Exhibit 10.1

$625,000,000

W&T OFFSHORE, INC.

9.75% SENIOR SECOND LIEN NOTES DUE 2023

PURCHASE AGREEMENT

October 5, 2018

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October 5, 2018

Morgan Stanley & Co. LLC

As Representative of the several Initial Purchasers named in Schedule I hereto

c/o

Morgan Stanley & Co. LLC

1585 Broadway

New York, New York 10036

Ladies and Gentlemen:

W&T Offshore, Inc., a Texas corporation (the “Company”), proposes to issue and
sell to the several purchasers named in Schedule I hereto (the “Initial
Purchasers”), for whom you are acting as representative (the “Representative”),
$625,000,000 in principal amount of its 9.75% Senior Second Lien Notes due 2023
(the “Notes”).

The Notes will be issued pursuant to the provisions of an indenture, to be
executed on and dated as of the Closing Date (as defined in Section 4) (the
“Indenture”), among the Company, the Guarantors (as defined below) and
Wilmington Trust, National Association, as trustee (the “Trustee”).

The Notes will be initially and severally guaranteed (the “Guarantees”) by each
entity set forth in Schedule IV hereto (referred to herein as the “Guarantors”).
The Notes and the Guarantees are referred to collectively herein as the “Offered
Securities.”

The Offered Securities will be secured by a second priority lien on the same
collateral (the “Collateral”) securing the Company’s and the Guarantors’
obligations under the Sixth Amended and Restated Credit Agreement to be entered
into on or prior to the Closing Date (as so amended and restated, the “New
Credit Agreement”), among the Company, as borrower, Toronto Dominion (Texas)
LLC, as administration agent (the “Administration Agent”), Societe Generale and
Natixis, New York Branch, as co-syndication agents, and the various lenders and
other parties from time to time party thereto, and the related guarantees,
pursuant to a collateral trust agreement to be dated the Closing Date (the
“Collateral Trust Agreement”), among the Company, the Guarantors, the Trustee
and Wilmington Trust, National Association, as collateral trustee (the
“Collateral Trustee”). The Company entered into an intercreditor agreement (as
amended, restated, supplemented or otherwise modified from time to time, the
“Intercreditor Agreement”) dated May 11, 2015, among the Company, Toronto
Dominion (Texas) LLC, as priority lien agent (in such capacity, and together
with its successors and assigns in such capacity, the “Original Priority Lien
Agent”), and Morgan Stanley Senior Funding, Inc., as second lien collateral
trustee (in such capacity and, together with its successors and assigns in such
capacity, the “Original Second Lien Collateral Trustee”), providing for the
relative priorities and rights in the Collateral of the lenders under the
Company’s revolving bank credit facility and holders of other priority lien debt
(if any), holders of the Company’s second lien debt (if any) and holders of the
Company’s third lien debt (if any). On September 7, 2016, in connection with the
entry into the Company’s 11.00% 1.5 Lien Term Loan (the “1.5 Lien Term Loan”)
and the issuance of its 9.00%/10.75% Senior Second Lien PIK Toggle Notes due
2020 (the “Second Lien PIK Toggle Notes”) and its 8.50%/10.00% Senior Third Lien
PIK Toggle Notes due 2021 (the “Third Lien PIK Toggle Notes”), (i) the Original
Priority Lien Agent, Cortland Capital Market Services LLC, as administrative
agent and 1.5 lien collateral agent under the 1.5 Lien Term Loan, and the
Original Second Lien Collateral Trustee entered into a Priority Confirmation
Joinder to the Intercreditor Agreement, (ii) the Original Priority Lien Agent,
Wilmington Trust National Association, as the second lien trustee and collateral
trustee, and the Original Second Lien Collateral Trustee entered into a Priority
Confirmation Joinder to the Intercreditor Agreement and (iii) the Original
Priority Lien Agent, the Original Second Lien Collateral Trustee and Wilmington
Trust National Association, as the third lien trustee and third lien collateral
trustee, entered into a Priority Confirmation Joinder to the Intercreditor
Agreement. Concurrently with the closing of the Offered Securities, (i) Toronto
Dominion (Texas) LLC, as administrative agent under the New Credit Agreement,
will enter into a Priority Confirmation Joinder to the Intercreditor Agreement
pursuant to which Toronto Dominion (Texas) LLC will become the priority lien
agent and the New Credit Agreement will be designated as priority lien debt
under the Intercreditor Agreement and (ii) the Trustee will enter into a
Priority Confirmation Joinder to the Intercreditor Agreement pursuant to which
the Offered Securities will be designated as second lien debt under the
Intercreditor Agreement (each, a “Priority Confirmation Joinder”). This
Agreement, the Notes, the Indenture, the Collateral Trust Agreement, the
Intercreditor Agreement and the Priority Confirmation Joinders are hereinafter
referred to collectively as the “Transaction Documents.”

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The proceeds from the offering of the Offered Securities are intended to be
used, together with cash on hand and borrowings from the New Credit Agreement,
to (i) repay and retire the 1.5 Lien Term Loan and the Company’s 9.00% Second
Lien Term Loan and (ii) fund the redemption or repurchase in full of the
Company’s 8.500% Senior Unsecured Notes due 2019, the Second Lien PIK Toggle
Notes and the Third Lien PIK Toggle Notes.

The Offered Securities will be offered without being registered under the
Securities Act of 1933, as amended (the “Securities Act”), to qualified
institutional buyers in compliance with the exemption from registration provided
by Rule 144A under the Securities Act (“Rule 144A”) and in offshore transactions
in reliance on Regulation S under the Securities Act (“Regulation S”).

In connection with the sale of the Offered Securities, the Company has prepared
a preliminary offering memorandum (the “Preliminary Memorandum”) and will
prepare a final offering memorandum (the “Final Memorandum”) including a
description of the terms of the Offered Securities, the terms of the offering
and a description of the Company. For purposes of this Agreement, “Additional
Written Offering Communication” means any written communication (as defined in
Rule 405 under the Securities Act) that constitutes an offer to sell or a
solicitation of an offer to buy the Offered Securities other than the
Preliminary Memorandum, the Pricing Supplement or the Final Memorandum, and
“Time of Sale Memorandum” means the Preliminary Memorandum together with the
Pricing Supplement and each Additional Written Offering Communication or other
information, if any, identified in Schedule II hereto under the caption “Time of
Sale Memorandum.” As used herein, the terms Preliminary Memorandum, Time of Sale
Memorandum and Final Memorandum shall include the documents incorporated by
reference therein. The terms “supplement”, “amendment” and “amend” as used
herein with respect to the Preliminary Memorandum, the Time of Sale Memorandum,
the Final Memorandum or any Additional Written Offering Communication shall
include all documents subsequently filed by the Company with the Securities and
Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), that are deemed to be incorporated by
reference therein.

 

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1.    Representations and Warranties. Each of the Company and the Guarantors,
jointly and severally, represents and warrants to, and agrees with, you that:

(a)    (i) Each document, if any, filed or to be filed pursuant to the Exchange
Act and incorporated by reference in the Preliminary Memorandum, the Time of
Sale Memorandum or the Final Memorandum complied or will comply when so filed in
all material respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (ii) the Time of Sale Memorandum did
not, at the time of the sale of the Offered Securities in connection with the
offering when the Final Memorandum is not yet available to prospective
purchasers, and at the Closing Date, the Time of Sale Memorandum, as then
amended or supplemented by the Company, if applicable, will not, contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, and (iii) the Preliminary Memorandum, as of its
date, did not, and the Final Memorandum, in the form used by the Initial
Purchasers to confirm sales and on the Closing Date, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph do not apply to statements or omissions in the Preliminary
Memorandum, the Time of Sale Memorandum or the Final Memorandum based upon
information relating to any Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through you expressly for use therein.

(b)    Except for the Additional Written Offering Communications, if any,
identified in Schedule II hereto, including electronic road shows, if any,
furnished to you before first use, the Company has not prepared, used or
referred to, and will not, without your prior consent, prepare, use or refer to,
any Additional Written Offering Communication.

(c)    The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Time of Sale Memorandum, and to enter
into and perform its obligations under each of the Transaction Documents. The
Company is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not, individually or in the
aggregate, have a material adverse effect on the general affairs, management,
consolidated financial position, stockholders’ equity, results of operations,
business or prospects of the Company and its subsidiaries, taken as a whole, or
the ability of the Company and any of its subsidiaries to perform its
obligations under the Transaction Documents (a “Material Adverse Effect”).

 

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(d)    Each Guarantor has been duly formed, is validly existing as a corporation
or limited liability company in good standing under the laws of jurisdiction of
its incorporation or formation, has the corporate or limited liability company
power and authority necessary to own or hold its property and to conduct its
business as described in the Time of Sale Memorandum and to enter into and
perform its obligations under each of the Transaction Documents to which it is a
party; each Guarantor is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a Material Adverse Effect; all of the membership interests of each Guarantor
have been duly and validly authorized and issued, are fully paid and
non-assessable (except as such non-assessability may be affected by
Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act) and
are owned directly by the Company, free and clear of all liens, encumbrances,
equities or claims except for any “Permitted Liens” as defined under the caption
“Description of Notes” in the Time of Sale Memorandum (other than under
clauses (4), (5) and (6) of such definition), such as are described in the Time
of Sale Memorandum or such as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property in the aggregate by the Company and its subsidiaries
(collectively, “Permitted Liens”); and other than the subsidiaries listed on
Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2017 (the “Form 10-K”), none of the Company’s subsidiaries is a
“significant subsidiary,” as such term is defined in Rule 405 under the
Securities Act.

(e)    This Agreement has been duly authorized, executed and delivered by the
Company and each of the Guarantors.

(f)    The issued and outstanding shares of common stock of the Company have
been duly authorized and are validly issued, fully paid and non-assessable.
Except as disclosed in the Time of Sale Memorandum and the Final Memorandum, the
Company does not own, directly or indirectly, any capital stock, membership
interest, partnership interest, joint venture interest or other equity or
ownership interest in any person or entity, other than the subsidiaries listed
on Exhibit 21.1 to the Form 10-K.

(g)    The table under the caption “Capitalization” in the Time of Sale
Memorandum and in the Final Memorandum (including the footnotes thereto) sets
forth or will set forth, as of the date of such table, (i) the actual cash and
cash equivalents and capitalization of the Company and its subsidiaries on a
consolidated basis and (ii) the as adjusted cash and cash equivalents and
capitalization of the Company and its subsidiaries on a consolidated basis,
after giving effect to the offer and sale of the Offered Securities and the
application of the net proceeds therefrom as described in the Time of Sale
Memorandum and in the Final Memorandum under the section entitled “Use of
Proceeds” and the other adjustments set forth preceding such table.

