paperboard Company LLC,
	 
	 	(xiv)	 	Texas Cement Company,
	 
	 	(xv)	 	Western Aggregates LLC,
	 
	 	(xvi)	 	Western Cement Company of California,
	 
	 	(xvii)	 	Centex Materials LLC,
	 
	 	(xviii)	 	TLCC GP LLC,
	 
	 	(xix)	 	TLCC LP LLC, 
	 
	 	(xx)	 	AG South Carolina LLC,
	 
	 	(xxi)	 	Illinois Cement Company LLC, and
	 
	 	(xxii)	 	such Subsidiaries as shall become parties hereto in accordance with Section
13 hereof (each a “Subsidiary Guarantor” and collectively the “Subsidiary
Guarantors”),

for the benefit of the holders from time to time of the Notes (as defined below) (the “Holders”).
Capitalized terms used herein are defined in Section 14 hereof or the Note Purchase Agreement
referred to below.

     Whereas, Eagle Materials Inc., a Delaware corporation (the “Company”), will authorize
the issue and sale of (i) $40,000,000 5.25% Series 2005A Senior Notes, Tranche A, due November 15,
2012 (the “Tranche A Notes”), (ii) $80,000,000 5.38% Series 2005A Senior Notes, Tranche B, due
November 15, 2015 (the “Tranche B Notes”) and (iii) $80,000,000 5.48% Series 2005A Senior Notes,
Tranche C, due November 15, 2017 (the “Tranche C Notes” and, together with the Tranche A Notes and
the Tranche B Notes, the “Series 2005A Notes”), pursuant to a Note Purchase Agreement, dated as of
the date hereof (as amended, modified or supplemented from time to time, the “Note Purchase
Agreement”) among the Company and the purchasers named therein.

     Whereas, the Company is authorized to issue Additional Notes (as such term is defined
in the Note Purchase Agreement) of one or more separate series from time to time in an

 

 

aggregate principal amount not to exceed $500,000,000 pursuant to Section 2.2 of the Note Purchase
Agreement.

     Whereas, the Additional Notes together with the Series 2005A Notes are collectively
referred to as the “Notes”.

     Whereas, each of the Subsidiary Guarantors is a Subsidiary of the Company.

     Whereas, the Company has agreed that certain of its Subsidiaries will guarantee its
obligations under the Notes and the Note Purchase Agreement.

     Whereas, the Subsidiary Guarantors each acknowledge that they will derive substantial
benefits from the issuance of the Notes.

     Now, Therefore, in consideration of the premises and to induce the Holders to
purchase the Notes, each of the Subsidiary Guarantors, intending to be legally bound, hereby agrees
for the benefit of the Holders, as follows:

Section 1.      Guaranty. 

     Each Subsidiary Guarantor with all other Subsidiary Guarantors, hereby absolutely,
unconditionally and irrevocably guarantees, jointly and severally, as a primary obligor and not
merely as a surety, to each Holder and its successors and assigns, the full and punctual payment
and performance when due, whether at stated maturity, by acceleration or otherwise, of the
principal of and Make-Whole Amount and interest on (including, without limitation, interest,
whether or not an allowable claim, accruing after the date of filing of any petition in bankruptcy,
or the commencement of any bankruptcy, insolvency or similar proceeding relating to the Company)
the Notes and all other amounts under the Note Purchase Agreement and all other obligations,
agreements and covenants of the Company now or hereafter existing under the Note Purchase Agreement
whether for principal, Make-Whole Amount, interest (including interest accruing or becoming owing
both prior to and subsequent to the commencement of any proceeding against or with respect to the
Company under any chapter of Title 11 of the United States Code), indemnification payments,
expenses (including reasonable attorneys’ fees and expenses) or otherwise, and all reasonable costs
and expenses, if any, incurred by any Holder in connection with enforcing any rights under this
Guaranty (all such obligations being the “Guaranteed Obligations”), and agrees to pay any and all
reasonable expenses incurred by each Holder in enforcing this Guaranty; provided that,
notwithstanding anything contained herein or in the Note Purchase Agreement to the contrary, the
maximum liability of each Subsidiary Guarantor hereunder and under the Note Purchase Agreement
shall in no event exceed such Guarantor’s Maximum Guaranteed Amount, and provided further, each
Subsidiary Guarantor shall be unconditionally required to pay all amounts demanded of it hereunder
prior to any determination of such Maximum Guaranteed Amount and the recipient of such payment, if
so required by a final non-appealable order of a court of competent jurisdiction, shall then be
liable for the refund of any excess amounts. If any such rebate or refund is ever required, all
other Subsidiary Guarantors (and the Company) shall be fully liable for the repayment thereof to
the maximum extent allowed by applicable law. This Guaranty is an absolute, unconditional, present

- 2 -

 

and continuing guaranty of payment and not of collectibility and is in no way conditioned upon any attempt to collect
from the Company or any other action, occurrence or circumstance whatsoever. Each Subsidiary
Guarantor agrees that the Guaranteed Obligations may at any time and from to time exceed the
Maximum Guaranteed Amount of such Subsidiary Guarantor without impairing this Guaranty or affecting
the rights and remedies of the Holders hereunder.

     Notwithstanding any stay, injunction or other prohibition preventing such action against the
Company, if for any reason whatsoever the Company shall fail or be unable duly, punctually and
fully to perform and (in the case of the payment of Guaranteed Obligations) pay such amounts as and
when the same shall become due and (in the case of the payment of Guaranteed Obligations) payable
or to perform or comply with any other Guaranteed Obligation, each Subsidiary Guarantor will
forthwith (in the case of the payment of Guaranteed Obligations) pay or cause to be paid such
amounts to the Holders, in lawful money of the United States of America, at the place specified in
the Note Purchase Agreement, or perform or comply with such Guaranteed Obligations or cause such
Guaranteed Obligations to be performed or complied with, (in the case of the payment of Guaranteed
Obligations) together with interest (in the amounts and to the extent required under such Notes) on
any amount due and owing.

Section 2.      Representations and Warranties. 

     Each Subsidiary Guarantor hereby represents and warrants as follows:

     (a) All representations and warranties contained in the Note Purchase Agreement that relate to
such Subsidiary Guarantor are true and correct in all respects and are incorporated by reference
with the same force and effect as though set forth herein in full.

     (b) Such Subsidiary Guarantor acknowledges that any default in the due observance or
performance by such Subsidiary Guarantor of any covenant, condition or agreement contained herein
(if, after the running of any applicable notice and opportunity to cure periods provided in the
Note Purchase Agreement, such default or event of default remains uncured) shall constitute an
Event of Default.

     (c) There are no conditions precedent to the effectiveness of this Guaranty that have not been
satisfied or expressly waived.

     (d) Such Subsidiary Guarantor has, independently and without reliance upon the Holders and
based on such documents and information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Guaranty. Such Subsidiary Guarantor has investigated fully the
benefits and advantages which will be derived by it from execution of this Guaranty, and the Board
of Directors (or equivalent governing body) of such Subsidiary Guarantor has decided that a direct
and/or an indirect benefit will accrue to such Subsidiary Guarantor by reason of the execution of
this Guaranty.

     (e) (i) This Guaranty is not given with actual intent to hinder, delay or defraud any Person
to which such Subsidiary Guarantor is or will become, on or after the date hereof,
indebted; (ii) such Subsidiary Guarantor has received at least a reasonably equivalent value in

- 3 -

 

exchange for the giving of this Guaranty; (iii) such Subsidiary Guarantor is not insolvent on the
date hereof and will not become insolvent as a result of the giving of this Guaranty; (iv) such
Subsidiary Guarantor is not engaged in a business or transaction, nor is about to engage in a
business or transaction, for which any property remaining with such Subsidiary Guarantor
constitutes an unreasonably small amount of capital; and (v) such Subsidiary Guarantor does not
intend to incur debts that will be beyond such Subsidiary Guarantor’s ability to pay as such debts
mature.

     (f) Each Subsidiary Guarantor is a corporation or other legal entity duly organized and
validly existing under the laws of its state of organization, and has the requisite power,
authority and legal right under the laws of its state of organization to conduct its business as
presently conducted and to execute, deliver and perform its obligations under this Guaranty.

     (g) The execution, delivery and performance of this Guaranty have been duly authorized by all
necessary action, corporate or otherwise, on the part of each Subsidiary Guarantor, and does not
require any consent or approval of, or the giving of notice to, or the taking of any other action
in respect of, any stockholder or trustee or holder of any equity, indebtedness or obligations of
such Subsidiary Guarantor. This Guaranty constitutes a legal, valid and binding obligation of each
Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in accordance with its terms,
except that such enforceability is subject to any limitations arising from bankruptcy, insolvency,
liquidation, moratorium, reorganization and other similar laws of general application relating to
or affecting the rights of creditors or pledgees and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

     (h) The execution, delivery and performance of this Guaranty does not and will not conflict
with or result in any violation of or default under any provision of the Articles or Certificate of
Incorporation or Formation or by-laws or partnership agreement or operating agreement or other
organizational documents, as the case may be, of any Subsidiary Guarantor, or any indenture,
mortgage, deed of trust, instrument, law, rule or regulation binding on any Subsidiary Guarantor or
any Subsidiary Guarantor’s assets or property or to which a Subsidiary Guarantor is a party.

     (i) The execution, delivery and performance of this Guaranty does not and will not result in
violation of any judgment or order applicable to any Subsidiary Guarantor or result in the creation
or imposition of any Lien on any of the properties or revenues of any Subsidiary Guarantor pursuant
to any requirement of law or any indenture, mortgage, deed of trust or other instrument to which
such Subsidiary Guarantor is a party or pursuant to which such Subsidiary Guarantor or any of its
assets or property is bound.

     (j) The execution, delivery and performance of this Guaranty do not and will not conflict with
and do not and will not require any consent, approval or authorization of, or registration or
filing with, any governmental authority or agency of the state of organization of any Subsidiary
Guarantor or of the United States or any State.

- 4 -

 

     (k) There are no pending or, to the knowledge of any Subsidiary Guarantor, threatened actions
or proceedings against or affecting such Subsidiary Guarantor or any of its properties by or before
any court or administrative agency or arbiter that would adversely affect the ability of such
Subsidiary Guarantor to perform its obligations hereunder or call into question the validity or
enforceability of this Guaranty.

     (l) Each Subsidiary Guarantor’s obligations under this Guaranty are at least pari passu in
right of payment with all other senior unsecured Debt (actual or contingent) of such Subsidiary
Guarantor, including, without limitation, all senior unsecured Debt of such Subsidiary Guarantor
described in Schedule 5.15 of the Note Purchase Agreement.

     (m) No Subsidiary Guarantor is in breach of or default under or with respect to any
instrument, document or agreement binding upon such Subsidiary Guarantor which breach or default
would reasonably be expected to have a Material Adverse Effect. Each Subsidiary Guarantor is in
compliance with all applicable requirements of law except such non-compliance as would not
reasonably be expected to have a Material Adverse Effect.

