Document:

exv10w30

 

EXHIBIT 10.30

Execution
Copy

STOCK PURCHASE AGREEMENT

     This STOCK PURCHASE AGREEMENT (this “Agreement”) is dated effective as of January 10,
2006 by and among Petrohawk Energy Corporation, a Delaware corporation (the “Company”), and
the entities listed on Schedule I to this Agreement (each a “Holder” and
collectively, the “Holders”).

     WHEREAS, the Company intends to enter into a placement agreement (the “Placement
Agreement”) with Lehman Brothers Inc. and Friedman, Billings, Ramsey & Co., Inc., as placement
agents (collectively, the “Placement Agents”) pursuant to which the Company is offering to
sell to accredited investors for cash pursuant to a private placement memorandum (the “Private
Offering”), a number of shares of its common stock, par value $0.001 per share (“Common
Stock”) sufficient to result in net proceeds to the Company (after placement agents’ fees,
before offering expenses and the repurchase of any Common Stock from Holders as provided herein,
“Net Proceeds”) of $166,000,000 (the “Target Offering Amount”). The closing of such offer
and sale is hereinafter referred to as the “Initial Offering Closing” and the date of such
Initial Offering Closing is hereinafter referred to as the “Initial Offering Closing Date”;
and

     WHEREAS, on the Initial Offering Closing Date (contemporaneously with the Initial Offering
Closing), each Holder desires to sell to the Company, and the Company desires to purchase from each
Holder, all of the shares of Common Stock set forth opposite such Holder’s name on Schedule
I hereto under the heading “Shares” (such shares being hereinafter referred to as the
“Shares” and such purchase and sale being hereinafter referred to as the
“Purchase”), if the entire Target Offering Amount is raised in the Private Offering and
subject to proportionate reduction in the event the shares of common stock to be sold by the
Company to the Placement Agents upon the Initial Offering Closing yields Net Proceeds less than the
Target Offering Amount; and

     NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and
agreements set forth herein, the parties hereto agree as follows:

ARTICLE I

PURCHASE AND SALE OF COMMON STOCK;

CLOSINGS

     On the basis of the representations and warranties contained herein and subject to the terms
and conditions hereof:

     1.1. Delivery of EnCap Certificates. Prior to the time the Placement Agreement is
executed, each Holder will deliver to the Company the certificate or certificates representing the
Shares owned by such Holder (the “EnCap Certificates”), duly endorsed in blank or
accompanied by separate stock powers so endorsed with all signatures guaranteed by a commercial
bank or trust company having an office or correspondent in the United States or a member firm of
the New York Stock Exchange.

 

 

     1.2. Closing.

     (a) Closing Date. At the time the Placement Agreement is executed by the
Company, and not before, the Company shall become obligated to purchase, and each Holder
will become obligated to sell hereunder, subject to satisfaction or waiver of the conditions
set forth herein, the Shares, which purchase and sale (the “EnCap Closing”) will
take place at the offices of the Company on the Initial Offering Closing Date
contemporaneously with the Initial Offering Closing.

     (b) Purchase and Sale of Shares. At the EnCap Closing, each Holder will sell
to the Company, and the Company will purchase from each Holder, a number of such Holder’s
Shares, at a price equal to the Net Proceeds to be received by the Company from the Private
Offering divided by the number of shares sold by the Company in the Private Offering (the
“Per Share Price”), determined as follows:

     (i) 100% of such Holder’s Shares as reflected on Schedule I, if the
Private Offering yields Net Proceeds equal to or greater than the Target Offering
Amount; and

     (ii) if the Private Offering yields Net Proceeds less than the Target Offering
Amount, a number of shares equal to the number of Shares owned by Holder as set
forth on Schedule I, multiplied by a fraction, the numerator of which shall
be the actual Net Proceeds to the Company raised in the Private Offering at the
Initial Offering Closing, and the denominator of which is the Target Offering
Amount.

     (c) Payment. On the EnCap Closing Date, the Company shall pay to each Holder
the Per Share Price for each Share to be purchased by the Company from such Holder in the
Purchase by wire transfer of immediately available funds to an account designated in writing
by such Holder to the Company at least one business day prior to the Initial Offering
Closing Date.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF

EACH HOLDER

     Each Holder represents and warrants to the Company, with respect to itself only, as follows:

     2.1. Existence and Power. Each Holder has been duly organized and is validly existing
and in good standing under the laws of its jurisdiction of formation or organization, with the
requisite power and authority to execute and deliver this Agreement and consummate the transactions
and perform each of its obligations contemplated hereunder.

     2.2. Authority; Enforceability. The execution and delivery of this Agreement by the
Holder and the consummation by the Holder of each of the transactions and the performance by the
Holder of each of its obligations contemplated herein have been duly and properly authorized

 

 

by all necessary action on the part of the Holder. This Agreement has been duly executed and
delivered by the Holder and constitutes the valid and legally binding obligation of such Holder,
enforceable against such Holder in accordance with its terms, subject, as to enforceability, to
bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors’ rights and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

     2.3. Ownership of Common Stock. The Holder is the record and beneficial owner of the
number of Shares set forth opposite such Holder’s name on Schedule I to this Agreement, and
such shares of Common Stock are free and clear of all mortgages, pledges, security interests,
liens, claims, encumbrances, equities or other restrictions (collectively, the “Liens”).
Upon payment for the shares of Common Stock to be sold by such Holder in accordance with the terms
and conditions of this Agreement, the Company will acquire good and valid title to such shares free
and clear all Liens.

     2.4. No Conflicts. The execution and delivery of this Agreement by the Holder and the
consummation by the Holder of each of the transactions and the performance by the Holder of each of
its obligations contemplated herein (a) do not conflict with or violate (whether with or without
notice or a lapse of time or both), require the consent of any Person to or otherwise result in a
material detriment to the Holder under its organizational documents or any agreement to which it is
a party or any law or order applicable to it, in each case in a manner that could reasonably be
expected to materially hinder or impair the completion of any of the transactions contemplated
hereby or have a material adverse effect on the business, properties, condition (financial or
otherwise), liabilities or prospects of the Holder; and (b) do not impose any penalty or other
onerous condition on the Holder that could reasonably be expected to materially hinder or impact
the completion of any of the transactions contemplated hereby. As used herein, the term
“Person” means a natural person, corporation, limited liability company, venture,
partnership, trust, unincorporated organization, association or other entity.

     2.5. No Governmental Approvals. No approval from any Governmental Entity is required
by or with respect to the Holder in connection with the execution and delivery by the Holder of
this Agreement or the consummation by the Holder of the transactions contemplated herein, except
for any such approval the failure of which to be made or obtained (a) has not impaired and could
not reasonably be expected to impair the ability of the Holder to perform its obligations under
this Agreement in any material respect and (b) could not reasonably be expected to delay in any
material respect or prevent the consummation of any of the transactions contemplated herein. As
used herein, the term “Governmental Entity” means any agency, bureau, commission,
authority, department, official, political subdivision, tribunal or other instrumentality of any
government, whether (i) regulatory, administrative or otherwise; (ii) federal, state or local or
(iii) domestic or foreign.

     2.6. Independent Investigation. Holder (a) has the requisite knowledge,
sophistication and experience in order to fairly evaluate a disposition of the shares of Common
Stock to be sold by such Holder hereunder, including the risks associated therewith, and (b) has
adequate information, and has made its own independent investigation of the Company, to make an
informed decision regarding the sale of such shares of Common Stock pursuant to this Agreement.

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF

THE COMPANY

     The Company hereby represents and warrants to each Holder as follows:

     3.1. Existence and Power. The Company has been duly organized and is validly existing
and in good standing as a corporation under the laws of the State of Delaware, with the requisite
corporate power and authority to execute and deliver this Agreement and consummate the transactions
and perform each of its obligations hereunder.

     3.2. Authority; Enforceability. The execution and delivery of this Agreement by the
Company and the consummation by the Company of each of the transactions and the performance by the
Company of each of its obligations contemplated herein have been duly and properly authorized by
all necessary corporate action on the part of the Company. This Agreement has been duly executed
and delivered by the Company and constitutes the valid and legally binding obligation of the
Company, enforceable against it in accordance with its terms, subject, as to enforceability, to
bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors’ rights and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

     3.3. No Conflicts. The execution and delivery of this Agreement by the Company and
the consummation of each of the transactions and the performance of each of the obligations
contemplated herein (a) do not conflict with or violate (whether with or without notice or a lapse
of time or both), require the consent of any Person to or otherwise result in a material detriment
to the Company under its organizational documents or any agreement to which it is a party or any
law or order applicable to it, in each case in a manner that could reasonably be expected to
materially hinder or impair the completion of any of the transactions contemplated herein or have a
material adverse effect on the business, properties, condition (financial or otherwise),
liabilities or prospects of the Company, other than consents that have been obtained by the Company
prior to the date hereof; and (b) do not impose any penalty or other onerous condition on the
Company that could reasonably be expected to materially hinder or impact the completion of any of
the transactions contemplated herein.

     3.4. No Governmental Approvals. No approval from any Governmental Entity is required
by or with respect to the Company in connection with the execution and delivery by the Company of
this Agreement or the consummation by the Company of the transactions contemplated herein, except
for any such approval the failure of which to be made or obtained (a) has not impaired and could
not reasonably be expected to impair the ability of the Company to perform its obligations under
this Agreement in any material respect and (b) could not reasonably be expected to delay in any
material respect or prevent the consummation of any of the transactions contemplated herein.

