Exhibit 10.1

 

Execution Version

 

PURCHASE AGREEMENT

 

January 13, 2014

 

MERRILL LYNCH, PIERCE, FENNER & SMITH

INCORPORATED
     As Representative of the Initial Purchasers

One Bryant Park
New York, New York 10036

 

Ladies and Gentlemen:

 

Introductory.  Laredo Petroleum, Inc., a Delaware corporation (the “Company”),
proposes to issue and sell to the several Initial Purchasers named in Schedule A
(the “Initial Purchasers”), acting severally and not jointly, the respective
amounts set forth in such Schedule A of a $450,000,000 aggregate principal
amount of the Company’s 5.625% Senior Notes due 2022 (the “Notes”).  Merrill
Lynch, Pierce, Fenner & Smith Incorporated has agreed to act as the
representative of the several Initial Purchasers (the “Representative”) in
connection with the offering and sale of the Notes.

 

Prior to the date hereof, the Company completed an internal corporate
reorganization, pursuant to which the following transactions, which are
collectively referred to herein as the “Reorganization,” occurred:

 

A.            Laredo Petroleum Texas, LLC and Laredo Petroleum—Dallas, Inc., two
former subsidiaries of Laredo Petroleum, Inc., merged with and into Laredo
Petroleum, Inc., with Laredo Petroleum, Inc. surviving the merger;

 

B.            Laredo Gas Services, LLC, the sole remaining wholly owned
subsidiary of Laredo Petroleum, Inc., changed its name to Laredo Midstream
Services, LLC;

 

C.            Laredo Petroleum, Inc., a wholly owned subsidiary of Laredo
Petroleum Holdings, Inc., a Delaware corporation (“Holdings”), merged with and
into Holdings, with Holdings surviving the merger; and

 

D.            Holdings changed its name to Laredo Petroleum, Inc.

 

The effective time of the Reorganization (other than the transaction described
under clause B. above) was 9:00 a.m., on December 31, 2013 (the “Reorganization
Effective Time”). As used herein, the “Company” shall mean Holdings prior to the
Reorganization Effective Time and Laredo Petroleum, Inc. at and after the
Reorganization Effective Time.  Prior to the Reorganization Effective Time, the
Company had four wholly owned subsidiaries: Laredo Petroleum, Inc., Laredo
Petroleum Texas, LLC, Laredo Gas Services, LLC, and Laredo
Petroleum—Dallas, Inc.  At and after the Reorganization Effective Time and as of
the date hereof, the Company’s only wholly owned subsidiary is Laredo Midstream
Services, LLC (the “Initial Guarantor”).

 

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The Securities (as defined below) will be issued pursuant to an indenture, to be
dated as of January 23, 2014 (the “Indenture”), among the Company, the Initial
Guarantor and Wells Fargo Bank, National Association, as trustee (the
“Trustee”).  The Notes will be issued only in book-entry form in the name of
Cede & Co., as nominee of The Depository Trust Company (the “Depositary”),
pursuant to a letter of representations (the “DTC Agreement”) to be dated on or
before the Closing Date (as defined in Section 2 hereof), from the Company to
the Depositary.

 

The holders of the Notes will be entitled to the benefits of a registration
rights agreement, to be dated as of January 23, 2014 (the “Registration Rights
Agreement”), among the Company, the Initial Guarantor and the Initial
Purchasers, pursuant to which the Company and the Initial Guarantor may be
required to file with the Commission (as defined below), under the circumstances
set forth therein, (i) a registration statement under the Securities Act (as
defined below) relating to another series of debt securities of the Company with
terms substantially identical to the Notes (the “Exchange Notes”) to be offered
in exchange for the Notes (the “Exchange Offer”) and (ii) to the extent required
by the Registration Rights Agreement, a shelf registration statement pursuant to
Rule 415 of the Securities Act relating to the resale by certain holders of the
Notes, and in each case, to use its commercially reasonable efforts to cause
such registration statements to be declared effective.  All references herein to
the Exchange Notes and the Exchange Offer are only applicable if the Company and
the Initial Guarantor are in fact required to consummate the Exchange Offer
pursuant to the terms of the Registration Rights Agreement.

 

The payment of principal of and premium, if any, and interest on the Notes will
be fully and unconditionally guaranteed on a senior unsecured basis, jointly and
severally, by (i) the Initial Guarantor and (ii) any subsidiary of the Company
formed or acquired after the Closing Date that executes a supplemental indenture
in accordance with the terms of the Indenture, and their respective successors
and assigns (collectively, the “Guarantors”), pursuant to their guarantees (the
“Guarantees”).  The Notes and the Guarantees related thereto are herein
collectively referred to as the “Securities;” and the Exchange Notes and the
Guarantees related thereto are herein collectively referred to as the “Exchange
Securities.”

 

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

 

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

 

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Securities are registered for sale under the Securities Act or if an exemption
from the registration requirements of the Securities Act is available (including
the exemptions afforded by Rule 144A under the Securities Act (“Rule 144A”) or
Regulation S under the Securities Act (“Regulation S”)).

 

The Company has prepared and delivered to each Initial Purchaser copies of a
Preliminary Offering Memorandum, dated January 13, 2014 (the “Preliminary
Offering Memorandum”), and has prepared and delivered to each Initial Purchaser
copies of a Pricing Supplement, dated January 13, 2014 (the “Pricing
Supplement”), describing the terms of the Securities, each for use by such
Initial Purchaser in connection with its solicitation of offers to purchase the
Securities.  The Preliminary Offering Memorandum and the Pricing Supplement are
herein referred to as the “Pricing Disclosure Package.”  Promptly after this
Agreement is executed and delivered, the Company will prepare and deliver to
each Initial Purchaser a final offering memorandum dated the date hereof (the
“Final Offering Memorandum”).

 

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

 

Each of the Company and the Initial Guarantor hereby confirms its agreements
with the Initial Purchasers as follows:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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with its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by general
equitable principles.

 

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

 

(j)                                    Authorization of the Indenture and the
Guarantees.  The Indenture will conform in all material respects with the
requirements of the Trust Indenture Act.  The Indenture (including with respect
to the Initial Guarantor, the Guarantees related to the Notes and the Exchange
Notes included therein, at such time as the Notes and the Exchange Notes (as the
case may be) have been duly and validly authenticated in accordance with the
terms of the Indenture and (in the case of the Notes) duly and validly paid for
by and delivered to the Initial Purchasers in accordance with the terms of this
Agreement) has been duly authorized by the Company and the Initial Guarantor
and, at the Closing Date, will have been duly executed and delivered by the
Company and the Initial Guarantor and, assuming due authorization and execution
by the Trustee, will constitute a valid and binding agreement of the Company and
the Initial Guarantor, enforceable against the Company and the Initial Guarantor
in accordance with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.

 

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

 

(l)                                     No Material Adverse Change.  Except as
otherwise disclosed in the Offering Memorandum (exclusive of any amendment or
supplement thereto), subsequent

 

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to the respective dates as of which information is included or incorporated by
reference in the Offering Memorandum (exclusive of any amendment or supplement
thereto): (i) there has been no material adverse change, or any development that
could reasonably be expected to result in a material adverse change, either
individually or in the aggregate, in or affecting the management, condition,
financial or otherwise, stockholders’ equity, results of operations or business,
regardless of whether arising from transactions in the ordinary course of
business, of the Company and its consolidated subsidiaries, considered as a
single enterprise, or on the performance by the Company or the Initial Guarantor
of its obligations under the Transaction Documents to which it is a party (any
such change is called a “Material Adverse Change”); (ii) the Company and the
Initial Guarantor, considered as a single enterprise, have not incurred any
material liability or obligation, indirect, direct or contingent (whether or not
in the ordinary course of business), nor entered into any transaction or
agreement (whether or not in the ordinary course of business) that is material
to the Company and the Initial Guarantor, considered as a single enterprise; and
(iii) there has been no dividend or distribution of any kind declared, set aside
for payment, paid or made by the Company or, except for dividends paid to the
Company or subsidiaries of the Company, any subsidiary of the Company on any
class of capital stock or repurchase or redemption by the Company or any
subsidiary of the Company of any class of capital stock.

 

(m)                             Independent Accountants.  Grant Thornton LLP,
which expressed its opinion with respect to the financial statements (which term
as used in this Agreement includes the related notes and supporting schedules
thereto) included or incorporated by reference in the Offering Memorandum is an
independent registered public accounting firm within the meaning of the
Securities Act, the Exchange Act and the rules of the Public Company Accounting
Oversight Board, and any non-audit services provided by Grant Thornton LLP to
the Company or its subsidiaries have been approved by the Audit Committee of the
Board of Directors of the Company.

 

(n)                                 Preparation of the Financial Statements. 
The historical financial statements of the Company and its consolidated
subsidiaries, together with the related schedules and notes, included or
incorporated by reference in the Offering Memorandum present fairly in all
material respects the consolidated financial position of the entities to which
they relate as of and at the dates indicated and the results of their operations
and cash flows for the periods specified.  Such financial statements have been
prepared in accordance with the applicable accounting requirements of Regulation
S-X under the Securities Act and in conformity with generally accepted
accounting principles as applied in the United States (“GAAP”) applied on a
consistent basis throughout the periods involved, except as may be expressly
stated in the related notes thereto.  The financial data set forth in the
Offering Memorandum under the caption “Summary—Summary Historical Consolidated
Financial Data” fairly present the information set forth therein on a basis
consistent with that of the audited financial statements contained or
incorporated by reference in the Offering Memorandum from which such information
has been derived.  The statistical and market-related data and forward-looking
statements included or incorporated by reference in the Offering Memorandum are
based on or derived from sources that the Company and its consolidated
subsidiaries believe to be reliable and

 

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accurate in all material respects and represent their good faith estimates that
are made on the basis of data derived from such sources. All disclosures
included or incorporated by reference in the Offering Memorandum regarding
“non-GAAP financial measures” (as such term is defined by the rules and
regulations of the Commission) comply in all material respects with Regulation G
under the Exchange Act and Item 10(e) of Regulation S-K of the Securities Act,
to the extent applicable. The interactive data in eXtensible Business Reporting
Language (“XBRL”) furnished with the documents incorporated by reference in the
Offering Memorandum fairly presents the information called for in all material
respects and has been prepared in accordance with the Commission’s rules and
guidelines applicable thereto.

