Document:

EX-10.2

 Exhibit 10.2 
  

 
  

BACKSTOP COMMITMENT AGREEMENT 

AMONG 
 LINN ENERGY, LLC 

AND 
 THE COMMITMENT PARTIES PARTY
HERETO 
 Dated as of October 25, 2016 
  

 
  

 TABLE OF CONTENTS 
  

							
	 	  	 	  	Page	 
		
	 ARTICLE I DEFINITIONS
	  	 	2	  
	            Section 1.1	  	Definitions	  	 	2	  
	            Section 1.2	  	Construction	  	 	20	  
		
	 ARTICLE II BACKSTOP COMMITMENT
	  	 	21	  
	            Section 2.1	  	The Rights Offering; Subscription Rights	  	 	21	  
	            Section 2.2	  	The Backstop Commitment	  	 	21	  
	            Section 2.3	  	Commitment Party Default	  	 	22	  
	            Section 2.4	  	Escrow Account Funding	  	 	25	  
	            Section 2.5	  	Closing	  	 	26	  
	            Section 2.6	  	Designation and Assignment Rights	  	 	26	  
		
	 ARTICLE III BACKSTOP COMMITMENT PREMIUM AND EXPENSE REIMBURSEMENT
	  	 	28	  
	            Section 3.1	  	Premium Payable by the Company	  	 	28	  
	            Section 3.2	  	Payment of Commitment Premium	  	 	29	  
	            Section 3.3	  	Expense Reimbursement	  	 	30	  
		
	 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	  	 	31	  
	            Section 4.1	  	Organization and Qualification	  	 	31	  
	            Section 4.2	  	Corporate Power and Authority	  	 	31	  
	            Section 4.3	  	Execution and Delivery; Enforceability	  	 	32	  
	            Section 4.4	  	Authorized and Issued Equity Interests	  	 	33	  
	            Section 4.5	  	No Conflict	  	 	33	  
	            Section 4.6	  	Consents and Approvals	  	 	33	  
	            Section 4.7	  	Company SEC Documents and Disclosure Statement	  	 	34	  
	            Section 4.8	  	Absence of Certain Changes	  	 	34	  
	            Section 4.9	  	No Violation; Compliance with Laws	  	 	34	  
	            Section 4.10	  	Legal Proceedings	  	 	34	  
	            Section 4.11	  	Labor Relations	  	 	34	  
	            Section 4.12	  	Intellectual Property	  	 	35	  
	            Section 4.13	  	Title to Real and Personal Property	  	 	35	  
	            Section 4.14	  	No Undisclosed Relationships	  	 	36	  
	            Section 4.15	  	Licenses and Permits	  	 	36	  
	            Section 4.16	  	Environmental	  	 	36	  
	            Section 4.17	  	Tax Returns	  	 	37	  
	            Section 4.18	  	Employee Benefit Plans	  	 	38	  
	            Section 4.19	  	Internal Control Over Financial Reporting	  	 	39	  
	            Section 4.20	  	Disclosure Controls and Procedures	  	 	39	  
	            Section 4.21	  	Material Contracts	  	 	39	  
	            Section 4.22	  	No Unlawful Payments	  	 	40	  
	            Section 4.23	  	Compliance with Money Laundering Laws	  	 	40	  
	            Section 4.24	  	Compliance with Sanctions Laws	  	 	40	  
	            Section 4.25	  	No Broker’s Fees	  	 	40	  
	            Section 4.26	  	Investment Company Act	  	 	40	  

  
 i 

 TABLE OF CONTENTS (cont’d) 

 

							
	 	  	 	  	Page	 
			
	            Section 4.27	  	Insurance	  	 	40	  
	            Section 4.28	  	Alternative Transactions	  	 	41	  
		
	 ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMMITMENT PARTIES
	  	 	41	  
	            Section 5.1	  	Organization	  	 	41	  
	            Section 5.2	  	Organizational Power and Authority	  	 	41	  
	            Section 5.3	  	Execution and Delivery	  	 	41	  
	            Section 5.4	  	No Conflict	  	 	41	  
	            Section 5.5	  	Consents and Approvals	  	 	42	  
	            Section 5.6	  	No Registration	  	 	42	  
	            Section 5.7	  	Purchasing Intent	  	 	42	  
	            Section 5.8	  	Sophistication; Investigation	  	 	42	  
	            Section 5.9	  	No Broker’s Fees	  	 	43	  
	            Section 5.10	  	Sufficient Funds	  	 	43	  
		
	 ARTICLE VI ADDITIONAL COVENANTS
	  	 	43	  
	            Section 6.1	  	Orders Generally	  	 	43	  
	            Section 6.2	  	Confirmation Order; Plan and Disclosure Statement	  	 	43	  
	            Section 6.3	  	Conduct of Business	  	 	44	  
	            Section 6.4	  	Access to Information; Confidentiality	  	 	45	  
	            Section 6.5	  	Financial Information	  	 	46	  
	            Section 6.6	  	Commercially Reasonable Efforts	  	 	46	  
	            Section 6.7	  	Registration Rights Agreement; Reorganized Company Organizational Documents	  	 	47	  
	            Section 6.8	  	Blue Sky	  	 	48	  
	            Section 6.9	  	DTC Eligibility	  	 	48	  
	            Section 6.10	  	Use of Proceeds	  	 	48	  
	            Section 6.11	  	Share Legend	  	 	48	  
	            Section 6.12	  	Antitrust Approval	  	 	49	  
	            Section 6.13	  	Alternative Transactions	  	 	50	  
	            Section 6.14	  	Hedging Arrangements	  	 	50	  
	            Section 6.15	  	Reorganized Company	  	 	51	  
		
	 ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF THE PARTIES
	  	 	52	  
	            Section 7.1	  	Conditions to the Obligations of the Commitment Parties	  	 	52	  
	            Section 7.2	  	Waiver of Conditions to Obligations of Commitment Parties	  	 	54	  
	            Section 7.3	  	Conditions to the Obligations of the Debtors	  	 	54	  
		
	 ARTICLE VIII INDEMNIFICATION AND CONTRIBUTION
	  	 	56	  
	            Section 8.1	  	Indemnification Obligations	  	 	56	  
	            Section 8.2	  	Indemnification Procedure	  	 	56	  
	            Section 8.3	  	Settlement of Indemnified Claims	  	 	57	  
	            Section 8.4	  	Contribution	  	 	58	  
	            Section 8.5	  	Treatment of Indemnification Payments	  	 	58	  
	            Section 8.6	  	No Survival	  	 	58	  

  
 ii 

 TABLE OF CONTENTS (cont’d) 

 

							
	 	  	 	  	Page	 
		
	 ARTICLE IX TERMINATION
	  	 	58	  
	            Section 9.1	  	Consensual Termination	  	 	58	  
	            Section 9.2	  	Automatic Termination	  	 	59	  
	            Section 9.3	  	Termination by the Company	  	 	60	  
	            Section 9.4	  	Effect of Termination	  	 	62	  
		
	 ARTICLE X GENERAL PROVISIONS
	  	 	62	  
	            Section 10.1	  	Notices	  	 	62	  
	            Section 10.2	  	Assignment; Third Party Beneficiaries	  	 	64	  
	            Section 10.3	  	Prior Negotiations; Entire Agreement	  	 	64	  
	            Section 10.4	  	Governing Law; Venue	  	 	64	  
	            Section 10.5	  	Waiver of Jury Trial	  	 	65	  
	            Section 10.6	  	Counterparts	  	 	65	  
	            Section 10.7	  	Waivers and Amendments; Rights Cumulative; Consent	  	 	65	  
	            Section 10.8	  	Headings	  	 	66	  
	            Section 10.9	  	Specific Performance	  	 	66	  
	            Section 10.10	  	Damages	  	 	66	  
	            Section 10.11	  	No Reliance	  	 	66	  
	            Section 10.12	  	Publicity	  	 	67	  
	            Section 10.13	  	Settlement Discussions	  	 	67	  
	            Section 10.14	  	No Recourse	  	 	67	  

 SCHEDULES 
  

			
	Schedule 1A	  	Unsecured Backstop Commitment Schedule
	Schedule 1B	  	Secured Backstop Commitment Schedule

 EXHIBITS 
  

			
	Exhibit A	  	Form of Rights Offering Procedures
	Exhibit B-1	  	Members of the Steering Committee of the Ad Hoc Group of Unsecured Noteholders
	Exhibit B-2	  	Members of the Steering Committee of the Ad Hoc Group of Secured Noteholders
	Exhibit C	  	Form of Transfer Notice
	Exhibit D	  	Form of Joinder Agreement
	Exhibit E	  	Form of Restructuring Support Agreement Transfer Agreement

  
 iii 

 BACKSTOP COMMITMENT AGREEMENT 

THIS BACKSTOP COMMITMENT AGREEMENT (this “Agreement”), dated as of October 25, 2016, is made by and among Linn
Energy, LLC, a Delaware limited liability company and the ultimate parent of each of the other Debtors (as the debtor in possession and a reorganized debtor, as applicable, the “Company”), on behalf of itself and each of the
other Debtors (as defined below), on the one hand, and each Commitment Party (as defined below), on the other hand. The Company and each Commitment Party is referred to herein, individually, as a “Party” and, collectively, as
the “Parties”. Capitalized terms that are used but not otherwise defined in this Agreement shall have the meanings given to them in Section 1.1 hereof or, if not defined therein, shall have the meanings given to
them in the Plan. 
 RECITALS 

WHEREAS, the Company, the Commitment Parties and the Consenting Creditors (as defined in the Restructuring Support Agreement) have
entered into a Restructuring Support Agreement, dated as of October 7, 2016 (including the terms and conditions set forth in the Restructuring Term Sheet attached as Exhibit A to the Restructuring Support Agreement (the
“Restructuring Term Sheet” and collectively, including all the exhibits thereto, as may be amended, supplemented or otherwise modified from time to time, the “Restructuring Support Agreement”)), which
(a) provides for the restructuring of the Debtors’ capital structure and financial obligations pursuant to a plan of reorganization to be filed in jointly administered cases (the “Chapter 11 Cases”) under Title 11
of the United States Code, 11 U.S.C. §§ 101-1532 (as it may be amended from time to time, the “Bankruptcy Code”), in the United States Bankruptcy Court for Southern District of Texas (the
“Bankruptcy Court”), implementing the terms and conditions of the Restructuring Transactions and (b) requires that the Plan be consistent with the Restructuring Support Agreement. 

WHEREAS, pursuant to the Plan and this Agreement, and in accordance with the Rights Offering Procedures, the Company, on behalf of the
Reorganized Company, will conduct (a) a rights offering for the Unsecured Rights Offering Shares (excluding the Common Shares to be issued pursuant to the Unsecured Equity Component) at an aggregate purchase price equal to the Unsecured Rights
Offering Amount and a per-share purchase price equal to the Per Share Purchase Price and (b) a rights offering for the Secured Rights Offering Shares (excluding the Common Shares to be issued pursuant to the Secured Equity Component) at an
aggregate purchase price equal to the Secured Rights Offering Amount and a per-share purchase price equal to the Per Share Purchase Price, and, on the Effective Date and following its formation, the Reorganized Company (which shall be formed by a
nominee of the Initial Commitment Parties prior to the Effective Date) shall assume and perform any remaining obligations with respect to the Rights Offerings and issue the Rights Offering Shares. 

WHEREAS, subject to the terms and conditions contained in this Agreement and in accordance with the Backstop Commitment Letter, dated
as of October 7, 2016, by and among the Debtors and certain Noteholders (as defined herein) party thereto, including the terms and conditions set forth in the Backstop Term Sheet attached to the Backstop Commitment Letter (the
“Backstop Term Sheet” and collectively, including all the exhibits thereto, as may be amended, supplemented or otherwise modified from time to time, the “Backstop Commitment 

  
 1 

 
Letter”), (a) each Unsecured Commitment Party has agreed to purchase (on a several and not joint basis) its Unsecured Backstop Commitment Percentage of the Unsecured Unsubscribed
Shares, if any, and (b) each Secured Commitment Party has agreed to purchase (on a several and not joint basis) its Secured Backstop Commitment Percentage of the Secured Unsubscribed Shares, if any. 

NOW, THEREFORE, in consideration of the mutual promises, agreements, representations, warranties and covenants contained herein, the Company
(on behalf of itself and each other Debtor) and each of the Commitment Parties hereby agrees as follows: 
 ARTICLE I 

DEFINITIONS 

Section 1.1 Definitions. Except as otherwise expressly provided in this Agreement, whenever used in this Agreement (including any
Exhibits and Schedules hereto), the following terms shall have the respective meanings specified therefor below or in the Plan, as applicable: 

“Ad Hoc Groups” means the Ad Hoc Group of Unsecured Noteholders and the Ad Hoc Group of Secured
Noteholders. 
 “Ad Hoc Group of Secured Noteholders” means that certain ad hoc group of holders of
Secured Notes represented by O’Melveny and Intrepid Financial Partners, or any of its members or their affiliates. 

“Ad Hoc Group of Unsecured Noteholders” means that certain ad hoc group of holders of Unsecured Notes
represented by Milbank and PJT Partners, or any of its members or their affiliates. 
 “Additional Commitment
Party” means a Person that executed a joinder agreement to the Backstop Commitment Letter in accordance with the terms thereof or becomes a Commitment Party pursuant to Section 2.6(c) of this Agreement. 

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, Controls or is
Controlled by or is under common Control with such Person, and shall include the meaning of “affiliate” set forth in section 101(2) of the Bankruptcy Code. “Affiliated” has a correlative meaning. 

“Affiliated Fund” means any investment fund the primary investment advisor to which is a Commitment Party or an
Affiliate thereof. 
 “Aggregate Backstop Commitment Percentage” has the meaning set forth in
Section 2.6(c). 
 “Aggregate Common Shares” means the total number of Common Shares
outstanding as of the Effective Date after giving effect to the Plan (but excluding all Common Shares issued or issuable under the EIP). 

  
 2 

 “Agreement” has the meaning set forth in the Preamble. 

“Alternative Transaction” means any dissolution, winding up, liquidation, reorganization, assignment for the
benefit of creditors, merger, transaction, consolidation, business combination, joint venture, partnership, sale of assets, financing (debt or equity), or restructuring of any of the Debtors, other than the Restructuring Transactions. 

“Antitrust Authorities” means the United States Federal Trade Commission, the Antitrust Division of the United
States Department of Justice, the attorneys general of the several states of the United States and any other Governmental Entity, whether domestic or foreign, having jurisdiction pursuant to the Antitrust Laws, and “Antitrust
Authority” means any of them. 
 “Antitrust Laws” means the Sherman Act, the Clayton Act,
the HSR Act, the Federal Trade Commission Act, and any other Law, whether domestic or foreign, governing agreements in restraint of trade, monopolization, pre-merger notification, the lessening of competition through merger or acquisition or
anti-competitive conduct, and any foreign investment Laws. 
 “Applicable Consent” has the meaning set
forth in Section 4.6. 
 “Available Shares” means all of the Unsecured Available Shares and the
Secured Available Shares. 
 “Backstop Agreement Motion” means the motion to be filed by the Debtors
seeking approval of the BCA Approval Order. 
 “Backstop Commitment” means the Secured Backstop
Commitment and/or the Unsecured Backstop Commitment, as applicable. 
 “Backstop Commitment Letter”
has the meaning set forth in the Recitals. 
 “Backstop Commitment Percentage” means the Secured
Backstop Commitment Percentage and/or the Unsecured Backstop Commitment Percentage, as applicable. 
 “Backstop
Commitment Schedules” means Schedule 1A and Schedule 1B to this Agreement, as each may be amended, supplemented or otherwise modified from time to time in accordance with this Agreement. 

“Backstop Term Sheet” has the meaning set forth in the Recitals. 

“Bankruptcy Code” has the meaning set forth in the Recitals. 

“Bankruptcy Court” has the meaning set forth in the Recitals. 

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure as promulgated by the United States Supreme
Court under section 2075 of title 28 of the United States Code, 28 U.S.C. § 2075, as applicable to the Chapter 11 Cases and the general, local, and chambers rules of the Bankruptcy Court. 

  
 3 

 “BCA Approval Obligations” means the obligations of the Company
and the other Debtors under this Agreement and the BCA Approval Order. 
 “BCA Approval Order” means
an Order of the Bankruptcy Court that that is not stayed under Bankruptcy Rule 6004(h) or otherwise (a) authorizes the Company (on behalf of itself and the other Debtors) to execute and deliver this Agreement, including all exhibits and other
attachments hereto, pursuant to section 365 of the Bankruptcy Code and (b) provides that the Commitment Premium, Expense Reimbursement and the indemnification provisions contained herein shall constitute allowed administrative expenses of the
Debtors’ estates under sections 503(b) and 507 of the Bankruptcy Code and shall be payable by the Debtors as provided in this Agreement without further Order of the Bankruptcy Court.  

“Berry Entities” means collectively Linn Acquisition Company, LLC and Berry Petroleum Company, LLC and their
direct and indirect Subsidiaries. 
 “Business Day” means any day, other than a Saturday, Sunday or
legal holiday, as defined in Bankruptcy Rule 9006(a). 
 “Bylaws” means the bylaws of the
Reorganized Company, which shall become effective as of Effective Date, and which shall be consistent with the terms set forth in the Restructuring Support Agreement and the Plan, and otherwise be in form and substance reasonably satisfactory to the
Requisite Commitment Parties and the Company. 
 “Certificate of Incorporation” means the certificate
of incorporation of the Reorganized Company as in effect on the Effective Date, which shall be consistent with the terms set forth in the Restructuring Support Agreement and the Plan, and otherwise be in form and substance reasonably satisfactory to
the Requisite Commitment Parties and the Company. 
 “Chapter 11 Cases” has the meaning set forth in
the Recitals. 
 “Claim” has the meaning set forth in section 101(5) of the Bankruptcy Code.

 “Closing” has the meaning set forth in Section 2.5(a). 

“Closing Date” has the meaning set forth in Section 2.5(a). 

“Code” means the Internal Revenue Code of 1986. 

“Commitment Party” means an Initial Commitment Party or an Additional Commitment Party. 

“Commitment Party Default” means an Unsecured Commitment Party Default or a Secured Commitment Party
Default. 
 “Commitment Party Replacement” has the meaning set forth in Section 2.3(b).

  
 4 

 “Commitment Party Replacement Period” has the meaning set forth in
Section 2.3(b). 
 “Commitment Premium” has the meaning set forth in Section
3.1. 
 “Common Shares” means the shares of common stock that constitute equity interests in the
Reorganized Company. 
 “Company” has the meaning set forth in the Preamble. 

“Company Disclosure Schedules” means the disclosure schedules delivered by the Company to the Commitment
Parties on the date of this Agreement. 
 “Company Plan” means any employee pension benefit plan, as
such term is defined in Section 3(2) of ERISA, (other than a Multiemployer Plan), subject to the provisions of Title IV of ERISA or Section 412 or 430 of the Code or Section 302 of ERISA, and (i) sponsored or maintained (at the
time of determination or at any time within the six years prior thereto) by any of the Debtors or any ERISA Affiliate, or with respect to which any such entity has any actual or contingent liability or obligation or (ii) in respect of which any
of the Debtors or any ERISA Affiliate is (or, if such plan were terminated, could under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA. 

“Company SEC Documents” means all of the reports, schedules, forms, statements and other documents (including
exhibits and other information incorporated therein) filed with the SEC by the Company. 
 “Confirmation
Date” means the date on which the Bankruptcy Court enters the Confirmation Order on the docket of the Chapter 11 Cases within the meaning of Bankruptcy Rules 5003 and 9021. 

“Confirmation Order” means a Final Order of the Bankruptcy Court confirming the Plan pursuant to section 1129
of the Bankruptcy Code. 
 “Consenting Noteholders” means each Noteholder that is party to the
Restructuring Support Agreement, solely in its capacity as such. 
 “Contract” means any agreement,
contract or instrument, including any loan, note, bond, mortgage, indenture, guarantee, deed of trust, license, franchise, commitment, lease, franchise agreement, letter of intent, memorandum of understanding or other obligation, and any amendments
thereto, whether written or oral, but excluding the Plan. 
 “Control” means, with respect to any
Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or agency or otherwise. 

“Debtors” means, collectively Linn Energy, LLC and its direct and indirect Subsidiaries (excluding the Berry
Entities), as the debtors in possession and reorganized debtors, as applicable; provided, however, that from and after the Effective Date, such definition shall include the Reorganized Company and shall not include Linn Energy, LLC.

  
 5 

 “Defaulting Commitment Party” means in respect of a Commitment
Party Default that is continuing, the applicable defaulting Commitment Party. 
 “Definitive
Documentation” means the definitive documents and agreements governing the Restructuring Transactions as set forth in the Restructuring Support Agreement. 

“Disclosure Statement” has the meaning set forth in the Restructuring Support Agreement. 

“Effective Date” means the date upon which (a) no stay of the Confirmation Order is in effect,
(b) all conditions precedent to the effectiveness of the Plan (or each respective Plan, if separate) have been satisfied or are expressly waived in accordance with the terms thereof, as the case may be, and (c) on which the Restructuring
and the other transactions to occur on the Effective Date pursuant to the Plan become effective or are consummated.  

“EIP” means the new employee incentive plan to be adopted by the Reorganized Company on the terms and
conditions set forth in the Restructuring Term Sheet. 
 “Environmental Laws” means all applicable
laws (including common law), rules, regulations, codes, ordinances, orders in council, Orders, decrees, treaties, directives, judgments or legally binding agreements promulgated or entered into by or with any Governmental Entity, relating in any way
to the environment, preservation or reclamation of natural resources, the generation, management, Release or threatened Release of, or exposure to, any Hazardous Material.  

“ERISA” means the Employee Retirement Income Security Act of 1974. 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with any of the
Debtors, is, or at any relevant time during the past six years was, treated as a single employer under any provision of Section 414 of the Code. 

“ERISA Event” means (a) any Reportable Event or the requirements of Section 4043(b) of ERISA apply
with respect to a Company Plan; (b) any failure by any Company Plan to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Company Plan, whether or not
waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Company Plan, the failure to make by its due date a required
installment under Section 430(j) of the Code with respect to any Company Plan or the failure to make any required contribution to a Multiemployer Plan; (d) the incurrence by any of the Debtors or any ERISA Affiliate of any liability under
Title IV of ERISA with respect to the termination of any Company Plan, including the imposition of any Lien in favor of the PBGC or any Company Plan or Multiemployer Plan; (e) a determination that any Company Plan is, or is expected to be, in
“at-risk” status (within the meaning of Section 303 of ERISA or Section 430 of the Code); (f) the receipt by any of the Debtors or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Company  

  
 6 

 
Plan or to appoint a trustee to administer any Company Plan under Section 4042 of ERISA; (g) the incurrence by any of the Debtors or any ERISA Affiliate of any liability with respect to
the withdrawal or partial withdrawal from any Company Plan or Multiemployer Plan; (h) the receipt by any of the Debtors or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any of the Debtors or any ERISA
Affiliate of any notice, concerning the impending imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, “insolvent” (within the meaning of Section 4245 of ERISA), or in
“endangered” or “critical status” (within the meaning of Section 305 of ERISA or Section 432 of the Code); (i) the conditions for imposition of a Lien under Section 303(k) of ERISA or Section 430(k) of
the Code shall have been met with respect to any Company Plan; (j) the adoption of an amendment to a Company Plan requiring the provision of security to such Company Plan pursuant to Section 307 of ERISA; (k) the assertion of a
material claim (other than routine claims for benefits) against any Company Plan or the assets thereof, or against any of the Debtors or any of the ERISA Affiliates in connection with any Company Plan; or (l) receipt from the IRS of notice of
the failure of any Company Plan (or any other employee benefit plan intended to be qualified under Section 401(a) of the Code) to qualify under Section 401(a) of the Code, or the failure of any trust forming part of any Company Plan to
qualify for exemption from taxation under Section 501(a) of the Code. 
 “Escrow Account” has the
meaning set forth in Section 2.4(a). 
 “Escrow Account Funding Date” has the meaning
set forth in Section 2.4(b).  
 “Event” means any event, development, occurrence,
circumstance, effect, condition, result, state of facts or change. 
 “Exchange Act” means the
Securities Exchange Act of 1934, as amended. 
 “Exit Facility” means, collectively, (a) the
new $1.4 billion reserve-based lending facility credit agreement substantially on the terms set forth in the Exit Facility Term Sheet (which shall be composed of a $1.4 billion conforming tranche and a $0 million non-conforming tranche as of the
Closing Date) and (b) the new $300 million secured term loan facility, substantially on the terms and conditions set forth in the Exit Facility Term Sheet and which shall be consistent with the terms set forth in the Restructuring Support
Agreement and the Plan. 
 “Exit Facility Lender” means any lender under the Exit Facility, solely in
its capacity as such. 
 “Exit Facility Term Sheet” means the term sheet attached as Exhibit B to the
Restructuring Term Sheet setting forth the terms and conditions of the Exit Facility. 
 “Expense
Reimbursement” has the meaning set forth in Section 3.3(a). 
 “Filing Party” has the
meaning set forth in Section 6.12(b). 
 “Final Cash Collateral Order” means the
Final Order under 11 U.S.C. §§ 105, 361, 362, 363, 507 and 552, and Bankruptcy Rules 2002, 4001 and 9014 (I) Authorizing Debtors to Use Cash Collateral and (II) Granting Adequate Protection to Prepetition Lenders
[Docket No. 743], as may be amended. 

  
 7 

 “Final Order” means, as applicable, an Order of the Bankruptcy
Court or other court of competent jurisdiction with respect to the relevant subject matter that has not been reversed, stayed, modified, or amended, and as to which the time to appeal or seek certiorari has expired and no appeal or petition for
certiorari has been timely taken, or as to which any appeal that has been taken or any petition for certiorari that has been or may be filed has been resolved by the highest court to which the Order could be appealed or from which certiorari could
be sought or the new trial, reargument, or rehearing shall have been denied, resulted in no modification of such Order, or has otherwise been dismissed with prejudice. 

“Financial Reports” has the meaning set forth in Section 6.5(a). 

“First Lien Agent” means Wells Fargo Bank, N.A., or any successor thereto, as administrative agent under the
First Lien Credit Agreement, solely in its capacity as such. 
 “First Lien Credit Agreement” means
that certain Sixth Amended and Restated Credit Agreement, dated as of April 24, 2013, as amended, restated, modified, supplemented, or replaced from time to time prior to the date hereof, by and among Linn Energy, LLC, as borrower, each of the
guarantors party thereto, the First Lien Agent, and the First Lien Lenders. 
 “First Lien Lenders”
means the lenders party to the First Lien Credit Agreement, solely in their capacity as such. 
 “Funding
Notice” has the meaning set forth in Section 2.4(a). 
 “Funding Notice Date” has
the meaning set forth in Section 2.4(a). 
 “GAAP” means United States generally accepted
accounting principles. 
 “Governmental Entity” has the meaning of “governmental unit” set
forth in section 101(27) of the Bankruptcy Code. 
 “Hazardous Materials” means all pollutants,
contaminants, wastes, chemicals, materials, substances and constituents, including explosive or radioactive substances or petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls or radon gas, of any
nature subject to regulation or which can give rise to liability under any Environmental Law other than naturally occurring radioactive material (“NORM”) on or inside of equipment wells or oil and gas property to the extent each of the
foregoing is in service. 
 “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended from time to time. 
 “Indemnified Claim” has the meaning set forth in
Section 8.2. 
 “Indemnified Person” has the meaning set forth in Section 8.1.

  
 8 

 “Indemnifying Party” has the meaning set forth in Section
8.1. 
 “Initial Commitment Party” means each Initial Secured Commitment Party and each Initial
Unsecured Commitment Party. 
 “Initial Secured Commitment Party” has the meaning set forth in the
Backstop Commitment Letter and includes any Ultimate Purchaser of such Initial Secured Commitment Party’s Backstop Commitment pursuant to Section 2.6(b), but excludes any Secured Commitment Party that is an Initial Secured
Commitment Party under the Backstop Commitment Letter solely by reason of being a transferee of an Initial Secured Commitment Party’s Backstop Commitment pursuant to Section 7 of the Backstop Commitment Letter. 

“Initial Unsecured Commitment Party” has the meaning set forth in the Backstop Commitment Letter and includes
any Ultimate Purchaser of such Initial Unsecured Commitment Party’s Backstop Commitment pursuant to Section 2.6(b), but excludes any Unsecured Commitment Party that is an Initial Unsecured Commitment Party under the Backstop
Commitment Letter solely by reason of being a transferee of an Initial Unsecured Commitment Party’s Backstop Commitment pursuant to Section 7 of the Backstop Commitment Letter. 

“Intellectual Property Rights” has the meaning set forth in Section 4.12. 

“IRS” means the United States Internal Revenue Service.  

“Joinder Agreement” has the meaning set forth in Section 2.6(c). 

“Joint Filing Party” has the meaning set forth in Section 6.12(c). 

“Knowledge of the Company” means the actual knowledge, after reasonable inquiry of their direct reports, of the
chief executive officer, chief financial officer, chief operating officer and general counsel of the Company. As used herein, “actual knowledge” means information that is personally known by the listed individual(s). 

“Law” means any law (statutory or common), statute, regulation, rule, code or ordinance enacted, adopted,
issued or promulgated by any Governmental Entity. 
 “Legal Proceedings” has the meaning set forth in
Section 4.10. 
 “Legend” has the meaning set forth in Section 6.11. 

“Lien” means any lien, adverse claim, charge, option, right of first refusal, servitude, security interest,
mortgage, pledge, deed of trust, easement, encumbrance, restriction on transfer, conditional sale or other title retention agreement, defect in title, lien or judicial lien as defined in sections 101(36) and (37) of the Bankruptcy Code or other
restrictions of a similar kind. 
 “Linn Termination Event” has the meaning set forth in Section
9.3. 

  
 9 

 “Losses” has the meaning set forth in Section 8.1. 

“Material Adverse Effect” means any Event, which individually, or together with all other Events, has had or
would reasonably be expected to have a material and adverse effect on (a) the business, assets, liabilities, finances, properties, results of operations or condition (financial or otherwise) of the Debtors, taken as a whole, or (b) the
ability of the Debtors, taken as a whole, to perform their obligations under, or to consummate the transactions contemplated by, the Transaction Agreements, including the Rights Offerings, in each case, except to the extent such Event results from,
arises out of, or is attributable to, the following (either alone or in combination): (i) any change after the date hereof in global, national or regional political conditions (including hostilities, acts of war, sabotage, terrorism or military
actions, or any escalation or material worsening of any such hostilities, acts of war, sabotage, terrorism or military actions existing or underway) or in the general business, market, financial or economic conditions affecting the industries,
regions and markets in which the Debtors operate, including any change in the United States or applicable foreign economies or securities, commodities or financial markets, or force majeure events or “acts of God”; (ii) any changes
after the date hereof in applicable Law or GAAP, or in the interpretation or enforcement thereof; (iii) the execution, announcement or performance of this Agreement or the other Transaction Agreements or the transactions contemplated hereby or
thereby (including any act or omission of the Debtors expressly required or prohibited, as applicable, by this Agreement or consented to or required by the Requisite Commitment Parties in writing); (iv) changes in the market price or trading
volume of the claims or equity or debt securities of the Debtors (but not the underlying facts giving rise to such changes unless such facts are otherwise excluded pursuant to the clauses contained in this definition); (v) the departure of
officers or directors of any of the Debtors not in contravention of the terms and conditions of this Agreement (but not the underlying facts giving rise to such departure unless such facts are otherwise excluded pursuant to the clauses contained in
this definition); (vi) the filing or pendency of the Chapter 11 Cases; (vii) declarations of national emergencies in the United States or natural disasters in the United States; (viii) any matters expressly disclosed in the
Disclosure Statement or the Company Disclosure Schedules as delivered on the date hereof; or (ix) the occurrence of a Commitment Party Default; provided, that the exceptions set forth in clauses (i) and (ii) shall not apply to
the extent that such Event is disproportionately adverse to the Debtors, taken as a whole, as compared to other companies in the industries in which the Debtors operate. 

“Material Contracts” means (a) all “plans of acquisition, reorganization, arrangement, liquidation or
succession” and “material contracts” (as such terms are defined in Items 601(b)(2) and 601(b)(10) of Regulation S-K under the Exchange Act) to which any of the Debtors is a party, (b) any Contracts to which any of the
Debtors is a party that is likely to reasonably involve consideration of more than $5,000,000, in the aggregate, over a twelve-month period, has a term of greater than one year and is not cancelable without material penalty on not more than thirty
(30) days’ notice or (c) the Contracts described in Section 1.1 of the Company Disclosure Schedules. 

“Milbank” shall mean Milbank, Tweed, Hadley & McCloy, LLP. 

“Money Laundering Laws” has the meaning set forth in Section 4.23. 

  
 10 

 “Multiemployer Plan” means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which any of the Debtors or any ERISA Affiliate is making or accruing an obligation to make contributions, has within any of the preceding six plan years made or accrued an obligation to make contributions, or
each such plan with respect to which any such entity has any actual or contingent liability or obligation.  

“Note Claims” means all claims against the Debtors arising on account of the Notes and the indentures pursuant
to which they were issued. 
 “Noteholders” means all Secured Noteholders and all Unsecured
Noteholders. 
 “Notes” shall mean, collectively, the Secured Notes and the Unsecured Notes. 

 “O’Melveny” shall mean O’Melveny & Myers LLP. 

“Order” means any judgment, order, award, injunction, writ, permit, license or decree of any Governmental
Entity or arbitrator of applicable jurisdiction. 
 “Outside Date” has the meaning set forth in
Section 9.2(a). 
 “Party” has the meaning set forth in the Preamble. 

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or
any successor thereto. 
 “Per Share Discounted Purchase Price” means the Per Share Plan Value
multiplied by 0.75, rounded to two decimal places. 
 “Per Share Plan Value” means the quotient of
(x) the Plan Equity Value divided by (y) the Aggregate Common Shares.  
 “Per Share Purchase
Price” means the Per Share Plan Value multiplied by 0.80, rounded to two decimal places. 
 “Permitted
Liens” means (a) Liens for Taxes that (i) are not yet delinquent or (ii) are being contested in good faith by appropriate proceedings and for which adequate reserves have been made with respect thereto;
(b) landlord’s, operator’s, vendors’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other similar Liens for labor, materials or supplies or other like Liens arising by
operation of law in the ordinary course of business or incident to the exploration, development, operation and maintenance of oil and gas properties provided with respect to any Real Property or personal property incurred in the ordinary course of
business consistent with past practice and as otherwise not prohibited under this Agreement, for amounts that are not more than sixty (60) days delinquent and that do not materially detract from the value of, or materially impair the use of,
any of the Real Property or personal property of any of the Debtors, or, if for amounts that do materially detract from the value of, or materially impair the use of, any of the Real Property or personal property of any of the Debtors, if such Lien
is being contested in good faith by appropriate proceedings and for which adequate reserves have been made with respect thereto; (c) zoning, building codes and  

  
 11 

 
other land use Laws regulating the use or occupancy of any Real Property or the activities conducted thereon that are imposed by any Governmental Entity having jurisdiction over such Real
Property; provided, that no such zoning, building codes and other land use Laws prohibit the use or occupancy of such Real Property; (d) easements, covenants, conditions, minor encroachments, restrictions on transfer and other similar
matters affecting title to any Real Property (including any title retention agreement) and other title defects and encumbrances that do not or would not materially impair the ownership, use or occupancy of such Real Property or the operation of the
Debtors’ business; (e) Liens granted under any Contracts (including joint operating agreements, oil and gas leases, farmout agreements, joint development agreements, transportation agreements, marketing agreements, seismic licenses and
other similar operational oil and gas agreements), in each case, to the extent the same are ordinary and customary in the oil and gas business and do not or would not materially impair the ownership, use or occupancy of any Real Property or the
operation of the Debtors’ business and which are for claims not more than sixty (60) days delinquent or, if such claim does materially impair such ownership, use, occupancy or operation and are for obligations that are more than sixty
(60) days delinquent, are being contested in good faith by appropriate proceedings and for which adequate reserves have been made with respect thereto; (f) from and after the occurrence of the Effective Date, Liens granted in connection
with the Exit Facility; (g) mortgages on a lessor’s interest in a lease or sublease; provided that no foreclosure proceedings have been duly filed (unless, in such case, such mortgage has been subordinated to the applicable lease);
and (h) Liens that, pursuant to the Plan and the Confirmation Order, will be discharged and released on the Effective Date. 

