Document:

exv10w1

Exhibit 10.1

EXECUTION COPY

      

JEFFERIES GROUP, INC.

(a Delaware corporation)

5.125% Senior Notes due 2018

PURCHASE AGREEMENT

Dated: April 8, 2011

      

 

 

JEFFERIES GROUP, INC.

(a Delaware corporation)

$800,000,000

5.125% Senior Notes due 2018

PURCHASE AGREEMENT

April 8, 2011

Jefferies & Company, Inc.

Citigroup Global Markets Inc.

J.P. Morgan Securities LLC

Natixis Securities North America Inc.

BMO Capital Markets Corp.

BNY Mellon Capital Markets, LLC

Deutsche Bank Securities Inc.

Rabo Securities USA, Inc.

SunTrust Robinson Humphrey, Inc.

Keefe, Bruyette & Woods, Inc.

BNP Paribas Securities Corp.

HSBC Securities (USA) Inc.

JMP Securities LLC

Oppenheimer & Co. Inc.

U.S. Bancorp Investments, Inc.

Rochdale Securities LLC

Sandler O’Neill & Partners, L.P.

c/o Jefferies & Company, Inc.

      520 Madison Avenue, 12th Floor

      New York, New York 10022

Ladies and Gentlemen:

     Jefferies Group, Inc., a Delaware corporation (the “Company”), confirms its agreement
with Jefferies & Company, Inc. and each of the other Underwriters named in Schedule A hereto
(collectively, the “Underwriters,” which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Jefferies & Company, Inc. is
acting as representative (in such capacity, the “Representative”), with respect to the
issue and sale by the Company and the purchase by the Underwriters, acting severally and not
jointly, of the respective principal amounts set forth in said Schedule A of $800,000,000 aggregate
principal amount of the Company’s 5.125% Senior Notes due 2018 (the “Notes,” referred to
herein as the “Securities”). The Securities are to be issued pursuant to an Indenture
dated as of March 12, 2002, as amended by the First Supplemental Indenture dated as of July 15,
2003 (as so amended, the “Indenture”), between the Company and The Bank of New York, as
trustee (the “Trustee”). The term “Indenture,” as used herein, includes the Officer’s
Certificate (as defined in the Indenture) establishing the form and terms of the Securities
pursuant to Section 3.01 of the Indenture.

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     The Company understands that the Underwriters propose to make a public offering of the
Securities as soon as the Representative deems advisable after this Agreement has been executed and
delivered.

     The Company has filed with the Securities and Exchange Commission (the “Commission”)
an automatic shelf registration statement on Form S-3 (No. 333-160214), including the related
preliminary prospectus or prospectuses and post-effective amendment No. 1 thereto, which
registration statement and amendment became effective upon filing under Rule 462(e) of the rules
and regulations of the Commission (the “1933 Act Regulations”) under the Securities Act of
1933, as amended (the “1933 Act”). Such registration statement, as amended, covers the
registration of the Securities under the 1933 Act. Promptly after execution and delivery of this
Agreement, the Company will prepare and file a prospectus in accordance with the provisions of Rule
430B (“Rule 430B”) of the 1933 Act Regulations and paragraph (b) of Rule 424 (“Rule
424(b)”) of the 1933 Act Regulations. Any information included in such prospectus that was
omitted from such registration statement at the time it became effective but that is deemed to be
part of and included in such registration statement pursuant to Rule 430B is referred to as “Rule
430B Information.” Each prospectus used in connection with the offering of the Securities that
omitted Rule 430B Information is herein called a “preliminary prospectus.” Such registration
statement, at any given time, including the amendments thereto to such time, the exhibits and any
schedules thereto at such time, the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the 1933 Act at such time and the documents otherwise deemed to be a part thereof
or included therein by 1933 Act Regulations, is herein called the “Registration Statement.” The
Registration Statement at the time it originally became effective is herein called the “Original
Registration Statement.” The final prospectus in the form first furnished to the Underwriters for
use in connection with the offering of the Securities, including the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at the time of the execution
of this Agreement and any preliminary prospectuses that form a part thereof, is herein called the
“Prospectus.” For purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall
be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system (“EDGAR”).

     All references in this Underwriting Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” (or other references of like import) in
the Registration Statement, Prospectus or preliminary prospectus shall be deemed to mean and
include all such financial statements and schedules and other information which is incorporated by
reference in or otherwise deemed by 1933 Act Regulations to be a part of or included in the
Registration Statement, Prospectus or preliminary prospectus, as the case may be, prior to the date
hereof; and all references in this Underwriting Agreement to amendments or supplements to the
Registration Statement, Prospectus or preliminary prospectus shall be deemed to include the filing
of any document under the 1934 Act which is incorporated by reference in or otherwise deemed by
1933 Act Regulations to be a part of or included in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be.

	 	 	SECTION 1. Representations and Warranties.

     (a) Representations and Warranties by the Company. The Company represents and warrants to
each Underwriter as of the date hereof, the Applicable Time referred to in Section 1(a)(i) hereof
and as of the Closing Time referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:

     (i) Status as a Well-Known Seasoned Issuer. (A) At the time of filing the
Original Registration Statement, (B) at the time of the most recent amendment thereto for
the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was
by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of
the 1934 Act or form of

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prospectus), (C) at the time the Company or any person acting on its behalf (within the
meaning, for this clause only, of Rule 163(c) of the 1933 Act Regulations) made any offer
relating to the Securities in reliance on the exemption of Rule 163 of the 1933 Act
Regulations and (D) at the date hereof, the Company was and is a “well-known seasoned
issuer” as defined in Rule 405 of the 1933 Act Regulations (“Rule 405”), including
not having been and not being an “ineligible issuer” as defined in Rule 405. The
Registration Statement is an “automatic shelf registration statement,” as defined in Rule
405, and the Securities, since their registration on the Registration Statement, have been
and remain eligible for registration by the Company on a Rule 405 “automatic shelf
registration statement”. The Company has not received from the Commission any notice
pursuant to Rule 401(g)(2) of the 1933 Act Regulations objecting to the use of the automatic
shelf registration statement form.

At the time of filing the Original Registration Statement, at the earliest time
thereafter that the Company or another offering participant made a bona fide offer (within
the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of the Securities and at the date
hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405.

     (ii) Registration Statement, Prospectus and Disclosure at Time of Sale. The
Original Registration Statement became effective upon filing under Rule 462(e) of the 1933
Act Regulations (“Rule 462(e)”) on June 25, 2009, and the post-effective amendment
thereto also became effective upon filing under Rule 462(e) on October 20, 2009. No stop
order suspending the effectiveness of the Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information with respect to the Registration Statement has
been complied with.

     Neither the Company, nor any person acting on the Company’s behalf (within the meaning,
for this paragraph only, of Rule 163(c) of the 1933 Act Regulations), has made any offer
that is a written communication relating to the Securities prior to the filing of the
Original Registration Statement.

     At the respective times the Original Registration Statement and each amendment thereto
became effective, at each deemed effective date with respect to the Underwriters pursuant to
Rule 430B(f)(2) of the 1933 Act Regulations and at the Closing Time, the Registration
Statement complied and will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the “1939 Act Regulations”), and did not and will not
contain an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that the Company makes no representations or warranties
as to (i) that part of the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the 1939 Act of the Trustee or (ii) the
information contained in or omitted from the Registration Statement or the Prospectus (or
any supplement thereto) in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Underwriter through the Representative
specifically for inclusion in the Registration Statement or the Prospectus (or any
supplement thereto).

     Neither the Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the Closing Time, included
or will include an untrue statement of a material fact or omitted or will omit to state a
material

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fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

     Each preliminary prospectus (including the prospectus or prospectuses filed as part of
the Original Registration Statement or any amendment thereto) complied when so filed in all
material respects with the 1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.

     As of the Applicable Time, neither (x) any Issuer General Use Free Writing
Prospectus(es) (as defined below) issued at or prior to the Applicable Time (as defined
below) and the Statutory Prospectus (as defined below), considered together (collectively,
the “General Disclosure Package”), nor (y) any individual Issuer Limited Use Free
Writing Prospectus, when considered together with the General Disclosure Package, included
any untrue statement of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under which they
were made, not misleading.

     As of the time of the filing of the Final Term Sheet, the General Disclosure Package,
when considered together with the Final Term Sheet (as defined in Section 3(b)), will not
include any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading.

     As used in this subsection and elsewhere in this Agreement:

     “Applicable Time” means 3:40 P.M. (Eastern time) on April 8, 2011 or such other time as
agreed by the Company and the Representative.

     “Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433 of the 1933 Act Regulations (“Rule 433”), relating to the Securities
that (i) is required to be filed with the Commission by the Company, (ii) is a “road show
that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not
required to be filed with the Commission or (iii) is exempt from filing pursuant to Rule
433(d)(5)(i) because it contains a description of the Securities or of the offering that
does not reflect the final terms, in each case in the form filed or required to be filed
with the Commission or, if not required to be filed, in the form retained in the Company’s
records pursuant to Rule 433(g).

     “Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced by its
being specified in Schedule C hereto.

     “Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is not an Issuer General Use Free Writing Prospectus.

     “Statutory Prospectus” as of any time means the prospectus relating to the Securities
that is included in the Registration Statement immediately prior to that time, including any
document incorporated by reference therein and any preliminary or other prospectus deemed to
be a part thereof.

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     Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Securities or until any earlier
date that the issuer notified or notifies the Representative as described in Section 3(e),
did not, does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or the Prospectus,
including any document incorporated by reference therein and any preliminary or other
prospectus deemed to be a part thereof that has not been superseded or modified.

     The representations and warranties in this subsection shall not apply to statements in
or omissions from the Registration Statement, the Prospectus or any Issuer Free Writing
Prospectus made in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representative expressly for use therein.

     (iii) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectus, at the time they
were or hereafter are filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the “1934 Act Regulations”), and, when read together with the
other information in the Prospectus, (a) at the time the Original Registration Statement
became effective, (b) at the earlier of the time the Prospectus was first used and the date
and time of the first contract of sale of Securities in this offering and (c) at the Closing
Time, did not and will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading.

     (iv) No Material Adverse Change. Since the respective dates as of which
information is given in the Registration Statement, the General Disclosure Package and the
Prospectus, except as otherwise stated therein, (A) there has been no material adverse
change in the condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and its subsidiaries
taken as a whole, and (C) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.

     (v) Good Standing of the Company and the Subsidiaries. Each of the Company
and its subsidiaries has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is chartered or organized with
full corporate power and authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and the Company and
Jefferies & Company, Inc., a Delaware corporation (the “Subsidiary”) are in good
standing and duly qualified to do business as foreign corporations under the laws of each
jurisdiction that requires such qualification of the Company or any subsidiary, except where
the failure to be so qualified would not have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary
course of business.

     (vi) Capital Stock of the Subsidiaries. All the outstanding shares of capital
stock of each subsidiary have been duly and validly authorized and issued and are fully paid
and nonassessable, and, except as otherwise set forth in the Prospectus (or as represented
by minority interests as disclosed in the financial statements incorporated by reference
therein), all outstanding shares of capital stock of the subsidiaries are owned by the
Company either directly

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or through wholly owned subsidiaries free and clear of any perfected security interest
or any other security interests, claims, liens or encumbrances (other than, in the case of
certain non-U.S. subsidiaries, director qualifying shares which individually and in the
aggregate represent an immaterial ownership interest in such subsidiaries). The Subsidiary
is the only subsidiary that is a Significant Subsidiary (as such term is defined by Rule
405) of the Company.

     (vii) Capitalization. The Company’s authorized equity capitalization is as set
forth in the Prospectus and the Securities conform in all material respects to the
description thereof contained or incorporated by reference in the Prospectus; and, except as
set forth in the Prospectus, no options, warrants or other rights to purchase, agreements or
other obligations to issue (other than equity compensation grants and awards under the
Company’s plans in the ordinary course consistent with past practice), or rights to convert
any obligations into or exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding.

     (viii) (A) Accuracy of Exhibits. There is no franchise, contract or other
document of a character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not described or filed as
required; and the statements in (I) the Prospectus under the headings “Certain ERISA
Considerations”, “Description of the Notes” and “Description of Securities We May Offer” and
(II) the Company’s Transition Report on Form 10-K for the eleven-month transition period
ended November 30, 2010 under the headings “Part I — Item 1. Business — Regulation” and
“Part I — Item 3. — Legal Proceedings”, insofar as such statements summarize legal matters,
agreements, documents or proceedings discussed therein, are accurate and fair summaries of
such legal matters, agreements, documents or proceedings.

     (B) The statements set forth in the Prospectus under the heading “Material United
States Federal Tax Considerations,” insofar as such statements purport to describe certain
federal tax laws of the United States, are accurate and complete in all material respects.

     (ix) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding obligation of the
Company.

     (x) Investment Company Act. The Company is not and, after giving effect to
the offering and sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an “investment company” as defined in the
Investment Company Act of 1940, as amended.

     (xi) Absence of Further Requirements. No consent, approval, authorization,
filing with or order of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been obtained under the 1933
Act and the 1939 Act and such as may be required under the blue sky laws of any jurisdiction
in connection with the purchase and distribution of the Securities by the Underwriters in
the manner contemplated herein and in the Prospectus.

     (xii) Absence of Conflicts. Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach or violation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its subsidiaries
pursuant to, (i) the charter or by-laws of the Company or any of its subsidiaries, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to which the
Company or any of its

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subsidiaries is a party or bound or to which its or their property is subject, or (iii)
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, which violation or default would, in the
case of clauses (ii) and (iii) above, either individually or in the aggregate with all other
violations and defaults referred to in this paragraph (xii) (if any), have a material
adverse effect on the condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto filed after the date hereof).

     (xiii) Absence of Registration Rights. No holders of securities of the Company
have rights to the registration of such securities under the Registration Statement.

     (xiv) Financial Statements. The consolidated historical financial statements
and schedules of the Company and its consolidated subsidiaries included in the Prospectus,
the Registration Statement and the General Disclosure Package present fairly in all material
respects the financial condition, results of operations and cash flows of the Company as of
the dates and for the periods indicated, comply as to form with the applicable accounting
requirements of the 1933 Act and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods involved (except
as otherwise noted therein). The selected financial data set forth under the caption
“Summary Consolidated Financial Information” in the Prospectus and Registration Statement
fairly present, on the basis stated in the Prospectus and the Registration Statement, the
information included therein.

     (xv) Absence of Proceedings. No action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the Company or
any of its subsidiaries or its or their property is pending or, to the best knowledge of the
Company, threatened that (i) could reasonably be expected to have a material adverse effect
on the performance of this Agreement or the consummation of any of the transactions
contemplated hereby or (ii) could reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto filed after the date hereof).

     (xvi) Possession of Properties. Each of the Company and each of its
subsidiaries owns or leases all such properties as are necessary to the conduct of its
operations as presently conducted.

     (xvii) Absence of Defaults. Neither the Company nor any subsidiary is in
violation or default of (i) any provision of its charter or bylaws, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which it is a party or bound or
to which its property is subject, or (iii) 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, which violation or default would, in the case of clauses
(ii) and (iii) above, either individually or in the aggregate with all other violations and
defaults referred to in this paragraph (xvii) (if any), have a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from

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transactions in the ordinary course of business, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto filed after the date hereof).

     (xviii) Independent Accountants. Each of (i) KPMG LLP, who have certified
certain financial statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements and schedules
included or incorporated by reference in the Prospectus, and (ii) Deloitte & Touche LLP is
an independent registered public accounting firm with respect to the Company as required by
the 1933 Act and the applicable published rules and regulations of the Public Company
Accounting Oversight Board.

     (xix) Tax Laws. The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof (except in any
case in which the failure so to file would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto filed after the date hereof) and has paid all taxes
shown by such returns to be payable and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or as would not
have a material adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any supplement thereto filed after
the date hereof).

     (xx) Absence of Labor Dispute. No labor problem or dispute with the employees
of the Company or any of its subsidiaries exists or is threatened or imminent, and the
Company is not aware of any existing or imminent labor disturbance by the employees of any
of its or its subsidiaries’ principal suppliers, contractors or customers, that could have a
material adverse effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto filed after the date
hereof).