 

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(h)    No labor disturbance by the employees of the Company or the Guarantors
exists or, to the knowledge of the Company or the Guarantors, is imminent or
threatened, which might be expected to have a Material Adverse Effect.

(i)    No “nationally recognized statistical rating organization” (as such term
is defined for purposes of Section 3(a)(62) of the Securities Act) (i) has
imposed (or has informed the Company that it is considering imposing) any
condition (financial or otherwise) on the Company relating to any rating
assigned to the Company or the Guarantors or to any securities of the Company or
the Guarantors, or (ii) has indicated to the Company that it is considering
(A) the downgrading, suspension, or withdrawal of, or any review for a possible
change that does not indicate the direction of the possible change in, any
rating so assigned, or (B) any change in the outlook for any rating of the
Company or the Guarantors or any securities of the Company or the Guarantors.

(j)    The Company intends to use the proceeds of the offering and sale of the
Offered Securities in the manner described in the Time of Sale Memorandum and
the Final Memorandum under the caption “Use of Proceeds.”

(k)    Except as disclosed in the Time of Sale Memorandum or the Final
Memorandum and as it relates to the Initial Purchasers, neither the Company nor
any affiliate (as defined in Rule 501(b) of Regulation D under the Securities
Act, an “Affiliate”) has and, to its knowledge after due inquiry, no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to
cause or to result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the Offered
Securities, (ii) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, any of the Offered Securities, or (iii) paid or agreed
to pay to any person any compensation for soliciting another to purchase any
other securities of the Company.

(l)    The Notes have been duly authorized and, when executed and authenticated
in accordance with the provisions of the Indenture and delivered to and paid for
by the Initial Purchasers in accordance with the terms of this Agreement, will
be valid and binding obligations of the Company, entitled to the benefit of the
Indenture, and enforceable against the Company in accordance with their terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors’ rights
generally, (ii) general principles of equity (whether applied by a court of law
or equity), an implied covenant of good faith and fair dealing and the
discretion of the court before which any proceeding therefor may be brought and
(iii) any limitations on rights to indemnity or contribution thereunder by
federal or state securities laws and public policy considerations (collectively,
the “Enforceability Exceptions”).

 

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(m)    The Guarantees, as evidenced by the notations of Guarantees attached to
the Notes, have been duly and validly authorized by the Guarantors and, upon
their execution by the Guarantors, such notations will be duly executed, issued
and delivered by each of the Guarantors. When the Notes have been issued,
executed and authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with the terms
of this Agreement, the Guarantee of each Guarantor will be duly issued and the
legal, valid and binding obligation of such Guarantor, entitled to the benefit
of the Indenture, and enforceable against such Guarantor in accordance with its
terms, except that the enforcement thereof may be subject to the Enforceability
Exceptions.

(n)    The Indenture has been duly authorized, executed and delivered by the
Company and the Guarantors and constitutes a valid and binding agreement of, the
Company and the Guarantors, enforceable in accordance with its terms, except
that the enforcement thereof may be subject to the Enforceability Exceptions.

(o)    Each of the Transaction Documents (other than those referenced in
clauses (l) through (n) above) have been duly authorized by the Company and, if
applicable, the Guarantors, and, assuming due authorization, execution and
delivery thereof by any third party to such Transaction Documents, will
constitute a valid and binding obligation of the Company and, if applicable, the
Guarantors, except that the enforcement thereof may be subject to the
Enforceability Exceptions.

(p)    Subject to the terms of the Intercreditor Agreement:

(i)    in the case of such portion of the Collateral constituting investment
property represented or evidenced by certificates or other instruments (in the
case of stock certificates, to the extent constituting “Certificated Securities”
as defined in Article 8 of the Uniform Commercial Code), upon delivery to the
Administrative Agent, the Collateral Trustee or the Collateral Agent (or to the
extent already held thereby), in each case, subject to the Intercreditor
Agreement and the Collateral Trust Agreement, of such certificates or
instruments accompanied by instruments of transfer and stock powers in
accordance with the Security Documents (as defined in the Indenture), and in the
case of all other investment property (other than securities accounts), the
filing of financing statements or other applicable filings in the appropriate
filing office, registry or other public office, together with the payment of the
requisite filing or recordation fees related thereto;

(ii)    in the case of such portion of the Collateral constituting securities
accounts, upon delivery to the Collateral Trustee or the Collateral Agent, in
each case, subject to the Intercreditor Agreement and the Collateral Trust
Agreement, of securities account control agreements (including any such
securities account control agreements already in place), in each case
satisfactory in form and substance to the Collateral Agent and duly executed by
the applicable securities intermediary, as may be necessary or, in the opinion
of the Collateral Agent, desirable to establish and maintain control of such
securities accounts from time to time;

 

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(iii)    in the case of such portion of the Collateral constituting deposit
accounts, upon delivery to the Collateral Trustee or the Collateral Agent, in
each case, subject to the Intercreditor Agreement and the Collateral Trust
Agreement, of deposit account control agreements (including any such deposit
account control agreements already in place), in each case satisfactory in form
and substance to the Collateral Agent and duly executed by the applicable
depositary bank, as may be necessary or, in the opinion of the Collateral Agent,
desirable to establish and maintain control of such deposit accounts from time
to time;

(iv)    in the case of such portion of the Collateral constituting registered
patents, trademarks and copyrights, upon the filing by the Collateral Trustee or
the Collateral Agent (or to the extent the filings in clauses (A) through (B)
below have already been made), in each case, subject to the Intercreditor
Agreement and the Collateral Trust Agreement, of (A) initial financing
statements with the appropriate filing offices, (B) any filings required with
the U.S. Patent and Trademark Office, (C) any filings required with the U.S.
Copyright Office, and (D) the other Security Documents with the appropriate
filing office, registry or other public office, together with the payment of the
requisite filing or recordation fees related thereto; and

(v)    in the case of any other Collateral a lien in which may be perfected by
filing of an initial financing statement or other applicable document in the
appropriate filing office, registry or other public office, upon the filing of
financing statements or other applicable document in such filing office,
registry or other public office, together with the payment of the requisite
filing or recordation fees related thereto, and in the case of any other
Collateral a lien in which is perfected by possession or control, when the
Administrative Agent, the Collateral Trustee or the Collateral Agent obtains
possession or control thereof (or to the extent such possession or control has
already been obtained thereby), in each case, subject to the Intercreditor
Agreement and Collateral Trust Agreement,

as of the Closing Date (or, to the extent that any of the foregoing is permitted
to be effectuated after the Closing Date, as of the date it is effectuated), the
liens granted pursuant to the Security Documents will constitute valid and
enforceable perfected liens, in each case prior and superior in right to any
other Person therein (other than any Person holding a Permitted Lien).

(q)     As of the Closing Date, there will be no currently effective financing
statement or equivalent filing or registration, security agreement, chattel
mortgage, real estate mortgage, deed of trust or other document filed,
registered or recorded with any filing records, registry, or other arrangement,
instrument or public office, that purports to cover, affect or give notice of
any present or possible future lien, encumbrance, equity or claim on any assets
or property of the Company or any Guarantor or any rights thereunder, except for
any Permitted Liens.

 

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(r)    The representations and warranties of the Company in the Security
Documents will be true and correct (if such representations and warranties are
not already qualified with respect to materiality) in all material respects as
of the Closing Date (except to the extent such representations and warranties
are made as of a specific date, in which case such representations and
warranties shall be true and correct as of such specified date).

(s)    No transaction has occurred between or among the Company, any of its
subsidiaries and their affiliates, officers or directors or any affiliate or
affiliates of any such officer or director that is required to have been
described under applicable securities laws in the Company’s filings under the
Exchange Act and is not so described.

(t)    The execution and delivery by the Company and the Guarantors of, and the
performance by the Company and the Guarantors of their respective obligations
under, the Transaction Documents, and the performance by the Company and the
Guarantors of their respective obligations thereunder, will not contravene any
provision of (i) applicable law, (ii) the certificate of incorporation, bylaws
or other governing documents of the Company or any of its subsidiaries,
(iii) any indenture, mortgage, deed of trust, loan agreement or other agreement
or other instrument binding upon the Company or any of its subsidiaries or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of the Company or any
subsidiary, or (iv) any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any subsidiary or any of
their property or assets; except, with respect to clauses (iii) and (iv) only,
for any such contravention that would not reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect.

(u)    Subject to the accuracy of the representations and warranties in
Section 7 hereof, no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company and the Guarantors of their obligations under the
Transaction Documents, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale of the
Offered Securities, the consummation of the transactions contemplated hereby,
and the application of the proceeds from the sale of the Offered Securities as
described under “Use of Proceeds” in each of the Time of Sale Memorandum and the
Final Memorandum.

(v)    The statements set forth in the Time of Sale Memorandum and the Final
Memorandum under the captions “Description of Notes” and “Certain U.S. Federal
Tax Considerations,” as the case may be, insofar as they constitute summaries of
the legal matters, documents or proceedings referred to therein, fairly present,
in all material respects, the information presented with respect to such legal
matters, documents or proceedings.

 

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(w)    Offered Securities are eligible for resale pursuant to Rule 144A under
the Securities Act and no other securities of the Company are of the same class
(within the meaning of Rule 144A under the Securities Act) as the Offered
Securities and listed on a national securities exchange registered under
Section 6 of the Exchange Act, or quoted in a U.S. automated inter-dealer
quotation system. No securities of the Company of the same class as the Offered
Securities have been offered, issued or sold by the Company or any of its
Affiliates, including any sales pursuant to Rule 144A or Regulation D or S of
the Securities Act, within the six-month period immediately prior to the date
hereof.

(x)    Neither the Company nor any of its subsidiaries has sustained, since the
date of the latest financial statements included or incorporated by reference in
the Time of Sale Memorandum, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, nor from any labor dispute or court or governmental action, order or
decree; and, since such date, there has not been any material change in the
capital stock or long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, consolidated
financial position, stockholders’ equity, results of operations, business or
prospects of the Company and its subsidiaries, taken as a whole.

(y)    The historical financial statements (including the related notes and
supporting schedules) included or incorporated by reference in the Time of Sale
Memorandum comply in all material respects with the applicable requirements
under the Securities Act, and such financial statements present fairly in all
material respects the financial condition, results of operations and cash flows
of the entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated. The financial information contained in the Time of Sale Memorandum
under the caption “Summary—Summary Historical Financial Information” is derived
from the accounting records of the Company and its subsidiaries and fairly
presents in all material respects the information purported to be shown thereby.
The other historical financial and statistical information and data included or
incorporated by reference in the Time of Sale Memorandum are, in all material
respects, fairly presented.

(z)    There are no legal or governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that would have
a Material Adverse Effect.