“Person” means an individual, firm, corporation (including any non-profit corporation), partnership, limited
liability company, joint venture, association, trust, Governmental Entity or other entity or organization. 

“Plan” means the Joint Chapter 11 Plan of Reorganization of Linn Energy, LLC and Its Debtor
Affiliates, filed on October 21, 2016 (as may be amended, supplemented, or modified from time to time in accordance with its terms and the terms of the Restructuring Support Agreement), including all exhibits, supplements, appendices, and
schedules thereto. 
 “Plan Equity Value” means the good faith estimate, as mutually agreed in writing
by the Company, PJT Partners and Intrepid Financial Partners prior to the commencement of the Rights Offerings, which estimate shall be based on a 13-week rolling cash flow statement of the Debtors prepared by the Company no later than five
(5) Business Days prior to the hearing with the Bankruptcy Court with respect to the Plan Solicitation Motion reflecting what the equity value of the Reorganized Company will be as of the Effective Date (after including cash on hand of the
Reorganized Company in excess of $50,000,000) pro forma for the restructured capital structure as of the Effective Date, including after giving effect to the Rights Offerings and the other Restructuring Transactions and subtracting all indebtedness
and accrued and unpaid Restructuring Transaction expenses then outstanding, based on an enterprise value of $2,350,000,000. Such estimated amount shall be the equity value of the Reorganized Company as of the Effective Date for purposes of the Plan,
after giving effect to the transactions contemplated by the Plan. 
 “Plan Solicitation Motion” means
the Debtors’ motion, in form and substance reasonably satisfactory to the Requisite Commitment Parties and the Company, for an order,  

  
 12 

 
among other things, (a) approving the Disclosure Statement; (b) establishing a voting record date for the Plan; (c) approving solicitation packages and procedures for the
distribution thereof; (d) approving the forms of ballots; (e) establishing procedures for voting on the Plan; (f) establishing notice and objection procedures for the confirmation of the Plan; (g) approving the Rights Offering
Procedures; and (h) establishing procedures for the assumption and/or assignment of executory Contracts and unexpired leases under the Plan. 

“Plan Solicitation Order” means an Order, in form and substance reasonably acceptable to the Requisite
Commitment Parties and the Company, approving the Disclosure Statement with respect to the Plan and approving the Rights Offering Procedures and the solicitation with respect to the Plan which are in form and substance reasonably acceptable to the
Requisite Commitment Parties and the Company. 
 “Plan Supplement” means the compilation of documents
and forms of documents, schedules, and exhibits to the Plan (as amended, supplemented, or modified from time to time in accordance with the Plan, the Bankruptcy Code, the Bankruptcy Rules, and the Restructuring Support Agreement), including without
limitation disclosure required under section 1129(a)(5) of the Bankruptcy Code, to be filed by the Debtors no later than 14 days before the Confirmation Hearing, and additional documents or amendments to previously filed documents, filed before the
Effective Date as amendments to the Plan Supplement, including the following, as applicable: (a) the Exit Facility Documents; (b) the Reorganized Company Organizational Documents; (c) a list of retained Causes of Action; (d) the
Description of Transaction Steps; (e) the Registration Rights Agreement; (f) the Schedule of Assumed Executory Contracts and Unexpired Leases (as defined in the Plan); (g) the Schedule of Rejected Executory Contracts and Unexpired
Leases (as defined in the Plan); (h) the Agreement; and (i) any and all other documentation necessary to effectuate the Restructuring Transactions or that is contemplated by the Plan. The Debtors shall have the right to amend the documents
contained in, and exhibits to, the Plan Supplement through the Effective Date consistent with and subject to the Restructuring Support Agreement.  

“Pre-Closing Period” has the meaning set forth in Section 6.3. 

“Pre-Hearing Letter Agreement” means an agreement executed by the Parties acknowledging their agreement to the
definitive forms of the documents contemplated hereby, including the Reorganized Company Organizational Documents and the EIP. 

“Real Property” means, collectively, all right, title and interest (including any leasehold estate) in and to
any and all parcels of or interests in real property owned in fee or leased by any of the Debtors, together with, in each case, all easements, hereditaments and appurtenances relating thereto, all improvements and appurtenant fixtures incidental to
the ownership or lease thereof.  
 “Registration Rights Agreement” has the meaning set forth in
Section 6.7(a).  
 “Related Party” means, with respect to any Person, (i) any
former, current or future director, officer, agent, Affiliate, employee, general or limited partner, member, manager or stockholder of such Person and (ii) any former, current or future director, officer, agent, Affiliate, employee, general or
limited partner, member, manager or stockholder of any of the foregoing. 

  
 13 

 “Related Purchaser” has the meaning set forth in Section
2.6(a). 
 “Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, disposing or migrating. “Released” has a correlative meaning. 

“Reorganized Company” means a new Delaware corporation to be formed by a non-Debtor, non-Commitment Party
nominee of the Initial Commitment Parties prior to the Effective Date and which will, as of the Effective Date, own 100% of the membership interests in a new Delaware limited liability company that will serve as the issuer of certain incentive
equity units issuable pursuant to the EIP. 
 “Reorganized Company Organizational Documents” means,
collectively, the Bylaws and the Certificate of Incorporation. 
 “Replacing Commitment Parties” has
the meaning set forth in Section 2.3(b). 
 “Reportable Event” means any reportable event as
defined in Section 4043(c) of ERISA or the regulations issued thereunder, other than those events as to which the 30 day notice period referred to in Section 4043(c) of ERISA has been waived, with respect to a Company Plan. 

“Representatives” means, with respect to any Person, such Person’s directors, officers, members, partners,
managers, employees, agents, investment bankers, attorneys, accountants, advisors and other representatives. 

“Requisite Commitment Parties” means (a) members of the Steering Committee of the Ad Hoc Group of
Unsecured Noteholders holding more than sixty-six and two-thirds percent (66-2/3%) of the Allowed LINN Unsecured Notes Claims held by all members of the Steering Committee of the Ad Hoc Group of Unsecured Noteholders at the time of the relevant
determination and (b) members of the Steering Committee of the Ad Hoc Group of Secured Noteholders holding more than sixty-six and two-thirds percent (66-2/3%) of the Allowed LINN Second Lien Notes Claims held by all members of the Steering
Committee of the Ad Hoc Group of Secured Noteholders at the time of the relevant determination, in the case of each of (a) and (b), voting as a separate class.  

“Restructuring” has the meaning set forth in the Restructuring Support Agreement. 

“Restructuring Support Agreement” has the meaning set forth in the Recitals.  

“Restructuring Term Sheet” has the meaning set forth in the Recitals. 

“Restructuring Transactions” means, collectively, the transactions contemplated by the Restructuring Support
Agreement. 

  
 14 

 “Rights Offerings” means the Unsecured Rights Offering and the
Secured Rights Offering. 
 “Rights Offering Amount” means an amount equal to the sum of the Unsecured
Rights Offering Amount and the Secured Rights Offering Amount, which were calculated pursuant to the terms and conditions of the Second Lien Settlement Agreement (as defined in the Restructuring Support Agreement). 

“Rights Offering Expiration Time” means the time and the date on which the rights offering subscription forms
must be duly delivered to the Rights Offering Subscription Agent in accordance with the Rights Offering Procedures, together with the applicable aggregate Per Share Purchase Price, if applicable. 

“Rights Offering Participants” means all of the Secured Rights Offering Participants and the Unsecured Rights
Offering Participants. 
 “Rights Offering Procedures” means the procedures with respect to the Rights
Offerings that are approved by the Bankruptcy Court pursuant to the Plan Solicitation Order, which procedures shall be in form and substance substantially as set forth on Exhibit A hereto, as may be modified in a manner that is reasonably
acceptable to the Requisite Commitment Parties and the Company.  
 “Rights Offering Shares” means all
of the Unsecured Rights Offering Shares and the Secured Rights Offering Shares, which aggregate number of Rights Offering Shares shall be reasonably acceptable to the Requisite Commitment Parties.  

“Rights Offering Subscription Agent” means Prime Clerk or another subscription agent appointed by the Company
and satisfactory to the Requisite Commitment Parties.  
 “SEC” means the U.S. Securities and
Exchange Commission. 
 “Secured Available Shares” means the Secured Unsubscribed Shares that any
Secured Commitment Party fails to purchase as a result of a Secured Commitment Party Default by such Secured Commitment Party. 

“Secured Backstop Commitment” has the meaning set forth in Section 2.2. 

“Secured Backstop Commitment Percentage” means, with respect to any Secured Commitment Party, such Secured
Commitment Party’s percentage of the Secured Backstop Commitment as set forth opposite such Secured Commitment Party’s name under the column titled “Secured Backstop Commitment Percentage” on Schedule 1B to this Agreement.
Any reference to “Secured Backstop Commitment Percentage” in this Agreement means the Secured Backstop Commitment Percentage in effect at the time of the relevant determination. 

“Secured Cash Component” means the portion of the Secured Commitment Premium that is payable in the form of
cash pursuant to Section 3.2. 

  
 15 

 “Secured Commitment Parties” means all Commitment Parties that are
also Secured Noteholders. 
 “Secured Commitment Party Default” means the failure by any Secured
Commitment Party to (a) deliver and pay the aggregate Per Share Discounted Purchase Price for such Secured Commitment Party’s Backstop Commitment Percentage of any Secured Unsubscribed Shares by the Escrow Account Funding Date in
accordance with Section 2.4(b) or (b) fully exercise all Secured Subscription Rights that are issued to it pursuant to the Secured Rights Offering and duly purchase all Secured Rights Offering Shares issuable to it pursuant to such
exercise, in accordance with this Agreement and the Plan. 
 “Secured Commitment Party Replacement”
has the meaning set forth in Section 2.3(b). 
 “Secured Commitment Party Replacement Period”
has the meaning set forth in Section 2.3(b). 
 “Secured Commitment Premium” has the meaning
set forth in Section 3.1. 
 “Secured Equity Component” means the portion of the Secured
Commitment Premium that is payable in the form of Common Shares pursuant to Section 3.2. 
 “Secured
Noteholders” means all holders of the Secured Notes. 
 “Secured Notes” shall mean the
$1.0 billion aggregate principal amount of 12.00% senior secured second lien notes due 2020 issued pursuant to that certain Indenture, dated as of November 13, 2015, among LINN Energy, LLC and LINN Energy Finance Corp., as Issuers, Delaware
Trust Company, as successor trustee and collateral trustee under such indenture and collateral agreement, and the guarantors party thereto (as amended from time to time prior to the date hereof).  

“Secured Replacing Commitment Parties” has the meaning set forth in Section 2.3(b). 

“Secured Rights Offering” means the rights offering that is backstopped by the Secured Commitment Parties for
the Secured Rights Offering Amount in connection with the Restructuring Transactions substantially on the terms reflected in the Restructuring Support Agreement and this Agreement, and in accordance with the Rights Offering Procedures. 

“Secured Rights Offering Shares” means the Common Shares (including all Secured Unsubscribed Shares purchased
by the Secured Commitment Parties pursuant to this Agreement) distributed pursuant to and in accordance with the Rights Offering Procedures in the Secured Rights Offering. 

“Secured Rights Offering Amount” means an amount equal to $210,995,592. 

“Secured Rights Offering Participants” means those Persons who duly subscribe for Secured Rights Offering
Shares in accordance with the Rights Offering Procedures. 

  
 16 

 “Secured Subscription Rights” means the subscription rights to
purchase Secured Rights Offering Shares. 
 “Secured Unsubscribed Shares” means the Secured
Rights Offering Shares that have not been duly purchased in the Secured Rights Offering by Secured Noteholders that are not Secured Commitment Parties in accordance with the Rights Offering Procedures and the Plan, including, for purposes of
calculating the number of Secured Unsubscribed Shares to be purchased pursuant to the Secured Backstop Commitment, any additional Common Shares issued and sold to the Secured Commitment Parties on account of such Secured Unsubscribed Shares pursuant
to this Agreement to account for the Per Share Discounted Purchase Price at which Secured Unsubscribed Shares will be sold. 

“Securities Act” means the Securities Act of 1933, as amended. 

“Steering Committee” means, as applicable, (a) the steering committee of the Ad Hoc Group of Unsecured
Noteholders as may be constituted from time to time and which shall initially be comprised of the entities set forth in Exhibit B-1 hereto and/or (b) the steering committee of the Ad Hoc Group of Secured Noteholders as may be constituted from
time to time and which shall initially be comprised of the entities set forth in Exhibit B-2 hereto. 

“Subscription Rights” means all of the Unsecured Subscription Rights and the Secured Subscription Rights.

 “Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture or other
legal entity as to which such Person (either alone or through or together with any other subsidiary), (a) owns, directly or indirectly, more than fifty percent (50%) of the stock or other equity interests, (b) has the power to elect a
majority of the board of directors or similar governing body, or (c) has the power to direct the business and policies. 

“Taxes” means all taxes, assessments, duties, levies or other mandatory governmental charges paid to a
Governmental Entity, including all federal, state, local, foreign and other income, franchise, profits, gross receipts, capital gains, capital stock, transfer, property, sales, use, value-added, occupation, excise, severance, windfall profits,
stamp, payroll, social security, withholding and other taxes, assessments, duties, levies or other mandatory governmental charges of any kind whatsoever paid to a Governmental Entity (whether payable directly or by withholding and whether or not
requiring the filing of a return), all estimated taxes, deficiency assessments, additions to tax, penalties and interest thereon and shall include any liability for such amounts as a result of being a member of a combined, consolidated, unitary or
affiliated group. For the avoidance of doubt, such term shall exclude any tax, penalties or interest thereon that result or have resulted from the non-payment of royalties. 

“Transaction Agreements” has the meaning set forth in Section 4.2(a). 

“Transfer” means to sell, transfer, assign, pledge, hypothecate, participate, donate or otherwise encumber or
dispose of, directly or indirectly (including through derivatives, options, swaps, pledges, forward sales or other transactions in which any Person receives the right to own or acquire any current or future interest in a Subscription Right, a Note
Claim, a Rights Offering Share or Common Share). “Transfer” used as a noun has a correlative meaning. 

  
 17 

 “Ultimate Purchaser” has the meaning set forth in Section
2.6(b). 
 “Unfunded Pension Liability” means the excess of a Company Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that Company Plan’s assets, determined in accordance with the assumptions used for funding the Company Plan pursuant to Section 412 of the Code for the
applicable plan year. 
 “Unlegended Shares” has the meaning set forth in Section 6.9. 

“Unsecured Available Shares” means the Unsecured Unsubscribed Shares that any Unsecured Commitment Party fails
to purchase as a result of a Unsecured Commitment Party Default by such Unsecured Commitment Party. 
 “Unsecured
Backstop Commitment” has the meaning set forth in Section 2.2. 
 “Unsecured Backstop
Commitment Percentage” means, with respect to any Unsecured Commitment Party, such Unsecured Commitment Party’s percentage of the Unsecured Backstop Commitment as set forth opposite such Unsecured Commitment Party’s name under
the column titled “Unsecured Backstop Commitment Percentage” on Schedule 1A to this Agreement. Any reference to “Unsecured Backstop Commitment Percentage” in this Agreement means the Unsecured Backstop Commitment
Percentage in effect at the time of the relevant determination. 
 “Unsecured Cash Component” means
the portion of the Unsecured Commitment Premium that is payable in the form of cash pursuant to Section 3.2. 

“Unsecured Commitment Parties” means all Commitment Parties that are also Unsecured Noteholders. 

“Unsecured Commitment Party Default” means the failure by any Unsecured Commitment Party to (a) deliver
and pay the aggregate Per Share Discounted Purchase Price for such Unsecured Commitment Party’s Backstop Commitment Percentage of any Unsecured Unsubscribed Shares by the Escrow Account Funding Date in accordance with Section 2.4(b)
or (b) fully exercise all Unsecured Subscription Rights that are issued to it pursuant to the Unsecured Rights Offering and duly purchase all Unsecured Rights Offering Shares issuable to it pursuant to such exercise, in accordance with this
Agreement and the Plan. 
 “Unsecured Commitment Party Replacement” has the meaning set forth in
Section 2.3(a). 
 “Unsecured Commitment Party Replacement Period” has the meaning set forth in
Section 2.3(a). 
 “Unsecured Commitment Premium” has the meaning set forth in Section
3.1. 

  
 18 

 “Unsecured Equity Component” means the portion of the Unsecured
Commitment Premium that is payable in the form of Common Shares pursuant to Section 3.2. 
 “Unsecured
Noteholders” means all holders of the Unsecured Notes. 
 “Unsecured Notes” shall mean,
collectively, (i) the $581 million aggregate principal amount of 6.25% notes issued pursuant to that certain Indenture, dated as of March 2, 2012, among LINN and LINN Energy Finance Corp., as Issuers, U.S. Bank, N.A., as Trustee, and the
guarantors party thereto (as amended from time to time prior to the date hereof); (ii) the $562 million aggregate principal amount of 6.50% notes due 2019 issued pursuant to that certain First Supplemental Indenture, dated as of
September 9, 2014, among LINN and LINN Energy Finance Corp., as Issuers, the LINN Unsecured Notes Indenture Trustee, and the guarantors party thereto (as amended from time to time prior to the date hereof; (iii) the $381 million aggregate
principal amount of 6.50% due 2021 notes issued pursuant to that certain First Supplemental Indenture, dated as of September 9, 2014, among LINN and LINN Energy Finance Corp., as Issuers, the LINN Unsecured Notes Indenture Trustee, and the
guarantors party thereto (as amended from time to time prior to the date hereof); (iv) the $780 million aggregate principal amount of 7.75% notes issued pursuant to that certain Indenture, dated as of September 13, 2010, among LINN and
LINN Energy Finance Corp., as Issuers, the LINN Unsecured Notes Indenture Trustee, and the guarantors party thereto (as amended from time to time prior to the date hereof); and (v) the $719 million aggregate principal amount of 8.625% notes
issued pursuant to that certain First Supplemental Indenture, dated as of July 2, 2010, among LINN and LINN Energy Finance Corp., as Issuers, the LINN Unsecured Notes Indenture Trustee, and the guarantors party thereto (as amended from time to
time prior to the date hereof).  
 “Unsecured Replacing Commitment Parties” has the meaning set forth
in Section 2.3(a). 
 “Unsecured Rights Offering” means the rights offering that is backstopped
by the Unsecured Commitment Parties for the Unsecured Rights Offering Amount in connection with the Restructuring Transactions substantially on the terms reflected in the Restructuring Support Agreement and this Agreement, and in accordance with the
Rights Offering Procedures. 
 “Unsecured Rights Offering Amount” means an amount equal to
$319,004,408. 
 “Unsecured Rights Offering Participants” means those Persons who duly subscribe for
Unsecured Rights Offering Shares in accordance with the Rights Offering Procedures. 
 “Unsecured Rights Offering
Shares” means the Common Shares (including all Unsecured Unsubscribed Shares purchased by the Unsecured Commitment Parties pursuant to this Agreement) distributed pursuant to and in accordance with the Rights Offering Procedures in the
Unsecured Rights Offering. 
 “Unsecured Subscription Rights” means the subscription rights to
purchase Unsecured Rights Offering Shares. 

  
 19 

 “Unsecured Unsubscribed Shares” means the Unsecured Rights
Offering Shares that have not been duly purchased in the Unsecured Rights Offering by Unsecured Noteholders that are not Unsecured Commitment Parties in accordance with the Rights Offering Procedures and the Plan, including, for purposes of
calculating the number of Unsecured Unsubscribed Shares to be purchased pursuant to the Unsecured Backstop Commitment, any additional Common Shares issued and sold to the Unsecured Commitment Parties on account of such Unsecured Unsubscribed Shares
pursuant to this Agreement to account for the Per Share Discounted Purchase Price at which Unsecured Unsubscribed Shares will be sold. 

“Unsubscribed Shares” means all of the Unsecured Unsubscribed Shares and the Secured Unsubscribed Shares.

 “willful or intentional breach” has the meaning set forth in Section 9.4(a). 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal
from such Multiemployer Plan, as such terms are defined in Section 4203 of ERISA. 
 Section 1.2 Construction. In
this Agreement, unless the context otherwise requires: 
 (a) references to Articles, Sections, Exhibits and Schedules are references to the
articles and sections or subsections of, and the exhibits and schedules attached to, this Agreement; 
 (b) references in this Agreement to
“writing” or comparable expressions include a reference to a written document transmitted by means of electronic mail in portable document format (pdf), facsimile transmission or comparable means of communication; 

(c) words expressed in the singular number shall include the plural and vice versa; words expressed in the masculine shall include the
feminine and neuter gender and vice versa; 
 (d) the words “hereof”, “herein”, “hereto” and
“hereunder”, and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, including all Exhibits and Schedules attached to this Agreement, and not to any provision of this Agreement; 

(e) the term “this Agreement” shall be construed as a reference to this Agreement as the same may have been, or may from time to
time be, amended, modified, varied, novated or supplemented; 
 (f) “include”, “includes” and “including” are
deemed to be followed by “without limitation” whether or not they are in fact followed by such words; 
 (g) references to
“day” or “days” are to calendar days; 
 (h) references to “the date hereof” means the date of this Agreement;

  
 20 

 (i) unless otherwise specified, references to a statute means such statute as amended from time
to time and includes any successor legislation thereto and any rules or regulations promulgated thereunder in effect from time to time; and 

(j) references to “dollars” or “$” refer to currency of the United States of America, unless otherwise expressly provided.

 ARTICLE II 

BACKSTOP COMMITMENT 

Section 2.1 The Rights Offering; Subscription Rights. On and subject to the terms and conditions hereof, including entry of the
BCA Approval Order, the Company, on behalf of the Reorganized Company, shall conduct the Rights Offerings pursuant to and in accordance with the Rights Offering Procedures and the Plan Solicitation Order. If reasonably requested by Commitment
Parties satisfying the definition of Requisite Commitment Parties pursuant to clause (a) thereof, from time to time prior to the Rights Offering Expiration Time (and any extensions thereto), the Company shall notify, or cause the Rights
Offering Subscription Agent to notify, within 48 hours of receipt of such request by the Company, the Unsecured Commitment Parties of the aggregate number of Unsecured Subscription Rights known by the Company or the Rights Offering Subscription
Agent to have been exercised pursuant to the Unsecured Rights Offering as of the most recent practicable time before such request. If reasonably requested by Commitment Parties satisfying the definition of “Requisite Commitment Parties”
pursuant to clause (b) thereof, from time to time prior to the Rights Offering Expiration Time (and any extensions thereto), the Company shall notify, or cause the Rights Offering Subscription Agent to notify, within 48 hours of receipt of such
request by the Company, the Secured Commitment Parties of the aggregate number of Secured Subscription Rights known by the Company or the Rights Offering Subscription Agent to have been exercised pursuant to the Secured Rights Offering as of the
most recent practicable time before such request. The Rights Offerings will be conducted in reliance upon the exemption from registration under the Securities Act provided in Section 1145 of the Bankruptcy Code, and all Rights Offering Shares
(other than the Unsubscribed Shares purchased by the Commitment Parties pursuant to this Agreement) will be issued in reliance upon such exemption, and the Disclosure Statement shall include a statement to such effect. The offer and sale of the
Unsubscribed Shares purchased by the Commitment Parties pursuant to this Agreement will be made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act or another available exemption from registration
under the Securities Act, and the Disclosure Statement shall include a statement to such effect. 
 Section 2.2 The Backstop
Commitment. On and subject to the terms and conditions hereof, including entry of the BCA Approval Order, each Unsecured Commitment Party and each Secured Commitment Party agrees, severally and not jointly, to fully exercise all Subscription
Rights that are issued to it pursuant to the Unsecured Rights Offering and Secured Rights Offering, respectively, and duly purchase all Rights Offering Shares issuable to it pursuant to such exercise, in accordance with the Rights Offering
Procedures and the Plan; provided that any Defaulting Commitment Party shall be liable to each non-Defaulting Commitment Party, the Company and the Reorganized Company as a result of any breach of its

  
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obligations hereunder. On and subject to the terms and conditions hereof, including entry of the Confirmation Order, (a) each Unsecured Commitment Party agrees, severally and not
jointly, to purchase, and the Reorganized Company shall sell to such Unsecured Commitment Party, on the Closing Date for the applicable aggregate Per Share Discounted Purchase Price, the number of Unsecured Unsubscribed Shares equal to (x) such
Unsecured Commitment Party’s Unsecured Backstop Commitment Percentage multiplied by (y) the aggregate number of Unsecured Unsubscribed Shares (such obligation to purchase, the “Unsecured Backstop Commitment”),
rounded among the Unsecured Commitment Parties solely to avoid fractional shares as the Steering Committee of the Ad Hoc Group of Unsecured Noteholders may determine in its sole discretion (provided that in no event shall such rounding reduce the
aggregate commitment of such Unsecured Commitment Parties) and (b) each Secured Commitment Party agrees, severally and not jointly, to purchase, and the Reorganized Company shall sell to such Secured Commitment Party, on the Closing Date for
the applicable aggregate Per Share Discounted Purchase Price, the number of Secured Unsubscribed Shares equal to (x) such Secured Commitment Party’s Secured Backstop Commitment Percentage multiplied by (y) the aggregate number of
Secured Unsubscribed Shares (such obligation to purchase, the “Secured Backstop Commitment”), rounded among the Secured Commitment Parties solely to avoid fractional shares as the Steering Committee of the Ad Hoc Group of
Secured Noteholders may determine in its sole discretion (provided that in no event shall such rounding reduce the aggregate commitment of such Secured Commitment Parties). 

Section 2.3 Commitment Party Default. 

(a) Upon the occurrence of an Unsecured Commitment Party Default, the Unsecured Commitment Parties that are, or are Affiliated with, an
Initial Unsecured Commitment Party (other than any Defaulting Commitment Party) shall have the right, but not the obligation, within three (3) Business Days after receipt of written notice from the Company to all Unsecured Commitment Parties of
such Unsecured Commitment Party Default, which notice shall be given promptly following the occurrence of such Unsecured Commitment Party Default and to all Unsecured Commitment Parties concurrently (such three (3) Business Day period, the
“Unsecured Commitment Party Replacement Period”), to make arrangements for one or more of the Unsecured Commitment Parties that is, or is Affiliated with, an Initial Unsecured Commitment Party (other than any Defaulting
Commitment Party) to purchase all or any portion of the Unsecured Available Shares (any such purchase, and any purchase by Secured Commitment Parties pursuant to the last sentence of this paragraph, an “Unsecured Commitment Party
Replacement”) on the terms and subject to the conditions set forth in this Agreement and in such amounts as may be agreed upon by all of the Unsecured Commitment Parties electing to purchase all or any portion of the Unsecured Available
Shares, or, if no such agreement is reached, based upon the relative applicable Unsecured Backstop Commitment Percentages of any such Unsecured Commitment Parties that are, or are Affiliated with, an Initial Unsecured Commitment Party (other than
any Defaulting Commitment Party) (such Commitment Parties, and any Secured Commitment Parties that purchase Unsecured Available Shares pursuant to the last sentence of this paragraph, the “Unsecured Replacing Commitment
Parties”). In the event the Unsecured Commitment Parties do not elect to purchase all of the Unsecured Available Shares pursuant to the foregoing provisions of this paragraph, the Company shall give prompt written notice thereof to each
of the Secured Commitment Parties that have the right to purchase Secured Available Shares pursuant to Section 2.3(b), and such Secured  

  
 22 

 
Commitment Parties shall have the right, but not the obligation, to purchase all or any portion of the remaining Unsecured Available Shares on the same terms and conditions as if they were
Secured Available Shares under Section 2.3(b) within three (3) Business Days of receiving notice from the Company. 

(b) Upon the occurrence of a Secured Commitment Party Default, the Secured Commitment Parties that are, or are Affiliated with, an
Initial Secured Commitment Party (other than any Defaulting Commitment Party) shall have the right, but not the obligation, within three (3) Business Days after receipt of written notice from the Company to all Secured Commitment Parties of
such Secured Commitment Party Default, which notice shall be given promptly following the occurrence of such Secured Commitment Party Default and to all Secured Commitment Parties concurrently (such three (3) Business Day period, the
“Secured Commitment Party Replacement Period” and, together with the Unsecured Commitment Party Replacement Period, the “Commitment Party Replacement Period”), to make arrangements for one or more of
the Secured Commitment Parties that is, or is Affiliated with, an Initial Secured Commitment Party (other than any Defaulting Commitment Party) to purchase all or any portion of the Secured Available Shares (any such purchase, and any purchase by
Unsecured Commitment Parties pursuant to the last sentence of this paragraph, a “Secured Commitment Party Replacement” and, together with the Unsecured Commitment Party Replacement and any purchase of Available Shares
pursuant to Section 2.3(c), the “Commitment Party Replacement”) on the terms and subject to the conditions set forth in this Agreement and in such amounts as may be agreed upon by all of the Secured Commitment
Parties electing to purchase all or any portion of the Secured Available Shares, or, if no such agreement is reached, based upon the relative applicable Secured Backstop Commitment Percentages of any such Secured Commitment Parties that are, or are
Affiliated with, an Initial Secured Commitment Party (other than the Defaulting Commitment Party) (such Commitment Parties, and any Unsecured Commitment Parties that purchase Secured Available Shares pursuant to the last sentence of this paragraph,
the “Secured Replacing Commitment Parties” and, together with the Unsecured Replacing Commitment Parties and any Commitment Party that purchases Available Shares pursuant to Section 2.3(c), the
“Replacing Commitment Parties”). In the event the Secured Commitment Parties do not elect to purchase all of the Secured Available Shares pursuant to the foregoing provisions of this paragraph, the Company shall give prompt
written notice thereof to each of the Unsecured Commitment Parties that have the right to purchase Unsecured Available Shares pursuant to Section 2.3(a), and such Unsecured Commitment Parties shall have the right, but not the obligation,
to purchase all or any portion of the remaining Secured Available Shares on the same terms and conditions as if they were Unsecured Available Shares under Section 2.3(a) within three (3) Business Days of receiving notice from the
Company. 
 (c) In the event the Unsecured Commitment Parties and the Secured Commitment Parties do not elect to purchase all of the
Unsecured Available Shares pursuant to Section 2.3(a) and all of the Secured Available Shares pursuant to Section 2.3(b), the Company shall give prompt written notice thereof to each of the Commitment Parties, and each
Commitment Party (other than any Defaulting Commitment Party) shall have the right, but not the obligation, within three (3) Business Days after receipt of such notice to make arrangements for one or more of the Commitment Parties (other than
any Defaulting Commitment Party) to purchase all or any portion of the remaining Available Shares on the terms and subject to the 

  
 23 

 
conditions set forth in this Agreement and in such amounts as may be agreed upon by all of the Commitment Parties electing to purchase all or any portion of such Available Shares, or, if no such
agreement is reached, based upon the relative applicable Aggregate Backstop Commitment Percentages of any such Commitment Parties. For the avoidance of doubt, nothing in this Section 2.3(c) shall relieve any Commitment Party of its
obligation to fulfill its Backstop Commitment. 
 (d) In the event that any Available Shares are available for purchase pursuant to
Section 2.3(c) and Commitment Parties do not elect to purchase all such Available Shares pursuant to the provisions thereof, the Company may, in its sole discretion, elect to utilize the Cover Transaction Period to consummate a Cover
Transaction. As used herein, “Cover Transaction” means a circumstance in which the Company arranges for the sale of all or any portion of the Available Shares to any other Person, on the terms and subject to the conditions set
forth in this Agreement, during the Cover Transaction Period, and “Cover Transaction Period” means the ten (10) Business Day period following expiration of the three (3) Business Day period specified in
Section 2.3(c). For the avoidance of doubt, the Company’s election to pursue a Cover Transaction, whether or not consummated, shall not relieve any Commitment Party of its obligation to fulfill its Backstop Commitment. 

(e) Any Available Shares purchased by a Replacing Commitment Party (and any commitment and applicable aggregate Per Share Discounted Purchase
Price associated therewith) shall be included, among other things, in the determination of (x) the Unsecured Unsubscribed Shares or Secured Unsubscribed Shares of such Unsecured Replacing Commitment Party or Secured Replacing Commitment Party,
respectively, for all purposes hereunder, (y) the Backstop Commitment Percentage of such Replacing Commitment Party for purposes of Section 2.3(g), Section 2.4(b), Section 3.1 and Section 3.2 and
(z) the Backstop Commitment of such Replacing Commitment Party for purposes of the definition of “Requisite Commitment Parties”. If a Commitment Party Default occurs, the Outside Date shall be delayed only to the extent necessary to
allow for (i) the Commitment Party Replacement to be completed within the Commitment Party Replacement Period and/or (ii), if applicable, the Cover Transaction to be completed within the Cover Transaction Period. 

(f) If a Commitment Party is a Defaulting Commitment Party, it shall not be entitled to any of the Commitment Premium hereunder. 

(g) Nothing in this Agreement shall be deemed to require a Commitment Party to purchase more than its Backstop Commitment Percentage of the
Unsubscribed Shares. 
 (h) For the avoidance of doubt, notwithstanding anything to the contrary set forth in Section 9.4 but
subject to Section 10.10, no provision of this Agreement shall relieve any Defaulting Commitment Party from liability hereunder, or limit the availability of the remedies set forth in Section 10.9, in connection with any such
Defaulting Commitment Party’s Commitment Party Default. 

  
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 Section 2.4 Escrow Account Funding. 

(a) Funding Notice. No later than the seventh (7th) Business Day following the Rights Offering Expiration Time, the Rights
Offering Subscription Agent shall, on behalf of the Company, deliver to each Commitment Party a written notice (the “Funding Notice,” and the date of such delivery, the “Funding Notice Date”) setting
forth (i) the number of Unsecured Rights Offering Shares and the number of Secured Rights Offering Shares elected to be purchased by the Rights Offering Participants, and the aggregate Per Share Purchase Price therefor in each case;
(ii) the aggregate number of Unsecured Unsubscribed Shares and the aggregate number of Secured Unsubscribed Shares, if any, and the aggregate Per Share Discounted Purchase Price therefor in each case; (iii) the aggregate number of
Unsecured Rights Offering Shares and/or Secured Rights Offering Shares, as applicable (based upon such Commitment Party’s Unsecured Backstop Commitment Percentage and/or Secured Backstop Commitment Percentage, as applicable) to be issued and
sold by the Reorganized Company to such Commitment Party on account of any Unsecured Unsubscribed Shares and/or Secured Unsubscribed Shares, as applicable, and the aggregate Per Share Discounted Purchase Price therefor; (iv) if applicable, the
number of Unsecured Rights Offering Shares and/or Secured Rights Offering Shares, as applicable, such Commitment Party is subscribed for in the Rights Offerings and for which such Commitment Party had not yet paid to the Rights Offering Subscription
Agent the aggregate Per Share Purchase Price therefor, together with such aggregate Per Share Purchase Price; and (v) subject to the last sentence of Section 2.4(b), the escrow account designated in escrow agreements satisfactory to
the Requisite Commitment Parties and the Company, each acting reasonably, to which such Commitment Party shall deliver and pay the aggregate Per Share Discounted Purchase Price for such Commitment Party’s Unsecured Backstop Commitment
Percentage and/or Secured Backstop Commitment Percentage of the Unsecured Unsubscribed Shares and/or Secured Unsubscribed Shares, as applicable, and, if applicable, the aggregate Per Share Purchase Price for the Unsecured Rights Offering Shares
and/or Secured Rights Offering Shares such Commitment Party has subscribed for in the Rights Offerings (the “Escrow Account”). The Company shall promptly direct the Rights Offering Subscription Agent to provide any written
backup, information and documentation relating to the information contained in the applicable Funding Notice as any Commitment Party may reasonably request. 

