Document:

EX-10.1

 Exhibit 10.1 

EXECUTION VERSION 
  

 
  

REGISTRATION RIGHTS AGREEMENT 

Dated as of June 2, 2015 
 By
and Among 
 MERITAGE HOMES CORPORATION 

as Issuer, 
 the GUARANTORS named
herein 
 and 
 J.P. MORGAN
SECURITIES LLC 
 CITIGROUP GLOBAL MARKETS INC. 

DEUTSCHE BANK SECURITIES INC. 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED 

PNC CAPITAL MARKETS LLC 
 RBC
CAPITAL MARKETS, LLC 
 CREDIT SUISSE SECURITIES (USA) LLC 

U.S. BANCORP INVESTMENTS, INC. 

REGIONS SECURITIES LLC 
 as Initial
Purchasers, 
 6.00% Senior Notes due 2025 
  

 
  

 TABLE OF CONTENTS 

 

									
							 	Page	  
			
	Section 1.		Definitions		 	1	  
			
	Section 2.		Exchange Offer		 	4	  
			
	Section 3.		Shelf Registration Statement		 	7	  
			
	Section 4.		Liquidated Damages		 	8	  
			
	Section 5.		Registration Procedures		 	10	  
			
	Section 6.		Registration Expenses		 	17	  
			
	Section 7.		Indemnification		 	18	  
			
	Section 8.		Rules 144 and 144A		 	20	  
			
	Section 9.		Underwritten Registrations		 	21	  
			
	Section 10.		Miscellaneous		 	21	  
				
			(a)		No Inconsistent Agreements		 	21	  
			(b)		Adjustments Affecting Registrable Notes		 	21	  
			(c)		Amendments and Waivers		 	21	  
			(d)		Notices		 	22	  
			(e)		Guarantors		 	23	  
			(f)		Successors and Assigns		 	23	  
			(g)		Counterparts		 	23	  
			(h)		Headings		 	23	  
			(i)		Governing Law		 	23	  
			(j)		Severability		 	23	  
			(k)		Securities Held by the Company or Its Affiliates		 	23	  
			(l)		Third-Party Beneficiaries		 	23	  
			(m)		Attorneys’ Fees		 	24	  
			(n)		Entire Agreement		 	24	  
				
	SIGNATURES						 	S-1	  

 REGISTRATION RIGHTS AGREEMENT 

This Registration Rights Agreement (this “Agreement”) is dated as of June 2, 2015, by and among Meritage Homes
Corporation, a Maryland corporation (the “Company”), and each of the Guarantors (as defined herein) (the Company and the Guarantors are referred to collectively herein as the “Issuers”), on the one hand, and J.P.
Morgan Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, PNC Capital Markets LLC, RBC Capital Markets, LLC, Credit Suisse Securities (USA) LLC, U.S. Bancorp
Investments, Inc. and Regions Securities LLC (the “Initial Purchasers”), on the other hand. 
 This Agreement is entered
into in connection with the Purchase Agreement, dated as of May 28, 2015, by and among the Issuers and the Initial Purchasers (the “Purchase Agreement”), relating to the offering of $200,000,000 aggregate principal amount of
the Company’s 6.00% Senior Notes due 2025 (including the guarantees thereof by the Guarantors, the “Notes”). The execution and delivery of this Agreement is a condition to the Initial Purchasers’ obligation to purchase the
Notes under the Purchase Agreement. 
 The parties hereby agree as follows: 

 

	 	Section 1.	Definitions 

 As used in this Agreement, the following terms shall have the following
meanings: 
 “action” shall have the meaning set forth in Section 7(c) hereof. 

“Advice” shall have the meaning set forth in Section 5 hereof. 

“Agreement” shall have the meaning set forth in the first introductory paragraph hereto. 

“Applicable Period” shall have the meaning set forth in Section 2(b) hereof. 

“Board of Directors” shall have the meaning set forth in Section 5 hereof. 

“Business Day” shall mean a day that is not a Legal Holiday. 

“Commission” shall mean the Securities and Exchange Commission. 

“Company” shall have the meaning set forth in the introductory paragraph hereto and shall also include the Company’s
permitted successors and assigns. 
 “day” shall mean a calendar day. 

“Delay Period” shall have the meaning set forth in Section 5 hereof. 

“Effectiveness Period” shall have the meaning set forth in the second paragraph of Section 3(a) hereof. 

“Event Date” shall have the meaning set forth in Section 4(b) hereof. 

  
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 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder. 
 “Exchange Notes” shall have the meaning set forth in
Section 2(a) hereof. 
 “Exchange Offer” shall have the meaning set forth in Section 2(a) hereof. 

“Exchange Offer Registration Statement” shall have the meaning set forth in Section 2(a) hereof. 

“FINRA” shall have the meaning set forth in Section 5(s) hereof. 

“Free Writing Prospectus” shall mean each free writing prospectus (as defined in Rule 405 under the Securities Act) prepared
by or on behalf of the Company or used or referred to by the Company in connection with sale of the Notes or the Exchange Notes. 

“Guarantors” shall mean each of the Persons executing this Agreement (as set forth on Schedule A) on the date hereof
and each Person who executes and delivers a counterpart of this Agreement hereafter pursuant to Section 10(e) hereof. 

“Holder” shall mean any holder of a Registrable Note or Registrable Notes. 

“Indenture” shall mean the Indenture, dated as of June 2, 2015, by and among the Issuers and Wells Fargo Bank, National
Association, as trustee, pursuant to which the Notes are being issued, as amended or supplemented from time to time in accordance with the terms thereof. 

“Initial Purchasers” shall have the meaning set forth in the first introductory paragraph hereof. 

“Initial Shelf Registration Statement” shall have the meaning set forth in Section 3(a) hereof. 

“Inspectors” shall have the meaning set forth in Section 5(n) hereof. 

“Issue Date” shall mean June 2, 2015, the date of original issuance of the Notes. 

“Issuers” shall have the meaning set forth in the introductory paragraph hereto. 

“Legal Holiday” shall mean a Saturday, a Sunday or a day on which banking institutions in New York, New York are required by
law, regulation or executive order to remain closed. 
 “Liquidated Damages” shall have the meaning set forth in
Section 4(a) hereof. 
 “Losses” shall have the meaning set forth in Section 7(a) hereof. 

“Notes” shall have the meaning set forth in the second introductory paragraph hereto. 

“Participant” shall have the meaning set forth in Section 7(a) hereof. 

“Participating Broker-Dealer” shall have the meaning set forth in Section 2(b) hereof. 

  
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 “Person” shall mean an individual, corporation, partnership, joint venture
association, joint stock company, trust, unincorporated limited liability company, government or any agency or political subdivision thereof or any other entity. 

“Private Exchange” shall have the meaning set forth in Section 2(b) hereof. 

“Private Exchange Notes” shall have the meaning set forth in Section 2(b) hereof. 

“Prospectus” shall mean the prospectus included in any Registration Statement (including, without limitation, any prospectus
subject to completion and a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. 

“Purchase Agreement” shall have the meaning set forth in the second introductory paragraph hereof. 

“Records” shall have the meaning set forth in Section 5(n) hereof. 

“Registrable Notes” shall mean each Note upon its original issuance and at all times subsequent thereto, each Exchange Note
as to which Section 2(c)(iv) hereof is applicable upon original issuance and at all times subsequent thereto and each Private Exchange Note upon original issuance thereof and at all times subsequent thereto, in each case until (i) a
Registration Statement (other than, with respect only to any Exchange Note as to which Section 2(c)(iv) hereof is applicable, the Exchange Offer Registration Statement) covering such Note, Exchange Note or Private Exchange Note has been
declared effective by the Commission and such Note, Exchange Note or such Private Exchange Note, as the case may be, has been disposed of in accordance with such effective Registration Statement, (ii) such Note has been exchanged pursuant to
the Exchange Offer for an Exchange Note or Exchange Notes that may be resold without restriction under state and federal securities laws, (iii) such Note, Exchange Note or Private Exchange Note, as the case may be, ceases to be outstanding for
purposes of the Indenture or (iv) the later of (x) the date which is one year after the Issue Date (such period to be extended in the event and to the extent of any Delay Period) and (y) the date upon which such Note or Private
Exchange Note has been sold in compliance with Rule 144. 
 “Registration Default” shall have the meaning set forth in
Section 4(a) hereof. 
 “Registration Statement” shall mean any appropriate registration statement of the Issuers
covering any of the Registrable Notes filed with the Commission under the Securities Act, and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference therein. 
 “Requesting Participating
Broker-Dealer” shall have the meaning set forth in Section 2(b) hereof. 
 “Rule 144” shall mean Rule 144
promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144A) or regulation hereafter adopted 

  
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by the Commission providing for offers and sales of securities made in compliance therewith resulting in offers and sales by subsequent holders that are not affiliates of an issuer of such
securities being free of the registration and prospectus delivery requirements of the Securities Act. 
 “Rule 144A” shall
mean Rule 144A promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144) or regulation hereafter adopted by the Commission. 

“Rule 415” shall mean Rule 415 promulgated under the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission. 
 “Securities Act” shall mean the Securities Act of 1933,
as amended, and the rules and regulations of the Commission promulgated thereunder. 
 “Shelf Filing Event” shall have the
meaning set forth in Section 2(c) hereof. 
 “Shelf Registration Statement” shall have the meaning set forth in
Section 3(b) hereof. 
 “Subsequent Shelf Registration Statement” shall have the meaning set forth in
Section 3(b) hereof. 
 “TIA” shall mean the Trust Indenture Act of 1939, as amended. 

“Trustee” shall mean the trustee under the Indenture and the trustee (if any) under any indenture governing the Exchange
Notes and Private Exchange Notes. 
 “underwritten registration or underwritten offering” shall mean a registration in
which securities of the Company are sold to an underwriter for reoffering to the public. 
  

	 	Section 2.	Exchange Offer 

 (a) The Issuers shall (i) file a Registration Statement (the
“Exchange Offer Registration Statement”) within 120 days after the Issue Date with the Commission on an appropriate registration form with respect to a registered offer (the “Exchange Offer”) to exchange any
and all of the Registrable Notes for a like aggregate principal amount of notes (including the guarantees with respect thereto, the “Exchange Notes”) that are identical in all material respects to the Notes (except that the Exchange
Notes bear no restrictive legend thereon and shall not contain terms with respect to Liquidated Damages upon a Registration Default), (ii) use their respective reasonable best efforts to cause the Exchange Offer Registration Statement to be
declared effective under the Securities Act within 180 days after the Issue Date and (iii) use their respective reasonable best efforts to complete the Exchange Offer within 240 days after the Issue Date. The Exchange Offer shall be deemed
completed or consummated for purposes of this Agreement upon delivery by the Company to the Trustee under the Indenture of Exchange Notes in the same aggregate principal amount as the aggregate principal amount of Notes tendered (and not withdrawn)
by Holders thereof pursuant to the Exchange Offer. Upon the Exchange Offer Registration Statement being declared effective by the Commission, the Company will offer the Exchange Notes in exchange for surrender of the Notes. The Company shall keep
the Exchange Offer open for not less than 30 days (or longer if required by applicable law to complete the Exchange Offer) after the date notice of the Exchange Offer is mailed to Holders. 

  
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 Each Holder that participates in the Exchange Offer will be required to represent to the Company
in writing (which may be contained in the applicable letter of transmittal) that (i) any Exchange Notes to be received by it will be acquired in the ordinary course of its business, (ii) it has no arrangement or understanding with any
Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Notes in violation of the Securities Act, (iii) it is not an affiliate (as defined in Rule 405 under the Securities Act) of any Issuer or,
if it is an affiliate, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a broker-dealer, it is not engaged in, and does not intend to engage in,
a distribution of Exchange Notes, (v) if such Holder is a broker-dealer that will receive Exchange Notes for its own account in exchange for Notes that were acquired as a result of market-making or other trading activities, it will deliver a
prospectus in connection with any resale of such Exchange Notes and (vi) the Holder is not acting on behalf of any Persons who could not truthfully make the foregoing representations. 

(b) The Company and the Initial Purchasers acknowledge that the staff of the Commission has taken the position that any broker-dealer that
elects to exchange Notes that were acquired by such broker-dealer for its own account as a result of market-making or other trading activities for Exchange Notes in the Exchange Offer (a “Participating Broker-Dealer”) may be deemed
to be an “underwriter” within the meaning of the Securities Act and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes (other than a resale of an unsold allotment
resulting from the original offering of the Notes). 
 The Company and the Initial Purchasers also acknowledge that the staff of the
Commission has taken the position that if the Prospectus contained in the Exchange Offer Registration Statement includes a plan of distribution containing a statement to the above effect and the means by which Participating Broker-Dealers may resell
the Exchange Notes, without naming the Participating Broker-Dealers or specifying the amount of Exchange Notes owned by them, such Prospectus may be delivered by Participating Broker-Dealers to satisfy their prospectus delivery obligations under the
Securities Act in connection with resales of Exchange Notes for their own accounts, so long as the Prospectus otherwise meets the requirements of the Securities Act. 

In light of the foregoing, if requested by a Participating Broker-Dealer (a “Requesting Participating Broker-Dealer”), the
Issuers agree to use their reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective for a period of up to 180 days after the date on which the Exchange Offer Registration Statement is declared effective, or
such longer period if extended pursuant to the last paragraph of Section 5 hereof (such period, the “Applicable Period”), or such earlier date as all Requesting Participating Broker-Dealers shall have notified the Company in
writing that such Requesting Participating Broker-Dealers have resold all Exchange Notes acquired in the Exchange Offer. The Company shall include a plan of distribution in such Exchange Offer Registration Statement that meets the requirements set
forth in the preceding paragraph. 
 If, prior to consummation of the Exchange Offer, any Holder holds any Notes acquired by it that have,
or that are reasonably likely to be determined to have, the status of an unsold allotment in an initial distribution, or if any Holder is not entitled to participate in the Exchange Offer, the Company upon the request of any such Holder shall
simultaneously with the delivery of the Exchange Notes in the Exchange Offer, issue and deliver to any such Holder, in exchange (the “Private Exchange”) for such Notes held by any such Holder, a like principal amount of notes (the
“Private Exchange Notes”) of the Company that are identical in all material respects to the Exchange Notes, except for the placement of a restrictive legend on such Private Exchange Notes. The Private Exchange Notes shall be issued
pursuant to the same indenture as the Exchange Notes and bear the same CUSIP number as the Exchange Notes. 

  
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 In connection with the Exchange Offer, the Company shall: 

(1) mail or cause to be mailed to each Holder entitled to participate in the Exchange Offer a copy of the Prospectus forming
part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; 

(2) utilize the services of a depositary for the Exchange Offer with an address in the Borough of Manhattan, The City of New
York; 
 (3) permit Holders to withdraw tendered Notes at any time prior to the close of business, New York time, on the
last Business Day on which the Exchange Offer shall remain open; and 
 (4) otherwise comply in all material respects with all applicable
laws, rules and regulations. 
 As soon as practicable after the close of the Exchange Offer and the Private Exchange, if any, the Company
shall: 
 (1) accept for exchange all Registrable Notes validly tendered and not validly withdrawn pursuant to the Exchange
Offer and the Private Exchange, if any; 
 (2) deliver or cause to be delivered to the Trustee for cancellation all
Registrable Notes so accepted for exchange; and 
 (3) cause the Trustee to authenticate and deliver promptly to each Holder
of Notes, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal amount to the Notes of such Holder so accepted for exchange. 

The Exchange Offer and the Private Exchange shall not be subject to any conditions, other than that (i) the Exchange Offer or Private
Exchange, as the case may be, does not violate applicable law or any applicable interpretation of the staff of the Commission, (ii) no action or proceeding shall have been instituted or threatened in any court or by any governmental agency
which might materially impair the ability of the Issuers to proceed with the Exchange Offer or the Private Exchange, and no material adverse development shall have occurred in any existing action or proceeding with respect to the Issuers that would
impair their ability to so proceed and (iii) all governmental approvals shall have been obtained, which approvals the Issuers deem necessary for the consummation of the Exchange Offer or Private Exchange. 

In the event that the Issuers are unable to consummate the Exchange Offer or the Private Exchange due to any event listed in clauses
(i) through (iii) above, the Issuers shall not be deemed to have breached any covenant under this Section 2. 
 The Exchange
Notes and the Private Exchange Notes shall be issued under (i) the Indenture or (ii) an indenture identical in all material respects to the Indenture (in either case, with such changes as are necessary to comply with any requirements of
the Commission to effect or maintain the qualification thereof under the TIA) and which, in either case, has been qualified under the TIA and shall provide that the Exchange Notes shall not be subject to the transfer restrictions set forth in the
Indenture. The Indenture or such other indenture shall provide that when a vote or consent of the Holders is required, 

  
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the Exchange Notes, the Private Exchange Notes and the Notes shall vote and consent together on all matters as one class and that none of the Exchange Notes, the Private Exchange Notes or the
Notes will have the right to vote or consent as a separate class on any matter. 
 (c) In the event that (i) any changes in law or the
applicable interpretations of the staff of the Commission do not permit the Issuers to effect the Exchange Offer, (ii) for any reason the Exchange Offer is not consummated within 240 days of the Issue Date, (iii) any Holder notifies
the Company that it is prohibited by law or the applicable interpretations of the staff of the Commission from participating in the Exchange Offer, (iv) in the case of any Holder that participates in the Exchange Offer, such Holder does not
receive Exchange Notes on the date of the exchange that may be sold without restriction under state and federal securities laws (other than due solely to the status of such holder as an affiliate of any Issuer), (v) the Initial Purchasers so
request with respect to Notes that have, or that are reasonably likely to be determined to have, the status of unsold allotments in an initial distribution or (vi) any Holder of Private Exchange Notes so requests (each such event referred to in
clauses (i) through (vi) of this sentence, a “Shelf Filing Event”), then the Issuers shall file a Shelf Registration Statement pursuant to Section 3 hereof. 