     (xxi) Insurance. The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are engaged; all
policies of insurance and fidelity or surety bonds insuring the Company or 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 with the terms
of such policies and instruments in all material respects; and there are no 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,
except for claims that in the aggregate are not significant in amount; neither the Company
nor any such subsidiary has been refused any insurance coverage sought or applied for; and
neither the Company nor any such subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a
cost that would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in

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or contemplated in the Prospectus (exclusive of any supplement thereto filed after the
date hereof).

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

     (xxiii) Possession of Licenses and Permits. The Company and its subsidiaries
possess all licenses, certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary and material to the
conduct of their respective businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto filed after the date hereof).

     (xxiv) Accounting Controls and Disclosure Controls. The Company and each of its
subsidiaries maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (a) transactions are executed in accordance with management’s
general or specific authorizations; (b) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (c) access to assets is permitted only in
accordance with management’s general or specific authorization; and (d) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except as described in the
Prospectus, since the end of the Company’s most recent audited fiscal year, there has been
(I) no material weakness in the Company’s internal control over financial reporting (whether
or not remediated) and (II) no change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting.

     The Company and its consolidated subsidiaries employ disclosure controls and procedures
that are designed to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the 1934 Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and forms, and is
accumulated and communicated to the Company’s management, including its principal executive
officer or officers and principal financial officer or officers, as appropriate, to allow
timely decisions regarding disclosure.

     (xxv) Absence of Manipulation. The Company has not taken, directly or
indirectly, any action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the 1934 Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of
the Securities.

     (xxvi) Compliance with the Sarbanes-Oxley Act. There is and has been no
failure on the part of the Company or any of the Company’s directors or officers, in their
capacities as such, to comply in all material respects with any provision of the
Sarbanes-Oxley Act of 2002 and the

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rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley
Act”), including Section 402 related to loans and Sections 302 and 906 related to
certifications.

     (xxvii) Environmental Laws. The Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental
Laws”), (ii) have received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their respective
businesses and (iii) have not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except where such non-compliance with Environmental
Laws, failure to receive required permits, licenses or other approvals, or liability would
not, individually or in the aggregate, have a material adverse change in the condition
(financial or otherwise), prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto filed after the date hereof). Except as set forth in the Prospectus,
neither the Company nor any of the subsidiaries has been named as a “potentially responsible
party” under the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended.

     (xxviii) ERISA. Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Section 302 of the United
States Employee Retirement Income Security Act of 1974 (“ERISA”) and the regulations
and published interpretations thereunder with respect to each “plan” (as defined in Section
3(3) of ERISA and such regulations and published interpretations) in which employees of the
Company and its subsidiaries are eligible to participate and each such plan is in compliance
in all material respects with the presently applicable provisions of ERISA and such
regulations and published interpretations. The Company and its subsidiaries have not
incurred any unpaid liability to the Pension Benefit Guaranty Corporation (other than for
the payment of premiums in the ordinary course) or to any such plan under Title IV of ERISA.

     (xxix) Pending Proceedings and Examinations. The Registration Statement is not
the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the 1933
Act, and the Company is not the subject of a pending proceeding under Section 8A of the 1933
Act in connection with the offering of the Securities.

     (xxx) Redemption. The Company has determined that there is no more than a
remote likelihood that it will exercise its right to redeem the Securities in circumstances
where the amount that the Company would have to pay in redemption is based on the sum of the
present values of the remaining scheduled payments of interest and principal on the
Securities. The Company makes this representation only in connection with the discussion in
the Prospectus under the heading “Material United States Federal Tax Considerations”.

     (xxxi) Foreign Corrupt Practices Act. Neither the Company nor any of its
subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by the Company or any subsidiary of
the FCPA, including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer, payment,
promise to pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of

10

 

value to any “foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political office, in
contravention of the FCPA and the Company and its subsidiaries have conducted their
businesses in compliance with the FCPA and have instituted and maintain policies and
procedures designed reasonably to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith.

     “FCPA” means Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder.

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

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

     (xxxiv) Description of Securities and Indenture. The Securities and the
Indenture conform in all material respects to the description thereof contained in the
Prospectus.

     (xxxv) Due Authorization of the Indenture and the Securities. The Indenture has
been duly authorized, executed and delivered by the Company, has been duly qualified under
the 1939 Act, and constitutes a legal, valid and binding instrument enforceable against the
Company in accordance with its terms (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or other laws
affecting creditors’ rights generally from time to time in effect and to general principles
of equity, including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing, regardless of whether considered in a proceeding in equity or at
law); and the Securities have been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement, will constitute legal, valid and binding
obligations enforceable against the Company in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or other laws affecting creditors’ rights generally from time to time
in effect and to general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless of whether considered
in a proceeding in equity or at law).

     (b) Officer’s Certificates. Any certificate signed by any officer of the Company or
any of its subsidiaries delivered to the Representative or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each Underwriter as to the matters covered
thereby.

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     SECTION 2. Sale and Delivery to Underwriters; Closing.

     (a) Securities. On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Company, at the price set forth in Schedule B, the aggregate principal amount of
Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional
principal amount of Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.

     (b) Payment. Payment of the purchase price for, and delivery of certificates for, the
Securities shall be made at the offices of Dewey & LeBoeuf LLP, 1301 Avenue of the Americas, New
York, New York 10019, or at such other place as shall be agreed upon by the Representative and the
Company, at 9:00 A.M. (Eastern time) on the third business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time not later than ten
business days after such date as shall be agreed upon by the Representative and the Company (such
time and date of payment and delivery being herein called “Closing Time”).

     Payment shall be made to the Company by wire transfer of immediately available funds to a bank
account designated by the Company, against delivery to the Representative for the respective
accounts of the Underwriters of certificates for the Securities to be purchased by them. It is
understood that each Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the Securities which it has
agreed to purchase. Jefferies & Company, Inc, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase price for the
Securities to be purchased by any Underwriter whose funds have not been received by the Closing
Time, but such payment shall not relieve such Underwriter from its obligations hereunder.

     (c) Denominations; Registration. Certificates for the Securities shall be in such
denominations ($5,000 or integral multiples of $1,000 in excess thereof) and registered in such
names as the Representative may request in writing at least one full business day before the
Closing Time. The Securities will be made available for examination and packaging by the
Representative in The City of New York not later than 10:00 A.M. (Eastern time) on the business day
prior to the Closing Time.

     SECTION 3. Covenants of the Company. The Company covenants with each Underwriter as
follows:

     (a) Compliance with Securities Regulations and Commission Requests; Payment of Filing Fees.
The Company, subject to Section 3(b), will comply with the requirements of Rule 430B and will
notify the Representative immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement or new registration statement relating to
the Securities shall become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration Statement or the filing of a
new registration statement or any amendment or supplement to the Prospectus or any document
incorporated by reference therein or otherwise deemed to be a part thereof or for additional
information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or such new registration statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes or of any examination pursuant to Section 8(e) of the 1933 Act
concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding
under

12

 

Section 8A of the 1933 Act in connection with the offering of the Securities. The Company
will effect the filings required under Rule 424(b), in the manner and within the time period
required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus supplement transmitted for filing
under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment. The Company shall pay the required Commission filing fees relating to the
Securities within the time required by Rule 456(b)(1) (i) of the 1933 Act Regulations without
regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of the 1933
Act Regulations (including, if applicable, by updating the “Calculation of Registration Fee” table
in accordance with Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration
Statement or on the cover page of a prospectus filed pursuant to Rule 424(b)).

     (b) Filing of Amendments and Exchange Act Documents; Preparation of Final Term Sheet. For so
long as the Company is required by the 1933 Act to deliver a prospectus in connection with
transactions contemplated hereby, the Company will give the Representative notice of its intention
to file or prepare any amendment to the Registration Statement or new registration statement
relating to the Securities or any amendment, supplement or revision to either any preliminary
prospectus (including any prospectus included in the Original Registration Statement or amendment
thereto at the time it became effective) or to the Prospectus, whether pursuant to the 1933 Act,
the 1934 Act or otherwise, and the Company will furnish the Representative with copies of any such
documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representative or counsel for the Underwriters
shall object. The Company has given the Representative notice of any filings made pursuant to the
1934 Act or 1934 Act Regulations within 48 hours prior to the Applicable Time; the Company will
give the Representative notice of its intention to make any such filing from the Applicable Time to
the Closing Time and will furnish the Representative with copies of any such documents a reasonable
amount of time prior to such proposed filing and will not file or use any such document to which
the Representative or counsel for the Underwriters shall object. The Company will prepare a final
term sheet (the “Final Term Sheet”) reflecting the final terms of the Securities, in form
and substance satisfactory to the Representative, and shall file such Final Term Sheet as an
“issuer free writing prospectus” pursuant to Rule 433 prior to the close of business two business
days after the date hereof; provided that the Company shall furnish the Representative with copies
of any such Final Term Sheet a reasonable amount of time prior to such proposed filing and will not
use or file any such document to which the Representative or counsel to the Underwriters shall
object.

     (c) Delivery of Registration Statements. The Company has furnished or will deliver to the
Representative and counsel for the Underwriters, without charge, signed or photo copies of the
Original Registration Statement and of each amendment thereto (including exhibits filed therewith
or incorporated by reference therein and documents incorporated or deemed to be incorporated by
reference therein or otherwise deemed to be a part thereof) and signed copies of all consents and
certificates of experts, and will also deliver to the Representative, without charge, a conformed
copy of the Original Registration Statement and of each amendment thereto (without exhibits) for
each of the Underwriters. The copies of the Original Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.

     (d) Delivery of Prospectuses. The Company has delivered to each Underwriter, without charge,
as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act, such number of copies of the Prospectus (as amended or

13

 

supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments
or supplements thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.

     (e) Continued Compliance with Securities Laws. The Company will comply with the 1933 Act and
the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations and the 1939 Act and the 1939
Act Regulations so as to permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time when a prospectus is required
by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements of a material fact
or omit to state a material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend the Registration
Statement or to file a new registration statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly
prepare and file with the Commission, subject to Section 3(b), such amendment, supplement or new
registration statement as may be necessary to correct such statement or omission or to comply with
such requirements, the Company will use its best efforts to have such amendment or new registration
statement declared effective as soon as practicable (if it is not an automatic shelf registration
statement with respect to the Securities) and the Company will furnish to the Underwriters such
number of copies of such amendment, supplement or new registration statement as the Underwriters
may reasonably request. If at any time following issuance of an Issuer Free Writing Prospectus
there occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration
Statement (or any other registration statement relating to the Securities) or the Statutory
Prospectus or any preliminary prospectus or included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances prevailing at that subsequent time, not
misleading, the Company will promptly notify the Representative and will promptly amend or
supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.

     (f) Blue Sky Qualifications. The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions as the Representative may designate and to maintain such
qualifications in effect for a period of not less than one year from date hereof; provided,
however, that the Company shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or so subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. The Company will also supply the Underwriters
with such information as is necessary for the determination of the legality of the Securities for
investment under the laws of such jurisdictions as the Underwriters may request.

     (g) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as are
necessary in order to make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide to the Underwriters the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.

     (h) Use of Proceeds. The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under “Use of Proceeds.”

14

 

     (i) Restriction on Sale of Securities. During a period of 30 days from the date of the
Prospectus, the Company will not, without the prior written consent of the Representative, directly
or indirectly, with respect to any debt securities of the Company or any securities convertible
into or exercisable or exchangeable for such debt securities:

	 	•	 	offer, pledge, sell or contract to sell any such securities;
	 
	 	•	 	sell any option or contract to purchase any such securities;
	 
	 	•	 	purchase any option or contract to sell any such securities;
	 
	 	•	 	grant any option, right or warrant for the sale of any such securities;
	 
	 	•	 	file a registration statement for any such securities; or
	 
	 	•	 	lend or otherwise dispose of or transfer any such securities.

     (j) Reporting Requirements. The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.

     (k) Issuer Free Writing Prospectuses. The Company represents and agrees that, unless it
obtains the prior consent of the Representative, and each Underwriter represents and agrees that,
unless it obtains the prior consent of the Company and the Representative, it has not made and will
not make any offer relating to the Securities that would constitute an “issuer free writing
prospectus,” as defined in Rule 433, or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405, required to be filed with the Commission; provided, however,
that prior to the preparation of the Final Term Sheet in accordance with Section 3(b), the
Underwriters are authorized to use the information with respect to the final terms of the
Securities in communications conveying information relating to the offering to investors. Any such
free writing prospectus consented to by the Company and the Representative is hereinafter referred
to as a “Permitted Free Writing Prospectus.” The Company represents that it has treated or agrees
that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,”
as defined in Rule 433, and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission
where required, legending and record keeping.

     SECTION 4. Payment of Expenses.

     (a) Expenses. The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as originally filed and of
each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters, the Indenture and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery of the Securities,
(iii) the preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, (iv) the fees and disbursements of the Company’s counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Survey and any supplement thereto, (vi) the printing and delivery to the Underwriters
of copies of each preliminary prospectus, any Permitted Free Writing Prospectus and of the

15

 

Prospectus and any amendments or supplements thereto and any cost associated with electronic
delivery of any of the foregoing by the Underwriters to investors, (vii) the preparation, printing
and delivery to the Underwriters of copies of the Blue Sky Survey and any supplement thereto,
(viii) the fees and expenses of the Trustee, including the fees and disbursements of counsel for
the Trustee in connection with the Indenture and the Securities, (ix) the costs and expenses of
the Company relating to investor presentations on any “road show” undertaken in connection with the
marketing of the Securities, including without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants engaged in connection with
the road show presentations, travel and lodging expenses of the Representative and officers of the
Company and any such consultants, and the cost of aircraft and other transportation chartered in
connection with the road show, (x) any fees payable in connection with the rating of the Securities
and (xi) the costs and expenses incurred by the Underwriters in connection with determining their
compliance with the rules and regulations of The Financial Industry Regulatory Authority, Inc.
(“FINRA”) related to the Underwriters’ participation in the offering and distribution of
the Securities, including any related FINRA filing fees and the legal fees of, and disbursements
by, counsel to the Underwriters.

     (b) Termination of Agreement. If this Agreement is terminated by the Representative in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall reimburse
the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.

     SECTION 5. Conditions of Underwriters’ Obligations. The obligations of the several
Underwriters hereunder are subject to the accuracy of the representations and warranties of the
Company contained in Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the performance by the
Company of its covenants and other obligations hereunder, and to the following further conditions:

     (a) Effectiveness of Registration Statement; Filing of Prospectus; Payment of Filing Fee. The
Registration Statement has become effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the reasonable satisfaction
of counsel to the Underwriters. A prospectus containing the Rule 430B Information shall have been
filed with the Commission in the manner and within the time period required by Rule 424(b) without
reliance on Rule 424(b)(8) (or a post-effective amendment providing such information shall have
been filed and become effective in accordance with the requirements of Rule 430B). The Company
shall have paid the required Commission filing fees relating to the Securities within the time
period required by Rule 456(1)(i) of the 1933 Act Regulations without regard to the proviso therein
and otherwise in accordance with Rules 456(b) and 457(r) of the 1933 Act Regulations and, if
applicable, shall have updated the “Calculation of Registration Fee” table in accordance with Rule
456(b)(1)(ii) either in a post-effective amendment to the Registration Statement or on the cover
page of a prospectus filed pursuant to Rule 424(b).

     (b) Opinion of Counsel for Company. At Closing Time, the Representative shall have received
the favorable opinion, dated as of Closing Time, of Morgan, Lewis & Bockius LLP, counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters, together with signed
or reproduced copies of such letter for each of the other Underwriters to the effect set forth in
Exhibit A hereto and to such further effect as counsel to the Underwriters may reasonably request.