(aa)    There are no contracts or other documents which are required to be
described in the Company’s filings under the Exchange Act or filed as exhibits
to any of the Company’s filings under the Exchange Act or by the rules and
regulations thereunder which have not been described or filed as required.

 

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(bb)    The Company and its subsidiaries (i) are in compliance with all
applicable foreign, federal, state and local laws and regulations relating to
protection of workplace health and safety, the environment, hazardous or toxic
substances, or wastes, pollutants or environmental contaminants (“Environmental
Laws”), (ii) have received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a Material Adverse Effect, whether
or not arising from transactions in the ordinary course of business. Except as
would not have a Material Adverse Effect, neither the Company nor its
subsidiaries have been named as a “potentially responsible party” under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended.

(cc)    There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes, hazardous substances or petroleum or fractions thereof
by the Company or any of its subsidiaries (or, to the knowledge of the Company,
any of their predecessors in interest) at, upon or from any of the property now
or previously owned or leased by the Company or its subsidiaries in violation of
any applicable Environmental Law or which would require remedial action under
any applicable Environmental Law, except for any violation or remedial action
which would not have, or could not be reasonably likely to have, individually or
in the aggregate with all such violations and remedial actions, a Material
Adverse Effect; and there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes, hazardous substances or petroleum or fractions thereof
due to or caused by the Company or any of its subsidiaries or any person acting
on their behalf, except for any such spill, discharge, leak, emission,
injection, escape, dumping or release which would not have or would not be
reasonably likely to have, individually or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect. The terms “hazardous wastes”, “toxic
wastes”, “hazardous substances” and “medical wastes” shall have the meanings
specified in applicable Environmental Laws.

(dd)    Ernst & Young LLP, who have certified certain financial statements of
the Company, whose report appears in the Form 10-K incorporated by reference in
the Time of Sale Memorandum and the Final Memorandum and who have delivered the
initial letters referred to in Section 5(e) hereof, are independent public
accountants with respect to the Company as required by the Securities Act and
the rules and regulations thereunder.

(ee)    The Company and each of its subsidiaries have (i) generally satisfactory
title to all their respective interests in their natural gas and oil properties
owned or leased by them, title investigations having been carried out by the
Company and its subsidiaries in accordance with the practice in the oil and gas
industries in the areas in which the Company and its subsidiaries operate,
(ii) good and marketable title in fee simple to all real property owned by them
to the extent necessary to carry on their business and (iii) good and marketable
title to all personal property owned by them to the extent necessary to carry on
their business, in each case free and clear of all liens, encumbrances and
defects, except Permitted Liens; and, to the extent material to the business and
operations of the Company and its subsidiaries, taken as a whole, all assets
held under lease by the Company and its subsidiaries, other than their interests
in natural gas and oil properties, are held by them under valid, subsisting and
enforceable leases, with such exceptions that do not interfere with the use made
of such properties and proposed to be made of such property and buildings by the
Company or any of its subsidiaries.

 

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(ff)    The Company and its subsidiaries carry, or are covered by, insurance by
reputable insurers in such amounts and covering such risks as is reasonably
adequate for the conduct of the business operated by them and the value of their
properties and as is customary for companies engaged in the oil and gas
exploration and production industry. Neither the Company nor any subsidiary has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other expenditures will have to be made in order to
continue such insurance; and all such insurance is outstanding and duly in force
on the date hereof and will be outstanding and duly in force on the Closing
Date.

(gg)    The Company and its subsidiaries own or possess adequate rights to use
all material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations, copyrights and
licenses necessary for the conduct of their business and have no reason to
believe that the conduct of their respective businesses will conflict with, and
have not received any notice of any claim of conflict with, any such rights of
others, where if determined adversely to the Company or its subsidiaries would
have a Material Adverse Effect.

(hh)    The Company is in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder
(“ERISA”); no “reportable event” (as defined in Section 4043 of ERISA) has
occurred with respect to any “pension plan” (as defined in Section 3 of ERISA)
for which the Company would have any liability; the Company has not incurred and
does not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan” or (ii) Section 4975 of
the Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the “Code”); and each “pension plan” for
which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified (except as would not result in
any material liability of the Company or its subsidiaries) and nothing has
occurred, to the Company’s knowledge, whether by action or by failure to act,
which would cause the loss of such qualification.

 

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(ii)    The Company and its subsidiaries have filed all federal, state and local
income and franchise Tax returns required to be filed through the date hereof
and have paid all Taxes due thereon, and no Tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had (nor does the
Company or any of the Guarantors have any knowledge of any Tax deficiency which,
if determined adversely to the Company or any of its subsidiaries, might have) a
Material Adverse Effect. For purposes of this Agreement, the term “Tax” and
“Taxes” shall mean all federal, state, local and foreign taxes, and other
assessments of a similar nature (whether imposed directly or through
withholding), including, without limitation, any interest, additions to tax, or
penalties applicable thereto.

(jj)    The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable assurance
that (A) transactions are executed in accordance with management’s
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for its assets,
(C) access to its assets is permitted only in accordance with management’s
authorization and (D) the reported accountability for its assets is compared
with existing assets at reasonable intervals.

(kk)    Neither the Company nor any of its subsidiaries (i) is in violation of
its articles of incorporation, bylaws or other governing documents, (ii) is in
default (and no event has occurred which, with notice or lapse of time or both,
would constitute such a default), in the due performance or observance of any
term, covenant or condition contained in any material indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which it is a party
or by which it is bound or to which any of its properties or assets is subject
where such default would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or (iii) is in violation of any law,
ordinance, governmental rule, regulation or court decree to which it or its
property or assets may be subject or has failed to obtain any license, permit,
certificate, franchise or other governmental authorization or permit necessary
to the ownership of its property or to the conduct of its business, except where
such violation or failure would not reasonably be expected to have a Material
Adverse Effect.

(ll)    (i) None of the Company or its subsidiaries or Affiliates, or any
director, officer, or employee thereof, or, to the Company’s knowledge, any
agent or representative of the Company or of any of its subsidiaries or
Affiliates, has taken or will take any action in furtherance of an offer,
payment, promise to pay, or authorization or approval of the payment, giving or
receipt of money, property, gifts or anything else of value, directly or
indirectly, to any government official (including any officer or employee of a
government or 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) in order to influence official action, or to any person in
violation of any applicable anti-corruption laws; (ii) the Company and its
subsidiaries and Affiliates have conducted their businesses in compliance with
applicable anti-corruption laws and have instituted and maintained, and will
continue to maintain, policies and procedures reasonably designed to promote and
achieve compliance with such laws and with the representations and warranties
contained herein; and (iii) neither the Company nor its subsidiaries will use,
directly or indirectly, the proceeds of the offering in furtherance of an offer,
payment, promise to pay, or authorization of the payment or giving of money, or
anything else of value, to any person in violation of any applicable
anti-corruption laws.

 

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(mm)    The operations of the Company and its subsidiaries are and have been
conducted at all times in material compliance with all applicable financial
recordkeeping and reporting requirements, including those of the Bank Secrecy
Act, as amended by Title III of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (“USA PATRIOT Act”), and the applicable anti-money laundering statutes of
jurisdictions where the Company and its subsidiaries conduct 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 best knowledge of the
Company, threatened.

(nn)    (i) None of the Company, any of its subsidiaries, or any director,
officer, or employee thereof, or, to the Company’s knowledge, any agent,
Affiliate or representative of the Company or any of its subsidiaries, is an
individual or entity (“Person”) that is, or is owned or controlled by one or
more Persons that are:

(A)     the subject of any sanctions administered or enforced by the U.S.
Department of Treasury’s Office of Foreign Assets Control (collectively,
“Sanctions”), or

(B)     located, organized or resident in a country or territory that is the
subject of Sanctions (including, without limitation, Crimea, Cuba, Iran, North
Korea and Syria).

(ii)    The Company will not, directly or indirectly, use the proceeds of the
offering, or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other Person:

(A)    to fund or facilitate any activities or business of or with any Person or
in any country or territory that, at the time of such funding or facilitation,
is the subject of Sanctions; or

(B)     in any other manner that will result in a violation of Sanctions by any
Person (including any Person participating in the offering, whether as
underwriter, advisor, investor or otherwise).

 

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(oo)    Netherland, Sewell & Associates, Inc., (i) whose report regarding the
oil and natural gas reserves of the Company and its subsidiaries is incorporated
by reference in the Time of Sale Memorandum and the Final Memorandum (the
“Company Reserve Report”), (ii) who issued a report, dated as of September 18,
2018, regarding the oil and natural gas reserves of the Company and its
subsidiaries as of June 30, 2018 (the “NSAI Mid-Year Reserve Report”) and
(iii) who will deliver the letter regarding the Company referred to in
Section 5(f) hereof, was, as of the respective dates of such reports, and is, as
of the date hereof, an independent petroleum engineer with respect to the
Company. The information underlying the estimates of oil and natural gas
reserves of the Company and its subsidiaries, which the Company prepared and
supplied to Netherland, Sewell & Associates, Inc. for the purpose of preparing
the Company Reserve Report and the NSAI Mid-Year Reserve Report was true and
correct in all material respects on the dates such estimates were made, except
for such inaccuracies when taken as a whole would not result in the material
misstatement of the estimate of proved reserves of the Company and its
subsidiaries, the future net cash flows therefrom or the present value thereof,
and such information was supplied and was prepared in accordance with customary
industry practices; other than normal production of the reserves and intervening
product price fluctuations as described in the Time of Sale Memorandum and the
Final Memorandum, the Company is not aware of any facts or circumstances that
would result in an adverse change in the reserves, or the present value of
future net cash flows therefrom, as described in the Time of Sale Memorandum and
the Final Memorandum and as reflected in the Company Reserve Report and the NSAI
Mid-Year Reserve Report, that would reasonably be expected to result in a
Material Adverse Effect; estimates of such reserves and present values as
described in the Time of Sale Memorandum and the Final Memorandum and reflected
in the Company Reserve Report and the NSAI Mid-Year Reserve Report comply in all
material respects with applicable requirements of Regulation S-X and the
industry guidelines in Subpart 1200 to Regulation S-K under the Securities Act.