 

 

ARTICLE IV

CONDITIONS TO CLOSING

     4.1. Conditions to Obligations of the Company. The obligation of the Company to
purchase the shares of Common Stock hereunder is subject to the satisfaction or waiver on or prior
to the Initial Offering Closing Date of each the following conditions:

     (a) No action, claim, suit, hearing, complaint, demand, injunction, litigation,
judgment, arbitration, order, decree, ruling or governmental investigation or proceeding
shall be pending or threatened by any Governmental Entity, and no such Governmental Entity
shall have issued any injunction, judgment or order, which shall remain in effect, that
would prevent the consummation of the transactions contemplated herein.

     (b) Each Holder shall have performed in all material respects all of its obligations
hereunder required to be performed by it on or prior to the Initial Offering Closing Date.

     (c) The representations and warranties of each Holder contained in this Agreement and
in any certificate or other writing delivered by each Holder pursuant hereto shall be true
and correct in all material respects on and as of the date hereof and on and as of the
Initial Offering Closing Date, as though made on and as of such date.

     (d) The Company shall have received a certificate signed by a duly authorized
representative of each Holder to the effects set forth in Section 4.1(b) and (c) above.

     (e) In the event that less than all of each Holder’s Shares are repurchased hereunder,
each Holder shall have executed and delivered to the Placement Agents a lock-up agreement in
the form negotiated by the Company and the Placement Agents for execution by significant
stockholders of the Company.

     (f) The Initial Offering Closing has occurred.

     4.2. Conditions of Obligations of Holders. The obligation of each Holder to sell the
shares of Common Stock hereunder is subject to the satisfaction or waiver on or prior to the
Initial Offering Closing Date of each the following conditions:

     (a) No action, claim, suit, hearing, complaint, demand, injunction, litigation,
judgment, arbitration, order, decree, ruling or governmental investigation or proceeding
shall be pending or threatened by any Governmental Entity, and no such Governmental Entity
shall have issued any injunction, judgment or order, which shall remain in effect, that
would prevent the consummation of the transactions contemplated herein.

     (b) The Company shall have performed in all material respects all of its obligations
hereunder required to be performed by it on or prior to the Initial Offering Closing Date.

 

 

     (c) The representations and warranties of the Company contained in this Agreement and
in any certificate or other writing delivered by the Company pursuant hereto shall be true
and correct in all material respects on and as of the date hereof and on and as of the
Initial Offering Closing Date, as though made on and as of such date.

     (d) Each Holder shall have received a certificate signed by a duly authorized officer
of the Company to the effects set forth in Section 4.2(b) and (c) above.

ARTICLE V

GOVERNMENTAL FILINGS

     Each Holder shall make all filings with any Governmental Entity required by such Holder in
connection with the execution and delivery by such Holder of this Agreement and the consummation by
such Holder of the transactions contemplated herein, including without limitation, all filings with
the Securities and Exchange Commission required pursuant to the Securities Exchange Act of 1934, as
amended.

ARTICLE VI

GENERAL PROVISIONS

     6.1. Notices. All notices, requests and other communications to any party hereunder
shall be in writing (including facsimile transmission) and shall be given,

     If to the Holders, to:

EnCap Investments L.P.

3811 Turtle Creek Blvd., Suite 1080

Dallas, Texas 75219

Attention: David B. Miller

Facsimile: (214) 599-0200

With a copy (which shall not constitute notice) to:

Thompson & Knight LLP

333 Clay Street, Suite 3300

Houston, Texas 77002

Attention: Michael K. Pierce

Facsimile: (713) 654-1871

 

 

     If to the Company, to:

Petrohawk Energy Corporation

1100 Louisiana, Suite 4400

Houston, Texas 77002

Attention: Chief Financial Officer

Facsimile: (832) 204-2877

with copies (which shall not constitute notice) to:

Hinkle Elkouri Law Firm L.L.C.

2000 Epic Center

301 North Main Street

Wichita, Kansas 67202

Attention: David S. Elkouri, Esq.

Facsimile: (316) 264-1518

and

Thompson & Knight LLP

333 Clay Street, Suite 3300

Houston, Texas 77002

Attention: Dallas Parker

Facsimile: (713) 654-1871

     All such notices, requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such
day is a business day in the place of receipt. Otherwise, any such notice, request or communication
shall be deemed not to have been received until the next succeeding business day in the place of
receipt. By notice given in accordance with this Section 6.1 to the other party, any party may
change its address for the receipt of notices under this Agreement.

     6.2. Amendments and Waivers. Any provision of this Agreement may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment,
by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver
is to be effective. No failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other right, power or
privilege.

     6.3. Successors and Assigns. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns.

     6.4. Governing Law. This Agreement shall be governed by and construed in accordance
with the law of the State of Delaware, without reference to its conflict of laws principles.

 

 

     6.5. Section Headings. The captions and headings appearing at the beginning of the
various sections of this Agreement are for convenience of reference only and shall not be given any
effect whatsoever in the construction or interpretation of this Agreement.

     6.6. Enforcement. The parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the
terms and provisions of this Agreement in any action instituted in any court of the United States
or any state thereof having jurisdiction over the parties and the matter, this being in addition to
any other remedy to which they are entitled at law or in equity.

     6.7. Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.

6.8. Termination.

     (a) Notwithstanding any provision in this Agreement to the contrary, this Agreement
shall terminate in the event the Placement Agreement is terminated. If this Agreement is
terminated, the Company will have no obligation to purchase the Shares and the Holders will
have no obligation to sell the Shares hereunder, and no party will have any further
obligation hereunder except that the Company must promptly return the EnCap Certificates to
the Holders.

     (b) Either the Company or the Holders may terminate this Agreement if the Placement
Agreement has not been executed and delivered by the parties thereto on or before January
31, 2006.

     6.9. Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument. Any party may execute this Agreement by the delivery of a facsimile signature, which
signature shall have the same force and effect as an original signature. Any party that delivers a
facsimile signature shall promptly thereafter deliver an originally executed signature to the other
party; provided, however, that the failure to deliver an original signature page shall not affect
the validity of any signature delivered by facsimile.

[Signature Page Follows]

 

 

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by its
duly authorized officer as of the date first written above.

PETROHAWK ENERGY CORPORATION

	 	 	 	 	 
	By:
	 	 	 	 
	 	 	 
	Name:	 	 
	 

	 	 	 	 
	Title:	 	 
	 

	 	 	 	 

	 	 	 
	ENCAP IV-B ACQUISITIONS, L.P.
	 
	 	 
	By:

	 	EnCap IV-B Acquisitions GP, LLC,
	 

	 	General Partner of EnCap IV-B Acquisitions, L.P.
	 
	 	 
	By:

	 	EnCap Energy Capital Fund IV-B, L.P.,
	 

	 	Sole Member of EnCap IV-B Acquisitions GP, LLC
	 
	 	 
	By:

	 	EnCap Equity Fund IV GP, L.P.,
	 

	 	General Partner of EnCap Energy Capital Fund IV-B, L.P.
	 
	 	 
	By:

	 	EnCap Investments L.P.,
	 

	 	General Partner of EnCap Equity Fund IV GP, L.P.
	 
	 	 
	By:

	 	EnCap Investments GP, L.L.C.,
	 

	 	General Partner of EnCap Investments L.P.

	 	 	 	 	 
	By:
	 	 	 	 
	 	 	 
	Name:	 	 
	 

	 	 	 	 
	Title:	 	Senior Managing Director

	 	 	 
	ENCAP ENERGY CAPITAL FUND IV, L.P.
	 
	 	 
	By:

	 	EnCap Equity Fund IV GP, L.P.,
	 

	 	General Partner of EnCap Energy Capital Fund IV, L.P.
	 
	 	 
	By:

	 	EnCap Investments L.P.,
	 

	 	General Partner of EnCap Equity Fund IV GP, L.P.
	 
	 	 
	By:

	 	EnCap Investments GP, L.L.C.,
	 

	 	General Partner of EnCap Investments L.P.

	 	 	 	 	 
	By:
	 	 	 	 
	 	 	 
	Name:	 	 
	 

	 	 	 	 
	Title:	 	Senior Managing Director

 

 

Execution Copy

Schedule I

to Stock Purchase Agreement

	 	 	 	 	 
	HOLDER	 	SHARES	 
	ENCAP IV-B ACQUISITIONS, L.P.
	 	 	1,047,157	 
	ENCAP ENERGY CAPITAL FUND IV, L.P.
	 	 	2,275,284	 
	TOTAL
	 	 	3,322,441exv10w33

 

EXHIBIT 10.33

13,000,000 Shares of

PETROHAWK ENERGY CORPORATION

Common Stock

PLACEMENT AGREEMENT

January 25, 2006

Lehman Brothers Inc.

Friedman, Billings, Ramsey & Co., Inc.

c/o Lehman Brothers Inc.

745 Seventh Avenue, Third Floor

New York, New York 10019

Ladies and Gentlemen:

     Petrohawk Energy Corporation, a Delaware corporation (the “Company”) proposes, upon the terms
and conditions set forth herein, to issue and sell to certain purchasers (each a “Purchaser” and,
collectively, the “Purchasers”), pursuant to the terms of this Placement Agreement (this
“Agreement”), an aggregate of 13,000,000 shares (the “Stock”) of the Company’s common stock, par
value $.001 per share (the “Common Stock”).

     Lehman Brothers Inc. (“Lehman”) and Friedman, Billings, Ramsey & Co., Inc. (together with
Lehman, the “Placement Agents”), will act as placement agents to solicit offers in connection with
the Company’s offer and sale to certain (i) Accredited Investors (as such term is defined in
Regulation D (“Regulation D”) under the Securities Act of 1933, as amended (the “Securities Act”)
and (ii) non-United States persons pursuant to offers and sales of the Stock that occur outside the
United States (“Non-US Persons”) within the meaning of Regulation S (“Regulation S”) under the
Securities Act, in each case, as set forth in the Private Placement Memorandum (as defined herein)
under the heading “Private Placement.” The offer and sale of the shares described in the first
sentence of this paragraph is referred to herein as the “Private Placement.”