(b) Escrow Account Funding. On the date agreed with the Requisite Commitment Parties pursuant to escrow agreements satisfactory
to the Requisite Commitment Parties and the Company, each acting reasonably (the “Escrow Account Funding Date”), each Commitment Party shall deliver and pay an amount equal to the sum of (i) the aggregate Per Share
Discounted Purchase Price for such Commitment Party’s Unsecured Backstop Commitment Percentage and/or Secured Backstop Commitment Percentage of the Unsecured Unsubscribed Shares and/or Secured Unsubscribed Shares, as applicable, plus
(ii) the aggregate Per Share Purchase Price for the Common Shares issuable pursuant to such Commitment Party’s exercise of all the Subscription Rights issued to it in the Rights Offerings, by wire transfer of immediately available funds in
U.S. dollars into the Escrow Account in satisfaction of such Commitment Party’s Backstop Commitment and its obligation to fully exercise its Subscription Rights; provided, that in no event shall the Escrow Account Funding Date be
less than four (4) Business Days after the Funding Notice Date or more than five (5) Business Days prior to the Effective Date. Notwithstanding the foregoing, all payments contemplated to be made by any 

  
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Commitment Party to the Escrow Account pursuant to this Section 2.4 may instead be made, at the option of such Commitment Party, to a segregated bank account of the Rights Offering
Subscription Agent designated by the Rights Offering Subscription Agent in the Funding Notice and shall be delivered and paid to such account on the Escrow Account Funding Date. 

Section 2.5 Closing. 

(a) Subject to Article VII, unless otherwise mutually agreed in writing between the Company and the Requisite Commitment
Parties, the closing of the Backstop Commitments (the “Closing”) shall take place at the offices of Kirkland & Ellis LLP, 601 Lexington Ave, New York, New York 10022, at 10:00 a.m., New York City time, on
the date on which all of the conditions set forth in Article VII shall have been satisfied or waived in accordance with this Agreement (other than conditions that by their terms are to be satisfied at the Closing, but subject to the
satisfaction or waiver of such conditions). The date on which the Closing actually occurs shall be referred to herein as the “Closing Date”. 

(b) At the Closing, the funds held in the Escrow Account (and any amounts paid to a Rights Offering Subscription Agent bank account pursuant
to the last sentence of Section 2.4(b)) shall, as applicable, be released and utilized in accordance with the Plan. 
 (c) At
the Closing, issuance of the Unsubscribed Shares will be made by the Reorganized Company to each Commitment Party (or to its designee in accordance with Section 2.6(a)) against payment of the aggregate Per Share Discounted Purchase Price
for the Unsubscribed Shares purchased by such Commitment Party, in satisfaction of such Commitment Party’s Backstop Commitment. Unless a Commitment Party requests delivery of a physical stock certificate, the entry of any Unsubscribed Shares to
be delivered pursuant to this Section 2.5(c) into the account of a Commitment Party pursuant to the Reorganized Company’s book entry procedures and delivery to such Commitment Party of an account statement reflecting the book entry
of such Unsubscribed Shares shall be deemed delivery of such Unsubscribed Shares for purposes of this Agreement. Notwithstanding anything to the contrary in this Agreement, all Unsubscribed Shares will be delivered with all issue, stamp, transfer,
sales and use, or similar transfer Taxes or duties that are due and payable (if any) in connection with such delivery duly paid by the Company on behalf of the Reorganized Company. 

Section 2.6 Designation and Assignment Rights. 

(a) Each Commitment Party shall have the right to designate by written notice to the Company no later than two (2) Business Days
prior to the Closing Date that some or all of the Unsubscribed Shares that it is obligated to purchase hereunder be issued in the name of, and delivered to, one or more of its Affiliates or Affiliated Funds (other than any portfolio company of such
Commitment Party or its Affiliates) (each, a “Related Purchaser”) upon receipt by the Company of payment therefor in accordance with the terms hereof, which notice of designation shall (i) be addressed to the Company and
signed by such Commitment Party and each such Related Purchaser, (ii) specify the number of Unsubscribed Shares to be delivered to or issued in the name of such Related Purchaser and (iii) contain a confirmation by each such Related
Purchaser of the accuracy of the representations set forth in Section 5.6 through Section 5.9 as applied to such Related Purchaser; provided, that no such designation pursuant to this Section 2.6(a) shall
relieve such Commitment Party from its obligations under this Agreement. 

  
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 (b) Commitment Parties shall not be entitled to Transfer all or any portion of their
Backstop Commitments except as expressly provided in this Section 2.6(b) or Section 2.6(c). Each Commitment Party shall have the right to Transfer all or any portion of its Backstop Commitment to (i) an Affiliated Fund
of the transferring Commitment Party or (ii) one or more special purpose vehicles that are wholly owned by one or more of such Commitment Parties and its Affiliated Funds, created for the purpose of holding such Backstop Commitment or holding
debt or equity of the Debtors, provided, that such Commitment Party either (A) shall have provided an adequate equity support letter or a guarantee of such special purpose vehicle’s Backstop Commitment, in form and substance reasonably
acceptable to the Company or (B) shall remain fully obligated to fund such Backstop Commitment; provided, further that such special purpose vehicle shall not be related to or Affiliated with any portfolio company of such
Commitment Party or any of its Affiliates or Affiliated Funds (other than solely by virtue of its affiliation with such Commitment Party) and the equity of such special purpose vehicle shall not be directly or indirectly transferable other than to
such Persons described in clauses (i) or (ii) of this Section 2.6(b), and in such manner as such Commitment Party’s Backstop Commitment is transferable pursuant to this Section 2.6(b) (each of the Persons
referred to in clauses (i) and (ii), an “Ultimate Purchaser”). In each case of a Commitment Party’s Transfer of all or any portion of its Backstop Commitment pursuant to this Section 2.6(b), (1) the
Ultimate Purchaser shall have provided a written agreement to the Company under which it (x) confirms the accuracy of the representations set forth in Article V as applied to such Ultimate Purchaser, (y) agrees to purchase such
portion of such Commitment Party’s Backstop Commitment and (z) agrees to be fully bound by, and subject to, this Agreement as a Commitment Party hereto, and (2) the transferring Commitment Party and the Ultimate Purchaser shall have
duly executed and delivered to the Company, Milbank and/or O’Melveny, as applicable (at the addresses set forth in Section 10.1) written notice of such Transfer; provided, however, that no such Transfer shall relieve
the transferring Commitment Party from any of its obligations under this Agreement. Other than as set forth in this Section 2.6(b) and Section 2.6(c), no Commitment Party shall be permitted to Transfer all or any portion of
its Backstop Commitment without the prior written consent of the Company, which shall not be unreasonably withheld, conditioned or delayed. 

(c) In addition to Transfers pursuant to Section 2.6(b), each Commitment Party shall have the right to Transfer, directly
or indirectly, all or any portion of its Backstop Commitment to any other Person; provided, that such transferee and the transferring Commitment Party shall have duly executed and delivered to the Company written notice of such Transfer in
substantially the form attached as Exhibit C hereto, and the Company shall have delivered countersigned copies of such notice to such transferee and the transferring Commitment Party and to Milbank and/or O’Melveny (at the addresses set
forth in Section 10.1), and (i) with respect any Transfer of a Backstop Commitment to a single transferee, the amount of such Backstop Commitment is no less than (a) 0.2%, as compared to the aggregate Backstop Commitment of all
Commitment Parties (the “Aggregate Backstop Commitment Percentage”), or (b) all of the Backstop Commitment of such Commitment Party or the Backstop Commitment of any fund or account on behalf of which such Commitment
Party is acting (if such Commitment Party, fund or account holds a Backstop Commitment representing less than 0.2% of the Aggregate Backstop Commitment Percentage of all Commitment Parties)  

  
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and (ii) with respect to any transferee that is not a Commitment Party, such transferee agrees, (x) pursuant to an agreement in substantially the form attached as Exhibit D
hereto or otherwise in form and substance reasonably acceptable to the Company (a “Joinder Agreement”), to be bound by the obligations of such Commitment Party under this Agreement and (y) pursuant to an agreement in
substantially the form attached as Exhibit E hereto, to be bound by the obligations under the Restructuring Support Agreement with respect to all Notes held by such transferee after giving effect to such Transfer, and provided,
further, that (except with respect to a Transfer to an Initial Commitment Party) the Company, acting in good faith, shall have determined, in its reasonable discretion, after due inquiry and investigation, that such transferee is reasonably
capable of fulfilling such obligations, or, absent such a determination, the proposed transferee shall have deposited with an agent of the Company or into an escrow account under arrangements satisfactory to the Company funds sufficient, in the
reasonable determination of the Company, to satisfy such proposed transferee’s Backstop Commitment. Upon compliance with this Section 2.6(c), the transferring Commitment Party shall be deemed to relinquish its rights (and be
released from its obligations, except for any claim for breach of this Agreement that occurs prior to such Transfer) under this Agreement to the extent of such transferred rights and obligations, and the transferee shall become an Additional
Commitment Party and be fully bound as a Commitment Party hereunder for all purposes of this Agreement. Any Transfer made in violation of this Section 2.6(c) shall be deemed null and void ab initio and of no force or effect, regardless
of any prior notice provided to the Parties or any Commitment Party, and shall not create any obligation or liability of any Debtor or any other Commitment Party to the purported transferee. Upon the effectiveness of any Transfer of a Backstop
Commitment pursuant to this Section 2.6(c), the Company shall update Schedule 1A or Schedule 1B, as applicable, to reflect such Transfer, and such updates shall not constitute an amendment to this Agreement or otherwise be
subject to any provision of this Agreement that applies to amendments of this Agreement. 
 (d) Each Commitment Party, severally and not
jointly, agrees that it will not Transfer, at any time prior to the Closing Date or the earlier termination of this Agreement in accordance with its terms, any of its rights and obligations under this Agreement to any Person other than in accordance
with Section 2.6(a), Section 2.6(b) or Section 2.6(c), as applicable. After the Closing Date, nothing in this Agreement shall limit or restrict in any way the ability of any Commitment Party (or any permitted
transferee thereof) to Transfer any of the Common Shares or any interest therein; provided, that any such Transfer shall be made pursuant to an effective registration statement under the Securities Act or an exemption from the registration
requirements thereunder and pursuant to applicable securities Laws. For the avoidance of doubt, notwithstanding anything to the contrary in this Agreement, nothing contained in this Agreement shall prohibit or restrict the ability of any Commitment
Party to Transfer its Notes at any time to any Person; provided, however, any Transfer of Notes by a Commitment Party shall be in accordance with the terms of the Restructuring Support Agreement. 

ARTICLE III 
 BACKSTOP
COMMITMENT PREMIUM AND EXPENSE REIMBURSEMENT 
 Section 3.1 Premium Payable by the Company. Subject to
Section 3.2, in consideration for the Backstop Commitment and the other agreements of the Commitment 

  
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Parties in this Agreement, the Debtors shall pay or cause to be paid a nonrefundable aggregate premium in the following amounts: (a) $12,760,176, which represents 4.0% of the
Unsecured Rights Offering Amount, payable in accordance with Section 3.2, to the Unsecured Commitment Parties (including any Unsecured Replacing Commitment Party, but excluding any Defaulting Commitment Party) or their designees based
upon their respective Unsecured Backstop Commitment Percentages at the time such payment is made (the “Unsecured Commitment Premium”) and (b) $8,439,824, which represents 4.0% of the Secured Rights Offering Amount,
payable in accordance with Section 3.2, to the Secured Commitment Parties (including any Secured Replacing Commitment Party, but excluding any Defaulting Commitment Party) or their designees based upon their respective Secured Backstop
Commitment Percentages at the time such payment is made (the “Secured Commitment Premium” and, together with the Unsecured Commitment Premium, the “Commitment Premium”). 

The provisions for the payment of the Commitment Premium and Expense Reimbursement, and the indemnification provided herein, are an integral
part of the transactions contemplated by this Agreement and without these provisions the Commitment Parties would not have entered into this Agreement. 

Section 3.2 Payment of Commitment Premium. The Commitment Premium shall be fully earned, nonrefundable and non-avoidable upon
entry of the BCA Approval Order, and shall be paid by the Debtors, free and clear of any withholding or deduction for any applicable Taxes, on the Effective Date or, if the Commitment Premium becomes payable pursuant to Section 9.4(b),
within the time specified therein. For the avoidance of doubt, the Commitment Premium will be payable as provided herein, irrespective of the amount of Unsubscribed Shares (if any) actually purchased. The Company (or the Reorganized Company, in the
case of an issuance of Common Shares pursuant to this Section 3.2) shall satisfy its obligation to pay the Commitment Premium by delivering to each: 

(a) Unsecured Commitment Party (including any Unsecured Replacing Commitment Party, but excluding any Defaulting Commitment Party) or its
designee, at or prior to the applicable payment deadline, its ratable share of the following, in each case based on the Unsecured Commitment Parties’ respective Unsecured Backstop Commitment Percentages on the date of such payment: (i) if
the Unsecured Commitment Premium is payable as a result of the Closing, (A) $9,570,132 in cash, by wire transfer of immediately available funds in U.S. dollars to the account specified in writing by such Unsecured Commitment Party to the
Company and (B) a number of additional Common Shares (rounding down to the nearest whole share solely to avoid fractional shares) equal to the quotient of $3,190,044 divided by the Per Share Discounted Purchase Price, to the address specified
in writing by such Unsecured Commitment Party to the Company or (ii) if the Unsecured Commitment Premium is payable pursuant to Section 9.4(b), $12,760,176 in cash, by wire transfer of immediately available funds in
U.S. dollars to the account specified in writing by such Unsecured Commitment Party to the Company; provided that the aggregate Unsecured Commitment Premium payable pursuant to this Section 3.2(a) shall be reduced ratably
(including corresponding reductions in the Unsecured Cash Component and the Unsecured Equity Component) upon an Unsecured Commitment Party Default based on the Unsecured Backstop Commitment Percentage of the Defaulting Commitment Party;
provided, further, that if an Unsecured Commitment Party Replacement sufficient to cure all or a portion of the Unsecured Commitment Party Default occurs within the Unsecured Commitment

  
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Party Replacement Period, the Unsecured Commitment Premium shall only be ratably reduced to the extent of the uncured Unsecured Commitment Party Default, and such amount that would have otherwise
been reduced shall be paid to the Unsecured Replacing Commitment Parties; and 
 (b) Secured Commitment Party (including any Secured
Replacing Commitment Party, but excluding any Defaulting Commitment Party) or its designee, at or prior to the applicable payment deadline, its ratable share of the following, in each case based on the Secured Commitment Parties’ respective
Secured Backstop Commitment Percentages on the date of such payment: (i) if the Secured Commitment Premium is payable as a result of the Closing, (A) $6,329,868 in cash, by wire transfer of immediately available funds in U.S. dollars
to the account specified in writing by such Secured Commitment Party to the Company and (B) a number of additional Common Shares (rounding down to the nearest whole share solely to avoid fractional shares) equal to the quotient of $2,109,956
divided by the Per Share Discounted Purchase Price, to the address specified in writing by such Secured Commitment Party to the Company or (ii) if the Secured Commitment Premium is payable pursuant to Section 9.4(b), $8,439,824 in
cash, by wire transfer of immediately available funds in U.S. dollars to the account specified in writing by such Secured Commitment Party to the Company; provided that the aggregate Secured Commitment Premium payable pursuant to this
Section 3.2(b) shall be reduced ratably (including corresponding reductions in the Secured Cash Component and the Secured Equity Component) upon a Secured Commitment Party Default based on the Secured Backstop Commitment Percentage of
the Defaulting Commitment Party; provided, further, that if a Secured Commitment Party Replacement sufficient to cure all or a portion of the Secured Commitment Party Default occurs within the Secured Commitment Party Replacement Period,
the Secured Commitment Premium shall only be ratably reduced to the extent of the uncured Secured Commitment Party Default, and such amount that would have otherwise been reduced shall be paid to the Secured Replacing Commitment Parties. 

Section 3.3 Expense Reimbursement. 

(a) In accordance with and subject to the BCA Approval Order, the Debtors agree to pay, in accordance with Section 3.3(b)
below, all reasonably incurred and documented out-of-pocket fees and expenses of all of the attorneys, accountants, other professionals, advisors, and consultants incurred on behalf of the Ad Hoc Groups, whether incurred directly by the
relevant Noteholders or on behalf of the Noteholders through the Indenture Trustees (other than the Berry Unsecured Notes Trustee), including, (i) in respect of the Ad Hoc Group of Unsecured Noteholders, the fees and expenses of Milbank and PJT
Partners, Inc. and (ii) in respect of the Ad Hoc Group of Secured Noteholders, the fees and expenses of O’Melveny, Porter Hedges LLP, Intrepid Financial Partners, L.L.C., and W.D. Von Gonten & Co. (such payment obligations, the
“Expense Reimbursement”). The Expense Reimbursement shall, pursuant to the BCA Approval Order, constitute allowed administrative expenses against each of the Debtors’ estates under sections 503(b) and 507 of
the Bankruptcy Code.  
 (b) The Expense Reimbursement described in Section 3.3(a)(i) shall be paid in accordance with
the Restructuring Support Agreement. The Expense Reimbursement accrued through the date on which the BCA Approval Order is entered shall be paid in accordance with the BCA Approval Order upon its entry by the Bankruptcy Court and as promptly as
reasonably practicable after the date of the entry of the BCA Approval Order. The Expense Reimbursement 

  
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shall thereafter be payable on a monthly basis by the Debtors in accordance with the BCA Approval Order; provided, that the Debtors shall not owe Expense Reimbursements from and after the
Closing or termination of this Agreement pursuant to Article IX (for the avoidance of doubt, this proviso shall not apply to any termination pursuant to an “Individual Termination Event” as defined in the Restructuring Support
Agreement), and the final payment thereof (for periods preceding the Closing or termination, as applicable) shall be made contemporaneously with the Closing or as promptly as reasonably practicable after termination. The Commitment Parties shall
promptly provide summary copies of all invoices (redacted as necessary to protect privileges) to the Debtors and to the United States Trustee. Unless otherwise ordered by the Bankruptcy Court, no recipient of any payment hereunder shall be required
to file with respect thereto any interim or final fee application with the Bankruptcy Court. 
 ARTICLE IV 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY 

Except (i) as set forth in the corresponding section of the Company Disclosure Schedules or (ii) as disclosed in the
Company SEC Documents filed with the SEC on or after December 31, 2015 and publicly available on the SEC’s Electronic Data-Gathering, Analysis and Retrieval system prior to the date hereof (excluding the exhibits, annexes and schedules
thereto, any disclosures contained in the “Forward-Looking Statements” or “Risk Factors” sections thereof, or any other statements that are similarly predictive, cautionary or forward looking in nature), the Company, on behalf of
itself and each of the other Debtors, jointly and severally, hereby represents and warrants to the Commitment Parties (unless otherwise set forth herein, as of the date of this Agreement and as of the Closing Date) as set forth below. 

Section 4.1 Organization and Qualification. Each of the Debtors (a) is a duly organized and validly existing corporation,
limited liability company or limited partnership, as the case may be, and, if applicable, in good standing (or the equivalent thereof) under the Laws of the jurisdiction of its incorporation or organization, (b) has the corporate or other
applicable power and authority to own its property and assets and to transact the business in which it is currently engaged and presently proposes to engage and (c) except where the failure to have such authority or qualification would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the conduct of its business as currently conducted
requires such qualifications. 
 Section 4.2 Corporate Power and Authority. 

(a) The Company has the requisite corporate power and authority (i) (A) subject to entry of the BCA Approval Order and the
Confirmation Order, to enter into, execute and deliver this Agreement and to perform the BCA Approval Obligations and (B) subject to entry of the BCA Approval Order and the Confirmation Order, to perform each of its other obligations hereunder
and (ii) subject to entry of the BCA Approval Order, the Plan Solicitation Order, and the Confirmation Order, to consummate the transactions contemplated herein and in the Plan, to enter into, execute and deliver all agreements to which it will
be a party as contemplated by this Agreement and the Plan (this Agreement, the Plan, the Disclosure 

  
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Statement, the Restructuring Support Agreement, the Exit Facility, and such other agreements and any Plan supplements or documents referred to herein or therein or hereunder or thereunder,
collectively, the “Transaction Agreements”) and to perform its obligations under each of the Transaction Agreements (other than this Agreement). Subject to the receipt of the foregoing Orders, as applicable, the
execution and delivery of this Agreement and each of the other Transaction Agreements and the consummation of the transactions contemplated hereby and thereby have been or will be duly authorized by all requisite corporate action on behalf of the
Company, and no other corporate proceedings on the part of the Company are or will be necessary to authorize this Agreement or any of the other Transaction Agreements or to consummate the transactions contemplated hereby or thereby. 

(b) Subject to entry of the BCA Approval Order, the Plan Solicitation Order, and the Confirmation Order, each of the other Debtors has the
requisite power and authority (corporate or otherwise) to enter into, execute and deliver each Transaction Agreement to which such other Debtor is a party and to perform its obligations thereunder. Subject to entry of the BCA Approval Order, the
Plan Solicitation Order, and the Confirmation Order, the execution and delivery of this Agreement and each of the other Transaction Agreements and the consummation of the transactions contemplated hereby and thereby have been or will be duly
authorized by all requisite action (corporate or otherwise) on behalf of each other Debtor party thereto, and no other proceedings on the part of any other Debtor party thereto are or will be necessary to authorize this Agreement or any of the other
Transaction Agreements or to consummate the transactions contemplated hereby or thereby. 
 (c) Notwithstanding the foregoing, the Company
makes no express or implied representations or warranties, on behalf of itself or the other Debtors, with respect to actions (including in the foregoing) to be undertaken by the Reorganized Company, which such actions shall be governed by with the
Plan. 
 Section 4.3 Execution and Delivery; Enforceability. Subject to entry of the BCA Approval Order, this Agreement will
have been, and subject to the entry of the BCA Approval Order, the Plan Solicitation Order, and the Confirmation Order, each other Transaction Agreement will be, duly executed and delivered by the Company and each of the other Debtors party thereto.
Upon entry of the BCA Approval Order and assuming due and valid execution and delivery hereof by the Commitment Parties, the BCA Approval Obligations will constitute the valid and legally binding obligations of the Company and, to the extent
applicable, the other Debtors, enforceable against the Company and, to the extent applicable, the other Debtors in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar Laws now or
hereafter in effect relating to creditor’s rights generally and subject to general principles of equity. Upon entry of the BCA Approval Order and assuming due and valid execution and delivery of this Agreement and the other Transaction
Agreements by the Commitment Parties and, to the extent applicable, any other parties hereof and thereof, each of the obligations of the Company and, to the extent applicable, the other Debtors hereunder and thereunder will constitute the valid and
legally binding obligations of the Company and, to the extent applicable, the other Debtors, enforceable against the Company and, to the extent applicable, the other Debtors, in accordance with their respective terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other similar Laws now or hereafter in effect relating to creditor’s rights generally and subject to general principles of equity. 

  
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 Section 4.4 Authorized and Issued Equity Interests. Except as set forth in this
Agreement, as of the Closing Date, none of the Debtors will be party to or otherwise bound by or subject to any outstanding option, warrant, call, right, security, commitment, Contract, arrangement or undertaking (including any preemptive right)
that (i) obligates any of the Debtors to issue, deliver, sell or transfer, or repurchase, redeem or otherwise acquire, or cause to be issued, delivered, sold or transferred, or repurchased, redeemed or otherwise acquired, any units or shares of
capital stock of, or other equity or voting interests in, any of the Debtors or any security convertible or exercisable for or exchangeable into any units or shares of capital stock of, or other equity or voting interests in, any of the Debtors,
(ii) obligates any of the Debtors to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking, (iii) restricts the Transfer of any units or shares of capital stock
of, or other equity interests in, any of the Debtors or (iv) relates to the voting of any units or other equity interests in any of the Debtors. 

Section 4.5 No Conflict. Assuming the consents described in clauses (a) through (g) of Section 4.6 are
obtained, the execution and delivery by the Company and, if applicable, any other Debtor, of this Agreement, the Plan and the other Transaction Agreements, the compliance by the Company and, if applicable, any other Debtor, with the provisions
hereof and thereof and the consummation of the transactions contemplated herein and therein will not (a) conflict with, or result in a breach, modification or violation of, any of the terms or provisions of, or constitute a default under (with
or without notice or lapse of time, or both), or result, except to the extent specified in the Plan, in the acceleration of, or the creation of any Lien under, or cause any payment or consent to be required under any Contract to which any Debtor
will be bound as of the Closing Date after giving effect to the Plan or to which any of the property or assets of any Debtor will be subject as of the Closing Date after giving effect to the Plan, (b) result in any violation of the provisions
of any of the Debtors’ organizational documents (other than, for the avoidance of doubt, a breach or default that would be triggered as a result of the Chapter 11 Cases or the Company’s or any Debtor’s undertaking to implement the
Restructuring Transactions through the Chapter 11 Cases), or (c) result in any violation of any Law or Order applicable to any Debtor or any of their properties, except in each of the cases described in clause (a) or (c) for any
conflict, breach, modification, violation, default, acceleration or Lien which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 

Section 4.6 Consents and Approvals. No consent, approval, authorization, Order, registration or qualification of or with any
Governmental Entity having jurisdiction over any of the Debtors or any of their properties (each, an “Applicable Consent”) is required for the execution and delivery by the Company and, to the extent relevant, the other
Debtors, of this Agreement, the Plan and the other Transaction Agreements, the compliance by the Company and, to the extent relevant, the other Debtors, with the provisions hereof and thereof and the consummation of the transactions contemplated
herein and therein, except for (a) the entry of the BCA Approval Order authorizing the Company to assume this Agreement and perform the BCA Approval Obligations, (b) entry of the Plan Solicitation Order, (c) entry by the Bankruptcy
Court, or any other court of competent jurisdiction, of Orders as may be necessary in the Chapter 11 Cases from time-to-time; (d) the entry of the Confirmation Order, (e) filings, notifications, authorizations, approvals, consents,
clearances or termination or expiration of all applicable waiting periods under any Antitrust Laws in connection with the 

  
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transactions contemplated by this Agreement, (f) such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or “Blue Sky”
Laws in connection with the purchase of the Unsubscribed Shares by the Commitment Parties, the issuance of the Subscription Rights, the issuance of the Rights Offering Shares pursuant to the exercise of the Subscription Rights, the issuance of
Common Shares as payment of the Commitment Premium, and (g) any Applicable Consents that, if not made or obtained, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 

Section 4.7 Company SEC Documents and Disclosure Statement. Since December 31, 2015, the Company has filed all required
Company SEC Documents with the SEC. No Company SEC Document that has been filed prior to the date this representation has been made, after giving effect to any amendments or supplements thereto and to any subsequently filed Company SEC Documents, in
each case filed prior to the date this representation is made, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Disclosure Statement as approved by the Bankruptcy Court will contain “adequate information,” as such term in defined in section 1125 of the Bankruptcy Code, and will otherwise
comply in all material respects with section 1125 of the Bankruptcy Code. 
 Section 4.8 Absence of Certain Changes. Since
December 31, 2015 to the date of this Agreement, no Event has occurred or exists that constitutes, individually or in the aggregate, a Material Adverse Effect. 

Section 4.9 No Violation; Compliance with Laws. (i) The Company is not in violation of its certificate of formation or
limited liability company operating agreement, and (ii) no other Debtor is in violation of its respective charter or bylaws, certificate of formation or limited liability company operating agreement or similar organizational document in any
material respect. None of the Debtors is or has been at any time since January 1, 2014 in violation of any Law or Order, except for any such violations that have not had and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. 
 Section 4.10 Legal Proceedings. Other than the Chapter 11 Cases and any adversary
proceedings or contested motions commenced in connection therewith, there are no material legal, governmental, administrative, judicial or regulatory investigations, audits, actions, suits, claims, arbitrations, demands, demand letters, claims,
notices of noncompliance or violations, or proceedings (“Legal Proceedings”) pending or, to the Knowledge of the Company, threatened to which any of the Debtors is a party or to which any property of any of the Debtors is the
subject, in each case that in any manner draws into question the validity or enforceability of this Agreement, the Plan or the other Transaction Agreements or that would reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. 
 Section 4.11 Labor Relations. Except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect: (a) there are no strikes or other labor disputes pending or threatened against any of the Debtors; (b) the hours worked and payments made to employees of any of the Debtors have not been in violation
of the Fair Labor Standards Act or any other applicable Law dealing with such matters; and (c) all 

  
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payments due from any of the Debtors or for which any claim may be made against any of the Debtors on account of wages and employee health and welfare insurance and other benefits have been paid
or accrued as a liability on the books of any of the Debtors to the extent required by GAAP. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the consummation of the transactions
contemplated by the Transaction Agreements will not give rise to a right of termination or right of renegotiation on the part of any union under any material collective bargaining agreement to which any of the Debtors (or any predecessor) is a party
or by which any of the Debtors (or any predecessor) is bound. 
 Section 4.12 Intellectual Property. Except as would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (a) each of the Debtors owns, or possesses the right to use, all of the patents, patent rights, trademarks, service marks, trade names, copyrights,
mask works, domain names, and any and all applications or registrations for any of the foregoing (collectively, “Intellectual Property Rights”) that are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person, (b) to the Knowledge of the Company, none of the Debtors nor any Intellectual Property Right, proprietary right, product, process, method, substance, part, or other material now employed,
sold or offered by or contemplated to be employed, sold or offered by such Person, is interfering with, infringing upon, misappropriating or otherwise violating any valid Intellectual Property Rights of any Person, and (c) no claim or
litigation regarding any of the foregoing is pending or, to the Knowledge of the Company, threatened. 
 Section 4.13 Title
to Real and Personal Property. 
 (a) Real Property. Each of the Debtors has good and defensible title to its respective Real
Properties, in each case, except for Permitted Liens and except for defects in title that do not materially interfere with its ability to conduct its business as currently conducted or to utilize such properties and assets for their intended
purposes, and except where the failure (or failures) to have such title would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; provided, however, the enforceability of such leased Real
Properties may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditor’s rights generally or general principles of equity, including the Chapter 11 Cases. To the
Knowledge of the Company, all such properties and assets are free and clear of Liens, except for Permitted Liens and except for such Liens as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 

(b) Leased Real Property. Each of the Debtors is in compliance with all obligations under all leases to which it is a party that have
not been rejected in the Chapter 11 Cases, except where the failure to comply would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and none of the Debtors has received written notice of any good
faith claim asserting that such leases are not in full force and effect, except leases in respect of which the failure to be in full force and effect would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect. Each of the Debtors enjoys peaceful and undisturbed possession under all such leases, other than leases in respect of which the failure to enjoy peaceful and undisturbed possession would not reasonably be expected to materially interfere
with its ability to conduct its business as currently conducted or have, individually or in the aggregate, a Material Adverse Effect. 

  
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 (c) Personal Property. Each of the Debtors owns or possesses the right to use all
Intellectual Property Rights and all licenses and rights with respect to any of the foregoing used in the conduct of their businesses, without any conflict (of which any of the Debtors has been notified in writing) with the rights of others, and
free from any burdensome restrictions on the present conduct of the Debtors, as the case may be, except where such conflicts and restrictions would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 

Section 4.14 No Undisclosed Relationships. Other than Contracts or other direct or indirect relationships between or among any of
the Debtors, there are no Contracts or other direct or indirect relationships existing as of the date hereof between or among any of the Debtors, on the one hand, and any director, officer or greater than five percent (5%) stockholder of any of
the Debtors, on the other hand, that is required by the Exchange Act to be described in the Company’s filings with the SEC and that is not so described, except for the transactions contemplated by this Agreement. Any Contract existing as of the
date hereof between or among any of the Debtors, on the one hand, and any director, officer or greater than five percent (5%) stockholder of any of the Debtors, on the other hand, that is required by the Exchange Act to be described in the
Company’s filings with the SEC is filed as an exhibit to, or incorporated by reference as indicated in, the Annual Report on Form 10-K for the year ended December 31, 2015 that the Company filed on March 15, 2016, as amended on
April 20, 2016, or any other Company SEC Document filed between March 15, 2016 and the date hereof. 
 Section 4.15
Licenses and Permits. The Debtors possess all licenses, certificates, permits and other authorizations issued by, have made all declarations and filings with and have maintained all financial assurances required by, the appropriate
Governmental Entities that are necessary for the ownership or lease of their respective properties and the conduct of the business, except where the failure to possess, make or give the same would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. None of the Debtors (i) has received notice of any revocation or modification of any such license, certificate, permit or authorization or (ii) has any reason to believe that any such license,
certificate, permit or authorization will not be renewed in the ordinary course, except to the extent that any of the foregoing would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 

Section 4.16 Environmental. Except as to matters that would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect: (a) no written notice, claim, demand, request for information, Order, complaint or penalty has been received by any of the Debtors, and there are no Legal Proceedings pending or, to the Knowledge of the Company,
threatened which allege a violation of or liability under any Environmental Laws, in each case relating to any of the Debtors, (b) each Debtor has received (including timely application for renewal of the same), and maintained in full force and
effect, all environmental permits, licenses and other approvals, and has maintained all financial assurances, in each case to the extent necessary for its operations to comply with all applicable Environmental Laws and is, and since January 1,
2014, has been, in compliance with the terms of 

  
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such permits, licenses and other approvals and with all applicable Environmental Laws, (c) to the Knowledge of the Company, no Hazardous Material is located at, on or under any property
currently or formerly owned, operated or leased by any of the Debtors that would reasonably be expected to give rise to any cost, liability or obligation of any of the Debtors under any Environmental Laws other than future costs, liabilities and
obligations associated with remediation at the end of the productive life of a well, facility or pipeline that has produced, stored or transported hydrocarbons, (d) no Hazardous Material has been Released, generated, owned, treated, stored or
handled by any of the Debtors, and no Hazardous Material has been transported to or Released at any location in a manner that would reasonably be expected to give rise to any cost, liability or obligation of any of the Debtors under any
Environmental Laws other than future costs, liabilities and obligations associated with remediation at the end of the productive life of a well, facility or pipeline that has produced, stored or transported hydrocarbons, and (e) there are no
agreements in which any of the Debtors has expressly assumed responsibility for any known obligation of any other Person arising under or relating to Environmental Laws that remains unresolved other than future costs, liabilities and obligations
associated with remediation at the end of the productive life of a well, facility or pipeline that has produced, stored or transported hydrocarbons, which has not been made available to the Commitment Parties prior to the date hereof.
Notwithstanding the generality of any other representations and warranties in this Agreement, the representations and warranties in this Section 4.16 constitute the sole and exclusive representations and warranties in this Agreement with
respect to any environmental, health or safety matters, including any arising under or relating to Environmental Laws or Hazardous Materials. 

Section 4.17 Tax Returns. 

(a) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (i) each of the
Debtors has filed or caused to be filed all U.S. federal, state, provincial, local and non-U.S. Tax returns required to have been filed by it and (ii) taken as a whole, each such Tax return is true and correct; 

(b) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, each of the Debtors has
timely paid or caused to be timely paid all Taxes shown to be due and payable by it on the returns referred to in clause (a) and all other Taxes or assessments (or made adequate provision (in accordance with GAAP) for the payment of all Taxes
due) with respect to all periods or portions thereof ending on or before the date hereof (except Taxes or assessments that are being contested in good faith by appropriate proceedings and for which the Debtors (as the case may be) has set aside on
its books adequate reserves in accordance with GAAP or with respect to the Debtors only, except to the extent the non-payment thereof is permitted by the Bankruptcy Code), which Taxes, if not paid or adequately provided for, would reasonably be
expected to be material to the Debtors taken as a whole; and 
 (c) Except as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, as of the date hereof, with respect to the Debtors, other than in connection with the Chapter 11 Cases and other than Taxes or assessments that are being contested in good faith and are not expected to
result in significant negative adjustments that would be material to the Debtors taken as a whole, (i) no claims have been asserted in writing 

  
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with respect to any Taxes, (ii) no presently effective waivers or extensions of statutes of limitation with respect to Taxes have been given or requested and (iii) no Tax returns are
being examined by, and no written notification of intention to examine has been received from, the IRS or any other Governmental Entity. 

Section 4.18 Employee Benefit Plans. 

(a) Except for the filing and pendency of the Chapter 11 Cases or otherwise as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect: (i) each Company Plan and each Multiemployer Plan is in compliance with the applicable provisions of ERISA and the Code; (ii) no Reportable Event has occurred during the past six years (or is
reasonably likely to occur); (iii) no Company Plan has any Unfunded Pension Liability in excess of $2,000,000 with respect to any single Company Plan and in excess of $3,000,000 with respect to all Company Plans in the aggregate; (iv) no
ERISA Event has occurred or is reasonably expected to occur; (v) none of the Debtors has engaged in a “prohibited transaction” (as defined in Section 406 of ERISA and Section 4975 of the Code) in connection with any employee
pension benefit plan (as defined in Section 3(2) of ERISA) that would subject any of the Debtors to Tax; (vi) no employee welfare plan (as defined in Section 3(1) of ERISA) maintained or contributed to by any of the Debtors provides
benefits to retired employees or other former employees (other than as required by Section 601 of ERISA); and (vii) none of the Debtors or any ERISA Affiliate has incurred or is reasonably expected to incur any Withdrawal Liability. 