 

	 	Section 3.	Shelf Registration Statement 

 If at any time a Shelf Filing Event shall occur, then:

 (a) Shelf Registration Statement. The Issuers shall file with the Commission a Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415 covering all of the Registrable Notes not exchanged in the Exchange Offer, Private Exchange Notes and Exchange Notes as to which Section 2(c)(iv) is applicable, which may be an
amendment to the Exchange Offer Registration Statement (the “Initial Shelf Registration Statement”). The Issuers shall file with the Commission the Initial Shelf Registration Statement as promptly as practicable and in any event on
or prior to 45 days after the Company determines or is notified that a Shelf Filing Event has occurred. The Initial Shelf Registration Statement shall be on Form S-3 or another appropriate form permitting registration of such Registrable Notes for
resale by Holders in the manner or manners designated by them (including, without limitation, one or more underwritten offerings). The Issuers shall not permit any securities other than the Registrable Notes to be included in the Initial Shelf
Registration Statement or in any Subsequent Shelf Registration Statement (as defined below). Notwithstanding the foregoing, in the event a Shelf Filing Event occurs as a result of the event set forth in Section 2(c)(ii), the Issuers’
obligation to file an Initial Shelf Registration pursuant to this Section 3 shall cease ab initio if the Exchange Offer is completed within 255 days of the Issue Date, or, if such date is not a Business Day, the next day that is a
Business Day. 
 The Issuers shall use their respective reasonable best efforts (x) to cause the Initial Shelf
Registration Statement to be declared effective under the Securities Act on or prior to the 90th day after the Company determines or is notified that such a Shelf Filing Event has occurred and (y) to keep the Initial Shelf Registration
Statement continuously effective under the Securities Act for the period ending on the date which is one year from the date it becomes effective (or one year if the Initial Shelf Registration Statement is filed at the request of the Initial
Purchasers), subject to extension pursuant to the penultimate paragraph of Section 5 hereof (the “Effectiveness Period”), or such shorter period ending when (i) all Registrable Notes covered by the Initial Shelf
Registration Statement have been sold in the manner set forth and as contemplated in the Initial Shelf Registration Statement or cease to be outstanding or (ii) a Subsequent Shelf Registration 

  
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Statement covering all of the Registrable Notes covered by and not sold under the Initial Shelf Registration Statement or an earlier Subsequent Shelf Registration Statement has been declared
effective under the Securities Act; provided, however, that (i) the Effectiveness Period in respect of the Initial Shelf Registration Statement shall be extended to the extent required to permit dealers to comply with the
applicable prospectus delivery requirements of Rule 174 under the Securities Act and as otherwise provided herein and (ii) the Company may suspend the effectiveness of the Initial Shelf Registration Statement by written notice to the Holders
solely as a result of the filing of a post-effective amendment to the Initial Shelf Registration Statement where such post-effective amendment is not yet effective and needs to be declared effective to permit holders to use the related Prospectus.

 (b) Subsequent Shelf Registration Statements. If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during the Effectiveness Period (other than because of the sale of all of the securities registered thereunder), the Issuers shall use their respective reasonable best efforts
to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall as soon as practicable after such cessation amend the Initial Shelf Registration Statement or such Subsequent Shelf Registration Statement, as
the case may be, in a manner to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional “shelf” Registration Statement pursuant to Rule 415 covering all of the Registrable Notes covered by and not
sold under the Initial Shelf Registration Statement or such earlier Subsequent Shelf Registration Statement (each, a “Subsequent Shelf Registration Statement”). If a Subsequent Shelf Registration Statement is filed, the Issuers
shall use their respective reasonable best efforts to cause the Subsequent Shelf Registration Statement to be declared effective under the Securities Act as soon as practicable after such filing and to keep such Subsequent Shelf Registration
Statement continuously effective for a period equal to the number of days in the Effectiveness Period less the aggregate number of days during which the Initial Shelf Registration Statement and any Subsequent Shelf Registration Statement was
previously continuously effective. As used herein, the term “Shelf Registration Statement” means the Initial Shelf Registration Statement and any Subsequent Shelf Registration Statement. 

(c) Supplements and Amendments. The Issuers agree to supplement or make amendments to the Shelf Registration Statement
as and when required by the rules, regulations or instructions applicable to the registration form used for such Shelf Registration Statement or by the Securities Act or rules and regulations thereunder for shelf registration, or if reasonably
requested by the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement or by any underwriter of such Registrable Notes; provided, however, that the Issuers shall not be
required to supplement or amend any Shelf Registration Statement upon the request of a Holder or any underwriter if such requested supplement or amendment would, in the good faith judgment of the Company (based on advice of counsel), violate the
Securities Act, the Exchange Act or the rules and regulations promulgated thereunder. 
  

	 	Section 4.	Liquidated Damages 

 (a) The Issuers and the Initial Purchasers agree that the Holders
will suffer damages if the Issuers fail to fulfill their obligations under Section 2 or Section 3 hereof and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, the Issuers agree that if: 

  
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 (i) the Exchange Offer Registration Statement is not filed with the Commission on
or prior to the 120th day following the Issue Date, or, if that day is not a Business Day, then the next day that is a Business Day, 

(ii) the Exchange Offer Registration Statement is not declared effective on or prior to the 180th day following the Issue
Date, or, if that day is not a Business Day, then the next day that is a Business Day, 
 (iii) the Exchange Offer is not
completed on or prior to the 240th day following the Issue Date, or, if that day is not a Business Day, then the next day that is a Business Day, or 

(iv) the Shelf Registration Statement is required to be filed but is not filed or declared effective within the time periods
set forth herein or is declared effective but thereafter ceases to be effective or usable prior to the expiration of the Effectiveness Period, except if the Shelf Registration Statement ceases to be effective or usable as specifically permitted by
the penultimate paragraph of Section 5 hereof 
 (each such event referred to in clauses (i) through (iv) a “Registration
Default”), liquidated damages in the form of additional cash interest (“Liquidated Damages”) will accrue on the affected Notes and the affected Exchange Notes, as applicable. The rate of Liquidated Damages will be
0.25% per annum for the first 90-day period (or portion thereof) immediately following the occurrence of a Registration Default, increasing by an additional 0.25% per annum with respect to each subsequent 90-day period (or portion thereof)
up to a maximum amount of additional interest of 1.00% per annum, from and including the date on which any such Registration Default shall occur to, but excluding, the earlier of (1) the date on which all Registration Defaults have been
cured or (2) the first anniversary of the Issue Date. 
 Notwithstanding the foregoing, (1) the amount of Liquidated Damages
payable shall not increase because more than one Registration Default has occurred and is pending, (2) a Holder of Notes or Exchange Notes who is not entitled to the benefits of the Shelf Registration Statement (i.e., such Holder has not
elected to include information) shall not be entitled to Liquidated Damages with respect to a Registration Default that pertains to the Shelf Registration Statement and (3) no Holder of Notes constituting an unsold allotment from the original
sale of the Notes by the Company to the Initial Purchasers shall be entitled to Liquidated Damages by reason of a Registration Default that pertains to an Exchange Offer. 

Notwithstanding anything to the contrary set forth herein, with respect to any Registration Default, (1) upon filing of the Exchange
Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of clause (i) or (iv) above, (2) upon the effectiveness of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of clause (ii) or (iv) above, (3) upon completion of the Exchange Offer, in the case of clause (iii) above, or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement) to again be declared effective or made usable, the applicable Registration Default
shall be deemed to have been cured. 
 (b) The Company shall notify the Trustee within one Business Day after each and every date on which
an event occurs in respect of which Liquidated Damages are required to be paid (an “Event Date”). Any amounts of Liquidated Damages due pursuant to this Section 4 will be payable in addition to any other interest payable from
time to time with respect to the Registrable Notes in cash 

  
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semi-annually on the interest payment dates specified in the Indenture (to the holders of record as specified in the Indenture), commencing with the first such interest payment date occurring
after any such Liquidated Damages commence to accrue. The amount of Liquidated Damages will be determined in a manner consistent with the calculation of interest under the Indenture. 

 

	 	Section 5.	Registration Procedures 

 In connection with the filing of any Registration Statement
pursuant to Section 2 or 3 hereof, the Issuers shall effect such registrations to permit the sale of the securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant thereto and in connection
with any Registration Statement filed by the Issuers hereunder, the Issuers shall: 
 (a) Prepare and file with the
Commission the Registration Statement or Registration Statements prescribed by Section 2 or 3 hereof, and use their reasonable best efforts to cause each such Registration Statement to become effective and remain effective as provided herein;
provided, however, that, if (1) such filing is pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period relating thereto, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Company
shall furnish to and afford the Holders of the Registrable Notes covered by such Registration Statement or each such Participating Broker-Dealer, as the case may be, their counsel and the managing underwriters, if any, a reasonable opportunity to
review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed (in each case at least five Business Days prior to such filing). The Issuers shall not file
any Registration Statement or Prospectus or any amendments or supplements thereto if the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement, or any such Participating Broker-Dealer, as
the case may be, their counsel, or the managing underwriters, if any, shall reasonably object within five Business Days after receipt thereof. 

(b) Prepare and file with the Commission such amendments and post-effective amendments to each Initial Shelf Registration
Statement or Exchange Offer Registration Statement, as the case may be, as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period or the Applicable Period, as the case may be; cause the related
Prospectus to be supplemented by any Prospectus supplement required by applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; and comply with the
provisions of the Securities Act and the Exchange Act with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to the subsequent resale of any
securities being sold by a Participating Broker-Dealer covered by any such Prospectus, in each case, in accordance with the intended methods of distribution set forth in such Registration Statement or Prospectus, as so amended. 

(c) If (1) a Shelf Registration Statement is filed pursuant to Section 3 hereof, or (2) a Prospectus contained
in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period relating
thereto from whom the Issuers have received written notice that it will be a Participating Broker-Dealer in the Exchange Offer, notify the selling Holders of Registrable Notes, or each such Participating Broker-Dealer,

  
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as the case may be, their counsel and the managing underwriters, if any, as promptly as possible, and, if requested by any such Person, confirm such notice in writing, (i) when a Prospectus
or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective under the Securities Act (including in such notice a written
statement that any Holder may, upon request in writing, obtain, at the sole expense of the Company, one conformed copy of such Registration Statement or post-effective amendment including financial statements and schedules, documents incorporated or
deemed to be incorporated by reference and exhibits), (ii) of the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any preliminary
prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when a Prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Notes or resales of Exchange Notes by
Participating Broker-Dealers the representations and warranties of the Issuers contained in any agreement (including any underwriting agreement) contemplated by Section 5(m) hereof cease to be true and correct in all material respects,
(iv) of the receipt by any of the Issuers of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Notes or the Exchange Notes for offer or
sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event, the existence of any condition or any information becoming known to any Issuer that makes any statement made in
such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in or amendments or supplements to such
Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any 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 not misleading, and that in the case of the Prospectus, it will not contain any 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
the light of the circumstances under which they were made, not misleading, and (vi) of the Company’s determination that a post-effective amendment to a Registration Statement would be appropriate. 

(d) If (1) a Shelf Registration Statement is filed pursuant to Section 3 hereof, or (2) a Prospectus contained
in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use their
reasonable best efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification)
of any of the Registrable Notes or the Exchange Notes, as the case may be, for sale in any jurisdiction, and, if any such order is issued, to use their reasonable best efforts to obtain the withdrawal of any such order at the earliest practicable
moment. 
 (e) If (1) a Shelf Registration Statement is filed pursuant to Section 3 or (2) a Prospectus
contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period and
if requested by the managing underwriter or underwriters (if any), the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement or any Participating Broker-Dealer, as the case may be,
(i) as promptly as practicable incorporate in such Registration Statement or Prospectus a prospectus supplement or post-effective amendment such information as the managing 

  
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underwriter or underwriters (if any), such Holders or any Participating Broker-Dealer, as the case may be (based upon advice of counsel), reasonably request as necessary to be included therein
and (ii) make all required filings of such prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such prospectus supplement or
post-effective amendment; provided, however, that the Issuers shall not be required to take any action hereunder that would, in the good faith judgment of the Company (based on advice of counsel), violate applicable laws. 

(f) If (1) a Shelf Registration Statement is filed pursuant to Section 3 hereof or (2) a Prospectus contained
in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, furnish to
each selling Holder of Registrable Notes and a single counsel to such Holders, or each such Participating Broker-Dealer and their counsel, as the case may be, who so requests and each managing underwriter, if any, and a single counsel for such
underwriters, at the sole expense of the Company, one conformed copy of the Registration Statement or Registration Statements and each post-effective amendment thereto, including financial statements and schedules, and, if requested, all documents
incorporated or deemed to be incorporated therein by reference and any exhibits. 
 (g) If (1) a Shelf Registration
Statement is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, deliver to each selling Holder of Registrable Notes and a single counsel to such Holders, or each such Participating Broker-Dealer and their counsel, as the case may be,
and the underwriters, if any, and a single counsel for such underwriters, at the sole expense of the Company, as many copies of the Prospectus or Prospectuses (including each form of preliminary prospectus) and each amendment or supplement thereto
and any documents incorporated by reference therein as such Persons may reasonably request; and, subject to the last paragraph of this Section 5, the Issuers hereby consent to the use of such Prospectus and each amendment or supplement thereto
(provided the manner of such use complies with any limitations resulting from any applicable laws, including state securities or “Blue Sky” laws, and subject to the provisions of this Agreement) by each of the selling Holders of
Registrable Notes or each such Participating Broker-Dealer, as the case may be, and the underwriters or agents, if any, and dealers (if any), in connection with the offering and sale of the Registrable Notes or the sale by Participating
Broker-Dealers of the Exchange Notes covered by or pursuant to such Prospectus and any amendment or supplement thereto. 

(h) Prior to any public offering of Registrable Notes or Exchange Notes or any delivery of a Prospectus contained in the
Exchange Offer Registration Statement by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use their reasonable best efforts to register or qualify, and to cooperate with the selling Holders of
Registrable Notes or each such Participating Broker-Dealer, as the case may be, the managing underwriter or underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration
or qualification) of such Registrable Notes or Exchange Notes, as the case may be, for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker-Dealer, or the
managing underwriter or underwriters reasonably request in writing; provided, however, that where Exchange Notes held by Participating Broker-Dealers or Registrable Notes are offered other than through an underwritten offering, the
Company agrees to cause the Company’s counsel to perform 

  
 -12- 

 
Blue Sky investigations and file registrations and qualifications required to be filed pursuant to this Section 5(h), keep each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of such Exchange Notes or Registrable
Notes covered by the applicable Registration Statement; provided, however, that no Issuer shall be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified, (B) take any action
that would subject it to general service of process in any such jurisdiction where it is not then so subject or (C) subject itself to taxation in excess of a nominal dollar amount in any such jurisdiction where it is not then so subject. 

(i) If a Shelf Registration Statement is filed pursuant to Section 3 hereof, cooperate with the selling Holders of
Registrable Notes and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Notes to be sold, which certificates shall not bear any restrictive legends and shall
be in a form eligible for deposit with The Depository Trust Company; and enable such Registrable Notes to be in such denominations and registered in such names as the managing underwriter or underwriters, if any, or selling Holders may reasonably
request at least two Business Days prior to any sale of such Registrable Notes or Exchange Notes. 
 (j) Use their
reasonable best efforts to cause the Registrable Notes or Exchange Notes covered by any Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be reasonably necessary to enable the seller
or sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of such Registrable Notes or Exchange Notes, except as may be required solely as a consequence of the nature of such selling Holder’s business, in
which case the Company will cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals. 

(k) If (1) a Shelf Registration Statement is filed pursuant to Section 3 hereof, or (2) a Prospectus contained
in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, upon the
occurrence of any event contemplated by Section 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and (subject to Section 5(a) and the penultimate paragraph of this Section 5) file with the Commission, at the sole expense
of the Company, a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Notes being sold thereunder or to the purchasers of the Exchange Notes to whom such Prospectus will be delivered by a Participating Broker-Dealer, any such Prospectus will not
contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 

(l) Prior to the effective date of the first Registration Statement relating to the Registrable Notes, (i) provide the
Trustee with certificates for the Registrable Notes in a form eligible for deposit with The Depository Trust Company and (ii) provide a CUSIP number for the Registrable Notes. 

  
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 (m) In connection with any underwritten offering of Registrable Notes pursuant to
a Shelf Registration Statement, enter into an underwriting agreement as is customary in underwritten offerings of debt securities similar to the Notes in form reasonably satisfactory to the Issuers and take all such other actions as are reasonably
requested by the managing underwriter or underwriters, if any, in order to expedite or facilitate the registration or the disposition of such Registrable Notes and, in such connection, (i) make such representations and warranties to, and
covenants with, the underwriters with respect to the business of the Issuers and their subsidiaries (including any acquired business, properties or entity, if applicable) and the Registration Statement, Prospectus and documents, if any, incorporated
or deemed to be incorporated by reference therein, in each case, as are customarily made by issuers to underwriters in underwritten offerings of debt securities similar to the Notes, and confirm the same in writing if and when requested in form
reasonably satisfactory to the Issuers; (ii) upon the request of any underwriter, use their reasonable best efforts to obtain the written opinions of counsel to the Company and written updates thereof in form, scope and substance reasonably
satisfactory to the managing underwriter or underwriters, addressed to the underwriters covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by the managing
underwriter or underwriters; (iii) upon the request of any underwriter, use their reasonable best efforts to obtain “cold comfort” letters and updates thereof in form, scope and substance reasonably satisfactory to the managing
underwriter or underwriters from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be, included or incorporated by reference in the Registration Statement), addressed to each of the underwriters, such letters to be in customary form and covering matters of the type
customarily covered in “cold comfort” letters in connection with underwritten offerings of debt securities similar to the Notes, and such other matters as reasonably requested by the managing underwriter or underwriters as permitted by the
Statement on Auditing Standards No. 72; and (iv) if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures no less favorable than those set forth in Section 7 hereof (or such
other provisions and procedures acceptable to Holders of a majority in aggregate principal amount of Registrable Notes covered by such Registration Statement and the managing underwriter or underwriters or agents, if any) with respect to all parties
to be indemnified pursuant to said Section. The above shall be done at each closing under such underwriting agreement, or as and to the extent required thereunder. 

