Exhibit 4.2


 


REGISTRATION RIGHTS AGREEMENT


 


This Registration Rights Agreement (this “Agreement”)
is made and entered into as of June 27, 2008, by and among Linn Energy, LLC, a
Delaware limited liability company (the “Company”), Linn Energy
Finance Corp., a Delaware corporation (“LinnCo” and, together with the
Company, the “Issuers”), the guarantors listed on Schedule A hereto
(collectively, the “Guarantors”) and Lehman Brothers Inc., Credit Suisse
Securities (USA) Inc., BNP Paribas Securities Corp., Deutsche Bank Securities
Inc. and RBC Capital Markets Corporation, as representatives of the several
Initial Purchasers named in the Purchase Agreement (as defined below)
(collectively, the “Initial Purchasers”), who have agreed to
purchase the Issuers’ 9 7/8% Senior Notes due 2018 (the “Initial Notes”)
fully and unconditionally guaranteed by the Guarantors (the “Guarantees”)
pursuant to the Purchase Agreement. The Initial Notes and the Guarantees are
herein collectively referred to as the “Initial Securities.”


 


This Agreement is made pursuant to the Purchase
Agreement, dated June 24, 2008 (the “Purchase Agreement”), among
the Issuers, the Guarantors and the Initial Purchasers (i) for the benefit of
the Initial Purchasers and (ii) for the benefit of the Holders from time to
time of the Initial Securities, including the Initial Purchasers. In order to
induce the Initial Purchasers to purchase the Initial Securities, the Issuers
have agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the obligations of
the Initial Purchasers set forth in Section 7(m) of the Purchase Agreement.


 


The parties hereby agree as follows:


 


SECTION 1. Definitions. As
used in this Agreement, the following capitalized terms shall have the
following meanings:


 


Additional Interest:  As defined in Section 5(a) hereof.


 


Advice:  As defined in the last paragraph of Section
6(c) hereof.


 


Affiliates:  As
defined in Rule 144 under the Securities Act.


 


Agreement:  As defined in the preamble hereto.


 


Blackout Period: 
As defined in the last paragraph of Section 4(a)
hereof.


 


Broker-Dealer: 
Any broker or dealer registered under the Exchange
Act.


 


Business
Day:  As defined in the
Indenture.


 


Closing Date: 
The date of this Agreement.


 


Commission:  The
Securities and Exchange Commission.


 


Company:  As defined in the preamble hereto.


 

















 


Consummate:  A
registered Exchange Offer shall be deemed “Consummated” for purposes of this
Agreement upon the occurrence of (i) the filing and effectiveness under the
Securities Act of the Exchange Offer Registration Statement relating to the
Exchange Securities to be issued in the Exchange Offer, (ii) the maintenance of
such Registration Statement continuously effective and the keeping of the Exchange
Offer open for a period not less than the minimum period required pursuant to
Section 3(b) hereof, and (iii) the delivery by the Issuers to the Registrar
under the Indenture of Exchange Securities in the same aggregate principal
amount as the aggregate principal amount of Initial Securities that were
tendered by Holders thereof pursuant to the Exchange Offer.


 


Exchange Act: 
The Securities Exchange Act of 1934, as amended.


 


Exchange Offer: 
The Issuers’ offer to the Holders of all outstanding
Transfer Restricted Securities of the opportunity to exchange all such
outstanding Transfer Restricted Securities held by such Holders for Exchange
Securities in an aggregate principal amount equal to the aggregate principal
amount of the Transfer Restricted Securities tendered in such exchange offer by
such Holders.


 


Exchange Offer Registration Statement:  The Registration Statement
relating to the Exchange Offer, including the related Prospectus.


 


Exempt Resales: 
The transactions in which the Initial Purchasers
propose to sell the Initial Securities to certain “qualified institutional
buyers,” as such term is defined in Rule 144A under the Securities Act and to
certain non-U.S. persons pursuant to Regulation S under the Securities Act.


 


Exchange Securities:  The 9 7/8% Senior Notes due
2018, of the same series under the Indenture as the Initial Notes, and the
Guarantees related thereto, issued to Holders in exchange for Transfer
Restricted Securities pursuant to this Agreement.


 


FINRA: The Financial Industry
Regulatory Authority, Inc.


 


Guarantees:  As defined in the preamble hereto.


 


Holder:  As
defined in Section 2(b) hereof.


 


Indemnified Holder: 
As defined in Section 8(a) hereof.


 


Indenture:  The
Indenture, dated as of June 27, 2008 by and among the Issuers, the Guarantors
and the Trustee, pursuant to which the Securities are to be issued, as such
Indenture is amended or supplemented from time-to-time in accordance with the
terms thereof.


 


Initial Purchasers: 
As defined in the preamble hereto.


 


Initial Notes: 
As defined in the preamble hereto.


 


Initial Placement: 
The issuance and sale by the Issuers of the Initial
Securities to the Initial Purchasers pursuant to the Purchase Agreement.


 

















 


Initial Securities: 
As defined in the preamble hereto.


 


Issuers:  As defined in the preamble hereto.


 


LinnCo: As defined in the
preamble hereto.


 


Person:  An
individual, partnership, limited liability company, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.


 


Prospectus:  The
prospectus included in a Registration Statement, as amended or supplemented by
any prospectus supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference into such
Prospectus.


 


Registration Default:  Any of the following
events:


 


(a)           the Initial Securities are not freely
tradeable (by Persons other than Affiliates of the Company) pursuant to Rule
144 under the Securities Act as of the 366th day after the Closing Date;


 


(b)           the restrictive legend on the Initial
Securities (other than with respect to Persons that are Affiliates of the
Company) has not been removed as of the 366th day after the Closing Date; or


 


(c)           after the Shelf Registration
Statement is declared (or becomes automatically) effective (i) such Shelf
Registration Statement thereafter ceases to be effective or (ii) such Shelf
Registration Statement or the related Prospectus ceases to be usable in
connection with resales of Transfer Restricted Securities during the periods
specified herein because (but excluding any Blackout Period) either (A) any
event occurs as a result of which the related Prospectus forming part of such
Shelf Registration Statement would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made not
misleading, (B) it shall be necessary to amend such Shelf Registration
Statement or supplement the related Prospectus, to comply with the Securities
Act or the Exchange Act or the respective rules thereunder or (C) such Shelf
Registration Statement has expired before a replacement Shelf Registration
Statement has become effective.


 


Registration Statement:  Any registration statement
of the Company relating to (a) an offering of Exchange Securities pursuant to
an Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, which is filed
pursuant to the provisions of this Agreement, in each case, including the
Prospectus.


 


Securities:  The Initial Securities and the Exchange
Securities.


