Exhibit 10.16

Execution Version

 

SECOND AMENDMENT

 

TO

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

Among

 

LINN ENERGY, LLC

as Borrower,

 

BNP PARIBAS,

as Administrative Agent,

 

and

 

The Lenders Signatory Hereto

 

 

Effective as of January 31, 2008

 

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SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

This SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this
“Second Amendment”) executed effective as of January 31, 2008 (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”).

 

Recitals

 

A.            The Borrower, the Administrative Agent and the Lenders are parties
to that certain Third Amended and Restated Credit Agreement dated as of
August 31, 2007 (as amended by the First Amendment to Third Amended and Restated
Credit Agreement, dated November 2, 2007, as the same has been further amended,
supplemented or otherwise modified prior to the date hereof, 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.

 

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 to such term in the Credit Agreement.  Unless
otherwise indicated, all section references in this Second Amendment refer to
the Credit Agreement.  For purposes of this Second Amendment, the following
terms have the meanings specified below:

 

“Acquisition” means the acquisition of certain oil, gas and mineral Properties
pursuant to the terms and conditions of the Acquisition Documents.

 

“Acquisition Documents” means (a) the Purchase and Sale Agreement dated as of
December 20, 2007, by and between Lamamco Drilling Company, as seller and Linn
Energy Holdings, LLC, as buyer, and (b) all bills of sale, assignments,
agreements, instruments and documents executed and delivered in connection
therewith, as amended.

 

“Acquisition Properties” means the Oil and Gas Properties and other properties
described in the Acquisition Documents.

 

Section 2.               Amendments to Credit Agreement.

 

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2.1           Definitions.  Section 1.02 is hereby amended by adding or amending
and restating the following definitions:

 

“ ‘Agreement’ means this Third Amended and Restated Credit Agreement, as amended
by that certain First Amendment to Third Amended and Restated Credit Agreement,
dated as of November 2, 2007, as amended by the Second Amendment, and as the
same may from time to time be further amended, modified, supplemented or
restated.”

 

“ ‘Asset Sale’ means, solely for purposes of Section 3.04(c), the sale, transfer
or other disposition (by way of merger, casualty, condemnation or otherwise) by
the Borrower or any of the Subsidiaries to any Person other than the Borrower or
any Guarantor of (a) any Equity Interests in any of the Subsidiaries (including
any such sale by the issuer of such Equity Interests but excluding directors’
qualifying shares) or (b) any other assets of the Borrower or any of the
Subsidiaries (other than (x)(i) inventory (including Hydrocarbons),
(ii) damaged, obsolete or worn out assets, scrap and equipment no longer used in
the operations of the Borrower or any Subsidiary, and (iii) Investments
permitted by Section 9.05, in each case disposed of in the ordinary course of
business and (y) any sale, transfer or other disposition that, together with all
related sales, transfers or other dispositions, has a value not in excess of
$25,000,000 in the aggregate).”

 

“ ‘Funded Debt’ means any Debt of the type described in clause (a), (e), (i) or
(m) of the definition thereof other than Loans or the Second Lien Term Loan.”

 

“ ‘Intercreditor Agreement’ means in respect of the Second Lien Term Loan
Agreement, that certain Intercreditor Agreement dated as of the Second Amendment
Effective Date entered into by and among the Administrative Agent, the Second
Lien Term Loan Administrative Agent, the Borrower and the Guarantors, as the
same may from time to time be amended, modified, supplemented or restated.”

 

“ ‘Net Cash Proceeds’ means (a) in connection with any issuance or sale of
Equity Interests, Debt securities, Casualty Events or the incurrence of Debt,
the cash proceeds received from such issuance or incurrence, net of attorneys’
fees, investment banking fees, accountants’ fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith; and (b) in connection with any Asset Sale, the cash
proceeds thereof (including cash proceeds subsequently received (as and when
received) in respect of noncash consideration initially received), net of
(i) selling and other expenses (including reasonable broker’s fees or
commissions, legal fees, transfer and similar taxes, and the Borrower’s good
faith estimate of income taxes actually paid or payable in connection with such
sale), (ii) amounts provided as a reserve, in accordance with GAAP, against any
liabilities under any indemnification obligations or purchase price adjustment
associated with such Asset Sale (provided that, to the extent and at the time
any such amounts are released from such reserve, such amounts shall constitute
Net Cash Proceeds) and (iii) any amount payable in

 

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respect of any Debt for borrowed money which is secured by the asset sold in
such Asset Sale and which is required to be repaid with such proceeds (excluding
any such Debt assumed by the purchaser of such asset).”