(pp)    DeGolyer & MacNaughton, (i) who issued a report, dated as of August 17,
2018, regarding the reserves of the Company and its subsidiaries as of June 30,
2018 attributable to certain oil and gas properties located in the Gulf of
Mexico (the “D&M Mid-Year Reserve Report”) and (ii) who will deliver the letter
regarding the Company referred to in Section 5(f) hereof, was, as of the date of
such report, and is, as of the date hereof, an independent petroleum engineer
with respect to the Company. The information underlying the estimates of oil and
natural gas reserves of the Company and its subsidiaries, which the Company
prepared and supplied to DeGolyer & MacNaughton for the purpose of preparing the
D&M Mid-Year Reserve Report was true and correct in all material respects on the
dates such estimates were made, except for such inaccuracies when taken as a
whole would not result in the material misstatement of the estimate of proved
reserves of the Company and its subsidiaries, the future net cash flows
therefrom or the present value thereof, and such information was supplied and
was prepared in accordance with customary industry practices; other than normal
production of the reserves and intervening product price fluctuations as
described in the Time of Sale Memorandum and the Final Memorandum, the Company
is not aware of any facts or circumstances that would result in an adverse
change in the reserves, or the present value of future net cash flows therefrom,
as described in the Time of Sale Memorandum and the Final Memorandum and as
reflected in the D&M Mid-Year Reserve Report, that would reasonably be expected
to result in a Material Adverse Effect; estimates of such reserves and present
values as described in the Time of Sale Memorandum and the Final Memorandum and
reflected in the D&M Mid-Year Reserve Report comply in all material respects
with applicable requirements of Regulation S-X and the industry guidelines in
Subpart 1200 to Regulation S-K under the Securities Act.

 

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(qq)    (i) The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act);
(ii) such disclosure controls and procedures are designed to ensure that
information required to be disclosed by the Company in the reports that the
Company will file or submit under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Commission’s
rules and forms, and are designed to ensure that information required to be
disclosed by the Company in the reports that it will file or submit under the
Exchange Act is accumulated and communicated to the Company’s management,
including the Company’s principal executive and principal financial officers, or
persons performing similar functions, as appropriate to allow timely decisions
regarding required disclosure; and (iii) such disclosure controls and procedures
are effective in all material respects to perform the functions for which they
were established.

(rr)    Since the date of the latest financial statements included or
incorporated by reference in the Time of Sale Memorandum, there has been no
change in the Company’s internal control over financial reporting that has
materially adversely affected, or is reasonably likely to materially adversely
affect the Company’s internal control over financial reporting. The company is
not aware of any material weakness or significant deficiencies in its internal
control over financial reporting.

(ss)    The Company is in compliance in all material respects with applicable
provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith.

(tt)    The Company has not engaged any broker, finder, commission agent or
other person (other than the Initial Purchasers) in connection with the offering
or any of the transactions contemplated in this Agreement, the Indenture or the
Offered Securities, and the Company is not under any obligation to pay any
broker’s fee or commission in connection with such transactions (other than
commissions or fees to the Initial Purchasers).

(uu)    Neither the Company nor the Guarantors are, and after giving effect to
the offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Final Memorandum will be, required to
register as an “investment company” as such term is defined in the Investment
Company Act of 1940, as amended.

(vv)    Neither the Company nor any of its Affiliates has directly, or through
any agent, (i) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Securities Act) which
is or will be integrated with the sale of the Offered Securities in a manner
that would require the registration under the Securities Act of the Offered
Securities or (ii) offered or solicited offers to buy or sell the Offered
Securities by any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(a)(2) of the
Securities Act.

 

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(ww)    None of the Company, its Affiliates or any person acting on its or their
behalf has engaged or will engage in any directed selling efforts (within the
meaning of Regulation S) with respect to the Offered Securities and the Company
and its Affiliates and any person acting on its or their behalf have complied
and will comply with the offering restrictions requirement of Regulation S,
except no representation, warranty or agreement is made by the Company in this
paragraph with respect to the Initial Purchasers.

(xx)    After giving effect to the consummation of the transactions contemplated
by and described in the Time of Sale Memorandum and the Final Memorandum,
(i) the sum of the debt (including contingent liabilities) of the Company and
the Guarantors, on a consolidated basis, does not exceed the fair value or the
present fair saleable value (in each case, on a going-concern basis) of the
assets of the Company and the Guarantors, on a consolidated basis; (ii) the
Company and the Guarantors, on a consolidated basis, are able to pay their
debts, on a consolidated basis, as they become due generally in the ordinary
course of business; (iii) the capital of the Company and the Guarantors, on a
consolidated basis, is not unreasonably small in relation to the business of the
Company and the Guarantors, on a consolidated basis, in existence or otherwise
contemplated as of the date hereof; and (iv) the Company and the Guarantors, on
a consolidated basis, do not intend to incur, or believe that they will incur,
debts (including current obligations and contingent liabilities) beyond their
ability to pay such debt at they mature in the ordinary course of business. For
purposes hereof, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

(yy)    Assuming the accuracy of representations and warranties in Section 7
hereof, it is not necessary in connection with the offer, sale and delivery of
the Offered Securities to the Initial Purchasers in the manner contemplated by
this Agreement to register the Offered Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended.

(zz)    The Notes satisfy the requirements set forth in Rule 144A(d)(3) under
the Securities Act.

Each certificate signed by any officer of the Company or the Guarantors
delivered to the Representative shall be deemed a representation and warranty by
the Company or the Guarantors (and not individually by such officer) to the
Representative with respect to the matters covered thereby.

 

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2.    Agreements to Sell and Purchase. The Company hereby agrees to sell to the
several Initial Purchasers, and each Initial Purchaser, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective principal amount of Notes set forth in Schedule I hereto
opposite its name at a purchase price of 98.75% of the principal amount thereof
(the “Purchase Price”) plus accrued interest, if any.

3.    Terms of Offering. You have advised the Company that the Initial
Purchasers will make an offering of the Offered Securities purchased by the
Initial Purchasers hereunder as soon as practicable after this Agreement is
entered into as in your judgment is advisable.

4.    Payment and Delivery. Payment for the Offered Securities shall be made to
the Company in federal or other funds immediately available in New York City
against delivery of such Offered Securities for the respective accounts of the
several Initial Purchasers at 10:00 a.m., New York City time, on October 18,
2018, or at such other time on the same or such other date as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the “Closing Date.”

The Notes shall be in global form and registered in the name of Cede & Co., as
nominee of The Depository Trust Company (“DTC”). The Notes shall be delivered to
you on the Closing Date through the facilities of DTC for the respective
accounts of the several Initial Purchasers, with any transfer taxes payable in
connection with the transfer of the Notes to the Initial Purchasers duly paid,
against payment of the Purchase Price therefor plus accrued interest, if any, to
the date of payment and delivery.

5.    Conditions to the Initial Purchasers’ Obligations. The several obligations
of the Initial Purchasers to purchase and pay for the Offered Securities on the
Closing Date are subject to the following conditions:

(a)    Subsequent to the execution and delivery of this Agreement and prior to
the Closing Date:

(i)    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 any of the securities of the Company or any of its
subsidiaries by any “nationally recognized statistical rating organization,” as
such term is defined in Section 3(a)(62) of the Exchange Act; and

(ii)    there shall not have occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Time of Sale Memorandum provided to the
prospective purchasers of the Offered Securities that, in your judgment, is
material and adverse and that makes it, in your judgment, impracticable to
market the Offered Securities on the terms and in the manner contemplated in the
Time of Sale Memorandum.

 

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(b)    The Initial Purchasers shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company and the Guarantors, to the effect set forth in Section 5(a)(i) and to
the effect that the representations and warranties of the Company and the
Guarantors contained in this Agreement are true and correct as of the Closing
Date and that the Company and the Guarantors have complied with all of the
agreements and satisfied all of the conditions on their part to be performed or
satisfied hereunder on or before the Closing Date. The officer signing and
delivering such certificate may rely upon the best of his or her knowledge as to
proceedings threatened.

(c)    The Initial Purchasers shall have received on the Closing Date an opinion
and negative assurance letter of Vinson & Elkins LLP, outside counsel for the
Company, dated the Closing Date, to the effect set forth in Exhibit A hereto.
Such opinion shall be rendered to the Representative at the request of the
Company and shall so state therein.

(d)    The Initial Purchasers shall have received on the Closing Date an opinion
and negative assurance letter of White & Case LLP, counsel for the Initial
Purchasers, dated the Closing Date, covering such matters as requested by the
Representative.

(e)    The Representative, on behalf of the Initial Purchasers, shall have
received from Ernst & Young LLP as public accountants for the Company, a letter,
on each of the date hereof and the Closing Date, dated the date hereof or the
Closing Date, as the case may be, in each case in form and substance
satisfactory to the Representative, containing statements and information of the
type ordinarily included in accountants’ “comfort letters” to underwriters with
respect to the financial statements and certain financial information included
or incorporated by reference in the Time of Sale Memorandum and the Final
Memorandum; provided that the letter delivered on the Closing Date shall use a
“cut-off date” not earlier than three days prior to the Closing Date.

(f)    The Initial Purchasers shall have received from each of Netherland
Sewell & Associates, Inc. and DeGolyer & MacNaughton, the Company’s independent
petroleum engineers, a letter, on each of the date hereof and the Closing Date,
in form and substance reasonably satisfactory to the Representative, each
stating, as of the date of such letter (or, with respect to matters involving
changes or developments since the respective dates as of which information
regarding the natural gas and oil reserves and future net cash flows is given in
the Time of Sale Memorandum and the Final Memorandum, as of the date not more
than five days prior to the date of such letter), the conclusions and findings
of such firm with respect to the natural gas and oil reserves of the Company and
such other matters as the Representative reasonably may request.

 

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(g)    The Company shall complete on or prior to the Closing Date (or if
permitted, after the Closing Date) all filings and other similar actions
required in connection with the perfection of security interests as and to the
extent contemplated by the Security Documents. Following the Closing Date, the
Company shall complete all lien releases and make all filings and other similar
actions required in connection with the perfection of security interests as and
to the extent contemplated by the Transaction Documents.

(h)     On or prior to the Closing Date, each obligor, lender and other party
thereto shall have duly authorized, executed and delivered the New Credit
Agreement.

(i)    On or prior to the Closing Date, the Company and the Guarantors shall
have furnished to the Initial Purchasers such further certificates and documents
as the Initial Purchasers may reasonably request.

6.    Covenants of the Company and the Guarantors. The Company and the
Guarantors covenant with each Initial Purchaser as follows:

(a)    To furnish to you in New York City, without charge, prior to 10:00 a.m.
New York City time on the business day next succeeding the date of this
Agreement and during the period mentioned in Section 6(d) or (e), as many copies
of the Time of Sale Memorandum, the Final Memorandum, any documents referred to
therein and any supplements and amendments thereto as you may reasonably
request.

(b)    Before amending or supplementing the Preliminary Memorandum, the Time of
Sale Memorandum or the Final Memorandum, to furnish to you a copy of each such
proposed amendment or supplement and not to use any such proposed amendment or
supplement to which you reasonably object.

(c)    To furnish to you a copy of each proposed Additional Written Offering
Communication to be prepared by or on behalf of, used by, or referred to by the
Company and not to use or refer to any proposed Additional Written Offering
Communication to which you reasonably object.