     (c) Opinion of Counsel for Underwriters. At Closing Time, the Representative shall have
received the favorable opinion, dated as of Closing Time, of Dewey & LeBoeuf LLP, counsel for the
Underwriters, together with signed or reproduced copies of such letter for each of the other
Underwriters

16

 

with respect to the matters set forth in clauses (i), (iii), (iv), (vi) and (vii) and the last
paragraph of Exhibit A hereto. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New York, the federal law
of the United States and the General Corporation Law of the State of Delaware, upon the opinions of
counsel satisfactory to the Representative. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of public officials.

     (d) Officers’ Certificate. At Closing Time, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the Prospectus or the General
Disclosure Package, any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, and the Representative
shall have received a certificate of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as though expressly made at
and as of Closing Time, (iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing Time, and (iv) no stop
order suspending the effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or, to their knowledge, contemplated by the
Commission.

     (e) Chief Financial Officer’s Certificate. At the time of the execution of this Agreement,
the Representative shall have received a certificate of the chief financial or chief accounting
officer of the Company, with respect to certain financial information contained in the Company’s
Transition Report on Form 10-K for the eleven-month transition period ended November 30, 2010 and
the preliminary prospectus and the Prospectus.

     (f) Independent Accountants’ Comfort Letters. At the time of the execution of this Agreement,
the Representative shall have received from each of Deloitte & Touche LLP and KPMG LLP a letter
dated such date, in form and substance satisfactory to the Representative, together with signed or
reproduced copies of such letter for each of the other Underwriters containing statements and
information of the type ordinarily included in accountants’ “comfort letters” to underwriters with
respect to the financial statements and certain financial information contained in the Registration
Statement, the preliminary prospectus and the Prospectus.

     (g) Bring-down Comfort Letters. At Closing Time, the Representative shall have received from
each of Deloitte & Touche LLP and KPMG LLP a letter, dated as of Closing Time, to the effect that
they reaffirm the statements made in the letter furnished pursuant to subsection (f) of this
Section, except that the specified date referred to shall be a date not more than five business
days prior to Closing Time.

     (h) Maintenance of Rating. At Closing Time, the Securities shall be rated at least Baa2
(stable) by Moody’s Investor’s Service Inc., BBB (stable) by Fitch Ratings and BBB (stable) by
Standard & Poor’s Ratings Group, a division of McGraw-Hill, Inc. Since the date of this Agreement,
there shall not have occurred a downgrading in the rating assigned to the Securities or any of the
Company’s other debt securities by any “nationally recognized statistical rating agency”, as that
term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act, and, except
for the negative outlook referred to above, no such organization shall have publicly announced that
it has under surveillance or review its rating of the Securities or any of the Company’s other debt
securities.

17

 

     (i) No Objection. FINRA has not raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.

     (j) Additional Documents. At Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence
the accuracy of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in connection with the
issuance and sale of the Securities as herein contemplated shall be satisfactory in form and
substance to the Representative and counsel for the Underwriters.

     (k) Termination of Agreement. If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated by the
Representative by notice to the Company at any time at or prior to Closing Time, and such
termination shall be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and remain in
full force and effect.

	 	 	SECTION 6. Indemnification.

     (a) Indemnification of Underwriters. (1) The Company agrees to indemnify and hold harmless
each Underwriter, its affiliates, as such term is defined in Rule 501(b) under the 1933 Act (each,
an “Affiliate”), its selling agents and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:

     (i) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), including the Rule 430B
Information, or the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (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;

     (ii) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company;

     (iii) against any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by the Representative), reasonably incurred in
investigating, preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under (i) or (ii)
above;

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with written
information furnished to the Company by

18

 

any Underwriter through the Representative expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430B Information or any preliminary prospectus any Issuer
Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto).

     (2) Insofar as this indemnity agreement may permit indemnification for liabilities under the
1933 Act of any person who is a partner of an Underwriter or who controls an underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and who, at the date of this
Agreement, is a director or officer of the Company or controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, such indemnity agreement is subject to
the undertaking of the Company in the Registration Statement under Item 17 “Undertakings.”

     (b) Indemnification of Company, Directors and Officers. Each Underwriter severally agrees to
indemnify and hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)(1) of this
Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment thereto), including
the Rule 430B Information or any preliminary prospectus, any Issuer Free Writing Prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the Representative expressly for
use therein.

     (c) Actions against Parties; Notification. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. In the case of parties
indemnified pursuant to Section 6(a)(1) above, counsel to the indemnified parties shall be selected
by the Representative and, in the case of parties indemnified pursuant to Section 6(b) above,
counsel to the indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided, however, that counsel
to the indemnifying party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified party.

     (d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(1) (ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such

19

 

indemnifying party shall have received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the date of such
settlement.

     SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is
for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the Underwriters on
the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.

     The relative benefits received by the Company on the one hand and the Underwriters 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 underwriting discount received by the Underwriters, in each case as set forth on the cover of
the Prospectus bear to the aggregate initial public offering price of the Securities as set forth
on the cover of the Prospectus.

     The relative fault of the Company on the one hand and the Underwriters on the other hand shall
be determined by reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.

     The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters 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 above in this Section 7. The aggregate amount
of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred
to above in this Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged
omission.

     Notwithstanding the provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.

     No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 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 an Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Underwriter’s
Affiliates

20

 

and selling agents shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The
Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Securities set forth opposite their respective names in
Schedule A hereto and not joint.

     SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in certificates of
officers of the Company or any of its subsidiaries submitted pursuant hereto, shall remain
operative and in full force and effect regardless of (i) any investigation made by or on behalf of
any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its
officers or directors or any person controlling the Company, and (ii) delivery of and payment for
the Securities.

     SECTION 9. Termination of Agreement.

     (a) Termination; General. The Representative may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since the time of execution
of this Agreement or since the respective dates as of which information is given in the Prospectus
(exclusive of any supplement thereto filed after the date hereof) or the General Disclosure
Package, any material adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the effect of which is such
as to make it, in the judgment of the Representative, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any
of said exchanges or by such system or by order of the Commission, FINRA. or any other governmental
authority, or a material disruption has occurred in commercial banking or securities settlement, or
(iv) a material disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, or (v) if a banking moratorium has been declared by either
Federal or New York authorities.

     (b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination
shall be without liability of any party to any other party except as provided in Section 4 hereof,
and provided further that Sections 1, 6, 7 and 8 shall survive such termination and remain in full
force and effect.

     SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time to purchase the Securities which it or they are obligated
to purchase under this Agreement (the “Defaulted Securities”), the Representative shall
have the right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of
the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth;
if, however, the Representative shall not have completed such arrangements within such 24-hour
period, then:

21

 

          (a) if the number of Defaulted Securities does not exceed 10% of the aggregate principal
amount of the Securities to be purchased hereunder, each of the non-defaulting Underwriters shall
be obligated, severally and not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or

          (b) if the number of Defaulted Securities exceeds 10% of the aggregate principal amount of the
Securities to be purchased hereunder, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter.

     No action taken pursuant to this Section shall relieve any defaulting Underwriter from
liability in respect of its default.

     In the event of any such default which does not result in a termination of this Agreement,
either the Representative or the Company shall have the right to postpone Closing Time for a period
not exceeding seven days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the term “Underwriter”
includes any person substituted for an Underwriter under this Section 10.

     SECTION 11. Tax Disclosure. Notwithstanding any other provision of this Agreement,
immediately upon commencement of discussions with respect to the transactions contemplated hereby,
the Company (and each employee, representative or other agent of the Company) may disclose to any
and all persons, without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by this Agreement and all materials of any kind (including opinions or
other tax analyses) that are provided to the Company relating to such tax treatment and tax
structure. For purposes of the foregoing, the term “tax treatment” is the purported or claimed
federal income tax treatment of the transactions contemplated hereby, and the term “tax structure”
includes any fact that may be relevant to understanding the purported or claimed federal income tax
treatment of the transactions contemplated hereby.

     SECTION 12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to the Underwriters shall be directed to the Underwriters shall be
directed to the Representative at 520 Madison Avenue, 12th Floor, New York, New York 10022,
Attention: Investment Grade Debt Capital Markets with a copy to the General Counsel, and notices to
the Company shall be directed to it at 520 Madison Avenue, 12th Floor, New York, New York 10022,
Attention: Legal Department..

     SECTION 13. No Advisory or Fiduciary Relationship. The Company acknowledges and
agrees that (a) the purchase and sale of the Securities pursuant to this Agreement, including the
determination of the public offering price of the Securities and any related discounts and
commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and
the several Underwriters, on the other hand, (b) in connection with the offering contemplated
hereby and the process leading to such transaction each Underwriter is and has been acting solely
as a principal and is not the agent or fiduciary of the Company, or its stockholders, creditors,
employees or any other party, (c) no Underwriter has assumed or will assume an advisory or
fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby
or the process leading thereto (irrespective of whether such Underwriter has advised or is
currently advising the Company on other matters) and no Underwriter has any obligation to the
Company with respect to the offering contemplated hereby except the obligations expressly set forth
in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the Company, and (e) the

22

 

Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to
the offering contemplated hereby and the Company has consulted its own legal, accounting,
regulatory and tax advisors to the extent it deemed appropriate.

     SECTION 14. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the Underwriters, or any of them,
with respect to the subject matter hereof.

     SECTION 15. Parties. This Agreement shall each inure to the benefit of and be binding
upon the Underwriters and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company
and their respective successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of
such purchase.

     SECTION 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     SECTION 17. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE
SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

     SECTION 18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.

     SECTION 19. Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.

23

 

     If the foregoing is in accordance with your understanding of our agreement, please sign
and return to the Company a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement between the Underwriters and the Company in
accordance with its terms.

	 	 	 	 	 
	 	Very truly yours,

JEFFERIES GROUP, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	CONFIRMED AND ACCEPTED,

     as of the date first above written:

JEFFERIES & COMPANY, INC.

CITIGROUP GLOBAL MARKETS INC.

J.P. MORGAN SECURITIES LLC

NATIXIS SECURITIES NORTH AMERICA INC.

BMO CAPITAL MARKETS CORP.

BNY MELLON CAPITAL MARKETS, LLC

DEUTSCHE BANK SECURITIES INC.

RABO SECURITIES USA, INC.

SUNTRUST ROBINSON HUMPHREY, INC.

KEEFE, BRUYETTE & WOODS, INC.

BNP PARIBAS SECURITIES CORP.

HSBC SECURITIES (USA) INC.

JMP SECURITIES LLC

OPPENHEIMER & CO. INC.

U.S. BANCORP INVESTMENTS, INC.

ROCHDALE SECURITIES LLC

SANDLER O’NEILL & PARTNERS, L.P.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:
Authorized Signatory  	 

24

 

	 	 	 	 	 

SCHEDULE A

	 	 	 	 	 
	 	 	Principal	 
	 	 	Amount of	 
	Name of Underwriter	 	Notes	 
	Jefferies & Company, Inc.
	 	$	260,000,000	 
	Citigroup Global Markets Inc.
	 	 	80,000,000	 
	J.P. Morgan Securities LLC
	 	 	80,000,000	 
	Natixis Securities North America Inc.
	 	 	80,000,000	 
	BMO Capital Markets Corp.
	 	 	40,000,000	 
	BNY Mellon Capital Markets, LLC
	 	 	40,000,000	 
	Deutsche Bank Securities Inc.
	 	 	40,000,000	 
	Rabo Securities USA, Inc.
	 	 	40,000,000	 
	SunTrust Robinson Humphrey, Inc.
	 	 	40,000,000	 
	Keefe, Bruyette & Woods, Inc.
	 	 	16,000,000	 
	BNP Paribas Securities Corp.
	 	 	12,000,000	 
	HSBC Securities (USA) Inc.
	 	 	12,000,000	 
	JMP Securities LLC
	 	 	12,000,000	 
	Oppenheimer & Co. Inc.
	 	 	12,000,000	 
	U.S. Bancorp Investments, Inc.
	 	 	12,000,000	 
	Rochdale Securities LLC
	 	 	12,000,000	 
	Sandler O’Neill & Partners, L.P.
	 	 	12,000,000	 
	 
	 	 	 
	Total
	 	$	800,000,000	 
	 
	 	 	 

Sch A-1

 

SCHEDULE B

JEFFERIES GROUP, INC.

5.125% Senior Notes due 2018

	1.	 	The initial public offering price of the Notes shall be 99.652% of the principal amount
thereof, plus accrued interest, if any, from the date of issuance.
	 
	2.	 	The purchase price to be paid by the Underwriters for the Notes shall be 99.252% of the
principal amount thereof.
	 
	3.	 	The interest rate on the Notes shall be 5.125% per annum.
	 
	4.	 	The Company may redeem the Notes in whole or in part at any time, at its option, on at least
30 but not more than 60 days prior notice, at a redemption price to be calculated as described
in the Prospectus.

Sch B-1

 

SCHEDULE C

	1.	 	Final Term Sheet, dated April 8, 2011

Sch C-1

 

Exhibit A

FORM OF OPINION OF COMPANY’S COUNSEL

TO BE DELIVERED PURSUANT TO

SECTION 5(b)

     (i) Each of the Company and the Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or lease, as the case may be, and to
operate its properties and conduct its business as described in the Prospectus, and is duly
qualified to do business as a foreign corporation and is in good standing under the laws of each of
the jurisdictions where the operation of its properties or the conduct of its business requires it
to be so qualified, except for those jurisdictions where its failure to be so qualified or in good
standing would not have a material adverse effect on the Company or the Subsidiary.

     (ii) All the outstanding shares of capital stock of the Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except as otherwise set forth in
the Prospectus, all outstanding shares of capital stock of the Subsidiary are owned by the Company
either directly or through wholly owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, after due inquiry, any other security interest,
claim, lien or encumbrance.

     (iii) The Securities and the Indenture conform in all material respects to the description
thereof contained in the Prospectus.

     (iv) The Indenture has been duly authorized, executed and delivered, has been duly qualified
under the 1939 Act, and constitutes a legal, valid and binding instrument enforceable against the
Company in accordance with its terms (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or other laws affecting
creditors’ rights generally from time to time in effect and to general principles of equity,
including, without limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in equity or at law); and the Securities
have been duly authorized and, when executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Underwriters pursuant to this Agreement, will
constitute legal, valid and binding obligations enforceable against the Company in accordance with
its terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or other laws affecting creditors’ rights generally
from time to time in effect and to general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether
considered in a proceeding in equity or at law).

     (v) (A) To the knowledge of such counsel, there is no pending or threatened action, suit or
proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries or its or their property, of a character required
to be disclosed in the Registration Statement which is not adequately disclosed in the Prospectus,
and there is no franchise, contract or other document required to be filed as an exhibit thereto
that is not filed as required.

          (B) The statements included or incorporated by reference in (I) the Prospectus under the
headings “Certain ERISA Considerations”, “Description of the Notes” and “Description of Securities
We

 

 

May Offer” and (II) the Company’s Transition Report on Form 10-K for the eleven-month transition
period ended November 30, 2010 under the headings “Part I — Item 1. Business — Regulation” and
“Part I — Item 3. — Legal Proceedings” insofar as such statements summarize legal matters,
agreements, documents or proceedings discussed therein, are accurate and fair summaries of such
legal matters, agreements, documents or proceedings.

          (C) The statements set forth in the Prospectus under the heading “Material United States
Federal Income Tax Considerations”, insofar as such statements purport to describe certain federal
tax laws of the United States, are accurate and complete in all material respects.

IRS CIRCULAR 230 DISCLOSURE

To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any U.S. federal tax
advice contained herein does not deal with a taxpayer’s particular circumstances. Further, it was written in support of the promotion, marketing
or recommending of the transaction of matter described herein. This opinion was not intended or written to be used, and cannot be used, for the purpose of
avoiding penalties under the Internal Revenue Code. Taxpayers should consult their own tax advisors regarding the tax consequences to them in their own
particular circumstances.

     (vi) The Registration Statement has become effective under the 1933 Act; any required filing
of each prospectus relating to the Securities (including the Prospectus, any preliminary
prospectus, and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b) (without reference to Rule 424(b)(8)); any required
filing of each Issuer Free Writing Prospectus pursuant to Rule 433 has been made in the manner and
within the time period required by Rule 433(d); to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened, and the Registration Statement and the Prospectus
(including without limitation each deemed effective date with respect to the Underwriters pursuant
to Rule 430B(f)(2) or the 1933 Act Regulations) (other than the financial statements and other
financial or statistical information contained therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the applicable requirements of the 1933
Act, the 1934 Act and the 1939 Act and the respective rules thereunder.

