exhibit10-1.htm


    Exhibit
10.1

    Execution
Version


    Third
Amendment

     

    to

     

    Third
Amended and Restated Credit Agreement

     

    Among

     

    Linn
Energy, LLC

    as
Borrower,

     

    BNP
Paribas,

    as
Administrative Agent,

     

    and

     

    The
Lenders Signatory Hereto

     

    Effective
as of June 16, 2008

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Third
Amendment to Third Amended and Restated Credit Agreement

     

    This
Third
Amendment to Third Amended and Restated Credit Agreement (this “Third Amendment”)
executed effective as of June 16, 2008 (the “Third Amendment Effective
Date”) is among Linn
Energy, LLC, a limited liability company formed under the laws of the
State of Delaware (the “Borrower”); each of
the undersigned guarantors (the “Guarantors”, and
together with the Borrower, the “Obligors”); each of
the Lenders that is a signatory hereto; and BNP
Paribas, as administrative agent for the Lenders (in such capacity,
together with its successors, the “Administrative
Agent”).

     

    Recitals

     

    A.           The
Borrower, the Administrative Agent and the Lenders are parties to that certain
Third Amended and Restated Credit Agreement dated as of August 31, 2007 (as
amended by that certain First Amendment to Third Amended and Restated Credit
Agreement dated as of November 2, 2007 and by that certain Second Amendment to
Third Amended and Restated Credit Agreement dated as of January 31, 2008, the
“Credit
Agreement”), pursuant to which the Lenders have made certain credit
available to and on behalf of the Borrower.

     

    B.           The
Borrower has requested and the Administrative Agent and the Lenders have agreed
to waive and/or amend certain provisions of the Credit Agreement.

     

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

     

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

     

    Section
2.                      Amendments to Credit
Agreement.

     

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

     

    “ ‘Agreement’ means this
Third Amended and Restated Credit Agreement, as amended by that certain First
Amendment to Third Amended and Restated Credit Agreement, dated as of November
2, 2007, by that certain Second Amendment to Third Amended and Restated Credit
Agreement dated as of January 31, 2008, by that certain Third Amendment to Third
Amended and Restated Credit Agreement dated as of June 16, 2008, and as the same
may from time to time be further amended, modified, supplemented or
restated.”

     

    2.2           Definitions.  Section
1.02 is hereby further amended by adding the following definitions where
alphabetically appropriate:

     

    “  ‘Clean Down Period’
has the meaning assigned such term in Section
8.19.”

     


    
      
        
           

        

         


      

      
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    “ ‘Distribution
Borrowing’ means that portion of any Borrowing the proceeds of which are
used to make any Restricted Payment constituting a distribution to members of
the Borrower made in accordance with Section 9.04(a)(iii)
..”

     

    2.3           Section
3.04(c).  Clause (viii) of Section 3.04(c) is hereby amended to
read as follows:

     

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

     

    2.4           Section
8.19.  A new Section 8.19 is hereby added, which reads as
follows:

     

    Section
8.19                                Clean Down
Period.  During each calendar year during the term of this
Agreement, the Borrower shall cause there to be a period of ten (10) consecutive
days (the “Clean Down
Period”) during which (a) there are no Distribution Borrowings
outstanding and (b) no Distribution Borrowings shall be made.

     

    2.5           Section
9.02(e).  Section 9.02(e) is hereby amended and restated in its
entirety to read as follows:

     

    (e)           Debt
(i) associated with bonds or surety obligations required by Governmental
Requirements in connection with the operation of Oil and Gas Properties in the
ordinary course of business and (ii) comprised of guarantees of obligations of
Subsidiaries under marketing agreements entered into in the ordinary course of
business.