 


Securities Act: 
The Securities Act of 1933, as amended.


 


Shelf Registration Statement:  As defined in Section
4(a)(x) hereof.


 

















 


Trustee:  U. S. Bank National Association.


 


Trust Indenture Act:  The Trust Indenture Act of
1939, as amended.


 


Transfer Restricted Securities:  Each Initial Security,
until the earliest to occur of (a) the date on which such Initial Security is
exchanged in the Exchange Offer for an Exchange Security entitled to be resold
to the public by the Holder thereof without complying with the prospectus
delivery requirements of the Securities Act, (b) the date on which such Initial
Security has been effectively registered under the Securities Act and disposed
of in accordance with a Shelf Registration Statement, (c) the date on which the
restrictive legend on such Initial Security has been removed (other than with
respect to Persons that are Affiliates of the Company) and the Initial Security
is freely tradeable (by Persons other than Affiliates of the Company) pursuant
to Rule 144 under the Securities Act, (d) the date on which such Initial
Security is distributed to the public by a Broker-Dealer pursuant to the “Plan
of Distribution” contemplated by the Exchange Offer Registration Statement
(including delivery of the Prospectus contained therein) and (e) the date on
which such Initial Security ceases to be outstanding for purposes of the
Indenture.


 


Underwritten Registration or Underwritten
Offering:  A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.


 


SECTION 2. Securities Subject to this
Agreement.


 


(a)  Transfer Restricted Securities. The Transfer Restricted Securities
are entitled to the benefits of this Agreement.


 


(b)  Holders of Transfer Restricted Securities. A Person is
deemed to be a holder of Transfer Restricted Securities (each, a “Holder”)
whenever such Person owns Transfer Restricted Securities.


 


SECTION 3. Registered Exchange Offer.


 


(a)  If the
restrictive legend on the Initial Securities has not been removed (other than
with respect to Persons that are Affiliates of the Company) and the Initial
Securities are not freely tradeable pursuant to Rule 144 under the Securities
Act (by Persons other than Affiliates of the Issuers) as of the 366th day after
the Closing Date, each of the Issuers and the Guarantors shall, at their cost,
(i) cause to be filed with the Commission, a Registration Statement under the
Securities Act relating to the Exchange Securities (other than Transfer
Restricted Securities acquired by any Broker-Dealer directly from the Issuers)
and the Exchange Offer (the “Exchange Offer Registration Statement”),
(ii) use their reasonable best efforts (which shall include the filing of all
necessary amendments to such Registration Statement) to cause the Exchange
Offer Registration Statement to be declared effective by the Commission and
(iii) upon the effectiveness of the Exchange Offer Registration Statement,
promptly commence the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting registration of the Exchange Securities to be
offered in exchange for the Transfer Restricted Securities (other than Transfer
Restricted Securities acquired by any Broker-Dealer directly from the Issuers)
and to permit resales of Initial Securities held by Broker-Dealers as
contemplated by Section 3(c) hereof; provided, however,
that if prior to the time that the Exchange Offer is Consummated the Initial
Securities become freely tradeable pursuant to Rule 144 under the Securities
Act (by


 

















 


Persons other than Affiliates of the Issuers), then the obligations of
the Issuers and the Guarantors under this Section 3(a) shall cease and be of no
further force and effect.


 


(b)  If the
Issuers and the Guarantors are required to commence the Exchange Offer pursuant
to Section 3(a) above, the Issuers and the Guarantors shall cause the Exchange
Offer Registration Statement to be effective continuously and shall keep the
Exchange Offer open for a period of not less than 20 Business Days (or longer
if required under applicable law) after the date that notice of the Exchange
Offer is mailed to Holders. The Issuers shall cause the Exchange Offer to
comply with all applicable federal and state securities laws. No securities
other than the Exchange Securities shall be included in the Exchange Offer
Registration Statement.


 


(c)  If the
Issuers and the Guarantors are required to commence the Exchange Offer pursuant
to Section 3(a) above, the Issuers shall indicate in a “Plan of Distribution”
section contained in the Prospectus forming a part of the Exchange Offer
Registration Statement that any Broker-Dealer who holds Initial Securities that
are Transfer Restricted Securities that were acquired for its own account as a
result of market-making activities or other trading activities (other than
Transfer Restricted Securities acquired directly from the Issuers) may exchange
such Initial Securities pursuant to the Exchange Offer; however, such
Broker-Dealer may be deemed to be an “underwriter” within the meaning of the
Securities Act and must, therefore, deliver a prospectus meeting the
requirements of the Securities Act in connection with any resales of the
Exchange Securities received by such Broker-Dealer in the Exchange Offer, which
prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement. Such “Plan of Distribution” section shall also contain all other
information with respect to such resales by Broker-Dealers that the Commission
may require in order to permit such resales pursuant thereto, but such “Plan of
Distribution” shall not name any such Broker-Dealer or disclose the amount of
Initial Securities held by any such Broker-Dealer except to the extent required
by the Commission.


 


(d)  If the
Issuers and the Guarantors are required to commence the Exchange Offer pursuant
to Section 3(a) above and if requested by any such Broker-Dealer, each of the
Issuers and the Guarantors shall use its reasonable best efforts to keep the
Exchange Offer Registration Statement continuously effective, supplemented and
amended as required by the provisions of Section 6(c) hereof to the extent
necessary to ensure that it is available for resales of Initial Securities
acquired by Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities, and to ensure that it conforms with the
requirements of this Agreement, the Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period
ending on the earlier of (i) 210 days after the Consummation of the Exchange
Offer and (ii) the date on which a Broker-Dealer is no longer required to
deliver a prospectus in connection with market-making or other trading
activities.


 


(e)  If the
Issuers and the Guarantors are required to commence the Exchange Offer pursuant
to Section 3(a) above, the Issuers shall provide sufficient copies of the
latest version of such Prospectus to Broker-Dealers promptly upon request at
any time during such 210-day (or shorter as provided in the foregoing sentence)
period in order to facilitate such resales.


 

















 


SECTION 4. Shelf Registration.


 


(a)  Shelf Registration.


