QuickLinks
 -- Click here to rapidly navigate through this document
  



 
 

Exhibit 10.7    
    


INTERCREDITOR AND SUBORDINATION AGREEMENT  


        This Intercreditor and Subordination Agreement (this "Agreement"), dated as of October 27, 2005, is among
BNP Paribas, as Administrative Agent (in such capacity, with its successors and assigns, the "Senior Administrative Agent") for the Senior Revolving
Lenders, Royal Bank of Canada, as Subordinated Administrative Agent and Linn Energy LLC, a Delaware limited liability company (the "Borrower"). 


        WHEREAS,
the Borrower, BNP Paribas, as Senior Administrative Agent and other Senior Revolving Lenders have entered into the Senior Revolving Credit Agreement, pursuant to which such
financial institutions will agree, subject to the terms and conditions thereof, to make loans and extend other financial accommodations to the Borrower; and 


        WHEREAS,
the Borrower proposes to amend the Senior Revolving Credit Agreement to allow for the Term Loan Agreement; and 



        WHEREAS,
it is a condition precedent to the obligations of the Senior Revolving Lenders under the amendment to the Senior Revolving Credit Agreement that the Borrower execute and deliver
this Agreement; 


        NOW
THEREFORE, in consideration of the foregoing and the mutual covenants herein contained and other good and valuable consideration, the existence and sufficiency of which are expressly
recognized by all of the parties hereto, and to induce the Senior Lenders to execute the Senior Revolving Credit Documents, the parties agree as follows: 


ARTICLE I

Defined Terms.  


        Section 1.01    Each
capitalized term used in this Agreement, but not defined herein, shall have the meaning ascribed such term in the Senior Revolving Credit Agreement. 


        Section 1.02    The
following terms have the following meanings when used in this Agreement: 


        "Blockage Period" means a Non-Payment Blockage Period or a Payment Blockage Period. 


        "Eligible Swap Agreement" means any present or future Swap Agreement between the Borrower or any Subsidiary and any Senior Revolving
Lender or any Affiliate of any Senior Revolving Lender. For the avoidance of doubt, a Swap Agreement ceases to be an Eligible Swap Agreement if the Person that is the counterparty to the Borrower
under a Swap Agreement ceases to be a Senior Revolving Lender under the Senior Revolving Credit Agreement (or, in the case of an affiliate of a Senior Revolving Lender, the Person affiliated therewith
ceases to be a Senior Revolving Lender under the Senior Revolving Credit Agreement). 


        "Enforcement Action" means, with respect to any Subordinated Obligations or Senior Indebtedness: any enforcement of any right or remedy
including any enforcement or foreclosure of Liens granted by the Borrower or any Subsidiary to secure any or all of such Subordinated Obligations or Senior Indebtedness, any enforcement or foreclosure
of Liens on any capital stock or other equity interests in the Borrower or any Subsidiary which may be granted by the Borrower or its Subsidiaries or any holder of equity in the Borrower to secure any
or all of such Subordinated Obligations or Senior Indebtedness, or any other efforts to collect proceeds from the Borrower's or any of its Subsidiary's assets or properties (including proceeds of
production) to satisfy the Subordinated Obligations or Senior Indebtedness, including, without limitation, the commencement, or the joining with any other creditor of the Borrower or any Subsidiary in
the commencement of any Insolvency Proceeding against 


1







 



the
Borrower or any Subsidiary; provided, that none of the following shall constitute an Enforcement Action: (a) acceleration of any of the Subordinated Obligations following acceleration of
any of the Senior Indebtedness (provided that such acceleration of Senior Indebtedness has not previously been rescinded), (b) acceleration of any of the Senior Indebtedness following
acceleration of any of the Subordinated Obligations (provided that such acceleration of the Subordinated Obligations has not previously been rescinded), (c) actions by any Term Lender to obtain
possession of or receive Reorganization Securities, or (d) taking any action described above during the existence of any Insolvency Proceeding subject to the jurisdiction of a court of
competent authority. 


        "Initial Public Offering" shall mean the initial public offering of common units of the Borrower. 


        "Insolvency Proceeding" shall mean (a) any voluntary or involuntary case, action, or proceeding before any Governmental Authority
having jurisdiction over the applicable Person or its assets relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up, or relief of debtors,
or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other similar arrangement in respect of its creditors generally or any
substantial portion of its creditors; in each case whether undertaken under U.S. Federal, state, or foreign law. 


        "Non-Payment Blockage Period" means, with respect to any Non-Payment Default, the period from and including the
date of receipt by the Term Lenders or the Subordinated Administrative Agent or other representative of a Non-Payment Default Notice relating thereto until the first to occur of
(a) the date upon which the Senior Indebtedness have been paid in full in cash, all commitments of any holder of Senior Indebtedness to make loans or extensions of credit have terminated, and
all letters of credit issued by any holder of Senior Indebtedness have expired, terminated or been fully collateralized in cash, (b) the 179th day after receipt of such Non-Payment
Default Notice, (c) the date on which the Non-Payment Default which is the subject of such Non-Payment Default Notice has been waived in writing by the applicable holder
or holders of the Senior Indebtedness or an agent or representative on their behalf, cured, or ceased to exist, or (d) the date upon which the Person(s) giving such Non-Payment
Default Notice notify the Term Lenders or the Subordinated
Administrative Agent or other representative in writing of the termination of such Non-Payment Blockage Period. 


        "Non-Payment Default" means the occurrence of any Borrowing Base Deficiency (as defined in the Senior Revolving Credit
Agreement) or other event under any Senior Revolving Document evidencing Senior Indebtedness, not constituting a Payment Default, which gives the holder(s) of such Senior Indebtedness, or an agent or
representative acting on behalf of such holder(s), the right to cause the maturity of such Senior Indebtedness to be accelerated immediately without any further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace period. 


        "Non-Payment Default Notice" means a written notice from or on behalf of the Senior Indebtedness Representative that a
Non-Payment Default has occurred and is continuing which identifies such Non-Payment Default and specifically designates such notice as a "Non-Payment Default
Notice". 


        "Payment Blockage Period" means, with respect to any Payment Default or Senior Indebtedness Acceleration, the period from and including
the date of receipt by the Term Lenders or the Subordinated Administrative Agent or other representative of a Payment Default Notice relating thereto until the first to occur of (a) the date
upon which the Senior Indebtedness have been paid in full in cash, all commitments of any holder of Senior Indebtedness to make loans or extensions of credit have terminated, and all letters of credit
issued by any holder of Senior Indebtedness have expired, terminated or been fully collateralized in cash, (b) if such Payment Default Notice relates to a Payment Default, the date on which the
Payment Default which is the subject of such Payment Default Notice has been waived in writing by the applicable holder or holders of the Senior Indebtedness or an agent or representative on their
behalf, cured or ceased to exist, or if such Payment Default Notice 


2







 



relates
to a Senior Indebtedness Acceleration, the date on which such acceleration is rescinded, annulled or ceased to exist, or (c) the day upon which the Person(s) giving such Payment Default
Notice notify the Term Lenders or the Subordinated Administrative Agent or other representative in writing of the termination of such Payment Blockage Period. 