 

(o)                                 Incorporation and Good Standing of the
Company and the Initial Guarantor. Each of the Company and the Initial Guarantor
has been duly incorporated or formed, as applicable, and is validly existing as
a corporation or limited liability company, as applicable, in good standing
under the laws of the jurisdiction of its incorporation or formation, as
applicable, and has corporate or limited liability company, as applicable, power
and authority to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum and to enter into and perform
its obligations under each of the Transaction Documents to which it is a party. 
Each of the Company and the Initial Guarantor is duly qualified as a foreign
corporation or limited liability company, as applicable, to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not reasonably be expected, individually
or in the aggregate, to result in a Material Adverse Change.  At and after the
Reorganization Effective Time and as of the date hereof, the only subsidiary of
the Company is the Initial Guarantor.  All the issued and outstanding membership
interests of the Initial Guarantor have been duly and validly authorized and
issued, are fully paid and non-assessable (except as such non-assessability may
be affected by the matters described in Sections 18-607 and 18-804 of the
Delaware LLC Act and limited to the extent set forth in the Initial Guarantor’s
organizational documents) and are owned, directly or indirectly, by the Company,
free and clear of any lien, charge, encumbrance, security interest, restriction
on voting or transfer or any other claim of any third party, except as may exist
pursuant to that certain Fourth Amended and Restated Credit Agreement, dated as
of December 31, 2013, among the Company (following the Reorganization Effective
Time), as borrower, Wells Fargo Bank, N.A., as Administrative Agent, Bank of
America, N.A. and JPMorgan Chase Bank, N.A., as Co-Syndication Agents, Societe
Generale, Union Bank, N.A. and BMO Harris Financing, Inc., as Co-Documentation
Agents, Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and J.P. Morgan Securities LLC, as Joint Lead Arrangers and the
lenders party thereto (the “Credit Agreement”).  The Company does not own or
control, directly or indirectly, any corporation, association or other entity,
other than the entities listed in Exhibit B hereto.  Except for the outstanding
options to acquire capital stock of the Company as disclosed in the Offering
Memorandum, there are no outstanding rights (including, without limitation,
pre-emptive rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of capital stock or other

 

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equity interests of the Company or the Initial Guarantor, or any contract,
commitment, agreement, understanding or arrangement of any kind relating to the
issuance of any capital stock or other equity interests of the Company or the
Initial Guarantor, any such convertible or exchangeable securities or any such
rights, warrants or options.

 

(p)                                 Capitalization and Other Capital Stock
Matters.  At September 30, 2013, on a consolidated basis, after giving pro forma
effect to the issuance and sale of the Securities pursuant hereto, the Company
would have an authorized and outstanding capitalization as set forth in the
Offering Memorandum under the caption “Capitalization” (other than for
subsequent issuances of capital stock, if any, pursuant to employee benefit
plans described in the Offering Memorandum or upon exercise of outstanding
options described in the Offering Memorandum).

 

(q)                                 Non-Contravention of Existing Instruments;
No Further Authorizations or Approvals Required.  Neither the Company nor the
Initial Guarantor is (i) in violation of its charter, bylaws or other
constitutive document; (ii) in violation of any law or statute or any judgment,
order, rule or regulation of any court or arbitrator or governmental or
regulatory authority; or (iii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default (“Default”) in
the due performance or observance of any term, covenant or condition under any
indenture, mortgage, loan or credit agreement, note, contract, franchise, lease
or other instrument to which the Company or the Initial Guarantor is a party or
by which it or either of them may be bound (including, without limitation, the
Credit Agreement and each of the indentures governing the Company’s 9 ½ % senior
notes due 2019 and 7 3/8% senior notes due 2022 (collectively, the “Existing
Indentures”)), or to which any of the property or assets of the Company or the
Initial Guarantor is subject (each, an “Existing Instrument”), except, in the
case of clauses (ii) and (iii) above, for such violations or Defaults as would
not reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Change.  The execution, delivery and performance of the
Transaction Documents by the Company and the Initial Guarantor, to the extent a
party thereto, and the issuance and delivery of the Securities and the Exchange
Securities, and consummation of the transactions contemplated hereby and thereby
and by the Offering Memorandum (i) have been duly authorized by all necessary
corporate or limited liability company action, as applicable, and will not
result in any violation of the provisions of the charter, bylaws or other
constitutive document of the Company or the Initial Guarantor, (ii) will not
conflict with or constitute a breach of, or Default or a Debt Repayment
Triggering Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or the Initial Guarantor pursuant to, or require the consent of any
other party to, any Existing Instrument, except for such conflicts, breaches,
Defaults, Debt Repayment Triggering Events, liens, charges or encumbrances as
would not reasonably be expected, individually or in the aggregate, to result in
a Material Adverse Change and (iii) will not result in any violation of any law,
statute, administrative regulation or administrative or court decree applicable
to the Company or the Initial Guarantor, except for such violations as would not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Change.  No consent, approval, authorization or other order of,
or registration,

 

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qualification of or filing with, any court or other governmental or regulatory
authority or agency is required for the execution, delivery and performance of
the Transaction Documents by the Company or the Initial Guarantor, to the extent
a party thereto, or the issuance and delivery of the Securities or the Exchange
Securities, or consummation of the transactions contemplated hereby and thereby
and by the Offering Memorandum, except as expressly contemplated by this
Agreement, such as have been obtained or made by the Company and are in full
force and effect under the Securities Act, applicable securities laws of the
several states of the United States or provinces of Canada and except such as
may be required by the securities laws of the several states of the United
States or provinces of Canada with respect to the Company’s and the Initial
Guarantor’s obligations under the Registration Rights Agreement.  As used
herein, a “Debt Repayment Triggering Event” means any event or condition that
gives, or with the giving of notice or lapse of time would give, the holder of
any note, debenture or other evidence of indebtedness (or any person acting on
such holder’s behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or the Initial
Guarantor.

 

(r)                                    No Material Actions or Proceedings. 
Except as otherwise described in the Offering Memorandum, there are no
regulatory investigations, legal or governmental actions, suits or proceedings
pending or, to the Company’s and the Initial Guarantor’s knowledge, threatened
or imminent (i) against or affecting the Company or the Initial Guarantor or
(ii) which has as the subject thereof any property owned or leased by the
Company or the Initial Guarantor, and no such action, suit or proceeding, if
determined adversely to the Company or the Initial Guarantor, would reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Change or adversely affect the consummation of the transactions contemplated by
this Agreement.  No material labor dispute with the employees of the Company or
the Initial Guarantor exists or, to the Company’s and the Initial Guarantor’s
knowledge, is threatened or imminent.

 

(s)                                   Intellectual Property Rights.  The Company
and the Initial Guarantor own or possess all trademarks, trade names, patents,
copyrights, trade secrets and other similar rights described in the Offering
Memorandum as being owned or licensed by it or which are necessary for the
conduct of, or material to, their respective businesses, except as would not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Change.  Neither the Company nor the Initial Guarantor has
received any notice of infringement or conflict with asserted intellectual
property rights of others, which infringement or conflict, if the subject of an
unfavorable decision, would reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Change.

 

(t)                                    All Necessary Licenses and Permits, etc. 
The Company and the Initial Guarantor possess such valid and current
certificates, authorizations, licenses and permits issued by the appropriate
state, federal or foreign regulatory agencies or bodies necessary to own, lease
and operate their respective properties and to conduct their respective
businesses, and neither the Company nor the Initial Guarantor has received any
notice of proceedings relating to the revocation or modification of, or
non-compliance with, any

 

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such certificate, authorization, license or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Change.

 

(u)                                 Title to Real and Personal Properties.  The
Company and the Initial Guarantor have good and marketable title in fee simple
(in the case of real property) to, or have valid and marketable rights to lease
or otherwise use, all items of real and personal property that are material to
the respective businesses of the Company or the Initial Guarantor, as
applicable, in each case free and clear of all liens, encumbrances, claims and
defects of title except those that (i) do not materially interfere with the use
made and proposed to be made of such property by the Company or the Initial
Guarantor, as applicable, (ii) would not reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Change or (iii) exist pursuant
to the Credit Agreement.

 

(v)                                 Title to Oil and Gas Properties. The Company
and the Initial Guarantor have good and defensible title to all of their
respective oil and gas properties, in each case free and clear of all liens,
encumbrances and defects, except (i) such as are described in the Offering
Memorandum, (ii) such as are permitted under the Credit Agreement, or (iii) such
as do not materially affect the value of the properties and do not materially
interfere with the use of the properties of the Company and the Initial
Guarantor, taken as a whole; and all of the leases and subleases under which the
Company or the Initial Guarantor holds or uses properties described in the
Offering Memorandum are in full force and effect, with such exceptions as would
not reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Change, and neither the Company nor the Initial Guarantor has
any notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or the Initial Guarantor under any of the
leases or subleases mentioned above, or affecting or questioning the rights of
the Company or the Initial Guarantor to the continued possession or use of the
leased or subleased premises, except for such claims that, if successfully
asserted, would not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Change; provided however, that the enforceability
of such leases and subleases, as the case may be, may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.

 

(w)                               Rights-of-Way. The Company and the Initial
Guarantor have such consents, easements, rights-of-way or licenses from any
person (“rights-of-way”) as are necessary to enable the Company and the Initial
Guarantor to conduct their respective businesses in the manner described in the
Offering Memorandum, except for such rights-of-way the failure of which to
obtain would not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Change.  The rights-of-way owned by the Company and
the Initial Guarantor are subject only to such qualifications, reservations and
encumbrances as may be set forth in the Offering Memorandum or as would not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Change.

 

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(x)                                 Tax Law Compliance.  The Company and the
Initial Guarantor have filed all necessary federal, state and foreign income and
franchise tax returns and have paid all taxes required to be paid by any of them
and, if due and payable, any related or similar assessment, fine or penalty
levied against any of them, except as would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Change. 
Except as otherwise disclosed in the Offering Memorandum, there is no material
tax deficiency that has been, or could reasonably be expected to be, asserted
against the Company or the Initial Guarantor or any of their respective
properties or assets. The Company has made adequate charges, accruals and
reserves in accordance with GAAP in the applicable financial statements referred
to in Section 1(n) hereof in respect of all federal, state and foreign income
and franchise taxes for all periods as to which the tax liability of the Company
or the Initial Guarantor has not been finally determined.

 

(y)                                 Company and Initial Guarantor Not an
“Investment Company”.  Neither the Company nor the Initial Guarantor is, or
after receipt of payment for the Securities and the application of the proceeds
thereof as described in the Offering Memorandum under the heading “Use of
Proceeds,” will be, an “investment company” or an entity “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations of the Commission thereunder.

 

(z)                                  Insurance.  The Company and the Initial
Guarantor are insured with policies in such amounts and with such deductibles
and covering such losses and risks as are reasonably adequate and customary to
protect them and their businesses, taken as a whole, in a manner consistent with
other businesses similarly situated.  The Company has no reason to believe that
it or the Initial Guarantor will not be able to (i) renew its existing insurance
coverage as and when such policies expire or (ii) obtain comparable coverage
from similar institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Change.
Neither the Company nor the Initial Guarantor has received a notice from any
insurer or agent of such insurer that capital improvements or other expenditures
are required or necessary to be made in order to continue such insurance.

 

(aa)                          No Price Stabilization or Manipulation.  Neither
the Company nor the Initial Guarantor has taken or will take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.

 

(bb)                          Solvency.  Each of the Company and the Initial
Guarantor is, and, after giving effect to the terms of the Guarantees pursuant
to the Indenture, immediately after the Closing Date will be, Solvent.  As used
herein, the term “Solvent” means, with respect to any person on a particular
date, that on such date (i) the fair market value of the assets of such person
is greater than the total amount of liabilities (including contingent
liabilities) of such person, (ii) the present fair salable value of the assets
of such person is greater than the amount that will be required to pay the
probable liabilities of such person on its debts as they become absolute and
matured, (iii) such person is able to realize upon

 

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its assets and pay its debts and other liabilities, including contingent
obligations, as they mature and (iv) such person does not have unreasonably
small capital.