 

“ ‘Permitted Refinancing Debt’ means Debt (for purposes of this definition, “new
Debt”) incurred in exchange for, or proceeds of which are used to refinance, all
of the Second Lien Term Loan 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 $400,000,000; (b) such new
Debt has a stated maturity no earlier than the day 365 days after August 1,
2010; 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.”

 

“ ‘Second Amendment’ means the Second Amendment to Third Amended and Restated
Credit Agreement, dated as of January 31, 2008, among the Borrower, the
Guarantors, the Administrative Agent and each Lender party thereto.”

 

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

 

“ ‘Second Lien Term Loan Administrative Agent’ means BNP Paribas, as
administrative agent for the lenders under the Second Lien Term Loan Agreement
(in such capacity, together with its successors and assigns).”

 

“ ‘Second Lien Term Loan Agreement’ means that certain Second Lien Term Loan
Agreement, dated as of January 31, 2008, by and among the Borrower, the several
lenders from time to time parties thereto, and the Second Lien Term Loan
Administrative Agent, as the same shall be amended, supplemented or otherwise
modified from time to time in accordance with Section 12.02 thereof and
Section 9.04(b).”

 

“ ‘Second Lien Term Loan’ means any Debt incurred pursuant to
Section 9.02(j) and all Debt and other obligations under the Second Lien Term
Loan Documents.”

 

“ ‘Second Lien Term Loan Documents’ means the Second Lien Term Loan Agreement
and the other Loan Documents (as defined in the Second Lien Term Loan Agreement)
as the same shall be amended, supplemented or otherwise modified from time to
time in accordance with Section 9.04(b).”

 

“ ‘Second Lien Term Loan Notes’ means the notes from time to time issued under
the Second Lien Term Loan Agreement.”

 

2.2           Section 2.07.

 

(a)           The first sentence of Section 2.07(a) is hereby amended and
restated as follows:

 

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“For the period from and including the Second Amendment Effective Date to but
excluding April 1, 2008, the amount of the Borrowing Base and the Conforming
Borrowing Base shall be $1,900,000,000.”

 

(b)           Section 2.07(e) is hereby amended and restated as follows:

 

“(e)         Reduction of the Borrowing Base Upon Issuance of Funded Debt. 
Notwithstanding anything to the contrary contained herein, upon the issuance of
any Funded Debt (excluding Permitted Refinancing Debt), the Borrowing Base then
in effect shall be reduced by an amount equal to the product of 0.25 multiplied
by the stated principal amount of such Debt (excluding 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.”

 

2.3           Section 3.04.

 

(a)  Section 3.04(c)(iv) is hereby amended and restated as follows:

 

“(iv)        If, at any time after the Effective Date, the Borrower issues
additional Funded Debt and any Borrowing Base Deficiency exists, then the
Borrower shall (a) use 100% of the Net Cash Proceeds from the issuance of such
Funded Debt to prepay the Borrowings in an aggregate principal amount equal to
such excess, and (b) if, as a result of an LC Exposure, any Borrowing Base
Deficiency remains after prepaying all of the Borrowings, deposit with the
Administrative Agent on behalf of the Lenders an amount equal to the lesser of
such LC Exposure and any remaining Net Cash Proceeds to be held as cash
collateral as provided in Section 2.08(j).  The Borrower shall be obligated to
make such prepayment and/or deposit of cash collateral as soon as practicable
and in any event no later than the Business Day after it or any Subsidiary
receives such Net Cash Proceeds as a result of such issuance of Funded Debt.”

