Document:

exv4w3

 

EXHIBIT 4.3

BANC OF AMERICA SECURITIES LLC

$300,000,000 AGGREGATE PRINCIPAL AMOUNT

CAL DIVE INTERNATIONAL, INC.

3.25% CONVERTIBLE SENIOR NOTES DUE 2025

Registration Rights Agreement

dated March 30, 2005

 

 

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     REGISTRATION RIGHTS AGREEMENT, dated as of March 30, 2005, between Cal Dive
International, Inc. a Minnesota company (together with any successor entity, herein referred to as
the “Company”) and Banc of America Securities LLC, as representative of the Initial Purchasers (the
“Initial Purchasers”), under the Purchase Agreement (as defined below).

     Pursuant to the Purchase Agreement, dated as of March 23, 2005 (the “Purchase Agreement”),
between the Company and the Initial Purchasers, the Initial Purchasers have agreed to purchase from
the Company $300,000,000 (as the Initial Purchasers have exercised their option in full) in
aggregate principal amount of 3.25% Convertible Senior Notes due 2025 (the “Notes”). The Notes
will be convertible into fully paid, non-assessable shares of common stock, no par value per share,
of the Company (the “Common Stock”). The Notes will be convertible on the terms, and subject to
the conditions, set forth in the Indenture (as defined herein). To induce the Initial Purchasers
to purchase the Notes, the Company has agreed to provide the registration rights set forth in this
Agreement pursuant to Section 5(j) of the Purchase Agreement.

     The parties hereby agree as follows:

     1. Definitions. Capitalized terms used in this Agreement without definition shall have their
respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following
capitalized terms shall have the following meanings:

     “Additional Amounts” has the meaning set forth in Section 3(a) hereof.

     “Additional Amounts Payment Date” means each June 15 and December 15.

     “Affiliate” of any specified person means any other person which, directly or indirectly, is
in control of, is controlled by, or is under common control with, such specified person. For
purposes of this definition, control of a person means the power, direct or indirect, to direct or
cause the direction of the management and policies of such person whether by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

     “Agreement” means this Registration Rights Agreement.

     “Amendment Effectiveness Deadline Date” has the meaning set forth in Section 2(e) hereof.

     “Blue Sky Application” has the meaning set forth in Section 6(a)(i) hereof.

     “Business Day” has the meaning set forth in the Indenture.

     “Commission” means the Securities and Exchange Commission.

 

 

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     “Common Stock” has the meaning set forth in the preamble hereto.

     “Company” has the meaning set forth in the preamble hereto.

     “Effectiveness Period” has the meaning set forth in Section 2(a)(iii) hereof.

     “Effectiveness Target Date” has the meaning set forth in Section 2(a)(ii) hereof.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.

     “Holder” means any Person who owns, beneficially or otherwise, Transfer Restricted Securities.

     “Indemnified Holder” has the meaning set forth in Section 6(a) hereof.

     “Indenture” means the Indenture, dated as of March 30, 2005 between the Company and JPMorgan
Chase Bank, N.A., as trustee (the “Trustee”), pursuant to which the Notes are to be issued, as such
Indenture is amended, modified or supplemented from time to time in accordance with the terms
thereof.

     “Initial Purchasers” has the meaning set forth in the preamble hereto.

     “Majority of Holders” means Holders holding over 50% of the aggregate principal amount of
Notes outstanding; provided that, for the purpose of this definition, a holder of shares of Common
Stock which constitute Transfer Restricted Securities and issued upon conversion of the Notes shall
be deemed to hold an aggregate principal amount of Notes (in addition to the principal amount of
Notes held by such holder) equal to the quotient of (x) the number of such shares of Common Stock
held by such holder and (y) the conversion rate in effect at the time of such conversion as
determined in accordance with the Indenture.

     “NASD” means the National Association of Securities Dealers, Inc.

     “Notes” has the meaning set forth in the preamble hereto.

     “Notice and Questionnaire” means a written notice executed by a Holder and delivered to the
Company containing substantially the information called for by the Form of Selling Securityholder
Notice and Questionnaire attached as Annex A to the Offering Memorandum of the Company dated March
23, 2005 relating to the Notes.

     “Notice Holder” has the meaning set forth in Section 2(b) hereof.

 

 

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     “Person” means any individual, partnership, corporation, company, unincorporated organization,
trust, joint venture or a government or agency or political subdivision thereof.

     “Purchase Agreement” has the meaning set forth in the preamble hereto.

     “Prospectus” means the prospectus included in a Shelf Registration Statement, as amended or
supplemented by any prospectus supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference into such prospectus.

     “Record Holder” means, with respect to any Additional Amounts Payment Date, each Person who is
a Holder on the interest record date set forth in the Indenture immediately preceding the relevant
Additional Amounts Payment Date. In the case of a Holder of shares of Common Stock issued upon
conversion of the Notes, “Record Holder” shall mean each Person who is a Holder of shares of Common
Stock which constitute Transfer Restricted Securities on the interest record date set forth in the
Indenture immediately preceding the relevant Additional Amounts Payment Date.

     “Registration Default” has the meaning set forth in Section 3(a) hereof.

     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
of the Commission promulgated thereunder.

     “Shelf Filing Deadline” has the meaning set forth in Section 2(a)(i) hereof.

     “Shelf Registration Statement” has the meaning set forth in Section 2(a)(i) hereof.

     “Subsequent Shelf Registration Statement” has the meaning set forth in Section 2(c) hereof.

     “Suspension Notice” has the meaning set forth in Section 4(c) hereof.

     “Suspension Period” has the meaning set forth in Section 4(b)(i) hereof.

     “TIA” means the Trust Indenture Act of 1939, as amended, and the rules and regulations of the
Commission promulgated thereunder, in each case, as in effect on the date the Indenture is
qualified under the TIA.

     “Transfer Restricted Securities” means each Note and each share of Common Stock issued or
issuable upon conversion of Notes until the earlier of:

     (i) the date on which such Note or such share of Common Stock issued upon
conversion of such Note has been effectively

 

 

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registered under the Securities Act and disposed of in accordance with the
Shelf Registration Statement;

     (ii) the date on which such Note or such share of Common Stock issued upon
conversion of such Note is transferred in compliance with Rule 144 under the
Securities Act or may be sold or transferred by a person who is not an affiliate
of the Company pursuant to Rule 144 under the Securities Act (or any other
similar provision then in force) without any volume or manner of sale
restrictions thereunder; or

     (iii) the date on which such Note or such share of Common Stock issued upon
conversion of such Note ceases to be outstanding (whether as a result of
redemption, repurchase and cancellation, conversion or otherwise).

     “Underwritten Registration” means a registration in which Notes of the Company are sold to an
underwriter for reoffering to the public.

     Unless the context otherwise requires, the singular includes the plural, and words in the
plural include the singular.

     2. Shelf Registration.

     (a) The Company shall:

     (i) not later than 90 days after the date hereof (the “Shelf Filing
Deadline”), cause to be filed a registration statement pursuant to Rule 415 under
the Securities Act (the “Shelf Registration Statement”), which Shelf Registration
Statement shall provide for resales of all Transfer Restricted Securities held by
Holders that have provided the information required pursuant to the terms of
Section 2(b) hereof;

     (ii) use its reasonable best efforts to cause the Shelf Registration
Statement to be declared effective by the Commission not later than 180 days
after the date hereof (the “Effectiveness Target Date”); and

     (iii) use its reasonable best efforts to keep the Shelf Registration
Statement continuously effective, supplemented and amended as required by the
provisions of Section 4(b) hereof to the extent necessary to ensure that (A) it
is available for resales by the Holders of Transfer Restricted Securities
entitled, subject to Section 2(b), to the benefit of this Agreement and (B) it
conforms with the requirements of this Agreement and the Securities Act, for a
period (the “Effectiveness Period”) until the earliest to occur of:

 

 

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     (1) expiration of the holding period applicable to the Transfer
Restricted Securities held by non-affiliates under Rule 144(k) under
the Securities Act; and

     (2) the date when all of the Transfer Restricted Securities are
disposed of pursuant to a Shelf Registration Statement or pursuant
to Rule 144 under the Securities Act (or any other similar provision
then in effect) or such Transfer Restricted Securities cease to be
outstanding (whether as a result of redemption, repurchase and
cancellation, conversion or otherwise).

     (b) The Company shall furnish a written notice to each Holder of the Transfer
Restricted Securities at least 30 days before filing the Shelf Registration Statement and
inform each Holder that to have its Transfer Restricted Securities included in the Shelf
Registration Statement it must deliver a completed Notice and Questionnaire to the
Company. At the time the Shelf Registration Statement is declared effective, each Holder
that has delivered a completed Notice and Questionnaire to the Company (a “Notice Holder”)
on or prior to the date fifteen (15) Business Days prior to such time of effectiveness
shall be named as a selling securityholder in the Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to
purchasers of Transfer Restricted Securities in accordance with applicable law. None of
the Company’s securityholders (other than the Holders of Transfer Restricted Securities)
shall have the right to include any of the Company’s securities in the Shelf Registration
Statement.

     (c) If the Shelf Registration Statement or any Subsequent Shelf Registration
Statement ceases to be effective or fails to be usable for any reason at any time during
the Effectiveness Period (other than because all Transfer Restricted Securities registered
thereunder shall have been resold pursuant thereto or shall have otherwise ceased to be
Transfer Restricted Securities), the Company shall use its reasonable best efforts to
obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any
event shall, subject to the Company’s right to declare a Suspension Period, as promptly as
possible amend the Shelf Registration Statement in a manner reasonably expected to obtain
the withdrawal of the order suspending the effectiveness thereof, or file an additional
Shelf Registration Statement covering all of the securities that as of the date of such
filing are Transfer Restricted Securities ( a “Subsequent Shelf Registration Statement”).
If a Subsequent Shelf Registration Statement is filed, the Company shall use its
reasonable best efforts to cause the Subsequent Shelf Registration Statement to become
effective as promptly as is practicable after such filing and to keep such Registration
Statement

 

 

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(or Subsequent Shelf Registration Statement) continuously effective until the end of
the Effectiveness Period.

     (d) The Company shall supplement and amend the Shelf Registration Statement if
required by the rules, regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration Statement, if required by the Securities
Act or as reasonably requested by the Initial Purchasers or by the Trustee on behalf of
the Holders of the Transfer Restricted Securities covered by such Shelf Registration
Statement.

     (e) Each Holder agrees that if such Holder wishes to sell Transfer Restricted
Securities pursuant to a Shelf Registration Statement and related Prospectus, it will do
so only in accordance with this Section 2(e), and the procedures set forth in Section 4
hereof. Each Holder wishing to sell Transfer Restricted Securities pursuant to a Shelf
Registration Statement and related Prospectus must deliver a Notice and Questionnaire to
the Company. In order to be named as a selling securityholder in the Prospectus at the
time of effectiveness of the Shelf Registration Statement, the Notice and Questionnaire
must be delivered at least fifteen (15) Business Days prior to the effectiveness of the
Shelf Registration Statement. From and after the date the Shelf Registration Statement is
declared effective the Company shall, as promptly as practicable after the date a Notice
and Questionnaire is received by the Company, and in any event upon the later of (x)
fifteen (15) Business Days after such date or (y) fifteen (15) Business Days after the
expiration of any Suspension Period in effect when the Notice and Questionnaire is
delivered or put into effect within fifteen (15) Business Days of such delivery date:

     (i) if required by applicable law, file with the Commission a post-effective
amendment to the Shelf Registration Statement or prepare and, if required by
applicable law, file a supplement to the related Prospectus or a supplement or
amendment to any document incorporated therein by reference or file any other
required document so that the Holder delivering such Notice and Questionnaire is
named as a selling securityholder in the Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of the Transfer Restricted Securities in accordance with
applicable law and, if the Company shall file a post-effective amendment to the
Shelf Registration Statement, use its reasonable best efforts to cause such
post-effective amendment to be declared effective under the Securities Act as
promptly as is practicable, but in any event by the date (the “Amendment
Effectiveness Deadline Date”) that is sixty (60) days after the date such
post-effective amendment is required by this clause to be filed;

 

 

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     (ii) provide such Holder copies of any documents filed pursuant to Section
2(e)(i) hereof; and

     (iii) notify such Holder as promptly as practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to
Section 2(e)(i) hereof;

provided that if such Notice and Questionnaire is delivered during a Suspension Period or a
Suspension Period begins within fifteen (15) Business Days after the delivery of such Notice and
Questionnaire, the Company shall so inform the Holder delivering such Notice and Questionnaire and
shall take the actions set forth in clauses (i), (ii) and (iii) above within fifteen (15) Business
Days after the expiration of the Suspension Period in accordance with Section 4(b); provided,
further, that, if the Company is required by law to file a post-effective amendment to add a
Holder, the Company shall not be required to file more than one post-effective amendment to the
Shelf Registration Statement for all Holders pursuant to this Section 2(e) during any three-month
period. Notwithstanding anything contained herein to the contrary, the Company shall be under no
obligation to name any Holder that is not a Notice Holder as a selling securityholder in any
Registration Statement or related Prospectus.

     3. Additional Amounts.

     (a) If:

     (i) the Shelf Registration Statement is not filed with the Commission prior
to or on the Shelf Filing Deadline;

     (ii) the Shelf Registration Statement has not been declared effective by the
Commission prior to or on the Effectiveness Target Date;

     (iii) the Company has failed to perform its obligations set forth in Section
2(e) within the time period required therein;

     (iv) any post-effective amendment to a Shelf Registration Statement filed
pursuant to Section 2(e)(i) has not become effective under the Securities Act on
or prior to the Amendment Effectiveness Deadline Date;

     (v) except as provided in Section 4(b)(i) hereof or as a result of the
requirement to file a post-effective amendment to add selling securityholders
pursuant to Section 2(e), the Shelf Registration Statement is filed and declared
effective but, during the Effectiveness Period, shall thereafter cease to be
effective or fail to be usable for its intended purpose without being succeeded
within ten (10) Business Days (or if a Suspension Period is then in effect, the
tenth (10th) Business Day following the expiration of

 

 

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such Suspension Period) by a post-effective amendment to the Shelf
Registration Statement, a supplement to the Prospectus or a report filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act that
cures such failure and, in the case of a post-effective amendment, is itself
immediately declared effective; or

     (vi) (A) if applicable, the Company does not terminate any Suspension Period
by the 45th day pursuant to Section 4(b)(i) hereof; or (B) the
Suspension Periods exceed an aggregate of 90 days in any 360-day period;

(each such event referred to in foregoing clauses (i) through (vi), a “Registration Default”),
occurs, the Company hereby agrees to pay cash interest (“Additional Amounts”) with respect to the
Transfer Restricted Securities from and including the day following the Registration Default to but
excluding the earlier of (1) the day on which the Registration Default has been cured or (2) the
date the Shelf Registration Statement is no longer required to be kept effective, as set forth
below:

     (A) in respect of the Notes, other than in the case of a
Registration Default relating to a failure to file or have an effective
Shelf Registration Statement with respect to shares of Common Stock
issuable upon conversion of the Notes that are Transfer Restricted
Securities, the Company agrees to pay interest to each holder of Notes,
accruing at a rate of (x) 0.25% per annum of the aggregate principal
amount of the Notes to and including the 90th day following
such Registration Default, and (y) 0.50% per annum of the aggregate
principal amount of the Notes from and after the 91st day
following such Registration Default; provided that in no event shall
Additional Amounts accrue at a rate per year exceeding 0.50% of the
aggregate principal amount of the Notes; and

     (B) in respect of the Notes that are Transfer Restricted Securities
submitted for conversion into Common Stock during the existence of a
Registration Default with respect to the Common Stock, the holder will
not be entitled to receive any Additional Amounts with respect to such
Common Stock but (x) will be entitled to a conversion rate adjustment in
accordance with the terms of the Notes as set forth in the Indenture and
(y) will receive from the Company on the settlement date with respect to
such conversion, accrued and unpaid Additional Amounts to the holders of
such Notes calculated in accordance with

 

 

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paragraph (A) to the Conversion Date (as defined in the Indenture)
relating to such settlement date; and

     (C) in respect of Common Stock issued upon conversion of Notes,
each holder of such Common Stock will not be entitled to any Additional
Amounts if the Registration Default with respect to such Common Stock
occurs after the holder has converted the Notes into Common Stock.