(n) If (1) a Shelf Registration Statement is filed pursuant to Section 3 hereof or (2) a Prospectus contained
in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, make
available for inspection by any selling Holder of such Registrable Notes being sold or each such Participating Broker-Dealer, as the case may be, any underwriter participating in any such disposition of Registrable Notes, if any, and any attorney,
accountant or other agent retained by any such selling Holder or each such Participating Broker-Dealer, as the case may be, or underwriter (collectively, the “Inspectors”), at the offices where normally kept, during reasonable
business hours, all financial and other records, pertinent corporate documents and instruments of the Company and its subsidiaries (collectively, the “Records”) as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the appropriate officers, directors and employees of the Company and its subsidiaries to supply all information reasonably requested by any such Inspector in connection with such Registration
Statement and Prospectus. Each Inspector shall agree in writing that it will keep the Records confidential and not disclose any Records that the Company determines, 

  
 -14- 

 
in good faith, to be confidential and that it notifies the Inspectors in writing are confidential unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or
omission in such Registration Statement or Prospectus, (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (iii) disclosure of such information is necessary or advisable
in connection with any action, claim, suit or proceeding, directly or indirectly, involving or potentially involving such Inspector and arising out of, based upon, relating to, or involving this Agreement or the Purchase Agreement, or any
transactions contemplated hereby or thereby or arising hereunder or thereunder, or (iv) the information in such Records has been made generally available to the public other than through an act of such Inspector in violation of this
Section 5(n); provided, however, that, if practicable, prior notice shall be provided as soon as practicable to the Issuers of the potential disclosure of any information by such Inspector pursuant to clause (ii) of this
sentence to permit the Issuers to obtain a protective order or to take other appropriate action to prevent the disclosure of such information and that such Inspector shall take such actions as are reasonably necessary to protect the confidentiality
of such information (if practicable) to the extent such action is otherwise not inconsistent with, an impairment of or in derogation of the rights and interests of the Holder or any Inspector. 

(o) Provide an indenture trustee for the Registrable Notes or the Exchange Notes, as the case may be, and cause the Indenture
or the trust indenture provided for in Section 2(b) hereof to be qualified under the TIA not later than the effective date of the Exchange Offer or the first Registration Statement relating to the Registrable Notes; and in connection therewith,
cooperate with the trustee under any such indenture and the Holders of the Registrable Notes or Exchange Notes, as applicable, to effect such changes to such indenture as may be required for such indenture to be so qualified in accordance with the
terms of the TIA; and execute, and use their reasonable best efforts to cause such trustee to execute, all documents as 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. 
 (p) Comply with all applicable rules and regulations of the Commission
and make generally available to the Company’s securityholders earnings statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act)
(i) commencing at the end of any fiscal quarter in which Registrable Notes or Exchange Notes are sold to underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company after the effective date of a Registration Statement. 

(q) Upon the request of a Holder, upon consummation of the Exchange Offer or a Private Exchange, use their reasonable best
efforts to obtain an opinion of counsel to the Issuers, in a form customary for underwritten transactions, addressed to the Trustee for the benefit of all Holders of Registrable Notes participating in the Exchange Offer or the Private Exchange, as
the case may be, that the Exchange Notes or Private Exchange Notes, as the case may be, and the related indenture constitute legal, valid and binding obligations of the Issuers, enforceable against the Issuers in accordance with its respective
terms, subject to customary exceptions and qualifications. 
 (r) If the Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the Company (or to such other Person as directed by 

  
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the Company) in exchange for the Exchange Notes or the Private Exchange Notes, as the case may be, mark, or cause to be marked, on such Registrable Notes that such Registrable Notes are being
cancelled in exchange for the Exchange Notes or the Private Exchange Notes, as the case may be; in no event shall such Registrable Notes be marked as paid or otherwise satisfied. 

(s) Cooperate with each seller of Registrable Notes covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Notes and their respective counsel in connection with any filings required to be made with the Financial Industry Regulatory Authority, Inc. (“FINRA”). 

(t) Use their reasonable best efforts to take all other steps necessary or advisable to effect the registration of the
Exchange Notes and/or Registrable Notes covered by a Registration Statement contemplated hereby. 
 (u) The Company
represents, warrants and covenants that it (including its agents and representatives) will not prepare, make, use, authorize, approve or refer to any Free Writing Prospectus in connection with the Exchange Offer or any Shelf Registration Statement.

 The Company may require each seller of Registrable Notes or Exchange Notes as to which any registration is being effected to furnish to
the Issuers such information regarding such seller and the distribution of such Registrable Notes or Exchange Notes as the Company may, from time to time, reasonably request. The Issuers may exclude from such registration the Registrable Notes or
Exchange Notes of any seller so long as such seller fails to furnish such information within a reasonable time after receiving such request. Each seller as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make any information previously furnished to the Company by such seller not materially misleading. 

If any such Registration Statement refers to any Holder by name or otherwise as the holder of any securities of the Company, then such Holder
shall have the right to require (i) the insertion therein of language, in form and substance reasonably satisfactory to such Holder, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Company, or (ii) in the event that such reference to
such Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force, the deletion of the reference to such Holder in any amendment or supplement to the Registration Statement filed or prepared
subsequent to the time that such reference ceases to be required. 
 Each Holder of Registrable Notes and each Participating Broker-Dealer
agrees by acquisition of such Registrable Notes or Exchange Notes that, upon actual receipt of any notice from the Company (x) of the happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi) hereof,
or (y) that the Board of Directors of the Company (the “Board of Directors”) has resolved that the Company has a bona fide business purpose for doing so, then the Company may delay the filing or the effectiveness of the
Exchange Offer Registration Statement or the Shelf Registration Statement (if not then filed or effective, as applicable) and shall not be required to maintain the effectiveness thereof or amend or supplement the Exchange Offer Registration
Statement or the Shelf Registration Statement, in all cases, for a period (a “Delay Period”) expiring upon the earlier to occur of (i) in the case of the immediately preceding clause (x), such Holder’s or
Participating Broker-Dealer’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof or until it is advised in writing 

  
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(the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or supplements thereto or (ii) in the case
of the immediately preceding clause (y), the date which is the earlier of (A) the date on which such business purpose ceases to interfere with the Company’s obligations to file or maintain the effectiveness of any such Registration
Statement pursuant to this Agreement or (B) 60 days after the Company notifies the Holders of such good faith determination. There shall not be more than 60 days of Delay Periods during any 12-month period. Each of the Effectiveness Period
and the Applicable Period, if applicable, shall be extended by the number of days during any Delay Period. Any Delay Period will not alter the obligations of the Company to pay Liquidated Damages under the circumstances set forth in Section 4
hereof. 
 In the event of any Delay Period pursuant to clause (y) of the preceding paragraph, notice shall be given as soon as
practicable after the Board of Directors makes such a determination of the need for a Delay Period and shall state, to the extent practicable, an estimate of the duration of such Delay Period and shall advise the recipient thereof of the agreement
of such Holder provided in the next succeeding sentence. Each Holder, by his acceptance of any Registrable Note, agrees that during any Delay Period, each Holder will discontinue disposition of such Notes or Exchange Notes covered by such
Registration Statement or Prospectus or Exchange Notes to be sold by such Holder or Participating Broker-Dealer, as the case may be. 
  

	 	Section 6.	Registration Expenses 

 All fees and expenses incident to the performance of or
compliance with this Agreement by the Issuers shall be borne by the Issuers, whether or not the Exchange Offer Registration Statement or the Shelf Registration Statement is filed or becomes effective or the Exchange Offer is consummated, including,
without limitation, (i) all registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with FINRA in connection with an underwritten offering and (B) fees and expenses of
compliance with state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of one counsel in connection with Blue Sky qualifications of the Registrable Notes or Exchange Notes and determination of the
eligibility of the Registrable Notes or Exchange Notes for investment under the laws of such jurisdictions (x) where the holders of Registrable Notes are located, in the case of an Exchange Offer, or (y) as provided in Section 5(h)
hereof, in the case of Exchange Notes to be sold by a Participating Broker-Dealer during the Applicable Period)), (ii) printing expenses, including, without limitation, expenses of printing certificates for Registrable Notes or Exchange Notes
in a form eligible for deposit with The Depository Trust Company and of printing prospectuses if the printing of prospectuses is requested by the managing underwriter or underwriters, if any, or by the Holders of a majority in aggregate principal
amount of the Registrable Notes included in any Registration Statement or in respect of Exchange Notes to be sold by any Participating Broker-Dealer during the Applicable Period, as the case may be, (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Issuers and reasonable fees and disbursements of one special counsel for all of the sellers of Registrable Notes (exclusive of any counsel retained pursuant to Section 7 hereof),
(v) fees and disbursements of all independent certified public accountants referred to in Section 5(m)(iii) hereof (including, without limitation, the expenses of any special audit and “cold comfort” letters required by or
incident to such performance), (vi) Securities Act liability insurance, if the Issuers desire such insurance, (vii) fees and expenses of all other Persons retained by any of the Issuers, (viii) internal expenses of the Issuers
(including, without limitation, all salaries and expenses of officers and employees of any of the Issuers performing legal or accounting duties), (ix) the expense of any audit, (x) the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange, and the obtaining of a rating of the securities, in each case, if applicable, and (xi) the expenses relating to printing, word processing and distributing all Registration
Statements, underwriting 

  
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agreements, indentures and any other documents necessary in order to comply with this Agreement. Notwithstanding the foregoing or anything to the contrary, each Holder shall pay all underwriting
discounts and commissions of any underwriters with respect to any Registrable Notes sold by or on behalf of it. 
  

	 	Section 7.	Indemnification 

 (a) Each Issuer, jointly and severally, agrees to indemnify and hold
harmless each Holder of Registrable Notes, each Initial Purchaser and each Participating Broker-Dealer selling Exchange Notes during the Applicable Period, each Person, if any, who controls any such Person within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act, the agents, employees, officers and directors of each Holder, each Initial Purchaser and each such Participating Broker-Dealer and the agents, employees, officers and directors of any
such controlling Person (each, a “Participant”) from and against any and all losses, liabilities, claims, damages and expenses whatsoever (including, but not limited to, reasonable attorneys’ fees and any and all reasonable
expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all reasonable amounts paid in settlement of any claim or litigation) (collectively,
“Losses”) to which they or any of them may become subject under the Securities Act, the Exchange Act or otherwise insofar as such Losses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement (or any amendment thereto) or Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), any preliminary prospectus
or any Free Writing Prospectus used in violation of this Agreement or any issuer information filed or required to be filed pursuant to Rule 433(d) under the Securities Act, or caused by, arising out of or based upon any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus, in the light of the circumstances under which they were made, not misleading; provided that the
foregoing indemnity shall not be available to any Participant insofar as such Losses are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to such
Participant furnished to the Company in writing by or on behalf of such Participant expressly for use therein. 
 (b) Each Participant
agrees, severally and not jointly, to indemnify and hold harmless each Issuer, each Person, if any, who controls any Issuer within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, and each of their
respective agents, employees, officers and directors and the agents, employees, officers and directors of any such controlling Person from and against any Losses to which they or any of them may become subject under the Securities Act, the Exchange
Act or otherwise insofar as such Losses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment thereto) or
Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by, arising out of or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus, 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 any
such Loss 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 information relating to such Participant furnished in writing to the Company by or
on behalf of such Participant expressly for use therein. 

  
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 (c) Promptly after receipt by an indemnified party under subsection 7(a) or 7(b) above of notice
of the commencement of any action, suit or proceeding (collectively, an “action”), such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the commencement of such action (but the failure so to notify an indemnifying party shall not relieve such indemnifying party from any liability that it may have under this Section 7
except to the extent that it has been prejudiced in any material respect by such failure or from any liability which it otherwise may have). In case any such action is brought against any indemnified party, and it notifies an indemnifying party of
the commencement of such action, the indemnifying party will be entitled to participate in such action, and to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense of such action with counsel reasonably satisfactory to such indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any
such action, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by the indemnifying parties in connection with
the defense of such action, (ii) the indemnifying parties shall not have employed counsel to take charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) the indemnified party or
parties shall have reasonably concluded that there may be defenses available to it or them that are different from or additional to those available to one or all of the indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such reasonable fees and expenses of counsel shall be borne by the indemnifying parties; provided, however, that the
indemnifying party will not be liable for the fees and expenses of more than one counsel (together with appropriate local counsel) designated by the indemnified party or parties at any time for all indemnified parties in connection with any one
action or separate but similar or related actions arising out of the same general allegations or circumstances. An indemnifying party shall not be liable for any settlement of any claim or action effected without its written consent, which consent
may not be unreasonably withheld. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement (x) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding
and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any indemnified party. 

(d) In order to provide for contribution in circumstances in which the indemnification provided for in this Section 7 is for any reason
held to be unavailable from the indemnifying party, or is insufficient to hold harmless a party indemnified under this Section 7, each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of
such aggregate Losses (i) in such proportion as is appropriate to reflect the relative benefits received by each indemnifying party, on the one hand, and each indemnified party, on the other hand, from the sale of the Notes to the Initial
Purchasers or the resale of the Registrable Notes by such Holder, as applicable, or (ii) if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to above but
also the relative fault of each indemnified party, on the one hand, and each indemnifying party, on the other hand, in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations.
The relative benefits received by the Issuers, on the one hand, and each Participant, on the other hand, shall be deemed to be in the same proportion as (x) the total proceeds from the sale of the Notes to the Initial Purchasers (net of
discounts and commissions but before deducting expenses) received by the Issuers are to (y) the total net profit received by such Participant in connection with the sale of the Registrable Notes. The relative fault of the parties shall be

  
 -19- 

 
determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to
information supplied by the Issuers or such Participant and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or alleged statement or omission. 

(e) The parties agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation that does not take into account the equitable considerations referred to above. Notwithstanding the provisions of this Section 7, (i) in no case shall any Participant be required to
contribute any amount in excess of the amount by which the net profit received by such Participant in connection with the sale of the Registrable Notes exceeds the amount of any damages that such Participant has otherwise been required to pay by
reason of any untrue or alleged untrue statement or omission or alleged omission and (ii) 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. For purposes of this Section 7, each Person, if any, who controls any Participant within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act and each director, officer, employee and agent of such Participant shall have the same rights to contribution as such Participant, and each Person, if any, who controls any Issuer within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act and each director, officer, employee and agent of such Issuer or Person who controls such Issuer shall have the same rights to contribution as such Issuer. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made against another party or parties under this Section 7, notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any obligation it or they may have under this Section 7 or otherwise, except to the
extent that it has been prejudiced in any material respect by such failure; provided, however, that no additional notice shall be required with respect to any action for which notice has been given under this Section 7 for
purposes of indemnification. Anything in this section to the contrary notwithstanding, no party shall be liable for contribution with respect to any action or claim settled without its written consent; provided, however, that such
written consent was not unreasonably withheld. 
  

	 	Section 8.	Rules 144 and 144A 

 The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder in a timely manner in accordance with the requirements of the Securities Act and the Exchange Act and, if at any time the
Company is not required to file such reports, it will, upon the request of any Holder or beneficial owner of Registrable Notes, make available such information necessary to permit sales pursuant to Rule 144A under the Securities Act, in each case
for so long as any Registrable Notes remain outstanding. The Issuers further covenant for so long as any Registrable Notes remain outstanding that they will take such further action as any Holder of Registrable Notes may reasonably request from time
to time to enable such Holder to sell Registrable Notes without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 and Rule 144A under the Securities Act, as such Rules may be amended from
time to time, or (b) any similar rule or regulation hereafter adopted by the Commission. 

  
 -20- 

	 	Section 9.	Underwritten Registrations 

 If any of the Registrable Notes covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Holders of a majority in aggregate principal amount of such
Registrable Notes included in such offering and shall be reasonably acceptable to the Company. 
 No Holder of Registrable Notes may
participate in any underwritten registration hereunder if such Holder does not (a) agree to sell such Holder’s Registrable Notes on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) complete and execute all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 

 

	 	Section 10.	Miscellaneous 

 (a) No Inconsistent Agreements. The Issuers have not entered, as
of the date hereof, and shall not enter, after the date of this Agreement, into any agreement with respect to any of their securities that is inconsistent with the rights granted to the Holders of Registrable Notes in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders hereunder do not conflict with and are not inconsistent with, in any material respect, the rights granted to the holders of any of the Issuers’ other issued and outstanding
securities under any such agreements. The Issuers have not entered and will not enter into any agreement with respect to any of their securities which will grant to any Person piggy-back registration rights with respect to any Registration
Statement. 
 (b) Adjustments Affecting Registrable Notes. The Issuers shall not, directly or indirectly, take any action with
respect to the Registrable Notes as a class that would adversely affect the ability of the Holders of Registrable Notes to include such Registrable Notes in a registration undertaken pursuant to this Agreement. 

(c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given except pursuant to a written agreement duly signed and delivered by (I) the Issuers and (II) (A) the Holders of not less than a majority in aggregate principal amount of the then
outstanding Registrable Notes and (B) in circumstances that would adversely affect the Participating Broker-Dealers, the Participating Broker-Dealers holding not less than a majority in aggregate principal amount of the Exchange Notes held by
all Participating Broker-Dealers; provided, however, that Section 7 and this Section 10(c) may not be amended, modified or supplemented except pursuant to a written agreement duly signed and delivered by each Holder and each Participating
Broker-Dealer (including any Person who was a Holder or Participating Broker-Dealer of Registrable Notes or Exchange Notes, as the case may be, disposed of pursuant to any Registration Statement) adversely affected by any such amendment,
modification, supplement or waiver. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Notes whose securities are being
sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Notes may be given by Holders of at least a majority in aggregate principal amount of
the Registrable Notes being sold pursuant to such Registration Statement. 