 

(b)  Section 3.04(c) is hereby amended by adding the following subsection
3.04(c)(vii):

 

“(vii)       If there is less than $350,000,000 in availability under this
Agreement after giving effect to any adjustment to the Borrowing Base pursuant
to Section 9.12, then the Borrower shall (A) use 100% of the Net Cash Proceeds
from any Asset Sale to prepay the Borrowings until there is at least
$350,000,000 in availability under this Agreement after giving effect to any
adjustments to the Borrowing Base pursuant to Section 9.12 and (B) if, as a
result of an LC Exposure, any Borrowing Base Deficiency remains after prepaying
all of the Borrowings, deposit with the Administrative Agent on behalf of the
Lenders an amount equal to the lesser of such LC Exposure and any remaining Net
Cash Proceeds to be held as cash collateral as provided in Section 2.08(j).  The
Borrower shall be obligated to make such prepayment and/or deposit of cash
collateral as soon as practicable and in any event no later than the Business
Day after it or any Subsidiary receives such Net

 

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Cash Proceeds as a result of such Asset Sale.”

 

(c)  Section 3.04(c) is hereby amended by adding the following subsection
3.04(c)(viii):

 

“(viii)      If not otherwise required as prepayments by this Section 3.04
(including payments required within 90 days pursuant to Section 3.04(c)(ii)),
the Borrower shall use 100% of the Net Cash Proceeds of any Equity Interests or
Funded Debt to prepay the Second Lien Term Loans.”

 

2.4           Article VII.  Article VII is hereby amended by adding a
Section 7.24 to read in its entirety as follows:

 

“Section 7.24  Specified Senior Indebtedness.

 

The Indebtedness of the Borrower constitutes “Senior Indebtedness” as defined in
the Intercreditor Agreement.”

 

2.5           Section 8.14.  Section 8.14 is hereby amended by adding a
subsection “(c)” to read in its entirety as follows:

 

“(c)         Prior to or contemporaneously with the granting of any Lien on any
Property to or for the benefit of any agent or lender under the Second Lien Term
Loan Agreement pursuant to any Second Lien Term Loan Document or otherwise, the
Borrower or applicable Subsidiary shall grant to the Administrative Agent a
first priority Lien interest (subject only to Excepted Liens of the type
described in clauses (a) to (d) and (f) in the definition thereof, but subject
to the provisos at the end of such definition) on such Property for the benefit
of the Lenders to secure the Indebtedness.  All such Liens in favor of the
Administrative Agent will be created and perfected by and in accordance with the
provisions of deeds of trust, security agreements and financing statements or
other Security Instruments, all in form and substance reasonably satisfactory to
the Administrative Agent and in a sufficient number of executed (and
acknowledged where necessary or appropriate) counterparts for recording
purposes.  In order to comply with the foregoing, if any Subsidiary places a
Lien on its Oil and Gas Properties and such Subsidiary is not a Guarantor, then
it shall become a Guarantor and comply with Section 8.14(b).”

 

2.6           Article VIII.  Article VIII is hereby amended by adding the
following Section 8.18:

 

“Section 8.18.  Additional Swap Agreements.  Within 30 days of the Second
Amendment Effective Date, the Borrower shall enter into Swap Agreements with
respect to the Acquisition Properties for volumes and prices satisfactory to the
Administrative Agent and the Borrower shall neither assign, terminate or unwind
any such Swap Agreements nor sell any Swap Agreements if the effect of such
action (when taken together with any other Swap Agreements executed
contemporaneously with the taking of such action) would have the effect of
canceling its positions under such Swap Agreements required hereby.”

 

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2.7           Section 9.02.  Section 9.02 is hereby amended by adding
subsections “(j)” and “(k)” to read as follows:

 

“(j)          Debt incurred by the Borrower pursuant to the Second Lien Term
Loan Agreement and/or the Permitted Refinancing Debt in respect thereof and any
guarantees thereof by any of the Guarantors; provided that, without the prior
written consent of all of the Lenders, (i) the aggregate principal amount of
such Debt shall not exceed $400,000,000, (ii) the maturity date of any Permitted
Refinancing Debt shall be no earlier than 365 days after August 1, 2010,
(iii) such Debt and the holders thereof shall at all times be subject to the
Intercreditor Agreement, and (iv) such Debt has no amortization.”

