Exhibit 10.1

Execution Version

$825,000,000

PETROHAWK ENERGY CORPORATION

7.25% Senior Notes due 2018

PURCHASE AGREEMENT

August 3, 2010

BARCLAYS CAPITAL INC.

As Representative of the several

    Initial Purchasers named in Schedule I attached hereto,

c/o Barclays Capital Inc.

745 Seventh Avenue

New York, New York 10019

Ladies and Gentlemen:

Petrohawk Energy Corporation, a Delaware corporation (the “Company”), proposes,
upon the terms and conditions set forth in this agreement (this “Agreement”), to
issue and sell to you, as the initial purchasers (the “Initial Purchasers”),
$825.0 million in aggregate principal amount of its 7.25% Senior Notes due 2018
(the “Notes”). The Notes will (i) have terms and provisions that are summarized
in the Offering Memorandum (as defined below) and (ii) are to be issued pursuant
to an Indenture (the “Indenture”) to be entered into among the Company, the
Guarantors (as defined below) and U.S. Bank National Association, as trustee
(the “Trustee”). The Company’s obligations under the Notes, including the due
and punctual payment of interest on the Notes, will be unconditionally
guaranteed (the “Guarantees”) by the guarantors listed in Schedule II hereto
(together the “Guarantors”). As used herein, the term “Notes” shall include the
Guarantees, unless the context otherwise requires. This is to confirm the
agreement concerning the purchase of the Notes from the Company by the Initial
Purchasers.

1. Purchase and Resale of the Notes. The Notes will be offered and sold to the
Initial Purchasers without registration under the Securities Act of 1933, as
amended (the “Securities Act”), in reliance on an exemption pursuant to
Section 4(2) under the Securities Act. The Company and the Guarantors have
prepared a preliminary offering memorandum, dated August 3, 2010 (the
“Preliminary Offering Memorandum”), a pricing term sheet substantially in the
form attached hereto as Schedule III (the “Pricing Term Sheet”) setting forth
the terms of the Notes omitted from the Preliminary Offering Memorandum, and an
offering memorandum, dated August 3, 2010 (the “Offering Memorandum”), setting
forth information regarding the Company, the Guarantors, the Notes, and the
Exchange Notes (as defined herein), the Guarantees and the Exchange Guarantees
(as defined herein). The Preliminary Offering Memorandum, as supplemented and
amended as of the Applicable Time (as defined below), together with the Pricing
Term Sheet and any of the documents listed on Schedule IV(a) hereto are
collectively referred to as the “Pricing Disclosure Package.” The Company and
the Guarantors hereby confirm that they have authorized the use of the Pricing
Disclosure Package and the Offering Memorandum in connection with the offering
and resale of the Notes by the Initial Purchasers. “Applicable Time” means 4:15
p.m. (New York City time) on the date of this Agreement.

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Any reference to the Preliminary Offering Memorandum, the Pricing Disclosure
Package or the Offering Memorandum shall be deemed to refer to and include the
Company’s most recent Annual Report on Form 10-K for the fiscal year ended
December 31, 2009 and all documents for subsequent periods and dates filed with
the United States Securities and Exchange Commission (the “Commission”) pursuant
to Section 13(a) or 15(d) of the United States Securities Exchange Act of 1934,
as amended (the “Exchange Act”), on or prior to the date of the Preliminary
Offering Memorandum, the Pricing Disclosure Package or the Offering Memorandum,
as the case may be and all documents otherwise incorporated by reference into
the Preliminary Offering Memorandum, Pricing Disclosure Package or the Offering
Memorandum. Any reference to the Preliminary Offering Memorandum, Pricing
Disclosure Package or the Offering Memorandum, as the case may be, as amended or
supplemented, as of any specified date, shall be deemed to include (i) any
documents filed with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act after the date of the Preliminary Offering Memorandum, Pricing
Disclosure Package or the Offering Memorandum, as the case may be, and prior to
such specified date and all documents otherwise incorporated by reference into
the Preliminary Offering Memorandum, Pricing Disclosure Package or the Offering
Memorandum prior to such specified date. All documents filed under the Exchange
Act and so deemed to be included in the Preliminary Offering Memorandum, Pricing
Disclosure Package or the Offering Memorandum, as the case may be, or any
amendment or supplement thereto are hereinafter called the “Exchange Act
Reports.” The Exchange Act Reports, when they were or are filed with the
Commission, conformed or will conform in all material respects to the applicable
requirements of the Exchange Act and the applicable rules and regulations of the
Commission thereunder.

It is understood and acknowledged that upon original issuance thereof, and until
such time as the same is no longer required under the applicable requirements of
the Securities Act, the Notes (and all securities issued in exchange therefor or
in substitution thereof) shall bear the following legend (along with such other
legends as the Initial Purchasers and their counsel deem necessary):

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
“QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT (“RULE 144A”)), OR (B) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, PURSUANT TO RULE 904 OF REGULATION S, AND (2) AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS

 

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ONE YEAR (OR SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY RULE 144(d) (OR ANY
SUCCESSOR PROVISION THEREOF) UNDER THE SECURITIES ACT) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF (OR ANY PREDECESSOR OF THIS SECURITY) AND THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY OR ANY
OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, PURSUANT TO RULE 904 OF REGULATION S, OR (E) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
THE SECURITIES LAWS OF ANY OTHER JURISDICTION, INCLUDING ANY STATE OF THE UNITED
STATES, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED
BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.”

You have advised the Company that you will make offers (the “Exempt Resales”) of
the Notes purchased by you hereunder on the terms set forth in each of the
Pricing Disclosure Package and the Offering Memorandum, as amended or
supplemented, solely to (i) persons whom you reasonably believe to be “qualified
institutional buyers” as defined in Rule 144A under the Securities Act (“QIBs”)
and (ii) outside the United States to certain persons who are not U.S. Persons
(as defined in Regulation S under the Securities Act (“Regulation S”)) (such
persons, “Non-U.S. Persons”) in offshore transactions in reliance on Regulation
S. Those persons specified in clauses (i) and (ii) are referred to herein as the
(“Eligible Purchasers”). You will offer the Notes to Eligible Purchasers
initially at a price equal to 100% of the principal amount thereof. Such price
may be changed at any time without notice.

Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the registration rights agreement (the
“Registration Rights Agreement”) among the Company, the Guarantors and the
Initial Purchasers to be dated August 17, 2010 (the “Closing Date”), for so long
as such Notes constitute “Transfer Restricted Securities” (as defined in the
Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Company

 

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and the Guarantors will agree to file with the Commission under the
circumstances set forth therein, a registration statement under the Securities
Act (the “Exchange Offer Registration Statement”) relating to the Company’s
$825.0 million 7.25% Senior Notes due 2018 (the “Exchange Notes”) and the
Guarantors’ Exchange Guarantees (the “Exchange Guarantees”) to be offered in
exchange for the Notes and the Guarantees. Such portion of the offering is
referred to as the “Exchange Offer.”

2. Representations, Warranties and Agreements of the Company and the Guarantors.
The Company and each of the Guarantors, jointly and severally, represent,
warrant and agree as follows:

(a) When the Notes and Guarantees are issued and delivered pursuant to this
Agreement, such Notes and Guarantees will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities of the Company or
the Guarantors that are listed on a United States national securities exchange
registered or that are quoted in a United States automated inter-dealer
quotation system.

(b) Neither the Company nor any subsidiary is, and after giving effect to the
offer and sale of the Notes and the application of the proceeds therefrom as
described under “Use of proceeds” in each of the Pricing Disclosure Package and
the Offering Memorandum will be, an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder.

(c) Assuming that your representations and warranties in Section 3(b) are true,
the purchase and resale of the Notes pursuant hereto (including pursuant to the
Exempt Resales) is exempt from the registration requirements of the Securities
Act. No form of general solicitation or general advertising within the meaning
of Regulation D (including, but not limited to, advertisements, articles,
notices or other communications published in any newspaper, magazine or similar
medium or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising)
was used by the Company, the Guarantors or any of their respective
representatives (other than you, as to whom the Company and the Guarantors make
no representation) in connection with the offer and sale of the Notes.

(d) No form of general solicitation or general advertising was used by the
Company, the Guarantors or any of their respective representatives (other than
you, as to whom the Company and the Guarantors make no representation) with
respect to Notes sold outside the United States to Non-U.S. Persons, by means of
any directed selling efforts within the meaning of Rule 902 under the Securities
Act, and the Company, any affiliate of the Company and any person acting on its
or their behalf (other than you, as to whom the Company and the Guarantors make
no representation) has complied with and will implement the “offering
restrictions” required by Rule 902 under the Securities Act.

(e) Each of the Preliminary Offering Memorandum, the Pricing Disclosure Package
and the Offering Memorandum, each as of its respective date, contains all the
information specified in, and meeting the requirements of, Rule 144A(d)(4) under
the Securities Act.

 

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(f) The Preliminary Offering Memorandum, the Pricing Disclosure Package and the
Offering Memorandum have been prepared by the Company and the Guarantors for use
by the Initial Purchasers in connection with the Exempt Resales. No order or
decree preventing the use of the Preliminary Offering Memorandum, the Pricing
Disclosure Package or the Offering Memorandum, or any order asserting that the
transactions contemplated by this Agreement are subject to the registration
requirements of the Securities Act has been issued, and no proceeding for that
purpose has commenced or is pending or, to the knowledge of the Company or any
of the Guarantors is contemplated.

(g) The Pricing Disclosure Package did not, as of the Applicable Time, and will
not, as of the Closing Date, contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Pricing Disclosure Package in
reliance upon and in conformity with written information furnished to the
Company through the Representative by or on behalf of any Initial Purchaser
specifically for inclusion therein, which information is specified in
Section 8(e).

(h) The Offering Memorandum will not, as of its date and as of the Closing Date,
contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading; provided that no
representation or warranty is made as to information contained in or omitted
from the Offering Memorandum in reliance upon and in conformity with written
information furnished to the Company through the Representative by or on behalf
of any Initial Purchaser specifically for inclusion therein, which information
is specified in Section 8(e).

(i) Other than the Pricing Term Sheet, the Company has not made any offer to
sell or solicitation of an offer to buy the Notes that would constitute a “free
writing prospectus” (if the offering of the Notes was made pursuant to a
registered offering under the Securities Act), as defined in Rule 405 under the
Securities Act (a “Free Writing Offering Document”) without the prior consent of
the Representative; any such Free Writing Offering Document the use of which has
been previously consented to by the Representative is listed on Schedule IV(a)
and (b). Each such Free Writing Offering Document, when taken together with the
Pricing Disclosure Package, did not, and at the Closing Date will not, contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided that no representation and
warranty is made with respect to any statements or omissions made in each such
Free Writing Offering Document in reliance upon and in conformity with
information relating to any Initial Purchaser furnished to the Company through
the Representative by or on behalf of any Initial Purchaser specifically for
inclusion therein.

(j) The Exchange Act Reports did not, and will not when filed with the
Commission, contain an untrue statement of material fact or omit to state a
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.

 

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(k) The statistical and market-related data included under the captions
“Summary,” “Management’s discussion and analysis of financial condition and
results of operations,” and “Business” in the Pricing Disclosure Package and the
Offering Memorandum and the consolidated financial statements of the Company and
its subsidiaries included in the Pricing Disclosure Package and the Offering
Memorandum are based on or derived from sources that the Company believes to be
reliable and accurate in all material respects.

