**EXHIBIT 4.7**

 

**REGISTRATION RIGHTSAGREEMENT**

 

THISREGISTRATION RIGHTS AGREEMENT (the “Agreement”) is made and entered into as ofthis         day of January, 2006 by andamong **PRB Gas Transportation, Inc.**, a Nevadacorporation (the “Company”), and the undersigned holders of the Company’sSenior Subordinated Convertible Notes in an aggregate amount not to exceed$15,000,000 (collectively, the “Investor”).

 

Theparties hereby agree as follows:

 

1.               Certain Definitions.

 

As used in this Agreement,the following terms shall have the following meanings:

 

“Affiliate”means, with respect to any person, any other person which directly orindirectly controls, is controlled by, or is under common control with, suchperson.

 

“BusinessDay” means a day, other than a Saturday or Sunday, on which banks in NewYork City are open for the general transaction of business.

 

“CommonStock” shall mean the Company’s common stock, no par value per share, andany securities into which such shares may hereinafter be reclassified.

 

“ConvertibleNote” shall mean the Company’s Senior Subordinated Convertible Notes datedas of the date hereof in the principal amount not to exceed US $15,000,000,bearing interest at 10% per annum payable quarterly in arrears with interestonly payable commencing March 15, 2006 and with all principal and unpaidinterest due in full 30 months from date of issuance.

 

“Investor”shall mean those undersigned holders of the Convertible Note that have lent upto an aggregate of $15,000,000 (US) pursuant to the Convertible Note, and anyAffiliate or permitted transferee or transferees of the Investor who is asubsequent holder of any Registrable Securities.

 

“Prospectus”shall mean the prospectus included in any Registration Statement, as amended orsupplemented by any prospectus supplement, with respect to the terms of theoffering of any portion of the Registrable Securities covered by suchRegistration Statement and by all other amendments and supplements to theprospectus, including post-effective amendments and all material incorporatedby reference in such prospectus.

 

“Register,”“registered” and “registration” refer to a registration made bypreparing and filing a Registration Statement in compliance with the 1933 Act(as defined below), and the declaration or ordering of effectiveness of suchRegistration Statement or document.

 

“RegistrableSecurities” or “Registrable Security” shall mean the Shares, any othersecurities issued or issuable with respect to or in exchange for RegistrableSecurities; provided, that, a security shall cease to be a Registrable Securityupon (A) sale pursuant to a Registration Statement or Rule 144 under the 1933Act or (B) such security becoming eligible, and the Company’s confirming sucheligibility in writing, for sale by the Investor pursuant to Rule 144(k).

 

“RegistrationStatement” shall mean any registration statement of the Company filed underthe 1933 Act that covers the resale of any of the Registrable Securitiespursuant to the provisions of this

 

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Agreement, amendments andsupplements to such Registration Statement, including post-effectiveamendments, all exhibits and all material incorporated by reference in suchRegistration Statement.

 

“RequiredInvestors” means the Investor and others who are affiliates and permittedtransferees of the Investor holding a majority of the Registrable Securities.

 

“SEC”means the U.S. Securities and Exchange Commission.

 

“Shares”means the shares of Common Stock issued upon conversion of and pursuant to theConvertible Note.

 

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

 

“1934Act” means the Securities Exchange Act of 1934, as amended, and the rulesand regulations promulgated thereunder.

 

2.               Registration. 

 

(a)   Registration Statements.

 