 

“(k)         Extensions, renewals or replacements of any Debt (for purposes of
this paragraph (k), “refinancing debt”) permitted in clauses (a) through (i) so
long as (i) the principal amount (or accreted value, if applicable) of such
refinancing debt does not exceed the principal amount (or accreted value, if
applicable) of the Debt extended, renewed or replaced (plus all accrued interest
on the Debt and the amount of all expenses and premiums incurred in connection
therewith), (ii) such refinancing debt has a final maturity date later than the
final maturity date of the Debt being extended, renewed or replaced, (iii) if
the Debt being extended, renewed or replaced is subordinated in right of payment
to the obligations under this Agreement, such refinancing debt has a final
maturity date equal to or later than the final maturity date of, and is
subordinated in right of payment to, the obligations under this Agreement on
terms at least as favorable to the Lenders as those contained in the
documentation governing the Debt being extended, renewed or replaced, (iv) such
refinancing debt is incurred either by the Borrower or by a Subsidiary who is
the obligor on the Debt being extended, renewed or replaced, and (v) if incurred
by the Borrower, such refinancing debt may be guaranteed by the Guarantors.

 

2.8           Section 9.03.  Section 9.03 is hereby amended by amending and
restating subsection (f) in its entirety and adding subsections “(g)” and “(h)”
to read as follows:

 

“(f)          Liens on Property not constituting collateral for the Indebtedness
and not otherwise permitted by the foregoing clauses of this Section 9.03;
provided that the aggregate principal or face amount of all Debt secured under
this Section 9.03(f) shall not exceed $10,000,000 at any time.”

 

“(g)         Liens securing the obligations of the Borrower and the Guarantors
under the Second Lien Term Loan Agreement and the other Second Lien Term Loan
Documents; provided that, such Liens shall not encumber any Property that is not
subject to a first priority Lien in favor of, or for the benefit of, the Lenders
to secure the Indebtedness as required by Section 8.14.”

 

“(h)         Extensions, renewals or replacements of any of the Liens permitted
in clauses (a) through (g) so long as (i) the principal amount of the Debt or
obligation

 

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secured thereby is no greater than the principal amount of such Debt or
obligation at the time such Lien was permitted hereunder except for increases in
an amount equal to a reasonable premium or other reasonable amount paid, and
fees and expenses reasonably incurred, in connection with such extension,
renewal, refinancing, or replacement and in an amount equal to any existing
commitments unutilized thereunder, (ii) any such extension, renewal or
replacement Lien is limited to the property originally encumbered thereby, and
(iii) any renewal or extension of the Debt or obligations secured or benefited
thereby is permitted by Section 9.02.”

 

2.9           Section 9.04(b).  Section 9.04(b) is hereby deleted and restated
in its entirety to read as follows:

 

“(b)         Redemption or Repayment of Subordinated Debt.  The Borrower will
not, and will not permit any Subsidiary to: (i) call, make or offer to make any
Redemption of or otherwise Redeem (whether optional or mandatory and whether in
whole or in part) or repay any subordinated Debt permitted to be incurred
hereunder, including the Second Lien Term Loan, except with the proceeds of
Asset Sales, Casualty Events or Funded Debt, or the proceeds of the sale or
issuance of Equity Interests or Permitted Refinancing Debt, in each case, in
accordance with 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 any subordinated Debt permitted hereunder,
including the Second Lien Term Loan, or any indenture, agreement, instrument,
certificate or other document relating to any subordinated Debt permitted
hereunder (including the Second Lien Term Loan Agreement, any Second Lien Term
Loan Document and any other document or agreement relating thereto) if (A) the
effect of such amendment, modification or waiver is to shorten the final
maturity, except as permitted under Section 9.02(h) or in accordance with the
definition of Permitted Refinancing Debt, 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 than those contained in this Agreement, 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) 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,
including the Second Lien Term Loan.”

 

2.10         Section 9.07.  Section 9.07 is hereby amended and restated as
follows:

 

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“Section 9.07 Limitation on Leases.  Neither the Borrower nor any of its
Subsidiaries will create, incur, assume or suffer to exist any obligation for
the payment of rent or hire of Property of any kind whatsoever (real or personal
but excluding Capital Leases permitted by Section 9.02(g), leases of Hydrocarbon
Interests and drilling and other similar contracts), under leases or lease
agreements which would cause the aggregate amount of all payments made by the
Borrower and its Subsidiaries pursuant to all such leases or lease agreements,
including, without limitation, any residual payments at the end of any lease, to
exceed $10,000,000 in any period of twelve consecutive calendar months during
the life of such leases.”

