Exhibit 10.1

Execution Version

PURCHASE AGREEMENT

April 25, 2017

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

    As Representative of the Initial Purchasers

c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated

One Bryant Park

New York, New York 10036

Ladies and Gentlemen:

Introductory. Bill Barrett Corporation, a Delaware corporation (the “Company”),
proposes to issue and sell to the several Initial Purchasers named in Schedule A
(the “Initial Purchasers”), acting severally and not jointly, the respective
amounts set forth in such Schedule A of $275,000,000 aggregate principal amount
of the Company’s 8.75% Senior Notes due 2025 (the “Notes”). Merrill Lynch,
Pierce, Fenner & Smith Incorporated has agreed to act as the representative of
the several Initial Purchasers (the “Representative”) in connection with the
offering and sale of the Notes.

The Securities (as defined below) will be issued pursuant to an indenture, to be
dated as of the Closing Date (as defined in Section 2 hereof) (the “Indenture”),
among the Company, the Guarantors (as defined below) and Deutsche Bank Trust
Company Americas, as trustee (the “Trustee”). The Securities will be issued only
in book-entry form in the name of Cede & Co., as nominee of The Depository Trust
Company (the “Depositary”) pursuant to a letter of representations and the
riders thereto, to be dated on or before the Closing Date (the “DTC Agreement”),
among the Company and the Depositary.

The holders of the Notes will be entitled to the benefits of a registration
rights agreement, to be dated as of the Closing Date (the “Registration Rights
Agreement”), among the Company, the Guarantors and the Initial Purchasers,
pursuant to which the Company and the Guarantors will be required to file with
the Commission (as defined below), under the circumstances set forth therein,
(i) a registration statement under the Securities Act (as defined below)
relating to another series of debt securities of the Company with terms
substantially identical to the Notes (the “Exchange Notes”) and the Guarantees
(the “Exchange Guarantees”) to be offered in exchange for the Notes and the
Guarantees (the “Exchange Offer”) or (ii) a shelf registration statement
pursuant to Rule 415 of the Securities Act relating to the resale by certain
holders of the Notes, and in each case, to use its best efforts to cause such
registration statements to be declared effective. All references herein to the
Exchange Securities and the Exchange Offer are only applicable if the Company
and the Guarantors are in fact required to consummate the Exchange Offer
pursuant to the terms of the Registration Rights Agreement.

The payment of principal of, premium, if any, and interest on the Notes will be
fully and unconditionally guaranteed on a senior unsecured basis, jointly and
severally by (i) the entities listed on the signature pages hereof as
“Guarantors” and (ii) any subsidiary of the Company formed or acquired after the
Closing Date that executes an additional guarantee in accordance with the terms
of the Indenture, and their respective successors and assigns (collectively, the

 

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“Guarantors”), pursuant to their guarantees (the “Guarantees”). The Notes and
the Guarantees attached thereto are herein collectively referred to as the
“Securities”; and the Exchange Notes and the Exchange Guarantees attached
thereto are herein collectively referred to as the “Exchange Securities.”

This Agreement, the Registration Rights Agreement, the DTC Agreement, the
Securities, the Exchange Securities, and the Indenture are referred to in this
Agreement collectively as the “Transaction Documents.”

The Company understands that the Initial Purchasers propose to make an offering
of the Securities on the terms and in the manner set forth herein and in the
Pricing Disclosure Package (as defined below) and agrees that the Initial
Purchasers may resell, subject to the conditions set forth herein, all or a
portion of the Securities to purchasers (the “Subsequent Purchasers”) on the
terms set forth in the Pricing Disclosure Package (the first time when sales of
the Securities are made is referred to as the “Time of Sale”). The Securities
are to be offered and sold to or through the Initial Purchasers without being
registered with the Securities and Exchange Commission (the “Commission”) under
the Securities Act of 1933, as amended (collectively, the “Securities Act,”
which term, as used herein, includes the rules and regulations of the Commission
promulgated thereunder), in reliance upon exemptions therefrom. Pursuant to the
terms of the Securities and the Indenture, investors who acquire Securities
shall be deemed to have agreed that Securities may only be resold or otherwise
transferred, after the date hereof, if such Securities are registered for sale
under the Securities Act or if an exemption from the registration requirements
of the Securities Act is available (including the exemptions afforded by Rule
144A under the Securities Act (“Rule 144A”) or Regulation S under the Securities
Act (“Regulation S”)).

The Company has prepared and delivered to each Initial Purchaser copies of a
Preliminary Offering Memorandum, dated April 24, 2017 (the “Preliminary Offering
Memorandum”), and has prepared and delivered to each Initial Purchaser copies of
a Pricing Supplement, dated April 25, 2017, in the form attached hereto as
Exhibit A (the “Pricing Supplement”), describing the terms of the Securities,
each for use by such Initial Purchaser in connection with its solicitation of
offers to purchase the Securities. The Preliminary Offering Memorandum and the
Pricing Supplement are herein referred to as the “Pricing Disclosure Package.”
Promptly after this Agreement is executed and delivered, the Company will
prepare and deliver to each Initial Purchaser a final offering memorandum dated
the date hereof (the “Final Offering Memorandum”).

All references herein to the terms “Pricing Disclosure Package” and “Final
Offering Memorandum” shall be deemed to mean and include all information filed
under the Securities Exchange Act of 1934 (as amended, the “Exchange Act,” which
term, as used herein, includes the rules and regulations of the Commission
promulgated thereunder) prior to the Time of Sale and incorporated by reference
in the Pricing Disclosure Package (including the Preliminary Offering
Memorandum) or the Final Offering Memorandum (as the case may be), and all
references herein to the terms “amend,” “amendment” or “supplement” with respect
to the Final Offering Memorandum shall be deemed to mean and include all
information filed under the Exchange Act after the Time of Sale and incorporated
by reference in the Final Offering Memorandum.

 

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The Company hereby confirms its agreements with the Initial Purchasers as
follows:

SECTION 1. Representations and Warranties. Each of the Company and the
Guarantors, jointly and severally, hereby represents, warrants and covenants to
each Initial Purchaser that, as of the date hereof and as of the Closing Date
(references in this Section 1 to the “Offering Memorandum” are to (x) the
Pricing Disclosure Package in the case of representations and warranties made as
of the date hereof and (y) the Pricing Disclosure Package and the Final Offering
Memorandum, together, in the case of representations and warranties made as of
the Closing Date):

(a) No Registration Required. Subject to compliance by the Initial Purchasers
with the representations and warranties set forth in Section 2 hereof and with
the procedures set forth in Section 7 hereof, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial Purchasers
and to each Subsequent Purchaser in the manner contemplated by this Agreement
and the Offering Memorandum to register the Securities under the Securities Act
or, until such time as the Exchange Securities are issued pursuant to an
effective registration statement, to qualify the Indenture under the Trust
Indenture Act of 1939 (the “Trust Indenture Act,” which term, as used herein,
includes the rules and regulations of the Commission promulgated thereunder).

(b) No Integration of Offerings or General Solicitation. None of the Company,
its affiliates (as such term is defined in Rule 501 under the Securities Act)
(each, an “Affiliate”), or any person acting on its or any of their behalf
(other than the Initial Purchasers, as to whom the Company makes no
representation or warranty) has, directly or indirectly, solicited any offer to
buy or offered to sell, or will, directly or indirectly, solicit any offer to
buy or offer to sell, in the United States or to any United States citizen or
resident, any security which is or would be integrated with the sale of the
Securities in a manner that would require the Securities to be registered under
the Securities Act. None of the Company, its Affiliates, or any person acting on
its or any of their behalf (other than the Initial Purchasers, as to whom the
Company makes no representation or warranty) has engaged or will engage, in
connection with the offering of the Securities, in any form of general
solicitation or general advertising within the meaning of Rule 502 under the
Securities Act. With respect to those Securities sold in reliance upon
Regulation S, (i) none of the Company, its Affiliates or any person acting on
its or their behalf (other than the Initial Purchasers, as to whom the Company
makes no representation or warranty) has engaged or will engage in any directed
selling efforts within the meaning of Regulation S and (ii) each of the Company
and its Affiliates and any person acting on its or their behalf (other than the
Initial Purchasers, as to whom the Company makes no representation or warranty)
has complied and will comply with the offering restrictions set forth in
Regulation S.

(c) Eligibility for Resale under Rule 144A. The Securities are eligible for
resale pursuant to Rule 144A and will not be, at the Closing Date, of the same
class as securities listed on a national securities exchange registered under
Section 6 of the Exchange Act or quoted in a U.S. automated interdealer
quotation system.

 

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(d) The Pricing Disclosure Package and Offering Memorandum. Neither the Pricing
Disclosure Package, as of the Time of Sale, nor the Final Offering Memorandum,
as of its date or (as amended or supplemented in accordance with Section 3(a),
as applicable) as of the Closing Date, contains or represents an untrue
statement of a material fact or omits 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; provided that this representation,
warranty and agreement shall not apply to statements in or omissions from the
Pricing Disclosure Package, the Final Offering Memorandum or any amendment or
supplement thereto made in reliance upon and in conformity with information
furnished to the Company in writing by any Initial Purchaser through the
Representative expressly for use in the Pricing Disclosure Package, the Final
Offering Memorandum or amendment or supplement thereto, as the case may be. The
Pricing Disclosure Package contains, and the Final Offering Memorandum will
contain, all the information specified in, and meeting the requirements of, Rule
144A. Except in accordance with Section 3(a), the Company has not distributed
and will not distribute, prior to the later of the Closing Date and the
completion of the Initial Purchasers’ distribution of the Securities, any
offering material in connection with the offering and sale of the Securities
other than the Pricing Disclosure Package and the Final Offering Memorandum.