  
 -21- 

 (d) Notices. All notices and other communications (including, without limitation, any
notices or other communications to the Trustee) provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, next-day air courier or telecopier: 

(i) if to a Holder of the Registrable Notes or any Participating Broker-Dealer, at the most current address of such Holder or
Participating Broker-Dealer, as the case may be, set forth on the records of the registrar under the Indenture. 
 (ii) if
to the Issuers, at the address as follows: 
 Meritage Homes Corporation 

8800 E. Raintree Drive 

Suite 300 

Scottsdale, AZ 85260 

Telephone: (480) 515-8100 

Fax: (480) 998-9162 

Attention: Larry W. Seay 

With a copy to: 

Snell & Wilmer L.L.P. 

One Arizona Center 

400 E. Van Buren Street 

Phoenix, AZ 85004-2223 

Telephone: (602) 382-6000 

Fax: (602) 382-6070 

Attention: Jeffrey Beck, Esq. 

(iii) if to the Initial Purchasers, at the address as follows: 

J.P. Morgan Securities LLC 

383 Madison Avenue 

New York, New York 10179 

Fax: (212) 270-0994 

Attention: Ken Lang 

With a copy to: 

Cahill Gordon & Reindel LLP 

80 Pine Street 

New York, NY 10005 

Telephone: (212) 701-3000 

Fax: (212) 269-5420 

Attention: Daniel J. Zubkoff, Esq. 

All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged by the recipient’s telecopier machine, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight
delivery. 

  
 -22- 

 Copies of all such notices, demands or other communications shall be concurrently delivered by
the Person giving the same to the Trustee at the address and in the manner specified in such Indenture. 
 (e) Guarantors. So long as
any Registrable Notes remain outstanding, the Issuers shall cause each Person that becomes a guarantor of the Notes under the Indenture to execute and deliver a counterpart to this Agreement which subjects such Person to the provisions of this
Agreement as a Guarantor. Each of the Guarantors agrees to join the Company in all of its undertakings hereunder to effect the Exchange Offer for the Exchange Notes and the filing of any Shelf Registration Statement required hereunder. 

(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 hereto, the Holders and the Participating Broker-Dealers; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign holds
Registrable Notes. 
 (g) Counterparts. This Agreement may be executed by facsimile or PDF and 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) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning
hereof. 
 (i) Governing Law. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. 

(j) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall
use their reasonable best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. 

(k) Securities Held by the Company or Its Affiliates. Whenever the consent or approval of Holders of a specified percentage of
Registrable Notes is required hereunder, Registrable Notes held by the Company or any of its affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was given by
the Holders of such required percentage. 
 (l) Third-Party Beneficiaries. Holders and beneficial owners of Registrable Notes and
Participating Broker-Dealers are intended third-party beneficiaries of this Agreement, and this Agreement may be enforced by such Persons. No other Person is intended to be, or shall be construed as, a third-party beneficiary of this Agreement. 

  
 -23- 

 (m) Attorneys’ Fees. As between the parties to this Agreement, in any action or
proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the successful party shall be entitled to recover reasonable attorneys’ fees actually incurred in addition to its
costs and expenses and any other available remedy. 
 (n) Entire Agreement. This Agreement, together with the Purchase Agreement and
the Indenture, is intended by the parties as a final and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein and any and all prior oral or written agreements,
representations, or warranties, contracts, understandings, correspondence, conversations and memoranda between the Holders on the one hand and the Issuers on the other, or between or among any agents, representatives, parents, subsidiaries,
affiliates, predecessors in interest or successors in interest with respect to the subject matter hereof and thereof are merged herein and replaced hereby. 

  
 -24- 

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

  

					
	MERITAGE HOMES CORPORATION
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MERITAGE PASEO CROSSING, LLC
		
	By:		Meritage Homes of Arizona, Inc.
	Its:		Sole Member
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MERITAGE PASEO CONSTRUCTION, LLC
		
	By:		Meritage Homes Construction, Inc.
	Its:		Sole Member
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MERITAGE HOMES OF ARIZONA, INC.
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary

  
 S-1 

 
					
	MERITAGE HOMES CONSTRUCTION, INC.
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MERITAGE HOMES OF TEXAS HOLDING, INC.
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MERITAGE HOMES OF CALIFORNIA, INC.
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MERITAGE HOMES OF TEXAS JOINT VENTURE HOLDING COMPANY, LLC
		
	By:		Meritage Homes of Texas, LLC
	Its:		Sole Member
		
	By:		Meritage Homes of Texas Holding, Inc.
	Its:		Sole Member
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary

  
 S-2 

 
					
	MERITAGE HOLDINGS, L.L.C.
		
	By:		Meritage Homes of Texas Holding, Inc.
	Its:		Sole Member
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MERITAGE-HOMES OF NEVADA, INC.
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MTH-CAVALIER, LLC
		
	By:		Meritage Homes Construction, Inc.
	Its:		Sole Member
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MTH GOLF, LLC
		
	By:		Meritage Homes Construction, Inc.
	Its:		Sole Member
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary

  
 S-3 

 
					
	MERITAGE HOMES OF COLORADO, INC.
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MERITAGE HOMES OF FLORIDA, INC.
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	CALIFORNIA URBAN HOMES, LLC
		
	By:		Meritage Homes of California, Inc.
	Its:		Sole Member and Manager
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MERITAGE HOMES OF TEXAS, LLC
		
	By:		Meritage Homes of Texas Holding, Inc.
	Its:		Sole Member
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary

  
 S-4 

 
					
	MERITAGE HOMES OPERATING COMPANY, LLC
		
	By:		Meritage Holdings, L.L.C.
	Its:		Manager
		
	By:		Meritage Homes of Texas Holding, Inc.
	Its:		Sole Member
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	WW PROJECT SELLER, LLC
		
	By:		Meritage Paseo Crossing. LLC
	Its:		Sole Member
		
	By:		Meritage Homes of Arizona, Inc.
	Its:		Sole Member
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MERITAGE HOMES OF THE CAROLINAS, INC.
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	CAREFREE TITLE AGENCY, INC.
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary

  
 S-5 

 
					
	M&M FORT MYERS HOLDINGS, LLC
		
	By:		Meritage Paseo Crossing, LLC
	Its:		Sole Member and Manager
		
	By:		Meritage Homes of Arizona, Inc.
	Its:		Sole Member
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MERITAGE HOMES OF FLORIDA REALTY LLC
		
	By:		Meritage Homes of Florida, Inc.
	Its:		Sole Member and Manager
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MERITAGE HOMES OF TENNESSEE, INC.
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MERITAGE HOMES OF SOUTH CAROLINA, INC.
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary

  
 S-6 

 
					
	MTH REALTY LLC
		
	By:		Meritage Paseo Crossing, LLC
	Its:		Sole Member and Manager
		
	By:		Meritage Homes of Arizona, Inc.
	Its:		Sole Member
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant Secretary
	
	MERITAGE HOMES OF GEORGIA, INC.
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MTH GA REALTY LLC
		
	By:		Meritage Homes of Georgia, Inc.
	Its:		Sole Member and Manager
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant Secretary
	
	MTH SC REALTY LLC
		
	By:		Meritage Homes of South Carolina, Inc.
	Its:		Sole Member and Manager
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant Secretary

  
 S-7 

 
					
	MTH SHELF CO., INC.
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant Secretary
	
	MLC HOLDINGS, INC. DBA MLC LAND HOLDINGS, INC.
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary
	
	MERITAGE HOMES OF GEORGIA REALTY, LLC
		
	By:		Meritage Homes of Georgia, Inc.
	Its:		Sole Member and Manager
		
	By:		/s/ Larry W. Seay
			Name:		Larry W. Seay
			Title:		Executive Vice President, Chief
					Financial Officer and Assistant
					Secretary

  
 S-8 

			
	J.P. MORGAN SECURITIES LLC,
		
	By:		/s/ Jeffrey Genova
			Name: Jeffrey Genova
			Title: Vice President
	
	CITIGROUP GLOBAL MARKETS INC.
		
	By:		/s/ David Leland
			Name: David Leland
			Title: Managing Director
	
	DEUTSCHE BANK SECURITIES INC.
		
	By:		/s/ Christopher Blum
			Name: Christopher Blum
			Title: Managing Director
		
	By:		/s/ John Huntington
			Name: John Huntington
			Title: Director
	
	MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
		
	By:		/s/ Jeffrey D. Horowitz
			Name: Jeffrey D. Horowitz
			Title: Managing Director Head of Global Real Estate, Gaming & Lodging Investment Banking
	
	PNC CAPITAL MARKETS LLC
		
	By:		/s/ Douglas C. Rogers
			Name: Douglas C. Rogers
			Title: Director

  
 S-9 

			
	RBC CAPITAL MARKETS, LLC
		
	By:		/s/ James S. Wolfe
			Name: James S. Wolfe
			Title: Managing Director Head of Global Leveraged Finance
	
	CREDIT SUISSE SECURITIES (USA) LLC
		
	By:		/s/ Jim Cronin
			Name: Jim Cronin
			Title: Director
	
	U.S. BANCORP INVESTMENTS, INC.
		
	By:		/s/ Jeff M. Kane
			Name: Jeff M. Kane
			Title: Managing Director
	
	REGIONS SECURITIES LLC
		
	By:		/s/ Neal Smith
			Name: Neal Smith
			Title: Managing Director

  
 S-10 

 Schedule A 

Guarantors 
  

	1.	Meritage Paseo Crossing, LLC 

	2.	Meritage Paseo Construction, LLC 

	3.	Meritage Homes of Arizona, Inc. 

	4.	Meritage Homes Construction, Inc. 

	5.	Meritage Homes of Texas Holding, Inc. 

	6.	Meritage Homes of California, Inc. 

	7.	Meritage Homes of Texas Joint Venture Holding Company, LLC 

	8.	Meritage Holdings, L.L.C. 

	9.	Meritage Homes of Nevada, Inc. 

	10.	MTH-Cavalier, LLC 

	11.	MTH Golf, LLC 

	12.	Meritage Homes of Colorado, Inc. 

	13.	Meritage Homes of Florida, Inc. 

	14.	California Urban Homes, LLC 

	15.	Meritage Homes of Texas, LLC 

	16.	Meritage Homes Operating Company, LLC 

	17.	WW Project Seller, LLC 

	18.	Meritage Homes of the Carolinas, Inc. 

	19.	Carefree Title Agency, Inc. 

	20.	M&M Fort Myers Holdings, LLC 

	21.	Meritage Homes of Florida Realty LLC 

	22.	Meritage Homes of Tennessee, Inc. 

	23.	Meritage Homes of South Carolina, Inc. 

	24.	MTH Realty LLC 

	25.	Meritage Homes of Georgia, Inc. 

	26.	MTH GA Realty LLC 

	27.	MTH SC Realty LLC 

	28.	MTH Shelf Co., Inc. 

	29.	MLC Holdings, Inc. dba MLC Land Holdings, Inc. 

	30.	Meritage Homes of Georgia Realty, LLCExhibit 10.1

 

EXECUTION VERSION

 

SANDRIDGE ENERGY, INC.

 

SANDRIDGE OPERATING COMPANY,
 INTEGRA ENERGY, L.L.C.,

LARIAT SERVICES, INC.,
 SANDRIDGE EXPLORATION AND PRODUCTION, LLC,
 SANDRIDGE MIDSTREAM, INC.,

SANDRIDGE HOLDINGS, INC.,

AND

SANDRIDGE GATHERING LLC

 

$1,250,000,000 8.75% Senior Secured Notes due 2020

 

PURCHASE AGREEMENT

 

dated May 28, 2015

 

Barclays Capital Inc.

Morgan Stanley & Co. LLC

RBC Capital Markets, LLC

 

 

PURCHASE AGREEMENT

 

May 28, 2015

 

BARCLAYS CAPITAL INC.

MORGAN STANLEY & CO. LLC

RBC CAPITAL MARKETS, LLC

 

As Representatives of the several

Initial Purchasers named in Schedule A attached hereto,

 

c/o Barclays Capital Inc.

745 Seventh Avenue

New York, New York 10019

 

Ladies and Gentlemen:

 

SandRidge Energy, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to the several Initial Purchasers named in Schedule A (the “Initial Purchasers”), acting severally and not jointly, the respective amounts set forth in such Schedule A of $1,250,000,000 in aggregate principal amount of the Company’s 8.75% Senior Secured Notes due 2020 (the “Notes”).  Barclays Capital Inc., Morgan Stanley & Co. LLC and RBC Capital Markets, LLC have agreed to act as the representatives of the Initial Purchasers (the “Representatives”) in connection with the offering and sale of the Notes.

 

The Notes will be issued pursuant to an indenture, to be dated as of June 10, 2015 (the “Indenture”), among the Company, the Guarantors (as defined below) and U.S. Bank National Association, as trustee (the “Trustee”).  Pursuant to a Collateral Trust Agreement, to be dated as of June 10, 2015 (the “Collateral Trust Agreement”), among the Company, the Guarantors and U.S. Bank National Association, as collateral agent (the “Collateral Agent”), the Collateral Agent will receive, hold, administer, maintain, enforce and distribute the proceeds of all liens upon any property of the Company or any Guarantor at any time held by it, in trust for the benefit of the current and future holders of the Parity Lien Obligations (as defined in the Indenture).  The Notes will be issued only in book-entry form in the name of Cede & Co., as nominee of The Depository Trust Company (the “Depositary”).

 

The payment of principal of, premium, if any, and interest on the Notes will be fully and unconditionally guaranteed on a senior secured, second priority basis, jointly and severally by (i) SandRidge Operating Company, Integra Energy, L.L.C., Lariat Services, Inc., SandRidge Exploration and Production, LLC, SandRidge Midstream, Inc., SandRidge Holdings, Inc., SandRidge Gathering LLC and (ii) any subsidiary of the Company formed or acquired after the Closing Date that executes a supplemental indenture in accordance with the terms of the Indenture, and their respective successors and assigns (collectively, the “Guarantors”), pursuant to their guarantees set forth in the Indenture (collectively, the “Guarantees”).  The Notes and the Guarantees related thereto are herein collectively referred to as the “Securities.”

 

On the Closing Date, the Company will enter into a new Senior Secured Reserve-Based Revolving Credit Facility (as amended, restated, supplemented or otherwise modified from time

 

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to time, the “New Credit Facility”), by and among the Company, the lenders party thereto, and Royal Bank of Canada, as administrative agent and first lien agent (the “First Lien Agent”), and will repay all borrowings under and terminate its prior senior secured credit facility (the “Existing Credit Facility”).

 

The Securities will be secured by a second-priority lien, subject to Permitted Liens (as defined in the Indenture), on substantially all of the tangible and intangible assets of the Company and the Guarantors, now owned or hereafter acquired by the Company and any Guarantor, that secure borrowings under the New Credit Facility on a first-priority basis, subject to certain exceptions described in the Indenture and the Security Documents (as defined below) (the “Collateral”).  The Collateral shall be described in: (a) with respect to real property located in the jurisdictions listed on Annex III, which are required to be mortgaged the mortgages, deeds of trust or deeds to secure debt to be executed or delivered on or before the date that is sixty (60) days following the Closing Date (collectively, the “Mortgages”) and (b) with respect to personal property that constitutes Collateral, the Collateral Trust Agreement and the Second Lien Pledge and Security Agreement to be dated as of the Closing Date (as defined below) and entered into by the Company, the Guarantors and the Collateral Agent (the “Security Agreement”), each to be delivered to the Trustee, granting a second-priority security interest in the Collateral, subject to Permitted Liens, for the benefit of the Trustee and each holder of the Securities and the successors and assigns of the foregoing.  The Liens on the Collateral will be subject to the terms of the Intercreditor Agreement to be dated as of the Closing Date, among the Company, the Guarantors, the Collateral Agent and the First Lien Agent (the “Intercreditor Agreement”), which will further govern the rights of the holders of the Securities with respect to the Collateral. The term “Security Documents,” as used herein, shall mean the Mortgages, the Collateral Trust Agreement and the Security Agreement, and the term “Note Documents” shall refer to the Indenture, the Notes, the Guarantees, the Security Documents and the Intercreditor Agreement.

 

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

 

The Company has prepared and delivered to each Initial Purchaser copies of a preliminary offering memorandum, dated May 28, 2015, including documents incorporated by reference therein (the “Preliminary Offering Memorandum”), and has prepared and delivered to

 

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each Initial Purchaser copies of a Pricing Supplement, dated May 28, 2015, in the form attached hereto as Exhibit B (the “Pricing Supplement”), describing the terms of the Securities, each for use by such Initial Purchaser in connection with its solicitation of offers to purchase the Securities.  The Preliminary Offering Memorandum and the Pricing Supplement are herein referred to as the “Pricing Disclosure Package.”  Promptly after this Agreement is executed and delivered, the Company will prepare and deliver to each Initial Purchaser a final offering memorandum dated the date hereof including documents incorporated by reference therein (the “Final Offering Memorandum”).

 

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

 

The Company and the Guarantors hereby confirm their agreements with the Initial Purchasers as follows:

 

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

 

(a)                                 No Registration Required.  Subject to compliance by the Initial Purchasers with the representations and warranties set forth in Section 2 hereof and with the procedures set forth in Section 8 hereof, it is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchasers and to each Subsequent Purchaser in the manner contemplated by this Agreement and the Offering Memorandum to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939 (as amended, the “Trust Indenture Act,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder).