     (n) The execution, delivery and performance by each Subsidiary Guarantor of this Guaranty will
not render such Subsidiary Guarantor insolvent, nor is it being made in contemplation of such
Subsidiary Guarantor’s insolvency, and the Subsidiary Guarantor does not have an unreasonably small
capital.

Section 3.      Subsidiary Guarantor’s Obligations Unconditional.

     (a) This Guaranty shall constitute a guarantee of payment, performance and compliance and not
of collection, and each Subsidiary Guarantor specifically agrees that it shall not be necessary,
and that such Subsidiary Guarantor shall not be entitled to require, before or as a condition of
enforcing the liability of such Subsidiary Guarantor under this Guaranty or requiring payment or
performance of the Guaranteed Obligations by any Subsidiary Guarantor hereunder, or at any time
thereafter, that any Holder: (a) file suit or proceed to obtain or assert a claim for personal
judgment against the Company or any other Person that may be liable for or with respect to any
Guaranteed Obligation; (b) make any other effort to obtain payment or performance of any Guaranteed
Obligation from the Company or any other Person that may be liable for or with respect to such
Guaranteed Obligation, except for the making of the demands, when appropriate, described in Section
1; (c) foreclose against, or seek to realize upon security now or hereafter existing for such
Guaranteed Obligations; (d) except to the extent set forth in Section 1, exercise or assert any
other right or remedy to which such Holder is or may be entitled in connection with any Guaranteed
Obligation or any security or other guaranty therefor; or (e) assert or file any claim against the
assets or property of the Company or any other Person liable for any Guaranteed Obligation. Each
Subsidiary Guarantor agrees that this Guaranty shall be continuing, and that the Guaranteed
Obligations will be paid and performed in accordance with their terms and the terms of this
Guaranty, and are the primary, absolute and unconditional obligations of such Subsidiary Guarantor,
irrespective of the value, genuineness, validity, legality, regularity or enforceability or lack
thereof of any part of the Guaranteed Obligations or any agreement or instrument relating to the
Guaranteed Obligations or this Guaranty, or the existence
of any indemnities with respect to the existence of any other guarantee of or security

- 5 -

 

for any
of the Guaranteed Obligations, or any substitution, release or exchange of any other guarantee of
or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a surety or guarantor, it being the intent of this
Section 3 that the obligations of each Subsidiary Guarantor hereunder shall be irrevocable,
primary, absolute and unconditional under any and all circumstances.

     (b) Each Subsidiary Guarantor hereby expressly waives notice of acceptance of and reliance
upon this Guaranty, diligence, presentment, demand of payment or performance, protest and all other
notices (except as otherwise provided for in Section 1) whatsoever, any requirement that the
Holders exhaust any right, power or remedy or proceed against the Company or against any other
Person under any other guarantee of, or security for, or any other agreement, regarding any of the
Guaranteed Obligations. Each Subsidiary Guarantor further agrees that, subject solely to the
requirement of making demands under Section 1, the occurrence of any event or other circumstance
that might otherwise vary the risk of the Company or such Subsidiary Guarantor or constitute a
defense (legal or equitable) available to, or a discharge of, or a counterclaim or right of set-off
by, the Company or such Subsidiary Guarantor (other than the full and indefeasible due payment and
performance of the Guaranteed Obligations), shall not affect the liability of any Subsidiary
Guarantor hereunder.

     (c) The obligations of each Subsidiary Guarantor under this Guaranty are not subject to any
counterclaim, set-off, deduction, diminution, abatement, recoupment, suspension, deferment or
defense based upon any claim such Subsidiary Guarantor or any other Person may have against the
Company, any Holder or any other Person, and shall remain in full force and effect without regard
to, and shall not be released, discharged or in any way affected by, any circumstances or condition
whatsoever (whether or not such Subsidiary Guarantor or the Company shall have any knowledge or
notice thereof), including:

     (i) any renewal, extension, modification, increase, decrease, alteration or
rearrangement of all or any part of the Guaranteed Obligations or any instrument executed in
connection therewith, or any contract or understanding with the Company, the Holders, or any
of them, or any other Person, pertaining to the Guaranteed Obligations;

     (ii) any adjustment, indulgence, forbearance or compromise that might be granted or
given by any Holder to the Company or any other Person liable on the Guaranteed Obligations,
or the failure of any Holder to assert any claim or demand or to exercise any right or
remedy against the Company or any other Person under the provisions of the Note Purchase
Agreement, the Notes or otherwise; or any rescission, waiver, amendment or modification of,
or any release from any of the terms or provisions of, the Note Purchase Agreement, the
Notes, any guarantee or any other agreement;

     (iii) the insolvency, bankruptcy arrangement, adjustment, composition, liquidation,
disability, dissolution or lack of power of the Company or any other Person at any time
liable for the payment of all or part of the Guaranteed Obligations; or any dissolution of
the Company or any other such

- 6 -

 

Person, or any change, restructuring or
termination of the organizational structure or existence of the Company or any other such
Person, or any sale, lease or transfer of any or all of the assets or property of the
Company or any other such Person, or any change in the shareholders, partners, or members of
the Company or any other such Person; or any default, failure or delay, willful or
otherwise, in the performance of the Guaranteed Obligations;

     (iv) the invalidity, illegality or unenforceability of all or any part of the
Guaranteed Obligations, or any document or agreement executed in connection with the
Guaranteed Obligations, for any reason whatsoever, including the fact that the Guaranteed
Obligations, or any part thereof, exceed the amount permitted by law, the act of creating
the Guaranteed Obligations or any part is ultra vires, the officers or representatives
executing the documents or otherwise creating the Guaranteed Obligations acted in excess of
their authority, the Guaranteed Obligations violate applicable usury laws, the Company or
any other Person has valid defenses, claims or offsets (whether at law, in equity or by
agreement) which render the Guaranteed Obligations wholly or partially uncollectible from
the Company or any other Person, the creation, performance or repayment of the Guaranteed
Obligations (or the execution, delivery and performance of any document or instrument
representing part of the Guaranteed Obligations or executed in connection with the
Guaranteed Obligations or given to secure the repayment of the Guaranteed Obligations) is
illegal, uncollectible, legally impossible or unenforceable, or the documents or instruments
pertaining to the Guaranteed Obligations have been forged or otherwise are irregular or not
genuine or authentic;

     (v) any full or partial release of the liability of the Company on the Guaranteed
Obligations or any part thereof, of any co-guarantors, or of any other Person now or
hereafter liable, whether directly or indirectly, jointly, severally, or jointly and
severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations or
any part thereof, it being recognized, acknowledged and agreed by each Subsidiary Guarantor
that such Subsidiary Guarantor may be required to pay the Guaranteed Obligations in full
without assistance or support of any other Person, and such Subsidiary Guarantor has not
been induced to enter into this Guaranty on the basis of a contemplation, belief,
understanding or agreement that any parties other than the Company will be liable to perform
the Guaranteed Obligations, or that the Holders will look to other parties to perform the
Guaranteed Obligations;

     (vi) the taking or accepting of any other security, collateral or guaranty, or other
assurance of payment, for all or any part of the Guaranteed Obligations;

     (vii) any release, surrender, exchange, subordination, deterioration, waste, loss or
impairment (including negligent, unreasonable or unjustifiable impairment) of any
collateral, property or security, at any time existing in connection with, or assuring or
securing payment of, all or any part of the Guaranteed Obligations;

     (viii) the failure of any Holder or any other Person to exercise diligence or
reasonable care in the preservation, protection, enforcement, sale or other handling or
treatment of all or any part of such collateral, property or security;

- 7 -

 

     (ix) the fact that any collateral, security, security interest or Lien contemplated or
intended to be given, created or granted as security for the repayment of the Guaranteed
Obligations shall not be properly perfected or created, or shall prove to be unenforceable
or subordinate to any other security interest or Lien, it being recognized and agreed by
each Subsidiary Guarantor that such Subsidiary Guarantor is not entering into this Guaranty
in reliance on, or in contemplation of the benefits of, the validity, enforceability,
collectibility or value of any of the collateral;

     (x) any payment by the Company to any Holder being held to constitute a preference
under any Fraudulent Conveyance Law, or for any reason any Holder being required to refund
such payment or pay such amount to the Company or someone else;

     (xi) any other action taken or omitted to be taken with respect to the Guaranteed
Obligations, or the security and collateral therefor, whether or not such action or omission
prejudices such Subsidiary Guarantor or increases the likelihood that such Subsidiary
Guarantor will be required to pay the Guaranteed Obligations pursuant to the terms hereof,
it being the unambiguous and unequivocal intention of such Subsidiary Guarantor that it
shall be obligated to pay the Guaranteed Obligations when due, notwithstanding any
occurrence, circumstance, event, action or omission whatsoever, whether or not contemplated,
and whether or not otherwise or particularly described herein, except for the full and final
indefeasible payment and satisfaction of the Guaranteed Obligations in cash;

     (xii) the fact that all or any of the Guaranteed Obligations cease to exist by
operation of law, including by way of a discharge, limitation or tolling thereof under
applicable bankruptcy laws;

     (xiii) any other circumstance (including any statute of limitations) that might in any
manner or to any extent otherwise constitute a defense available to, vary the risk of, or
operate as a discharge of, the Company or any Person as a matter of law or equity;

     (xiv) any change in the ownership of any shares of capital stock (or other equity
interests) of the Company, or any change in the relationship between the Company and such
Subsidiary Guarantor or any termination of any such relationship;

     (xv) any default, failure or delay, willful or otherwise, in the performance by the
Company, any Subsidiary Guarantor or any other Person of any obligations of any kind or
character whatsoever under the Note Purchase Agreement or any other agreement;

     (xvi) any merger or consolidation of the Company or any Subsidiary Guarantor or any
other Person into or with any other Person or any sale, lease, transfer or other disposition
of any of the assets or property of the Company, any Subsidiary Guarantor or any other
Person to any other Person, or any change in the ownership of any shares or partnership
interests or other equity interests of the Company, any Subsidiary Guarantor or any other
Person;

- 8 -

 

     (xvii) in respect of the Company, any Subsidiary Guarantor or any other Person, any
change of circumstances, whether or not foreseen or foreseeable, whether or not imputable to
the Company, any Subsidiary Guarantor or any other Person, or other impossibility of
performance through fire, explosion, accident, labor disturbance, floods, droughts,
embargoes, wars (whether or not declared), civil commotion, acts of God or the public enemy,
delays or failure of suppliers or carriers, inability to obtain materials, action of any
Federal or state regulatory body or agency, change of law or any other causes affecting
performance, or any other force majeure, whether or not beyond the control of the Company,
any Subsidiary Guarantor or any other Person and whether or not of the kind hereinbefore
specified; or

     (xviii) any other occurrence, circumstance, or event whatsoever, whether similar or
dissimilar to the foregoing, whether foreseen or unforeseen, and any other circumstance
which might otherwise constitute a legal or equitable defense or discharge of the
liabilities of a guarantor or surety or which might otherwise limit recourse against such
Subsidiary Guarantor;

provided that the specific enumeration of the above-mentioned acts, failures or omissions shall not
be deemed to exclude any other acts, failures or omissions, though not specifically mentioned
above, it being the purpose and intent of this Guaranty and the parties hereto that the obligations
of each Subsidiary Guarantor shall be absolute and unconditional and shall not be discharged,
impaired or varied except by the payment and performance of all obligations of the Company under
the Note Purchase Agreement and the Notes in accordance with their respective terms as each may be
amended or modified from time to time. Without limiting the foregoing, it is understood that
repeated and successive demands may be made and recoveries may be had hereunder as and when, from
time to time, the Company or any Subsidiary Guarantor shall default under or in respect of the
terms of the Note Purchase Agreement and that notwithstanding recovery hereunder for or in respect
of any given default or defaults by the Company or any Subsidiary Guarantor under the Note Purchase
Agreement, this Guaranty shall remain in full force and effect and shall apply to each and every
subsequent default. All waivers herein contained shall be without prejudice to the Holders at
their respective options to proceed against the Company, any Subsidiary Guarantor or other Person,
whether by separate action or by joinder.