     (vii) This Agreement has been duly authorized, executed and delivered by the Company.

     (viii) The Company is not and, after giving effect to the offering and sale of the Securities
and the application of the proceeds thereof as described in the Prospectus, will not be an
“investment company” as defined in the Investment Company Act of 1940, as amended.

     (ix) No consent, approval, authorization, filing with or order of any court or governmental
agency or body is required in connection with the transactions contemplated herein, except such as
have been obtained under the 1933 Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters
in the manner contemplated in this Agreement and in the Prospectus and such other approvals
(specified in such opinion) as have been obtained.

     (x) Neither the execution and delivery of the Indenture, the issue and sale of the Securities,
nor the consummation of any other of the transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach or violation of or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or its subsidiaries pursuant to,
(i) the charter or

 

 

by-laws of the Company or the Subsidiary, (ii) the terms of any indenture,
contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant
or instrument, known to such counsel, to which the Company or its subsidiaries is a party or bound
or to which its or their property is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or its subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority having jurisdiction
over the Company or its subsidiaries or any of its or their properties, which violation or default
would, in the case of clauses (ii) and (iii) above, either individually or in the aggregate with
all other violations and defaults referred to in this paragraph (x) (if any), have a material
adverse effect on the condition, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus.

     In rendering such opinion, such counsel may rely (A) as to matters involving the application
of laws of any jurisdiction other than the State of New York, the General Corporation Law of the
State of Delaware or the Federal laws of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the Underwriters and (B) as to matters of fact,
to the extent they deem proper, on certificates of responsible officers of the Company and public
officials.

     In addition, such counsel shall state that such counsel has participated in conferences with
officers and other representatives of the Company, representatives of the independent public
accountants of the Company and representatives of the Underwriters at which the contents of the
Original Registration Statement and Prospectus were discussed and, although such counsel is not
passing upon and does not assume responsibility for the accuracy, completeness or fairness of the
statements contained in the Original Registration Statement or Prospectus (except as and to the
extent stated in subparagraphs (iii) and (v) above), such counsel has no reason to believe that the
Original Registration Statement or any amendment thereto (except for financial statements and
schedules and other financial data included or incorporated by reference therein or omitted
therefrom and the Form T-1, as to which such counsel need make no statement), at the time such
Original Registration Statement or any such amendment became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; that the Registration Statement, including
the Rule 430B Information (except for financial statements and schedules and other financial data
included or incorporated by reference therein or omitted therefrom and the Form T-1, as to which
such counsel need make no statement), at each deemed effective date with respect to the
Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; or that the Prospectus or any amendment or
supplement thereto (except for financial statements and schedules and other financial data included
or incorporated by reference therein or omitted therefrom and the Form T-1, as to which such
counsel need make no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they were made, not
misleading. In addition, nothing has come to such counsel’s attention that would lead such counsel
to believe that the General Disclosure Package, other than the financial statements and schedules
and other financial data included or incorporated by reference therein or omitted therefrom, as to
which such counsel need make no statement, as of the Applicable Time, contained any untrue
statement of a material fact or omitted to state any material fact necessary in order to make the
statements therein, in the light of circumstances under which they were made, not misleading. With
respect to statements contained in the General Disclosure Package, any statement contained in any
of the constituent documents shall be deemed to be modified or superseded to the extent that any
information contained in subsequent constituent documents modifies or replaces such statement.exv10w3

Exhibit 10.3

CONVEYANCE OF TERM NET PROFITS INTEREST AND ASSIGNMENT OF PRE-
EFFECTIVE TIME PAYMENT

     This Conveyance of Term Net Profits Interest and Assignment of Pre-Effective Time Payment
(this “Conveyance”) is made, as of [____________], 2011, from VOC Brazos Energy Partners, L.P., a
Texas limited partnership and VOC Kansas Energy Partners, LLC, a Kansas limited liability company
(collectively, “Grantor”) to The Bank of New York Mellon Trust Company, N.A., with offices at 919
Congress Avenue, Suite 500, Austin, Texas 78701, Attention: Michael J. Ulrich, as trustee (the
“Trustee”), acting not in its individual capacity but solely as trustee of the VOC Energy Trust
(the “Trust”), a statutory trust created under the Delaware Statutory Trust Act as of November 3,
2010 (such Trustee acting as trustee of the Trust, “Grantee”). Capitalized terms shall have the
meaning set forth in Article II below.

ARTICLE I

GRANT OF NET PROFITS INTEREST

     For and in consideration of Ten and No/100 Dollars ($10.00) and other good and valuable
consideration (including the issuance by Grantee to VOC Brazos Energy Partners, L.P. of 16,540,000
Trust Units) to Grantor paid by Grantee, the receipt and sufficiency of which are hereby
acknowledged by Grantor, Grantor hereby GRANTS, BARGAINS, SELLS, CONVEYS, TRANSFERS, ASSIGNS, SETS
OVER AND DELIVERS unto Grantee subject to the terms and conditions set forth hereinafter, effective
as of the Effective Time, a net profits interest (the “Net Profits Interest”) in and to the Subject
Leases and the Subject Minerals if, as, and when produced, saved and marketed, equal to the product
of the Proceeds Percentage times the Net Profits attributable to the Subject Interests, calculated
in accordance with the provisions of Article III below and payable solely out of gross proceeds
attributable to the sale of the Subject Minerals produced and saved through the Subject Wells,
during the Net Profits Period, all as more fully provided herein below.

     TO HAVE AND TO HOLD the Net Profits Interest, together with all and singular the rights and
appurtenances thereto in anywise belonging, unto Grantee, its successors and assigns, subject,
however, to the following terms and provisions, to-wit:

ARTICLE II

DEFINITIONS

As used herein, the following terms shall have the meaning ascribed to them below:

     “Administrative Hedge Costs” shall mean those costs paid by Grantor to counterparties under
the Existing Hedges or to Persons that provide credit to maintain any Existing Hedge, (in each
case) after the Effective Time but excluding any Hedge Settlement Costs.

     “Affiliate” shall mean with respect to a specified Person, any Person that directly or
indirectly controls, is controlled by, or is under common control with, the specified Person, and,
with respect to Grantor, includes any Person that is directly or indirectly a beneficial owner of a
10% or greater interest in Grantor. As used in this definition, the term “control” (and the
correlative terms “controlling,” “controlled by,” and “under common control”) shall mean the

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possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through ownership of voting securities, by contract or otherwise,
and the term “beneficial owner” shall have the meaning set forth in Section 13(d) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

     “Average Annual Capital Expenditure Amount” shall mean the quotient of (a) the sum of (i) the
capital expenditures to be debited to the Net Profits Account and (ii) the amounts debited to the
Net Profits Account pursuant to Section 3.1(b)(xvii) for capital expenditure projects, in each case
attributable to the three twelve-month periods ending on the Capital Expenditure Limitation Date,
divided by (b) three. Commencing on the Capital Expenditure Limitation Date, and each anniversary
of the Capital Expenditure Limitation Date thereafter, the Average Annual Capital Expenditure
Amount will be increased by 2.5% to account for expected increased costs due to inflation.

     “BOE” shall mean (a) for Oil included in the Subject Minerals, one barrel, (b) for Gas Liquids
included in the Subject Minerals, one barrel and (c) for Gas included in the Subject Minerals, the
amount of such hydrocarbons equal to one barrel, determined using the ratio of six Mcf of Gas to
one barrel of Oil.

     “Business Day” shall mean any day that is not a Saturday, Sunday or any other day on which
national banking institutions in New York, New York or Wilmington, Delaware are closed as
authorized or required by law.

     “Capital Expenditure Limitation Date” shall mean the later to occur of (a) December 31, 2027
and (b) the last day of the Payment Period during which the total volumes of the Subject Minerals
produced, saved and sold from and after January 1, 2011 equals the volume of 9.8 MMBOE (which is
the equivalent of 7.8 MMBOE in respect of the Net Profits Interest).

     “Contingent Debt Regulations” shall have the meaning given such term in Section 9.9(b).

     “Code” shall mean the Internal Revenue Code of 1986, as amended.

     “Conveyance” shall mean this Conveyance of Net Profits Interest and Assignment of
Pre-Effective Time Payment, as the same may be amended or modified from time to time by one or more
instruments executed by both Grantor and Grantee.

     “Debit Balance” shall have the meaning given such term in Section 3.2(c).

     “Effective Time” shall mean 12:01 a.m., local time in effect where the Subject Interests are
located, on the date of this Conveyance.

     “Eligible Materials” shall mean Materials for which amounts in respect of the cost of such
Materials were properly debited to the Net Profits Account in accordance with Section 3.1(b).

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     “Existing Hedges” shall mean the Hedges entered into by Grantor with respect to the Subject
Minerals prior to the date hereof.

     “Fair Value” shall mean, with respect to any portion of the Net Profits Interest to be
released pursuant to Section 5.2 in connection with a sale or release of any Subject Interest, an
amount equal to the excess of (i) the proceeds which could reasonably be expected to be obtained
from the sale of such portion of the Net Profits Interest to a party which is not an Affiliate or a
Related Party of either Grantor or the Trust on an arms’-length negotiated basis, taking into
account relevant market conditions and factors existing at the time of any such proposed sale or
release, over (ii) Grantee’s proportionate share of any sales costs, commissions and brokerage
fees.

     “Farmout Agreement” shall mean any farmout agreement, participation agreement, exploration
agreement, development agreement or any similar agreement.

“Gas” shall mean natural gas and other gaseous hydrocarbons or minerals, including helium, but
excluding any Gas Liquids.

     “Gas Liquids” shall mean those natural gas liquids and other liquid hydrocarbons, including
ethane, propane, butane and natural gasoline, and mixtures thereof, that are removed from a Gas
stream by the liquids extraction process of any field facility or gas processing plant and
delivered by the facility or plant as natural gas liquids.

     “Grantee” shall mean Grantee as defined in the first paragraph of this Conveyance, and its
successors and permitted assigns; and, unless the context in which used shall otherwise require,
such term shall include any successor owner at the time in question of any or all of the Net
Profits Interest.

     “Grantor” shall mean VOC Brazos Energy Partners, L.P. and VOC Kansas Energy Partners, LLC,
individually and collectively, and their successors and permitted assigns; and, unless the context
in which used shall otherwise require, such term shall also include any successor owner at the time
in question of any or all of the Subject Interests.

     “Hedge” shall mean any commodity hedging transaction pertaining to Minerals, whether in the
form of (i) forward sales and options to acquire or dispose of a futures contract solely on an
organized commodities exchange, (ii) derivative agreements for a swap, cap, collar or floor of the
commodity price, or (iii) similar types of financial transactions classified as “notional principal
contracts” pursuant to Treasury Regulation Section 1.988-1(a)(2).

     “Hedge Settlement Costs” shall mean any and all payments required to be made by Grantor to the
counterparties in connection with the settlement or mark-to-market of trades made under any
Existing Hedge.

     “Hedge Settlement Revenues” shall mean any and all payments received by Grantor from the
counterparties in connection with the settlement or mark-to-market of trades made

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under any Existing Hedge and all payments received by Grantor for any early termination of any
Existing Hedge.

     “Lease” shall mean (i) a lease of one or more Minerals described in Exhibit A attached
hereto as to all lands and depths described in such lease (or the applicable part or portion
thereof if limited in depth and/or areal extent in Exhibit A) and any interest therein and
any leasehold interest in any other lease of Minerals derived from the pooling or unitization of
such lease (or portion thereof, if limited in depth or areal extent in Exhibit A) with
other leases, together with any interest acquired or maintained by Grantor in any and all
extensions of such lease, (ii) any replacement lease taken upon or in anticipation of termination
of such lease (if executed and delivered during the term of or within one year after the expiration
of the predecessor lease), as to all lands and depths described in the predecessor lease (unless
the extended or predecessor lease is specifically limited in depth or areal extent in Exhibit
A, in which event only the corresponding portion of such lease shall be considered a renewal or
extension or a replacement lease subject to this Conveyance), and (iii) any other Mineral
leasehold, royalty, overriding royalty or Mineral fee interest described in Exhibit A
attached hereto (or the applicable part or portion thereof if limited in depth and/or areal extent
in Exhibit A); and “Leases” shall mean all such leases and all such renewal and extensions
and replacement leases.

     “Manufacturing Costs” shall mean the costs of Processing that generate Manufacturing Proceeds
received by Grantor.

     “Manufacturing Proceeds” shall mean the excess, if any, of (i) proceeds received by Grantor
from the sale of Subject Minerals that are the result of any Processing over (ii) the part of such
proceeds that represents the Market Value of such Subject Minerals before any Processing.

     “Market Value” of any Subject Minerals shall mean:

          (a) With respect to Oil and Gas Liquids, (i) the highest price available to Grantor for such
Oil and Gas Liquids at the Lease on the date of delivery pursuant to a bona fide offer, posted
price or other generally available marketing arrangement from or with a non-Affiliate or
non-Related Party purchaser, or (ii) if no such offer, posted price or arrangement is available,
the fair market value of such Oil and/or Gas Liquids, on the date of delivery at the Lease, being a
price which could reasonably be expected to be obtained from the sale on an arm’s-length negotiated
basis, taking into account relevant market conditions and factors existing at the time of sale; and

          (b) With respect to Gas, (i) the price specified in any Production Sales Contract for the sale
of such Gas or (ii) if such Gas cannot be sold pursuant to a Production Sales Contract, (A) the
average of the three highest prices (adjusted for all material differences in quality) being paid
at the time of production for Gas produced from the same field in sales between non-affiliated
Persons (or, if there are not three such prices within such field, within a 50-mile radius of such
field) but, for any Gas subject to price restrictions established, prescribed or otherwise imposed
by any governmental authority having jurisdiction over the sale of such Gas, no more than the
highest price permitted for such category or type of Gas after all

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applicable adjustments (including without limitation tax reimbursement, dehydration, compression
and gathering allowances, inflation and other permitted escalations), or (B) if subsection
(b)(ii)(A) above is not applicable, the fair market value of such Gas, on the date of delivery, at
the Lease, being a price which could reasonably be expected to be obtained from the sale on an
arm’s-length negotiated basis, taking into account relevant market conditions and factors existing
at the time of sale.

     “Materials” shall mean materials, supplies, equipment and other personal property or fixtures
located on or used in connection with the Subject Interests.

     “Mcf” shall mean one thousand cubic feet.

     “Minerals” shall mean Oil, Gas and Gas Liquids.

     “MMBOE” shall mean one million BOE.

     “Net Profits” shall have the meaning given such term in Section 3.2(b).

     “Net Profits Account” shall mean the account maintained in accordance with the provisions of
Section 3.1.

     “Net Profits Interest” shall have the meaning given such term in Article I.

     “Net Profits Period” shall mean the period from and after the Effective Time until and
including the Termination Date.

     “Oil” shall mean crude oil, condensate and other liquid hydrocarbons recovered by field
equipment or facilities, excluding Gas Liquids.

     “Payment Period” shall mean a calendar quarter, provided that for purposes of the Net
Profits Interest the first Payment Period shall mean the period from and after the Effective Time
until June 30, 2011, and the last Payment Period shall mean any portion of the calendar quarter
during which the Termination Date occurs from the beginning of such calendar quarter until and
including the Termination Date, and provided further that for purposes of the
Pre-Effective Time Payment the first Payment Period shall mean the period from and after January 1,
2011 until March 31, 2011 and the second Payment Period shall mean the period from and after April
1, 2011 through, but excluding, the Effective Time.