(i)    Promptly following theclosing of the purchase and sale of the Convertible Notes (the “Closing Date”)but no later than ninety (90) days after the Closing Date (the “Filing Deadline”),the Company shall prepare and file with the SEC one Registration Statement onForm S-1 (or on such form of registration statement as is then available toeffect a registration for resale of the Registrable Securities), covering thesale of the Registrable Securities on their issuance in an amount at leastequal to the number of Shares that the Company may issue at the currentconversion price of $7.00 per Share. Such Registration Statement shall include the plan of distributionattached hereto as **Exhibit A**. SuchRegistration Statement also shall cover, to the extent allowable under the 1933Act and the rules promulgated thereunder (including Rule 416), suchindeterminate number of additional shares of Common Stock resulting from stocksplits, stock dividends or similar transactions with respect to the RegistrableSecurities. The Company shall use its reasonable best efforts to obtain fromeach person who now has piggyback registration rights a waiver of those rightswith respect to the Registration Statement. The Registration Statement (andeach amendment or supplement thereto, and each request for acceleration ofeffectiveness thereof) shall be provided in accordance with Section 3(c) to theInvestors’ counsel prior to its filing or other submission. If a RegistrationStatement covering the Registrable Securities is not filed with the SEC on orprior to the Filing Deadline, the Company will make pro rata payments to eachInvestor, as liquidated damages and not as a penalty, in an amount equal to1.00% of the aggregate amount invested by such Investor for each 30-day periodor pro rata for any portion thereof following the Filing Deadline for which noRegistration Statement is filed with respect to the Registrable Securities.Such payments shall be made to each Investor in cash. Notwithstanding theforegoing, such payments shall not constitute the Investor’s exclusive remedy.

 

(ii)   S-3 Qualification.Promptly following the date (the “Qualification Date”) upon which the Companybecomes eligible to use a registration statement on Form S-3 to register theRegistrable Securities or Additional Shares, as applicable, for resale, but inno event more than sixty (60) days after the Qualification Date (the “QualificationDeadline”), the Company shall file a registration statement on Form S-3covering the Registrable Securities (or a post-effective amendment on Form S-3to the registration statement on Form S-1) (a “Shelf Registration Statement”)and shall use commercially reasonable efforts to cause such Shelf RegistrationStatement to be declared effective as promptly as practicable thereafter.

 

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(b)   Expenses. The Companywill pay all expenses associated with each registration, including filing andprinting fees, the Company’s counsel and accounting fees and expenses, costsassociated with clearing the Registrable Securities for sale under applicablestate securities laws, listing fees and the Investors’ reasonable expenses inconnection with the registration, but excluding the Investors’ legal fees,discounts, commissions, fees of underwriters, selling brokers, dealer managersor similar securities industry professionals with respect to the RegistrableSecurities being sold.

 

(c)   Effectiveness.

 

(i)    The Company shall usecommercially reasonable efforts to have the Registration Statement declaredeffective as soon as practicable. The Company shall notify the Investors byfacsimile or e-mail as promptly as practicable, and in any event, withinforty-eight (48) hours, after any Registration Statement is declared effectiveand shall simultaneously provide the Investors with copies of any relatedProspectus to be used in connection with the sale or other disposition of thesecurities covered thereby. If (A)(x) a Registration Statement covering theRegistrable Securities is not declared effective by the SEC prior to theearlier of (i) five (5) Business Days after the SEC shall have informed theCompany that no review of the Registration Statement will be made or (ii) the120th day after the Closing Date or (B) after a RegistrationStatement has been declared effective by the SEC, sales of Shares cannot bemade pursuant to such Registration Statement for any reason (including withoutlimitation by reason of a stop order, or the Company’s failure to update theRegistration Statement), but excluding the inability of any Investor to sellthe Registrable Securities covered thereby due to market conditions and exceptas excused pursuant to subparagraph (ii) below, then the Company will make prorata payments to each Investor, as liquidated damages and not as a penalty, inan amount equal to 1.00% of the aggregate amount invested by such Investor foreach 30-day period or pro rata for any portion thereof following the date bywhich such Registration Statement should have been effective (the “BlackoutPeriod”).  The amounts payable asliquidated damages pursuant to this paragraph shall be paid monthly withinthree (3) Business Days of the last day of each month following thecommencement of the Blackout Period until the termination of the BlackoutPeriod. Such payments shall be made to each Investor in cash. Notwithstandingthe foregoing, such payments shall not constitute the Investor’s exclusiveremedy.

 

(ii)   For not more than twenty(20) consecutive days or for a total of not more than forty-five (45) days inany twelve (12) month period, the Company may delay the disclosure of materialnon-public information concerning the Company, by suspending the use of anyProspectus included in any registration contemplated by this Section containingsuch information, the disclosure of which at the time is not, in the good faithopinion of the Company, in the best interests of the Company (an “Allowed Delay”);provided, that the Company shall promptly (a) notify the Investors in writingof the existence of (but in no event, without the prior written consent of anInvestor, shall the Company disclose to such Investor any of the facts orcircumstances regarding) material non-public information giving rise to an AllowedDelay, (b) advise the Investors in writing to cease all sales under theRegistration Statement until the end of the Allowed Delay and (c) usecommercially reasonable efforts to terminate an Allowed Delay as promptly aspracticable.