 


If (i) because of any change in law or in applicable
interpretations thereof by the staff of the Commission, the Company is not
permitted to effect an Exchange Offer that is required by Section 3
hereof, (ii) for any reason the Exchange Offer is required by Section 3
hereof to be but is not Consummated within one year and 90 days of the Closing
Date and the Transfer Restricted Securities are not freely tradeable pursuant
to Rule 144 under the Securities Act (unless an Exchange Offer Registration
Statement has been filed within one year and 45 days of the Closing Date and
has not yet been declared effective by the Commission other than as a result of
the fault of any Issuer or Guarantor), (iii) any Initial Purchaser so requests
with respect to the Initial Securities not eligible to be exchanged for
Exchange Securities in any Exchange Offer required by Section 3 hereof and
held by it following Consummation of such Exchange Offer or (iv) any
Holder (other than a Broker-Dealer who holds Transfer Restricted Securities
that were acquired for its own account as a result of market-making activities
or other trading activities) is not eligible to participate in any Exchange
Offer required by Section 3 hereof or, in the case of any Holder (other
than a Broker-Dealer who holds Transfer Restricted Securities that were
acquired for its own account as a result of market-making activities or other
trading activities) that participates in any such Exchange Offer, such Holder
does not receive freely tradeable Exchange Securities on the date of the
exchange, then the Issuers and the Guarantors shall, at their cost:


 


(x) as promptly as
practicable, cause to be filed a shelf registration statement pursuant to
Rule 415 under the Securities Act, which may be an amendment to the
Exchange Offer Registration Statement (in either event, the “Shelf
Registration Statement”), which Shelf Registration Statement shall provide
for resales of all Transfer Restricted Securities the Holders of which shall
have provided the information required pursuant to Section 4(b) hereof; and


 


(y)  use their reasonable best efforts to cause
such Shelf Registration Statement to be declared effective by the Commission on
or before the 90th day after the date on which the filing obligation arises.


 


Each of the Issuers and the Guarantors shall use its
reasonable best efforts to keep such Shelf Registration Statement continuously
effective, supplemented and amended as required by the provisions of Sections
6(b) and (c) hereof to the extent necessary to ensure that it is available for
resales of Initial Securities by the Holders of Transfer Restricted Securities
entitled to the benefit of this Section 4(a) and to ensure that it conforms
with the requirements of this Agreement, the Securities Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of at least one year following the effective date of the Shelf
Registration Statement or such shorter period that will terminate when all the
Initial Securities covered by such Shelf Registration Statement (A) have been
sold pursuant to such Shelf Registration Statement or (B) may be sold without a
restrictive legend or volume limitations pursuant Rule 144 under the Securities
Act or any successor rule thereof. Each of the Issuers and the Guarantors shall
be deemed not to have used its reasonable best efforts to keep the Shelf
Registration Statement effective during the requisite period if any of the
Issuers or the Guarantors voluntarily takes any action that would result in
Holders of Transfer Restricted


 

















 


Securities covered thereby not being able to offer and sell such
Transfer Restricted Securities during that period, unless (X) such action is
required by applicable law; or (Y) such action is taken by any of the Issuers
or Guarantors in good faith and for valid business reasons (not including
avoidance of the Issuers or the Guarantors obligations hereunder) including,
but not limited to, the acquisition or divestiture of assets, so long as the
Issuers and the Guarantors promptly thereafter comply with the requirements of
the last paragraph of Section 6(c) hereof (the period during which the Shelf
Registration Statement is not available under clauses (X) or (Y) above, the “Blackout
Period”). The Blackout Period shall not exceed 45 days in any three-month
period or  90 days in any twelve-month period,
except as a result of a review of any post-effective amendment to the Shelf
Registration Statement by the Commission before declaring any post-effective
amendment to the Shelf Registration Statement effective, provided that
the Issuers have used their reasonable best efforts to cause such
post-effective amendment to be declared effective.


 


(b)  Provision by Holders of
Certain Information in Connection with the Shelf Registration Statement. No
Holder of Transfer Restricted Securities may include any of its Transfer
Restricted Securities in any Shelf Registration Statement pursuant to this
Agreement unless and until such Holder furnishes to the Company in writing,
within 20 Business Days after receipt of a request therefor, such information
as the Company may reasonably request for use in connection with any Shelf
Registration Statement or Prospectus or preliminary Prospectus included therein.
Each Holder as to which any Shelf Registration Statement is being effected
agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading.


 


SECTION 5. Additional Interest.


 


(a)  If any Registration Default shall occur, the
Issuers hereby agree that the interest rate borne by the Transfer Restricted
Securities shall be increased by 0.25% per annum during the 90-day period
immediately following the occurrence of any Registration Default and shall
increase by 0.25% per annum at the end of each subsequent 90-day period, but in
no event shall such increase exceed 1.00% per annum. Such additional interest
to be paid pursuant to a Registration Default as set forth in this Section 5 is
herein referred to as “Additional Interest.”


 


(b)  Registration Defaults shall be cured on the
date that (i) the Initial Securities are freely tradeable (by Persons other
than Affiliates of the Company) pursuant to Rule 144 under the Securities Act
and the restrictive legend on the Initial Securities has been removed (other
than with respect to Persons that are Affiliates of the Company), (ii) the
Exchange Offer has been Consummated (provided that this clause (ii) shall not
cure a Registration Default if a Shelf Registration Statement is required to be
filed pursuant to clause (i), (iii) or (iv) of the first paragraph of Section
4(a)) or (iii) a Shelf Registration Statement is declared (or automatically
becomes) effective under the Securities Act, unless subsequent to the date it
was last declared effective it fails to remain effective or usable for the time
period contemplated by Section 4(a) after taking into account all other periods
during which such Shelf Registration Statement was effective. Following the
cure of all Registration Defaults relating to any particular Transfer
Restricted Securities in accordance with this Section 5(b), the interest rate
borne by the relevant Transfer Restricted Securities will be reduced to the
original interest rate borne by such Transfer


 

















 


Restricted Securities; provided,
however, that, if after any such reduction in interest rate, a
different Registration Default occurs, the interest rate borne by the relevant
Transfer Restricted Securities shall again be increased pursuant to the
foregoing provisions. The Issuers shall not be required to pay Additional
Interest for more than one Registration Default at any given time.


 


(c)           All
Additional Interest accrued pursuant to this Section 5 shall be paid in the
manner provided for in the Indenture. All obligations of the Issuers and the
Guarantors set forth in Section 5(a) that are outstanding with respect to any
Transfer Restricted Security at the time such security ceases to be a Transfer
Restricted Security shall survive until such time as all such obligations with
respect to such security shall have been satisfied in full.


 


SECTION 6. Registration Procedures.