        "Payment Default" means a default by the Borrower or any Guarantor in the payment of any amount owing with respect to the Senior
Indebtedness, whether with respect to principal, interest, premium, letter of credit reimbursement obligations, commitment fees or letter of credit fees or otherwise when the same becomes due and
payable, whether at maturity or at a date fixed for payment of an installment or prepayment or by declaration or acceleration or otherwise. 


        "Payment Default Notice" means a written notice from or on behalf of the Senior Indebtedness Representative that either (i) a
Payment Default with respect to such Senior Indebtedness has occurred
and is continuing, or (ii) a Senior Indebtedness Acceleration with respect to such Senior Indebtedness has occurred and is continuing which identifies such Payment Default and specifically
designates such notice as a "Payment Default Notice". 


        "Reorganization Securities" means (a) debt securities that are issued pursuant to an Insolvency Proceeding the payment of which is
subordinate and junior at least to the extent provided in this Agreement to the payment of the Senior Indebtedness outstanding at the time of the issuance thereof (including any refinancing of Senior
Indebtedness pursuant to an Insolvency Proceeding) and to the payment of all debt securities issued in exchange for such Senior Indebtedness in such Insolvency Proceeding (whether such subordination
is effected by the terms of such securities, an order or decree issued in such Insolvency Proceeding, by agreement of the Term Lenders or otherwise), or (b) equity securities that are issued
pursuant to an Insolvency Proceeding; provided, in either case, that such securities are authorized by an order or decree made by a court of competent jurisdiction in such Insolvency Proceeding. 


        "Required Senior Revolving Lenders" means Senior Revolving Lenders holding at least sixty-six and two-thirds
percent (662/3%) of the outstanding Senior Indebtedness, or if no principal amount of Loans or letters of credit is then outstanding, Senior Revolving Lenders holding at least
sixty-six and two-thirds percent (662/3%) of the total commitments. 



        "Senior Indebtedness" means and includes (a) all principal indebtedness for loans now outstanding or hereafter incurred, and all
letter of credit reimbursement obligations now existing or hereafter arising, under the Senior Revolving Credit Agreement, provided that the aggregate outstanding principal amount of Senior
Indebtedness under this clause (a) shall not exceed $250,000,000 at any time, and provided further, that if the aggregate principal amount of Senior Indebtedness (constituting principal and
letter of credit reimbursement obligations) shall exceed $250,000,000, then the subordination of the Term Notes as contemplated by this Agreement to the Senior Indebtedness of $250,000,000 or less
shall not be impaired, (b) all amounts now or hereafter owing to any of the Senior Revolving Lenders or any of their Affiliates under any Eligible Swap Agreement, (c) all interest
accruing on the Senior Indebtedness described in the preceding clauses (a) and (b), and (d) all other monetary obligations (whether now outstanding or hereafter incurred) for which the
Borrower or any Guarantor is responsible or liable as obligor, guarantor or otherwise under or pursuant to any of the Senior Revolving Credit Documents including, without limitation, all fees,
penalties, yield protections, breakage costs, damages, indemnification obligations, reimbursement obligations, and expenses (including, without limitation, fees and expenses of counsel to the Senior
Indebtedness Representative and the Senior Revolving Lenders) together with interest on the foregoing to the extent provided for in the Senior Revolving Credit Documents. The interest described in the
preceding clause (c) and the premiums and penalties described in the preceding clause (d) include, without limitation, all interest accruing after the commencement of any Insolvency
Proceeding under the terms of the Senior 


3







 



Revolving
Credit Documents whether or not such interest constitutes an allowed claim in any such Insolvency Proceeding. 


        "Senior Indebtedness Acceleration" means with respect to the Senior Indebtedness that the holder or holders of such Senior Indebtedness,
or an agent or representative on behalf of such holder or holders, have caused the maturity of such Senior Indebtedness to be accelerated. 


        "Senior Indebtedness Default" means a Payment Default or a Non-Payment Default. 


        "Senior Indebtedness Representative" means (a) initially, BNP Paribas, as administrative agent for the Senior Revolving Lenders
under the Senior Revolving Credit Agreement or (b) such other Person selected by the Majority Lenders (as such term is defined in the Senior Revolving Credit Agreement) to replace BNP Paribas
or the then Senior Indebtedness Representative. 


        "Senior Revolving Credit Agreement" means that certain Credit Agreement dated as of April 13, 2005, as amended by that certain
First Amendment and Consent, dated May 3, 2005, the Second Amendment, dated August 12, 2005 and the Third Amendment, dated as of October 27, 2005, among the Borrower, BNP Paribas,
as administrative agent and the financial institutions listed therein from time to time as Senior Revolving Lenders, as from time to time renewed, extended, amended, supplemented, or restated, and any
agreements representing the refinancing, replacement, or substitution in whole or in part of the revolving credit loans and letter of credit liabilities made or incurred under such Senior Revolving
Credit Agreement. 


        "Senior Revolving Credit Documents" means, collectively, (a) the Senior Revolving Credit Agreement and the Eligible Swap
Agreements, (b) any note, bond or other instrument evidencing Senior Indebtedness, (c) all mortgages, security agreements, pledge agreements or financing statements evidencing, creating
or perfecting any Lien to secure the Senior Indebtedness in any way, (d) all guarantees of the Senior Indebtedness, (d) all other documents, instruments or agreements relating to the
Senior Indebtedness now or hereafter executed or delivered by and among the Borrower, any Subsidiary, the Senior Indebtedness Representative or any Senior Revolving Lender, including without
limitation each of the other "Loan Documents" as such term is defined in the Senior Revolving Credit Agreement, and (e) all renewals, extensions, amendments, modifications or restatements of
the foregoing. 


        "Senior Revolving Lenders" means all Persons which now or hereafter constitute a "Lender" under the Senior Revolving Credit Agreement and
their respective successors and assigns, and all Person refinancing any Senior Indebtedness and their respective successors and assigns. 



        "Standstill Period" means the period beginning with the commencement of a Blockage Period and ending on the earliest of (a) the
date when the Senior Indebtedness Default giving rise to such Blockage Period has been cured or waived in writing, (b) the date of the repayment in full in cash of the Senior Indebtedness,
(c) the date that is 179 days after the commencement of a Blockage Period, (d) the date on which the Senior Indebtedness shall have been declared due and payable prior to its
stated maturity or any holder of Senior Indebtedness commences proceedings to collect any Senior Indebtedness or
realize upon any material part of the collateral for any Senior Indebtedness and (e) the date upon which any Insolvency Proceeding is commenced. 



