Document:

exv4w3

Exhibit 4.3

Second Amendment

to

Fourth Amended and Restated Credit Agreement

Among

Linn Energy, LLC,

As Borrower,

BNP Paribas,

As Administrative Agent,

Royal Bank of Canada,

As Syndication Agent,

The Royal Bank of Scotland plc, Citibank, NA, Credit Agricole Corporate and

Investment Bank New York Branch, Barclays Bank PLC and Wells Fargo Bank,

N.A.,

As Co-Documentation Agents

and

The Lenders Party Hereto

Dated as of April 6, 2010

 

 

Second Amendment to Fourth Amended and Restated Credit Agreement

     This Second Amendment to Fourth Amended and Restated Credit Agreement (this “Second
Amendment”) dated as of April 6, 2010 (the “Second Amendment Effective Date”) is among Linn
Energy, LLC, a limited liability company formed under the laws of the State of Delaware (the
“Borrower”); each of the undersigned guarantors (the “Guarantors”, and together with the Borrower,
the “Obligors”); each of the Lenders that is a signatory hereto; and BNP Paribas, as
administrative agent for the Lenders (in such capacity, together with its successors, the
“Administrative Agent”).

R E C I T A L S

     A. The Borrower, the Administrative Agent and the Lenders are parties to that certain Fourth
Amended and Restated Credit Agreement dated as of April 28, 2009 (as the same has been amended,
modified, supplemented or restated from time to time, the “Credit Agreement”), pursuant to which
the Lenders have made certain credit available to and on behalf of the Borrower.

     B. The Borrower has requested and the Administrative Agent and the Lenders have agreed to
amend certain provisions of the Credit Agreement as more particularly set forth herein.

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

     Section 1. Defined Terms. Each capitalized term which is defined in the Credit
Agreement, but which is not defined in this Second Amendment, shall have the meaning ascribed such
term in the Credit Agreement. Unless otherwise indicated, all section references in this Second
Amendment refer to the Credit Agreement.

     Section 2. Amendments to Credit Agreement.

     2.1 Amendments to Section 1.02.

          (a) The following terms, as defined in Section 1.02 of the Credit Agreement, are hereby
amended and restated in their entirety to read as follows:

“‘Agreement’ means this Fourth Amended and Restated Credit Agreement, as
amended by the First Amendment, the Second Amendment and as the same may from time
to time be further amended, modified, supplemented or restated.”

“‘Alternate Base Rate’ means, for any day, a rate per annum equal to the
highest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%, and (c) the LIBO Rate for a three-month
Interest Period on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1.00%, provided that, in the context of this definition
of Alternate Base Rate and for the avoidance of doubt, the LIBO Rate for any day
shall be based on the rate as quoted at approximately 11:00 a.m.

Page 1

 

London time on such day to the Administrative Agent’s London office for dollar
deposits of $5,000,000 having a three-month maturity. Any change in the Alternate
Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the
LIBO Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate, respectively.”

“‘Applicable Margin’ means, for any day, with respect to any ABR Loan or
Eurodollar Loan, as the case may be, the rate per annum set forth in the Borrowing
Base Utilization Grid below based upon the Borrowing Base Utilization Percentage
then in effect:

	 	 	 	 	 	 	 	 	 
	Borrowing Base Utilization Percentage	 	Eurodollar Loans	 	ABR Loans
	Less than or equal to 30%
	 	 	2.00	%	 	 	1.00	%
	Greater than 30% and less than or equal to
60%
	 	 	2.25	%	 	 	1.25	%
	Greater than 60% and less than or equal to
75%
	 	 	2.50	%	 	 	1.50	%
	Greater than 75% and less than or equal to
90%
	 	 	2.75	%	 	 	1.75	%
	Greater than 90%
	 	 	3.00	%	 	 	2.00	%

Each change in the Applicable Margin shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change, provided, however, that if at any time the
Borrower fails to deliver a Reserve Report pursuant to Section 8.12(a), then until
such time as a Reserve Report is delivered the “Applicable Margin” means the rate
per annum set forth on the grid when the Borrowing Base Utilization Percentage is at
its highest level.”

“‘Indebtedness’ means, without duplication, any and all amounts owing or to
be owing by the Borrower or any Guarantor (whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising): (a) to the Administrative Agent, any Issuing Bank
or any Lender under any Loan Document; and all renewals, extensions and/or
rearrangements of any of the above and (b) to any Secured Hedge Provider under any
Secured Swap Agreement.”

“‘LIBO Rate’ means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate (rounded upwards, if necessary, to the next 1/100 of 1%)
appearing on Reuters Screen LIBOR01 Page as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the event that such rate
does not appear on such page (or otherwise on such screen), the “LIBO Rate” shall be
determined by reference to such other comparable publicly available service for
displaying Eurodollar rates (rounded upwards, if necessary,

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to the next 1/100 of 1%) as may be selected by the Administrative Agent or, in the
absence of such availability, by reference to the rate at which the Administrative
Agent is offered dollar deposits at or about 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period in the interbank Eurodollar
market where its Eurodollar and foreign currency and exchange operations are then
being conducted for delivery on the first day of such Interest Period for the number
of days comprised therein.”

“‘Maturity Date’ means April 6, 2015.”

“‘Permitted Refinancing Debt’ means Debt (for purposes of this definition,
“new Debt”) incurred in exchange for, or proceeds of which are used to
refinance, any Existing Senior Notes, Funded Debt or any Permitted Refinancing Debt
theretofore incurred (as applicable, the “Refinanced Debt”); provided that
(a) such new Debt is in an aggregate principal amount not in excess of the sum of
(i) the original principal amount of the Refinanced Debt and (ii) an amount
necessary to pay any fees, expenses, accrued but unpaid interest and premiums
related to such exchange or refinancing; (b) such new Debt has a stated maturity no
earlier than the day 365 days after the Maturity Date; and (c) such new Debt (and
any guarantees thereof) is subordinated in right of payment to the Indebtedness (or,
if applicable, the Guaranty Agreement) to at least the same extent as the Refinanced
Debt or is otherwise subordinated on terms reasonably satisfactory to the
Administrative Agent.”

“‘Senior Notes’ means the Existing Senior Notes and any Permitted
Refinancing Debt in respect thereof.”

          (b) The following new definitions are hereby added to Section 1.02 where alphabetically
appropriate as follows:

“‘Exemption Period’ means any period during which the notional amounts of
Swap Agreements in respect of interest rates (when aggregated with all other Swap
Agreements of the Borrower and its Subsidiaries then in effect effectively
converting interest rates from floating to fixed) exceed 100% of the then
outstanding principal amount of the Borrower’s Debt for borrowed money which bears
interest at a floating rate as a result of the Borrower’s repayment of Loans with
the proceeds of any sale or issuance of Equity or the proceeds of any Debt permitted
to be incurred under this Agreement; provided, that such period occurs between (a)
the date on which the Borrower or a Subsidiary signs a definitive acquisition
agreement for any acquisition of Property or Equity Interests of any Person not
prohibited by this Agreement and (b) the earliest of (i) the date such acquisition
is consummated, (ii) the date such acquisition is terminated and (iii) 90 days after
such definitive acquisition agreement was executed (or such longer period as to
which the Administrative Agent may agree).”

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“‘Existing Senior Notes’ means, collectively, (a) the $255,927,000 9-7/8%
Senior Notes due 2018, (b) the $250,000,000 11-3/4% Senior Notes due 2017 and (c)
the $1,300,000,000 8 5/8% Senior Notes due 2020.”

“‘Exiting Lender’ means any Person that is a Lender immediately prior to the
Second Amendment Effective Date and which, after giving effect to the assignments in
Section 5.1 of the Second Amendment, ceases to be a party hereto as of the Second
Amendment Effective Date, including, without limitation, DZ Bank AG, Deutsche
Zentral-Genossenschaftsbank, Frankfurt AM Main, New York Branch, Fortis Capital
Corp. and KeyBank National Association.”

“‘First Amendment’ means that certain First Amendment to Fourth Amended and
Restated Credit Agreement executed effective as of May 15, 2009 among the Borrower,
the Lenders signatory thereto, the Guarantors signatory thereto and the
Administrative Agent.”

“‘Second Amendment’ means that certain Second Amendment to Fourth Amended
and Restated Credit Agreement dated as of April 6, 2010 among the Borrower, the
Lenders signatory thereto, the Guarantors signatory thereto and the Administrative
Agent.”

“‘Second Amendment Effective Date’ has the meaning assigned to such term in
the Second Amendment.”

“‘Secured Hedge Provider’ means any Person that is party to a Swap Agreement
with the Borrower or any of its Subsidiaries, so long as either (a) such Person was
a Lender or an Affiliate of a Lender at the time such Person entered into such Swap
Agreement or (b) such Person was a Lender, an Exiting Lender, or an Affiliate of a
Lender or an Exiting Lender on the Second Amendment Effective Date and such Swap
Agreement was in effect as of the Second Amendment Effective Date (including all
Swap Agreements set forth on Schedule 1.02 to the Second Amendment, including,
without limitation, the Swap Agreements of the Exiting Lenders set forth on Schedule
1.02 to the Second Amendment).”

“‘Secured Swap Agreement’ means any Swap Agreement by and between the
Borrower or any of its Subsidiaries and any Secured Hedge Provider.”