(e) Company Additional Written Communications. The Company has not made, used,
authorized, approved or distributed and will not make, use, authorize, approve
or distribute any written communication that constitutes an offer to sell or
solicitation of an offer to buy the Securities other than (i) the Pricing
Disclosure Package, (ii) the Final Offering Memorandum and (iii) any electronic
road show or other written communications, in each case used in accordance with
Section 3(a). Each such communication by the Company or its agents and
representatives pursuant to clause (iii) of the preceding sentence (each, a
“Company Additional Written Communication”), when taken together with the
Pricing Disclosure Package, did not as of the Time of Sale, 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 the light
of the circumstances under which they were made, not misleading; provided that
this representation, warranty and agreement shall not apply to statements in or
omissions from each such Company Additional Written Communication made in
reliance upon and in conformity with information furnished to the Company in
writing by any Initial Purchaser through the Representative expressly for use in
any Company Additional Written Communication.

(f) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Offering Memorandum at the time they were or
hereafter are filed with the Commission (collectively, the “Incorporated
Documents”) complied and will comply in all material respects with the
requirements of the Exchange Act. Each such Incorporated Document, when taken
together with the Pricing Disclosure Package, did not as of the Time of Sale,
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 the light of the circumstances under which they were made, not
misleading.

 

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(g) The Purchase Agreement. This Agreement has been duly authorized, executed
and delivered by the Company and the Guarantors.

(h) The Registration Rights Agreement and DTC Agreement. The Registration Rights
Agreement has been duly authorized and, on the Closing Date, will have been duly
executed and delivered by, and will constitute a valid and binding agreement of,
the Company and the Guarantors, enforceable in accordance with its terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles and except
as rights to indemnification may be limited by applicable law. The DTC Agreement
has been duly authorized and, on the Closing Date, will have been duly executed
and delivered by, and will constitute a valid and binding agreement of, the
Company, enforceable in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.

(i) Authorization of the Notes, the Guarantees and the Exchange Securities. The
Notes to be purchased by the Initial Purchasers from the Company will on the
Closing Date be in the form contemplated by the Indenture, have been duly
authorized for issuance and sale pursuant to this Agreement and the Indenture
and, at the Closing Date, will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered against
payment of the purchase price therefor, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles and will be entitled to the benefits of the Indenture. The Exchange
Securities have been duly and validly authorized for issuance by the Company,
and when issued and authenticated in accordance with the terms of the Indenture,
the Registration Rights Agreement and the Exchange Offer, will constitute valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or affecting enforcement of the rights and remedies of creditors or by general
principles of equity and will be entitled to the benefits of the Indenture. The
Guarantees of the Notes on the Closing Date and the Guarantees of the Exchange
Notes when issued will be in the respective forms contemplated by the Indenture
and have been duly authorized for issuance pursuant to this Agreement and the
Indenture; the Guarantees of the Notes, at the Closing Date, will have been duly
executed by each of the Guarantors and, when the Notes have been authenticated
in the manner provided for in the Indenture and issued and delivered against
payment of the purchase price therefor, the Guarantees of the Notes will
constitute valid and binding agreements of the Guarantors; and, when the
Exchange Notes have been authenticated in the manner provided for in the
Indenture and issued and delivered in accordance with the Registration Rights
Agreement, the Guarantees of the Exchange Notes will constitute valid and
binding agreements of the Guarantors, in each case, enforceable against the
Guarantors in accordance with their terms, except as the enforcement thereof may
be limited by bankruptcy,

 

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insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles and will be entitled to the benefits of the Indenture.

(j) Authorization of the Indenture. The Indenture has been duly authorized by
the Company and the Guarantors and, at the Closing Date, will have been duly
executed and delivered by the Company and the Guarantors and will constitute a
valid and binding agreement of the Company and the Guarantors, assuming due
authorization, execution and delivery thereof by the Trustee, enforceable
against the Company and the Guarantors in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.

(k) Description of the Transaction Documents. The Transaction Documents will
conform in all material respects to the respective statements relating thereto
contained in the Offering Memorandum.

(l) No Material Adverse Change. Neither the Company, the Guarantors nor any of
their subsidiaries have sustained since the date of the latest audited financial
statements incorporated by reference in the Offering Memorandum any material
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, nor has there been any material
adverse change, or any development involving an actual or prospective material
adverse change, either individually or in the aggregate, in or affecting the
management, condition, financial or otherwise, stockholders’ equity, results of
operations, prospects or business of the Company, taken as a whole (a “Material
Adverse Change”) otherwise than as set forth or contemplated in the Offering
Memorandum; and since such date as of which information is given in the Offering
Memorandum, there has been no dividend or distribution of any kind declared,
paid or made by the Company or any of its subsidiaries (except for dividends
paid to the Company by its subsidiaries) on any class of capital stock or
repurchase or redemption by the Company or any of its subsidiaries of any class
of capital stock other than ordinary course repurchases or redemptions in
connection with the Company’s equity compensation plans.

(m) Independent Accountants. Deloitte & Touche LLP, who have audited the
consolidated financial statements of the Company and its subsidiaries, and have
audited the Company’s internal control over financial reporting and management’s
assessment thereof, are independent public accountants as required by the
Exchange Act and the rules and regulations of the Public Company Accounting
Oversight Board.

(n) Preparation of the Financial Statements. The financial statements and the
related notes thereto incorporated by reference in the Offering Memorandum
comply in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, as applicable, and present fairly the
financial position of the Company and its subsidiaries as of the dates indicated
and the results of their operations and the changes in their cash flows for the
periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis

 

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throughout the periods covered thereby, and the supporting schedules included or
incorporated by reference in the Offering Memorandum present fairly the
information required to be stated therein; and the other financial information
included or incorporated by reference in the Offering Memorandum has been
derived from the accounting records of the Company and its subsidiaries and
presents fairly the information shown thereby.

(o) Incorporation and Good Standing of the Company and its Subsidiaries. The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware, with corporate power and
authority to own or lease its properties, as the case may be, and conduct its
business as described in the Offering Memorandum and has been duly qualified as
a foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification, or is subject to
no material liability or disability by reason of the failure to be so qualified
in any such jurisdiction, except where the failure to be so qualified or to be
in good standing in any such jurisdiction would not have a Material Adverse
Change; and each subsidiary of the Company has been duly formed and is validly
existing as an entity in good standing under the laws of its jurisdiction of
formation and is duly qualified as a foreign limited liability company for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such jurisdiction,
except where the failure to be so qualified or to be in good standing in any
such jurisdiction would not have a Material Adverse Change.

(p) Capitalization and Other Capital Stock Matters. The Company has an
authorized capitalization as set forth in the Offering Memorandum and all of the
issued shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and conform to the
description of the Common Stock contained in the Company’s filings with the
Commission; and all of the issued interests of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid (to the extent
required by the applicable subsidiary’s organizational documents) and
non-assessable (except as such non-assessability may be affected by
Section 7-80-606 of the Colorado Revised Statutes or Sections 101.206 and
101.613 of the Texas Business Organizations Code, as applicable) and (except for
directors’ qualifying shares and except as set forth in the Offering Memorandum)
are owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims other than those (i) arising under the Third
Amended and Restated Credit Agreement dated as of March 16, 2010, among the
Company, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America,
N.A. and Deutsche Bank Securities Inc., as syndication agents, and Bank of
Montreal and Wells Fargo Bank, N.A., as documentation agents, and the lenders
from time to time party thereto, as amended through the date hereof (the “Credit
Facility”), or (ii) set forth in the Offering Memorandum.

(q) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required. Neither the Company nor any of its subsidiaries is (i) in
violation of its charter, bylaws or other constitutive document or (ii) in
default (or, with

 

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the giving of notice or lapse of time, would be in default) (“Default”) under
any indenture, mortgage, loan or credit agreement, note, contract, franchise,
lease or other instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is subject (each,
an “Existing Instrument”), except, in the case of clause (ii) above, for such
Defaults as would not, individually or in the aggregate, result in a Material
Adverse Change. The execution, delivery and performance of the Transaction
Documents by the Company and the Guarantors party thereto, and the issuance and
delivery of the Securities and the Exchange Securities, and consummation of the
transactions contemplated hereby and thereby and by the Offering Memorandum
(a) have been duly authorized by all necessary corporate action and will not
result in any violation of the provisions of the charter, bylaws or other
constitutive document of the Company or any subsidiary, (b) will not conflict
with or constitute a breach of, or Default or a Debt Repayment Triggering Event
(as defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument, except for such conflicts, breaches, Defaults, liens,
charges or encumbrances as would not, individually or in the aggregate, result
in a Material Adverse Change and (c) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the Company or any subsidiary. No consent, approval, authorization or other
order of, or registration or filing with, any court or other governmental or
regulatory authority or agency is required for the execution, delivery and
performance of the Transaction Documents by the Company and the Guarantors to
the extent a party thereto, or the issuance and delivery of the Securities or
the Exchange Securities, or consummation of the transactions contemplated hereby
and thereby and by the Offering Memorandum, except such as have been obtained or
made by the Company and are in full force and effect under the Securities Act,
such as may be required under applicable securities laws of the several states
of the United States or provinces of Canada or other relevant foreign
jurisdictions and, with respect to the Company’s obligations under the
Registration Rights Agreement, such as will be required under the Securities Act
and the Trust Indenture Act and as may be required by the securities laws of the
several states of the United States or provinces of Canada or other relevant
foreign jurisdictions. As used herein, a “Debt Repayment Triggering Event” means
any event or condition which gives, or with the giving of notice or lapse of
time would give, the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness
by the Company or any of its subsidiaries.

(r) No Material Actions or Proceedings. Except as described in the Offering
Memorandum, 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 of the
Company or any of its subsidiaries is the subject which, if determined adversely
to the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Change or as would materially adversely affect
the consummation of the transactions contemplated hereunder; and, to the best of
the Company’s knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.