 

(b)                                 No Integration of Offerings or General Solicitation.  None of the Company, its affiliates (as such term is defined in Rule 501 under the Securities Act) (each, an “Affiliate”) or any person acting on its or any of their behalf (other than the Initial Purchasers, as to whom the Company makes no representation or warranty) has, directly or indirectly, solicited any offer to buy or offered to sell, or will, directly or indirectly, solicit any offer to buy or offer to sell, in the United States or to any United States citizen or resident, any security which is or would be integrated with the sale of the Securities in a manner that would require the Securities to be

 

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registered under the Securities Act.  None of the Company, its Affiliates, or any person acting on its or any of their behalf (other than the Initial Purchasers, as to whom the Company makes no representation or warranty) has engaged or will engage, in connection with the offering of the Securities, in any form of general solicitation or general advertising within the meaning of Rule 502 under the Securities Act.  With respect to those Securities sold in reliance upon Regulation S, (i) none of the Company, its Affiliates or any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company makes no representation or warranty) has engaged or will engage in any directed selling efforts within the meaning of Regulation S and (ii) each of the Company, its Affiliates and any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company makes no representation or warranty) has complied and will comply with the offering restrictions set forth in Regulation S.

 

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

 

(d)                                 The Pricing Disclosure Package and Offering Memorandum.  Neither the Pricing Disclosure Package, as of the Time of Sale, nor the Final Offering Memorandum, as of its date or (as amended or supplemented in accordance with Section 3(a), as applicable) as of the Closing Date, contains or represents an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation, warranty and agreement shall not apply to statements in or omissions from the Pricing Disclosure Package, the Final Offering Memorandum or any amendment or supplement thereto made in reliance upon and in conformity with information furnished to the Company in writing by any Initial Purchaser through Barclays Capital Inc. expressly for use in the Pricing Disclosure Package, the Final Offering Memorandum or amendment or supplement thereto, as the case may be.  Neither the Company nor the Guarantors have distributed and will not distribute, prior to the later of the Closing Date and the completion of the Initial Purchasers’ distribution of the Securities, any offering material in connection with the offering and sale of the Securities other than the Company Additional Written Communications set forth on Schedule C hereto, the Pricing Disclosure Package and the Final Offering Memorandum.

 

(e)                                  Company Additional Written Communications.  Neither the Company nor the Guarantors have prepared, made, used, authorized, approved or distributed and will not prepare, make, use, authorize, approve or distribute any written communication that constitutes an offer to sell or solicitation of an offer to buy the Securities (each such communication by the Company, the Guarantors or their respective agents and representatives (other than a communication referred to in clauses (i) and (ii) below) a “Company Additional Written Communication”) other than (i) the Pricing Disclosure Package, (ii) the Final Offering Memorandum and (iii) any electronic road show or other written communications and the documents set forth on Schedule C, in each case used in accordance with Section 3(a).  Each such Company Additional Written Communication, when taken together with the Pricing Disclosure Package, did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation, warranty and

 

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agreement shall not apply to statements in or omissions from each such Company Additional Written Communication made in reliance upon and in conformity with information furnished to the Company in writing by any Initial Purchaser through Barclays Capital Inc. expressly for use in any Company Additional Written Communication.

 

(f)                                   Incorporated Documents.  The documents incorporated or deemed to be incorporated by reference in the Offering Memorandum at the time they were or hereafter are filed with the Commission (collectively, the “Incorporated Documents”) complied and will comply in all material respects with the requirements of the Exchange Act.

 

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

 

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

 

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

 

(j)                                    Authorization of the Security Documents and Intercreditor Agreement.  The Security Documents have been duly authorized by the Company and the applicable Guarantors.  On the Closing Date, the Security Agreement, the Collateral Trust Agreement and the Intercreditor Agreement will have been duly executed and delivered by the Company and the applicable Guarantors, and will conform in all material respects to the description thereof contained in the Pricing Disclosure Package and the Offering Memorandum and, assuming the due authorization, execution and delivery thereof by the other parties thereto, will constitute

 

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valid and binding agreements of the Company and the Guarantors, enforceable against the Company and the Guarantors, in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles. The Company and the Guarantors have taken commercially reasonable efforts to prepare, execute and deliver the other Security Documents.  Upon the execution and delivery of the other Security Documents, such Security Documents, assuming the due authorization, execution and delivery thereof by the other parties thereto, will constitute legal, valid and binding instruments enforceable against the Company and the applicable Guarantors in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

 

(k)                                 Perfected Security Interests. (A) The Security Documents (other than the Mortgages), when executed and delivered in connection with the sale of the Securities, will create in favor of the Collateral Agent for the benefit of itself, the Trustee and the holders of the Notes, valid and enforceable security interests in and liens on the Collateral and, upon the filing of appropriate Uniform Commercial Code (as in effect in the applicable state of jurisdiction, (“UCC”)) financing statements in U.S. jurisdictions as set forth on Annex II hereto and/or the taking of other actions, in each case as further described in the Security Documents, the security interests in and liens on the rights of the Company or the applicable Guarantor in such Collateral will be perfected security interests and liens, superior to and prior to the liens of all third persons other than the liens securing the New Credit Facility and other Permitted Liens (as defined in the Indenture).

 

(B)                               Upon execution and delivery, the Mortgages will be effective to grant a legal, valid and enforceable mortgage lien or security title and security interest on all of the mortgagor’s right, title and interest in the real property described therein (each, a “Mortgaged Property” and, collectively, the “Mortgaged Properties”).  When the Mortgages are duly recorded in the proper recorders’ offices or appropriate public records and the mortgage recording fees and taxes in respect thereof are paid and compliance is otherwise had with the formal requirements of state law, applicable to the recording of real estate mortgages generally, each such Mortgage shall constitute a validly perfected and enforceable second-priority lien or security title and security interest in the related Mortgaged Property constituting Collateral for the benefit of the Trustee and the holders of the Securities, subject only to Permitted Liens (as defined in the Indenture) or liens and encumbrances expressly set forth as an exception to the policies of title insurance, if any, obtained to insure the lien of each Mortgage with respect to each of the Mortgaged Properties, and as may be limited by (x) the effect of any applicable bankruptcy, insolvency, fraudulent conveyance or similar law affecting creditors’ rights generally and (y) general principles of equity (regardless of whether considered in a proceeding in equity or at law), including concepts of commercial reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief.

 

(l)                                     Liens. On the Closing Date, the applicable pledging entity under each Security Document will own the relevant Collateral covered by such Security Document, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim (“Liens”), except (i) for any Liens securing the Collateral for the benefit of the holders of the Notes and the New Credit

 

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Facility, (ii) Permitted Liens under the terms of the Indenture or (iii) any Liens that will be discharged at or prior to the Closing Date.

 

(m)                             Registrations, Filings, Etc. The Company and each Guarantor have used their commercially reasonable efforts to complete all filings, registrations with any governmental or judicial office in the relevant jurisdiction of organization necessary to ensure the validity, legality and enforceability of the Security Documents and other actions necessary to perfect and protect the security interest in the Collateral to be created under the Security Documents, and when (i) UCC financing statements and other filings in appropriate form describing the Collateral with respect to which a security interest may be perfected by filing or recordation are filed or recorded with the appropriate governmental authority and (ii) upon the taking of possession or control by the First Lien Agent holding such Collateral as gratuitous bailee and/or gratuitous agent on behalf of the Collateral Agent and the holders of the Notes, of the Collateral with respect to which a security interest may be perfected only by possession or control, and the acknowledgement by the First Lien Agent that it is holding such Collateral for the Collateral Agent and the holders of the Notes, the Liens created by the Security Documents shall constitute fully perfected Liens on, and security interests in the Collateral to the extent such security interests can be perfected by such filing, recordation, possession or control and to the extent such matter is governed by the laws of the United States or a jurisdiction thereof, subject in each case to Permitted Liens (as defined in the Indenture), with the priority required by the Security Documents.

 

(n)                                 Description of the Securities, the Indenture, the Intercreditor Agreement and the Security Documents.  The Securities, the Indenture, the Intercreditor Agreement and the Security Documents will conform in all material respects to the respective statements relating thereto contained in the Offering Memorandum.

 

(o)                                 No Material Adverse Change. Except as otherwise disclosed in the Offering Memorandum (exclusive of any amendment or supplement thereto), subsequent to the respective dates as of which information is given in the Offering Memorandum (exclusive of any amendment or supplement thereto): (i) there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change, in the condition, financial or otherwise, or in the earnings, business, properties, operations or prospects (other than as a result of developments affecting the oil and gas industry generally), whether or not arising from transactions in the ordinary course of business, of the Company and its subsidiaries, considered as one entity (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) other than with respect to the 8.5% Convertible Perpetual Preferred Stock of the Company issued on January 21, 2009 and the 7.0% Convertible Perpetual Preferred Stock of the Company issued on November 10, 2010 and November 15, 2010 (collectively, the “Preferred Stock”), there has been no cash dividend or distribution of any kind declared, paid or made by the Company, or, except for dividends paid to the Company or other subsidiaries and except for distributions declared and paid by SandRidge Mississippian Trust I, SandRidge Permian Trust and SandRidge Mississippian Trust II, any of the Company’s subsidiaries or consolidated variable interest entities on any class of capital stock or repurchase or redemption by the Company or any of its subsidiaries of any class of capital stock.

 

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(p)                                 Independent Accountants.  PricewaterhouseCoopers LLP, who have expressed their opinion with respect to certain of the financial statements of the Company (which term as used in this Agreement includes the related notes thereto) included or incorporated by reference in the Offering Memorandum, are independent registered public accountants with respect to the Company as required by the Securities Act and the Exchange Act and the rules of the Public Company Accounting Oversight Board.

 

(q)                                 Preparation of the Financial Statements.  The consolidated financial statements and schedules of the Company and its consolidated subsidiaries 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, as applicable. Such financial statements comply as to form with the applicable accounting requirements of Regulation S-X and 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 caption “Summary Historical Consolidated Financial Data” and under the “Actual” column under the caption “Capitalization” fairly present the information set forth therein on a basis consistent with that of the audited and unaudited financial statements incorporated by reference in the Offering Memorandum.  The statistical and market-related data and forward looking statements included in the Offering Memorandum are based on or derived from sources that the Company and its subsidiaries believe to be reliable and accurate in all material respects and represent their good faith estimates that are made on the basis of data derived from such sources. The interactive data in eXtensible Business Reporting Language incorporated by reference in the Pricing Disclosure Package or the Offering Memorandum fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.

 

(r)                                    Incorporation and Good Standing of the Company and the Guarantors.  Each of the Company and the Guarantors has been duly incorporated or otherwise formed and is validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, as the case may be, and has power and authority (corporate or otherwise) to own or lease, as the case may be, and operate its properties and to conduct its business as described in the Offering Memorandum and, in the case of the Company and the Guarantors, to enter into and perform its obligations under each of the Note Documents to which it is a party.  Each of the Company and the Guarantors is duly qualified 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 effect on the condition, financial or otherwise, or on the earnings, business, properties or operations, whether or not arising from transactions in the ordinary course of business, of the Company and its subsidiaries, considered as one entity (a “Material Adverse Effect”).  All of the issued and outstanding shares of capital stock, or similar equity interest, of each subsidiary of the Company have been duly authorized and validly issued, are fully paid and nonassessable and, except as set forth on Schedule B, are owned by the Company, directly or through subsidiaries.  All shares of capital stock, or similar equity interest, so owned are owned free and clear of any

 

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security interest, mortgage, pledge, lien, encumbrance or claim, other than those granted pursuant to the Existing Credit Facility or, upon the closing of the Offering, the New Credit Facility, the Indenture and the Security Documents.

 

(s)                                   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 described in the Offering Memorandum).

 

(t)                                    Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required.  Neither the Company nor any of its subsidiaries, is (i) in violation of its charter or by laws (or other applicable organizational document), (ii) (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”), or (iii) in violation of any statute, law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or such subsidiary or any of its properties, as applicable, except with respect to clauses (ii) and (iii), for such Defaults or violations as would not, individually or in the aggregate, have a Material Adverse Effect.

 

The Company’s and the Guarantors’ execution, delivery and performance of this Agreement and the Note Documents to which they are a party (including the granting of the liens on the Collateral), and the issuance and delivery of the Securities, and consummation of the transactions contemplated hereby and thereby and by the Offering Memorandum (i) have been duly authorized by all necessary action (corporate or otherwise) and will not result in any violation of the charter or bylaws (or other applicable organizational document) of the 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 statute, law, rule, regulation, judgment, order or decree applicable to the Company or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or any of its subsidiaries or any of its or their properties.  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.

 

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 and the Guarantors’ execution, delivery and performance of this Agreement, or the Note Documents, or the issuance and delivery of the Securities, or consummation of the transactions contemplated hereby and thereby and by the Offering Memorandum, except for such

 

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as have been obtained or made by the Company and are in full force and effect under the Securities Act, and applicable state securities or blue sky laws.

 

(u)                                 No Material Actions or Proceedings.  Except as otherwise disclosed in the Offering Memorandum, there are no legal or governmental actions, suits or proceedings pending or, to 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 any of its subsidiaries and (B) any such action, suit or proceeding, if so determined adversely, would reasonably be expected to have a Material Adverse Effect or adversely affect the consummation of the transactions contemplated by this Agreement.

 

(v)                                 Labor Matters.  No labor problem or dispute with the employees of the Company or any of its subsidiaries exists or is threatened or imminent that would reasonably be expected to have a Material Adverse Effect.

 

(w)                               Intellectual Property Rights.  The Company and its subsidiaries own, possess, license or have other rights to use, on reasonable terms, all patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property (collectively, the “Intellectual Property Rights”) necessary for the conduct of the Company’s business, as now conducted or as proposed in the Offering Memorandum to be conducted except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.  Except as set forth in the Offering Memorandum, (a) no party has been granted an exclusive license to use any portion of such Intellectual Property Rights owned by the Company; (b) to the Company’s knowledge there is no material infringement by third parties of any such Intellectual Property Rights owned by or exclusively licensed to the Company; (c) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s rights in or to any material Intellectual Property Rights; and (d) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company’s business as now conducted infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others that, if so determined adversely, would reasonably be expected to have a Material Adverse Effect or adversely affect the consummation of the transactions contemplated by this Agreement, and the Company is unaware of any other fact which would form a reasonable basis for any such claim.

 

(x)                                 All Necessary Permits, etc.  The Company and each Guarantor possess such valid and current licenses, certificates, authorizations or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their respective businesses except where the failure to do so would not reasonably be expected to have a Material Adverse Effect, and none of the Company or any Guarantor 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 have a Material Adverse Effect.

 

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(y)                                 Title to Properties. Each of the Company and its subsidiaries has (A) generally satisfactory title to its oil and gas properties, title investigations having been carried out by the Company or its subsidiaries in accordance with the practice in the oil and gas industry in the areas in which the Company and its subsidiaries operate, (B) good and marketable title to all other real property owned by it (including pipeline easement rights) to the extent necessary to carry on its business, and (C) good and marketable title to all personal property owned by it, in each case free and clear of all liens, encumbrances and defects except such as are described in the Offering Memorandum or such as do not materially affect the value of the properties of the Company and its subsidiaries, considered as one enterprise, and do not interfere in any material respect with the use made and proposed to be made of such properties, by the Company and its subsidiaries, considered as one enterprise; and all of the easements, leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under which the Company or any of its subsidiaries holds or uses properties described in the Offering Memorandum, are in full force and effect, and neither the Company nor any of its subsidiaries has any notice of any claim of any sort that has been asserted by anyone adverse to the rights of the Company or its subsidiaries under any of the easements, leases or subleases mentioned above, or affecting or questioning the rights of the Company or any subsidiary thereof to the continued possession or use of the easement or leased or subleased premises, except for any claims that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(z)                                  Condition of Properties.  Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company, the plants, buildings, structures and equipment owned by the Company are in good operating condition and repair and have been reasonably maintained consistent with standards generally followed in the industry (giving due account to the age and length of use of same, ordinary wear and tear excepted), are adequate and suitable for their present uses and, in the case of plants, buildings and other structures, are structurally sound.

 

(aa)                          Tax Law Compliance.  The Company and its subsidiaries have filed all necessary federal, state, local and foreign tax returns in a timely manner and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them, except for (i) any taxes, assessments, fines or penalties that are being contested in good faith and by appropriate proceedings and with respect to which adequate reserves are being maintained in conformity with generally accepted accounting principles or (ii) where the failure to do so would not reasonably be expected to have a Material Adverse Effect.  The Company has made appropriate provisions in the financial statements incorporated by reference in the Offering Memorandum in respect of all federal, state and foreign income and franchise taxes for all current or prior periods as to which the tax liability of the Company or any of its consolidated subsidiaries has not been finally determined except to the extent that the failure to do so would not have a Material Adverse Effect.

 

(bb)                          Company Not an “Investment Company.”  Neither the Company nor any of the Guarantors is, or, after receipt of payment for the Securities and application of the proceeds as described under “Use of Proceeds” in the Offering Memorandum will 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.

 

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(cc)                            Insurance.  Each of the Company and its subsidiaries are insured by recognized, and to the knowledge of the Company, 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.  All policies of insurance and fidelity or surety bonds insuring the Company and any of its subsidiaries, or their respective businesses, assets, employees, officers and directors are in full force and effect; the Company and its subsidiaries are in compliance, in all material respects, with the terms of such policies and instruments; and there are no material claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; and neither the Company nor any of its subsidiaries has, in the past three years, been refused any insurance coverage sought or applied for.

 

(dd)                          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 any security of the Company to facilitate the sale or resale of the Securities.  The Company acknowledges that the Initial Purchasers may engage in stabilization transactions as described in the Offering Memorandum.

 

(ee)                            Compliance with Sarbanes-Oxley.  The Company and its subsidiaries and their respective officers and directors are in compliance with the applicable provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder).