     “Permitted Encumbrances” shall mean the following whether now existing or hereinafter created
but only insofar as they cover, describe or relate to the Subject Interests or the lands described
in any Lease:

          (a) the terms, conditions, restrictions, exceptions, reservations, limitations and other
matters contained in the agreements, instruments and documents that create or reserve to Grantor
its interests in any of the Leases, including any Prior Reversionary Interest; provided,
however, that none of the foregoing shall operate to reduce Grantor’s “Net Revenue
Interest” for

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any Subject Well or Subject Lease to below the “Net Revenue Interest” set forth on Exhibit
B for such Subject Well or Subject Lease or increase the “Working Interest” of Grantor for any
Subject Well or Subject Lease above that “Working Interest” set forth on Exhibit B for such
Subject Well or Subject Lease (unless there is a proportionate increase in Grantor’s corresponding
“Net Revenue Interest” for such Subject Well or Subject Lease);

          (b) any (i) undetermined or inchoate liens or charges constituting or securing the payment of
expenses that were incurred incidental to maintenance, development, production or operation of the
Leases or for the purpose of developing, producing or processing Minerals therefrom or therein, and
(ii) materialman’s, mechanics’, repairman’s, employees’, contractors’, operators’ or other similar
liens or charges for liquidated amounts, in each case arising in the ordinary course of business
that Grantor has agreed to pay or is contesting in good faith in the ordinary course of business;

          (c) any liens for taxes and assessments not yet delinquent or, if delinquent, that are being
contested in good faith by Grantor in the ordinary course of business;

          (d) any liens or security interests created by law or reserved in any Lease for the payment of
royalty, bonus or rental, or created to secure compliance with the terms of the agreements,
instruments and documents that create or reserve to Grantor its interests in the Leases;

          (e) any obligations or duties affecting the Leases to any municipality or public authority
with respect to any franchise, grant, license or permit, and all applicable laws, rules,
regulations and orders of any governmental authority;

          (f) any (i) easements, rights-of-way, servitudes, permits, surface leases and other rights in
respect of surface operations, pipelines, grazing, hunting, lodging, canals, ditches, reservoirs or
the like, and (ii) easements for streets, alleys, highways, pipelines, telephone lines, power
lines, railways and other similar rights-of-way, on, over or in respect of the lands described in
the Leases, provided that, in the case of clauses (i) and (ii), such easements,
rights-of-way, servitudes, permits, surface leases and other rights do not materially impair the
value of the Net Profits Interest;

          (g) all lessors’ royalties, overriding royalties, net profits interests, carried interests,
production payments, reversionary interests and other burdens on or deductions from the proceeds of
production created or in existence as of the Effective Time; provided, however,
that none of the foregoing shall operate to reduce Grantor’s “Net Revenue Interest” for any Subject
Well or Subject Lease to below the “Net Revenue Interest” set forth on Exhibit B for such
Subject Well or Subject Lease or increase the “Working Interest” of Grantor for any Subject Well or
Subject Lease above that “Working Interest” set forth on Exhibit B for such Subject Well or
Subject Lease (unless there is a proportionate increase in Grantor’s corresponding “Net Revenue
Interest” for such Subject Well or Subject Lease);

          (h) preferential rights to purchase or similar agreements and required third party consents to
assignments or similar agreements;

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          (i) all rights to consent by, required notices to, filings with, or other actions by any
governmental authority in connection with the sale or conveyance of the Leases or interests
therein;

          (j) production sales contracts; division orders; contracts for sale, purchase, exchange,
refining or processing of Minerals; unitization and pooling designations, declarations, orders and
agreements; operating agreements; agreements for development; area of mutual interest agreements;
gas balancing or deferred production agreements; processing agreements; plant agreements; pipeline,
gathering and transportation agreements; injection, repressuring and recycling agreements; salt
water or other disposal agreements; seismic or geophysical permits or agreements; and any and all
other agreements entered into by Grantor or its Affiliates in connection with the exploration or
development of the Leases or the extraction, processing or marketing of production therefrom or to
which any of the Leases were subject when acquired by Grantor or its Affiliates; provided,
however, that none of the foregoing shall operate to reduce Grantor’s “Net Revenue
Interest” for any Subject Well or Subject Lease to below the “Net Revenue Interest” set forth on
Exhibit B for such Subject Well or Subject Lease or increase the “Working Interest” of
Grantor for any Subject Well or Subject Lease above that “Working Interest” set forth on
Exhibit B for such Subject Well or Subject Lease (unless there is a proportionate increase
in Grantor’s corresponding “Net Revenue Interest” for such Subject Well or Subject Lease); and

          (k) conventional rights of reassignment that obligate Grantor to reassign all or part of a
property to a third party if Grantor intends to release or abandon such property.

     “Person” shall mean any individual, partnership, limited liability company, corporation,
trust, unincorporated association, governmental agency, subdivision, or instrumentality, or other
entity or association.

     “Possible Refundable Amounts” shall have the meaning set forth in Section 3.1(a)(v).

     “Pre-Effective Time Payment” shall have the meaning set forth in Section 8.1.

     “Prime Interest Rate” shall mean the lesser of (a) the rate of interest per annum publicly
announced from time to time by JPMorgan Chase Bank, N.A. as its “prime rate” in effect at its
principal office in New York City (each change in the prime rate to be effective on the date such
change is publicly announced), with the understanding that such bank’s “prime rate” may be one of
several base rates, may serve as a basis upon which effective rates are from time to time
calculated for loans making reference thereto, and may not be the lowest of such bank’s base rates
or (b) the maximum rate of interest permitted under applicable law.

     “Prior Reversionary Interest” shall mean any contract, agreement, Farmout Agreement, lease,
deed, conveyance or operating agreement that exists as of the Effective Time or that burdened the
Subject Interests at the time such Subject Interests were acquired by Grantor, that by the terms
thereof requires a Person to convey a part of the Subject Interests to another Person or to
permanently cease production of any Subject Well, including obligations arising pursuant to

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any operating agreements, Leases, coal leases, and other similar agreements or instruments
affecting the Subject Interests.

     “Proceeds Percentage” shall mean eighty percent (80%).

     “Processing” or “Processed” shall mean to manufacture, fractionate or refine Subject Minerals,
but such terms do not mean or include activities involving the use of normal lease or well
equipment (such as dehydrators, gas treating facilities, simple gravity or mechanical separators,
heater-treaters, lease compression facilities, injection or recycling equipment, tank batteries,
field gathering systems, pipelines and equipment and so forth) to treat or condition Minerals or
other normal operations on any of the Subject Interests.

     “Production Period Prior to Effective Time” shall mean the period commencing on and including
January 1, 2011 through, but excluding, the day of the Effective Time.

     “Production Sales Contracts” shall mean all contracts, agreements and arrangements for the
sale or disposition of Minerals.

     “Quarterly
Record Date” shall mean the 30th day (or the next Business Day, if the
30th day is not a Business Day) of the first month following the close of each Payment
Period; provided, however that the first Quarterly
Record Date shall be August 1,
2011.

     “Related Party” shall mean Vess Oil Corporation, Vess Texas Partners, LLC, LD Drilling Inc.
and Davis Petroleum, Inc. and their successors and permitted assigns.

     “Release” shall mean any depositing, spilling, leaking, pumping, pouring, placing, emitting,
discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping or
disposing into the environment.

     “Reserve Account” shall mean an account to be maintained by Grantor pursuant to Section 3.1;
provided that the balance in such account at the Effective Time shall be zero and at any
time shall not exceed $1,000,000, and provided further that amounts held in such
account shall be expended by Grantor only with respect to the development, maintenance or operation
of the Subject Interests and related activities.

     “Subject Interests” shall mean each kind and character of right, title, claim, or interest
(collectively the “rights”) that Grantor has or owns in the Subject Leases and the Subject Wells
whether such right be under or by virtue of a lease, a unitization or pooling order or agreement,
an operating agreement, a division order, or a transfer order or be under or by virtue of any other
type of claim or title, legal or equitable, recorded or unrecorded, all as such rights shall be (a)
enlarged or diminished by virtue of the provisions of Section 4.2, and (b) enlarged by the
discharge of any payments out of production or by the removal of any charges or encumbrances to
which any of such rights are subject at the Effective Time (provided that such removal is
pursuant to the express terms of the instrument that created such charge or encumbrance) and any
and all renewals and extensions of the right occurring within one year after the expiration of such
rights.

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     “Subject Leases” shall mean each kind and character of right, title, claim or interest
(collectively the “rights”) that Grantor has or owns in the Leases whether such right be under or
by virtue of a lease, a unitization or pooling order or agreement, an operating agreement, a
division order, or a transfer order or be under or by virtue of any other type of claim or title,
legal or equitable, recorded or unrecorded, all as such rights shall be (a) enlarged or diminished
by virtue of the provisions of Section 4.2, and (b) enlarged by the discharge of any payments out
of production or by the removal of any charges or encumbrances to which any of such rights are
subject at the Effective Time (provided that such removal is pursuant to the express terms
of the instrument that created such charge or encumbrance) and any and all renewals and extensions
of the right occurring within one year after the expiration of such rights.

     “Subject Minerals” shall mean all Minerals in and under and that may be produced, saved, and
sold from, and are attributable to, the Subject Interests from and after the Effective Time, after
deducting the appropriate share of all royalties and any overriding royalties, production payments
and other similar charges (except the Net Profits Interest) burdening the Subject Interests at the
Effective Time, provided that, (a) there shall not be included in the Subject Minerals (i)
any Minerals attributable to non-consent operations conducted with respect to the Subject Interests
(or any portion thereof) as to which Grantor shall be a non-consenting party as of the Effective
Time that are dedicated to the recoupment or reimbursement of costs and expenses of the consenting
party or parties by the terms of the relevant operating agreement, unit agreement, contract for
development, or other instrument providing for such non-consent operations (including any interest,
penalty or other amounts related thereto), or (ii) any Minerals unavoidably lost in production or
used by Grantor for production operations (including without limitation, fuel, secondary or
tertiary recovery) conducted solely for the purpose of producing Subject Minerals from the Subject
Interests, and (b) there shall be included in the Subject Minerals any Minerals attributable to
non-consent operations conducted with respect to the Subject Interests (or any portion thereof) as
to which Grantor shall be a non-consenting party as of the Effective Time that are produced, saved,
and sold from, and are attributable to the Subject Interests after the Effective Time from and
after the recoupment or reimbursement of costs and expenses (including any interest, penalty or
other amounts related thereto) of the consenting party or parties by the terms of the relevant
operating agreement, unit agreement, contract agreement, contract development, or other instruments
providing for such non-consent operations.

     “Subject Well” shall mean each well (whether now existing or hereinafter drilled) on the
Subject Leases in respect of which Grantor owns any interest or is entitled to any of the Minerals
production or the proceeds therefrom (whether directly or indirectly by virtue of the effect of any
farmout or farmin provisions or other provisions).

     “Termination Date” shall mean the later of (a) December 31, 2030 and (b) the day on which the
total volume of the Subject Minerals (including any Subject Minerals produced from the Subject
Interests Transferred by Grantor pursuant to Section 5.1 hereof) produced, saved and sold from and
after January 1, 2011 equals a volume of (i) 10.6 MMBOE (which is the equivalent of 8.5 MMBOE in
respect of the Net Profits Interest) less (ii) the aggregate volume of proved reserves attributable
to the Subject Interests that are Transferred by Grantor pursuant to

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Section 5.2 hereof (with the volume of proved reserves attributable to any individual Subject
Interest so Transferred determined solely by reference to the quantity of reserves attributable to
such Subject Interest that are expected to be produced during the then applicable remainder of the
term of the Net Profits Interest in the most recent reserve report prepared by an independent
reserve engineer in accordance with the methodology specified in the rules and regulations of the
Securities and Exchange Commission, provided that, in the event an independent reserve
engineer has not prepared a reserve report satisfying the foregoing requirements within 12 months
prior to the date of the Transfer of such Subject Interest, no volume of proved reserves for much
Subject Interest shall be included in such aggregate volume pursuant to this clause (ii)).

     “Transfer” including its syntactical variants, shall mean any assignment, sale, transfer,
conveyance, or disposition of any property; provided, however, “Transfer” as used
herein does not include the granting of a security interest, pledge or mortgage in Grantor’s
interest in any property, including Grantor’s interest in the Subject Interests or the Subject
Minerals.

     “Trust Agreement” means the Amended and Restated Trust Agreement of VOC Energy Trust, dated of
even date herewith, by and among VOC Brazos Energy Partners, L.P., Grantee and Wilmington Trust
Company, a banking corporation organized under the laws of the State of Delaware.

     “Trust Units” shall have the meaning ascribed to such term in the Trust Agreement.

ARTICLE III

ESTABLISHMENT OF NET PROFITS ACCOUNT

     3.1 Net Profits Account and Reserve Account. Grantor shall establish and maintain
true and correct books and records in order to determine the credits and debits to the Net Profits
Account and the Reserve Account to be maintained by Grantor at all times during the Net Profits
Period, in accordance with the terms of this Conveyance and prudent and accepted accounting
practices. For purposes of this Section 3.1:

     (a) The Net Profits Account shall be credited with an amount equal to the sum, from and after
the Effective Time with respect to each Payment Period, of the gross proceeds (determined before
calculating the Net Profits) received by Grantor from the sale of all Subject Minerals;
provided, however, that:

	 	(i)	 	Subject to the following provisions of this Section 3.1(a), gross proceeds shall
include all consideration received, directly or indirectly, for Transfers of Subject
Minerals as, if and when produced, including without limitation advance payments and
payments under take-or-pay and similar provisions of Production Sales Contracts when
actually received by Grantor during such preceding Payment Period;
	 
	 	(ii)	 	if any proceeds are withheld from Grantor for any reason (other than at the
request of Grantor), such proceeds shall not be considered to be gross proceeds until
such proceeds are actually received by Grantor;

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	 	(iii)	 	if Grantor becomes an underproduced party under any Gas balancing or similar
arrangement affecting the Subject Interests, then the Net Profits Account shall not be
credited with any amounts for any Gas attributable to the Subject Interests that is
deemed to be stored for Grantor’s account under the terms of such Gas balancing
arrangement, and if Grantor becomes an overproduced party under any Gas balancing or
similar arrangement affecting the Subject Interests, then the Net Profits Account shall
not be credited with any amount for any Gas taken by an underproduced party as “make-up”
Gas that would otherwise be attributable to the Subject Interests. The Net Profits
Account shall be credited with amounts received by Grantor (1) for any “make up” Gas
taken by Grantor as a result of its position as an underproduced party under any Gas
balancing or similar arrangement affecting the Subject Interests, (2) as a balancing of
accounts under a Gas balancing or other similar arrangement affecting the Subject
Interests either as an interim balancing or at the depletion of the reservoir, and (3)
for any Gas taken by Grantor attributable to the Subject Interests in excess of its
entitlement share of such Gas;
	 
	 	(iv)	 	if Grantor shall be a party as to any non-consent operations conducted with
respect to all or any of the Subject Interests from and after the Effective Time, all
gross proceeds to be credited to the Net Profits Account with respect thereto shall be
governed by Section 4.3;
	 
	 	(v)	 	if a controversy or possible controversy exists (whether by reason of any
statute, order, decree, rule, regulation, contract, or otherwise) as to the correct or
lawful sales price of any Subject Minerals, or if any amounts received or to be received
by Grantor as “take-or-pay” or “ratable take” payments are subject to refund to any
purchasers of Subject Minerals (in each case, such amounts together with any other gross
proceeds withheld from, or repayable by, Grantor, “Possible Refundable Amounts”), then:

	 	(A)	 	amounts withheld by such purchaser or deposited by it with an
escrow agent shall not be considered to have been received by Grantor and shall
not be credited to the Net Profits Account until actually collected by Grantor;
provided, however, that the Net Profits Account shall not be
credited with any interest, penalty, or other amount that is not derived from
the sale of Subject Minerals; and
	 
	 	(B)	 	amounts received or to be received by Grantor and promptly
deposited or to be deposited by it with a non-Affiliate and non-Related Party
escrow agent, to be placed in interest bearing accounts under usual and
customary terms, shall not be considered to have been received by Grantor and
shall not be credited to the Net Profits Account until actually disbursed to
Grantor by such escrow agent; provided, however, that the Net
Profits Account shall not be credited with any interest, penalty, or other
amount that is not derived from the sale of Subject Minerals;

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	 	(vi)	 	gross proceeds shall not include any amount received by Grantor in respect of any
production of Subject Minerals prior to the Effective Time;
	 
	 	(vii)	 	the Net Profits Account shall not be credited with any amount that Grantor shall
receive for any sale or other disposition of any of the Subject Interests or in
connection with any adjustment of any well or leasehold equipment upon unitization of
any of the Subject Interests;
	 
	 	(viii)	 	gross proceeds shall not include any Manufacturing Proceeds or other amounts that are
reductions of debits to the Net Profits Account under the proviso of Section 3.1(b);
	 
	 	(ix)	 	in the event that Subject Minerals are Processed prior to sale, gross proceeds
shall include only the Market Value of such Subject Minerals before any such Processing;
	 
	 	(x)	 	the amount of gross proceeds credited to the Net Profits Account during any
Payment Period shall be reduced by (1) the aggregate Hedge Settlement Costs paid by
Grantor with respect to such Payment Period and (2) overpayments pursuant to Section
3.4(a);
	 
	 	(xi)	 	gross proceeds shall not include any amount to which Grantor is entitled by
virtue of a judgment of a court of competent jurisdiction resolving a dispute hereunder
between Grantee and Grantor in favor of Grantor, or any amount paid to Grantor in
settlement of such dispute; and
	 
	 	(xii)	 	gross proceeds shall not include any additional proceeds from the sale of
Minerals related to any Subject Well with respect to which Grantor elects to be a
participating party (whether pursuant to an operating agreement or other agreement or
arrangement, including without limitation, non-consent rights and obligations imposed by
statute or regulatory agency) with respect to any operation with respect to such Subject
Well where another party or parties have elected not to participate in such operation
(or have elected to abandon such Subject Well) and Grantor elects to pay the costs of
such nonparticipating or abandoning party and as a result of which Grantor becomes
entitled to receive, either temporarily (i.e., through a period of recoupment) or
permanently any additional proceeds from the sale of Minerals related to such Subject
Well.