 

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(s) Reserve Engineer. Netherland, Sewell & Associates, Inc. (“NSAI”), whose
audit letter containing its report effective as of December 31, 2016 (the
“Reserve Report Letter”) is referenced in the Offering Memorandum, was, as of
the date of each such report, and is, as of the date hereof, an independent
petroleum engineer with respect to the Company.

(t) Reserve Reports. The information underlying the estimates of reserves of the
Company and its subsidiaries, which was supplied by the Company to NSAI for
purposes of reviewing the reserve reports and estimates of the Company and
preparing the Reserve Report Letter in the Offering Memorandum, 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 and correct in all material respects on the dates
such estimates were made and such information was supplied and was prepared in
accordance with customary industry practices; other than normal production of
the reserves, intervening market commodity price fluctuations, fluctuations of
demand for such products, adverse weather conditions, unavailability or
increased costs of equipment, supplies or transportation capacity, the timing of
third party operations and other factors described in the Offering Memorandum,
the Company is not aware of any facts or circumstances that would result in a
material adverse change in the aggregate net reserves, or the present value of
future net cash flows therefrom, as described in the Offering Memorandum and as
reflected in the Reserve Report Letter; and estimates of such reserves and
present values as described in the Offering Memorandum and reflected in the
Reserve Report Letter comply in all material respects with the applicable
requirements of Regulation S-X and Regulation S-K.

(u) Title to Properties. The Company and its subsidiaries have legal, valid and
defensible title to substantially all of the interests in oil and gas properties
underlying the Company’s estimates of its net proved reserves contained in the
Offering Memorandum in accordance with general industry standards and to
substantially all other real and personal property reflected in the Offering
Memorandum as assets owned by them, in each case free and clear of all liens,
encumbrances and defects except under the Credit Facility and such as are
described in the Offering Memorandum or would not have a Material Adverse
Change; any other real property and buildings held under lease by the Company
and its subsidiaries are held by them under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not materially interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries; and the working interests derived from oil, gas
and mineral leases or mineral interests which constitute a portion of the real
property held or leased by the Company or its subsidiaries reflect in all
material respects the right of the Company and its subsidiaries to explore,
develop or produce hydrocarbons from such real property, and the care taken by
the Company and its subsidiaries with respect to acquiring or otherwise
procuring such leases or other property interests was generally consistent with
standard industry practices in the areas in which the Company operates for
acquiring or procuring leases and interests therein to explore, develop or
produce hydrocarbons.

(v) Licenses and Permits. The Company and its subsidiaries possess all licenses,
sub-licenses, certificates, permits and other authorizations issued by, and have

 

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made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of their
respective businesses as described in the Offering Memorandum, except where the
failure to possess or make the same would not, individually or in the aggregate,
have a Material Adverse Change and except for future permits and approvals
expected to be obtained in connection with the development of the Company’s
properties; and except as described in the Offering Memorandum, neither the
Company nor any of its subsidiaries has received notice of any revocation or
modification of any such license, sub-license, certificate, permit or
authorization or has any reason to believe that any such license, sub-license,
certificate, permit or authorization will not be renewed in the ordinary course.

(w) Tax Law Compliance. The Company and its subsidiaries have filed all
necessary federal, state and local income and franchise tax returns in a timely
manner (except in any case in which the failure to so file would not reasonably
be expected to have a Material Adverse Change) and have paid all taxes required
to be paid by any of them and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them, except for any taxes,
assessments, fines or penalties as may be being contested in good faith and by
appropriate proceedings or as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Change. The Company has made
appropriate provisions in the applicable financial statements referred to in
Section 1(n) above in respect of all federal, state and local income and
franchise taxes for all current or prior periods as to which the tax liability
of the Company or any of its subsidiaries has not been finally determined.

(x) Company and Guarantors Not an “Investment Company”. Neither the Company nor
any Guarantor is, or after receipt of payment for the Securities will be, an
“investment company” as such term is defined in the Investment Company Act of
1940, as amended (the “Investment Company Act”).

(y) Insurance. Each of the Company and its subsidiaries carry, or are covered
by, insurance in such amounts and with such deductibles and covering such risks
as are generally deemed adequate and customary for their businesses.

(z) No Price Stabilization or Manipulation. None of the Company or any of the
Guarantors has taken or will take, directly or indirectly, any action designed
to or that might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.

(aa) Solvency. Each of the Company and the Guarantors is, and immediately after
the Closing Date will be, Solvent. As used herein, the term “Solvent” means,
with respect to any person on a particular date, that on such date (i) the fair
market value of the assets of such person is greater than the total amount of
liabilities (including contingent liabilities) of such person, (ii) the present
fair salable value of the assets of such person is greater than the amount that
will be required to pay the probable liabilities of such person on its debts as
they become absolute and matured, (iii) such person is able to realize upon its
assets and pay its debts and other liabilities, including contingent
obligations, as they mature and (iv) such person does not have unreasonably
small capital.

 

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(bb) Compliance with Sarbanes-Oxley. 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 any provision of the Sarbanes-Oxley Act of
2002 and the rules and regulations promulgated in connection therewith (the
“Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302
and 906 related to certifications, in all material respects.

(cc) Company’s Accounting System. The Company and each of its subsidiaries
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) material transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. There
are no material weaknesses in the Company’s internal accounting controls. Since
the date of the latest audited financial statements incorporated by reference in
the Offering Memorandum, there has been no change in the Company’s internal
control over financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial
reporting.

(dd) Disclosure Controls and Procedures. The Company and its subsidiaries
maintain an effective system of “disclosure controls and procedures” (as defined
in Rule 13a-15(e) of the Exchange Act) that is designed to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Commission’s rules and forms, including
controls and procedures designed to ensure that such information is accumulated
and communicated to the Company’s management as appropriate to allow timely
decisions regarding required disclosure; and the Company and its subsidiaries
have carried out evaluations of the effectiveness of their disclosure controls
and procedures as required by Rule 13a-15e of the Exchange Act.

(ee) Compliance with and Liability Under Environmental Laws. Except as described
in the Offering Memorandum and except as would not, singly or in the aggregate,
result in a Material Adverse Change, (i) none of the Company or any of its
subsidiaries is in violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products,
asbestos-containing materials or

 

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mold (collectively, “Hazardous Materials”) or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, “Environmental Laws”), (ii) the Company and
its subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (iii) there are no pending or, to the knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries, and (iv) to the knowledge of the Company,
there are no events or circumstances that would reasonably be expected to form
the basis of an order for clean-up or remediation, or any actions, suits or
proceedings by any private party or governmental body or agency, against or
affecting the Company or any of its subsidiaries relating to Hazardous Materials
or any Environmental Laws.

(ff) Compliance with ERISA. (i) Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), for which the Company or any member of its “Controlled Group”
(defined as any entity, whether or not incorporated, that is under common
control with the Company within the meaning of Section 4001(a)(14) of ERISA or
any entity that would be regarded as a single employer with the Company under
Section 414(b),(c),(m) or (o) 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 the requirements of any applicable statutes,
orders, rules and regulations, including but not limited to ERISA and the Code;
(ii) no prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code, has occurred with respect to any Plan, excluding
transactions effected pursuant to a statutory or administrative exemption;
(iii) for each Plan that is subject to the funding rules of Section 412 of the
Code or Section 302 of ERISA, no Plan has failed (whether or not waived), or is
reasonably expected to fail, to satisfy the minimum funding standards (within
the meaning of Section 302 of ERISA or Section 412 of the Code) applicable to
such Plan; (iv) no Plan is, or is reasonably expected to be, in “at risk status”
(within the meaning of Section 303(i) of ERISA) and no Plan that is a
“multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA is in
“endangered status” or “critical status” (within the meaning of Sections 304 and
305 of ERISA); (v) the fair market value of the assets of each Plan exceeds the
present value of all benefits accrued under such Plan (determined based on those
assumptions used to fund such Plan); (vi) no “reportable event” (within the
meaning of Section 4043(c) of ERISA and the regulations promulgated thereunder)
has occurred or is reasonably expected to occur; (vii) 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; (viii) neither the Company nor any member of the
Controlled Group has incurred, nor reasonably expects to incur, any liability
under Title IV of ERISA (other than contributions to the Plan or premiums to the
Pension Benefit Guarantee Corporation, in the ordinary course and without
default) in respect of a Plan (including a “multiemployer plan” within the
meaning of Section 4001(a)(3) of ERISA); and (ix) none of the following events
has occurred or is reasonably likely to occur: (A) a material increase in the
aggregate amount of contributions

 

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required to be made to all Plans by the Company or its Controlled Group
affiliates in the current fiscal year of the Company and its Controlled Group
affiliates compared to the amount of such contributions made in the Company’s
and its Controlled Group affiliates’ most recently completed fiscal year; or
(B) a material increase in the Company and its subsidiaries’ “accumulated
post-retirement benefit obligations” (within the meaning of Accounting Standards
Codification Topic 715-60) compared to the amount of such obligations in the
Company and its subsidiaries’ most recently completed fiscal year, except in
each case with respect to the events or conditions set forth in (i) through (ix)
hereof, as would not, individually or in the aggregate, have a Material Adverse
Change.

(gg) No Labor Disputes. No labor disturbance by or dispute with employees of the
Company or any of its subsidiaries exists or, to the knowledge of the Company,
is contemplated or threatened, and the Company is not aware of any existing or
imminent labor disturbance by, or dispute with, the employees of any of its or
its subsidiaries’ principal suppliers, contractors or customers, except as would
not have a Material Adverse Change. Neither the Company nor any of its
subsidiaries has received any notice of cancellation or termination with respect
to any collective bargaining agreement to which it is a party.

(hh) Related Party Transactions. No relationship, direct or indirect, exists
between or among the Company or any of its subsidiaries, on the one hand, and
the directors, officers, stockholders, customers, suppliers or other affiliates
of the Company or any of its subsidiaries, on the other, that is required by the
Securities Act to be described in Offering Memorandum and that is not so
described.