          (c) The following definitions are hereby deleted from Section 1.02 in their entireties: ABR
Request, Cost of Funds, Cost of Funds Calculation Threshold, Determination Date, Lender Hedging
Obligation and Reference Bank Cost of Funds Rate.

     2.2 Amendment to Section 2.04 (Interest Elections). Section 2.04 of the Credit
Agreement is hereby amended by deleting clause (f) thereof in its entirety.

     2.3 Amendment to Section 2.07 (Borrowing Base). Section 2.07 of the Credit Agreement
is hereby amended by (a) deleting clause (a) thereof in its entirety and replacing it as follows:

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“(a) Initial Borrowing Base. For the period from and
including the Second Amendment Effective Date to but excluding the
first Scheduled Redetermination Date thereafter, the amount of the
Borrowing Base shall be $1,375,000,000. Notwithstanding the
foregoing, the Borrowing Base may be subject to further adjustments
from time to time pursuant to Section 2.07(e), Section 2.07(f),
Section 8.13(c), Section 9.02(g) or Section 9.12(d). The Borrowing
Base shall, under no circumstances, exceed the Aggregate Maximum
Credit Amounts.”;

          (b) deleting the first sentence of clause (b) thereof in its entirety and replacing it as
follows:

“Subject to Section 2.07(d), the Borrowing Base shall be
redetermined (a “Scheduled Redetermination”) on April 1st
and October 1st of each year, commencing October 1, 2010.”; and

(c) deleting clause (e) thereof in its entirety and replacing it as follows:

“Upon the issuance of any Funded Debt in accordance with Sections
9.02(g) or 9.02(i), the Borrowing Base then in effect shall be
reduced by an amount equal to 0.25 multiplied by (i) in the case of
Funded Debt constituting Permitted Refinancing Debt, the portion of
the stated principal amount of such Funded Debt that exceeds the
original principal amount of the refinanced Funded Debt and (ii) in
the case of all other Funded Debt, the stated principal amount of
such Funded Debt (without regard to any original issue discount),
and the Borrowing Base as so reduced shall become the new Borrowing
Base immediately upon the date of such issuance, effective and
applicable to the Borrower, the Agents, each Issuing Bank and the
Lenders on such date until the next redetermination or modification
thereof hereunder.”

     2.4 Amendment to Section 7.04 (Financial Position; No Material Adverse Change).
Section 7.04 of the Credit Agreement is hereby amended by deleting clauses (a) and (b) thereof in
their entireties and replacing them as follows:

“(a) The Borrower has heretofore furnished to the Lenders the
audited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 2009, and related
audited consolidated statements of income, cash flows and changes in
members’ equity for the fiscal year ending December 31, 2009. The
financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the
Borrower and its consolidated subsidiaries as of such date and for
such period in accordance with GAAP.

Page 5

 

(b) Since December 31, 2009, (i) there has been no event,
development or circumstance that has had or could reasonably be
expected to have a Material Adverse Effect and (ii) the business of
the Borrower and its Subsidiaries has been conducted only in the
ordinary course consistent with past business practices.”

     2.5 Amendment to Section 9.02 (Debt). Section 9.02 of the Credit Agreement is hereby
amended by (a) deleting paragraph (g) in its entirety and replacing it as follows:

“Funded Debt and any guarantees thereof, provided that (i) at the
time such Debt is incurred (A), no Default has occurred and is then
continuing and (B) no Default would result from the incurrence of
such Debt after giving effect to the incurrence thereof (and any
concurrent repayment of Debt with the proceeds of such incurrence),
(ii) immediately after the incurrence of such Debt, the Borrowing
Base shall be adjusted in accordance with Section 2.07(e) and
prepayment shall be made to the extent required by Section
3.04(c)(iii), (iii) at the time such Debt is incurred, such Debt
does not have any scheduled amortization prior to four years after
the Maturity Date, (iv) at the time such Debt is incurred, such Debt
does not mature sooner than four years after the Maturity Date, (v)
such Debt and any guarantees thereof are on market terms for issuers
of similar size and credit quality given the then prevailing market
conditions and (vi) such Debt does not have any mandatory prepayment
or redemption provisions (other than customary change of control or
asset sale tender offer provisions) which would require a mandatory
prepayment or redemption in priority to the Indebtedness; and any
Permitted Refinancing Debt in respect thereof.”;

          (b) deleting the words “and any Permitted Refinancing Debt in respect thereof” at the end of
paragraph (i) thereof; and

          (c) deleting paragraph (j) thereof in its entirety.

     2.6 Amendment to Section 9.04 (Dividends, Distributions and Redemptions). Section
9.04 is hereby amended by deleting paragraph (b) thereof in its entirety and replacing it as
follows:

“The Borrower will not, and will not permit any Subsidiary to: (i)
call, make or offer to make any optional Redemption of or otherwise
optionally Redeem whether in whole or in part or repay any Senior
Notes or any Funded Debt issued under Section 9.02(g), except with
the proceeds of Asset Sales or Casualty Events or the proceeds of
the sale or issuance of Equity Interests, Funded Debt to the extent
it can be incurred under Section 9.02(g) or Permitted Refinancing
Debt, in each case, in accordance with

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Section 3.04; (ii) amend, modify, waive or otherwise change, consent
or agree to any amendment, modification, waiver or other change to,
any of the terms of any notes evidencing the Senior Notes, or any
indenture, agreement, instrument, certificate or other document
relating to any Funded Debt incurred under Section 9.02(g) or
Permitted Refinancing Debt permitted hereunder if (A) the effect of
such amendment, modification or waiver is to shorten the final
maturity to a date that is earlier than the date that is 365 days
after the Maturity Date then in effect, or increase the amount of
any payment of principal thereof or increase the rate or shorten any
period for payment of interest thereon or modify the method of
calculating the interest rate, (B) such action adds covenants,
events of default or other agreements to the extent more
restrictive, taken as a whole, than those contained in this
Agreement, as determined by the Board of Directors of the Borrower
in its reasonable and good faith judgment, or (C) such action adds
collateral unless the Loan Documents are being amended at the same
time to reflect such new collateral, provided that the foregoing
shall not prohibit the execution of supplemental agreements in
connection with the issuance of Permitted Refinancing Debt or the
addition of guarantors if required by the terms thereof; and (iii)
if the Senior Notes are contractually subordinated in right of
payment, designate any Debt (other than obligations of the Borrower
and the Subsidiaries pursuant to the Loan Documents) as “Specified
Senior Indebtedness” or “Specified Guarantor Senior Indebtedness” or
give any such other Debt any other similar designation for the
purposes of any indentures or other documents relating to any
subordinated Debt permitted hereunder.”

     2.7 Amendment to Section 9.18 (Swap Agreements). Section 9.18 of the Credit Agreement
is hereby amended by deleting such Section in its entirety and replacing it as follows:

“Neither the Borrower nor any of its Subsidiaries will enter into
(or, in the case of clause (b) below, permit to exist) any Swap
Agreements with any Person other than

     (a) Swap Agreements in respect of commodities (i) with an
Approved Counterparty, (ii) the notional volumes for which (when
aggregated with other commodity Swap Agreements then in effect other
than basis differential swaps on volumes already hedged pursuant to
other Swap Agreements) do not exceed, as of the date such Swap
Agreement is executed, 85% of the reasonably anticipated projected
production from Proved Properties for each month during the period
during which such Swap Agreement is in effect for each of crude oil
and natural gas, calculated separately, for the remainder of the
calendar year plus the next two full calendar years succeeding the
execution of such Swap Agreement

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and 70% of the reasonably anticipated projected production from
Proved Properties for each month during the period during which such
Swap Agreement is in effect for each of crude oil and natural gas,
calculated separately, for each month thereafter, and (iii) the
notional volumes for which do not exceed the current net monthly
production (regardless of projected production levels) at the time
such Swap Agreement is executed, calculated separately for each of
crude oil and natural gas, and

     (b) Swap Agreements in respect of interest rates with an
Approved Counterparty, which effectively convert interest rates from
floating to fixed, the notional amounts of which (when aggregated
with all other Swap Agreements of the Borrower and its Subsidiaries
then in effect effectively converting interest rates from floating
to fixed) do not exceed at any time (other than during an Exemption
Period) 100% of the then outstanding principal amount of the
Borrower’s Debt for borrowed money which bears interest at a
floating rate.

     If, at any time (other than during an Exemption Period), the
Borrower determines that the notional amounts of Swap Agreements in
respect of interest rates exceed 100% of the then outstanding
principal amount of the Borrower’s Debt for borrowed money which
bears interest at a floating rate, then the Borrower shall, within
thirty (30) days of such determination, terminate, create
off-setting positions or otherwise unwind existing Swap Agreements
in order to comply with this Section 9.18.

     If, at any time during an Exemption Period, the Borrower
determines that the notional amounts of Swap Agreements in respect
of interest rates exceed 100% of the outstanding principal amount of
the Borrower’s Debt for borrowed money which bears interest at a
floating rate calculated on a pro forma basis assuming any relevant
acquisition subject of such Exemption Period were funded completely
with borrowed money which bears interest at a floating rate, then
the Borrower shall, within thirty (30) days of such determination,
terminate, create off-setting positions or otherwise unwind existing
Swap Agreements such that the notional volumes do not exceed 100% of
such pro forma principal amount.