(l) Each of the Company, the Guarantors and their respective subsidiaries has
been duly organized and is validly existing and in good standing as a
corporation or other business entity under the laws of its jurisdiction of
organization and is duly qualified to do business and in good standing as a
foreign corporation or other business entity in each jurisdiction in which its
ownership or lease of property or the conduct of its businesses requires such
qualification, except where the failure to be so qualified or in good standing
would not, in the aggregate, reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), results of operations,
stockholders’ equity, properties, business or prospects of the Company and its
subsidiaries taken as a whole or a material adverse effect on the performance by
the Company and the Guarantors of the performance of this Agreement, the
Indenture or the Notes or the consummation of any of the transactions
contemplated hereby or thereby (a “Material Adverse Effect”); each of the
Company, the Guarantors and their respective subsidiaries has all power and
authority necessary to own or hold its properties and to conduct the businesses
in which it is engaged. The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in the Company’s Annual Report on Form 10-K for the most
recent fiscal year and any entities listed on Schedule V. None of the
subsidiaries of the Company (other than the subsidiaries set forth on Schedule
VI (collectively, the “Significant Subsidiaries”)) is a “significant subsidiary”
(as defined in Rule 405 under the Securities Act).

(m) The Company has an authorized capitalization as set forth in each of the
Pricing Disclosure Package and the Offering Memorandum, and all of the issued
shares of capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; and all of the issued shares of
capital stock or other ownership interests of each subsidiary of the Company
have been duly authorized and validly issued, are fully paid and non-assessable
and are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims, except as described in the Pricing
Disclosure Package and the Offering Memorandum and except for such liens,
encumbrances, equities or claims as would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.

(n) The Company and each Guarantor has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Indenture.
The Indenture has been duly and validly authorized by the Company and the
Guarantors, and upon its execution and delivery and, assuming due authorization,
execution and delivery by the Trustee, will constitute the valid and binding
agreement of the Company and the Guarantors, enforceable against the Company and
the Guarantors in accordance with its terms, except as such enforceability may
be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,

 

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moratorium, and other laws relating to or affecting creditors’ rights generally
and by general equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law); no qualification of the
Indenture under the Trust Indenture Act of 1939 (the “1939 Act”) is required in
connection with the offer and sale of the Notes contemplated hereby or in
connection with the Exempt Resales. The Indenture will conform to the
description thereof in each of the Pricing Disclosure Package and the Offering
Memorandum.

(o) The Company has all requisite corporate power and authority to execute,
issue, sell and perform its obligations under the Notes. The Notes have been
duly authorized by the Company and, when duly executed by the Company in
accordance with the terms of the Indenture, assuming due authentication of the
Notes by the Trustee, upon delivery to the Initial Purchasers against payment
therefor in accordance with the terms hereof, will be validly issued and
delivered and will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture, enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors’ rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law). The Notes will conform in all material
respects to the description thereof in each of the Pricing Disclosure Package
and the Offering Memorandum.

(p) The Company has all requisite corporate power and authority to execute,
issue and perform its obligations under the Exchange Notes. The Exchange Notes
have been duly and validly authorized by the Company and if and when issued and
authenticated in accordance with the terms of the Indenture and delivered in
accordance with the Exchange Offer provided for in the Registration Rights
Agreement, will be validly issued and delivered and will constitute valid and
binding obligations of the Company entitled to the benefits of the Indenture,
enforceable against the Company in accordance with their terms, except as such
enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting creditors’
rights generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

(q) Each Guarantor has all requisite corporate, partnership or limited liability
company power and authority, as applicable, to execute, issue and perform its
obligations under the Guarantees. The Guarantees have been duly and validly
authorized by the Guarantors and when the Indenture is duly executed and
delivered by the Guarantors in accordance with its terms and upon the due
execution, authentication and delivery of the Notes in accordance with the
Indenture and the issuance of the Notes in the sale to the Initial Purchasers
contemplated by this Agreement, will constitute valid and binding obligations of
the Guarantors, enforceable against the Guarantors in accordance with their
terms, except as such enforceability may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to
or affecting creditors’ rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). The Guarantees will conform in all material respects to the
description thereof in each of the Pricing Disclosure Package and the Offering
Memorandum.

 

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(r) Each Guarantor has all requisite corporate, partnership or limited liability
company power and authority, as applicable, to execute, issue and perform its
obligations under the Exchange Guarantees. The Exchange Guarantees have been
duly and validly authorized by the Guarantors and if and when executed and
delivered by the Guarantors in accordance with the terms of the Indenture and
upon the due execution and authentication of the Exchange Notes in accordance
with the Indenture and the issuance and delivery of the Exchange Notes in the
Exchange Offer contemplated by the Registration Rights Agreement, will be
validly issued and delivered and will constitute valid and binding obligations
of the Guarantors entitled to the benefits of the Indenture, enforceable against
the Guarantors in accordance with their terms, except as such enforceability may
be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors’ rights generally
and by general equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).

(s) The Company and each Guarantor has all requisite corporate, partnership or
limited liability company power and authority, as applicable, to execute,
deliver and perform its obligations under the Registration Rights Agreement. The
Registration Rights Agreement has been duly authorized by the Company and each
Guarantor and, when executed and delivered by the Company and each Guarantor in
accordance with the terms hereof and thereof, will be validly executed and
delivered and (assuming the due authorization, execution and delivery thereof by
you) will be the legally valid and binding obligation of the Company and each
Guarantor in accordance with the terms thereof, enforceable against the Company
and each Guarantor in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditor’s rights generally, by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and, as to rights of indemnification and
contribution, by principles of public policy. The Registration Rights Agreement
will conform to the description thereof in each of the Pricing Disclosure
Package and the Offering Memorandum.

(t) The Company and each Guarantor has all requisite corporate power to execute,
deliver and perform its obligations under this Agreement. This Agreement has
been duly and validly authorized, executed and delivered by the Company and each
of the Guarantors.

(u) The issue and sale of the Notes and the Guarantees, the execution, delivery
and performance by the Company and the Guarantors of the Notes, the Guarantees,
the Exchange Notes, the Exchange Guarantees, the Indenture, the Registration
Rights Agreement and this Agreement, the application of the proceeds from the
sale of the Notes as described under “Use of proceeds” in each of the Pricing
Disclosure Package and the Offering Memorandum and the consummation of the
transactions contemplated hereby and thereby, will not (i) conflict with or
result in a breach or violation of any of the terms or provisions of, impose any
lien, charge or encumbrance upon any property or assets of the Company, the
Guarantors or their respective subsidiaries, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, license, lease or other
agreement or instrument to which the Company, the Guarantors or any of their
respective subsidiaries is a party or by which the Company, the Guarantors or
any of their respective subsidiaries is bound or to which any of the property or
assets of the Company, the Guarantors or any of their respective subsidiaries is
subject, (ii) result

 

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in any violation of the provisions of the charter or by-laws or similar
organizational document of the Company, the Guarantors or any of their
respective subsidiaries or (iii) result in any violation of any statute or any
judgment, order, decree, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company, the Guarantors or any of their
respective subsidiaries or any of their properties or assets, except, with
respect to clauses (i) and (iii), conflicts or violations that could not
reasonably be expected to have a Material Adverse Effect.

(v) No consent, approval, authorization or order of, or filing, registration or
qualification with any court or governmental agency or body having jurisdiction
over the Company, the Guarantors or any of their respective subsidiaries is
required for the issue and sale of the Notes and the Guarantees, the execution,
delivery and performance by the Company and the Guarantors of the Notes, the
Guarantees, the Exchange Notes, the Exchange Guarantees, the Indenture, the
Registration Rights Agreement and this Agreement, the application of the
proceeds from the sale of the Notes as described under “Use of proceeds” in each
of the Pricing Disclosure Package and the Offering Memorandum and the
consummation of the transactions contemplated hereby and thereby, except for the
filing of a registration statement by the Company with the Commission pursuant
to the Securities Act as required by the Registration Rights Agreement and the
qualification of the Indenture under the Trust Indenture Act of 1939 in
connection with the registration of the Exchange Notes under the Securities Act
and such consents, approvals, authorizations, orders, filings, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Notes by the Initial
Purchasers.

(w) Except for the Registration Rights Agreement, there are no contracts,
agreements or understandings between the Company, any Guarantor and any person
granting such person the right to require the Company or any Guarantor to file a
registration statement under the Securities Act with respect to any securities
of the Company or any Guarantor owned or to be owned by such person or to
require the Company or any Guarantor to include such securities in the
securities registered pursuant to the Registration Rights Agreement or in any
securities being registered pursuant to any other registration statement filed
by the Company or any Guarantor under the Securities Act.

(x) Neither the Company, any Guarantor nor any other person acting on behalf of
the Company or any Guarantor has sold or issued any securities that would be
integrated with the offering of the Notes contemplated by this Agreement
pursuant to the Securities Act, the rules and regulations thereunder or the
interpretations thereof by the Commission. The Company and the Guarantors will
take reasonable precautions designed to insure that any offer or sale, direct or
indirect, in the United States or to any U.S. person (as defined in Rule 902
under the Securities Act), of any Notes or any substantially similar security
issued by the Company or any Guarantor, within six months subsequent to the date
on which the distribution of the Notes has been completed (as notified to the
Company by the Initial Purchasers), is made under restrictions and other
circumstances reasonably designed not to affect the status of the offer and sale
of the Notes in the United States and to U.S. persons contemplated by this
Agreement as transactions exempt from the registration provisions of the
Securities Act, including any sales pursuant to Rule 144A under, or Regulations
D or S of, the Securities Act.

 

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(y) Neither the Company, the Guarantors nor any of their respective subsidiaries
has sustained, since the date of the latest audited financial statements
included or incorporated by reference in the Pricing Disclosure Package and the
Offering Memorandum, any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, and, since
such date, there has not been any change in the capital stock, partnership or
limited liability interests, as applicable, or long-term debt, of the Company,
the Guarantors or any of their respective subsidiaries or any adverse change, or
any development involving a prospective adverse change, in or affecting the
condition (financial or otherwise), results of operations, stockholders’ equity,
properties, management, business or prospects of the Company and its
subsidiaries, taken as a whole, in each case except as could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.