     (d) Each Subsidiary Guarantor hereby consents and agrees that any Holder or Holders from time
to time, with or without any further notice to or assent from any other Subsidiary Guarantor may,
without in any manner affecting the liability of any Subsidiary Guarantor under this Guaranty, and
upon such terms and conditions as any such Holder or Holders may deem advisable:

     (i) extend in whole or in part (by renewal or otherwise), modify, change, compromise,
release or extend the duration of the time for the performance or payment of any debt,
liability or obligation of the Company or any Subsidiary Guarantor or of any other Person
secondarily or otherwise liable for any debt, liability or obligations of the Company on the
Note Purchase Agreement or the Notes, or waive any Default or Event

- 9 -

 

of Default with respect
thereto, or waive, modify, amend or change any provision of any other agreement or waive
this Guaranty; or

     (ii) sell, release, surrender, modify, impair, exchange or substitute any and all
property, of any nature and from whomsoever received, held by, or for the benefit of, any
such Holder as direct or indirect security for the payment or performance of any debt,
liability or obligation of the Company, any Subsidiary Guarantor or of any other Person
secondarily or otherwise liable for any debt, liability or obligation of the Company on the
Note Purchase Agreement or the Notes; or

     (iii) settle, adjust or compromise any claim of the Company or any Subsidiary Guarantor
against any other Person secondarily or otherwise liable for any debt, liability or
obligation of the Company on the Note Purchase Agreement or the Notes; or

     (iv) purchase Additional Notes form time to time from the Company pursuant to the terms
and provisions of the Note Purchase Agreement.

Each Subsidiary Guarantor hereby ratifies and confirms any such extension, renewal, change, sale,
release, waiver, surrender, exchange, modification, amendment, impairment, substitution,
settlement, adjustment, compromise or purchase of Additional Notes and that the same shall be
binding upon it, and hereby waives, to the fullest extent permitted by law, any and all defenses,
counterclaims or offsets which it might or could have by reason thereof, it being understood that
such Subsidiary Guarantor shall at all times be bound by this Guaranty and remain liable hereunder.

     (e) All rights of any Holder may be transferred or assigned at any time in accordance with the
Note Purchase Agreement and shall be considered to be transferred or assigned at any time or from
time to time upon the transfer of such Note in accordance with the Note Purchase Agreement without
the consent of or notice to the Subsidiary Guarantors under this Guaranty.

     (f) No Holder shall be under any obligation: (i) to marshal any assets in favor of the
Subsidiary Guarantors or in payment of any or all of the liabilities of the Company or any
Subsidiary Guarantor under or in respect of the Notes or the obligations of the Company and the
Subsidiary Guarantors under the Note Purchase Agreement or (ii) to pursue any other remedy that the
Subsidiary Guarantors may or may not be able to pursue themselves and that may lighten the
Subsidiary Guarantors’ burden, any right to which each Subsidiary Guarantor hereby expressly
waives.

Section 4.      Full Recourse Obligations; Pari Passu Ranking.

     Subject to the Maximum Guaranteed Amount specified above, the obligations of each Subsidiary
Guarantor set forth herein constitute the full recourse obligations of such Subsidiary Guarantor
enforceable against it to the full extent of all its assets and properties.

     The respective obligations under this Guaranty of the Subsidiary Guarantors in respect of the
Notes, and all other obligations of the Subsidiary Guarantors hereunder, are and at all times

- 10 -

 

shall remain direct and unsecured obligations of the Subsidiary Guarantors ranking pari passu as against
the assets of the Subsidiary Guarantors with all obligations of the Subsidiary Guarantors hereunder
in respect of all other Notes from time to time issued and outstanding under the Note Purchase
Agreement without any preference among themselves and pari passu with the Subsidiary Guarantors’
Guaranty in respect of the Debt outstanding under the Bank Credit Agreement and all other present
and future unsecured Debt (actual or contingent) of the Subsidiary Guarantors which is not
expressed to be subordinate or junior in rank to any other unsecured Debt of the Subsidiary
Guarantors.

Section 5. Waiver.

     Each Subsidiary Guarantor unconditionally waives, to the extent permitted by applicable law:

     (a) notice of any of the matters referred to in Section 3;

     (b) notice to such Subsidiary Guarantor of the incurrence of any of the Guaranteed
Obligations, notice to such Subsidiary Guarantor of any breach or default by the Company or
such Subsidiary Guarantor with respect to any of the Guaranteed Obligations or any other
notice that may be required, by statute, rule of law or otherwise, to preserve any rights of
any Holder against such Subsidiary Guarantor;

     (c) presentment to the Company or such Subsidiary Guarantor or of payment from the
Company or such Subsidiary Guarantor with respect to any Note or other Guaranteed Obligation
or protest for nonpayment or dishonor;

     (d) any right to the enforcement, assertion, exercise or exhaustion by any Holder of
any right, power, privilege or remedy conferred in any Note, the Note Purchase Agreement or
otherwise;

     (e) any requirement of diligence on the part of any Holder;

     (f) any requirement to mitigate the damages resulting from any default under the Notes
or the Note Purchase Agreement;

     (g) any notice of any sale, transfer or other disposition of any right, title to or
interest in any Note or other Guaranteed Obligation by any Holder, assignee or participant
thereof, or in the Note Purchase Agreement;

     (h) any release of any Subsidiary Guarantor from its obligations hereunder resulting
from any loss by it of its rights of subrogation hereunder; and

     (i) any other circumstance whatsoever which might otherwise constitute a legal or
equitable discharge, release or defense of a guarantor or surety or which might otherwise
limit recourse against such Subsidiary Guarantor.

- 11 -

 

Section 6. Waiver of Subrogation.

     Notwithstanding any payment or payments made by any Subsidiary Guarantor hereunder, or any
application by any Holder of any security or of any credits or claims, no Subsidiary Guarantor will
assert or exercise any rights of any Holder or of such Subsidiary Guarantor against the Company to
recover the amount of any payment made by such Subsidiary Guarantor to any Holder hereunder by way
of any claim, remedy or subrogation, reimbursement, exoneration, contribution, indemnity,
participation or otherwise arising by contract, by statute, under common law or otherwise, and such
Subsidiary Guarantor shall not have any right of recourse to or any claim against assets or
property of the Company, in each case unless and until the Guaranteed Obligations have been
indefeasibly paid in full. Until such time (but not thereafter), each Subsidiary Guarantor hereby
expressly waives any right to exercise any claim, right or remedy which such Subsidiary Guarantor
may now have or hereafter acquire against the Company or any other Subsidiary Guarantor that arises
under the Notes, the Note Purchase Agreement or from the performance by any Subsidiary Guarantor of
the guaranty hereunder including any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification or participation in any claim, right or remedy of any
Holder against the Company or any Subsidiary Guarantor, or any security that any Holder now has or
hereafter acquires, whether or not such claim, right or remedy arises in equity, under contract, by
statute, under common law or otherwise. If any amount shall be paid to a Subsidiary Guarantor by
the Company or another Subsidiary Guarantor after payment in full of the Guaranteed Obligations,
and all or any portion of the Guaranteed Obligations shall thereafter be reinstated in whole or in
part and any Holder is required to repay any sums received by any of them in payment of the
Guaranteed Obligations, this Guaranty shall be automatically reinstated and such amount shall be
held in trust for the benefit of the Holders and shall forthwith be paid to the Holders to be
credited and applied to the Guaranteed Obligations, whether matured or unmatured. The provisions
of this paragraph shall survive the termination of this Guaranty, and any satisfaction and
discharge of the Company by virtue of any payment, court order or any Federal or state law.

Section 7. Subordination.

     If any Subsidiary Guarantor is or becomes the holder of any indebtedness payable by the
Company or another Subsidiary Guarantor, each Subsidiary Guarantor hereby subordinates all
indebtedness owing to it from the Company or such other Subsidiary Guarantor to all indebtedness of
the Company to the Holders, and agrees that, during the continuance of any Event of Default, it
shall not accept any payment on the same until payment in full of the Guaranteed Obligations and
shall in no circumstance whatsoever attempt to set-off or reduce any obligations hereunder because
of such indebtedness. If any amount shall nevertheless be paid in violation of the foregoing to a
Subsidiary Guarantor by the Company or another Subsidiary Guarantor prior to payment in full of the
Guaranteed Obligations, such amount shall be held in trust for the benefit of the Holders and shall forthwith be paid to the Holders to be credited
and applied to the Guaranteed Obligations, whether matured or unmatured.

- 12 -

 

Section 8. Effect of Bankruptcy Proceedings, Etc.

     (a) If after receipt of any payment of, or proceeds of any security applied (or intended to be
applied) to the payment of all or any part of, the Guaranteed Obligations, any Holder is for any
reason compelled to surrender or voluntarily surrenders (under circumstances in which it believes
it could reasonably be expected to be so compelled if it did not voluntarily surrender), such
payment or proceeds to any Person (i) because such payment or application of proceeds is or may be
avoided, invalidated, declared fraudulent, set aside, determined to be void or voidable as a
preference, fraudulent conveyance, fraudulent transfer, impermissible set-off or a diversion of
trust funds or (ii) for any other similar reason, including, without limitation, (x) any judgment,
decree or order of any court or administrative body having jurisdiction over any Holder or any of
their respective properties or (y) any settlement or compromise of any such claim effected by any
Holder with any such claimant (including the Company), then the Guaranteed Obligations or part
thereof intended to be satisfied shall be reinstated and continue, and this Guaranty shall continue
in full force as if such payment or proceeds had not been received, notwithstanding any revocation
thereof or the cancellation of any Note or any other instrument evidencing any Guaranteed
Obligations or otherwise, and the Subsidiary Guarantors, jointly and severally, shall be liable to
pay the Holders, and hereby do indemnify the Holders and hold them harmless for, the amount of such
payment or proceeds so surrendered and all expenses (including reasonable attorneys’ fees, court
costs and expenses attributable thereto) incurred by any Holder in defense of any claim made
against any of them that any payment or proceeds received by any Holder in respect of all or part
of the Guaranteed Obligations must be surrendered. The provisions of this paragraph shall survive
the termination of this Guaranty, and any satisfaction and discharge of the Company by virtue of
any payment, court order or any Federal or state law.