     

    2.6           Section
9.02(h).  Section 9.02(h) is hereby amended and restated in its
entirety to read as follows:

     

    (h)           Debt
and any guarantees thereof, provided that (1) (a) at the time such Debt is
incurred, no Default has occurred and is then continuing and (b) no Default
would result from the incurrence of such Debt after giving effect to the
incurrence of such Debt (and any concurrent repayment of Debt with the proceeds
of such incurrence), (2) immediately after the incurrence of such Debt, the
Borrowing Base shall be adjusted in accordance with Section 2.07(e) and/or
Section 3.04(c)(iv) and the incurrence of such Debt (and any concurrent
repayment of Debt with the proceeds of such incurrence) would not result in the
total Revolving Credit Exposure exceeding such adjusted Borrowing Base, (3) such
Debt does not have any scheduled amortization prior to four years after the
Maturity Date, (4) such Debt does not mature sooner than four years after the
Maturity Date, (5) such Debt and any guarantees thereof are on market terms for
issuers of similar size and credit quality given the then prevailing market
conditions and (6) such Debt does not have any mandatory prepayment or
redemption provisions (other than customary change of control or asset
sale

     


    
      
         


      

      
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    tender
offer provisions) which would require a mandatory prepayment or redemption in
priority to the Indebtedness.

     

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

     

    (b)           Redemption or Repayment of
Subordinated Debt.  The Borrower will not, and will not permit
any Subsidiary to: (i) call, make or offer to make any optional Redemption of or
otherwise optionally Redeem (and in the case of any subordinated Debt, call,
make or offer to make any mandatory or optional Redemption) whether in whole or
in part or repay any Debt permitted to be incurred hereunder, including the
Second Lien Term Loan or any Permitted Refinancing Debt, except with the
proceeds of Asset Sales, Casualty Events or Funded Debt, or the proceeds of the
sale or issuance of Equity Interests or Permitted Refinancing Debt, in each
case, in accordance with Section 3.04; (ii) amend, modify, waive or otherwise
change, consent or agree to any amendment, modification, waiver or other change
to, any of the terms of any notes evidencing any Debt permitted hereunder,
including the Second Lien Term Loan or any Permitted Refinancing Debt, or any
indenture, agreement, instrument, certificate or other document relating to any
Debt permitted hereunder (including any agreement, instrument, certificate or
other document executed or delivered in connection with any Permitted
Refinancing Debt, the Second Lien Term Loan Agreement, any Second Lien Term Loan
Document and any other document or agreement relating thereto) if (A) the effect
of such amendment, modification or waiver is to shorten the final maturity,
except as permitted under Section 9.02(h) or in accordance with the definition
of Permitted Refinancing Debt, or increase the amount of any payment of
principal thereof or increase the rate or shorten any period for payment of
interest thereon or modify the method of calculating the interest rate, (B) such
action adds covenants, events of default or other agreements to the extent more
restrictive, taken as a whole, than those contained in this Agreement, as
determined by the Board of Directors of the Borrower in its reasonable and good
faith judgment, or (C) such action adds collateral unless the Loan Documents are
being amended at the same time to reflect such new collateral, provided that the
foregoing shall not prohibit the execution of supplemental agreements in
connection with the issuance of Permitted Refinancing Debt or the addition of
guarantors if required by the terms thereof; and (iii) designate any Debt (other
than obligations of the Borrower and the Subsidiaries pursuant to the Loan
Documents) as “Specified Senior Indebtedness” or “Specified Guarantor Senior
Indebtedness” or give any such other Debt any other similar designation for the
purposes of any indentures or other documents relating to any subordinated Debt
permitted hereunder, including the Second Lien Term Loan.

     

    2.8           Section
10.01(g).  Section 10.01(g) is hereby amended and restated in
its entirety to read as follows:

     


    
      
         


      

      
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    (g)           any
event or condition occurs (after giving effect to any notice or cure period)
that results in any Material Indebtedness becoming due prior to its scheduled
maturity (other than the Second Lien Term Loans becoming due upon the giving of
notice of any prepayment thereof to be effected with the proceeds of permitted
refinancing Debt) or that enables or permits (with or without the giving of
notice, the lapse of time or both) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any
Material Indebtedness to become due, or to require the Redemption thereof or any
offer to Redeem to be made in respect thereof, prior to its scheduled maturity
or require the Borrower or any of its Subsidiaries to make an offer in respect
thereof.

     

    Section
3.                      Clarification regarding
Borrowing Base; Waivers.