 


(a)  Exchange Offer Registration Statement. In connection with
the Exchange Offer, the Issuers and the Guarantors shall comply with all of the
provisions of Section 6(c) hereof, shall use their reasonable best efforts to
effect such exchange to permit the sale of Transfer Restricted Securities being
sold in accordance with the intended method or methods of distribution thereof.
As a condition to its participation in the Exchange Offer pursuant to the terms
of this Agreement, each Holder of Transfer Restricted Securities shall furnish,
upon the request of the Issuers, prior to the Consummation thereof, a written
representation to the Issuers (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement) to the
effect that (A) it is not an affiliate (within the meaning of Rule 405 under the
Securities Act) of any of the Issuers or the Guarantors, (B) it is not engaged
in, and does not intend to engage in, and has no arrangement or understanding
with any Person to participate in, a distribution of the Exchange Securities to
be issued in the Exchange Offer and (C) it is acquiring the Exchange Securities
in its ordinary course of business. In addition, all such Holders of Transfer
Restricted Securities shall otherwise cooperate in the Issuers’ preparations
for the Exchange Offer. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to participate in a
distribution of the securities to be acquired in the Exchange Offer (1) could
not under Commission policy as in effect on the date of this Agreement rely on
the position of the Commission enunciated in Morgan Stanley and Co., Inc.
(available June 5, 1991) and Exxon Capital Holdings Corporation
(available May 13, 1988), as interpreted in the Commission’s letter to Shearman
& Sterling dated July 2, 1993, and similar no-action letters, and (2) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction and that such
a secondary resale transaction should be covered by an effective registration
statement containing the selling security holder information required by Item
507 or 508, as applicable, of Regulation S-K if the resales are of Exchange
Securities obtained by such Holder in exchange for Initial Securities acquired
by such Holder directly from the Issuers.


 


(b)  Shelf Registration Statement. In connection with the Shelf
Registration Statement, each of the Issuers and the Guarantors shall comply
with all the provisions of Section 6(c) hereof and shall use its reasonable
best efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof, and pursuant thereto each of the Issuers and
the Guarantors will as expeditiously as possible prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Securities Act, which form shall be


 
















 


available for the sale of the Transfer Restricted Securities in
accordance with the intended method or methods of distribution thereof.


 


(c)  General Provisions.  In
connection with any Registration Statement and any Prospectus required by this
Agreement to permit the sale or resale of Transfer Restricted Securities
(including, without limitation, any Registration Statement and the related
Prospectus required to permit resales of Initial Securities by Broker-Dealers),
each of the Issuers and the Guarantors shall:


 


(i)  use its
reasonable best efforts to keep such Registration Statement continuously
effective and provide all requisite financial statements (including, if
required by the Securities Act or any regulation thereunder, financial
statements of the Guarantors) for the period specified in Section 3 or 4
hereof, as applicable; upon the occurrence of any event that would cause any
such Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the period required
by this Agreement, the Issuers and the Guarantors shall file promptly an
appropriate amendment to such Registration Statement, in the case of clause
(A), correcting any such misstatement or omission, and, in the case of either
clause (A) or (B), use its reasonable best efforts to cause such amendment
to be declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter;


 


(ii)  prepare
and file with the Commission such amendments and post-effective amendments to
the applicable Registration Statement as may be necessary to keep the
Registration Statement effective for the applicable period set forth in Section 3
or 4 hereof, as applicable, or such shorter period as set forth in this
Agreement; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under
the Securities Act, and to comply fully with the applicable provisions of Rules 424
and 430A under the Securities Act in a timely manner; and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement to the
Prospectus;


 


(iii)  advise
the underwriter(s), if any, and selling Holders promptly and, if requested by
such Persons, to confirm such advice in writing, (A) when the Prospectus
or any Prospectus supplement or post-effective amendment has been filed, and,
with respect to any Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating thereto, (C) of
the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement under the Securities Act or of the suspension by
any state securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, (D) of the existence of any
fact or the happening of any event that makes any statement of a material fact
made in the 


 

















 


Registration Statement, the Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the Registration
Statement or the Prospectus in order to make the statements therein (with
respect to the Prospectus, in the light of the circumstances under which they
were made) not misleading.  If at any
time the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under state
securities or blue sky laws, each of the Issuers and the Guarantors shall use
its reasonable best efforts to obtain the withdrawal or lifting of such order
at the earliest possible time;


 


(iv)  furnish
without charge to the Initial Purchasers, each selling Holder named in any
Registration Statement, and each of the underwriter(s), if any, before filing
with the Commission, copies of any Registration Statement or any Prospectus
included therein or any amendments or supplements to any such Registration
Statement or Prospectus (including all documents incorporated by reference
after the initial filing of such Registration Statement), which documents will
be subject to the review and comment of such Holders and underwriter(s) in
connection with such sale, if any, for a period of at least two Business Days;
make the Issuers’ and the Guarantors’ representatives available for discussion
of such document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as such selling
Holders or underwriter(s), if any, reasonably request; and not file any such
Registration Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents incorporated
by reference) to which an Initial Purchaser of Transfer Restricted Securities
covered by such Registration Statement or the underwriter(s), if any, shall
reasonably object in writing within two Business Days after the receipt thereof
(such objection to be deemed timely made upon confirmation of telecopy
transmission within such period); provided, that
this clause (iv) shall not apply to any filing by the Company of any
annual report on Form 10-K, quarterly report on Form 10-Q or Current
Report on Form 8-K with respect to matters unrelated to the Transfer
Restricted Securities and the offering or exchange therefor.


 


(v)  in the
case of a Shelf Registration Statement, make available during normal business
hours for inspection by the Initial Purchasers, the managing underwriter(s), if
any, participating in any disposition pursuant to such Shelf Registration
Statement and any attorney or accountant retained by the Initial Purchasers or
any of the underwriter(s), all financial and other records, pertinent corporate
documents and properties of each of the Issuers and the Guarantors and cause
the Issuers’ and the Guarantors’ officers, directors and employees to supply
all information reasonably requested by any such Initial Purchaser,
underwriter, attorney or accountant in connection with such Shelf Registration
Statement or any post-effective amendment thereto subsequent to the filing
thereof and prior to its effectiveness and to participate in meetings with
investors to the extent requested by the managing underwriter(s), if any;


 


(vi)  in the
case of a Shelf Registration Statement, if requested by any Holder, promptly
incorporate in such Prospectus, pursuant to a supplement, such information as 


 

















 


such selling Holders and underwriter(s), if any, may reasonably request
to have included therein, including, without limitation, information relating
to the “Plan of Distribution” of the Transfer Restricted Securities,
information with respect to the principal amount of Transfer Restricted
Securities being sold to such underwriter(s), the purchase price being paid
therefor and any other terms of the offering of the Transfer Restricted
Securities to be sold in such offering; and make all required filings of such
Prospectus supplement as soon as practicable after the Company is notified of
the matters to be incorporated in such Prospectus supplement;


 