(ii) No Unlawful Contributions or Other Payments. Neither the Company nor any of
its subsidiaries nor any director, officer or employee of the Company or any of
its subsidiaries nor, to the knowledge of the Company, any agent, affiliate or
other person associated with or acting on behalf of the Company or any of its
subsidiaries has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made or taken an act in furtherance of an offer, promise or authorization
of any direct or indirect unlawful payment or benefit to any foreign or domestic
government official or employee, including of any government-owned or controlled
entity or of a public international organization, or any person acting in an
official capacity for or on behalf of any of the foregoing, or any political
party or party official or candidate for political office; (iii) violated or is
in violation of any provision of the Foreign Corrupt Practices Act of 1977, as
amended, or any applicable law or regulation implementing the OECD Convention on
Combating Bribery of Foreign Public Officials in International Business
Transactions, or committed an offence under the Bribery Act 2010 of the United
Kingdom or any other applicable anti-bribery or anti-corruption law; or
(iv) made, offered, agreed, requested or taken an act in furtherance of any
unlawful bribe or other unlawful benefit, including, without limitation, any
rebate, payoff, influence payment, kickback or other unlawful or improper
payment or benefit. The Company and its subsidiaries have instituted, maintain
and enforce, and will continue to maintain and enforce policies and procedures
designed to promote and ensure compliance with all applicable anti-bribery and
anti-corruption laws.

 

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(jj) Compliance with Anti-Money Laundering Laws. 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, including those
of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the
applicable money laundering statutes of all jurisdictions where the Company or
any of its subsidiaries conducts business, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines issued, administered
or enforced by any governmental agency (collectively, the “Anti-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 Anti-Money Laundering Laws is pending or, to
the knowledge of the Company, threatened.

(kk) No Conflicts with Sanctions Laws. Neither the Company nor any of its
subsidiaries, directors, officers, or employees, nor, to the knowledge of the
Company, any agent, affiliate or other person associated with or acting on
behalf of the Company or any of its subsidiaries is currently the subject or the
target of any sanctions administered or enforced by the U.S. government
(including, without limitation, the Office of Foreign Assets Control of the U.S.
Department of the Treasury (“OFAC”) or the U.S. Department of State and
including, without limitation, the designation as a “specially designated
national” or “blocked person”), the United Nations Security Council (“UNSC”),
the European Union, Her Majesty’s Treasury (“HMT”) or other relevant sanctions
authority (collectively, “Sanctions”), nor is the Company or any of its
subsidiaries located, organized or resident in a country or territory that is
the subject or target of Sanctions, including, without limitation, Cuba, Iran,
North Korea, Sudan, Syria and Crimea (each, a “Sanctioned Country”); and the
Company will not directly or indirectly use the proceeds of the offering of the
Securities hereunder, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity
(i) to fund or facilitate any activities of or business with any person that, at
the time of such funding or facilitation, is the subject or target of Sanctions,
(ii) to fund or facilitate any activities of or business in any Sanctioned
Country or (iii) in any other manner that will, to the Company’s knowledge,
result in a violation by any person (including any person participating in the
transaction, whether as underwriter, advisor, investor or otherwise) of
Sanctions. For the past five years, the Company and its subsidiaries have not
knowingly engaged in and are not now knowingly engaged in any dealings or
transactions with any person that at the time of the dealing or transaction is
or was the subject or the target of Sanctions or with any Sanctioned Country.

(ll) No Significant Subsidiaries. As of the date of this Agreement, the Company
has no subsidiaries which, individually or considered as a whole, would be
deemed to be a significant subsidiary (as such term is defined in Rule 405 under
the Act). A list of all subsidiaries of the Company as of the date of this
Agreement is set forth on Schedule B hereto.

(mm) No Broker’s Fees. Other than the compensation pursuant to Section 2, there
is no broker, finder or other party that is entitled to receive from the Company
any brokerage or finder’s fee or other fee or commission as a result of any
transactions contemplated by this Agreement.

 

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(nn) Margin Rules. Neither the issuance, sale and delivery of the Securities nor
the application of the proceeds thereof by the Company as described in the
Offering Memorandum will violate Regulation T, U or X of the Board of Governors
of the Federal Reserve System or any other regulation of such Board of
Governors.

(oo) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) included or incorporated by reference in the Offering Memorandum has been
made or reaffirmed without a reasonable basis or has been disclosed other than
in good faith.

(pp) Statistical and Market Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and
market-related data included or incorporated by reference in the Offering
Memorandum is not based on or derived from sources that are reliable and
accurate in all material respects.

(qq) Regulation S. The Company, the Guarantors and their respective affiliates
and all persons acting on their behalf (other than the Initial Purchasers, as to
whom the Company and the Guarantors make no representation) have complied with
and will comply with the offering restrictions requirements of Regulation S in
connection with the offering of the Securities outside the United States and, in
connection therewith, the Offering Memorandum will contain the disclosure
required by Rule 902. The Securities sold in reliance on Regulation S will be
represented upon issuance by a temporary global security that may not be
exchanged for definitive securities until the expiration of the 40-day
restricted period referred to in Rule 903 of the Securities Act and only upon
certification of beneficial ownership of such Securities by non-U.S. persons or
U.S. persons who purchased such Securities in transactions that were exempt from
the registration requirements of the Securities Act.

SECTION 2. Purchase, Sale and Delivery of the Securities.

(a) The Securities. Each of the Company and the Guarantors agrees to issue and
sell to the Initial Purchasers, severally and not jointly, all of the
Securities, and subject to the conditions set forth herein, the Initial
Purchasers agree, severally and not jointly, to purchase from the Company and
the Guarantors the aggregate principal amount of Securities set forth opposite
their names on Schedule A, at a purchase price of 98.5% of the principal amount
thereof payable on the Closing Date, in each case, on the basis of the
representations, warranties and agreements herein contained, and upon the terms
herein set forth.

(b) The Closing Date. Delivery of the Securities to be purchased by the Initial
Purchasers and payment therefor shall be made at the offices of Latham & Watkins
LLP, 885 Third Avenue, New York, New York 10022 (or such other place as may be
agreed to by the Company and the Representative) at 9:00 a.m. New York City
time, on April 28, 2017, or such other time and date as may be agreed to by the
Company and the Representative (the time and date of such closing are called the
“Closing Date”).

(c) Delivery of the Securities. The Issuer shall deliver, or cause to be
delivered, to the nominee of the Depositary for the accounts of the several
Initial Purchasers of the Notes to be

 

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purchased by them, in one or more global notes representing the Notes
(collectively, the “Global Notes”) at the Closing Date against the irrevocable
release of a wire transfer of immediately available funds for the amount of the
purchase price therefore to a bank account designated by the Company. The Global
Notes shall be in such denominations and registered in the name of Cede & Co.,
as nominee of the Depositary, pursuant to the DTC Agreement, as the
Representative may designate. Time shall be of the essence, and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of the Initial Purchasers.

(d) Initial Purchasers as Qualified Institutional Buyers. Each Initial Purchaser
severally and not jointly represents and warrants to, and agrees with, the
Company that:

(i) it will offer and sell Securities only to (a) persons who it reasonably
believes are “qualified institutional buyers” within the meaning of Rule 144A
(“Qualified Institutional Buyers”) in transactions meeting the requirements of
Rule 144A or (b) upon the terms and conditions set forth in Annex I to this
Agreement;

(ii) it is an institutional “accredited investor” within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act; and

(iii) it has not and will not offer or sell Securities by, any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Securities Act, and has not and will not use,
authorize, distribute or approve any written communication that constitutes an
offer to sell or solicitation of an offer to buy the Securities other than the
Pricing Disclosure Package, the Final Offering Memorandum and other
communications approved in advance by the Company.

SECTION 3. Additional Covenants. Each of the Company and the Guarantors further
covenants and agrees with each Initial Purchaser as follows:

(a) Preparation of Final Offering Memorandum; Initial Purchasers’ Review of
Proposed Amendments and Supplements and Company Additional Written
Communications. As promptly as practicable following the Time of Sale and in any
event not later than the second business day following the date hereof, the
Company will prepare and deliver to the Initial Purchasers the Final Offering
Memorandum, which shall consist of the Preliminary Offering Memorandum as
modified only by the information contained in the Pricing Supplement. The
Company will not amend or supplement the Preliminary Offering Memorandum or the
Pricing Supplement. The Company will not amend or supplement the Final Offering
Memorandum prior to the Closing Date unless the Representative shall previously
have been furnished a copy of the proposed amendment or supplement at least two
business days prior to the proposed use or filing, and shall not have objected
to such amendment or supplement. Before using, authorizing, approving or
distributing any Company Additional Written Communication, the Company will
furnish to the Representative a copy of such written communication for review
and will not use, authorize, approve or distribute any such written
communication to which the Representative reasonably objects.

 

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(b) Amendments and Supplements to the Final Offering Memorandum and Other
Securities Act Matters. If at any time prior to the Closing Date (i) any event
shall occur or condition shall exist as a result of which any of the Pricing
Disclosure Package as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (ii) it is necessary to amend or
supplement the Pricing Disclosure Package to comply with law, the Company and
the Guarantors will immediately notify the Initial Purchasers thereof and
forthwith prepare and (subject to Section 3(a) hereof) furnish to the Initial
Purchasers such amendments or supplements to the Pricing Disclosure Package as
may be necessary so that the statements in the Pricing Disclosure Package as so
amended or supplemented will not, in the light of the circumstances under which
they were made, be misleading or so that the Pricing Disclosure Package will
comply with all applicable law. If, prior to the completion of the placement of
the Securities by the Initial Purchasers with the Subsequent Purchasers, or
prior to the expiration of nine months after the date of the Final Offering
Memorandum, whichever is shorter, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Final Offering
Memorandum, as then amended or supplemented, in order to make the statements
therein, in the light of the circumstances when the Final Offering Memorandum is
delivered to a Subsequent Purchaser, not misleading, or if in the judgment of
the Representative or counsel for the Initial Purchasers it is otherwise
necessary to amend or supplement the Final Offering Memorandum to comply with
law, the Company and the Guarantors agree to promptly prepare and (subject to
Section 3 hereof) furnish at its own expense to the Initial Purchasers,
amendments or supplements to the Final Offering Memorandum so that the
statements in the Final Offering Memorandum as so amended or supplemented will
not, in the light of the circumstances at the Closing Date and at the time of
sale of Securities, be misleading or so that the Final Offering Memorandum, as
amended or supplemented, will comply with all applicable law.