(d)    If the Time of Sale Memorandum is being used to solicit offers to buy the
Offered Securities at a time when the Final Memorandum is not yet available to
prospective purchasers and any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Time of Sale Memorandum in
order to make the statements therein, in the light of the circumstances, not
misleading, or if, in the opinion of counsel for the Initial Purchasers, it is
necessary to amend or supplement the Time of Sale Memorandum to comply with
applicable law, forthwith to prepare and furnish, at its own expense, to the
Initial Purchasers and to any dealer upon request, either amendments or
supplements to the Time of Sale Memorandum so that the statements in the Time of
Sale Memorandum as so amended or supplemented will not, in the light of the
circumstances when delivered to a prospective purchaser, be misleading or so
that the Time of Sale Memorandum, as amended or supplemented, will comply with
applicable law.

 

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(e)    If, during such period after the date hereof and prior to the date on
which all of the Offered Securities shall have been sold by the Initial
Purchasers, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Final Memorandum in order to make the
statements therein, in the light of the circumstances when the Final Memorandum
is delivered to a purchaser, not misleading, or if, in the opinion of counsel
for the Initial Purchasers, it is necessary to amend or supplement the Final
Memorandum to comply with applicable law, forthwith to prepare and furnish, at
its own expense, to the Initial Purchasers and to such dealers as the
Representative may designate, either amendments or supplements to the Final
Memorandum so that the statements in the Final Memorandum as so amended or
supplemented will not, in the light of the circumstances when the Final
Memorandum is delivered to a purchaser, be misleading or so that the Final
Memorandum, as amended or supplemented, will comply with applicable law.

(f)    To endeavor to qualify the Offered Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.

(g)    To use the proceeds from the offer and sale of the Offered Securities in
the manner described in the Time of Sale Memorandum and the Final Memorandum
under the caption “Use of Proceeds.”

(h)    Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of their respective obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Company’s
counsel and the Company’s accountants in connection with the issuance and sale
of the Offered Securities and the granting and perfecting of the security
interests in the Collateral and all other fees or expenses in connection with
the issuance and sale of the Offered Securities, including, without limitation,
in connection with the preparation of the Preliminary Memorandum, the Time of
Sale Memorandum, the Final Memorandum, any Additional Written Offering
Communication prepared by or on behalf of, used by, or referred to by the
Company and any amendments and supplements to any of the foregoing, this
Agreement, the Indenture, the Security Documents and the Notes, including all
printing costs associated therewith, and the delivering of copies thereof to the
Initial Purchasers, in the quantities herein above specified, (ii) all costs and
expenses related to the preparation, issuance and delivery of the Notes to the
Initial Purchasers, including any transfer or other taxes payable thereon,
(iii) the costs of reproducing and distributing each of the Transaction
Documents; (iv) the cost of printing or producing any Blue Sky or legal
investment memorandum in connection with the offer and sale of the Offered
Securities under state securities laws and all expenses in connection with the
qualification of the Offered Securities for offer and sale under state
securities laws as provided in Section 6(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Initial Purchasers in
connection with such qualification and in connection with the Blue Sky or legal
investment memorandum, (v) any fees charged by rating agencies for the rating of
the Notes, (vi) the costs and charges of the Trustee, the Collateral Agent and
any transfer agent, registrar or depositary, (vii) the costs and expenses of the
Company relating to investor presentations on any “road show” undertaken in
connection with the marketing of the offering of the Offered Securities,
including, without limitation, expenses associated with the preparation or
dissemination of any electronic road show, expenses associated with production
of road show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show, (viii) the fees and expenses incurred with
respect to creating, documenting and perfecting the security interests in the
Collateral as contemplated by the Security Documents (including the related
reasonable fees and expenses of counsel to the Initial Purchasers for all period
prior to and after the Closing Date in connection therewith) and (ix) all other
costs and expenses incident to the performance of the obligations of the Company
and the Guarantors hereunder and under the other Transaction Documents for which
provision is not otherwise made in this Section 6. It is understood, however,
that except as provided in this Section 6, Section 8, and the last paragraph of
Section 10, the Initial Purchasers will pay all of their costs and expenses,
including fees and disbursements of their counsel, transfer taxes payable on
resale of any of the Offered Securities by them and any advertising expenses
connected with any offers they may make.

 

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(i)    Neither the Company nor any Affiliate will sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Securities Act) which could be integrated with the sale of the
Offered Securities in a manner which would require the registration under the
Securities Act of the Offered Securities.

(j)    Not to solicit any offer to buy or offer to sell the Offered Securities
by means of any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(a)(2) of the
Securities Act.

(k)    While any of the Offered Securities remain “restricted securities” within
the meaning of the Securities Act, to make available, upon request, to any
seller of such Offered Securities the information specified in Rule 144A(d)(4)
under the Securities Act, unless the Company is then subject to Section 13 or
15(d) of the Exchange Act.

(l)    None of the Company, its Affiliates or any person acting on its or their
behalf (other than the Initial Purchasers) will engage in any directed selling
efforts (as that term is defined in Regulation S) with respect to the Offered
Securities, and the Company and its Affiliates and each person acting on its or
their behalf (other than the Initial Purchasers) will comply with the offering
restrictions requirement of Regulation S.

(m)    During the period of one year after the Closing Date the Company will
not, and will not permit any of its affiliates (as defined in Rule 144 under the
Securities Act) to resell any of the Offered Securities which constitute
“restricted securities” under Rule 144 that have been reacquired by any of them.

 

21

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The Company also agrees that, without the prior written consent of Morgan
Stanley & Co. LLC on behalf of the Initial Purchasers, it will not, during the
period beginning on the date hereof and continuing to and including the Closing
Date, offer, sell, contract to sell or otherwise dispose of any debt securities
of the Company or warrants to purchase debt securities of the Company
substantially similar to the Offered Securities (other than the sale of the
Offered Securities under this Agreement).

(n)    The Company will deliver to each Initial Purchaser (or its agent), on the
date of execution of this Agreement, a properly completed and executed
Certification regarding Beneficial Owners of Legal Entity Customers, together
with copies of identifying documentation, and the Company undertakes to provide
such additional supporting documentation as each Initial Purchaser may
reasonably request in connection with the verification of the foregoing
Certification.

(o)    If any Existing Notes remain outstanding after the Closing Date, the
Company shall as promptly as possible thereafter, provide to the trustee under
the indenture governing each such series of Existing Notes, an irrevocable
notice of redemption in accordance with the terms of the applicable indenture
stating that the Company will redeem all of the Existing Notes outstanding under
such indenture.

(p)    The Company shall apply the proceeds from the offer and sale of the
Offered Securities as described in the Time of Sale Memorandum and the Final
Memorandum under the caption “Use of Proceeds” in accordance with the notice of
redemption described in Section 6(o) herein.

7.    Offering of Offered Securities; Restrictions on Transfer. (a) Each Initial
Purchaser, severally and not jointly, represents and warrants that such Initial
Purchaser is a qualified institutional buyer as defined in Rule 144A under the
Securities Act (a “QIB”). Each Initial Purchaser, severally and not jointly,
agrees with the Company that (i) it will not solicit offers for, or offer or
sell, such Offered Securities by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of
Section 4(a)(2) of the Securities Act, (ii) it will sell such Offered Securities
in the United States only to persons that it reasonably believes to be QIBs, and
(iii) in the case of offers outside the United States, it will solicit offers
for such Offered Securities only from, and will offer such Offered Securities
only to, persons that it reasonably believes to be persons other than U.S.
persons (“foreign purchasers,” which term shall include dealers or other
professional fiduciaries in the United States acting on a discretionary basis
for foreign beneficial owners (other than an estate or trust)) in reliance upon
Regulation S under the Securities Act that, in each case, in purchasing such
Offered Securities are deemed to have represented and agreed as provided in the
Final Memorandum under the caption “Notice to Investors.”

 

22

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(b)    Each Initial Purchaser, severally and not jointly, represents, warrants,
and agrees with respect to offers and sales outside the United States that:

(i)    such Initial Purchaser understands that no action has been or will be
taken in any jurisdiction by the Company that would permit a public offering of
the Offered Securities, or possession or distribution of the Preliminary
Memorandum, the Time of Sale Memorandum, the Final Memorandum or any other
offering or publicity material relating to the Offered Securities, in any
country or jurisdiction where action for that purpose is required;

(ii)    such Initial Purchaser will comply with all applicable laws and
regulations in each jurisdiction in which it acquires, offers, sells or delivers
Offered Securities or has in its possession or distributes the Preliminary
Memorandum, the Time of Sale Memorandum, the Final Memorandum or any such other
material, in all cases at its own expense;

(iii)    the Offered Securities have not been registered under the Securities
Act and may not be sold within the United States or to, or for the account or
benefit of, U.S. persons except in accordance with Rule 144A or Regulation S
under the Securities Act;

(iv)    such Initial Purchaser has offered the Offered Securities and will offer
and sell the Offered Securities (A) as part of their distribution at any time
and (B) otherwise until 40 days after the later of the commencement of the
offering and the Closing Date, only in accordance with Rule 903 of Regulation S
or as otherwise permitted in Section 7(a); accordingly, neither such Initial
Purchaser, its Affiliates nor any persons acting on its or their behalf have
engaged or will engage in any directed selling efforts (within the meaning of
Regulation S) with respect to the Offered Securities, and any such Initial
Purchaser, its Affiliates and any such persons have complied and will comply
with the offering restrictions requirement of Regulation S; and

(v)    such Initial Purchaser agrees that, at or prior to confirmation of sales
of the Offered Securities, it will have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration that purchases
Offered Securities from it during the restricted period a confirmation or notice
to substantially the following effect:

“The Notes covered hereby have not been registered under the U.S. Securities Act
of 1933 (the “Securities Act”) and may not be offered and sold within the United
States or to, or for the account or benefit of, U.S. persons (i) as part of
their distribution at any time or (ii) otherwise until 40 days after the later
of the commencement of the offering and the Closing Date, except in either case
in accordance with Regulation S (or Rule 144A if available) under the Securities
Act. Terms used above have the meaning given to them by Regulation S.”

Terms used in this Section 7(b) have the meanings given to them by Regulation S.

 

23

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8.    Indemnity and Contribution. (a) The Company and each Guarantor agrees,
jointly and severally, to indemnify and hold harmless each Initial Purchaser,
each person, if any, who controls any Initial Purchaser within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, and
each affiliate of any Initial Purchaser within the meaning of Rule 405 under the
Securities Act from and against any and all losses, claims, damages and
liabilities (including any reasonable legal or other expenses incurred in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained or
incorporated by reference in the Preliminary Memorandum, the Time of Sale
Memorandum, any Additional Written Offering Communication prepared by or on
behalf of, used by, or referred to by the Company, or the Final Memorandum or
any amendment or supplement thereto, or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in the light of the circumstances under which they were made not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Initial Purchaser furnished to
the Company in writing by such Initial Purchaser through you expressly for use
therein.