(vii)  in the
case of a Shelf Registration Statement, furnish to each Initial Purchaser, each
selling Holder and each of the underwriter(s), if any, without charge, at least
one copy of such Shelf Registration Statement, as first filed with the
Commission, and of each amendment thereto, including, if they so request,
financial statements and schedules, all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference);


 


 (viii)  deliver to each selling Holder
and each of the underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; each of the Issuers
and the Guarantors hereby consents to the use of the Prospectus and any
amendment or supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any amendment or
supplement thereto;


 


(ix)  enter
into such agreements (including an underwriting agreement), and make such
representations and warranties, and take all such other actions in connection
therewith in order to expedite or facilitate the disposition of the Transfer
Restricted Securities pursuant to any Shelf Registration Statement contemplated
by this Agreement, all to such extent as may be requested by any Initial
Purchaser or by any Holder of Transfer Restricted Securities or underwriter in
connection with any sale or resale pursuant to any Shelf Registration Statement
contemplated by this Agreement; and whether or not an underwriting agreement is
entered into and whether or not the registration is an Underwritten
Registration, each of the Issuers and the Guarantors shall:


 


(A)  furnish
to each Initial Purchaser, each selling Holder and each underwriter, if any, in
such substance and scope as they may request and as are customarily made by
issuers to underwriters in primary underwritten offerings, upon the
effectiveness of the Shelf Registration Statement:


 


(1)  a
certificate, dated the date of effectiveness of the Shelf Registration
Statement signed by (y) any two authorized officers of the Issuers and (z) a
principal financial or accounting officer of each of the Issuers and the
Guarantors, confirming, as of the date thereof, the matters set forth in Section 7(h) of
the Purchase Agreement and such other matters as such parties may reasonably
request;


 

















 


(2)  an
opinion, dated the date of effectiveness of the Shelf Registration Statement of
counsel for the Issuers and the Guarantors, covering the relevant matters set
forth in Section 7(c) of the Purchase Agreement and such other matter
as such parties may reasonably request, and in any event including a statement
to the effect that such counsel has participated in conferences with officers
and other representatives of the Issuers and the Guarantors, representatives of
the independent public accountants for the Issuers and the Guarantors,
representatives of the underwriter(s), if any, and counsel to the
underwriter(s), if any, in connection with the preparation of such Registration
Statement and the related Prospectus at which the content of the Registration
Statement and Prospectus were discussed and, although such counsel has not
independently verified the accuracy, completeness or fairness of such
statements contained in the Registration Statement and Prospectus; and that
such counsel advises that, on the basis of the foregoing, no facts came to such
counsel’s attention that caused such counsel to believe that the Shelf
Registration Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus contained in such Registration Statement as of its date contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.  Without limiting the foregoing, such counsel
may state further that such counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or fairness of the oil and
gas reserve and production information or the financial statements, notes and
schedules and other financial or statistical data included in any Shelf
Registration Statement contemplated by this Agreement or the related
Prospectus;


 


(3)  a
customary comfort letter, dated the date of effectiveness of the Shelf
Registration Statement, from the Company’s independent accountants and the
other accountants whose reports are included or incorporated by reference in
the Shelf Registration Statement, in the customary form and covering matters of
the type customarily requested to be covered in accountants’ comfort letters by
underwriters in connection with primary underwritten offerings, and covering or
affirming the matters set forth in the comfort letters delivered pursuant to Section 7(e) of
the Purchase Agreement, provided that to be an addressee of the comfort letter,
if requested by the applicable accountant, each Initial Purchaser and Holder
may be required to confirm that it is in the category of persons to whom a
comfort letter may be delivered in accordance with applicable accounting
literature; and


 

















 


(4)  a
customary comfort letter, dated the date of effectiveness of the Shelf
Registration Statement, from the Company’s independent reserve engineers and
the other reserve engineers whose reports or data are included or incorporated
by reference in the Shelf Registration Statement, in the customary form and
covering matters of the type customarily requested to be covered in reserve
engineers’ comfort letters by underwriters in connection with primary
underwritten Offerings, and covering or affirming the matters set forth in the
comfort letters delivered pursuant to Section 7(g) of the Purchase
Agreement;


 


(B)  set
forth in full or incorporate by reference in the underwriting agreement, if
any, the indemnification provisions and procedures of Section 8 hereof
with respect to all parties to be indemnified pursuant to said underwriting
agreement; and


 


(C)  deliver
such other documents and certificates as may be reasonably requested by such
parties to evidence compliance with Section 6(c)(ix)(A) hereof and
with any customary conditions contained in the underwriting agreement or other
agreement entered into by the Issuers or any of the Guarantors pursuant to this
Section 6(c)(ix), if any.


 


If at any time the
representations and warranties of the Issuers and the Guarantors contemplated
in Section 6(c)(ix)(A)(1) hereof cease to be true and correct, the
Issuers or the Guarantors shall so advise the Initial Purchasers and the
underwriter(s), if any, and each selling Holder promptly and, if requested by
such Persons, shall confirm such advice in writing;


 


(x)  prior to
any public offering of Transfer Restricted Securities pursuant to a Shelf
Registration Statement, cooperate with the selling Holders, the underwriter(s),
if any, and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the state securities
or blue sky laws of such jurisdictions as the selling Holders or
underwriter(s), if any, may reasonably request and do any and all other acts or
things necessary or advisable to enable the disposition in such jurisdictions
of the Transfer Restricted Securities covered by the Shelf Registration
Statement; provided, however, that none of the
Issuers or the Guarantors shall be required to register or qualify as a foreign
corporation where it is not then so qualified or to take any action that would
subject it to the service of process in suits or to taxation in any
jurisdiction where it is not then so subject;


 


(xi)  issue, upon the request of any Holder of
Initial Securities covered by the Shelf Registration Statement, Exchange
Securities having an aggregate principal amount equal to the aggregate
principal amount of Initial Securities surrendered to the Issuers by such
Holder in exchange therefor or being sold by such Holder; such Exchange
Securities, if in certificated form, to be registered in the name of such
Holder or in the name of the purchaser(s) of such Securities, as the case
may be; in return, the Initial Securities held by such Holder, if in
certificated form, shall be surrendered to the Issuers for cancellation;


 

















 


(xii)  cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be sold and not
bearing any restrictive legends; and enable such Transfer Restricted Securities
to be in such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two Business Days prior to any
sale of Transfer Restricted Securities made by such Holders or underwriter(s);


 


(xiii)  use its reasonable best efforts to cause the
Transfer Restricted Securities covered by the Registration Statement to be
registered with or approved by such domestic other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof or the
underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in Section 6(c)(x) hereof;


 


(xiv)  if any fact or event contemplated by Section 6(c)(ii)(D) hereof
shall exist or have occurred, prepare a supplement or post-effective amendment
to the Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of Transfer Restricted Securities,
the Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;