The Company hereby expressly acknowledges that the indemnification and
contribution provisions of Sections 8 and 9 hereof are specifically applicable
and relate to each offering memorandum, registration statement, prospectus,
amendment or supplement referred to in this Section 3.

(c) Copies of the Offering Memorandum. The Company agrees to furnish the Initial
Purchasers, without charge, as many copies of the Pricing Disclosure Package and
the Final Offering Memorandum and any amendments and supplements thereto as they
shall reasonably request.

(d) Blue Sky Compliance. Each of the Company and the Guarantors shall cooperate
with the Initial Purchasers and counsel for the Initial Purchasers to qualify or
register (or to obtain exemptions from qualifying or registering) all or any
part of the Securities for offer and sale under the securities laws of the
several states of the United States, the provinces of Canada or any other
jurisdictions reasonably designated by the Representative, shall comply with
such laws and shall continue such qualifications, registrations and exemptions
in effect so long as required for the distribution of the Securities.
Notwithstanding the foregoing, none of the Company or any of the Guarantors
shall be

 

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required to qualify as a foreign corporation or to take any action that would
subject it to general service of process in any such jurisdiction where it is
not presently qualified or where it would be subject to taxation as a foreign
corporation. The Company will advise the Representative promptly of the
suspension of the qualification or registration of (or any such exemption
relating to) the Securities for offering, sale or trading in any jurisdiction or
any initiation or threat of any proceeding for any such purpose, and in the
event of the issuance of any order suspending such qualification, registration
or exemption, each of the Company and the Guarantors shall use its best efforts
to obtain the withdrawal thereof at the earliest possible moment.

(e) Use of Proceeds. The Company shall apply the net proceeds from the sale of
the Securities sold by it in the manner described under the caption “Use of
Proceeds” in the Pricing Disclosure Package.

(f) The Depositary. The Company will cooperate with the Initial Purchasers and
use its best efforts to permit the Securities to be eligible for clearance and
settlement through the facilities of the Depositary.

(g) Additional Issuer Information. Prior to the completion of the placement of
the Securities by the Initial Purchasers with the Subsequent Purchasers, or
prior to the expiration of nine months after the date of the Final Offering
Memorandum, whichever is shorter, the Company shall file, on a timely basis,
with the Commission and the NYSE all reports and documents required to be filed
under Section 13 or 15 of the Exchange Act. Additionally, at any time when the
Company is not subject to Section 13 or 15 of the Exchange Act, for the benefit
of holders and beneficial owners from time to time of the Securities, the
Company shall furnish, at its expense, upon request, to holders and beneficial
owners of Securities and prospective purchasers of Securities information
(“Additional Issuer Information”) satisfying the requirements of Rule 144A(d).

(h) Agreement Not To Offer or Sell Additional Securities. During the period of
60 days following the date hereof, the Company will not, without the prior
written consent of the Representative (which consent may be withheld at the sole
discretion of Merrill Lynch), directly or indirectly, sell, offer, contract or
grant any option to sell, pledge, transfer or establish an open “put equivalent
position” within the meaning of Rule 16a-1 under the Exchange Act, or otherwise
dispose of or transfer, or announce the offering of, or file any registration
statement under the Securities Act in respect of, any debt securities of the
Company or securities exchangeable for or convertible into debt securities of
the Company (other than as contemplated by this Agreement and to register the
Exchange Securities).

(i) Future Reports to the Initial Purchasers. While the Securities remain
outstanding and are “restricted securities” within the meaning of Rule 144(a)(3)
under the Securities Act, the Company will, during any period in which the
Company is not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act, furnish to holders of the Securities and prospective purchasers of
the Securities designated by such holders, upon the request of such holders or
such prospective purchasers, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.

 

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(j) No Integration. The Company agrees that it will not and will cause its
controlled Affiliates not to make any offer or sale of securities of the Company
of any class if, as a result of the doctrine of “integration” referred to in
Rule 502 under the Securities Act, such offer or sale would render invalid (for
the purpose of (i) the sale of the Securities by the Company to the Initial
Purchasers, (ii) the resale of the Securities by the Initial Purchasers to
Subsequent Purchasers or (iii) the resale of the Securities by such Subsequent
Purchasers to others) the exemption from the registration requirements of the
Securities Act provided by Section 4(a)(2) thereof or by Rule 144A or by
Regulation S thereunder or otherwise.

(k) No General Solicitation or Directed Selling Efforts. The Company agrees that
it will not and will not permit any of its controlled Affiliates or any other
person acting on its or their behalf (other than the Initial Purchasers, as to
which no covenant is given) to (i) solicit offers for, or offer or sell, the
Securities 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(a)(2) of the Securities Act or
(ii) engage in any directed selling efforts with respect to the Securities
within the meaning of Regulation S, and the Company will and will cause all such
persons to comply with the offering restrictions requirement of Regulation S
with respect to the Securities.

(l) No Restricted Resales. The Company will not, and will not permit any of its
controlled affiliates (as defined in Rule 144 under the Securities Act) to
resell any of the Notes that have been reacquired by any of them.

(m) Legended Securities. Each Global Note will bear the legend contained in
“Transfer Restrictions” in the Preliminary Offering Memorandum for the time
period and upon the other terms stated in the Preliminary Offering Memorandum.

The Representative on behalf of the several Initial Purchasers, may, in its sole
discretion, waive in writing the performance by the Company or any Guarantor of
any one or more of the foregoing covenants or extend the time for their
performance.

SECTION 4. Payment of Expenses. Each of the Company and the Guarantors agrees to
pay all costs, fees and expenses incurred in connection with the performance of
its obligations hereunder and in connection with the transactions contemplated
hereby, including, without limitation, (i) all expenses incident to the issuance
and delivery of the Securities (including all printing and engraving costs),
(ii) all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Securities to the Initial Purchasers, (iii) all fees
and expenses of the Company’s and the Guarantors’ counsel, independent public or
certified public accountants and other advisors, (iv) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and
distribution of the Pricing Disclosure Package and the Final Offering Memorandum
(including financial statements and exhibits), and all amendments and
supplements thereto, and the Transaction Documents, (v) all filing fees,
attorneys’ fees and expenses incurred by the Company, the Guarantors or the
Initial Purchasers in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Securities for offer and sale under the securities laws of the several states of
the United

 

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States, the provinces of Canada or other jurisdictions designated by the Initial
Purchasers (including, without limitation, the cost of preparing, printing and
mailing preliminary and final blue sky or legal investment memoranda and any
related supplements to the Pricing Disclosure Package or the Final Offering
Memorandum, (vi) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee in connection with the Indenture, the
Securities and the Exchange Securities, (vii) any fees payable in connection
with the rating of the Securities or the Exchange Securities with the ratings
agencies, (viii) any filing fees incident to, and any reasonable fees and
disbursements of counsel to the Initial Purchasers in connection with the review
by FINRA, if any, of the terms of the sale of the Securities or the Exchange
Securities, (ix) all fees and expenses (including reasonable fees and expenses
of counsel) of the Company and the Guarantors in connection with approval of the
Securities by the Depositary for “book-entry” transfer, and the performance by
the Company and the Guarantors of their respective other obligations under this
Agreement and (x) all expenses incident to the “road show” for the offering of
the Securities. Except as provided in this Section 4 and Sections 6, 8 and 9
hereof, the Initial Purchasers shall pay their own expenses, including the fees
and disbursements of their counsel.

SECTION 5. Conditions of the Obligations of the Initial Purchasers. The
obligations of the several Initial Purchasers to purchase and pay for the
Securities as provided herein on the Closing Date shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Guarantors set forth in Section 1 hereof as of the date hereof and as of the
Closing Date as though then made and to the timely performance by the Company of
its covenants and other obligations hereunder, and to each of the following
additional conditions:

(a) Accountants’ Comfort Letter. On the date hereof, the Initial Purchasers
shall have received from Deloitte & Touche LLP, the independent registered
public accounting firm for the Company, a “comfort letter” dated the date hereof
addressed to the Initial Purchasers, in form and substance satisfactory to the
Representative, covering the financial information in the Pricing Disclosure
Package and other customary matters. In addition, on the Closing Date, the
Initial Purchasers shall have received from such accountants a “bring-down
comfort letter” dated the Closing Date addressed to the Initial Purchasers, in
form and substance satisfactory to the Representative, in the form of the
“comfort letter” delivered on the date hereof, except that (i) it shall cover
the financial information in the Final Offering Memorandum and any amendment or
supplement thereto and (ii) procedures shall be brought down to a date no more
than 3 days prior to the Closing Date.

(b) Reserve Engineer Letters. On the date hereof and on the Closing Date, the
Initial Purchasers shall have received, in form and substance reasonably
satisfactory to the Representative, letters, dated the respective dates of
delivery thereof and addressed to the Initial Purchasers, containing statements
and information of the type customarily included in reserve engineer’s letters
to initial purchasers with respect to the oil and gas reserves information
contained or incorporated by reference in the Pricing Disclosure Package or the
Final Offering Memorandum, as applicable.

(c) No Material Adverse Change or Ratings Agency Change. For the period from and
after the date of this Agreement and prior to the Closing Date:

(i) in the judgment of the Representative there shall not have occurred any
Material Adverse Change; and

(ii) there shall not have occurred any downgrading, nor shall any notice have
been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change, in
the rating accorded the Company or any of its subsidiaries or any of their
securities or indebtedness by any “nationally recognized statistical rating
organization” registered under Section15E of the Exchange Act.