 

(ff)                              Internal Controls.  Except as described in the Incorporated Documents, the Company maintains effective internal control over financial reporting as defined in Rule 13a-15 under the Exchange Act, and the Company maintains a system of internal accounting control sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific authorization, (B) transactions are recorded as necessary to permit preparation of its financial statements in conformity with accounting principles generally accepted in the United States and to maintain accountability for its assets, (C) access to its assets is permitted only in accordance with management’s general or specific authorization, (D) the recorded accountability for its assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences and (E) the interactive data in eXtensible Business Reporting Language incorporated by reference in the Pricing Disclosure Package and the Final Offering Memorandum fairly presents the information called for in all material respects and is prepared in accordance with the Commission’s rules and guidelines applicable thereto.

 

(gg)                            Disclosure Controls and Procedures.  The Company has established and maintains disclosure controls and procedures (as such term is defined in Rules 13a-15 and 15d-14 under the Exchange Act); such disclosure controls and procedures are designed to ensure that material information relating to the Company and its subsidiaries is made known to the chief executive officer and chief financial officer of the Company by others within the Company or any of its subsidiaries, and such disclosure controls and procedures are reasonably effective to

 

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perform the functions for which they were established subject to the limitations of any such control system; the Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of:  (i) any significant deficiencies or material weaknesses in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize, and report financial data; and (ii) any fraud, whether or not material, that involves management or other employees who have a role in the Company’s internal controls; and since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

 

(hh)                          Compliance with Environmental Laws.  Except as otherwise disclosed in the Offering Memorandum: (i)  neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign law, regulation, order, permit or other requirement 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 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 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 its subsidiaries received any written communication, whether from a governmental authority, citizens group, employee or otherwise, that alleges that the Company or any of its subsidiaries is in violation of any Environmental Law, except, in each case, as would not, individually or in the aggregate, have a Material Adverse Effect; (ii) there is no claim, action or cause of action filed with a court or governmental authority, no investigation with respect to which the Company has received written notice, and no written notice by any person or entity alleging actual or 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”), pending or, to 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, except as would not, individually or in the aggregate, have a Material Adverse Effect; and (iii) to 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 reasonably could result in a violation of any Environmental Law, require expenditures to be incurred pursuant to Environmental Law, except as would not, individually or in the aggregate, have a Material Adverse Effect.

 

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(ii)                                  Independent Petroleum Engineers.  Cawley, Gillespie & Associates Inc., whose reports regarding the Company as of December 31, 2013 and 2014, are referenced in the Offering Memorandum, was, as of December 31, 2013 and 2014, and is, as of the date hereof, an independent petroleum engineer with respect to the Company.  Netherland, Sewell & Associates Inc., whose reports regarding the Company as of December 31, 2012, 2013 and 2014, are referenced in the Offering Memorandum, was, as of December 31, 2012, 2013 and 2014, and is, as of the date hereof, an independent petroleum engineer with respect to the Company.  Lee Keeling and Associates, Inc., whose report as of December 31, 2012 is referenced in the Offering Memorandum, was, as of December 31, 2012, and is, as of the date hereof, an independent petroleum engineer with respect to the Company.  The information underlying the estimates of reserves of the Company and its subsidiaries which was supplied by the Company to Cawley, Gillespie & Associates, Inc., Netherland, Sewell & Associates, Inc. and Lee Keeling and Associates, Inc. for purposes of reviewing the reserve reports and estimates of the Company and preparing the letters (the “Reserve Report Letters”) of Cawley, Gillespie & Associates, Inc., Netherland, Sewell & Associates, Inc. and Lee Keeling and Associates, Inc., including, without limitation, production, costs of operation and development, current prices for production, agreements relating to current and future operations and sales of production, was true and correct in all material respects on the dates such estimates were made and such information was supplied and was prepared in accordance with customary industry practices; estimates of such reserves and present values with respect to the Company, as described in the Offering Memorandum and reflected in the Reserve Report Letters comply in all material respects with the applicable requirements of Regulation S-X and Regulation S-K under the Act.

 

(jj)                                Related Party Transactions.  No relationship, direct or indirect, exists between or among any of the Company or any affiliate of the Company, on the one hand, and any director, officer, member, stockholder, customer or supplier of the Company or any affiliate of the Company, on the other hand, which is required by the Securities Act to be disclosed in a registration statement on Form S-3 which is not so disclosed in the Offering Memorandum.  There are no outstanding loans, advances (except advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company or any affiliate of the Company to or for the benefit of any of the officers or directors of the Company or any affiliate of the Company or any of their respective family members.

 

(kk)                          Lending Relationship.  Except as disclosed in the Offering Memorandum, to its knowledge, the Company (i) does not have any material lending or other relationship with any bank or lending affiliate of any Initial Purchaser and (ii) does not intend to use any of the proceeds from the sale of the Securities hereunder to repay any outstanding debt owed to any affiliate of any Initial Purchaser.

 

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

 

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including contingent obligations, as they mature and (iv) such person does not have unreasonably small capital.

 

(mm)                  No Default in Senior Indebtedness.  No event of default exists under the Existing Credit Facility.

 

(nn)                          Regulation S.  The Company, the Guarantors and their respective affiliates and all persons acting on their behalf (other than the Initial Purchasers, as to whom the Company and the Guarantors make no representation) have complied with and will comply with the offering restrictions requirements of Regulation S in connection with the offering of the Securities outside the United States and, in connection therewith, the Offering Memorandum will contain the disclosure required by Rule 902.  The Company is a “reporting issuer,” as defined in Rule 902 under the Securities Act.

 

(oo)                          No Unlawful Payments; Compliance with Anti-Corruption Law.  Neither the Company nor any of its subsidiaries or affiliates, nor any director, officer, or employee, nor, to the Company’s knowledge, any agent or representative of the Company, or of any of its subsidiaries or affiliates, is aware of or has taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any “government official” (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to influence official action or secure an improper advantage; and the Company, its subsidiaries and affiliates have conducted their businesses in compliance with applicable anti-corruption laws (including the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder) and have instituted and maintain and will continue to maintain policies and procedures designed to promote and achieve compliance with such laws and with the representation and warranty contained herein.

 

(pp)                          Compliance with USA PATRIOT Act and Money Laundering Laws.  The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with all applicable financial recordkeeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of jurisdictions where the Company and its subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company and any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.

 

(qq)                          Compliance with OFAC.

 

(A)  The Company and the Guarantors represent that neither the Company nor any of its subsidiaries (collectively, the “Entity”) or, to the knowledge of the Entity, any director, officer,

 

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employee, agent, affiliate or representative of the Entity, is an individual or entity (“Person”) that is, or is owned or controlled by a Person that is:

 

(1)  the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), nor

 

(2)  located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, North Korea, Sudan and Syria).

 

(B)  The Company represents and covenants that it 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:

 

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

 

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

 

(C)  The Entity represents and covenants that for the past 5 years, it has not knowingly engaged in, is not now knowingly engaged in, and will not engage in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.

 

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

 

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

 

(a)                                 The Securities.  The Company agrees to issue and sell to the Initial Purchasers on the Closing Date, severally and not jointly, all of the Notes, and the Initial Purchasers agree, severally and not jointly, to purchase from the Company and the Guarantors on the Closing Date, the aggregate principal amount of the Notes set forth opposite each Initial Purchaser’s name on Schedule A, at a purchase price of 98.25% of the principal amount thereof plus accrued interest thereon from June 10, 2015 to the Closing Date payable on the basis of the representations, warranties and agreements herein contained, and upon the terms, subject to the conditions thereto, herein set forth.

 

(b)                                 The Closing Date.  Delivery of certificates for the Notes in definitive form to be purchased by the Initial Purchasers and payment therefor shall be made at the offices of Simpson

 

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Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York 10017 (or such other place as may be agreed to by the Company and Barclays Capital Inc.) at 10:00 a.m. New York City time, on June 10, 2015 or such other time and date as Barclays Capital Inc. shall designate by notice to the Company (the time and date of such closing are called the “Closing Date”).  The Company hereby acknowledges that circumstances under which Barclays Capital Inc. may provide notice to postpone the Closing Date as originally scheduled include, but are in no way limited to, any determination by the Company or the Initial Purchasers to recirculate to investors copies of an amended or supplemented Offering Memorandum or a delay as contemplated by the provisions of Section 17 hereof.

 

(c)                                  Delivery of the Securities.  The Company shall deliver the Notes, or cause them to be delivered, to the Representatives through the facilities of the Depositary, for the accounts of the several Initial Purchasers, on the Closing Date, against the irrevocable release of a wire transfer of immediately available funds for the amount of the purchase price therefor.  The certificates for the Notes of each series shall be delivered at the closing to the Trustee, as custodian for the Depositary, each in global form and registered in the name of Cede & Co., as nominee of the Depositary, and each in such principal amount as the Representatives may designate to the Company to reflect sales of the Notes pursuant to Rule 144 and Regulation S.  Time shall be of the essence, and delivery at the time and in the manner specified in this Agreement is a further condition to the obligations of the Initial Purchasers.

 

(d)                                 Initial Purchasers as Qualified Institutional Buyers.  Each Initial Purchaser severally and not jointly represents and warrants to, and agrees with, the Company that it is a “qualified institutional buyer” within the meaning of Rule 144A (a “Qualified Institutional Buyer”).

 

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

 

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

 

(b)                                 Amendments and Supplements to the Final Offering Memorandum and Other Securities Act Matters.  If, prior to the later of (x) the Closing Date and (y) the completion of the

 

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placement of the Securities by the Initial Purchasers with the Subsequent Purchasers, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Pricing Disclosure Package or the Final Offering Memorandum, as then amended or supplemented, in order to make the statements therein, in the light of the circumstances when the Pricing Disclosure Package or the Final Offering Memorandum is delivered to a Subsequent Purchaser, not misleading, or if in the judgment of the Initial Purchasers or counsel for the Initial Purchasers it is otherwise necessary to amend or supplement the Pricing Disclosure Package or the Final Offering Memorandum to comply with law, the Company agrees to promptly prepare (subject to Section 3 hereof) and furnish at its own expense to the Initial Purchasers, amendments or supplements to the Pricing Disclosure Package and the Final Offering Memorandum so that the statements in the Pricing Disclosure Package and the Final Offering Memorandum as so amended or supplemented will not, in the light of the circumstances at the Closing Date and at the time of sale of Securities, be misleading or so that the Pricing Disclosure Package and the Final Offering Memorandum, as amended or supplemented, will comply with all applicable law.

 

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

 

(d)                                 Blue Sky Compliance.  Each of the Company and the Guarantors shall cooperate with the Initial Purchasers and counsel for the Initial Purchasers to qualify or register (or to obtain exemptions from qualifying or registering) all or any part of the Securities for offer and sale under the securities laws of the several states of the United States, the provinces of Canada or any other jurisdictions designated by the Initial Purchasers, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Securities.  None of the Company or any of the Guarantors shall be required to qualify as a foreign corporation or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a foreign corporation.  The Company will advise the Initial Purchasers promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, each of the Company and the Guarantors shall use its best efforts to obtain the withdrawal thereof at the earliest possible moment.

 

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

 

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

 

(g)                                  Additional Issuer Information.  Prior to the completion of the placement of the Securities by the Initial Purchasers with the Subsequent Purchasers, the Company shall file, on a timely basis, with the Commission and the NYSE all reports and documents required to be filed

 

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under Section 13 or 15 of the Exchange Act.  Additionally, at any time when the Company is not subject to Section 13 or 15 of the Exchange Act, for the benefit of holders and beneficial owners from time to time of the Securities, the Company shall furnish, at its expense, upon request, to holders and beneficial owners of Securities and prospective purchasers of Securities information (“Additional Issuer Information”) satisfying the requirements of Rule 144A(d).

 

(h)                                 Agreement Not To Offer or Sell Additional Securities.  During the period of 60 days following the date hereof, the Company will not, without the prior written consent of Barclays Capital Inc. (which consent may be withheld at the sole discretion of Barclays Capital Inc.), 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” or liquidate or decrease a “call equivalent position” within the meaning of Rule 16a-1 under the Exchange Act, or otherwise dispose of or transfer (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by the Company at any time in the future), or announce the offering of, or file (or participate in the filing of) any registration statement under the Securities Act in respect of, any debt securities of the Company or securities exchangeable for or convertible into debt securities of the Company (other than (i) the filing of a universal shelf registration statement or (ii) as contemplated by this Agreement).

 

(i)                                     Future Reports to the Initial Purchasers.  At any time when the Company is not subject to Section 13 or 15 of the Exchange Act and any Securities remain outstanding, the Company will furnish to Barclays Capital Inc.:  (i) as soon as practicable after the end of each fiscal year, copies of the Annual Report of the Company containing the balance sheet of the Company as of the close of such fiscal year and statements of income, stockholders’ equity and cash flows for the year then ended and the opinion thereon of the Company’s independent public or certified public accountants; (ii) as soon as practicable after the filing thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report filed by the Company with the Commission, the Financial Industry Regulatory Authority, Inc. (the “FINRA”) or any securities exchange; and (iii) as soon as available, copies of any report or communication of the Company mailed generally to holders of its capital stock or debt securities (including the holders of the Securities), if, in each case, such documents are not filed with the Commission within the time periods specified by the Commission’s rules and regulations under Section 13 or 15 of the Exchange Act.

 

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

 

(k)                                 No Restricted Resales.  During the period of one year after the Closing Date, the Company will not, and will not permit any of its affiliates (as defined in Rule 144 under the Securities Act) to resell any of the Notes which constitute “restricted securities” under Rule 144 that have been reacquired by any of them.

 

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

 

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

 

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

 

SECTION 4.                                 Payment of Expenses.  Each of the Company and the Guarantors agrees to pay all costs, fees and expenses incurred in connection with the performance of its obligations hereunder and in connection with the transactions contemplated hereby, including, without limitation, (i) all expenses incident to the issuance and delivery of the Securities (including all printing and engraving costs), (ii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Securities to the Initial Purchasers, (iii) all fees and expenses of the Company’s and the Guarantors’ counsel, independent public or certified public accountants and other advisors, (iv) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the Pricing Disclosure Package and the Final Offering Memorandum (including financial statements and exhibits), and all amendments and supplements thereto, this Agreement, the Indenture, the Security Documents, and the Notes and Guarantees, (v) all filing fees, attorneys’ fees and expenses incurred by the Company, the Guarantors or the Initial Purchasers in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Securities for offer and sale under the securities laws of the several states of the United States, the provinces of Canada or other jurisdictions designated by the Initial Purchasers (including, without limitation, the cost of preparing, printing and mailing preliminary and final blue sky or legal investment memoranda and any related supplements to the Pricing Disclosure Package or the Final Offering Memorandum, (vi) the fees and expenses of the Trustee and Collateral Agent, including the fees and disbursements of counsel for the Trustee and Collateral Agent in connection with the Indenture, the Security Documents and the Securities, (vii) any fees payable in connection with the rating of the Securities with the ratings agencies, (viii) any filing fees incident to, and any reasonable fees and disbursements of counsel to the Initial Purchasers in connection with the review by the FINRA, if any, of the terms of the sale of the Securities, (ix) all fees and expenses (including reasonable fees and expenses of counsel) of the Company and the Guarantors in connection with approval of the Securities by the Depositary for “book-entry” transfer, and the performance by the Company and the Guarantors of their respective other obligations under this Agreement, (x) the expenses incident to the “road show” for the offering of the Securities, including the travel and lodging expenses of representatives and officers of the Company, (xi) all

 

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out-of-pocket legal fees, costs and expenses, including filing fees, title fees and search fees, incurred by counsel to the Initial Purchasers in connection with the preparation, negotiation and implementation of the Security Documents, and the creation and perfection of the security interests in the Collateral pursuant to the terms thereof and (xii) any and all title insurance premiums, recording costs and reasonable fees of local counsel to the Company and Guarantors incurred in connection with the Collateral.  Except as provided in this Section 4 and Sections 7, 9 and 10 hereof, the Initial Purchasers shall pay their own expenses, including the fees and disbursements of their counsel.

 

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

 

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

 

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

 

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

 

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

 

(iii)            there shall not have been any change or decrease specified in the letter or letters referred to in paragraph (a) of this Section 5 which is, in the sole judgment of the Representatives, so material and adverse as to make it impractical or inadvisable to

 

22

 

proceed with the offering or delivery of the Notes as contemplated by the Preliminary Offering Memorandum and the Pricing Supplement.

 

(c)                                  Opinions of Counsel for the Company.  On the Closing Date the Initial Purchasers shall have received (i) the favorable opinion and negative assurance statement of Vinson & Elkins L.L.P., counsel for the Company, dated as of such Closing Date, the form of which is attached as Exhibit A-1 and (ii) the favorable opinion of Philip T. Warman, Senior Vice President—General Counsel and Corporate Secretary of the Company, dated as of such Closing Date, the form of which is attached as Exhibit A-2.

 

(d)                                 Opinion of Counsel for the Initial Purchasers.  On the Closing Date the Initial Purchasers shall have received the favorable opinion and negative assurance letter of Simpson Thacher & Bartlett LLP, counsel for the Initial Purchasers, dated as of such Closing Date, with respect to such matters as may be reasonably requested by the Initial Purchasers.

 

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

 

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

 

(ii)                                  the representations, warranties and covenants of the Company and the Guarantors set forth in Section 1 and Section 3 hereof, respectively, were true and correct as of the date hereof and are true and correct as of the Closing Date with the same force and effect as though expressly made on and as of the Closing Date;

 

(iii)                               no event of default exists under the New Credit Facility; and

 

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

 

(f)                                   Engineers’ Comfort Letters.  On each of the date hereof and the Closing Date, the Initial Purchasers shall have received from each of Cawley, Gillespie & Associates, Inc., Netherland, Sewell & Associates, Inc., and Lee Keeling and Associates, Inc., independent petroleum engineers, a letter with respect to the Company dated the date hereof addressed to the Initial Purchasers, in form and substance that is satisfactory to the Representatives.

 

(g)                                  Effectiveness of New Credit Facility. Concurrently with or prior to the Closing Date, all condition precedents to the effectiveness of the New Credit Facility shall have been satisfied and the Company and the Guarantors shall have entered into the New Credit Facility consistent in all material respects with the terms described in the Pricing Disclosure Package and the Offering Memorandum, and the Initial Purchasers shall have received executed copies of the New Credit Facility and all related documentation.