     (b) If an event permitting the acceleration of the maturity of any of the Guaranteed
Obligations shall at any time have occurred and be continuing, and such acceleration shall at such
time be prevented by reason of the pendency against the Company or any other Person of any case or
proceeding contemplated by Section 8(a) hereof, then, for the purpose of defining the obligation of
any Subsidiary Guarantor under this Guaranty, the maturity of the principal amount of the
Guaranteed Obligations shall be deemed to have been accelerated with the same effect as if an
acceleration had occurred in accordance with the terms of such Guaranteed Obligations, and such
Subsidiary Guarantor shall forthwith pay such principal amount, all accrued and unpaid interest
thereon, and all other Guaranteed Obligations, due or that would have become due but for such case
or proceeding, without further notice or demand.

Section 9. Term of Guaranty.

     This Guaranty and all guarantees, covenants and agreements of each Subsidiary Guarantor
contained herein shall continue in full force and effect and shall not be discharged until such
time as all of the principal of and interest on the Notes, the other Guaranteed
Obligations and other independent payment obligations of such Subsidiary Guarantor under this
Guaranty shall be indefeasibly paid in cash and performed in full, and all of the agreements of
each of the other Subsidiary Guarantors hereunder shall be duly and indefeasibly paid in cash and
performed in full.

- 13 -

 

Section 10. Contribution.

     In order to provide for just and equitable contribution among the Subsidiary Guarantors, each
Subsidiary Guarantor agrees that, to the extent any Subsidiary Guarantor makes any payment
hereunder on any date which, when added to all preceding payments made by such Subsidiary Guarantor
hereunder, would result in the aggregate payments by such Subsidiary Guarantor hereunder exceeding
its Percentage (as defined below) of all payments then or theretofore made by all Subsidiary
Guarantors hereunder, such Subsidiary Guarantor shall have a right of contribution against each
other Subsidiary Guarantor whose aggregate payments then or theretofore made hereunder are less
than its Percentage of all payments by all Subsidiary Guarantors then or theretofore made
hereunder, in an amount such that, after giving effect to any such contribution rights, each
Subsidiary Guarantor will have paid only its Percentage of all payments by all Subsidiary
Guarantors then or theretofore made hereunder. Such contribution rights shall be subordinate and
subject in right of payment to the Guaranteed Obligations and all other indebtedness owed to any
Holder and, except as provided in the next sentence, no Subsidiary Guarantor shall exercise such
rights of contribution until all Guaranteed Obligations have been indefeasibly paid in cash and
performed in full. Furthermore, each Subsidiary Guarantor hereby unconditionally and irrevocably
agrees that in the event any payment shall be required to be made to any Holder under this Guaranty
or any other guaranty, such Subsidiary Guarantor will contribute, to the maximum extent permitted
by law, such amounts to each other Subsidiary Guarantor and each other guarantor so as to maximize
the aggregate amount paid to the Holders under or in respect of the Notes and the Note Purchase
Agreement. A Subsidiary Guarantor’s “Percentage” on any date shall mean the percentage obtained by
dividing (a) the Adjusted Net Assets of such Subsidiary Guarantor on such date by (b) the sum of
the Adjusted Net Assets of all Subsidiary Guarantors on such date. “Adjusted Net Assets” means,
for each Subsidiary Guarantor on any date, the lesser of (i) the amount by which the fair value of
the property of such Subsidiary Guarantor exceeds the total amount of liabilities, including
contingent liabilities, but excluding liabilities under this Guaranty, of such Subsidiary Guarantor
on such date and (ii) the amount by which the present fair salable value of the assets of such
Subsidiary Guarantor on such date exceeds the amount that will be required to pay the probable
liability of such Subsidiary Guarantor on its debts, excluding debt in respect of this Guaranty, as
they become absolute and matured.

Section 11. Limitation of Liability. 

     Each Subsidiary Guarantor hereby confirms that it is the intention of such Subsidiary
Guarantor that the guarantee by such Subsidiary Guarantor pursuant to this Guaranty not constitute
a fraudulent transfer or conveyance for purposes of Title 11 of the United States Code, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
applicable Federal or state law (all such statutes and laws are collectively referred to as
“Fraudulent Conveyance Laws”). To effectuate the foregoing intention, each Subsidiary Guarantor
hereby irrevocably agrees that the obligations of such Subsidiary Guarantor under this Guaranty
shall be limited to the amount as will, after giving effect to all rights to receive any
collections from or payments by or on behalf of any other Subsidiary Guarantor in respect of the
obligations of such other Subsidiary Guarantor pursuant to Section 10 hereof, result in the
obligations of such Subsidiary Guarantor under this Guaranty not constituting such a fraudulent

- 14 -

 

transfer or conveyance. In the event that the liability of any Subsidiary Guarantor hereunder is
limited pursuant to this Section 11 to an amount that is less than the total amount of the
Guaranteed Obligations, then it is understood and agreed that the portion of the Guaranteed
Obligations for which such Subsidiary Guarantor is liable hereunder shall be the last portion of
the Guaranteed Obligations to be repaid.

Section 12. Negative Pledge. 

     Except as permitted under Section 10.3 of the Note Purchase Agreement, no Subsidiary Guarantor
will create any Lien on its assets or property to any other Person during the pendency of this
Guaranty except for Liens permitted by Section 10.3 of the Note Purchase Agreement.

Section 13. Supplemental Agreement. 

     Upon execution and delivery by a Subsidiary of a Supplemental Agreement substantially in the
form of Exhibit A hereto, such Subsidiary shall become a Subsidiary Guarantor hereunder with the
same force and effect as if originally named as a Subsidiary Guarantor herein. The execution and
delivery of any such instrument shall not require the consent of any other Subsidiary Guarantor
hereunder or of any Holder. The rights and obligations of each Subsidiary Guarantor hereunder
shall remain in full force and effect notwithstanding the addition of any new Subsidiary Guarantor
as a party to this Guaranty.

Section 14. Definitions and Terms Generally. 

     (a) Unless otherwise defined herein, capitalized terms defined in the Note Purchase Agreement
are used herein as defined therein. In addition, the following terms shall have the following
meanings.

     “Adjusted Net Assets” has the meaning specified in Section 10 hereof.

     “Fraudulent Conveyance Laws” has the meaning specified in Section 11 hereof.

     “Guaranteed Obligations” has the meaning specified in Section 1 hereof.

     “Guaranty” has the meaning specified in the introduction hereto.

     “holder” means, with respect to any Note, the Person in whose name such Note is registered in
the register maintained by the Company pursuant to Section 13.1 of the Note Purchase Agreement.

     “Holders” has the meaning specified in the introduction hereto.

     “Material Adverse Effect” means a material adverse effect on (a) the business, operations,
affairs, financial condition, assets or properties of the Company and the Subsidiary Guarantors,
taken as a whole, (b) the ability of any Subsidiary Guarantor to perform its

- 15 -

 

obligations under this Guaranty or (c) the validity or enforceability of this Guaranty, the Note Purchase Agreement or the
Notes.

     “Maximum Guaranteed Amount” shall mean, for each Subsidiary Guarantor, the maximum amount
which any Subsidiary Guarantor could pay under this Guaranty without having such payment set aside
as a fraudulent transfer or conveyance or similar action under Fraudulent Conveyance Law.

     “Note Purchase Agreement” has the meanings specified in the Recitals hereto.

     “Notes” has the meanings specified in the Recitals hereto.

     “Percentage” has the meaning specified in Section 10 hereof.

     “property” or “properties” means, unless otherwise specifically limited, real or personal
property of any kind, tangible or intangible, choate or inchoate.

     “Required Holders” has the meaning specified in the Note Purchase Agreement.

     “Subsidiary Guarantor” has the meaning specified in the introduction hereto.

     (b) Whenever the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be
followed by the phrase “without limitation.” All references herein to Articles, Sections, Exhibits
and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules
to, this Guaranty unless the context shall otherwise require.

Section 15. Notices. 

     All notices under the terms and provisions hereof shall be in writing (with charges prepaid),
and shall be delivered or sent by hand, by telecopy, by express courier service or by registered or
certified mail, return receipt requested, postage prepaid, addressed,

     (a) if to any Holder, at the address set forth in the Note Purchase Agreement, or at
such other address as any such Holder shall from time to time designate to the Company,

     (b) if to a Subsidiary Guarantor, at the address of such Subsidiary Guarantor set forth
on the signature pages hereto or at such other address as such Subsidiary Guarantor shall
from time to time designate in writing to each Holder.

A notice or communication shall be deemed to have been duly given and effective:

	 	(a)	 	when delivered (whether or not accepted), if personally delivered;

- 16 -

 

	 	(b)	 	five Business Days after being deposited in the mail, postage prepaid, if
delivered by first-class mail (whether or not accepted);
	 
	 	(c)	 	when sent, if sent via facsimile;
	 
	 	(d)	 	when delivered if sent by registered or certified mail (whether or not
accepted); and
	 
	 	(e)	 	on the next Business Day if timely delivered by an overnight air courier, with
charges prepaid (whether or not accepted).

Section 16. Amendments, Etc. 

     No amendment, alteration, modification or waiver of any term or provision of this Guaranty,
nor consent to any departure by any Subsidiary Guarantor therefrom, shall in any event be effective
unless the same shall be in writing and consented to by each Subsidiary Guarantor and the Required
Holders provided, however, that (i) any amendment, alteration, modification or waiver of the terms
and conditions contained in Section 1 hereof shall require consent from all Holders, and then such
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which given and (ii) any Supplemental Agreement executed pursuant to Section 13 shall not require
the consent of any Holder or any Subsidiary Guarantor.

Section 17. Consent to Jurisdiction; Service of Process. 

     (a) Each Subsidiary Guarantor irrevocably submits to the nonexclusive in personam jurisdiction
of any New York State or federal court sitting in New York City, over any suit, action or
proceeding arising out of or relating to this Guaranty or the Notes. To the fullest extent it may
effectively do so under applicable law, each Subsidiary Guarantor irrevocably waives and agrees not
to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the in
personam jurisdiction of any such court, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in any such court and any claim
that any such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.

     (b) Each Subsidiary Guarantor agrees, to the fullest extent it may effectively do so under
applicable law, that a final judgment in any suit, action or proceeding of the nature referred
to in paragraph (a) of this Section 17 brought in any such court shall be conclusive and binding
upon such party, subject to rights of appeal and may be enforced in the courts of the United States
of America or the State of New York (or any other courts to the jurisdiction of which such party is
or may be subject) by a suit upon such judgment.