(z) The historical financial statements (including the related notes and
supporting schedules) included or incorporated by reference in the Pricing
Disclosure Package and the Offering Memorandum present fairly in all material
respects the financial condition, results of operations and cash flows of the
entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with accounting principles
generally accepted in the United States applied on a consistent basis throughout
the periods involved. The pro forma financial statements included or
incorporated by reference in the Pricing Disclosure Package and the Offering
Memorandum include assumptions that provide a reasonable basis for presenting
the significant effects directly attributable to the transactions and events
described therein, the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma adjustments reflect the proper application
of those adjustments to the historical financial statement amounts in the pro
forma financial statements included in the Pricing Disclosure Package. The pro
forma financial statements included or incorporated by reference in the Pricing
Disclosure Package and the Offering Memorandum have been prepared in accordance
with the Commission’s rules and guidance with respect to pro forma financial
information. The pro forma financial statements included or incorporated by
reference in the Pricing Disclosure Package and the Offering Memorandum have
been prepared on the basis consistent with such historical financial statements,
except for the pro forma adjustments specified therein include all material
adjustments to the historical financial data required by Rule 11-02 of
Regulation S-X to reflect the Company’s sale of its Permian Basin properties,
which closed on October 30, 2009, and the disposition of its Haynesville Shale
midstream operations in the KinderHawk Field Services LLC joint venture
transactions with an affiliate of Kinder Morgan Energy Partners, L.P., which
closed on May 21, 2010 (as discussed in the Pricing Disclosure Package and the
Offering Memorandum), and give effect to assumptions made on a reasonable basis
and in good faith present fairly in all material respects the historical and
proposed transactions contemplated by the Pricing Disclosure Package and the
Offering Memorandum. The other financial information and data included in the
Pricing Disclosure Package and the Offering Memorandum, historical and pro
forma, are, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company.

(aa) Deloitte & Touche LLP, who have certified certain financial statements of
the Company and its consolidated subsidiaries, whose report appears in the
Pricing Disclosure Package and the Offering Memorandum or is incorporated by
reference therein and who have

 

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delivered the initial letter referred to in Section 7(f) hereof, are independent
public accountants as required by the Securities Act and the rules and
regulations thereunder and the rules and regulations of the Public Company
Accounting Oversight Board (the “PCAOB”) during the periods covered by the
financial statements on which they reported contained or incorporated by
reference in the Pricing Disclosure Package and the Offering Memorandum.

(bb) Netherland, Sewell & Associates, Inc., an oil and gas consulting firm
(“NSAI”), whose report dated February 16, 2010, is summarized or excerpted in
reports incorporated by reference, or included, in the Pricing Disclosure
Package and the Offering Memorandum and who has delivered the initial expert
letter referred to in Section 7(j) hereof, was, as of the date of such report,
and is, as of the date hereof, an independent petroleum engineer with respect to
the Company. The written engineering report prepared by NSAI dated February 16,
2010, setting forth the proved reserves attributed to the oil and gas properties
of the Company and its subsidiaries accurately reflects in all material respects
the ownership interests of the Company its subsidiaries in the properties
therein as of December 31, 2009; the information furnished by the Company to
NSAI for purposes of preparing its report, including, without limitation,
production, costs of operation and development, current prices for production,
agreements relating to current and future operations and sales of production,
was true, correct and complete in all material respects on the date supplied and
was prepared in accordance with customary industry practices, as indicated in
the letter of NSAI dated February 16, 2010.

(cc) Except as described in the Pricing Disclosure Package and the Offering
Memorandum, the Company, the Guarantors and each of their respective
subsidiaries has defensible title to all of their interests in oil and gas
properties (other than interests earned under farm-out, participation or similar
agreements in which an assignment or transfer is pending) and all their
interests in other real property and good title to all other properties owned by
them, in each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such as
(i) are described in the Pricing Disclosure Package and the Offering Memorandum,
(ii) liens and encumbrances under operating agreements, unitization and pooling
agreements, production sales contracts, farm-out agreements and other oil and
gas exploration participation and production agreements, in each case that
secure payment of amounts not yet due and payable for the performance of other
unmatured obligations and are of a scope and nature customary in the oil and gas
industry or arise in connection with drilling and production operations, or
(iii) would not have a Material Adverse Effect on the value of the affected
property or the use made and proposed to be made of such property by the
Company, the Guarantors or any of their respective subsidiaries, as the case may
be; except as would not have a Material Adverse Effect, all of the leases and
subleases of real property of the Company, the Guarantors or any of their
respective subsidiaries and under which the Company, the Guarantors or any of
their respective subsidiaries holds properties described in the Pricing
Disclosure Package and the Offering Memorandum, are in full force and effect,
and neither the Company, the Guarantors nor any of their respective subsidiaries
has received written notice of any claim of any sort that has been asserted by
anyone adverse to the rights of the Company, the Guarantors or any of their
respective subsidiaries under any of such leases or subleases, or affecting or
questioning the rights of the Company, the Guarantors or any of their respective
subsidiaries to the continued possession of the leased or subleased premises
under any such lease or sublease.

 

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(dd) The Company and each of its subsidiaries have such permits, licenses,
patents, franchises, certificates of need and other approvals or authorizations
of governmental or regulatory authorities (“Permits”) as are necessary under
applicable law to own their properties and conduct their businesses in the
manner described in the Pricing Disclosure Package and the Offering Memorandum,
except for any of the foregoing that could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect; each of the Company and its
subsidiaries has fulfilled and performed all of its obligations with respect to
the Permits, and no event has occurred that allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other
impairment of the rights of the holder or any such Permits, except for any of
the foregoing that could not reasonably be expected to have a Material Adverse
Effect.

(ee) The Company and each of its subsidiaries own or possess adequate rights to
use all material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations, copyrights,
licenses, know-how, software, systems and technology (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of their
respective businesses and have no reason to believe that the conduct of their
respective businesses will conflict with, and have not received any notice of
any claim of conflict with, any such rights of others.

(ff) There are no legal or governmental proceedings pending to which the Company
or any of its subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject that could, in the aggregate,
reasonably be expected to have a Material Adverse Effect or could, in the
aggregate, reasonably be expected to have a material adverse effect on the
performance by the Company and the Guarantors of the performance of this
Agreement, the Indenture or the Notes or the consummation of any of the
transactions contemplated hereby; and to the Company’s and each Guarantors’
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or others.

(gg) There are no legal or governmental proceedings or contracts or other
documents that would be required to be described in a registration statement
filed under the Securities Act or, in the case of documents, would be required
to be filed as exhibits to a registration statement of the Company pursuant to
Item 601(10) of Regulation S-K that have not been described in the Pricing
Disclosure Package and the Offering Memorandum. Neither the Company, the
Guarantors nor any of their respective subsidiaries has knowledge that any other
party to any such contract, agreement or arrangement has any intention not to
render full performance as contemplated by the terms thereof; and that
statements made in the Pricing Disclosure Package and the Offering Memorandum
under the captions “Business,” “Material U.S. federal tax considerations,” and
“Certain ERISA considerations” insofar as they purport to constitute summaries
of the terms of legal or governmental proceedings or contracts and other
documents, constitute accurate summaries of the terms of such legal and
governmental proceedings and contracts and other documents in all material
respects.

(hh) No relationship, direct or indirect, that would be required to be described
in a registration statement of the Company pursuant to Item 404 of Regulation
S-K, exists between or among the Company or any Guarantor, on the one hand, and
the directors, officers, stockholders, customers or suppliers of the Company or
any Guarantor, on the other hand, that has not been described in the Pricing
Disclosure Package and the Offering Memorandum.

 

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(ii) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company or any Guarantor, is
imminent that could reasonably be expected to have a Material Adverse Effect.

(jj) (i) Each “employee benefit plan” (within the meaning of Section 3(3) of the
Employee Retirement Security Act of 1974, as amended (“ERISA”)) for which the
Company or any member of its “Controlled Group” (defined as any organization
which is a member of a controlled group of corporations within the meaning of
Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”)) would
have any liability (each a “Plan”) has been maintained in compliance with its
terms and with the requirements of all applicable statutes, rules and
regulations including ERISA and the Code; (ii) with respect to each Plan subject
to Title IV of ERISA (a) no “reportable event” (within the meaning of
Section 4043(c) of ERISA) has occurred or is reasonably expected to occur,
(b) no “accumulated funding deficiency” (within the meaning of Section 302 of
ERISA or Section 412 of the Code), whether or not waived, has occurred or is
reasonably expected to occur, (c) the fair market value of the assets under each
Plan exceeds the present value of all benefits accrued under such Plan
(determined based on those assumptions used to fund such Plan) and (d) neither
the Company or any member of its Controlled Group has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the PBGC in the ordinary course and
without default) in respect of a Plan (including a “multiemployer plan”, within
the meaning of Section 4001(c)(3) of ERISA); and (iii) each Plan that is
intended to be qualified under Section 401(a) of the Code is so qualified and
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.

(kk) The Company and each of its subsidiaries has filed all federal, state,
local and foreign income and franchise tax returns required to be filed through
the date hereof, subject to permitted extensions, and paid all taxes due
thereon, and (i) no tax deficiency has been determined adversely to the Company,
the Guarantors or any of their respective subsidiaries, nor (ii) does the
Company or any Guarantor have any knowledge of any tax deficiencies that could,
in the case of clause (i) or (ii) in the aggregate, reasonably be expected to
have a Material Adverse Effect.

(ll) There are no transfer taxes or other similar fees or charges under Federal
law or the laws of any state, or any political subdivision thereof, required to
be paid in connection with the execution and delivery of this Agreement or the
issuance by the Company or sale by the Company of the Notes.

(mm) Since the date as of which information is given in the Pricing Disclosure
Package and the Offering Memorandum and except as may otherwise be described in
the Pricing Disclosure Package and the Offering Memorandum, neither the Company
nor any Guarantor has (i) issued or granted any securities except pursuant to
the exercise of outstanding options described therein, (ii) incurred any
liability or obligation, direct or contingent, other than liabilities and
obligations that were incurred in the ordinary course of business, (iii) entered
into any material transaction not in the ordinary course of business or
(iv) declared or paid any dividend on its capital stock.

 

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(nn) The Company and each of its subsidiaries (i) makes and keeps accurate
financial books and records and (ii) maintains and has maintained effective
internal control over financial reporting as defined in Rule 13a-15 under the
Exchange Act and a system of internal accounting controls sufficient to provide
reasonable assurance that (A) transactions are executed in accordance with
management’s general or specific authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements in conformity with
accounting principles generally accepted in the United States and to maintain
accountability for its assets, (C) access to its assets is permitted only in
accordance with management’s general or specific authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(oo) Neither the Company nor any of its subsidiaries (i) is in violation of its
charter or by-laws (or similar organizational documents), (ii) is in default,
and no event has occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant, condition or other obligation contained in any indenture, mortgage,
deed of trust, loan agreement, license or other agreement or instrument to which
it is a party or by which it is bound or to which any of its properties or
assets is subject or (iii) is in violation of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
it or its property or assets or has failed to obtain any license, permit,
certificate, franchise or other governmental authorization or permit necessary
to the ownership of its property or to the conduct of its business, except in
the case of clauses (ii) and (iii), to the extent any such conflict, breach,
violation or default could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.

(pp) Neither the Company nor any of its subsidiaries, nor, to the knowledge of
the Company and the Guarantors, any director, officer, agent, employee or other
person associated with or acting on behalf of the Company, the Guarantors or any
of their respective subsidiaries, has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.