 

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(d) Opinion of Counsel for the Company. On the Closing Date the Initial
Purchasers shall have received the favorable opinion and 10b-5 statement of
Davis Graham & Stubbs LLP, counsel for the Company, dated as of the Closing
Date, the form of which is attached as Exhibit B.

(e) Opinion of Counsel for the Initial Purchasers. On the Closing Date the
Initial Purchasers shall have received the favorable opinion and 10b-5 statement
of Latham & Watkins LLP, counsel for the Initial Purchasers, dated as of such
Closing Date, with respect to such matters as may be reasonably requested by the
Initial Purchasers.

(f) Opinion of Company General Counsel. Kenneth A. Wonstolen, Senior Vice
President, General Counsel and Secretary of the Company, as counsel for the
Company, shall have furnished to the Representative, at the request of the
Company, his written opinion, dated the Closing Date, and addressed to the
Initial Purchasers, in form and substance reasonably satisfactory to the
Representative, to the effect set forth in Exhibit C hereto.

(g) Officers’ Certificate. On the Closing Date the Initial Purchasers shall have
received a written certificate executed by an executive officer of the Company
and each Guarantor and the Principal Financial Officer or Chief Accounting
Officer of the Company and each Guarantor, dated as of the Closing Date, to the
effect set forth in Section 5(c)(ii) hereof, and further to the effect that:

(i) for the period from and after the date of this Agreement and prior to the
Closing Date there has not occurred any Material Adverse Change;

(ii) the representations, warranties and covenants of the Company and the
Guarantors set forth in Section 1 hereof were true and correct as of the date
hereof and are true and correct as of the Closing Date with the same force and
effect as though expressly made on and as of the Closing Date; and

(iii) each of the Company and the Guarantors has complied with all the
agreements and satisfied all the conditions on its part to be performed or
relating to the accuracy of certain financial information of the Company
contained in the Offering Memorandum at or prior to the Closing Date.

(h) Good Standing. The Representative shall have received on and as of the
Closing Date, satisfactory evidence of the good standing of the Company and its
subsidiaries

 

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in their respective jurisdictions of organization and their good standing in
such other jurisdictions as the Representative may reasonably request, in each
case in writing or any standard form of telecommunication from the appropriate
governmental authorities of such jurisdictions.

(i) Indenture; Registration Rights Agreement. The Company and the Guarantors
shall have executed and delivered the Indenture, in form and substance
reasonably satisfactory to the Initial Purchasers, and the Initial Purchasers
shall have received executed copies thereof. The Company and the Guarantors
shall have executed and delivered the Registration Rights Agreement, in form and
substance reasonably satisfactory to the Initial Purchasers, and the Initial
Purchasers shall have received such executed counterparts.

(j) Principal Financial Officer’s Certificate. On the date hereof and on the
Closing Date the Initial Purchasers shall have received a written certificate
executed by the Principal Financial Officer of the Company, in the form attached
hereto as Exhibit D.

(k) Additional Documents. On or before the Closing Date, the Initial Purchasers
and counsel for the Initial Purchasers shall have received such information,
documents and opinions as they may reasonably require for the purposes of
enabling them to pass upon the issuance and sale of the Securities as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.

If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Representative
by notice to the Company at any time on or prior to the Closing Date, which
termination shall be without liability on the part of any party to any other
party, except that Sections 4, 6, 8 and 9 hereof shall at all times be effective
and shall survive such termination.

SECTION 6. Reimbursement of Initial Purchasers’ Expenses. If this Agreement is
terminated by the Representative pursuant to Section 5 or 10 hereof, including
if the sale to the Initial Purchasers of the Securities on the Closing Date is
not consummated because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or to comply with any provision hereof,
the Company agrees to reimburse the Initial Purchasers, severally, upon demand
for all out-of-pocket expenses that shall have been reasonably incurred by the
Initial Purchasers in connection with the proposed purchase and the offering and
sale of the Securities, including, without limitation, fees and disbursements of
counsel, printing expenses, travel expenses, postage, facsimile and telephone
charges.

SECTION 7. Offer, Sale and Resale Procedures. Each of the Initial Purchasers, on
the one hand, and the Company and each of the Guarantors, on the other hand,
hereby agree to observe the following procedures in connection with the offer
and sale of the Securities:

(a) Offers and sales of the Securities will be made only by the Initial
Purchasers or Affiliates thereof qualified to do so in the jurisdictions in
which such offers or sales are made. Each such offer or sale shall only be made
to persons whom the offeror or

 

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seller reasonably believes to be Qualified Institutional Buyers or non-U.S.
persons outside the United States to whom the offeror or seller reasonably
believes offers and sales of the Securities may be made in reliance upon
Regulation S upon the terms and conditions set forth in Annex I hereto, which
Annex I is hereby expressly made a part hereof.

(b) No general solicitation or general advertising (within the meaning of Rule
502 under the Securities Act) will be used in the United States in connection
with the offering of the Securities.

(c) Upon original issuance by the Company, and until such time as the same is no
longer required under the applicable requirements of the Securities Act, the
Securities (and all securities issued in exchange therefor or in substitution
thereof, other than the Exchange Securities) shall bear the legend contained in
“Transfer Restrictions” in the Preliminary Offering Memorandum.

SECTION 8. Indemnification.

(a) Indemnification of the Initial Purchasers. Each of the Company and the
Guarantors, jointly and severally, agrees 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 the
Securities Act and the Exchange Act against any loss, claim, damage, liability
or expense, as incurred, to which such Initial Purchaser, affiliate, director,
officer, employee or controlling person may become subject, under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum, the Pricing Supplement, any Company Additional Written
Communication or the Final Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and to reimburse each
Initial Purchaser and each such affiliate, director, officer, employee or
controlling person for any and all expenses (including the documented fees and
disbursements of counsel chosen by Merrill Lynch, Pierce, Fenner & Smith
Incorporated) as such expenses are reasonably incurred by such Initial Purchaser
or such affiliate, director, officer, employee or controlling person in
connection with investigating, defending, settling or compromising (pursuant to
a settlement or compromise effected with the written consent of the Company) or
paying upon final judgment any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not
apply, with respect to an Initial Purchaser, to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by such Initial Purchaser through the
Representative expressly for use in the Preliminary Offering Memorandum, the
Pricing Supplement, any Company Additional Written Communication or the Final
Offering Memorandum (or any amendment or supplement thereto). The indemnity
agreement set forth in this Section 8(a) shall be in addition to any liabilities
that the Company may otherwise have.

 

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(b) Indemnification of the Company and the Guarantors. Each Initial Purchaser
agrees, severally and not jointly, to indemnify and hold harmless the Company,
each Guarantor, each of their respective directors and each person, if any, who
controls the Company or any Guarantor within the meaning of the Securities Act
or the Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Company, any Guarantor or any such director or
controlling person may become subject, under the Securities Act, the Exchange
Act, or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Initial Purchaser), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum, the Pricing Supplement, any Company Additional Written
Communication or the Final Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Preliminary Offering
Memorandum, the Pricing Supplement, any Company Additional Written Communication
or the Final Offering Memorandum (or any amendment or supplement thereto), in
reliance upon and in conformity with written information furnished to the
Company by such Initial Purchaser through the Representative expressly for use
therein; and to reimburse the Company, any Guarantor and each such director or
controlling person for any and all expenses (including the documented fees and
disbursements of counsel) as such expenses are reasonably incurred by the
Company, any Guarantor or such director or controlling person in connection with
investigating, defending, settling or compromising (pursuant to a settlement or
compromise effected with the written consent of the Company) or paying upon
final judgment any such loss, claim, damage, liability, expense or action. Each
of the Company and the Guarantors hereby acknowledges that the only information
that the Initial Purchasers through the Representative have furnished to the
Company expressly for use in the Preliminary Offering Memorandum, the Pricing
Supplement, any Company Additional Written Communication or the Final Offering
Memorandum (or any amendment or supplement thereto) are the statements set forth
in the fifth, sixth and seventh paragraphs under the caption “Plan of
Distribution” in the Preliminary Offering Memorandum and the Final Offering
Memorandum. The indemnity agreement set forth in this Section 8(b) shall be in
addition to any liabilities that each Initial Purchaser may otherwise have.

(c) Notifications and Other Indemnification Procedures. Promptly after receipt
by an indemnified party under this Section 8 of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 8, notify the indemnifying
party in writing of the commencement thereof; provided that the failure to so
notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party under this Section 8 except to the extent that
it has been materially prejudiced by such failure (through the forfeiture of
substantive rights and defenses) and shall not relieve the indemnifying party
from any liability that the indemnifying party may have to an indemnified party
other than under this Section 8. In case any such action is

 

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brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (together with local counsel (in each
jurisdiction)), which shall be selected by Merrill Lynch, Pierce, Fenner & Smith
Incorporated (in the case of counsel representing the Initial Purchasers or
their related persons), representing the indemnified parties who are parties to
such action) or (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action, in
each of which cases the fees and expenses of counsel shall be at the expense of
the indemnifying party.

(d) Settlements. The indemnifying party under this Section 8 shall not be liable
for any settlement of any proceeding effected without its written consent, which
will not be unreasonably withheld, but if settled with such consent or if there
be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party against any loss, claim, damage, liability or
expense by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent (i) includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding and (ii) does not include any statements as to or any findings of
fault, culpability or failure to act by or on behalf of any indemnified party.

SECTION 9. Contribution. If the indemnification provided for in Section 8 hereof
is for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses

 

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referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, from the offering of the
Securities pursuant to this Agreement 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 hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, 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 hand, in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company, and the total discount received by the Initial Purchasers bear
to the aggregate initial offering price of the Securities. The relative fault of
the Company and the Guarantors, on the one hand, and the Initial Purchasers, on
the other hand, shall be determined by reference to, among other things, whether
any such 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 and the Guarantors, on the one hand, or the Initial Purchasers, on the
other hand, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.