        "Subordinated Obligations" means any and all indebtedness (whether for principal, interest, fees, indemnifications or otherwise, but not
expenses) now or hereafter owing by the Borrower or any Subsidiary under or in connection with the Term Loan Agreement, the Term Notes, any mortgage, guaranty or other security instrument given in
connection therewith, and any letter agreement or other agreement providing for payment of fees in connection therewith. 


4







 



        "Subordinated Administrative Agent" means Royal Bank of Canada, in its capacity as administrative agent for the Term Lenders under the
Term Loan Agreement, together with any successors in such capacity. 


        "Term Lenders" means all Persons which now or hereafter constitute a "Lender" under the Term Loan Agreement and their respective
successors and assigns, and all Persons refinancing any Subordinated Obligations and their respective successors and assigns. 


        "Term Loan Agreement" means that certain $60,000,000 Second Lien Senior Subordinated Term Loan Agreement dated as of the
October 27, 2005 among the Borrower, Royal Bank of Canada, as administrative agent and the financial institutions listed therein from time to time as Term Lenders, as from time to time renewed,
extended, amended, supplemented, or restated, and any agreements representing the refinancing, replacement, or substitution in whole or in part of the loans made or incurred under such Term Loan
Agreement. 


        "Term Loan Agreement Event of Default" means the occurrence of an Event of Default as defined in the Term Loan Agreement. 


        "Term Loan Documents" means, collectively, (a) the Term Loan Agreement, (b) the Term Notes and any other note, bond or other
instrument evidencing Subordinated Obligations, (c) all mortgages, security agreements, pledge agreements or financing statements evidencing, creating or perfecting any Lien to secure the Term
Loan Agreement and the Term Notes in any way, (d) all guarantees thereof, (d) all other documents, instruments or agreements relating to the Term Loan Agreement or the Term Note now or
hereafter executed or delivered by and among the Borrower, any Subsidiary, the Subordinated Administrative Agent or any Term Lender, including without limitation each of the other the "Loan Documents"
as such term is defined in the Term Loan Agreement, and (e) all renewals, extensions, amendments, modifications or restatements of the foregoing. 


        "Term Notes" means each promissory note issued under the Term Loan Agreement evidencing the term loans made pursuant to the term thereof,
as from time to time renewed, extended, amended, supplemented, or restated, and any agreements representing the refinancing, replacement, or substitution in whole or in part thereof. 


ARTICLE II

Subordination  


 
 

           Section 2.01    Subordination of Obligations.     The Borrower and each Subsidiary covenant and agree, and
each Term Lender by its acceptance of a Term Note covenants and agrees, that the payment of the
Subordinated Obligations shall, to the extent set forth in this Agreement, be subordinate and junior and subject in right of payment to the prior payment in full in cash of all Senior Indebtedness,
whether outstanding on the date hereof or hereafter created, incurred, assumed or guaranteed; provided, however, that the existence of any Non-Payment Default or a Standstill Period
resulting from any Non-Payment Default, shall not prevent or prohibit the Borrower or any Subsidiary from paying or prepaying the Subordinated Obligations in full prior to the repayment or
prepayment of any Senior Indebtedness, provided that (a) any Borrowing Base Deficiency (as defined in the Senior Revolving Credit Agreement) is cured prior to such payment or prepayment and
(b) such payment or prepayment of the Subordinated Obligations is made using proceeds received by Borrower from the sale of its equity (or the sale of any Subsidiary's equity) in the Initial
Public Offering. 


 
 

           Section 2.02    Payment Default or Acceleration.     Except under circumstances when the terms of
Section 2.01 or Section 2.05 of this Agreement are applicable, if (a) a Payment Default or
Senior Indebtedness Acceleration shall have occurred and be continuing and (b) the Term Lenders or the Subordinated Administrative Agent or other representative shall have received a Payment
Default Notice, then neither the Borrower nor any Subsidiary may make, and no Term Lender shall accept, 


5







 

receive
or collect, any direct or indirect payment or distribution of any kind or character (in cash, securities, other Property, by setoff, or otherwise other than Reorganization Securities) of any
properties or assets of the Borrower or any Subsidiary on account of the Subordinated Obligations during the Payment Blockage Period; provided, however, that in the case of any payment on or in
respect of any Subordinated Obligation that would (in the absence of any such Payment Default Notice) have been due and payable on any date (a "Scheduled Payment
Date") during such Payment Blockage Period pursuant to the terms of the Term Notes as in effect on the date hereof or as amended consistent with the provisions of
Section 2.12 of this Agreement, the provisions of this Section 2.02 shall not prevent the making and acceptance of such payment (a "Scheduled
Payment"), together with any additional default interest as is due on the Term Notes, on or after the date immediately following the termination of such Payment Blockage
Period. In the event that, notwithstanding the foregoing, either the Borrower or any Subsidiary shall make any payment or distribution to any Term Lender prohibited by the foregoing provisions of this
Section 2.02, then and in such event such payment or distribution shall be held in trust for the benefit of and immediately shall be paid over to the holders of the Senior Indebtedness or the
Senior Indebtedness Representative for application against the Senior Indebtedness remaining unpaid until such Senior Indebtedness is paid in full in cash. Any Payment Default Notice shall be deemed
received by the Term Lenders upon the date of actual receipt by the Term Lenders or the Subordinated Administrative Agent or other representative of such Payment Default Notice in writing. 


 
 

           Section 2.03    Non-Payment Default.     Except under circumstances when the terms of Section 2.01,
Section 2.02 or Section 2.05 of this Agreement are applicable, if (a) a
Non-Payment Default shall have occurred and be continuing, (b) the Term Lenders or the Subordinated Administrative Agent or other representative shall have received a
Non-Payment Default Notice, and (c) no Non-Payment Default Notice shall have been given within the 360-day period immediately preceding the giving of such
Non-Payment Default Notice, then neither the Borrower nor any Subsidiary may make, and no Term Lender shall accept, receive or collect, any direct or indirect payment or distribution of
any kind or character (in cash, securities, other Property, by setoff, or otherwise other than Reorganization Securities) of any properties or assets of the Borrower or any Subsidiary on account of
the Subordinated Obligations during the Non-Payment Blockage Period; provided, however, that in the case of any Scheduled Payment on or in respect of any Subordinated Obligation that would
(in the absence of any such Non-Payment Default Notice) have been due and payable on any Scheduled Payment Date during such Non-Payment Blockage Period pursuant to the terms of
the Term Notes as in effect on the date hereof or as amended consistent with the requirements of Section 2.12 of this Agreement, the provisions of this Section 2.03 shall not prevent the
making and acceptance of such Scheduled Payment, together with any additional default interest as is due on the Term Notes, on or after the date immediately following the termination of such
Non-Payment Blockage Period. In the event that, notwithstanding the foregoing, the Borrower or any Subsidiary shall make any payment or distribution to any Term Lender prohibited by the
foregoing provisions of this Section 2.03, then and in such event such payment or distribution shall be held in trust for the benefit of and immediately shall be paid over to the holders of the
Senior Indebtedness or the Senior Indebtedness Representative for application against the Senior Indebtedness remaining unpaid until such Senior Indebtedness is paid in full in cash. Any
Non-Payment Default Notice shall be deemed received by the Term Lenders upon the date of actual receipt by the Term Lenders or the Subordinated Administrative Agent or other representative
of such Non-Payment Default Notice in writing. 


