exv4w7



 




Exhibit 4.7 

REGISTRATION RIGHTS AGREEMENT




by and between




EAGLE ROCK PARTNERS, L.P.




and




NGP-VII INCOME CO-INVESTMENT OPPORTUNITIES, L.P.




 









 








REGISTRATION RIGHTS AGREEMENT




     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of April 30,
2007, by and between EAGLE ROCK ENERGY PARTNERS, L.P., a Delaware limited partnership (the
“Company”), and NGP-VII INCOME CO-INVESTMENT OPPORTUNITIES, L.P., a Delaware limited partnership
(“Co-Investment”). Capitalized terms used herein without definition shall have the meanings given
to them in the Contribution Agreement, as defined below.



RECITALS:




     WHEREAS, the Company, Co-Investment and the other parties thereto have entered into a
Partnership Interests Contribution Agreement, dated as of March 31, 2007 (the “Contribution
Agreement”);



     WHEREAS, pursuant to the Contribution Agreement, the Company has agreed to provide the
registration and other rights set forth in this Agreement for the benefit of Co-Investment pursuant
to the Contribution Agreement;



     NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by
each party hereto, the parties hereby agree as follows:



ARTICLE I

DEFINITIONS




     Section 1.1 Definitions. The terms set forth below are used herein as so defined:



     “Affiliate” means, with respect to a specified Person, any other Person, directly or
indirectly controlling, controlled by or under direct or indirect common control with such
specified Person. For purposes of this definition, “control” (including, with correlative
meanings, “controlling,” “controlled by” and “under common control with”) means the power to direct
or cause the direction of the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise.



     “Affiliate Transfer” means any transfer of Registrable Securities (and/or the rights granted
to Co-Investment by the Company under this Agreement) from Co-Investment to an Affiliate of
Co-Investment and any successive Affiliate Transfers.



     “Business Day” means any day other than a Saturday, Sunday, or a legal holiday for commercial
banks in New York, New York.



     “Commission” means the United States Securities and Exchange Commission.



     “Common Units” shall have the meaning set forth in the Contribution Agreement.



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     “Company” has the meaning specified therefor in the introductory paragraph of this Agreement.



     “Company Units” means the number of securities issued pursuant to the Contribution Agreement.



     “Contribution Agreement” has the meaning specified in the recitals to this Agreement.



     “Effectiveness Period” has the meaning specified in Section 2.1(a).



     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.



     “Included Registrable Securities” has the meaning specified in Section 2.2(a).



     “Indemnified Persons” has the meaning specified in Section 2.7(a).



     “Losses” has the meaning specified in Section 2.7(a).



     “Managing Underwriter” means, with respect to any Underwritten Offering, the book running lead
manager or managers of such Underwritten Offering.



     “March Investors” means those investors who hold registration rights pursuant to that certain
Registration Rights Agreement dated March 27, 2006 among the Company and those investors named
therein.



     “Person” means any individual, corporation, company, voluntary association, partnership, joint
venture, trust, limited liability company, unincorporated organization, government or any agency,
instrumentality or political subdivision thereof, or any other form of entity.



     “Piggyback Registration” has the meaning specified in Section 2.2(a).



     “PIPE Investors” means those investors who hold registration rights pursuant to that certain
Registration Rights Agreement dated March ___, 2007 among Eagle Rock Pipeline, L.P. and those
investors named therein.



     “Registrable Securities” means the Common Units comprising the Company Units and any common
units or other equity securities issued in exchange therefor in connection with any merger,
consolidation or other business combination involving the Company until such time as such
securities cease to be Registrable Securities pursuant to Section 1.2.



     “Registration Expenses” has the meaning specified in Section 2.6(a).



     “Rule 144” means Rule 144 as promulgated under the Securities Act.



     “S-3 Shelf Registration Statement” has the meaning specified in Section 2.1(d).



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     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
of the Commission promulgated thereunder.



     “Selling Expenses” has the meaning specified in Section 2.6(a).



     “Shelf Registration” has the meaning specified in Section 2.1(a).



     “Shelf Registration Statement” has the meaning specified in Section 2.1(a).



     “Underwritten Offering” means an offering (including an offering pursuant to a Shelf
Registration Statement) in which Common Units are sold to an underwriter on a firm commitment basis
for reoffering to the public or an offering that is a “bought deal” with one or more investment
banks.