          In no event shall Additional Amounts accrue on the Notes solely as a result of a Registration
Default with respect to the Common Stock.

     (b) All accrued Additional Amounts shall be paid in arrears to Record Holders by the
Company on each Additional Amounts Payment Date. Upon the cure of all Registration
Defaults relating to any particular Note, the accrual of Additional Amounts with respect
to such Note will cease.

     All obligations of the Company set forth in this Section 3 that are outstanding with respect
to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations with respect to such Transfer
Restricted Security shall have been satisfied in full.

     The Additional Amounts set forth above shall be the exclusive monetary remedy available to the
Holders of Transfer Restricted Securities for each Registration Default.

     4. Registration Procedures.

     (a) In connection with the Shelf Registration Statement, the Company shall comply
with all the provisions of Section 4(b) hereof and shall use its reasonable best efforts
to effect such registration to permit the sale of the Transfer Restricted Securities, and
pursuant thereto, shall as expeditiously as possible but no later than the Shelf Filing
Deadline prepare and file with the Commission a Shelf Registration Statement relating to
the registration on any appropriate form under the Securities Act.

     (b) In connection with the Shelf Registration Statement and any Prospectus required
by this Agreement to permit the sale or resale of Transfer Restricted Securities, the
Company shall:

     (i) Subject to any notice by the Company of a Suspension Period, use its
reasonable best efforts to keep the Shelf Registration Statement continuously
effective during the Effectiveness Period; upon the occurrence of any event that
would

 

 

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cause the Shelf Registration Statement or the Prospectus contained therein
(A) to contain a material misstatement or omission or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the Effectiveness
Period, the Company shall file promptly an appropriate amendment to the Shelf
Registration Statement, a supplement to the Prospectus or a report filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, in
the case of clause (A), correcting any such misstatement or omission, and, in the
case of either clause (A) or (B), use its reasonable best efforts to cause such
amendment to be declared effective and the Shelf Registration Statement and the
related Prospectus to become usable for their intended purposes as soon as
practicable thereafter. Notwithstanding the foregoing, the Company may suspend
the use of the Shelf Registration Statement by written notice to the Holders for
a period not to exceed an aggregate of 45 days in any 90-day period (each such
period, a “Suspension Period”) if:

     (A) an event occurs and is continuing as a result of which the
Shelf Registration Statement, the Prospectus, any amendment or
supplement thereto, or any document incorporated by reference therein
would, in the Company’s judgment, 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; or

     (B) the occurrence or existence of any pending corporate
development that in the reasonable discretion of the Company, makes it
appropriate to suspend the availability of the Shelf Registration
Statement;

provided that Suspension Periods shall not exceed an aggregate of 90 days in any
360-day period. The Company shall not be required to specify in the written
notice to the Holders the nature of the event giving rise to the Suspension
Period. Holders hereby agree to hold any communications in response to a notice
of a proposed business transaction in confidence.

     (ii) Prepare and file with the Commission such amendments and post-effective
amendments to the Shelf Registration Statement as may be necessary to keep the
Shelf Registration Statement effective during the Effectiveness Period; cause the
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act, and to
comply fully with the applicable provisions of Rules 424 and 430A under the
Securities Act in a timely manner; and comply with the provisions

 

 

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of the Securities Act with respect to the disposition of all Transfer
Restricted Securities covered by the Shelf Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in the Shelf Registration Statement
or supplement to the Prospectus.

     (iii) Advise the selling Holders promptly and, if requested by such selling
Holders, to confirm such advice in writing, except as provided in clause (D)
below:

     (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the Shelf
Registration Statement or any post-effective amendment thereto, when the
same has become effective,

     (B) of any request by the Commission for amendments to the Shelf
Registration Statement or amendments or supplements to the Prospectus or
for additional information relating thereto,

     (C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Shelf Registration Statement under the
Securities Act or of the suspension by any state securities commission
of the qualification of the Transfer Restricted Securities for offering
or sale in any jurisdiction, or the initiation of any proceeding for any
of the preceding purposes, or

     (D) of the existence of any fact or the happening of any event,
during the Effectiveness Period, that makes any statement of a material
fact made in the Shelf Registration Statement, the Prospectus, any
amendment or supplement thereto, or any document incorporated by
reference therein untrue, or that requires the making of any additions
to or changes in the Shelf Registration Statement or the Prospectus in
order to make the statements therein not misleading.

If at any time the Commission shall issue any stop order suspending the
effectiveness of the Shelf Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Transfer Restricted
Securities under state securities or Blue Sky laws, the Company shall use its
reasonable best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time and will provide to each Holder who is

 

 

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named in the Shelf Registration Statement prompt notice of the withdrawal of any
such order.

     (iv) Make available at reasonable times for inspection by one or more
representatives of the selling Holders, designated in writing by a Majority of
Holders whose Transfer Restricted Securities are included in the Shelf
Registration Statement, and any attorney or accountant retained by such selling
Holders, all financial and other records, pertinent corporate documents and
properties of the Company as shall be reasonably necessary to enable them to
conduct a reasonable investigation within the meaning of Section 11 of the
Securities Act, and cause the Company’s officers, directors, managers and
employees to supply all information reasonably requested by any such
representative or representatives of the selling Holders, attorney or accountant
in connection therewith; provided, however, that the Company shall have no
obligation to deliver information to any selling Holder or representative
pursuant to this Section 4(b)(iv) unless such selling Holder or representative
shall have executed and delivered a confidentiality agreement in a form
acceptable to the Company relating to such information.

     (v) If requested by any selling Holders, promptly incorporate in the Shelf
Registration Statement or Prospectus, pursuant to a supplement or post-effective
amendment, if necessary, such information as such selling Holders may reasonably
request to have included therein, including, without limitation, information
relating to the “Plan of Distribution” of the Transfer Restricted Securities.

     (vi) Furnish to each selling Holder upon their request, without charge, at
least one copy of the Shelf Registration Statement, as first filed with the
Commission, and of each amendment thereto (and any documents incorporated by
reference therein or exhibits thereto (or exhibits incorporated in such exhibits
by reference) as such selling Holder may request).

     (vii) Deliver to each selling Holder, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) and any amendment or
supplement thereto as such selling Holder reasonably may request; subject to any
notice by the Company of a Suspension Period, the Company hereby consents to the
use of the Prospectus and any amendment or supplement thereto by each of the
selling Holders in connection with the offering and the sale of the Transfer
Restricted Securities covered by the Prospectus or any amendment or supplement
thereto.

 

 

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     (viii) Before any public offering of Transfer Restricted Securities,
cooperate with the selling Holders and their counsel in connection with the
registration and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions in the United States as the
selling Holders may reasonably request and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Transfer Restricted Securities covered by the Shelf Registration Statement;
provided, however, that the Company shall not be required (A) to register or
qualify as a foreign corporation or a dealer of securities where it is not now so
qualified or to take any action that would subject it to the service of process
in any jurisdiction where it is not now so subject or (B) to subject itself to
general or unlimited service of process or to taxation in any such jurisdiction
if they are not now so subject.

     (ix) Unless the Transfer Restricted Securities shall be in book-entry only
form, cooperate with the selling Holders to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to be sold
and not bearing any restrictive legends (unless required by applicable securities
laws); and enable such Transfer Restricted Securities to be in such denominations
and registered in such names as the Holders may request at least two Business
Days before any sale of Transfer Restricted Securities.

     (x) Subject to Section 4(b)(i) hereof, if any fact or event contemplated by
Section 4(b)(iii)(D) hereof shall exist or have occurred, use its reasonable best
efforts to prepare a supplement or post-effective amendment to the Shelf
Registration Statement or related Prospectus or any document incorporated therein
by reference or file any other required document so that, as thereafter delivered
to the purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they are made, not misleading.

     (xi) Provide CUSIP numbers for all Transfer Restricted Securities not later
than the effective date of the Shelf Registration Statement and provide the
Trustee under the Indenture with certificates for the Notes that are in a form
eligible for deposit with The Depository Trust Company.

     (xii) Cooperate and assist in any filings required to be made with the NASD
and in the performance of any due diligence

 

 

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investigation by any underwriter that is required to be retained in
accordance with the rules and regulations of the NASD.

     (xiii) Otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission and all reporting requirements
under the Exchange Act.

     (xiv) Cause the Indenture to be qualified under the TIA not later than the
effective date of the Shelf Registration Statement required by this Agreement,
and, in connection therewith, cooperate with the Trustee and the holders of Notes
to effect such changes to the Indenture as may be required for such Indenture to
be so qualified in accordance with the terms of the TIA; and execute and use its
reasonable best efforts to cause the Trustee thereunder to execute all documents
that may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner.

     (xv) Cause all Common Stock covered by the Shelf Registration Statement to
be listed or quoted, as the case may be, on each securities exchange or automated
quotation system on which Common Stock is then listed or quoted.

     (xvi) Provide to each Holder upon written request each document filed with
the Commission pursuant to the requirements of Section 13 and Section 15 of the
Exchange Act after the effective date of the Shelf Registration Statement, unless
such document is available through the Commission’s EDGAR system.

     (c) Each Holder agrees by acquisition of a Transfer Restricted Security that, upon
receipt of any notice (a “Suspension Notice”) from the Company of a Suspension Period,
such Holder will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the Shelf Registration Statement until:

     (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 4(b)(xi) hereof; or

     (ii) such Holder is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus.

If so directed by the Company, each Holder will deliver to the Company (at the Company’s
expense) all copies, other than permanent file copies then in such Holder’s possession, of
the Prospectus covering such Transfer

 

 

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Restricted Securities that was current at the time of receipt of such notice of
suspension.

     (d) Each Holder agrees by acquisition of the Transfer Restricted Securities, that no
Holder shall be entitled to sell any of such Transfer Restricted Securities pursuant to a
Shelf Registration Statement, or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with a Notice and Questionnaire as required pursuant to
Section 2(e) hereof (including the information required to be included in such Notice and
Questionnaire) and the information set forth in the next sentence. Each Notice Holder
agrees promptly to furnish to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such Notice Holder
not misleading and any other information regarding such Notice Holder and the distribution
of such Transfer Restricted Securities as the Company may from time to time reasonably
request in writing. Any sale of any Transfer Restricted Securities by any Holder shall
constitute a representation and warranty by such Holder that the information relating to
such Holder and its plan of distribution is as set forth in the Prospectus delivered by
such Holder in connection with such disposition, that such Prospectus does not as of the
time of such sale contain any untrue statement of a material fact relating to or provided
by such Holder or its plan of distribution and that such Prospectus does not as of the
time of such sale omit to state any material fact relating to or provided by such Holder
or its plan of distribution necessary to make the statements in such Prospectus, in the
light of the circumstances under which they were made not misleading.

     5. Registration Expenses.

     All expenses incident to the Company’s performance of or compliance with this
Agreement shall be borne by the Company regardless of whether a Shelf Registration
Statement becomes effective, including, without limitation:

     (i) all registration and filing fees and expenses (including filings made
with the NASD);

     (ii) all fees and expenses of compliance with federal securities and state
Blue Sky or securities laws;

     (iii) all expenses of printing (including printing of Prospectuses and
certificates for the Common Stock to be issued upon conversion of the Notes) and
the Company’s expenses for messenger and delivery services and telephone;

     (iv) all fees and disbursements of counsel to the Company;

 

 

16

     (v) all application and filing fees in connection with listing (or
authorizing for quotation) the Common Stock on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and

     (vi) all fees and disbursements of independent certified public accountants
of the Company.

     The Company shall bear its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal, accounting or other duties), the expenses
of any annual audit and the fees and expenses of any Person, including special experts, retained by
the Company.

     6. Indemnification And Contribution.

     (a) The Company agrees to indemnify and hold harmless each Holder (including the
Initial Purchasers), its directors, officers, and employees and each person, if any, who
controls any such Holder within the meaning of the Securities Act or the Exchange Act
(each, an “Indemnified Holder”), against any loss, claim, damage, liability or expense,
joint or several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to resales of the Transfer Restricted
Securities), to which such Indemnified Holder may become subject, insofar as any 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 in (A) the Shelf Registration Statement as originally filed or in any
amendment thereof, in any Prospectus, or in any amendment or supplement thereto
or (B) any blue sky application or other document or any amendment or supplement
thereto prepared or executed by the Company (or based upon written information
furnished by or on behalf of the Company expressly for use in such blue sky
application or other document or amendment on supplement) filed in any
jurisdiction specifically for the purpose of qualifying any or all of the
Transfer Restricted Securities under the securities law of any state or other
jurisdiction (such application or document being hereinafter called a “Blue Sky
Application”); or

     (ii) the omission or alleged omission to state therein any 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,

and agrees to reimburse each Indemnified Holder promptly upon demand for any legal or
other expenses reasonably incurred by such Indemnified

 

 

17

Holder in connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or expense arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of such
Holder (or its related Indemnified Holder) specifically for use therein. The foregoing
indemnity agreement is in addition to any liability which the Company may otherwise have.

     (b) Each Holder, severally and not jointly, agrees to indemnify and hold harmless the
Company, its directors, officers and employees and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act to the same extent as
the foregoing indemnity from the Company to each such Holder, but only with reference to
written information relating to such Holder furnished to the Company by or on behalf of
such Holder specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement set forth in this Section 6(b) shall be in addition
to any liabilities which any such Holder may otherwise have. In no event shall any
Holder, its directors, officers or any person who controls such Holder be liable or
responsible for any amount in excess of the amount by which the total amount received by
such Holder with respect to its sale of Transfer Restricted Securities pursuant to a Shelf
Registration Statement exceeds (i) the amount paid by such Holder for such Transfer
Restricted Securities and (ii) the amount of any damages that such Holder, its directors,
officers or any person who controls such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged omission.