6









  




 
 

           Section 2.04    Standstill.     At any time that the Term Lenders are not permitted to receive payments on
the Subordinated Obligations pursuant to either Section 2.02 or
Section 2.03of this Agreement, the Term Lenders and the Subordinated Administrative Agent or other representative of the Term Lenders will not commence any Enforcement Action relative to the
Borrower or any Subsidiary during the Standstill Period. Upon the termination of the Standstill Period, the Term Lenders may exercise all rights or remedies they may have in law or equity; provided,
however, that if a Standstill Period terminates pursuant to clause (e) thereof, no Term Lender and no agent or representative thereof shall exercise any remedies against, or attempt to
foreclose upon, garnish, sequester or execute upon, any Property known to it as constituting collateral for the Senior Indebtedness (other than to file or record any judgment Liens it may have
obtained against such collateral) during the period that such Standstill Period would have been in effect but for termination pursuant to clause (e) of the definition of "Standstill Period;"
provided further, that the Payment Blockage Period or the Non-Payment Blockage Period, as the case may be, if not also terminated, shall continue for its full period notwithstanding the
termination of the Standstill Period. Notwithstanding the foregoing, no Standstill Period may be commenced while any other Standstill Period exists or within 180 days following the termination
of any prior Standstill Period (provided that this sentence shall not relieve any Term Lender of its obligation to provide notice under Section 2.09 of this Agreement). 


 
 

           Section 2.05    Insolvency; Bankruptcy; Etc.     In the event of the institution of any Insolvency
Proceeding relative to the Borrower or any Subsidiary, then: 



        (a)   The
holders of the Senior Indebtedness shall be entitled to receive payment in full in cash of the Senior Indebtedness before the Term Lenders are entitled to receive
any direct or indirect payment or distribution of any kind or character, whether in cash, Property or securities (other than Reorganization Securities) on account of the Subordinated Obligations. 


        (b)   Any
direct or indirect payment or distribution of any kind or character, whether in cash, Property or securities, by setoff or otherwise, which may be payable or
deliverable in such proceedings in respect of the Subordinated Obligations but for the provisions of this Agreement shall be paid or delivered by the Person making such payment or distribution,
whether the Borrower, a Subsidiary of the Borrower, a trustee in bankruptcy, a receiver, a liquidating trustee, or otherwise, directly to the holders of the Senior Indebtedness or the Senior
Indebtedness Representative, to the extent necessary to make payment in full in cash of all Senior Indebtedness remaining unpaid; provided, however, that no such delivery of any Reorganization
Securities shall be made to any holders of the Senior Indebtedness. In the event that, notwithstanding the foregoing provisions of this Section 2.05, any Term Lender shall have received any
such payment or distribution of any kind or character, whether in cash, Property or
securities, by setoff or otherwise, before all Senior Indebtedness is paid in full in cash, which is to be paid to the holders of the Senior Indebtedness under the foregoing provisions of this
Section 2.05, then and in such event such payment or distribution shall be held in trust for the benefit of and immediately shall be paid over to the holders of the Senior Indebtedness or the
Senior Indebtedness Representative for application to the payment of all Senior Indebtedness remaining unpaid until all such Senior Indebtedness shall have been paid in full in cash. 


        (c)   If
no proof of claim is filed in any Insolvency Proceeding with respect to any Subordinated Obligations by the tenth day prior to the bar date for any such proof of
claim, the Senior Indebtedness Representative may, after notice to the Term Lenders or the Subordinated Administrative Agent or other representative, file such a proof of claim on behalf of the Term
Lenders, and each Term Lender hereby irrevocably appoints the Senior Indebtedness Representative as its agent and attorney-in-fact for such limited purpose; provided, that the
foregoing shall not confer to the holder of any Senior Indebtedness the right to vote on behalf of the Term Lenders in any Insolvency Proceedings. The Senior Indebtedness Representative shall 



7







 




promptly
deliver to the Subordinated Administrative Agent a copy of any proof of claim filed by it pursuant to this Section, but there shall no be no liability for failure to deliver such copy. 




 
 

           Section 2.06    No Impairment.     No right of any present or future holder of Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be prejudiced or impaired
by any act or failure to act on the part of the Borrower or any Subsidiary or by any non-compliance by the Borrower or any Subsidiary with the terms, provisions, and covenants of this
Agreement, the Term Loan Agreement or the Term Notes, regardless of any knowledge thereof any such Term Lender may have or be otherwise charged with. The provisions of this Agreement shall be
enforceable directly by any present or future holder of the Senior Indebtedness and/or the Senior Indebtedness Representative. 


 
 

           Section 2.07    Rights of Creditors; Subrogation.     The provisions of this Agreement are for the purpose
of defining the relative rights of the holders of the Senior Indebtedness on the one hand, and the Term
Lenders on the other hand, and nothing herein shall impair, as between the Borrower and the Guarantors and the Term Lenders, the obligation of the Borrower and the Guarantors, which are unconditional
and absolute, to pay to the Term Lenders the principal thereof and interest thereon in accordance with their terms and the provisions thereof, nor shall anything herein, except as otherwise provided
in Section 2.04 of this Agreement, prevent the Term Lenders from exercising all remedies otherwise permitted by applicable law or hereunder upon default under the Term Loan Agreement or under
the Term Notes (including the right to demand payment and sue for performance thereof and of the Term Notes and to accelerate the maturity thereof as provided by the terms of the Term Notes), subject
to the rights of holders of the Senior Indebtedness under this Agreement. Upon payment in full of the Senior Indebtedness in cash and termination of the commitments of any holder of the Senior
Indebtedness to make loans or extensions of credit, and expiration or termination of all letters of credit issued by any holder of the Senior Indebtedness, the Term Lenders shall, to the extent of any
payments or distributions paid or delivered to the holders of the Senior Indebtedness or otherwise applied to the Senior Indebtedness pursuant to the provisions of this Agreement, be subrogated to the
rights of the holders of the Senior Indebtedness to receive payments or distributions of assets of the Borrower or any Guarantor made on Senior Indebtedness (and any security therefor) until the
Subordinated Obligations shall be paid in full (and, for this purpose, no such payments or distributions paid or delivered to the holders of the Senior Indebtedness or otherwise applied to the Senior
Indebtedness shall be deemed to have discharged the Subordinated Obligations), and, for the purposes of such subrogation, no payments to the holders of the Senior Indebtedness of any cash, assets,
stock, or obligations to which the Term Lenders would be entitled except for the provisions of this Agreement shall, as between the Borrower and the Guarantors, any of their respective creditors
(other than the holders of the Senior Indebtedness), and the Term Lenders, be deemed to be a payment by the Borrower or any Guarantor to or on account of Senior Indebtedness. The fact that failure to
make any payment on account of the Subordinated Obligations is caused by reason of the operation of any provision of this Agreement shall not be construed as preventing the occurrence of a Term Loan
Agreement Event of Default. 