(qq) The Company and each of its subsidiaries (i) are, and at all times prior
hereto were, in compliance with all laws, regulations, ordinances, rules,
orders, judgments, decrees, permits or other legal requirements of any
governmental authority, including without limitation any international,
national, state, provincial, regional, or local authority, relating to the
protection of human health or safety, the environment, or natural resources, or
to hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”) applicable to such entity, which compliance includes,
without limitation, obtaining, maintaining and complying with all permits and
authorizations and approvals required by Environmental Laws to conduct their
respective businesses, and (ii) have not received notice of any actual or
alleged violation of Environmental Laws, or of any potential liability for or
other obligation concerning the presence, disposal or release of hazardous or
toxic substances or wastes, pollutants or

 

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contaminants, except in the case of clause (i) or (ii) where such
non-compliance, violation, liability, or other obligation could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect. Except as
described in the Pricing Disclosure Package, (A) there are no proceedings that
are pending, or known to be contemplated, against the Company or any of its
subsidiaries under Environmental Laws in which a governmental authority is also
a party, other than such proceedings regarding which it is reasonably believed
no monetary sanctions of $100,000 or more will be imposed, (B) the Company, the
Guarantors and their respective subsidiaries are not aware of any issues
regarding compliance with Environmental Laws, or liabilities or other
obligations under Environmental Laws or concerning hazardous or toxic substances
or wastes, pollutants or contaminants, that could reasonably be expected to have
a Material Adverse Effect, and (C) none of the Company, the Guarantors and their
respective subsidiaries anticipates material capital expenditures other than in
the ordinary course of business relating to Environmental Laws.

(rr) None of the transactions contemplated by this Agreement (including, without
limitation, the use of the proceeds from the sale of the Notes), will violate or
result in a violation of Section 7 of the Exchange Act, or any regulation
promulgated thereunder, including, without limitation, Regulations T, U and X of
the Board of Governors of the Federal Reserve System.

(ss) The statements set forth in each of the Pricing Disclosure Package and the
Offering Memorandum under the caption “Description of the Notes,” insofar as
they purport to constitute a summary of the terms of the Notes and the
Guarantees and under the captions “Material U.S. federal tax considerations,”
“Description of other indebtedness,” and “Plan of distribution,” insofar as they
purport to describe the provisions of the documents referred to therein, are
accurate in all material respects.

(tt) The Company and its affiliates have not taken, directly or indirectly, any
action designed to or that has constituted or that could reasonably be expected
to cause or result in the stabilization or manipulation of the price of any
security of the Company or the Guarantors in connection with the offering of the
Notes.

(uu) (i) The Company and each of its subsidiaries have established and maintain
disclosure controls and procedures (as such term is defined in Rule 13a-15 under
the Exchange Act), (ii) such disclosure controls and procedures are designed to
ensure that the information required to be disclosed by the Company in the
reports they file or submit under the Exchange Act (assuming the Company was
required to file or submit such reports under the Exchange Act) is accumulated
and communicated to management of the Company and its subsidiaries, including
their respective principal executive officers and principal financial officers,
as appropriate, to allow timely decisions regarding required disclosure to be
made; and (iii) such disclosure controls and procedures are effective in all
material respects to perform the functions for which they were established.

(vv) Since the date of the most recent balance sheet of the Company and its
consolidated subsidiaries reviewed or audited by Deloitte & Touche LLP and the
audit committee of the board of directors of the Company, (i) the Company has
not been advised by its auditors of (A) any significant deficiencies in the
design or operation of internal controls that

 

15

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would adversely affect the ability of the Company or any of its subsidiaries to
record, process, summarize and report financial data, or any material weaknesses
in internal controls and (B) any fraud, whether or not material, that involves
management or other employees who have a significant role in the internal
controls of the Company and each of its subsidiaries, and (ii) since that date,
there have been no significant changes in internal controls or in other factors
that would significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses.

(ww) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary’s property or assets to the Company or any other
subsidiary of the Company, except as described in the Pricing Disclosure
Package.

(xx) There is and has been no failure on the part of the Company and any of the
Company’s directors or officers, in their capacities as such, to comply with the
provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith.

(yy) The section entitled “Management’s discussion and analysis of financial
condition and results of operations – Critical accounting policies and
estimates” contained in the Pricing Disclosure Package and the Offering
Memorandum accurately and fully describes in all material respects (A) the
accounting policies that the Company believed as of the date thereof were the
most important in the portrayal of the Company’s financial condition and results
of operations and that required management’s most difficult, subjective or
complex judgments; (B) the judgments and uncertainties affecting the application
of critical accounting policies; and (C) the likelihood that materially
different amounts would be reported under different conditions or using
different assumptions and an explanation thereof.

(zz) The operations of the Company and its subsidiaries are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all jurisdictions, the rules
and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company, threatened,
except, in each case, as would not reasonably be expected to have a Material
Adverse Effect.

(aaa) Neither the Company nor any of its subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the Company
or any of its subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC.

 

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(bbb) The Company has not taken any action or omitted to take any action (such
as issuing any press release relating to any Notes without an appropriate
legend) which may result in the loss by any of the Initial Purchasers of the
ability to rely on any stabilization safe harbor provided by the Financial
Services Authority under the Financial Services and Markets Act 2000 (the
“FSMA”). The Company has been informed of the guidance relating to stabilization
provided by the Financial Services Authority, in particular in Section MAR 2
Annex 2G of the Financial Services Handbook.

(ccc) Immediately after the consummation of the issuance and sale of the Notes
in accordance with the terms of this Agreement, the Company will be Solvent. As
used in this paragraph, the term “Solvent” means, with respect to a particular
date, that on such date (i) the present fair market value (or present fair
saleable value) of the assets of the Company and its subsidiaries are not less
than the total amount required to pay the probable liabilities of the Company
and its subsidiaries on their total existing debts and liabilities (including
contingent liabilities) as they become absolute and matured, (ii) the Company
and its subsidiaries are able to realize upon their assets and pay their debts
and other liabilities, contingent obligations and commitments as they mature and
become due in the normal course of business, (iii) assuming the sale of the
Notes as contemplated by this Agreement, the Pricing Disclosure Package and the
Offering Memorandum, the Company and its subsidiaries are not incurring debts or
liabilities beyond their ability to pay as such debts and liabilities mature and
(iv) the Company and its subsidiaries are not engaged in any business or
transaction, and are not about to engage in any business or transaction, for
which their property would constitute unreasonably small capital after giving
due consideration to the prevailing practice in the industry in which the
Company and its subsidiaries are engaged. In computing the amount of such
contingent liabilities at any time, it is intended that such liabilities will be
computed at the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

(ddd) As of the date hereof, (i) all royalties, rentals, deposits and other
amounts owed under the oil and gas leases constituting the oil and gas
properties of the Company, the Guarantors and their respective subsidiaries have
been properly and timely paid (other than amounts held in suspense accounts
pending routine payments or related to disputes about the proper identification
of royalty owners), and no material amount of proceeds from the sale or
production attributable to the oil and gas properties of the Company, the
Guarantors and their respective subsidiaries are currently being held in
suspense by any purchaser thereof, except where such amounts due could not,
individually or in the aggregate, have a Material Adverse Effect on the Company,
the Guarantors or any of their respective subsidiaries, and (ii) there are no
claims under take-or-pay contracts pursuant to which natural gas purchasers have
any make-up rights affecting the interests of the Company, the Guarantors or
their respective subsidiaries in their oil and gas properties, except where such
claims could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company, the Guarantors or any of their
respective subsidiaries.

 

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Any certificate signed by any officer of the Company or any Guarantor and
delivered to the Representative or counsel for the Initial Purchasers in
connection with the offering of the Notes shall be deemed a representation and
warranty by the Company or such Guarantor, as to matters covered thereby, to
each Initial Purchaser.

3. Purchase of the Notes by the Initial Purchasers, Agreements to Sell, Purchase
and Resell. (a) The Company and the Guarantors, jointly and severally hereby
agree, on the basis of the representations, warranties and agreements of the
Initial Purchasers contained herein and subject to all the terms and conditions
set forth herein, to issue and sell to the Initial Purchasers and, upon the
basis of the representations, warranties and agreements of the Company and the
Guarantors herein contained and subject to all the terms and conditions set
forth herein, each Initial Purchaser agrees, severally and not jointly, to
purchase from the Company, at a purchase price of 98.125% of the principal
amount thereof, the total principal amount of Notes set forth opposite the name
of such Initial Purchaser in Schedule I hereto. The Company and the Guarantors
shall not be obligated to deliver any of the securities to be delivered
hereunder except upon payment for all of the securities to be purchased as
provided herein.

(b) Each of the Initial Purchasers, severally and not jointly hereby represents
and warrants to the Company that it will offer the Notes for sale upon the terms
and conditions set forth in this Agreement and in the Pricing Disclosure
Package. Each of the Initial Purchasers hereby represents and warrants to, and
agrees with, the Company, on the basis of the representations, warranties and
agreements of the Company and the Guarantors, that such Initial Purchaser:
(i) is a QIB with such knowledge and experience in financial and business
matters as are necessary in order to evaluate the merits and risks of an
investment in the Notes; (ii) is purchasing the Notes pursuant to a private sale
exempt from registration under the Securities Act; (iii) in connection with the
Exempt Resales, will solicit offers to buy the Notes only from, and will offer
to sell the Notes only to, the Eligible Purchasers in accordance with this
Agreement and on the terms contemplated by the Pricing Disclosure Package; and
(iv) will not offer or sell the Notes, nor has it offered or sold the Notes by,
or otherwise engaged in, any form of general solicitation or general advertising
(within the meaning of Regulation D, including, but not limited to,
advertisements, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising) and will not engage in any directed selling
efforts within the meaning of Rule 902 under the Securities Act, in connection
with the offering of the Notes. The Initial Purchasers have advised the Company
that they will offer the Notes to Eligible Purchasers at a price initially equal
to 100% of the principal amount thereof, plus accrued interest, if any, from the
date of issuance of the Notes. Such price may be changed by the Initial
Purchasers at any time without notice.

(c) Each Initial Purchaser, severally and not jointly, represents and warrants
to and agrees with the Company that:

 

  (i)

it has complied and will comply with all applicable provisions of the Financial
Services and Markets Act 2000 (the “FSMA”) with respect to anything done by it
in relation to the Notes in, from or otherwise involving the United Kingdom, and
it has only communicated or caused to be communicated and it will only
communicate or cause to be communicated

 

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any invitation or inducement to engage in investment activity (within the
meaning of section 21 of the FSMA) received by it in connection with the issue
or sale of any Notes, in circumstances in which section 21(1) of the FSMA does
not apply to the Company; and

 

  (ii) in relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a Relevant Member State), with
effect from and including the date on which the Prospectus Directive is
implemented in that Relevant Member State (the “Relevant Implementation Date”),
it has not made and will not make an offer of the Notes to the public in that
Relevant Member State prior to the publication of a prospectus in relation to
the Notes which has been approved by the competent authority in that Relevant
Member State or, where appropriate, approved in another Relevant Member State
and notified to the competent authority in that Relevant Member State, all in
accordance with the Prospectus Directive, except that it may, with effect from
and including the Relevant Implementation Date, make an offer of the Notes to
the public in that Relevant Member State at any time:

 

  (A) to legal entities which are authorized or regulated to operate in the
financial markets or, if not so authorized or regulated, whose corporate purpose
is solely to invest in securities;

 

  (B) to any legal entity which has two or more of (1) an average of at least
250 employees during the last financial year; (2) a total balance sheet of more
than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as
shown in its last annual or consolidated accounts; or

 

  (C) in any other circumstances which do not require the publication by the
issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this representation, the expression an “offer of Notes to
the public” in any Relevant Member State means the communication in any form and
by any means of sufficient information on the terms of the offer and the Notes
to be offered so as to enable an investor to decide to purchase or subscribe the
Notes, as the same may be varied in that Relevant Member State by any measure
implementing the Prospectus Directive in that Relevant Member State and the
expression “Prospectus Directive” means Directive 2003/71/EC and includes any
relevant implementing measure in each Relevant Member State.