     (c) Promptly after receipt by an indemnified party under this Section 6 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 6, notify
the indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 6 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 which it may have to an
indemnified party otherwise than under this Section 6. 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 satisfactory to the indemnified party. After
notice from the indemnifying

 

 

18

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 6 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 indemnified party shall have the right to employ a single
counsel to represent jointly the indemnified party and its officers, employees and
controlling persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought against the indemnifying party under this Section 6 if the
indemnified party seeking indemnification shall have been advised by legal counsel that
there may be one or more legal defenses available to such indemnified party and its
respective officers, employees and controlling persons that are different from or
additional to those available to the indemnifying party, and in that event, the fees and
expenses of such separate counsel shall be paid by the indemnifying party. No
indemnifying party shall, 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.

     (d) The indemnifying party under this Section shall not be liable for any settlement
of any proceeding effected without its written consent, which shall not be withheld
unreasonably, but if settled with such consent or if there is a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party against any
loss, claim, damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 6(c) hereof, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party shall not
have reimbursed the indemnified party in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry of judgment
in any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have been
sought hereunder by such indemnified party, unless such

 

 

19

settlement, compromise or consent (x) includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such action,
suit or proceeding and (y) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.

     (e) If the indemnification provided for in this Section 6 shall for any reason be
unavailable or insufficient to hold harmless an indemnified party under Section 6(a) or
6(b) in respect of any loss, claim, damage or liability (or action in respect thereof)
referred to therein, 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 is appropriate to reflect the relative benefits
received by the Company from the offering and sale of the Transfer Restricted
Securities on the one hand and a Holder with respect to the sale by such Holder
of the Transfer Restricted Securities on the other, or

     (ii) if the allocation provided by Section (6)(e)(i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in Section 6(e)(i) but also the relative fault of
the Company on the one hand and the Holders on the other in connection with the
statements or omissions or alleged statements or alleged 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 a Holder on the other
with respect to such offering and such sale shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Notes purchased under the Purchase
Agreement (before deducting expenses) received by the Company, on the one hand, bear to
the total proceeds received by such Holder with respect to its sale of Transfer Restricted
Securities on the other. The relative fault of the parties shall be determined by
reference to whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by
the Company on the one hand or the Holders on the other, 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 each Holder agree that it would not be just and
equitable if the amount of contribution pursuant to this Section 6(e) were determined by
pro rata allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the first sentence of this Section 6(e).

 

 

20

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 6 shall be
deemed to include, for purposes of this Section 6, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending or
preparing to defend any such action or claim.

Notwithstanding the provisions of this Section 6, no Holder shall be required to
contribute any amount in excess of the amount by which the total price at which the
Transfer Restricted Securities purchased by it were resold exceeds the amount of any
damages which such Holder has otherwise been required 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 Holders’ obligations to contribute as provided in this Section
6(e) are several and not joint.

     (f) The provisions of this Section 6 shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Holder or the Company or any
of the officers, directors or controlling persons referred to in Section 6 hereof, and
will survive the sale by a Holder of Transfer Restricted Securities.

     7. Rule 144A and Rule 144. The Company agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the Company (i) is not
subject to Section 13 or 15(d) of the Exchange Act, to make available, upon request of any Holder,
to such Holder or beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in
order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A, and (ii) is
subject to Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby in a
timely manner in order to permit resales of such Transfer Restricted Securities pursuant to Rule
144.

     8. No Participation In Underwritten Registrations. No Holder may participate in any
Underwritten Registration hereunder.

     9. Miscellaneous.

     (a) Remedies. The Company acknowledges and agrees that any failure by the Company to
comply with its obligations under Section 2 hereof may result in material irreparable
injury to the Initial Purchasers or the Holders for which there is no adequate remedy at
law, that it will not be possible to measure damages for such injuries precisely, and
that, in the

 

 

21

event of any such failure, the Initial Purchasers or any Holder may obtain such
relief as may be required to specifically enforce the Company’s obligations under Section
2 hereof. The Company further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.

     (b) Actions Affecting Transfer Restricted Securities. The Company shall not,
directly or indirectly, take any action with respect to the Transfer Restricted Securities
as a class that would adversely affect the ability of the Holders of Transfer Restricted
Securities to include such Transfer Restricted Securities in a registration undertaken
pursuant to this Agreement.

     (c) No Inconsistent Agreements. The Company has not, as of the date hereof, entered
into, nor shall it, on or after the date hereof, enter into, any agreement with respect to
its securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. In addition, the Company
shall not grant to any of its securityholders (other than the Holders of Transfer
Restricted Securities in such capacity) the right to include any of its securities in the
Shelf Registration Statement provided for in this Agreement other than the Transfer
Restricted Securities.

     (d) Amendments and Waivers. This Agreement may not be amended, modified or
supplemented, and waivers or consents to or departures from the provisions hereof may not
be given, unless the Company has obtained the written consent of a Majority of Holders;
provided, however, that with respect to any matter that directly or indirectly adversely
affects the rights of any Initial Purchaser hereunder, the Company shall obtain the
written consent of each such Initial Purchaser against which such amendment,
qualification, supplement, waiver or consent is to be effective. Notwithstanding the
foregoing (except the foregoing proviso), a waiver or consent to depart from the
provisions hereof, with respect to a matter, which relates exclusively to the rights of
Holders whose securities are being sold pursuant to a Shelf Registration Statement and
does not directly or indirectly adversely affect the rights of other Holders, may be given
by the Majority of Holders, determined on the basis of Notes being sold rather than
registered under such Shelf Registration Statement.

     (e) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, first class mail (registered or
certified, return receipt requested), telex, facsimile transmission, or air courier
guaranteeing overnight delivery:

 

 

22

     (i) if to a Holder, at the address set forth on the records of the registrar
under the Indenture or the transfer agent of the Common Stock, as the case may
be;

     (ii) if to the Company, at its address set forth in the Purchase Agreement,
with a copy to Fulbright & Jaworski L.L.P. at its address set forth in the
Purchase Agreement; and

     (iii) if to the Initial Purchasers, at the address of the Initial Purchasers
set forth in the Purchase Agreement.

     All such notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if
transmitted by facsimile; and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.

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

     (f) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties, including without
limitation and without the need for an express assignment, subsequent Holders of Transfer
Restricted Securities. The Company hereby agrees to extend the benefit of this Agreement
to any Holder and any such Holder may specifically enforce the provisions of this
Agreement as if an original party hereto.

     (g) Counterparts. This Agreement may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one and the same
agreement.

     (h) Notes Held by the Company or Its Affiliates. Whenever the consent or approval of
Holders of a specified percentage of Transfer Restricted Securities is required hereunder,
Transfer Restricted Securities held by the Company or its Affiliates (other than
subsequent Holders if such subsequent Holders are deemed to be Affiliates solely by reason
of their holding of such Notes) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.

     (i) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

 

 

23

     (j) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

     (k) Severability. If any one or more of the provisions contained herein, or
the application thereof in any circumstance, is held invalid, illegal or unenforceable,
the validity, legality and enforceability of any such provision in every other respect and
of the remaining provisions contained herein shall not be affected or impaired thereby, it
being intended that all of the rights and privileges of the parties shall be enforceable
to the fullest extent permitted by law.

     (l) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein with respect to the registration rights granted
by the Company with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with respect to
such subject matter.

 

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 
	 	CAL DIVE INTERNATIONAL, INC.

 	 
	 	By:  	/s/ A. Wade Pursell
 	 
	 	 	Name:  	A. Wade Pursell 	 
	 	 	Title:  	Senior Vice President and CFO 	 
	 

	 	 	 	 	 
	 	 BANC OF AMERICA SECURITIES LLC 

as representative of the Initial Purchasers

BANC OF AMERICA SECURITIES LLC

 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	By:  	                     /s/ Robert Santangelo
 	 
	 	 	Name:  	Robert Santangelo 	 
	 	 	Title:  	Managing Directorexv4w4

 

EXHIBIT 4.4

BANC OF AMERICA SECURITIES LLC

$240,000,000 AGGREGATE PRINCIPAL AMOUNT

CAL DIVE INTERNATIONAL, INC.

3.25 % CONVERTIBLE SENIOR NOTES DUE 2025

Purchase Agreement

dated March 23, 2005

 

 

 i

	 	 	 	 	 	 	 
	Section 1.

	 	Representations and Warranties of the Company
	 	 	2	 
	(a)

	 	No Registration
	 	 	2	 
	(b)

	 	No Integration
	 	 	3	 
	(c)

	 	Rule 144A
	 	 	3	 
	(d)

	 	Offering Memorandum
	 	 	3	 
	(e)

	 	Offering Materials Furnished to Initial Purchasers
	 	 	3	 
	(f)

	 	Authorization of the Purchase Agreement
	 	 	3	 
	(g)

	 	Authorization of the Indenture
	 	 	4	 
	(h)

	 	Authorization of the Notes
	 	 	4	 
	(i)

	 	Authorization of the Conversion Shares
	 	 	4	 
	(j)

	 	Authorization of the Registration Rights Agreement
	 	 	4	 
	(k)

	 	No Material Adverse Change
	 	 	4	 
	(l)

	 	Independent Accountants
	 	 	5	 
	(m)

	 	Preparation of the Financial Statements
	 	 	5	 
	(n)

	 	Incorporation and Good Standing of the Company and its Subsidiaries
	 	 	5	 
	(o)

	 	Capitalization and Other Capital Stock Matters
	 	 	6	 
	(p)

	 	No Stamp or Transfer Taxes
	 	 	6	 
	(q)

	 	Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required
	 	 	6	 
	(r)

	 	No Material Actions or Proceedings
	 	 	7	 
	(s)

	 	Intellectual Property Rights
	 	 	7	 
	(t)

	 	All Necessary Permits, Etc
	 	 	8	 
	(u)

	 	Title to Properties
	 	 	8	 
	(v)

	 	Tax Law Compliance
	 	 	8	 
	(w)

	 	Company Not Required to Register as an “Investment Company”
	 	 	8	 
	(x)

	 	Compliance with Reporting Requirements
	 	 	9	 
	(y)

	 	Insurance
	 	 	9	 
	(z)

	 	No Price Stabilization or Manipulation
	 	 	9	 
	(aa)

	 	Related Party Transactions
	 	 	9	 
	(bb)

	 	No Restriction on Distributions
	 	 	9	 
	(cc)

	 	Recent Sales
	 	 	9	 
	(dd)

	 	No General Solicitation
	 	 	10	 
	(ee)

	 	Sarbanes-Oxley Compliance
	 	 	10	 
	(ff)

	 	Internal Controls and Procedures
	 	 	10	 
	(gg)

	 	No Material Weakness in Internal Controls
	 	 	10	 
	(hh)

	 	Compliance with Environmental Laws
	 	 	10	 
	(ii)

	 	Periodic Review of Costs of Environmental Compliance
	 	 	11	 
	(jj)

	 	ERISA Compliance
	 	 	12	 
	(kk)

	 	No Outstanding Loans or Other Indebtedness
	 	 	12	 
	(ll)

	 	Compliance with Laws
	 	 	12	 
	(mm)

	 	No Unlawful Payments
	 	 	12	 
	(nn)

	 	No Conflict with Money Laundering Laws
	 	 	13	 
	(oo)

	 	No Conflict with OFAC Laws
	 	 	13	 
	(pp)

	 	Reserves
	 	 	13	 
	(qq)

	 	Registration Rights
	 	 	13	 
	Section 2.

	 	Purchase, Sale and Delivery of the Notes
	 	 	14	 
	(a)

	 	The Firm Notes
	 	 	14	 
	(b)

	 	The First Closing Date
	 	 	14	 

 

 

 ii

	 	 	 	 	 	 	 
	(c)

	 	The Optional Notes; Subsequent Closing Dates
	 	 	14	 
	(d)

	 	Payment for the Notes
	 	 	15	 
	(e)

	 	Delivery of the Notes
	 	 	15	 
	Section 3.

	 	Additional Covenants of the Company
	 	 	16	 
	(a)

	 	Representative’s Review of Proposed Amendments and Supplements
	 	 	16	 
	(b)

	 	Amendments and Supplements to the Offering Memorandum and Other Securities Act Matters
	 	 	16	 
	(c)

	 	Copies of Offering Memorandum
	 	 	17	 
	(d)

	 	Blue Sky Compliance
	 	 	17	 
	(e)

	 	Rule 144A Information
	 	 	17	 
	(f)

	 	Legends
	 	 	17	 
	(g)

	 	No General Solicitation
	 	 	17	 
	(h)

	 	No Integration
	 	 	17	 
	(i)

	 	Rule 144 Tolling
	 	 	18	 
	(j)

	 	Use of Proceeds
	 	 	18	 
	(k)

	 	Transfer Agent
	 	 	18	 
	(l)

	 	Company to Provide Interim Financial Statements
	 	 	18	 
	(m)

	 	Compliance with Securities Laws
	 	 	18	 
	(n)

	 	Agreement Not to Offer or Sell Additional Securities
	 	 	18	 
	(o)

	 	Future Reports to the Representative
	 	 	19	 
	(p)

	 	Investment Limitation
	 	 	19	 
	(q)

	 	No Manipulation of Price
	 	 	19	 
	(r)

	 	Existing Lock-Up Agreements
	 	 	19	 
	(s)

	 	Quotation of Conversion Shares
	 	 	19	 
	(t)

	 	Available Common Shares
	 	 	19	 
	(u)

	 	Conversion Price
	 	 	19	 
	Section 4.

	 	Payment of Expenses
	 	 	19	 
	Section 5.

	 	Conditions of the Obligations of the Initial Purchaser
	 	 	20	 
	(a)

	 	Accountants’ Comfort Letter
	 	 	20	 
	(b)

	 	No Material Adverse Change or Rating Agency Change
	 	 	20	 
	(c)

	 	Opinion of Counsel for the Company
	 	 	21	 
	(d)

	 	Opinion of Counsel for the Initial Purchasers
	 	 	21	 
	(e)

	 	Officers’ Certificate
	 	 	21	 
	(f)

	 	Bring-Down Comfort Letter
	 	 	21	 
	(g)

	 	Registration Rights Agreement
	 	 	22	 
	(h)

	 	Lock-Up Agreement from Certain Securityholders of the Company
	 	 	22	 
	(i)

	 	PORTAL Designation
	 	 	22	 
	(j)

	 	Certificate of Engineering Consultant
	 	 	22	 
	(k)

	 	Additional Documents
	 	 	22	 
	Section 6.

	 	Representations, Warranties and Agreements of Initial Purchasers
	 	 	23	 
	Section 7.

	 	Reimbursement of Initial Purchasers’ Expenses
	 	 	23	 
	Section 8.

	 	Indemnification
	 	 	23	 
	(a)

	 	Indemnification of the Initial Purchasers
	 	 	24	 
	(b)

	 	Indemnification of the Company, its Directors and Officers
	 	 	24	 
	(c)

	 	Notifications and Other Indemnification Procedures
	 	 	25	 
	(d)

	 	Settlements
	 	 	26	 
	Section 9.