     The offer and sale of the Stock to the Accredited Investors and the Non-US Persons will be
made without registration under the Securities Act, and the rules and regulations (the “Securities
Act Rules”) of the United States Securities and Exchange Commission (the “Commission”) thereunder,
in reliance upon the exemption from the registration requirements of the Securities Act provided by
Section 4(2) thereunder.

     The Company has prepared a preliminary private placement memorandum, dated January 11, 2006
(the “Preliminary Private Placement Memorandum”), and the Company hereby agrees to prepare prior to
close of business on the business day immediately following the execution and delivery of this
Agreement in a form approved by the Placement Agents, a final private placement memorandum (the
“Private Placement Memorandum”), in each case, setting forth information regarding the Company, its
subsidiaries (as defined in Section 16) and the Stock, and to make no further amendment or
supplement prior to the Closing Date except as provided herein. The Company hereby confirms that
it has authorized the use of the Private Placement Memorandum by the Placement Agents in connection
with the Private Placement.

1

 

     Holders (including subsequent transferees) of the Stock will have the registration rights set
forth in the form of registration rights agreement attached hereto as Exhibit A (the
“Registration Rights Agreement”) among the Company and the Placement Agents to be dated as of the
Closing Date (as defined below), for so long as such Stock constitutes “Registrable Securities” (as
defined in the Registration Rights Agreement). Pursuant to, and subject to the terms of, the
Registration Rights Agreement, the Company will agree to file with the Commission, under the
circumstances set forth therein, a shelf registration statement (the “Registration Statement”) on
Form S-3 or such other appropriate form pursuant to Rule 415 under the Securities Act registering
the offer and resale by holders of Stock constituting Registrable Shares, and to use its reasonable
best efforts to cause any such registration statement to become effective.

     1. Representations and Warranties and Agreements of the Company. The Company represents and
warrants to, and agrees with, the Placement Agents and the Purchasers that:

     (a) No order or decree preventing the use of the Preliminary Private Placement
Memorandum or the Private Placement Memorandum, or any order asserting that the transactions
contemplated by this Agreement are subject to the registration requirements of the
Securities Act has been issued and no proceeding for that purpose has commenced or is
pending or, to the knowledge of the Company, is contemplated.

     (b) The Preliminary Private Placement Memorandum as of the date hereof does not, and
the Private Placement Memorandum as of the Closing Date will not, contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided that no representation
or warranty is made as to information contained in or omitted from the Preliminary Private
Placement Memorandum or the Private Placement Memorandum in reliance upon and in conformity
with written information furnished to the Company by either Placement Agent specifically for
inclusion therein.

     (c) All documents (the “Exchange Act Reports”) filed by the Company under the United
States Securities Exchange Act of 1934, as amended (the “Exchange Act”), when they were or
are filed with the Commission, conformed or will conform in all material respects to the
applicable requirements of the Exchange Act and the applicable rules and regulations of the
Commission thereunder.

     (d) The documents incorporated by reference in the Preliminary Private Placement
Memorandum did not, and any further documents filed and incorporated by reference in the
Private Placement Memorandum will not, when filed with the Commission, contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading.

     (e) The Company has furnished to the Purchasers all of the information specified in,
and meeting the requirements of, Rule 502(b)(2)(ii) under the Securities Act.

     (f) Assuming the Placement Agents’ representations and warranties in Section 2 are
true, the Private Placement is exempt from the registration requirements of the Securities
Act.

2

 

     (g) No form of general solicitation or general advertising within the meaning of
Regulation D (including, but not limited to, advertisements, articles, notices or other
communications published in any newspaper, magazine or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising) was used by the Company or any of its
affiliates or representatives (other than the Placement Agents and their respective
affiliates and representatives, as to whom the Company makes no representation) in
connection with the offer and sale of the Stock.

     (h) During the six-month period preceding the date of the Private Placement Memorandum,
neither the Company, nor any of its subsidiaries, or any of their respective officers and
directors, has, whether directly or through any agent or person acting on behalf of the
Company (other than the Placement Agents): (i) offered Stock or any other securities
convertible into or exchangeable or exercisable for Stock in a manner in violation of the
Securities Act or Securities Act Rules, (ii) distributed any other offering material in
connection with the offer and sale of the Stock, other than the Marketing Materials (as
defined below) and as described in or incorporated by reference in the Private Placement
Memorandum, or (iii) sold, offered for sale, solicited offers to buy or otherwise negotiated
in respect of any security (as defined in the Securities Act) which is or will be integrated
with the Private Placement in a manner that would require the registration of the offer or
sale by the Company of the Stock under the Securities Act.

     (i) The Registration Rights Agreement will conform in all material respects to the
summary description thereof in the Private Placement Memorandum.

     (j) Each of the Company and its subsidiaries has been duly organized, is validly
existing and is in good standing as a corporation or other business entity under the laws of
its jurisdiction of organization and is duly qualified to do business and in good standing
as a foreign corporation or other business entity in each jurisdiction in which its
ownership or lease of property or the conduct of its businesses requires such qualification,
except where the failure to be so qualified or in good standing, individually or in the
aggregate, could not reasonably be expected to cause, individually or in the aggregate, a
material adverse effect on the condition (financial or otherwise), results of operations,
stockholders’ equity, properties or business of the Company and its subsidiaries, taken as a
whole (a “Material Adverse Effect”). Each of the Company and its subsidiaries has all
corporate or other power and authority necessary to own or hold its properties and to
conduct its business in all material respects as described in or incorporated by reference
in the Private Placement Memorandum. The Company does not own or control, directly or
indirectly, any corporation, partnership, company, association or other entity other than
the subsidiaries listed in Schedule 1 attached to this Agreement. None of the
subsidiaries of the Company (other than Petrohawk Operating Company, Petrohawk Holdings, LLC
and Petrohawk Properties, LP) (collectively, the “Significant Subsidiaries”) is a
“significant subsidiary” (as defined in Rule 405 of the Securities Act Rules).

     (k) The Company has an authorized capitalization as set forth in or incorporated by
reference in the Private Placement Memorandum, and all of the issued shares of capital stock
of the Company have been duly authorized and validly issued, are fully paid and
non-assessable, conform to the description thereof contained in or incorporated by reference
in

3

 

the Private Placement Memorandum and were issued in compliance with federal and state
securities laws and not in violation of any preemptive right, resale right, right of first
refusal or similar right. All of the Company’s options, warrants and other rights to
purchase or exchange any securities for shares of the Company’s capital stock have been duly
authorized and validly issued, conform to the description thereof contained in or
incorporated by reference in the Private Placement Memorandum and were issued in compliance
with federal and state securities laws. All of the issued shares of capital stock of each
of its subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims, except for such liens, encumbrances, equities or
claims as set forth in or incorporated by reference in the Private Placement Memorandum and
those that could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

     (l) The shares of the Stock to be issued and sold by the Company to the Purchasers
hereunder have been duly authorized and, upon payment and delivery in accordance with this
Agreement, will be validly issued, fully paid and non-assessable, will conform to the
description thereof contained in or incorporated by reference in the Private Placement
Memorandum, assuming the accuracy of the representations and warranties in Section 2, will
be issued in compliance with federal and state securities laws and will be free of statutory
and contractual preemptive rights, rights of first refusal and similar rights.

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

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

     (o) The execution, delivery and performance of this Agreement and the Registration
Rights Agreement by the Company, the consummation of the transactions contemplated hereby
and thereby, the application of the proceeds from the sale of the Stock as described under
“Use of Proceeds” in the Private Placement Memorandum and the compliance by the Company with
all of the provisions of this Agreement and the Registration Rights Agreement and the consummation of the transactions contemplated
hereby and thereby will not (i) conflict with or result in a breach or violation of any of
the terms or provisions of, impose any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries, or constitute a default under, any
indenture,

4

 

mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject, (ii) result in any violation of the provisions of the charter
or by-laws of the Company or the charter, by-laws, partnership agreement, limited liability
company agreement or similar organizational documents of any of its subsidiaries or (iii)
result in any violation of any statute (assuming the accuracies of the representations set
forth in Section 2) or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets which conflicts, breaches, violations or defaults, in the
case of clause (i) or (iii), would, individually or in the aggregate, have a Material
Adverse Effect or would materially impair the ability of the Company to perform its
obligations under this Agreement.

     (p) Assuming the accuracy of the representations set forth in Section 2, no consent,
approval, authorization or order of, or filing, registration or qualification with any court
or governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their property or assets (each, a “Consent”) is required for the
execution, delivery and performance of this Agreement or the Registration Rights Agreement
by the Company, the consummation of the transactions contemplated hereby and thereby and the
application of the proceeds from the sale of the Stock as described under “Use of Proceeds”
in the Private Placement Memorandum, except for (i) such Consents as may be required under
state securities or Blue Sky laws or foreign laws or (ii) in the case of the consummation of
the transactions contemplated by the Registration Rights Agreement, for registration of the
offer and resale of the Stock under the Securities Act and under the rules of the National
Association of Securities Dealers, Inc. with respect to the purchase and distribution of the
Stock by underwriters in connection therewith. Except as described in or incorporated by
reference in the Private Placement Memorandum, there are no contracts, agreements or
understandings between the Company and any person granting such person the right to require
the Company to file a registration statement under the Securities Act with respect to any
securities of the Company (other than the Registration Rights Agreement) owned or to be
owned by such person or to require the Company to include such securities in the securities
registered pursuant to the Registration Rights Agreement or in any securities being
registered pursuant to any other registration statement filed by the Company under the
Securities Act.