 

3.     Company Obligations.The Company will use commercially reasonable efforts to effect the registration of the Registrable Securitiesin accordance with the terms hereof, and pursuant thereto the Company will, asexpeditiously as possible:

 

(a)    use commercially reasonable efforts to causesuch Registration Statement to become effective and to remain continuouslyeffective for a period that will terminate upon the earlier of (i) the date onwhich all Registrable Securities covered by such Registration Statement asamended from time to time, have been sold, and (ii) the date on which allRegistrable Securities covered by such Registration Statement

 

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may he sold pursuant to Rule144(k) (the “Effectiveness Period”) and advise the Investors in writing whenthe Effectiveness Period has expired;

 

(b)   prepare and file with the SEC such amendmentsand post-effective amendments to the Registration Statement and the Prospectusas may be necessary to keep the Registration Statement effective for the periodspecified in Section 3(a) and to comply with the provisions of the 1933 Act andthe 1934 Act with respect to the distribution of all of the RegistrableSecurities covered thereby;

(c)   provide copies to and permit counseldesignated by the Investors to review each Registration Statement and allamendments and supplements thereto prior to their filing with the SEC;

 

(d)   furnish to the Investors’ legal counsel (i)promptly after the same is prepared and publicly distributed, filed with theSEC, or received by the Company (but not later than two (2) Business Days afterthe filing date, receipt date or sending date, as the case may be) one (1) copyof any Registration Statement and any amendment thereto, each preliminaryprospectus and Prospectus and each amendment or supplement thereto, and eachletter written by or on behalf of the Company to the SEC or the staff of theSEC and each item of correspondence from the SEC or the staff of the SEC, ineach case relating to such Registration Statement (other than any portion ofany item thereof which contains information for which the Company has soughtconfidential treatment), and (ii) such number of copies of a Prospectus,including a preliminary prospectus, and all amendments and supplements theretoand such other documents as each Investor may reasonably request in order tofacilitate the disposition of the Registrable Securities owned by such Investorthat are covered by the related Registration Statement;

 

(e)   use commercially reasonable efforts to (i)prevent the issuance of any stop order or other suspension of effectivenessand, (ii) if such order is issued, obtain the withdrawal of any such order atthe earliest possible moment;

 

(f)    prior to any public offering of RegistrableSecurities, use commercially reasonable efforts to register or qualify orcooperate with the Investors and their counsel in connection with theregistration or qualification of such Registrable Securities for offer and saleunder the securities or blue sky laws of such jurisdictions requested by theInvestors and do any and all other commercially reasonable acts or thingsnecessary or advisable to enable the distribution in such jurisdictions of theRegistrable Securities covered by the Registration Statement; provided, however,that the Company shall not be required in connection therewith or as acondition thereto to (i) qualify to do business in any jurisdiction where itwould not otherwise be required to qualify but for this Section 3(f), (ii)subject itself to general taxation in any jurisdiction where it would nototherwise be so subject but for this Section 3(f) or (iii) file a generalconsent to service of process in any such jurisdiction;

 

(g)   use commercially reasonable efforts to causeall Registrable Securities covered by a Registration Statement to be listed oneach securities exchange, interdealer quotation system or other market on whichsimilar securities issued by the Company are then listed;

 

(h)   immediately notify the Investors, at any timewhen a Prospectus relating to Registrable Securities is required to bedelivered under the 1933 Act, upon discovery that, or upon the happening of anyevent as a result of which, the Prospectus included in a RegistrationStatement, as then in effect, includes an untrue statement of a material factor omits to state any material fact required to be stated therein or necessaryto make the statements therein not misleading in light of the circumstancesthen existing, and at the request of any such holder, promptly prepare andfurnish to such holder a reasonable number of copies of a supplement to or anamendment of such Prospectus as may be necessary so that, as thereafterdelivered to the purchasers of such Registrable Securities, such Prospectusshall not include an