     (c) Notwithstanding anything to the contrary in this Section
9.18, (1) there shall be no prohibition against the Borrower
entering into any “put” or “call spread option” contracts or
commodity price floors so long as such agreements are entered into
for non-speculative purposes and in the ordinary course of business
for the purpose of hedging against fluctuations of commodity

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prices and (2) any “swaption” entered into by the Borrower
shall be counted against the sublimits contained in this Section
9.18.”

     2.8 Amendment to Section 10.02 (Remedies). Section 10.02 of the Credit Agreement is
hereby amended by deleting paragraph (c) of such Section in its entirety and replacing it as
follows:

“(c) All proceeds realized from the liquidation or other disposition
of collateral or otherwise received after maturity of the Notes,
whether by acceleration or otherwise, shall be applied: first, to
reimbursement of expenses and indemnities provided for in this
Agreement and the Security Instruments; second, to accrued and
unpaid interest on the Loans; third, to that portion of the
Indebtedness constituting fees payable to the Administrative Agent
or the Lenders under the Loan Documents; fourth, pro rata (i) to the
payment of unpaid principal of the Loans, (ii) to the payment of
Indebtedness referred to in clause (b) of the definition thereof
owing to any Secured Hedge Provider and (iii) to serve as cash
collateral to be held by the Administrative Agent to secure the LC
Exposure; fifth, to any other Indebtedness; and any excess shall be
paid to the Borrower or as otherwise required by any Governmental
Requirement.”

     2.9 Amendment to Section 11.10 (Authority of Administrative Agent to Release Collateral
and Liens). Section 11.10 of the Credit Agreement is hereby amended by deleting such Section
in its entirety and replacing it as follows:

     “Section 11.10 Authority of Administrative Agent to Release
Collateral and Liens. Each Lender, each Issuing Bank and each
Secured Hedge Provider hereby authorizes the Administrative Agent to
release any collateral that is permitted to be sold or released
pursuant to the terms of the Loan Documents. Each Lender, each
Issuing Bank and each Secured Hedge Provider hereby authorizes the
Administrative Agent to execute and deliver to the Borrower, at the
Borrower’s sole cost and expense, any and all releases of Liens,
termination statements, assignments or other documents reasonably
requested by the Borrower in connection with any sale or other
disposition of Property to the extent such sale or other disposition
is permitted by the terms of Section 9.12 or is otherwise authorized
by the terms of the Loan Documents.”

     2.10 Amendment to Section 12.02 (Waivers; Amendments). Section 12.02 of the Credit
Agreement is hereby amended by deleting paragraph (b) of such Section in its entirety and replacing
it as follows:

“(b) In each instance subject to Section 4.04(c)(ii), neither this
Agreement nor any provision hereof nor any Security Instrument

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nor any other Loan Document nor any provision thereof may be waived,
amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Majority Lenders or by
the Borrower and the Administrative Agent with the written consent
of the Majority Lenders; provided that no such agreement shall (i)
increase the Maximum Credit Amount of any Lender without the written
consent of such Lender, (ii) increase the Borrowing Base without the
consent or deemed consent of each Lender, decrease or maintain the
Borrowing Base without the consent of the Super-Majority Lenders, or
modify in any manner Section 2.07 without the consent of each
Lender, (iii) reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any
fees payable hereunder, or reduce any other Indebtedness hereunder
or under any other Loan Document, without the written consent of
each Lender affected thereby, (iv) postpone the scheduled date of
payment of the principal amount of any Loan or LC Disbursement, or
any interest thereon, or any fees payable hereunder, or any other
Indebtedness hereunder or under any other Loan Document, or reduce
the amount of, waive or excuse any such payment, or postpone or
extend the Termination Date or the Maturity Date without the written
consent of each Lender affected thereby, (v) change Section 4.01(b)
or Section 4.01(c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each
Lender, (vi) waive or amend Section 6.01, Section 10.02(c) or
Section 8.14 or change the definition of the terms “Domestic
Subsidiary”, “Foreign Subsidiary”, “Material Domestic Subsidiary” or
“Subsidiary”, without the written consent of each Lender, (vii)
release any Guarantor (except as set forth in the Guaranty
Agreement), release all or a substantial portion of the collateral
(other than as provided in Section 11.10), or reduce the percentage
set forth in Section 8.14(a) to less than 80%, without the written
consent of each Lender, (viii) modify the terms of clause (b) of the
definition of “Indebtedness”, the definition of “Secured Hedge
Provider”, the definition of “Secured Swap Agreement”, Section
10.02(c), Section 12.14, or any of the provisions of this Section
12.02(b) without the consent of each Secured Hedge Provider
adversely affected thereby, (ix) change any of the provisions of
this Section 12.02(b) or the definition of “Majority Lenders” or
“Super-Majority Lenders” or any other provision hereof specifying
the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or under any other Loan Documents or
make any determination or grant any consent hereunder or any other
Loan Documents, without the written consent of each Lender or (x)
amend or otherwise modify any Security Instrument in a manner that
results in the obligations

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of the Borrower or any Subsidiary owing to any Secured Hedge
Provider under any Secured Swap Agreement no longer being secured
pursuant to such Security Instrument, without the written consent of
such Secured Hedge Provider; provided further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, any other Agent, or any Issuing Bank hereunder
or under any other Loan Document without the prior written consent
of the Administrative Agent, such other Agent or such Issuing Bank,
as the case may be. Notwithstanding the foregoing, any supplement
to Schedule 7.14 (Subsidiaries) shall be effective simply by
delivering to the Administrative Agent a supplemental schedule
clearly marked as such and, upon receipt, the Administrative Agent
will promptly deliver a copy thereof to the Lenders.”

     2.11 Amendment to Section 12.03(b) (Indemnity). Section 12.03(b) of the Credit
Agreement is hereby amended by deleting clause (xiv) (it being agreed that, for the avoidance of
doubt, the proviso immediately following such clause (xiv) shall not be deleted) of such Section in
its entirety and replacing it as follows:

“(xiv) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING
RELATING TO ANY OF THE FOREGOING, WHETHER BROUGHT BY A THIRD PARTY, THE BORROWER OR
ANY GUARANTOR, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF
WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY SHALL EXTEND TO EACH
INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR
CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN
OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN
THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNITEES OR BY REASON OF
STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNITEES;”

     2.12 Amendment to Section 12.14 (Collateral Matters; Swap Agreements). Section 12.14
of the Credit Agreement is hereby amended by deleting such Section in its entirety and replacing it
as follows:

“The benefit of the Security Instruments and of the provisions of
this Agreement relating to any collateral securing the Indebtedness
shall also extend to and be available to each Secured Hedge Provider
on a pro rata basis in respect of any obligations of the Borrower or
any of its Subsidiaries owed to such Secured Hedge Provider under
any Secured Swap Agreement. Except as set forth in Sections
12.02(b)(viii) and (x), no Secured Hedge Provider shall have any
voting rights under any Loan Document as a result of the

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existence of obligations owed to it under any Secured Swap
Agreement.”

     Section 3. Conditions Precedent. The effectiveness of this Second Amendment is
subject to the receipt by the Administrative Agent of the following documents and satisfaction or
waiver by the Lenders of the other conditions provided in this Section 3, each of which shall be
reasonably satisfactory to the Administrative Agent in form and substance:

     3.1 Payment by the Borrower to the Administrative Agent of all fees and other amounts due and
payable on or prior to the Second Amendment Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the
Borrower pursuant to the Credit Agreement.

     3.2 The Administrative Agent shall have received multiple counterparts as requested of this
Second Amendment from the Borrower and the Lenders.

     3.3 No Default or Event of Default shall have occurred and be continuing as of the Second
Amendment Effective Date.

     3.4 The Administrative Agent shall have received a certificate of the Secretary of the
Borrower and each Guarantor certifying (i) that the resolutions of the Borrower and each Guarantor
adopted or certified to as of April 28, 2009 with respect to the authorization of the Borrower or
such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into
the transactions contemplated in such Loan Documents are still in full force and effect, (ii) the
individuals (A) who are authorized to sign the Loan Documents to which the Borrower or such
Guarantor is a party and (B) who will, until replaced by another individual duly authorized for
that purpose, act as its representative for the purposes of signing documents and giving notices
and other communications in connection with this Agreement and the other Loan Documents to which it
is a party, (iii) specimen signatures of such authorized individuals, and (iv) that, except as
attached, there have been no changes since April 28, 2009 to the articles or certificate of
incorporation or formation and bylaws, operating agreement or partnership agreement, as applicable,
of the Borrower and each Guarantor. The Administrative Agent and the Lenders may conclusively rely
on such certificate until the Administrative Agent receives notice in writing from the Borrower to
the contrary.

     3.5 The Administrative Agent shall have received certificates of the appropriate State
agencies with respect to the existence, qualification and good standing of the Borrower and each
Guarantor in their respective States of organization.

     3.6 The Administrative Agent shall have received duly executed Notes (or replacement Notes),
dated as of the date hereof, payable to the order of each Lender who has requested a Note or a
replacement Note at least two Business Days prior to the Second Amendment Effective Date, in a
principal amount equal to such Lender’s Maximum Credit Amount.