     

    3.1           Adjustment to Borrowing Base
upon Incurrence of Funded Debt.  The parties wish to confirm
their mutual understanding regarding the interpretation of Section 2.07(e) and
Section 9.02(h).  In that regard, for the avoidance of doubt, the
parties intend that any adjustment to the Borrowing Base only occur in respect
of the net amount of Funded Debt incurred, i.e. the gross amount less the amount
of any Debt concurrently repaid or retired with the proceeds of such
incurrence.  As an example, if $500 million of Funded Debt were
incurred and $400 million of existing Funded Debt were retired with the proceeds
of such incurrence, the Borrowing Base adjustment under Section 2.07(e) would be
$25 million (25% of $100 million).

     

    3.2           The
Borrower has informed the Administrative Agent that it desires to sell certain
of its Appalachia Oil and Gas Properties identified in (i) that certain Purchase
and Sale Agreement Appalachia Region dated as of April 13, 2008, among Linn
Energy Holdings, LLC, Linn Operating, Inc., Penn West Pipeline, LLC (each of
which are Subsidiaries of the Borrower) and XTO Energy Inc. and (ii) that
certain Limited Partnership Asset Purchase and Sale Agreement Appalachia Region
dated April 13, 2008 among Linn Energy Holdings, LLC, Marathon 85-II Limited
Partnership, Marathon 85-III Limited Partnership and XTO Energy Inc. for
approximately $600,000,000 in the aggregate (collectively, the “Asset
Sale”).  The Borrower has informed the Administrative Agent and
the Lenders that consummation of the Asset Sale and application of the proceeds
thereof as currently contemplated may violate the following
sections:

     

    
      	
               
      

            	
              ·

            	
              Section
      3.04(c)(viii)—requirement that 100% of Net Cash Proceeds of Asset Sales be
      used to repay Second Lien Loans.

            


    

     

    
      	
               
      

            	
              ·

            	
              Section
      9.11—prohibition on sale of all or substantially all assets of a
      Subsidiary (sale of all or substantially all assets of Penn West Pipeline,
      LLC and Mid Atlantic Well Service,
Inc.).

            


    

     

    
      	
               
      

            	
              ·

            	
              Section
      9.15—prohibition on sale of Equity Interests in a Subsidiary (sale of all
      Equity Interests in Big Creek
Pipeline).

            


    

     

    3.3           The
Borrower further informs the Administrative Agent of its interests in Marathon
85-II Limited Partnership and Marathon 85-III Limited Partnership, each of which
constitutes the ownership of a Subsidiary other than a Wholly-Owned Subsidiary,
and that the continued ownership of such interests may violate Section
9.15.  The Borrower hereby requests

     


    
      
         


      

      
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    that the
Lenders waive any Default or Event of Default that may have arisen prior to the
date hereof, or may hereafter arise, under Section 9.15 as a result of the
ownership of such non-Wholly Owned Subsidiaries

     

    3.4           The
Borrower hereby requests that the Lenders waive the foregoing Sections of the
Credit Agreement identified in Sections 3.2 and 3.3 of this Third Amendment to
permit the Asset Sale and the Lenders hereby waive such Sections of the Credit
Agreement.

     

    3.5           Neither
the execution by the Administrative Agent or the Lenders of this Third
Amendment, nor any other act or omission by the Administrative Agent or the
Lenders or their officers in connection herewith, shall be deemed a waiver by
the Administrative Agent or the Lenders of any other defaults which may exist,
which may have occurred prior to the Asset Sale, or which may occur in the
future under the Loan Agreement and/or the other Loan Documents, or any future
defaults of the same provision waived hereunder (collectively “Other
Violations”).  Similarly, nothing contained in this Third
Amendment shall directly or indirectly in any way whatsoever either: (i) impair,
prejudice or otherwise adversely affect the Administrative Agent’s or the
Lenders’ right at any time to exercise any right, privilege or remedy in
connection with the Loan Documents with respect to any Other Violations, (ii)
amend or alter any provision of the Loan Agreement, the other Loan Documents, or
any other contract or instrument, or (iii) constitute any course of dealing or
other basis for altering any obligation of the Borrower or any right, privilege
or remedy of the Administrative Agent or the Lenders under the Loan Agreement,
the other Loan Documents, or any other contract or
instrument.  Nothing in this Third Amendment shall be construed to be
a consent by the Administrative Agent or the Lenders to any Other
Violations.