 

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untrue statement of amaterial fact or omit to state a material fact required to be stated therein ornecessary to make the statements therein not misleading in light of thecircumstances then existing;

 

(i)    otherwise use commercially reasonableefforts to comply with all applicable rules and regulations of the SEC underthe 1933 Act and the 1934 Act, take such other actions as may he reasonablynecessary to facilitate the registration of the Registrable Securitieshereunder; and make available to its security holders, as soon as reasonablypracticable, but not later than the Availability Date (as defined below), anearnings statement covering a period of at least twelve (12) months, beginningafter the effective date of each Registration Statement, which earningsstatement shall satisfy the provisions of Section 11(a) of the 1933 Act,including Rule 158 promulgated thereunder (for the purpose of this subsection3(i), “Availability Date” means the 45th day following the end of the fourthfiscal quarter that includes the effective date of such Registration Statement,except that, if such fourth fiscal quarter is the last quarter of the Company’sfiscal year, “Availability Date” means the 90th day after the end of suchfourth fiscal quarter); and

 

(j)    with a view to making available to theInvestors the benefits of Rule 144 (or its successor rule) and any other ruleor regulation of the SEC that may at any time permit the Investors to sellshares of Common Stock to the public without registration, the Companycovenants and agrees to:  (i) make andkeep public information available, as those terms are understood and defined inRule 144, until the earlier of (A) six months after such date as all of theRegistrable Securities may be resold pursuant to Rule 144(k) or any other ruleof similar effect or (B) such date as all of the Registrable Securities shallhave been resold; (ii) file with the SEC in a timely manner all reports andother documents required of the Company under the 1934 Act; and (iii) furnishto each Investor upon request, as long as such Investor owns any RegistrableSecurities, (A) a written statement by the Company that it has complied withthe reporting requirements of the 1934 Act, (B) a copy of the Company’s mostrecent Annual Report on Form 10-KSB or Quarterly Report on Form 10-QSB and (C)such other information as may be reasonably requested in order to avail suchInvestor of any rule or regulation of the SEC that permits the selling of anysuch Registrable Securities without registration.

 

4.     Due Diligence Review;Information. The Company shall make available, during normal businesshours, for inspection and review by the Investors, advisors to andrepresentatives of the Investors (who may or may not be affiliated with theInvestors and who are reasonably acceptable to the Company), all financial andother records, all SEC Filings (as defined in the Convertible Note) and otherfilings with the SEC, and all other corporate documents and properties of theCompany as may be reasonably necessary for the purpose of such review, andcause the Company’s officers, directors and employees, within a reasonable timeperiod, to supply all such information reasonably requested by the Investors orany such representative, advisor or underwriter in connection with suchRegistration Statement (including, without limitation, in response to allquestions and other inquiries reasonably made or submitted by any of them),prior to and from time to time after the filing and effectiveness of theRegistration Statement for the sole purpose of enabling the Investors and suchrepresentatives, advisors and underwriters and their respective accountants andattorneys to conduct initial and ongoing due diligence with respect to the Companyand the accuracy of such Registration Statement.

 

The Company shall not disclose material nonpublic information to theInvestors, or to advisors to or representatives of the Investors, unless priorto disclosure of such information the Company identifies such information asbeing material nonpublic information and provides the Investors, such advisorsand representatives with the opportunity to accept or refuse to accept suchmaterial nonpublic information for review and any Investor wishing to obtainsuch information enters into an appropriate confidentiality agreement with theCompany with respect thereto.

 

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5.     Obligations of theInvestors. 

 

(a)   Each Investor shall furnish in writing to theCompany such information regarding itself, the Registrable Securities held byit and the intended method of disposition of the Registrable Securities held byit, as shall be reasonably required to effect the registration of suchRegistrable Securities and shall execute such documents in connection with suchregistration as the Company may reasonably request. At least five (5)**BusinessDays prior to the first anticipated filing date of any Registration Statement,the Company shall notify each Investor of the information the Company requiresfrom such Investor if such Investor elects to have any of the RegistrableSecurities included in the Registration Statement. An Investor shall providesuch information to the Company at least two (2) Business Days prior to the firstanticipated filing date of such Registration Statement if such Investor electsto have any of the Registrable Securities included in the RegistrationStatement.