	 	Contribution
	 	 	26	 
	Section 10.

	 	Default of One or More of the Several Initial Purchasers
	 	 	27	 

 

 

 iii

	 	 	 	 	 	 	 
	Section 11.

	 	Termination of this Agreement
	 	 	28	 
	Section 12.

	 	Representations and Indemnities to Survive Delivery
	 	 	29	 
	Section 13.

	 	Notices
	 	 	29	 
	Section 14.

	 	Successors
	 	 	30	 
	Section 15.

	 	Partial Unenforceability
	 	 	30	 
	Section 16.

	 	Governing Law Provisions; Consent to Jurisdiction
	 	 	30	 
	(a)

	 	Governing Law Provisions
	 	 	31	 
	(b)

	 	Consent to Jurisdiction
	 	 	31	 
	Section 17.

	 	KGeneral Provisions	 	 	31	 

 

 

Purchase Agreement

March 23, 2005

BANC OF AMERICA SECURITIES LLC

As Representative of the several Initial Purchasers

          c/o BANC OF AMERICA SECURITIES LLC

          9 West 57th Street

          New York, New York 10019

Ladies and Gentlemen:

     Cal Dive International, Inc., a Minnesota corporation (the “Company”), proposes to issue and
sell to the several purchasers named in Schedule A (the “Initial Purchasers”) $240,000,000 in
aggregate principal amount of its 3.25% Convertible Senior Notes due 2025 (the “Firm Notes”). In
addition, the Company has granted to the Initial Purchasers an option to purchase up to an
additional $60,000,000 in aggregate principal amount of its 3.25% Convertible Senior Notes due 2025
(the “Optional Notes” and, together with the Firm Notes, the “Notes”), solely to cover
over-allotments. The Notes will be redeemable at the Company’s option at any time after December
20, 2012. Banc of America Securities LLC (“BAS”) has agreed to act as representative of the
several Initial Purchasers (in such capacity, the “Representative”) in connection with the offering
and sale of the Notes.

     The Notes will be convertible into fully paid, non-assessable shares of common stock, no par
value per share, of the Company (the “Common Stock”). The Notes will be convertible into cash, and
in certain circumstances, stock, initially at a conversion rate of 15.56 shares per $1,000
principal amount of the Notes, on the terms, and subject to the conditions, set forth in the
Indenture (as defined below). As used herein, “Conversion Shares” means the shares of Common Stock
into which the Notes are convertible. The Notes will be issued pursuant to an indenture (the
“Indenture”) to be dated as of the First Closing Date (as defined in Section 2), between the
Company and JPMorgan Chase Bank, National Association, as trustee (the “Trustee”).

     The Notes will be offered and sold to the Initial Purchasers without being registered under
the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the
“Securities Act”), in reliance upon an exemption therefrom.

     Holders of the Notes (including the Initial Purchasers and their direct and indirect
transferees) will be entitled to the benefits of a Resale Registration Rights Agreement, dated the
First Closing Date, between the Company and the Initial Purchasers (the

 

 

  2

“Registration Rights Agreement”), pursuant to which the Company will agree to file with the
Securities and Exchange Commission (the “Commission”) a shelf registration statement pursuant to
Rule 415 under the Securities Act (the “Registration Statement”) covering the resale of the Notes
and the Conversion Shares, and to use its reasonable best efforts to cause the Registration
Statement to be declared effective. This Agreement, the Indenture, the Notes and the Registration
Rights Agreement are referred to herein collectively as the “Operative Documents.”

     The Company understands that the Initial Purchasers propose to make an offering of the Notes
on the terms and in the manner set forth herein and in the Offering Memorandum (as defined below)
and agrees that the Initial Purchasers may resell, subject to the conditions set forth herein, all
or a portion of the Notes to purchasers (the “Subsequent Purchasers”) at any time after the date of
this Agreement. The Notes are to be offered and sold to or through the Initial Purchasers without
being registered with the Commission under the Securities Act in reliance upon exemptions
therefrom. The terms of the Notes and the Indenture will require that investors that acquire Notes
expressly agree that Notes (and any Conversion Shares) may only be resold or otherwise transferred,
after the date hereof, if such Notes (or Conversion Shares) are registered for sale under the
Securities Act or if an exemption from the registration requirements of the Securities Act is
available (including the exemption afforded by Rule 144A (“Rule 144A”) thereunder).

     The Company has prepared an offering memorandum dated the date hereof setting forth
information concerning the Company, the Notes, the Registration Rights Agreement (as defined below)
and the Common Stock in form and substance reasonably satisfactory to the Initial Purchasers. As
used in this Agreement, “Offering Memorandum” means, collectively, the Preliminary Offering
Memorandum dated as of March 22, 2005 (the “Preliminary Offering Memorandum”) and the offering
memorandum dated the date hereof (the “Final Offering Memorandum”), each as amended or supplemented
by the Company. As used herein, each of the terms “Offering Memorandum”, “Preliminary Offering
Memorandum” and “Final Offering Memorandum” shall include in each case the documents incorporated
or deemed to be incorporated by reference therein.

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

     Section 1. Representations and Warranties of the Company.

     The Company hereby represents, warrants and covenants to each Initial Purchaser as follows:

     (a) No Registration. Assuming the accuracy of the representations and warranties of the Initial Purchasers contained
in Section 6 and their compliance with the agreements set forth therein, it is not necessary, in
connection with the issuance and sale

 

 

  3

of the Notes to the Initial Purchasers, the offer, resale and delivery of the Notes by the Initial Purchasers and the conversion of the Notes into Conversion
Shares, in each case in the manner contemplated by this Agreement, the Indenture and the Offering
Memorandum, to register the Notes or the Conversion Shares under the Securities Act or to qualify
the Indenture under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”)

     (b) No Integration. Other than to the Initial Purchasers in connection with the
transactions contemplated by this Agreement, about which no representation is made by the Company,
none of the Company or any of its subsidiaries has, directly or through any agent, sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of, any “security” (as defined
in the Securities Act) that is or will be integrated with the sale of the Notes or the Conversion
Shares in a manner that would require registration under the Securities Act of the Notes or the
Conversion Shares.

     (c) Rule 144A. No securities of the same class (within the meaning of Rule 144A(d)(3)
under the Securities Act) as the Notes are listed on any national securities exchange registered
under Section 6 of the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the “Exchange Act”), or quoted on an automated inter-dealer quotation
system. The Company is subject to and in full compliance with the reporting requirements of Section
13 or Section 15(d) of the Exchange Act.

     (d) Offering Memorandum. The Company hereby confirms that it has authorized the use of
the Offering Memorandum in connection with the offer and sale of the Securities by the Initial
Purchasers. Each document, if any, filed or to be filed pursuant to the Exchange Act and
incorporated by reference in the Offering Memorandum complied or will comply when it is filed in
all material respects with the Exchange Act. The Preliminary Offering Memorandum does not contain
and the Final Offering Memorandum in the form used by the Initial Purchasers to confirm sales as of
each Closing Date (as defined in Section 2), will not contain, any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided that the Company
makes no representation or warranty as to information contained in or omitted from the Offering
Memorandum in reliance upon and in conformity with written information furnished to the Company by
or on the behalf of the Initial Purchasers specifically for inclusion therein.

     (e) Offering Materials Furnished to Initial Purchasers. The Company has delivered to the
Representative Preliminary Offering Memorandums and Final Offering Memorandums, as amended or
supplemented, in such quantities and at such places as the Representative has reasonably requested
for each of the Initial Purchasers.

     (f) Authorization of the Purchase Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.

 

 

  4

     (g) Authorization of the Indenture. The Indenture has been duly authorized by the
Company and, upon the effectiveness of the Registration Statement, will be qualified under the
Trust Indenture Act; on the First Closing Date, the Indenture will have been duly executed and
delivered by the Company and, assuming the due authorization, execution and delivery of the
Indenture by the Trustee, the Indenture will constitute the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except (a) as such
enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other laws affecting creditors’ rights generally and (b) that the remedy of specific
performance and injunctive and other forms of equitable relief are subject to certain equitable
defenses and to the discretion of the court before which any proceeding therefor may be brought;
and the Indenture will conform in all material respects to the description thereof contained in the
Offering Memorandum.

     (h) Authorization of the Notes. The Notes have been duly authorized by the Company; when
the Notes are executed, authenticated and issued in accordance with the terms of the Indenture and
delivered to and paid for by the Initial Purchasers pursuant to this Agreement on the respective
Closing Date (assuming due authentication of the Notes by the Trustee), the Notes will constitute
valid and binding obligations of the Company, enforceable against the Company in accordance with
their respective terms and entitled to the benefits provided by the Indenture, except (a) as such
enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other laws affecting creditors’ rights generally and (b) that the remedy of specific
performance and injunctive and other forms of equitable relief are subject to certain equitable
defenses and to the discretion of the court before which any proceeding therefor may be brought;
and the Notes will conform in all material respects to the description thereof contained in the
Offering Memorandum.

     (i) Authorization of the Conversion Shares. The shares of Common Stock initially
issuable upon conversion of the Notes have been duly authorized and reserved and, when issued upon
conversion of the Notes in accordance with the terms of the Notes, will be validly issued, fully paid and non-assessable, and
the issuance of such shares will not be subject to any preemptive or similar rights.

     (j) Authorization of the Registration Rights Agreement. The Registration Rights
Agreement has been duly authorized and will be duly executed and delivered by the Company.

     (k) No Material Adverse Change. Except as otherwise disclosed in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of this Agreement),
subsequent to the respective dates as of which information is given in the Offering Memorandum: (i)
there has been no material adverse change, or any development involving a prospective material
adverse change that would reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings, business or operations, whether or not
arising from transactions in the

 

 

  5

ordinary course of business, of the Company and its subsidiaries, considered as one entity (any such change is called a “Material Adverse Change”); (ii) the Company
and its subsidiaries, considered as one entity, have not incurred any material liability or
obligation, indirect, direct or contingent, nor entered into any material transaction or agreement;
and (iii) there has been no dividend or distribution of any kind declared, paid or made by the
Company or, except for dividends paid to the Company or other subsidiaries, any of its subsidiaries
on any class of capital stock or repurchase or redemption by the Company or any of its subsidiaries
of any class of capital stock.

     (l) Independent Accountants. Ernst & Young LLP, who have expressed their opinion with
respect to the financial statements (which term as used in this Agreement includes the related
notes thereto) included in or incorporated by reference in the Offering Memorandum, are independent
public or certified public accountants as required by the Securities Act and the Exchange Act.

     (m) Preparation of the Financial Statements. The financial statements included in or
incorporated by reference in the Offering Memorandum present fairly the consolidated financial
position of the Company and its consolidated subsidiaries as of and at the dates indicated and the
results of their operations and cash flows for the periods specified. Such financial statements
have been prepared in conformity with generally accepted accounting principles as applied in the
United States applied on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. The financial data set forth in the Offering
Memorandum under the captions “Summary—Selected Historical Consolidated Financial Information of Cal Dive International, Inc.” and “Capitalization” fairly present the
information set forth therein on a basis consistent with that of the audited financial statements
contained in the Offering Memorandum. The Company’s ratios of earnings to fixed charges set forth
in the Offering Memorandum have been calculated in compliance with Item 503(d) of Regulation S-K
under the Securities Act.

     (n) Incorporation and Good Standing of the Company and its Subsidiaries. Each of the
Company and its subsidiaries has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation and has corporate power and
authority to own, lease and operate its properties and to conduct its business as described in the
Offering Memorandum and, in the case of the Company, to enter into and perform its obligations
under this Agreement. Each of the Company and each subsidiary is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of property or the conduct
of business, except for such jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a Material Adverse Change. All of
the issued and outstanding capital stock of each subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim, except as disclosed in the Offering

 

 

  6

Memorandum. The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries
listed in Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2004.

     (o) Capitalization and Other Capital Stock Matters. The authorized, issued and
outstanding capital stock of the Company is as set forth in the Offering Memorandum under the
caption “Capitalization” (other than for subsequent issuances, if any, pursuant to employee benefit
plans described in the Offering Memorandum or upon exercise of outstanding options or warrants
described in the Offering Memorandum). The Common Stock (including the Conversion Shares) conforms
in all material respects to the description thereof contained in the Offering Memorandum. All of
the issued and outstanding shares of Common Stock have been duly authorized and validly issued, are
fully paid and nonassessable and have been issued in compliance with federal and state securities
laws. None of the outstanding shares of Common Stock were issued in violation of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or purchase securities of
the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights
of first refusal or other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other
than those accurately described in the Offering Memorandum. The description of the Company’s stock
option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Offering Memorandum accurately and
fairly presents and summarizes such plans, arrangements, options and rights.

     (p) No Stamp or Transfer Taxes. There are no stamp or other issuance or transfer taxes
or duties or other similar fees or charges required to be paid in connection with the execution and
delivery of this Agreement or the issuance or sale by the Company of the Securities or upon the
issuance of Common Stock upon the conversion thereof.

     (q) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required. Neither the Company nor any of its subsidiaries is in violation of its respective
charter or by-laws or is in default (or, with the giving of notice or lapse of time, would be in
default) (“Default”) under any indenture, mortgage, loan or credit agreement, note, contract,
franchise, lease or other instrument to which the Company or any of its subsidiaries is a party or
by which it or any of them may be bound or to which any of the property or assets of the Company or
any of its subsidiaries is subject (each, an “Existing Instrument”), except for such Defaults as
would not, individually or in the aggregate, result in a Material Adverse Change.

     The Company’s execution, delivery and performance of the Operative Documents and consummation
of the transactions contemplated thereby and by the Offering Memorandum (i) have been duly
authorized by all necessary corporate action and will not result in any violation of the provisions
of the charter or by-laws of the

 

 

  7

Company or any subsidiary, (ii) will not conflict with or constitute a breach of, or Default or a Debt Repayment Triggering Event (as defined below) under,
or result in the creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, or require the consent of any other
party to, any Existing Instrument and (iii) will not result in any violation of any law,
administrative regulation or administrative or court decree applicable to the Company or any
subsidiary. No consent, approval, authorization or other order of, or registration or filing with,
any court or other governmental or regulatory authority or agency, is required for the Company’s
execution, delivery and performance of the Operative Documents and consummation of the transactions
contemplated thereby and by the Offering Memorandum, except (i) with respect to the transactions
contemplated by the Registration Rights Agreement, as may be required under the Securities Act, the
Trust Indenture Act and the rules and regulations promulgated thereunder and (ii) such as have been
obtained or made by the Company and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and from the National Association of Securities
Dealers, Inc. (the “NASD”). As used herein, a “Debt Repayment Triggering Event” means any event or
condition which gives, or with the giving of notice or lapse of time would give, the holder of any
note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or
any of its subsidiaries.