     (q) Neither the Company nor any of its subsidiaries has sustained, since the date of
the latest audited financial statements included or incorporated by reference in the Private
Placement Memorandum, any loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree, except as could not reasonably be expected to have
a Material Adverse Effect; and except as set forth in the Private Placement Memorandum,
since such date, there has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any adverse change, in or affecting the condition
(financial or otherwise), results of operations, stockholders’ equity, properties,
management or business of the Company and its subsidiaries, taken as a whole, except as
could not reasonably be expected to have a Material Adverse Effect.

5

 

     (r) Since the date as of which information is given in the Private Placement Memorandum
and except as may otherwise be described in the Private Placement Memorandum, including the
documents incorporated by reference therein as of the date hereof, the Company has not (i)
incurred any liability or obligation, direct or contingent, other than liabilities and
obligations that were incurred in the ordinary course of business, (ii) entered into any
material transaction not in the ordinary course of business or (iii) declared or paid any
dividend on its capital stock.

     (s) The historical financial statements (including the related notes and supporting
schedules) included in the Private Placement Memorandum present fairly in all material
respects the financial condition, results of operations and cash flows of the entities
purported to be shown thereby at the dates and for the periods indicated and have been
prepared in conformity with accounting principles generally accepted in the United States
applied on a consistent basis throughout the periods involved, except as otherwise stated
therein.

     (t) The pro forma financial information and operating data included or incorporated by
reference in the Private Placement Memorandum include assumptions that provide a reasonable
basis for presenting the significant effects directly attributable to the transactions and
events described therein, the related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma adjustments reflect the proper application of those
adjustments to the historical financial statement amounts in the pro forma financial
statements included or incorporated by reference in the Private Placement Memorandum.

     (u) Deloitte & Touche LLP, who have certified certain financial statements of the
Company and its consolidated subsidiaries, whose report appears in the Private Placement
Memorandum or is incorporated by reference therein and who have delivered the initial letter
referred to in Section 7(g) hereof, are independent public accountants as required by the
Securities Act and the Securities Act Rules; and each of KPMG LLP, Ernst & Young LLP and
Hein & Associates LLP, whose reports appear in the Private Placement Memorandum or are
incorporated by reference therein, were independent public accountants as required by the
Securities Act and the Securities Act Rules during the periods covered by the financial
statements on which they reported contained or incorporated by reference in the Private
Placement Memorandum.

     (v) Netherland Sewell & Associates, Inc. (the “Reservoir Engineer”), whose report
appears in the Private Placement Memorandum or is incorporated by reference therein and who
has delivered the letter referred to in Section 7(i) hereof, was, as of the date of such
report, and is, as of the date hereof, an independent petroleum engineer with respect to the
Company.

     (w) The information underlying the estimates of the Company’s proved reserves that was
supplied to the Reservoir Engineer for the purposes of preparing the independent reserve
reports and estimates of the proved reserves of the Company disclosed in the Private
Placement Memorandum or incorporated by reference therein (such estimates, the “Audited
Reserve Estimates”) and the Company’s internal estimates of its proved reserves which are
disclosed in the Private Placement Memorandum (such internal estimates, the “Unaudited
Reserve Estimates”), including, production, costs of operation, and, to the Company’s
knowledge, future operations and sales of production, were true and correct in all material

6

 

respects on the dates such information was provided, and such information was supplied and
was prepared in accordance with customary industry practices; other than normal production
of the reserves, product price fluctuations, and fluctuations of demand for such products,
and except as disclosed in the Private Placement Memorandum, the Company is not aware of any
facts or circumstances that would result in a materially adverse change in their reserves in
the aggregate, or the aggregate present value of the future net cash flows therefrom as
described in the Private Placement Memorandum and as reflected in the reserve reports
prepared by the Reservoir Engineer or in the Unaudited Reserve Estimates; the Audited
Reserve Estimates and Unaudited Reserve Estimates and present value as described in the
Private Placement Memorandum and reflected in the reserve report referenced therein have
been prepared in a manner that complies with the applicable requirements of Regulation S-X
and Industry Guide 2 under the Securities Act.

     (x) Neither the Company nor any of its subsidiaries is, or after giving effect to the
offering and sale of the Stock and upon application of the proceeds as described under the
caption “Use of Proceeds” in the Private Placement Memorandum will be, (i) an “investment
company” within the meaning of such term under the Investment Company Act of 1940, as
amended (the “Investment Company Act”), and the rules and regulations of the Commission
thereunder or (ii) a “business development company” (as defined in Section 2(a)(48) of the
Investment Company Act).

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

     (z) No relationship, direct or indirect, that would be required to be described in a
Company registration statement pursuant to Item 404 of Regulation S-K or otherwise exists
between or among the Company, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company, on the other hand, that is not described in or
incorporated by reference in the Private Placement Memorandum.

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

     (bb) (i) Each “employee benefit plan” (within the meaning of Section 3(3) of the
Employee Retirement Security Act of 1974, as amended (“ERISA”)) for which the Company or any
member of its “Controlled Group” (defined as any organization which is a member of a
controlled group of corporations within the meaning of Section 414 of the Internal Revenue
Code of 1986, as amended (the “Code”)) would have any liability (each a “Plan”) has been
maintained, in all material respects, in compliance with its terms and with
the requirements of all applicable statutes, rules and regulations including ERISA and
the Code; (ii) with respect to each Plan subject to Title IV of ERISA (a) no “reportable
event” (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably
expected to

7

 

occur, (b) no “accumulated funding deficiency” (within the meaning of Section
302 of ERISA or Section 412 of the Code), whether or not waived, has occurred or is
reasonably expected to occur, (c) the fair market value of the assets under each Plan
exceeds the present value of all benefits accrued under such Plan (determined based on those
assumptions used to fund such Plan) and (d) neither the Company or any member of its
Controlled Group has incurred, or reasonably expects to incur, any liability under Title IV
of ERISA (other than contributions to the Plan or premiums to the PBGC in the ordinary
course and without default) in respect of a Plan (including a “multiemployer plan”, within
the meaning of Section 4001(c)(3) of ERISA); and (iii) each Plan that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such qualification.

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

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

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

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

8

 

     (gg) The Company and each of its Significant Subsidiaries owns or possesses adequate
rights to use all material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations, copyrights and licenses
necessary for the conduct of their respective businesses as presently conducted and have no
reason to believe that the conduct of their respective businesses will in any material
respect conflict with, and have not received any notice of any claim of conflict with, any
such rights of others in any material respect.

     (hh) The Company and each of its Significant Subsidiaries have (i) legal, valid and
defensible title to the interests in its natural gas and oil properties underlying the
Company’s estimates of its net proved reserves contained in the Private Placement
Memorandum, (ii) good and marketable title in fee simple to all real property and (iii) good
and marketable title to all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects, except such as are described in the Private Placement
Memorandum and except for any of the foregoing that would not reasonably be expected to have
a Material Adverse Effect; and all assets held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases, with such
exceptions as would not reasonably be expected to have a Material Adverse Effect.

     (ii) The Company and each of its subsidiaries (i) are in compliance with all laws,
regulations, ordinances, rules, orders, judgments, decrees, permits or other legal
requirements of any governmental authority, including without limitation any international,
national, state, provincial, regional, or local authority, relating to the protection of
human health and safety, the environment, or natural resources, or to hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”) applicable to such
entity, which compliance includes obtaining, maintaining and complying with all permits and
authorizations and approvals required by Environmental Laws to conduct their respective
businesses, and (ii) have not received notice of any actual or alleged violation of
Environmental Laws, or of any potential liability for or other obligation concerning the
presence, disposal or release of hazardous or toxic substances or wastes, pollutants or
contaminants, except in the case of clause (i) or (ii) where such non-compliance, violation,
liability, or other obligation could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect. Except as described in the Private Placement Memorandum, (A) there
are no proceedings that are pending, or known to be contemplated, against the Company or any
of its subsidiaries under Environmental Laws in which a governmental authority is also a
party, other than such proceedings regarding which it is reasonably believed no monetary
sanctions of $100,000 or more will be imposed, and (B) the Company and its subsidiaries are
not aware of any issues regarding compliance with Environmental Laws, or liabilities or
other obligations under Environmental Laws or concerning hazardous or toxic substances or
wastes, pollutants or contaminants, that could reasonably be expected to have a Material
Adverse Effect.

     (jj) Neither the Company nor any of its subsidiaries, nor, to the knowledge of the
Company, any director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries, has (i) used any corporate funds for any

9

 

unlawful contribution, gift, entertainment or other unlawful expense relating to political
activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in violation of
any provision of the U.S. Foreign Corrupt Practices Act of 1977; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment.

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

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

     (mm) The Company has not taken and will not take, directly or indirectly, any action
designed to or that has constituted or that could reasonably be expected to cause or result
in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the shares of the Stock.

     (nn) The statements set forth under the captions “Material United States Federal Tax
Considerations for Non-United States Holders”, “Business and Properties”, “The North
Louisiana Acquisitions”, “Certain Relationships and Related Transactions”, “Registration
Rights” and “Private Placement,” insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate in all material respects.

     (oo) Except as disclosed in the Private Placement Memorandum, the Company and its
subsidiaries have insurance covering the properties, operations, personnel and businesses of
the Company and its subsidiaries, which insurance is in amounts and insures against such
losses and risks as are customary in the oil and gas industry; and neither the Company nor
any subsidiary has (i) received 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 or (ii) any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
comparable coverage at reasonable cost from similar insurers as may be necessary to
continue its business.

10

 

     (pp) Any certificate signed by any officer of the Company and delivered to the
Placement Agent or counsel for the Placement Agent in connection with the offering of the
Stock shall be deemed a representation and warranty by the Company, as to the matters
covered thereby, to the Placement Agent and the Purchasers.