 
 

           Section 2.08    Payments on Senior Indebtedness.     In the event that any Term Lender determines in good
faith that evidence is required with respect to the right of any holder of the Senior Indebtedness to
participate in any payment or distribution pursuant to this Agreement or the amount of such participation, such Term Lender may request such Person to furnish evidence to the reasonable satisfaction
of such Term Lender as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Agreement, and if such evidence is not furnished, such Term Lender may defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment; provided that, upon the written request of such Person to such Term Lender, such payment shall be made to the court having jurisdiction over such judicial
determination or to another Person mutually satisfactory to such Person and such Term Lender, as 


8







 

escrowee,
to be held and invested pending such judicial determination in accordance with such instructions as shall be mutually satisfactory to such Person and such Term Lender and upon such judicial
determination becoming final and non-appealable to be distributed in accordance therewith to the Person entitled thereto. 


 
 

          Section 2.09    Notice of Acceleration, Enforcement Action.     



        (a)   Each
Term Lender agrees that in the event any Term Loan Agreement Event of Default shall occur, and as a result thereof, any Term Lender or the Subordinated
Administrative Agent or other representative of such Term Lender accelerates maturity of the Term Notes, then such Term Lender or the Subordinated Administrative Agent or other representative shall
give prompt (and in any event within three (3) Business Days) notice thereof in writing to the holders of the Senior Indebtedness or the Senior Indebtedness Representative. Neither the Borrower
nor any Subsidiary may pay the Term Notes until ten (10) Business Days after the Senior Indebtedness Representative receives the notice described above and, after that ten (10) Business
Day period, may pay the Term Notes, and the Term Lenders may receive or collect such payment, only if the provisions of this Agreement do not prohibit such payment at that time. 


        (b)   Each
Term Lender agrees that in the event any Term Loan Agreement Event of Default shall occur, and as a result thereof, any Term Lender or the Subordinated
Administrative Agent or other representative of such Term Lender intends to commence any Enforcement Action, then such Term Lender or the Subordinated Administrative Agent or other representative
shall first deliver notice thereof in writing to the Senior Indebtedness Representative both (i) not less than ten (10) days prior to taking any such Enforcement Action, and
(ii) one (1) Business Day after such Enforcement Action is taken. 


        (c)   Each
Senior Revolving Lender agrees that in the event any Event of Default (as defined in the Senior Revolving Credit Documents) shall occur, and as a result thereof,
any Senior Revolving Lender or the Senior Indebtedness Representative or other representative of such Senior Revolving Lender accelerates maturity of the Senior Indebtedness, then such Senior
Revolving Lender or the Senior Indebtedness Representative or other representative shall use reasonable efforts to give (and in any event within three (3) Business Days) notice thereof in
writing to the holders of the Term Notes or the Subordinated Administrative Agent, but there shall be no liability for failure to deliver such notice. 


        (d)   Each
Senior Revolving Lender agrees that in the event any Event of Default (as defined in the Senior Revolving Credit Documents) shall occur, and as a result thereof,
any Senior Revolving Lender or the Senior Indebtedness Representative or other representative of such Senior Revolving Lender intends to commence any Enforcement Action, then such Senior Revolving
Lender or the Senior Indebtedness Representative or other representative shall use reasonable efforts to give notice thereof in writing to the Subordinated Administrative Agent within one
(1) Business Day after such Enforcement Action is taken, but there shall be no liability for failure to deliver such notice. 




 
 

           Section 2.10    Reinstatement.     The provisions of this Agreement shall remain in force and effect until
the indefeasible payment in full of all Senior Indebtedness and the termination of all
commitments of any holder of the Senior Indebtedness to make loans or extensions of credit, and expiration or termination of all letters of credit issued by any holder of the Senior Indebtedness. To
the extent any payment of or distribution in respect of the Senior Indebtedness (whether by or on behalf of the Borrower or any of its Subsidiaries, as proceeds of security or enforcement of any right
of set off or otherwise) is declared to be fraudulent or preferential, set aside or required to be paid to the Borrower or any Subsidiary or any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar person under any bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then if such payment or distribution is recovered by, or paid over to, the Borrower
or any Subsidiary or such 


9







 

receiver,
trustee in bankruptcy, liquidating trustee, agent or other similar Person, the Senior Indebtedness or part thereof originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment has not occurred and the provisions of this Agreement shall continue to be applicable in respect of said reinstated Senior Indebtedness. 


 
 

           Section 2.11    Rights of Holders of the Senior Indebtedness.     The holders of the Senior Indebtedness may,
 at any time and from time to time subject to the terms of the Senior Indebtedness, without the consent of or notice to
the Term Lenders or the Subordinated Administrative Agent or other representative of the Term Lenders, without incurring responsibility to the Term Lenders and without impairing or releasing the
subordination or other benefits provided in this Agreement or the obligations hereunder of the Term Lenders to the holders of the Senior Indebtedness, do any one or more of the following:
(a) change the manner, place or terms of payment or extend the time of payment of, or renew, increase (but not in excess of the cap provided for in the definition of "Senior Indebtedness"),
alter or amend, Senior Indebtedness or any instrument evidencing the same or any covenant or agreement under which Senior Indebtedness is outstanding or secured or any liability of any obligor
thereon; (b) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness to the extent currently permitted under the terms of the
Senior Revolving Credit Agreement but any sale, exchange or release of property pledged, mortgaged or otherwise securing Senior Indebtedness in contravention of such currently existing provisions can
only be made with the prior written consent of the Subordinated Administrative Agent; (c) settle or compromise any Senior Indebtedness or any liability of any obligor thereon or release any
Person liable in any manner for the payment of Senior Indebtedness; and (d) waive any default under Senior Indebtedness and exercise or refrain from exercising any rights against the Borrower,
any Subsidiary or any other Person. The foregoing provisions are not intended to permit a change to the definition of "Senior Indebtedness". 