     (b) The Net Profits Account shall be debited with an amount equal to the sum of the following
(excluding in all events Manufacturing Costs and Hedge Settlement Costs), to the extent that the
same relate to the Existing Hedges or are properly allocable to the Subject Interests (and any
related equipment or property used in connection therewith) and the production and (subject to
Section 4.4) marketing of Subject Minerals therefrom and have been incurred or accrued (as
described below) by Grantor from and after the Effective Time and attributable to periods from and
after the Effective Time and ending on or before the Termination Date:

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	(i)	 	all direct costs (including capital costs) paid by Grantor (A) for all direct
labor (including fringe benefits) and other services necessary for developing,
operating, producing, reworking and maintaining the Subject Interests, (B) for
dehydration, compression, separation and transportation of the Subject Minerals, and (C)
for all Materials purchased for use on, or in connection with, any of the Subject
Interests (including without limitation (1) all amounts charged Grantor for conformance
of investment if the Subject Interests or any part or parts thereof are hereafter from
time to time unitized or if any participating area in a federal divided-type unit is
changed, (2) the costs of any seismic (including 3-D seismic surveys), geological or
geophysical operations to the extent relating to the search for Subject Minerals, (3)
the costs of drilling, completing, testing, equipping, plugging back, reworking,
recompleting and plugging and abandoning any Subject Well on the Subject Interests,
whether or not such Subject Well is a producer or is abandoned as a dry hole or junked,
(4) the cost of constructing gathering facilities, tanks and other production and
delivery facilities on the Subject Interests, and (5) the cost of secondary recovery,
pressure maintenance, repressuring, recycling and other operations conducted for the
purpose of enhancing production); provided, however, that the debits
made to the Net Profits Account pursuant to this subsection (and, to the extent
applicable, pursuant to the other applicable provisions of this Conveyance) with respect
to any Subject Interest shall be made on the same basis as such costs are charged under
the operating agreement (if any) applicable to such Subject Interest at the time the
transaction giving rise to such debit occurred, except that (I) in the case where
Grantor, a Related Party or one of Grantor’s Affiliates acts as operator of any Subject
Interest, the costs (including any producing overhead) debited to the Net Profits
Account with respect to such Subject Interest shall not exceed the costs charged
pursuant to operating agreements applicable to similar properties operated by third
parties that are not Related Parties or Affiliates of Grantor; and (II) in the event a
Subject Interest is operated at such time by a third party that is not a Related Party
or an Affiliate of Grantor but is not subject to an operating agreement, such debit
shall be made on the same basis as Grantor is charged by such third party;
provided, further, if Grantor elects to pay the costs of a nonconsenting
party or nonparticipating party with respect to which the gross proceeds derived from
such costs are not credited to the Net Profits Account pursuant to Section 3.1(a),
Grantor shall be solely responsible for such costs;

	(ii)	 	all costs (including without limitation outside legal, accounting and engineering
services) attributable to the Subject Interests of (A) handling, investigating and/or
settling litigation, administrative proceedings and claims (including without limitation
lien claims other than liens for borrowed funds) and (B) payment of judgments, penalties
and other liabilities (including interest thereon), paid by Grantor (and not reimbursed
under insurance maintained by Grantor or others) and to the extent involving any of the
Subject Interests, or to the extent incident to the development, operation or
maintenance of the Subject Interests, or requiring the payment or restitution of any
proceeds of Subject Minerals, or arising from tax or royalty audits; provided
that there shall not be debited to the Net Profits Account any expenses incurred by
Grantor in litigation of any claim or dispute

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	 	 	arising hereunder between Grantor and Grantee or amounts paid by Grantor to Grantee
pursuant to a final order entered by a court of competent jurisdiction resolving any
such claim or dispute or amounts paid by Grantor to Grantee in connection with the
settlement of any such claim or dispute;

	(iii)	 	all taxes (except federal and state income, transfer, mortgage, inheritance,
estate, franchise and like taxes) incurred, accrued or paid by Grantor with respect to
the ownership of the Subject Interests or the extraction of the Subject Minerals,
including without limitation production, severance, sales, gathering and/or excise and
other similar taxes assessed against, and/or measured by, the production of (or the
proceeds or value of production of) Subject Minerals, sales and use taxes, and ad
valorem taxes assessed against or attributable to the Subject Interests or any equipment
used in connection with production from any of the Subject Interests and any
extraordinary or windfall profits taxes that may be assessed in the future based upon
profits realized or prices received from the sale of Subject Minerals; provided,
however, that if Grantee is assessed any of such taxes individually and Grantee
pays such taxes, then the taxes which Grantee is assessed individually and has paid
shall not be debited to the Net Profits Account;

	(iv)	 	insurance premiums attributable to the ownership or operation of the Subject
Interests paid by Grantor for insurance actually carried for periods after the Effective
Time with respect to the Subject Interests, or any equipment located on any of the
Subject Interests, or incident to the development, operation or maintenance of the
Subject Interests, it being recognized that where the coverage is general in nature, or
relates to a group of properties (or more than one interest in the same property), only
that portion which is reasonably allocated to the Subject Interests shall be debited
hereunder;

	(v)	 	all amounts paid by Grantor attributable to the Subject Interests and consisting
of (A) rent and other consideration paid for the use or damage to the surface, (B) delay
rentals, shut-in well payments, overriding royalties and other burdens on production,
minimum royalties and similar payments paid pursuant to the provisions of agreements in
force and effect before the Effective Time and (C) fees for renewals or extensions of
the Leases included in the Subject Interests;

	(vi)	 	amounts attributable to the Subject Interests and charged by the relevant
operator (including those amounts charged to Grantor by any Related Party) as overhead
charges specified in the applicable operating agreements or other arrangements now or
hereafter covering the Subject Interests or Grantor’s operations with respect thereto;

	(vii)	 	to the extent Grantor is the operator of a Subject Interest and there is no
operating agreement covering such Subject Interest now or hereafter, those overhead
charges that are allocated by Grantor to such Subject Interest, to the extent that such
charges are allocated in the same manner that Grantor allocates to other similarly owned
and operated properties for which operating agreements exist with third parties other
than Related Parties and Affiliates of Grantor;

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	 	(viii)	 	if as a result of the occurrence of the bankruptcy or insolvency or similar occurrence
of the purchaser of Subject Minerals any amounts previously credited to the Net Profits
Account are reclaimed from Grantor or its representative, then the amounts reclaimed as
promptly as practicable following Grantor’s payment thereof;

	 	(ix)	 	if Grantor shall be a party to any non-consent operations conducted with respect
to all or any of the Subject Interests, all costs related to such non-consent operations
to be debited to the Net Profits Account with respect thereto, if any, shall be governed
by Section 4.3;

	 	(x)	 	the costs paid by Grantor in connection with the exercise of its rights pursuant
to Section 4.6;

	 	(xi)	 	all costs paid by Grantor for recording this Conveyance and, immediately prior to
the last Payment Period, costs estimated in good faith to record the termination and/or
release of this Conveyance;

	 	(xii)	 	all Administrative Hedge Costs paid by Grantor;

	 	(xiii)	 	all costs attributable to the Subject Interests associated with complying with tariffs
and with federal policies related to the use of interstate pipeline capacity, obtaining
and maintaining any permits, licenses, franchises, drilling bonds, approvals and
certificates from federal, state or local governmental authorities, and reporting
obligations imposed by federal, state or local governmental authorities;

	 	(xiv)	 	any amounts previously included in gross proceeds, if such amounts have
subsequently been refunded or paid out as interest or a penalty;

	 	(xv)	 	without duplication of the costs described elsewhere in this Section 3.1(b)
above, all other direct costs paid by Grantor for the necessary or proper drilling,
completion, hook up, production, operation, reworking, recompleting and maintenance of
the Subject Wells and Subject Interests, and the plugging and abandoning of any
unplugged Subject Wells located on the Subject Interests, abandoning of any facilities
used in connection with the Subject Interests and, where applicable, restoring of the
surface of the Subject Interests;

	 	(xvi)	 	any Debit Balance carried forward pursuant to Section 3.2(c); and

	 	(xvii)	 	the amount of any increase in the Reserve Account related to projected costs of
scheduled future capital expenditure projects, including well drilling, recompletion and
workover costs that have been approved by Grantor in writing;

provided that the costs referred to in this Section 3.1(b) shall be reduced by the
following amounts received by Grantor from and after the Effective Time: (A) any amounts received
by Grantor as delay rentals, bonus, royalty or other similar payments in connection with any
Farmout Agreement or for dry hole, bottom hole or other similar contributions related to the

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Subject Interests or otherwise, (B) upon salvage or other disposition, the applicable actual
salvage value (as determined in accordance with the applicable operating agreement then in effect
and binding upon Grantor) of any Eligible Materials, less, in each instance the actual costs of
salvage or other disposition, (C) any cash payments received by Grantor as a result of any pooling
or unitization of the Subject Interests if the costs giving rise to such payments were charged to
the Net Profits Account, directly or indirectly, (D) any insurance proceeds received by Grantor in
respect of the Subject Interests, Subject Minerals or Eligible Materials if the cost of such
insurance was charged to the Net Profits Account, directly or indirectly, (E) any amounts received
by Grantor from third parties as rental or use fees for Eligible Materials, (F) the gross proceeds
of any judgments or claims received by Grantor for damages occurring on or after the Effective Time
to the Subject Interests (or any part thereof or interest therein) or any Materials (or any part
thereof or interest therein) used in connection with the operation of the Subject Interests or any
Subject Minerals, (G) any proceeds from the sale of Eligible Materials, (H) any payments made to
Grantor in connection with the drilling or deferring of drilling of any Subject Well, (I) if, from
and after the Effective Time, any Subject Minerals shall be Processed before sale, the excess, if
any, of the Manufacturing Proceeds arising therefrom over the Manufacturing Costs of such
Processing, (J) any interest, penalty or other amount not derived from the sale of the Subject
Minerals that is paid to Grantor by the purchaser of production or escrow agent in connection with
Possible Refundable Amounts withheld or deposited with an escrow agent, (K) the Hedge Settlement
Revenues, (L) the amount described in Section 5.2(b), and (M) any amounts in the Reserve Account
that are used to pay for any costs specified in clauses (i) through (xv) of this Section 3.1(b)
(which amounts so used shall reduce the amount of the Reserve Account); provided that in
any Payment Period where the aggregate reduction in costs described in subparts (A) through (M)
above exceeds the amounts described in Section 3.1(b) above for such Payment Period, then such
excess, plus interest at the Prime Interest Rate on such amount, commencing on the expiration date
of the preceding Payment Period to the date such amounts have been used to reduce the costs
referred to in this Section 3.1(b) shall not be applied to reduce the costs described in Sections
3.1(b) below zero but instead shall be applied to reduce such costs in each succeeding Payment
Period, subject to this limitation, until exhausted, provided, however, that if any
portion of such excess remains on the Termination Date, such amount will be forfeited and Grantee
will not be entitled to benefit from such amount, and provided further that (1)
during each 12-month period beginning on the Capital Expenditure Limitation Date, the sum of (x)
the capital expenditures to be debited to the Net Profits Account and (y) the amounts debited to
the Net Profits Accounts pursuant to Section 3.1(b)(xvi) may not exceed the Average Annual Capital
Expenditure Amount, and (2) any amounts in the Reserve Account referred to in Section 3.1(b)(xvii)
immediately preceding the Termination Date shall be credited to Net Profits Account as of the
Termination Date.

     (c) Notwithstanding anything herein to the contrary, the amounts debited to the Net Profits
Account shall not include any of the following: (A) any amount that has also been used to reduce or
offset the amount of the Subject Minerals (or proceeds of production thereof) or has otherwise not
been included therein (including, by way of example and without limitation, proceeds attributable
to royalties, overriding royalties, production payments and other charges burdening the Subject
Interests at the Effective Time); (B) any overriding royalty, production payment or other charge
burdening the Subject Interests which was created by Grantor after the Effective Time; (C) any
general, administrative or overhead costs paid or incurred by Grantor or its Affiliates, except for
those permitted under Section 3.1(b)(vi) and (vii); (D) any amounts paid

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by Grantor (initial or a successor) to such Grantor’s predecessor in interest with respect to
part or all of the Subject Interests (including without limitation any purchase price or other
consideration paid by Grantor to such predecessor in interest to acquire all or part of the Subject
Interests); (E) any interest, premiums, fees or similar charges arising out of borrowings or
purchases of any goods, equipment or other items on credit, whether or not used on or otherwise
related to the Subject Interests; (F) any amount arising from any condition, circumstance,
activity, practice, incident, action, or plan that gives rise to any material liability, or
otherwise form the basis of any claim, action, suit, proceeding, hearing or investigation, based on
or related to the processing, distribution, use, treatment, storage, disposal, transport, or
handling, or the emission, discharge, Release or threatened Release into the environment, of any
pollutant, contaminant, or hazardous substance or other toxic material or waste from or
attributable to the use or operation of any of the Subject Interests which either occurred prior
to, on or after the Effective Time and are attributable to Grantor’s gross negligence or willful
misconduct.

     (d) Nothing set forth in this Section 3.1 shall be interpreted or applied in any manner that
shall ever require or permit any duplication of all or any part of any credit or debit (or
reduction thereto) to the Net Profits Account with respect to the same transaction, item of expense
or charge, under this Conveyance, or that shall ever require or permit any inclusion of any charge
to the Net Profits Account that is reimbursed to Grantor by any Person.

     (e) GRANTEE, BY ITS ACCEPTANCE OF THE NET PROFITS INTEREST, CLEARLY AND UNEQUIVOCALLY
EXPRESSES ITS INTENT THAT THE DEBITS TO THE NET PROFITS ACCOUNT CONTAINED IN SECTION 3.2(b) SHALL
BE APPLICABLE REGARDLESS OF WHETHER OR NOT THE LOSSES, COSTS, EXPENSES AND DAMAGES THAT MAY BE
DEBITED IN ACCORDANCE WITH SUCH SECTION AROSE SOLELY OR IN PART FROM THE ACTIVE, PASSIVE OR
CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF GRANTOR OR ANY OF ITS AFFILIATES, OTHER
THAN THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF GRANTOR OR ANY OF ITS AFFILIATES, EXCEPT TO THE
EXTENT THAT ANY SUCH LOSSES, COSTS, EXPENSES OR DAMAGES RESULT, DIRECTLY OR INDIRECTLY, FROM ANY
BREACH OR NONCOMPLIANCE WITH THE OPERATIONS STANDARD SET FORTH IN SECTION 4.1 HEREOF, AND NOTHING
CONTAINED HEREIN OR ELSEWHERE IN THIS CONVEYANCE SHALL BE CONSTRUED AS A WAIVER OR RELEASE OF
GRANTOR FROM ANY CLAIM, ACTION OR LIABILITY ARISING UNDER SECTION 4.1 HEREOF.