 

2.11         Section 9.12.  Section 9.12(d)(iii) is hereby amended and restated
as follows:

 

“(iii) if such other sale or disposition of Oil and Gas Property or Subsidiary
owning Oil and Gas Properties included in the most recently delivered Reserve
Report during any period between two successive Scheduled Redetermination Dates
has a fair market value (as determined by the Administrative Agent),
individually or in the aggregate, in excess of $25,000,000 (or, if the Second
Lien Term Loan Agreement has been terminated, $50,000,000), the Borrowing Base
shall be reduced, effective immediately upon such sale or disposition, by an
amount equal to the value, if any, assigned such Property as determined in good
faith by the Supermajority Lenders assigned such Property in the most recently
delivered Reserve Report and”

 

2.12         Section 9.16.  The first parenthetical in Section 9.16 is hereby
amended and restated in its entirety as follows:

 

“(other than this Agreement, the Security Instruments or the Second Lien Term
Loan Documents)”

 

2.13         Section 10.01.  Section 10.01 is hereby amended by adding a
subsection “(o)” to read in its entirety as follows:

 

“(o)         the Intercreditor Agreement, after delivery thereof shall for any
reason, except to the extent permitted by the terms thereof, cease to be in full
force and effect and valid, binding and enforceable in accordance with its terms
against the Borrower or any party thereto or holder of the Debt subordinated
thereby or shall be repudiated by any of them, or cause the payment of the
obligations of the Second Lien Term Loan Notes to be senior or pari passu in
right to the payment of obligations of this Agreement, or the Borrower or any
Guarantor shall make any payment in violation of the terms of the Intercreditor
Agreement.”

 

2.14         Section 11.08(b).  Section 11.08(b) is hereby deleted and replaced
in its entirety to read as follows:

 

“(b)         The Lenders acknowledge that the Administrative Agent and the
Arrangers

 

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are acting solely in administrative capacities with respect to the structuring
and syndication of this facility and have no duties, responsibilities or
liabilities under this Agreement and the other Loan Documents other than their
administrative duties, responsibilities and liabilities specifically as set
forth in the Loan Documents and in their capacity as Lenders hereunder.  In
structuring, arranging or syndicating this facility, each Lender acknowledges
that the Administrative Agent and/or Arrangers may be agents or lenders under
these Notes, the Second Lien Term Loan Notes, other loans or other securities
and waives any existing or future conflicts of interest associated with their
role in such other debt instruments.  If in its administration of this facility
or any other debt instrument, the Administrative Agent determines (or is given
written notice by any Lender) that a conflict exists, then it shall eliminate
such conflict within 90 days or resign pursuant to Section 11.06 and shall have
no liability for action taken or not taken, other than actions taken or not
taken which represent Administrative Agent’s gross negligence or willful
misconduct, while such conflict existed.”

 

2.15         Section 12.01.  Section 12.01(a)(i) and (ii) are hereby amended and
restated in their entirety as follows:

 

 

(i)

 

“if to the Borrower, to it at

 

 

 

 

 

Linn Energy, LLC

 

 

600 Travis Street, Suite 5100

 

 

Houston, TX 77002

 

 

 

 

 

Attention: Kolja Rockov

 

 

Telephone: 281-840-4169

 

 

Fax: 281-840-4189

 

 

E-Mail: kr@linnenergy.com

 

 

 

 

 

with a copy to:

 

 

 

 

 

Linn Energy, LLC

 

 

600 Travis Street, Suite 5100

 

 

Houston, TX 77002

 

 

 

 

 

Attention: Charlene A. Ripley

 

 

Telephone: 281-840-4119

 

 

Fax: 281-840-4180

 

 

E-mail: cripley@linnenergy.com

 

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(ii)

 

if to the Administrative Agent, to it at

 

 

 

 

 

525 Washington Blvd., 8th floor

 

 

Jersey City, New Jersey 07310

 

 

Attention: Dina Wilson, Loan Assistant

 

 

Telecopy: 201-850-4020

 

 

 

 

 

with a copy to the Administrative Agent at:

 

 

 

 

 

1200 Smith Street, Suite 3100

 

 

Houston, Texas 77002

 

 

Attention: Betsy Jocher

 

 

Telecopy: 713-659-6915”

 

2.16         Annex I.  Annex I is hereby amended and restated in is entirety as
shown on the attached Annex I.

 

2.17         Schedule 7.14.  Schedule 7.14 is hereby amended and restated in its
entirety as shown on the attached Schedule 7.14.