(d) Such Initial Purchaser has not nor, prior to the later to occur of (A) the
Closing Date and (B) completion of the distribution of the Notes, will not, use,
authorize use of, refer to or distribute any material in connection with the
offering and sale of the Notes other than (i) the Preliminary Offering
Memorandum, the Pricing Disclosure Package, the Offering Memorandum, (ii) any
written communication that contains no “issuer information” (as defined

 

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in Rule 433(h)(2) under the Act) that was not included (including through
incorporation by reference) in the Preliminary Offering Memorandum or any Free
Writing Offering Document listed on Schedule IV(a) and (b) hereto, (iii) the
Free Writing Offering Documents listed on Schedule IV(a) and (b) hereto,
(iv) any written communication prepared by such Initial Purchaser and approved
by the Company in writing, or (v) any written communication relating to or that
contains the terms of the Notes and/or other information that was included
(including through incorporation by reference) in the Preliminary Offering
Memorandum, the Pricing Disclosure Package or the Offering Memorandum.

Each of the Initial Purchasers understands that the Company and, for purposes of
the opinions to be delivered to the Initial Purchasers pursuant to Sections 7(c)
and 7(e) hereof, counsel to the Company and counsel to the Initial Purchasers,
will rely upon the accuracy and truth of the foregoing representations,
warranties and agreements, and the Initial Purchasers hereby consents to such
reliance.

4. Delivery of the Notes and Payment Therefor. Delivery to the Initial
Purchasers of and payment for the Notes shall be made at 10:00 A.M., New York
City time, on the third full business day following the date of this Agreement
or at such other date or place as shall be determined by agreement between the
Representative and the Company (the “Closing Date”). The place of closing for
the Notes and the Closing Date may be varied by agreement between the Initial
Purchasers and the Company.

The Notes will be delivered to the Initial Purchasers, or the Trustee as
custodian for The Depository Trust Company (“DTC”), against payment by or on
behalf of the Initial Purchasers of the purchase price therefor by wire transfer
in immediately available funds, by causing DTC to credit the Notes to the
account of the Initial Purchasers at DTC. The Notes will be evidenced by one or
more global securities in definitive form (the “Global Notes”) and will be
registered in the name of Cede & Co. as nominee of DTC. The Notes to be
delivered to the Initial Purchasers shall be made available to the Initial
Purchasers in New York City for inspection and packaging not later than 9:30
A.M., New York City time, on the business day next preceding the Closing Date.

5. Agreements of the Company and the Guarantors. The Company and the Guarantors,
jointly and severally, agree with each of the Initial Purchasers as follows:

(a) The Company and the Guarantors will furnish to the Initial Purchasers,
without charge, within one business day of the date of the Offering Memorandum,
such number of copies of the Offering Memorandum as may then be amended or
supplemented as they may reasonably request.

(b) The Company and the Guarantors will not make any amendment or supplement to
the Pricing Disclosure Package or to the Offering Memorandum of which the
Initial Purchasers shall not previously have been advised or to which they shall
reasonably object after being so advised.

(c) The Company and each of the Guarantors consents to the use of the Pricing
Disclosure Package and the Offering Memorandum in accordance with the securities
or Blue Sky laws of the jurisdictions in which the Notes are offered by the
Initial Purchasers and by all dealers to whom Notes may be sold, in connection
with the offering and sale of the Notes.

 

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(d) If, at any time prior to completion of the distribution of the Notes by the
Initial Purchasers to Eligible Purchasers, any event occurs or information
becomes known that, in the judgment of the Company or any of the Guarantors or
in the opinion of counsel for the Initial Purchasers, should be set forth in the
Pricing Disclosure Package or the Offering Memorandum so that the Pricing
Disclosure Package or the Offering Memorandum, as then amended or supplemented,
does not include any untrue statement of material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it is
necessary to supplement or amend the Pricing Disclosure Package or the Offering
Memorandum in order to comply with any law, the Company and the Guarantors will
forthwith prepare an appropriate supplement or amendment thereto, and will
expeditiously furnish to the Initial Purchasers and dealers a reasonable number
of copies thereof.

(e) None of the Company nor any Guarantor will make any offer to sell or
solicitation of an offer to buy the Notes that would constitute a Free Writing
Offering Document without the prior consent of the Representative, which consent
shall not be unreasonably withheld or delayed; if at any time following issuance
of a Free Writing Offering Document any event occurred or occurs as a result of
which such Free Writing Offering Document conflicts with the information in the
Preliminary Offering Memorandum, the Pricing Disclosure Package or the Offering
Memorandum or, when taken together with the information in the Preliminary
Offering Memorandum, the Pricing Disclosure Package or the Offering Memorandum,
includes an untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, as promptly as practicable after
becoming aware thereof, the Company will give notice thereof to the Initial
Purchasers through the Representative and, if requested by the Representative,
will prepare and furnish without charge to each Initial Purchaser a Free Writing
Offering Document or other document which will correct such conflict, statement
or omission.

(f) Promptly from time to time to take such action as the Initial Purchasers may
reasonably request to qualify the Notes for offering and sale under the
securities or Blue Sky laws of such jurisdictions as the Initial Purchasers may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Notes; provided that in connection therewith
the Company shall not be required to (i) qualify as a foreign corporation in any
jurisdiction in which it would not otherwise be required to so qualify,
(ii) file a general consent to service of process in any such jurisdiction or
(iii) subject itself to taxation in any jurisdiction in which it would not
otherwise be subject.

(g) For a period commencing on the date hereof and ending on the 90th day after
the date of the Offering Memorandum, the Company and the Guarantors agree not
to, directly or indirectly, (1) offer for sale, sell, or otherwise dispose of
(or enter into any transaction or device that is designed to, or would be
expected to, result in the disposition by any person at any time in the future
of) any debt securities of the Company substantially similar to the Notes or
securities convertible into or exchangeable for such debt securities of the
Company, or sell or

 

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grant options, rights or warrants with respect to such debt securities of the
Company or securities convertible into or exchangeable for such debt securities
of the Company, (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or risks
of ownership of such debt securities of the Company, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
debt securities of the Company or other securities, in cash or otherwise,
(3) file or cause to be filed a registration statement, including any
amendments, with respect to the registration of debt securities of the Company
substantially similar to the Notes or securities convertible, exercisable or
exchangeable into debt securities of the Company or (3) publicly announce an
offering of any debt securities of the Company substantially similar to the
Notes or securities convertible or exchangeable into such debt securities, in
each case without the prior written consent of Barclays Capital Inc., on behalf
of the Initial Purchasers, except in exchange for the Exchange Notes and the
Exchange Guarantees in connection with the Exchange Offer.

(h) The Company will furnish to the holders of the Notes as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders’ equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the date of the
Offering Memorandum), will make available to its securityholders consolidated
summary financial information of the Company and its subsidiaries for such
quarter in reasonable detail; provided that so long as the Company files
periodic reports pursuant to Section 13 or 15(d) of the Exchange Act for the
foregoing periods, the Company shall be deemed to comply with this Section 5(h).

(i) So long as any of the Notes are outstanding, the Company and the Guarantors
will furnish to the Initial Purchasers (i) upon request and as soon as
available, a copy of each report of the Company or any Guarantor mailed to
stockholders generally or filed with any stock exchange or regulatory body and
(ii) from time to time such other information concerning the Company or the
Guarantors as the Initial Purchasers may reasonably request.

(j) The Company and the Guarantors will apply the net proceeds from the sale of
the Notes to be sold by it hereunder substantially in accordance with the
description set forth in the Offering Memorandum under the caption “Use of
proceeds.”

(k) The Company, the Guarantors and their respective affiliates will not take,
directly or indirectly, any action designed to or that has constituted or that
reasonably would be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company or the Guarantors in
connection with the offering of the Notes.

(l) The Company and the Guarantors will use their best efforts to permit the
Notes to be eligible for clearance and settlement through DTC.

(m) The Company and the Guarantors will not, and will not permit any of their
respective affiliates (as defined in Rule 144 under the Securities Act) to,
resell any of the Notes that have been acquired by any of them, except for Notes
purchased by the Company, the Guarantors or any of their respective affiliates
and resold in a transaction registered under the Securities Act.

 

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(n) The Company and the Guarantors agree not to sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
the Securities Act) that would be integrated with the sale of the Notes in a
manner that would require the registration under the Securities Act of the sale
to the Initial Purchasers or the Eligible Purchasers of the Notes.

(o) The Company and the Guarantors agree to comply with all the terms and
conditions of the Registration Rights Agreement and all agreements set forth in
the representation letters of the Company and the Guarantors to DTC relating to
the approval of the Notes by DTC for “book entry” transfer.

(p) The Company and the Guarantors will take such steps as shall be necessary to
ensure that neither the Company nor any of the Company’s subsidiaries becomes an
“investment company” within the meaning of such term under the Investment
Company Act of 1940, as amended.

(q) Neither the Company nor any Guarantor will take any action or omit to take
any action (such as issuing any press release relating to the Notes without an
appropriate legend) which may result in the loss by any of the Initial
Purchasers of the ability to rely on any stabilization safe harbor provided by
the Financial Services Authority under the FSMA.

(r) None of the Company or any of its affiliates or any other person acting on
its or their behalf (other than the Initial Purchasers, as to which no covenant
is given) will (i) solicit offers for, or offer or sell, the Notes by means of
any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act or (ii) engage in any directed
selling efforts within the meaning of Regulation S, and all such persons will
comply with the offering restrictions requirement of Regulation S.

(s) The Company and the Guarantors will do and perform all things required or
necessary to be done and performed under this Agreement by them prior to the
Closing Date, and to satisfy all conditions precedent to the Initial Purchasers’
obligations hereunder to purchase the Notes.

6. Expenses. Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement becomes effective or is terminated, the Company
and the Guarantors, jointly and severally, agree, to pay all costs, expenses,
fees and taxes incident to and in connection with: (i) the preparation,
printing, filing and distribution of the Preliminary Offering Memorandum, the
Pricing Disclosure Package and the Offering Memorandum (including, without
limitation, financial statements and exhibits) and all amendments and
supplements thereto (including the fees, disbursements and expenses of the
Company’s accountants and counsel, but not, however, legal fees and expenses of
the Initial Purchasers’ counsel incurred in connection therewith); (ii) the
preparation, printing (including, without limitation, word processing and
duplication costs) and delivery of this Agreement, the Indenture,

 

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the Registration Rights Agreement, all Blue Sky memoranda and all other
agreements, memoranda, correspondence and other documents printed and delivered
in connection therewith and with the Exempt Resales (but not, however, legal
fees and expenses of the Initial Purchasers’ counsel incurred in connection with
any of the foregoing other than fees of such counsel plus reasonable
disbursements incurred in connection with the preparation, printing and delivery
of such Blue Sky memoranda); (iii) the issuance and delivery by the Company of
the Notes and by the Guarantors of the Guarantees and any taxes payable in
connection therewith; (iv) the qualification of the Notes and Exchange Notes for
offer and sale under the securities or Blue Sky laws of the several states
(including, without limitation, the reasonable fees and disbursements of the
Initial Purchasers’ counsel relating to such registration or qualification);
(v) the furnishing of such copies of the Pricing Disclosure Package and the
Offering Memorandum, and all amendments and supplements thereto, as may be
reasonably requested for use in connection with the Exempt Resales; (vi) the
preparation of certificates for the Notes (including, without limitation,
printing and engraving thereof); (vii) the approval of the Notes by DTC for
“book-entry” transfer (including fees and expenses of counsel); (viii) the
rating of the Notes and the Exchange Notes; (ix) the obligations of the Trustee,
any agent of the Trustee and the counsel for the Trustee in connection with the
Indenture, the Notes, the Guarantees, the Exchange Notes and the Exchange
Guarantees; (x) the performance by the Company and the Guarantors of their other
obligations under this Agreement; and (xi) all travel expenses (including
expenses related to chartered aircraft) of each Initial Purchaser and the
Company’s officers and employees and any other expenses of each Initial
Purchaser and the Company in connection with attending or hosting meetings with
prospective purchasers of the Notes, and expenses associated with any electronic
road show.