 


(xv)  provide a CUSIP number for all Securities not
later than the effective date of the Registration Statement covering such
Securities and provide the Trustee under the Indenture with certificates for such
Securities which are in a form eligible for deposit with The Depository Trust
Company and take all other action necessary to ensure that all such Securities
are eligible for deposit with The Depository Trust Company;


 


(xvi)  cooperate and assist in any filings required
to be made with FINRA and in the performance of any due diligence investigation
by any underwriter (including any “qualified independent underwriter”) that is
required to be retained in accordance with the rules and regulations of
FINRA;


 


(xvii)  otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the Commission, and
make generally available to its security holders, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) for the twelve-month period (A) commencing at
the end of any fiscal quarter in which Transfer Restricted Securities are sold
to underwriters in a firm commitment or best efforts Underwritten Offering or (B) if
not sold to underwriters in such an offering, beginning with the first month of
the Company’s first fiscal quarter commencing after the effective date of the
Registration Statement;


 


(xviii)  cause the Indenture to be qualified under the
Trust Indenture Act not later than the effective date of the first Registration
Statement required by this Agreement, and, in connection therewith, cooperate
with the Trustee and the Holders of Securities to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the Trust Indenture Act; and to execute and use
its reasonable best efforts to cause the Trustee to execute, all documents that
may be 


 

















 


required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner; and


 


(xix)  cause all Securities covered by the
Registration Statement to be listed on each securities exchange or automated
quotation system on which similar securities issued by the Company are then
listed if requested by the Holders of a majority in aggregate principal amount
of Initial Securities or the managing underwriter(s), if any.


 


Each Holder agrees
by acquisition of a Transfer Restricted Security that, upon receipt of any
notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(C) or
(D) hereof or any Blackout Period described in Section 4(a) hereof,
such Holder will forthwith discontinue disposition of Transfer Restricted
Securities pursuant to the applicable Registration Statement until such Holder’s
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(xiv) hereof, or until it is advised in writing (the “Advice”)
by the Company that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus.  If so
directed by the Company, each Holder will deliver to the Issuers (at the
Company’s expense) all copies, other than permanent file copies then in such
Holder’s possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice.  In the event the Company shall give any such
notice, the time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 hereof, as applicable, shall be
extended by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 6(c)(iii)(D) hereof or
notice of any Blackout Period to and including the date when each selling
Holder covered by such Registration Statement shall have received the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xiv)
hereof or shall have received the Advice.


 


SECTION 7.  Registration Expenses.


 


(a)  All
expenses incident to the Issuers’ and the Guarantors’ performance of or
compliance with this Agreement will be borne by the Issuers and the Guarantors,
jointly and severally, regardless of whether a Registration Statement becomes
effective, including, without limitation: (i) all registration and filing
fees and expenses (including filings made by any Initial Purchaser or Holder
with the FINRA (and, if applicable, the fees and expenses of any “qualified
independent underwriter” and its counsel that may be required by the rules and
regulations of FINRA)); (ii) all fees and expenses of compliance with
federal securities and state securities or blue sky laws; (iii) all
expenses of printing (including printing certificates for the Exchange
Securities to be issued in the Exchange Offer and printing of Prospectuses),
messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Issuers and the Guarantors and, subject to Section 7(b) hereof,
the Holders of Transfer Restricted Securities; (v) all application and
filing fees in connection with listing the Exchange Securities on a securities
exchange or automated quotation system pursuant to the requirements thereof; (vi) all
fees and disbursements of independent certified public accountants of the
Issuers and the Guarantors (including the expenses of any special audit and
comfort letters required by or incident to such performance) and (vii) all
fees and disbursements of the Trustee and its counsel, but in all cases (unless
otherwise provided in the underwriting agreement relating to an offering using
any Registration Statement), excluding brokers’ or underwriters’ discounts and
commissions and 


 

















 


transfer taxes or the fees and disbursements of any counsel to any
Person other than the Issuers or the Guarantors.


 


(b)  In
connection with any Registration Statement required by this Agreement
(including, without limitation, the Exchange Offer Registration Statement and
the Shelf Registration Statement), the Issuers and the Guarantors, jointly and
severally, will reimburse the Initial Purchasers and the Holders of Transfer
Restricted Securities being tendered in the Exchange Offer and/or resold
pursuant to the “Plan of Distribution” contained in the Exchange Offer
Registration Statement or registered pursuant to the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not more
than one counsel, who shall be Baker Botts L.L.P. or such other counsel as may
be chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared.


 


Each of the
Issuers and the Guarantors will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by the Issuers or the Guarantors.


 


SECTION 8.  Indemnification.


 


(a)  The
Issuers and the Guarantors, jointly and severally, agree to indemnify and hold
harmless (i) each Holder and (ii) each Person, if any, who controls
(within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) any such Holder (any of the Persons referred to in this
clause (ii) being hereinafter referred to as a “controlling person”)
and (iii) the respective officers, directors, partners, employees,
representatives and agents of any Holder or any controlling person (any Person
referred to in clause (i), (ii) or (iii) may hereinafter be referred
to as an “Indemnified Holder”), to the fullest extent lawful, from and
against any and all losses, claims, damages or liabilities (or actions in
respect thereof) (including, without limitation, and as incurred, reimbursement
of each such Indemnified Holder for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action), joint or several, directly or indirectly
arising out of or based upon any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement or Prospectus (or
any amendment or supplement thereto), or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein (with respect to the Prospectus, in the light of
the circumstances under which they were made) not misleading, except insofar as
such losses, claims, damages, liabilities or actions are caused by an untrue
statement or omission or alleged untrue statement or omission that is made in
reliance upon and in conformity with information relating to any of the Holders
furnished in writing to the Company by any of the Holders expressly for use
therein.  This indemnity agreement shall
be in addition to any liability that the Issuers or any of the Guarantors may
otherwise have.