 

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 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.

 

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

 

3.3           The Administrative Agent shall have received an Intercreditor
Agreement executed by the Second Lien Term Loan Administrative Agent and the
Borrower.

 

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

 

3.5           The Administrative Agent or its counsel shall have received (a) a
certificate of a Responsible Officer of the Borrower certifying: (i) that the
Borrower is concurrently consummating the Acquisition in accordance with the
terms of the Acquisition Documents (with all of the material conditions
precedent thereto having been satisfied in all material respects by the parties
thereto) and acquiring substantially all of the Acquisition Properties
contemplated by the Acquisition Documents; (ii) as to the final purchase price
for the Acquisition Properties after giving effect to all adjustments as of the
closing date contemplated by the Acquisition Documents and specifying, by
category, the amount of such adjustment, provided that the final purchase price

 

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shall not be greater than $600,000,000, subject to pre-closing and post-closing
adjustments under the Acquisition Documents; (iii) that attached thereto is a
true and complete list of the Acquisition Properties which have been excluded
from the Acquisition pursuant to the terms of the Acquisition Documents,
specifying with respect thereto the basis of exclusion as (A) title defect,
(B) preferential purchase right, (C) environmental or (D) casualty loss;
(iv) that attached thereto is a true and complete list of all Acquisition
Properties for which any seller has elected to cure a title defect, (v) that
attached thereto is a true and complete list of all Acquisition Properties for
which any seller has elected to remediate an adverse environmental condition,
(vi) there was no known breach of the seller’s title or environmental
representations in the Acquisition Documents that would have a material adverse
effect on the Acquisition Properties, taken as a whole, and (vii) that attached
thereto is a true and complete list of all Acquisition Properties which are
currently pending final decision by a third party regarding purchase of such
property in accordance with any preferential right; (b) a true and complete
executed copy of each of the Acquisition Documents; (c) original counterparts or
copies, certified as true and complete, of the assignments, deeds and leases for
all of the Acquisition Properties; and (d) such other related documents and
information as the Administrative Agent shall have reasonably requested.

 

3.6           The Administrative Agent shall have received an opinion of
(i) Akin Gump Strauss Hauer Feld LLP, special counsel to the Borrower, in form
and substance satisfactory to the Administrative Agent, as to such matters
incident to the Transactions as the Administrative Agent may reasonably request
and (ii) local counsel in each of the following states: West Virginia,
Pennsylvania, Texas, Oklahoma and California and any other jurisdictions
requested by the Administrative Agent, in form and substance satisfactory to the
Administrative Agent.

 

3.7           The Administrative Agent shall have received a certificate of the
Borrower and of each Guarantor setting forth (a) resolutions of the Managers,
board of directors or other managing body with respect to the authorization of
the Borrower or such Guarantor to execute and deliver the Second Amendment and
related documents to which it is a party and to enter into the transactions
contemplated in those documents, (b) the individuals (i) who are authorized to
sign the Loan Documents to which the Borrower or such Guarantor is a party and
(ii) 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, (c) specimen signatures of such
authorized individuals, and (d) that the articles or certificate of
incorporation or formation and bylaws, operating agreement or partnership
agreement, as applicable, of the Borrower and each Guarantor, in each case, are
certified as not being amended since last delivered to the Administrative
Agent.  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.

 

3.8           The Administrative Agent shall have received from each party
thereto duly executed counterparts (in such number as may be requested by the
Administrative Agent) of the Security Instruments described on Exhibit A.  After
giving effect to the execution and delivery of the Security Instruments, the
Borrower shall be in compliance with Section 8.14(a).

 

3.9           The Administrative Agent shall be reasonably satisfied with the
environmental condition of the Acquisition Properties.

 

12

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3.10         The Administrative Agent shall have received duly executed Notes
payable to the order of each Lender who has requested a Note in a principal
amount equal to its new Aggregate Maximum Credit Amount dated as of the date
hereof.

 

3.11         The Administrative Agent shall have received such other documents
as the Administrative Agent or special counsel to the Administrative Agent may
reasonably request.