 

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(h)                                 Security Documents. Except as otherwise provided for in this Agreement, the Security Agreement, the Indenture or the other Security Documents, Barclays Capital Inc. and the Collateral Agent shall have received each of the Security Documents, in form and substance satisfactory to the Initial Purchasers and executed and delivered by the Company and the applicable Guarantors, and all other certificates, agreements or instruments necessary to perfect the Collateral Agent’s security interest in all of the Collateral, including but not limited to, to the extent that any capital stock required to be pledged pursuant to the Security Agreement is certificated and required to be delivered thereunder, stock certificates accompanied by instruments of transfer and stock powers undated and endorsed in blank, UCC financing statements in a form that can be filed in the appropriate central filing office (such as the office of a Secretary of State) necessary or, in the reasonable opinion of counsel to the Representatives, desirable to perfect, or continue the perfection of, the Collateral Agent’s security interest in any Collateral granted by the Company and the Guarantors pursuant to the Security Documents, it being understood that with respect to Capital Stock this condition shall be satisfied by the First Lien Agent holding such certificate of Capital Stock as gratuitous bailee for the Collateral Agent.

 

(i)                                     Lien Searches. The Initial Purchasers shall have received the results of recent lien and tax lien certified searches from the appropriate filing office (such as the office of a Secretary of State) of each State where the Company and the Guarantors are incorporated or organized or, in the case of a state tax lien search, from the appropriate county office based on the taxpayer or corporate address of the Company and the Guarantors, and from the United States Patent and Trademark Office and United States Copyright Office, in each case, as reasonably requested by the Initial Purchasers.

 

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

 

If any condition specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Initial Purchasers by notice to the Company at any time on or prior to the Closing Date, which termination shall be without liability on the part of any party to any other party, except that Sections 4, 7, 9 and 10 hereof shall at all times be effective and shall survive such termination.

 

SECTION 6.                                 Post-Closing Actions Relating to Collateral.  Notwithstanding anything to the contrary contained in this Agreement, the Indenture or the Security Documents, the parties hereto acknowledge and agree that the Company and the Guarantors shall be required to take the actions specified in Annex IV hereto as promptly as reasonably practicable, and in any event within the time periods set forth in Annex IV hereto.  The provisions of Annex IV hereto shall be deemed incorporated by reference herein as fully as if set forth herein in their entirety.

 

SECTION 7.                                 Reimbursement of Initial Purchasers’ Expenses.  If this Agreement is terminated by the Initial Purchasers pursuant to Section 5 hereof, including if the sale to the Initial Purchasers of the Securities on the Closing Date is not consummated because of any

 

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refusal, inability or failure on the part of the Company to perform any agreement herein or to comply with any provision hereof, the Company agrees to reimburse the Initial Purchasers, severally, upon demand for all reasonable out-of-pocket expenses that shall have been reasonably incurred by the Initial Purchasers in connection with the proposed purchase and the offering and sale of the Securities, including, without limitation, fees and disbursements of counsel, printing expenses, travel expenses, postage, facsimile and telephone charges.  If this Agreement is terminated pursuant to Section 11 or Section 17 by reason of the default of one or more Initial Purchasers, the Company shall not be obligated to reimburse any defaulting Initial Purchaser on account of those expenses.

 

SECTION 8.                                 Offer, Sale and Resale Procedures.  Each of the Initial Purchasers, on the one hand, and the Company and each of the Guarantors, on the other hand, hereby agree to observe the following procedures in connection with the offer and sale of the Securities:

 

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

 

(B)                               The Securities will be offered by approaching prospective Subsequent Purchasers on an individual basis.  No general solicitation or general advertising (within the meaning of Rule 502 under the Securities Act) will be used in the United States in connection with the offering of the Securities.

 

(C)                               Upon original issuance by the Company, and until such time as the same is no longer required under the applicable requirements of the Securities Act, the Notes (and all securities issued in exchange therefor or in substitution thereof) shall bear the legend specified in Exhibit C to the Indenture.

 

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

 

SECTION 9.                                 Indemnification.

 

(a)                                 Indemnification of the Initial Purchasers.  Each of the Company and the Guarantors, jointly and severally, agrees to indemnify and hold harmless each Initial Purchaser, its directors, officers and employees, and each person, if any, who controls any Initial Purchaser within the meaning of the Securities Act and the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Initial Purchaser, director, officer, employee or controlling person may become subject, under the Securities Act, the Exchange Act or other

 

25

 

federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Company), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, Pricing Disclosure Package, any Company Additional Written Communication or other press release issued by the Company in connection with the offering of the Securities (other than any press release issued by the Company pursuant to Rule 135c under the Securities Act) or the Final Offering Memorandum (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and to reimburse each Initial Purchaser and each such director, officer, employee or controlling person for any and all expenses (including the fees and disbursements of counsel chosen by Barclays Capital Inc.) as such expenses are reasonably incurred by such Initial Purchaser or such director, officer, employee or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the foregoing indemnity agreement shall not apply 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 Initial Purchasers through the Representatives expressly for use in the Preliminary Offering Memorandum, Pricing Disclosure Package, any Company Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto).  The indemnity agreement set forth in this Section 9(a) shall be in addition to any liabilities that the Company may otherwise have.

 

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

 

26

 

expenses (including the fees and disbursements of counsel) as such expenses are reasonably incurred by the Company, any Guarantor or such director or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action.  Each of the Company and the Guarantors hereby acknowledges that the only information that the Initial Purchasers have furnished to the Company expressly for use in the Preliminary Offering Memorandum, Pricing Disclosure Package, any Company Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto) are the statements set forth in the third paragraph under the caption “Plan of Distribution,”  the third and fourth sentences under the caption “Plan of Distribution—New Issue of Notes”  and first and second paragraphs under the caption “Plan of Distribution—Over-Allotment, Stabilizing and Related Transactions” in the Preliminary Offering Memorandum and the Final Offering Memorandum.  The indemnity agreement set forth in this Section 9(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 9 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 9, notify the indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party for contribution or otherwise than under the indemnity agreement contained in this Section 9 or to the extent it is not materially prejudiced as a proximate result of such failure.  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; 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 defenses available to such indemnified party that are different from or additional to those available to any 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 9 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless 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 (Barclays Capital Inc. in the case of Sections 9(b) and 10 hereof), representing the indemnified parties who are parties to such action).

 

(d)                                 Settlements.  The indemnifying party under this Section 9 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such

 

27

 

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

 

SECTION 10.                          Contribution.  If the indemnification provided for in Section 9 hereof is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.  The relative benefits received by the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company, and the total discount received by the Initial Purchasers bear to the aggregate initial offering price of the Securities.  The relative fault of the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact or any such inaccurate or alleged inaccurate representation or warranty relates to information supplied by the Company and the Guarantors, on the one hand, or the Initial Purchasers, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or inaccuracy.

 

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 9 hereof, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.  The provisions set forth in Section 9 hereof with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 10; provided, however, that no additional notice shall be required with respect to any action for which notice has been given under Section 9 hereof for purposes of indemnification.

 

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The Company, the Guarantors and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 10 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 10.

 

Notwithstanding the provisions of this Section 10, no Initial Purchaser shall be required to contribute any amount in excess of the discount received by such Initial Purchaser in connection with the Securities distributed by it.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11 of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The Initial Purchasers’ obligations to contribute pursuant to this Section 10 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 10, each director, officer and employee of an Initial Purchaser and each person, if any, who controls an Initial Purchaser within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as such Initial Purchaser, and each director of the Company or any Guarantor, and each person, if any, who controls the Company or any Guarantor within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as the Company and the Guarantors.

 

SECTION 11.                          Termination of this Agreement. Prior to the Closing Date, this Agreement may be terminated by the Representatives by notice given to the Company if at any time (i) trading in securities generally on either the New York Stock Exchange shall have been suspended or materially limited, or minimum or maximum prices shall have been generally established on any of such stock exchanges by the Commission or the FINRA, or trading of any securities issued or guaranteed by the Company or any of the Guarantors shall have been suspended on any exchange or in any over-the-counter market; (ii) a general banking moratorium shall have been declared by any federal or New York authority or a material disruption in commercial banking or securities settlement or clearance services in the United States has occurred; or (iii) there shall have occurred any outbreak or escalation of national or international hostilities or any crisis or calamity, or any change in the United States or international financial markets, or any substantial change or development involving a prospective substantial change in United States’ or international political, financial or economic conditions, as in the judgment of the Representatives is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities in the manner and on the terms described in the Final Offering Memorandum or to enforce contracts for the sale of securities.

 

SECTION 12.                          Representations and Indemnities to Survive Delivery.  The respective indemnities, agreements, representations, warranties and other statements of the Company, the Guarantors, their respective officers and the several Initial Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Initial Purchaser, the Company, any Guarantor or any of their partners, officers or directors or any controlling person, as the case may be, and will survive delivery of and payment for the Securities sold hereunder and any termination of this Agreement.

 

SECTION 13.                          Notices.  All communications hereunder shall be in writing and shall be mailed, hand delivered, couriered or facsimiled and confirmed to the parties hereto as follows:

 

29

 

If to the Initial Purchasers:

 

Barclays Capital Inc.
 745 Seventh Avenue

New York, New York 10019

Facsimile:  646-834-8133

Attention: Syndicate Registration

 

with a copy to:

 

Simpson Thacher & Bartlett LLP

425 Lexington Avenue, 9th Floor

New York, New York 10017

Facsimile:  212-455-2502

Attention: Kenneth Wallach

 

If to the Company or the Guarantors:

 

SandRidge Energy, Inc.
 123 Robert S. Kerr Avenue
 Oklahoma City, Oklahoma 73102
 Facsimile:  405-429-5983
 Attention: General Counsel

 

with a copy to:

 

Vinson & Elkins L.L.P.

1001 Fannin Street, Suite 2500

Houston, Texas 77002

Facsimile:  713-615-5139

Attention: Jim Prince

 

Any party hereto may change the address or facsimile number 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 17 hereof, and to the benefit of the indemnified parties referred to in Sections 9 and 10 hereof, and in each case their respective successors, and no other person will have any right or obligation hereunder.  The term “successors” shall not include any Subsequent Purchaser of other purchaser of the Securities 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

 

30

 

be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

 

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

 

SECTION 17.                          Default of One or More of the Several Initial Purchasers.  If any one or more of the several Initial Purchasers shall fail or refuse to purchase Securities that it or they have agreed to purchase hereunder on the Closing Date, and the aggregate number of Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase does not exceed 10% of the aggregate number of the Securities to be purchased on such date, the other Initial Purchasers shall be obligated, severally, in the proportions that the number of Securities set forth opposite their respective names on Schedule A bears to the aggregate number of Securities set forth opposite the names of all such non-defaulting Initial Purchasers, or in such other proportions as may be specified by the Initial Purchasers with the consent of the non-defaulting Initial Purchasers, to purchase the Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase on the Closing Date.  If any one or more of the Initial Purchasers shall fail or refuse to purchase Securities and the aggregate number of Securities with respect to which such default occurs exceeds 10% of the aggregate number of Securities to be purchased on the Closing Date, and arrangements satisfactory to the Initial Purchasers and the Company for the purchase of such Securities are not made within 48 hours after such default, this Agreement shall terminate without liability of any party to any other party except that the provisions of Sections 4, 7, 9 and 10 hereof shall at all times be effective and shall survive such termination.  In any such case either the Initial Purchasers or the Company shall have the right to postpone the Closing Date, as the case may be, but in no event for longer than seven days in order that the required changes, if any, to the Final Offering Memorandum or any other documents or arrangements may be effected.

 

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

 

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

 

31

 

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

 

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

 

SECTION 19.                          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, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit.  The section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.

 

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

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
SANDRIDGE   ENERGY, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Eddie M. LeBlanc
    
	
 
    	
 
    	
Name:   
    	
Eddie   M. LeBlanc
    
	
 
    	
 
    	
Title:   
    	
Executive   Vice President and
    
	
 
    	
 
    	
 
    	
Chief   Financial Officer
    

 

SANDRIDGE OPERATING COMPANY

INTEGRA ENERGY, L.L.C.
 LARIAT SERVICES, INC.
  SANDRIDGE EXPLORATION AND PRODUCTION, LLC

SANDRIDGE MIDSTREAM, INC.

SANDRIDGE HOLDINGS, INC.

SANDRIDGE GATHERING LLC

 

 

	
By:
    	
/s/   Eddie M. LeBlanc
    	
 
    
	
 
    	
Name:   
    	
Eddie   M. LeBlanc
    	
 
    
	
 
    	
Title:
    	
Executive   Vice President and
    	
 
    
	
 
    	
 
    	
Chief   Financial Officer
    	
 
    

 

 

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

 

BARCLAYS CAPITAL INC.

MORGAN STANLEY & CO. LLC

RBC CAPITAL MARKETS, LLC

Acting on behalf of themselves
 and as the Representatives of
 the several Initial Purchasers

 

	
BARCLAYS   CAPITAL INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Paul Cugno
    	
 
    
	
 
    	
Name:   Paul Cugno
    	
 
    
	
 
    	
Title:     Managing Director
    	
 
    
	
 
    	
 
    
	
MORGAN   STANLEY & CO. LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Henrik Sandstrom
    	
 
    
	
 
    	
Name:   Henrik Sandstrom
    	
 
    
	
 
    	
Title:     Authorized Signatory
    	
 
    
	
 
    	
 
    
	
RBC   CAPITAL MARKETS, LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Steve Pedone
    	
 
    
	
 
    	
Name:   Steve Pedone
    	
 
    
	
 
    	
Title:     Managing Director
    	
 
    

 

 

SCHEDULE A

 

	
Initial Purchasers
    	
 
    	
Aggregate Principal 
   Amount of the Notes 
   to be Purchased
    	
 
    
	
Barclays Capital Inc. 
    	
 
    	
$
    	
260,418,000
    	
 
    
	
Morgan Stanley & Co. LLC 
    	
 
    	
$
    	
260,416,000
    	
 
    
	
RBC Capital Markets, LLC 
    	
 
    	
$
    	
260,416,000
    	
 
    
	
Capital One Securities, Inc. 
    	
 
    	
$
    	
93,750,000
    	
 
    
	
Natixis Securities Americas LLC 
    	
 
    	
$
    	
93,750,000
    	
 
    
	
RBS Securities Inc. 
    	
 
    	
$
    	
93,750,000
    	
 
    
	
SunTrust Robinson Humphrey, Inc. 
    	
 
    	
$
    	
93,750,000
    	
 
    
	
UBS Securities LLC 
    	
 
    	
$
    	
93,750,000
    	
 
    
	
Total 
    	
 
    	
$
    	
1,250,000,000
    	
 
    

 

 

SCHEDULE B

 

	
Subsidiary
    	
 
    	
SandRidge Ownership Interest
    	
 
    
	
Cholla Pipeline, L.P.
    	
 
    	
98.71430
    	
%
    
	
Sagebrush Pipeline, LLC
    	
 
    	
73.80881
    	
%
    

 

In addition, SandRidge owns equity interests in the following entities: (i) 50% of the Partnership interests of Grey Ranch Plant. L.P., (ii) approximately 26.89% of the trust units of SandRidge Mississippian Trust I, (iii) approximately 25.00% of the trust units of SandRidge Permian Trust and (iv) approximately 37.56% of the trust units of SandRidge Mississippian Trust II.

 

Schedule B-1

 

SCHEDULE C

 

Company Additional Written Communications

 

1.  Senior Secured Second Lien Notes Investor Presentation, dated May 2015

2. Draft of the Description of Notes, dated May 26, 2015

 

Schedule C-1

 

EXHIBIT A-1

 

FORM OF OPINION OF ISSUER’S COUNSEL

 

Opinion of Vinson & Elkins L.L.P., counsel for the Company, to be delivered pursuant to Section 5(c)(i) of the Purchase Agreement.

 

(1)                                 The Company is a corporation, validly existing and in good standing under the laws of the State of Delaware. The Company has all corporate power and authority necessary for it to own or hold its properties and to conduct its business as described in the Pricing Disclosure Package and the Final Offering Memorandum and to enter into and perform its obligations under the Purchase Agreement, and the Note Documents.

 

(2)                                 Each Guarantor is validly existing as a corporation or limited liability company, as applicable, in good standing under the laws of the jurisdiction of its incorporation or formation, as applicable, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Pricing Disclosure Package and the Final Offering Memorandum.

 

(3)                                 Each of the Company and Guarantors has duly authorized, executed and delivered the Purchase Agreement.

 

(4)                                 Each of the Company and Guarantors has duly authorized, executed and delivered each of the other Note Documents to which it is a party, and, assuming due authorization, execution and delivery by the other parties thereto, each of the Note Documents constitute the valid and binding obligation of the Company and each Guarantor, as applicable, enforceable against the Company and each Guarantor, as applicable, in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

 

(5)                                 The Company has duly authorized, executed and delivered the Notes, and, assuming the Trustee has duly authenticated the Notes, each of the Notes constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

 

(6)                                 Each Guarantor has duly authorized the Guarantees.  Assuming the Trustee has duly authenticated the Notes, each of the Guarantees constitutes the valid and binding obligation of each Guarantor, enforceable against such Guarantor in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles.  In giving this opinion, such counsel need not express any opinion as to the existence or adequacy of consideration received by the Guarantors for the Guarantees.

 

Schedule C-1

 

(7)                                 The Notes, the Guarantees, the Indenture, the Intercreditor Agreement and the Security Documents conform in all material respects as to legal matters to the descriptions thereof contained in the Pricing Disclosure Package and the Final Offering Memorandum.

 

(8)                                 The statements in the Pricing Disclosure Package and the Final Offering Memorandum under the caption “Certain U.S. Federal Income Tax Considerations,” insofar as such statements constitute summaries of the laws, regulations, legal matters, agreements or other legal documents referred to therein, are accurate in all material respects and fairly summarize the matters referred to therein.