     Section 1.2 Registrable Securities. Any Registrable Security will cease to be a
Registrable Security when (a) a registration statement covering such Registrable Security has been
declared effective by the Commission and such Registrable Security has been sold or disposed of
pursuant to such effective registration statement; (b) such Registrable Security has been disposed
of pursuant to any section of Rule 144 (or any similar provision then in force under the Securities
Act); (c) such Registrable Security is held by the Company or one of its subsidiaries or (d) such
Registrable Security has been sold in a private transaction in which the transferor’s rights under
this Agreement are not assigned to the transferee of such securities.



ARTICLE II

REGISTRATION RIGHTS




     Section 2.1 Shelf Registration.



     (a) Shelf Registration. The Company shall use its commercially reasonable efforts to
prepare and file with the Commission a registration statement under the Securities Act within 90
days of the closing of the Contribution Agreement to permit the public resale by Co-Investment of
the Registrable Securities from time to time as permitted by Rule 415 of the Securities Act (the
“Shelf Registration Statement”), and the Company shall use its commercially reasonable efforts to
cause the Shelf Registration Statement to become effective as soon as practicable thereafter (the
“Shelf Registration”). A Shelf Registration Statement filed pursuant to this Section
2.1(a) shall be on such appropriate registration form of the Commission as shall be selected by
the Company; provided, however, that if a prospectus supplement will be used in connection with the
marketing of an Underwritten Offering from the Shelf Registration Statement and the Managing
Underwriter at any time shall notify the Company in writing that, in the sole judgment of such
Managing Underwriter, inclusion of detailed information to be used in such prospectus supplement is
of material importance to the success of the Underwritten Offering of such Registrable Securities,
the Company shall use its commercially reasonable efforts to include such information in the
prospectus. The Company shall cause the Shelf Registration Statement filed pursuant to this
Section 2.1(a) to be continuously effective, supplemented and amended to the extent
necessary to ensure that it is available for resale of all Registrable Securities by Co-Investment
and that it conforms in all material respects with the requirements of the Securities Act during
the entire period beginning on the date the Shelf Registration Statement first is declared
effective under the Securities Act and ending on the



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earlier to occur of (i) the date all Registrable Securities covered by the Shelf Registration
Statement have been distributed in the manner set forth and as contemplated in the Shelf
Registration Statement and (ii) the date on which all Registrable Securities have ceased to be
Registrable Securities hereunder in accordance with Section 1.2 (the “Effectiveness
Period”). The Shelf Registration Statement when declared effective will comply as to form in all
material respects with all applicable requirements of the Securities Act and will not contain an
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.




     (b) Delay Rights Notwithstanding anything to the contrary contained herein, the
Company may, upon written notice to Co-Investment, suspend Co-Investment’s use of any prospectus
which is a part of the Shelf Registration Statement (in which event Co-Investment shall discontinue
sales of the Registrable Securities pursuant to the Shelf Registration Statement), for a period not
to exceed (X) an aggregate of 90 days in any 365-day period, if (i) the Company is pursuing a
material acquisition, merger, reorganization, disposition or other similar transaction and the
Company determines in good faith that the Company’s ability to pursue or consummate such a
transaction would be materially adversely affected by any required disclosure of such transaction
in the Shelf Registration Statement, (ii) the Company has experienced some other material
non-public event the disclosure of which at such time, in the good faith judgment of the Company,
would materially adversely affect the Company or (iii) at any time prior to the time when the
Company is eligible to utilize Form S-3 for the Shelf Registration Statement, the Company has
prepared and filed with the Commission a post-effective amendment for the purpose of updating
financial information or other information therein and such post-effective amendment has not been
declared effective by the Commission, or (Y) a period specified by means of a written amendment
signed by the Company and Co-Investment of a majority of the then outstanding Registrable
Securities. Upon disclosure of such information or the termination of the condition or expiration
of the period described above, as applicable, the Company shall provide prompt notice to
Co-Investment whose Registrable Securities are included in the Shelf Registration Statement, and
shall promptly terminate any suspension of sales it has put into effect and shall take such other
actions to permit registered sales of Registrable Securities as contemplated in this Agreement.