     3.2 Accounting.

     (a) After the end of each Payment Period, a calculation shall be made by Grantor by deducting
(i) the total debits (net of reductions thereof) properly made to the Net Profits Account during
such Payment Period pursuant to Section 3.1(b) from (ii) the total credits properly made to such
Net Profits Account during such Payment Period pursuant to Section 3.1(a).

     (b) If the computation made in accordance with Section 3.2(a) results in a positive amount
with respect to a Payment Period (any such positive amount, the “Net Profits”), then (i) the Net
Profits shall be subtracted from the balance of the Net Profits Account to cause the Net

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Profits Account to have a zero balance immediately following the end of such Payment Period,
(ii) the Net Profits shall be multiplied by the Proceeds Percentage to determine the Net Profits
Interest and (iii) the resulting product from the calculations in (ii) above shall be payable to
Grantee as specified in Section 3.3.

     (c) If the computation made in accordance with Section 3.2(a) results in a negative amount
with respect to a Payment Period, the negative sum shall be deemed the “Debit Balance.” Any Debit
Balance shall be carried forward as a debit to the Net Profits Account for the following Payment
Period. If there is a Debit Balance at the end of any Payment Period, no payments shall be made to
Grantee in respect of the Net Profits Interest nor shall Grantee ever be liable to make any payment
to Grantor in respect of the Debit Balance. In the event that any Debit Balance exists, then an
amount shall be computed equal to interest on such Debit Balance at the Prime Interest Rate for the
period between the last day of the Payment Period that resulted in such Debit Balance and the last
day of the next Payment Period, which amount shall, on the last day of such next Payment Period, be
debited to the Net Profits Account in the same manner as other debits to the Net Profits Account
for such Payment Period.

     (d) All amounts received by Grantor from the sale of the Subject Minerals for any Payment
Period shall be held by Grantor in one of its general bank accounts and Grantor shall not be
required to maintain a segregated account for such funds.

     3.3 Payment of Proceeds Percentage of Net Profits. On or before the Quarterly Record
Date for each Payment Period, Grantor shall transfer or cause to be transferred to Grantee an
amount in respect of the Subject Interests equal to the product of the Proceeds Percentage times
the Net Profits with respect to the immediately preceding Payment Period in accordance with Section
3.2(b). All funds delivered to Grantee on account of the Net Profits Interest shall be calculated
and paid entirely and exclusively out of the gross proceeds attributable to the Subject Minerals
attributable to the Subject Interests.

     3.4 Overpayment; Past Due Payments.

     (a) If Grantor ever pays Grantee more than the amount of money then due and payable to Grantee
under this Conveyance, Grantee shall not be obligated to return the overpayment, but Grantor may,
subject to the next sentence, reduce the gross proceeds used to calculate the Net Profits and
retain for its own account an amount equal to the overpayment, plus interest at the Prime Interest
Rate on such amount, commencing on the sixth (6th) day from the date of the overpayment to the date
such amount is recovered by Grantor from such proceeds. In order to exercise its rights under this
Section 3.4, Grantor must notify Grantee in writing, together with supporting worksheets and data,
within 120 days after the end of the fiscal year to which the quarterly statement (as required by
Section 3.5(a)) containing such overpayment relates.

     (b) Any amount not paid by Grantor to Grantee with respect to the Net Profits Interest when
due shall bear, and Grantor hereby agrees to pay, interest at the Prime Interest Rate from the due
date until such amount has been paid.

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     (c) Grantor shall give Grantee written notice with respect to any underpayment described in
Section 3.4(b), together with supporting worksheets and data.

     3.5 Statements.

     (a) At least
twelve days before each Quarterly Record Date, Grantor shall deliver to Grantee a
statement showing the computation of the Net Profits and the Proceeds Percentage of the Net
Profits, including gross proceeds and debits therefrom (including any reductions to such gross
proceeds and/or debits), with respect to the preceding Payment Period.

     (b) At least twelve days before the first Quarterly Record Date after the end of each calendar
year and at least twelve days before the Quarterly Record Date after the Termination Date, such statement shall
also show the computation of the Net Profits and the Proceeds Percentage of the Net Profits,
including gross proceeds and debits therefrom (including any reductions to such gross proceeds
and/or debits), for the preceding calendar year (or portion thereof when the Net Profits Interest
was in effect).

     (c) If Grantee takes exception to any item or items included in any quarterly statement
required by Section 3.5(a) (including, with respect to the first Quarterly Record Date, information
relating to the Pre-Effective Time Payment), Grantee must notify Grantor in writing within 120 days
after the end of the fiscal year with respect to which such statements relate. Such notice must
set forth in reasonable detail the specific debits complained of and to which exception is taken or
the specific credits which should have been made and allowed. Adjustments shall be made for all
complaints and exceptions that are agreed to by the parties; provided that if the parties
do not agree, such disputed matters shall be subject to the arbitration provisions set forth in
Article XI of the Trust Agreement.

     (d) Notwithstanding anything to the contrary herein, all matters reflected in Grantor’s
statements for the preceding calendar year (or portion thereof) that are not objected to by Grantee
in the manner provided by this Section 3.5(c) shall be deemed correct as rendered by Grantor to
Grantee.

     3.6 Information/Access.

     (a) Grantor shall maintain true and correct books, records, and accounts of (i) all
transactions and activities required or permitted by, or otherwise associated with, this Conveyance
and (ii) the financial information necessary to reflect such transactions and activities, including
the financial information needed to calculate the Net Profits with respect to any Payment Period.

     (b) Grantee or its representative, at the Trust’s expense, may inspect and copy such books,
records, and accounts, and such other documents, contracts and information as may be reasonably
requested by the Trustee, in the offices of Grantor during normal business hours and upon
reasonable notice.

     (c) At Grantee’s request, subject to applicable restrictions on disclosure and transfer of
information, Grantor shall give Grantee and its designated representatives (on behalf of the Trust)
reasonable access in Grantor’s office during normal business hours to (i) all geological,

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Subject Well and production data in Grantor’s possession or Grantor’s Affiliates’ possession,
relating to operations on the Subject Interests and (ii) all reserve reports and reserve studies in
the possession of Grantor or of Grantor’s Affiliates, relating to the Subject Interests, whether
prepared by Grantor, by Grantor’s Affiliates, or by consulting engineers.

     (d) Grantor makes no representations or warranties about the accuracy or completeness of any
such data, reports, or studies referred to in Section 3.6(c) and shall have no liability to
Grantee, the Trust or any other Person resulting from such data, studies, or reports.

ARTICLE IV

OPERATION OF THE SUBJECT INTERESTS

     4.1 Operations Standard. To the extent that Grantor controls such matters and
notwithstanding anything to the contrary herein, with respect to each Subject Interest, Grantor
agrees that it will conduct and carry on, or use commercially reasonable efforts to cause the
operator thereof to conduct and carry on, the maintenance and operation of such Subject Interest in
the same manner as a reasonably prudent operator in the state in which the Subject Interest is
located would do under the same or similar circumstances acting with respect to its own properties
(without regard to the existence of the Net Profits Interest). Grantee acknowledges that Grantor
is and shall be an undivided interest owner with respect to the Subject Interests. Grantee agrees
that the acts or omissions of Grantor’s co-owners shall not be deemed to constitute a violation of
the provisions of this Section 4.1, nor shall any action required by a vote of co-owners be deemed
to constitute such a violation so long as Grantor has voted its interest in a manner designed to
comply with this Section 4.1. Nothing contained in this Section 4.1 shall be deemed to prevent or
restrict Grantor from electing not to participate in any operations that are to be conducted under
the terms of any operating agreement, unit operating agreement, contract for development, or
similar instrument affecting or pertaining to the Subject Interests (or any portion thereof) and
permitting consenting parties to conduct non-consent operations thereon if a reasonably prudent
operator in the state in which the Subject Interest affected thereby is located acting with respect
to its own properties (without regard to the existence of the Net Profits Interest) would make such
elections.

     4.2 Pooling and Unitization. Grantor shall have the right to pool or unitize all or
any of the Leases as to any one or more of the formations or horizons thereunder, and as to any of
the Subject Minerals, when, in the reasonable judgment of Grantor, it is necessary or advisable to
do so in order to form a drilling or proration unit to facilitate the orderly development of the
Subject Interests or to comply with the requirements of any law or governmental order or regulation
relating to the spacing of wells or proration of the production therefrom. For purposes of
computing the Net Profits, there shall be allocated to the Subject Interests included in such unit
a pro rata portion of the Minerals produced from the pooled unit on the same basis that production
from the pool or unit is allocated to other working interests in such pool or unit. The interest
in any such unit attributable to the Subject Interests (or any part thereof) included therein shall
become a part of the Subject Interests and shall be subject to the Net Profits Interest in the same
manner and with the same effect as if such unit and the interest of Grantor therein were
specifically described in Exhibit A to this Conveyance.

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     4.3 Non-Consent. Subject to Section 4.1, if Grantor elects to be a non-participating
party (whether pursuant to an operating agreement or other agreement or arrangement, including
without limitation, non-consent rights and obligations imposed by statute or regulatory agency)
with respect to any operation on any Subject Interest or elects to be an abandoning party with
respect to a Subject Well located on any Subject Interest, the consequence of which election is
that Grantor’s interest in such Subject Interest or part thereof is temporarily (i.e., during a
recoupment period) or permanently forfeited to the parties participating in such operations, or
electing not to abandon such Subject Well, then the costs and proceeds attributable to such
forfeited interest shall not, for the period of such forfeiture (which may be a continuous and
permanent period), be debited or credited to the Net Profits Account and such forfeited interest
shall not, for the period of such forfeiture, be subject to the Net Profits Interest.
Notwithstanding anything to the contrary contained herein, Grantor shall not elect, as to any
Subject Interest, to be a non-participating party with respect to any operation contemplated in
this Section 4.3 in the event any Related Party or Affiliate of Grantor will also be a
participating party in such operation.

     4.4 Marketing/Hedges. As between Grantor and Grantee, Grantor shall have exclusive
charge and control of the marketing of all Subject Minerals. Grantor shall market, or cause to be
marketed, the Subject Minerals allocable to the Net Profits Interest in the same manner that it
markets its Subject Minerals and Grantor shall not be entitled to deduct from the calculation of
the Net Profits any fee for marketing the Subject Minerals allocable to the Net Profits Interest.
Grantor shall not enter into any Hedges (other than the Existing Hedges) with respect to the
Subject Minerals from and after the Effective Time or modify or terminate the Existing Hedges.

     4.5 Amendment of Leases. Grantor shall have the unrestricted right to renew, extend,
modify, amend, or supplement the Leases with respect to any of the lands covered thereby in any
particular without the consent of Grantee; provided, that the Net Profits Interest shall
apply to all renewals, extensions, modifications, amendment, supplements and other similar
arrangements (and/or interests therein) of the Leases, whether or not such renewals, extensions
modifications, amendment, supplements or arrangements have heretofore been obtained, or are
hereafter obtained, by Grantor and no renewal, extension, modification, amendment, or
supplementation shall adversely affect any of Grantee’s rights hereunder, including, without
limitation, the amount, computation, or method of payment of the Net Profits Interest;
provided further that any fees payable with respect to such renewal, extension,
modification, amendment or supplementation may be debited to the Net Profits Account pursuant to
Section 3.1(b). Grantor shall furnish Grantee with written notice of any renewal, extension,
modification, amendment, or supplementation, which materially affects the Net Profits Interest,
within 30 days after Grantor has entered into the same, which notice shall specify the date thereof
and the location and the acreage covered thereby.

     4.6 Abandonment. Grantor shall have the right without the joinder of Grantee to
release, surrender and/or abandon its interest in the Subject Interests, or any part thereof, or
interest therein even though the effect of such release, surrender or abandonment will be to
release, surrender or abandon the Net Profits Interest the same as though Grantee had joined
therein insofar as the Net Profits Interest covers the Subject Interests, or any part thereof or
interest therein, so released, surrendered or abandoned by Grantor; provided,
however, that

-21-

 

Grantor shall not release, surrender or abandon any Subject Interest unless and until Grantor
reasonably believes (acting like a reasonably prudent operator in the state in which such Subject
Interests are located with respect to its own properties, without regard to the existence of the
Net Profits Interest) that such Subject Interest has ceased to produce or will no longer produce
Subject Minerals in commercially paying quantities; and provided further that
Grantor will, promptly after the release, surrender or abandonment of any Subject Interest, or any
part thereof or interest therein, notify Grantee in writing, giving a description of such Subject
Interest, or part thereof or interest therein, that has been released, surrendered or abandoned,
and the date on which such release, surrender or abandonment has occurred. Grantor shall have an
unequivocal right to abandon a Subject Interest or any part thereof, if such abandonment is
necessary for health, safety or environmental reasons, or the Subject Minerals that would have been
produced from the abandoned Subject Interest would otherwise be produced from Subject Wells located
on the remaining Subject Interests.

     4.7 Contracts with Affiliates and Related Parties. Grantor, its Affiliates or Related
Parties may perform services and furnish supplies and/or equipment with respect to the Subject
Interests that are required to operate the Subject Interests in accordance with the operations
standard set forth in Section 4.1 hereof and debit the Net Profits Account for the costs of such
services and/or furnishing of such supplies and/or equipment, provided that,
notwithstanding anything to the contrary herein, the terms of the provision of such services or
furnishing of supplies and/or equipment shall not be less favorable than those terms available from
non-Affiliates and non-Related Parties in the same area as such Subject Interests that are engaged
in the business of rendering comparable services or furnishing comparable equipment and supplies,
taking into consideration all such terms, including the price, term, condition of supplies or
equipment, availability of supplies and/or equipment, and all other terms.

ARTICLE V

RELEASES AND TRANSFERS OF SUBJECT INTERESTS/SUBJECT WELLS

     5.1 Assignment by Grantor Subject to Net Profits Interest.

     (a) Grantor may from time to time Transfer, mortgage, or pledge the Subject Interests, or any
part thereof or undivided interest therein, subject to the Net Profits Interest and this
Conveyance.

     (b) Upon any Transfer of the Subject Interests, or any part thereof or undivided interest
therein, by Grantor pursuant to this Section 5.1, Grantor may delegate to its transferee all
obligations, requirements, and responsibilities of Grantor arising under this Conveyance with
respect to the property Transferred, but, as between Grantor and Grantee, Grantor shall
remain responsible therefor as if the Transfer had not taken place.

     (c) Grantee is not entitled to receive any share of the sales proceeds received by Grantor in
any transaction permitted by this Section 5.1.

     (d) For purposes of computing Net Profits from and after the effective date of any Transfer
pursuant to this Section 5.1, the Transfer shall be disregarded; provided however,
that the debits and credits to the Net Profits Account during each Payment Period in respect of the

-22-

 

Subject Interests Transferred shall reflect items received or incurred by the transferee, such
items to be computed in accordance with the provisions of Article III hereof.

     5.2 Sale and Release of Properties.

     (a) Grantor may from time to time Transfer the Subject Interests, or any part thereof or
undivided interest therein, free of the Net Profits Interest and this Conveyance provided
that:

	 	(i)	 	no Subject Interest or portion thereof may be Transferred pursuant to this
Section 5.2 where the production of Subject Minerals from such Subject Interest or part
thereof for the twelve (12) months immediately preceding the proposed sale date for such
Subject Interest or part thereof exceeds one quarter of one percent (0.25%) of the total
production of total Subject Minerals produced from all of the Subject Interests for the
twelve (12) months immediately preceding the proposed sale date for such Subject
Interest or part thereof;
	 
	 	(ii)	 	in connection with any such Transfer, Grantee shall receive as compensation for
the release of its Net Profits Interest in the Subject Interest (or portion thereof) so
Transferred the Fair Value of the portion of the Net Profits Interest so released;
	 
	 	(iii)	 	such Transfer shall not be to an Affiliate or Related Party; and
	 
	 	(iv)	 	the aggregate fair market value of all portions of the Net Profits Interest
released pursuant to Section 5.2(a) during any consecutive twelve (12) month period
shall not exceed $500,000.