 

(cc)                            Company’s Accounting System.  The Company and
the Initial Guarantor maintain a system of accounting controls that is
sufficient to provide reasonable assurances that: (i) transactions are executed
in accordance with management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences; and (v) the interactive data in XBRL
furnished with the documents incorporated by reference in the Offering
Memorandum fairly presents the information called for in all material respects
and is prepared in accordance with the Commission’s rules and guidelines
applicable thereto.

 

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

 

(ee)                            Regulations T, U and X.  Neither the Company nor
the Initial Guarantor nor any agent thereof acting on their behalf has taken,
and none of them will take, any action that might cause this Agreement or the
issuance or sale of the Securities to violate Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System.

 

(ff)                              Compliance with and Liability under
Environmental Laws. (i) The Company and each of its subsidiaries (A) are, and at
all prior times were, in compliance with any and all applicable federal, state,
local and foreign laws, rules, regulations, requirements, decisions, judgments,
decrees, orders and the common law relating to pollution or the protection of
the environment, natural resources or human health or safety, including those
relating to the generation, storage, treatment, use, handling, transportation,
Release or threat of Release of Hazardous Materials (collectively,
“Environmental Laws”), (B) have received and are in compliance with all permits,
licenses, certificates or other authorizations or approvals required of them
under applicable Environmental Laws to conduct their respective businesses,
(C) have not received written notice of any actual or potential liability under
or relating to, or actual or potential violation of, any Environmental Laws,
including for the investigation or remediation of any Release (as defined in
Section 1(gg)) or threat of Release of Hazardous Materials (as defined in
Section 1(gg)), and have no knowledge of any event or condition that would
reasonably be expected to result in any such notice, (D) are not

 

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conducting or paying for, in whole or in part, any investigation, remediation or
other corrective action pursuant to any Environmental Law at any location, and
(E) are not a party to any order, decree or agreement that imposes any
obligation or liability under any Environmental Law, and (ii) there are no costs
or liabilities associated with Environmental Laws of or relating to the Company
or its subsidiaries, except in the case of each of clauses (i) and (ii) above,
for any such failure to comply, or failure to receive required permits,
licenses, certificates or approvals, or cost or liability, as would not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Change; and (iii) except as described in the Offering
Memorandum, (A) there are no proceedings that are pending, or that are known to
be contemplated, against the Company or any of its subsidiaries under any
Environmental Laws in which a governmental entity is also a party, other than
such proceedings regarding which it is reasonably believed no monetary sanctions
of $100,000 or more will be imposed, (B) neither the Company nor any of its
subsidiaries is aware of any facts or issues regarding compliance with
Environmental Laws, or liabilities or other obligations under Environmental
Laws, including the Release or threat of Release of Hazardous Materials, that
would reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Change, and (C) neither the Company nor any of its subsidiaries
anticipates material capital expenditures relating to any Environmental Laws.

 

(gg)                            Hazardous Materials. There has been no storage,
generation, transportation, use, handling, treatment, Release or threat of
Release of Hazardous Materials by, relating to or caused by the Company or any
of its subsidiaries (or, to the knowledge of the Company or the Initial
Guarantor, any other entity (including any predecessor) for whose acts or
omissions the Company or any of its subsidiaries is or could reasonably be
expected to be liable) at, on, under or from any property or facility now or
previously owned, operated or leased by the Company or any of its subsidiaries,
or at, on, under or from any other property or facility, in violation of any
Environmental Laws or in a manner or amount or to a location that could
reasonably be expected to result in any liability under any Environmental Law,
except for any violation or liability that would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change. 
“Hazardous Materials” means any material, chemical, substance, waste, pollutant,
contaminant, compound, mixture, or constituent thereof, in any form or amount,
including petroleum (including crude oil or any fraction thereof) and petroleum
products, natural gas liquids, asbestos and asbestos containing materials,
naturally occurring radioactive materials and brine, which can give rise to
liability under any Environmental Law.  “Release” means any spilling, leaking,
seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, disposing, depositing, dispersing, or migrating in, into or
through the environment, or in, into from or through any building or structure.

 

(hh)                          ERISA Compliance.  (i) Each employee benefit plan,
within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), for which the Company or any member of the
Company’s “Controlled Group” (defined as any organization which is a member of a
controlled group of corporations within the meaning of Section 414 of the
Internal Revenue Code of 1986, as

 

14

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amended (the “Code”)) would have any liability (each, a “Plan”), has been
maintained in compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to ERISA and
the Code, except for noncompliance that has not resulted in or could not
reasonably be expected to result in material liability to the Company or its
subsidiaries; (ii) no prohibited transaction, within the meaning of Section 406
of ERISA or Section 4975 of the Code, has occurred with respect to any Plan,
excluding transactions effected pursuant to a statutory or administrative
exemption, that has resulted in or could reasonably be expected to result in
material liability to the Company or its subsidiaries; (iii) for each Plan that
is subject to the funding rules of Section 412 of the Code or Section 302 of
ERISA, the minimum funding standard of Section 412 of the Code or Section 302 of
ERISA, as applicable, has been satisfied (without taking into account any waiver
thereof or extension of any amortization period) and is reasonably expected to
be satisfied in the future (without taking into account any waiver thereof or
extension of any amortization period); (iv) except as otherwise disclosed in the
Offering Memorandum, the fair market value of the assets of each Plan that is
required to be funded by applicable law exceeds the present value of all
benefits accrued under such Plan (determined based on those assumptions used to
fund such Plan); (v) no “reportable event” (within the meaning of
Section 4043(c) of ERISA) has occurred or is reasonably expected to occur that
either has resulted, or could reasonably be expected to result, in material
liability to the Company or its subsidiaries; and (vi) none of the Company or
any member of the Controlled Group has incurred, nor reasonably expects to
incur, any liability under Title IV of ERISA (other than contributions to the
Plan or premiums to the Pension Benefit Guaranty Corporation, in the ordinary
course and without default) in respect of a Plan (including a “multiemployer
plan,” within the meaning of Section 4001(a)(3) of ERISA).

 

(ii)                                  Related Party Transactions.  Except as
described or incorporated by reference in the Offering Memorandum, no material
relationship, direct or indirect, exists between or among any of the Company and
its subsidiaries, on one hand, and the Company’s majority stockholder, on the
other hand.

 

(jj)                                Compliance with Labor Laws.  Except as would
not reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Change, (i) there is (A) no unfair labor practice complaint
pending or, to the Company’s and the Initial Guarantor’s knowledge, threatened
against the Company or any of its subsidiaries before the National Labor
Relations Board, and no grievance or arbitration proceeding arising out of or
under collective bargaining agreements pending or, to the Company’s and the
Initial Guarantor’s knowledge, threatened against the Company or any of its
subsidiaries, (B) no strike, labor dispute, slowdown or stoppage pending or, to
the Company’s and the Initial Guarantor’s knowledge, threatened against the
Company or any of its subsidiaries and (C) no union representation dispute
currently existing with respect to the employees of the Company or any of its
subsidiaries and, to the Company’s and the Initial Guarantor’s knowledge, no
union organizing activities taking place and (ii) there has been no violation of
any federal, state or local law relating to discrimination in hiring, promotion
or pay of employees or of any applicable wage or hour laws.

 

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(kk)                          No Unlawful Contributions or Other Payments. 
Neither the Company nor any of its subsidiaries, nor, to the knowledge of the
Company or the Initial Guarantor, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries (i) used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity, (ii) made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds, (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder, or (iv) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official, employee, or private party under any anticorruption or anti-bribery
law in effect in the jurisdiction in which the Company or any of its
subsidiaries operates or to which the Company or any of its subsidiaries is
otherwise subject.

 

(ll)                                  No Conflict with Money Laundering Laws. 
The operations of the Company and its subsidiaries are and have been conducted
at all times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all applicable jurisdictions, the
rules and regulations thereunder and any related or similar rules, regulations
or guidelines issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”), and no action, suit or proceeding
by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries with respect to the
Money Laundering Laws is pending or, to the knowledge of the Company or the
Initial Guarantor, threatened.

 

(mm)                  No Conflict with OFAC Laws.  Neither the Company nor any
of its subsidiaries, nor, to the knowledge of the Company or the Initial
Guarantor, any director, officer, agent, employee or affiliate of the Company or
any of its subsidiaries is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”); and the Company will not directly or indirectly: (i) use the proceeds
of the offering for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC; or (ii) to the
knowledge of the Company or the Initial Guarantor, lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner, or other
affiliate for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.

 

(nn)                          Regulation S.  The Company, the Initial Guarantor
and their respective affiliates and all persons acting on their behalf (other
than the Initial Purchasers, as to whom the Company and the Initial Guarantor
make no representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the offering of the
Securities outside the United States and, in connection therewith, the Offering
Memorandum will contain the disclosure required by Rule 902 of the Securities
Act.  The Securities sold in reliance on Regulation S will be represented upon
issuance by a temporary global security that may not be exchanged for definitive

 

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securities until the expiration of the 40-day restricted period referred to in
Rule 903 of the Securities Act and only upon certification of beneficial
ownership of such Securities by non-U.S. persons or U.S. persons who purchased
such Securities in transactions that were exempt from the registration
requirements of the Securities Act.

 

(oo)                          Independent Reserve Engineers. Ryder Scott
Company, L.P. (“Ryder Scott”), who has prepared the reserve reports and
estimates of proved reserves disclosed in the Offering Memorandum, has
represented to the Company that they are, and the Company believes them to be,
independent reserve engineers with respect to Company and its subsidiaries
within the applicable rules and regulations adopted by the Commission for the
periods set forth in the Offering Memorandum.

 

(pp)                          Information Underlying Reserve Reports.  The oil
and natural gas proved reserve estimates of the Company and its subsidiaries
contained in the Offering Memorandum are derived from reports that have been
prepared by Ryder Scott, and such estimates fairly reflect, in all material
respects, the oil and natural gas reserves attributable to the Company and its
subsidiaries at the dates indicated therein and are prepared, in all material
respects, in accordance with Commission guidelines applied on a consistent basis
throughout the periods involved.  Other than normal production of the reserves,
the impact of changes in prices and costs, and fluctuations in demand for oil
and natural gas, and except as disclosed in the Offering Memorandum, neither the
Company nor any of its subsidiaries is aware of any facts or circumstances that
would reasonably be expected in the aggregate to result in a material adverse
change in the aggregate net proved reserves, or the aggregate present value or
the standardized measure of the future net cash flows therefrom, as described in
the Offering Memorandum and as reflected in such reserve reports.

 

(qq)                          No Broker’s Fees. Neither the Company nor the
Initial Guarantor is a party to any contract, agreement or understanding with
any person (other than this Agreement) that would give rise to a valid claim
against the Company or the Initial Guarantor or any Initial Purchaser for a
brokerage commission, finder’s fee or like payment to any person other than the
Initial Purchasers and their affiliates in connection with the offering and sale
of the Securities.

 

(rr)                                Sarbanes-Oxley Act. There is and has been no
failure on the part of the Company or its subsidiaries or, to the knowledge of
the Company or the Initial Guarantor, any of the Company’s directors or
officers, in their capacities as such, to comply with any provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith, including Section 402 related to loans and Sections 302
and 906 related to certifications.