     (c) Each Subsidiary Guarantor consents to process being served in any suit, action or
proceeding of the nature referred to in paragraph (a) of this Section 17 by mailing a copy thereof
by registered or certified mail, postage prepaid, return receipt requested, to the address of each
Subsidiary Guarantor specified in Section 15 or at such other address of which you shall then

- 17 -

 

have been notified pursuant to said Section. Each Subsidiary Guarantor agrees that such service upon
receipt (i) shall be deemed in every respect effective service of process upon it in any such suit,
action or proceeding and (ii) shall, to the full extent permitted by law, be taken and held to be
valid personal service upon and personal delivery to such party. Notices hereunder shall be
conclusively presumed received as evidenced by a delivery receipt furnished by the United States
Postal Service or any reputable commercial delivery service.

     (d) Nothing in this Section 17 shall affect the right of any Holder to serve process in any
manner permitted by law, or limit any right that any of the Holders may have to bring proceedings
against any Subsidiary Guarantor in the courts of any appropriate jurisdiction or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

Section 18. Waiver of Jury Trial. 

     Each Subsidiary Guarantor and by its acceptance hereof each Holder, to the fullest extent
permitted by applicable law, irrevocably and unconditionally waives the right to trial by jury in
any legal or equitable action, suit or proceeding arising out of or relating to this Guaranty or
the Note Purchase Agreement or any transaction contemplated hereby or thereby or the subject matter
of any of the foregoing.

Section 19. Survival. 

     All warranties, representations and covenants made by each Subsidiary Guarantor herein or in
any written certificate or other instrument required to be delivered by it or on its behalf
hereunder or under the Note Purchase Agreement shall be considered to have been relied upon by the
Holders and shall survive the execution and delivery of this Guaranty, regardless of any
investigation made by any Holder or on such Holder’s behalf. All statements in any such
certificate or other instrument shall constitute warranties and representations by such Subsidiary
Guarantor hereunder.

Section 20. Severability. 

     Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. To the extent permitted by applicable law, each Subsidiary Guarantor
hereby waives any provision of law that renders any provisions hereof prohibited or unenforceable
in any respect.

- 18 -

 

Section 21. Successors and Assigns. 

     The terms of this Guaranty shall be binding upon each Subsidiary Guarantor and its successors
and assigns and shall inure to the benefit of the Holders and their respective successors and
assigns.

Section 22. Table of Contents; Headings. 

     The section and paragraph headings in this Guaranty and the table of contents are for
convenience of reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof, and all references herein to numbered sections, unless otherwise indicated, are
to sections in this Guaranty.

Section 23. Counterparts. 

     This Guaranty may be executed in any number of counterparts, each of which shall be an
original, but all of which together shall constitute one instrument.

Section 24. Governing Law. 

     This Guaranty shall in all respects be governed by, and construed and interpreted in
accordance with, the laws of the State of New York, without regard to the conflicts of laws
principles of such state.

Section 25. Release. 

     Notwithstanding any other provision hereof to the contrary, including without limitation
Section 3(c)(v), 3(c)(xiv) and 3(c)(xv), a Subsidiary Guarantor shall be automatically released
from its guaranty hereunder upon the sale or exchange of all or substantially all of the stock (or
other equity interests) or the assets of such Subsidiary Guarantor permitted pursuant to Section
10.4 of the Note Purchase Agreement.

Section 26. Covenant Compliance. 

     Each Subsidiary Guarantor agrees to comply with each of the covenants contained herein and in
the Note Purchase Agreement that imposes or purports to impose, by reference to such
Subsidiary Guarantor, express or otherwise, through agreements with the Company, restrictions
or obligations on such Subsidiary Guarantor.

- 19 -

 

     In Witness Whereof, each party hereto has caused this Guaranty to be duly executed as
of the date first above written.

	 	 	 
	 

	 	American Gypsum Company
	 

	 	American Gypsum Marketing Company
	 

	 	CCP Cement Company
	 

	 	CCP Concrete/Aggregates LLC
	 

	 	CCP Gypsum Company
	 

	 	CCP Land Company
	 

	 	Centex Cement Corporation
	 

	 	Hollis & Eastern Railroad Company LLC
	 

	 	Mathews Readymix LLC
	 

	 	M&W Drywall Supply Company
	 

	 	Mountain Cement Company
	 

	 	Nevada Cement Company
	 

	 	Republic Paperboard Company LLC
	 

	 	Texas Cement Company
	 

	 	Western Aggregates LLC 
	 

	 	Western Cement Company of California
	 

	 	AG South Carolina LLC
	 

	 	Illinois Cement Company LLC 

	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:

Title:
	 
	 	 	 	 
	 	 	Centex Materials LLC

	 	 	TLCC GP LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:

Title:
	 
	 	 	 	 
	 	 	TLCC LP LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:

Title:

	 	 	 	 	 	 	 
	 

	 	Notice for each of the above:	 	 	 	 
	 

	 	 	 	Address:
	 	3811 Turtle Creek Blvd.
	 

	 	 	 	 	 	Suite 1100

Dallas, Texas 75219
	 
	 	 	 	 	 	 
	 

	 	 	 	Telecopy:
	 	(214) 432-2100

- 20 -

 

Exhibit A

Form of Supplemental Agreement

     Supplemental Agreement dated as of                     , ___from                     , a                     
organized under the laws of the State of                      (the “New Subsidiary”), for the benefit of the
Holders (as defined in the Guaranty referred to below). Capitalized terms used herein without
definition shall have the respective meanings ascribed thereto in the Subsidiary Guaranty
Agreement, dated as of November 15, 2005 (the “Guaranty”), from: (i) [names of guarantors] and (___)
such other Subsidiaries (as defined below) as shall become parties thereto in accordance therewith,
for the benefit of the Holders (as such term is defined in such Guaranty).

     Whereas, Eagle Materials Inc., a Delaware corporation (the “Company”), authorized the
issue and sale of (i) $40,000,000 5.25% Series 2005A Senior Notes, Tranche A, due November 15, 2012
(the “Tranche A Notes”), (ii) $80,000,000 5.38% Series 2005A Senior Notes, Tranche B, due November
15, 2015 (the “Tranche B Notes”) and (iii) $80,000,000 5.48% Series 2005A Senior Notes, Tranche C,
due November 15, 2017 (the “Tranche C Notes” and, together with the Tranche A Notes and the Tranche
B Notes, the “Series 2005A Notes”), pursuant to a Note Purchase Agreement, dated as of November 15,
2005 (as amended, modified or supplemented from time to time, the “Note Purchase Agreement”) among
the Company and the purchasers named therein.

     Whereas, the Company is authorized to issue Additional Notes (as such term is defined
in the Note Purchase Agreement) of one or more separate series from time to time in an aggregate
principal amount not to exceed $500,000,000 pursuant to Section 2.2 of the Note Purchase Agreement.

     Whereas, the Additional Notes together with the Series 2005A Notes are collectively
referred to as the “Notes”.

     Whereas, the New Subsidiary is a Subsidiary of the Company.

     Whereas, certain of the existing Subsidiaries of the Company have entered into the
Guaranty.

     Whereas, the Note Purchase Agreement requires that certain Subsidiaries become party
to the Guaranty (as a Subsidiary Guarantor).

     Whereas, the New Subsidiary acknowledges that it has and will derive substantial
benefits from the issuance of the Notes.

     Whereas, the Guaranty specifies that additional Subsidiaries may become Subsidiary
Guarantors under such Guaranty by execution and delivery of an instrument in the form of this
Agreement. The undersigned Subsidiary is executing this Agreement in accordance with the
requirements of the Note Purchase Agreement and the Guaranty in order to become a Subsidiary
Guarantor under the Guaranty as consideration for the Notes previously purchased.

 

 

     Now, Therefore, the New Subsidiary Guarantor agrees as follows:

     Section 1. Guaranty. In accordance with Section 13 of the Guaranty, the New Subsidiary by its
signature hereto shall become a Subsidiary Guarantor under such Guaranty with the same force and
effect as if originally named therein as a Subsidiary Guarantor and the New Subsidiary hereby (a)
agrees to all the terms and provisions of such Guaranty applicable to it as a Subsidiary Guarantor
thereunder, (b) represents and warrants that the representations and warranties made by it as a
Subsidiary Guarantor are true and correct on and as of the date hereof with the same effect as
though made on and as of the date hereof, (c) acknowledges receipt of a copy of and agrees to be
obligated and bound by the terms of such Guaranty, and (d) agrees that each reference to a
“Subsidiary Guarantor” in such Guaranty shall be deemed to include the New Subsidiary.

     Section 2. Enforceability. The New Subsidiary hereby represents and warrants that this
Agreement has been duly authorized, executed and delivered by the New Subsidiary and that each of
this Agreement and the Guaranty (as supplemented hereby) constitutes a legal, valid and binding
obligation of the New Subsidiary enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the applicability of creditors’ rights generally and by equitable principles of
general applicability (regardless of whether such enforceability is considered in a proceeding in
equity or at law).

     Section 3. Effect on Guaranty. Except as expressly supplemented hereby, the Guaranty shall
continue in full force and effect.

     Section 4. Governing Law. This Agreement shall in all respects be governed by,
and construed and interpreted in accordance with, the laws of the State of New York, without regard
to the conflicts of laws principles of such state.

     Section 5. Savings Clause. To the fullest extent permitted under applicable law, in the event
any one or more of the provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect with respect to the New Subsidiary, no party hereto shall be required
to comply with such provision for so long as such provision is held to be invalid, illegal or
unenforceable, and the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired. The parties shall endeavor in good-faith
negotiations to replace any invalid, illegal or unenforceable provisions with valid provisions, the
economic effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

     Section 6. Notices. All communications to the New Subsidiary shall be given to it at the
address or telecopy number set forth under its signature hereto.

 

 

     In Witness Whereof, the New Subsidiary has duly executed this Agreement as of the day
and year first above written.

	 	 	 	 	 	 	 
	 	 	[New Subsidiary]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Telecopy:	 	 
	 	 	 	 	 	 	 

 

 

Form of Opinion of General Counsel

to the Company

     The closing opinion of James H. Graass, General Counsel of the Company, which is called for by
Section 4.4 of the Note Purchase Agreement, shall be dated the Closing Date and addressed to the
Purchasers, shall be satisfactory in scope and form to each Purchaser and shall be in the form
attached hereto.

Exhibit 4.4(a)

(to Note Purchase Agreement)

 

 

November 15, 2005

To each of the Purchasers listed on

Schedule I attached hereto

	 	 	 	 	 
	 

	 	Re:
	 	Eagle Materials Inc.
	 