 

The Administrative Agent shall notify the Borrower and the Lenders of the Second
Amendment Effective Date, and such notice shall be conclusive and binding. 
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
of each Issuing Bank to issue Letters of Credit pursuant to this Second
Amendment shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 12.02) at or prior to 1:00 p.m.,
Houston time, on February 1, 2008 (and, in the event such conditions are not so
satisfied or waived, the Commitments shall terminate at such time).

 

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, was true as of
such date); and (b) that after giving effect to this Second Amendment and to the
transactions contemplated hereby, no Defaults exist under the Loan Documents or
will exist under the Loan Documents.

 

Section 5.               Miscellaneous.

 

5.1           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.

 

5.2           Ratification and Affirmation of Obligors.  Each of the Obligors
hereby expressly (i) acknowledges the terms of this Second Amendment,
(ii) ratifies and affirms its obligations under the Guaranty Agreement and the
other Security Instruments to which it is a party, (iii) acknowledges, renews
and extends its continued liability under the Guaranty Agreement and the other
Security Instruments to which it is a party and agrees that its guarantee under
the Guarantee Agreement and the other Security Instruments to which it is a
party remains in full force and effect with respect to the Indebtedness as
amended hereby.

 

5.3           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.

 

5.4           No Oral Agreement.  THIS WRITTEN 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.

 

13

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5.5           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.

 

14

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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 ATLANTIC WELL SERVICE, INC.

 

 

 

 

 

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

 

15

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BNP PARIBAS, as Administrative Agent and a
Lender

 

 

 

 

 

 

 

By:

/s/ Douglas R. Liftman

 

 

Name:

/s/ Douglas R. Liftman

 

Title:

Managing Director

 

 

 

 

 

 

 

By:

/s/ Betsy Jocher

 

 

Name:

Betsy Jocher

 

Title:

Director

 

16

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ROYAL BANK OF CANADA, as Syndication
Agent and a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Don J. McKinnerney

 

 

Name:

Don J. McKinnerney

 

Title:

Authorized Signatory

 

17

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SOCIETE GENERALE, as a Co-Documentation
Agent and a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Elena Robciuc

 

 

Name:

Elena Robciuc

 

Title:

Director

 

18

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COMERICA BANK, as a Lender

 

 

 

 

 

 

 

By:

/s/ Huma Manal

 

 

Name:

Huma Manal

 

Title:

Vice President

 

19

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FORTIS CAPITAL CORP., as a Lender

 

 

 

 

 

 

 

By:

/s/ David Montgomery

 

 

Name:

David Montgomery

 

Title:

Director

 

 

 

 

 

 

 

By:

/s/ Deirdre Sanbom

 

 

Name:

Deirdre Sanbom

 

Title:

Director

 

20

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CITIBANK, NA, as a Co-Documentation Agent
and a Lender

 

 

 

 

 

 

 

By:

/s/ David E. Hunt

 

 

Name:

David E. Hunt

 

Title:

Vice President

 

21

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KEYBANK NATIONAL ASSOCIATION, as a
Lender

 

 

 

 

 

 

 

By:

/s/ Thomas Rajan

 

 

Name:

Thomas Rajan

 

Title:

Director

 

22

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WACHOVIA BANK, N.A., as a Lender

 

 

 

 

 

 

 

By:

/s/ Leanne S. Phillips

 

 

Name:

Leanne S. Phillips

 

Title:

Director

 

23

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BMO CAPITAL MARKETS FINANCING,
INC., as a Co-Documentation Agent and a Lender

 

 

 

 

 

 

 

By:

/s/ James V. Ducote

 

 

Name:

James V. Ducote

 

Title:

Director

 

24

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CREDIT SUISSE, as a Lender

 

 

 

 

 

 

 

By:

/s/ Vanessa Gomez

 

 

Name:

Vanessa Gomez

 

Title:

Director

 

 

 

 

 

 

 

By:

/s/ Morenikeji Ajayi

 

 

Name:

Morenikeji Ajayi

 

Title:

Associate

 

25

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COMPASS BANK, as a Lender

 

 

 

 

 

 

 

By:

/s/ Murray E. Brasseux

 

 

Name:

Murray E. Brasseux

 

Title:

Executive Vice President

 

26

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DnB NOR BANK ASA, as a Lender

 

 

 

 

 

 

 

By:

/s/ Philip F. Kurpiewski

 

 

Name:

Philip F. Kurpiewski

 

Title:

Senior Vice President

 

 

 

 

 

 

 

By:

/s/ Jack Sun

 

 

Name:

Jack Sun

 

Title:

First Vice President

 

27

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DZ BANK AG, DEUTSCHE ZENTRAL-
GENOSSENSCHAFTSBANK, FRANKFURT
AM MAIN, NEW YORK BRANCH, as a Lender

 

 

 

 

 

 

 

By:

/s/ Scott B. Lamoreaux

 

 

Name:

Scott B. Lamoreaux

 

Title:

First Vice President

 

 

 

 

 

 

 

By:

/s/ Paul J. Bowles

 

 

Name:

Paul J. Bowles

 

Title:

Assistant Treasurer

 

28

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GUARANTY BANK, FSB, as a Lender

 

 

 

 

 

 

 

By:

/s/ W. David McCarver IV

 

 

Name:

W. David McCarver IV

 

Title:

Vice President

 

29

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LEHMAN BROTHERS COMMERCIAL
BANK, as a Lender

 

 

 

 

 

 

 

By:

/s/ Brian McNany

 

 

Name:

Brian McNany

 

Title:

Authorized Signatory

 

30

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JPMORGAN CHASE BANK, N.A., as a Lender

 

 

 

 

 

 

By:

/s/ Michael A. Kamauf

 

Name:

Michael A. Kamauf

 

Title:

Vice President

 

31

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THE ROYAL BANK OF SCOTLAND plc, as a

 

Lender

 

 

 

 

 

 

By:

/s/ Mark Lumpkin, Jr.

 

Name:

Mark Lumpkin, Jr.

 

Title:

Vice President

 

32

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RZB FINANCE LLC, as a Lender

 

 

 

 

 

 

By:

/s/ Shirley Ritch

 

Name:

Shirley Ritch

 

Title:

Assistant Vice President

 

 

 

 

 

 

 

By:

/s/ John A. Valiska

 

Name:

John A. Valiska

 

Title:

First Vice President

 

33

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UNION BANK OF CALIFORNIA, N.A., as a
Lender

 

 

 

 

 

 

By:

/s/ Scott Gildea

 

Name:

Scott Gildea

 

Title:

Vice President

 

34

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U.S. BANK NATIONAL ASSOCIATION, as a
Lender

 

 

 

 

 

 

By:

/s/ Justin M. Alexander

 

Name:

Justin M. Alexander

 

Title:

Vice President

 

35

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CALYON NEW YORK BRANCH, as a Lender

 

 

 

 

 

 

By:

/s/ Page Dillehunt

 

Name:

Page Dillehunt

 

Title:

Managing Director

 

 

 

 

 

 

 

By:

/s/ Sharada Manne

 

Name:

Sharada Manne

 

Title:

Vice President

 

36

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THE BANK OF NOVA SCOTIA, as a Lender

 

 

 

 

 

 

By:

/s/ David Mills

 

Name:

David Mills

 

Title:

Director

 

 

37

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DEUTSCHE BANK TRUST COMPANY
AMERICAS, as a Lender

 

 

 

 

 

 

By:

/s/ Susan LeFevre

 

Name:

Susan LeFevre

 

Title:

Director

 

 

 

 

 

 

 

By:

/s/ Erin Morrissey

 

Name:

Erin Morrissey

 

Title:

Vice President

 

38

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ALLIED IRISH BANKS P.L.C., as a Lender

 

 

 

 

 

 

 

By:

/s/ David O’Driscoll

 

Name:

David O’Driscoll

 

Title:

Assistant Vice President

 

 

 

 

 

 

 

By:

/s/ Aidan Lanigan

 

Name:

Aidan Lanigan

 

Title:

Vice President

 

39

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WESTLB AG, NEW YORK BRANCH, as a
Lender

 

 

 

 

 

 

By:

/s/ Dominick D’Ascoli

 

Name:

Dominick D’Ascoli

 

Title:

Director

 

 

 

 

 

 

 

By:

/s/ Jennifer King

 

Name:

Jennifer King

 

Title:

Director

 

40

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SUNTRUST BANK, as a Lender

 

 

 

 

 

 

 

By:

/s/ Peter Panos

 

Name:

Peter Panos

 

Title:

Vice President

 

41

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