 

(ss)                              Corporate Reorganization. (i) The
Reorganization was effective as of the Reorganization Effective Time; (ii) the
Reorganization was consummated in the manner described in the Offering
Memorandum and herein; (iii) in connection with the Reorganization, the Company
and its subsidiaries (A) received all consents, approvals, authorizations,
orders, registrations and qualifications necessary to effect the Reorganization
and (B) filed all material notices, reports, documents or other information

 

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required to be filed pursuant to, and otherwise complied with all requirements
of, all applicable laws in connection with the consummation of the
Reorganization; and (iv) the Reorganization did not (A) conflict with or result
in a breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its subsidiaries
pursuant to, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or its subsidiaries is a party or
by which the Company or its subsidiaries is bound or to which any of the
property or assets of the Company or its subsidiaries is subject, (B) result in
any violation of the provisions of the charter or by-laws or similar
organizational documents of the Company or its subsidiaries or (C) result in the
violation of any law or statute or any judgment, order, rule or regulation of
any court or arbitrator or governmental or regulatory authority, except, in the
case of clauses (iv)(A) and (iv)(C) above, for any such conflict, breach,
violation, default, lien, charge or encumbrance that was consented to or waived
in writing or did not materially impair the consummation of the Reorganization.

 

Any certificate signed by an officer of the Company or the Initial Guarantor and
delivered to the Initial Purchasers or to counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by the Company or the
Initial Guarantor to each Initial Purchaser as to the matters set forth therein.

 

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

 

(a)                                 The Securities.  Each of the Company and the
Initial Guarantor agrees to issue and sell to the Initial Purchasers, severally
and not jointly, all of the Securities, and, subject to the conditions set forth
herein, the Initial Purchasers agree, severally and not jointly, to purchase
from the Company and the Initial Guarantor the aggregate principal amount of the
Securities set forth opposite their names on Schedule A, at a purchase price of
98.5% of the principal amount thereof, plus accrued interest, if any, from
January 23, 2014 to the Closing Date, payable on the Closing Date, in each case,
on the basis of the representations, warranties and agreements herein contained,
and upon the terms herein set forth.

 

(b)                                 The Closing Date.  Delivery of certificates
for the Notes in definitive form to be purchased by the Initial Purchasers and
payment therefor shall be made at the offices of Andrews Kurth LLP, 600 Travis
St., Suite 4200, Houston, TX 77002  at 10:00 a.m., New York City time, on
January 23, 2014, or at such other place, time or date as the Initial
Purchasers, on the one hand, and the Company, on the other hand, may agree upon,
unless postponed as contemplated by the provisions of Section 17 hereof (such
time and date of delivery against payment being herein referred to as the
“Closing Date”).  The Company hereby acknowledges that circumstances under which
the Representative may provide notice to postpone the Closing Date as originally
scheduled include, but are in no way limited to, any determination by the
Company or the Initial Purchasers to recirculate to investors copies of an
amended or supplemented Offering Memorandum or a delay as contemplated by the
provisions of Section 17 hereof.

 

(c)                                  Delivery of the Notes.  The Company shall
deliver, or cause to be delivered, through the facilities of the Depositary, to
the Representative for the accounts of the several Initial Purchasers
certificates for the Notes at the Closing Date against the irrevocable release
of

 

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a wire transfer of immediately available funds for the amount of the purchase
price therefor.  The certificates for the Notes shall be in global form and in
such denominations and registered in the name of Cede & Co., as nominee of the
Depositary, pursuant to the DTC Agreement, and shall be made available for
inspection on the business day preceding the Closing Date at a location in New
York City, as the Representative may designate.  Time shall be of the essence,
and delivery at the time and place specified in this Agreement is a further
condition to the obligations of the Initial Purchasers.

 

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

 

(i)                                     it is an accredited investor within the
meaning of Rule 501(a) under the Securities Act;

 

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

 

(iii)                               it will not offer or sell Securities by any
form of general solicitation or general advertising, including but not limited
to the methods described in Rule 502(c) under the Securities Act.

 

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

 

(a)                                 Preparation of Final Offering Memorandum;
Initial Purchasers’ Review of Proposed Amendments and Supplements and Company
Additional Written Communications.  As promptly as practicable following the
Time of Sale and in any event not later than the second business day following
the date hereof, the Company will prepare and deliver to the Initial Purchasers
the Final Offering Memorandum, which shall consist of the Preliminary Offering
Memorandum as modified only by the information contained in the Pricing
Supplement unless otherwise consented to by the Representative.  The Company
will not amend or supplement the Preliminary Offering Memorandum or the Pricing
Supplement unless the Representative shall previously have been furnished a copy
of the proposed amendment or supplement and shall not have reasonably objected
in writing to such amendment or supplement (unless the Company is advised by
counsel that it is required by law to so amend or supplement the Preliminary
Offering Memorandum or the Pricing Supplement, in which case the Company shall
notify, and furnish a copy of such amendment or supplement to, the
Representative prior to the use or filing of any such amendment or supplement). 
The Company will not amend or supplement the Final Offering Memorandum prior to
the Closing Date unless the Representative shall previously have been furnished
a copy of the proposed amendment or supplement and shall not have reasonably
objected in writing to such amendment or supplement (unless the Company is
advised by counsel that it is required by law to so amend or supplement the
Final Offering Memorandum, in which case the Company shall notify, and furnish a
copy of such amendment or supplement to,

 

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the Representative prior to the use or filing of any such amendment or
supplement).  Before making, preparing, using, authorizing, approving or
distributing any Company Additional Written Communication, the Company will
furnish to the Representative a copy of such written communication for review
and will not make, prepare, use, authorize, approve or distribute any such
written communication to which the Representative reasonably objects in writing
(unless the Company is advised by counsel that it is required by law to so make,
prepare, use, authorize, approve or distribute such written communication, in
which case the Company shall notify, and furnish a copy of such written
communication and authorization therefor to, the Representative prior to the use
or filing of any such written communication).

 

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

 

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

 

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(d)                                 Blue Sky Compliance.  Each of the Company
and the Initial Guarantor shall cooperate with the Representative and counsel
for the Initial Purchasers to qualify or register (or to obtain exemptions from
qualifying or registering) all or any part of the Securities for offer and sale
under the securities laws of the several states of the United States, the
provinces of Canada or any other jurisdictions reasonably designated by the
Representative, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as required for
the distribution of the Securities.  Neither the Company nor the Initial
Guarantor shall be required to qualify as a foreign corporation or to take any
action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation.  The Company will advise the Representative
promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Securities for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification,
registration or exemption, each of the Company and the Initial Guarantor will
use its reasonable best efforts to obtain the withdrawal thereof at the earliest
possible moment.

 

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

 

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

 

(g)                                  Additional Issuer Information.  Prior to
the completion of the placement of the Securities by the Initial Purchasers with
the Subsequent Purchasers, the Company shall file, on a timely basis, with the
Commission and the New York Stock Exchange (the “NYSE”) all reports and
documents required to be filed under Section 13 or 15 of the Exchange Act. 
Additionally, at any time when the Company is not subject to Section 13 or 15 of
the Exchange Act and the Securities are “restricted securities” within the
meaning of Rule 144(a)(3) under the Securities Act, for the benefit of holders
and beneficial owners from time to time of the Securities, the Company shall
furnish, at its expense, upon request, to holders and beneficial owners of
Securities and prospective purchasers of Securities information satisfying the
requirements of Rule 144A(d) of the Securities Act.

 

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

 

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convertible into debt securities of the Company (other than as contemplated by
this Agreement and the registration of the Exchange Securities).

 

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

 

(j)                                    No General Solicitation or Directed
Selling Efforts.  The Company agrees that it will not and will not permit any of
its Affiliates or any other person acting on its or their behalf (other than the
Initial Purchasers, as to which no covenant is given) to (i) solicit offers for,
or offer or sell, the Securities by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D or in any
manner involving a public offering within the meaning of Section 4(a)(2) of the
Securities Act or (ii) engage in any directed selling efforts with respect to
the Securities within the meaning of Regulation S, and the Company will and will
cause all such persons to comply with the offering restrictions requirement of
Regulation S with respect to the Securities.

 

(k)                                 No Restricted Resales.  Until consummation
of the Exchange Offer, 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 Securities that constitute “restricted securities” under
Rule 144(a)(3) under the Securities Act that have been reacquired by any of them
(other than pursuant to an effective registration statement under the Securities
Act or in accordance with Rule 144 under the Securities Act).

 

(l)                                     Legended Securities.  Each certificate
for a Note will bear the legend contained in “Notice to Investors” in the
Preliminary Offering Memorandum for the time period and upon the other terms
stated in the Preliminary Offering Memorandum.

 

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

 

SECTION 4.                            Payment of Expenses.  Each of the Company
and the Initial Guarantor agrees to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including, without limitation,
(i) all expenses incident to the issuance and delivery of the Securities
(including all printing and engraving costs), (ii) all necessary issue, transfer
and other stamp taxes in connection with the original issuance and sale of the
Securities to the Initial Purchasers, (iii) all fees and expenses of the
Company’s and the Initial Guarantor’s counsel, independent public or certified
public accountants and other advisors, (iv) all costs and expenses incurred in

 

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connection with the preparation, printing, filing, shipping and distribution of
the Pricing Disclosure Package and the Final Offering Memorandum (including
financial statements and exhibits), and all amendments and supplements thereto,
and the Transaction Documents, (v) all filing fees and expenses incurred by the
Company, the Initial Guarantor or the Initial Purchasers in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Securities for offer and sale under the
securities laws of the several states of the United States, the provinces of
Canada or other jurisdictions reasonably designated by the Initial Purchasers
(including, without limitation, reasonable fees and expenses of counsel for the
Initial Purchasers related to such qualification and registration, the cost of
preparing, printing and mailing preliminary and final blue sky or legal
investment memoranda and any related supplements to the Pricing Disclosure
Package or the Final Offering Memorandum), (vi) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture, the Securities and the Exchange Securities,
(vii) any fees payable in connection with the rating of the Securities or the
Exchange Securities with the ratings agencies, (viii) any filing fees incident
to, and any reasonable fees and disbursements of counsel to the Initial
Purchasers in connection with the review by the Financial Industry Regulatory
Authority, Inc. (“FINRA”), if any, of the terms of the sale of the Securities or
the Exchange Securities, (ix) all fees and expenses (including reasonable fees
and expenses of counsel) of the Company and the Guarantors in connection with
approval of the Securities by the Depositary for “book-entry” transfer, and the
performance by the Company and the Guarantors of their respective other
obligations under this Agreement and (x) one half of all expenses incident to
the “road show” for the offering of the Securities, including the cost of any
chartered airplanes used for the purposes of the road show (with the Initial
Purchasers to pay the remaining one half of all expenses, including the cost of
any chartered airplane). Except as provided in this Section 4 and Sections 6, 8
and 9 hereof, the Initial Purchasers shall pay their own expenses, including the
fees and disbursements of their counsel.

 

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

 

(a)                                 Accountants’ Comfort Letter.  On the date
hereof, the Initial Purchasers shall have received from Grant Thornton LLP, the
independent registered public accounting firm for the Company, a “comfort
letter” dated the date hereof addressed to the Initial Purchasers, in form and
substance satisfactory to the Representative, covering the financial information
in the Pricing Disclosure Package and other customary matters.  In addition, on
the Closing Date, the Initial Purchasers shall have received from such
accountants a “bring-down comfort letter” dated the Closing Date addressed to
the Initial Purchasers, in form and substance satisfactory to the
Representative, in the form of the “comfort letter” delivered on the date
hereof, except that (i) it shall cover the financial information in the Final
Offering Memorandum and any amendment or supplement

 

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thereto and (ii) procedures shall be brought down to a date no more than three
days prior to the Closing Date.