     2. Representations, Warranties and Agreements of the Placement Agents. Each Placement Agent hereby
represents and warrants to the Company and to each other that such Placement Agent:

     (a) has not solicited and will not solicit offers or sales of the Stock on behalf of
the Company except in accordance with this Agreement and on the terms contemplated by the
Private Placement Memorandum;

     (b) has not, nor has any of its Affiliates (as such term is defined in Regulation D),
nor has any person acting on their behalf, engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D, including, but not limited to,
advertisements, articles, notices or other communications published in any newspaper,
magazine, or similar medium or broadcast over television or radio, or any seminar or meeting
whose attendees have been invited by any general solicitation or general advertising);

     (c) has not, nor has any of its Affiliates, nor has any person acting on their behalf,
directly or indirectly, made offers or sales of any security, or solicited offers to buy any
security, under circumstances that would require the registration of the Stock under the
Securities Act;

     (d) has not distributed and will not distribute any offering materials in connection
with the Private Placement of the Stock other than the Preliminary Private Placement
Memorandum, the Private Placement Memorandum, the Marketing Materials and such additional
material as may be furnished to the Placement Agents specifically by the Company for such
purpose; and

     (e) is registered as a broker-dealer under the Exchange Act and is a member in good
standing of the National Association of Securities Dealers, Inc.

     3. Private Placement of Securities. On the basis of the representations, warranties and agreements
contained in, and subject to the conditions of this Agreement, the Company and the Placement Agents
agree as follows:

     (a) The Company shall offer and sell the Stock to Purchasers who have subscribed
pursuant to the terms and conditions set forth in the subscription agreements substantially
in the forms attached to the Private Placement Memorandum as Annexes A, B and C, as
applicable (each a “Subscription Agreement”). The Stock will be sold by the Company
pursuant to this Agreement at a price equal to $14.50 per share (the “Purchase
Price”). The Placement Agents shall have no liability to the Company in the event any
such purchase is not consummated for any reason. Under no circumstances will the Placement
Agents be obligated to purchase any Stock for its own account and, in soliciting purchases
of the Stock, the Placement Agents shall act solely as the Company’s agent and not as
principal.

11

 

     (b) As compensation for the services to be provided by the Placement Agents in
connection with the Private Placement, the Company shall pay to the Placement Agents on the
Closing Date an amount equal to $0.595 for each share of the Stock sold at such time (the
“Placement Fee”), with each Placement Agent receiving an amount equal to 50% of the
Placement Fee.

     (c) The Placement Agents shall be the sole agents of the Company in connection with the
Private Placement and in such capacity may arrange for the private offer and sale of the
Stock by the Company under restrictions and other circumstances designed to preclude a
distribution of the Stock that would require registration of the Stock under the Securities
Act. Offers for the purchase of the Stock may be solicited solely by the Placement Agents,
as agents for the Company, at such times and in such amounts as the Placement Agents deem
advisable.

     (d) Offers by the Placement Agents on behalf of the Company shall be made only to
Accredited Investors and Non-US Persons (which may include affiliates of the Placement
Agents) with whom a Placement Agent has an existing relationship. The Placement Agents will
not engage in a general solicitation or utilize general advertising within the meaning of
Regulation D in connection with the offering of the Stock.

     (e) Prior to the earlier of the date on which this Agreement is terminated and the
Closing Date, neither the Company nor any other person or entity on behalf of the Company
shall, without the prior consent of the Placement Agents, solicit or accept offers to
purchase Stock (other than pursuant to the exercise of options or warrants or convertible
securities evidencing the right to purchase shares of Common Stock that are outstanding at
the date hereof) otherwise than through the Placement Agents.

     (f) The Company shall have the sole right to accept offers to purchase the Stock and
may reject any such offer, in whole or in part and any such rejection shall not be deemed a
breach of its agreements contained herein. The Placement Agents shall have the right, in
their discretion reasonably exercised, without notice to the Company, to reject any offer to
purchase the Stock received by them, in whole or in part, and any such rejection shall not
be deemed a breach of their agreements contained herein.

     (g) Concurrently with the execution and delivery of this Agreement, the Placement
Agents and The Bank of New York, as escrow agent (the “Escrow Agent”), shall enter into an
Escrow Agreement substantially in the form of Exhibit B attached hereto (the “Escrow
Agreement”), pursuant to which an escrow account will be established, at the Company’s
expense, for the benefit of the Purchasers (the “Escrow Account”). Prior to the Closing Date
each of the Purchasers will deposit in the Escrow Account an amount equal to the Purchase
Price multiplied by the number of shares of Stock to be purchased by such Purchaser (the
“Escrow Funds”).

     (h) As compensation for services rendered, on the Closing Date a cash amount equal to
the aggregate Placement Fee plus the expenses which the Company has agreed to reimburse
hereunder shall be released to the Placement Agents directly out of the Escrow Account.

12

 

     (i) The Company shall sell the Stock only to persons that have provided the Company a
fully completed and executed Subscription Agreement in the form of Annex A, B or C, as
applicable, to the Private Placement Memorandum.

     (j) No Stock which the Company has agreed to sell pursuant to this Agreement shall be
deemed to have been purchased and paid for, or sold by the Company, until such Stock shall
have been delivered to the Purchaser thereof against payment by such Purchaser. If the
Company shall default in its obligations to deliver Stock to a Purchaser whose offer it has
accepted, and from which it has received payment for such Stock, the Company shall indemnify
and hold the Placement Agents harmless against any loss, claim or damage arising from or as
a result of such default by the Company, as the case may be.

     (k) The Stock may be resold or otherwise transferred by the holders thereof only if the
offer and sale of such Stock is registered under the Securities Act or if an exemption from
registration is available. The Private Placement Memorandum shall state that the offer and
sale of the Stock has not been and will not be registered (other than pursuant to the
Registration Rights Agreement) under the Securities Act, and that no resale or other
transfer of any Stock or any interest therein prior to the date that is two years (or such
shorter period as is prescribed by Rule 144(k) under the Securities Act as then in effect)
after the later of the original issuance of such Stock and the last date on which the
Company or any “affiliate” (as defined in Rule 144 under the Securities Act) of the Company
was the owner of such Stock may be made by a purchaser of such Stock except as follows:

     (i) to the Company or any subsidiary thereof,

     (ii) pursuant to offers and sales that occur outside of the United States within
the meaning of Regulation S under the Securities Act,

     (iii) pursuant to a registration statement that has been declared effective
under the Securities Act,

     (iv) to an Accredited Investor that is acquiring the Stock for his, her or its
own account or an investment adviser who is acquiring the Stock for the account of an
Accredited Investor for investment purposes and not with a view to, or for offer or
sale in connection with, any distribution thereof, or

     (v) pursuant to any other available exemption from the registration requirements
of the Securities Act,

in each case in accordance with any applicable federal securities laws and the securities
laws of any state of the United States or other jurisdiction.

     (l) The Company shall take reasonable precautions designed to insure that any offer or
sale, direct or indirect, in the United States or to any U.S. person (as defined in Rule
902 under the Securities Act) of any Common Stock or any substantially similar security
issued by the Company, within six months subsequent to the date on which the distribution of
the Stock has been completed (as notified to the Company by the Placement Agents), is made
under restrictions and other circumstances reasonably designed not to affect the status of
the offer and sale of the Stock in the United States and to U.S. persons contemplated by
this Agreement as transactions exempt from the registration provisions of the Securities
Act, including any sales of Common Stock hereunder pursuant to Regulation D.

13

 

     4. Payment and Delivery. The closing of the Private Placement shall be held at the Houston office
of Akin Gump Strauss Hauer & Feld LLP, 1111 Louisiana Street, 44th Floor, Houston, Texas
77002 at 10:00 a.m., New York City time, on the fifth full business day following the date of this
Agreement or at such other date or place as shall be agreed upon by the Placement Agents and the
Company. The date and time at which payment and delivery are actually made is hereinafter
sometimes referred to as the “Closing Date”. On the Closing Date, subject to the satisfaction of
the closing conditions set forth herein, the Placement Agents shall cause to be released from the
Escrow Account to an account of the Company designated to the Placement Agents in writing, by wire
transfer of immediately available funds, the aggregate Purchase Price for the Stock received prior
to the Closing Date (net of an amount equal to the aggregate Placement Fee and the fees and
expenses which the Company has agreed to reimburse hereunder) against the Company’s irrevocable
instruction to its transfer agent to deliver certificates of Stock to each Purchaser.

     5. Covenants of the Company. The Company agrees with the Placement Agents that:

     (a) The Company shall furnish to the Placement Agents, without charge, such number of
copies of the Preliminary Private Placement Memorandum and the Private Placement Memorandum
and any amendment or supplement thereto as the Placement Agents may reasonably request.

     (b) The Company shall not make any amendment or supplement to the Preliminary Private
Placement Memorandum or the Private Placement Memorandum of which the Placement Agents shall
not previously have been advised or to which the Placement Agents shall reasonably object
after being so advised.

     (c) If, at any time prior to completion of the distribution of the Stock, any event
occurs or information becomes known that, in the judgment of the Company or in the opinion
of counsel for the Placement Agents, should be set forth in the Private Placement Memorandum
so that the Private Placement Memorandum does not include any untrue statement of material
fact or omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if it is
otherwise necessary to supplement or amend the Private Placement Memorandum in order to
comply with any law, the Company shall forthwith prepare an appropriate supplement or
amendment thereto, and will expeditiously furnish to the Placement Agents a reasonable
number of copies thereof.

     (d) The Company shall cooperate with the Placement Agents and with their counsel in
connection with the qualification of the offering and sale of the Stock under the securities
or Blue Sky laws of such jurisdictions as the Placement Agents may designate and will file
such consents to service of process or other documents necessary or appropriate in order to
effect such qualification; provided, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to service of process in suits, other than those arising out of
the offering or sale of the Stock, in any jurisdiction where it is not now so subject.