7. Conditions to Initial Purchasers’ Obligations. The respective obligations of
the Initial Purchasers hereunder are subject to the accuracy, when made and on
and as of the Closing Date, of the representations and warranties of the Company
and the Guarantors contained herein, to the performance by the Company and the
Guarantors of their respective obligations hereunder, and to each of the
following additional terms and conditions:

(a) The Initial Purchasers shall not have discovered and disclosed to the
Company on or prior to the Closing Date that the Pricing Disclosure Package or
the Offering Memorandum, or any amendment or supplement thereto, contains an
untrue statement of a fact which, in the opinion of counsel to the Initial
Purchasers, is material or omits to state a fact which, in the opinion of such
counsel, is material and is necessary to make the statements therein not
misleading.

(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Notes, the Guarantees,
the Exchange Notes, the Exchange Guarantees, the Registration Rights Agreement,
the Indenture, the Pricing Disclosure Package and the Offering Memorandum, and
all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects to
counsel for the Initial Purchasers, and the Company and the Guarantors shall
have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.

 

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(c) Thompson & Knight LLP shall have furnished to the Initial Purchasers its
written opinion, as counsel to the Company and the Guarantors, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Representative.

(d) David Elkouri, General Counsel of the Company, shall have furnished to the
Initial Purchasers his written opinion, as counsel to the Company and the
Guarantors, addressed to the Initial Purchasers and dated the Closing Date, in
form and substance reasonably satisfactory to the Representative.

(e) The Initial Purchasers shall have received from Vinson & Elkins L.L.P.,
counsel for the Initial Purchasers, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Notes, the Pricing Disclosure
Package, the Offering Memorandum and other related matters as the Initial
Purchasers may reasonably require, and the Company shall have furnished to such
counsel such documents and information as they reasonably request for the
purpose of enabling them to pass upon such matters.

(f) At the time of execution of this Agreement, the Initial Purchasers shall
have received from Deloitte & Touche LLP a letter, in form and substance
satisfactory to the Initial Purchasers, addressed to the Initial Purchasers and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and the rules of the PCAOB
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the Commission
and (ii) stating, as of the date hereof (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Pricing Disclosure Package, as of a date
not more than three days prior to the date hereof), the conclusions and findings
of such firm with respect to the financial information and (iii) covering such
other matters as are ordinarily covered by accountants’ “comfort letters” to
underwriters in connection with registered public offerings.

(g) With respect to the letter of Deloitte & Touche LLP referred to in the
preceding paragraph and delivered to the Initial Purchasers concurrently with
the execution of this Agreement (each, an “initial letter”), the Company shall
have furnished to the Initial Purchasers a letter (each, a “bring-down letter”)
of such accountants, addressed to the Initial Purchasers and dated the Closing
Date (i) confirming that they were independent public accountants within the
meaning of the Securities Act and the rules of the PCAOB during the periods
covered by the financial statements on which they reported and are in compliance
with the applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the
Closing Date (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is given
in each of the Pricing Disclosure Package or the Offering Memorandum, as of a
date not more than three days prior to the date of the Closing Date), the
conclusions and findings of such firms with respect to the financial information
and other matters covered by the initial letter and (iii) confirming in all
material respects the conclusions and findings set forth in the initial letter.

 

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(h) (i) Neither the Company, any Guarantor nor any of their respective
subsidiaries shall have sustained, since the date of the latest audited
financial statements included in the Pricing Disclosure Package, any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree or (ii) since such date, there shall not
have been any change in the capital stock or long-term debt of the Company, any
Guarantor or any of their respective subsidiaries or any change, or any
development involving a prospective change, in or affecting the condition
(financial or otherwise), results of operations, stockholders’ equity,
properties, management, business or prospects of the Company, the Guarantors and
their respective subsidiaries, taken as a whole, the effect of which, in any
such case described in clause (i) or (ii), is, individually or in the aggregate,
in the judgment of the Representative, so material and adverse as to make it
impracticable or inadvisable to proceed with the offering, sale or the delivery
of the Notes being delivered on the Closing Date on the terms and in the manner
contemplated in the Offering Memorandum.

(i) At the time of execution of this Agreement, the Initial Purchasers shall
have received from NSAI an initial letter (the “initial expert letter”), in form
and substance satisfactory to the Initial Purchasers, addressed to the Initial
Purchasers and dated the date hereof, confirming that they are independent with
respect to the Company and stating the conclusions and findings of such firm
with respect to matters pertaining to the Company’s use of NSAI’s report on
proved reserves of the Company as of December 31, 2009, as is customary to
initial purchasers in connection with similar transactions. On the Closing Date,
the Initial Purchasers shall have received from NSAI a bring-down letter in form
and substance satisfactory to the Initial Purchasers, addressed to the Initial
Purchasers and dated as of the Closing Date, which such letter shall cover the
period from the initial expert letter to the Closing Date, confirming they are
independent with respect to the Company and stating the conclusions and findings
of such firm with respect to matters pertaining to the Company’s use of NSAI’s
report on proved reserves of the Company as of December 31, 2009, as is
customary to initial purchasers in connection with similar transactions.

(j) The Company and each Guarantor shall have furnished or caused to be
furnished to the Initial Purchasers on the Closing Date certificates of officers
of the Company and each Guarantor satisfactory to the Initial Purchasers as to
such matters as the Representative may reasonably request, including, without
limitation, a statement that:

(i) The representations, warranties and agreements of the Company and the
Guarantors in Section 2 are true and correct on and as of the Closing Date, and
the Company has complied with all its agreements contained herein and satisfied
all the conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date; and

(ii) They have carefully examined the Pricing Disclosure Package and the
Offering Memorandum, and, in their opinion, (A) the Pricing Disclosure Package,
as of the Applicable Time and as of the Closing Date, and the Offering
Memorandum, as of its date and as of the Closing Date, did not and do not
contain any untrue statement of a material fact and did not and do not omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not

 

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misleading and (B) since the date of the Pricing Disclosure Package and the
Offering Memorandum, no event has occurred which should have been set forth in a
supplement or amendment to the Pricing Disclosure Package of the Offering
Memorandum.

(k) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Company’s debt
securities by any “nationally recognized statistical rating organization,” as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative implications, its
rating of any of the Company’s debt securities.

(l) The Notes shall be eligible for clearance and settlement through DTC.

(m) The Company and the Guarantors shall have executed and delivered the
Registration Rights Agreement in form and substance reasonably satisfactory to
the Representative, and the Initial Purchasers shall have received an original
copy thereof, duly executed by the Company and the Guarantors.

(n) The Company, the Guarantors and the Trustee shall have executed and
delivered the Indenture, and the Initial Purchasers shall have received an
original copy thereof, duly executed by the Company, the Guarantors and the
Trustee.

(o) Subsequent to the execution and delivery of this Agreement there shall not
have occurred any of the following: (i) trading in securities generally on the
New York Stock Exchange or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or
materially limited or the settlement of such trading generally shall have been
materially disrupted or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have been a
declaration by the United States of a national emergency, or there shall have
occurred any calamity or crisis or war involving the United States or (iv) there
shall have occurred such a material adverse change in general economic,
political or financial conditions, including, without limitation, as a result of
terrorist activities after the date hereof (or the effect of international
conditions on the financial markets in the United States shall be such), as to
make it, in the judgment of the Representative, impracticable or inadvisable to
proceed with the offering, sale or delivery of the Notes being delivered on the
Closing Date on the terms and in the manner contemplated in the Offering
Memorandum or that, in the judgment of the Representative, would materially and
adversely affect the financial markets or the markets for the Notes and other
debt securities.

(p) The Company shall have furnished to the Initial Purchasers a certificate,
dated the Closing Date, of the Chief Financial Officer of the Company as to the
Solvency of the Company following the consummation of the issuance and sale of
the Notes in accordance with the terms of this Agreement.

 

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(q) Holland & Hart LLP and Stradley Ronan Stevens & Young, LLP shall have
furnished to the Initial Purchasers their written opinions, as local counsel to
the Company and the Guarantors, addressed to the Initial Purchasers and dated
the Closing Date, in form and substance reasonably satisfactory to the
Representative.

(r) Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C. shall have furnished to
the Initial Purchasers its written opinion, as local counsel to the Company and
the Guarantors, addressed to the Initial Purchasers and dated the Closing Date,
in form and substance reasonably satisfactory to the Representative.

All opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Initial Purchasers.

8. Indemnification and Contribution.

(a) The Company and each Guarantor, hereby agree, jointly and severally, to
indemnify and hold harmless each Initial Purchaser, its affiliates, directors,
officers and employees and each person, if any, who controls any Initial
Purchaser within the meaning of Section 15 of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Notes), to which that
Initial Purchaser, affiliate, director, officer, employee or controlling person
may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained (A) in
any Free Writing Offering Document, the Preliminary Offering Memorandum, the
Pricing Disclosure Package or the Offering Memorandum or in any amendment or
supplement thereto, (B) in any Blue Sky application or other document prepared
or executed by the Company or any Guarantor (or based upon any written
information furnished by the Company or any Guarantor) specifically for the
purpose of qualifying any or all of the Notes under the securities laws of any
state or other jurisdiction (any such application, document or information being
hereinafter called a “Blue Sky Application”) or (C) in any materials or
information provided to investors by, or with the approval of, the Company in
connection with the marketing of the offering of the Notes (“Marketing
Materials”), including any roadshow or investor presentations made to investors
by the Company (whether in person or electronically) or any materials prepared
for the purpose of compliance with Canadian securities laws, (ii) the omission
or alleged omission to state in any Free Writing Offering Document, the
Preliminary Offering Memorandum, the Pricing Disclosure Package or the Offering
Memorandum, or in any amendment or supplement thereto, or in any Blue Sky
Application or in any Marketing Materials, any material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, and shall reimburse each Initial Purchaser and
each such director, officer, employee or controlling person promptly upon demand
for any legal or other expenses reasonably incurred by that Initial Purchaser,
director, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company and the Guarantors shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged

 

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untrue statement or omission or alleged omission made in any Preliminary
Offering Memorandum, the Pricing Disclosure Package or Offering Memorandum, or
in any such amendment or supplement thereto, or in any Blue Sky Application or
in any Marketing Materials, in reliance upon and in conformity with written
information concerning such Initial Purchaser furnished to the Company through
the Representative by or on behalf of any Initial Purchaser specifically for
inclusion therein, which information consists solely of the information
specified in Section 8(e). The foregoing indemnity agreement is in addition to
any liability that the Company or the Guarantors may otherwise have to any
Initial Purchaser or to any director, officer, employee or controlling person of
that Initial Purchaser.