 

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

 

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

 

(ii)                                  there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded the Company or the
Initial Guarantor or any of their respective securities by any “nationally
recognized statistical rating organization” as such term is defined in
Section 3(a)(62) of the Exchange Act.

 

(c)                                  Opinion of Counsel for the Company.  On the
Closing Date, the Initial Purchasers shall have received the favorable opinions
of Akin Gump Strauss Hauer & Feld LLP, counsel for the Company and the Initial
Guarantor, and Kenneth Dornblaser, Senior Vice President and General Counsel for
the Company and the Initial Guarantor, each dated as of such Closing Date, and
in substantially the form and substance as set forth in Exhibits A-1 and A-2,
respectively.

 

(d)                                 Opinion of Counsel for the Initial
Purchasers.  On the Closing Date, the Initial Purchasers shall have received the
favorable opinion of Andrews Kurth LLP, counsel for the Initial Purchasers,
dated as of such Closing Date, with respect to such matters as may be reasonably
requested by the Initial Purchasers.

 

(e)                                  Officers’ Certificate.  On the Closing
Date, the Initial Purchasers shall have received a written certificate executed
by the Chairman of the Board, Chief Executive Officer or President of the
Company and the Initial Guarantor and the Chief Financial Officer or Chief
Accounting Officer of the Company and the Initial Guarantor, dated as of the
Closing Date, to the effect set forth in Section 5(b)(ii) hereof, and further to
the effect that:

 

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

 

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

 

(iii)                               the Company and the Initial Guarantor have
complied with all the agreements and satisfied all the conditions on their part
to be performed or satisfied at or prior to the Closing Date.

 

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(f)                                   Engineers’ Letter.  On the date hereof,
the Initial Purchasers shall have received from Ryder Scott Company, L.P., a
letter dated the date hereof addressed to the Initial Purchasers, in form and
substance satisfactory to the Initial Purchasers, containing the conclusions and
findings of such firm with respect to the oil and gas properties of the Company
and its subsidiaries.  In addition, on the Closing Date, the Initial Purchasers
shall have received from Ryder Scott Company, L.P., a letter dated the Closing
Date addressed to the Initial Purchasers (which may refer to the letter
previously delivered to the Initial Purchasers), in form and substance
satisfactory to the Initial Purchasers, containing the conclusions and findings
of such firm with respect to the oil and gas properties of the Company and its
subsidiaries.

 

(g)                                  Indenture.  On the Closing Date, the
Company, the Initial Guarantor and the Trustee shall have entered into the
Indenture, in form and substance reasonably satisfactory to the Initial
Purchasers, and the Indenture shall be in full force and effect, and the Initial
Purchasers shall have received copies of the fully executed and delivered
Indenture.

 

(h)                                 Registration Rights Agreement.  On the
Closing Date, the Company and the Initial Guarantor shall have executed and
delivered the Registration Rights Agreement, in form and substance reasonably
satisfactory to the Initial Purchasers, and the Initial Purchasers shall have
received such executed counterparts.

 

(i)                                     DTC.  The Securities shall be eligible
for clearance and settlement through the facilities of DTC.

 

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

 

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

 

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

 

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

 

(a)                                 Offers and sales of the Securities will be
made only by the Initial Purchasers or Affiliates thereof qualified to do so in
the jurisdictions in which such offers or sales are made.  Each such offer or
sale shall only be made to persons whom the offeror or seller reasonably
believes to be Qualified Institutional Buyers or non-U.S. persons outside the
United States to whom the offeror or seller reasonably believes offers and sales
of the Securities may be made in reliance upon Regulation S upon the terms and
conditions set forth in Annex I hereto, which Annex I is hereby expressly made a
part hereof.

 

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

 

(c)                                  Upon original issuance by the Company, and
until such time as the same is no longer required under the applicable
requirements of the Securities Act, the Securities (and all securities issued in
exchange therefor or in substitution thereof, other than the Exchange
Securities) shall bear the following legend:

 

“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.  THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i) (a) TO A PERSON WHO IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
(c) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF

 

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COUNSEL IF THE COMPANY SO REQUESTS), (ii) TO THE COMPANY, OR (iii) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.  NO REPRESENTATION CAN BE
MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF
THE SECURITY EVIDENCED HEREBY.”

 

Following the sale of the Securities by the Initial Purchasers to Subsequent
Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be
liable or responsible to the Company or any of the Guarantors for any losses,
damages or liabilities suffered or incurred by the Company or any of the
Guarantors, including any losses, damages or liabilities under the Securities
Act, arising from or relating to any resale or transfer of any Security.

 

SECTION 8.                            Indemnification.

 

(a)                                 Indemnification of the Initial Purchasers. 
Each of the Company and the Initial Guarantor, jointly and severally, agrees to
indemnify and hold harmless each Initial Purchaser, its affiliates, directors,
officers and employees, and each person, if any, who controls any Initial
Purchaser within the meaning of the Securities Act and the Exchange Act against
any loss, claim, damage, liability or expense, as incurred, to which such
Initial Purchaser, affiliate, director, officer, employee or controlling person
may become subject under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the written
consent of the Company or is otherwise permitted by Section 8(d)), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum, the Pricing Supplement, any Company Additional Written
Communication or the Final Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and to reimburse each
Initial Purchaser and each such affiliate, director, officer, employee or
controlling person for any and all expenses (including the reasonable fees and
disbursements of counsel chosen by the Representative) as such expenses are
reasonably incurred by such Initial Purchaser or such affiliate, director,
officer, employee or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply, with respect to an Initial Purchaser, to any loss,
claim, damage, liability or expense to the extent, but only to the extent,
arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by such Initial Purchaser

 

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through the Representative expressly for use in the Preliminary Offering
Memorandum, the Pricing Supplement, any Company Additional Written Communication
or the Final Offering Memorandum (or any amendment or supplement thereto).  The
indemnity agreement set forth in this Section 8(a) shall be in addition to any
liabilities that the Company or the Initial Guarantor may otherwise have.

 

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

 

(c)                                  Notifications and Other Indemnification
Procedures.  Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party

 

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under this Section 8, notify the indemnifying party in writing of the
commencement thereof; provided that the failure to so notify the indemnifying
party will not relieve it from any liability that it may have to any indemnified
party under this Section 8 except to the extent that it has been materially
prejudiced by such failure (through the forfeiture of substantive rights and
defenses) and shall not relieve the indemnifying party from any liability that
the indemnifying party may have to an indemnified party other than under this
Section 8.  In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in and, to the
extent that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may arise
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties.  Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party’s election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more than
one separate counsel (together with local counsel (in each jurisdiction)),
approved by the indemnifying party (Merrill Lynch, Pierce, Fenner & Smith
Incorporated in the case of Sections 8(b) and 9 hereof), representing the
indemnified parties who are parties to such action) or (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.

 

(d)                                 Settlements.  The indemnifying party under
this Section 8 shall not be liable for any settlement of any proceeding effected
without its written consent, which will not be unreasonably withheld, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or judgment. 
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by this Section 8, 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 or disputed in good faith the
indemnified party’s entitlement to such reimbursement prior to the

 

29

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date of such settlement.  No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent (i) includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding and (ii) does not include any
statements as to or any findings of fault, culpability or failure to act by or
on behalf of any indemnified party.

 

SECTION 9.                            Contribution.  If the indemnification
provided for in Section 8 hereof is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party, as incurred, as a result of any losses, claims, damages,
liabilities or expenses referred to therein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Initial Guarantor, on the one hand, and the Initial Purchasers, on the other
hand, from the offering of the Securities pursuant to this Agreement or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Initial Guarantor, on the one hand, and the Initial Purchasers, on the other
hand, in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations.  The relative benefits received by the Company and the
Initial Guarantor, on the one hand, and the Initial Purchasers, on the other
hand, in connection with the offering of the Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Securities pursuant to this Agreement
(before deducting expenses) received by the Company, and the total discount
received by the Initial Purchasers bear to the aggregate initial offering price
of the Securities.  The relative fault of the Company and the Initial Guarantor,
on the one hand, and the Initial Purchasers, on the other hand, shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company and the
Initial Guarantor, on the one hand, or the Initial Purchasers, on the other
hand, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

 

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

 

The Company, the Initial Guarantor and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata

 

30

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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 this Section 9.

 

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

 

SECTION 10.                     Termination of this Agreement.  Prior to the
Closing Date, this Agreement may be terminated by the Representative by notice
given to the Company if at any time: (i) trading or quotation in any of the
Company’s securities shall have been suspended or materially limited by the
Commission, or trading in securities generally on either the Nasdaq Stock Market
or the NYSE, shall have been suspended or materially limited, or minimum or
maximum prices shall have been generally established on any of such quotation
system or stock exchange by the Commission or FINRA; (ii) a general banking
moratorium shall have been declared by any of federal, New York or Delaware
authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States or international financial markets, or any substantial
change or development in United States’ or international political, financial or
economic conditions, in each such case, as in the judgment of the Representative
is material and adverse and makes it impracticable or inadvisable to proceed
with the offering, sale or delivery of the Securities in the manner and on the
terms described in the Pricing Disclosure Package or to enforce contracts for
the sale of securities; or (iv) in the judgment of the Representative there
shall have occurred any Material Adverse Change.  Any termination pursuant to
this Section 10 shall be without liability on the part of (i) the Company or the
Initial Guarantor to any Initial Purchaser, except that the Company and the
Initial Guarantor shall be obligated to reimburse the expenses of the Initial
Purchasers pursuant to Sections 4 and 6 hereof, (ii) any Initial Purchaser to
the Company, or (iii) any party hereto to any other party except that the
provisions of 8 and 9 hereof shall at all times be effective and shall survive
such termination.

 

SECTION 11.                     Representations and Indemnities to Survive
Delivery.  The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Initial Guarantor, their respective
officers and the several Initial Purchasers set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Initial Purchaser, the Company, the
Initial Guarantor or any of their

 

31

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partners, officers or directors or any controlling person, as the case may be,
and will survive delivery of and payment for the Securities sold hereunder and
any termination of this Agreement.

 

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

 

If to the Initial Purchasers:

 

Merrill Lynch, Pierce, Fenner & Smith

Incorporated
50 Rockefeller Plaza
New York, New York 10020
Facsimile: (212) 901-7897
Attention:  HY Legal Department

 

with a copy to:

 

Andrews Kurth LLP

600 Travis, Suite 4200

Houston, Texas 77002

Facsimile: (713) 238-7130
Attention: G. Michael O’Leary

 

If to the Company or the Initial Guarantor:

 

Laredo Petroleum, Inc.

15 West Sixth Street

Suite 1800

Tulsa, Oklahoma 74119

Facsimile: (918) 513-4571

Attention: Richard C. Buterbaugh

Ken Dornblaser

 

with a copy to:

 

Akin Gump Strauss Hauer & Feld LLP

1111 Louisiana St. 44th Floor

Houston, Texas 77002

Facsimile: (713) 236-0822

Attention: Christine B. LaFollette

 

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

 

SECTION 13.                     Successors.  This Agreement will inure to the
benefit of and be binding upon the parties hereto, and to the benefit of the
indemnified parties referred to in Sections 8 and

 

32

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9 hereof, and in each case their respective successors, and no other person will
have any right or obligation hereunder.  The term “successors” shall not include
any Subsequent Purchaser or other purchaser of the Securities as such from any
of the Initial Purchasers merely by reason of such purchase.