 


In case any action
or proceeding (including any governmental or regulatory investigation or
proceeding) shall be brought or asserted against any of the Indemnified Holders
with respect to which indemnity may be sought against any Issuer or Guarantor,
such Indemnified Holder (or the Indemnified Holder controlled by such
controlling person) shall promptly notify the Issuers 


 

















 


and the Guarantors in writing; provided, however,
that the failure to give such notice shall not relieve any of the Issuers or
the Guarantors of its obligations pursuant to this Agreement.  Such Indemnified Holder shall have the right
to employ its own counsel in any such action and the fees and expenses of such
counsel shall be paid, as incurred, by the Issuers and the Guarantors
(regardless of whether it is ultimately determined that an Indemnified Holder
is not entitled to indemnification hereunder). 
The Issuers and the Guarantors shall not, in connection with any one
such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) at
any time for such Indemnified Holders, which firm shall be designated by the
Holders.  The Issuers and the Guarantors
shall be liable for any settlement of any such action or proceeding effected
with the Issuers’ and the Guarantors’ prior written consent, which consent
shall not be withheld unreasonably, and each of the Issuers and the Guarantors
agrees to indemnify and hold harmless any Indemnified Holder from and against
any loss, claim, damage, liability or action by reason of any settlement of any
action effected with the written consent of the Issuers and the
Guarantors.  The Issuers and the
Guarantors shall not, without the prior written consent of each Indemnified
Holder, not to be unreasonably withheld, settle or compromise or consent to the
entry of judgment in or otherwise seek to terminate any pending or threatened
action, claim, litigation or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not any Indemnified Holder is
a party thereto), unless such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Holder from all liability
arising out of such action, claim, litigation or proceeding.


 


(b)  Each
Holder of Transfer Restricted Securities agrees, severally and not jointly, to
indemnify and hold harmless the Issuers, the Guarantors and their respective
directors, officers of the Issuers and the Guarantors who sign a Registration
Statement, and any Person controlling (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) any Issuer or any
Guarantor, and the respective officers, directors, partners, employees,
representatives and agents of each such Person, to the same extent as the
foregoing indemnity from the Issuers and the Guarantors to each of the
Indemnified Holders, but only with respect to claims and actions (i) based
on information relating to such Holder furnished in writing by such Holder
expressly for use in any Registration Statement or Prospectus or (ii) with
respect to any sales after the receipt from the Company by such Holder of the
notice contemplated by Section 6(c)(iii)(C) or (D) and before
the receipt from the Company by such Holder of the Advice with respect to such
notice.  In case any action or proceeding
shall be brought against the Issuers, the Guarantors or their respective
directors or officers or any such controlling person in respect of which
indemnity may be sought against a Holder of Transfer Restricted Securities,
such Holder shall have the rights and duties given the Issuers and the
Guarantors, and the Issuers, the Guarantors, their respective directors and
officers and such controlling person shall have the rights and duties given to
each Holder by the preceding paragraph. 
The liability of any Holder of Transfer Restricted Securities under this
Section 8(b) shall not exceed the aggregate net proceeds to such
Holder, if any, received from the sale of Transfer Restricted Securities or
Exchange Securities pursuant to any Registration Statement.  This indemnity agreement shall be in addition
to any liability that the Holders of Transfer Restricted Securities may
otherwise have.


 

















 


(c)  If the
indemnification provided for in this Section 8 is unavailable to an
indemnified party under Section 8(a) or (b) hereof (other than
by reason of exceptions provided in those Sections) in respect of any losses,
claims, damages, liabilities or actions referred to therein, then each
applicable 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, claims, damages, liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuers and the Guarantors, on the one hand, and the Holders, on the other
hand, from the Initial Placement, the amount of Additional Interest which did
not become payable as a result of the filing of the Registration Statement
resulting in such losses, claims, damages, liabilities or actions, and such
Registration Statement (and, if applicable, from sales of Transfer Restricted
Securities pursuant to a Shelf Registration Statement), or if such allocation
is not permitted by applicable law, the relative fault of the Issuers and the
Guarantors, on the one hand, and the Holders, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities or actions, as well as any other relevant equitable
considerations.  The relative fault of
the Issuers and the Guarantors on the one hand and of the Indemnified Holder 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 relates to information supplied by
the Issuers or any of the Guarantors, on the one hand, or the Indemnified
Holders, on the other hand, and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.  The amount paid or payable by
a party as a result of the losses, claims, damages, liabilities or actions
referred to above shall be deemed to include, subject to the limitations set
forth in the second paragraph of Section 8(a) hereof, any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.


 


The Issuers, the
Guarantors and each Holder of Transfer Restricted Securities agree that it
would not be just and equitable if contribution pursuant to this Section 8(c) were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph.  The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or actions referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 8,
none of the Holders (and its related Indemnified Holders) shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total discount received by such Holder with respect to the Initial Securities
(and, if applicable, from sales of Transfer Restricted Securities pursuant to a
Shelf Registration Statement) exceeds the amount of any damages which such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.  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 was not
guilty of such fraudulent misrepresentation. 
The Holders’ obligations to contribute pursuant to this Section 8(c) are
several in proportion to the respective principal amount of Initial Securities
held by each of the Holders hereunder and not joint.


 
















 


SECTION 9.  Rule 144 and 144A
Information.  The Company
shall use its reasonable best efforts to file the reports required to be filed
by it under the Securities Act and the Exchange Act in a timely manner and, if
at any time the Company is not required to file such reports, it will, upon the
request of any Holder of Initial Securities, make publicly available other
information so long as necessary to permit sales of their securities pursuant
to Rules 144 and 144A.  The Issuers
agree that they will take such further action as any Holder of Initial
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell Initial Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rules 144
and 144A (including the requirements of Rule 144A(d)(4)).  The Issuers, upon request by the Initial
Purchasers, will provide a copy of this Agreement to prospective purchasers of
Initial Securities identified to the Issuers by the Initial Purchasers.  Upon the request of any Holder of Initial
Securities, the Issuers shall deliver to such Holder a written statement as to
whether it has complied with such requirements. Notwithstanding the foregoing,
nothing in this Section 9 shall be deemed to require the Issuers to
register any of their securities pursuant to the Exchange Act.


 


SECTION 10.  Participation in
Underwritten Registrations.  No
Holder may participate in any Underwritten Registration hereunder unless such
Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and
executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.


 


SECTION 11.  Selection of
Underwriters.  The Holders of
Transfer Restricted Securities covered by the Shelf Registration Statement who
desire to do so may sell such Transfer Restricted Securities in an Underwritten
Offering.  In any such Underwritten
Offering, the investment banker(s) and managing underwriter(s) that
will administer such offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, however, that such
investment banker(s) and managing underwriter(s) must be reasonably
satisfactory to the Issuers.


 


SECTION 12.  Miscellaneous.


 


(a)  Remedies.  Each of the Issuers and the
Guarantors hereby agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.


 


(b)  No Inconsistent Agreements.  Each of the Issuers and the
Guarantors will not on or after the date of this Agreement enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof.  Except as disclosed
in its filings with the Commission prior to the date hereof, neither either
Issuer nor any of the Guarantors has previously entered into any agreement
granting any registration rights with respect to its securities to any
Person.  The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Issuers’ or any of the Guarantors’
securities under any agreement in effect on the date hereof.