     (r) No Material Actions or Proceedings. There are no legal or governmental actions,
suits or proceedings pending or, to the best of the Company’s knowledge, threatened (i) against or
affecting the Company or any of its subsidiaries, (ii) which has as the subject thereof any officer
or director of, or property owned or leased by, the Company or any of its subsidiaries or (iii)
relating to environmental or discrimination matters, where in any such case (A) there is a
reasonable possibility that such action, suit or proceeding might be determined adversely to the
Company or such subsidiary and (B) any such action, suit or proceeding, if so determined adversely,
would reasonably be expected to result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated by this Agreement. No material labor dispute with
the employees of the Company or any of its subsidiaries, or with the employees of any principal
supplier of the Company, exists or, to the best of the Company’s knowledge, is threatened or
imminent.

     (s) Intellectual Property Rights. The Company and its subsidiaries own, possess, license
or have other rights to use, on reasonable terms, all trademarks, trade names, copyrights, domain
names, licenses, trade secrets and patent rights (collectively, “Intellectual Property Rights”)
reasonably necessary to conduct their businesses as now conducted; and the expected expiration of
any of such Intellectual Property Rights would not result in a Material Adverse Change. Neither
the Company nor any of its subsidiaries has received any notice of infringement or conflict with
asserted Intellectual Property Rights of others, which infringement or conflict, if the subject of
an unfavorable decision, would result in a Material Adverse Change. To the Company’s knowledge,
there is no

 

 

  8

material infringement by third parties of any Intellectual Property Rights owned by or
exclusively licensed to the Company. The Company is not a party to or bound by any options,
licenses or agreements with respect to the Intellectual Property Rights of any other person or
entity that are required to be set forth in the Offering Memorandum if it were a registration
statement on Form S-3 (including through incorporation by reference) and are not described in all
material respects. None of the technology employed by the Company has been obtained or is being
used by the Company in violation of any contractual obligation binding on the Company or, to the
Company’s knowledge, any of its officers, directors or employees or otherwise in violation of the
rights of any persons.

     (t) All Necessary Permits, Etc. The Company and each subsidiary possess such valid and
current certificates, authorizations or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct their respective businesses, and neither the Company nor any subsidiary has received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would
reasonably be expected to result in a Material Adverse Change.

     (u) Title to Properties. The Company and each of its subsidiaries has good and
marketable title to all the properties and assets reflected as owned by each of them in the
financial statements included or incorporated by reference in the Offering Memorandum, in each case
free and clear of any security interests, mortgages, liens, encumbrances, equities, claims and
other defects, except such as do not, singly or in the aggregate, materially and adversely affect
the value of such property and do not, singly or in the aggregate, materially interfere with the
use made or proposed to be made of such property by the Company or such subsidiary. The real
property, improvements, equipment and personal property held under lease by the Company or any
subsidiary are held under valid and enforceable leases, with such exceptions as are not material
and do not, singly or in the aggregate, materially interfere with the use made or proposed to be
made of such real property, improvements, equipment or personal property by the Company or such
subsidiary.

     (v) Tax Law Compliance. The Company and its consolidated subsidiaries have filed all
material federal, state and foreign income and franchise tax returns and have paid all taxes
required to be paid by any of them and, if due and payable, any related or similar assessment, fine
or penalty levied against any of them. The Company has made adequate charges, accruals and
reserves in the financial statements included in the Offering Memorandum in respect of all federal,
state and foreign income and franchise taxes for all periods as to which the tax liability of the
Company or any of its consolidated subsidiaries has not been finally determined.

     (w) Company Not Required to Register as an “Investment Company”. The Company has been
advised of the rules and requirements under the Investment Company Act of 1940, as amended (the
“Investment Company Act”). The Company is not, and,

 

 

  9

after receipt of payment for the Notes and application of the proceeds as described in the Offering Memorandum, will not be, required to
register as an “investment company” within the meaning of the Investment Company Act and will
conduct its business in a manner so that it will not become subject to the Investment Company Act.

     (x) Compliance with Reporting Requirements. The Company is subject to and in full
compliance with the reporting requirements of Section 13 or Section 15(d) of the Exchange Act.

     (y) Insurance. Each of the Company and its subsidiaries are insured by recognized,
financially sound and reputable institutions with policies in such amounts and with such
deductibles and covering such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real and personal property owned or
leased by the Company and its subsidiaries against theft, damage, destruction, acts of terrorism or
vandalism and earthquakes. The Company has no reason to believe that it or any subsidiary will not
be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result in a Material Adverse Change.
Neither of the Company nor any subsidiary has been denied any insurance coverage which it has
sought or for which it has applied.

     (z) No Price Stabilization or Manipulation. The Company has not taken and will not take,
directly or indirectly, any action designed to or that might be reasonably expected to cause or
result in stabilization or manipulation of the price of the Notes, the Conversion Shares or any
other security of the Company to facilitate the sale or resale of the Notes. The Company
acknowledges that the Initial Purchasers may engage in stabilization transactions as described in
the Offering Memorandum.

     (aa) Related Party Transactions. There are no business relationships or related-party
transactions involving the Company or any subsidiary or any other person required to be described
in the Offering Memorandum if it were a registration statement on Form S-3 (including through
incorporation by reference) which have not been described as required.

     (bb) No Restriction on Distributions. No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances
to such subsidiary from the Company or from transferring any of such subsidiary’s property or
assets to the Company or any other subsidiary of the Company, except as described in or
contemplated by the Offering Memorandum.

     (cc) Recent Sales. Except as disclosed in the Offering Memorandum, the Company has not
sold or issued any shares of Common Stock, any security convertible

 

 

  10

into shares of Common Stock or any security of the same class as the Notes during the six-month period preceding the date of the
Offering Memorandum, including any sales pursuant to Rule 144A or under Regulations D or S of the Securities Act, other than shares issued pursuant to the Company’s stock
plans or pursuant to outstanding options, rights or warrants, and within the last six months the
Company has not offered or sold any such securities in a manner that would be integrated with
offering contemplated hereunder.

     (dd) No General Solicitation. None of the Company or any of its affiliates (as defined
in Rule 501(b) of Regulation D under the Securities Act (“Regulation D”)), has, directly or through
an agent, engaged in any form of general solicitation or general advertising in connection with the
offering of the Notes or the Conversion Shares (as those terms are used in Regulation D) under the
Securities Act or in any manner involving a public offering within the meaning of Section 4(2) of
the Securities Act; the Company has not entered into any contractual arrangement with respect to
the distribution of the Notes or the Conversion Shares except for this Agreement, and the Company
will not enter into any such arrangement except for the Registration Rights Agreement and as may be
contemplated thereby.

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

     (ff) Internal Controls and Procedures. The Company maintains effective disclosure
controls and procedures and internal control over financial reporting, each as defined in Rule
13a-15 under the Exchange Act.

     (gg) No Material Weakness in Internal Controls. Except as disclosed in the Offering
Memorandum, since the end of the Company’s most recent audited fiscal year, there has been (i) no
material weakness in the Company’s internal control over financial reporting (whether or not
remediated) and (ii) no change in the Company’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Company’s internal control
over financial reporting.

     (hh) Compliance with Environmental Laws. Except as would not, individually or in the
aggregate, result in a Material Adverse Change (i) neither the Company nor any of its subsidiaries
is in violation of any federal, state, local or foreign law or regulation relating to pollution or
protection of human health or the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or protection of wildlife, including without limitation, laws and regulations relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum and petroleum products (collectively, “Materials of Environmental Concern”), or otherwise
relating to

 

 

  11

the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Materials of Environmental Concern (collectively, “Environmental Laws”), which
violation includes, but is not limited to, noncompliance with any permits or other governmental
authorizations required for the operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and conditions thereof, nor has the
Company or any of its subsidiaries received any written communication, whether from a governmental
authority, citizens group, employee or other third party, that alleges that the Company or any of
its subsidiaries is in violation of any Environmental Law; (ii) there is (A) no claim, action or
cause of action filed with a court or governmental authority; (B) no investigation by any third
party with respect to which the Company has received written notice and (C) no written notice
received by, or to the best of the Company’s knowledge, threatened against the Company or any of
its subsidiaries, in each case that alleges potential liability for investigatory costs, cleanup
costs, governmental responses costs, natural resources damages, property damages, personal
injuries, attorneys’ fees or penalties arising out of, based on or resulting from the presence, or
release into the environment, of any Material of Environmental Concern at any location owned,
leased or operated by the Company or any of its subsidiaries, now or in the past (collectively,
“Environmental Claims”), and in each case that is pending or, to the best of the Company’s
knowledge, threatened against the Company or any of its subsidiaries or any person or entity whose
liability for any Environmental Claim the Company or any of its subsidiaries has retained or
assumed either contractually or by operation of law; and (iii) to the best of the Company’s
knowledge, there are no past, present or anticipated future actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the release, emission, discharge,
presence or disposal of any Material of Environmental Concern, that would reasonably be expected to
result in a violation of any Environmental Law, require expenditure to be incurred pursuant to
Environmental Law or form the basis of a potential Environmental Claim against the Company or any
of its subsidiaries or against any person or entity whose liability for any Environmental Claim the
Company or any of its subsidiaries has retained or assumed either contractually or by operation of
law; and (iv) neither the Company nor any of its subsidiaries is subject to any pending or, to the
best of the Company’s knowledge, threatened proceeding under Environmental Law to which a
governmental authority is a party and which is reasonably likely to result in monetary sanctions of
$100,000 or more.

     (ii) Periodic Review of Costs of Environmental Compliance. In the ordinary course of its
business, the Company conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential liabilities to third
parties). On the basis of such review and the amount of its established reserves, the Company has
reasonably concluded that such associated costs

 

 

  12

and liabilities would not, individually or in the aggregate, result in a Material Adverse Change.

     (jj) ERISA Compliance. None of the following events has occurred or exists: (i) a
failure to fulfill the obligations, if any, under the minimum funding standards of Section 302 of
the United States Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the
regulations and published interpretations thereunder with respect to a Plan, determined without
regard to any waiver of such obligations or extension of any amortization period; (ii) an audit or
investigation by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit
Guaranty Corporation or any other federal or state governmental agency or any foreign regulatory
agency with respect to the employment or compensation of employees by the Company; or (iii) any
breach of any contractual obligation, or any violation of law or applicable qualification
standards, with respect to the employment or compensation of employees by the Company, in each
case, that would reasonably be expected to result in a Material Adverse Change. None of the
following events has occurred or is reasonably likely to occur: (A) a material increase in the
aggregate amount of contributions required to be made to all Plans in the current fiscal year of
the Company compared to the amount of such contributions made in the Company’s most recently
completed fiscal year; (B) a material increase in the Company’s “accumulated post-retirement
benefit obligations” (within the meaning of Statement of Financial Accounting Standards 106)
compared to the amount of such obligations in the Company’s most recently completed fiscal year;
(C) any event or condition giving rise to a liability under Title IV of ERISA; or (D) the filing of
a claim by one or more employees or former employees of the Company related to their employment, in
each case, that would reasonably be expected to result in a Material Adverse Change. For purposes
of this paragraph, the term “Plan” means a plan (within the meaning of Section 3(3) of ERISA)
subject to Title IV of ERISA with respect to which the Company may have any liability.

     (kk) No Outstanding Loans or Other Indebtedness. There are no outstanding loans,
advances (except normal advances for business expenses in the ordinary course of business) or
guarantees or indebtedness by the Company to or for the benefit of any of the officers or directors
of the Company or any of the members of any of their families, except as disclosed in the Offering
Memorandum.

     (ll) Compliance with Laws. The Company has not been advised, and has no reason to believe, that it and each of its
subsidiaries are not conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business, except where failure to be so
in compliance would not result in a Material Adverse Change.

     (mm) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor, to the
best knowledge of the Company, any director, officer, agent, employee or other person associated
with or acting on behalf of the Company has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful

 

 

  13

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; or (iii) made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.

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

     (oo) No Conflict with OFAC Laws. 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.

     (pp) Reserves. The Company’s estimates of oil and natural gas reserves in or
incorporated by reference in the Offering Memorandum were prepared in good faith and with a
reasonable basis; the information used to arrive at such estimates was prepared in accordance with
customary industry practices; other than normal production of reserves and intervening spot market
product price fluctuations, and except as disclosed in the Offering Memorandum, the Company is not aware of any facts or circumstances that would result in a
materially adverse change in such estimates in the aggregate, or the aggregate present value of
future net cash flows therefrom, as described in the Offering Memorandum; and estimates of such
reserves and the present value of the future net cash flows therefrom as described in the Offering
Memorandum comply in all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder. The information provided to Huddleston & Co., Inc.
(“Huddleston & Co.”) for purposes of reviewing the reserve report referenced in or incorporated by
reference in the Offering Memorandum (the “Reserve Report”) was prepared in accordance with
customary industry practices; to the best of the Company’s knowledge, Huddleston & Co. was, as of
the date of the Reserve Report reviewed by it, and are, as of the date hereof, independent
petroleum engineers with respect to the Company.

     (qq) Registration Rights. Except as publicly disclosed, there are no contracts,
agreements or understandings between the Company and any person granting such

 

 

  14

person the right to require the Company to file a registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such securities with the Conversion
Shares registered pursuant to a registration statement. All such rights to require the Company to
include securities with the Conversion Shares registered pursuant to a registration statement have
been validly waived pursuant to the terms of any such agreement or understanding.

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

          The Company acknowledges that the Initial Purchasers and, for purposes of the opinions to be
delivered pursuant to Section 5 hereof, counsel to the Company and counsel to the Initial
Purchasers, will rely upon the accuracy and truthfulness of the foregoing representations and
hereby consents to such reliance.

     Section 2. Purchase, Sale and Delivery of the Notes.

     (a) The Firm Notes. The Company agrees to issue and sell to the several Initial
Purchasers the Firm Notes upon the terms herein set forth. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to the conditions herein
set forth, the Initial Purchasers agree, severally and not jointly, to purchase from the Company
the respective principal amount of Firm Notes set forth opposite their names under the heading
“Aggregate Principal Amount of Firm Notes to be Purchased” on Schedule A at a purchase price of
97.5% of the aggregate principal amount thereof.

     (b) The First Closing Date. Delivery of the Firm Notes to be purchased by the Initial
Purchasers and payment therefor shall be made at the offices of Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York (or such other place as may be agreed to by the Company and
the Initial Purchasers) at 10:00 a.m. New York time, on March 30, 2005 (unless postponed in
accordance with the provisions of Section 10), or such other time and date not later than 10:00
a.m. New York time, on April 6, 2005 as the Representative shall designate by notice to the Company
(the time and date of such closing are called the “First Closing Date”). The Company hereby
acknowledges that circumstances under which the Representative may provide notice to postpone the
First Closing Date as originally scheduled include, but are in no way limited to, any determination
by the Company or the Representative to recirculate copies of an amended or supplemented Offering
Memorandum or a delay as contemplated by the provisions of Section 10.