 

SECTION 14.                     Authority of the Representative.  Any action by
the Initial Purchasers hereunder may be taken by the Representative on behalf of
the Initial Purchasers, and any such action taken by the Representative shall be
binding upon the Initial Purchasers.

 

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

 

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

 

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

 

As used in this Agreement, the term “Initial Purchaser” shall be deemed to
include any person substituted for a defaulting Initial Purchaser under this
Section 17.  Any action taken

 

33

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under this Section 17 shall not relieve a defaulting Initial Purchaser of any
liability it may have to the Company, the Initial Guarantor or any
non-defaulting Initial Purchaser for damages by its default.

 

SECTION 18.                     No Advisory or Fiduciary Responsibility.  Each
of the Company and the Initial Guarantor acknowledges and agrees that:  (i) the
purchase and sale of the Securities pursuant to this Agreement, including the
determination of the offering price of the Securities and any related discounts
and commissions, is an arm’s-length commercial transaction between the Company
and the Initial Guarantor, on the one hand, and the several Initial Purchasers,
on the other hand, and the Company and the Initial Guarantor are capable of
evaluating and understanding and understand and accept the terms, risks and
conditions of the transactions contemplated by this Agreement; (ii) in
connection with each transaction contemplated hereby and the process leading to
such transaction each Initial Purchaser is and has been acting solely as a
principal and is not the agent or fiduciary of the Company, and the Initial
Guarantor or their respective Affiliates, equityholders, creditors or employees
or any other party; (iii) no Initial Purchaser has assumed or will assume an
advisory or fiduciary responsibility in favor of the Company and the Initial
Guarantor with respect to any of the transactions contemplated hereby or the
process leading thereto (irrespective of whether such Initial Purchaser has
advised or is currently advising the Company and the Initial Guarantor on other
matters) or any other obligation to the Company and the Initial Guarantor except
the obligations expressly set forth in this Agreement; (iv) the several Initial
Purchasers and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company and
the Initial Guarantor, and the several Initial Purchasers have no obligation to
disclose any of such interests by virtue of any fiduciary or advisory
relationship; and (v) the Initial Purchasers have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated
hereby, and the Company and the Initial Guarantor have consulted their own
legal, accounting, regulatory and tax advisors to the extent they deemed
appropriate.

 

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

 

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

 

SECTION 20.                     General Provisions.  This Agreement constitutes
the entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.  This Agreement may be
executed in two or more counterparts, each one of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.

 

34

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Delivery of an executed counterpart of a signature page to this Agreement by
telecopier, facsimile or other electronic transmission (e.g., a “pdf” or “tif”)
shall be effective as delivery of a manually executed counterpart thereof.  This
Agreement may not be amended or modified unless in writing by all of the parties
hereto, and no condition herein (express or implied) may be waived unless waived
in writing by each party whom the condition is meant to benefit.  The section
headings herein are for the convenience of the parties only and shall not affect
the construction or interpretation of this Agreement.

 

35

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

 

 

Very truly yours,

 

 

 

 

Laredo Petroleum, Inc.

 

 

 

 

 

 

 

 

By:

/s/ Randy A. Foutch

 

 

 

Name: Randy A. Foutch

 

 

 

Title:   Chairman & CEO

 

 

 

 

 

 

 

 

Laredo Midstream Services, LLC

 

 

 

 

 

 

 

 

By:

/s/ Randy A. Foutch

 

 

Name: Randy A. Foutch

 

 

Title:   CEO

 

 [Signature Page to the Purchase Agreement]

 

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

 

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

 

MERRILL LYNCH, PIERCE, FENNER & SMITH

 

INCORPORATED

 

 

Acting on behalf of itself

 

 

and as the Representative of

 

 

the several Initial Purchasers

 

 

 

 

By:

Merrill Lynch, Pierce, Fenner & Smith

 

 

Incorporated

 

 

 

 

 

 

By:

/s/ J. Lex Maultsby

 

 

Name: J. Lex Maultsby

 

 

Title:   Managing Director

 

 

[Signature Page to the Purchase Agreement]

 

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

 

SCHEDULE A

 

Initial Purchaser

 

Aggregate
Principal Amount
of Securities to be
Purchased

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated

 

$

141,750,000

 

Citigroup Global Markets Inc.

 

40,500,000

 

Credit Suisse Securities (USA) LLC

 

40,500,000

 

Wells Fargo Securities, LLC

 

40,500,000

 

Goldman, Sachs & Co.

 

30,375,000

 

BMO Capital Markets Corp.

 

16,875,000

 

Capital One Securities, Inc.

 

16,875,000

 

J.P. Morgan Securities LLC

 

16,875,000

 

Scotia Capital (USA) Inc.

 

16,875,000

 

SG Americas Securities, LLC

 

16,875,000

 

Barclays Capital Inc.

 

9,000,000

 

BB&T Capital Markets, a division of BB&T Securities, LLC

 

9,000,000

 

BBVA Securities Inc.

 

9,000,000

 

BOSC, Inc.

 

9,000,000

 

Comerica Securities, Inc.

 

9,000,000

 

ING Financial Markets LLC

 

9,000,000

 

Mitsubishi UFJ Securities (USA), Inc.

 

9,000,000

 

SunTrust Robinson Humphrey, Inc.

 

9,000,000

 

Total

 

$

450,000,000

 

 

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

 

EXHIBIT A-1

 

FORM OF OPINION OF COUNSEL TO THE COMPANY

 

We have acted as special counsel to Laredo Petroleum, Inc., a Delaware
corporation (the “Issuer”), in connection with the offering and sale (the
“Offering”) of $450,000,000 aggregate principal amount of the Issuer’s 5.625%
Senior Notes due 2022 (the “Securities”) pursuant to the Purchase Agreement,
dated January 13, 2014 (the “Purchase Agreement”), among the Issuer, Laredo
Midstream Services, LLC, a Delaware limited liability company (the “Guarantor”),
and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative (the
“Representative”) of the several initial purchasers (the “Initial Purchasers”)
named in Schedule A to the Purchase Agreement.  This opinion is rendered at the
request of the Issuer pursuant to Section 5(c) of the Purchase Agreement.  All
capitalized terms used in this letter without definition have the meanings
assigned to them in the Purchase Agreement.

 

In connection with this letter, we have examined executed originals or copies of
executed originals of each of the following documents, each of which is dated as
of the date hereof unless otherwise noted (collectively, the “Examined
Documents”):

 

the Purchase Agreement;

 

the Preliminary Offering Memorandum, dated January 13, 2014 (together with the
documents incorporated therein by reference, the “Preliminary Offering
Memorandum”);

 

the Pricing Supplement, dated January 13, 2014 (the “Pricing Supplement”),
relating to the Securities specified on Annex A (together with the Preliminary
Offering Memorandum, the “Pricing Disclosure Package”);

 

the Final Offering Memorandum, dated January 13, 2014 (together with the
documents incorporated therein by reference, the “Final Offering Memorandum”);

 

the Indenture, dated as of January 23, 2014 (including the provisions of the
Trust Indenture Act (the “TIA”) that are deemed pursuant to
Section 318(c) thereof to be a part of and govern such indenture,
the “Indenture”), among the Issuer, the Guarantor and Wells Fargo Bank, National
Association, as trustee (the “Trustee”);

 

the Registration Rights Agreement, dated as of January 23, 2014
(the “Registration Rights Agreement” and, together with the Indenture, the
Purchase Agreement, the Securities and the Exchange Securities, the “Transaction
Documents”), among the Issuer, the Guarantor and the Initial Purchasers; and

 

the global certificates evidencing the Securities.

 

In addition, we have examined the following documents (collectively, the “Due
Diligence Documents”):

 

Exhibit A-1-1

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

 

(a)                                 officers’ and secretaries’ certificates
executed by officers and secretaries of the Issuer and the Guarantor;

 

(b)                                 the other certificates and other closing
documents delivered by the Issuer and the Guarantor in connection with the
Purchase Agreement;

 

(c)                                  the written authentication order of the
Issuer authorizing the issuance of the Securities pursuant to Section [2.02] of
the Indenture;

 

(d)                                 the orders, writs, judgments or decrees
listed on Exhibit A attached hereto;

 

(e)                                  copies of the governing documents of the
Issuer and the Guarantor listed on Exhibit B attached hereto (the “Governing
Documents”);

 

(f)                                   the good standing certificates of the
Issuer and the Guarantor listed on Exhibit C attached hereto (the “Good Standing
Certificates”); and

 

(g)                                  resolutions of each of the board of
directors or the managers, as applicable, of the Issuer and the Guarantor
authorizing the Issuer and the Guarantor to execute and deliver the Transaction
Documents.

 

We have examined originals or certified copies of such corporate or other entity
records of the Issuer and the Guarantor and other certificates and documents of
officials of the Issuer, the Guarantor, public officials and others as we have
deemed appropriate for purposes of this letter. As to various questions of fact
relevant to this letter, we have relied, without independent investigation, upon
the Due Diligence Documents, certificates of public officials, certificates of
officers of the Issuer and the Guarantor and the representations and warranties
of the Issuer, the Guarantor and the Initial Purchasers in the Purchase
Agreement, all of which we assume to be true, correct and complete.  We have
made no investigation or review of any matters related to the Issuer, the
Guarantor or any other person or entity, including governmental authorities
(“Person”), other than as expressly listed herein.  In addition, we have made no
inquiry of the Issuer, the Guarantor or any other Person regarding, and no
review of, any judgments, orders, decrees, franchises, licenses, certificates,
permits or other public records or agreements to which the Issuer or the
Guarantor are a party other than the Examined Documents and the Due Diligence
Documents.

 

The Issuer or the Guarantor may use or have used other law firms to represent
the Issuer or Guarantor in connection with other matters, including, without
limitation, regulatory matters and matters other than such matters in connection
with the Examined Documents. The scope of the matters addressed in this letter
is necessarily limited due to the limited scope of our representation.

 

We have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to authentic original
documents of all copies submitted to us as conformed, certified or reproduced
copies, that the certificates for the Securities and the Exchange Securities
conform to the specimens thereof we have reviewed and

 

Exhibit A-1-2

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

 

that the Securities and the Exchange Securities will be duly authenticated in
accordance with the terms of the Indenture.  In our examination of documents, we
have also assumed the legal capacity of natural persons, the corporate or other
entity power and due authorization of each Person not a natural person (other
than, solely with respect to the Transaction Documents, the Issuer and the
Guarantor) to execute and deliver such documents and to consummate the
transactions contemplated thereby, the due execution and delivery of each such
document by all parties thereto (other than, solely with respect to the
Transaction Documents, the Issuer and the Guarantor) and that each such document
constitutes the legal, valid and binding obligation of each party thereto (other
than, solely with respect to the Transaction Documents, the Issuer and the
Guarantor), enforceable against such party in accordance with its terms.