     (c) Inapplicability of Rule 415. If the Commission deems the registration of any
Registrable Securities to be a primary offering by the Company or Co-Investment, and the Commission
prohibits the use of Rule 415 under the Securities Act (or any similar provision then in force) to
sell Registrable Securities on a delayed or continuous basis, then the parties agree that the
Company’s failure to get the Registration Statement effective shall not be a breach of any this
Agreement. Additionally, Co-Investment agrees to negotiate in good faith with the Company for an
acceptable number of Registrable Securities to be included in a primary offering to allow the
Registration Statement to be eligible for Rule 415. In the event that Registrable Securities are
excluded from the Registration Statement for purposes of eligibility under Rule 415, the Company
aggress that it shall use commercially reasonable efforts to file a Registration Statement under
Section 2.1 for the remaining shares as soon as reasonably practicable.



     Section 2.2 Piggyback Registration.



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     (a) Underwritten Offering Participation. If at any time after the closing of the
Contribution Agreement, the Company proposes to file a registration statement for the sale of
Common Units in an Underwritten Offering for its own account and/or another Person (a “Piggyback
Registration”), then as soon as practicable but not less than ten (10) Business Days prior to the
filing of (x) any preliminary prospectus supplement relating to such Underwritten Offering pursuant
to Rule 424(b), (y) the prospectus supplement relating to such Underwritten Offering pursuant to
Rule 424(b) (if no preliminary prospectus supplement is used) or (z) such registration statement as
the case may be, the Company shall give notice of such proposed Underwritten Offering to
Co-Investment and such notice shall offer Co-Investment the opportunity to include in such
Underwritten Offering such number of Registrable Securities as Co-Investment may request in
writing. Subject to Section 2.2(b), the Company shall include in such Underwritten
Offering all such Registrable Securities with respect to which the Company has received a request
within five (5) Business Days after the Company’s notice has been delivered in accordance with
Section 3.1 (the “Included Registrable Securities”). If no request for inclusion is
received within the specified time, Co-Investment shall have no further right to participate in
such Underwritten Offering. If, at any time after giving written notice of its intention to
undertake an Underwritten Offering and prior to the closing of such Underwritten Offering, the
Company shall determine for any reason not to undertake or to delay such Underwritten Offering, the
Company may, at its election, give written notice of such determination to Co-Investment and, (i)
in the case of a determination not to undertake such Underwritten Offering, shall be relieved of
its obligation to sell any Included Registrable Securities in connection with such terminated
Underwritten Offering, and (ii) in the case of a determination to delay such Underwritten Offering,
shall be permitted to delay offering any Included Registrable Securities for the same period as the
delay in the Underwritten Offering. Co-Investment shall have the right to withdraw its request for
inclusion of Registrable Securities in such offering by giving written notice to the Company of
such withdrawal up to and including the time of pricing of such offering.



     (b) Priority of Registration. If the Managing Underwriter or Underwriters of any
proposed Underwritten Offering of Common Units advises the Company in writing that the total amount
of Common Units which Co-Investment and any other Persons intend to include in such offering
exceeds the number which can be sold in such offering without being likely to have an adverse
effect in any material respect on the price, timing or distribution of the Common Units offered or
the market for the Common Units, then the Common Units to be included in such Underwritten Offering
shall include the number of Registrable Securities that such Managing Underwriter or Underwriters
advises the Company can be sold without having such adverse effect, with such number to be first,
allocated to the Company or the Person demanding such Underwritten Offering; if there remains
availability for additional Common Units to be included in such Piggyback Registration, second, pro
rata between the March Investors and the PIPE Investors, and, third, all pro rata among all others,
including Co-Investment.



     Section 2.3 Underwritten Offering.



     (a) Underwritten Offering. In the event that Co-Investment elects dispose of
Registrable Securities under the Shelf Registration Statement pursuant to an Underwritten Offering
or separately pursuant to an Underwritten Offering after 180 days from the Closing of the
Contribution Agreement and the Company reasonably anticipate gross proceeds from such



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Underwritten Offering of at least $15.0 million, the Company shall take all such other
reasonable actions as are requested by the Managing Underwriter in order to expedite or facilitate
the registration and disposition of such Registered Securities in an Underwritten Offering;
provided, however, that the Company shall not be required to cause officers of the Company or its
Affiliates to participate in a “road show” or similar marketing effort being conducted by such
Managing Underwriter with respect to such Underwritten Offering.