     3.7 The Administrative Agent shall have received appropriate UCC search certificates
reflecting no prior Liens (other than Liens permitted by Section 9.03 of the Credit Agreement)
encumbering the Properties of the Borrower and its Subsidiaries for each of the following

Page 12

 

jurisdictions: Delaware (with respect to the Borrower and each Guarantor other than Linn
Exploration Midcontinent LLC) and Oklahoma (with respect to Linn Exploration Midcontinent LLC).

     3.8 The Administrative Agent shall have received such title information as the Administrative
Agent may reasonably request with respect to Oil and Gas Properties having a total value of not
more than 80% of the total value of all Oil and Gas Properties evaluated in the most recently
delivered Reserve Report.

     3.9 The Administrative Agent shall (a) have received from each party thereto duly executed
original copies of amendments to each Security Instrument and (b) the Administrative Agent shall be
reasonably satisfied that the Security Instruments create first priority, perfected Liens (subject
only to Excepted Liens identified in clauses (a) to (d) and (f) of the definition thereof, but
subject to the provisos at the end of such definition) on at least 80% of the total value of the
Oil and Gas Properties evaluated in the most recently delivered Reserve Report.

     3.10 The representations and warranties of the Borrower and the Guarantors set forth in the
Credit Agreement and in the other Loan Documents shall be true and correct in all material respects
on and as of the Second Amendment Effective Date, except to the extent any such representations and
warranties are expressly limited to an earlier date, in which case, on and as of the Second
Amendment Effective Date, such representations and warranties remain true and correct in all
material respects as of such specified earlier date.

     3.11 The Administrative Agent shall have received the financial statements referred to in
Section 7.04(a) of the Credit Agreement (as such Section 7.04(a) has been amended by this Second
Amendment) and the most recent Reserve Report required to be delivered under Section 8.12(a) of the
Credit Agreement, accompanied by a Reserve Report Certificate.

     3.12 The Borrower shall have issued senior unsecured notes due 2020 (the “New Notes”) having
terms and conditions substantially similar to the existing Senior Notes, subject to any differences
due to market conditions for similar securities issued at or around the time as the New Notes, in
an aggregate principal amount not less than $500,000,000. For the avoidance of doubt, the
Borrowing Base shall not be reduced as a result of the issuance of such New Notes.

     Section 4. Representations and Warranties; Etc. Each Obligor hereby affirms (a) that
as of the date of execution and delivery of this Second Amendment, all of the representations and
warranties contained in each Loan Document to which such Obligor is a party are true and correct in
all material respects as though made on and as of the Second Amendment Effective Date (unless made
as of a specific earlier date, in which case, such representations and warranties remain true and
correct in all material respects as of such earlier date); and (b) that after giving effect to this
Second Amendment and to the transactions contemplated hereby, no Defaults exist under the Loan
Documents.

     Section 5. Assignment and Assumption.

     5.1 For an agreed consideration, each Lender (individually an “Assignor” and collectively, the
“Assignors”) hereby irrevocably sells and assigns, severally and not jointly, (i) all of such
Assignor’s rights and obligations in its capacity as Lender under the Credit

Page 13

 

Agreement and any other documents or instruments delivered pursuant thereto to the extent
related to its Commitment and Credit Exposure, as the case may be, identified in Annex II
attached hereto and (ii) to the extent permitted to be assigned under applicable law, all claims,
suits, causes of action and any other right of such Assignor (in its capacity as Lender) against
any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the transactions governed thereby or
in any way based on or related to any of the foregoing, including contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein collectively for all
Assignors as the “Assigned Interests”) to the Lenders (individually, an “Assignee” and,
collectively, the “Assignees”) set forth on Annex I to this Second Amendment (which shall
replace the existing Annex I to the Credit Agreement as of the Second Amendment Effective
Date), and each Assignee hereby irrevocably purchases and assumes from each Assignor such
Assignee’s percentage (as set forth on Annex I to this Second Amendment) of the Assigned
Interests, subject to and in accordance with the Credit Agreement and this Second Amendment, as of
the Second Amendment Effective Date. Such sale and assignment is without recourse to the Assignors
and, except as expressly provided in this Second Amendment, without representation or warranty by
the Assignors.

     5.2 From and after the Second Amendment Effective Date, the Administrative Agent shall
distribute all payments in respect of the Assigned Interests (including payments of principal,
interest, fees and other amounts) to the appropriate Assignors for amounts which have accrued to
but excluding the Second Amendment Effective Date and to the appropriate Assignees for amounts
which have accrued from and after the Second Amendment Effective Date.

     5.3 Each Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of
the percentage of the Assigned Interest set forth on Annex II attached hereto, (ii) such
Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and deliver this
assignment and to consummate the transactions contemplated by this Section 5; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations made by any other
Person in or in connection with the Credit Agreement or any other Loan Document, (ii) the
execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of their
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv)
the performance or observance by the Borrower, any of their Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.

     5.4 Each Assignee (a) represents and warrants that (i) it has full power and authority, and
has taken all action necessary, to execute and deliver this assignment and to consummate the
transactions contemplated hereby, (ii) it satisfies the requirements specified in the Credit
Agreement and this Second Amendment that are required to be satisfied by it in order to acquire the
percentage of the Assigned Interests set forth in Annex I to this Second Amendment, (iii)
from and after the Second Amendment Effective Date, it shall have the obligations of a Lender
thereunder to the extent of its percentage (as set forth on Annex I to this Second
Amendment) of

Page 14

 

the Assigned Interests, (iv) it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant thereto, and such other documents
and information as it has deemed appropriate to make its own credit analysis and decision to enter
into this Second Amendment and to purchase its percentage of the Assigned Interests on the basis of
which it has made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, it has supplied to the
Administrative Agent any documentation required to be delivered by it pursuant to the terms of the
Credit Agreement, duly completed and executed by such Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, any Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it
will perform in accordance with their terms all of the obligations which by the terms of the Loan
Documents are required to be performed by it as a Lender.

     5.5 Each Exiting Lender shall no longer be a “Lender”. Each Exiting Lender joins in the
execution of this Second Amendment solely for purposes of effectuating this Second Amendment
pursuant to Section 3 hereof and assigning their Assigned Interests pursuant to this Section 5.

     Section 6. Miscellaneous.

     6.1 Return of Notes. As soon as practicable after the Second Amendment Effective
Date, each Lender who has requested a replacement Note as described in Section 3.6 shall return its
existing Note to the Borrower marked “canceled”.

     6.2 Confirmation. The provisions of the Credit Agreement (as amended by this Second
Amendment) shall remain in full force and effect in accordance with its terms following the
effectiveness of this Second Amendment.

     6.3 Ratification and Affirmation of Obligors. Each Obligor hereby expressly (i)
acknowledges the terms of this Second Amendment, (ii) ratifies and affirms its obligations under
each Loan Document to which it is a party, (iii) acknowledges, renews and extends its continued
liability under each Loan Document to which it is a party and agrees that its grant of security
interest and/or guarantee, as applicable, under the Security Instruments to which it is a party
remains in full force and effect with respect to the Indebtedness after giving effect to this
Second Amendment.

     6.4 Counterparts. This Second Amendment may be executed by one or more of the parties
hereto in any number of separate counterparts, and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.

     6.5 No Oral Agreement. This Second Amendment, the Credit Agreement and
the other Loan Documents executed in connection herewith and therewith represent the final
agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or
unwritten oral agreements of the parties. There are no subsequent oral agreements between the
parties.

Page 15

 

     6.6 Governing Law. This Second Amendment (including, but not limited to,
the validity and enforceability hereof) shall be governed by, and construed in accordance with, the
laws of the State of Texas.

Page 16

 

     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly
executed effective as of the date first written above.

	 	 	 	 	 
	BORROWER: 	
 LINN ENERGY, LLC

 	 
	 	By:  	/s/ Kolja Rockov
 	 
	 	 	Kolja Rockov, 	 
	 	 	Executive Vice President and Chief Financial

Officer 	 
	GUARANTORS: 
	

      LINN ENERGY HOLDINGS, LLC

LINN OPERATING, INC.

PENN WEST PIPELINE, LLC

MID-CONTINENT HOLDINGS I, LLC

MID-CONTINENT HOLDINGS II, LLC

MID-CONTINENT I, LLC

MID-CONTINENT II, LLC

LINN GAS MARKETING, LLC

LINN EXPLORATION MIDCONTINENT, LLC
 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                               /s/ Kolja Rockov
 	 
	 	 	Kolja Rockov, 	 
	 	 	Executive Vice President and Chief Financial

Officer 	 
	 

Second Amendment to Fourth Amended and Restated Credit Agreement

Signature Page

 

 

	 	 	 	 	 
	 	BNP PARIBAS, as Administrative Agent and a Lender

 	 
	 	By:  	/s/ Douglas R. Liftman
 	 
	 	 	Name:  	Douglas R. Liftman 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                          /s/ Betsy Jocher
 	 
	 	 	Name:  	Betsy Jocher 	 
	 	 	Title:  	Director 	 
	 

	 	 	 	 	 
	 	ROYAL BANK OF CANADA, as Syndication Agent 

and a Lender

 	 
	 	By:  	/s/      Don J. McKinnerney
 	 
	 	 	Name:  	Don J. McKinnerney 	 
	 	 	Title:  	Authorized Signatory 	 
	 

	 	 	 	 	 
	 	CITIBANK, NA, as a Co-Documentation 

Agent and a Lender

 	 
	 	By:  	/s/      John F. Miller
 	 
	 	 	Name:  	John F. Miller 	 
	 	 	Title:  	Attorney-In-Fact 	 
	 

	 	 	 	 	 
	 	BARCLAYS BANK PLC, as a Co-Documentation Agent 

and a
Lender

 	 
	 	By:  	/s/      Sam Yoo
 	 
	 	 	Name:  	Sam Yoo 	 
	 	 	Title:  	Assistant Vice President 	 
	 

Second Amendment to Fourth Amended and Restated Credit Agreement

Signature Page

 