14

 

     (e) Neither the Company nor any of its Affiliates shall solicit any offer to buy or
offer to sell the Stock by means of any form of general solicitation or general advertising
(within the meaning of Regulations D, including, but not limited to, advertisements,
articles, notices or other communications published in any newspaper, magazine, or similar
medium or broadcast over television or radio, or any seminar or meeting whose attendees have
been invited by any general solicitation or general advertising).

     (f) Until the third anniversary of the Closing Date, the Company shall furnish to the
holders of the Stock (i) as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income, stockholders’ equity and cash
flows of the Company and its consolidated subsidiaries certified by independent public
accountants) and, (ii) as soon as practicable after the end of each of the first three
quarters of each fiscal year (beginning with the first such fiscal quarter ending after the
date of the Private Placement Memorandum), will make available to its securityholders
consolidated summary financial information of the Company and each of its subsidiaries for
such quarter in reasonable detail prepared, in each case, in accordance with the
requirements of the Exchange Act and the rules and regulations promulgated thereunder
applicable to companies whose shares are registered under Section 12(g) of the Exchange Act;
provided, however, that for so long as the Company shall file Exchange Act Reports in
accordance with the rules and regulations under the Exchange Act, the Company will be deemed
to have satisfied the covenant in this Section 5(e) if the information required to be
furnished hereunder is included in any Exchange Act Reports.

     (g) Until the third anniversary of the Closing Date, the Company shall furnish to the
Placement Agents (i) as soon as available, a copy of each report of the Company mailed to
stockholders generally or filed with any stock exchange or regulatory body, which obligation
shall be deemed satisfied if an electronic copy of each such report is publicly available
for a reasonable period of time after the date of any such mailing or filing (ii) from time
to time such other information concerning the Company as the Placement Agents may reasonably
request, and (iii) during any period in the two years (or such shorter period as may then be
applicable under the Securities Act regarding the holding period for securities under Rule
144(k) under the Securities Act or any successor rule) after the Closing in which the
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon request by the
Placement Agents or any holder of such Stock, the information specified in Rule 144A(d)(4)
under the Securities Act.

     (h) The Company shall apply the net proceeds from the sale of the Stock to be sold by
the Company substantially in accordance with the description set forth in the Private
Placement Memorandum under the caption “Use of Proceeds.”

     (i) Except as stated in this Agreement and in the Private Placement Memorandum, neither
the Company nor any of its Affiliates shall 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 of the
Stock.

15

 

     (j) Prior to the Closing Date, the Company shall not, and the Company shall not permit
any subsidiary to, issue any press release or other communication directly or indirectly or
hold any press conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except for communications in
the ordinary course of business and consistent with the past practices of the Company and of
which the Placement Agents are notified), without the prior consent of the Placement Agents,
unless in the judgment of the Company and its counsel, and after notification to the
Placement Agents, such press release or communication is required by law.

     (k) Prior to the Closing Date, the Company shall promptly disclose to the Placement
Agents in writing any information that gives the Company any reason to believe that any of
the conditions set forth in Section 7 will not be satisfied as of the Closing Date.

     (l) The Company shall supply the Placement Agents with copies of all correspondence to
and from, and all documents issued to and by, the Commission in connection with or with
respect to the Private Placement, if any.

     (m) For a period beginning on the date hereof and ending on the date 30 days after the
date the Registration Statement is declared effective (the “Lock-Up Period”), the Company
shall not, directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device that is designed to, or could be expected to,
result in the disposition by any person at any time in the future of) any shares of Common
Stock or securities convertible into or exchangeable for Common Stock (other than shares
issued pursuant to employee benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof or pursuant to currently outstanding options,
warrants or rights), or sell or grant options, rights or warrants with respect to any shares
of Common Stock or securities convertible into or exchangeable for Common Stock (other than
the grant of options pursuant to option plans existing on the date hereof), (2) enter into
any swap or other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common Stock, whether
any such transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, (3) file or cause to be filed a
registration statement with respect to any shares of Common Stock or securities convertible,
exercisable or exchangeable into Common Stock or any other securities of the Company or (4)
publicly disclose the intention to do any of the foregoing, in each case without the prior
written consent of the Placement Agents, which consents shall not be unreasonably withheld;
provided, however, that, if (A) during the last 17 days of the Lock-Up Period, the Company
issues an earnings release or material news or a material event relating to the Company
occurs or (B) prior to the expiration of the Lock-Up Period, the Company announces that it
will release earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, then the restrictions imposed in the preceding paragraph shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the earnings
release or the announcement of the material news or the occurrence of the material event, unless
the Placement Agents waive such extension in writing.

     (n) The Company shall cause each officer and director of the Company set forth on
Schedule 2 hereto to furnish to the Placement Agents, prior to the Closing Date, a
letter or letters, substantially in the form of Exhibit C-1 hereto (the “D&O Lock-Up
Agreements”), and cause each stockholder of the Company set forth on Schedule 2
hereto to furnish to the Placement Agents, prior to the Closing Date, a letter or letters,
substantially in
the form of Exhibit C-2 hereto (together with the D&O Lock-Up Agreements, the “Lock-Up Agreements”).

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     (o) The Company shall furnish to the Placement Agents such further information,
certificates and documents as the Placement Agents may reasonably request and shall do and
perform all things required or necessary to be done and performed under this Agreement by it
prior to the Closing Date, and satisfy all conditions precedent to the Placement Agents’
obligations hereunder.

     6. Expenses. The Company agrees, whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, to pay all costs, expenses, fees and taxes
incident to and in connection with (a) the authorization, issuance, sale and delivery of the Stock
and any stamp duties or other taxes payable in that connection, and the preparation and printing of
certificates for the Stock; (b) the preparation and printing of the Preliminary Private Placement
Memorandum and the Private Placement Memorandum (including all annexes thereto) and any amendment
or supplement thereto; (c) the distribution of the Preliminary Private Placement Memorandum and the
Private Placement Memorandum (including any exhibits thereto) and any amendment or supplement
thereto, or any document incorporated by reference therein, all as provided in this Agreement; (d)
the production and distribution of this Agreement, the Registration Rights Agreement, any
supplemental agreement among Placement Agents, and any other related documents in connection with
the offering, purchase, sale and delivery of the Stock; (e) the qualification of the Stock for
offer and sale under the securities laws of the several jurisdictions and the determination of its
eligibility for investment under state law (including any filing fees and the reasonable legal fees
and other disbursements of the Placement Agents); (f) the preparation, printing and distribution of
a Blue Sky Memorandum (including related fees and expenses of counsel to the Placement Agents); (g)
the investor presentations on any “road show” undertaken in connection with the marketing of the
Stock, including, without limitation, expenses associated with any electronic roadshow, travel and
lodging expenses of the representatives and officers of the Company and the cost of any aircraft
chartered in connection with the road show; (h) the reasonable out-of-pocket expenses incurred by
the Placement Agents in connection with their services under this Agreement (including the fees and
disbursements of the Placement Agents’ legal counsel and external advisors); and (i) all other
costs and expenses incident to the performance of the obligations of the Company.

     7. Conditions to the Obligations of the Placement Agents. The obligations of the Placement Agents
to privately place the Stock pursuant to this Agreement are subject to the accuracy, when made and
on the Closing Date, of the representations and warranties on the part of the Company contained herein, to the accuracy of the statements of the
Company made in any certificates pursuant to the provisions hereof, to the performance by the
Company in all material respects to the extent not otherwise qualified by materiality, and in all
respects to the extent qualified by materiality, of their respective obligations hereunder, and to
each of the following additional terms and conditions:

     (a) No order or decree preventing the use of the Preliminary Private Placement
Memorandum or the Private Placement Memorandum, or any order asserting that the transactions
contemplated by this Agreement are subject to the registration requirements of the
Securities Act shall have been issued and no proceeding for that purpose shall have
commenced or is pending or, to the knowledge of the Company, is contemplated.

17

 

     (b) The Placement Agents shall not have discovered and disclosed to the Company that
the Private Placement Memorandum or any amendment or supplement thereto contains an untrue
statement of fact, which in the opinion of Akin Gump Strauss Hauer & Feld LLP, counsel to
the Placement Agents, is material or omits to state a fact which, in the opinion of such
counsel is material and is required to be stated therein or is necessary to make the
statements therein not misleading.

     (c) All corporate proceedings and other legal matters incident to the authorization,
form and validity of this Agreement, the Stock, the Registration Rights Agreement, and the
Private Placement Memorandum, and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all material respects
to counsel for the Placement Agents, and the Company shall have furnished to such counsel
all documents and information that they may reasonably request to enable them to pass upon
such matters.

     (d) Thompson & Knight LLP shall have furnished to the Placement Agents its written
opinion, as counsel to the Company, addressed to the Placement Agents and dated the Closing
Date, substantially in the form of Exhibit D hereto.

     (e) The Placement Agents shall have received from Akin Gump Strauss Hauer & Feld LLP,
counsel for the Placement Agents, such opinion or opinions, dated the Closing Date, with
respect to the issuance and sale of the Stock, the Private Placement Memorandum and other
related matters as the Placement Agents may reasonably require, and the Company shall have
furnished to such counsel such documents and information as they reasonably request for the
purpose of enabling them to pass upon such matters.

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

     (g) With respect to the letters of Deloitte & Touche LLP, KPMG, LLC and Hein &
Associates referred to in the preceding paragraph and delivered to the Placement Agents
concurrently with the execution of this Agreement (the “initial letter”), the Company shall
have furnished to the Placement Agents a letter (the “bring-down letter”) of such
accountants, addressed to the Placement Agents and dated the Closing Date (i) confirming
that they are independent public accountants within the meaning of the Securities Act and
are in compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the

18

 

Closing Date (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the Private
Placement Memorandum, as of a date not more than five days prior to the date of the Closing
Date), the conclusions and findings of such firm with respect to the financial information
and other matters covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.