 

Based upon the foregoing and subject to the assumptions, exceptions,
qualifications and limitations set forth herein, we are of the opinion that:

 

1.                                      The Issuer is validly existing as a
corporation and in good standing under the laws of the State of Delaware, the
jurisdiction of its organization. The Guarantor is validly existing as a limited
liability company and in good standing under the laws of the State of Delaware,
the jurisdiction of its organization.

 

2.                                      Each of the Issuer and the Guarantor has
all requisite corporate or limited liability company, as applicable, power and
authority to execute and deliver, and incur and perform its respective
obligations under, the Transaction Documents.

 

3.                                      The execution and delivery by each of
the Issuer and the Guarantor of the Transaction Documents to which it is a party
and the performance by each of the Issuer and the Guarantor of its respective
obligations thereunder have been duly authorized by all necessary corporate or
limited liability company, as applicable, action by the Issuer and the
Guarantor.  Each of the Purchase Agreement, the Indenture and the Registration
Rights Agreement has been duly and validly authorized, executed and delivered by
each of the Issuer and the Guarantor.

 

4.                                      The Securities have been duly and
validly authorized and executed by the Issuer and, when 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,
will be valid and legally binding obligations of the Issuer, entitled to the
benefits of the Indenture and enforceable against the Issuer in accordance with
their terms. The Exchange Securities have been duly and validly authorized by
the Issuer and, when duly executed, authenticated, issued and delivered as
provided in the Indenture and the Registration Rights Agreement, will constitute
valid and legally binding obligations of the Issuer, enforceable against the
Issuer in accordance with their terms.

 

5.                                      The Indenture (including, with respect
to the Guarantor, (i) when the Securities have been duly and validly
authenticated in accordance with the terms of the Indenture and duly and validly
paid for by and delivered to the Initial Purchasers in accordance with the terms
of the Purchase Agreement, the guarantee of the

 

Exhibit A-1-3

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

 

Guarantor in respect of the Securities provided for in Article [Ten] of the
Indenture and (ii) when the Exchange Securities have been duly executed,
authenticated, issued and delivered as provided in the Indenture and the
Registration Rights Agreement, the guarantee of the Guarantor in respect of the
Exchange Securities provided for in Article [Ten] of the Indenture) constitutes
the valid and legally binding obligation of each of the Issuer and the
Guarantor, enforceable against each of the Issuer and the Guarantor in
accordance with its terms.

 

6.                                      The Registration Rights Agreement is a
valid and legally binding obligation of each of the Issuer and the Guarantor,
enforceable against the Issuer and the Guarantor in accordance with its terms.

 

7.                                      The execution and delivery of the
Transaction Documents by each of the Issuer and the Guarantor party thereto does
not, and the performance by the Issuer and the Guarantor of its respective
obligations under the Transaction Documents to which it is a party will not,
(a) result in any violation of any law, statute, rule or regulation of or under
any Included Law (as defined below) (including Regulations T, U and X of the
Board of Governors of the Federal Reserve System), (b) result in any violation
of the Governing Documents of the Issuer or the Guarantor, or (c) result in any
violation of any order, writ, judgment or decree under any Included Law of any
New York or Federal governmental authority or regulatory body applicable to the
Issuer or the Guarantor or their assets or properties listed on Exhibit A
attached hereto.

 

8.                                      No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body (each, a “Filing”)  is required under any of the Included Laws
for the due execution and delivery of the Transaction Documents by the Issuer
and the Guarantor party thereto and the performance by the Issuer and the
Guarantor of its respective obligations under the Transaction Documents to which
it is a party, subject to the assumptions set forth in paragraph 12 and except
for (i) routine Filings necessary in connection with the conduct of the business
of the Issuer and the Guarantor, (ii) such other Filings as have been obtained
or made, and (iii) Filings under Federal and state securities Laws as required
by the Registration Rights Agreement.

 

9.                                      The statements in the Preliminary
Offering Memorandum(1) and the Final Offering Memorandum under the caption
“Description of the Notes” and “Description of

 

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(1)         Qualification in opinion letter will state that any reference to
“Preliminary Offering Memorandum” in opinion paragraphs 9, 10 and 11 shall mean
the Preliminary Offering Memorandum as supplemented by the information contained
in the Pricing Supplement.

 

Exhibit A-1-4

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Other Indebtedness,” insofar as such statements purport to summarize certain
provisions of documents referred to therein and reviewed by us as described
above, fairly summarize such provisions in all material respects, subject to the
qualifications and assumptions stated therein.  The statements in the
Preliminary Offering Memorandum and the Final Offering Memorandum under the
caption “Description of the Notes” and “Description of Other Indebtedness,”
insofar as such statements purport to summarize provisions of any law, statute,
rule or regulation of or under any Included Law referred to therein, fairly
summarize such laws, statutes, rules and regulations in all material respects,
subject to the qualifications and assumptions stated therein.  The Indenture and
the Securities conform, and the Exchange Securities, when duly executed,
authenticated, issued and delivered as provided in the Indenture and the
Registration Rights Agreement, will conform, in all material respects as to
legal matters to the descriptions thereof under the heading “Description of the
Notes” in the Preliminary Offering Memorandum and the Final Offering Memorandum
(in the case of the Preliminary Offering Memorandum, when considered together
with the Pricing Supplement).

 

10.                               The statements in the Preliminary Offering
Memorandum and the Final Offering Memorandum under the caption “Certain Material
United States Federal Income Tax Considerations,” insofar as such statements
constitute a summary of the United States Federal tax laws referred to therein,
as of the date of the Preliminary Offering Memorandum and the Final Offering
Memorandum, in all material respects, are accurate and fairly summarize the
United States Federal tax laws referred to therein, subject to the
qualifications and assumptions stated therein.

 

11.                               The Issuer and the Guarantor are not, and
after giving effect to the offering and sale of the Securities contemplated by
the Purchase Agreement and the application of the net proceeds from such sale as
described in the Preliminary Offering Memorandum and the Final Offering
Memorandum, the Issuer and the Guarantor will not be, required to register as an
“investment company,” as such term is defined under the Investment Company Act
of 1940, as amended.

 

12.                               Assuming without independent investigation,
(a) that the Securities are sold to the Initial Purchasers, and initially resold
by the Initial Purchasers, in accordance with the terms of and in the manner
contemplated by, the Purchase Agreement and the Final Offering Memorandum;
(b) the accuracy of the representations and warranties of the Issuer and the
Guarantor set forth in the Purchase Agreement and the matters certified in those
certain certificates delivered on the date hereof; (c) the accuracy of the
representations and warranties of the Initial Purchasers set forth in the
Purchase Agreement; (d) the due performance and compliance by the Issuer, the
Guarantor and the Initial Purchasers of their respective covenants and
agreements set forth in the Purchase Agreement; and (e) the Initial Purchasers’
compliance with the transfer procedures and restrictions described in the Final
Offering Memorandum, it is not necessary to register the Securities under the
Securities Act or to qualify an indenture in respect thereof under the TIA in

 

Exhibit A-1-5

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connection with the issuance and sale of the Securities by the Issuer to the
Initial Purchasers or in connection with the offer, resale and delivery of the
Securities by the Initial Purchasers in the manner contemplated by the Purchase
Agreement and the Final Offering Memorandum, it being expressly understood that
we express no opinion in this paragraph 12 or paragraph 8 as to any subsequent
offer or resale of any of the Securities.

 

13.                               The Indenture conforms in all material
respects to the requirements of the TIA and the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder.

 

Our identification of documents and information as part of the Pricing
Disclosure Package has been at your request and with your approval.  Such
identification is for the limited purpose of making the statements set forth in
this letter and is not the expression of a view by us as to whether any such
information has been or should have been conveyed to investors generally or to
any particular investors at any particular time or in any particular manner.

 

Because the primary purpose of our professional engagement was not to establish
or confirm factual matters, financial or accounting data and information or
information pertaining to natural resource reserves and production, and our
participation in the preparation of the documents incorporated by reference in
the Pricing Disclosure Package and the Final Offering Memorandum has been
limited, and because many determinations involved in the preparation of the
Pricing Disclosure Package and the Final Offering Memorandum are of a wholly or
partially non-legal character, except as expressly set forth in paragraphs 9 and
10 herein, we are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained or incorporated
by reference in the Final Offering Memorandum or the Pricing Disclosure Package
(the “Disclosure Documents”) and we make no representation that we have
independently verified the accuracy, completeness or fairness of such
statements.

 

However, in the course of our acting as special counsel to the Issuer in
connection with the preparation of the Final Offering Memorandum and the Pricing
Disclosure Package, we have reviewed each Disclosure Document and have
participated in conferences and telephone conversations with representatives of
the Issuer, representatives of the independent public accountants for the
Issuer, representatives of the independent reserve engineers of the Issuer,
representatives of the Initial Purchasers and representatives of the Initial
Purchasers’ counsel, during which conferences and conversations the contents of
such Disclosure Documents and related matters were discussed.

 

Based on our participation in such conferences and conversations, our review of
the documents described above, our understanding of the United States Federal
securities Laws and the experience we have gained in our practice thereunder, we
advise you that:

 

(a)  each of the periodic and current reports filed by the Issuer under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), to the extent
incorporated by reference in the Preliminary Offering Memorandum and the Final
Offering Memorandum (except the financial statements, financial schedules or
other financial or accounting data and

 

Exhibit A-1-6

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information or information pertaining to natural resource reserves and
production contained in, or omitted from, such reports, as to which we express
no view) (the “Incorporated Documents”), at the time it was filed with the
Securities and Exchange Commission (the “Commission”), appeared on its face to
comply as to form in all material respects to the requirements of the particular
form under the Exchange Act and the applicable rules and regulations promulgated
by the Commission thereunder, except that we express no view as to the antifraud
provisions of the Federal securities Laws and the rules and regulations
promulgated under such provisions; and

 

(b) we have no reason to believe that (i) the Final Offering Memorandum, as of
its date or as of the Closing Date, contained or contains any untrue statement
of a material fact or omitted or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (ii) the Pricing Disclosure Package, as
of the Time of Sale (which you have informed us is a time after the Pricing
Supplement specified on Annex A was made available to investors), contained any
untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; it being understood
that we express no opinion as to the financial statements, financial schedules
or other financial or accounting data and information or information pertaining
to natural resource reserves and production contained in, or omitted from, the
Pricing Disclosure Package or the Final Offering Memorandum.

 

Exhibit A-1-7

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EXHIBIT A-2

 

FORM OF OPINION OF GENERAL COUNSEL

 

I am Senior Vice President and General Counsel to (a) Laredo Petroleum, Inc., a
Delaware corporation (the “Issuer”), and (b) Laredo Midstream Services, LLC, a
Delaware limited liability company (the “Guarantor”).  This opinion letter is
furnished to you in connection with the offering and sale (the “Offering”) of
$450,000,000 aggregate principal amount of the Issuer’s 5.625% Senior Notes due
2022 (the “Securities”) pursuant to the Purchase Agreement, dated January 13,
2014 (the “Purchase Agreement”), among the Issuer, the Guarantor and Merrill
Lynch, Pierce, Fenner & Smith Incorporated, as representative (the
“Representative”) of the several initial purchasers (the “Initial Purchasers”)
named in Schedule A to the Purchase Agreement.  This opinion is rendered at the
request of the Issuer pursuant to Section 5(c) of the Purchase Agreement.  All
capitalized terms used in this letter without definition have the meanings
assigned to them in the Purchase Agreement.