(b)    Each Initial Purchaser agrees, severally and not jointly, to indemnify
and hold harmless the Company, each Guarantor, their respective directors,
officers and each person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Company to such Initial
Purchaser, but only with reference to information relating to such Initial
Purchaser furnished to the Company in writing by such Initial Purchaser through
you expressly for use in the Preliminary Memorandum, the Time of Sale
Memorandum, any Additional Written Offering Communication prepared by or on
behalf of, used by or referred to by the Company, or the Final Memorandum or any
amendment or supplement thereto.

(c)    In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 8(a) or 8(b), such person (the “indemnified party”) shall
promptly notify the person against whom such indemnity may be sought (the
“indemnifying party”) in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the reasonable
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the reasonable fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees and expenses of more
than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such reasonable fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
Morgan Stanley & Co. LLC, in the case of parties indemnified pursuant to
Section 8(a), and by the Company, in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, 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 from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel as contemplated by the second and third sentences of this
paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement (i) includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any indemnified
party.

 

 

24

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(d)    To the extent the indemnification provided for in Section 8(a) or 8(b) is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (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 Offered Securities or (ii) if the allocation provided by
clause 8(d)(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 8(d)(i) above but also the relative fault of the Company and the
Guarantors on the one hand and of the Initial Purchasers on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, 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 Offered Securities shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Offered
Securities (before deducting expenses) received by the Company and the
Guarantors and the total discounts and commissions received by the Initial
Purchasers bear to the aggregate offering price of the Offered Securities. The
relative fault of the Company and the Guarantors on the one hand and of the
Initial Purchasers on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Guarantors or by the Initial
Purchasers and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. For purposes
of the preceding two sentences, the net proceeds deemed to be received by the
Company shall be deemed to be also for the benefit of the Guarantors and
information supplied by the Company shall also be deemed to be supplied by the
Guarantors. The Initial Purchasers’ respective obligations to contribute
pursuant to this Section 8 are several in proportion to the respective principal
amount of Offered Securities they have purchased hereunder, and not joint.

 

25

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(e)    The Company, the Guarantors and the Initial Purchasers agree that it
would not be just or equitable if contribution pursuant to this Section 8 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 that does
not take account of the equitable considerations referred to in Section 8(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in Section 8(d) shall be deemed to
include, subject to the limitations set forth above, any reasonable legal or
other reasonable expenses incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at which
the Offered Securities resold by it in the initial placement of such Offered
Securities were offered to investors exceeds the amount of any damages that such
Initial Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 8 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.

(f)    The indemnity and contribution provisions contained in this Section 8 and
the representations, warranties and other statements of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Initial Purchaser, any person controlling any Initial Purchaser or
any affiliate of any Initial Purchaser or by or on behalf of the Company, its
officers or directors or any person controlling the Company and (iii) acceptance
of and payment for any of the Offered Securities.

9.    Termination. The Initial Purchasers may terminate this Agreement by notice
given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, the NYSE or the
NASDAQ Global Market, (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
material disruption in securities settlement, payment or clearance services in
the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or
(v) there shall have occurred any outbreak or escalation of hostilities, or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and which, singly or together with any other event
specified in this clause (v), makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Offered
Securities on the terms and in the manner contemplated in the Time of Sale
Memorandum or the Final Memorandum.

 

26

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10.    Effectiveness; Defaulting Initial Purchasers. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.

If, on the Closing Date, any one or more of the Initial Purchasers shall fail or
refuse to purchase Offered Securities that it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Offered Securities
which such defaulting Initial Purchaser or Initial Purchasers agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal
amount of Offered Securities to be purchased on such date, the other Initial
Purchasers shall be obligated severally in the proportions that the principal
amount of Offered Securities set forth opposite their respective names in
Schedule I bears to the aggregate principal amount of Offered Securities set
forth opposite the names of all such non-defaulting Initial Purchasers, or in
such other proportions as you may specify, to purchase the Offered Securities
which such defaulting Initial Purchaser or Initial Purchasers agreed but failed
or refused to purchase on such date; provided that in no event shall the
principal amount of Offered Securities that any Initial Purchaser has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 10 by
an amount in excess of one-ninth of such principal amount of Offered Securities
without the written consent of such Initial Purchaser. If, on the Closing Date
any Initial Purchaser or Initial Purchasers shall fail or refuse to purchase
Offered Securities which it or they have agreed to purchase hereunder on such
date and the aggregate principal amount of Offered Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Offered Securities to be purchased on such date, and arrangements
satisfactory to you and the Company for the purchase of such Offered Securities
are not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Initial Purchaser or of the
Company. In any such case either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Time of Sale Memorandum, the Final
Memorandum or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Initial Purchaser
from liability in respect of any default of such Initial Purchaser under this
Agreement.

 

27

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If this Agreement shall be terminated by the Initial Purchasers, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Initial Purchasers or such Initial
Purchasers as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Initial Purchasers in connection
with this Agreement or the offering contemplated hereunder.

11.    Entire Agreement. (a) This Agreement, together with any contemporaneous
written agreements and any prior written agreements (to the extent not
superseded by this Agreement) that relate to the offering of the Offered
Securities, represents the entire agreement between the Company and the Initial
Purchasers with respect to the preparation of the Preliminary Memorandum, the
Time of Sale Memorandum, the Final Memorandum, the conduct of the offering, and
the purchase and sale of the Offered Securities.

(b)    The Company and the Guarantors acknowledge that in connection with the
offering of the Offered Securities: (i) the Initial Purchasers have acted at
arm’s length, are not agents of, and owe no fiduciary duties to, the Company,
the Guarantors or any other person, (ii) the Initial Purchasers owe the Company
and the Guarantors only those duties and obligations set forth in this Agreement
and prior written agreements (to the extent not superseded by this Agreement) if
any, and (iii) the Initial Purchasers may have interests that differ from those
of the Company and the Guarantors. The Company and the Guarantors waive to the
full extent permitted by applicable law any claims it may have against the
Initial Purchasers arising from an alleged breach of fiduciary duty in
connection with the offering of the Offered Securities.

12.    Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

13.    Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

14.    Waiver of Jury Trial. The Company and the Guarantors hereby irrevocably
waive, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.

15.    Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.

16.    Notices. All communications hereunder shall be in writing and effective
only upon receipt and if to the Initial Purchasers shall be delivered, mailed or
sent to you in care of Morgan Stanley & Co. LLC, 1585 Broadway, New York, New
York 10036, Attention: High Yield Syndicate Desk, with a copy to the Legal
Department; and if to the Company shall be delivered, mailed or sent to W&T
Offshore, Inc., Nine Greenway Plaza, Suite 300, Houston, Texas 77046, Attention:
Janet Yang. In accordance with the requirements of the USA PATRIOT Act, 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.

 

28

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Very truly yours, W&T OFFSHORE, INC. By:   /s/ Janet Yang  

Name:   Janet Yang

 

Title:    Vice President, Acting Chief Financial Officer and Chief Accounting
Officer

 

W&T ENERGY VI, LLC W&T ENERGY VII, LLC By: W&T Offshore, Inc., its sole member
By:  

/s/ Shahid Ghauri

 

Name:   Shahid Ghauri

 

Title:    Vice President, General Counsel and Corporate Secretary

 

 

 

[Signature Page to Purchase Agreement]

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Accepted as of the date hereof

Morgan Stanley & Co. LLC

Acting severally on behalf of itself and as the

Representative of the several Initial

Purchasers named in Schedule I hereto.

 

By:   Morgan Stanley & Co. LLC

 

 

By:

 

/s/ Chance Moreland

 

Name:   Chance Moreland

 

Title:    Authorized Signatory

 

 

 

[Signature Page to Purchase Agreement]

 

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SCHEDULE I

 

 

Initial Purchasers

   Principal Amount of
Notes to be Purchased  

Morgan Stanley & Co. LLC

   $ 218,750,000  

Stifel, Nicolaus & Company, Incorporated

     62,500,000  

Seaport Global Securities LLC

     62,500,000  

TD Securities (USA) LLC

     62,500,000  

SG Americas Securities, LLC

     62,500,000  

Natixis Securities Americas LLC

     62,500,000  

ABN AMRO Securities (USA) LLC

     46,875,000  

ING Financial Markets LLC

     46,875,000  

Total:

   $ 625,000,000     

 

 

 

 

I-1

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SCHEDULE II

Time of Sale Memorandum

 

1.

Preliminary Memorandum issued October 1, 2018

 

2.

Pricing Supplement on Schedule III

Additional Written Offering Communications

 

1.

None

 

II-1

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SCHEDULE III

FINAL PRICING SUPPLEMENT

Issued October 5, 2018

$625,000,000

W&T OFFSHORE, INC.

9.75% SENIOR SECOND LIEN NOTES DUE 2023

 

 

Pricing Supplement dated October 5, 2018 to Preliminary Offering Memorandum
dated October 1, 2018 of W&T Offshore, Inc.

This Pricing Supplement incorporates the Preliminary Offering Memorandum in its
entirety herein. The information in this Pricing Supplement supplements the
Preliminary Offering Memorandum and supersedes the information in the
Preliminary Offering Memorandum to the extent inconsistent with the information
in the Preliminary Offering Memorandum.

Unless otherwise indicated, terms used but not defined herein have the meanings
assigned to such terms in the Preliminary Offering Memorandum.

 

 

Issuer:    W&T Offshore, Inc. Security Description:    9.75% Senior Second Lien
Notes due 2023 Distribution:    144A/Regulation S – without Registration Rights
Face:    $625,000,000 Gross Proceeds:    $625,000,000 Coupon:    9.75% Yield to
Maturity:    9.75% Maturity:    November 1, 2023 Offering Price:    100.000% and
accrued interest, if any. Interest Payment Dates:    Interest on the notes will
accrue at the rate of 9.75% per annum and will be payable semi-annually in
arrears on November 1 and May 1, commencing on May 1, 2019. We will make each
interest payment to the holders of record on the immediately preceding
October 15 and April 15. Equity Clawback:    Prior to November 1, 2020, we may
on one or more occasions redeem up to 35% of the aggregate principal amount of
the notes with the net cash proceeds of certain equity offerings, at a price
equal to 109.75% of the aggregate principal amount of the notes plus accrued and
unpaid interest.