 

	 	 	 	 	 
	 	CREDIT AGRICOLE CORPORATE AND 

INVESTMENT BANK, as a Co-Documentation Agent 

and a Lender

 	 
	 	By:  	/s/      Dennis Petito
 	 
	 	 	Name:  	Dennis Petito 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                         /s/      Sharada Manne
 	 
	 	 	Name:  	Sharada Manne 	 
	 	 	Title:  	Director 	 
	 

	 	 	 	 	 
	 	THE ROYAL BANK OF SCOTLAND plc, as a Co-

Documentation Agent and a Lender

 	 
	 	By:  	/s/      Phil Ballard
 	 
	 	 	Name:  	Phil Ballard 	 
	 	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	 	WELLS FARGO BANK, N.A., as a Co-

Documentation Agent and a Lender

 	 
	 	By:  	/s/      Doug McDowell
 	 
	 	 	Name:  	Doug McDowell 	 
	 	 	Title:  	Vice President

Senior Portfolio Manager 	 
	 

	 	 	 	 	 
	 	SOCIETE GENERALE, as a Lender

 	 
	 	By:  	/s/      Stephen W. Warfel
 	 
	 	 	Name:  	Stephen W. Warfel 	 
	 	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	 	BANK OF MONTREAL, as a Lender

 	 
	 	By:  	/s/      James Whitmore
 	 
	 	 	Name:  	James Whitmore 	 
	 	 	Title:  	Managing Director 	 
	 

Second Amendment to Fourth Amended and Restated Credit Agreement

Signature Page

 

 

	 	 	 	 	 
	 	COMERICA BANK, as a Lender

 	 
	 	By:  	/s/      Greg Smith
 	 
	 	 	Name:  	Greg Smith 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 
	 	ING CAPITAL LLC, as a Lender

 	 
	 	By:  	/s/      Charles E. Hall
 	 
	 	 	Name:  	Charles E. Hall 	 
	 	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	 	FORTIS CAPITAL CORP., as a Lender

 	 
	 	By:  	/s/      Douglas R. Liftman
 	 
	 	 	Name:  	Douglas R. Liftman 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                        /s/      Betsy Jocher
 	 
	 	 	Name:  	Betsy Jocher 	 
	 	 	Title:  	Director 	 
	 

	 	 	 	 	 
	 	KEYBANK NATIONAL ASSOCIATION,

as a Lender

 	 
	 	By:  	/s/      Todd Coker
 	 
	 	 	Name:  	Todd Coker 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	CREDIT SUISSE, Cayman Islands Branch as a Lender

 	 
	 	By:  	/s/ Nupur Kumar                               /s/ Vipul Dhadda
 	 
	 	 	Name:  	Nupur Kumar             Vipul Dhadda 	 
	 	 	Title:  	Vice President              Associate 	 
	 

Second Amendment to Fourth Amended and Restated Credit Agreement

Signature Page

 

 

	 	 	 	 	 
	 	COMPASS BANK, as a Lender

 	 
	 	By:  	/s/      Dorothy Marchand
 	 
	 	 	Name:  	Dorothy Marchand 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 
	 	DnB NOR BANK ASA, as a Lender

 	 
	 	By:  	/s/      Sanjiv Nayar
 	 
	 	 	Name:  	Sanjiv Nayar 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	 	 
	 	By:  	                       /s/      Cathleen Buckley
 	 
	 	 	Name:  	Cathleen Buckley 	 
	 	 	Title:  	First Vice President 	 
	 

	 	 	 	 	 
	 	DZ BANK AG, DEUTSCHE ZENTRAL-

GENOSSENSCHAFTSBANK, FRANKFURT AM 

MAIN, NEW YORK BRANCH, as a Lender

 	 
	 	By:  	/s/      William G. Roos
 	 
	 	 	Name:  	William G. Roos 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                         /s/      John Hammarskjold
 	 
	 	 	Name:  	John Hammarskjold 	 
	 	 	Title:  	Vice President 	 
	 

Second Amendment to Fourth Amended and Restated Credit Agreement

Signature Page

 

 

	 	 	 	 	 
	 	UNION BANK, N.A., as a Lender

 	 
	 	By:  	/s/      Scott Gildea
 	 
	 	 	Name:  	Scott Gildea 	 
	 	 	Title:  	Vice President 	 
	 
	 	U.S. BANK NATIONAL ASSOCIATION,

as a Lender

 	 
	 	By:  	/s/      Heather W. Kiely
 	 
	 	 	Name:  	Heather W. Kiely 	 
	 	 	Title:  	Vice President 	 
	 
	 	THE BANK OF NOVA SCOTIA, as a Lender

 	 
	 	By:  	/s/      Marc Graham
 	 
	 	 	Name:  	Marc Graham 	 
	 	 	Title:  	Director 	 
	 
	 	ALLIED IRISH BANKS P.L.C., as a Lender

 	 
	 	By:  	/s/      Edward M. Fenk
 	 
	 	 	Name:  	Edward M. Fenk 	 
	 	 	Title:  	Vice President 	 
	 	 	 
	 	By:  	                     /s/      James Giordano
 	 
	 	 	Name:  	James Giordano 	 
	 	 	Title:  	Assistant Vice President 	 
	 
	 	CAPITAL ONE, N.A., as a Lender

 	 
	 	By:  	/s/      Michael Higgins
 	 
	 	 	Name:  	Michael Higgins 	 
	 	 	Title:  	Vice President 	 
	 

Second Amendment to Fourth Amended and Restated Credit Agreement

Signature Page

 

 

	 	 	 	 	 
	 	UBS AG, STAMFORD BRANCH, as a Lender

 	 
	 	By:  	/s/      Mary E. Evans
 	 
	 	 	Name:  	Mary E. Evans 	 
	 	 	Title:  	Associate Director 	 
	 	 	 
	 	By:  	                        /s/      Irja R. Otsa
 	 
	 	 	Name:  	Irja R. Otsa 	 
	 	 	Title:  	Associate Director 	 
	 
	 	MACQUARIE BANK LIMITED, as a Lender

 	 
	 	By:  	/s/      Robert McRobbie
 	 
	 	 	Name:  	Robert McRobbie 	 
	 	 	Title:  	Division Director
Legal Risk Management 	 
	 
	 	 	 
	 	By:  	                       /s/      Katie Choi
 	 
	 	 	Name:  	Katie Choi 	 
	 	 	Title:  	Division Director
Macquarie Bank Limiited 	 
	 

Second Amendment to Fourth Amended and Restated Credit Agreement

Signature Page

 

 

ANNEX I

LIST OF MAXIMUM CREDIT AMOUNTS

Aggregate Maximum Credit Amounts (as of the Second Amendment Effective Date)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Maximum Credit
	Name of Lender	 	Applicable Percentage	 	Amount
	BNP Paribas
	 	 	6.6666667	%	 	$	100,000,000	 
	Royal Bank of Canada
	 	 	6.6666667	%	 	$	100,000,000	 
	The Royal Bank of Scotland plc
	 	 	6.2666667	%	 	$	94,000,000	 
	Citibank, NA
	 	 	6.2666667	%	 	$	94,000,000	 
	Credit Agricole Corporate and
Investment Bank New York Branch
	 	 	6.2666667	%	 	$	94,000,000	 
	Barclays Bank PLC
	 	 	6.2666667	%	 	$	94,000,000	 
	Wells Fargo Bank, N.A.
	 	 	6.2666667	%	 	$	94,000,000	 
	The Bank of Nova Scotia
	 	 	5.3333333	%	 	$	80,000,000	 
	Bank of Montreal
	 	 	5.3333333	%	 	$	80,000,000	 
	UBS AG, Stamford Branch
	 	 	5.3333333	%	 	$	80,000,000	 
	Comerica Bank
	 	 	4.3333333	%	 	$	65,000,000	 
	ING Capital LLC
	 	 	4.3333333	%	 	$	65,000,000	 
	Societe Generale
	 	 	4.3333333	%	 	$	65,000,000	 
	U.S. Bank National Association
	 	 	4.3333333	%	 	$	65,000,000	 
	Compass Bank
	 	 	3.3333333	%	 	$	50,000,000	 
	Credit Suisse
	 	 	3.3333333	%	 	$	50,000,000	 
	DnB NOR Bank ASA
	 	 	3.3333333	%	 	$	50,000,000	 
	Union Bank, N.A.
	 	 	3.3333333	%	 	$	50,000,000	 
	Capital One, N.A.
	 	 	3.3333333	%	 	$	50,000,000	 
	Macquarie Bank Limited
	 	 	3.3333333	%	 	$	50,000,000	 
	Allied Irish Banks p.l.c.
	 	 	2.0000000	%	 	$	30,000,000	 
	Total
	 	 	100.0000000	%	 	$	1,500,000,000	 

Annex I

 

 