(b) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, none of the Debtors has
established, sponsored or maintained, or has any liability with respect to, any employee pension benefit plan or other employee benefit plan, program, policy, agreement or arrangement governed by or subject to the Laws of a jurisdiction other than
the United States of America. 
 (c) Except as would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, there are no pending, or to the Knowledge of the Company, threatened claims, sanctions, actions or lawsuits, asserted or instituted against any Company Plan or any Person as fiduciary or sponsor of any Company Plan, in each case
other than claims for benefits in the normal course. 
 (d) Within the last six years, no Company Plan has been terminated, whether or not
in a “standard termination” as that term is used in Section 4041(b)(1) of ERISA, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect nor has any Company Plan with Unfunded
Pension Liabilities been transferred outside of the “controlled group” (within the meaning of Section 4001(a)(14) of ERISA). 

(e) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, all compensation and
benefit arrangements of the Debtors comply and have complied in both form and operation with their terms and all applicable Laws and legal requirements, and none of the Debtors, has any obligation to provide any individual with a “gross
up” or similar payment in respect of any Taxes that may become payable under Section 409A or 4999 of the Code. 

  
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 (f) Except as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, all liabilities (including all employer contributions and payments required to have been made by any of the Debtors) under or with respect to any compensation or benefit arrangement of any of the Debtors have been properly
accounted for in the Company’s financial statements in accordance with GAAP. 
 (g) Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (i) each of the Debtors has complied and is currently in compliance with all Laws and legal requirements in respect of personnel, employment and employment practices; (ii) all
service providers of each of the Debtors are correctly classified as employees, independent contractors, or otherwise for all purposes (including any applicable tax and employment policies or law); and (iii) the Debtors have not and are not
engaged in any unfair labor practice. 
 Section 4.19 Internal Control Over Financial Reporting. Except as would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company has established and maintains a system of internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated
under the Exchange Act) that complies with the requirements of the Exchange Act and has been designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with GAAP and to the Knowledge of the Company, there are no weaknesses in the Company’s internal control over financial reporting as of the date hereof. 

Section 4.20 Disclosure Controls and Procedures. Except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, the Company maintains disclosure controls and procedures (within the meaning of Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) designed to ensure that information required to be
disclosed by the Company in the reports that it files and submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including that information required to be
disclosed by the Company in the reports that it files and submits under the Exchange Act is accumulated and communicated to management of the Company as appropriate to allow timely decisions regarding required disclosure. 

Section 4.21 Material Contracts. Other than as a result of a rejection motion filed by any of the Debtors in the Chapter 11
Cases, all Material Contracts are valid, binding and enforceable by and against the Debtor party thereto and, to the Knowledge of the Company, each other party thereto (except where the failure to be valid, binding or enforceable does not constitute
a Material Adverse Effect), and no written notice to terminate, in whole or part, any Material Contract has been delivered to any of the Debtors (except where such termination would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect). Other than as a result of the filing of the Chapter 11 Cases, none of the Debtors nor, to the Knowledge of the Company, any other party to any Material Contract, is in material default or breach under the
terms thereof, in each case, except for such instances of material default or breach that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 

  
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 Section 4.22 No Unlawful Payments. Since January 1, 2014, none of the Debtors
nor, to the Knowledge of the Company, any of their respective directors, officers or employees has in any material respect: (a) used any funds of any of the Debtors for any unlawful contribution, gift, entertainment or other unlawful expense,
in each case relating to political activity; (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (c) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977; or (d) made any bribe, rebate, payoff, influence payment, kickback or other similar unlawful payment. 

Section 4.23 Compliance with Money Laundering Laws. The operations of the Debtors are and, since January 1, 2014 have been
at all times, conducted in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the U.S. Currency and Foreign Transactions Reporting Act of 1970, the money laundering statutes of all
jurisdictions in which the Debtors operate (and the rules and regulations promulgated thereunder) and any related or similar Laws (collectively, the “Money Laundering Laws”) and no material Legal Proceeding by or before any
Governmental Entity or any arbitrator involving any of the Debtors with respect to Money Laundering Laws is pending or, to the Knowledge of the Company, threatened. 

Section 4.24 Compliance with Sanctions Laws. None of the Debtors nor, to the Knowledge of the Company, any of their respective
directors, officers, employees or other Persons acting on their behalf with express authority to so act is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department. The
Company will not directly or indirectly use the proceeds of the Rights Offerings, or lend, contribute or otherwise make available such proceeds to any other Debtor, joint venture partner or other Person, for the purpose of financing the activities
of any Person that, to the Knowledge of the Company, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department. 

Section 4.25 No Broker’s Fees. None of the Debtors is a party to any Contract with any Person (other than this Agreement)
that would give rise to a valid claim against the Commitment Parties for a brokerage commission, finder’s fee or like payment in connection with the Rights Offerings or the sale of the Unsubscribed Shares. 

Section 4.26 Investment Company Act. None of the Debtors is an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended (the “Investment Company Act”), and this conclusion is based on one or more bases or exclusions other than Sections 3(c)(1) and 3(c)(7) of the Investment Company Act,
including that none of the Debtors comes within the basic definition of ‘investment company’ under section 3(a)(1) of the Investment Company Act. 

Section 4.27 Insurance. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect: (i) the Debtors have insured their properties and assets against such risks and in such amounts as are customary for companies engaged in similar businesses and have made available to the Commitment Parties a schedule of such insurance
policies in force; (ii) all premiums due and payable in respect of insurance policies maintained by the Debtors have been paid; (iii) the Company reasonably 

  
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believes that the insurance maintained by or on behalf of the Debtors is adequate in all respects; and (iv) as of the date hereof, to the Knowledge of the Company, none of the Debtors has
received notice from any insurer or agent of such insurer with respect to any insurance policies of the Debtors of cancellation or termination of such policies, other than such notices which are received in the ordinary course of business or for
policies that have expired in accordance with their terms. 
 Section 4.28 Alternative Transactions. As of the date hereof, the
Company is not pursuing, or in discussions or negotiations regarding, any solicitation, offer, or proposal from any Person concerning any actual or proposed Alternative Transaction and, as applicable, has terminated any existing discussions or
negotiations regarding any actual or proposed Alternative Transaction. 
 ARTICLE V 

REPRESENTATIONS AND WARRANTIES OF THE COMMITMENT PARTIES 

Each Commitment Party, severally and not jointly, represents and warrants as to itself only (unless otherwise set forth herein, as of the date
of this Agreement and as of the Closing Date) as set forth below. 
 Section 5.1 Organization. Such Commitment Party is a legal
entity duly organized, validly existing and, if applicable, in good standing (or the equivalent thereof) under the Laws of its jurisdiction of incorporation or organization. 

Section 5.2 Organizational Power and Authority. Such Commitment Party has the requisite power and authority (corporate or
otherwise) to enter into, execute and deliver this Agreement and each other Transaction Agreement to which such Commitment Party is a party and to perform its obligations hereunder and thereunder and has taken all necessary action (corporate or
otherwise) required for the due authorization, execution, delivery and performance by it of this Agreement and the other Transaction Agreements. 

Section 5.3 Execution and Delivery. This Agreement and each other Transaction Agreement to which such Commitment Party is a party
(a) has been, or prior to its execution and delivery will be, duly and validly executed and delivered by such Commitment Party and (b) upon entry of the BCA Approval Order and assuming due and valid execution and delivery hereof and
thereof by the Company and the other Debtors (as applicable), will constitute valid and legally binding obligations of such Commitment Party, enforceable against such Commitment Party in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other similar Laws limiting creditors’ rights generally or by equitable principles relating to enforceability. 

Section 5.4 No Conflict. Assuming that the consents referred to in clauses (a) and (b) of Section 5.5 are
obtained, the execution and delivery by such Commitment Party of this Agreement and each other Transaction Agreement to which such Commitment Party is a party, the compliance by such Commitment Party with all of the provisions hereof and thereof and
the consummation of the transactions contemplated herein and therein (a) will not 

  
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conflict with, or result in breach, modification, termination or violation of, any of the terms or provisions of, or constitute a default under (with or without notice or lapse of time or both),
or result in the acceleration of, or the creation of any Lien under, any Contract to which such Commitment Party is party or is bound or to which any of the property or assets or such Commitment Party are subject, (b) will not result in any
violation of the provisions of the certificate of incorporation or bylaws (or comparable constituent documents) of such Commitment Party and (c) will not result in any material violation of any Law or Order applicable to such Commitment Party
or any of its properties, except in each of the cases described in clauses (a) or (c), for any conflict, breach, modification, termination, violation, default, acceleration or Lien which would not reasonably be expected, individually or in
the aggregate, to prohibit or materially and adversely impact such Commitment Party’s performance of its obligations under this Agreement. 

Section 5.5 Consents and Approvals. No consent, approval, authorization, Order, registration or qualification of or with any
Governmental Entity having jurisdiction over such Commitment Party or any of its properties is required for the execution and delivery by such Commitment Party of this Agreement and each other Transaction Agreement to which such Commitment Party is
a party, the compliance by such Commitment Party with the provisions hereof and thereof and the consummation of the transactions (including the purchase by such Commitment Party of its Backstop Commitment Percentage of the Unsubscribed Shares and
its portion of the Rights Offering Shares) contemplated herein and therein, except (a) any consent, approval, authorization, Order, registration or qualification which, if not made or obtained, would not reasonably be expected, individually or
in the aggregate, to prohibit or materially and adversely impact such Commitment Party’s performance of its obligations under this Agreement and each other Transaction Agreement to which such Commitment Party is a party and (b) filings,
notifications, authorizations, approvals, consents, clearances or termination or expiration of all applicable waiting periods under any Antitrust Laws in connection with the transactions contemplated by this Agreement. 

Section 5.6 No Registration. Such Commitment Party understands that (a) the Unsubscribed Shares have not been registered
under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends on, among other things, the bona fide nature of the investment intent and the accuracy of such
Commitment Party’s representations as expressed herein or otherwise made pursuant hereto, and (b) the foregoing shares cannot be sold unless subsequently registered under the Securities Act or an exemption from registration is available.

 Section 5.7 Purchasing Intent. Such Commitment Party is acquiring the Unsubscribed Shares for its own account or accounts or
funds over which it holds voting discretion, not otherwise as a nominee or agent, and not otherwise with the view to, or for resale in connection with, any distribution thereof not in compliance with applicable securities Laws, and such Commitment
Party has no present intention of selling, granting any other participation in, or otherwise distributing the same, except in compliance with applicable securities Laws. 

Section 5.8 Sophistication; Investigation. Such Commitment Party has such knowledge and experience in financial and business
matters such that it is capable of evaluating the merits and risks of its investment in the Unsubscribed Shares. Such Commitment 

  
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Party is an “accredited investor” within the meaning of Rule 501(a) of the Securities Act or a “qualified institutional buyer” within the meaning of Rule 144A of the
Securities Act. Such Commitment Party understands and is able to bear any economic risks associated with such investment (including the necessity of holding such shares for an indefinite period of time). Except for the representations and warranties
expressly set forth in this Agreement or any other Transaction Agreement, such Commitment Party has independently evaluated the merits and risks of its decision to enter into this Agreement and disclaims reliance on any representations or
warranties, either express or implied, by or on behalf of any of the Debtors. 
 Section 5.9 No Broker’s Fees. Such
Commitment Party is not a party to any Contract with any Person (other than the Transaction Agreements and any Contract giving rise to the Expense Reimbursement hereunder) that would give rise to a valid claim against any of the Debtors for a
brokerage commission, finder’s fee or like payment in connection with the Rights Offerings or the sale of the Unsubscribed Shares. 

Section 5.10 Sufficient Funds. Such Commitment Party has sufficient assets and the financial capacity to perform all of its
obligations under this Agreement, including the ability to fully exercise all Subscription Rights that are issued to it pursuant to the Rights Offerings and fund such Commitment Party’s Backstop Commitment. 

ARTICLE VI 
 ADDITIONAL
COVENANTS 
 Section 6.1 Orders Generally. The Company and the Reorganized Company shall support and make commercially
reasonable efforts, consistent with the Restructuring Support Agreement and the Plan, to (a) obtain the entry of the BCA Approval Order, the Plan Solicitation Order, and the Confirmation Order, and (b) cause the BCA Approval Order, the
Plan Solicitation Order, and the Confirmation Order to become Final Orders (and request that such Orders become effective immediately upon entry by the Bankruptcy Court pursuant to a waiver of Rules 3020 and 6004(h) of the Bankruptcy Rules, as
applicable), in each case, as soon as reasonably practicable, consistent with the Bankruptcy Code, the Bankruptcy Rules, and the Restructuring Support Agreement, following the filing of the respective motion seeking entry of such Orders. The Company
shall provide to each of the Commitment Parties and its counsel copies of the proposed motions seeking entry of the BCA Approval Order, the Plan Solicitation Order, and the Confirmation Order (together with the proposed Plan Solicitation Order and
the proposed BCA Approval Order), and a reasonable opportunity to review and comment on such motions and such Orders prior to such motions and such Orders being filed with the Bankruptcy Court (and in no event less than 48 hours prior to such
filing), and such Orders must be in form and substance reasonably satisfactory to the Requisite Commitment Parties and the Company. Any amendments, modifications, changes, or supplements to the BCA Approval Order, Plan Solicitation Order, and
Confirmation Order, and any of the motions seeking entry of such Orders, shall be in form and substance reasonably satisfactory to the Requisite Commitment Parties and the Company. 

Section 6.2 Confirmation Order; Plan and Disclosure Statement. The Debtors shall use their commercially reasonable efforts to
obtain entry of the Confirmation 

  
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Order. The Company shall provide to each of the Commitment Parties and its counsel a copy of the proposed Plan and the Disclosure Statement and any proposed amendment, modification, supplement or
change to the Plan or the Disclosure Statement, and a reasonable opportunity to review and comment on such documents (and in no event less than 48 hours prior to filing the Plan and/or the Disclosure Statement, as applicable, with the Bankruptcy
Court), and each such amendment, modification, supplement or change to the Plan or the Disclosure Statement must be in form and substance reasonably satisfactory to each of the Requisite Commitment Parties and the Company. The Company shall provide
to each of the Commitment Parties and its counsel a copy of the proposed Confirmation Order (together with copies of any briefs, pleadings and motions related thereto), and a reasonable opportunity to review and comment on such Order, briefs,
pleadings and motions prior to such Order, briefs, pleadings and motions being filed with the Bankruptcy Court (and in no event less than 48 hours prior to a filing of such Order, briefs, pleadings or motions with the Bankruptcy Court), and such
Order, briefs, pleadings and motions must be in form and substance reasonably satisfactory to each of the Requisite Commitment Parties and the Company. 

Section 6.3 Conduct of Business. Except as expressly set forth in this Agreement, the Restructuring Support Agreement, the
Plan or with the prior written consent of Requisite Commitment Parties (requests for which, including related information, shall be directed to the counsel and financial advisors to the Ad Hoc Groups), during the period from the date of this
Agreement to the earlier of the Closing Date and the date on which this Agreement is terminated in accordance with its terms (the “Pre-Closing Period”), (a) the Company shall, and shall cause each of the other Debtors
to, carry on its business in the ordinary course and use its commercially reasonable efforts to: (i) preserve intact its business, (ii) preserve its material relationships with customers, suppliers, licensors, licensees, distributors and
others having material business dealings with any of the Debtors in connection with their business, and (iii) file Company SEC Documents within the time periods required under the Exchange Act, in each case in accordance with ordinary course
practices, and (b) each of the Debtors shall not enter into any transaction (including any transaction with, or investment in, any of the Berry Entities) that is material to the Debtors’ business other than (A) transactions in the
ordinary course of business that are consistent with prior business practices of the Debtors, (B) other transactions after prior notice to the Commitment Parties to implement tax planning which transactions are not reasonably expected to
materially adversely affect any Commitment Party and (C) transactions expressly contemplated by the Transaction Agreements. 
 For the
avoidance of doubt, the following shall be deemed to occur outside of the ordinary course of business of the Debtors and shall require the prior written consent of the Requisite Commitment Parties unless the same would otherwise be permissible under
the Restructuring Support Agreement, the Plan or this Agreement (including the preceding clause (B) or (C)): (1) entry into, or any amendment, modification, termination, waiver, supplement, restatement or other change to, any Material
Contract or any assumption of any Material Contract in connection with the Chapter 11 Cases (other than any Material Contracts that are otherwise addressed by clause (4) below), (2) entry into, or any amendment, modification, waiver,
supplement or other change to, any employment agreement to which any of the Debtors is a party or any assumption of any such employment agreement in connection with the Chapter 11 Cases, (3) any (x) termination by any of the Debtors
without cause or (y) reduction in title or responsibilities, in each case, of the individuals who are as of the date of 

  
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this Agreement the Chief Executive Officer, the Chief Financial Officer or the Chief Operating Officer of Linn Energy, LLC and (4) the adoption or amendment of any management or employee
incentive or equity plan by any of the Debtors except for the EIP. Following a request for consent of the Requisite Commitment Parties under this Section 6.3 by or on behalf of the Debtors, if the consent of the Requisite Commitment
Parties is not obtained or declined within five (5) Business Days following the date such request is made in writing and delivered to each of the Ad Hoc Groups (which notice will be deemed delivered if given in writing to Milbank and
O’Melveny), such consent shall be deemed to have been granted by the Requisite Commitment Parties. Except as otherwise provided in this Agreement, nothing in this Agreement shall give the Commitment Parties, directly or indirectly, any right to
control or direct the operations of the Debtors. Prior to the Closing Date, the Debtors shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of the business of the Debtors. 

Section 6.4 Access to Information; Confidentiality. 

(a) Subject to applicable Law and Section 6.4(b), upon reasonable notice during the Pre-Closing Period, the Debtors shall afford
the Commitment Parties and their Representatives upon request reasonable access, during normal business hours and without unreasonable disruption or interference with the Debtors’ business or operations, to the Debtors’ employees,
properties, books, Contracts and records and, during the Pre-Closing Period, the Debtors shall furnish promptly to such parties all reasonable information concerning the Debtors’ business, properties and personnel as may reasonably be requested
by any such party, provided that the foregoing shall not require the Company (i) to permit any inspection, or to disclose any information, that in the reasonable judgment of the Company, would cause any of the Debtors to violate any of
their respective obligations with respect to confidentiality to a third party if the Company shall have used its commercially reasonable efforts to obtain, but failed to obtain, the consent of such third party to such inspection or disclosure,
(ii) to disclose any legally privileged information of any of the Debtors or (iii) to violate any applicable Laws or Orders. All requests for information and access made in accordance with this Section 6.4 shall be directed to
an executive officer of the Company or such Person as may be designated by the Company’s executive officers. 
 (b) From and after the
date hereof until the date that is one (1) year after the expiration of the Pre-Closing Period, each Commitment Party shall, and shall cause its Representatives to, (i) keep confidential and not provide or disclose to any Person any
documents or information received or otherwise obtained by such Commitment Party or its Representatives pursuant to Section 6.4(a), Section 6.5 or in connection with a request for approval pursuant to Section 6.3
(except that provision or disclosure may be made to any Affiliate or Representative of such Commitment Party who needs to know such information for purposes of this Agreement or the other Transaction Agreements and who agrees to observe the terms of
this Section 6.4(b) (and such Commitment Party will remain liable for any breach of such terms by any such Affiliate or Representative)), and (ii) not use such documents or information for any purpose other than in connection with
this Agreement or the other Transaction Agreements or the transactions contemplated hereby or thereby. Notwithstanding the foregoing, the immediately preceding sentence shall not apply in respect of documents or information that (A) is now or
subsequently becomes generally available to the public through no violation of this Section 6.4(b), (B) becomes available to a Commitment Party or its 

  
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Representatives on a non-confidential basis from a source other than any of the Debtors or any of their respective Representatives, (C) becomes
available to a Commitment Party or its Representatives through document production or discovery in connection with the Chapter 11 Cases or other judicial or administrative process, but subject to any confidentiality restrictions imposed by the
Chapter 11 Cases or other such process, or (D) such Commitment Party or any Representative thereof is required to disclose pursuant to judicial or administrative process or pursuant to applicable Law or applicable securities exchange rules;
provided, that, such Commitment Party or such Representative shall provide the Company with prompt written notice of such legal compulsion and cooperate with the Company to obtain a protective Order or similar remedy to cause such information
or documents not to be disclosed, including interposing all available objections thereto, at the Company’s sole cost and expense; provided, further, that, in the event that such protective Order or other similar remedy is not
obtained, the disclosing party shall furnish only that portion of such information or documents that is legally required to be disclosed and shall exercise its commercially reasonable efforts (at the Company’s sole cost and expense) to obtain
assurance that confidential treatment will be accorded such disclosed information or documents. The provisions of this Section 6.4(b) shall not apply to any Initial Commitment Party that, as of the date hereof, is party to a
confidentiality or non-disclosure agreement with the Debtors, for so long as such agreement remains in full force and effect. 

Section 6.5 Financial Information. During the Pre-Closing Period, the Company shall deliver to the counsel and financial advisors
to each Ad Hoc Group, and to each Commitment Party that so requests, all statements and reports the Company is required to deliver to the First Lien Agent pursuant to Section 11(a)(iv) of the Final Cash Collateral Order (as in effect on the
date hereof) (the “Financial Reports”). Neither any waiver by the parties to the Final Cash Collateral Order of their right to receive the Financial Reports nor any amendment or termination of the First Lien Credit
Agreement shall affect the Company’s obligation to deliver the Financial Reports to the Commitment Parties in accordance with the terms of this Agreement; provided, however, (a) the parties to the Final Cash
Collateral Order may extend the date of delivery of any Financial Report by no more than ten (10) Business Days and such extension shall be deemed binding on the Commitment Parties for all purposes hereunder and (b) delivery of the
applicable Financial Report within such extension period shall be deemed in compliance with this Agreement. 
 Section 6.6
Commercially Reasonable Efforts. 
 (a) Without in any way limiting any other respective obligation of the Company or any Commitment
Party in this Agreement, each Party shall use (and the Company shall cause the other Debtors to use) commercially reasonable efforts to take or cause to be taken all actions, and do or cause to be done all things, reasonably necessary, proper or
advisable in order to consummate and make effective the transactions contemplated by this Agreement and the Plan, including using commercially reasonable efforts in: 

(i) timely preparing and filing all documentation reasonably necessary to effect all necessary notices, reports and other
filings of such Person and to obtain as promptly as practicable all consents, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any third party or Governmental Entity; 

  
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 (ii) defending any Legal Proceedings in any way challenging (A) this
Agreement, the Plan, the Registration Rights Agreement or any other Transaction Agreement, (B) the BCA Approval Order, the Plan Solicitation Order or the Confirmation Order or (C) the consummation of the transactions contemplated hereby
and thereby, including seeking to have any stay or temporary restraining Order entered by any Governmental Entity vacated or reversed; and 

(iii) working together in good faith to finalize the Reorganized Company Organizational Documents, Transaction Agreements, the
Registration Rights Agreement and all other documents relating thereto for timely inclusion in the Plan and filing with the Bankruptcy Court. 

(b) Subject to Laws or applicable rules relating to the exchange of information, and in accordance with the Restructuring Support Agreement,
the Commitment Parties and the Company shall have the right to review in advance, and to the extent practicable each will consult with the other on all of the information relating to Commitment Parties or the Company, as the case may be, and any of
their respective Subsidiaries, that appears in any filing made with, or written materials submitted to, any Governmental Entity in connection with the transactions contemplated by this Agreement or the Plan; provided, however, that the
Commitment Parties are not required to provide for review in advance declarations or other evidence submitted in connection with any filing with the Bankruptcy Court. In exercising the foregoing rights, the Parties shall act as reasonably and as
promptly as practicable. 
 (c) Without limitation to Section 6.1 or Section 6.2, to the extent exigencies permit,
the Company shall provide or cause to be provided to the Commitment Parties a draft of all motions, applications, pleadings, schedules, Orders, reports or other material papers (including all material memoranda, exhibits, supporting affidavits and
evidence and other supporting documentation) in the Chapter 11 Cases relating to or affecting the Transaction Agreements or the Registration Rights Agreement in accordance with the Restructuring Support Agreement and in no event less than 48 hours
before such motions, applications, pleadings, schedules, Orders, reports or other material papers are filed with the Bankruptcy Court. All such motions, applications, pleadings, schedules, Orders, reports and other material papers shall be in form
and substance reasonably satisfactory to the Requisite Commitment Parties and the Company. 
 (d) Nothing contained in this
Section 6.6(d) shall limit the ability of any Commitment Party to consult with the Debtors, to appear and be heard, or to file objections, concerning any matter arising in the Chapter 11 Cases to the extent not inconsistent with the
Restructuring Support Agreement. 
 Section 6.7 Registration Rights Agreement; Reorganized Company Organizational Documents.

 (a) The Plan will provide that from and after the Effective Date each Commitment Party and each other Noteholder receiving at least ten
percent (10%) or more of the Common Shares issued under the Plan and/or the Rights Offerings or that cannot sell its Common Shares under Rule 144 of the Securities Act without volume or manner of sale restrictions shall be entitled to
registration rights that are customary for a transaction of this 

  
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nature, pursuant to a registration rights agreement to be entered into as of the Effective Date, which agreement shall be in form and substance consistent with the terms set forth in the
Restructuring Term Sheet and otherwise reasonably acceptable to the Requisite Commitment Parties and the Company (the “Registration Rights Agreement”). A form of the Registration Rights Agreement shall be filed with the
Bankruptcy Court as part of the Plan Supplement or an amendment thereto. 
 (b) The Plan will provide that on the Effective Date, the
Reorganized Company Organizational Documents will be duly authorized, approved, adopted and in full force and effect. Forms of the Reorganized Company Organizational Documents shall be filed with the Bankruptcy Court as part of the Plan Supplement
or an amendment thereto. 
 Section 6.8 Blue Sky. The Company shall, on or before the Closing Date, take such action as the
Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the offer and sale of the Unsubscribed Shares to the Commitment Parties pursuant to this Agreement under applicable securities and “Blue
Sky” Laws of the states of the United States (or to obtain an exemption from such qualification) and any applicable foreign jurisdictions, and shall provide evidence of any such action so taken to the Commitment Parties on or prior to the
Closing Date. The Reorganized Company shall timely make all filings and reports relating to the offer and sale of the Unsubscribed Shares issued hereunder required under applicable securities and “Blue Sky” Laws of the states of the United
States following the Closing Date. The Company or the Reorganized Company, as applicable, shall pay all fees and expenses in connection with satisfying its obligations under this Section 6.8. 

Section 6.9 DTC Eligibility. Unless otherwise requested by the Requisite Commitment Parties, the Reorganized Company shall use
commercially reasonable efforts to promptly make, when applicable from time to time after the Closing, all Unlegended Shares eligible for deposit with The Depository Trust Company. “Unlegended Shares” means any Common Shares
acquired by the Commitment Parties and their respective Affiliates (including any Related Purchaser or Ultimate Purchaser in respect thereof) pursuant to this Agreement and the Plan, including all shares issued to the Commitment Parties and their
respective Affiliates in connection with the Rights Offerings, that do not require, or are no longer subject to, the Legend. 

Section 6.10 Use of Proceeds. The Reorganized Company will utilize the proceeds from the exercise of the Subscription Rights and
the sale of the Unsubscribed Shares (together with the Exit Facility) and less than 50% of the total number of Common Shares outstanding (without accounting for dilution from the EIP) to purchase the Debtors’ assets (or equity in an entity that
holds such assets) in a transaction that is intended to be taxable from a U.S. federal income tax perspective. The Debtors will apply the proceeds from the exercise of the Subscription Rights and the sale of the Unsubscribed Shares (together with
the Exit Facility and the Common Shares received) for the purposes identified in the Disclosure Statement and the Plan. 

Section 6.11 Share Legend. Each certificate evidencing Unsubscribed Shares issued hereunder, and each certificate issued in
exchange for or upon the Transfer of any such shares, shall be stamped or otherwise imprinted with a legend (the “Legend”) in substantially the following form: 

  
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 “THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON [DATE OF ISSUANCE], HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY OTHER APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT OR AN AVAILABLE EXEMPTION FROM REGISTRATION THEREUNDER.” 
 In the event that any such shares are uncertificated, such shares shall be subject to a
restrictive notation substantially similar to the Legend in the stock ledger or other appropriate records maintained by the Reorganized Company or agent and the term “Legend” shall include such restrictive notation. The Reorganized Company
shall remove the Legend (or restrictive notation, as applicable) set forth above from the certificates evidencing any such shares (or the share register or other appropriate Reorganized Company records, in the case of uncertified shares), upon
request, at any time after the restrictions described in such Legend cease to be applicable, including, as applicable, when such shares may be sold under Rule 144 of the Securities Act. The Reorganized Company may reasonably request such opinions,
certificates or other evidence that such restrictions no longer apply as a condition to removing the Legend. 
 Section 6.12
Antitrust Approval. 
 (a) Each Party agrees to use commercially reasonable efforts to take, or cause to be taken, all actions and to
do, or cause to be done, all things necessary to consummate and make effective the transactions contemplated by this Agreement, the Plan and the other Transaction Agreements, including (i) if applicable, filing, or causing to be filed, the
Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated by this Agreement with the Antitrust Division of the United States Department of Justice and the United States Federal Trade Commission and any
filings (or, if required by any Antitrust Authority, any drafts thereof) under any other Antitrust Laws that are necessary to consummate and make effective the transactions contemplated by this Agreement as soon as reasonably practicable (and with
respect to any filings required pursuant to the HSR Act, no later than fifteen (15) Business Days following the date hereof) and (ii) promptly furnishing any documents or information reasonably requested by any Antitrust Authority. 

(b) The Company and each Commitment Party subject to an obligation pursuant to the Antitrust Laws to notify any transaction
contemplated by this Agreement, the Plan or the other Transaction Agreements that has notified the Company in writing of such obligation (each such Commitment Party, a “Filing Party”) agree to reasonably cooperate with each
other as to the appropriate time of filing such notification and its content. The Company and each Filing Party shall, to the extent permitted by applicable Law: (i) promptly notify each other of, and if in writing, furnish each other with
copies of (or, in the case of material oral communications, advise each other orally of) any material communications from or with an Antitrust Authority; (ii) not participate in any meeting with an Antitrust Authority unless it consults with
each other Filing Party and the Company, as applicable, in advance and, to the  

  
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extent permitted by the Antitrust Authority and applicable Law, give each other Filing Party and the Company, as applicable, a reasonable opportunity to attend and participate thereat;
(iii) furnish each other Filing Party and the Company, as applicable, with copies of all material correspondence and communications between such Filing Party or the Company and the Antitrust Authority; (iv) furnish each other Filing Party
with such necessary information and reasonable assistance as may be reasonably necessary in connection with the preparation of necessary filings or submission of information to the Antitrust Authority; and (v) not withdraw its filing, if any,
under the HSR Act without the prior written consent of the Requisite Commitment Parties and the Company. 
 (c) Should a Filing Party
be subject to an obligation under the Antitrust Laws to jointly notify with one or more other Filing Parties (each, a “Joint Filing Party”) any transaction contemplated by this Agreement, the Plan or the other Transaction
Agreements, such Joint Filing Party shall promptly notify each other Joint Filing Party of, and if in writing, furnish each other Joint Filing Party with copies of (or, in the case of material oral communications, advise each other Joint Filing
Party orally of) any communications from or with an Antitrust Authority. 
 (d) The Company and each Filing Party shall use their
commercially reasonable efforts to obtain all authorizations, approvals, consents, or clearances under any applicable Antitrust Laws or to cause the termination or expiration of all applicable waiting periods under any Antitrust Laws in connection
with the transactions contemplated by this Agreement at the earliest possible date after the date of filing. The communications contemplated by this Section 6.12 may be made by the Company or a Filing Party on an outside counsel-only
basis or subject to other agreed upon confidentiality safeguards. The obligations in this Section 6.12 shall not apply to filings, correspondence, communications or meetings with Antitrust Authorities unrelated to the transactions
contemplated by this Agreement, the Plan or the other Transaction Agreements. 
 Section 6.13 Alternative Transactions. The
Company and the other Debtors shall not seek, solicit, or support any Alternative Transaction, and shall not cause or allow any of their agents or representatives to solicit any agreements relating to an Alternative Transaction; provided,
however, that nothing in this Section 6.13 shall limit (i) subject to obtaining all applicable consents and approvals required under the Restructuring Support Agreement and this Agreement (including Section 6.3
hereof), the Parties’ ability to engage in (a) marketing efforts, discussions, and/or negotiations with any party regarding refinancing of the Exit Facility to be consummated following the Effective Date or (b) any transaction with
respect to the Berry Entities that does not involve any of the Debtors or any properties or assets of the Debtors, or (ii) the Company’s and the other Debtors’ boards of directors’ fiduciary duties consistent with Section 8
of the Restructuring Support Agreement. 
 Section 6.14 Hedging Arrangements. The Company will consult with the
Requisite Commitment Parties in its implementation of its hedging program; provided, that the Company will obtain the written consent (not to be unreasonably withheld) of the Requisite Commitment Parties prior to its implementation of hedging
transactions that are not consistent with the Final Order Authorizing the Debtors to Enter Into and Perform Under Postpetition Hedging Arrangements entered by the Bankruptcy Court on August 16, 2016. Following a 

  
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request for consent by or on behalf of the Debtors, if the consent of the Requisite Commitment Parties is not obtained or declined within three (3) Business Days following the date such
request is made in writing and delivered to each Ad Hoc Group (which notice will be deemed delivered if given in writing to Milbank and O’Melveny), such consent shall be deemed to have been granted by the Requisite Commitment Parties. 

Section 6.15 Reorganized Company. 

(a) The Requisite Commitment Parties have the right at any time prior to the Disclosure Statement hearing, to elect to require that
(i) the Reorganized Company be organized as a Delaware limited liability company instead of a Delaware corporation and/or (ii) the Debtors use reasonably best efforts to either (A) cause Linn Energy, LLC’s registration under
Section 12 of the Exchange Act to be terminated on the Effective Date or as promptly as practicable thereafter or (B) cause the Reorganized Company to be registered under Section 12 of the Exchange Act (as the “successor
issuer” to Linn Energy, LLC or otherwise) on the Effective Date or as promptly as practicable thereafter. 
 (b) The Requisite
Commitment Parties shall cause the Reorganized Company to be formed by a non-Debtor, non-Commitment Party third party (provided that in the reasonable judgment of the Debtors such formation does not result in a material risk of any negative tax
consequences to any Debtor (including for these purposes, but not limited to, a material risk of tax liability at LinnCo, LLC)). In all cases, (i) the Debtors shall conduct the Rights Offerings, including where the Reorganized Company is not
formed or owned by the Debtors (in which case the Debtors shall conduct the Unsecured Rights Offering and the Secured Rights Offering on the Reorganized Company’s behalf), (ii) the Reorganized Company shall be a successor to Linn Energy,
LLC under the Plan and the Rights Offerings will be exempt from registration under the Securities Act pursuant to Section 1145 of the Bankruptcy Code and (iii) the Reorganized Company Organizational Documents will provide that the
Reorganized Company’s initial board of directors will be constituted on the Effective Date pursuant to the Plan and will be the continuing directors and will adopt resolutions authorizing the Reorganized Company to do all actions required to
consummate the Rights Offerings and the Plan. 
 (c) The Company and the Requisite Commitment Parties shall determine the number of
Aggregate Common Shares as soon as reasonably practicable, and in any event prior to the commencement of the Rights Offerings. 
 (d) On the
Effective Date, all rights and obligations of the Company under this Agreement shall vest in the Reorganized Company and the Plan shall include language to such effect. From and after the Effective Date, the Reorganized Company shall be deemed
to be a party to this Agreement as the successor to all rights and obligations of the Company hereunder. 

  
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 ARTICLE VII 

CONDITIONS TO THE OBLIGATIONS OF THE PARTIES 

Section 7.1 Conditions to the Obligations of the Commitment Parties. The obligations of each Commitment Party to consummate the
transactions contemplated hereby shall be subject to (unless waived in accordance with Section 7.2) the satisfaction of the following conditions prior to or at the Closing: 

(a) BCA Approval Order. The Bankruptcy Court shall have entered the BCA Approval Order in form and substance reasonably acceptable to
the Requisite Commitment Parties, and such Order shall be a Final Order. 
 (b) Plan Solicitation Order. The Bankruptcy Court shall
have entered the Plan Solicitation Order in form and substance reasonably acceptable to the Requisite Commitment Parties, and such Order shall be a Final Order. 