 

(b)   Each Investor, by its acceptance of theRegistrable Securities agrees to cooperate with the Company as reasonablyrequested by the Company in connection with the preparation and filing of aRegistration Statement hereunder, unless such Investor has notified the Companyin writing of its election to exclude all of its Registrable Securities fromsuch Registration Statement.

 

(c)   Each Investor agrees that, upon receipt ofany notice from the Company of either (i) the commencement of an Allowed Delaypursuant to Section 2(c)(ii) or (ii) the happening of an event pursuant toSection 3(h) hereof, such Investor will immediately discontinue disposition ofRegistrable Securities pursuant to the Registration Statement covering suchRegistrable Securities, until the Investor’s receipt of the copies of thesupplemented or amended prospectus filed with the SEC and until any relatedpost-effective amendment is declared effective and, if so directed by theCompany, the Investor shall deliver to the Company (at the expense of theCompany) or destroy (and deliver to the Company a certificate of destruction) allcopies in the Investor’s possession of the Prospectus covering the RegistrableSecurities current at the time of receipt of such notice.

 

6.     Indemnification. 

 

(a)   The Company will indemnify and hold harmlesseach Investor and its officers, directors, members, limited partners, employeesand agents, successors and assigns, and each other person, if any, who controlssuch Investor within the meaning of the 1933 Act, against any losses, claims,damages or liabilities, joint or several, to which they may become subjectunder the 1933 Act or otherwise, insofar as such losses, claims, damages orliabilities (or actions in respect thereof) arise out of or are based upon: (i)any untrue statement or alleged untrue statement of any material fact containedin any Registration Statement, any preliminary prospectus or final prospectuscontained therein, or any amendment or supplement thereof; (ii) any blue skyapplication or other document executed by the Company specifically for thatpurpose or based upon written information furnished by the Company filed in anystate or other jurisdiction in order to qualify any or all of the RegistrableSecurities under the securities laws thereof (any such application, document orinformation herein called a “Blue Sky Application”); (iii) the omission oralleged omission to state therein a material fact required to be stated thereinor necessary to make the statements therein not misleading; (iv) any violationby the Company or its agents of any rule or regulation promulgated under the1933 Act applicable to the Company or its agents and relating to action orinaction required of the Company in connection with such registration; or (v)any failure to register or qualify the Registrable Securities included in anysuch Registration in any state where the Company or its agents hasaffirmatively undertaken or agreed in writing that the Company will undertakesuch registration or qualification on an Investor’s behalf and will reimbursesuch Investor, and each such officer, director or member and each suchcontrolling person for any legal or other expenses reasonably incurred by themin connection with investigating or defending any such loss, claim, damage,liability or action; provided, however, that the Company will not be liable inany such case if and to the extent that

 

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any such loss, claim, damageor liability arises out of or is based upon an untrue statement or allegeduntrue statement or omission or alleged omission so made in conformity withinformation furnished by such Investor or any such controlling person inwriting specifically for use in such Registration Statement or Prospectus.

 

(b)   Indemnification by the Investors. EachInvestor agrees, severally but not jointly, to indemnify and hold harmless, tothe fullest extent permitted by law, the Company, its directors, officers,employees, stockholders and each person who controls the Company (within themeaning of the 1933 Act) against any losses, claims, damages, liabilities and expense(including reasonable attorney fees) resulting from any untrue statement of amaterial fact or any omission of a material fact required to be stated in theRegistration Statement or Prospectus or preliminary prospectus or amendment orsupplement thereto or necessary to make the statements therein not misleading,to the extent, but only to the extent that such untrue statement or omission iscontained in any information furnished in writing****by suchInvestor to the Company specifically for inclusion in such RegistrationStatement or Prospectus or amendment or supplement thereto. In no event shallthe liability of an Investor be greater in amount than the dollar amount of theproceeds (net of all expense paid by such Investor in connection with any claimrelating to this Section 6 and the amount of any damages such Investor hasotherwise been required to pay by reason of such untrue statement or omission)received by such investor upon the sale of the Registrable Securities includedin the Registration Statement giving rise to such indemnification obligation.