	 	 	 	$40,000,000 5.25% Series 2005A Senior Notes, Tranche A due November 15, 2012

	 

	 	 	 	$80,000,000 5.38% Series 2005A Senior Notes, Tranche B due November 15, 2015
	 

	 	 	 	$80,000,000 5.48% Series 2005A Senior Notes, Tranche C due November 15, 2017

Dear Sirs:

     I am Executive Vice President and General Counsel of Eagle Materials Inc., a Delaware
corporation (the “Company”), and have represented the Company and the Subsidiary Guarantors, as
defined below, in connection with (i) the Note Purchase Agreement dated as of November 15, 2005
(the “Note Agreement”) among the Company and each of you, pursuant to which the Company has issued
to you collectively today $40,000,000 aggregate principal amount of its 5.25% Series 2005A Senior
Notes, Tranche A due November 15, 2012, $80,000,000 aggregate principal amount of its 5.38% Series
2005A Senior Notes, Tranche B due November 15, 2015, and $80,000,000 aggregate principal amount of
its 5.48% Series 2005A Senior Notes, Tranche C due November 15, 2017 (collectively, the “Notes”),
and (ii) the Subsidiary Guaranty Agreement dated as of November 15, 2005 (the “Subsidiary
Guaranty”), entered into by certain direct and indirect Subsidiaries of the Company parties thereto
(the “Subsidiary Guarantors”). The Note Agreement, the Notes and the Subsidiary Guaranty are
sometimes referred to collectively herein as the “Transaction Documents”. All capitalized terms
used in this opinion and not otherwise defined herein shall have the meanings attributed to them in
the Note Agreement. This opinion is being furnished to you pursuant to Section 4.4(a) of the Note
Agreement.

     In connection with the foregoing, I have researched such questions of law and examined the
originals or copies, certified or otherwise authenticated to my satisfaction, of the Transaction
Documents and of such corporate, partnership or limited liability company records, agreements or
other instruments of the Company and the Subsidiary Guarantors, certificates of public officials
and of officers of the Company and the Subsidiary Guarantors and other instruments and documents as
I have deemed necessary as a basis for the opinions hereinafter expressed. As to various questions
of fact material to such opinions, I have, where relevant facts were not independently established,
relied upon statements of officers of the Company or applicable Subsidiary Guarantor.

 

 

     I have, with your permission and without independent verification, assumed that the signatures
(other than those of the officers of the Company or any Subsidiary Guarantors) on all documents
examined by me are genuine, all documents submitted to me as originals are authentic and all
documents submitted as certified or photostatic copies conform to the originals thereof.

     Upon the basis of the foregoing and subject to the conditions and qualifications set forth
herein, I am of the opinion that:

     1. The Company and each Subsidiary Guarantor has the requisite corporate or other
organizational power and authority to conduct the activities in which it is now engaged.

     2. Each Subsidiary Guarantor is a corporation or other legal entity, validly existing and in
good standing under the laws of its jurisdiction of organization, and has the requisite corporate
or other organizational power and authority to execute, deliver and perform the Subsidiary
Guaranty.

     3. The issuance and sale of the Notes, the execution, delivery and performance by the Company
of the Note Agreement, and the execution, delivery and performance by each Subsidiary Guarantor of
the Subsidiary Guaranty do not violate any provision of any law or other rule or regulation of any
Governmental Authority applicable to the Company or any such Subsidiary Guarantor or conflict with
or result in any breach of any of the provisions of or constitute a default under or result in the
creation or imposition of any Lien upon any property of the Company or any such Subsidiary
Guarantor pursuant to the provisions of the Articles or Certificate of Incorporation or By-laws, or
such similar organizational or governing instrument, as the case may be, of the Company or such
Subsidiary Guarantor or any of the agreements listed on Schedule 5.15 to the Note Agreement or any
other material agreement or other instrument to which the Company or any such Subsidiary Guarantor
is a party or by which the Company or any such Subsidiary Guarantor may be bound.

     4. There are no actions, suits or proceedings pending or, to my knowledge after due inquiry,
threatened against or affecting the Company or any Subsidiary in any court or before any
governmental authority or arbitration board or tribunal which, if adversely determined, would have
a materially adverse effect on the ability of the Company to perform its obligations under the Note
Agreement and the Notes, on the ability of any Subsidiary Guarantor to perform its obligations
under the Subsidiary Guaranty or on the legality, validity or enforceability of the Company’s
obligations under the Note Agreement and the Notes or any Subsidiary Guarantor’s obligations under
the Subsidiary Guaranty. Neither the Company nor any Subsidiary is in default in any material
respect with respect to any court or government authority, or arbitration board or tribunal.

     5. No approval, consent or withholding of objection on the part of, or filing, registration or
qualification with, any governmental body, Federal or state, is necessary in connection with the
execution and delivery by the Company of the Note Agreement and the Notes or the execution and
delivery by each Subsidiary Guarantor of the Subsidiary Guaranty.

 

 

     6. The Subsidiary Guaranty has been duly authorized by all necessary corporate or other
organizational action on the part of each Subsidiary Guarantor and has been duly executed and
delivered by each Subsidiary Guarantor.

     The opinions expressed above are subject to the following qualifications:

	 	(a)	 	I am a member of the bar of the State of Texas, and, except as
hereinafter provided with respect to the business organization laws of the
states of California, Delaware and Nevada, I express no opinion herein as to
the effect that the laws or decisions of courts of any jurisdiction other than
the United States of America and the State of Texas may have upon such
opinions. To the extent that the opinions expressed above may relate to or be
governed by or construed under the laws of the states of California, Delaware
or Nevada, such opinion pass on such matters; however, I advise you that I am
not a member of the bar of the state of California, Delaware or Nevada although
it is my practice as General Counsel of the Company and each Subsidiary
Guarantor to pass upon matters governed by California, Delaware or Nevada
business organization laws. I undertake no obligation or responsibility to
update or supplement such opinion in response to subsequent changes in law or
future events affecting any of the transactions contemplated by the Transaction
Documents.
	 
	 	(b)	 	The opinions expressed above are solely for your benefit and,
without my prior written consent, may not be relied upon, quoted in whole or in
part or otherwise referred to in any legal opinion, document or other report,
and may not be furnished to any other person or entity provided, that: (i) a
copy of this opinion letter may be included in routine filings made with
regulatory authorities by the Purchasers and subsequent institutional holders
of the Notes; and (ii) subsequent institutional holders of the Notes and the
Purchaser’s special counsel, Chapman and Cutler LLP, may each also rely upon
the opinions expressed herein as if this opinion letter were addressed and
delivered to such holders or such special counsel on the date hereof.

	 	 	 
	 

	 	Very truly yours,
	 
	 	 
	 

	 	James H. Graass
	 

	 	Executive Vice President and
	 

	 	General Counsel

 

 

			
	Each of the Purchasers listed

on Schedule I
	 	November 15, 2005

Schedule I

Purchasers

Metropolitan Life Insurance Company

General American Life Insurance Company

The Travelers Insurance Company

Transamerica Occidental Life Insurance Company

Transamerica Life Insurance Company

Monumental Life Insurance Company

The Lincoln National Life Insurance Company

Sons of Norway

First Penn-Pacific Life Insurance Company

Lincoln Life & Annuity Company of New York

Jackson National Life Insurance Company

Jackson National Life Insurance Company of New York

General Electric Capital Assurance Company

GE Capital Life Assurance Company of New York

 

 

			
	Each of the Purchasers listed

on Schedule I
	 	November 15, 2005

Form of Opinion of Special Counsel

to the Company

     The closing opinion of Baker Botts L.L.P., special counsel to the Company, which is called for
by Section 4.4 of the Note Purchase Agreement, shall be dated the Closing Date and addressed to the
Purchasers, shall be satisfactory in scope and form to each Purchaser and shall be in the form
attached hereto.

Exhibit 4.4(b)

(to Note Purchase Agreement)

 

 

November 15, 2005

Each of the Purchasers listed on

Schedule I attached hereto

	 	 	 	 	 
	 

	 	Re:
	 	Eagle Materials Inc.
	 

	 	 	 	$40,000,000 5.25% Series 2005A Senior Notes, Tranche A due November 15, 2012
	 

	 	 	 	$80,000,000 5.38% Series 2005A Senior Notes, Tranche B due November 15, 2015
	 

	 	 	 	$80,000,000 5.48% Series 2005A Senior Notes, Tranche C due November 15, 2017

Ladies and Gentlemen:

     We have acted as special counsel to Eagle Materials Inc., a Delaware corporation (the
“Company”), in connection with (i) the Note Purchase Agreement dated as of November 15, 2005 (the
“Note Agreement”) among the Company and each of you, pursuant to which the Company has issued to
you collectively today $40,000,000 aggregate principal amount of its 5.25% Series 2005A Senior
Notes, Tranche A due November 15, 2012, $80,000,000 aggregate principal amount of its 5.38% Series
2005A Senior Notes, Tranche B due November 15, 2015, and $80,000,000 aggregate principal amount of
its 5.48% Series 2005A Senior Notes, Tranche C due November 15, 2017 (collectively, the “Notes”),
and (ii) the Subsidiary Guaranty Agreement dated as of November 15, 2005 (the “Subsidiary Guaranty
Agreement”), entered into by certain direct and indirect Subsidiaries of the Company parties
thereto (the “Subsidiary Guarantors”). The Note Agreement, the Notes and the Subsidiary Guaranty
Agreement are sometimes referred to collectively herein as the “Transaction Documents”. Capitalized
terms used and not otherwise defined herein have the respective meanings specified in the Note
Agreement. This opinion is being furnished to you pursuant to Section 4.4(b) of the Note
Agreement.

     In this connection and as a basis for the opinions hereinafter expressed, we have examined
executed counterparts of each of the Transaction Documents. We have also examined originals, or
copies certified or otherwise identified to our satisfaction, of (i) the certificate of
incorporation and bylaws of the Company, each as amended to date, (ii) certain corporate records of
the Company, (iii) certificates of public officials and of officers of the Company and the
Subsidiary Guarantors and (iv) such other documents, all as we have deemed relevant and necessary
as a basis for the opinions hereinafter expressed. In giving such opinions, we have relied upon
certificates of officers of the Company and the Subsidiary Guarantors and of governmental and
public officials, and upon the representations and warranties of the parties in

 

 

the Transaction Documents, in each case with respect to the accuracy of factual matters contained
therein or covered thereby.

     We have, with your permission and without independent verification, assumed that the
signatures on all documents examined by us are genuine, all documents submitted to us as originals
are authentic and all documents submitted as certified or photostatic copies conform to the
originals thereof, and that each of the Transaction Documents constitutes a valid, binding and
enforceable obligation of each party thereto other than the Company and the Subsidiary Guarantors.