     (c) The Optional Notes; Subsequent Closing Dates. In addition, on the basis of the
representations, warranties and agreements herein contained, and upon the terms but subject to the
conditions herein set forth, the Company hereby grants an option to the

 

 

  15

several Initial Purchasers to purchase, severally and not jointly, up to $60,000,000 aggregate principal amount of Optional
Notes from the Company at the same price as the purchase price to be paid by the Initial Purchasers
for the Firm Notes. The option granted hereunder is for use by the Initial Purchasers solely in
covering any over-allotments in connection with the sale and distribution of the Firm Notes. The
option granted hereunder may be exercised in whole or in part at any time or from time to time upon
notice by the Representative to the Company, which notice may be given prior to, and any Subsequent
Closing Dates must occur, within 13 days from the date of the First Closing Date. Such notice
shall set forth (i) the amount (which shall be an integral multiple of $1,000 in aggregate
principal amount) of Optional Notes as to which the Initial Purchasers are exercising the option,
(ii) the names and denominations in which the Optional Notes are to be registered and (iii) the
time, date and place at which such Notes will be delivered (which time and date may be simultaneous
with, but not earlier than, the First Closing Date; and in such case the term “First Closing Date”
shall refer to the time and date of delivery of the Firm Notes and the Optional Notes). Such time
and date of delivery, if subsequent to the First Closing Date, is called a “Subsequent Closing
Date” (each of the First Closing Date and any Subsequent Closing Date shall also be referred to
herein individually as a “Closing Date”) and shall be determined by the Representative. Such date
may be the same as the First Closing Date but not earlier than the First Closing Date nor later
than 10 business days after the date of such notice. If any Optional Notes are to be purchased,
each Initial Purchaser agrees, severally and not jointly, to purchase the principal amount of
Optional Notes (subject to such adjustments to eliminate fractional amounts as the Representative
may determine) that bears the same proportion to the total principal amount of Optional Notes to be
purchased as the principal amount of Firm Notes set forth on Schedule A opposite the name of such
Initial Purchaser bears to the total principal amount of Firm Notes. The Representative may cancel the option at any time prior to its expiration by giving written notice of such cancellation
to the Company.

     (d) Payment for the Notes. Payment for the Notes shall be made at the First Closing Date
(and, if applicable, at any Subsequent Closing Date) by wire transfer of immediately available
funds to a bank account designated by the Company.

     It is understood that the Representative has been authorized, for its own account and the
accounts of the several Initial Purchasers, to accept delivery of and receipt for, and make payment
of the purchase price for, the Firm Notes and any Optional Notes the Initial Purchasers have agreed
to purchase. BAS, individually and not as the Representative of the Initial Purchasers, may (but
shall not be obligated to) make payment for any Notes to be purchased by any Initial Purchaser
whose funds shall not have been received by the Representative by the First Closing Date or any
Subsequent Closing Date, as the case may be, for the account of such Initial Purchaser, but any
such payment shall not relieve such Initial Purchaser from any of its obligations under this
Agreement.

     (e) Delivery of the Notes. The Company shall deliver, or cause to be delivered, to the
Representative for the accounts of the several Initial Purchasers the Firm Notes in

 

 

  16

the form of one or more permanent global securities in definitive form (the “Global Notes”), deposited with the
Trustee as custodian for DTC and registered in the name of Cede & Co., as nominee for DTC, at the
First Closing Date, against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. The Company shall also deliver, or cause to
be delivered, to the Representative for the accounts of the several Initial Purchasers, the
Optional Notes in the form of Global Notes, deposited with the Trustee as custodian for DTC and
registered in the name of Cede & Co., as nominee for DTC, which the Initial Purchasers has agreed
to purchase at the First Closing Date or any Subsequent Closing Date, as the case may be, against
the irrevocable release of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The Notes shall be registered in such names and denominations as the
Initial Purchasers shall have requested at least two full business days prior to the First Closing
Date (or any Subsequent Closing Date, as the case may be) and shall be made available for
inspection on the business day preceding the First Closing Date (or any Subsequent Closing Date, as
the case may be) at a location in New York City as the Initial Purchasers may designate. Time
shall be of the essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Initial Purchasers.

     Section 3. Additional Covenants of the Company.

     The Company further covenants and agrees with each Initial Purchaser as follows:

     (a) Representative’s Review of Proposed Amendments and Supplements. During such period
beginning on the date hereof and ending on the date which is the earlier of nine months after the
date hereof or the completion of the resale of the Notes by the Initial Purchasers (as notified by
the Initial Purchasers to the Company), prior to amending or supplementing the Offering Memorandum,
the Company shall furnish to the Representative for review a copy of each such proposed amendment
or supplement, and the Company shall not print or distribute such proposed amendment or supplement
to which the Representative reasonably objects.

     (b) Amendments and Supplements to the Offering Memorandum and Other Securities Act
Matters. If, at any time prior to the earlier of nine months after the date hereof or the
completion of the resale of the Notes by the Initial Purchasers (as notified by the Initial
Purchasers to the Company), any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Offering Memorandum in order that the Offering Memorandum will
not include an untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, or if in the opinion of the Representative or counsel for
the Initial Purchasers it is otherwise necessary to amend or supplement the Offering Memorandum to
comply with law, the Company shall promptly notify the Initial Purchasers and prepare, subject to
Section 3(a) hereof, such amendment or supplement as may be necessary to correct such untrue
statement or omission.

 

 

 17

     (c) Copies of Offering Memorandum. The Company agrees to furnish the
Representative, without charge, until the earlier of nine months after the date hereof or the
completion of the resale of the Notes by the Initial Purchasers (as notified by the Initial
Purchasers to the Company) as many copies of the Offering Memorandum and any amendments and
supplements thereto as the Representative may request.

     (d) Blue Sky Compliance. The Company shall cooperate with the Representative and counsel
for the Initial Purchasers, as the Initial Purchasers may reasonably request from time to time, to
qualify or register the Notes for sale under (or obtain exemptions from the application of) the
state securities or blue sky laws of those jurisdictions designated by the Representative, shall
comply with such laws and shall continue such qualifications, registrations and exemptions in
effect so long as required for the distribution of the Notes. The Company shall not be required to
qualify as a foreign corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where it would be subject
to taxation as a foreign corporation. The Company will advise the Representative promptly of the
suspension of the qualification or registration of (or any such exemption relating to) the Notes
for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best efforts to obtain the withdrawal thereof
at the earliest possible moment.

     (e) Rule 144A Information. For so long as any of the Notes are “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Company shall
provide to any holder of the Notes or to any prospective purchaser of the Notes designated by any
holder, upon request of such holder or prospective purchaser, information required to be provided
by Rule 144A(d)(4) of the Securities Act if, at the time of such request, the Company is not
subject to the reporting requirements under Section 13 or 15(d) of the Exchange Act.

     (f) Legends. Each of the Notes will bear, to the extent applicable, the legend
contained in “Notice to Investors” in the Offering Memorandum for the time period and upon the
other terms stated therein.

     (g) No General Solicitation. Except following the effectiveness of the Registration
Statement (as defined in the Registration Rights Agreement), the Company will not, and will cause
its subsidiaries not to, solicit any offer to buy or offer to sell the Notes by means of any form
of general solicitation or general advertising (as those terms are used in Regulation D under
the Securities Act) or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act.

     (h) No Integration. The Company will not, and will cause its subsidiaries not to,
sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any “security”
(as defined in the Securities Act) in a transaction that could be integrated with

 

 

 18

the sale of the
Notes in a manner that would require the registration under the Securities Act of the Notes.

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

     (j) Use of Proceeds. The Company shall apply the net proceeds from the sale of the
Notes sold by it in the manner described under the caption “Use of Proceeds” in the Offering
Memorandum.

     (k) Transfer Agent. The Company shall maintain, at its expense, a registrar and
transfer agent for the Common Stock.

     (l) Company to Provide Interim Financial Statements. Prior to the Closing Date, the
Company will furnish the Initial Purchasers, as soon as they have been prepared by or are available
to the Company, a copy of any unaudited interim financial statements of the Company for any period
subsequent to the period covered by the most recent financial statements appearing in the Offering
Memorandum.

     (m) Compliance with Securities Laws. The Company will comply with all applicable
securities and other laws, rules and regulations, including, without limitation, the Sarbanes Oxley
Act, and use its best efforts to cause the Company’s directors and officers, in their capacities as
such, to comply with such laws, rules and regulations, including, without limitation, the
provisions of the Sarbanes-Oxley Act.

     (n) Agreement Not to Offer or Sell Additional Securities. During the period commencing on the date hereof and ending on the 90th day following the date of
the Final Offering Memorandum, the Company will not, without the prior written consent of BAS
(which consent may be withheld at the sole discretion of BAS), directly or indirectly, sell, offer,
contract or grant any option to sell, pledge, transfer or establish an open “put equivalent
position” within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or
transfer, or announce the offering of, or file any registration statement under the Securities Act
in respect of, any shares of Common Stock, options or warrants to acquire shares of the Common
Stock or securities exchangeable or exercisable for or convertible into shares of Common Stock
(other than as contemplated by this Agreement with respect to the Notes); provided, however, that
the Company may (i) issue shares of its Common Stock or options to purchase its Common Stock, or
Common Stock upon exercise of options, pursuant to any stock option, stock bonus or other stock
plan or arrangement described in the Final Offering Memorandum, and (ii) may issue shares of its
Common Stock pursuant to options, warrants or agreements outstanding on the date hereof that
require delivery of shares and described in the Offering Memorandum.

 

 

 19

     (o) Future Reports to the Representative. During the period of five years after the
First Closing Date the Company will furnish to the Representative at 9 West 57th Street, New York,
NY 10022, Attention: Raymond P. Ko (i) as soon as available, a copy of each report and other
communication (financial or otherwise) of the Company mailed generally to the holders of the
Company’s capital stock or Nasdaq or such other any national securities exchange on which any class
of securities of the Company may be listed other than (A) materials filed with the Commission and
(B) listing applications and routine reports and certifications provided to Nasdaq or such other
national securities exchange and (ii) from time to time such other information concerning the
Company and the subsidiaries as the Initial Purchasers may reasonably request.

     (p) Investment Limitation. The Company shall not invest or otherwise use the
proceeds received by the Company from its sale of the Notes in such a manner as would require the
Company or any of its subsidiaries to register as an investment company under the Investment
Company Act.

     (q) No Manipulation of Price. The Company will not take, directly or indirectly,
any action designed to cause or result in, or that constitutes or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any securities of the Company.

     (r) Existing Lock-Up Agreements. The Company will enforce all existing agreements between the Company and any of its
security holders that prohibit the sale, transfer, assignment, pledge or hypothecation of any of
the Company’s securities.

     (s) Quotation of Conversion Shares. The Company will use its best efforts to have the
Conversion Shares approved by the Nasdaq National Market (“Nasdaq”) for quotation prior to the
First Closing Date, if required.

     (t) Available Common Shares. The Company will reserve and keep available at all times,
free of pre-emptive rights, the full number of Shares of Common Stock issuable upon conversion of
the Securities.

     (u) Conversion Price. Between the date hereof and the Closing Date, the Company will not
do or authorize any act or thing that would result in an adjustment of the conversion price.

     Section 4. Payment of Expenses.

     The Company agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the issuance and delivery of the
Notes (including all printing and engraving costs), (ii) all fees and expenses of the Trustee under
the Indenture, (iii) all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Notes to the Initial

 

 

 20

Purchasers, (iv) all fees and expenses of the
Company’s counsel, independent public or certified public accountants and other advisors, (v) all
costs and expenses incurred in connection with the preparation, printing, shipping and distribution
of the Offering Memorandum, all amendments and supplements thereto and this Agreement, (vi) all
filing fees, attorneys’ fees and expenses incurred by the Company or the Initial Purchasers in
connection with qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Notes for offer and sale under the state securities or blue
sky laws or the provincial securities laws of Canada and, if requested by the Initial Purchasers,
preparing and printing a “Blue Sky Survey” or memorandum, and any supplements thereto, advising the
Initial Purchasers of such qualifications, registrations and exemptions, (vii) the expenses of the
Company and the Initial Purchasers in connection with the marketing and offering of the Notes,
(viii) the fees and expenses associated with including the Conversion Shares on the Nasdaq National
Market and (ix) all expenses and fees in connection with admitting the Notes for trading in the
NASD PORTAL Market (“PORTAL”). Except as provided in this P Section 7, Section 10 and
Section 11 hereof, the Initial Purchasers shall pay their own expenses, including the fees and
disbursements of their counsel.

     Section 5. Conditions of the Obligations of the Initial Purchaser.

     The obligations of the several Initial Purchasers to purchase and pay for the Notes as
provided herein on the First Closing Date and, with respect to the Optional Notes, any Subsequent
Closing Date, shall be subject to the accuracy of the representations and warranties on the part of
the Company set forth in Section 1 hereof as of the date hereof and as of the First Closing Date as
though then made and, with respect to the Optional Notes, as of any Subsequent Closing Date as
though then made, to the timely performance by the Company of its covenants and other obligations
hereunder, and to each of the following additional conditions:

     (a) Accountants’ Comfort Letter. On the date hereof, the Representative shall have
received from Ernst & Young, LLP, independent public or certified public accountants for the
Company, a letter dated the date hereof addressed to the Initial Purchasers, in form and substance
satisfactory to the Representative, containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to Initial Purchasers, delivered according to Statement
of Auditing Standards No. 72 (or any successor bulletin), with respect to the audited and unaudited
financial statements and certain financial information contained in the Offering Memorandum.

     (b) No Material Adverse Change or Rating Agency Change. For the period from and after
the date of this Agreement and prior to the First Closing Date and, with respect to the Optional
Notes, any Subsequent Closing Date:

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

 

 

21

     (ii) there shall not have occurred any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any review for a possible change that
does not indicate the direction of the possible change, in the rating accorded any
securities of the Company or any of its subsidiaries or in the rating outlook for the
Company and its subsidiaries by any “nationally recognized statistical rating organization”
as such term is defined for purposes of Rule 436(g)(2) under the Securities Act.

     (c) Opinion of Counsel for the Company. On each of the First Closing Date and any
Subsequent Closing Date the Representative shall have received the favorable opinions of (i) the
Company’s special counsel, Andrew C. Becher, (ii) the Company’s Senior Vice President, General
Counsel and Corporate Secretary, James Lewis Connor, III and (iii) Fulbright & Jaworski L.L.P.
counsel for the Company, each dated as of such Closing Date, the forms of which are attached as
Exhibits A-1, A-2 and A-3, respectively.

     (d) Opinion of Counsel for the Initial Purchasers. On each of the First Closing
Date and any Subsequent Closing Date the Representative shall have received the favorable opinion
of Davis Polk & Wardwell, counsel for the Initial Purchasers, dated as of such Closing Date, in
form and substance satisfactory to the Representative.

     (e) Officers’ Certificate. On each of the First Closing Date and any Subsequent
Closing Date the Representative shall have received a written certificate executed by the Chairman
of the Board, Chief Executive Officer or President of the Company and the Chief Financial Officer
or Chief Accounting Officer of the Company, dated as of such Closing Date, to the effect set forth
in subsection (b)(ii) of this Section 5, and further to the effect that:

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

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

     (iii) the Company has complied with all the agreements hereunder and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to such Closing
Date.