 

(9)                                 The execution and delivery by the Company and each Guarantor of the Purchase Agreement, the Notes the Indenture and the Security Documents by the Company and each Guarantor, as applicable (including, but not limited to, the filing of any applicable fixture filings relating to the real property covered by the Mortgages or the filing of any applicable financing statements pursuant to the Security Agreement), do not, and the performance by the Company and each Guarantor of its obligations thereunder will not (a) violate the provisions of the Company’s Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws or the organizational documents of any of the Guarantors, (b) result in the any violation by the Company or and Guarantor of any Applicable Law (as defined below) or (c) breach or result in a default under the Applicable Contracts (as defined below).

 

“Applicable Laws” means (i) with respect to the Company and Sandridge Holdings, Inc. the Delaware General Corporation Law and, to the extent provided in paragraph 15 below, the Uniform Commercial Code as in effect in the State of Delaware (the “Delaware UCC”), (ii) with respect to Sandridge Exploration and Production, LLC and Sandridge Gathering, LLC, The Delaware Limited Liability Company Act and, to the extent provided in paragraph 15 below, the Delaware UCC, and (iii) those laws of the States of New York and Texas and the United States of America and the rules and regulations adopted thereunder that, in our experience, are normally applicable to transactions of the type contemplated by the Opinion Documents.  Furthermore, the term “Applicable Laws” does not include, and we express no opinion with regard to (a) any state or federal laws, rules or regulations relating to:  (i) pollution or protection of the environment; (ii) zoning, land use, building or construction; (iii) occupational, safety and health or other similar matters; (iv) labor and employee rights and benefits, including, without limitation, the Employee Retirement Income Security Act of 1974, as amended; (v) the regulation of energy or utilities; (vi) antitrust and trade regulation; (vii) tax; (viii) except as specifically set forth in paragraphs 10 and 16 below, securities: (ix) corrupt practices, including, without limitation, the Foreign Corrupt Practices Act of 1977; (x) copyrights, patents and trademarks; (xi) communication, telecommunication or similar matters; (xii) the USA Patriot Act of 2001 and the rules, regulations and policies promulgated thereunder, or any foreign assets control regulations of the United States Treasury Department or any enabling legislation or orders relating thereto; and (xiii) the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and (b) any

 

Exhibit A-1-2

 

laws, rules or regulations of any county, municipality or similar political subdivision or any agency or instrumentality thereof.

 

“Applicable Contracts” means the agreements listed on Schedule I attached hereto.(1)

 

(10)                          Neither the Company nor any of the Guarantors is or, after giving effect to the offering and sale of the Notes and the application of the proceeds thereof as described in the Final Offering Memorandum, will be an “investment company” as defined in the Investment Company Act of 1940, as amended.

 

(11)                          No Governmental Approval (as defined below) that has not been obtained or taken and is not in full force and effect, is required to be obtained or taken by the Company or any Guarantor to authorize, or is required in connection with the execution and delivery by the Company or any Guarantor of the Purchase Agreement, the Notes the Indenture and the Security Documents or the performance by the Company or any of the Guarantors of its obligations thereunder except (a) the filing of the UCC Financing Statements in the offices referred to in paragraph 15 below and (b) Governmental Approvals not required to consummate the transactions occurring on the date hereof but required to be obtained or made after the date of this opinion letter to enable the Company and the Guarantors to comply with requirements of Applicable Law including those required to maintain existence and good standing of the Company and the Guarantors.

 

“Governmental Approvals” means any consent, approval, license or authorization of, or filing, recording or registration with, any Governmental Authority (as defined below) pursuant to any Applicable Laws (as defined in paragraph 9 above).

 

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

(12)  The Security Agreement constitutes the valid and binding obligations of the Company and the Guarantors enforceable against the Company and the Guarantors in accordance with its terms under the laws of the State of New York.

 

(13) The provisions of the Security Agreement are effective to create in favor of the Collateral Trustee for the benefit of the Secured Parties (as defined therein) a valid security interest in the Company’s and each Guarantor’s right, title and interest in and to that portion of

 

(1)  To cover the existing unsecured notes indentures and the New Credit Facility.

 

Exhibit A-1-3

 

the Collateral (as defined therein) in which a security interest may be created under Article 9 of the Uniform Commercial Code as in effect in the State of New York (the “Article 9 Collateral”).

 

(14)                          With respect to that portion of the Article 9 Collateral consisting of the certificates representing the shares or units identified in Schedule II hereto (the “Pledged Securities”), upon the Priority Lien Agent (as defined in the Intercreditor Agreement) taking possession in the State of New York of the Pledged Securities and the execution and delivery by the parties thereto of the Intercreditor Agreement, the security interest of the Collateral Trustee therein is a perfected security interest under the Uniform Commercial Code as in effect in New York.

 

(15)                          To the extent the filing of a financing statement can be effective to perfect a security interest in the Company’s Article 9 Collateral under the Delaware UCC or the Uniform Commercial Code as in effect in the State of Texas (the “Texas UCC”), the security interest in favor of the Collateral Trustee in the portion of the Company’s Article 9 Collateral described in the UCC Financing Statements will be perfected upon the proper filing of such UCC Financing Statement in the office of the Secretary of State of the States of Delaware or Texas, as applicable.  For purposes of our opinion set forth in this paragraph 15, we have based such opinion solely on our review of the generally available compilations of Article 9 of the Delaware UCC and the Texas UCC as in effect on the date hereof and we have not reviewed any other laws of the State of Delaware or the State of Texas or retained or relied on any opinion or advice of Delaware counsel.

 

(16)                          Based upon and assuming the accuracy of the representations and warranties in the Purchase Agreement, the compliance with the conditions and covenants in the Purchase Agreement, and the compliance with the procedures set forth in the Final Offering Memorandum, it is not necessary in connection with (a) the issuance and sale to the Initial Purchasers of the Notes pursuant to the Purchase Agreement or (b) the initial resale of the Notes by the Initial Purchasers in the manner contemplated by the Purchase Agreement and the Final Offering Memorandum pursuant to Rule 144A under the Securities Act, to register the Notes under the Securities Act or to qualify an indenture under the Trust Indenture Act of 1939.

 

In addition, such counsel shall state that, as counsel to the Company, they reviewed the Pricing Disclosure Package and the Final Offering Memorandum and participated in discussions with representatives of the Initial Purchasers and those of the Company, the Guarantors, counsel to the Initial Purchasers and the Company’s independent registered public accounting firm and independent reserve engineers.  On the basis of the information which was reviewed by them in the course of the performance of the services referred to above, considered in the light of such counsel’s understanding of the applicable law and the experience such counsel has gained through their practice under the Federal securities laws, such counsel shall confirm that nothing which came to their attention in the course of such review has caused such counsel to believe that: (a) the Pricing Disclosure Package, as of 4:30 p.m. New York time on May 28, 2015, contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (b) the Final Offering Memorandum, as of its date or as of the date hereof,

 

Exhibit A-1-4

 

contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that in each case such counsel need not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Pricing Disclosure Package or the Final Offering Memorandum, except as specified in Paragraphs (7) and (8) above.  Also, such counsel need not express any opinion or belief as to the financial statements, including the notes thereto, and the financial statement schedules and other financial data and the oil and gas reserve and production data included or incorporated by reference in the Pricing Disclosure Package or the Final Offering Memorandum.

 

Exhibit A-1-5

 

EXHIBIT A-2

 

FORM OF OPINION OF COMPANY’S COUNSEL

 

Opinion of Philip T. Warman, Senior Vice President—General Counsel and Corporate Secretary for the Company to be delivered pursuant to Section 5(c)(ii) of the Purchase Agreement.

 

(1)                                 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, singly or in the aggregate, have a Material Adverse Effect.

 

(2)                                 Each Guarantor is duly qualified as a foreign corporation or limited liability company, as applicable, to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, have a Material Adverse Effect.

 

(3)                                 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, to such counsel’s knowledge, 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, could have a Material Adverse Effect.

 

(4)                                 Except as disclosed in the Pricing Disclosure Package, 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) any such action, suit or proceeding, if so determined adversely, would reasonably be expected to, singly or in the aggregate, have a Material Adverse Effect or adversely affect the consummation of the transactions contemplated by this Agreement.  After due inquiry, such counsel does not know of any existing or, to the best of such counsel’s knowledge, threatened or pending, material labor dispute with the employees of the Company or any of its subsidiaries.

 

(5)                                 To the best knowledge of such counsel, neither the Company nor any subsidiary is in violation of its charter, by-laws or other organizational document, as the case may be.

 

In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the General Corporation Law of the State of Delaware or the federal law of the United States or the laws of the State of Texas, to the extent

 

Exhibit A-2-1

 

such counsel deems proper and specified in such opinion, upon the opinion (which shall be dated the Closing Date, shall be satisfactory in form and substance to the Initial Purchasers, 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 such counsel believes to be reliable and who is satisfactory to counsel for the Initial Purchasers; and (B) as to matters of fact, to the extent such counsel deems proper, on certificates of responsible officers of the Company and public officials.

 

Exhibit A-2-2

 

EXHIBIT B

 

PRICING SUPPLEMENT

 

 

SandRidge Energy, Inc.

May 28, 2015

 

This Pricing Supplement is qualified in its entirety by reference to the Preliminary Offering Memorandum dated May 28, 2015 (the “Preliminary Offering Memorandum”).  The information in this Pricing Supplement supplements the Preliminary Offering Memorandum and updates and supersedes the information in the Preliminary Offering Memorandum to the extent it is inconsistent with the information in the Preliminary Offering Memorandum. Terms used and not defined herein have the meanings assigned in the Preliminary Offering Memorandum.

 

The Notes have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction and are being offered only to persons reasonably believed to be “qualified institutional buyers” pursuant to Rule 144A under the Securities Act and outside the United States to non-U.S. persons in accordance with Regulation S under the Securities Act.

 

	
Issuer:
    	
 
    	
SandRidge   Energy, Inc.
    
	
 
    	
 
    	
 
    
	
Principal Amount:
    	
 
    	
$1,250,000,000
    
	
 
    	
 
    	
 
    
	
Gross Proceeds:
    	
 
    	
$1,250,000,000
    
	
 
    	
 
    	
 
    
	
Net Proceeds:
    	
 
    	
Approximately   $1,226 million (after deducting the initial purchasers’ discounts and   estimated expenses)
    
	
 
    	
 
    	
 
    
	
Title of Securities:
    	
 
    	
8.75%   Senior Secured Notes due 2020 (the “Notes”)
    
	
 
    	
 
    	
 
    
	
Final Maturity Date:
    	
 
    	
June 1,   2020; provided, however,   that if on October 15, 2019, the aggregate outstanding principal amount   of the Issuer’s 8.75% senior notes due 2020 that shall not have been   cancelled or retired as a result of a redemption, repurchase or other   acquisition or shall have not otherwise been discharged or defeased exceeds   $100.0 million, the Notes will mature on October 16, 2019
    
	
 
    	
 
    	
 
    
	
Issue Price:
    	
 
    	
100%,   plus accrued interest, if any, from June 10, 2015
    
	
 
    	
 
    	
 
    
	
Coupon:
    	
 
    	
8.75%
    

 

Exhibit B-1

 

	
Spread to Benchmark Treasury:
    	
 
    	
+723   basis points
    
	
 
    	
 
    	
 
    
	
Benchmark Treasury:
    	
 
    	
UST   1.375% due May 31, 2020
    
	
 
    	
 
    	
 
    
	
Yield to Maturity:
    	
 
    	
8.751%
    
	
 
    	
 
    	
 
    
	
Interest Payment Dates:
    	
 
    	
June 1   and December 1, beginning on December 1, 2015
    
	
 
    	
 
    	
 
    
	
Record Dates:
    	
 
    	
May 15   and November 15
    
	
 
    	
 
    	
 
    
	
Optional Redemption:
    	
 
    	
Prior   to June 1, 2017, the Notes will be redeemable by the Issuer, in whole or   in part, at a price equal to 100% of the principal amount thereof, plus the   “Applicable Premium” as described in the Preliminary Offering Memorandum,   plus accrued and unpaid interest, if any, to the date of redemption.  In addition, the Notes will be redeemable   by the Issuer, in whole or in part, on or after June 1, 2017 at the   redemption prices (expressed as percentages of the principal amount thereof)   set forth below, plus accrued and unpaid interest, if any, to the applicable   date of redemption, on June 1 of the years set forth below:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Year
    	
 
    	
Price
    	
 
    	
 
    
	
 
    	
 
    	
2017
    	
 
    	
104.375
    	
%
    	
 
    
	
 
    	
 
    	
2018
    	
 
    	
102.188
    	
%
    	
 
    
	
 
    	
 
    	
2019 and thereafter
    	
 
    	
100.000
    	
%
    	
 
    
	
 
    	
 
    	
 
    
	
Optional Redemption with Equity Proceeds:
    	
 
    	
Up   to 35% at 108.750% prior to June 1, 2017
    
	
 
    	
 
    	
 
    
	
Change of control:
    	
 
    	
Putable   at 101% of principal plus accrued and unpaid interest
    
	
 
    	
 
    	
 
    
	
Joint Global Coordinators:
    	
 
    	
Barclays Capital   Inc.

Morgan Stanley &   Co. LLC

RBC Capital   Markets, LLC
    
	
 
    	
 
    	
 
    
	
Joint Book-Runners:
    	
 
    	
Capital One   Securities Inc.
   Natixis Securities Americas LLC
   RBS Securities Inc.

SunTrust Robinson   Humphrey, Inc.
   UBS Securities LLC
    
	
 
    	
 
    	
 
    
	
Trade Date:
    	
 
    	
May 28,   2015
    
	
 
    	
 
    	
 
    
	
Settlement Date:
    	
 
    	
June 10,   2015 (T+9)

 

We   expect that delivery of the Notes will be made against payment therefor on or   about the ninth business day following the date of confirmation of orders   with respect to the Notes (this settlement cycle being referred to as “T+9”).   Under Rule 15c6-1 of the Securities Exchange Age of 1934, as amended,   trades in the secondary market generally are required to settle in three   business days, unless the parties to any such trade expressly agree   otherwise. Accordingly, purchasers who wish to trade the notes on the date of   pricing of the notes or the next succeeding five business days will be   required, by virtue of the fact that the notes initially will settle in T+9,   to specify an alternate settlement cycle at the time of any such trade to   prevent a failed settlement and should consult their own advisors.
    

 

Exhibit B-2

 

	
Denominations:
    	
 
    	
$2,000   and integral multiples of $1,000 in excess thereof
    
	
 
    	
 
    	
 
    
	
Ratings*:
    	
 
    	
Moody’s:   B1
   S&P: B
    
	
 
    	
 
    	
 
    
	
Distribution:
    	
 
    	
144A   and Regulation S without registration rights
    
	
 
    	
 
    	
 
    
	
CUSIPS and ISIN
   Numbers:
    	
 
    	
144A   Notes:
   CUSIP: 80007PAU3
   ISIN: US80007PAU30
    	
Reg   S Notes:
   CUSIP: U79864AH4
   ISIN: USU79864AH45
    

 

Changes from Preliminary Offering Memorandum:

 

The Issuer has increased the offering size of the notes from $1,000,000,000 aggregate principal amount to $1,250,000,000 aggregate principal amount; all corresponding references in the Preliminary Offering Memorandum relating to the aggregate principal amount of the notes offered are hereby updated and all references in the Preliminary Offering Memorandum to the amount of outstanding indebtedness as adjusted for this offering of notes are hereby increased by the corresponding amount. The additional net proceeds will be used for general corporate purposes.

 

Other information (including financial information) presented in the Preliminary Offering Memorandum is deemed to have changed to the extent affected by the changes described herein.

 

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

 

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

 

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

 

*A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.

 

Any disclaimers or other notices that may appear below are not applicable to this communication and should be disregarded. Such disclaimers or other notices were automatically generated as a result of this communication being sent via Bloomberg email or another communication system.

 

Exhibit B-3

 

ANNEX I

 

Resale Pursuant to Regulation S or Rule 144A.

 

Each Initial Purchaser understands that:

 

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

 

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

 

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

 

 

ANNEX II

 

UCC Financing Statements Jurisdictions

 

·                  Delaware, Texas, New Mexico, Oklahoma, Louisiana and Kansas

 

 

ANNEX III

 

Jurisdictions of Mortgaged Property

 

·                  New Mexico, Oklahoma, Louisiana and Kansas

 

 

ANNEX IV

 

Post-Closing Deliverables

 

Within 60 days after the Closing Date, for the Mortgaged Properties, the Representatives shall have received the following documents or evidence of completion of the following:

 

(1)                                 Mortgages.  A second priority Mortgage (or deed of trust or deed to secure debt, as applicable), in the form and substance required under the Security Documents and reasonably satisfactory to the Representatives, with respect to each of the Mortgaged Properties executed and delivered by the Company or Guarantor party thereto.

 

(2)                                 UCC Financing Statements. Properly filed UCC Financing Statements for the Mortgaged Properties in each of the jurisdictions listed on Annex III hereto.

 

(3)                                 Opinions of Local Counsel. A written opinion of local counsel to the Company licensed in the jurisdictions where each of the Mortgaged Properties are located shall be furnished to the Collateral Trustee, at the request of the Company, addressed to the Collateral Trustee (which the Company shall use commercially reasonable efforts to cause such counsel to include in such opinion a provision for the Initial Purchasers’ complete reliance thereon), with respect to the Mortgages and the related UCC financing statements, covering the compliance as to form, proper recordation, perfection, and priority of the liens created thereby and the enforceability of the Mortgages in form and substance that is satisfactory to the Collateral Trustee.

 

(4)                                 Additional Documents. Any other documents required to be delivered to perfect the second-priority lien on the Collateral as contemplated by the Security Documents by no later than the dates required under the applicable Security Documents.

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