The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8 hereof, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8 hereof with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this Section 9; provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under Section 8 hereof for purposes of
indemnification.

The Company, the Guarantors and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 9 were 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 which does not
take account of the equitable considerations referred to in this Section 9.

Notwithstanding the provisions of this Section 9, no Initial Purchaser shall be
required to contribute any amount in excess of the discount received by such
Initial Purchaser in connection with the Securities distributed by it. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11 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 pursuant to this Section 9 are several, and not joint, in
proportion to their respective commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each director, officer and employee
of an Initial Purchaser and each person, if any, who controls an Initial
Purchaser within the meaning of the Securities Act and the Exchange Act shall
have the same rights to contribution as such Initial Purchaser, and each
director of the Company or any Guarantor, and each person, if any, who controls
the Company or any Guarantor with the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Company and the
Guarantors.

 

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SECTION 10. Termination of this Agreement. Prior to the Closing Date, this
Agreement may be terminated by the Representative by notice given to the Company
if at any time: (i) trading or quotation in any of the Company’s securities
shall have been suspended or limited by the Commission or by NYSE, or trading in
securities generally on either the Nasdaq Stock Market or the NYSE shall have
been suspended or limited, or minimum or maximum prices shall have been
generally established on any of such quotation system or stock exchange by the
Commission or FINRA; (ii) a general banking moratorium shall have been declared
by any of federal, New York or Delaware authorities; (iii) there shall have
occurred any outbreak or escalation of national or international hostilities or
any crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States’ or international political,
financial or economic conditions, as in the judgment of the Representative is
material and adverse and makes it impracticable or inadvisable to proceed with
the offering sale or delivery of the Securities in the manner and on the terms
described in the Pricing Disclosure Package or to enforce contracts for the sale
of securities; (iv) in the judgment of the Representative there shall have
occurred any Material Adverse Change; or (v) the Company shall have sustained a
loss by strike, fire, flood, earthquake, accident or other calamity of such
character as in the judgment of the Representative may interfere materially with
the conduct of the business and operations of the Company regardless of whether
or not such loss shall have been insured. Any termination pursuant to this
Section 10 shall be without liability on the part of (i) the Company or any
Guarantor to any Initial Purchaser, except that the Company and the Guarantors
shall be obligated to reimburse the expenses of the Initial Purchasers pursuant
to Sections 4 and 6 hereof, (ii) any Initial Purchaser to the Company, or
(iii) any party hereto to any other party except that the provisions of
Sections 8 and 9 hereof shall at all times be effective and shall survive such
termination.

SECTION 11. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the
Company, the Guarantors, their respective officers and the several Initial
Purchasers set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Initial Purchaser, the Company, any Guarantor or any of their partners, officers
or directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Securities sold hereunder and any termination of
this Agreement.

SECTION 12. Notices. All communications hereunder shall be in writing and shall
be mailed, hand delivered, couriered or facsimiled and confirmed to the parties
hereto as follows:

If to the Initial Purchasers:

Merrill Lynch, Pierce, Fenner & Smith Incorporated

50 Rockefeller Plaza

New York, New York 10020

Facsimile: 212-901-7897

Attention: High Yield Legal Department

 

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If to the Company or the Guarantors:

Bill Barrett Corporation

1099 18th Street, Suite 2300, Denver, Colorado, 80202

Facsimile: 303-291-0420

Attention: Principal Financial Officer

Email address: bcrawford@billbarrettcorp.com

Any party hereto may change the address or facsimile number for receipt of
communications by giving written notice to the others.

SECTION 13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, and to the benefit of the indemnified parties
referred to in Sections 8 and 9 hereof, and in each case their respective
successors, and no other person will have any right or obligation hereunder. The
term “successors” shall not include any Subsequent Purchaser or other purchaser
of the Securities as such from any of the Initial Purchasers merely by reason of
such purchase.

SECTION 14. Authority of the Representative. Any action by the Initial
Purchasers hereunder may be taken by Merrill Lynch, Pierce, Fenner & Smith
Incorporated on behalf of the Initial Purchasers, and any such action taken by
Merrill Lynch, Pierce, Fenner & Smith Incorporated shall be binding upon the
Initial Purchasers.

SECTION 15. Partial Unenforceability. The invalidity or unenforceability of any
section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other section, paragraph or provision hereof. If any
section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.

SECTION 16. Governing Law Provisions. THIS AGREEMENT, AND ANY CLAIM, CONTROVERSY
OR DISPUTE RELATING TO OR ARISING OUT OF THIS AGREEMENT, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD
TO CONFLICTS OF LAW PRINCIPLES THEREOF.

(a) Consent to Jurisdiction. Any legal suit, action or proceeding arising out of
or based upon this Agreement or the transactions contemplated hereby (“Related
Proceedings”) may be instituted in the federal courts of the United States of
America located in the City and County of New York or the courts of the State of
New York in each case located in the City and County of New York (collectively,
the “Specified Courts”), and each party irrevocably submits to the exclusive
jurisdiction (except for suits, actions, or proceedings instituted in regard to
the enforcement of a judgment of any Specified Court in a Related Proceeding a
“Related Judgment”, as to which such jurisdiction is non-exclusive) of the
Specified Courts in any Related Proceeding. Service of any process, summons,
notice or document by mail to such party’s address

 

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set forth above shall be effective service of process for any Related Proceeding
brought in any Specified Court. The parties irrevocably and unconditionally
waive any objection to the laying of venue of any Related Proceeding in the
Specified Courts and irrevocably and unconditionally waive and agree not to
plead or claim in any Specified Court that any Related Proceeding brought in any
Specified Court has been brought in an inconvenient forum.

SECTION 17. Default of One or More of the Several Initial Purchasers. If any one
or more of the several Initial Purchasers shall fail or refuse to purchase
Securities that it or they have agreed to purchase hereunder on the Closing
Date, and the aggregate number of Securities which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase does
not exceed 10% of the aggregate number of the Securities to be purchased on such
date, the other Initial Purchasers shall be obligated, severally, in the
proportions that the number of Securities set forth opposite their respective
names on Schedule A bears to the aggregate number of Securities set forth
opposite the names of all such non-defaulting Initial Purchasers, or in such
other proportions as may be specified by the Initial Purchasers with the consent
of the non-defaulting Initial Purchasers, to purchase the Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused
to purchase on the Closing Date. If any one or more of the Initial Purchasers
shall fail or refuse to purchase Securities and the aggregate number of
Securities with respect to which such default occurs exceeds 10% of the
aggregate number of Securities to be purchased on the Closing Date, and
arrangements satisfactory to the Initial Purchasers and the Company for the
purchase of such Securities are not made within 48 hours after such default,
this Agreement shall terminate without liability of any party (other than the
defaulting Initial Purchasers) to any other party except that the provisions of
Sections 4, 6, 8 and 9 hereof shall at all times be effective and shall survive
such termination. In any such case either the Initial Purchasers or the Company
shall have the right to postpone the Closing Date, as the case may be, but in no
event for longer than seven days in order that the required changes, if any, to
the Final Offering Memorandum or any other documents or arrangements may be
effected.

As used in this Agreement, the term “Initial Purchaser” shall be deemed to
include any person substituted for a defaulting Initial Purchaser under this
Section 17. Any action taken under this Section 17 shall not relieve any
defaulting Initial Purchaser from liability in respect of any default of such
Initial Purchaser under this Agreement.

SECTION 18. No Advisory or Fiduciary Responsibility. Each of the Company and the
Guarantors acknowledges and agrees that: (i) the purchase and sale of the
Securities pursuant to this Agreement, including the determination of the
offering price of the Securities and any related discounts and commissions, is
an arm’s-length commercial transaction between the Company and the Guarantors,
on the one hand, and the several Initial Purchasers, on the other hand, and the
Company and the Guarantors are capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement; (ii) in connection with each transaction
contemplated hereby and the process leading to such transaction each Initial
Purchaser is and has been acting solely as a principal and is not the agent or
fiduciary of the Company, and the Guarantors or their respective affiliates,
stockholders, creditors or employees or any other party; (iii) no Initial
Purchaser has assumed or will assume an advisory or fiduciary responsibility in
favor of the Company and the Guarantors with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective

 

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of whether such Initial Purchaser has advised or is currently advising the
Company and the Guarantors on other matters) or any other obligation to the
Company and the Guarantors except the obligations expressly set forth in this
Agreement; (iv) the several Initial Purchasers and their respective affiliates
may be engaged in a broad range of transactions that involve interests that
differ from those of the Company and the Guarantors, and the several Initial
Purchasers have no obligation to disclose any of such interests by virtue of any
fiduciary or advisory relationship; and (v) the Initial Purchasers have not
provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby, and the Company and the Guarantors have consulted
their own legal, accounting, regulatory and tax advisors to the extent they
deemed appropriate.

This Agreement supersedes all prior agreements and understandings (whether
written or oral) between the Company, the Guarantors and the several Initial
Purchasers, or any of them, with respect to the subject matter hereof. The
Company and the Guarantors hereby waive and release, to the fullest extent
permitted by law, any claims that the Company and the Guarantors may have
against the several Initial Purchasers with respect to any breach or alleged
breach of fiduciary duty.

SECTION 19. Compliance with USA Patriot Act. In accordance with the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)), the Initial Purchasers are required to obtain, verify and record
information that identifies their respective clients, including the Company,
which information may include the name and address of their respective clients,
as well as other information that will allow the Initial Purchasers to properly
identify their respective clients.