(b) Each Initial Purchaser, severally and not jointly, hereby agrees to
indemnify and hold harmless the Company, each Guarantor, their respective
officers and employees, each of their respective directors, and each person, if
any, who controls the Company or any Guarantor within the meaning of Section 15
of the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company, any
Guarantor or any such director, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained (A) in
any Free Writing Offering Document, Preliminary Offering Memorandum, the Pricing
Disclosure Package or the Offering Memorandum or in any amendment or supplement
thereto, (B) in any Blue Sky Application, or (C) in any Marketing Materials or
(ii) the omission or alleged omission to state in any Free Writing Offering
Document, Preliminary Offering Memorandum, the Pricing Disclosure Package or the
Offering Memorandum, or in any amendment or supplement thereto, or in any Blue
Sky Application or in any Marketing Materials any material fact necessary to
make the statements therein not misleading, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
concerning such Initial Purchaser furnished to the Company through the
Representative by or on behalf of that Initial Purchaser specifically for
inclusion therein, which information is limited to the information set forth in
Section 8(e). The foregoing indemnity agreement is in addition to any liability
that any Initial Purchaser may otherwise have to the Company, any Guarantor or
any such director, officer, employee or controlling person.

(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability that it
may have under Section 8(a) or 8(b) except to the extent it has been materially
prejudiced by such failure and; provided, further, that the failure to notify
the indemnifying party shall not relieve it from any liability that it may have
to an indemnified party otherwise than under Section 8(a) or 8(b). If any such
claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable

 

29

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to the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Initial Purchasers shall have the right to employ counsel to represent
jointly the Initial Purchasers and their respective directors, officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Initial Purchasers
against the Company or any Guarantor under this Section 8, if (i) the Company,
the Guarantors and the Initial Purchasers shall have so mutually agreed;
(ii) the Company and the Guarantors have failed within a reasonable time to
retain counsel reasonably satisfactory to the Initial Purchasers; (iii) the
Initial Purchasers and their respective affiliates, directors, officers,
employees and controlling persons shall have reasonably concluded, based on the
advice of counsel, that there may be legal defenses available to them that are
different from or in addition to those available to the Company and the
Guarantors; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Initial Purchasers or their respective
affiliates, directors, officers, employees or controlling persons, on the one
hand, and the Company and the Guarantors, on the other hand, and representation
of both sets of parties by the same counsel would present a conflict due to
actual or potential differing interests between them, and in any such event the
fees and expenses of such separate counsel shall be paid by the Company and the
Guarantors. No indemnifying party shall (i) without the prior written consent of
the indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding and does not include any statement as to or admission of
fault, culpability or failure to act by or on behalf of any indemnified party,
or (ii) be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with the consent of the indemnifying party or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.

(d) If the indemnification provided for in this Section 8 shall for any reason
be unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or 8(b) in respect of any loss, claim, damage or liability, or any
action in respect thereof, referred to therein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the Company
and the Guarantors, on the one hand, and the Initial Purchasers, on the other,
from the offering of the Notes or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Guarantors, on the
one hand, and the Initial Purchasers, on the other, with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other, with
respect to such offering shall be deemed to be in the same

 

30

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proportion as the total net proceeds from the offering of the Notes purchased
under this Agreement (before deducting expenses) received by the Company and the
Guarantors, on the one hand, and the total discounts and commissions received by
the Initial Purchasers with respect to the Notes purchased under this Agreement,
on the other hand, bear to the total gross proceeds from the offering of the
Notes under this Agreement. The relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company, the Guarantors, or the Initial Purchasers, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. For purposes of the preceding two
sentences, the net proceeds deemed to be received by the Company shall be deemed
to be also for the benefit of the Guarantors, and information supplied by the
Company shall also be deemed to have been supplied by the Guarantors. The
Company, the Guarantors, and the Initial Purchasers agree that it would not be
just and equitable if contributions pursuant to this Section 8(d) were to be
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation that does
not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 8(d) shall be deemed to include, for purposes of this Section 8(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d), no Initial Purchaser shall
be required to contribute any amount in excess of the amount by which the net
proceeds from the sale to Eligible Purchasers of the Notes initially purchased
by it exceeds the amount of any damages that such Initial Purchaser has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers’ obligations to contribute
as provided in this Section 8(d) are several in proportion to their respective
purchase obligations and not joint.

(e) The Initial Purchasers severally confirm and the Company and the Guarantors
acknowledge and agree that the marketing names of the Initial Purchasers
appearing on the front cover of the Offering Memorandum, and the third
paragraph, the fourth and fifth sentences of the eleventh paragraph and the
thirteenth paragraph of the section entitled “Plan of distribution” in the
Pricing Disclosure Package and the Offering Memorandum are correct and
constitute the only information concerning such Initial Purchasers furnished in
writing to the Company or any Guarantor by or on behalf of the Initial
Purchasers specifically for inclusion in the Preliminary Offering Memorandum,
the Pricing Disclosure Package and the Offering Memorandum or in any amendment
or supplement thereto.

9. Defaulting Initial Purchasers. If, on the Closing Date, any Initial Purchaser
defaults in the performance of its obligations under this Agreement, the
remaining non-defaulting Initial Purchasers shall be obligated to purchase the
Notes that the defaulting Initial Purchaser agreed but failed to purchase on the
Closing Date in the respective proportions that the number of Notes set opposite
the name of each remaining non-defaulting Initial Purchaser in Schedule I hereto
bears to the total number of Notes set opposite the names of all the remaining
non-defaulting Initial Purchasers in Schedule I hereto; provided, however, that
the remaining

 

31

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non-defaulting Initial Purchasers shall not be obligated to purchase any of the
Notes on the Closing Date if the aggregate principal amount of Notes that the
defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase
on such date exceeds 9.09% of the aggregate principal amount of Notes to be
purchased on the Closing Date, and any remaining non-defaulting Initial
Purchasers shall not be obligated to purchase more than 110% of the aggregate
principal amount of Notes that it agreed to purchase on the Closing Date
pursuant to the terms of Section 3. If the foregoing maximums are exceeded, the
remaining non-defaulting Initial Purchasers, or those other Initial Purchasers
satisfactory to the Initial Purchasers who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Notes to be purchased on the Closing Date. If the remaining
Initial Purchasers or other Initial Purchasers satisfactory to the Initial
Purchasers do not elect to purchase the Notes that the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase on the Closing
Date, this Agreement shall terminate without liability on the part of any
non-defaulting Initial Purchaser or the Company or the Guarantors, except that
the Company and the Guarantors will continue to be liable for the payment of
expenses to the extent set forth in Sections 6 and 11. As used in this
Agreement, the term “Initial Purchaser” includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule I hereto that, pursuant to this Section 9, purchases Notes that a
defaulting Initial Purchaser agreed but failed to purchase.

Nothing contained herein shall relieve a defaulting Initial Purchaser of any
liability it may have to the Company or any Guarantor for damages caused by its
default. If other Initial Purchasers are obligated or agree to purchase the
Notes of a defaulting or withdrawing Initial Purchaser, either the remaining
Initial Purchasers or the Company may postpone the Closing Date for up to seven
full business days in order to effect any changes that in the opinion of counsel
for the Company or counsel for the Initial Purchasers may be necessary in the
Pricing Disclosure Package, the Offering Memorandum or in any other document or
arrangement.

10. Termination. The obligations of the Initial Purchasers hereunder may be
terminated by the Initial Purchasers by notice given to and received by the
Company prior to delivery of and payment for the Notes if, prior to that time,
any of the events described in Sections 7(i) or (o) shall have occurred or if
the Initial Purchasers shall decline to purchase the Notes for any reason
permitted under this Agreement.

11. Reimbursement of Initial Purchasers’ Expenses. If (a) the Company fails to
tender the Notes for delivery to the Initial Purchasers for any reason or
(b) the Initial Purchasers shall decline to purchase the Notes for any reason
permitted under this Agreement, the Company and the Guarantors shall reimburse
the Initial Purchasers for all reasonable out-of-pocket expenses (including fees
and disbursements of counsel) incurred by the Initial Purchasers in connection
with this Agreement and the proposed purchase of the Notes, and upon demand the
Company and the Guarantors shall pay the full amount thereof to the Initial
Purchasers. If this Agreement is terminated pursuant to Section 10 by reason of
the default of one or more Initial Purchasers, the Company and the Guarantors
shall not be obligated to reimburse any defaulting Initial Purchaser on account
of those expenses.

 

32

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12. Notices, Etc. All statements, requests, notices and agreements hereunder
shall be in writing, and:

(a) if to any Initial Purchaser, shall be delivered or sent by hand delivery,
mail, telex, overnight courier or facsimile transmission to the Representative
c/o Barclays Capital Inc., 745 Seventh Avenue, New York, New York 10019,
Attention: Syndicate Registration (Fax: 646-834-8133), with a copy, in the case
of any notice pursuant to Section 8, to the Director of Litigation, Office of
the General Counsel, Barclays Capital Inc., 745 Seventh Avenue, New York, New
York 10019;

(b) if to the Company or any Guarantor, shall be delivered or sent by mail,
telex, overnight courier or facsimile transmission to the address of the Company
set forth in the Pricing Disclosure Package, Attention: David S. Elkouri,
Executive Vice-President and General Counsel (Fax: 832-204-2872);

provided, however, that any notice to an Initial Purchaser pursuant to
Section 8(c) shall be delivered or sent by hand delivery, mail, telex or
facsimile transmission to such Initial Purchaser at its address set forth in its
acceptance telex to Barclays Capital Inc., which address will be supplied to any
other party hereto by Barclays Capital Inc. upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof. The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Initial Purchasers
by Barclays Capital Inc.

13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the Initial Purchasers, the Company, the
Guarantors and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
the representations, warranties, indemnities and agreements of the Company and
the Guarantors contained in this Agreement shall also be deemed to be for the
benefit of the affiliates, directors, officers and employees of the Initial
Purchasers and each person or persons, if any, controlling any Initial Purchaser
within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 13, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.

14. Survival. The respective indemnities, representations, warranties and
agreements of the Company, the Guarantors and the Initial Purchasers contained
in this Agreement or made by or on behalf on them, respectively, pursuant to
this Agreement, shall survive the delivery of and payment for the Notes and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.

15. Definition of the Terms “Business Day,” “Affiliate” and “Subsidiary.” For
purposes of this Agreement, (a) “business day” means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) “affiliate” and
“subsidiary” have the meanings set forth in Rule 405 under the Securities Act.

 

33

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16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.