(c) Confirmation Order. The Bankruptcy Court shall have entered the Confirmation Order in form and substance reasonably satisfactory to
the Requisite Commitment Parties, and such Order shall be a Final Order. 
 (d) Secured Notes. No LINN Second Lien Notes Claim shall
have been Allowed, wholly or partially, as a Secured Claim under the Plan or otherwise by the Bankruptcy Court (other than claims that are deemed Allowed under section 502(a) of the Bankruptcy Code). 

(e) Plan. The Company and all of the other Debtors shall have substantially complied with the terms of the Plan (as amended or
supplemented from time to time) that are to be performed by the Company, the Reorganized Company and the other Debtors on or prior to the Effective Date and the conditions to the occurrence of the Effective Date (other than any conditions relating
to occurrence of the Closing) set forth in the Plan shall have been satisfied or waived in accordance with the terms of the Plan. 
 (f)
Rights Offerings. Each of: (i) the Unsecured Rights Offering and (ii) the Secured Rights Offering, shall have been conducted in accordance with the Plan Solicitation Order and this Agreement. 

(g) Effective Date. The Effective Date shall have occurred, or shall be deemed to have occurred concurrently with the Closing, as
applicable, in accordance with the terms and conditions in the Plan and in the Confirmation Order. 
 (h) Registration Rights Agreement;
Reorganized Company Organizational Documents. 
 (i) The Registration Rights Agreement shall have been executed and
delivered by the Reorganized Company, shall otherwise have become effective with respect to the Commitment Parties and the other parties thereto, and shall be in full force and effect. 

  
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 (ii) The Reorganized Company Organizational Documents shall have been duly
approved and adopted and shall be in full force and effect. 
 (i) Expense Reimbursement. The Debtors shall have paid all Expense
Reimbursements accrued through the Closing Date pursuant to Section 3.3. 
 (j) Governmental Approvals. All waiting
periods imposed by any Governmental Entity or Antitrust Authority in connection with the transactions contemplated by this Agreement shall have terminated or expired and all authorizations, approvals, consents or clearances under the Antitrust Laws
or otherwise required by any Governmental Entity in connection with the transactions contemplated by this Agreement shall have been obtained or filed. 

(k) No Legal Impediment to Issuance. No Law or Order shall have become effective or been enacted, adopted or issued by any Governmental
Entity that prohibits the implementation of the Plan or the transactions contemplated by this Agreement; 
 (l) Representations and
Warranties. 
 (i) The representations and warranties of the Debtors contained in Section 4.8 shall be true
and correct in all respects on and as of the Closing Date with the same effect as if made on and as of the Closing Date (except for such representations and warranties made as of a specified date, which shall be true and correct only as of the
specified date). 
 (ii) The representations and warranties of the Debtors contained in Section 4.2,
Section 4.3, Section 4.4 and Section 4.5(b) shall be true and correct in all material respects on and as of the Closing Date after giving effect to the Plan with the same effect as if made on and as of the Closing
Date after giving effect to the Plan (except for such representations and warranties made as of a specified date, which shall be true and correct in all material respects only as of the specified date). 

(iii) The representations and warranties of the Debtors contained in this Agreement other than those referred to in clauses
(i) and (ii) above shall be true and correct (disregarding all materiality or Material Adverse Effect qualifiers) on and as of the Closing Date after giving effect to the Plan with the same effect as if made on and as of the Closing Date
after giving effect to the Plan (except for such representations and warranties made as of a specified date, which shall be true and correct only as of the specified date), except where the failure to be so true and correct does not constitute,
individually or in the aggregate, a Material Adverse Effect. 
 (m) Covenants. The Debtors shall have performed and complied, in all
material respects, with all of their respective covenants and agreements contained in this Agreement that contemplate, by their terms, performance or compliance prior to the Closing Date. 

  
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 (n) Material Adverse Effect. Since the date of this Agreement, there shall not have
occurred, and there shall not exist, any Event that constitutes, individually or in the aggregate, a Material Adverse Effect. 
 (o)
Officer’s Certificate. The Commitment Parties shall have received on and as of the Closing Date a certificate of the chief executive officer or chief financial officer of the Company confirming that the conditions set forth in
Section 7.1(l), (m), and (n) have been satisfied. 
 (p) Funding Notice. The Noteholders shall
have received the Funding Notice. 
 (q) Exit Facility. The Exit Facility shall have become effective and shall otherwise be in form
and substance substantially in accordance with the Exit Facility Term Sheet. 
 (r) Key Contracts. The assumption or rejection (in
each case, pursuant to section 365 of the Bankruptcy Code) and/or amendment of the Contracts described in Section 1.1 of the Company Disclosure Schedules as of the Closing Date and the liabilities of the Reorganized Company with respect to such
Contracts shall, in the aggregate, be reasonably satisfactory to the Requisite Commitment Parties. 
 (s) Pre-Hearing Letter
Agreement. The Pre-Hearing Letter Agreement shall have been executed and delivered by the Company, shall otherwise have become effective with respect to the Commitment Parties, and shall be in full force and effect. 

Section 7.2 Waiver of Conditions to Obligations of Commitment Parties. All or any of the conditions set forth in
Section 7.1 may only be waived in whole or in part with respect to all Commitment Parties by a written instrument executed by the Requisite Commitment Parties in their sole discretion and if so waived, all Commitment Parties shall be
bound by such waiver; provided, however, that the conditions set forth in subsections (c), (g), (j), (k) and (m) of Section 7.1 shall not be subject to waiver except by a written instrument executed by all
Commitment Parties. 
 Section 7.3 Conditions to the Obligations of the Debtors. The obligations of the Debtors to consummate
the transactions contemplated hereby with the Commitment Parties is subject to (unless waived by the Company) the satisfaction of each of the following conditions: 

(a) BCA Approval Order. The Bankruptcy Court shall have entered the BCA Approval Order and such Order shall be a Final Order. 

(b) Plan Solicitation Order. The Bankruptcy Court shall have entered the Plan Solicitation Order, and such Order shall be a Final
Order. 
 (c) Confirmation Order. The Bankruptcy Court shall have entered the Confirmation Order, and such Order shall be a Final
Order. 
 (d) [Reserved]. 

  
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 (e) Effective Date. The Effective Date shall have occurred, or shall be deemed to have
occurred concurrently with the Closing, as applicable, in accordance with the terms and conditions in the Plan and in the Confirmation Order. 

(f) Governmental Approvals. All waiting periods imposed by any Governmental Entity or Antitrust Authority in connection with the
transactions contemplated by this Agreement shall have terminated or expired and all authorizations, approvals, consents or clearances under the Antitrust Laws or otherwise required by any Governmental Entity in connection with the transactions
contemplated by this Agreement shall have been obtained or filed. 
 (g) No Legal Impediment to Issuance. No Law or Order shall have
become effective or been enacted, adopted or issued by any Governmental Entity that prohibits the implementation of the Plan or the transactions contemplated by this Agreement. 

(h) Representations and Warranties. 

(i) The representations and warranties of the Commitment Parties contained in this Agreement that are qualified by
“materiality” or “material adverse effect” or words or similar import shall be true and correct in all respects on and as of the Closing Date with the same effect as if made on and as of the Closing Date (except for such
representations and warranties made as of a specified date, which shall be true and correct in all respects only as of the specified date). 

(ii) The representations and warranties of the Commitment Parties contained in this Agreement that are not qualified by
“materiality” or “material adverse effect” or words or similar import shall be true and correct in all material respects on and as of the Closing Date with the same effect as if made on and as of the Closing Date (except for such
representations and warranties made as of a specified date, which shall be true and correct in all material respects only as of the specified date). 

(i) Covenants. The Commitment Parties shall have performed and complied, in all material respects, with all of their covenants and
agreements contained in this Agreement and in any other document delivered pursuant to this Agreement. 
 (j) Exit Facility. The Exit
Facility shall have become effective and shall otherwise be in form and substance substantially in accordance with the Exit Facility Term Sheet. 

(k) Pre-Hearing Letter Agreement. The Pre-Hearing Letter Agreement shall have been executed and delivered by the Commitment Parties,
shall otherwise have become effective with respect to the Company, and shall be in full force and effect. 

  
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 ARTICLE VIII 

INDEMNIFICATION AND CONTRIBUTION 

Section 8.1 Indemnification Obligations. Following the entry of the BCA Approval Order, the Company, the Reorganized Company and
the other Debtors (the “Indemnifying Parties” and each, an “Indemnifying Party”) shall, jointly and severally, indemnify and hold harmless each Commitment Party and its Affiliates, equity holders,
members, partners, general partners, managers and its and their respective Representatives and controlling persons (each, an “Indemnified Person”) from and against any and all losses, claims, damages, liabilities and costs
and expenses (other than Taxes of the Commitment Parties except to the extent otherwise provided for in this Agreement) arising out of a claim asserted by a third-party (collectively, “Losses”) that any such Indemnified
Person may incur or to which any such Indemnified Person may become subject arising out of or in connection with this Agreement, the Plan and the transactions contemplated hereby and thereby, including the Backstop Commitment, the Rights Offerings,
the payment of the Commitment Premium or the use of the proceeds of the Rights Offerings, or any claim, challenge, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any Indemnified Person is a party
thereto, whether or not such proceedings are brought by the Company, the Reorganized Company, the other Debtors, their respective equity holders, Affiliates, creditors or any other Person, and reimburse each Indemnified Person upon demand for
reasonable documented (with such documentation subject to redaction to preserve attorney client and work product privileges) legal or other third-party expenses incurred in connection with investigating, preparing to defend or defending, or
providing evidence in or preparing to serve or serving as a witness with respect to, any lawsuit, investigation, claim or other proceeding relating to any of the foregoing (including in connection with the enforcement of the indemnification
obligations set forth herein), irrespective of whether or not the transactions contemplated by this Agreement or the Plan are consummated or whether or not this Agreement is terminated; provided, that the foregoing indemnity will not, as to
any Indemnified Person, apply to Losses (a) as to a Defaulting Commitment Party, its Related Parties or any Indemnified Person related thereto, caused by a Commitment Party Default by such Commitment Party, or (b) to the extent they are
found by a final, non-appealable judgment of a court of competent jurisdiction to arise from the bad faith, willful misconduct or gross negligence of such Indemnified Person. 

Section 8.2 Indemnification Procedure. Promptly after receipt by an Indemnified Person of notice of the commencement of any
claim, challenge, litigation, investigation or proceeding (an “Indemnified Claim”), such Indemnified Person will, if a claim is to be made hereunder against the Indemnifying Party in respect thereof, notify the Indemnifying
Party in writing of the commencement thereof; provided, that (a) the omission to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability that it may have hereunder except to the extent it has been
materially prejudiced by such failure and (b) the omission to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability that it may have to such Indemnified Person otherwise than on account of this
Article VIII. In case any such Indemnified Claims are brought against any Indemnified Person and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be entitled to participate therein, and, at its
election by providing written notice to such Indemnified Person, the Indemnifying Party will be entitled to assume the defense thereof, with 

  
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counsel reasonably acceptable to such Indemnified Person; provided, that if the parties (including any impleaded parties) to any such Indemnified Claims include both such Indemnified
Person and the Indemnifying Party and based on advice of such Indemnified Person’s counsel there are legal defenses available to such Indemnified Person that are different from or additional to those available to the Indemnifying Party, such
Indemnified Person shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such Indemnified Claims. Upon receipt of notice from the Indemnifying Party to such Indemnified Person of
its election to so assume the defense of such Indemnified Claims with counsel reasonably acceptable to the Indemnified Person, the Indemnifying Party shall not be liable to such Indemnified Person for expenses incurred by such Indemnified Person in
connection with the defense thereof or participation therein (other than reasonable costs of investigation) unless (i) such Indemnified Person shall have employed separate counsel (in addition to any local counsel) in connection with the
assertion of legal defenses in accordance with the proviso to the immediately preceding sentence (it being understood, however, that the Indemnifying Party shall not be liable for the expenses of more than one separate counsel representing the
Indemnified Persons who are parties to such Indemnified Claims (in addition to one local counsel in each jurisdiction in which local counsel is required)), (ii) the Indemnifying Party shall not have employed counsel reasonably acceptable to
such Indemnified Person to represent such Indemnified Person within a reasonable time after the Indemnifying Party has received notice of commencement of the Indemnified Claims from, or delivered on behalf of, the Indemnified Person,
(iii) after the Indemnifying Party assumes the defense of the Indemnified Claims, the Indemnified Person determines in good faith that the Indemnifying Party has failed or is failing to defend such claim and provides written notice of such
determination and the basis for such determination, and such failure is not reasonably cured within ten (10) Business Days of receipt of such notice, or (iv) the Indemnifying Party shall have authorized in writing the employment of counsel
for such Indemnified Person. Notwithstanding anything herein to the contrary, the Debtors shall have sole control over any Tax controversy or Tax audit and shall be permitted to settle any liability for Taxes of the Debtors. 

Section 8.3 Settlement of Indemnified Claims. In connection with any Indemnified Claim for which an Indemnified Person is
assuming the defense in accordance with this Article VIII, the Indemnifying Party shall not be liable for any settlement of any Indemnified Claims effected by such Indemnified Person without the written consent of the Indemnifying Party
(which consent shall not be unreasonably withheld, conditioned or delayed). If any settlement of any Indemnified Claims is consummated with the written consent of the Indemnifying Party or if there is a final judgment for the plaintiff in any such
Indemnified Claims, the Indemnifying Party agrees to indemnify and hold harmless each Indemnified Person from and against any and all Losses by reason of such settlement or judgment to the extent such Losses are otherwise subject to indemnification
by the Indemnifying Party hereunder in accordance with, and subject to the limitations of, this Article VIII. The Indemnifying Party shall not, without the prior written consent of an Indemnified Person (which consent shall be granted or
withheld, conditioned or delayed in the Indemnified Person’s sole discretion), effect any settlement of any pending or threatened Indemnified Claims in respect of which indemnity or contribution has been sought hereunder by such Indemnified
Person unless (i) such settlement includes an unconditional release of such Indemnified Person in form and substance satisfactory to such Indemnified Person from all liability on the claims that are the subject matter of such Indemnified Claims
and (ii) such settlement does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person. 

  
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 Section 8.4 Contribution. If for any reason the foregoing indemnification is
unavailable to any Indemnified Person or insufficient to hold it harmless from Losses that are subject to indemnification pursuant to Section 8.1, then the Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Person as a result of such Loss in such proportion as is appropriate to reflect not only the relative benefits received by the Indemnifying Party, on the one hand, and such Indemnified Person, on the other hand, but also the relative
fault of the Indemnifying Party, on the one hand, and such Indemnified Person, on the other hand, as well as any relevant equitable considerations. It is hereby agreed that the relative benefits to the Indemnifying Party, on the one hand, and all
Indemnified Persons, on the other hand, shall be deemed to be in the same proportion as (a) the total value received or proposed to be received by the Company and the Reorganized Company pursuant to the issuance and sale of the Unsubscribed
Shares in the Rights Offerings contemplated by this Agreement and the Plan bears to (b) the Commitment Premium paid or proposed to be paid to the Commitment Parties. The Indemnifying Parties also agree that no Indemnified Person shall have any
liability based on their comparative or contributory negligence or otherwise to the Indemnifying Parties, any Person asserting claims on behalf of or in right of any of the Indemnifying Parties, or any other Person in connection with an Indemnified
Claim. 
 Section 8.5 Treatment of Indemnification Payments. All amounts paid by an Indemnifying Party to an Indemnified Person
under this Article VIII shall, to the extent permitted by applicable Law, be treated as adjustments to the Per Share Purchase Price (or Per Share Discounted Purchase Price, as applicable) for all Tax purposes. The provisions of this
Article VIII are an integral part of the transactions contemplated by this Agreement and without these provisions the Commitment Parties would not have entered into this Agreement. The BCA Approval Order shall provide that the obligations of
the Company and the Reorganized Company under this Article VIII shall constitute allowed administrative expenses of the Debtors’ estate under sections 503(b) and 507 of the Bankruptcy Code and are payable without further Order
of the Bankruptcy Court, and that the Company and the Reorganized Company may comply with the requirements of this Article VIII without further Order of the Bankruptcy Court. 

Section 8.6 No Survival. All representations, warranties, covenants and agreements made in this Agreement shall not survive the
Closing Date except for covenants and agreements that by their terms are to be satisfied after the Closing Date, which covenants and agreements shall survive until satisfied in accordance with their terms. 

ARTICLE IX 
 TERMINATION

 Section 9.1 Consensual Termination. This Agreement may be terminated and the transactions contemplated hereby may be
abandoned at any time prior to the Closing Date by mutual written consent of the Company and the Requisite Commitment Parties. 

  
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 Section 9.2 Automatic Termination. Notwithstanding anything to the contrary in this
Agreement, unless and until there is an unstayed Order of the Bankruptcy Court providing that the giving of notice under and/or termination of this Agreement in accordance with its terms is not prohibited by the automatic stay imposed by section 362
of the Bankruptcy Code, and except as otherwise provided in this Section 9.2, at which point this Agreement may be terminated by the Requisite Commitment Parties upon written notice to the Company upon the occurrence of any of the
following Events, this Agreement shall terminate automatically without any further action or notice by any Party at 5:00 p.m., New York City time on the fifth Business Day following the occurrence of any of the following Events; provided that
the Requisite Commitment Parties may waive such termination or extend any applicable dates in accordance with Section 10.7: 

(a) the Closing Date has not occurred by 11:59 p.m., New York City time on March 1, 2017 (as may be extended pursuant to
Section 2.3(e) or the following proviso, the “Outside Date”), unless prior thereto the Effective Date occurs and each Rights Offering has been consummated; provided, that the Outside Date may be waived or
extended (but not beyond 5:00 p.m., New York City time on May 1, 2017) with the prior written consent of the Requisite Commitment Parties; 

(b) the obligations of the Consenting Noteholders under the Restructuring Support Agreement are terminated in accordance with the terms of the
Restructuring Support Agreement; 
 (c) [Reserved]. 

(d) (i) the Company or the other Debtors shall have breached any representation, warranty, covenant or other agreement made by the Company or
the other Debtors in this Agreement or any such representation or warranty shall have become inaccurate and such breach or inaccuracy would, individually or in the aggregate, cause a condition set forth in Section 7.1(l),
Section 7.1(m), or Section 7.1(n) not to be satisfied, (ii) the Commitment Parties shall have delivered written notice of such breach or inaccuracy to the Company, (iii) such breach or inaccuracy is not cured
by the Company or the other Debtors by the tenth (10th) Business Day after receipt of such notice, and (iv) as a result of such failure to cure, any condition set forth in Section 7.1(l), Section 7.1(m), or
Section 7.1(n) is not capable of being satisfied; provided, that, this Agreement shall not terminate automatically pursuant to this Section 9.2(d) if the Commitment Parties are then in willful or intentional breach of
this Agreement; 
 (e) any Law or final and non-appealable Order shall have been enacted, adopted or issued by any Governmental Entity that
prohibits the implementation of the Plan or any Rights Offering or the transactions contemplated by this Agreement, the other Transaction Agreements or the Registration Rights Agreement in a way that cannot be remedied by the Debtors subject to the
reasonable satisfaction of the Requisite Commitment Parties; 
 (f) (i) the Debtors have materially breached their obligations under
Section 6.13; (ii) the Bankruptcy Court approves or authorizes an Alternative Transaction; or (iii) any of the Debtors enters into any Contract providing for the consummation of any Alternative Transaction; 

  
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 (g) [Reserved]; 

(h) the Company or any other Debtor (i) materially and adversely (to the Commitment Parties) amends or modifies, or files a pleading
seeking authority to amend or modify, the Definitive Documentation in a manner that is materially inconsistent with this Agreement without the consent (not to be unreasonably withheld, conditioned or delayed) of the Requisite Commitment Parties or
(ii) publicly announces its intention to take any such action listed in sub-clauses (i) of this subsection; 
 (i) the BCA
Approval Order, Plan Solicitation Order, or Confirmation Order is terminated, reversed, stayed, dismissed, vacated, or reconsidered, or any such Order is modified or amended after entry without the prior acquiescence or written consent (not to be
unreasonably withheld, conditioned or delayed) of the Requisite Commitment Parties in a manner that prevents or prohibits the consummation of the Restructuring Transactions contemplated in this Agreement or any of the Definitive Documents in a way
that cannot be remedied by the Debtors subject to the reasonable satisfaction of the Requisite Commitment Parties; 
 (j) any of the Orders
approving the Exit Facility, the Backstop Commitment Agreement, the Rights Offering Procedures, the Plan or the Disclosure Statement, or the Confirmation Order are reversed, stayed, dismissed, vacated or reconsidered or modified or amended without
the acquiescence or written consent (not to be unreasonably withheld, conditioned or delayed) of the Requisite Commitment Parties (and such action has not been reversed or vacated within thirty (30) calendar days after its issuance) in a manner
that prevents or prohibits the consummation of the Restructuring Transactions contemplated in this Agreement or any of the Definitive Documents in a way that cannot be remedied by the Debtors subject to the reasonable satisfaction of the Requisite
Commitment Parties; 
 (k) any LINN Second Lien Notes Claim is wholly or partially Allowed as a Secured Claim under the Plan or otherwise by
the Bankruptcy Court (other than claims that are deemed allowed under section 502(a) of the Bankruptcy Code); or 
 (l) the Parties have not
entered into the Pre-Hearing Letter Agreement on or prior to the date on which the Backstop Agreement Motion is heard by the Bankruptcy Court. 

Section 9.3 Termination by the Company. 

This Agreement may be terminated by the Company upon written notice to each Commitment Party upon the occurrence of any of the
following Events, subject to the rights of the Company to fully and conditionally waive, in writing, on a prospective or retroactive basis the occurrence of such Event (each, a “Linn Termination Event”): 

(a) any Law or final and non-appealable Order shall have been enacted, adopted or issued by any Governmental Entity that prohibits the
implementation of the Plan or any Rights Offering or the transactions contemplated by this Agreement, the other Transaction Agreements or the Registration Rights Agreement in a way that cannot be remedied by the Debtors subject to the reasonable
satisfaction of the Requisite Commitment Parties; 

  
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 (b) subject to the right of the Commitment Parties to arrange a Commitment Party Replacement in
accordance with Section 2.3(a) or Section 2.3(b) (which will be deemed to cure any breach by the replaced Commitment Party pursuant to this subsection (b)), (i) any Commitment Party shall have breached any
representation, warranty, covenant or other agreement made by such Commitment Party in this Agreement or any such representation or warranty shall have become inaccurate and such breach or inaccuracy would, individually or in the aggregate, cause a
condition set forth in Section 7.3(h) or Section 7.3(i) not to be satisfied, (ii) the Company shall have delivered written notice of such breach or inaccuracy to such Commitment Party, (iii) such breach or
inaccuracy is not cured by such Commitment Party by the tenth (10th) Business Day after receipt of such notice, and (iv) as a result of such failure to cure, any condition set forth in Section 7.3(h) or
Section 7.3(i) is not capable of being satisfied; provided, that the Company shall not have the right to terminate this Agreement pursuant to this Section 9.3(b) if it is then in willful or intentional breach of this
Agreement; 
 (c) the BCA Approval Order, Plan Solicitation Order, or Confirmation Order is terminated, reversed, stayed, dismissed,
vacated, or reconsidered, or any such Order is modified or amended after entry without the prior acquiescence or written consent (not to be unreasonably withheld, conditioned or delayed) of the Company in a manner that prevents or prohibits the
consummation of the Restructuring Transactions contemplated in this Agreement or any of the Definitive Documents in a way that cannot be remedied by the Commitment Parties subject to the reasonable satisfaction of the Debtors; 

(d) any of the Orders approving the Exit Facility, the Backstop Commitment Agreement, the Rights Offering Procedures, the Plan or the
Disclosure Statement, or the Confirmation Order are reversed, stayed, dismissed, vacated or reconsidered or modified or amended without the acquiescence or consent (not to be unreasonably withheld, conditioned or delayed) of the Company (and such
action has not been reversed or vacated within thirty (30) calendar days after its issuance) in a manner that prevents or prohibits the consummation of the Restructuring Transactions contemplated in this Agreement or any of the Definitive
Documents in a way that cannot be remedied by the Commitment Parties subject to the reasonable satisfaction of the Debtors; 
 (e) solely if
the Bankruptcy Court has entered the BCA Approval Order but has not yet entered the Confirmation Order, the board of directors of the Company determines that continued performance under this Agreement (including taking any action or refraining from
taking any action and including, without limitation, the Plan or solicitation of the Plan) would be inconsistent with the exercise of its fiduciary duties (as reasonably determined by such entity in good faith after consultation with outside legal
counsel and based on the advice of such counsel); 
 (f) the Restructuring Support Agreement is terminated in accordance with its terms;

 (g) the Closing Date has not occurred by the Outside Date (as the same may be extended pursuant to Section 9.2(a) or
Section 2.3(e)), unless prior thereto the Effective Date 

  
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occurs and each Rights Offering has been consummated; provided, that the Company shall not have the right to terminate this Agreement pursuant to this Section 9.3(g) if it is
then in willful or intentional breach of this Agreement; or 
 (h) the Parties have not entered into the Pre-Hearing Letter Agreement on or
prior to the date on which the Backstop Agreement Motion is heard by the Bankruptcy Court. 
 Section 9.4 Effect of
Termination. 
 (a) Upon termination of this Agreement pursuant to this Article IX, this Agreement shall forthwith become
void and there shall be no further obligations or liabilities on the part of the Parties; provided, that (i) the obligations of the Debtors to pay the Expense Reimbursement pursuant to Article III and to satisfy their
indemnification obligations pursuant to Article VIII and to pay the Commitment Premium pursuant to Section 9.4(b) shall survive the termination of this Agreement and shall remain in full force and effect, in each case, until
such obligations have been satisfied, (ii) the provisions set forth in Article VIII, this Section 9.4 and Article X shall survive the termination of this Agreement in accordance with their terms and (iii) subject
to Section 10.10, nothing in this Section 9.4 shall relieve any Party from liability for its gross negligence or any willful or intentional breach of this Agreement. For purposes of this Agreement, “willful or
intentional breach” means a breach of this Agreement that is a consequence of an act undertaken by the breaching Party with the knowledge that the taking of such act would, or would reasonably be expected to, cause a breach of this
Agreement. 
 (b) If this Agreement is terminated for any reason other than by the Company under Section 9.3(b), the
Debtors shall, promptly after the date of such termination, pay the Commitment Premium entirely in cash to the Commitment Parties or their designees, in accordance with Section 3.2. To the extent that all amounts due in respect of the
Commitment Premium pursuant to this Section 9.4(b) have actually been paid by the Debtors to the Commitment Parties in connection with a termination of this Agreement, the Commitment Parties shall not have any additional recourse against
the Debtors for any obligations or liabilities relating to or arising from this Agreement, except for liability for gross negligence or willful or intentional breach of this Agreement pursuant to Section 9.4(a). Except as set forth in
this Section 9.4(b), the Commitment Premium shall not be payable upon the termination of this Agreement. The Commitment Premium shall, pursuant to the BCA Approval Order, constitute allowed administrative expenses of the Debtors’
estate under sections 503(b) and 507 of the Bankruptcy Code. 
 ARTICLE X 

GENERAL PROVISIONS 

Section 10.1 Notices. All notices and other communications in connection with this Agreement shall be in writing and shall be
deemed given if delivered personally, sent via electronic facsimile (with confirmation), mailed by registered or certified mail (return receipt requested) or delivered by an express courier (with confirmation) to the Parties at the following
addresses (or at such other address for a Party as may be specified by like notice): 

  
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	 	(a)	If to the Company or any of the other Debtors: 

  

			
	   Linn Energy, LLC

	   JPMorgan Chase Tower

	   600 Travis, Suite 5100

	   Houston, Texas 77002

	                  Tel:	 	(281) 840-4000
	                  Fax:	 	(832) 426-5956
	                  Attn:	 	Candice Wells
	                  Email:  	 	cwells@linnenergy.com

  

			
	   with copies (which shall not constitute notice) to:

	
	   Kirkland & Ellis LLP

	   601 Lexington Avenue

	   New York, New York 10022,

	                  Tel:        	 	(212) 446-4800
	                  Fax:	 	(212) 446-4900
	                  Attn:	 	Paul Basta, P.C.; Stephen E. Hessler, P.C.; Brian Lennon, Esq.
	                  E-mail:	 	paul.basta@kirkland.com;
		 	stephen.hessler@kirkland.com;
		 	brian.lennon@kirkland.com

 and 

Kirkland & Ellis LLP 

300 North LaSalle 
 Chicago,
Illinois 60654 
 Tel:      (312) 862-2000 

Fax:     (312) 862-2200 

Attn:    Alexandra Schwarzman, Esq. 

Email:  alexandra.schwarzman@kirkland.com 
  

	 	(b)	If to the Commitment Parties: 

 To each Commitment Party at the addresses or e-mail addresses
set forth below the Commitment Party’s signature in its signature page to this Agreement. 
 with a copy (which shall not
constitute notice) to: 
 Milbank, Tweed, Hadley & McCloy LLP 

28 Liberty Street 
 New York, New
York 10005-1413 
 Tel:        (212) 530-5000 

Fax:       (212) 530-5219 

Attn:      Mark Mandel; Paul Denaro; Brian Kelly; Michael Price 

  
 63 

 Email:  mmandel@milbank.com 

pdenaro@milbank.com 

bkelly@milbank.com 

mprice@milbank.com 

and 
 O’Melveny &
Myers LLP 
 7 Times Square 

New York, New York 10036 
 Tel:
 (212) 326-2000 
 Fax: (212) 326-2061 

Attn: John Rapisardi and David Johnson, Jr. 

Email: jrapisardi@omm.com 

djohnson@omm.com 

Section 10.2 Assignment; Third Party Beneficiaries. Neither this Agreement nor any of the rights, interests or obligations under
this Agreement shall be assigned by any Party (whether by operation of Law or otherwise) without the prior written consent of the Company and the Requisite Commitment Parties, other than an assignment by a Commitment Party expressly permitted by
Section 2.3 or Section 2.6 and any purported assignment in violation of this Section 10.2 shall be void ab initio. Except as provided in Article VIII with respect to the Indemnified Persons, this
Agreement (including the documents and instruments referred to in this Agreement) is not intended to and does not confer upon any Person any rights or remedies under this Agreement other than the Parties. 

Section 10.3 Prior Negotiations; Entire Agreement. 

(a) This Agreement (including the agreements attached as Exhibits to and the documents and instruments referred to in this Agreement)
constitutes the entire agreement of the Parties and supersedes all prior agreements, arrangements or understandings, whether written or oral, among the Parties with respect to the subject matter of this Agreement, except that the Parties hereto
acknowledge that any confidentiality agreements heretofore executed among the Parties and the Restructuring Support Agreement (including the Restructuring Term Sheet) will each continue in full force and effect. 

(b) Notwithstanding anything to the contrary in the Plan (including any amendments, supplements or modifications thereto) or the Confirmation
Order (and any amendments, supplements or modifications thereto) or an affirmative vote to accept the Plan submitted by any Commitment Party, nothing contained in the Plan (including any amendments, supplements or modifications thereto) or
Confirmation Order (including any amendments, supplements or modifications thereto) shall alter, amend or modify the rights of the Commitment Parties under this Agreement unless such alteration, amendment or modification has been made in accordance
with Section 10.7. 
 Section 10.4 Governing Law; Venue. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE 

  
 64 

 
STATE OF NEW YORK, WITHOUT REGARD TO SUCH STATE’S CHOICE OF LAW PROVISIONS WHICH WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION. BY ITS EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES FOR ITSELF THAT ANY LEGAL ACTION, SUIT, OR PROCEEDING AGAINST IT WITH RESPECT TO ANY MATTER ARISING UNDER OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT RENDERED IN ANY SUCH ACTION, SUIT, OR PROCEEDING, MAY BE BROUGHT IN THE BANKRUPTCY COURT, AND BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH OF THE PARTIES IRREVOCABLY ACCEPTS AND SUBMITS ITSELF TO THE EXCLUSIVE
JURISDICTION OF SUCH COURT, GENERALLY AND UNCONDITIONALLY, WITH RESPECT TO ANY SUCH ACTION, SUIT OR PROCEEDING. THE PARTIES HEREBY AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING TO AN ADDRESS PROVIDED
IN WRITING BY THE RECIPIENT OF SUCH MAILING, OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND SUFFICIENT SERVICE THEREOF AND HEREBY WAIVE ANY OBJECTIONS TO SERVICE ACCOMPLISHED IN THE MANNER HEREIN PROVIDED. 

Section 10.5 Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY JURISDICTION IN ANY ACTION, SUIT
OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE AMONG THE PARTIES UNDER THIS AGREEMENT, WHETHER IN CONTRACT, TORT OR OTHERWISE. 

Section 10.6 Counterparts. This Agreement may be executed in any number of counterparts, all of which will be considered one and
the same agreement and will become effective when counterparts have been signed by each of the Parties and delivered to each other Party (including via facsimile or other electronic transmission), it being understood that each Party need not sign
the same counterpart. 
 Section 10.7 Waivers and Amendments; Rights Cumulative; Consent. This Agreement may be amended,
restated, modified or changed only by a written instrument signed by the Company and the Requisite Commitment Parties; provided, that (a) any Commitment Party’s prior written consent shall be required for any amendment that would,
directly or indirectly: (i) modify such Commitment Party’s Backstop Commitment Percentage, (ii) increase the Per Share Discounted Purchase Price or the Per Share Purchase Price, (iii) decrease the Commitment Premium or adversely
modify in any material respect the method of payment thereof, (iv) increase the Backstop Commitment of such Commitment Party or (v) have a materially adverse and disproportionate effect on such Commitment Party; (b) the prior written
consent of each Initial Commitment Party shall be required for any amendment to the definition of “Requisite Commitment Parties”; and (c) no amendment or modification of the rights or obligations of the Unsecured Commitment Parties or
the Secured Commitment Parties or the terms of the Unsecured Rights Offering or the Secured Rights Offering as set forth under this Agreement may be made unless either (i) such amendments or modifications are applied to the rights or
obligations of each of the Unsecured Commitment Parties and the Secured Commitment Parties mutatis mutandis or applied to the terms of the Unsecured Rights Offering and the Secured Rights Offering mutatis mutandis, as applicable or
(ii) Unsecured Commitment Parties 

  
 65 

 
holding at least 662/3% of the aggregate Unsecured Backstop Commitment Percentage and Secured Commitment Parties holding at least 662/3% of the aggregate Secured Backstop Commitment Percentage consent to such amendment or modification. Notwithstanding the foregoing, the Backstop Commitment Schedule shall be revised as necessary
without requiring a written instrument signed by the Company and the Requisite Commitment Parties to reflect changes in the composition of the Commitment Parties and Backstop Commitment Percentages as a result of Transfers permitted in accordance
with the terms and conditions of this Agreement. The terms and conditions of this Agreement (other than the conditions set forth in Section 7.1 and Section 7.3, the waiver of which shall be governed solely by Article
VII) may be waived (A) by the Debtors only by a written instrument executed by the Company and (B) by the Requisite Commitment Parties only by a written instrument executed by the Requisite Commitment Parties. No delay on the part of
any Party in exercising any right, power or privilege pursuant to this Agreement will operate as a waiver thereof, nor will any waiver on the part of any Party of any right, power or privilege pursuant to this Agreement, nor will any single or
partial exercise of any right, power or privilege pursuant to this Agreement, preclude any other or further exercise thereof or the exercise of any other right, power or privilege pursuant to this Agreement. 

Section 10.8 Headings. The headings in this Agreement are for reference purposes only and will not in any way affect the meaning
or interpretation of this Agreement. 
 Section 10.9 Specific Performance. The Parties agree that irreparable damage would
occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to an injunction or injunctions without the necessity of posting a bond to prevent breaches of this Agreement or
to enforce specifically the performance of the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity. Unless otherwise expressly stated in this Agreement, no right or remedy described or provided
in this Agreement is intended to be exclusive or to preclude a Party from pursuing other rights and remedies to the extent available under this Agreement, at law or in equity. 