     With respect to the Subsidiary Guarantors, we have also, with your permission and without
independent verification, assumed the following: (i) each of the Subsidiary Guarantors is a
corporation or limited liability company, as applicable, validly existing and in good standing
under the laws of such Subsidiary Guarantor’s applicable jurisdiction of organization and has the
requisite power to enter into, and to perform its obligations under, the Subsidiary Guaranty
Agreement, (ii) the Subsidiary Guaranty Agreement has been duly authorized by all requisite action
by each of the Subsidiary Guarantors, (iii) the Subsidiary Guaranty Agreement has been duly
executed and delivered by an authorized officer of each of the Subsidiary Guarantors, (iv) the
execution and delivery by each of the Subsidiary Guarantors of, and performance of each of the
Subsidiary Guarantor’s agreements in, the Subsidiary Guaranty Agreement does not violate the
certificate or articles of incorporation, bylaws, certificate or articles of formation, limited
liability company agreement or other organizational or governance document of any Subsidiary
Guarantor or breach or otherwise violate any existing obligation of any Subsidiary Guarantor under
any court order, judgment or decree, (v) the execution and delivery by each of the Subsidiary
Guarantors of the Subsidiary Guaranty Agreement, the consummation of the transactions contemplated
by the Subsidiary Guaranty Agreement, and compliance by each of the Subsidiary Guarantors with the
provisions thereof will not violate any statute, rule or regulation of any applicable governmental
authority and (vi) no consent, approval, waiver, license or authorization or other action by or
filing with any governmental authority is required under the statutes, rules or regulations of any
applicable governmental authority in connection with the execution, delivery and performance by the
Subsidiary Guarantors of the Subsidiary Guaranty Agreement.

     On the basis of the foregoing, and subject to the qualifications, exceptions, assumptions and
limitations hereinafter set forth, we are of the opinion that:

     1. The Company is validly existing as a corporation in good standing under the laws of the
State of Delaware and has the corporate power to execute and deliver the Note Agreement and the
Notes, to perform its obligations under the Note Agreement and to issue and sell the Notes.

     2. The Note Agreement and the Notes have been duly authorized by all requisite corporate
action by the Company, have been duly executed and delivered by an authorized officer of the
Company and constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms.

     3. The Subsidiary Guaranty Agreement constitutes the valid and binding obligation of each of
the Subsidiary Guarantors, enforceable against each of the Subsidiary Guarantors in accordance with
their respective terms.

 

 

     4. Based upon the factual representations contained in Sections 5.13, 6.1 and 6.2 of the Note
Agreement and in the letter dated November 15, 2005 from Banc of America Securities LLC relating to
its offering of the Notes, it is not necessary in connection with the offering, issuance, sale and
delivery of the Notes and the execution and delivery of the Subsidiary Guaranty Agreement under the
circumstances contemplated by the Note Agreement and the Subsidiary Guaranty Agreement to register
the Notes or the Subsidiary Guaranty Agreement under the Securities Act or to qualify an indenture
in respect of the Notes or the Subsidiary Guaranty Agreement under the Trust Indenture Act of 1939,
as amended.

     5. The extension, arranging and obtaining of the credit represented by (i) the execution and
delivery by the Company of the Note Agreement and the Notes, (ii) the issuance of the Notes by the
Company and (iii) the application of the proceeds of the sale of the Notes do not result in a
violation of Regulations T, U or X of the Board of Governors of the Federal Reserve System.

     6. Neither the Company nor any of the Subsidiary Guarantors is an “investment company” or a
company controlled by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended.

     The opinions set forth above are subject to the following qualifications and limitations:

     (a) The enforceability of the Transaction Documents may be subject to or limited by
bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance or transfer, moratorium
or other similar laws and court decisions, now or hereafter in effect, relating to or affecting the
rights of creditors generally.

     (b) The enforceability of the Transaction Documents is subject to the application of and may
be limited by general principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in equity
or at law).

     (c) The remedies of specific performance and injunctive and other forms of equitable relief
are subject to equitable defenses and to the discretion of the court before which any proceeding
therefor may be brought.

     (d) Insofar as the opinions expressed in paragraphs 2 and 3 relate to the enforceability of
the Company’s and the Subsidiary Guarantors’ obligation to pay the Make-Whole Amount under the
circumstances contemplated by Sections 11 and 12 of the Note Agreement, we have assumed, with your
permission, that a court would give effect to the parties’ characterization of the Make-Whole
Amount in the final sentence of Section 12.1 of the Note Agreement and would not hold that such
amount constituted a penalty.

     (e) Certain of the remedial, waiver, consent and other provisions of the Subsidiary Guaranty
Agreement may be unenforceable under existing laws or judicial decisions. However, subject to the
other express qualifications contained herein, such laws or judicial decisions would not, in our
opinion, substantially interfere with the practical realization of the principal benefits expressed
in the Subsidiary Guaranty Agreement, except for the economic consequences of any procedural delay
that might result from such laws or decisions.

 

 

     (f) Without limiting the opinion expressed in paragraph 4 above, we express no
opinion as to the various state, federal and foreign laws regulating the Purchasers
or the conduct of their business that may relate to the Transaction Documents and the
transactions contemplated thereby.

     The foregoing opinions are limited in all respects to the laws of the State of
New York, the applicable federal laws of the United States of America and the
Delaware General Corporation Law (and with respect to such Delaware statute, without
consideration of any judicial or administrative interpretations thereof), each as in
effect on the date hereof, and no opinion is expressed herein as to any matters
governed by the laws of any other jurisdiction. We undertake no obligation or
responsibility to update or supplement such opinions in response to subsequent
changes in the law or future events affecting any of the transactions contemplated by
the Transaction Documents.

     The opinions expressed herein are rendered for your benefit solely in connection with the
transactions consummated on the date hereof pursuant to the Transaction Documents and may not be
relied upon or used for any purpose by any other Person without, in each instance, our express
prior written consent; provided, that (i) a copy of this opinion letter may be included in routine
filings made with regulatory authorities by the Purchasers and subsequent institutional holders of
the Notes; and (ii) subsequent institutional holders of the Notes and the Purchaser’s special
counsel, Chapman and Cutler LLP, may each also rely upon the opinions expressed herein solely for
the aforesaid purposes as if this opinion letter were addressed and delivered to such holders or
such special counsel on the date hereof.

Very truly yours,

PBD

 

 

Schedule I

Purchasers

Metropolitan Life Insurance Company

General American Life Insurance Company

The Travelers Insurance Company

Transamerica Occidental Life Insurance Company

Transamerica Life Insurance Company

Monumental Life Insurance Company

The Lincoln National Life Insurance Company

Sons of Norway

First Penn-Pacific Life Insurance Company

Lincoln Life & Annuity Company of New York

Jackson National Life Insurance Company

Jackson National Life Insurance Company of New York

General Electric Capital Assurance Company

GE Capital Life Assurance Company of New York

 

 

Form of Opinion of Special Counsel

to the Purchasers

     The closing opinion of Chapman and Cutler LLP, special counsel to the Purchasers, called for
by Section 4.4 of the Note Purchase Agreement, shall be dated the Closing Date and addressed to
each Purchaser, shall be satisfactory in form and substance to each Purchaser and shall be to the
effect that:

     1. The Company is a corporation, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and the corporate authority to execute
and deliver the Note Purchase Agreement and to issue the Series 2005A Notes.

     2. The Note Purchase Agreement has been duly authorized by all necessary corporate action on
the part of the Company, has been duly executed and delivered by the Company and constitutes the
legal, valid and binding contract of the Company enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent conveyance and similar laws affecting creditors’ rights
generally, and general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).

     3. The Series 2005A Notes have been duly authorized by all necessary corporate action on the
part of the Company, and the Series 2005A Notes being delivered on the date hereof have been duly
executed and delivered by the Company and constitute the legal, valid and binding obligations of
the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent conveyance and similar laws affecting creditors’ rights generally, and general
principles of equity (regardless of whether the application of such principles is considered in a
proceeding in equity or at law).

     4. The issuance, sale and delivery of the Series 2005A Notes and the execution and delivery of
the Subsidiary Guaranty under the circumstances contemplated by the Note Purchase Agreement and the
Subsidiary Guaranty do not, under existing law, require the registration of the Series 2005A Notes
or the Subsidiary Guaranty under the Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.

Exhibit 4.4(c)

(to Note Purchase Agreement)

E-4.4(c)-1

 

     With respect to matters of fact upon which such opinion is based, Chapman and Cutler LLP may
rely on appropriate certificates of public officials and officers of the Company and upon
representations of the Company and the Purchasers delivered in connection with the issuance and
sale of the Series 2005A Notes.

     In rendering the opinion set forth in paragraph 1 above, Chapman and Cutler LLP may rely, as
to matters referred to in paragraph 1, solely upon an examination of the Articles of Incorporation
certified by, and a certificate of good standing of the Company from, the Secretary of State of the
State of Delaware, the Bylaws of the Company and the general business corporation law of the State
of Delaware. The opinion of Chapman and Cutler LLP is limited to the laws of the State of New
York, the general business corporation law of the State of Delaware and the Federal laws of the
United States.

E-4.4(c)-2

 

 

Eagle Materials Inc.

[Number] Supplement to Note Purchase Agreement

Dated as of________________________

Re: $                                                             % Series                      Senior Notes

Due                                         

 

Exhibit S

(to Note Purchase Agreement)

 

Eagle Materials Inc.

3811 Turtle Creek Blvd., Suite 1100

Dallas, Texas 75219

Dated as of

                                        , 20__

To the Purchaser(s) named in

Schedule A hereto

Ladies and Gentlemen:

     This [Number] Supplement to Note Purchase Agreement (the “Supplement”) is between Eagle
Materials Inc., a Delaware corporation (the “Company”), and the institutional investors named
on Schedule A attached hereto (the “Purchasers”).

     Reference is hereby made to that certain Note Purchase Agreement dated as of November ___, 2005
(the “Note Purchase Agreement”) between the Company and the purchasers listed on Schedule A
thereto. All capitalized terms not otherwise defined herein shall have the same meaning as
specified in the Note Purchase Agreement. Reference is further made to Section 2.2 of the Note
Purchase Agreement which requires that, prior to the delivery of any Additional Notes, the Company
and each Additional Purchaser shall execute and deliver a Supplement.

     The Company hereby agrees with the Purchaser(s) as follows:

     1. The Company has authorized the issue and sale of $                     aggregate principal amount of
its                     % Series                      Senior Notes due                     , ___(the “Series                      Notes”). The Series
___Notes, together with the Series 2005A Notes [and the Series ___Notes] initially issued
pursuant to the Note Purchase Agreement [and the                      Supplement] and each series of
Additional Notes which may from time to time hereafter be issued pursuant to the provisions of
Section 2.2 of the Note Purchase Agreement, are collectively referred to as the “Notes” (such term
shall also include any such notes issued in substitution therefor pursuant to Section 13 of the
Note Purchase Agreement). The Series ___Notes shall be substantially in the form set out in
Exhibit 1 hereto with such changes therefrom, if any, as may be approved by the Purchaser(s) and
the Company.

     2. Subject to the terms and conditions hereof and as set forth in the Note Purchase Agreement
and on the basis of the representations and warranties hereinafter set forth, the Company agrees to
issue and sell to each Purchaser, and each Purchaser agrees to purchase from the Company, Series
___Notes in the principal amount set forth opposite such Purchaser’s name on Schedule A hereto
at a price of 100% of the principal amount thereof on the closing date hereinafter mentioned.