ANNEX II

LIST OF MAXIMUM CREDIT AMOUNTS

Aggregate Maximum Credit Amounts (immediately prior to the Second Amendment Effective Date)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Maximum Credit
	Name of Lender	 	Applicable Percentage	 	Amount
	BNP Paribas
	 	 	7.714285714	%	 	$	135,000,000	 
	Royal Bank of Canada
	 	 	7.714285714	%	 	$	135,000,000	 
	The Royal Bank of Scotland plc
	 	 	7.714285714	%	 	$	135,000,000	 
	Citibank, NA
	 	 	7.714285714	%	 	$	135,000,000	 
	Credit Agricole Corporate and
Investment Bank New York Branch
	 	 	7.714285714	%	 	$	135,000,000	 
	Barclays Bank PLC
	 	 	7.714285714	%	 	$	135,000,000	 
	The Bank of Nova Scotia
	 	 	5.428571429	%	 	$	95,000,000	 
	Bank of Montreal
	 	 	5.428571429	%	 	$	95,000,000	 
	Wells Fargo Bank, N.A.
	 	 	5.428571429	%	 	$	95,000,000	 
	Comerica Bank
	 	 	4.285714286	%	 	$	75,000,000	 
	ING Capital LLC
	 	 	4.285714286	%	 	$	75,000,000	 
	Societe Generale
	 	 	4.285714286	%	 	$	75,000,000	 
	U.S. Bank National Association
	 	 	3.428571429	%	 	$	60,000,000	 
	Compass Bank
	 	 	2.857142857	%	 	$	50,000,000	 
	Credit Suisse
	 	 	2.857142857	%	 	$	50,000,000	 
	DnB NOR Bank ASA
	 	 	2.857142857	%	 	$	50,000,000	 
	DZ Bank AG, Deutsche
Zentral-Genossenschaftsbank,
Frankfurt AM Main, New York
Branch
	 	 	2.857142857	%	 	$	50,000,000	 
	Union Bank, N.A.
	 	 	2.857142857	%	 	$	50,000,000	 
	KeyBank National Association
	 	 	2.285714286	%	 	$	45,000,000	 
	Fortis Capital Corp.
	 	 	2.571428571	%	 	$	40,000,000	 
	Allied Irish Banks p.l.c.
	 	 	2.000000000	%	 	$	35,000,000	 
	Total
	 	 	100.000000000	%	 	$	1,750,000,000	 

Annex II

 

 

Schedule 1.02

Swap Agreements as of the Second Amendment Effective Date

Schedule 1.02exv4w1

Exhibit 4.1

SLM CORPORATION

OFFICERS’ CERTIFICATE

     This certificate is furnished to The Bank of New York Mellon, as successor to J.P. Morgan
Chase Bank, National Association, as trustee (the “Trustee”), for the securities
designated as Medium Term Notes, Series A (the “Series A Notes”) of SLM Corporation, a
Delaware corporation (the “Company”), pursuant to Sections 2.02(a) and (c) of the
Indenture, dated as of October 1, 2000 (the “Base Indenture”), between the Company and The
Bank of New York Mellon, as subsequently amended and supplemented (the Base Indenture, as amended
and supplemented, is referred to herein as the “Indenture”).

     By resolution dated May 10, 2001, the Board of Directors of the Company authorized the Company
to develop a medium term note program or programs and to issue and sell medium term notes and
authorized certain officers or any one of their designees to take or cause to be taken actions
under such resolution. By officers’ certificate dated May 5, 2006, the Company established,
pursuant to Section 2.02 of the Indenture, the Series A Notes.

     The undersigned, John F. Remondi, Vice Chairman and Chief Financial Officer
of the Company, and Carol R. Rakatansky, Corporate Secretary of the Company, hereby make this
certificate in order to set forth the terms of the Notes set forth in the pricing supplement or
pricing supplements, and to be issued on March 22, 2010 (the “Notes”).

     A. The resolution of the Board of Directors of the Company authorizing the issuance from time
to time of the Company’s Series A Notes is attached as Exhibit A to this certificate.

     B. The terms of the Notes, including the principal amount, maturity date, method for
calculating and paying interest and applicable covenants, are as set forth in Exhibit B to
this certificate.

     C. The Notes shall be evidenced by the Medium Term Note, Series A, Master Note previously
delivered to the Trustee, a copy of which is attached as Exhibit C to this certificate.

     D. Each of the undersigned (i) has read Section 2.02 and other relevant provisions of the
Indenture, (ii) has examined documents and made inquiries of officers of the Company or its
affiliates in order to ascertain compliance with Section 2.02 of the Indenture, (iii) is of the
opinion that the signing officer has made such examination and investigation as the signing officer
deems necessary to enable such officer to express an informed opinion as to whether the conditions
of Section 2.02 of the Indenture have been complied with, and (iv) is of the opinion that the
requirements of Section 2.02 of the Indenture have been complied with.

     IN WITNESS WHEREOF, we have executed this certificate as of March 17, 2010.

	 	 	 	 	 	 	 

	/s/ John F. Remondi

	 	 	 	/s/ Carol R. Rakatansky	 	 
	 

	 	 	 	 	 	 
	John F. Remondi

	 	 
	 	Carol R. Rakatansky
	 	 
	Vice Chairman and Chief Financial Officer

	 	 	 	Corporate Secretary	 	 
	SLM Corporation

	 	 	 	SLM Corporation	 	 

 

 

Exhibit A

 

USA Education, Inc.

Meeting of the Board of Directors

May 10, 2001

 

5/01-2/1-2

 

RESOLUTIONS

 

(Pertaining to the Creation and Authorization of a Medium
Term Note

Program or Programs)

 

WHEREAS, the Board of
Directors has determined that it is in the best interest of the Corporation to
develop alternative financing sources for origination and purchases of
education-related and other loans by its subsidiaries (other than the Student
Loan Marketing Association), repurchases of stock and other permitted general
corporate purposes;

 

NOW, THEREFORE, BE IT
RESOLVED, that the Corporation is hereby directed to explore and develop a
medium term note program or programs;

 

FURTHER RESOLVED, that the
Corporation and its subsidiaries (other than the Student Loan Marketing
Association) shall be authorized in connection with such medium term note
program or programs: (1) to issue and sell medium term notes, including
but not limited any debt (which may or may not be designated as a medium term
note) issued under a registration statement or debt exempt from registration
requirements, (2) to establish and borrow under credit, letter of credit
or other liquidity facilities or other credit enhancement, (3) to use the
proceeds of such medium term note issuances to repurchase the Corporation’s
common shares, originate and purchase education-related and other loans, notes
or other assets through subsidiaries (other than the Student Loan Marketing
Association), to make loans or advances to the Corporation’s subsidiaries, or
for other permitted general corporate purposes, (4) to sell, transfer,
pledge or otherwise encumber any and all of such student loans, notes or other
assets, (5) to execute and deliver all instruments and agreements that may
be necessary, appropriate or desirable (including, without limitation, global
securities definitive form certificates representing the medium term notes,
other forms of notes or evidences of debt, distribution agreements, terms
agreements, indentures, credit enhancement or liquidity facility agreements and
any other agreements with administrative or distribution agents, ratings
agencies, placement agents, underwriters, trustees or other agents), (6) to
file one or more registration statements on Form S-3 and any pre- or post-
effective amendment thereto with the Securities and Exchange Commission with
regard to the securities described herein, and (7) to take all other
actions and to do all other things necessary, appropriate or desirable in
connection with and to accomplish the foregoing;

 

FURTHER RESOLVED, that in
furtherance of the development and establishment of such a program or programs,
the Chief Executive Officer, any Executive Vice President, the Chief Financial
Officer or any one of their respective designees (collectively, the “Authorized
Officers”) are authorized to take or cause to be taken any and all such actions
as such officer or officers may deem necessary or desirable to carry out the purpose
and intent of the forgoing resolutions, and any and all actions heretofore
taken by any one or more of such Authorized Officers in connection with the
transactions contemplated herein are hereby ratified, approved and confirmed.

 

 

Exhibit B

	 	 	 

	Pricing Supplement No. 1 dated March 17, 2010

	 	Filed under Rule 424(b)(2)
	(to Prospectus dated November 20, 2008

	 	File No. 333-155492
	and Prospectus Supplement dated March 17, 2010)
	 	 

SLM Corporation

Medium Term Notes, Series A

Due 9 Months or Longer From the Date of Issue

	 	 	 	 	 	 	 	 	 	 	 	 	 

	Principal Amount:
	 	$1,500,000,000	 	Floating Rate Notes:	 	o           	 	Fixed Rate Notes:	 	 	þ
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Original Issue Date:
	 	March 22, 2010	 	Closing Date:	 	March 22, 2010	 	CUSIP Number:	 	78442F EJ 3
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Maturity Date:
	 	March 25, 2020	 	Option to Extend Maturity:	 	þ      No

 o     Yes	 	Specified Currency:	 	U.S. Dollars
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	If Yes, Final Maturity Date:	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 

	Redeemable in whole or in part at the
option of the Company:

	 	o
þ
	 	No

Yes
	 	Redemption Price:
	 	See “Additional Terms of the Notes
— Optional Redemption.”
	 

	 	 	 	 	 	Redemption Dates:
	 	At any time as described in
“Additional Terms of the Notes —
Optional Redemption.”
	 