 
 

           Section 2.12    Amendments.     No amendment of this Agreement, or the definitions used in this Agreement,
or which would have the effect of modifying this Agreement, or the definitions used in
this Agreement, shall be effective unless it is in writing and complies with Section 5.03. 


 
 

           Section 2.13    Identity of Term Lenders and Senior Revolving Lenders for Notice Purposes.     



        (a)   For
purposes of any notice required or permitted to be given hereunder by the holders of the Senior Indebtedness or the Senior Indebtedness Representative to the Term
Lenders, or any of them, the holders of the Senior Indebtedness and the Senior Indebtedness Representative shall be entitled to rely, conclusively, on the identity and address of each Term Lender as
set forth in the Term Loan Agreement or as otherwise set forth in the most recent notice received by the Senior Indebtedness Representative from a Term Lender referring to the Term Loan Agreement for
purposes of providing the identity and address of each Term Lender. The Term Lenders agree that any notices required to be given to the Term Lenders shall be effective if such notice is given to the
Subordinated Administrative Agent or other representative of the Term Lenders. For so long as the Subordinated Obligations are outstanding, the Term Lenders agree to designate and maintain an agent or
other representative for such purposes. 


        (b)   For
purposes of any notice required or permitted to be given hereunder by the holders of the Subordinated Obligations or the Subordinated Administrative Agent to the
Senior Revolving Lenders, or any of them, the holders of the Subordinated Obligations and the Subordinated Administrative Agent shall be entitled to rely, conclusively, on the identity and address of
each Senior Revolving Lender as set forth in the Senior Revolving Credit Agreement or as otherwise set forth in the most recent notice received by the Subordinated Administrative Agent from a Senior
Revolving Lender referring to the Senior Revolving Credit Agreement for purposes of providing the identity and address of each Senior Revolving Lender. The Senior Revolving Lenders agree that any
notices required to be given to the Senior Revolving Lenders shall be effective if such 



10







 




notice
is given to the Senior Indebtedness Representative or other representative of the Senior Revolving Lenders. For so long as the Senior Indebtedness is outstanding, the Senior Revolving Lenders
agree to designate and maintain an agent or other representative for such purposes. 




 
 

           Section 2.14    Liens.     



        (a)   All
Liens granted by the Borrower, or, if applicable, any Guarantor, which at any time secure the Term Loan Agreement, any Term Note or any other Term Loan Document are
hereby made, and will at all times prior to the full payment or discharge of the Senior Indebtedness be, subject and subordinate to all Liens granted by the Borrower or any Guarantor which at any time
secure the Senior Indebtedness, which subordination shall be effective whether or not all such Liens securing Senior Indebtedness have been properly recorded, filed and otherwise perfected prior to
all such Liens securing any Term Note and regardless of the relative priority of such Liens as determined without regard to this Agreement. The mortgages included in the Senior Revolving Credit
Documents do (and other mortgages, security agreements and similar Senior Revolving Credit Documents may) describe the indebtedness secured thereby in a manner which might include indebtedness other
than the Senior Indebtedness. For so long as any Term Note is outstanding, as between the Term Lenders and the holders of the Senior Indebtedness, only the Senior Indebtedness shall be deemed to be
secured by any Liens granted under the Senior Revolving Credit Documents. 


        (b)   Each
Term Lender agrees that it will not initiate, join in or prosecute any claim, action or other proceeding challenging the validity or enforceability of the Senior
Indebtedness or the Liens securing the Senior Indebtedness. Furthermore, each Term Lender agrees that if the Senior Indebtedness Representative shall take any Enforcement Action respecting any
collateral under the Senior Indebtedness, that the Term Lenders will not enjoin or otherwise interfere with such Enforcement Action. 



        (c)   The
Subordinated Administrative Agent agrees to promptly release all Liens granted by the Borrower, or, if applicable, any Guarantor, which at any time secure the Term
Loan Agreement, any
Term Note or any other Term Loan Document if such release is authorized by the terms of the Senior Revolving Credit Documents. 




 
 

           Section 2.15    Legend.     



        (a)   Each
Term Note shall be conspicuously inscribed with a legend substantially in the form and substance as follows: 




PAYMENT
OF THIS INSTRUMENT SHALL, TO THE EXTENT SET FORTH IN THE INTERCREDITOR AND SUBORDINATION AGREEMENT DATED OCTOBER 27, 2005 BY AND AMONG LINN ENERGY LLC, BNP PARIBAS, AS SENIOR ADMINISTRATIVE
AGENT, ROYAL BANK OF CANADA, AS SUBORDINATED ADMINISTRATIVE AGENT AND PARTIES THERETO, BE SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL SENIOR INDEBTEDNESS, THE
PROVISIONS OF WHICH INTERCREDITOR AGREEMENT BEING INCORPORATED HEREIN AND BY THIS REFERENCE BEING MADE A PART HEREOF. 





        (b)   The
Borrower and each Term Lender or the Subordinated Administrative Agent or other representative of the Term Lenders shall cause each mortgage, security agreement and
other instrument securing all or any part of the Subordinated Obligations to be conspicuously inscribed with a legend substantially in the form and substance as follows: 




ALL
LIENS GRANTED BY THIS INSTRUMENT SHALL, TO THE EXTENT SET FORTH IN THE INTERCREDITOR AND SUBORDINATION AGREEMENT 





11







 



DATED
OCTOBER 27, 2005 BY AND AMONG LINN ENERGY LLC, BNP PARIBAS, AS SENIOR ADMINISTRATIVE AGENT, ROYAL BANK OF CANADA, AS SUBORDINATED ADMINISTRATIVE AGENT AND PARTIES THERETO, BE SUBORDINATE AND
JUNIOR TO ALL LIENS GRANTED BY GRANTOR TO SECURE THE SENIOR INDEBTEDNESS REGARDLESS OF THE RELATIVE PRIORITY OF SUCH LIENS, SUCH INTERCREDITOR AGREEMENT BEING INCORPORATED HEREIN AND BY THIS REFERENCE
BEING MADE A PART HEREOF. 