 

     3. The sale and purchase of the Series                      Notes to be purchased by each Purchaser shall
occur at the offices of [                                                            ] at 10:00 a.m. Chicago time, at a closing
(the “Closing”) on                     , ___or on such other Business Day thereafter on or prior to                     ,
___as may be agreed upon by the Company and the Purchasers. At the Closing, the Company will
deliver to each Purchaser the Series                      Notes to be purchased by such Purchaser in the form of
a single Series                      Note (or such greater number of Series                      Notes in denominations of at
least $100,000 as such Purchaser may request) dated the date of the Closing and registered in such
Purchaser’s name (or in the name of such Purchaser’s nominee), against delivery by such Purchaser
to the Company or its order of immediately available funds in the amount of the purchase price
therefor by wire transfer of immediately available funds for the account of the Company to account
number [                                                            ] at                                          Bank, [Insert Bank address, ABA number for wire
transfers, and any other relevant wire transfer information]. If, at the Closing, the Company
shall fail to tender such Series                      Notes to any Purchaser as provided above in this Section 3,
or any of the conditions specified in Section 4 shall not have been fulfilled to any Purchaser’s
satisfaction, such Purchaser shall, at such Purchaser’s election, be relieved of all further
obligations under this Supplement and the Note Purchase Agreement, without thereby waiving any
rights such Purchaser may have by reason of such failure or such nonfulfillment.

     4. The obligation of each Purchaser to purchase and pay for the Series                      Notes to be sold
to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction,
prior to the Closing, of the conditions set forth in Section 4 of the Note Purchase Agreement with
respect to the Series                      Notes to be purchased at the Closing, and to the following additional
conditions:

(a) Except as supplemented, amended or superceded by the representations and warranties
set forth in Exhibit A hereto, each of the representations and warranties of the Company set
forth in Section 5 of the Note Purchase Agreement shall be correct as of the date of Closing
and the Company shall have delivered to each Purchaser an Officer’s Certificate, dated the
date of the Closing certifying that such condition has been fulfilled.

(b) Contemporaneously with the Closing, the Company shall sell to each Purchaser, and
each Purchaser shall purchase, the Series                      Notes to be purchased by such Purchaser at
the Closing as specified in Schedule A.

     5. [Here insert special provisions for Series                      Notes including prepayment provisions
applicable to Series                      Notes (including Make-Whole Amount) and closing conditions applicable
to Series                      Notes].

     6. Each Purchaser represents and warrants that the representations and warranties set forth in
Section 6 of the Note Purchase Agreement are true and correct on the date hereof with respect to
the purchase of the Series                      Notes by such Purchaser.

     7. The Company and each Purchaser agree to be bound by and comply with the terms and
provisions of the Note Purchase Agreement as fully and completely as if such Purchaser were an
original signatory to the Note Purchase Agreement.

- 2 -

 

     The execution hereof shall constitute a contract between the Company and the Purchaser(s) for
the uses and purposes hereinabove set forth, and this agreement may be executed in any number of
counterparts, each executed counterpart constituting an original but all together only one
agreement.

	 	 	 	 	 	 	 	 	 
	 	 	Eagle Materials Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Accepted as of                     , _______

	 	 	 	 	 	 	 	 	 
	 	 	[Variation]	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

- 3 -

 

Information Relating to Purchasers

	 	 	 	 	 
	 

	 	Principal 

	Name and Address of Purchaser

	 	Amount of Series

	 

	 	                     Notes to

	 

	 	Be Purchased

	 
	 	 	 	 
	[Name of Purchaser]

	 	 	$	 

	(1)	 	All payments by wire transfer of
immediately available funds to:
	 
	 	 	with sufficient information to identify the
source and application of such funds.
	 
	(2)	 	All notices of payments and written
confirmations of such wire transfers:
	 
	(3)	 	All other communications:

Schedule A

(to Supplement)

 

Supplemental Representations

     The Company represents and warrants to each Purchaser that except as hereinafter set forth in
this Exhibit A, each of the representations and warranties set forth in Section 5 of the Note
Purchase Agreement is true and correct in all material respects as of the date hereof with respect
to the Series                      Notes with the same force and effect as if each reference to “Series 2005A
Notes” set forth therein was modified to refer the “Series                      Notes” and each reference to
“this Agreement” therein was modified to refer to the Note Purchase Agreement as supplemented by
the                      Supplement. The Section references hereinafter set forth correspond to the similar
sections of the Note Purchase Agreement which are supplemented hereby:

     Section 5.3. Disclosure. The Company, through its agent, Banc of America Securities LLC has
delivered to each Purchaser a copy of a Private Placement Memorandum, dated                                          (the
“Memorandum”), relating to the transactions contemplated by the                      Supplement. The Memorandum
fairly describes, in all material respects, the general nature of the business and principal
properties of the Company and its Restricted Subsidiaries. The Note Purchase Agreement, the
Memorandum, the documents, certificates or other writings delivered to each Purchaser by or on
behalf of the Company in connection with the transactions contemplated by the Note Purchase
Agreement and the                      Supplement and the financial statements listed in Schedule 5.5 to the
                    Supplement, taken as a whole, do not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Since                                         , there has been no change in the
financial condition, operations, business, properties or prospects of the Company or any
Restricted Subsidiary except changes that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect. There is no fact known to the Company that would
reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in
the Memorandum or in the other documents, certificates and other writings delivered to each
Purchaser by or on behalf of the Company specifically for use in connection with the transactions
contemplated hereby.

     Section 5.4. Organization and Ownership of Shares of Subsidiaries. (a) Schedule 5.4 to the
                     Supplement contains (except as noted therein) complete and correct lists of (i) the
Company’s Restricted and Unrestricted Subsidiaries, and showing, as to each Subsidiary, the correct
name thereof, the jurisdiction of its organization, and the percentage of shares of each class of
its capital stock or similar equity interests outstanding owned by the Company and each other
Subsidiary, (ii) the Company’s Affiliates, other than Subsidiaries, and (iii) the Company’s
directors and senior officers.

     Section 5.13. Private Offering by the Company. Neither the Company nor anyone acting on its
behalf has offered the Series ___Notes or any similar securities for sale to, or solicited any
offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with,
any Person other than the Purchasers and not more than [                    ] other Institutional Investors, each
of which has been offered the Series                      Notes at a private sale for investment. Neither the
Company nor anyone acting on its behalf has taken, or will take, any action that would

Exhibit A

(to Supplement)

 

subject the issuance or sale of the Notes to the registration requirements of Section 5 of the
Securities Act.

     Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply the proceeds of the
sale of the Series                      Notes to                                                             and for general corporate
purposes. No part of the proceeds from the sale of the Series                      Notes pursuant to the                     
Supplement will be used, directly or indirectly, for the purpose of buying or carrying any margin
stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224)
or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).
Margin stock does not constitute more than 5% of the value of the consolidated assets of the
Company and its Subsidiaries and the Company does not have any present intention that margin stock
will constitute more than 5% of the value of such assets. As used in this Section, the terms
“margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said
Regulation U.

     Section 5.15. Existing Debt; Future Liens. (a) Schedule 5.15 to the                      Supplement sets
forth a complete and correct list of all outstanding Debt of the Company and its Restricted
Subsidiaries as of                                         , since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of the Debt of the
Company or its Restricted Subsidiaries. Neither the Company nor any Restricted Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any principal or
interest on any Debt of the Company or such Subsidiary and no event or condition exists with
respect to any Debt of the Company or any Restricted Subsidiary that would permit (or that with
notice or the lapse of time, or both, would permit) one or more Persons to cause such Debt to
become due and payable before its stated maturity or before its regularly scheduled dates of
payment.

[Add any additional Sections as appropriate at the time the Series                      Notes are issued]

- 2 -

 

[Form of Series                      Note]

Eagle Materials Inc.

___% Series ______ Senior Note due ______________

			
	No. [                    ]
	 	[Date]
	$[                                        ]
	 	PPN [                                        ]

     For Value Received, the undersigned, Eagle Materials Inc., a corporation
organized and existing under the laws of the State of Delaware (herein called the “Company”),
hereby promises to pay to [                                        ], or registered assigns, the principal sum of
[                                        ] Dollars (or so much thereof as shall not have been prepaid) on
                    , with interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance hereof at the rate of                     % per annum from the date hereof, payable
semiannually, on the                      day of                      and                      in each year, commencing on the first of such
dates after the date hereof, until the principal hereof shall have become due and payable, and (b)
to the extent permitted by law, at a rate per annum from time to time equal to [2% above the stated
rate], on any overdue payment of interest and, during the continuance of an Event of Default, on
the unpaid balance hereof and on any overdue payment of any Make-Whole Amount, payable
[semiannually] as aforesaid (or, at the option of the registered holder hereof, on demand).

     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at                                         , in
                                        , or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

     This Note is one of a series of Senior Notes (the “Notes”) issued pursuant to a Supplement to
the Note Purchase Agreement dated as of November 15, 2005 (as from time to time amended,
supplemented or modified, the “Note Purchase Agreement”), between the Company, the Purchasers named
therein and Additional Purchasers of Notes from time to time issued pursuant to any Supplement to
the Note Purchase Agreement. This Note and the holder hereof are entitled equally and ratably with
the holders of all other Notes of all series from time to time outstanding under the Note Purchase
Agreement to all the benefits provided for thereby or referred to therein. Each holder of this
Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions
set forth in Section 20 of the Note Purchase Agreement and (ii) made the representations set forth
in Sections 6.2 and 6.3 of the Note Purchase Agreement. Unless otherwise indicated, capitalized
terms used in this Note shall have the respective meanings ascribed to such terms in the Note
Purchase Agreement.

     This Note is registered with the Company and, as provided in the Note Purchase Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or

Exhibit A

(to Supplement)

 

accompanied by a written instrument of transfer duly executed, by the registered holder hereof
or such holder’s attorney duly authorized in writing, a new Note of the same series for a like
principal amount will be issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in whose name this Note
is registered as the owner hereof for the purpose of receiving payment and for all other purposes,
and the Company will not be affected by any notice to the contrary.

     The Company will make required prepayments of principal on the dates and in the amounts
specified in the Note Purchase Agreement. [This Note is not subject to regularly scheduled
prepayments of principal.] This Note is [also] subject to optional prepayment, in whole or from
time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but
not otherwise.

     Pursuant to the Subsidiary Guaranty Agreement dated as of November 15, 2005 (as amended or
modified from time to time, the “Subsidiary Guaranty”), certain Subsidiaries of the Company have
absolutely and unconditionally guaranteed payment in full of the principal of, Make-Whole Amount,
if any, and interest on this Note and the performance by the Company of its obligations contained
in the Note Purchase Agreement all as more fully set forth in said Subsidiary Guaranty.

     If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable in the manner, at
the price (including any applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.

     This Note shall be construed and enforced in accordance with, and the rights of the parties
shall be governed by, the law of the State of New York excluding choice-of-law principles of the
law of such State that would require the application of the laws of a jurisdiction other than such
State.

	 	 	 	 	 	 	 	 	 
	 	 	Eagle Materials Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

- 2 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00093-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00093-of-00352.parquet"}]]