	 	 	 	 	 	 	 	 
	Repayment at the option of the Holder:

	 	þ
	 	No
	 	Repayment Price:
	 	Not Applicable.
	 

	 	o
	 	Yes
	 	Repayment Dates:
	 	Not Applicable.
	 
	 	 	 	 	 	 	 	 
	Repurchase Upon a Change of Control
Triggering Event:

	 	o
	 	No	 	 	 	 
	 

	 	þ
	 	Yes	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Applicable to Fixed Rate Notes Only:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Interest Rate: 8.000%.

	 	 	 	 	 	Interest Payment Dates:
	 	Each March 25th and September 25th during the term of the
Notes, unless earlier redeemed, beginning September 25, 2010, subject to adjustment in accordance with the
following business day convention.
	 
	 	 	 	 	 	 	 	 
	Interest Accrual Method: 30/360.

	 	 	 	 	 	Interest Periods:
	 	From and including the Closing Date or each March 25th and
September 25th thereafter, as the case may be, to and including the next succeeding March
24th and September 24th, as the case may be, unless earlier redeemed, with no
adjustment to period end dates for accrual purposes.

Joint Book-Running Managers

	 	 	 	 	 

	BofA Merrill Lynch
	 	Barclays Capital
	 	J.P. Morgan

Co-Managers

	 	 	 	 	 

	Credit Suisse
	 	Deutsche Bank Securities
	 	 RBC Capital Markets

RBS

 

March 17, 2010

CALCULATION OF REGISTRATION FEE

	 	 	 	 	 
	Title of Each Class of Securities	 	Maximum Aggregate	 	Amount of
	Offered	 	Offering Price	 	Registration Fee
	8.000% Medium Term Notes, 

Series A, due March 25, 2020	 	$1,500,000,000	 	$106,950.00

 

 

	 	 	 

	Business Day Convention:

	 	Following Business Day. Unadjusted.
	 
	 	 
	Form:

	 	Book-entry.
	 
	 	 
	Denominations:

	 	$2,000 minimum and integral multiples of $1,000 in excess thereof.
	 
	 	 
	Trustee:

	 	The Bank of New York Mellon, as successor trustee by virtue of a transfer of all or
substantially all of the corporate trust business assets of JPMorgan Chase Bank,
National Association, formerly known as JPMorgan Chase Bank and The Chase Manhattan
Bank.
	 
	 	 
	Agents:

	 	The following agents are acting as underwriters in connection with this issuance.

	 	 	 	 	 
	Agents	 	Principal Amount of Notes	 
	Banc of America Securities LLC
	 	$	400,000,000.00	 
	Barclays Capital Inc.
	 	 	400,000,000.00	 
	J.P. Morgan Securities Inc.
	 	 	400,000,000.00	 
	Credit Suisse Securities (USA) LLC
	 	 	75,000,000.00	 
	Deutsche Bank Securities Inc.
	 	 	75,000,000.00	 
	RBC Capital Markets Corporation
	 	 	75,000,000.00	 
	RBS Securities Inc.
	 	 	75,000,000.00	 
	 
	 	 	 
	Total
	 	$	1,500,000,000.00	 

	 	 	 

	Issue Price:
	 	98.318%.
	 
	 	 
	Agents’ Commission:
	 	0.75% (75 bps).
	 
	 	 
	Net Proceeds:
	 	$1,463,520,000.
	 
	 	 
	Concession:
	 	0.45% (45 bps).
	 
	 	 
	Reallowance:
	 	0.25% (25 bps).
	 
	 	 
	CUSIP Number:
	 	78442F EJ 3.
	 
	 	 
	ISIN Number:
	 	US78442FEJ30.

An affiliate of one of the underwriters has entered into a swap transaction in connection with the
Notes and may receive compensation for that transaction.

 

Obligations of SLM Corporation and any subsidiary of SLM Corporation are not guaranteed by the full faith and

credit of the United States of America. Neither SLM Corporation

nor any subsidiary of SLM Corporation is a government-sponsored enterprise

or an instrumentality of the United States of America.

 

RECENT DEVELOPMENTS

Currently, it has been announced by the Democratic leadership that the Student Aid and Fiscal
Responsibility Act is going to be considered in connection with the Affordable Health Care for
America Act and is going to be voted on in the U.S. Senate using reconciliation. We cannot predict
the timing or the likelihood of passage of this legislation or the final version of this
legislation. Please refer to our Annual Report on Form 10-K for a more complete discussion of this
legislation.

2

 

ADDITIONAL TERMS OF THE NOTES

Optional Redemption

The notes will be redeemable as a whole or in part, at the option of the Company at any time, at a
redemption price equal to the greater of (i) 100% of the principal amount of such notes and (ii)
the sum of the present values of the remaining scheduled payments of principal and interest thereon
(exclusive of interest accrued to the date of redemption) discounted to the redemption date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate
plus 50 basis points, plus in each case accrued interest thereon to the date of redemption.

“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the
semiannual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such redemption date.

“Comparable Treasury Issue” means the United States Treasury security or securities
selected by an Independent Investment Banker as having an actual or interpolated maturity
comparable to the remaining term of the notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new issues of corporate
debt securities of a comparable maturity to the remaining term of such notes.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by
the Trustee after consultation with the Company.

“Comparable Treasury Price” means, with respect to any redemption date, (A) the average of
the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than four
such Reference Treasury Dealer Quotations, the average of all such quotations.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m. New York
time on the third business day preceding such redemption date.

“Reference Treasury Dealer” means each of Banc of America Securities LLC, Barclays Capital
Inc. and J.P. Morgan Securities Inc. plus two others or their affiliates which are primary U.S.
Government securities dealers, and their respective successors; provided, however, that if any of
the foregoing or their affiliates shall cease to be a primary U.S. Government securities dealer in
The City of New York (a “Primary Treasury Dealer”), the Company shall substitute therefor another
Primary Treasury Dealer.

Notice of any redemption will be mailed at least 30 days but not more than 60 days before the
redemption date to each holder of notes to be redeemed.

Unless the Company defaults in payment of the redemption price, on and after the redemption date
interest will cease to accrue on the notes or portions thereof called for redemption.

Repurchase Upon a Change of Control

If a Change of Control Triggering Event occurs, unless we have exercised our right, if any, to
redeem the notes in full, (the “Change of Control Offer”) to repurchase any and all of such
noteholder’s notes (equal to $2,000 or an integral multiple of $1,000 above that amount) at a
repurchase price in cash equal to 101% of the aggregate principal amount of the notes repurchased
plus accrued and unpaid interest, if any, thereon, to the date of repurchase (the “Change of
Control Payment”). Within 30 days following any Change of Control Triggering Event, we will be
required to mail a notice to noteholders, with a copy to the trustee, describing the transaction or
transactions that constitute the Change of Control Triggering Event and offering to repurchase the
notes on the date specified in the notice, which date will be no less than 30 days and no more than
60 days from the date such notice is mailed (the “Change of Control Payment Date”), pursuant to the
procedures described in such notice.

We must comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the repurchase of the notes as
a result of a Change of Control Triggering Event. To the

3

 

extent that the provisions of any
securities laws or regulations conflict with the Change of Control repurchase provisions of the
notes, we will be required to comply with the applicable securities laws and regulations and will
not be deemed to have breached our obligations under the Change of Control repurchase provisions of
the notes by virtue of such conflicts.

We will not be required to offer to repurchase the notes upon the occurrence of a Change of Control
Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in
compliance with the requirements for an offer
made by us and the third party repurchases on the applicable date all notes properly tendered and
not withdrawn under its offer; provided that for all purposes of the notes and the indenture
governing the notes, a failure by such third party to comply with the requirements of such offer
and to complete such offer shall be treated as a failure by us to comply with our obligations to
offer to purchase the notes unless we promptly make an offer to repurchase the notes at 101% of the
principal amount thereof plus accrued and unpaid interest, if any, thereon, to the date of
repurchase, which shall be no later than 30 days after the third party’s scheduled Change of
Control Payment Date.

     On the Change of Control Payment Date, we will be required, to the extent lawful, to:

	 	•	 	accept or cause a third party to accept for payment all notes or portions of
notes properly tendered pursuant to the Change of Control Offer;
	 
	 	•	 	deposit or cause a third party to deposit with the paying agent an amount equal
to the Change of Control Payment in respect of all notes or portions of notes properly
tendered; and
	 
	 	•	 	deliver or cause to be delivered to the trustee the notes properly accepted,
together with an officer’s certificate stating the principal amount of notes or
portions of notes being purchased.

The definition of Change of Control includes a phrase relating to the direct or indirect sale,
lease, transfer, conveyance or other disposition of “all or substantially all” of the properties or
assets of SLM Corporation and its subsidiaries taken as a whole. Although there is a limited body
of case law interpreting the phrase “substantially all,” there is no precise, established
definition of the phrase under applicable law. Accordingly, the applicability of the requirement
that we offer to repurchase the notes as a result of a sale, lease, transfer, conveyance or other
disposition of less than all of the assets of SLM Corporation and its subsidiaries taken as a whole
to another Person (as defined in the indenture governing the notes) or group may be uncertain.

Additionally, we will not execute any supplemental indenture that would make any change in the
terms and conditions of this issuance of notes described above that would adversely affect the
rights of any holder of such notes without the written consent of the holders of a majority in
principal amount of the outstanding notes described above.