Section 10.10 Damages. Notwithstanding anything to the contrary in this Agreement, none of the Parties will be liable for, and
none of the Parties shall claim or seek to recover, any punitive, special, indirect or consequential damages or damages for lost profits. 

Section 10.11 No Reliance. No Commitment Party or any of its Related Parties shall have any duties or obligations to the other
Commitment Parties in respect of this Agreement, the Plan or the transactions contemplated hereby or thereby, except those expressly set forth herein. Without limiting the generality of the foregoing, (a) no Commitment Party or any of its
Related Parties shall be subject to any fiduciary or other implied duties to the other Commitment Parties, (b) no Commitment Party or any of its Related Parties shall have any duty to take any discretionary action or exercise any discretionary
powers on behalf of any other Commitment Party, (c) no Commitment Party or any of its Related Parties shall have any duty to the other Commitment Parties to obtain, through the exercise of diligence or otherwise, to investigate, confirm, or
disclose to the other Commitment Parties any information relating to the Company or any of its Subsidiaries that may have been communicated to or obtained by such Commitment Party or any of its Affiliates in any capacity, (d) no Commitment
Party may rely, 

  
 66 

 
and each Commitment Party confirms that it has not relied, on any due diligence investigation that any other Commitment Party or any Person acting on behalf of such other Commitment Party may
have conducted with respect to the Company or any of its Affiliates or any of their respective securities, and (e) each Commitment Party acknowledges that no other Commitment Party is acting as a placement agent, initial purchaser, underwriter,
broker or finder with respect to its Unsubscribed Shares or Backstop Commitment Percentage of its Backstop Commitment. 

Section 10.12 Publicity. At all times prior to the Closing Date or the earlier termination of this Agreement in accordance with
its terms, the Company and the Commitment Parties shall consult with each other prior to issuing any press releases (and provide each other a reasonable opportunity to review and comment upon such release) or otherwise making public announcements
with respect to the transactions contemplated by this Agreement, it being understood that nothing in this Section 10.12 shall prohibit any Party from filing any motions or other pleadings or documents with the Bankruptcy Court in
connection with the Chapter 11 Cases. 
 Section 10.13 Settlement Discussions. This Agreement and the transactions contemplated
herein are part of a proposed settlement of a dispute between the Parties. Nothing herein shall be deemed an admission of any kind. Pursuant to Section 408 of the U.S. Federal Rules of Evidence and any applicable state rules of evidence,
this Agreement and all negotiations relating thereto shall not be admissible into evidence in any Legal Proceeding, except to the extent filed with, or disclosed to, the Bankruptcy Court in connection with the Chapter 11 Cases (other than a
Legal Proceeding to approve or enforce the terms of this Agreement). 
 Section 10.14 No Recourse. Notwithstanding anything
that may be expressed or implied in this Agreement, and notwithstanding the fact that certain of the Parties may be partnerships or limited liability companies, each Party covenants, agrees and acknowledges that no recourse under this Agreement or
any documents or instruments delivered in connection with this Agreement shall be had against any Party’s Affiliates, or any of such Party’s Affiliates’ or respective Related Parties in each case other than the Parties to this
Agreement and each of their respective successors and permitted assignees under this Agreement, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable Law, it being expressly agreed and
acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any of the Related Parties, as such, for any obligation or liability of any Party under this Agreement or any documents or instruments
delivered in connection herewith for any claim based on, in respect of or by reason of such obligations or liabilities or their creation; provided, however, nothing in this Section 10.14 shall relieve or otherwise limit the
liability of any Party hereto or any of their respective successors or permitted assigns for any breach or violation of its obligations under this Agreement or such other documents or instruments. For the avoidance of doubt, none of the Parties
will have any recourse, be entitled to commence any proceeding or make any claim under this Agreement or in connection with the transactions contemplated hereby except against any of the Parties or their respective successors and permitted assigns,
as applicable. 

  
 67 

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

					
	LINN ENERGY, LLC
		
	By:	 	 /s/ David B. Rottino

		 	Name:	 	David B. Rottino
		 	Title:	 	Executive Vice President and Chief Financial Officer

 [Signature page to Backstop Commitment Agreement] 

 [Creditor signature pages redacted.] 

 Schedule 1A 

Unsecured Backstop Commitment Schedule 

[REDACTED] 

 Schedule 1B 

Secured Backstop Commitment Schedule 

[REDACTED] 

 Company Disclosure Schedule 

Section 1.1 

Contracts 
 ISDA Master Agreement and
Schedule, by and between Linn Energy Holdings, LLC and Morgan Stanley Capital Group Inc., dated as of August 31, 2016 
 ISDA Master Agreement and
Schedule, by and between Linn Energy Holdings, LLC and BP Energy Company, dated as of August 31, 2016 
 ISDA Master Agreement and Schedule, by and
between Linn Energy Holdings, LLC and Macquarie Bank Limited, dated as of August 31, 2016 
 ISDA Master Agreement and Schedule, by and between Linn
Energy Holdings, LLC and JPMorgan Chase Bank, N.A., dated as of September 29, 2016 
 ISDA Master Agreement and Schedule, by and between Linn Energy
Holdings, LLC and, Cargill Incorporated, dated as of October 14, 2016 

 Exhibit A 

Rights Offering Procedures 

 LINN ENERGY, LLC (THE “COMPANY”), 

ON BEHALF OF AN ENTITY TO BE FORMED LATER 

RIGHTS OFFERING PROCEDURES 
 Each
Rights Offering Share (as defined below) is being distributed and issued by the Debtors without registration under the Securities Act of 1933, as amended (the “Securities Act”)1,
in reliance upon the exemption provided in Section 1145 of the Bankruptcy Code. None of the LINN Rights or the Rights Offering Shares issuable upon exercise of such rights distributed pursuant to these Rights Offering Procedures have been or
will be registered under the Securities Act, nor any state or local law requiring registration for offer and sale of a security. 
 The LINN Rights
are not transferable, except as permitted by the LINN Backstop Agreement (with respect to the LINN Backstop Parties) or as agreed to by the Company and the Requisite Commitment Parties. 

The Disclosure Statement (as defined below) has previously been distributed in connection with the Debtors’ solicitation of votes to accept or reject
the Plan (as defined below) and that document sets forth important information, including risk factors, that should be carefully read and considered by each Eligible Holder (as defined below) prior to making a decision to participate in the Rights
Offerings. Additional copies of the Disclosure Statement are available upon request from the Subscription Agent. 
 The Rights Offerings are
being conducted by the Company on behalf of Reorganized LINN in good faith and in compliance with the Bankruptcy Code. In accordance with Section 1125(e) of the Bankruptcy Code, a debtor or any of its agents that participate, in good faith and
in compliance with the applicable provisions of the Bankruptcy Code, in the offer, issuance, sale, or purchase of a security offered or sold under the plan of the debtor, of an affiliate participating in a joint plan with the debtor, or of a newly
organized successor to the debtor under the plan, is not liable, on account of such participation, for violation of any applicable law, rule, or regulation governing the offer, issuance, sale or purchase of securities. 

 
  

	1 	Terms used and not defined herein shall have the meaning assigned to them in the Joint Chapter 11 Plan of Reorganization of Linn Energy, LLC and Its Debtor Affiliates (as may be amended,
modified, or supplemented from time to time, the “Plan”). 

 Eligible Holders should note the following times relating to the Rights Offerings: 

 

					
	 Date
	  	 Calendar Date
	  	 Event

	 Record Date
	  	[•],2016	  	 The date and time fixed by the Company for

the determination of the holders eligible to
 participate in the
Rights Offerings.

			
	 Subscription Commencement Date
	  	[•],2016	  	Commencement of the Rights Offerings.
			
	 Subscription Expiration Deadline
	  	4:00 p.m. Central Time on [•], 2016	  	 The deadline for Eligible Holders to subscribe for Rights Offering Shares. An Eligible Holder’s applicable Beneficial Holder
Subscription Form(s) (with accompanying IRS Form W-9 or appropriate IRS Form W-8, as applicable) must be received by the Eligible Holder’s Nominee (as defined below) in sufficient time to allow such Nominee to deliver the Master Subscription
Form to the Subscription Agent by the Subscription Expiration Deadline.
  
 Eligible
Holders who are not LINN Backstop Parties must deliver the aggregate Purchase Price (as defined below) by the Subscription Expiration Deadline.
  

Eligible Holders who are LINN Backstop Parties must deliver the aggregate Purchase Price no
later

					
		  		  	than the deadline specified in the Funding Notice (as defined below) in accordance with the terms of the LINN Backstop Agreement.

 To Eligible Holders and Nominees of Eligible Holders: 

On [•], 2016, the Debtors filed the Plan with the United States Bankruptcy Court for the Southern District of Texas, Victoria Division,
and the Disclosure Statement for the Joint Chapter 11 Plan of Reorganization of Linn Energy, LLC and Its Debtor Affiliates (as may be amended from time to time in accordance with its terms, the “Disclosure Statement”).
Pursuant to the Plan, each holder of an Allowed LINN Unsecured Notes Claim as of the Record Date (each such holder, an “Eligible Unsecured Holder”) has a right to participate in the Unsecured Rights Offering (as defined below), and
each holder of an Allowed LINN Second Lien Notes Claim as of the Record Date (each such holder, an “Eligible Secured Holder” and, together with the Eligible Unsecured Holders, “Eligible Holders”) has a right to
participate in the Secured Rights Offering (as defined below), in each case, in accordance with the terms and conditions of these Rights Offering Procedures. The Unsecured Rights Offering and the Secured Rights Offering are collectively referred to
herein as the “Rights Offerings”. 
 Pursuant to the Plan, each Eligible Unsecured Holder will receive rights to subscribe
for its pro rata portion of a rights offering of Reorganized LINN Common Stock in an aggregate amount of $319,004,408 (the “Unsecured Rights Offering,” and such shares, the “Unsecured Rights Offering
Shares”), provided that it timely and properly executes and delivers its applicable Beneficial Holder Subscription Form(s) (with accompanying IRS Form W-9 or appropriate IRS Form W-8, as applicable) to the Subscription Agent or its Nominee,
as applicable, in advance of the Subscription Expiration Deadline. Each such Nominee will receive a Master Subscription Form which it shall use to summarize the LINN Rights exercised by each Eligible Unsecured Holder that timely returns the
applicable properly filled out Beneficial Holder Subscription Form(s) to such Nominee. Beneficial Holder Subscription Forms should only be returned directly to the Subscription Agent if the Eligible Unsecured Holder is the direct holder of record on
the books of the applicable indenture trustee and does not hold its LINN Unsecured Notes Claim through a Nominee. 
 Pursuant to the Plan,
each Eligible Secured Holder will receive rights to subscribe for its pro rata portion of a rights offering of Reorganized LINN Common Stock in an aggregate amount of $210,995,592 (the “Secured Rights Offering,” and such
shares, the “Secured Rights Offering Shares” and, together with the Unsecured Rights Offering Shares, the “Rights Offering Shares”), provided that it timely and properly executes and delivers its applicable
Beneficial Holder Subscription Form(s) (with accompanying IRS Form W-9 or appropriate IRS Form W-8, as applicable) to the Subscription Agent or its Nominee, as applicable, in advance of the Subscription Expiration Deadline. Each such Nominee will
receive a Master Subscription Form which it shall use to summarize the LINN Rights exercised by each Eligible Secured Holder that timely returns the applicable properly filled out Beneficial Holder Subscription Form(s) to such Nominee. Beneficial
Holder Subscription Forms should only be returned directly to the Subscription Agent if the Eligible Secured Holder is the direct holder of record on the books of the applicable indenture trustee and does not hold its LINN Second Lien Notes Claim
through a Nominee. 

 Please note that all Beneficial Holder Subscription Forms (with accompanying IRS Form W-9 or
appropriate IRS Form W-8, as applicable) must be returned to the applicable Nominee in sufficient time to allow such Nominee to process and deliver the Master Subscription Form and copies of all Beneficial Holder Subscription Forms, and the
accompanying IRS Forms prior to the Subscription Expiration Deadline. To the extent of any discrepancy between the Master Subscription Form and the Beneficial Holder Subscription Form(s) regarding the Eligible Holder’s principal amount, the
Master Subscription Form shall govern. While the amount of time necessary for a Nominee to process and deliver the Master Subscription Form to the Subscription Agent will vary from Nominee to Nominee, Eligible Holders are urged to consult with their
Nominees to determine the necessary deadline to return their Beneficial Holder Subscription Forms. Failure to submit such Beneficial Holder Subscription Forms on a timely basis will result in forfeiture of an Eligible Holder’s rights to
participate in the Rights Offerings. None of the Company, the Subscription Agent or any of the LINN Backstop Parties will have any liability for any such failure. 

No Eligible Holder shall be entitled to participate in the Rights Offerings unless the aggregate Purchase Price (as defined below) for the
Rights Offering Shares it subscribes for is received by the Subscription Agent (i) in the case of an Eligible Holder that is not a LINN Backstop Party, by the Subscription Expiration Deadline, and (ii) in the case of an Eligible Holder
that is a LINN Backstop Party, no later than the deadline specified in a written notice (a “Funding Notice”) delivered by or on behalf of the Debtors to the LINN Backstop Parties in accordance with Section [2.4] of the LINN Backstop
Agreement (the “Backstop Funding Deadline”), provided that the LINN Backstop Parties may deposit their aggregate Purchase Price in the Escrow Account (as defined below), in accordance with the terms of the LINN Backstop Agreement.
No interest is payable on any advanced funding of the Purchase Price. If the Rights Offerings are terminated for any reason, the aggregate Purchase Price previously received by the Subscription Agent will be returned to Eligible Holders as provided
in Section 6 hereof. No interest will be paid on any returned Purchase Price. Any Eligible Holder who is not a LINN Backstop Party submitting payment via its Nominee must coordinate such payment with its Nominee in sufficient time to allow the
Nominee to forward such payment to the Subscription Agent by the Subscription Expiration Deadline. 
 In order to participate in the
Rights Offerings, an Eligible Holder must complete all of the steps outlined below. If all of the steps outlined below are not completed by the Subscription Expiration Deadline or the Backstop Funding Deadline, as applicable, an Eligible Holder
shall be deemed to have forever and irrevocably relinquished and waived its right to participate in the Rights Offerings. 
 1.
Rights Offerings 
 Eligible Unsecured Holders have the right, but not the obligation, to participate in the Unsecured Rights Offering,
and Eligible Secured Holders have the right, but not the obligation, to participate in the Secured Rights Offering. 
 Eligible Unsecured
Holders shall receive rights to subscribe for their pro rata portion of the Unsecured Rights Offering Shares, and Eligible Secured Holders shall receive rights to subscribe for their pro rata portion of the Secured Rights Offering Shares.

 Subject to the terms and conditions set forth in the Plan and these Rights Offering Procedures,
each Eligible Unsecured Holder is entitled to subscribe for up to: 
  

	 	•	 	[•] Unsecured Rights Offering Shares per $1,000 of Principal Amount of the 6.500% Senior Notes due May 2019; 

  

	 	•	 	[•] Unsecured Rights Offering Shares per $1,000 of Principal Amount of the 6.250% Senior Notes due November 2019; 

  

	 	•	 	[•] Unsecured Rights Offering Shares per $1,000 of Principal Amount of the 8.625% Senior Notes due April 2020; 

  

	 	•	 	[•] Unsecured Rights Offering Shares per $1,000 of Principal Amount of the 7.750% Senior Notes due February 2021; or 

  

	 	•	 	[•] Unsecured Rights Offering Shares per $1,000 of Principal Amount of the 6.500% Senior Notes due September 2021; 

in each case at a purchase price of $[•] per share (the “Purchase Price”). The difference in the number of Rights Offering
Shares that an Eligible Unsecured Holder is entitled to subscribe for with respect to each series of LINN Unsecured Notes is to take into account the differing amounts of pre-petition accrued and unpaid interest thereon. 

Subject to the terms and conditions set forth in the Plan and these Rights Offering Procedures, each Eligible Secured Holder is entitled to
subscribe for up to: 
  

	 	•	 	[•] Secured Rights Offering Shares per $1,000 of Principal Amount of the 12.000% Senior Secured Second Lien Notes due December 2020; 

at the Purchase Price. The difference in the number of Rights Offering Shares that an Eligible Secured Holder is entitled to subscribe for with
respect to the LINN Second Lien Notes compared to an Eligible Unsecured Holder is to take into account the differing amounts of pre-petition accrued and unpaid interest thereon as compared to the LINN Unsecured Notes and the amount of LINN Second
Lien Notes Claims being allowed under the Plan being counted at double face value. 
 There will be no over-subscription privilege in
the Rights Offerings. Any Rights Offering Shares that are unsubscribed by the Eligible Holders entitled thereto will not be offered to other Eligible Holders but will be purchased by the applicable LINN Backstop Parties in accordance with the LINN
Backstop Agreement. Subject to the terms and conditions of the LINN Backstop Agreement, each LINN Backstop Party is obligated to purchase its pro rata portion of the applicable Rights Offering Shares. 

Any Eligible Holder that subscribes for Rights Offering Shares and is deemed to be an “underwriter” under Section 1145(b) of
the Bankruptcy Code will be subject to restrictions under 

 
the Securities Act on its ability to resell those securities. Resale restrictions are discussed in more detail in Article XII of the Disclosure Statement, entitled “Certain Securities Law
Matters.” 
 SUBJECT TO THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING PROCEDURES AND THE LINN BACKSTOP AGREEMENT IN THE CASE OF
ANY LINN BACKSTOP PARTY, ALL SUBSCRIPTIONS SET FORTH IN THE APPLICABLE BENEFICIAL HOLDER SUBSCRIPTION FORM(S) ARE IRREVOCABLE. 
 2.
Subscription Period 
 The Rights Offerings will commence on the Subscription Commencement Date and will expire at the Subscription
Expiration Deadline. Each Eligible Holder intending to purchase Rights Offering Shares in any Rights Offering must affirmatively elect to exercise its LINN Rights in the manner set forth in the applicable Subscription Form by the Subscription
Expiration Deadline. 
 Any exercise of LINN Unsecured Rights by an Eligible Unsecured Holder after the Subscription Expiration Deadline
will not be allowed and any purported exercise received by the Subscription Agent after the Subscription Expiration Deadline, regardless of when the documents or payment relating to such exercise were sent, will not be honored, except that the
Company shall have the discretion, with the consent of the members of the Steering Committee of the Ad Hoc Group of Unsecured Noteholders holding more than sixty-six and two-thirds percent (66-2/3%) of the Allowed LINN Unsecured Notes Claims held by
all members of the Steering Committee of the Ad Hoc Group of Unsecured Noteholders at the time of the relevant determination (the “Unsecured Requisite Commitment Parties”), to allow any exercise of LINN Unsecured Rights after the
Subscription Expiration Deadline. 
 Any exercise of LINN Secured Rights by an Eligible Secured Holder after the Subscription Expiration
Deadline will not be allowed and any purported exercise received by the Subscription Agent after the Subscription Expiration Deadline, regardless of when the documents or payment relating to such exercise were sent, will not be honored, except that
the Company shall have the discretion, with the consent of the members of the Steering Committee of the Ad Hoc Group of Secured Noteholders holding more than sixty-six and two-thirds percent (66-2/3%) of the Allowed LINN Second Lien Notes Claims
held by all members of the Steering Committee of the Ad Hoc Group of Secured Noteholders at the time of the relevant determination (the “Secured Requisite Commitment Parties” and together with the Unsecured Requisite Commitment
Parties, the “Requisite Commitment Parties”), to allow any exercise of LINN Secured Rights after the Subscription Expiration Deadline. 

The Subscription Expiration Deadline may be extended with the consent of the Requisite Commitment Parties, or as required by law. 

 3. Delivery of Subscription Documents 

Each Eligible Holder may exercise all or any portion of such Eligible Holder’s LINN Rights, but subject to the terms and conditions
contained herein. In order to facilitate the exercise of the LINN Rights, beginning on the Subscription Commencement Date, the applicable Subscription Form and these Rights Offering Procedures will be sent to each Eligible Holder, together with
appropriate instructions for the proper completion, due execution and timely delivery of the executed Subscription Form and the payment of the applicable aggregate Purchase Price for its Rights Offering Shares. 

4. Exercise of LINN Rights 

(a) In order to validly exercise its LINN Rights, each Eligible Holder that is not a LINN Backstop Party must: 

 

	 	i.	return duly completed and executed applicable Beneficial Holder Subscription Form(s) (with accompanying IRS Form W-9 or appropriate IRS Form W-8, as applicable) to the Subscription Agent or its Nominee, as applicable,
so that, if applicable, such documents may be transmitted to the Subscription Agent by the Nominee, so that such documents are actually received by the Subscription Agent by the Subscription Expiration Deadline; and 

 

	 	ii.	at the same time it returns its Beneficial Holder Subscription Form(s) to its Nominee, but in no event later than the Subscription Expiration Deadline, pay, or arrange for the payment by its Nominee of, the applicable
Purchase Price to the Subscription Agent by wire transfer ONLY of immediately available funds in accordance with the instructions included in the applicable Beneficial Holder Subscription Form(s). 

(b) In order to validly exercise its LINN Rights, each Eligible Holder that is a LINN Backstop Party must: 

 

	 	i.	return duly completed and executed applicable Beneficial Holder Subscription Form(s) (with accompanying IRS Form W-9 or appropriate IRS Form W-8, as applicable) to the Subscription Agent or its Nominee, as applicable so
that, if applicable, such documents may be transmitted to the Subscription Agent by the Nominee, so that such documents are actually received by the Subscription Agent by the Subscription Expiration Deadline; and 

 

	 	ii.	no later than the Backstop Funding Deadline, pay the applicable Purchase Price to the Subscription Agent or to the escrow account established and maintained by a third party satisfactory to the LINN Backstop Parties and
the Company (the “Escrow Account”)2 by wire transfer ONLY of immediately available funds in accordance with the wire instructions included in the Funding Notice.

  
  

	2 	NTD: BCA Parties to select an escrow agent prior to launch of the rights offerings 

 ALL LINN BACKSTOP PARTIES MUST PAY THEIR APPLICABLE PURCHASE PRICE DIRECTLY TO THE SUBSCRIPTION AGENT OR TO
THE ESCROW ACCOUNT, AS APPLICABLE, AND SHOULD NOT PAY THEIR NOMINEE(S). 
  

	 	(c)	With respect to 4(a) and (b) above, each Eligible Holder must duly complete, execute and return the applicable Beneficial Holder Subscription Form(s) in accordance with the instructions herein to its Nominee in
sufficient time to allow its Nominee to process its instructions and deliver to the Subscription Agent the Master Subscription Form, its completed Beneficial Holder Subscription Form(s) (with accompanying IRS Form W-9 or appropriate IRS Form W-8, as
applicable), and, solely with respect to the Eligible Holders that are not LINN Backstop Parties, payment of the applicable Purchase Price, payable for the Rights Offering Shares elected to be purchased by such Eligible Holder, by the Subscription
Expiration Deadline. Eligible Holders that are LINN Backstop Parties must deliver their payment of the applicable Purchase Price payable for the Rights Offering Shares elected to be purchased by such LINN Backstop Party directly to the Subscription
Agent or to the Escrow Account, as applicable, no later than the Backstop Funding Deadline. 

  

	 	(d)	In the event that the funds received by the Subscription Agent or the Escrow Account, as applicable, from any Eligible Holder do not correspond to the Purchase Price payable for the Rights Offering Shares elected to be
purchased by such Eligible Holder, the number of the Rights Offering Shares deemed to be purchased by such Eligible Holder will be the lesser of (a) the number of the Rights Offering Shares elected to be purchased by such Eligible Holder and
(b) a number of the Rights Offering Shares determined by dividing the amount of the funds received by the Purchase Price, in each case up to such Eligible Holder’s pro rata portion of Rights Offering Shares. 

 

	 	(e)	The cash paid to the Subscription Agent in accordance with these Rights Offering Procedures will be deposited and held by the Subscription Agent in a segregated account until released to the Debtors in connection with
the settlement of the Rights Offerings on the Effective Date. The Subscription Agent may not use such cash for any other purpose prior to the Effective Date and may not encumber or permit such cash to be encumbered with any lien or similar
encumbrance. The cash held by the Subscription Agent hereunder shall not be deemed part of the Debtors’ bankruptcy estates. 

5. Transfer Restriction; Revocation 

The LINN Rights are not transferable, except as permitted by the LINN Backstop Agreement (with respect to the LINN Backstop Parties) or as
agreed to by the Company and the Requisite Commitment Parties. If any LINN Rights are transferred by an Eligible Holder in contravention of the foregoing, the LINN Rights will be cancelled, and neither such Eligible Holder nor the purported
transferee will receive any Rights Offering Shares otherwise purchasable on account of such transferred LINN Rights. Any Notes traded after the Record Date will not be traded with the LINN Rights attached. 

 Once an Eligible Holder has properly exercised its LINN Rights, subject to the terms and
conditions contained in these Rights Offering Procedures and the LINN Backstop Agreement in the case of any LINN Backstop Party, such exercise will be irrevocable. 

6. Termination/Return of Payment 

Unless the Effective Date has occurred, the Rights Offerings will be deemed automatically terminated without any action of any party upon the
earlier of (i) termination of the Plan or rejection of the Plan by all classes entitled to vote, (ii) termination of the Restructuring Support Agreement in accordance with its terms, (iii) termination of the LINN Backstop Agreement in
accordance with its terms and (iv) the Outside Date (as defined in the LINN Backstop Agreement) (as such date may be extended pursuant to the terms of the LINN Backstop Agreement). In the event the Rights Offerings are terminated, any payments
received pursuant to these Rights Offering Procedures will be returned, without interest, to the applicable Eligible Holder as soon as reasonably practicable, but in any event, within six (6) Business Days after the date of termination. 

7. Settlement of the Rights Offerings and Distribution of the Rights Offering Shares 

The settlement of the Rights Offerings is conditioned on confirmation of the Plan by the Bankruptcy Court, compliance by the Debtors with
these Rights Offering Procedures, and the simultaneous occurrence of the Effective Date. The Debtors intend that the Rights Offering Shares will be issued to the Eligible Holders and/or to any party that an Eligible Holder so designates in the
Beneficial Holder Subscription Form(s), in book-entry form, and that DTC, or its nominee, will be the holder of record of such Rights Offering Shares. To the extent DTC is unwilling or unable to make the Rights Offering Shares eligible on the DTC
system, the Rights Offering Shares will be issued directly to the Eligible Holder or its designee. 
 8. Fractional Shares 

No fractional rights or Rights Offering Shares will be issued in the Rights Offerings. All share allocations (including each Eligible
Holder’s Rights Offering Shares) will be calculated and rounded down to the nearest whole share. 
 9. Validity of Exercise of LINN
Rights 
 All questions concerning the timeliness, viability, form and eligibility of any exercise of LINN Rights will be determined in
good faith by the Debtors in consultation with the Requisite Commitment Parties, and, if necessary, subject to a final and binding determination by the Bankruptcy Court. The Debtor, with the consent of the Requisite Commitment Parties, may waive or
reject any defect or irregularity in, or permit such defect or irregularity to be corrected within such time as they may determine in good faith, the purported exercise of any LINN Rights. Subscription Forms will be deemed not to have been received
or accepted until all 

 
irregularities have been waived or cured within such time as the Debtors determine in good faith in consultation with the Requisite Commitment Parties. 

Before exercising any LINN Rights, Eligible Holders should read the Disclosure Statement and the Plan for information relating to the
Debtors and the risk factors to be considered. 
 All calculations, including, to the extent applicable, the calculation of (a)(i) the
value of any Eligible Unsecured Holder’s Allowed LINN Unsecured Notes Claims for the purposes of the Unsecured Rights Offering and (ii) any Eligible Unsecured Holder’s Unsecured Rights Offering Shares, shall be made in good faith by
the Company with the consent of the Unsecured Requisite Commitment Parties and (b)(i) the value of any Eligible Secured Holder’s Allowed LINN Secured Notes Claims for the purposes of the Secured Rights Offering and (ii) any Eligible
Secured Holder’s Secured Rights Offering Shares, shall be made in good faith by the Company with the consent of the Secured Requisite Commitment Parties and in each case in accordance with any Claim amounts included in the Plan, and any
disputes regarding such calculations shall be subject to a final and binding determination by the Bankruptcy Court. 
 10. Modification
of Procedures 
 With the prior written consent of the Requisite Commitment Parties, the Debtors reserve the right to modify these
Rights Offering Procedures, or adopt additional procedures consistent with these Rights Offering Procedures to effectuate the Rights Offerings and to issue the Rights Offering Shares, provided, however, that the Debtors shall provide prompt written
notice to each Eligible Holder of any material modification to these Rights Offering Procedures made after the Subscription Commencement Date, provided further that any amendments or modifications to the terms of the Rights Offerings are subject to
the provisions of Section 10.7 of the LINN Backstop Agreement. In so doing, and subject to the consent of the Requisite Commitment Parties, the Debtors may execute and enter into agreements and take further action that the Debtors determine in
good faith is necessary and appropriate to effectuate and implement the Rights Offerings and the issuance of the Rights Offering Shares. 

The Debtors shall undertake reasonable procedures to confirm that each participant in the Rights Offerings is in fact an Eligible Holder. 

11. Inquiries And Transmittal of Documents; Subscription Agent 

The Rights Offering Instructions for Eligible Holders attached hereto should be carefully read and strictly followed by the Eligible Holders.

 Questions relating to the Rights Offerings should be directed to the Subscription Agent via email to linnballots@primeclerk.com (please
reference “LINN Rights Offering” in the subject line) or at the following phone number: (844) 794-3479. 
 The risk of
non-delivery of all documents and payments to the Subscription Agent, the Escrow Account and any Nominee is on the Eligible Holder electing to exercise its LINN Rights and not the Debtors, the Subscription Agent, or the LINN Backstop Parties. 

 LINN ENERGY, LLC, 

ON BEHALF OF AN ENTITY TO BE FORMED LATER 

RIGHTS OFFERING INSTRUCTIONS FOR ELIGIBLE HOLDERS 

Terms used and not defined herein shall have the meaning assigned to them in the Plan. 

To elect to participate in the Rights Offerings, you must follow the instructions set out below: 

 

	1.	Insert the principal amount of the Allowed LINN Unsecured Notes Claims or Allowed LINN Second Lien Notes Claims, as applicable, that you held as of the Record Date in Item 1 of your applicable
Beneficial Holder Subscription Form(s) (if you do not know such amount, please contact your Nominee immediately). 

  

	2.	Complete the calculation in Item 2a of your applicable Beneficial Holder Subscription Form(s), which calculates the maximum number of Rights Offering Shares available for you to purchase. Such amount
must be rounded down to the nearest whole share. 

  

	3.	Complete the calculation in Item 2b of your applicable Beneficial Holder Subscription Form(s) to indicate the number of Rights Offering Shares that you elect to purchase and calculate the aggregate
Purchase Price for the Rights Offering Shares that you elect to purchase. 

  

	4.	Confirm whether you are a LINN Backstop Party pursuant to the representation in Item 3 of your applicable Beneficial Holder Subscription Form(s). (This section is only for LINN Backstop Parties,
each of whom is aware of their status as a LINN Backstop Party). 

	5.	Read, complete and sign the certification in Item 5 of your applicable Beneficial Holder Subscription Form(s). Such execution shall indicate your acceptance and approval of the terms and conditions
set forth in these Rights Offering Procedures. 

  

	6.	Read, complete and sign an IRS Form W-9 if you are a U.S. person. If you are a non-U.S. person, read, complete and sign an appropriate IRS Form W-8. These forms may be obtained from the IRS at its website:
www.irs.gov. 

  

	7.	Return your applicable signed Beneficial Holder Subscription Form(s) (with accompanying IRS Form W-9 or appropriate IRS Form W-8, as applicable) to your Nominee in sufficient time to allow your Nominee to
process your instructions and prepare and deliver the Master Subscription Form to the Subscription Agent by the Subscription Expiration Deadline. 

  

	8.	 Arrange for full payment of the aggregate Purchase Price by wire transfer of immediately available
funds, calculated in accordance with Item 2b of your applicable Beneficial Holder Subscription Form(s). For Eligible Holders that are not LINN Backstop Parties, please instruct your Nominee to coordinate payment of the Purchase

 
Price and transmit and deliver such payment to the Subscription Agent by the Subscription Expiration Deadline. An Eligible Holder that is not a LINN Backstop Party should follow the payment
instructions as provided in the Master Subscription Form. Any LINN Backstop Party should follow the payment instructions that will be provided in the Funding Notice, except to the extent of any aggregate Purchase Price previously paid by such
Eligible Holder to the Subscription Agent or the Escrow Account in accordance with the terms of the LINN Backstop Agreement. 
 The Subscription
Expiration Deadline is 4:00 p.m. Central Time on [•], 2016. 
 Please note that the Beneficial Holder Subscription Form(s) (with accompanying
IRS Form W-9 or appropriate IRS Form W-8, as applicable) must be received by your broker, bank, commercial bank, transfer agent, trust company, dealer, or other agent or nominee (as applicable, the
“Nominee”) in sufficient time to allow such Nominee to process and deliver the Master Subscription Form to the Subscription Agent, by the Subscription Expiration Deadline, along with the appropriate funding (with respect to Eligible
Holders that are not LINN Backstop Parties) or the subscription represented by your applicable Beneficial Holder Subscription Form(s) will not be counted and you will be deemed forever to have relinquished and waived your right to participate in the
Rights Offerings. 
 Eligible Holders that are LINN Backstop Parties must deliver the appropriate funding directly to the Subscription Agent or to
the Escrow Account, as applicable, pursuant to the Funding Notice (except to the extent of any funding previously provided by any such Eligible Holder to the Subscription Agent or the Escrow Account in accordance with the terms of the LINN Backstop
Agreement) no later than the Backstop Funding Deadline. 

 Exhibit B-1 

Steering Committee of Ad Hoc Group of Unsecured Noteholders 

[REDACTED] 

 Exhibit B-2 

Steering Committee of Ad Hoc Group of Secured Noteholders 

[REDACTED] 

 Exhibit C 

Form of Transfer Notice 

TRANSFER NOTICE 

[●], 2016 
 BY EMAIL 

Linn Energy, LLC 
 JPMorgan Chase Tower 

600 Travis St #5100 
 Houston, TX 77002 

Attn: Candice Wells 
 E-mail address: cwells@linnenergy.com 

with copies to: 
 O’Melveny & Myers LLP

 7 Times Square 
 New York, NY 10036 

Attn: John Rapisardi, Esq. 
 Joseph Zujkowski, Esq. 

E-mail addresses: jrapisardi@omm.com 
 jzujkowski.com 

Milbank, Tweed, Hadley & McCloy LLP 
 28 Liberty Street

 New York, NY 10005 
 Attn: Brian Kelly, Esq. 

Michael W. Price, Esq. 
 E-mail addresses: bkelly@milbank.com 

mprice@milbank.com 
 Kirkland & Ellis LLP 

610 Lexington Avenue 
 New York, NY 10022 

601 Lexington Avenue 
 New York, New York 10022, 

Attn: Paul Basta, P.C. 
 Stephen E. Hessler, P.C. 

Brian Lennon, Esq. 
 E-mail addresses: paul.basta@kirkland.com

 stephen.hessler@kirkland.com 
 brian.lennon@kirkland.com 

 Kirkland & Ellis LLP 

300 North LaSalle 
 Chicago, Illinois 60654 

Attn: Alexandra Schwarzman, Esq. 
 E-mail address:
alexandra.schwarzman@kirkland.com 
 Ladies and Gentlemen: 
  

	 	Re:	Transfer Notice Under Backstop Commitment Agreement 

 Reference is hereby made to that certain
Backstop Commitment Agreement, dated as of October 25, 2016 (the “Backstop Commitment Agreement”), by and between the Debtors and the Commitment Parties thereto. Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Backstop Commitment Agreement. 
 The purpose of this notice (“Notice”) is to advise you, pursuant to
Section 2.6 of the Backstop Commitment Agreement, of the proposed transfer by [●] (“Transferor”) to [●] (“Transferee”) of a [Secured][Unsecured] Backstop Commitment representing [●]% of the
aggregate Backstop Commitment of all Commitment Parties as of the date hereof, which represents $[●] of the Transferor’s [Secured][Unsecured] Backstop Commitment (or [●]% of the aggregate [Secured][Unsecured] Backstop Commitment of
all [Secured][Unsecured] Commitment Parties). [Transferor also proposes to transfer $[●] aggregate principal amount of [Linn Second Lien Notes][LINN Unsecured Notes] (as defined in the RSA (as defined below)) to Transferee.] [Transferee is not
currently a party to (i) the Backstop Commitment Letter, (ii) that certain Settlement Agreement dated as of April 4, 2016 (the “Settlement Agreement”), or (iii) that certain Restructuring Support Agreement dated
October 7, 2016 (the “RSA”).][OR][The Transferee represents to the Debtors and the Transferor that it is a Commitment Party under the Backstop Commitment Agreement.] 