     (b) General Procedures. In connection with an Underwritten Offering, Co-Investment
and the Company shall be obligated to enter into an underwriting agreement which contains such
representations, covenants, indemnities and other rights and obligations as are customary in
underwriting agreements for firm commitment offerings of securities. Co-Investment may not
participate in such Underwritten Offering unless it agrees to sell its Registrable Securities on
the basis provided in such underwriting agreement and completes and executes all questionnaires,
powers of attorney, indemnities and other documents reasonably required under the terms of such
underwriting agreement. Co-Investment may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters also be made to and for Co-Investment’s benefit and that any or
all of the conditions precedent to the obligations of such underwriters under such underwriting
agreement also be conditions precedent to its obligations. Co-Investment shall not be required to
make any representations or warranties to or agreements with the Company or the underwriters other
than representations, warranties or agreements regarding Co-Investment and its ownership of the
securities being registered on its behalf and its intended method of distribution and any other
representation required by law. If Co-Investment disapproves of the terms of an underwriting, it
may elect to withdraw therefrom by notice to the Company and the Managing Underwriter; provided,
however, that such withdrawal may be made up to and including the time of pricing of the
Underwritten Offering. No such withdrawal or abandonment shall affect the Company’s obligation to
pay Registration Expenses.



     (c) Appointment of Underwriters. In connection with an Underwritten Offering, the
Company shall have the sole right to appoint the Managing Underwriters.



     Section 2.4 Registration Procedures. In connection with its obligations contained in
Sections 2.1, 2.2 and 2.3 hereof, the Company will, as expeditiously as possible:




     (a) subject to Section 2.1(b), prepare and file with the Commission such
amendments and supplements to the Shelf Registration Statement and the prospectus used in
connection therewith or reports filed with the Commission pursuant to Section 13(a), 13(c),
14 of 15(d) of the Exchange Act as may be necessary to keep the Shelf Registration Statement
effective for the Effectiveness Period and as may be necessary to comply with the provisions
of the Securities Act with respect to the disposition of all Registrable Securities covered
by the Shelf Registration Statement;




     (b) furnish to Co-Investment (i) as far in advance as reasonably practicable before
filing the Shelf Registration Statement or any other registration statement contemplated by
this Agreement or any supplement or amendment thereto (excluding documents filed pursuant to
the Exchange Act that are incorporated by reference into the Shelf Registration Statement,
any other registration statement contemplated by this Agreement or any supplement on
amendment thereto), upon request, copies of reasonably



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complete drafts of all such documents proposed to be filed, and provide Co-Investment
the opportunity to object to any information pertaining to Co-Investment and its plan of
distribution that is contained therein and make the corrections reasonably requested by
Co-Investment with respect to such information prior to filing the Shelf Registration
Statement or such other registration statement and the prospectus included therein or any
supplement or amendment thereto, and (ii) such number of copies of the Shelf Registration
Statement or such other registration statement and the prospectus included therein and any
supplements and amendments thereto as Co-Investment may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Securities covered by
such Shelf Registration Statement or other registration statement;




     (c) if applicable, use its commercially reasonable efforts to register or qualify the
Registrable Securities covered by the Shelf Registration Statement or any other registration
statement contemplated by this Agreement under the securities or blue sky laws of such
jurisdictions as Co-Investment or, in the case of an Underwritten Offering, the Managing
Underwriter, shall reasonably request, provided that the Company will not be required to
qualify generally to transact business in any jurisdiction where it is not then required to
so qualify or to take any action which would subject it to general service of process in any
such jurisdiction where it is not then so subject;




     (d) promptly notify Co-Investment and each underwriter of (i) the filing of the Shelf
Registration Statement or any other registration statement contemplated by this Agreement or
any prospectus or prospectus supplement to be used in connection therewith, or any amendment
or supplement thereto, and, with respect to such Shelf Registration Statement or any other
registration statement or any post-effective amendment thereto, when the same has become
effective; and (ii) any written comments from the Commission with respect to any filing
referred to in clause (i) and any written request by the Commission for amendments or
supplements to the Shelf Registration Statement or any other registration statement or any
prospectus or prospectus supplement thereto;