For purposes of the foregoing discussion of the applicable Change of Control provisions, the
following definitions are applicable:

“Below Investment Grade Rating Event” means the notes cease to have an Investment Grade Rating from
at least two of the three Rating Agencies on any date during the period (the “Trigger Period”)
commencing 60 days prior to the first public announcement by the Company of any Change of Control
(or pending Change of Control) and ending 60 days following the consummation of such Change of
Control; provided, however, that if (i) during such Trigger Period one or more Rating Agencies has
publicly announced that it is considering the possible downgrade of the notes, and (ii) a downgrade
by each of the Rating Agencies that has made such an announcement would result in a Below
Investment Grade Rating Event, then such Trigger Period shall be extended for such time as the
rating of the notes by any such Rating Agency remains under publicly announced consideration for
possible downgrade to a rating below an Investment Grade Rating and a downgrade by such Rating
Agency to a rating below an Investment Grade Rating could cause a Below Investment Grade Rating
Event.

“Change of Control” means the occurrence of any of the following: (1) direct or indirect sale,
transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or
a series of related transactions, of all or substantially all of the properties or assets of SLM
Corporation and its subsidiaries taken as a whole to any “person” (as that term is used in Section
13(d)(3) of the Exchange Act) other than to SLM Corporation or one of its subsidiaries; (2) the
consummation of any transaction (including, without limitation, any merger or consolidation) the
result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act)
other than SLM Corporation or one of its subsidiaries becomes the beneficial owner, directly or
indirectly, of more than 50% of the then-outstanding number of shares of SLM Corporation’s voting
stock; (3) SLM Corporation consolidates with, or merges with or into, any “person” (as that term is
used in Section 13(d)(3) of the Exchange Act), or any “person” (as that term is used in Section
13(d)(3) of the Exchange Act) consolidates with, or merges with or into, SLM Corporation, in any
such event pursuant to a

4

 

transaction in which any of the outstanding voting stock of SLM
Corporation or such other “person” (as that term is used in Section 13(d)(3) of the Exchange Act)
is converted into or exchanged for cash, securities or other property, other than any such
transaction where the shares of the voting stock of SLM Corporation outstanding immediately prior
to such transaction constitute, or are converted into or exchanged for, a majority of the voting
stock of the surviving “person” (as that term is used in Section 13(d)(3) of the Exchange Act)
immediately after giving effect to such transaction; (4) the first day on which a majority of the
members of SLM Corporation’s Board of Directors are not Continuing Directors; or (5)
the adoption of a plan relating to the liquidation or dissolution of SLM Corporation; provided,
however, that a transaction will not be deemed to involve a Change of Control if (A) we become a
wholly owned subsidiary of a holding company and (B) the holders of the voting stock of such
holding company immediately following that transaction are substantially the same as the holders of
SLM Corporation’s voting stock immediately prior to that transaction. For purposes of this
definition, “voting stock” means capital stock of any class or kind the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of SLM Corporation, even if the right to vote has been
suspended by the happening of such a contingency.

“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Below
Investment Grade Rating Event.

“Continuing Directors” means, as of any date of determination, any member of the Board of Directors
of SLM Corporation who (1) was a member of the Board of Directors of SLM Corporation on the date of
the issuance of the notes; or (2) was nominated for election or elected to the Board of Directors
of SLM Corporation with the approval of a majority of the Continuing Directors who were members of
such Board of Directors of SLM Corporation at the time of such nomination or election (either by
specific vote or by approval of SLM Corporation’s proxy statement in which such member was named as
a nominee for election as a director).

“Fitch” means Fitch Ratings Inc.

“Investment Grade Rating” means a rating by Moody’s equal to or higher than Baa3 (or the equivalent
under a successor rating category of Moody’s), a rating by S&P equal to or higher than BBB- (or the
equivalent under any successor rating category of S&P), a rating by Fitch equal to or higher than
BBB- (or the equivalent under any successor rating category of Fitch), and the equivalent
investment grade credit rating from any replacement rating agency or rating agencies selected by us
under the circumstances permitting us to select a replacement agency and in the manner for
selecting a replacement agency, in each case as set forth in the definition of “Rating Agencies”.

“Moody’s” means Moody’s Investors Service, Inc.

“Rating Agencies” means (1) Moody’s, S&P and Fitch; and (2) if any or all of Moody’s, S&P or Fitch
ceases to rate the notes or fails to make a rating of the notes publicly available for reasons
outside of our control, a “nationally recognized statistical rating organization” within the
meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, that we select (pursuant to a
resolution of the SLM Corporation Board of Directors) as a replacement agency for any of Moody’s,
S&P or Fitch, or all of them, as the case may be.

“S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.

5

 

 

Exhibit C

 

EXCEPT AS OTHERWISE PROVIDED
IN SECTION 2.15 OF THE INDENTURE, THIS MASTER NOTE MAY BE TRANSFERRED
IN WHOLE, BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE DEPOSITARY OR TO A
SUCCESSOR DEPOSITARY OR TO A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

USA EDUCATION, INC.

MEDIUM TERM NOTE, SERIES A

 

MASTER NOTE

 

October 31,
2001

(Date of Issuance)

 

USA EDUCATION, INC., a
corporation organized and existing under the laws of the State of Delaware (the
“Company”), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns: (i) on each principal payment date, including each
amortization date, redemption date, repayment date, maturity date and extended
maturity date, as applicable, of each obligation identified on the records of
the Issuer (which records are maintained by The Chase Manhattan Bank, in its
capacity as paying agent (the “Paying Agent”)), the principal amount then due and
payable for each such obligation, and (ii) on each interest payment date,
if any, the interest then due and payable, on the principal amount for each
such obligation. Payment shall be made by wire transfer of United States
dollars to the registered owner, or in immediately available funds or the
equivalent to a party authorized by the registered owner and in the currency
other than United States dollars as provided for in each such obligation, by
the Paying Agent without the necessity and surrender of this Master Note (the
“Master Note”).

 

REFERENCE IS HEREBY MADE TO
THE FURTHER PROVISIONS OF THIS MASTER NOTE SET FORTH ON THE REVERSE HEREOF AND)
TO THE TERMS OF THE PROSPECTUS SUPPLEMENT AND PRICING SUPPLEMENT(S), WHICH ARE
INCORPORATED HEREIN BY REFERENCE.

 

This Master Note shall be
governed by and construed in accordance with the laws of the State of New York.
This Master Note is a valid and binding obligation of the Issuer.

 

 

 

Unless the certificate of
authentication hereon has been executed by The Chase Manhattan Bank, the
Trustee under the Indenture, or its successor thereunder by the manual
signature of one of its authorized signatories, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the
Company has caused this instrument to be duly executed.

 

Dated: October 31, 2001

 

 

	
   

  	
   

  	
  USA EDUCATION, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John F. Remondi

  
	
   

  	
  Name:

  	
  John F. Remondi

  
	
   

  	
  Title:

  	
  Vice Chairman and Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary F. Eure

  
	
   

  	
  Name:

  	
  Mary F. Eure

  
	
   

  	
  Title:

  	
  Corporate Secretary

  

 

2

 

 

CERTIFICATE
OF AUTHENTICATION

 

This is one of the Notes
referred to in the within-mentioned Indenture.

 

 

	
   

  	
   

  	
  THE CHASE MANHATTAN BANK,
  as Trustee  

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig M. Kantor

  
	
   

  	
   

  	
  Craig M. Kantor

  
	
   

  	
   

  	
  Vice President

  
				

 

3

 

 

[Reverse
of Note]

 

USA
EDUCATION, INC.

 

MEDIUM
TERM NOTES, SERIES A

 

MASTER
NOTE

 

This Master Note is one of a
duly authorized issue of notes (the “Notes”) of the Company issued under the
Indenture, dated as of October 1, 2000 (the “Base Indenture”), as amended
prior to the date hereof (collectively, the “Indenture”), between the Company
and The Chase Manhattan Bank, as trustee (the “Trustee,” which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and limitations of rights thereunder of the Company, the
Trustee and the Holders of the Notes (the “Holders”), and the terms upon which
the Securities are, and are to be, authenticated and delivered. Capitalized
terms used and not otherwise defined in this Master Note have the meanings
ascribed to them in the indenture.

 

The Trustee shall calculate
the interest payable hereon in accordance with the foregoing and will confirm
in writing such calculation to the Company and the Paying Agent (if other than
the Trustee) immediately after each determination. All determinations made by
the Trustee shall be, in the absence of manifest error, conclusive for all
purposes and binding on the Company and Holders.

 

If an Event of Default with
respect to the Notes shall occur and be continuing, the Trustee, by notice to
the Company, or the Holders of at least 25% in principal amount of all of the
outstanding Notes, by notice to the Company and the Trustee, may declare the
principal of all the Notes due and payable in the manner and with the effect
provided in the Indenture.

 

The indenture permits, with
certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the
Holders at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding. The indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Notes at the time
outstanding, on behalf of the Holders of all Notes, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Master Note shall be conclusive and binding upon such Holder and
upon future Holders of this Master Note and of any Note issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this Master
Note.

 

Holders may not enforce
their rights pursuant to the Indenture or the Notes except as provided in the
Indenture. No reference herein to the Indenture and no provision of this Master
Note or the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Master Note at the time, place, and rate, and in the coin or currency,
herein prescribed.

 

4

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