 

















 


(c)  Amendments and Waivers.  The
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to or departures from the provisions hereof may not be
given unless the Issuers have (i) in the case of Section 5 hereof and
this Section 12(c)(i), obtained the written consent of Holders of all
outstanding Transfer Restricted Securities and (ii) in the case of all
other provisions hereof, obtained the written consent of Holders of a majority
of the outstanding principal amount of Transfer Restricted Securities
(excluding any Transfer Restricted Securities held by the Issuers or their
respective Affiliates).  Notwithstanding
the foregoing, a waiver or consent to departure from the provisions hereof that
relates exclusively to the rights of Holders whose securities are being
tendered pursuant to the Exchange Offer or included on a Shelf Registration Statement
and that does not affect directly or indirectly the rights of other Holders
whose securities are not being tendered pursuant to such Exchange Offer or
included in such Shelf Registration Statement may be given by the Holders of a
majority of the outstanding principal amount of Transfer Restricted Securities
being tendered or registered, as the case may be; provided, however, that, with respect to any matter that
directly or indirectly affects the rights of any Initial Purchaser hereunder,
the Issuers shall obtain the written consent of each such Initial Purchaser
with respect to which such amendment, qualification, supplement, waiver,
consent or departure is to be effective.


 


(d)  Notices.  All notices
and other communications provided for or permitted hereunder shall be made in
writing by hand-delivery, first-class mail (registered or certified, return
receipt requested), telex, telecopier, or air courier guaranteeing overnight
delivery:


 


(i)  if to a
Holder, at the address set forth on the records of the Registrar under the
Indenture, with a copy to the Registrar under the Indenture;


 


(ii)  if to the Issuers:


 


Linn Energy, LLC

600 Travis Street, Suite 5100

Houston, Texas 77002

Facsimile:  (281) 840-4180

Attention:  General Counsel


 


with a copy to (which
shall not constitute notice):



Akin Gump Strauss Hauer and Feld LLP

1111 Louisiana Street

Houston, Texas 77002

Facsimile:  (713) 236-0822

Attention:  J. Michael Chambers


 


and


 

















 


(iii)          if to the Initial Purchasers:


 


Lehman Brothers Inc.

1271 Avenue of the Americas, 42nd Floor

New York, New York 10020

Facsimile:  (646) 834-8133

Attention:  Syndicate Registration


 


with a copy to (which
shall not constitute notice):


 


Baker Botts L.L.P.

910 Louisiana Street

Houston, Texas 77002

Facsimile:  (713) 229-7996

Attention:  Kelly Rose


 


All such notices
and communications shall be deemed to have been duly given:  at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and on the next Business Day, if timely delivered to an air
courier guaranteeing overnight delivery.


 


Copies of all such
notices, demands or other communications shall be concurrently delivered by the
Person giving the same to the Trustee at the address specified in the
Indenture.


 


(e)  Successors and Assigns.  This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties, including, without limitation, and without the
need for an express assignment, subsequent Holders of Transfer Restricted
Securities; provided however, that this Agreement
shall not inure to the benefit of or be binding upon a successor or assign of a
Holder unless and to the extent such successor or assign acquired Transfer
Restricted Securities from such Holder.


 


(f)  Counterparts.  This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.


 


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


 


(h)  Governing Law.  THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW RULES THEREOF.


 


(i)  Severability.  In the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.


 


(j)  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 registration rights granted by the Issuers with respect to
the Transfer Restricted Securities.  This
Agreement supersedes all prior agreements and understandings among the parties
with respect to such subject matter.


 

















 


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


 


	
   

  	
  ISSUERS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Linn Energy, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Linn Energy Finance
  Corp.

  
	
   

  	
  By:

  	
  /s/ Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GUARANTORS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Linn Energy Holdings,
  LLC

  
	
   

  	
  By:

  	
  /s/ Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Penn West Pipeline, LLC

  
	
   

  	
  By:

  	
  /s/ Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Mid-Continent Holdings
  I, LLC

  
	
   

  	
  By:

  	
  /s/ Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Mid-Continent Holdings
  II, LLC

  
	
   

  	
  By:

  	
  /s/ Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  



 

















 


	
   

  	
  Mid-Continent I, LLC

  
	
   

  	
  By:

  	
  /s/ Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Linn Gas Marketing, LLC

  
	
   

  	
  By:

  	
  /s/ Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Mid-Continent II, LLC

  
	
   

  	
  By:

  	
  /s/ Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Linn Exploration
  Midcontinent, LLC

  
	
   

  	
  By:

  	
  /s/ Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Linn
  Operating, Inc.

  
	
   

  	
  By:

  	
  /s/ Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Mid Atlantic Well
  Service, Inc.

  
	
   

  	
  By:

  	
  /s/ Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  



 

















 


The foregoing
Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:


 


For themselves and as Representatives

of the several Underwriters named

in Schedule 1 to the Purchase Agreement


 


	
  By
  LEHMAN BROTHERS INC.

  
	
   

  
	
  By:

  	
  /s/
  Timothy N. Hartzell

  	
   

  
	
   

  	
  Authorized
  Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
  By
  CREDIT SUISSE SECURITIES (USA) LLC

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jaime Casas

  	
   

  
	
   

  	
  Authorized
  Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
  By
  BNP PARIBAS SECURITIES CORP.

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Paul Brown

  	
   

  
	
   

  	
  Authorized
  Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
  By
  DEUTSCHE BANK SECURITIES INC.

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Brian Jinks

  	
   

  
	
   

  	
  Authorized
  Representative

  
	
   

  	
   

  
	
  By:

  	
  /s/
  J. Michael Hafner

  	
   

  
	
   

  	
  Authorized
  Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
  BY
  RBC CAPITAL MARKETS CORPORATION

  
	
   

  	
   

  
	
  By:

  	
  /s/
  David Capaldi

  	
   

  
	
   

  	
  Authorized
  Representative

  



 

















 


SCHEDULE A


 


GUARANTORS


 


	
  Name

  	
   

  	
  Jurisdiction of

  Formation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Linn Energy
  Holdings, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Linn Gas
  Marketing, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Linn
  Operating, Inc.

  	
   

  	
  Delaware

  	
   

  
	
  Mid Atlantic Well
  Service, Inc.

  	
   

  	
  Delaware

  	
   

  
	
  Mid-Continent I,
  LLC

  	
   

  	
  Delaware

  	
   

  
	
  Mid-Continent II,
  LLC

  	
   

  	
  Delaware

  	
   

  
	
  Mid-Continent
  Holdings I, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Mid-Continent
  Holdings II, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Penn West
  Pipeline, LLC

  	
   

  	
  Delaware

  	
   

  
	
  Linn Exploration
  Midcontinent, LLC

  	
   

  	
  Oklahoma