     (e) immediately notify Co-Investment and each underwriter, at any time when a
prospectus relating thereto is required to be delivered under the Securities Act, of (i) the
happening of any event as a result of which the prospectus or prospectus supplement
contained in the Shelf Registration Statement or any other registration statement
contemplated by this Agreement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances then
existing, provided, however, that the Company shall not be required to specify in the
written notice to Co-Investment the nature of such event; (ii) the issuance or threat of
issuance by the Commission of any stop order suspending the effectiveness of the Shelf
Registration Statement or any other registration statement contemplated by this Agreement,
or the initiation of any proceedings for that purpose; or (iii) the receipt by the Company
of any notification with respect to the suspension of the qualification of any Registrable
Securities for sale under the applicable securities or blue sky laws of any jurisdiction;
following the provision of such notice, the Company agrees to as promptly as practicable
amend or supplement the prospectus or prospectus supplement or take



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other appropriate action so that the prospectus or prospectus supplement does not
include an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in the light of
the circumstances then existing and to take such other action as is necessary to remove such
stop order, suspension, threat thereof or proceedings related thereto;




     (f) furnish to Co-Investment copies of any and all transmittal letters or other
correspondence with the Commission or any other governmental agency or self-regulatory body
or other body having jurisdiction (including any domestic or foreign securities exchange)
relating to such offering of Registrable Securities;




     (g) in the case of an Underwritten Offering, furnish upon request, (i) an opinion of
counsel for the Company, dated the effective date of the applicable registration statement
or the date of any amendment or supplement thereto, and an opinion in customary form dated
the date of the closing of the Underwritten Offering, and (ii) a “cold comfort” letter or
letters, dated the date of execution of the underwriting agreement and a letter or letters
of like kind dated the date of the closing of the Underwritten Offering, in each case,
signed by the independent public accountants who have certified the financial statements
included or incorporated by reference into the applicable registration statement, and each
of the opinion and the “cold comfort” letter or letters shall be in customary form and
covering substantially the same matters with respect to such registration statement (and the
prospectus and any prospectus supplement included therein) and as are customarily covered in
opinions of issuer’s counsel and in accountants’ letters delivered to the underwriters in
Underwritten Offerings of securities, such other matters as such underwriters may reasonably
request;




     (h) otherwise use its commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to its security
holders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an
earnings statement satisfying the provisions of Section 11(a) of the Securities Act in
accordance with Rule 158 thereunder (or any similar rule promulgated under the Securities
Act) or otherwise;




     (i) make available to the appropriate representatives of the Managing Underwriter and
Co-Investment access to such information and personnel as is reasonable and customary to
enable such parties to establish a due diligence defense under the Securities Act; provided
that the Company need not disclose any information to any such representative unless and
until such representative has entered into a confidentiality agreement with the Company;




     (j) cause all such Registrable Securities registered pursuant to this Agreement to be
listed on each securities exchange or nationally recognized quotation system on which
similar securities issued by the Company are then listed;




     (k) use its commercially reasonable efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company to enable Co-Investment to
consummate the disposition of such Registrable Securities;



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     (l) provide a transfer agent and registrar for all Registrable Securities covered by
such registration statement not later than the effective date of such registration
statement; and




     (m) enter into customary agreements and take such other actions as are reasonably
requested by Co-Investment or the underwriters, if any, in order to expedite or facilitate
the disposition of such Registrable Securities.



     Co-Investment, upon receipt of notice from the Company of the happening of any event of the
kind described in subsection (e) of this Section 2.4, shall forthwith discontinue
disposition of the Registrable Securities until Co-Investment’s receipt of the copies of the
supplemented or amended prospectus contemplated by subsection (e) of this Section 2.4 or
until it is advised in writing by the Company that the use of the prospectus may be resumed, and
has received copies of any additional or supplemental filings incorporated by reference in the
prospectus, and, if so directed by the Company, Co-Investment will, or will request the Managing
Underwriter or underwriters, if any, to deliver to the Company (at the Company’s expense) all
copies in their possession or control, other than permanent file copies then in Co-Investment’s
possession, of the prospectus and any prospectus supplement covering such Registrable Securities
current at the time of receipt of such notice.



     Section 2.5 Cooperation by Co-Investment. The Company shall have no obligation to
include in the Shelf Registration Statement units of Co-Investment or in any Piggyback Registration
units of Co-Investment if Co-Investment has failed to timely furnish such information which, in the
opinion of counsel to the Company, is reasonably required in order for the registration statement
or prospectus supplement, as applicable, to comply with the Securities Act.