 

III-1

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Optional Redemption:    Prior to November 1, 2020, we may redeem all or part of
the notes at a redemption price equal to 100% of the aggregate principal amount
of the notes to be redeemed, plus a make-whole premium at T+50bps and accrued
and unpaid interest. Then:

   On or after November 1:    Price:    2020    104.875%    2021    102.438%   
2022 and thereafter    100.000%

Change of Control:    Put at 101% of the aggregate principal amount of the notes
repurchased plus accrued and unpaid interest on the notes repurchased. Ranking:
   Senior secured obligations. Trade Date:    October 5, 2018 Settlement Date:
  

October 18, 2018 (T+8)

 

It is expected that delivery of the notes will be made against payment therefor
on or about October 18, 2018, which will be the eighth business day following
the date of pricing of the notes. Under Rule 15c6-1 of the Exchange Act, trades
in the secondary market generally settle in two business days, unless parties to
any such trade expressly agree otherwise. Accordingly, purchasers who wish to
trade the notes prior to the delivery hereunder will be required, by virtue of
the fact that the notes will settle in T+8, to specify alternative settlement
arrangements to prevent a failed settlement. Purchasers of notes who wish to
trade the notes prior to their delivery hereunder should consult their own
advisors.

Reference Treasury:    UST1.625% due October 31, 2023 Spread to Treasury:    667
bps Denominations:    The notes will be issued in denominations of $1,000 and
integral multiples of $1,000. Ratings:    B3/B Global Coordinator and Joint
Active Book-Running Manager:    Morgan Stanley & Co. LLC

 

III-2

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Joint Active Book-Running Managers:   

Stifel, Nicolaus & Company, Incorporated

Seaport Global Securities LLC

TD Securities (USA) LLC

SG Americas Securities, LLC

Natixis Securities Americas LLC

Joint Passive Book-Running Managers:   

ABN AMRO Securities (USA) LLC

ING Financial Markets LLC

CUSIP:   

144A: 92922P AL0

Reg S: U85254 AF4

ISIN:   

144A: US92922PAL04

Reg S: USU85254AF42

Other Changes to the Preliminary Offering Memorandum:   

Security

 

Clause (1) of the first paragraph under the heading “Description of
Notes—Security” shall be revised to reflect the revisions indicated by the
blacklined language below:

 

(1) cash, certificates of deposit, deposit accounts, money market accounts or
other such liquid assets (“Excluded Liquid Assets”), but only to the extent that
such cash, certificates of deposit, deposit accounts, money market accounts or
other such liquid assets Excluded Liquid Assets that are on deposit or
maintained with the Priority Lien Collateral Agent or any other holder of
Priority Lien Obligations to cash collateralize letters of credit constituting
Priority Lien Obligations rather than generally to the holders of the Priority
Lien Obligations or to the Priority Lien Collateral Agent for the benefit of the
holders of Priority Lien Obligations as a whole;

 

The following shall be added as a new paragraph at the end of the subsection
under the heading “Description of Notes—Security—Security Documents”:

 

III-3

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W&T will file a Current Report on Form 8-K with the SEC within the applicable
time period for such a filing, containing customary detail on such actions, upon
completion of the deliveries referred to in the preceding paragraph.

 

Asset Sales

 

The second paragraph under the heading “Description of Notes—Repurchase at the
Option of Holders—Asset Sales” shall be revised to reflect the revisions
indicated by the blacklined language below:

 

Within 360 365 days after the receipt of any Net Proceeds from an Asset Sale,
or, if within such 365-day period W&T has entered into a binding commitment or
commitments with respect to the actions described in clauses (2) or (3) below,
within 540 180 days after the receipt of any Net Proceeds from an Asset Sale
entry into such binding commitment or commitments (or, if later, 365 days after
receipt of such Net Proceeds), W&T (or the applicable Restricted Subsidiary, as
the case may be) may apply such Net Proceeds:

 

(1)(a) if the Asset Sale is a Collateral Disposition, to repay, prepay, redeem
or repurchase Priority Lien Debt, the notes and other outstanding or Parity Lien
Debt; provided that with respect to Parity Lien Debt, such repayment,
prepayment, redemption or repurchase must be made either by a pro rata
redemption, repayment or repurchase of outstanding Parity Lien Debt or by an
Asset Sale Offer made to all holders of Parity Lien Debt under the procedures
set forth below or (b) if such Asset Sale is not a Collateral Disposition, to
repay, prepay, redeem or repurchase Indebtedness of W&T or a Restricted
Subsidiary that is not subordinated in right of payment to the notes (but, in
each case, excluding intercompany Indebtedness of W&T or any Restricted
Subsidiary or any of its Affiliates);

 

(2) to invest in Additional Assets;

 

(3) to make capital expenditures in respect of W&T’s or its Restricted
Subsidiaries’ Oil and Gas Business; or

 

(4) any combination of the foregoing.

 

The reference to “$40.0 million” in the second sentence of the fourth paragraph
under the heading “Description of Notes—Repurchase at the Option of
Holders—Asset Sales” shall be changed to “$20.0 million”.

 

III-4

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Restricted Payments

 

Clause (9) of the second paragraph under the heading “Description of
Notes—Certain Covenants—Restricted Payments” shall be revised to reflect the
revisions indicated by the blacklined language below:

 

(9) Restricted Payments in an amount up to $60.0 $35.0 million for each 12-month
period following the Issue Date, with any unused portion of such amount in any
such period to be carried forward to succeeding 12-month periods; provided that
if the Senior Secured Leverage Ratio is greater than 2.00:1.00 on any
anniversary of the Issue Date, such amount shall be limited to $40.0
$15.0 million for the subsequent 12-month period;

 

Incurrence of Indebtedness and Issuance of Preferred Stock

 

Clause (1) of the second paragraph under the heading “Description of
Notes—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred
Stock” shall be revised to reflect the revisions indicated by the blacklined
language below:

 

(1) the incurrence by W&T and any Restricted Subsidiary of Indebtedness
(including letters of credit) under Credit Facilities in an aggregate principal
amount at any one time outstanding under this clause (1) (with letters of credit
being deemed to have a principal amount equal to the maximum potential liability
of W&T and its Restricted Subsidiaries thereunder) not to exceed the greatest of
(a) $400.0 $300.0 million, (b) 30.0% 20.0% of Adjusted Consolidated Net Tangible
Assets determined as of the date of the incurrence of such Indebtedness after
giving pro forma effect to such incurrence and the application of the proceeds
therefrom and (c) the Borrowing Base at the time of incurrence; provided that if
the lenders under each Credit Facility incurred under this clause (1) do not
include at least one commercial bank that provides, in the ordinary course of
its business, reserve-based bank loans in the Oil and Gas Business, then the
aggregate amount that may be incurred under this clause (1) shall not exceed
$300.0 million;

 

III-5

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Clause (4) of the second paragraph under the heading “Description of
Notes—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred
Stock” shall be revised to reflect the revisions indicated by the blacklined
language below:

 

(4) the incurrence by W&T or any of its Restricted Subsidiaries of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of financing all or any part
of the purchase price or cost of design, construction, installation or
improvement of property, plant or equipment used in the business of W&T or any
of its Restricted Subsidiaries, in an aggregate principal amount at any time
outstanding, including all Permitted Refinancing Indebtedness incurred to renew,
refund, refinance, replace, defease or discharge any Indebtedness incurred
pursuant to this clause (4), not to exceed the greater of (a) $50.0
$30.0 million and (b) 3.5% 2.0% of Adjusted Consolidated Net Tangible Assets
determined as of the date of the incurrence of such Indebtedness;

 

Clause (16) of the second paragraph under the heading “Description of
Notes—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred
Stock” shall be revised to reflect the revisions indicated by the blacklined
language below:

 

(16) the incurrence by W&T or any of its Restricted Subsidiaries of additional
Indebtedness in an aggregate principal amount (or accreted value, as applicable)
at any time outstanding not to exceed the greater of (a) $100.0 $60.0 million
and (b) 7.0% 4.0% of Adjusted Consolidated Net Tangible Assets determined as of
the date of the incurrence of such Indebtedness; and

 

 

III-6

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Transactions with Affiliates

 

Clause (2) of the first paragraph under the heading “Description of
Notes—Certain Covenants—Transactions with Affiliates” shall be revised to
reflect the revisions indicated by the blacklined language below:

 

(2) W&T delivers to the trustee:

 

(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $20.0 $10.0 million,
an officers’ certificate certifying that such Affiliate Transaction complies
with this covenant; and

 

(b) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $40.0 $30.0 million,
a resolution of W&T’s Board of Directors set forth in an officers’ certificate
certifying that such Affiliate Transaction complies with this covenant and that
such Affiliate Transaction has been approved by a majority of the disinterested
members of W&T’s Board of Directors.

 

The reference to “80%” in the first sentence of the fourth paragraph under the
heading “Description of Notes—Certain Covenants—Additional Note Guarantees and
Collateral” shall be changed to “85%”.

 

Certain Definitions

 

Clauses (1) and (2) of the definition of “Permitted Liens” under the heading
“Description of Notes—Certain Definitions” shall be revised to reflect the
revisions indicated by the blacklined language below:

 

(1) Liens securing the Priority Lien Debt or Parity Lien Debt (other than
Indebtedness represented by the notes and the related Note Guarantees incurred
on the Issue Date) incurred under clause (1) of the definition of “Permitted
Debt”; provided that any Liens securing Priority Lien Debt shall be secured
equally and ratably with Liens securing Priority Lien Debt under this clause
(1);

 

(2) Parity Liens securing the notes (other than any additional notes) and the
related Note Guarantees;

 

III-7

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The following new clause (15)(c) shall be added to the definition of “Permitted
Liens” under the heading “Description of Notes—Certain Definitions”:

 

(c) to the extent the Indebtedness being refunded, refinanced or replaced
constitutes Parity Lien Debt, then the Indebtedness secured by the new Lien may
be only Parity Lien Debt or secured on a junior Lien basis to all Parity Lien
Debt;

 

Clause (28) of the definition of “Permitted Liens” under the heading
“Description of Notes—Certain Definitions” shall be revised to reflect the
revisions indicated by the blacklined language below:

 

(28) Liens of W&T or any Subsidiary of W&T with respect to Indebtedness that
does not exceed in principal amount the greater of (a) $100.0 $60.0 million at
any one time outstanding and (b) 7.0% 4.0% of the Adjusted Consolidated Net
Tangible Assets determined as of the date of the incurrence of such Indebtedness
after giving pro forma effect to such incurrence and the application of proceeds
therefrom; and

 

Clause (2) of the definition of “Priority Lien Debt” under the heading
“Description of Notes—Certain Definitions” shall be revised to reflect the
revisions indicated by the blacklined language below:

 

III-8

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(2) additional Indebtedness of W&T and the Guarantors under any other Credit
Facility that is secured equally and ratably with the Indebtedness referenced in
clause (1) of this definition the Credit Agreement by a Priority Lien that was
permitted to be incurred and so secured under each applicable Secured Debt
Document; provided that, in the case of any Indebtedness referred to in this
clause (2), that:

 

Release of Liens; Automatic Release of Second Liens and Third Liens

 

Clause (b) of the first paragraph under the heading “Intercreditor
Agreement—Release of Liens; Automatic Release of Second Liens and Third Liens”
shall be revised to reflect the revisions indicated by the blacklined language
below:

 

(b) subject to the provisions of the Intercreditor Agreement described under the
caption “—Application of Proceeds,” such release is effected in connection with
the Priority Lien Agent’s foreclosure upon, or other exercise of rights or
remedies with respect to, such Collateral,

 

The reference to “80%” in clause (c)(x) of the first paragraph under the heading
“Intercreditor Agreement—Release of Liens; Automatic Release of Second Liens and
Third Liens” shall be changed to “85%”.