17. No Fiduciary Duty. The Company and the Guarantors acknowledge and agree that
in connection with this offering, or any other services the Initial Purchasers
may be deemed to be providing hereunder, notwithstanding any preexisting
relationship, advisory or otherwise, between the parties or any oral
representations or assurances previously or subsequently made by the Initial
Purchasers: (i) no fiduciary or agency relationship between the Company, any
Guarantor and any other person, on the one hand, and the Initial Purchasers, on
the other, exists; (ii) the Initial Purchasers are not acting as advisors,
expert or otherwise, to the Company or the Guarantors, including, without
limitation, with respect to the determination of the purchase price of the
Notes, and such relationship between the Company and the Guarantors, on the one
hand, and the Initial Purchasers, on the other, is entirely and solely
commercial, based on arms-length negotiations; (iii) any duties and obligations
that the Initial Purchasers may have to the Company and the Guarantors shall be
limited to those duties and obligations specifically stated herein; and (iv) the
Initial Purchasers and their respective affiliates may have interests that
differ from those of the Company and the Guarantors. The Company and the
Guarantors hereby waive any claims that the Company and the Guarantors may have
against the Initial Purchasers with respect to any breach of fiduciary duty in
connection with the Notes.

18. Counterparts. This Agreement may be executed in one or more counterparts
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.

19. Headings. The headings herein are inserted for convenience of reference only
and are not intended to be part of, or to affect the meaning or interpretation
of, this Agreement.

[Signature pages follow.]

 

34

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If the foregoing correctly sets forth the agreement among the Company, the
Guarantors, and the Initial Purchasers, please indicate your acceptance in the
space provided for that purpose below.

 

Very truly yours, PETROHAWK ENERGY CORPORATION By  

        /s/ David S. Elkouri

  David S. Elkouri   Executive Vice President – General Counsel   and Secretary
GUARANTORS PETROHAWK OPERATING COMPANY P-H ENERGY, LLC HAWK FIELD SERVICES,
L.L.C. WINWELL RESOURCES, L.L.C. WSF, INC.

KCS RESOURCES, LLC

KCS ENERGY SERVICES, INC.

MEDALLION CALIFORNIA PROPERTIES COMPANY

PROLIQ, INC.

ONE TEC, LLC

ONE TEC OPERATING, LLC

BISON RANCH LLC PETROHAWK HOLDINGS LLC HK TRANSPORTATION LLC BIG HAWK SERVICES,
LLC By  

        /s/ David S. Elkouri

  David S. Elkouri   Executive Vice President – General Counsel

 

Signature Page to Purchase Agreement – Page 1

--------------------------------------------------------------------------------

H-K ENERGY MARKETING, LLC By  

        /s/ David S. Elkouri

  David S. Elkouri   Secretary PETROHAWK PROPERTIES, LP By:   P-H Energy, LLC  
Its General Partner By  

        /s/ David S. Elkouri

  David S. Elkouri   Executive Vice President – General Counsel and Secretary

 

Signature Page to Purchase Agreement – Page 2

--------------------------------------------------------------------------------

Agreed to and accepted as of the date first written above.

BARCLAYS CAPITAL INC.

For itself and as Representative of the several Initial Purchasers named on
Schedule I hereto.

 

 

By  

        /s/ Paul Cugno

  Authorized Signatory

 

Signature Page to Purchase Agreement – Page 3

--------------------------------------------------------------------------------

SCHEDULE I

 

Initial Purchasers

   Principal
Amount of
Notes to be
Purchased BARCLAYS CAPITAL INC.    $ 156,750,000 J.P. MORGAN SECURITIES INC.   
  115,500,000 BNP PARIBAS SECURITIES CORP.      74,250,000 BANC OF AMERICA
SECURITIES LLC      66,000,000 RBC CAPITAL MARKETS CORPORATION      66,000,000
WELLS FARGO SECURITIES, LLC      66,000,000 CREDIT SUISSE SECURITIES (USA) LLC
     66,000,000 BMO CAPITAL MARKETS CORP.      66,000,000 MORGAN STANLEY & CO.
INCORPORATED      49,500,000 CREDIT AGRICOLE SECURITIES (USA) INC.     
33,000,000 CAPITAL ONE SOUTHCOAST, INC.      16,500,000 CITIGROUP GLOBAL MARKETS
INC.      16,500,000 MIZUHO SECURITIES USA INC.      16,500,000 NATIXIS
BLEICHROEDER LLC      16,500,000       

Total

   $ 825,000,000       

 

I-1

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SCHEDULE II

GUARANTORS

 

Petrohawk Operating Company P-H Energy, LLC Hawk Field Services, LLC Petrohawk
Properties, LP Winwell Resources, L.L.C. WSF, Inc. KCS Resources, LLC KCS Energy
Services, Inc. Medallion California Properties Company Proliq, Inc. One Tec, LLC
One Tec Operating, LLC Bison Ranch LLC Petrohawk Holdings LLC HK Energy
Marketing, LLC HK Transportation, LLC Big Hawk Services, LLC

 

II-1

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SCHEDULE III

PETROHAWK ENERGY CORPORATION

$825,000,000 7.25% SENIOR NOTES DUE 2018

Pricing Term Sheet

Pricing Supplement dated August 3, 2010 to the Preliminary Offering Memorandum
dated August 3, 2010 of Petrohawk Energy Corporation. This Pricing Supplement is
qualified in its entirety by reference to the Preliminary Offering Memorandum.
The information in this Pricing Supplement supplements the Preliminary Offering
Memorandum and supersedes the information in the Preliminary Offering Memorandum
to the extent it is inconsistent with the information in the Preliminary
Offering Memorandum. Capitalized terms used in this Pricing Supplement but not
defined have the meanings given them in the Preliminary Offering Memorandum.

 

Issuer    Petrohawk Energy Corporation Guarantors    The notes will be initially
guaranteed on a senior unsecured basis by the Issuer’s existing wholly-owned
subsidiaries Title of Securities    7.25% Senior Notes due 2018 Aggregate
Principal Amount    $825.0 million Gross Proceeds    $825.0 million Net Proceeds
(after expenses)    $809.3 million Distribution    144A/RegS w/ Registration
Rights Maturity Date    August 15, 2018 Issue Price    100.00% Coupon    7.25%
Yield to Maturity    7.25% Spread to Benchmark Treasury    +434 basis points
Benchmark Treasury    UST 3.50% due 5/15/20 Interest Payment Dates    Each
August 15 and February 15 of each year, beginning on February 15, 2011. Record
Dates    August 1 and February 1 of each year Ratings*    B3 (Moody’s) / B+
(S&P) Trade Date    August 3, 2010

 

III-1

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Settlement Date    August 17, 2010 (T+10)    We expect that delivery of the
Notes will be made against payment therefor on or about the closing date as
specified on the cover page of the Final Offering Memorandum, which will be the
tenth business day following the date of this Pricing Supplement (this
settlement cycle being referred to as “T + 10”). Under Rule 15c6-1 under the
Securities Exchange Act of 1934, as amended, trades in the secondary market
generally are required to settle in three business days, unless the parties to
any such trade expressly agree otherwise. Accordingly, purchasers who wish to
trade notes prior to the delivery of the notes hereunder will be required, by
virtue of the fact that the notes initially settle in T+ 10, to specify an
alternate settlement arrangement at the time of any such trade to prevent a
failed settlement. Purchasers of the notes who wish to trade the notes prior to
their date of delivery hereunder should consult their advisors. Make-Whole
Redemption    Make-whole redemption at Treasury Rate + 50 bps prior to
August 15, 2014 Optional Redemption    On or after August 15, 2014, at the
following redemption prices (expressed as a percentage of principal amount),
plus accrued and unpaid interest, if any, on the Notes redeemed during the
twelve-month period indicated beginning on August 15 of the years indicated
below:      

Year

  

Price

       

2014

   103.625%      

2015

   101.813%      

2016 and thereafter

   100.000%    Equity Clawback    Up to 35% at 107.25% prior to August 15, 2013
Change of Control    Put @ 101% of principal plus accrued interest Joint
Book-Running Managers   

Barclays Capital Inc.

 

J.P. Morgan Securities Inc.

 

Wells Fargo Securities, LLC

 

Banc of America Securities LLC

 

BMO Capital Markets Corp.

 

BNP Paribas Securities Corp.

 

Credit Suisse Securities (USA) LLC

 

RBC Capital Markets Corporation

Senior Co-Managers   

Credit Agricole Securities (USA) Inc.

 

Morgan Stanley & Co. Incorporated

Co- Managers   

Capital One Southcoast, Inc.

 

Citigroup Global Markets Inc.

 

Mizuho Securities USA Inc.

 

Natixis Bleichroeder LLC

 

III-2

--------------------------------------------------------------------------------

CUSIP Numbers   

Rule 144A: 716495 AK2

 

Regulation S: U71618 AE9

ISIN Numbers   

Rule 144A: US716495AK25

 

Regulation S: USU71618AE93

Denominations    Minimum denominations of $2,000 and integral multiples of
$1,000 in excess thereof

 

* Note: A securities rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any time.

 

 

This material is strictly confidential and has been prepared by the Issuer
solely for use in connection with the proposed offering of the securities
described in the Preliminary Offering Memorandum. This material is personal to
each offeree and does not constitute an offer to any other person or the public
generally to subscribe for or otherwise acquire the securities. Please refer to
the Preliminary Offering Memorandum for a complete description.

The securities have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”), and are being offered only to (1) “qualified
institutional buyers” as defined in Rule 144A under the Securities Act and
(2) outside the United States to non-U.S. persons in compliance with Regulation
S under the Securities Act, and this communication is only being distributed to
such persons.

This communication is not an offer to sell the securities and it is not a
solicitation of an offer to buy the securities in any jurisdiction to any person
to whom it is unlawful to make such offer or solicitation in such jurisdiction.

Any disclaimer or other notice that may appear below is not applicable to this
communication and should be disregarded. Such disclaimer or notice was
automatically generated as a result of this communication being sent by
Bloomberg or another email system.

 

III-3

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SCHEDULE IV

(a) Free Writing Offering Documents and other documents that comprise the
Pricing Disclosure Package:

Term sheet containing the terms of the securities, substantially in the form of
Schedule III.

(b) Free Writing Offering Documents not included in the Pricing Disclosure
Package

Electronic Roadshow of the Company dated August 3, 2010, including related
graphic presentations in the form available on www.netroadshow.com

 

IV-1

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SCHEDULE V

OTHER ENTITIES

KinderHawk Field Services LLC

 

V-1

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SCHEDULE VI

 

Subsidiary

  

Jurisdiction of Organization

1.      Petrohawk Operating Company

   Texas

2.      P-H Energy, LLC

   Texas

3.      Petrohawk Holdings, LLC

   Delaware

4.      Petrohawk Properties, LP

   Texas

5.      Winwell Resources, LLC

   Louisiana

6.      WSF, Inc.

   Louisiana

7.      KCS Resources, LLC

   Delaware

8.      KCS Energy Services, Inc.

   Delaware

9.      One TEC, LLC

   Texas

10.    One TEC Operating, LLC

   Texas

11.    HK Energy Marketing, LLC

   Delaware

12.    Hawk Field Services, LLC

   Oklahoma

13.    Bison Ranch, LLC

   Idaho

14.    Medallion California Properties Company

   Texas

15.    Proliq, Inc.

   New Jersey

16.    HK Transportation, LLC

   Oklahoma

17.    Big Hawk Services, LLC

   Delaware

 

VI-1