     Section 2.6 Restrictions on Public Sale by Co-Investment.



          (a) Co-Investment agrees not to effect any sale, distribution or other disposition to an
unaffiliated third party of the Registrable Securities during the 180 calendar-day period following
the date hereof. Co-Investment agrees to execute a lock-up letter to reflect the foregoing in a
form reasonably acceptable to each of Co-Investment and the Company.




          (b) As long as Co-Investment, along with its Affiliates, holds at least $5.0 million of
Registrable Securities (determined by multiplying the number of Registrable Securities offered by
the average of the closing price for Common Units for the ten trading days preceding the date of
such notice), it shall not to effect any public sale or distribution of the Registrable Securities
during the 90 calendar-day period beginning on the date of a prospectus or prospectus supplement
filed with the Commission with respect to the pricing of an Underwritten Offering, provided that
the duration of the foregoing restrictions shall be no longer than the duration of the shortest
restriction generally imposed by the underwriters on the Company or the officers, directors or any
other unitholder of the Company on whom a restriction is imposed.




     Section 2.7 Expenses.



     (a) Certain Definitions. “Registration Expenses” means all expenses incident to the
Company’s performance under or compliance with this Agreement to effect the registration of



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Registrable Securities in a Shelf Registration pursuant to Section 2.1, a Piggyback
Registration pursuant to Section 2.2 or an Underwritten Offering pursuant to Section
2.3, and the disposition of such securities, including, without limitation, all registration,
filing, securities exchange listing and quotation system fees, all registration, filing,
qualification and other fees and expenses of complying with securities or blue sky laws, fees of
the National Association of Securities Dealers, Inc., transfer taxes and fees of transfer agents
and registrars, all word processing, duplicating and printing expenses, the fees and disbursements
of counsel and independent public accountants for the Company, including the expenses of any
special audits or “cold comfort” letters required by or incident to such performance and
compliance. Except as otherwise provided in Section 2.8 hereof, the Company shall not be
responsible for legal fees or other costs incurred by Holders in connection with the exercise of
such Holders’ rights hereunder. In addition, the Company shall not be responsible for any “Selling
Expenses,” which means all underwriting fees, discounts and selling commissions allocable to the
sale of the Registrable Securities.




     (b) Expenses. The Company will pay all Registration Expenses in connection with the
Shelf Registration Statement filed pursuant to Section 2.1(a) of this Agreement, a
Piggyback Registration pursuant to Section 2.2 or an Underwritten Offering pursuant to
Section 2.3, whether or not the applicable registration statement becomes effective or any
sale is made pursuant to the Shelf Registration Statement, a Piggyback Registration or an
Underwritten Offering. Co-Investment shall pay all Selling Expenses in connection with any sale of
its Registrable Securities hereunder.



     Section 2.8 Indemnification.



     (a) By the Company In the event of a registration of any Registrable Securities under
the Securities Act pursuant to this Agreement, the Company will indemnify and hold harmless
Co-Investment thereunder, its Affiliates and their respective directors and officers, and each
underwriter, pursuant to the applicable underwriting agreement with such underwriter, of
Registrable Securities thereunder and each Person, if any, who controls Co-Investment or
underwriter within the meaning of the Securities Act and the Exchange Act (collectively, the
“Indemnified Persons”), against any losses, claims, damages, expenses or liabilities (including
reasonable attorneys’ fees and expenses) (collectively, “Losses”), joint or several, to which such
Indemnified Person may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Shelf Registration Statement or any other registration statement
contemplated by this Agreement, any preliminary prospectus or final prospectus contained therein,
or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a prospectus, in the light of the circumstances under which they
were made) not misleading, and will reimburse each such Indemnified Person for any legal or other
expenses reasonably incurred by them in connection with investigating or defending any such Loss or
actions or proceedings within a reasonable time after such expenses are incurred and the
Indemnified Person notifies the Company of such expenses; provided, however, that the Company will
not be liable in any such case if and to the extent that any such Loss arises out of or is based
upon an untrue statement or alleged untrue



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statement or omission or alleged omission so made in conformity with information furnished by
such Indemnified Person in writing specifically for use in the Shelf Registration Statement or such
other registration statement, or prospectus supplement, as applicable. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of such Indemnified
Person, and shall survive the transfer of such securities by Co-Investment.