 

In connection with this letter, I have examined executed originals or copies of
executed originals of each of the following documents:

 

(i)                                     the Purchase Agreement;

 

(ii)                                  the Preliminary Offering Memorandum, dated
January 13, 2014 (together with the documents incorporated therein by reference,
the “Preliminary Offering Memorandum”);

 

(iii)                               the Pricing Supplement, dated January 13,
2014 (the “Pricing Supplement”), relating to the Securities specified on Annex A
(together with the Preliminary Offering Memorandum, the “Pricing Disclosure
Package”);

 

(iv)                              the Final Offering Memorandum, dated
January 13, 2014 (together with the documents incorporated therein by reference,
the “Final Offering Memorandum”);

 

(v)                                 the Indenture, dated as of January 23, 2014
(including the provisions of the Trust Indenture Act (the “TIA”) that are deemed
pursuant to Section 318(c) thereof to be a part of and govern such indenture,
the “Indenture”), among the Issuer, the Guarantor and Wells Fargo Bank, National
Association, as trustee (the “Trustee”); and

 

(vii)                           the Registration Rights Agreement, dated as of
January 23, 2014 (the “Registration Rights Agreement” and, together with the
Indenture, the Purchase Agreement, the Securities and the Exchange Securities,
the “Transaction Documents”), among the Issuer, the Guarantor and the Initial
Purchasers.

 

Additionally, I have examined the following documents (collectively, the “Due
Diligence Documents”): (a) copies of the documents described in Exhibit A
attached

 

Exhibit A-2-1

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hereto (the “Governing Documents”); (b) the documents described in Exhibit B
attached hereto (the “Good Standing Documents”); and (c) the documents described
in Exhibit C attached hereto (the “Material Agreements”).

 

In rendering the opinions expressed below, I have also examined originals or
copies of all certificates of public officials and such other documents and
records as I deem appropriate as a basis for the opinions hereinafter
expressed.  As to various questions of fact relevant to this opinion letter, I
have made such inquiry of the Issuer and the Guarantor and their files and
records as I have deemed appropriate and I have relied, without independent
investigation, upon the Due Diligence Documents, certificates of public
officials, certificates of officers of the Issuer and the Guarantor and the
representations and warranties of the Issuer, the Guarantor and the Initial
Purchasers in the Purchase Agreement, all of which I assume to be true, correct
and complete.  I wish to inform you that my knowledge is necessarily limited due
to the limited scope of my review.

 

I have assumed the genuineness of all signatures, the authenticity of all
documents submitted to me as originals, the conformity to authentic original
documents of all copies submitted to me as conformed, certified or reproduced
copies.  I have also assumed the legal capacity of natural persons, the
corporate or other entity power and due authorization of each Person not a
natural person other than the Issuer and the Guarantor to execute and deliver
the Transaction Documents and to consummate the transactions contemplated by the
Transaction Documents, the due execution and delivery of the Transaction
Documents by all parties thereto other than the Issuer and the Guarantor, and
that each Transaction Document constitutes the legal, valid and binding
obligation of each party thereto other than the Issuer and the Guarantor,
enforceable against such party in accordance with its terms.

 

Based upon the foregoing and subject to the assumptions, exceptions,
qualifications and limitations set forth hereinafter, I am of the opinion that:

 

1.                                      The Issuer has been duly incorporated as
a corporation, and is validly existing and in good standing under the laws of
the State of Delaware, the jurisdiction of its organization. The Guarantor has
been duly formed as a limited liability company, and is validly existing and in
good standing under the laws of the State of Delaware, the jurisdiction of its
organization.

 

2.                                      The Issuer is duly qualified and is in
good standing as a foreign corporation in the State of Oklahoma. The Issuer is
duly qualified and has the right to transact business as a foreign corporation
in the State of Texas.

 

3.                                      The Guarantor is duly qualified and is
in good standing as a foreign corporation in the State of Oklahoma. The
Guarantor is duly qualified and has the right to transact business as a foreign
corporation in the State of Texas.

 

Exhibit A-2-2

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4.                                      (a)  The Issuer has the corporate power
and authority to execute and deliver each of the Transaction Documents to which
it is a party and to perform its obligations thereunder, and has the corporate
power and authority to own and hold its properties and conduct its business in
all material respects as described in the Preliminary Offering Memorandum,
Pricing Disclosure Package and the Final Offering Memorandum. The execution and
delivery by the Issuer of each of the Transaction Documents to which it is a
party and the consummation by the Issuer of the transactions contemplated
thereby have been duly authorized by all necessary corporate action on the part
of the Issuer.  Each of the Transaction Documents to which the Issuer is a party
has been duly executed and delivered by the Issuer.

 

(b)  The Guarantor has the power and authority to execute and deliver each of
the Transaction Documents to which it is a party and to perform its obligations
thereunder, and has the power and authority to own and hold its properties and
conduct its business in all material respects as described in the Preliminary
Offering Memorandum, Pricing Disclosure Package and the Final Offering
Memorandum. The execution and delivery by the Guarantor of each of the
Transaction Documents to which it is a party and the consummation by the
Guarantor of the transactions contemplated thereby have been duly authorized by
all necessary limited liability company action on the part of the Guarantor. 
Each of the Transaction Documents to which the Guarantor is a party has been
duly executed and delivered by the Guarantor.

 

5.                                      (a)  The execution and delivery by the
Issuer of each of the Transaction Documents to which it is a party do not, and
the performance by the Issuer of its obligations thereunder will not, (1) result
in a violation of the Governing Documents of the Issuer, (2) result in any
violation by the Issuer of any law applicable to Issuer, (3) breach or result in
a default (or an event which, with notice or lapse of time, or both, would
constitute a default), or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Issuer, under the
Material Agreements (including under Section 4.07 of the 2011 Existing Indenture
and Section 4.07 of the 2012 Existing Indenture (each as defined in Exhibit C
hereto)) or instruments known to me after due inquiry, or (4) result in any
violation of any order, writ, judgment or decree known to me after due inquiry.

 

(b)  The execution and delivery by the Guarantor of each of the Transaction
Documents to which it is a party do not, and the performance by the Guarantor of
its obligations thereunder will not, (1) result in a violation of the Governing
Documents of the Guarantor, (2) result in any violation by the Guarantor of any
law applicable to the Guarantor, (3) breach or result in a default (or an event
which, with notice or lapse of time, or both, would constitute a default), or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Guarantor, under the Material Agreements (including
under Section 4.07 of the 2011 Existing Indenture and Section 4.07 of the 2012

 

Exhibit A-2-3

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Existing Indenture) or instruments known to me after due inquiry, or (4) result
in any violation of any order, writ, judgment or decree known to me after due
inquiry.

 

6.                                      (a)  Except as disclosed pursuant to the
Transaction Documents, there are, to my knowledge after due inquiry, no actions,
suits or proceedings pending or threatened in writing against the Issuer, before
any court or arbitrator(s) or by or before any administrative agency or
government authority, in which there is a reasonable possibility of an adverse
decision that could reasonably be expected to (i) result in a Material Adverse
Change, (ii) call into question the validity or enforceability of any
Transaction Document, or (iii) materially and adversely affect the ability of
the Issuer to perform its obligations under any Transaction Document.

 

(b)  Except as disclosed pursuant to the Transaction Documents, there are, to my
knowledge after due inquiry, no actions, suits or proceedings pending or
threatened in writing against the Guarantor, before any court or
arbitrator(s) or by or before any administrative agency or government authority,
in which there is a reasonable possibility of an adverse decision that could
reasonably be expected to (i) result in a Material Adverse Change, (ii) call
into question the validity or enforceability of any Transaction Document, or
(iii) materially and adversely affect the ability of the Guarantor to perform
its obligations under any Transaction Document.

 

7.                                      (a)  No authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body (each, a “Filing”) is required under any of the Included Laws
for the due execution and delivery of the Transaction Documents by the Issuer
and the performance by the Issuer of its obligations thereunder, except for
(i) routine Filings necessary in connection with the conduct of the business of
the Issuer, (ii) such other Filings as have been obtained or made and
(iii) Filings required to maintain corporate and similar standing and existence
as and to the extent required by Section [4.18] of the Indenture.

 

(b)  No Filing is required under any of the Included Laws for the due execution
and delivery of the Transaction Documents by the Guarantor and the performance
by the Guarantor of its obligations thereunder, except for (i) routine Filings
necessary in connection with the conduct of the business of the Guarantor,
(ii) such other Filings as have been obtained or made and (iii) Filings required
to maintain corporate and similar standing and existence as and to the extent
required by Section [4.18] of the Indenture.

 

Exhibit A-2-4

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ANNEX I

 

Resale Pursuant to Regulation S or Rule 144A.  Each Initial Purchaser
understands that:

 

With respect to offers and sales of the Securities outside the United States,
such Initial Purchaser agrees that it has not offered or sold and will not offer
or sell the Securities in the United States or to, or for the benefit or account
of, a U.S. Person (other than a distributor), in each case, as defined in
Rule 902 of Regulation S (i) as part of its distribution at any time and
(ii) otherwise until 40 days after the later of the commencement of the offering
of the Securities pursuant hereto and the Closing Date, other than in accordance
with Regulation S or another exemption from the registration requirements of the
Securities Act.  Such Initial Purchaser agrees that, during such 40-day
restricted period, it will not cause any advertisement with respect to the
Securities (including any “tombstone” advertisement) to be published in any
newspaper or periodical or posted in any public place and will not issue any
circular relating to the Securities, except such advertisements as permitted by
and include the statements required by Regulation S.

 

Such Initial Purchaser agrees that, at or prior to confirmation of a sale of
Securities by it to any distributor, dealer or person receiving a selling
concession, fee or other remuneration during the 40-day restricted period
referred to in Rule 903 of Regulation S, it will send to such distributor,
dealer or person receiving a selling concession, fee or other remuneration a
confirmation or notice to substantially the following effect:

 

“The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (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 your distribution at any time or (ii) otherwise
until 40 days after the later of the date the Securities were first offered to
persons other than distributors in reliance on Regulation S and the Closing
Date, except in either case in accordance with Regulation S under the Securities
Act (or in accordance with Rule 144A under the Securities Act or to accredited
investors in transactions that are exempt from the registration requirements of
the Securities Act), and in connection with any subsequent sale by you of the
Securities covered hereby in reliance on Regulation S under the Securities Act
during the period referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you must deliver a
notice to substantially the foregoing effect.  Terms used above have the
meanings assigned to them in Regulation S under the Securities Act.”

 

Such Initial Purchaser agrees that the Securities offered and sold in reliance
on Regulation S will be represented upon issuance by a global security that may
not be exchanged for definitive securities until the expiration of the 40-day
restricted period referred to in Rule 903 of Regulation S and only upon
certification of beneficial ownership of such Securities by non-U.S. persons or
U.S. persons who purchased such Securities in transactions that were exempt from
the registration requirements of the Securities Act.

 

Annex I-1

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EXHIBIT B

 

Subsidiaries and Other Entities of the Company

 

Wholly Owned Subsidiaries

 

Laredo Midstream Services, LLC

 

Less than 50% Owned Entities

 

Medallion Gathering & Processing, LLC

 

Exhibit B-1

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