[By signing this Notice below, Transferee represents to the Debtors and the Transferor that it will execute and deliver a joinder to the Backstop Commitment
Agreement and Settlement Agreement and an RSA Transfer Agreement.] [In addition, by countersigning this Notice, the Debtors agree that they have determined, in their reasonable discretion and after due inquiring and investigation, that the
Transferee [is reasonably capable of fulfilling its obligations under the Backstop Commitment Agreement and that the Transferee is not required to deposit any amounts with an agent of the Debtors or into an escrow account in order to satisfy the
Backstop Commitment proposed to be transferred to the Transferee][OR][shall deposit with an agent of the Company or into an escrow account, under arrangements satisfactory to the Company, funds sufficient, in the Company’s reasonably
discretion, to satisfy such Transferee’s Backstop Commitment]. 
 This Notice shall serve as a transfer notice in accordance with the terms of the
Backstop Commitment Agreement, Settlement Agreement and RSA. Please acknowledge receipt of this Notice delivered in accordance with Section 2.6 of the Backstop Commitment Agreement by returning a countersigned copy of this Notice to Milbank,
Tweed, Hadley & McCloy LLP and O’Melveny & Myers LLP via the contact information set forth above. 

 
			
	TRANSFEROR:
		
	[●]	 	
		
	By:	 	  

		 	Name:
		 	Title:

 
			
	TRANSFEREE:
		
	[●]	 	
		
	By:	 	  

		 	Name:
		 	Title:

 Acknowledged and agreed to by and on behalf of the Debtors: 

 

			
	LINN ENERGY LLC, as a Debtor
		
	By:	 	  

		 	Name:
		 	Title:

 Exhibit D 

Form of Joinder Agreement 

JOINDER AGREEMENT 
 This
joinder agreement (the “Joinder Agreement”) to Backstop Commitment Agreement dated October 25, 2016 (as amended, supplemented or otherwise modified from time to time, the “BCA”), between the Debtors (as defined
in the BCA) and the Commitment Parties (as defined in the BCA) is executed and delivered by
                            (the “Joining Party”) as of
                    , 2016 (the “Joinder Date”). Each capitalized term used herein but not otherwise defined shall have the meaning
set forth in the BCA. 
 Agreement to be Bound. The Joining Party hereby agrees to be bound by all of the terms of the BCA, a copy of
which is attached to this Joinder Agreement as Annex I (as the same has been or may be hereafter amended, restated or otherwise modified from time to time in accordance with the provisions hereof). The Joining Party shall hereafter be deemed
to be an “Commitment Party” for all purposes under the BCA. 
 Representations and Warranties. The Joining Party hereby
severally and not jointly makes the representations and warranties of the Commitment Parties set forth in Section 5 of the BCA to the Debtors as of the date of this Joinder Agreement. 

Governing Law. This Joinder Agreement shall be governed by and construed in accordance with the laws of the State of New York without
application of any choice of law provisions that would require the application of the laws of another jurisdiction. 
 [Signature pages
follow.] 

 IN WITNESS WHEREOF, the Joining Party has caused this Joinder Agreement to be executed as of the
Joinder Date. 
  

			
	JOINING PARTY
	
	[COMMITMENT PARTY], by and on behalf of certain of its and its affiliates’ managed funds and/or accounts
		
	By:	 	  

		 	Name:
		 	Title:
	
	[Secured][Unsecured] Backstop Commitment
	Holdings:
	
	  

	
	Holdings of Unsecured Notes:
	
	  

	
	Holdings of Secured Notes:
	
	  

  

			
	AGREED AND ACCEPTED AS OF THE
	JOINDER DATE:
	
	LINN ENERGY, LLC, as Debtor
		
	By:	 	  

		 	Name:
		 	Title:

 Exhibit E 

Form of Restructuring Support Agreement Transfer Agreement 

Transfer Agreement 
 The
undersigned (“Transferee”) hereby acknowledges that it has read and understands the Restructuring Support Agreement dated as of October 7, 2016 (the
“Agreement”),1 by and among the Company and the Consenting Creditors, including the transferor to the Transferee of any Claims (each such transferor, a
“Transferor”), and shall be deemed a “Consenting Creditor,” under the terms of the Agreement and agrees to be bound by (a) the terms and conditions of the Agreement to the extent the Transferor was thereby
bound and (b) any direction letters provided by the Consenting Creditor to any agent or trustee. The Transferee specifically agrees to be bound by the terms and conditions of the Agreement and makes all representations and warranties contained
therein as of the date of the Transfer. 
  

	
	Date Executed:
	
	  

	Name:
	Title:

 Address: 
 E-mail address(es):

 Telephone: 
 Facsimile: 

 

			
	 Aggregate Amounts Beneficially Owned or Managed on
Account of:

	 Type
	  	$[        ]
		  	
		  	
		  	

  

	1 	Capitalized terms not used but not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement.Exhibit 4.1

 

EXECUTION VERSION

 

	
 
    	
 
    	
 
    

 

YUM CHINA HOLDINGS, INC.

 

and

 

AMERICAN STOCK TRANSFER &

TRUST COMPANY, LLC

 

Rights Agreement

 

Dated as of October 27, 2016

 

	
 
    	
 
    	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 1.
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
Section 2.
    	
Appointment of Rights   Agent
    	
8
    
	
 
    	
 
    	
 
    
	
Section 3.
    	
Issue of Right   Certificates
    	
8
    
	
 
    	
 
    	
 
    
	
Section 4.
    	
Form of Right   Certificates
    	
12
    
	
 
    	
 
    	
 
    
	
Section 5.
    	
Countersignature and Registration
    	
12
    
	
 
    	
 
    	
 
    
	
Section 6.
    	
Transfer, Split Up,   Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or   Stolen Right Certificates
    	
13
    
	
 
    	
 
    	
 
    
	
Section 7.
    	
Exercise of Rights;   Purchase Price; Expiration Date of Rights
    	
15
    
	
 
    	
 
    	
 
    
	
Section 8.
    	
Cancellation and   Destruction of Right Certificates
    	
18
    
	
 
    	
 
    	
 
    
	
Section 9.
    	
Availability of   Preferred Shares
    	
18
    
	
 
    	
 
    	
 
    
	
Section 10.
    	
Preferred Shares Record   Date
    	
19
    
	
 
    	
 
    	
 
    
	
Section 11.
    	
Adjustment of Purchase   Price, Number of Shares or Number of Rights
    	
20
    
	
 
    	
 
    	
 
    
	
Section 12.
    	
Certificate of Adjusted   Purchase Price or Number of Shares
    	
32
    
	
 
    	
 
    	
 
    
	
Section 13.
    	
Consolidation, Merger   or Sale or Transfer of Assets or Earning Power
    	
32
    
	
 
    	
 
    	
 
    
	
Section 14.
    	
Fractional Rights and   Fractional Shares
    	
34
    
	
 
    	
 
    	
 
    
	
Section 15.
    	
Rights of Action
    	
36
    
	
 
    	
 
    	
 
    
	
Section 16.
    	
Agreement of Right   Holders
    	
37
    
	
 
    	
 
    	
 
    
	
Section 17.
    	
Right Certificate   Holder Not Deemed a Stockholder
    	
38
    
	
 
    	
 
    	
 
    
	
Section 18.
    	
Concerning the Rights   Agent
    	
39
    
	
 
    	
 
    	
 
    
	
Section 19.
    	
Merger or Consolidation   or Change of Name of Rights Agent
    	
40
    
	
 
    	
 
    	
 
    
	
Section 20.
    	
Duties of Rights Agent
    	
41
    
	
 
    	
 
    	
 
    
	
Section 21.
    	
Change of Rights Agent
    	
45
    

 

i

 

	
Section 22.
    	
Issuance of New Right   Certificates
    	
47
    
	
 
    	
 
    	
 
    
	
Section 23.
    	
Redemption
    	
47
    
	
 
    	
 
    	
 
    
	
Section 24.
    	
Exchange
    	
48
    
	
 
    	
 
    	
 
    
	
Section 25.
    	
Notice of Certain   Events
    	
50
    
	
 
    	
 
    	
 
    
	
Section 26.
    	
Notices
    	
52
    
	
 
    	
 
    	
 
    
	
Section 27.
    	
Supplements and   Amendments
    	
53
    
	
 
    	
 
    	
 
    
	
Section 28.
    	
Successors
    	
53
    
	
 
    	
 
    	
 
    
	
Section 29.
    	
Benefits of this   Agreement
    	
54
    
	
 
    	
 
    	
 
    
	
Section 30.
    	
Severability
    	
54
    
	
 
    	
 
    	
 
    
	
Section 31.
    	
Governing Law
    	
54
    
	
 
    	
 
    	
 
    
	
Section 32.
    	
Counterparts
    	
54
    
	
 
    	
 
    	
 
    
	
Section 33.
    	
Descriptive Headings
    	
55
    
	
 
    	
 
    	
 
    
	
Section 34.
    	
Customer Identification   Program
    	
55
    
	
 
    	
 
    	
 
    
	
Section 35.
    	
Force Majeure
    	
55
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
Form of   Certificate of Designations
    	
 
    
	
Exhibit B
    	
Form of Right   Certificate
    	
 
    
	
Exhibit C
    	
Summary of Rights to   Purchase Preferred Shares
    	
 
    

 

ii

 

Rights Agreement, dated as of October 27, 2016, between Yum China Holdings, Inc., a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, as rights agent (the “Rights Agent”).

 

A duly authorized committee of the Board of Directors of the Company has authorized and declared a dividend of one preferred share purchase right (a “Right”) for each Common Share (as hereinafter defined) of the Company outstanding as of 5:01 P.M., New York City time, on October 27, 2016 (the “Record Date”), each Right representing the right to purchase one one-hundredth of a Preferred Share (as hereinafter defined), upon the terms and subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right with respect to each Common Share that shall become outstanding between the Record Date and the earliest of the Distribution Date, the Redemption Date and the Final Expiration Date (as such terms are hereinafter defined).

 

Accordingly, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

 

Section 1.          Definitions.  For purposes of this Agreement, the following terms have the meanings indicated:

 

(a)           “Acquiring Person” shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 15% or more of the Common Shares of the Company then outstanding, but shall not include the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any Subsidiary of the Company, or any entity holding Common Shares for or pursuant to the terms of any such plan.  Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as the result of an acquisition of Common Shares by the Company that, by reducing the number of Common Shares

 

1

 

of the Company outstanding, increases the proportionate number of Common Shares of the Company Beneficially Owned by such Person to 15% or more of the Common Shares of the Company then outstanding; provided, however, that, if a Person shall become the Beneficial Owner of 15% or more of the Common Shares of the Company then outstanding by reason of share purchases by the Company and shall, after the public announcement of such share purchases by the Company, become the Beneficial Owner of any additional Common Shares of the Company, then such Person shall be deemed to be an “Acquiring Person.”  Notwithstanding the foregoing, if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of Common Shares so that such Person would no longer be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), then such Person shall not be deemed to be an “Acquiring Person” for any purposes of this Agreement.  Notwithstanding the foregoing, if a bona fide swaps dealer who would otherwise be an “Acquiring Person” has become so as a result of its actions in the ordinary course of its business that the Board of Directors of the Company determines, in its sole discretion, were taken without the intent or effect of evading or assisting any other Person to evade the purposes and intent of this Agreement, or otherwise seeking to control or influence the management or policies of the Company, then, and unless and until the Board of Directors shall otherwise determine, such Person shall not be deemed to be an “Acquiring Person” for any purposes of this Agreement.  Notwithstanding anything in this Agreement to the contrary, the term “Acquiring Person” shall not include Pollos Investment L.P. (“PV”), API (Hong Kong) Investment Limited (“AF” and, together with PV, the “Investors”) or any of their respective Affiliates or Associates, to the extent and only to the extent that PV, AF or

 

2

 

such Affiliates or Associates acquire beneficial ownership, in the aggregate, of up to, but not exceeding, 19.9% of the Common Shares (or any securities convertible into or exchangeable for Common Shares) of the Company in accordance with and only as expressly permitted by the Shareholders Agreement, to be entered into on or around November 1, 2016, among the Company and the Investors.

 

(b)           “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement.

 

(c)           “Associate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement.

 

(d)           A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “Beneficially Own” any securities:

 

(i)            which such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly;

 

(ii)           which such Person or any of such Person’s Affiliates or Associates has (A) the right or the obligation to acquire (whether such right is exercisable, or such obligation is required to be performed, immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities), or upon the exercise of conversion rights, exchange rights, rights (other than these Rights), warrants or options, or otherwise; provided,

 

3

 

however, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange; or (B) the right to vote pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, any security if the agreement, arrangement or understanding to vote such security (1) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report);

 

(iii)          which are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to Section 1(d)(ii)(B) hereof) or disposing of any securities of the Company; or

 

(iv)          which are beneficially owned, directly or indirectly, by a Counterparty (or any of such Counterparty’s Affiliates or Associates) under any Derivatives Contract (without regard to any short or similar position under the same or any other Derivatives Contract) to which such Person or any of such Person’s Affiliates or Associates is a Receiving Party (as such terms are defined in the immediately following

 

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paragraph); provided, however, that the number of Common Shares that a Person is deemed to Beneficially Own pursuant to this clause (iv) in connection with a particular Derivatives Contract shall not exceed the number of Notional Common Shares with respect to such Derivatives Contract; provided, further, that the number of securities beneficially owned by each Counterparty (including its Affiliates and Associates) under a Derivatives Contract shall for purposes of this clause (iv) be deemed to include all securities that are beneficially owned, directly or indirectly, by any other Counterparty (or any of such other Counterparty’s Affiliates or Associates) under any Derivatives Contract to which such first Counterparty (or any of such first Counterparty’s Affiliates or Associates) is a Receiving Party, with this proviso being applied to successive Counterparties as appropriate.

 

A “Derivatives Contract” is a contract between two parties (the “Receiving Party” and the “Counterparty”) that is designed to produce economic benefits and risks to the Receiving Party that correspond substantially to the ownership by the Receiving Party of a number of Common Shares specified or referenced in such contract (the number corresponding to such economic benefits and risks, the “Notional Common Shares”), regardless of whether obligations under such contract are required or permitted to be settled through the delivery of cash, Common Shares or other property, without regard to any short position under the same or any other Derivatives Contract.  For the avoidance of doubt, interests in broad-based index options, broad-based index futures and broad-based publicly traded market baskets of stocks approved for trading by the appropriate federal governmental authority shall not be deemed to be Derivatives Contracts.

 

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Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of securities of the Company, shall mean the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which are issuable by the Company and which such Person would be deemed to Beneficially Own hereunder.

 

(e)           “Book Entry” shall mean an uncertificated book entry for any Common Share or Preferred Share.

 

(f)            “Business Day” shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

 

(g)           “Close of Business” on any given date shall mean 5:00 P.M., New York City time, on such date; provided, however, that, if such date is not a Business Day, it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day.

 

(h)           “Common Shares” when used with reference to the Company shall mean the shares of common stock, par value $0.01 per share, of the Company.  “Common Shares” when used with reference to any Person other than the Company shall mean the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person.

 

(i)            “Customer Identification Program” shall have the meaning set forth in Section 34 hereof.

 

(j)            “Distribution Date” shall have the meaning set forth in Section 3(a) hereof.

 

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(k)           “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(l)            “Exchange Ratio” shall have the meaning set forth in Section 24(a) hereof.

 

(m)          “Final Expiration Date” shall have the meaning set forth in Section 7(a) hereof.

 

(n)           “NASDAQ” shall mean the National Association of Securities Dealers, Inc. Automated Quotation System.

 

(o)           “Ownership Statements” means, with respect to any Book Entry Common Share, current ownership statements issued to the record holders thereof in lieu of a certificate representing such Common Share.

 

(p)           “Person” shall mean any individual, partnership, firm, corporation, limited liability company, association, trust, limited liability partnership, joint venture, unincorporated organization or other entity, and shall include any successor (by merger or otherwise) of such entity, as well as any group under Rule 13d-5(b)(1) of the Exchange Act.

 

(q)           “Preferred Shares” shall mean shares of Series A Junior Participating Preferred Stock, par value $0.01 per share, of the Company having the rights and preferences set forth in the Form of Certificate of Designations attached to this Agreement as Exhibit A.

 

(r)            “Purchase Price” shall have the meaning set forth in Section 4 hereof.

 

(s)            “Record Date” shall have the meaning set forth in the second paragraph hereof.

 

(t)            “Redemption Date” shall have the meaning set forth in Section 7(a) hereof.

 

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(u)           “Redemption Price” shall have the meaning set forth in Section 23(a) hereof.

 

(v)           “Right” shall have the meaning set forth in the second paragraph hereof.

 

(w)          “Right Certificate” shall have the meaning set forth in Section 3(a) hereof.

 

(x)           “Shares Acquisition Date” shall mean the first date of public announcement by the Company or an Acquiring Person that an Acquiring Person has become such.

 

(y)           “Subsidiary” of any Person shall mean any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by such Person.

 

(z)           “Summary of Rights” shall have the meaning set forth in Section 3(b) hereof.

 

(aa)         “Trading Day” shall have the meaning set forth in Section 11(d) hereof.

 

Section 2.          Appointment of Rights Agent.  The Company hereby appoints the Rights Agent to act as agent for the Company in accordance with the express terms and conditions (and no implied terms and conditions) hereof, and the Rights Agent hereby accepts such appointment.  The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable, upon ten (10) days’ prior written notice to the Rights Agent.  The Rights Agent shall have no duty to supervise, and shall in no event be liable for the acts or omissions of any such co-Rights Agent.

 

Section 3.          Issue of Right Certificates.   (a)  Until the tenth (10th) day after the Shares Acquisition Date (including any such date that is after the date of this Agreement and prior to the issuance of the Rights; the “Distribution Date”), (x) the Rights will be evidenced (subject to

 

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the provisions of Section 3(b) hereof) by the certificates for Common Shares of the Company (or by Book Entry Common Shares of the Company) registered in the names of the holders thereof (which certificates shall also be deemed to be Right Certificates) and not by separate Right Certificates or book entry, and (y) the Rights Certificates and the right to receive Right Certificates will be transferable only in connection with the transfer of Common Shares of the Company.  As soon as practicable after the Distribution Date, the Company will prepare and execute, and upon written request of the Company, the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent will, if requested and provided with all necessary information and documents at the expense of the Company, send) by first-class, insured, postage-prepaid mail, to each record holder of Common Shares of the Company as of the Close of Business on the Distribution Date (other than any Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of Exhibit B hereto (a “Right Certificate”), evidencing one Right for each Common Share so held, subject to adjustment as provided herein; provided, however, that notwithstanding anything to the contrary herein, the Company may choose to use book entry in lieu of physical certificates, in which case “Rights Certificates” shall be deemed to mean the uncertificated book entry representing the related Rights.  As of and after the Distribution Date, the Rights will be evidenced solely by such Right Certificates.  The Company shall promptly notify the Rights Agent in writing upon the occurrence of the Distribution Date, the Redemption Date and/or the Final Expiration Date and, if such notification is given orally, the Company shall confirm the same in writing on or prior to the Business Day next following.  Until such written notice is received by the Rights Agent, the Rights Agent may presume conclusively for all

 

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purposes that none of the Distribution Date, the Redemption Date or the Final Expiration Date has occurred.

 

(b)           On the Record Date, or as soon as practicable thereafter, the Company will send (directly, or at the expense of the Company, upon the written request of the Company and after providing all necessary information and documents, through the Rights Agent or the Company’s transfer agent for the Common Shares) a copy of a Summary of Rights to Purchase Preferred Shares, in substantially the form of Exhibit C hereto (the “Summary of Rights”), by first-class, postage-prepaid mail, to each record holder of Common Shares as of the Record Date (other than any Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the address of such holder shown on the records of the Company.  With respect to certificates for Common Shares of the Company or Book Entry Common Shares of the Company outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates (or such Book Entry Common Shares) registered in the names of the holders thereof together with a copy of the Summary of Rights attached thereto.  Until the Distribution Date (or the earlier of the Redemption Date or the Final Expiration Date), the surrender for transfer of any certificate for Common Shares or the transfer of any Book Entry Common Shares of the Company outstanding on the Record Date, with or without a copy of the Summary of Rights attached thereto, shall also constitute the transfer of the Rights associated with the Common Shares of the Company represented thereby.

 

(c)           Certificates for Common Shares (or Book Entry Common Shares) that become outstanding (including, but not limited to, reacquired Common Shares referred to in the penultimate sentence of this Section 3(c)) after the Record Date but prior to the earliest of the

 

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Distribution Date, the Redemption Date or the Final Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them a legend in substantially the following form:

 

This certificate also evidences and entitles the holder hereof to certain rights as set forth in an Agreement between Yum China Holdings, Inc. and American Stock Transfer & Trust Company, LLC, dated as of October 27, 2016, as it may be amended from time to time (the “Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of Yum China Holdings, Inc.  Under certain circumstances, as set forth in the Agreement, such Rights (as defined in the Agreement) will be evidenced by separate certificates and will no longer be evidenced by this certificate.  Yum China Holdings, Inc. will mail to the holder of this certificate a copy of the Agreement without charge after receipt of a written request therefor.  As set forth in the Agreement, Rights that are or were acquired or Beneficially Owned (as defined in the Agreement)  by any Person (as defined in the Agreement) who becomes an Acquiring Person (as defined in the Agreement) or an Associate or Affiliate (each as defined in the Agreement) thereof automatically, upon such acquisition, become null and void.

 

With respect to any Book Entry Common Share of the Company, such legend shall be included in the Ownership Statement in respect of such Common Share or in a notice to the record holder of such Common Share in accordance with applicable law.   With respect to such certificates containing the foregoing legend, or any Ownership Statement or notice containing the foregoing legend delivered to holders of Book Entry Common Shares, until the earliest of the Distribution Date, the Redemption Date or the Final Expiration Date, the Rights associated with the Common Shares of the Company represented by such certificates or such Book Entry Common Shares shall be evidenced by such certificates or such Book Entry Common Shares (including any Ownership Statement) alone, and the surrender for transfer of any such certificate or the transfer of any Book Entry Common Share shall also constitute the transfer of the Rights associated with the Common Shares of the Company represented thereby.  In the event that the Company purchases or acquires any Common Shares of the Company after the Record Date but prior to the Distribution Date, any Rights associated with such Common Shares of the Company shall be deemed cancelled and

 

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retired so that the Company shall not be entitled to exercise any Rights associated with the Common Shares of the Company which are no longer outstanding.  Notwithstanding this Section 3(c), the omission of a legend shall not affect the enforceability of any part of this Rights Agreement or the rights of any holder of the Rights.

 

Section 4.          Form of Right Certificates.  The Right Certificates (and the forms of election to purchase Preferred Shares and of assignment to be printed on the reverse thereof) shall be substantially the same as Exhibit B hereto, and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate (but which do not materially and adversely affect the rights, duties, liabilities or responsibilities of the Rights Agent) and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any applicable rule or regulation made pursuant thereto or with any applicable rule or regulation of any stock exchange or the Financial Industry Regulatory Authority, or to conform to usage.  Subject to the provisions of Section 22 hereof, the Right Certificates shall entitle the holders thereof to purchase such number of one one-hundredths of a Preferred Share as shall be set forth therein at the price per one one-hundredth of a Preferred Share set forth therein (the “Purchase Price”), but the number of such one one-hundredths of a Preferred Share and the Purchase Price shall be subject to adjustment as provided herein.

 

Section 5.          Countersignature and Registration.  The Right Certificates shall be executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its President, any of its Vice Presidents or its Treasurer, either manually or by facsimile signature, shall have affixed thereto the Company’s seal or a facsimile thereof, and shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature.

 

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The Right Certificates shall be countersigned, either manually or by facsimile signature, by the Rights Agent and shall not be valid for any purpose unless countersigned.  In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the individual who signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of the Company by any individual who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Agreement any such individual was not such an officer.

 

Following the Distribution Date, receipt by the Rights Agent of notice to that effect and all other relevant information and documents referred to in Section 3(a), the Rights Agent will keep or cause to be kept, at its principal office, books for registration and transfer of the Right Certificates issued hereunder.  Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right Certificates.

 

Section 6.          Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.  Subject to the provisions of Section 14 hereof, at any time after the Close of Business on the Distribution Date, and at or prior to the Close of Business on the earlier of the Redemption Date or the Final Expiration Date, any Right Certificate or Right Certificates (other than Right Certificates representing Rights that have become null and void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to

 

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Section 24 hereof) may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates entitling the registered holder to purchase a like number of one one-hundredths of a Preferred Share as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase.  Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the principal office of the Rights Agent.  The Right Certificates are transferrable only on the registry books of the Rights Agent.  Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Right Certificate until the registered holder shall have properly completed and duly executed the certificate contained in the form of assignment on the reverse side of such Right Certificate, shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) thereof and of the Rights evidenced thereby and the Affiliates and Associates of such Beneficial Owner (or former Beneficial Owner) thereof as the Company or the Rights Agent shall reasonably request and paid a sum sufficient to cover any tax or charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates as required hereunder.  Thereupon, the Rights Agent shall countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested, registered in such name or names as may be designated by the surrendering registered holder.  The Company may require payment of a sum sufficient to cover any tax or charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates.  The Rights Agent shall promptly forward any such sum collected by it to the Company or to such Persons as the Company shall specify by written notice.  The Rights Agent

 

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shall have no duty or obligation under any Section of this Agreement that requires the payment of taxes or charges unless and until it is reasonably satisfied that all such taxes and/or charges have been paid.

 

Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will issue, execute and deliver a new Right Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.

 

Notwithstanding any other provisions hereof, the Company and the Rights Agent may amend this Rights Agreement to provide for uncertificated Rights in addition to or in place of Rights evidenced by Rights Certificates.

 

Section 7.          Exercise of Rights; Purchase Price; Expiration Date of Rights.  (a)  The registered holder of any Right Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein), in whole or in part, at any time after the Distribution Date, upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof properly completed and duly executed, to the Rights Agent at the principal office of the Rights Agent, together with payment of the Purchase Price for each one one-hundredth of a Preferred Share as to which the Rights are exercised, at or prior to the earliest of (i) the Close of Business on October 27, 2017 (the “Final Expiration Date”), (ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the “Redemption Date”), or (iii) the time at which such Rights are

 

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exchanged as provided in Section 24 hereof.  From such time as the Rights are no longer exercisable hereunder, the Rights Agent shall have no further duties, obligations or liabilities hereunder except as expressly stated herein.

 

(b)           The Purchase Price for each one one-hundredth of a Preferred Share purchasable pursuant to the exercise of a Right shall initially be $113.00, and shall be subject to adjustment from time to time as provided in Section 11 or 13 hereof, and shall be payable in lawful money of the United States of America in accordance with paragraph (c) below.

 

(c)           Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase properly completed and duly executed, accompanied by payment of the Purchase Price for the shares to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 9 hereof by cash or by certified check, cashier’s check or money order payable to the order of the Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Shares (or make available if the Rights Agent is the Transfer Agent) certificates for the number of Preferred Shares to be purchased and the Company hereby irrevocably authorizes any such transfer agent to comply with all such requests, or (B) requisition from the depositary agent depositary receipts representing such number of one one-hundredths of a Preferred Share as are to be purchased (in which case certificates for the Preferred Shares represented by such receipts shall be deposited by the transfer agent of the Preferred Shares with such depositary agent) and the Company hereby directs such depositary agent to comply with such request; (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 14 hereof; (iii) after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Right

 

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Certificate, registered in such name or names as may be designated by such holder; and (iv) when appropriate, after receipt, deliver such cash to or upon the order of the registered holder of such Right Certificate.  In the event that the Company is obligated to issue securities of the Company other than Preferred Shares (including Common Shares) of the Company pursuant to Section 11(a) hereof, the Company will make all arrangements necessary so that such other securities are available for distribution by the Rights Agent.

 

(d)           Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder of Rights or other securities upon the occurrence of any purported transfer or exercise as set forth in Section 6 hereof or this Section 7 unless such registered holder shall have (i) properly completed and duly executed the certification following the form of election to purchase set forth on the reverse side of the Right Certificate surrendered for such transfer or exercise, (ii) tendered the Purchase Price (and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 9) to the Company in the manner set forth in Section 7(c), and (iii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company or the Rights Agent shall reasonably request.

 

(e)           In case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to such holder’s duly authorized assigns, subject to the provisions of Section 14 hereof.

 

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Section 8.          Cancellation and Destruction of Right Certificates.  All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if delivered or surrendered to the Rights Agent, shall be cancelled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement.  The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof.  The Rights Agent shall deliver all cancelled Right Certificates to the Company, or shall, at the written request of the Company, destroy such cancelled Right Certificates, and, in such case, shall deliver a certificate of destruction thereof to the Company.

 

Section 9.          Availability of Preferred Shares.  The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued Preferred Shares or any Preferred Shares held in its treasury the number of Preferred Shares that will be sufficient to permit the exercise in full of all outstanding Rights in accordance with Section 7 hereof.  The Company covenants and agrees that it will take all such action as may be necessary to ensure that all Preferred Shares (or Common Shares and other securities as the case may be) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Preferred Shares (or Common Shares and other securities, as the case may be) (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable shares.

 

The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges that may be payable in respect of the

 

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issuance or delivery of the Right Certificates or of any Preferred Shares upon the exercise of Rights.  The Company shall not, however, be required to pay any transfer tax that may be payable in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary receipts for the Preferred Shares in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise or to issue or to deliver any certificates or depositary receipts for Preferred Shares upon the exercise of any Rights until any such tax shall have been paid (any such tax being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax is due.

 

Section 10.        Preferred Shares Record Date.  Each Person in whose name any certificate for Preferred Shares or other securities is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preferred Shares or other securities represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered with the forms of election and certification properly completed and duly executed and payment of the Purchase Price (and any applicable transfer taxes) was made; provided, however, that, if the date of such surrender and payment is a date upon which the Preferred Shares or other securities transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Shares or other securities transfer books of the Company are open.  Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of Preferred Shares for which the Rights shall be exercisable, including, but not limited to, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights,

 

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and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.

 

Section 11.        Adjustment of Purchase Price, Number of Shares or Number of Rights.  The Purchase Price, the number of Preferred Shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.

 

(a)           (i)            In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Shares (including any such reclassification in connection with a share exchange, consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right.

 

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(ii)           Subject to Section 24 hereof, in the event any Person becomes an Acquiring Person, each holder of a Right other than any Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall thereafter have a right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number of Common Shares of the Company as shall equal the result obtained by (A) multiplying the then current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable and dividing that product by (B) 50% of the then current per share market price of the Common Shares of the Company (determined pursuant to Section 11(d) hereof) on the date of the occurrence of such event.  In the event that any Person shall become an Acquiring Person and the Rights shall then be outstanding, the Company shall not take any action that would eliminate or diminish the benefits intended to be afforded by the Rights.

 

From and after the occurrence of such event, any Rights that are or were acquired or Beneficially Owned by any Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall be null and void without any further action, and any holder of such Rights shall thereafter have no right to exercise such Rights under any provision of this Agreement or otherwise.  Neither the Company nor the Rights Agent shall have liability to any holder of Right Certificates or other Person as a result of the Company’s or the Rights Agent’s failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder.  No Right Certificate shall be issued pursuant to Section 3 hereof that represents Rights Beneficially Owned by an Acquiring

 

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Person whose Rights would be null and void pursuant to the preceding sentence or any Associate or Affiliate thereof; no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be null and void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate or with respect to any Common Shares otherwise deemed to be Beneficially Owned by any of the foregoing; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person or other Person whose Rights would be null and void pursuant to the preceding sentence shall be cancelled.  The Company shall give the Rights Agent written notice of the identity of any such Acquiring Person, Associate or Affiliate, or the nominee of any of the foregoing, and the Rights Agent may rely on such written notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Associate or Affiliate, or the nominee of any of the foregoing, unless and until it shall have received such written notice.

 

(iii)          In the event that there shall not be sufficient Common Shares issued but not outstanding or authorized but unissued to permit the exercise in full of the Rights in accordance with subparagraph (ii) above, the Company shall take all such action as may be necessary to authorize additional Common Shares for issuance upon exercise of the Rights.  In the event the Company shall, after good faith effort, be unable to take all such action as may be necessary to authorize such additional Common Shares, the Company shall substitute, for each Common Share that would otherwise be issuable upon exercise of a Right, a number of Preferred Shares or fraction thereof such that the current per share market price of one Preferred Share multiplied by such number or fraction is

 

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equal to the current per share market price of one Common Share as of the date of issuance of such Preferred Shares or fraction thereof.

 

(b)           In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Shares (or shares having the same rights, privileges and preferences as the Preferred Shares (“equivalent preferred shares”)) or securities convertible into Preferred Shares or equivalent preferred shares at a price per Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into Preferred Shares or equivalent preferred shares) less than the then current per share market price of the Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of Preferred Shares outstanding on such record date plus the number of Preferred Shares which the aggregate offering price of the total number of Preferred Shares and/or equivalent preferred shares so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price and the denominator of which shall be the number of Preferred Shares outstanding on such record date plus the number of additional Preferred Shares and/or equivalent preferred shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one

 

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Right.  In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a written statement filed with the Rights Agent and shall be binding on the Rights Agent and holders of the Rights.  Preferred Shares owned by or held for the account of the Company or any Subsidiary of the Company shall not be deemed outstanding for the purpose of any such computation.  Such adjustment shall be made successively whenever such a record date is fixed; and, in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.

 

(c)           In case the Company shall fix a record date for the making of a distribution to all holders of the Preferred Shares (including any such distribution made in connection with a share exchange, consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then-current per share market price of the Preferred Shares on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a written statement filed with the Rights Agent and shall be binding on the Rights Agent and holders of the Rights) of the portion of the assets or evidences of indebtedness so to be distributed or of such

 

24

 

subscription rights or warrants applicable to one Preferred Share and the denominator of which shall be such then-current per share market price of the Preferred Shares on such record date; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right.  Such adjustments shall be made successively whenever such a record date is fixed; and, in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.

 

(d)           (i) For the purpose of any computation hereunder, the “current per share market price” of any security (a “Security” for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days immediately prior to but not including such date; provided, however, that, in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or Securities convertible into such shares, or (B) any subdivision, combination or reclassification of such Security and prior to but not including the expiration of 30 Trading Days after but not including the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security.  The closing price for each day shall be the last sale price, regular way, reported at or prior to 4:00 P.M. Eastern time or, in case no such sale takes place on such day, the average of the bid and asked prices, regular way,

 

25

 

reported as of 4:00 P.M. Eastern time, in either case, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price reported at or prior to 4:00 P.M. Eastern time or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported as of 4:00 P.M. Eastern time by NASDAQ or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company.  The term “Trading Day” shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business, or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day.

 

(ii)           For the purpose of any computation hereunder, the “current per share market price” of the Preferred Shares shall be determined in accordance with the method set forth in Section 11(d)(i).  If the Preferred Shares are not publicly traded, the “current per share market price” of the Preferred Shares shall be conclusively deemed to be the current per share market price of the Common Shares as determined pursuant to Section 11(d)(i) hereof (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof), multiplied by one hundred.  If neither

 

26

 

the Common Shares nor the Preferred Shares are publicly held or so listed or traded, “current per share market price” shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a written statement filed with the Rights Agent.

 

(e)           No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.  All calculations under this Section 11 shall be made to the nearest cent or to the nearest one one-millionth of a Preferred Share or one ten-thousandth of any other share or security as the case may be.  Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment or (ii) the date of the expiration of the right to exercise any Rights.

 

(f)            If, as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than Preferred Shares, thereafter the number of such other shares so receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Shares contained in Section 11(a) through (c) hereof, inclusive, and the provisions of Sections 7, 9, 10 and 13 hereof with respect to the Preferred Shares shall apply on like terms to any such other shares.

 

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(g)           All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-hundredths of a Preferred Share purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.