     (b) By Co-Investment. Co-Investment agrees to indemnify and hold harmless the
Company, its Affiliates and their respective directors and officers, and each Person, if any, who
controls the Company within the meaning of the Securities Act or of the Exchange Act to the same
extent as the foregoing indemnity from the Company to Co-Investment, but only with respect to
information regarding Co-Investment furnished in writing by or on behalf of Co-Investment expressly
for inclusion in the Shelf Registration Statement or prospectus supplement relating to the
Registrable Securities, or any amendment or supplement thereto; provided, however, that the
liability of Co-Investment shall not be greater in amount than the dollar amount of the proceeds
(net of any Selling Expenses) received by Co-Investment from the sale of the Registrable Securities
giving rise to such indemnification.



     (c) Notice. Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party hereunder, notify the indemnifying party in writing thereof;
provided, however, that the failure to notify the indemnifying party shall not relieve it from any
liability that it may have under this Section 2.8 except to the extent that it has been
materially prejudiced by such failure and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to any indemnified
party other than under this Section 2.8. The indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the defense thereof with
counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the defense thereof, the
indemnifying party shall not be liable to such indemnified party under this Section 2.8 for
any legal expenses subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with counsel so selected;
provided, however, that, (i) if the indemnifying party has failed to assume the defense and employ
counsel or (ii) if the defendants in any such action include both the indemnified party and the
indemnifying party and counsel to the indemnified party shall have concluded that there may be
reasonable defenses available to the indemnified party that are different from or additional to
those available to the indemnifying party, or if the interests of the indemnified party reasonably
may be deemed to conflict with the interests of the indemnifying party, then the indemnified party
shall have the right to select a separate counsel and to assume such legal defense and otherwise to
participate in the defense of such action, with the reasonable expenses and fees of such separate
counsel and other reasonable expenses related to such participation to be reimbursed by the
indemnifying party as incurred. Notwithstanding any other provision of this Agreement, no
indemnified party shall settle any action brought against it with respect to which it is entitled
to indemnification hereunder without the consent of the indemnifying party, unless the settlement
thereof imposes no liability or obligation on, and includes a complete and unconditional release
from all liability of, the indemnifying party and does not contain any admission of wrongdoing or
illegal activity by the indemnified party.



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     (d) Contribution. If the indemnification provided for in this Section 2.8 is
held by a court or government agency of competent jurisdiction to be unavailable to the Company or
Co-Investment or is insufficient to hold them harmless in respect of any Losses, then each such
indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and of Co-Investment on
the other in connection with the statements or omissions which resulted in such Losses, as well as
any other relevant equitable considerations; provided, however, that in no event shall
Co-Investment be required to contribute an aggregate amount in excess of the dollar amount of
proceeds (net of Selling Expenses) received by Co-Investment from the sale of Registrable
Securities giving rise to such indemnification. The relative fault of the Company on the one hand
and Co-Investment on the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged omission to state
a material fact has been made by, or relates to, information supplied by such party, and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just and equitable if
contributions pursuant to this paragraph were to be determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable considerations referred to
above. The amount paid by an indemnified party as a result of the Losses referred to in the first
sentence of this paragraph shall be deemed to include any legal and other expenses reasonably
incurred by such indemnified party in connection with investigating or defending any Loss which is
the subject of this paragraph. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person
who is not guilty of such fraudulent misrepresentation.



     (e) Other Indemnification. The provisions of this Section 2.8 shall be in
addition to any other rights to indemnification or contribution which an indemnified party may have
pursuant to law, equity, contract or otherwise.



     Section 2.9 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission that may permit the sale of the Registrable
Securities to the public without registration, the Company agrees to use its commercially
reasonable efforts to:




     (a) Make and keep public information regarding the Company available, as those terms
are understood and defined in Rule 144 of the Securities Act;




     (b) File with the Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and




     (c) So long as Co-Investment owns any Registrable Securities, furnish to Co-Investment
forthwith upon request a copy of the most recent annual or quarterly report of the Company,
and such other reports and documents so filed as Co-Investment may reasonably request in
availing itself of any rule or regulation of the Commission allowing Co-Investment to sell
any such securities without registration.