     

    Section
4.                      Conditions
Precedent.  The effectiveness of this Third Amendment is
subject to the receipt by the Administrative Agent of the following documents
and satisfaction of the other conditions provided in this Section 4, each of
which shall be reasonably satisfactory to the Administrative Agent in form and
substance:

     

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

     

    4.2           The
Administrative Agent shall have received multiple counterparts as requested of
this Third Amendment from the Majority Lenders.

     

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

     

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

     

    Section
5.                      Representations and
Warranties; Etc.  Each Obligor hereby affirms:  (a)
that as of the date of execution and delivery of this Third Amendment, all of
the representations and warranties contained in each Loan Document to which such
Obligor is a party are true and correct in all material respects as though made
on and as of the Third Amendment Effective Date

     


    
      
         


      

      
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    (unless
made as of a specific earlier date, in which case, was true as of such date);
and (b) that after giving effect to this Third Amendment and to the transactions
contemplated hereby, no Defaults exist under the Loan Documents or will exist
under the Loan Documents.

     

    Section
6.                      Miscellaneous.

     

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

     

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

     

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

     

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

     

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

     

    


     

    


     


    
      
         


      

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

     

    BORROWER:                                                      LINN
ENERGY, LLC

    


    


    


    By:/s/ Kolja
Rockov                                                   
            


    Kolja
Rockov,

    Executive
Vice President and Chief Financial Officer

    


    


    GUARANTORS:                        
LINN ENERGY HOLDINGS, LLC

    LINN
OPERATING, INC.

    PENN
WEST PIPELINE, LLC

    MID
ATLANTIC WELL SERVICE, INC.

    MID-CONTINENT
HOLDINGS I, LLC

    MID-CONTINENT
HOLDINGS II, LLC

    MID-CONTINENT
I, LLC

    MID-CONTINENT
II, LLC

    LINN
GAS MARKETING, LLC

    LINN
EXPLORATION MIDCONTINENT, LLC

    


    


    


    By:/s/ Kolja
Rockov                                                                


    Kolja
Rockov,

    Executive
Vice President and Chief Financial Officer

    



    
      
        
        

        Third
Amendment

      

      
        Signature
Page - 1

        
          

        

      

      
         


      

    


    BNP PARIBAS, as Administrative
Agent and a Lender

    


    


    By: /s/ Betsy
Jocher                                                              
 

    Name:
Betsy Jocher

    Title:   Director

    


    


    By: /s/ Robert Long                                                                

    Name: Robert
Long

    Title:   Vice
President

    


    


    


    ROYAL BANK OF CANADA, as
Syndication Agent and a Lender

    


    


    By: Don J.
McKinnerney                                                      
 

    Name: Don
J. McKinnerney

    Title:   Authorized
Signatory

    


    


    


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

    


    


    By: /s/ Stephen W.
Warfel                                                     

    Name: Stephen
W. Warfel

    Title:   Managing
Director

    


    


    


    COMERICA BANK, as a
Lender

    


    


    By: /s/ Gregory D.
Smith                                                        


    Name: Gregory
D. Smith

    Title:   Vice
President

    


    



    
      
        
        

        Third
Amendment

      

      
        Signature
Page - 2

        
          

        

      

      
         


      

    


    FORTIS CAPITAL CORP., as a
Lender

    


    


    


    By: /s/ David
Montgomery                                                  
  

    Name: David
Montgomery

    Title:   Director

    


    


    By: /s/ Darrell
Holley                                                              


    Name: Darrell
Holley

    Title:   Managing
Director

    


    


    


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

    


    


    By: /s/ David E.
Hunt                                                              


    Name: David
E. Hunt

    Title:   Vice
President

    


    


    


    KEYBANK NATIONAL ASSOCIATION,
as a Lender

    


    


    By: /s/ Thomas
Rajan                                                             


    Name: Thomas
Rajan

    Title:   Managing
Director

    


    


    


    WACHOVIA BANK, N.A., as a
Lender

    


    


    By: /s/ Leanne S.
Phillips                                                       


    Name: Leanne
S. Phillips

    Title:   Director

    


    


    



    
      
        
        

        Third
Amendment

      

      
        Signature
Page - 3

        
          

        

      

      
         


      

    


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

    


    


    By: /s/ James V.
Ducote                                                         


    Name: James
V. Ducote

    Title:   Director

    


    


    


    CREDIT SUISSE, as a
Lender

    


    