 

(h)           Unless the Company shall have exercised its election as provided in Section 11(a)(ii) hereof, upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c) hereof, each Right outstanding immediately prior to the making of such adjustment (other than Rights that have become void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-hundredths of a Preferred Share (calculated to the nearest one one-millionth of a Preferred Share) obtained by (A) multiplying (x) the number of one one-hundredths of a share covered by a Right immediately prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (B) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.

 

(i)            The Company may elect, on or after the date of any adjustment of the Purchase Price, to adjust the number of Rights in substitution for any adjustment in the number of one one-hundredths of a Preferred Share purchasable upon the exercise of a Right.  Each of the Rights outstanding after such adjustment of the number of Rights (other than Rights that have become void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) shall be exercisable for the number of one

 

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one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such adjustment.  Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price.  The Company shall make a public announcement (with prompt written notice thereof to the Rights Agent) of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made.  This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement.  If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment.  Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein, and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement.

 

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(j)            Irrespective of any adjustment or change in the Purchase Price or in the number of one one-hundredths of a Preferred Share issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of one one-hundredths of a Preferred Share that were expressed in the initial Right Certificates issued hereunder.

 

(k)           Before taking any action that would cause an adjustment reducing the Purchase Price below one one-hundredth of the then par value, if any, of the Preferred Shares issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable Preferred Shares at such adjusted Purchase Price.

 

(l)            In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer (with prompt written notice thereof to the Rights Agent) until the occurrence of such event the issuing to the holder of any Right exercised after such record date of the Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence of the event requiring such adjustment.

 

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(m)          Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it, in its sole discretion, shall determine to be advisable in order that any consolidation or subdivision of the Preferred Shares, issuance wholly for cash of any Preferred Shares at less than the current market price, issuance wholly for cash of Preferred Shares or securities which by their terms are convertible into or exchangeable for Preferred Shares, dividends on Preferred Shares payable in Preferred Shares or issuance of rights, options or warrants referred to in Section 11(b) hereof, hereafter made by the Company to holders of the Preferred Shares shall not be taxable to such stockholders.

 

(n)           In the event that, at any time after the date of this Agreement and prior to the Distribution Date, the Company shall (i) declare or pay any dividend on the Common Shares payable in Common Shares, or (ii) effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares) into a greater or lesser number of Common Shares, then, in any such case, (A) the number of one one-hundredths of a Preferred Share purchasable after such event upon proper exercise of each Right shall be determined by multiplying the number of one one-hundredths of a Preferred Share so purchasable immediately prior to such event by a fraction, the numerator of which is the number of Common Shares outstanding immediately before such event and the denominator of which is the number of Common Shares outstanding immediately after such event, and (B) each Common Share outstanding immediately after such event shall have issued with respect to it that number of Rights which each Common Share outstanding immediately prior to such event had issued

 

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with respect to it.  The adjustments provided for in this Section 11(n) shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is effected.

 

Section 12.        Certificate of Adjusted Purchase Price or Number of Shares.  Whenever an adjustment is made or there is any event affecting the Rights or their exercisability (including without limitation an event that causes Rights to become null and void) as provided in Section 11 or 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment or describing such event  and a brief statement of the facts accounting for such adjustment or describing such event, (b) file with the Rights Agent and with each transfer agent for the Common Shares or the Preferred Shares a copy of such certificate and (c) if such adjustment occurs at any time after the Distribution Date, mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof.  The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment or statement therein contained and shall not be obligated or responsible for calculating any adjustment, nor shall it have any duty or liability with respect to, or be deemed to have knowledge of any such adjustment or event unless and until it shall have received such a certificate.

 

Section 13.        Consolidation, Merger or Sale or Transfer of Assets or Earning Power.  In the event, directly or indirectly, at any time after a Person has become an Acquiring Person, (a) the Company shall effect a share exchange, consolidate with, or merge with and into, any other Person, (b) any Person shall effect a share exchange, consolidate with the Company, or merge with and into the Company and the Company shall be the continuing or surviving corporation of such share exchange or merger and, in connection with such merger, all or part of the Common Shares shall be changed into or exchanged for stock or other securities of any other

 

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Person (or the Company) or cash or any other property, or (c) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person other than the Company or one or more of its wholly-owned Subsidiaries, then, and in each such case, proper provision shall be made so that (i) each holder of a Right (except as otherwise provided herein, and other than Rights that have become void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) shall thereafter have the right to receive, upon the exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number of Common Shares of such other Person (including the Company as successor thereto or as the surviving corporation) as shall equal the result obtained by (A) multiplying the then current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable and dividing that product by (B) 50% of the then current per share market price of the Common Shares of such other Person (determined pursuant to Section 11(d) hereof) on the date of consummation of such consolidation, merger, sale or transfer; (ii) the issuer of such Common Shares shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such issuer; and (iv) such issuer shall take such steps (including, but not limited to, the reservation of a sufficient number of its Common Shares in accordance with Section 9 hereof) in connection with such consummation as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the Common Shares of the

 

33

 

Company thereafter deliverable upon the exercise of the Rights.  The Company shall not consummate any such consolidation, merger, sale or transfer unless, prior thereto, the Company and such issuer shall have executed and delivered to the Rights Agent a supplemental agreement so providing.  The Company shall not enter into any transaction of the kind referred to in this Section 13 if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements or arrangements which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights.  The provisions of this Section 13 shall similarly apply to successive mergers, share exchanges, or consolidations or sales or other transfers.

 

Section 14.        Fractional Rights and Fractional Shares.  (a)  The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights.  In lieu of such fractional Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right.  For purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable.  The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not

 

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listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the Company.  If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board of Directors of the Company shall be used.

 

(b)           The Company shall not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred Share).  Fractions of Preferred Shares in integral multiples of one one-hundredth of a Preferred Share may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it; provided that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Shares represented by such depositary receipts.  In lieu of fractional Preferred Shares that are not integral multiples of one one-hundredth of a Preferred Share, the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one Preferred Share.  For the purposes of this Section 14(b), the current market value of a Preferred Share shall be the closing price of a Preferred Share

 

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(as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise.

 

(c)           The holder of a Right, by the acceptance of the Right, expressly waives such holder’s right to receive any fractional Rights or any fractional shares upon exercise of a Right (except as provided above).

 

(d)           Whenever a payment for fractional Rights or fractional shares or other securities is to be made by the Rights Agent, the Company shall (i) promptly prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail the amounts of such payments, and (ii) provide sufficient monies to the Rights Agent in the form of fully collected funds to make such payments.  The Rights Agent shall be fully protected in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to have knowledge of any payment for fractional Rights or fractional shares or other securities under any Section of this Agreement relating to the payment of fractional Rights or fractional shares or other securities unless and until the Rights Agent shall have received such a certificate and sufficient monies.

 

Section 15.        Rights of Action.  All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent under Section 18 hereof, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common Shares), may, in such holder’s own behalf and for such holder’s own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such holder’s right to exercise the Rights evidenced by such Right Certificate in

 

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the manner provided in such Right Certificate and in this Agreement.  Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement, and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to, this Agreement.

 

Notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as a result of the inability of the Company or the Rights Agent to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, judgment, decree or ruling (whether interlocutory or final) issued by a court or by a governmental, regulatory, self-regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation; provided, however, that the Company shall use all reasonable efforts to have any such injunction, order, judgment, decree or ruling lifted or otherwise overturned as soon as possible.

 

Section 16.        Agreement of Right Holders.  Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that:

 

(a)           prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Shares;

 

(b)           after the Distribution Date, the Right Certificates are transferable (subject to the provisions of this Agreement) only on the registry books maintained by the

 

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Rights Agent if surrendered at the principal office of the Rights Agent, duly endorsed or accompanied by a proper instrument of transfer with a completed form of certification; and

 

(c)           the Company and the Rights Agent may deem and treat the person in whose name the Right Certificate (or, prior to the Distribution Date, the associated Common Shares certificate (or Book Entry Common Share)) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificate or the associated Common Shares certificate (or Ownership Statements or other notices provided to holders of Book Entry Common Shares) made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary.

 

Section 17.        Right Certificate Holder Not Deemed a Stockholder.  No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the Preferred Shares or any other securities of the Company which may at any time be issuable on the exercise or exchange of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have been exercised or exchanged in accordance with the provisions hereof.

 

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Section 18.        Concerning the Rights Agent.  The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder, and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the preparation, negotiation, delivery, amendment, administration and execution of this Agreement and the exercise and performance of its duties hereunder.  The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement or expense (including, but not limited to, the reasonable fees and expenses of legal counsel) incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent (each as determined by a final, nonappealable judgment of a court of competent jurisdiction), for anything done or omitted by the Rights Agent in connection with the acceptance, administration, exercise and performance of its duties under this Agreement, including the costs and expenses of defending against any claim of liability in connection herewith.  The reasonable costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company to the extent that the Rights Agent is successful in so enforcing its right of indemnification.

 

The Rights Agent shall be protected and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with, its administration of this Agreement in reliance upon any Right Certificate or certificate for the Preferred Shares or Common Shares or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper person or persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof.  Notwithstanding anything in this Agreement to the contrary, in no

 

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event will the Rights Agent be liable for special, punitive, indirect, incidental or consequential loss or damage of any kind whatsoever (including, but not limited to, lost profits), even if the Rights Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.  The Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to receive notice thereof hereunder, and the Rights Agent shall be fully protected and shall incur no liability for failing to take any action in connection therewith, unless and until it has received such notice.

 

The provisions of this Section 18 and Section 20 hereof shall survive the expiration or termination of this Agreement, the exercise or expiration of the Rights and the resignation, replacement or removal of the Rights Agent.

 

Section 19.        Merger or Consolidation or Change of Name of Rights Agent.  Any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may effect a share exchange, be consolidated, or any Person resulting from any merger, share exchange, or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the stock transfer or corporate trust powers of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or document or any further act on the part of any of the parties hereto; provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof.  In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and, in case at that time any of the Right Certificates shall not have been

 

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countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and, in all such cases, such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

 

In case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and, in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and, in all such cases, such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

 

Section 20.        Duties of Rights Agent.  The Rights Agent undertakes to perform only the duties and obligations imposed by this Agreement and no implied duties or obligations shall be read into this Agreement against the Rights Agent.  The Rights Agent shall perform those duties and obligations upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound:

 

(a)           The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken or omitted by it in good faith and in accordance with such advice or opinion.

 

(b)           Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including, but not

 

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limited to, the identity of an Acquiring Person and the determination of the current per share market price of any security) be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one of the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer, the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full and complete authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such a certificate.

 

(c)           The Rights Agent shall be liable hereunder to the Company and any other Person only for its own gross negligence, bad faith or willful misconduct (each as determined by a final, nonappealable judgment of a court of competent jurisdiction).  Any liability of the Rights Agent shall be limited to three times the amount of aggregate annual fees paid by the Company to the Rights Agent.

 

(d)           The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.

 

(e)           The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any

 

42

 

breach by the Company of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including, but not limited to, the Rights becoming null and void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights (including, but not limited to, the manner, method or amount thereof) provided for in Section 3, 11, 13, 23 or 24 hereof, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after receipt of a certificate furnished pursuant to Section 12 describing such change or adjustment upon which the Rights Agent may rely); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Preferred Shares or other securities to be issued pursuant to this Agreement or any Right Certificate or as to whether any Preferred Shares or other securities will, when so issued, be validly authorized and issued, fully paid and nonassessable.

 

(f)            The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement.

 

(g)           The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any one of the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its

 

43

 

duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such officer or for any delay in acting while waiting for those instructions.  The Rights Agent shall be fully authorized and protected in relying upon the most recent instructions received by any such officer.  Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken, suffered or omitted to be taken by the Rights Agent with respect to its duties and obligations under this Agreement and the date on and/or after which such action shall be taken, suffered or such omission shall be effective.  The Rights Agent shall not be liable for any action taken, suffered or omitted to be taken by it in accordance with a proposal included in any such application on or after the date specified therein (which date shall not be less than three (3) Business Days after the date indicated in such application unless any such officer shall have consented in writing to an earlier date) unless, prior to taking, suffering or omitting to take any such action, the Rights Agent has received written instructions in response to such application specifying the action to be taken, suffered or omitted to be taken.

 

(h)           The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not the Rights Agent under this Agreement.  Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other Person.

 

44

 

(i)            The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself (through its directors, officers and employees) or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided that reasonable care was exercised in the selection and continued employment thereof.

 

Section 21.        Change of Rights Agent.  The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing mailed to the Company and, in the event that the Rights Agent or one of its Affiliates is not also the transfer agent for the Company, to each transfer agent of the Common Shares or Preferred Shares by registered or certified mail.  In the event the transfer agency relationship in effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to have resigned automatically and be discharged from its duties as Rights Agent under this Agreement as of the effective date of such termination, and the Company shall be responsible for sending any required notice.  The Company may remove the Rights Agent or any successor Rights Agent (with or without cause) upon 30 days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Shares or Preferred Shares by registered or certified mail, and to the holders of the Right Certificates by first-class mail.  If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent.  If the Company shall fail to make such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent

 

45

 

or by the holder of a Right Certificate (which holder shall, with such notice, submit such holder’s Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent.  Any successor Rights Agent, whether appointed by the Company or by such a court, shall be either (a) a Person organized and doing business under the laws of the United States or of the State of New York (or of any other state of the United States so long as such corporation is authorized to do business as a banking institution in such state), in good standing which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $100 million or (b) an Affiliate or direct or indirect wholly-owned Subsidiary of such Person or its wholly-owning parent.  After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose.  Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares or Preferred Shares, and mail a notice thereof in writing to the registered holders of the Right Certificates.  Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

 

46

 

Section 22.        Issuance of New Right Certificates.  Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by the Board of Directors of the Company to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement.

 

Section 23.        Redemption.  (a) The Board of Directors of the Company may, at its option, at any time prior to such time as any Person becomes an Acquiring Person, redeem all but not less than all the then outstanding Rights at a redemption price of $0.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the “Redemption Price”).  The redemption of the Rights by the Board of Directors of the Company may be made effective at such time, on such basis and with such conditions as the Board of Directors of the Company, in its sole discretion, may establish.

 

(b)           Immediately upon the action of the Board of Directors of the Company ordering the redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at such later time as the Board of Directors of the Company may establish for the effectiveness of such redemption), and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price.  The Company shall promptly give public notice of any such redemption (with prompt written notice thereof to the Rights Agent); provided, however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption.  Within ten (10) days after such action of the Board of Directors of the Company ordering the redemption of the Rights

 

47

 

or the effectiveness of the redemption of the Rights pursuant to Section 23(a) hereof, as the case may be, the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares.  Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.  Each such notice of redemption will state the method by which the payment of the Redemption Price will be made.  Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 23 or in Section 24 hereof, and other than in connection with the purchase of Common Shares prior to the Distribution Date.

 

Section 24.        Exchange.  (a) The Board of Directors of the Company may, at its option, at any time after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any adjustment in the number of Rights pursuant to Section 11(i) (such exchange ratio being hereinafter referred to as the “Exchange Ratio”).  Notwithstanding the foregoing, the Board of Directors of the Company shall not be empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Shares for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the Common Shares then outstanding.  The exchange of Rights by the Board of Directors may be made effective at such time, on such basis and with such conditions as the Board

 

48

 

of Directors in its sole discretion may establish. Without limiting the foregoing, in connection with effecting an exchange pursuant to this Section 24, the Board of Directors may direct the Company to enter into a trust agreement in such form and with such terms as the Board of Directors shall then approve and issue to the trust created by such trust agreement all or some (as designated by the Board of Directors) of the securities to be exchanged for the Rights pursuant to this Section 24, and all Persons entitled to receive such securities pursuant to the exchange shall be entitled to receive all or some (as designated by the Board of Directors) of such securities (and any dividends or distributions made thereon after the date on which such securities are deposited in the trust) from such trust and upon compliance with the relevant terms of the trust agreement.

 

(b) Immediately upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of Common Shares equal to the number of such Rights held by such holder multiplied by the Exchange Ratio.  The Company shall promptly give public notice of any such exchange (with prompt written notice thereof to the Rights Agent); provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange.  The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent.  Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.  Each such notice of exchange will state the method by which the exchange of the Common Shares for Rights will be effected, and, in the event of any partial exchange, the number of Rights which will be exchanged.  Any partial exchange shall be effected

 

49

 

pro rata based on the number of Rights (other than Rights which have become null and void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

 

(c)           In the event that there shall not be sufficient Common Shares issued but not outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company shall take all such action as may be necessary to authorize additional Common Shares for issuance upon exchange of the Rights.  In the event the Company shall, after good faith effort, be unable to take all such action as may be necessary to authorize such additional Common Shares, the Company shall substitute, for each Common Share that would otherwise be issuable upon exchange of a Right, a number of Preferred Shares or fraction thereof such that the current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the date of issuance of such Preferred Shares or fraction thereof.

 

(d)           The Company shall not be required to issue fractions of Common Shares or to distribute certificates which evidence fractional Common Shares.  In lieu of such fractional Common Shares, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional Common Shares would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole Common Share.  For the purposes of this paragraph (d), the current market value of a whole Common Share shall be the closing price of a Common Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24.

 

Section 25.        Notice of Certain Events.  (a) In case the Company shall, at any time after the Distribution Date, propose (i) to pay any dividend payable in stock of any class to the holders of the Preferred Shares or to make any other distribution to the holders of the Preferred

 

50

 

Shares (other than a regular quarterly cash dividend), (ii) to offer to the holders of the Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of the Preferred Shares (other than a reclassification involving only the subdivision of outstanding Preferred Shares), (iv) to effect any share exchange, consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the liquidation, dissolution or winding up of the Company, or (vi) to declare or pay any dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares), then, in each such case, the Company shall give to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, or distribution of rights or warrants, or the date on which such share exchange, reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the Common Shares and/or Preferred Shares, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 10 days prior to the record date for determining holders of the Preferred Shares for purposes of such action, and, in the case of any such other action, at least 10 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Shares and/or Preferred Shares, whichever shall be the earlier.

 

51

 

(b)           In case the event set forth in Section 11(a)(ii) hereof shall occur, then the Company shall, as soon as practicable thereafter, give to the Rights Agent and each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such event and the consequences of such event to holders of Rights under Section 11(a)(ii) hereof.

 

Section 26.        Notices.  Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by overnight delivery service or first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows:

 

Yum China Holdings, Inc.

16/F Two Grand Gateway

3 Hongqiao Road

Shanghai 200030

The People’s Republic of China

Attention:  Chief Legal Officer

 

Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by overnight delivery service or first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows:

 

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, New York 11219
 Attention:  Alexandra Albrecht

 

Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.

 

52

 

Section 27.        Supplements and Amendments.  Subject to this Section, the Company may, and the Rights Agent shall, if directed by the Company, from time to time supplement or amend this Agreement without the approval of any holders of Right Certificates in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or to make any other provisions with respect to the Rights which the Company may deem necessary or desirable, any such supplement or amendment to be evidenced by a writing signed by the Company and the Rights Agent; provided, however, that, from and after such time as any Person becomes an Acquiring Person, this Agreement shall not be amended in any manner which would adversely affect the interests of the holders of Rights.  For the avoidance of doubt, the Company shall be entitled to adopt and implement such procedures and arrangements (including with third parties) as it may deem necessary or desirable to facilitate the exercise, exchange, trading, issuance or distribution of the Rights (and Preferred Shares) as contemplated hereby and to ensure that an Acquiring Person does not obtain the benefits thereof, and amendments in respect of the foregoing shall not be deemed to adversely affect the interests of the holders of Rights.  Upon the delivery of a certificate from an appropriate officer of the Company that states that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment; provided, that notwithstanding anything in this Agreement to the contrary, the Rights Agent may, but shall not be obligated to, enter into any supplement or amendment that materially and adversely affects the Rights Agent’s own rights, duties, obligations or immunities under this Agreement.

 

Section 28.        Successors.  All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

 

53

 

Section 29.        Benefits of this Agreement.  Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares).

 

Section 30.        Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that if any such excluded term, provision, covenant or restriction shall materially and adversely affect the rights, immunities, duties or obligations of the Rights Agent, the Rights Agent shall be entitled to resign upon 10 Business Days’ written notice to the Company pursuant to the requirements of Section 26 of this Agreement.

 

Section 31.        Governing Law.  This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts to be made and performed entirely within such state.

 

Section 32.        Counterparts.  This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.  A signature to this Agreement transmitted electronically shall have the same authority, effect, and enforceability as an original signature.

 

54

 

Section 33.        Descriptive Headings.  Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

 

Section 34.        Customer Identification Program.  The Company acknowledges that the Rights Agent is subject to the customer identification program (“Customer Identification Program”) requirements under the USA PATRIOT Act and its implementing regulations, and that the Rights Agent must obtain, verify and record information that allows the Rights Agent to identify the Company.  Accordingly, prior to accepting an appointment hereunder, the Rights Agent may request information from the Company that will help the Rights Agent to identify the Company, including without limitation the Company’s physical address, tax identification number, organizational documents, certificate of good standing, license to do business, or any other information that the Rights Agent deems necessary.  The Company agrees that the Rights Agent cannot accept an appointment hereunder unless and until the Rights Agent verifies the Company’s identity in accordance with the Customer Identification Program requirements.

 

Section 35.        Force Majeure.  Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, but not limited to, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunctions of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.  The Rights Agent shall provide the Company prompt notice as soon as practicable in the event that any such delay or failure in performance occurs and keep the Company apprised of developments and mitigation effort with respect thereto.

 

55

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and attested, all as of the day and year first above written.

 

 

	
Attest:
    	
 
    	
YUM   CHINA HOLDINGS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By
    	
/s/   Shella Ng
    	
 
    	
By
    	
/s/   Paul A. Hill
    
	
 
    	
Name:
    	
Shella   Ng
    	
 
    	
Name:
    	
Paul   A. Hill
    
	
 
    	
Title:
    	
Chief   Legal Officer and
    	
 
    	
Title:
    	
Vice   President and Controller
    
	
 
    	
 
    	
Corporate   Secretary
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attest:
    	
 
    	
AMERICAN   STOCK TRANSFER & TRUST COMPANY, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By
    	
/s/   Alexandra Albrecht
    	
 
    	
By
    	
/s/   Michael Nespoli
    
	
 
    	
Name:
    	
Alexandra   Albrecht
    	
 
    	
Name:
    	
Michael   Nespoli
    
	
 
    	
Title:
    	
Vice   President
    	
 
    	
Title:
    	
Executive   Director of Relationship Management
    

 

56

 

FORM
 of
 CERTIFICATE OF DESIGNATIONS
 of
 SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
 of
 YUM CHINA HOLDINGS, INC.

 

(Pursuant to Section 151 of the
 Delaware General Corporation Law)

 

Yum China Holdings, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (hereinafter called the “Corporation”), hereby certifies that the following resolution was adopted by a duly authorized committee of the Board of Directors of the Corporation as required by Section 151 of the General Corporation Law by written consent in lieu of a meeting:

 

RESOLVED, that pursuant to the authority granted to and vested in the ChinaCo Spin Committee (hereinafter called the “Spin Committee”) of the Board of Directors of this Corporation (hereinafter called the “Board of Directors”) in accordance with the provisions of the Certificate of Incorporation, the Spin Committee, on behalf of, and as authorized by, the Board of Directors, hereby creates a series of Preferred Stock, par value $0.01 per share, of the Corporation (the “Preferred Stock”), and hereby states the designation and number of shares, and fixes the relative rights, preferences, and limitations thereof as follows:

 

Series A Junior Participating Preferred Stock:

 

Section 1.  Designation and Amount.  The shares of such series shall be designated as “Series A Junior Participating Preferred Stock” (the “Series A Preferred Stock”) and the number of shares constituting the Series A Preferred Stock shall be 10,000,000.  Such number of shares may be increased or decreased by resolution of the Board of Directors; provided that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Preferred Stock.

 

Section 2.  Dividends and Distributions.

 

(A)          Subject to the rights of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior and superior to the Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of Common Stock, par value $0.01 per share (the “Common Stock”), of the Corporation, and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of March, June, September and December in

 

A-1

 

each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1 or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock.  In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

(B)          The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (A) of this Section immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

 

(C)          Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date.  Accrued but unpaid dividends shall not bear interest.  Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding.  The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof.

 

A-2

 

Section 3.  Voting Rights.  The holders of shares of Series A Preferred Stock shall have the following voting rights:

 

(A)          Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Corporation.  In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

(B)          Except as otherwise provided herein, in any other Certificate of Designations creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

 

(C)          Except as set forth herein, or as otherwise provided by law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

 

Section 4.  Certain Restrictions.

 

(A)          Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not:

 

(i)  declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock;

 

(ii)  declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

 

(iii)  redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or

 

A-3

 

winding up) to the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or

 

(iv)  redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

 

(B)          The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.

 

Section 5.  Reacquired Shares.  Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof.  All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation, or in any other Certificate of Designations creating a series of Preferred Stock or any similar stock or as otherwise required by law.

 

Section 6.  Liquidation, Dissolution or Winding Up.  Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Series A Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (2) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up.  In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of the preceding sentence shall be

 

A-4

 

adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

Section 7.  Consolidation, Merger, etc.  In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged.  In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

Section 8.  No Redemption.  The shares of Series A Preferred Stock shall not be redeemable.

 

Section 9.  Rank.  The Series A Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets, junior to all series of any other class of the Corporation’s Preferred Stock.

 

Section 10.  Amendment.  The Certificate of Incorporation of the Corporation shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single class.

 

A-5

 

IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation by its                            and attested by its Secretary this            day of                              , 2016.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Secretary
    	
 
    	
 
    

 

A-6

 

Form of Right Certificate

 

	
Certificate   No. R-
    	
Rights
    

 

NOT EXERCISABLE AFTER OCTOBER 27, 2017 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS.  THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.

 

Right Certificate

 

YUM CHINA HOLDINGS, INC.

 

This certifies that                     , or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Agreement, dated as of October 27, 2016 (the “Agreement”), between Yum China Holdings, Inc., a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company, LLC (the “Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Agreement) and prior to 5:00 P.M., New York City time, on October 27, 2017 at the principal office of the Rights Agent, or at the office of its successor as Rights Agent, one one-hundredth of a fully paid non-assessable share of Series A Junior Participating Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Shares”), at a purchase price of $113.00 per one one-hundredth of a Preferred Share (the “Purchase Price”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase duly executed.  The number of Rights evidenced by this Right Certificate (and the number of one one-hundredths of a Preferred Share which may be purchased upon

 

B-1

 

exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of October 27, 2016, based on the Preferred Shares as constituted at such date.  As provided in the Agreement, the Purchase Price and the number of one one-hundredths of a Preferred Share which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events.

 

If the Rights evidenced by this Right Certificate are (a) beneficially owned by an Acquiring Person (or any Associate or Affiliate of such Acquiring Person) or (b) transferred to an Acquiring Person (or any Associate or Affiliate of such Acquiring Person or to any nominee of such Acquiring Person, Associate or Affiliate), such Rights shall become null and void and no holder hereof shall have any right with respect to such Rights.

 

This Right Certificate is subject to all of the terms, provisions and conditions of the Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates.  Copies of the Agreement are on file at the principal executive offices of the Company and the offices of the Rights Agent.

 

This Right Certificate, with or without other Right Certificates, upon surrender at the principal office of the Rights Agent, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of Preferred Shares as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase.  If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised.

 

B-2

 

Subject to the provisions of the Agreement, the Rights evidenced by this Right Certificate (i) may be redeemed by the Company at a redemption price of $0.01 per Right or (ii) may be exchanged in whole or in part for Preferred Shares or shares of the Company’s Common Stock, par value $0.01 per share.

 

No fractional Preferred Shares will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one one-hundredth of a Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts), but, in lieu thereof, a cash payment will be made, as provided in the Agreement.

 

No holder of this Right Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Shares or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the Agreement.

 

This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

 

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WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.  Dated as of               ,     .

 

 

	
Attest:
    	
 
    	
YUM   CHINA HOLDINGS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By
    	
 
    	
 
    	
By
    	
 
    
	
 
    	
Name:
    	
 
    	
Name:
    	
 
    
	
 
    	
Title:   
    	
 
    	
Title:
    	
 
    
	
 
    	
Countersigned:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
AMERICAN STOCK   TRANSFER & TRUST COMPANY, LLC
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Michael   Nespoli
    	
 
    	
 
    
	
 
    	
Title:
    	
Executive   Director of Relationship Management
    	
 
    	
 
    

 

B-4

 

Form of Reverse Side of Right Certificate

 

FORM OF ASSIGNMENT

 

(To be executed by the registered holder if such
 holder desires to transfer the Right Certificate.)

 

FOR VALUE RECEIVED                                 hereby sells, assigns and transfers unto

	
 
    

(Please print name and address of transferee)

this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint                          Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature
    

 

Signature Guaranteed:

 

Signatures must be guaranteed by a member or participant in the Medallion Signature Guarantee Program at a guarantee level acceptable to the Company’s Transfer Agent.

 

The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Agreement) and are not issued with respect to Notional Common Shares related to a Derivatives Contract described in clause (iv) of the definition of Beneficial Owner (as such terms are defined in the Agreement).

 

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature
    

 

B-5

 

Form of Reverse Side of Right Certificate — continued

 

FORM OF ELECTION TO PURCHASE

 

(To be executed if holder desires to exercise
 Rights represented by the Right Certificate.)

 

To: YUM CHINA HOLDINGS, INC.

 

The undersigned hereby irrevocably elects to exercise                                       Rights represented by this Right Certificate to purchase the Preferred Shares issuable upon the exercise of such Rights and requests that certificates for such Preferred Shares be issued in the name of:

 

Please insert social security
 or other identifying number

 

	
 
    

(Please print name and address)

 

	
 
    

 

If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to:

 

Please insert social security
 or other identifying number

 

	
 
    

(Please print name and address)

 

	
 
    

 

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature
    

 

B-6

 

Signature Guaranteed:

 

Signatures must be guaranteed by a member or participant in the Medallion Signature Guarantee Program at a guarantee level acceptable to the Company’s Transfer Agent.

 

The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Agreement) and are not issued with respect to Notional Common Shares related to a Derivatives Contract described in clause (iv) of the definition of Beneficial Owner (as such terms are defined in the Agreement).

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature
    

 

B-7

 

NOTICE

 

The signature in the Form of Assignment or Form of Election to Purchase, as the case may be, must conform to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.

 

In the event the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, the Company and the Rights Agent will deem the Beneficial Owner of the Rights evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Agreement) and such Assignment or Election to Purchase will not be honored.

 

B-8

 

SUMMARY OF RIGHTS TO PURCHASE
 PREFERRED SHARES

 

Introduction

 

On October 27, 2016, a duly authorized committee of the Board of Directors (the “Board”) of Yum China Holdings, Inc., a Delaware corporation (the “Company”), declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock, par value $0.01 per share.  The dividend is payable on October 27, 2016 to the sole stockholder of record as of 5:01 P.M., New York City time, on October 27, 2016 (the “Record Date”).

 

The committee adopted the Rights Agreement to protect stockholders from coercive or otherwise unfair takeover tactics.  In general terms, it works by imposing a significant penalty upon any person or group that acquires 15% (or 19.9% in the case of the Investors, as such term is defined in the Rights Agreement) or more of our outstanding common stock without the approval of our Board.  The Rights Agreement should not interfere with any merger or other business combination approved by our Board.

 

For those interested in the specific terms of the Rights Agreement as made between our Company and American Stock Transfer & Trust Company, LLC, as the Rights Agent, on October 27, 2016, we provide the following summary description.  Please note, however, that this description is only a summary, and is not complete, and should be read together with the entire Rights Agreement, which has been filed with the Securities and Exchange Commission as an exhibit to a Registration Statement on Form 8-A dated October 27, 2016.  A copy of the agreement is available free of charge from our Company.

 

C-1

 

The Rights.  Our Board authorized the issuance of a Right with respect to each outstanding share of common stock on October 27, 2016.  The Rights will initially trade with, and will be inseparable from, the common stock.  The Rights are evidenced only by certificates (or, in the case of uncertificated shares, by notations in the book entry account system) that represent shares of common stock.  New Rights will accompany any new shares of common stock that we issue after October 27, 2016 until the Distribution Date described below or any earlier expiration of the Rights.

 

Exercisability.  The Rights will not be exercisable until 10 days after the public announcement that a person or group has become an “Acquiring Person” by obtaining beneficial ownership of 15% (or 19.9% in the case of the Investors) or more of our outstanding common stock.  Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.

 

We refer to the date when the Rights become exercisable as the “Distribution Date.”  Until that date, common stock certificates (or, in the case of uncertificated shares, notations in the book entry account system) will also evidence the Rights, and any transfer of shares of common stock will constitute a transfer of Rights.  After that date, the Rights will separate from the common stock and be evidenced by book-entry credits or by Rights certificates that we will mail to all eligible holders of common stock.  Any Rights held by an Acquiring Person are null and void and may not be exercised.

 

Exercise Price.  Each Right will allow its holder to purchase from our Company one one-hundredth of a share of Series A Junior Participating Preferred Stock (“Preferred Share”) for $113.00 (the “Exercise Price”), once the Rights become

 

C-2

 

exercisable.  This fraction of a Preferred Share will give the stockholder approximately the same dividend, voting, and liquidation rights as would one share of common stock.

 

Beneficial Ownership.  Certain synthetic interests in securities created by derivative positions — whether or not such interests are considered to be ownership of the underlying common stock or are reportable for purposes of Regulation 13D of the Securities Exchange Act of 1934, as amended — are treated as beneficial ownership of the number of shares of the company’s common stock equivalent to the economic exposure created by the derivative position, to the extent actual shares of the company’s common stock are directly or indirectly held by counterparties to the derivatives contracts.  Swaps dealers unassociated with any control intent or intent to evade the purposes of the rights plan are excepted from such imputed beneficial ownership.

 

Shares held by Affiliates and Associates of a person, and Notional Common Shares held by counterparties to a Derivatives Contract (as such terms are defined in the Rights Agreement) with a person, will be deemed to be beneficially owned by that person.

 

Consequences of a Person or Group Becoming an Acquiring Person.

 

·                  Flip In.  If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person may, for the Exercise Price, purchase shares of our common stock with a market value of $226.00, based on the market price of the common stock prior to such acquisition.

 

·                  Exchange.  After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of our outstanding common stock, our Board may extinguish the Rights by exchanging one share of common stock or an equivalent security for each Right, other than Rights held by the Acquiring Person.

 

·                  Flip Over.  If our Company is later acquired in a merger or similar transaction after the Rights Distribution Date, all holders of Rights except the Acquiring Person may, for the Exercise Price, purchase shares of the acquiring corporation with a market value of $226.00, based on the market price of the acquiring corporation’s stock, prior to such merger.

 

C-3

 

Preferred Share Provisions.

 

Each one one-hundredth of a Preferred Share, if issued:

 

·                  will not be redeemable.

 

·                  will entitle holders to quarterly dividend payments of $0.01 per share, or an amount equal to the dividend paid on one share of common stock, whichever is greater.

 

·                  will entitle holders upon liquidation either to receive $1.00 per share, or an amount equal to the payment made on one share of common stock, whichever is greater.

 

·                  will have the same voting power as one share of common stock.

 

·                  if shares of our common stock are exchanged via merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of common stock.

 

The value of one one-hundredth interest in a Preferred Share should approximate the value of one share of common stock.

 

Expiration.  The Rights will expire on October 27, 2017.

 

Redemption.  Our Board may redeem the Rights for $0.01 per Right at any time before any person or group becomes an Acquiring Person.  If our Board redeems any Rights, it must redeem all of the Rights.  Once the Rights are redeemed, the only right of the holders of Rights will be to receive the redemption price of $0.01 per Right.  The redemption price will be adjusted in the event of any stock split of or stock dividends on our common stock.

 

Anti-Dilution Provisions.  Our Board may adjust the purchase price of the Preferred Shares, the number of Preferred Shares issuable and the number of outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split or a reclassification of the Preferred Shares or common stock.  No adjustments to the Exercise Price of less than 1% will be made.

 

C-4

 

Amendments.  The terms of the Rights Agreement may be amended by our Board without the consent of the holders of the Rights.  However, the Board may not cause a person or group to become an Acquiring Person by lowering the 15% threshold below the percentage interest that such person or group already owns.  After a person or group becomes an Acquiring Person, our Board may not amend the Rights Agreement in a way that adversely affects holders of the Rights.

 

C-5

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