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ARTICLE III

MISCELLANEOUS




     Section 3.1 Communications. All notices and other communications provided for or
permitted hereunder shall be made in writing by facsimile, courier service or personal delivery:




     (a) if to Co-Investment, at the most current address given by Co-Investment to the
Company in accordance with the provisions of this Section 3.1, which address
initially is the address set forth in the Contribution Agreement,




     (b) if to a permitted transferee of Co-Investment, to such Holder at the address
furnished by such permitted transferee, and




     (c) if to the Company, at 16701 Greenspoint Park Drive, Suite 200, Houston, Texas
77060, notice of which is given in accordance with the provisions of this Section 3.1.



     All such notices and communications shall be deemed to have been received at the time
delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or
sent via Internet electronic mail; and when actually received, if sent by any other means.



     Section 3.2 Successor and Assigns. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of each of the parties, including subsequent holders of
Registrable Securities to the extent permitted herein.



     Section 3.3 Transfer or Assignment of Registration Rights. The rights granted to
Co-Investment by the Company under this Agreement may be transferred or assigned by Co-Investment
to one or more transferee(s) or assignee(s) of such Registrable Securities, provided that (x) the
Company is given written notice prior to any said transfer or assignment, stating the name and
address of each such transferee and identifying the securities with respect to which such
registration rights are being transferred or assigned, and (y) each such transferee assumes in
writing responsibility for its portion of the obligations of Co-Investment under this Agreement
(unless it is already a party to this Agreement); and provided further, that the requirements in
this Section 3.3 shall not apply to an Affiliate Transfer.



     Section 3.4 Recapitalization, Exchanges, etc. Affecting the Common Units. The
provisions of this Agreement shall apply to the full extent set forth herein with respect to any
and all Common Units or other partnership interests of the Company or any successor or assign of
the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in exchange for or in substitution of, the Registrable Securities, including any common
units or other equity securities that may be issued in exchange for Registrable Securities in
connection with any merger, consolidation or other business combination involving the Company, and
shall be appropriately adjusted for combinations, recapitalizations and the like occurring after
the date of this Agreement. The Company shall not merge, consolidate or combine with any other
Person unless the agreement providing for such merger, consolidation or combination expressly
provides for the continuation of the registration rights specified in this Agreement with respect
to the Common Units or other equity securities issued pursuant to such merger, consolidation or
combination.



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     Section 3.5 Specific Performance. Damages in the event of breach of this Agreement by
a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that
each such Person, in addition to and without limiting any other remedy or right it may have, will
have the right to an injunction or other equitable relief, including specific performance, in any
court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms
and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may
have on the ground of lack of jurisdiction or competence of the court to grant such an injunction
or other equitable relief. The existence of this right will not preclude any such Person from
pursuing any other rights and remedies at law or in equity which such Person may have.



     Section 3.6 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.



     Section 3.7 Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.



     Section 3.8 Governing Law. The laws of the State of New York shall govern this
Agreement without regard to principles of conflict of laws.



     Section 3.9 Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof or affecting or impairing the validity or enforceability of such provision in any other
jurisdiction.



     Section 3.10 Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the rights granted by the Company set forth herein.
This Agreement supersedes all prior agreements and understandings between the parties with respect
to such subject matter.



     Section 3.11 Amendment. This Agreement may be amended only by means of a written
amendment signed by the Company and Co-Investment.



     Section 3.12 No Presumption. In the event any claim is made by a party relating to
any conflict, omission, or ambiguity in this Agreement, no presumption or burden of proof or
persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the
request of a particular party or its counsel.



[The remainder of this page is intentionally left blank.]




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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.



	 	 	 	 	 	 	 	 	 
	 	 	EAGLE ROCK ENERGY PARTNERS, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Eagle Rock Energy GP, L.P.,


its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Eagle Rock Energy G&P, LLC,

its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:

Name:
	 	/s/ Alfredo Garcia
 

Alfredo Garcia
	 	 
	 

	 	 	 	Title:
	 	Senior Vice President,

   Corporate Development	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	NGP-VII INCOME CO-INVESTMENT

OPPORTUNITIES, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	NGP Income Management, L.L.C., 


its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Tony Weber	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Tony Weber	 	 
	 

	 	 	 	Title:
	 	Authorized Member	 	 







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