 

(c)   Conduct of Indemnification Proceedings.Any person entitled to indemnification hereunder shall (i) give prompt noticeto the indemnifying party of any claim with respect to which it seeks indemnificationand (ii) permit such indemnifying party to assume the defense of such claimwith counsel reasonably satisfactory to the indemnified party; provided thatany person entitled to indemnification hereunder shall have the right to employseparate counsel and to participate in the defense of such claim, but the feesand expenses of such counsel shall be at the expense of such person unless (a)the indemnifying party has agreed to pay such fees or expenses, (b) theindemnifying party shall have failed to assume the defense of such claim andemploy counsel reasonably satisfactory to such person or (c) in the reasonablejudgment of any such person, based upon written advice of its counsel, aconflict of interest exists between such person and the indemnifying party withrespect to such claims (in which case, if the person notifies the indemnifyingparty in writing that such person elects to employ separate counsel at theexpense of the indemnifying party, the indemnifying party shall not have theright to assume the defense of such claim on behalf of such person); andprovided, further, that the failure of any indemnified party to give notice asprovided herein shall not relieve the indemnifying party of its obligationshereunder, except to the extent that such failure to give notice shallmaterially adversely affect the indemnifying party in the defense of any suchclaim or litigation, it is understood that the indemnifying party shall not, inconnection with any proceeding in the same jurisdiction, be liable for fees orexpenses of more than one separate firm of attorneys at any time for all suchindemnified parties. No indemnifying party will, except with the consent of theindemnified party, consent to entry of any judgment or enter into anysettlement that does not include as an unconditional term thereof the giving bythe claimant or plaintiff to such indemnified party of a release from allliability in respect of such claim or litigation.

 

(d)   Contribution. If for any reason theindemnification provided for in the preceding paragraphs (a) and (b) isunavailable to an indemnified party or insufficient to hold it harmless, otherthan as expressly specified therein, then the indemnifying party shallcontribute to the amount paid or payable by the indemnified party as a resultof such loss, claim, damage or liability in such proportion as is appropriateto reflect the relative fault of the indemnified party and the indemnifyingparty, as well as any other relevant equitable considerations. No person guiltyof fraudulent misrepresentation within the meaning of Section 11(f) of the 1933Act shall be entitled to contribution from any person not guilty of suchfraudulent misrepresentation. In no event shall the contribution obligation ofa holder of Registrable Securities be greater in amount than the dollar amountof the proceeds (net of all expenses paid by such

 

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holder in connection withany claim relating to this Section 6 and the amount of any damages such holderhas otherwise been required to pay by reason of such untrue or alleged untruestatement or omission or alleged omission) received by it upon the sale of theRegistrable Securities giving rise to such contribution obligation.

 

7.     Miscellaneous. 

 

(a)   Amendments and Waivers. This Agreementmay be amended only by a writing signed by the Company and the RequiredInvestors. The Company may take any action herein prohibited, or omit toperform any act herein required to be performed by it, only if the Company shallhave obtained the written consent to such amendment, action or omission to act,of the Required Investors.

 

(b)   Notices. All notices and othercommunications provided for or permitted hereunder shall be made as set forthin Section (m)(iv) of the Convertible Note.

 

(c)   Assignments and Transfers by Investors.The provisions of this Agreement shall be binding upon and inure to the benefitof the Investors and their respective successors and assigns. An Investor maytransfer or assign, in whole or from time to time in part, to one or morepersons its rights hereunder in connection with the transfer of RegistrableSecurities by such Investor to such person, provided that such Investorcomplies with all laws applicable thereto and provides written notice of assignmentto the Company promptly after such assignment is effected.

 

(d)   Assignments and Transfers by the Company.This Agreement may not be assigned by the Company (whether by operation of lawor otherwise) without the prior written consent of the Required Investors,provided, however, that the Company may assign its rights and delegate itsduties hereunder to any surviving or successor corporation in connection with amerger or consolidation of the Company with another corporation, or a sale,transfer or other disposition of all or substantially all of the Company’sassets to another corporation, without the prior written consent of theRequired Investors, after notice duly given by the Company to each Investor.