     (h) Except as described in the Private Placement Memorandum, neither the Company nor
any of its subsidiaries shall have sustained, since the date of the latest audited financial
statements included in the Private Placement Memorandum, any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or decree; and,
since such date, there shall not have been any change in the stockholders’ equity or
long-term debt of the Company or any subsidiary that, and no event or events shall have
occurred that, and no circumstance shall have become known that, individually or in the
aggregate, has had or could reasonably be expected to have a Material Adverse Effect.

     (i) The Placement Agents shall have received from the Reservoir Engineer letters dated,
respectively, as of the date hereof and the Closing Date, addressed to the Placement Agents
and in form and substance satisfactory to the Placement Agents.

     (j) The Placement Agents shall receive a certificate of the Secretary of the Company
certifying (i) the Certificate of Incorporation of the Company and any amendments thereto,
(ii) the Bylaws of the Company and any amendments thereto, (iii) that all corporate action
has been taken on the part of the Company necessary to authorize the execution and delivery
of the Agreement, the Registration Rights Agreement and the other offering documents and the
transactions contemplated herein and therein, (iv) resolutions of the Board of Directors of
the Company approving the original issuance and sale of the Stock to the Purchasers, and (v)
a specimen common stock certificate.

     (k) The Placement Agents shall have received a certificate from the Company, dated as
of the Closing Date, signed by its Chief Executive Officer and Chief Financial Officer on
behalf of the Company stating, as applicable, that:

     (i) the representations and warranties of the Company (after giving effect to
all qualifiers therein) are true and correct as if made on and as of such date (other
than to the extent any such representation or warranty is made expressly as of a
certain date), and the Company has performed all covenants and agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at or
prior to such date;

     (ii) they have carefully examined the Private Placement Memorandum and, in their
opinion, the Private Placement Memorandum, as of its date, did not, and, as of such
date, does not include any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading
except that such representation and warranty shall not apply to statements in or
omissions from the Private Placement Memorandum made in reliance upon and

19

 

in conformity with information relating to the Placement Agents furnished to the Company
in writing by or on behalf of the Placement Agents expressly for use therein; and

     (iii) the issuance and sale of the Stock by the Company hereunder has not been
enjoined (temporarily or permanently) by any court or governmental body or agency.

     (l) The Company shall have furnished to the Placement Agents a certificate, dated the
date of such Delivery Time, of its Secretary certifying as of the Closing Date as to the
incumbency and signatures of the officers or representatives of such entity authorized to
sign this Agreement and the other documents delivered hereunder, together with evidence of
the incumbency of such Secretary.

     (m) (i) Neither the Company nor any of its subsidiaries shall have sustained, since the
date of the latest audited financial statements included or incorporated by reference in the
Private Placement Memorandum, any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree or (ii) except as described in the
Private Placement Memorandum, since such date there shall not have been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries or any change, or
any development involving a prospective change, in or affecting the condition (financial or
otherwise), results of operations, stockholders’ equity, properties, management or business
of the Company and its subsidiaries taken as a whole, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the Placement Agents, so material
and adverse as to make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Private Placement Memorandum.

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

     (o) Subsequent to the execution and delivery of this Agreement there shall not have
occurred any of the following: (i) trading in securities generally on the New York Stock
Exchange, the Nasdaq National Market or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the Company on any exchange or in
the over-the-counter market, has been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by such exchange or by
any other regulatory body or governmental authority having jurisdiction; (ii) a material
disruption in securities settlement, payment or clearance services in the United States;
(iii) a banking moratorium has been declared by Federal or state authorities; (iv) any
attack on, outbreak or escalation of hostilities or act of terrorism involving the United
States, any declaration of war by Congress or any other national or international calamity,
crisis or emergency if, in the judgment of the Placement Agents, the effect of any such
attack,

20

 

outbreak, escalation, act, declaration, calamity, crisis or emergency makes it
impractical or inadvisable to proceed with completion of the offering or sale of and payment
for the Stock; or (v) the occurrence of any other calamity, crisis (including without
limitation as a result of terrorist activities), or material adverse change in general
economic, political or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such) as to make it, in the judgment of
the Placement Agents, impracticable or inadvisable to proceed with offering or delivery of
the Stock being delivered on the Closing Date or that, in the judgment of the Placement
Agents, would materially and adversely affect the financial markets or the markets for the
Stock and other equity securities.

     (p) The Company shall have executed and delivered the Registration Rights Agreement,
and the Placement Agents shall have received an original copy thereof, duly executed by the
Company.

     (q) The Company and EnCap Investments, L.P. and each of its affiliates which hold of
record or beneficially own shares of Common Stock (collectively, “EnCap”) shall have
executed and delivered a stock purchase agreement (the “EnCap Purchase Agreement”), pursuant
to which the Company shall have agreed to repurchase, and EnCap shall have agreed to sell,
all of such shares of Common Stock held by EnCap (the “EnCap Share Repurchase”); and the
Placement Agents shall have received a true, correct and complete of the EnCap Purchase
Agreement, certified as to authenticity by an authorized officer of the Company.

     (r) The borrowing base under that certain senior revolving credit agreement, dated
November 23, 2004 (the “Revolving Credit Agreement”), among the Company, the lenders from
time to time party thereto, BNP Paribas, as administrative agent, Fleet National Bank, as
syndication agent, and Fortis Capital Corp., U.S. Bank National Association and Key Bank,
National Association as co-documentation agents, shall have been redetermined by the Lenders
to be an amount equal to at least $350 million; and the Placement Agents shall have received
a true, correct and complete copy of the notice of such redetermination from BNP Paribas,
certified as to authenticity by an authorized officer of the Company.

     (s) The Company shall have received a written consent under the Revolving Credit
Agreement from the “Majority Lenders” (as such term is defined therein) to the EnCap Share
Repurchase; and the Placement Agents shall have received a true, correct and
complete of such consent, certified as to authenticity by an authorized officer of the
Company.

     (t) The Company shall have received a written consent under that certain Second Lien
Term Loan, dated November 23, 2004, among the Company, the lenders from time to time party
thereto, and BNP Paribas, as administrative agent, from the “Majority Lenders” (as such term
is defined therein) to the EnCap Share Repurchase; and the Placement Agents shall have
received a true, correct and complete of such consent, certified as to authenticity by an
authorized officer of the Company.

21

 

     (u) The Lock-Up Agreements among the Placement Agents and the officers, directors and
stockholders of the Company set forth on Schedule 2 delivered to the Placement
Agents on or before the date of this Agreement shall be in full force and effect on such
Delivery Date.

     (v) In the event the number of shares of Common Stock to be repurchased by the Company
from EnCap on the Closing Date shall be reduced to a number of shares equal to or less than
75% of the shares of Common Stock held of record or beneficially owned by EnCap as of the
close of business on the business day immediately preceding the Closing Date, the Company
shall have caused EnCap to furnish to the Placement Agents, prior to the Closing Date, a
letter or letters, substantially in the form of Exhibit C-2 hereto, and such letter
or letters shall be in full force and effect on the Closing Date.

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

     8. Indemnification and Contribution.

     (a) The Company hereby agrees to indemnify and hold harmless the Placement Agents,
their respective directors, officers and employees and each person, if any, who controls a
Placement Agent within the meaning of Section 15 of the Securities Act (each a “Placement
Agent Indemnified Party”), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to the offer and sale of the Stock), to which such
Placement Agent Indemnified Party may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact contained (A) in any
Preliminary Private Placement Memorandum or Private Placement Memorandum or in any amendment
or supplement thereto, (B) in any Blue Sky application or other document prepared or
executed by the Company (or based upon any written information furnished by the Company)
specifically for the purpose of qualifying any or all of the Stock under the securities laws
of any state or other jurisdiction (any such application, document or information being
hereinafter called a “Blue Sky Application”) or (C) in any materials or information provided
to investors by, or with the approval of, the Company in connection with the marketing of
the offering of the Stock (“Marketing Materials”), including any
roadshow or investor presentations made to investors by the Company (whether in person
or electronically, (ii) the omission or alleged omission to state in any Preliminary Private
Placement Memorandum or Private Placement Memorandum, or in any amendment or supplement
thereto, or in any Blue Sky Application or in any Marketing Materials, any material fact
required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading or (iii) any act or failure
to act or any alleged act or failure to act by the Placement Agents in connection with, or
relating in any manner to, the Stock or the offering contemplated hereby, and that is
included as part of or referred to in any loss, claim, damage, liability or action arising
out of or based upon matters covered by clause (i) or (ii) above (provided that the Company
shall not be liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction (or an arbitrator in the event the parties
agree to submit to binding arbitration; provided that nothing in this Agreement shall
require any party to agree to participate in or be bound by any arbitration proceedings)
that such loss,

22

 

claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by the Placement Agents through its gross
negligence or willful misconduct), and shall reimburse each Placement Agent Indemnified
Party promptly upon demand for any legal or other expenses reasonably incurred by that
Placement Agent Indemnified Party in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged omission made
in any Preliminary Private Placement Memorandum or Private Placement Memorandum, or in any
such amendment or supplement thereto, or in any Blue Sky Application or in any Marketing
Materials, in reliance upon and in conformity with written information concerning the
Placement Agents furnished to the Company through the Placement Agents by or on behalf of
the Placement Agents specifically for inclusion therein, which information consists solely
of the information specified in Section 8(e). The foregoing indemnity agreement is in
addition to any liability that the Company may otherwise have to any Placement Agent
Indemnified Party.