 
 

           Section 2.16    Successors and Assigns.     Each Term Lender acknowledges and agrees that the provisions of
this Agreement are, and are intended to be, an inducement and a consideration to each holder of
the Senior Indebtedness to make, extend and continue the Senior Indebtedness; and each holder of the Senior Indebtedness shall be deemed conclusively to have relied upon the provisions of this
Agreement in permitting the Borrower to incur the Subordinated Obligations and in making, extending, continuing and/or acquiring such Senior Indebtedness. This Agreement shall pass to and be fully
binding upon the successors and assigns of each Term Lender and shall inure to the benefit of the present and future holders of the Senior Indebtedness and the Senior Indebtedness Representative and
their respective successors and assigns (including without limitation any Person refinancing any Senior Indebtedness). 


ARTICLE III

RELIANCE; WAIVERS; ETC.  


 
 
        Section 3.01    Reliance.     The Senior Revolving Credit Documents are deemed to have been executed and delivered,
and all extensions of credit thereunder are deemed to have been made or
incurred, in reliance upon this Agreement. The Subordinated Administrative Agent expressly waives all notice of the acceptance of and reliance on this Agreement by the Senior Revolving Lenders. 



 
 

          Section 3.02    No Warranties or Liability.     The Subordinated Administrative Agent and the Senior
Administrative Agent acknowledge and agree that neither has made any representation or warranty with respect
to the execution, validity, legality, completeness, collectibility or enforceability of any Senior Revolving Credit Document. Except as otherwise provided in this Agreement, the Subordinated
Administrative Agent and the Administrative Agent will be entitled to manage and supervise their respective extensions of credit to the Borrower in accordance with law and their usual practices,
modified from time to time as they deem appropriate. 


 
 

           Section 3.03    No Waivers.     Except as provided in Section 5.03, no right or benefit of any party
hereunder shall at any time in any way be prejudiced or impaired by any act or failure
to act on the part of such party or any other party hereto or by any noncompliance by the Borrower or any of its Subsidiaries with the terms and conditions of any of the Senior Revolving Credit
Documents. 


ARTICLE IV

OBLIGATIONS UNCONDITIONAL  


 
 
        Section 4.01    Senior Indebtedness Unconditional.     All rights of the Senior Administrative Agent and the Senior
Revolving Lenders hereunder, and all agreements and obligations of each of the Subordinated
Administrative Agent and Term Lenders, the Borrower and the Guarantors under the Senior Revolving Credit Documents (to the extent applicable) hereunder, shall remain in full force and effect
irrespective of: 



        (a)   any
lack of validity or enforceability of any Senior Revolving Credit Document; 


        (b)   any
change in the time, place or manner of payment of, or in any other term of, all or any portion of the Senior Indebtedness, or any amendment, waiver or other
modification, whether 



12







 




by
course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any Senior Revolving Document; 



        (c)   prior
to the Senior Indebtedness having been paid in full in cash and all commitments to lend thereunder terminated and all letters of credit thereunder terminated or
cash collateralized, and except as provided in Section 2.11(b), any exchange, release, voiding, avoidance or non-perfection of any security interest in any collateral, or any
release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of all or any portion of the Senior Indebtedness
or any guarantee thereof; or 


        (d)   any
other circumstances that otherwise might constitute a defense available to, or a discharge of, the Borrower or any Guarantor in respect of the Senior Indebtedness,
or the Subordinated Administrative Agent, the Borrower or any Guarantor, to the extent applicable, in respect of this Agreement. 



ARTICLE V

MISCELLANEOUS  


 
 
        Section 5.01    Conflicts.     In the event of any conflict between the provisions of this Agreement and the
provisions of any Senior Revolving Credit Document or the Term Loan Documents, the
provisions of this Agreement shall govern. 


 
 

           Section 5.02    Continuing Nature of Provisions; Termination.     This Agreement shall continue to be
effective, and shall not be revocable by any party hereto, until, but, subject to Section 2.11, shall automatically
terminate and be of no further force or effect on, the earlier to occur of (i) the date upon which the Senior Indebtedness has been paid in full in cash, all commitments of any holder of Senior
Indebtedness to make loans or extensions of credit have terminated, and all letters of credit issued by any holder of Senior Indebtedness have expired, terminated or been fully collateralized in cash
and (ii) to the extent not in violation of this Agreement, the date that the Subordinated Obligations have been paid in full. This is a continuing agreement and the Senior Revolving Lenders and
the Subordinated Administrative Agent may continue, at any time and without notice to the other parties hereto, to extend credit and other financial accommodations, lend monies and provide
indebtedness to, or for the benefit of, Borrower or any Guarantor on the faith hereof. 


 
 

           Section 5.03    Amendments; Waivers.     No amendment or modification of any of the provisions of this
Agreement shall be effective unless the same shall be in writing and signed by the Senior
Administrative Agent, the Subordinated Administrative Agent and, only if the rights or duties of the Borrower or any Guarantor are directly affected thereby, such Person. 


 
 

           Section 5.04    Information Concerning Financial Condition of the Borrower.     The Subordinated
Administrative Agent and the Senior Administrative Agent each hereby assume responsibility for keeping itself informed of the financial condition
of the Borrower and each of the Guarantors and all other circumstances bearing upon the risk of nonpayment of the Senior Indebtedness or the Subordinated Obligations. The Subordinated Administrative
Agent and the Senior Administrative Agent hereby agree that no party shall have any duty to advise any other party of information known to it regarding such condition or any such circumstances. In the
event the Subordinated Administrative Agent or the Senior Administrative Agent, in its sole discretion, undertakes at any time or from time to time to provide any information to any other party to
this Agreement, it shall be under no obligation (1) to provide any such information to such other party or any other party on any subsequent occasion, (2) to undertake any investigation
not a part of its regular business routine, or (3) to disclose any other information. 


13







 

 
 

           Section 5.05    Governing Law.     This Agreement shall be construed in accordance with and governed by the
law of the State of Texas, except as otherwise required by mandatory provisions of law
and except to the extent that remedies provided by the laws of any jurisdiction other than the State of Texas are governed by the laws of such jurisdiction. 



 
 

          Section 5.06    Submission to Jurisdiction; Waiver of Jury Trial.     



        (a)   Each
party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the courts of the State of Texas and
of the United States District Court for the Southern District of Texas, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and
determined in such Texas State court or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the any Senior Revolving
Lender may otherwise have to bring any action or proceeding relating to this Agreement or any Senior Revolving Credit Documents against the Borrower or any Guarantor or its properties in the courts of
any jurisdiction. 


        (b)   The
Borrower and the Subordinated Administrative Agent hereby irrevocably and unconditionally waive, to the fullest extent they may legally and effectively do so
(x) any objection they may now or
hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (a) of this Section 5.06 and
(y) the defense of an inconvenient forum to the maintenance of such action or proceeding. 


        (c)   Each
party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 5.07. Nothing in this Agreement will affect
the right of any party to this Agreement to serve process in any other manner permitted by law. 