 

(e)   Benefits of the Agreement. The terms andconditions of this Agreement shall inure to the benefit of and be binding uponthe respective permitted successors and assigns of the parties. Nothing in thisAgreement, express or implied, is intended to confer upon any party other thanthe parties hereto or their respective successors and assigns any rights,remedies, obligations, or liabilities under or by reason of this Agreement,except as expressly provided in this Agreement.

 

(f)    Counterparts; Faxes. This Agreementmay be executed in two or more counterparts, each of which shall be deemed anoriginal, but all of which together shall constitute one and the sameinstrument. This Agreement may also be executed via facsimile, which shall hedeemed an original.

 

(g)   Titles and Subtitles. The titles and subtitlesused in this Agreement are used for convenience only and are not to beconsidered in construing or interpreting this Agreement.

 

(h)   Severability. Any provision of thisAgreement that is prohibited or unenforceable in any jurisdiction shall, as tosuch jurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof but shallhe interpreted as if it were written so as to be enforceable to the maximumextent permitted by applicable law, and any such prohibition orunenforceability in any jurisdiction shall not invalidate or renderunenforceable such provision in any other jurisdiction.  To the extent permitted by applicable law,the parties hereby waive any provision of law which renders any provisionshereof prohibited or unenforceable in any respect.

 

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(i)    Further Assurances. The parties shallexecute and deliver all such further instruments and documents and take allsuch other actions as may reasonably be required to carry out the transactionscontemplated hereby and to evidence the fulfillment of the agreements hereincontained.

 

(j)    Entire Agreement. This Agreement isintended by the parties as a final expression of their agreement and intendedto be a complete and exclusive statement of the agreement and understanding ofthe parties hereto in respect of the subject matter contained herein. ThisAgreement supersedes all prior agreements and understandings between theparties with respect to such subject matter.

 

(k)   Governing Law Consent to Jurisdiction; Waiverof Jury Trial. ThisAgreement shall be governed by, and construed in accordance with, the internallaws of the State of Colorado without regard to the choice of law principlesthereof. Each of the parties hereto irrevocably submits to the exclusivejurisdiction of the courts of the State of Colorado located in the City andCounty of Denver and the United States District Court in the City and County ofDenver for the purpose of any suit, action, proceeding or judgment relating toor arising out of this Agreement and the transactions contemplated hereby. Eachof the parties hereto irrevocably consents to the jurisdiction of any suchcourt in any such suit, action or proceeding and to the laying of venue in suchcourt. Each party hereto irrevocably waives any objection to the laying ofvenue of any such suit, action or proceeding brought in such courts andirrevocably waives any claim that any such suit, action or proceeding broughtin any such court has been brought in an inconvenient forum. **EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUESTA TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTSTHAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.**

 

INWITNESS WHEREOF, the parties have executed this Agreement or caused their dulyauthorized officers to execute this Agreement as of the date first abovewritten.

 
| The  Company:     | PRB  Gas Transportation, Inc. |
|-------------------|-------------------------------|
|              |                          |
|              |                          |
|              | By:                           |   |   |
|              |                          | Robert  W. Wright |   |
|              |                          | Chief  Executive Officer |   |
|              |                          |
|              |                          |
| The  Investor(s): |                          |
|              |                          |   |
|              |                          |   |
|              | By:                           |   |   |
|              |                          |   |
|              | Name:                         |   |   |
|              |                          |   |
|              | Title:                        |   |   |
|                   |                               |  |  |  |  |  |

 

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**EXHIBIT A**

**TO**

**REGISTRATION RIGHTS AGREEMENT**

 

**PLAN OF D****ISTRIBUTION**

 

The selling stockholder(s), which as used herein includes donees,pledgees, transferees or other successors-in-interest selling shares of commonstock or interests in shares of common stock received after**the date ofthis prospectus from a selling stockholder as a gift, pledge, partnershipdistribution or other transfer, may, from time to time, sell, transfer orotherwise dispose of any or all of their shares of common stock or interests inshares of common stock on any stock exchange, market or****trading facilityon which the shares are traded or in private transactions. These dispositionsmay be at fixed prices, at prevailing market prices at the time of sale, atprices related to the prevailing market price, at varying prices determined atthe time of sale or at negotiated prices.