    By: /s/ Vanessa
Gomez                                                           

    Name: Vanessa
Gomez

    Title:   Director

    


    


    By: /s/ Nupur
Kumar                                                               

    Name: Nupur
Kumar

    Title:   Associate

    


    


    COMPASS BANK, as a
Lender

    


    


    By: /s/ Greg
Determann                                                          

    Name: Greg
Determann

    Title:   Vice
President

    


    


    


    DnB NOR BANK ASA, as a
Lender

    


    


    By: /s/ Henrik
Asland                                                             


    Name: Henrik
Asland

    Title:   Senior
Vice President

    


    


    By: /s/ Thomas
Tangen                                                          

    Name: Thomas
Tangen

    Title:   First
Vice President

    


    


    



    
      
        
        

        Third
Amendment

      

      
        Signature
Page - 4

        
          

        

      

      
         


      

    


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

    


    


    By:                                                                                             


    Name:

    Title:

    


    


    By:                                                                                             


    Name:

    Title:

    


    


    


    GUARANTY BANK, FSB, as a
Lender

    


    


    By: /s/ W. David McCarver
IV                                              

    Name: W.
David McCarver IV

    Title:   Vice
President

    


    


    


    LEHMAN BROTHERS COMMERCIAL
BANK, as a Lender

    


    


    By: /s/ Darren S.
Lane                                                             

    Name: Darren
S. Lane

    Title:   Operations
Officer

    


    


    


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

    


    


    By: /s/ Michael A.
Kamauf                                                     

    Name: Michael
A. Kamauf

    Title:   Vice
President

    



    
      
        
        

        Third
Amendment

      

      
        Signature
Page - 5

        
          

        

      

      
         


      

    


    THE ROYAL BANK OF SCOTLAND
plc, as a Lender

    


    


    By: /s/ Mark Lumpkin,
Jr.                                                       

    Name: Mark
Lumpkin, Jr.

    Title:   Vice
President

    


    


    


    RZB FINANCE LLC, as a
Lender

    


    


    By: /s/ Shirley
Ritch                                                                

    Name: Shirley
Ritch

    Title:   Assistant
Vice President

    


    


    By: /s/ John A.
Valiska                                                           

    Name: John
A. Valiska

    Title:   First
Vice President

    


    


    


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

    


    


    By: /s/ Scott Gildea                                                                 

    Name: Scott
Gildea

    Title:   Vice
President

    


    


    


    U.S. BANK NATIONAL
ASSOCIATION, as a Lender

    


    


    By: /s/ Tyler
Fauerbach                                                          

    Name: Tyler
Fauerbach

    Title:   Vice
President

    


    


    


    



    
      
        
        

        Third
Amendment

      

      
        Signature
Page - 6

        
          

        

      

      
         


      

    


    CALYON NEW YORK BRANCH, as a
Lender

    


    


    By: /s/ Tom Byargeon       Sharada
Manne        

    Name: Tom
Byargeon       Sharada
Manne

    Title:   Managing
Director    Director

    


    


    


    THE BANK OF NOVA SCOTIA, as a
Lender

    


    


    By: /s/ David Mills                                                                  

    Name: David
Mills

    Title:   Director

    


    


    


    DEUTSCHE BANK TRUST COMPANY
AMERICAS, as a Lender

    


    


    By: /s/ David J.
Bell                                                                 

    Name: David
J. Bell

    Title:   Managing
Director

    


    


    By: /s/ Dusan
Lazarov                                                            


    Name: Dusan
Lazarov

    Title:   Vice
President

    


    


    


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

    


    


    By: /s/ David O’Driscoll       Robert F.
Moyle          

    Name: David
O’Driscoll        Robert F.
Moyle

    Title:   Assistant
Vice President  Senior Vice
President

    


    


    


    



    
      
        
        

        Third
Amendment

      

      
        Signature
Page - 7

        
          

        

      

      
         


      

    


    WESTLB AG, NEW YORK BRANCH, as
a Lender

    


    


    By:                                                                                             


    Name:

    Title:

    


    


    


    SUNTRUST BANK, as a
Lender

    


    


    By: /s/ Yann Pirio                                                                     

    Name: Yann
Pirio

    Title:   Director

    


     

    Third Amendment

    Signature Page - 8