     (b) Each Placement Agent, severally and not jointly, shall indemnify and hold harmless
the Company and its directors, officers and employees, and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act (each a “Seller
Indemnified Party”), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Seller Indemnified Party may become
subject, under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Preliminary Private Placement
Memorandum or Private Placement Memorandum or in any amendment or supplement thereto, (B) in
any Blue Sky Application, or (C) in any Marketing Materials or (ii) the omission or alleged
omission to state in any Preliminary Private Placement Memorandum or Private Placement
Memorandum, or in any amendment or supplement thereto, or in any Blue Sky Application or in
any Marketing Materials any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning the Placement Agents
furnished to the Company by or on behalf of the Placement Agents specifically for
inclusion therein, which information consists solely of the information specified in Section
8(e) and shall reimburse the Company and any such director, officer or controlling person
for any legal or other expenses reasonably incurred by the Company or any such director,
officer or controlling person in connection with investigating or defending or preparing to
defend against any loss, claim, damage, liability or action as such expenses are incurred.
The foregoing indemnity agreement is in addition to any liability that the Placement Agents
may otherwise have to any Seller Indemnified Party.

     (c) Promptly after receipt by an indemnified party under this Section 8 of notice of
any claim or the commencement of any action, the indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under this Section 8, notify
the indemnifying party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it from any

23

 

liability that it may have under this Section 8 except to the extent it has been materially
prejudiced by such failure and; provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability that it may have to an
indemnified party otherwise than under this Section 8. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Placement Agents shall have the right to employ
counsel to represent the Placement Agents and their respective directors, officers,
employees and controlling persons who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by the Placement Agents against the Company
under this Section 8 if, (i) the Company and the Placement Agents shall have so mutually
agreed; (ii) the Company has failed within a reasonable time to retain counsel reasonably
satisfactory to the Placement Agents; (iii) the Placement Agents and their respective
directors, officers, employees and controlling persons shall have reasonably conclude, based
on advice of counsel that there may be legal defenses available to them that are different
from or in addition to those available to the Company; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Placement Agents or their
respective directors, officers, employees or controlling persons, on the one hand, and the
Company on the other hand, and representation of both sets of parties by the same counsel
would be inappropriate due to actual or potential differing interests between them, and in
any such event the fees and expenses of such separate counsel shall be paid by the Company.
No indemnifying party shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an unconditional release of
each indemnified party from all liability arising out of such claim, action, suit or
proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or liability by reason of
such settlement or judgment.

     (d) If the indemnification provided for in this Section 8 shall for any reason be
unavailable to or insufficient to hold harmless an indemnified party under Section 8(a),
8(b) or 8(c) in respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such indemnified party
as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Placement Agents, on the other, from the offering of the
Stock or

24

 

(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, on the one hand, and the
Placement Agents, on the other, with respect to the statements or omissions that resulted in
such loss, claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Company, on the
one hand, and the Placement Agents, on the other, with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering of the Stock
in the Private Placement (before deducting expenses) received by the Company, on the one
hand, and the total fees received by the Placement Agents with respect to the Stock offered
and sold in the Private Placement, on the other hand, bear to the total gross proceeds from
the offering of the Stock in the Private Placement. The relative fault shall be determined
by reference to whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information supplied by the
Company or the Placement Agents, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or omission. The
Company and the Placement Agents agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were to be determined by pro rata allocation or
by any other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 8(d) shall be deemed to include, for purposes of this Section 8(d),
any legal or other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the provisions of this
Section 8(d), the Placement Agents shall not be required to contribute any amount in excess
of the amount by which the aggregate Placement Fee paid to the Placement Agents exceeds the
amount of any damages that the Placement Agents have otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Placement Agents’ obligations to contribute as provided
in this Section 8(d) are several in proportion to their respective obligations and not
joint.

     (e) The Placement Agents severally confirm and the Company acknowledges and agrees that
the statements in the third paragraph appearing under the caption “Private Placement” in,
the Preliminary Private Placement Memorandum and the Private Placement Memorandum are
correct and constitute the only information furnished in writing to the Company by or on
behalf of the Placement Agents specifically for inclusion in any Private Placement
Memorandum, Blue Sky Application, Marketing Materials or in any amendment or supplement
thereto.

     9. Termination. The obligations of the Placement Agents hereunder may be terminated by the
Placement Agents by notice given to and received by the Company prior to delivery of and payment
for the Stock if, prior to that time, any of the events described in Sections 7(h), 7(l) and 7(o)
shall have occurred or if the Placement Agents shall decline to act as the placement agent to
solicit offers in connection with the Private Placement of the Stock for any reason permitted
hereunder.

25

 

     10. Reimbursement of Placement Agents’ Expenses. If the Company fails to tender the Stock for
delivery in connection with the Private Placement for any reason not permitted under this
Agreement, the Company shall reimburse the Placement Agents for all reasonable out-of-pocket
expenses (including fees and disbursements of counsel) incurred by the Placement Agents in
connection with this Agreement and the proposed Private Placement, and upon demand the Company
shall pay the full amount thereof to the Placement Agents.

     11. Research Independence. In addition, the Company acknowledges that the Placement Agents’
research analysts and research departments are required to be independent from their respective
investment banking divisions and are subject to certain regulations and internal policies, and that
the Placement Agents’ research analysts may hold and make statements or investment recommendations
and/or publish research reports with respect to the Company and/or the offering that differ from
the views of their respective investment banking divisions. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company may have against the
Placement Agents with respect to any conflict of interest that may arise from the fact that the
views expressed by their independent research analysts and research departments may be different
from or inconsistent with the views or advice communicated to the Company by the Placement Agents’
investment banking divisions. The Company acknowledges that the Placement Agents are full service
securities firms and as such from time to time, subject to applicable securities laws, may effect
transactions for its own account or the account of its customers and hold long or short positions
in debt or equity securities of the companies which may be the subject of the transactions
contemplated by this Agreement.

     12. No Fiduciary Duty. The Company acknowledges and agrees that in connection with the Private
Placement or any other services the Placement Agents may be deemed to be providing hereunder,
notwithstanding any preexisting relationship, advisory or otherwise, between the parties or any
oral representations or assurances previously or subsequently made by the Placement Agents: (i) no
fiduciary or agency relationship between the Company and any other person, on the one hand, and
either Placement Agent, on the other, exists; (ii) neither Placement Agent is acting as an advisor, expert or
otherwise, to the Company, including, without limitation, with respect to the determination of the
public offering price of the Stock, and such relationship between the Company, on the one hand, and
the Placement Agents, on the other, is entirely and solely commercial, based on arms-length
negotiations; (iii) any duties and obligations that the Placement Agents may have to the Company
shall be limited to those duties and obligations specifically stated herein; and (iv) the Placement
Agents and their affiliates may have interests that differ from those of the Company. The Company
hereby waives any claims that the Company may have against the Placement Agents with respect to any
breach of fiduciary duty in connection with the Private Placement.

     13. Notices, etc. All statements, requests, notices and agreements hereunder shall be in writing,
and:

     (a) if to the Placement Agents, shall be delivered or sent by mail, overnight delivery
or facsimile transmission to Lehman Brothers Inc., 745 Seventh Avenue, New York, New York
10019, Attention: Syndicate Registration (Fax: (646) 834-8133), and with a copy, in the
case of any notice pursuant to Section 8(c), to the Director of Litigation, Office of the
General Counsel, Lehman Brothers Inc., 399 Park Avenue, New York, New York 10022 (Fax:
(212) 520-0421); and

26

 

     (b) if to the Company, shall be delivered or sent by mail, overnight delivery or
facsimile transmission to the address of the Company set forth in the Private Placement
Memorandum Attention: Chief Financial Officer (Fax: (832)-204-2877);

Any such statements, requests, notices or agreements shall take effect at the time of receipt
thereof. The Company shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Placement Agents.

     14. Successors; Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the Placement Agents and the Company and their respective
successors. This Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (a) the representations, warranties, indemnities and agreements of the
Company contained in this Agreement shall also be deemed to be for the benefit of the directors,
officers and employees of the Placement Agents and each person or persons, if any, who control
either Placement Agent within the meaning of Section 15 of the Securities Act and (b) the indemnity
agreement of the Placement Agents contained in Section 8(c) of this Agreement shall be deemed to be
for the benefit of the directors of the Company and any person controlling the Company within the
meaning of Section 15 of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section 14, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any provision contained
herein.

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

     16. Definition
of the Term “Business Day” and “subsidiary”. For purposes of this Agreement, (a)
“business day” means each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which
banking institutions in New York are generally authorized or obligated by law or executive order to
close and (b) “subsidiary” has the meaning set forth in Rule 405 of the Securities Act Rules.

     17. Jurisdiction. Each of the parties hereto irrevocably consents to the jurisdiction of the
courts of the State of New York and the courts of the United States of America located in the
Borough of Manhattan, City and State of New York, over any suit, action or proceeding with respect
to this Agreement or the transactions contemplated hereby. Each of the parties hereto waives any
objection that it may have to the venue of any suit, action or proceeding with respect to this
Agreement or the transactions contemplated hereby in the courts of the State of New York or the
courts of the United States of America, in each case, located in the Borough of Manhattan, City and
State of New York or that such suit, action or proceeding brought in the courts of the State of New
York or United States of America, in each case, located in the Borough of Manhattan, City and State
of New York was brought in an inconvenient court and agrees not to plead or claim the same.

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

27

 

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

     20. Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any
consent or approval to any departure therefrom, shall in any event be effective unless the same
shall be in writing and signed by the parties hereto.

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

[Signature Page to Follow]

28

 

     If the foregoing correctly sets forth the agreement between the Company and the Placement
Agents, please indicate your acceptance in the space provided for that purpose below.

	 	 	 	 	 
	 	Very truly yours,

PETROHAWK ENERGY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	Accepted and agreed to as
of the date first above written:	 	 
	 
	 	 	 	 
	LEHMAN BROTHERS INC.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:

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