 

The selling stockholder(s) may use any one or more of the followingmethods when disposing of shares or interests therein:

 

•                  ordinary brokerage transactions andtransactions in which the broker-dealer solicits purchasers;

 

•      block trades in which the broker-dealerwill attempt to sell the shares as agent, but may position and resell a portionof the block as principal to facilitate the transaction;

 

•      purchases by a broker-dealer as principaland resale by the broker-dealer for its account;

 

•      an exchange distribution in accordancewith the rules of the applicable exchange;

 

•     privately negotiated transactions;

 

•      through the writing or settlement ofoptions or other hedging transactions, whether through an options exchange orotherwise;

 

•      broker-dealers may agree with the sellingstockholders to sell a specified number or such shares at a stipulated priceper share; and

 

•      acombination of any such methods of sale.

 

The selling stockholder(s) may, from time to time, pledge or grant asecurity interest in some or all of the shares of common stock owned by themand, if they default in the performance of their secured obligations, thepledgees or secured parties may offer and sell the shares of common stock, fromtime to time, under this prospectus, or under an amendment to this prospectusunder Rule 424(b)(3) or other applicable provision of the Securities Actamending the list of selling stockholders to include the pledgee, transferee orother successors in interest as selling stockholders under this prospectus. Theselling stockholders also may transfer the shares of common stock in othercircumstances, in which case the transferees, pledgees or other successors ininterest will be the selling beneficial owners for purposes of this prospectus.

 

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The aggregate proceeds to the selling stockholders from the sale of thecommon stock offered by them will be the purchase price of the common stockless discounts or commissions, if any. Each of the selling stockholdersreserves the right to accept and, together with their agents from time to time,to reject, in whole or in part, any proposed purchase of common stock to bemade directly or through agents. We will not receive any of the proceeds fromthis offering. Upon any exercise of the warrants by payment of cash, however,we will receive the exercise price of the warrants.

 

Theselling stockholders also may resell all or a portion of the shares in openmarket transactions in reliance upon Rule 144 under the Securities Act of 1933,provided that they meet the criteria and conform to the requirements of thatrule.

 

Theselling stockholders and any underwriters, broker-dealers or agents thatparticipate in the sale of the common stock or interests therein may beunderwriters within the meaning of Section 2(11) of the Securities Act. Anydiscounts, commissions, concessions or profit they earn on any resale of theshares may be underwriting discounts and commissions under the Securities Act.Selling stockholders who are ‘underwriters’ within the meaning of Section 2(11)of the Securities Act will be subject to the prospectus delivery requirementsof the Securities Act.

 

Tothe extent required, the shares of our common stock to be sold, the names ofthe selling stockholders, the respective purchase prices and public offeringprices, the names of any agents, dealer or underwriter, any applicablecommissions or discounts with respect to a particular offer will be set forthin an accompanying prospectus supplement or, if appropriate, a post-effectiveamendment to the registration statement that includes this prospectus.

 

Inorder to comply with the securities laws of some states, if applicable, thecommon stock may be sold in these jurisdictions only through registered orlicensed brokers or dealers. In addition, in some states the common stock maynot be sold unless it has been registered or qualified for sale or an exemptionfrom registration or qualification requirements is available and is compliedwith.

 

Wehave advised the selling stockholders that the anti-manipulation rules ofRegulation M under the Exchange Act may apply to sales of shares in the marketand to the activities of the selling stockholders and their affiliates. Inaddition, we will make copies of this prospectus (as it may he supplemented oramended from time to time) available to the selling stockholders for thepurpose of satisfying the prospectus delivery requirements of the SecuritiesAct. The selling stockholders may indemnify any broker-dealer that participatesin transactions involving the sale of the shares against certain liabilities,including liabilities arising under the Securities Act.

 

Wehave agreed to indemnify the selling stockholders against liabilities,including liabilities under the Securities Act and state securities laws,relating to the registration of the shares offered by this prospectus.

 

We have agreed with the selling stockholders to keep the registrationstatement of which this prospectus constitutes a part effective until the earlier of (1) such time as all of the sharescovered by this prospectus have been disposed of pursuant to andin accordance with the registration statement or (2) the date on which the sharesmay be sold pursuant to Rule144(k) of the Securities Act.

 

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