SECTION 20. General Provisions. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof. This Agreement may be executed in two or
more counterparts, each one of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. Delivery
of an executed counterpart of a signature page to this Agreement by telecopier,
facsimile or other electronic transmission (i.e., a “pdf” or “tif”) shall be
effective as delivery of a manually executed counterpart thereof. This Agreement
may not be amended or modified unless in writing by all of the parties hereto,
and no condition herein (express or implied) may be waived unless waived in
writing by each party whom the condition is meant to benefit. The section
headings herein are for the convenience of the parties only and shall not affect
the construction or interpretation of this Agreement.

[Signature Pages Follow]

 

30

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If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.

Very truly yours,

 

COMPANY BILL BARRETT CORPORATION By:  

/s/ William M. Crawford

  Name:   William M. Crawford   Title:   Senior Vice President – Treasury and
Finance GUARANTORS CIRCLE B LAND COMPANY LLC By:  

/s/ William M. Crawford

  Name:   William M. Crawford   Title:   Senior Vice President – Treasury and
Finance AURORA GATHERING, LLC By:  

s/ William M. Crawford

  Name:   William M. Crawford   Title:   Senior Vice President – Treasury and
Finance

 

[Signature Page to Purchase Agreement]

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The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial
Purchasers as of the date first above written.

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

By:  

/s/ J. Lex Maultsby

Name:   J. Lex Maultsby Title:   Managing Director

 

[Signature Page to Purchase Agreement]

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SCHEDULE A

 

Initial Purchasers

   Aggregate Principal
Amount of
Securities to be
Purchased  

Merrill Lynch, Pierce, Fenner & Smith Incorporated

   $ 99,000,000  

J.P. Morgan Securities LLC

     27,500,000  

BMO Capital Markets Corp.

     16,500,000  

Citigroup Global Markets Inc.

     16,500,000  

Deutsche Bank Securities Inc.

     16,500,000  

Wells Fargo Securities, LLC

     16,500,000  

Lazard Freres & Co. LLC

     11,000,000  

BBVA Securities Inc.

     8,250,000  

Comerica Securities, Inc.

     8,250,000  

Scotia Capital (USA) Inc.

     8,250,000  

Santander Investment Securities Inc.

     8,250,000  

U.S. Bancorp Investments, Inc.

     8,250,000  

Barclays Capital Inc.

     2,750,000  

BOK Financial Securities, Inc.

     2,750,000  

Coker & Palmer, Inc.

     2,750,000  

Goldman, Sachs & Co.

     2,750,000  

Johnson Rice & Company L.L.C.

     2,750,000  

KeyBanc Capital Markets Inc.

     2,750,000  

KLR Group, LLC

     2,750,000  

Ladenburg Thalmann & Co. Inc.

     2,750,000  

Macquarie Capital (USA) Inc.

     2,750,000  

Seaport Global Securities LLC

     2,750,000  

Wunderlich Securities, Inc.

     2,750,000  

Total

   $ 275,000,000  

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

SCHEDULE B

Subsidiaries

 

Entity         State of Formation           Circle B Land Company LLC   
Colorado       Aurora Gathering, LLC       Texas           

Unknown

 

SCHEDULE B-1

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

EXHIBIT A

Pricing Supplement dated April 25, 2017

to

Preliminary Offering Memorandum dated April 24, 2017

 

LOGO [g371967stamp200.jpg]

Bill Barrett Corporation

$275,000,000

8.75% Senior Notes due 2025

Final Term Sheet

The following Term Sheet dated April 25, 2017 relates to the Preliminary
Offering Memorandum dated April 24, 2017 of Bill Barrett Corporation. This Term
Sheet is qualified in its entirety by reference to the Preliminary Offering
Memorandum. The information in this Term Sheet 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 Term Sheet but
not defined have the meanings given them in the Preliminary Offering Memorandum.

 

Issuer    Bill Barrett Corporation Principal Amount    $275,000,000 Title of
Securities    8.75% Senior Notes due 2025 (the “Notes”) Maturity    June 15,
2025 Offering Price    100.000% Coupon    8.75% Yield-to-Maturity    8.75% Net
Proceeds Before Expenses    $270.9 million Estimated Expenses    $0.6 million
Interest Payment Dates    June 15 and December 15 Record Dates:    June 1 and
December 1 First Interest Payment Date    December 15, 2017 Make-Whole
Redemption    Make-whole redemption at Treasury Rate + 50 basis points prior to
June 15, 2020 Optional Redemption    On or after June 15, 2020, 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 June 15 of the years indicated below:

 

Year

   Price  

2020

     106.563 % 

2021

     104.375 % 

2022

     102.188 % 

2023 and thereafter

     100.000 % 

 

Exhibit A-1

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

Equity Clawback    Up to 35% at 108.75% prior to June 15, 2020 Change of Control
   101% plus accrued and unpaid interest Joint Bookrunning Managers   

Merrill Lynch, Pierce, Fenner & Smith

                      Incorporated

J.P. Morgan Securities LLC

BMO Capital Markets Corp.

Citigroup Global Markets Inc.

Deutsche Bank Securities

Wells Fargo Securities, LLC

Co-Managers   

Lazard Frères & Co. LLC

BBVA Securities Inc.

Comerica Securities, Inc.

Scotia Capital (USA) Inc.

Santander Investment Securities Inc.

U.S. Bancorp Investments, Inc.

Barclays Capital Inc.

BOK Financial Securities, Inc.

Coker & Palmer, Inc.

Goldman, Sachs & Co.

Johnson Rice & Company L.L.C.

KeyBanc Capital Markets Inc.

KLR Group, LLC

Ladenburg Thalmann & Company

Macquarie Capital (USA) Inc.

Seaport Global Securities LLC

Wunderlich Securities, Inc.

Trade Date    April 25, 2017 Settlement Date    April 28, 2017 (T+3)
Distribution    144A/Regulation S with Registration Rights CUSIP Numbers   

Rule 144A: 06846N AE4

Regulation S: U0684N AA7

ISIN Numbers   

Rule 144A: US06846NAE40

Regulation S: USU0684NAA73

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

 

 

The Preliminary Offering Memorandum is hereby revised to reflect the following,
as well as additional conforming changes consistent with the changes described
below.

Description of the notes—Definitions

The following changes shall be made to clause (2) of the definition of
“Permitted Indebtedness”:

“(2) Indebtedness of the Issuer or any Restricted Subsidiary incurred pursuant
to the Credit Facilities; provided, however, that immediately after giving
effect to the incurrence of Indebtedness under the Credit Facilities, the
aggregate principal amount of all Indebtedness incurred under this clause
(2) and then outstanding does not exceed the greater of  (i) $1.0 billion and
(ii) an amount equal to the sum of (A) $400.0 million plus (B) 30% of Adjusted
Consolidated Net Tangible Assets determined as of the date of

 

Exhibit A-2

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

the incurrence of such Indebtedness (i) $450.0 million and (ii) the Borrowing
Base under the Senior Credit Facility as in effect as of the date of such
incurrence; provided, that any Indebtedness incurred under this clause (2) must
be secured on a basis that is or would be pari passu with the Senior Credit
Facility as in effect on the date of the Indenture;”

The following definition shall be added to the Description of the Notes:

““Borrowing Base” means the “Borrowing Base” as defined in and as determined
from time to time pursuant to the Senior Credit Facility; provided that the
Borrowing Base under such Credit Facility is determined on a basis substantially
consistent with customary terms for oil and gas secured reserve based loan
transactions and has a lender group that includes one or more commercial
financial institutions which engage in oil and gas reserve based lending in the
ordinary course of their respective businesses.”

The term “Credit Facilities” is hereby replaced in its entirety as follows:

““Credit Facility” means, with respect to the Issuer or any Restricted
Subsidiary, one or more debt facilities (or other financing arrangement
(including, without limitation, the Senior Credit Facility, commercial paper
facilities, letters of credit facilities, bankers’ acceptances or indentures),
in each case with banks or other institutional lenders that engage in making
bank loans or similar extensions of credit in the ordinary course, providing for
revolving credit loans, term loans, letters of credit, bankers’ acceptances or
other borrowings, in each case, as amended, restated, modified, renewed,
extended, refunded, replaced (whether upon or after termination or otherwise) or
refinanced (in each case, without limitation as to amount), in whole or in part,
from time to time; provided that any Credit Facility includes assignment
provisions substantially similar to the assignment provisions contained in the
Senior Credit Facility as in effect on the date of the Indenture.”

The term “Measurement Date” is hereby replaced in its entirety as follows:

““Measurement Date” means March 31, 2017.”

The term “Senior Credit Facility” is hereby replaced in its entirety as follows:

““Senior Credit Facility” means the debt facility provided for under the Third
Amended and Restated Credit Agreement dated as of March 16, 2010 among Bill
Barrett Corporation, as borrower, JPMorgan Chase Bank, N.A., as administrative
agent, Bank of America, N.A. and Deutsche Bank Securities Inc., as syndication
agents, Bank of Montreal and Wells Fargo Bank, N.A., as documentation agents and
the lenders party thereto, or any successor or replacement agreements and
whether by the same or any other agent, lender or group of lenders, together
with the related documents thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreements extending the
maturity of, Refinancing, replacing, increasing or otherwise restructuring all
or any portion of the Indebtedness under such agreements (provided that any
increase in borrowings is permitted under clause (2) of the definition of
“Permitted Indebtedness”).”

 

 

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”), or the securities laws of any other
jurisdiction, 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. The
securities described in the Preliminary Offering Memorandum may not be offered
or sold in the United States or to U.S. persons (as defined in Regulation S
under the Securities Act) except in transactions exempt from, or not subject to,
the registration requirements of the Securities Act.

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 soliciation in such jurisdiction.

Any disclaimers or notices that may appear on this Term Sheet below the text of
this legend are not applicable to this Term Sheet and should be disregarded.
Such disclaimers may have been electronically generated as a result of this Term
Sheet having been sent via, or posted on, Bloomberg or another electronic mail
system.

 

Exhibit A-3