        (d)   EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 




 
 

           Section 5.07    Notices.     Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and may be
personally served, telecopied, or sent by overnight express courier service or United States mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of
a telecopy or five (5) days after deposit in the United States mail (certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section) shall be as set forth below each party's name on the signature pages hereof, or, as to each party, at such other address as may be
designated by such party in a written notice to all of the other parties. 


14







 

 
 

           Section 5.08    Successors and Assigns.     This Agreement shall be binding upon and inure to the benefit of
each of the parties hereto and each of the Senior Revolving Lenders and Subordinated
Administrative Agent and their respective successors and assigns, and nothing herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect of
this Agreement or any collateral. All references to any Person shall include such Person as debtor-in-possession and any receiver or trustee for such Person in any Insolvency
Proceeding. 


 
 

           Section 5.09    Headings.     Section headings used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement. 


 
 

          Section 5.10    Severability.     Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other jurisdiction. 



 
 

          Section 5.11    Counterparts; Integration; Effectiveness.     This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement. This Agreement shall become effective when it shall have been executed by each party hereto. 



 
 

          Section 5.12    Consent to Incurrence of Senior Indebtedness.     Notwithstanding any provision of the
Subordinated Obligations to the contrary, the Subordinated Administrative Agent consents to the incurrence of the Senior
Indebtedness in amounts up to the caps on the principal amount thereof set forth in the definition of Senior Indebtedness. 


 
 

           Section 5.13    Senior Administrative Agent Acting as Bailee and Agent.     The Senior Administrative Agent
may from time to time in order to perfect a security interest in certain collateral securing the Senior Indebtedness hold
possession of stock certificates or other collateral in which a security interest can be perfected by possession or may have entered into a control agreement with respect to collateral in which a
security interest can be perfected by having control. For purposes of perfecting the junior and subordinate lien of the Term Lenders in such collateral, the Senior Administrative Agent agrees to also
hold such certificates or other collateral as agent and bailee for the Term Lenders, subject to the provisions of this Agreement. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Senior Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Term Lender or the
Subordinated Administrative Agent, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist against the Senior
Administrative Agent. 


 
 

           Section 5.14    Purchase of Senior Indebtedness.     The Senior Indebtedness Representative, on behalf of
itself and the Senior Revolving Lenders (and, where appropriate with regard to the Eligible Swap Agreements,
their respective Affiliates), and the Borrower hereby agree with the Term Lenders that, if the Senior Indebtedness Representative delivers a Payment Default Notice to the Subordinated Administrative
Agent or the Term Lenders, then the Term Lenders may (but shall not be obligated to) purchase the Senior Indebtedness and all of the rights, titles and interests of the Senior Indebtedness
Representative and the Senior Revolving Lenders under the Senior Revolving Credit Documents, by giving notice of Term Lenders' intent to buy within ten days after delivery of such Payment Default
Notice and consummating such sale within thirty days after the delivery of such Payment Default Notice for a price in immediately available funds equal to the unpaid principal of and accrued interest
on the Senior Indebtedness, all other amounts then due to the Senior Indebtedness Representative and the Senior Revolving Lenders under the Senior Revolving Credit Documents and all unpaid amounts 


15







 

and
termination payments due to the Senior Revolving Lenders (and their respective Affiliates, where appropriate) of the Eligible Swap Agreements, all subject to documents reasonably acceptable to the
Senior Indebtedness Representative, the Senior Revolving Lenders and the Term Lenders, but without any necessity for any consent from the Borrower or any Guarantor. 


[Signature
Pages Begin on the Next Page] 


16










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



	 	 	BNP PARIBAS, as

Administrative Agent for and on behalf of the

Senior Lenders
	

 	
 	

By:	
 	

/s/  DOUGLAS R. LIFTMAN      

	 	 	 	 	Name: Douglas R. Liftman
	 	 	 	 	Title: Managing Director
	

 	
 	

By:	
 	

/s/  BETSY JOCHER      

	 	 	 	 	Name: Betsy Jocher
	 	 	 	 	Title: Vice President
	

 	
 	

Address for Notices:
	

 	
 	

919 Third Avenue

New York, New York 10022

Attention: Millie Carillo, Loan Assistant

Facsimile: (212) 841-2683
	

 	
 	

with a copy to:
	

 	
 	

BNP Paribas

1200 Smith Street, Suite 3100

Houston, Texas 77002

Attention: Betsy Jocher

Telephone: (713) 982-1155

Facsimile: (713) 659-6915





Signature Page to the Intercreditor Agreement 









	 	 	ROYAL BANK OF CANADA, as Administrative

Agent for and on behalf of the Term Lenders
	

 	
 	

By:	
 	

/s/  LORNE A. GARTNER      

	 	 	 	 	Name: Lorne A. Gartner
	 	 	 	 	Title: Authorized Signatory





Signature Page to the Intercreditor Agreement 









	 	 	LINN ENERGY LLC
	

 	
 	

By:	
 	

/s/  KOLJA ROCKOV      
    Kolja Rockov

    Executive Vice President & Chief Financial

    Officer





Signature Page to the Intercreditor Agreement 











QuickLinks



Exhibit 10.7

Section 2.01 Subordination of Obligations.

Section 2.02 Payment Default or Acceleration.

Section 2.03 Non-Payment Default.




Section 2.04 Standstill.

Section 2.05 Insolvency; Bankruptcy; Etc.

Section 2.06 No Impairment.

Section 2.07 Rights of Creditors; Subrogation.

Section 2.08 Payments on Senior Indebtedness.

Section 2.09 Notice of Acceleration, Enforcement Action.

Section 2.10 Reinstatement.

Section 2.11 Rights of Holders of the Senior Indebtedness.

Section 2.12 Amendments.

Section 2.13 Identity of Term Lenders and Senior Revolving Lenders for Notice Purposes.

Section 2.14 Liens.

Section 2.15 Legend.

Section 2.16 Successors and Assigns.

Section 3.01 Reliance.

Section 3.02 No Warranties or Liability.

Section 3.03 No Waivers.

Section 4.01 Senior Indebtedness Unconditional.

Section 5.01 Conflicts.

Section 5.02 Continuing Nature of Provisions; Termination.

Section 5.03 Amendments; Waivers.

Section 5.04 Information Concerning Financial Condition of the Borrower.

Section 5.05 Governing Law.

Section 5.06 Submission to Jurisdiction; Waiver of Jury Trial.

Section 5.07 Notices.

Section 5.08 Successors and Assigns.

Section 5.09 Headings.

Section 5.10 Severability.

Section 5.11 Counterparts; Integration; Effectiveness.

Section 5.12 Consent to Incurrence of Senior Indebtedness.

Section 5.13 Senior Administrative Agent Acting as Bailee and Agent.

Section 5.14 Purchase of Senior Indebtedness.