This material is strictly confidential and is for your information only and is
not intended to be used by anyone other than you. This information does not
purport to be a complete description of these securities or the offering. Please
refer to the offering memorandum for a complete description.

This communication is being distributed in the United States solely to Qualified
Institutional Buyers, as defined in Rule 144A under the Securities Act of 1933,
and outside the United States solely to non-U.S. persons as defined under
Regulation S.

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

A copy of the offering memorandum for the offering can be obtained from your
Morgan Stanley sales person or Morgan Stanley & Co. LLC, 1585 Broadway, New
York, NY 10036, Attention: High Yield New Issue Group.

 

III-9

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SCHEDULE IV

GUARANTORS

 

1.

W&T ENERGY VI, LLC

2.

W&T ENERGY VII, LLC

 

IV-1

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EXHIBIT A

OPINION OF COUNSEL FOR THE COMPANY

The opinion of the counsel for the Company, to be delivered pursuant to
Section 5(c) of the Purchase Agreement shall be to the effect that:

A.    The Company is validly existing as a corporation in good standing under
the laws of the State of Texas, has the corporate power and authority to own its
property and to conduct its business as described in the Time of Sale Memorandum
and is duly qualified to transact business and is in good standing in each
jurisdiction indicated in the schedule attached hereto.

B.    Each Guarantor is validly existing in good standing under the laws of its
jurisdiction of formation, is duly qualified to do business and is in good
standing as a foreign limited liability company in each jurisdiction indicated
in the schedule attached hereto.

C.    Each Guarantor has all limited liability company power and authority
necessary to own or hold its respective properties and conduct the business in
which it is engaged.

D.    The Company has the authorized equity capitalization as set forth in the
Time of Sale Memorandum; all of the issued membership interests of each
Guarantor have been duly and validly authorized and issued, are fully paid and
non-assessable (except as such non-assessability may be affected by Sections
18-607 and 18-804 of the Delaware LLC Act), and are owned directly by the
Company, free and clear of all liens, encumbrances, equities or claims (i) in
respect of which a financing statement under the Uniform Commercial Code of the
State of Texas naming the Company as debtor is on file in the office of the
Secretary of State of the State of Texas or (ii) otherwise known to such
counsel, without independent investigation, other than those created by or
arising under the Delaware LLC Act or those created by the New Credit Agreement.

E.    The Purchase Agreement has been duly authorized, executed and delivered by
the Company and each of the Guarantors.

F.    The Company and each of the Guarantors have all requisite corporate or
limited liability company power and authority to execute and deliver the
Purchase Agreement and the other Transaction Documents to which it is a party,
and to perform their obligations under the Purchase Agreement and the other
Transaction Documents.

 

A-1

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G.    The Notes have been duly authorized by the Company and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers in accordance with the terms of the
Purchase Agreement, and assuming the due execution and delivery of the Indenture
by the Trustee and the authentication and delivery of the Notes by the Trustee,
will be valid and binding obligations of the Company, entitled to the benefit of
the Indenture, and enforceable in accordance with their terms, except that the
enforcement thereof may be subject to the Enforceability Exceptions.

H.    The Guarantees have been duly and validly authorized by each of the
Guarantors. When the Notes have been issued, executed and authenticated in
accordance with the terms of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of the Purchase Agreement, and
assuming the due execution and delivery of the Indenture by the Trustee and the
authentication and delivery of the Notes by the Trustee, the Guarantee of each
Guarantor will be duly issued and constitute the legal, valid and binding
obligation of such Guarantor, entitled to the benefit of the Indenture, and
enforceable against such Guarantor in accordance with its terms, except that the
enforcement thereof may be subject to the Enforceability Exceptions.

I.    The Indenture has been duly authorized, executed and delivered by the
Company and each of the Guarantors, and assuming the due execution and delivery
thereof by the Trustee, constitutes a valid and binding agreement of, the
Company and each Guarantor, enforceable in accordance with its terms, except
that the enforcement thereof may be subject to the Enforceability Exceptions.

J.    The Collateral Trust Agreement constitutes the valid and binding
obligation of the Company and the Guarantors enforceable against each of the
Company and Guarantors in accordance with the terms under the laws of the State
of New York.

K.    The provisions of the Collateral Trust Agreement are effective to create,
in favor of the Collateral Trustee to secure the Secured Obligations (as defined
therein), a valid security interest in all of each of the Company’s and
Guarantors’ right, title and interest in and to that portion of the Collateral
(as defined therein) in which a security interest may be created under Article 9
of the Uniform Commercial Code as in effect in the State of New York (the “NY
UCC”) (the “Article 9 Collateral”).

L.    To the extent that the filing of a financing statement can be effective to
perfect a security interest in the Article 9 Collateral under (a) the Uniform
Commercial Code as in effect in the State of Delaware (the “DE UCC”), the
security interest in favor of the Collateral Trustee in that portion of the
Article 9 Collateral described in the applicable DE Financing Statement will be
perfected upon the proper filing of such DE Financing Statement in the Office of
the Secretary of State of the State of Delaware and (b) the Uniform Commercial
Code as in effect in the State of Texas (the “TX UCC”), the security interest in
favor of the Collateral Trustee in that portion of the Article 9 Collateral
described in the applicable TX Financing Statement will be perfected upon the
proper filing of such TX Financing Statement in the Office of the Secretary of
State of the State of Texas. For purposes of our opinions set forth in this
paragraph 3, we have based such opinions solely on our review of the generally
available compilations of Article 9 of the DE UCC and the TX UCC, each as in
effect on the date hereof, and we have not reviewed any other laws of the State
of Delaware or the State of Texas or retained or relied on any opinion or advice
of Delaware counsel.

 

A-2

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M.    The execution and delivery by the Company and the Guarantors of, and the
performance by the Company and the Guarantors of their obligations under, the
Purchase Agreement and the other Transaction Documents, and the performance by
the Company and the Guarantors of their respective obligations under the
Transaction Documents, will not contravene any provision of (i) the certificate
of incorporation or bylaws of the Company or the Certificate of Formation or
limited liability company agreement of each Guarantor, (ii) the New Credit
Agreement, (iii) the Delaware LLC Act, any federal, Texas or New York statute,
rule or regulation applicable to the Company or any Guarantor, or to such
counsel’s knowledge, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any Guarantor; except,
with respect to clauses (ii) and (iii) only, for any such contravention that
would not reasonably be expected to result in, individually or in the aggregate,
a Material Adverse Effect. With respect to clauses (ii) and (iii) above, such
counsel need express no opinion as to the applicability of any federal or state
securities or Blue Sky laws.

N.    No consent, approval, authorization or order of, or filing or registration
or qualification with, any governmental body or agency is required for the
performance by the Company and Guarantors of their respective obligations under
the Purchase Agreement or the other Transaction Documents, except (i) such as
have previously been obtained, (ii) such as may be required by state securities
or Blue Sky laws in connection with the offer and sale of the Offered
Securities, as to which such counsel need express no opinion and (iii) such as
may be required under federal securities laws, as to which such counsel need
express no opinion other than the opinion provided in paragraph R below.

O.    Neither the Company nor the Guarantors are, and after giving effect to the
offer and sale of the Offered Securities and the application of the proceeds
therefrom as described “Use of Proceeds” in the Final Memorandum will be, an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations of the Securities and Exchange
Commission thereunder.

 

A-3

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P.    The Notes, the Guarantees, the Indenture, the Intercreditor Agreement and
the Security Documents conform in all material respects as to legal matters to
the descriptions thereof contained in the Time of Sale Memorandum and the Final
Memorandum.

Q.    The statements in each of the Time of Sale Memorandum and the Final
Memorandum under the caption “Certain U.S. Federal Tax Considerations,” insofar
as such statements constitute a summary of the United States federal tax laws
referred to therein, are accurate in all material respects.

R.    Based upon the representations, warranties and agreements of the Company
and the Initial Purchasers in the Purchase Agreement, it is not necessary in
connection with the offer, sale and delivery of the Offered Securities to the
Initial Purchasers under the Purchase Agreement or in connection with the
initial resale of such Offered Securities by the Initial Purchasers in
accordance with the Purchase Agreement to register the Offered Securities under
the Securities Act of 1933 or to qualify the Indenture under the Trust Indenture
Act of 1939, it being understood that no opinion is expressed as to any
subsequent resale of any Note.

In addition, such counsel should state that nothing has come to the attention of
such counsel that causes such counsel to believe that (A) the Time of Sale
Memorandum (except for the financial statements and financial schedules and
other financial and accounting data, and the oil and natural gas reserve and
future net revenue data included or incorporated by reference in or omitted from
the Time of Sale Memorandum, as to which such counsel need not express any
belief) as of the date of the Purchase Agreement or as amended or supplemented,
if applicable, as of the Time of First Sale (which such counsel may assume to be
5:20 p.m. New York City time on the date of the Purchase Agreement) contained or
contains any untrue statement of a material fact or omitted 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 or (B) the Final
Memorandum (except for the financial statements and financial schedules and
other financial and accounting data, and the oil and natural gas reserve and
future net revenue data included or incorporated by reference in or omitted from
the Time of Sale Memorandum, as to which such counsel need not express any
belief) as of its date contained, or as of the date such opinion is delivered
contains, any untrue statement of a material fact or omitted 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.

 

A-4

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With respect to the matters referred to in the paragraph above, counsel may
state that its beliefs are based upon its participation in the preparation of
the Time of Sale Memorandum and the Final Memorandum (and any amendments or
supplements thereto) and review and discussion of the contents thereof and
review of the documents referred to therein, but are without independent check
or verification except as specified.

 

A-5

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SCHEDULE OF QUALIFICATION

 

      Name of Entity    Domestic Jurisdiction    Foreign Qualifications      
W&T Offshore, Inc.    Texas    Alabama, Louisiana       W&T Energy VI, LLC   
Delaware    Alabama       W&T Energy VII, LLC    Delaware    None

 

A-6