     (f) Bring-Down Comfort Letter. On each of the First Closing Date and any Subsequent
Closing Date the Representative shall have received from Ernst & Young LLP, independent public or
certified public accountants for the Company, a letter dated such date, in form and substance
satisfactory to the Representative, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to subsection (a) of this Section 5, except that the specified
date referred to therein for the carrying out of

 

 

22

procedures shall be no more than three business
days prior to the First Closing Date or any Subsequent Closing Date, as the case may be.

     (g) Registration Rights Agreement. The Company and the Initial Purchasers shall
have executed and delivered the Registration Rights Agreement (in form and substance satisfactory
to the Initial Purchasers), and the Registration Rights Agreement shall be in full force and
effect.

     (h) Lock-Up Agreement from Certain Securityholders of the Company. On or prior to
the date hereof, the Company shall have furnished to the Representative an agreement in the form of
Exhibit B hereto from each of the executive officers and directors of the Company, and such
agreement shall be in full force and effect on each of the First Closing Date and any Subsequent
Closing Date.

     (i) PORTAL Designation. The Notes shall have been designated PORTAL-eligible securities
in accordance with the rules and regulations of the NASD.

     (j) Certificate of Engineering Consultant. On each of the First Closing Date and any
Subsequent Closing Date, the Representative shall have received a written certificate executed by
an executive officer of Huddleston & Co., Inc., independent petroleum engineering consultants,
dated as of such Closing Date, to the effect that (i) it consents to the incorporation by reference
into the Offering Memorandum of its report letter dated February 10, 2005 concerning the proved
reserves as of December 31, 2004 attributable to Energy Resource Technology, Inc., (ii) since the
date of the report letter, it has not been provided any additional information by the Company that
would cause the results set forth in the report letter to be misleading as of December 31, 2004 and
(iii) as of such Closing Date, nothing has come to its attention which would cause it to revise by
any material amount any statement made or opinion expressed by them in the report letter with
respect to its estimates of the oil and gas reserves and future net revenues attributable to the
interests of the Company in such properties.

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

     If any condition specified in this Section 5 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Representative by notice to the Company at any
time on or prior to the First Closing Date and, with respect to the Optional Notes, at any time
prior to any Subsequent Closing Date, which termination shall be without liability on the part of
any party to any other party, except that Section 4,

 

 

23

Section 7, Section 8 and Section 9 shall at
all times be effective and shall survive such termination.

     Section 6. Representations, Warranties and Agreements of Initial Purchasers.

     Each of the Initial Purchasers represents and warrants that it is a “qualified institutional
buyer” (“QIB”), as defined in Rule 144A of the Securities Act, or an accredited investor within the
meaning of Rule 501(a)(1) under the Securities Act. The Initial Purchasers agree with the Company
that:

     (a) The Notes and the Conversion Shares have not been and will not be registered under the
Securities Act in connection with the initial offering of the Notes.

     (b) The Initial Purchasers are purchasing the Notes pursuant to a private sale exemption from
registration under the Securities Act.

     (c) The Notes have not been and will not be offered or sold by such Initial Purchasers or its
affiliates acting on its behalf except in accordance with Rule 144A.

     (d) The Initial Purchasers will not offer or sell the Notes in the United States by means of
any form of general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D, including (i) any advertisement, article, notice or other communication published in
any newspaper, magazine or similar medium or broadcast over television or radio, or (ii) any
seminar or meeting whose attendees have been invited by any general solicitation or general
advertising in the United States.

     (e) The Initial Purchasers have not offered or sold, and will not offer or sell, any Notes
except to persons whom they reasonably believe to be a QIB.

     Section 7. Reimbursement of Initial Purchasers’ Expenses.

     If this Agreement is terminated by the Representative pursuant to Section 5, Section 10 or
Section 11, or if the sale to the Initial Purchasers of the Notes on the First Closing Date is not
consummated because of any refusal, inability or failure on the part of the Company to perform any
agreement herein or to comply with any provision hereof, the Company agrees to reimburse the
Representative and the other Initial Purchasers (or such Initial Purchasers as have terminated this
Agreement with respect to themselves), severally, upon demand for all out-of-pocket expenses that
shall have been reasonably incurred by the Representative and the Initial Purchasers in connection
with the proposed purchase and the offering and sale of the Notes, including but not limited to
fees and disbursements of counsel, printing expenses, travel expenses, postage, facsimile and
telephone charges.

     Section 8. Indemnification.

 

 

 24

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

     (b) Indemnification of the Company, its Directors and Officers. Each Initial
Purchaser agrees, severally and not jointly, to indemnify and hold harmless the Company, each of
its directors, each of its officers and each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act, against any loss, claim, damage, liability or
expense, as incurred, to which the Company, or any such director, officer or controlling person may
become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law
or regulation, or at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Initial Purchaser), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises
out of or is based upon any untrue or alleged untrue statement of a material fact contained in the
Offering Memorandum (or any amendment or supplement thereto), or arises out of or is based upon the
omission or alleged omission to state therein a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Offering Memorandum (or any amendment or supplement
thereto), in reliance upon and in conformity with written information furnished to the Company by
the Representative expressly for use therein; and to
reimburse the Company, or any such director, officer or

 

 

25

controlling person for any legal and
other expense reasonably incurred by the Company, or any such director, officer or controlling
person in connection with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action. The Company hereby acknowledges that the only
information that the Initial Purchasers have furnished to the Company expressly for use in the
Offering Memorandum (or any amendment or supplement thereto) are the statements set forth in
Schedule B; and the Initial Purchasers confirm that such statements are correct. The indemnity
agreement set forth in this Section 8(b) shall be in addition to any liabilities that each Initial
Purchaser may otherwise have.

     (c) Notifications and Other Indemnification Procedures. Promptly after receipt by
an indemnified party under this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof may be made against an indemnifying party
under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the
failure to so notify the indemnifying party (i) will not relieve it from liability under paragraph
(a) or (b) above unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any liability which it may have
for contribution or any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent
that it shall elect, jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall have reasonably
concluded that a conflict may arise between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise participate in the defense
of such action on behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of such indemnifying party’s election so to assume the
defense of such action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense thereof unless (i)
the indemnified party shall have employed separate counsel in accordance with the proviso to the
next preceding sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel (together with local
counsel), approved by the indemnifying party (BAS in the case of Section 8(b) and Section 9),
representing the

 

 

26

indemnified parties who are parties to such action) or (ii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action, in each of which cases
the fees and expenses of counsel shall be at the expense of the indemnifying party.

     (d) Settlements. The indemnifying party under this Section 8 shall not be liable
for any settlement of any proceeding effected without its written consent, but if settled with such
consent or if there is a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of
such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by Section 8(c) hereof, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect
of which any indemnified party is or could have been a party and indemnity was or could have been
sought hereunder by such indemnified party, unless such settlement, compromise or consent (x)
includes an unconditional release of such indemnified party from all liability on claims that are
the subject matter of such action, suit or proceeding and (y) does not include a statement as to or
an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

     Section 9. Contribution.

     If the indemnification provided for in Section 8 is for any reason held to be unavailable to
or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any
losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one hand, and the
Initial Purchasers, on the other hand, from the offering of the Notes pursuant to this Agreement or
(ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one hand, and the Initial Purchasers, on
the other hand, in connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the offering of the Notes

 

 

27

pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total net proceeds from
the offering of the Notes pursuant to this Agreement (before deducting expenses) received by the
Company, and the total discount received by the Initial Purchasers bear to the aggregate initial
offering price of the Notes. The relative fault of the Company, on the one hand, and the Initial
Purchasers, on the other hand, shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or alleged omission to state
a material fact or any such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company, on the one hand, or the Initial Purchasers, on the other hand,
and the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

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

     The Company and the Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation (even if the Initial
Purchasers were treated as one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to in this Section 9.

     Notwithstanding the provisions of this Section 9, the Initial Purchaser shall not be required
to contribute any amount in excess of the amount by which the total price at which the Notes
purchased by it and distributed to investors were offered to investors exceeds the amount of any
damages which the Initial Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers’ obligations to contribute pursuant to this Section 9 are several, and not joint, in
proportion to their respective commitments as set forth opposite their names in Schedule A. For
purposes of this Section 9, each officer and employee of an Initial Purchaser and each person, if
any, who controls an Initial Purchaser within the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as such Initial Purchaser, and each director of the
Company, each officer of the Company, and each
person, if any, who controls the Company within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Company.

     Section 10. Default of One or More of the Several Initial Purchasers.

 

 

 28

     If, on the First Closing Date or any Subsequent Closing Date, as the case may be, any one or
more of the several Initial Purchasers shall fail or refuse to purchase Notes that it or they have
agreed to purchase hereunder on such date, and the aggregate principal amount of Notes which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase does
not exceed 10% of the aggregate principal amount of the Notes to be purchased on such date, the
other Initial Purchasers shall be obligated, severally, in the proportions that the principal
amount of Firm Notes set forth opposite their respective names on Schedule A bears to the aggregate
principal amount of Firm Notes set forth opposite the names of all such non-defaulting Initial
Purchasers, or in such other proportions as may be specified by the Representative with the consent
of the non-defaulting Initial Purchasers, to purchase the Notes which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase on such date. If, on the
First Closing Date or any Subsequent Closing Date, as the case may be, any one or more of the
Initial Purchasers shall fail or refuse to purchase Notes and the aggregate principal amount of
Notes with respect to which such default occurs exceeds 10% of the aggregate principal amount of
Notes to be purchased on such date, and arrangements satisfactory to the Representative and the
Company for the purchase of such Notes are not made within 48 hours after such default, this
Agreement shall terminate without liability of any party (other than a defaulting Initial
Purchaser) to any other party except that the provisions of Section 4, Section 7, Section 8 and
Section 9 shall at all times be effective and shall survive such termination. In any such case
either the Representative or the Company shall have the right to postpone the First Closing Date or
any Subsequent Closing Date, as the case may be, but in no event for longer than seven days in
order that the required changes, if any, to the Offering Memorandum or any other documents or
arrangements may be effected.

     As used in this Agreement, the term “Initial Purchaser” shall be deemed to include any person
substituted for a defaulting Initial Purchaser under this Section 10. Any action taken under this
Section 10 shall not relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.

     Section 11. Termination of this Agreement.

     On or prior to the First Closing Date this Agreement may be terminated by the Representative
by notice given to the Company if at any time (i) trading or quotation in any of the Company’s
securities shall have been suspended or limited by the Commission or by the Nasdaq National Market,
or trading in securities generally on either the Nasdaq National Market or the New York Stock
Exchange shall have been suspended or limited, or minimum or maximum prices shall have been
generally established on any of such stock exchanges by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by any federal or New York authority; (iii) there shall have occurred
any outbreak or escalation of national or international hostilities or any crisis or calamity, or
any change in the United States or international financial markets, or any substantial change or
development involving a prospective substantial change in United States’ or international
political, financial or economic conditions, as in the judgment of

 

 

29

the Representative is material
and adverse and makes it impracticable to market the Notes in the manner and on the terms described
in the Offering Memorandum or to enforce contracts for the sale of securities; (iv) in the judgment
of the Representative there shall have occurred any Material Adverse Change; or (v) the Company
shall have sustained a loss by strike, fire, flood, earthquake, accident or other calamity of such
character as in the judgment of the Representative may, singly or in the aggregate, interfere
materially with the conduct of the business and operations of the Company regardless of whether or
not such loss shall have been insured. Any termination pursuant to this Section 10 shall be
without liability on the part of (a) the Company to any Initial Purchaser, except that the Company
shall be obligated to reimburse the expenses of the Representative and the Initial Purchasers
pursuant to Sections 4 and 7 hereof, (b) any Initial Purchaser to the Company, or (c) of any party
hereto to any other party except that the provisions of Section 8 and Section 9 shall at all times
be effective and shall survive such termination.

     Section 12. Representations and Indemnities to Survive Delivery.

     The respective indemnities, contribution, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Initial Purchasers set forth in or
made pursuant to this Agreement shall remain operative and in full force and effect, regardless of
(i) any investigation, or statement as to the result hereof, made by or on behalf of the Initial
Purchaser or the Company or any of its or their partners, officers or directors or any controlling
person, as the case may be, (ii) acceptance of the Notes and payment for them hereunder and (iii)
any termination of this Agreement.

     Section 13. Notices.

     All communications hereunder shall be in writing and shall be mailed, hand delivered or
telecopied and confirmed to the parties hereto as follows:

  If to the Representative:

        Banc of America Securities LLC

        9 West 57th Street

        New York, New York 10019

        Facsimile: (212) 583-8457

        Attention: Raymond Ko

  with a copy to:

        Davis Polk & Wardwell

        450 Lexington Avenue

        New York, New York 10017

        Facsimile: (212) 450-3674

        Attention: Richard Truesdell, Esq.

  If to the Company:

        Cal Dive International, Inc.

 

 

 30

        400 N. Sam Houston Parkway E., Suite 400

        Houston, Texas 77060

        Facsimile: (281) 618-0505

        Attention: General Counsel

  with a copy to:

        Fulbright & Jaworski L.L.P.

        1301 McKinney, Suite 5100

        Houston, Texas 77010

        Facsimile: (713) 651-5246

        Attention: Arthur H. Rogers, Esq.

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

     Section 14. Successors.

     This Agreement will inure to the benefit of and be binding upon the parties hereto, including
any substitute Initial Purchasers pursuant to Section 10 hereof, and to the benefit of the
employees, officers and directors and controlling persons referred to in Section 8 and Section 9,
and in each case their respective successors, and no other person will have any right or obligation
hereunder. Nothing expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Initial Purchasers and the Company and their
respective successors and the controlling persons and officers and directors referred to in
Sections 8 and 9 and their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the
Initial Purchasers and the Company and their respective successors, and said controlling persons
and officers and directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. The term “successors” shall not include any purchaser of the
Notes as such from any of the Initial Purchasers merely by reason of such purchase.

     Section 15. Partial Unenforceability.

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

     Section 16. Governing Law Provisions; Consent to Jurisdiction.

 

 

 31

     (a) Governing Law Provisions

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

     (b) Consent to Jurisdiction

          Any legal suit, action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of
the United States of America located in the City and County of New York or the courts of the State
of New York in each case located in the City and County of New York (collectively, the “Specified
Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court, as to which such
jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of
any process, summons, notice or document by mail to such party’s address set forth above shall be
effective service of process for any suit, action or other proceeding brought in any such court.
The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit,
action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and
agree not to plead or claim in any such court that any such suit, action or other proceeding
brought in any such court has been brought in an inconvenient forum.

     Section 17. General Provisions.

     This Agreement constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This Agreement may be executed in two or
more counterparts, each one of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or
modified unless in writing by all of the parties hereto. The Table of Contents and the Section
headings herein are for the convenience of the parties only and shall not affect the construction
or interpretation of this Agreement.

     Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions
hereof, including, without limitation, the indemnification provisions of Section 8 and the
contribution provisions of Section 9, and is fully informed regarding said provisions. Each of the
parties hereto further acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate
the risks in light of the ability of the parties to investigate the Company, its affairs and its
business in order to assure that adequate disclosure has been made in the Offering Memorandum (and
any amendments and supplements thereto), as required by the Securities Act and the Exchange Act.

 

 

32

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

	 	 	 	 	 
	 	Very truly yours,

CAL DIVE INTERNATIONAL, INC.

 	 
	 	By:  	/s/ A. Wade Pursell
 	 
	 	 	Name:  	A. Wade Pursell 	 
	 	 	Title:  	Senior Vice President and CFO 	 
	 

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

BANC OF AMERICA SECURITIES LLC

Acting as Representative of the several Initial

Purchasers named in the attached Schedule A

	 	 	 	 	 
	By:

	 	/s/ Robert Santangelo

	 	 
	

	 	Name: Robert Santangelo	 	 
	

	 	Title: Managing Director	 	 

 

 

SCHEDULE A

	 	 	 	 	 	 	 	 	 
	 	 	Aggregate	 	 	Aggregate	 
	 	 	Principal	 	 	Principal	 
	 	 	Amount of Firm	 	 	Amount of	 
	 	 	Notes to be	 	 	Optional Notes	 
	Initial Purchasers	 	Purchased	 	 	Allocated	 
	Banc of America Securities LLC
	 	$	180,000,000	 	 	$	45,000,000	 
	UBS Securities LLC
	 	 	60,000,000	 	 	 	15,000,000	 
	 
	 	 	 	 	 	 
	Total
	 	$	240,000,000	 	 	$	60,000,000	 
	 
	 	 	 	 	 	 

 

 

2

SCHEDULE B

Information the Initial Purchasers have furnished to the Company for use in the Offering
Memorandum:

     (a) The last sentence of the text on the cover page of the Offering Memorandum,
concerning delivery of the Notes by the Initial Purchasers;

     (b) The names and corresponding amounts set forth in the table of Initial Purchasers
in the first paragraph of text under the caption “Plan of Distribution” in the Offering
Memorandum;

     (c) The statements set forth under the caption “Plan of Distribution” in the Offering
Memorandum describing market making.

     (d) The statements set forth under the caption “Plan of Distribution” in the Offering
Memorandum describing short sales and stabilizing transactions.

 

 

EXHIBIT A-1

FORM OF OPINION OF ANDREW C. BECHER

     (i) The Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Minnesota.

     (ii) The Company has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering Memorandum and to enter
into and perform its obligations under the Purchase Agreement.

     (iii) The Company is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business, except for
such jurisdictions where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse Change.

     (iv) The Company’s authorized capitalization is as set forth in the Offering
Memorandum. The authorized, issued and outstanding capital stock of the Company (including
the Common Stock) conform to the descriptions thereof set forth in the Offering Memorandum.
All of the outstanding shares of Common Stock have been duly authorized and validly
issued, are fully paid and non-assessable.

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

     (vi) The Indenture has been duly authorized, executed and delivered by the Company.

     (vii) The Notes have been duly authorized by the Company.

     (viii) The shares of Common Stock initially issuable upon conversion of the Notes have
been duly authorized and reserved and, when issued upon conversion of the Notes in
accordance with the terms of the Notes, will be validly issued, fully paid and
non-assessable, and the issuance of such shares will not be subject to any preemptive or
similar rights.

     (ix) The Registration Rights Agreement has been duly authorized, executed and
delivered by the Company.

     (x) No stockholder of the Company or any other person has any preemptive right, right
of first refusal or other similar right to subscribe for or purchase securities of the
Company arising by operation of the charter or by-laws of the Company or the Minnesota
Business Corporation Act.

A1 -1

 

     (xi) The execution and delivery of the Purchase Agreement, the Registration Rights
Agreement, the Indenture and the Notes by the Company and the performance by the Company of
its obligations thereunder (i) have been duly authorized by all necessary corporate action
on the part of the Company and (ii) will not result in any violation of the provisions of
the charter or by-laws of the Company or any subsidiary.

     In rendering such opinion, such counsel may rely (A) as to matters involving the application of
laws of any jurisdiction other than the laws of the State of New York or the State of Minnesota or
the federal law of the United States, to the extent he deems proper and specified in such opinion,
upon the opinion (which shall be dated the First Closing Date or any Subsequent Closing Date, as
the case may be, shall be satisfactory in form and substance to the Initial Purchaser, shall
expressly state that the Initial Purchasers may rely on such opinion as if it were addressed to
them and shall be furnished to the Initial Purchasers) of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Initial Purchasers; provided,
however, that such counsel shall further state that they believe that they and the Initial
Purchaser are justified in relying upon such opinion of other counsel, and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of the Company and
public officials

A1 -2

 

EXHIBIT A-2

FORM OF OPINION OF JAMES LEWIS CONNOR, III

     (i) Each subsidiary of the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its incorporation,
has corporate power and authority to own, lease and operate its properties and to conduct
its business as described in the Offering Memorandum and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so qualify or to be
in good standing would not, individually or in the aggregate, result in a Material Adverse
Change.

     (ii) All of the issued and outstanding capital stock of each subsidiary of the Company
has been duly authorized and validly issued, is fully paid and non-assessable and is owned
by the Company, directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim or, to the best of such counsel’s knowledge,
any pending or threatened claim.

     (iii) After due inquiry, such counsel does not know of any legal or governmental
actions, suits or proceedings pending or, to the best of such counsel’s knowledge,
threatened (i) against or affecting the Company or any of its subsidiaries, (ii) which has
as the subject thereof any officer or director of, or property owned or leased by, the
Company or any of its subsidiaries or (iii) relating to environmental or discrimination
matters, where in any such case (A) there is a reasonable possibility that such action,
suit or proceeding might be determined adversely to the Company or such subsidiary and (B)
if such action, suit or proceeding were so determined adversely, would reasonably be
expected to, singly or in the aggregate, result in a Material Adverse Change or adversely
affect the consummation of the transactions contemplated by this Agreement.

     (iv) The execution and delivery of the Purchase Agreement, the Registration Rights
Agreement, the Indenture and the Notes by the Company and the performance by the Company of
its obligations thereunder will not conflict with or constitute a breach of, or Default or
a Debt Repayment Triggering Event under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to, any Existing
Instrument, or to the knowledge of such counsel, will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to the Company
or any subsidiary.

     In addition, such counsel shall state that he has participated in conferences with officers
and other representatives of the Company, representatives of the independent

A2-1

 

public or certified public accountants for the Company and with representatives of the Initial
Purchasers at which the contents of the Offering Memorandum, and any supplements or amendments
thereto, and related matters were discussed and, although such counsel is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum (other than as specified above), and any supplements or
amendments thereto, on the basis of the foregoing, and the information disclosed to him, no facts
have come to his attention that cause him to believe that either the Offering Memorandum or any
amendments thereto, as of its date or at the First Closing Date or any Subsequent Closing Date, as
the case may be, contained an untrue statement of a material fact or omitted 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 (it being understood that such counsel need express no belief
as to the financial statements or schedules or other financial or statistical data set forth or
referred to in the Offering Memorandum or any amendments or supplements thereto).

     In rendering such opinion, such counsel may rely (A) as to matters involving the application
of laws of any jurisdiction other than the laws of the State of Texas or the federal law of the
United States, to the extent he deems proper and specified in such opinion, upon the opinion (which
shall be dated the First Closing Date or any Subsequent Closing Date, as the case may be, shall be
satisfactory in form and substance to the Initial Purchaser, shall expressly state that the Initial
Purchasers may rely on such opinion as if it were addressed to them and shall be furnished to the
Initial Purchasers) of other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Initial Purchasers; provided, however, that such counsel shall
further state that they believe that they and the Initial Purchaser are justified in relying upon
such opinion of other counsel, and (B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.

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EXHIBIT A-3

FORM OF OPINION OF FULBRIGHT & JAWORSKI L.L.P.

     (i) Assuming the due authorization, execution and delivery of the Indenture by the
Trustee, the Indenture will constitute the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except (a) as such
enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other laws affecting creditors’ rights generally and (b) that the
remedy of specific performance and injunctive and other forms of equitable relief are
subject to certain equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought; and the Indenture conforms in all material respects to
the description thereof contained in the Offering Memorandum.

     (ii) Assuming the due authentication of the Notes by the Trustee, the Notes constitute
valid and binding obligations of the Company, enforceable against the Company in accordance
with their respective terms and entitled to the benefits provided by the Indenture, except
(a) as such enforceability may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other laws affecting creditors’ rights generally and
(b) that the remedy of specific performance and injunctive and other forms of equitable
relief are subject to certain equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought; and the Notes will conform in all material
respects to the description thereof contained in the Offering Memorandum.

     (iii) It is not necessary in connection with the offer, sale and delivery of the Notes
to the Initial Purchaser or the offer and resale by the Initial Purchaser of such Notes, in
the manner provided for by the Purchase Agreement and the Offering Memorandum, to register
the Notes under the Securities Act or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended. Such counsel need express no opinion, however, as to any
subsequent offers or sales. 

     (iv) No consent, approval, authorization or order of, or registration or filing with,
any court or other governmental or regulatory authority or agency is required for the
consummation of the transactions contemplated by, or the execution, delivery and
performance of the Company’s obligations under, the Indenture, the Purchase Agreement, the
Registration Rights Agreement or the Notes, except as required under the Securities Act,
applicable state securities or blue sky laws and from the NASD.

     (v) The Company is not, and after giving effect to the offering of the Notes and
application of the proceeds as described in the Offering Memorandum, will not be, required
to register as an “investment company” within the meaning of the Investment Company Act.

A3-1

 

     (vi) Each document incorporated by reference in the Offering Memorandum (except for
financial statements and schedules and other financial and statistical data included
therein as to which we express no opinion) complied when so filed as to form in all
material respects with the Exchange Act and the applicable rules and regulations of the
Commission thereunder.

     (vii) The statements in the Offering Memorandum under the captions “Description of the
Notes” and “Description of Capital Stock” insofar as such statements constitute summaries
of the documents referred to therein, accurately present, in all material respects, the
information called for with respect to such documents and accurately summarize, in all
material respects, such documents.

     (viii) The statements in the Offering Memorandum under the caption “Material U.S.
Federal Income Tax Considerations,” insofar as such statements constitute a summary of U.S.
federal income tax laws (it being understood that such counsel need express no opinion as
to statements of facts), and subject to the assumptions, qualifications and limitations set
forth therein, accurately summarize in all material respects the U.S. federal income tax
laws referred to therein.

     In addition, such counsel shall state that they have participated in conferences with officers
and other representatives of the Company, representatives of the independent public or certified
public accountants for the Company and with representatives of the Initial Purchaser at which the
contents of the Offering Memorandum, and any supplements or amendments thereto, and related matters
were discussed and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements contained in the
Offering Memorandum (other than as specified above), and any supplements or amendments thereto, on
the basis of the foregoing, and the information disclosed to them, no facts have come to their
attention that cause them to believe that either the Offering Memorandum or any amendments thereto,
as of its date or at the First Closing Date or any Subsequent Closing Date, as the case may be,
contained an untrue statement of a material fact or omitted 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 (it being understood that such counsel need express no belief as to the financial
statements or schedules or other financial or statistical data set forth or referred to in the
Offering Memorandum or any amendments or supplements thereto).

     In rendering such opinion, such counsel may rely (A) as to matters involving the application
of laws of any jurisdiction other than the laws of the State of New York or the federal law of the
United States, to the extent they deem proper and specified in such opinion, upon the opinion
(which shall be dated the First Closing Date or any Subsequent Closing Date, as the case may be,
shall be satisfactory in form and substance to the Initial Purchaser, shall expressly state that
the Initial Purchaser may rely on such opinion as if it were addressed to them and shall be
furnished to the Initial Purchaser) of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Initial Purchaser; provided, however, that
such counsel shall further state that they

A3-2

 

believe that they and the Initial Purchaser are justified in relying upon such opinion of
other counsel, and (B) as to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials.

A3-3

 

EXHIBIT B

FORM OF LOCK-UP AGREEMENT

March ľ, 2005

Banc of America Securities LLC

As Representative of the several Initial Purchasers

c/o Banc of America Securities LLC

9 West 57th Street

New York, New York 10019

Re: Cal Dive International, Inc. (the “Company”)

Ladies and Gentlemen:

     The undersigned is an owner of record or beneficially of certain shares of common stock, no
par value per share, of the Company (“Common Stock”) or securities convertible into or exchangeable
or exercisable for Common Stock. The Company proposes to carry out an offering of Convertible
Senior Notes (the “Offering”) for which you will act as the representative (the “Representative”)
of the initial purchasers of the Offering. The Convertible Senior Notes will be convertible into
shares of Common Stock. The undersigned recognizes that the Offering will be of benefit to the
undersigned and will benefit the Company. The undersigned acknowledges that you and the other
initial purchasers are relying on the representations and agreements of the undersigned contained
in this letter in carrying out the Offering and in entering into underwriting arrangements with the
Company with respect to the Offering.

In consideration of the foregoing, the undersigned hereby agrees that the undersigned will not,
(and will cause any spouse or immediate family member of the spouse of the undersigned living in
the undersigned’s household not to), without the prior written consent of Banc of America
Securities LLC (which consent may be withheld in its sole discretion), directly or indirectly,
sell, offer, contract or grant any option to sell (including without limitation any short sale),
pledge, transfer, establish an open “put equivalent position” within the meaning of Rule 16a-1(h)
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise dispose of
any shares of Common Stock, options or warrants to acquire shares of Common Stock, or securities
exchangeable or exercisable for or convertible into shares of Common Stock currently or hereafter
owned either of record or beneficially (as defined in Rule 13d-3 under the Exchange Act) by the
undersigned (or such spouse or family member), or publicly

B-1

 

announce an intention to do any of the foregoing, for a period commencing on the date hereof and
continuing through the close of trading on the date 90 days after the date of the purchase
agreement between the Company and the initial purchasers with respect to the Offering (the
“Purchase Agreement”). The foregoing sentence shall not apply to (i) shares of Common Stock sold
pursuant to any Rule 10b5-1 plans existing on the date of the Purchase Agreement, (ii) the
establishment after the date hereof of any new 10b5-1 plan or (iii) sales pursuant to existing
forward sale arrangements between
the undersigned and each of UBS Warburg LLC, Credit Suisse First Boston
and Citibank NA; provided that, in the case of clause (ii), (a) no filing by any party under
Section 16(a) of the Exchange Act shall be required or shall be made voluntarily in connection with
such any such establishment and (b) no sale thereunder may be made during the lockup period. The
undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s
transfer agent and registrar against the transfer of shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.

     This agreement is irrevocable and will be binding on the undersigned and the respective
successors, heirs, personal representatives, and assigns of the undersigned.

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	Printed Name of Holder
	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	

	 	Signature	 	 
	 
	 	 	 	 
	 

	 	Printed Name of Person Signing	 	 

(and indicate capacity of person signing if signing as custodian, trustee, or on behalf of an
entity)

B-2

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