     (b) In connection with any Transfer pursuant to this Section 5.2, Grantor shall remit to
Grantee an amount equal to the Fair Value of the portion of the Net Profits Interest being
released. Grantor shall make such payment to Grantee on or before the Quarterly Record Date for
the Payment Period in which Grantor receives the payment with respect to any such Transfer of the
Subject Interest.

     (c) In connection with any Transfer provided for in this Section 5.2, Grantee shall, on
request, immediately prior to any such Transfer, execute, acknowledge, and deliver to Grantor a
recordable instrument (reasonably acceptable to Grantor) that releases the Net Profits Interest and
this Conveyance with respect to the Subject Interests being Transferred.

     (d) From and after the actual date of any such Transfer by Grantor, Grantor and any assignee,
purchaser, transferee or grantee of such Subject Interest shall be relieved of all obligations,
requirements, and responsibilities arising under the Net Profits Interest or this Conveyance with
respect to the Subject Interests Transferred, except for those that accrued prior to such date.

     5.3 Release of Other Properties.

     (a) Notwithstanding anything herein to the contrary, in the event that any Person notifies
Grantor that, pursuant to a Prior Reversionary Interest, Grantor is required to convey any of the
Subject Interests to such Person or cease production from any Subject Well, Grantor may

-23-

 

provide such conveyance with respect to such Subject Interest or permanently cease production
from any such Subject Well.

     (b) Notwithstanding anything herein to the contrary, in the event that Grantor receives
compensation pursuant to any Prior Reversionary Interest, Grantee shall not be entitled to any
share of such compensation.

     (c) In connection with any conveyance or permanent cessation of production provided for in
Section 5.3(a) above, Grantee shall, on request, immediately prior to such event, execute,
acknowledge, and deliver to Grantor a recordable instrument (reasonably acceptable to Grantor) that
releases the Net Profits Interest and this Conveyance with respect to any such Subject Well or
Subject Interests.

     (d) From and after the actual date of any conveyance or permanent cessation of production
provided for in Section 5.3(a), Grantor and any assignee, purchaser, transferee or grantee of such
Subject Interest shall be relieved of all obligations, requirements, and responsibilities arising
under the Net Profits Interest or this Conveyance with respect to the Subject Interests Transferred
(and no credits or debits shall be made to the Net Profits Account therefor), except for those that
accrued prior to such date.

     5.4 Farmouts.

     (a) Grantor may from time to time enter into Farmout Agreements with third parties who are not
Related Parties or Affiliates of Grantor with respect to a Subject Interest. In the event that
Grantor enters into any Farmout Agreement with a third party, the Net Profits Interest and this
Conveyance shall burden only Grantor’s retained interest in the Subject Interest after giving
effect to any interest in the Subject Interest that a counterparty to the Farmout Agreement may
earn under such Farmout Agreement.

     (b) In connection with Grantor entering into any Farmout Agreement, Grantee shall, upon
request, execute, acknowledge, and deliver to Grantor a recordable instrument (reasonably
acceptable to Grantor) that releases the Net Profits Interest and this Conveyance with respect to
the Subject Interests being Transferred pursuant to such Farmout Agreement; provided, the
Net Profits Interest shall continue to burden the Subject Interest retained by Grantor.

ARTICLE VI

OWNERSHIP OF PROPERTY; LIABILITY OF GRANTEE; NO RIGHT OF 
OPERATIONS BY GRANTEE

     6.1 Ownership of Certain Property. The Net Profits Interest does not include any
right, title, or interest in and to any personal property, fixtures, or equipment and is
exclusively an interest in and to the Subject Leases and the Minerals in and under and produced and
saved from the Subject Interests, and Grantee shall look solely to the Subject Minerals and
payments in respect thereof (as provided herein) for the satisfaction and realization of the Net
Profits Interest.

     6.2 No Personal Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
CONVEYANCE, GRANTEE SHALL NEVER PERSONALLY BE RESPONSIBLE FOR PAYMENT OF ANY PART OF THE COSTS,

-24-

 

EXPENSES OR LIABILITIES INCURRED IN CONNECTION WITH THE EXPLORING, DEVELOPING, OPERATING AND
MAINTAINING OF THE SUBJECT INTERESTS; PROVIDED, HOWEVER, ALL SUCH COSTS AND
EXPENSES SHALL, TO THE EXTENT THE SAME RELATE TO ACTS, OMISSIONS, EVENTS, CONDITIONS OR
CIRCUMSTANCES OCCURRING FROM AND AFTER THE EFFECTIVE TIME, NEVERTHELESS BE CHARGED AGAINST THE NET
PROFITS ACCOUNT AS AND TO THE EXTENT HEREIN PERMITTED, except as otherwise provided herein.

     6.3 No In-Kind Rights. Grantee shall have no right to take in kind any Subject
Minerals allocable to the Net Profits Interest.

     6.4 No Operating Rights. IT IS THE EXPRESS INTENT OF GRANTOR AND GRANTEE THAT THE NET
PROFITS INTEREST SHALL CONSTITUTE (AND THIS CONVEYANCE SHALL CONCLUSIVELY BE CONSTRUED FOR ALL
PURPOSES AS CREATING) A SINGLE, SEPARATE NON-OPERATING NET PROFITS INTEREST IN AND TO THE SUBJECT
LEASES AND MINERALS IN AND UNDER AND PRODUCED AND SAVED FROM THE SUBJECT INTERESTS DURING THE NET
PROFITS PERIOD FOR ALL PURPOSES AND A FULLY VESTED AND FULLY CONVEYED INTEREST IN PROPERTY.
WITHOUT LIMITATION OF THE GENERALITY OF THE IMMEDIATELY PRECEDING SENTENCE, GRANTOR AND GRANTEE
ACKNOWLEDGE THAT GRANTEE HAS NO RIGHT OR POWER TO PARTICIPATE IN THE SELECTION OF A DRILLING
CONTRACTOR, TO PROPOSE THE DRILLING OF A WELL, TO DETERMINE THE TIMING OR SEQUENCE OF DRILLING
OPERATIONS, TO COMMENCE OR SHUT DOWN PRODUCTION, TO TAKE OVER OPERATIONS, OR TO SHARE IN ANY
OPERATING DECISION WHATSOEVER, OR IN ANY DECISION PERTAINING TO THE MARKETING AND SALE OF
PRODUCTION WHATSOEVER. GRANTOR AND GRANTEE HEREBY EXPRESSLY NEGATE ANY INTENT TO CREATE (AND THIS
CONVEYANCE SHALL NEVER BE CONSTRUED AS CREATING) A MINING OR OTHER PARTNERSHIP OR JOINT VENTURE OR
OTHER RELATIONSHIP SUBJECTING GRANTOR AND GRANTEE TO JOINT LIABILITY.

ARTICLE VII

WARRANTY AND NEGATIVE COVENANT

     7.1 Warranty. Grantor agrees to warrant and forever defend, all and singular, the Net
Profits Interest unto Grantee, its successors and assigns, against all persons whomsoever claiming
or to claim the same, or any part thereof, by, through or under Grantor, but not otherwise, subject
to the Permitted Encumbrances. Subject to the Net Profits Interest and the Permitted Encumbrances,
Grantor further warrants to Grantee that with respect to claims made by, through or under Grantor
or its Affiliates, immediately prior to the transfer made pursuant to this Conveyance, with respect
to each Subject Well or Subject Lease set forth in Exhibit B, Grantor is (i) entitled to
receive not less than the percentage set forth in Exhibit B hereto as the “Net Revenue
Interest” of all Minerals produced, saved and marketed from such Subject Well or Subject Lease to
which such “Net Revenue Interest” corresponds without reduction of such interest throughout the
duration of the life of such Subject Well or Subject Lease, except as specifically set forth in
Exhibit B, and (ii) obligated to bear the percentage of the costs and expenses relating to
the maintenance, development and operation of such Subject Well or Subject Lease not greater than
the “Working

-25-

 

Interest” shown in Exhibit B with respect to such Subject Well or Subject Lease,
without increase throughout the duration of the life of such Subject Well or Subject Lease, as
applicable, except as specifically set forth in Exhibit B. Grantor also hereby transfers
to Grantee by way of substitution and subrogation (to the fullest extent that same may be
transferred), all rights or actions over and against all predecessors (other than Affiliates of
Grantor), covenantors or warrantors of title.

     7.2 Senior Obligation. Grantor and Grantee acknowledge and agree that the Net Profits
Interest is intended to be a real property conveyance and, as such, each agreement, indenture,
bond, deed of trust, filing, application or other instrument that creates or purports to create a
lien, mortgage, security interest or other charge secured by the Subject Interests, Subject
Minerals or the proceeds from the sale of the Subject Minerals or the Existing Hedges that is
entered into on or after the date hereof shall be subject to the Net Profits Interest and the Net
Profits Interest shall be senior in right of payment and collection to any and all obligations
created thereby in respect of the Subject Interests, Subject Minerals or the proceeds from the sale
of the Subject Minerals or the Existing Hedges.

ARTICLE VIII

ASSIGNMENT OF PRE-EFFECTIVE TIME PAYMENT

     8.1 For and in consideration of Ten and No/100 Dollars ($10.00) and other good and valuable
consideration (including the issuance by Grantee to Grantor of the Trust Units identified in
Article I) to Grantor paid by Grantee, the receipt and sufficiency of which are hereby acknowledged
by Grantor, Grantor hereby GRANTS, BARGAINS, SELLS, CONVEYS, TRANSFERS, ASSIGNS, SETS OVER AND
DELIVERS unto Grantee, effective as of the Effective Time, an amount, payable by wire transfer of
immediately available funds on or before August 1, 2011, equal to the product of the Proceeds
Percentage times the Net Profits that would have been payable by Grantor to Grantee pursuant to the
terms of this Conveyance for the Production Period Prior to the Effective Time as if the Net
Profits Interest had been in existence and this Conveyance had been dated and in effect as of
January 1, 2011 (the “Pre-Effective Time Payment”). In no event shall any item of gross proceeds,
cost, revenue or other amount used in determining the Pre-Effective Time Payment be duplicated with
any such item of gross proceeds, cost, revenue or other amount pursuant to the calculation of Net
Profits.

ARTICLE IX

MISCELLANEOUS

     9.1 Notices. All notices and other communications required or permitted under this
Conveyance shall be in writing and, unless otherwise specifically provided, shall be delivered
personally, by electronic transmission, by registered or certified mail, postage prepaid, or by
delivery service for which a receipt is obtained, to the respective addresses of Grantor and
Grantee shown below, and shall be deemed delivered on the date of receipt. Either party may
specify his proper address or any other post office address within the continental limits of the
United States by giving notice to the other party, in the manner provided in this Section, at least
fifteen (15) days prior to the effective date of such change of address. For purposes of notice,
the addresses of Grantor and Grantee shall be as follows:

	 	 	 

	If to Grantor:

	 	VOC Brazos Energy Partners, L.P.

-26-

 

	 	 	 

	 

	 	c/o Vess Oil Corporation.
	 

	 	1700 Waterfront Parkway, Building 500
	 

	 	Wichita, Kansas 67206
	Attention:

	 	Mike Vess
	 
	 	 
	If to Grantee:

	 	The Bank of New York Mellon Trust Company, N.A.
	 

	 	919 Congress Avenue, Suite 500
	 

	 	Austin, Texas 78701
	Attention:

	 	Michael J. Ulrich

     9.2 Payments. Grantor shall transfer or cause to be transferred all monies to which
Grantee is entitled hereunder by Federal funds wire transfer not later than the date when due, to
Grantee at the bank account specified by Grantee in writing to Grantor.

     9.3 Amendments. This Conveyance may not be amended, altered, or modified except
pursuant to a written instrument executed by Grantor and Grantee.

     9.4 Further Assurances. Grantor and Grantee shall from time to time do and perform
such further acts and execute and deliver such further instruments, conveyances, and documents as
may be required or reasonably requested by the other party to establish, maintain, or protect the
respective rights and remedies of Grantor and Grantee and to carry out and effectuate the
intentions and purposes of this Conveyance, provided in each case the same does not
conflict with any provision of this Conveyance.

     9.5 Waivers. The failure of Grantor or Grantee to insist upon strict performance of
any provision hereof shall not constitute a waiver of or estoppel against asserting the right to
require such performance in the future, nor shall a waiver or estoppel in any one instance
constitute a waiver or estoppel with respect to a later breach of a similar nature or otherwise.

     9.6 No Partition. Grantor and Grantee acknowledge that Grantee has no right or
interest that would permit Grantee to partition any portion of the Subject Interests, and Grantee
hereby waives any such right.

     9.7 Governing Law. THIS CONVEYANCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THE PROPERTY LAWS OF THE STATE IN WHICH
THE SUBJECT INTERESTS ARE LOCATED ARE APPLICABLE.

     9.8 Rule Against Perpetuities. It is not the intent of Grantor or Grantee that any
provision herein violate any applicable law regarding the rule against perpetuities, the suspension
of the absolute power of alienation, or other rules regarding the vesting or duration of estates,
and this Conveyance shall be construed as not violating any such applicable law to the extent the
same can be so construed consistent with the intent of the parties. In the event, however, that
any provision hereof is determined to violate any such applicable law, then such provision shall
nevertheless be effective for the maximum period (but not longer than the maximum period) permitted
by any such applicable law that will result in no violation. To the extent such maximum period is
permitted to be determined by reference to “lives in being”, Grantor and

-27-

 

Grantee agree that “lives in being” shall refer to the lifetime of the last to die of the now
living lineal descendants of the late Joseph P. Kennedy (father of the late President of the United
States of America).

     9.9 Tax Matters.

     (a) Nothing herein contained shall be construed to constitute a partnership or to cause either
party hereto (under state law or for tax purposes) to be treated as being the agent of, or in
partnership with, the other party. In addition, the parties hereto intend that the Net Profits
Interest conveyed hereby to Grantee shall at all times be treated as (i) an incorporeal (i.e., a
non-possessory) interest in real property or land under the laws of the state in which the Subject
Interests are located, and (ii) a production payment under Section 636 of the Code, and therefore,
for tax purposes, debt, payable out of net profits from the production of Subject Minerals (rather
than as a working or any other interest). The parties hereto intend that the Pre-Effective Time
Payment conveyed hereby to Grantee shall at all times prior to Grantor’s payment of the
Pre-Effective Time Payment to Grantee, be treated for United States federal income tax purposes as
a payment obligation of Grantor separate and apart from the Net Profits Interest.

     (b) Grantor and Grantee agree, and by acquisition of an interest in Grantee each holder of an
interest in Grantee shall be deemed to have agreed, for United States federal income tax purposes,
(1) to treat the Net Profits Interest as indebtedness that is subject to Treasury Regulations
Section 1.1275-4 (the “Contingent Debt Regulations”) and, for purposes of the Contingent Debt
Regulations, to treat payments received with respect to the Net Profits Interest as contingent
payments, and (2) to accrue interest with respect to the Net Profits Interest according to the
“noncontingent bond method” set forth in Treasury Regulations Section 1.1275-4(b), using the
comparable yield of [____%] per annum compounded semi-annually. [NTD: Confirm]

     (c) Grantor and Grantee acknowledge and agree, and by acquisition of an interest in Grantee
each holder of an interest in Grantee shall be deemed to have agreed, that (i) the comparable yield
and the schedule of projected payments are not determined for any purpose other than for the
determination of interest accruals and adjustments thereof in respect of the Net Profits Interest
for United States federal income tax purposes and (ii) the comparable yield and the schedule of
projected payments do not constitute a projection or representation regarding the amounts payable
on the Net Profits Interest.

     (d) Grantor may cause to be withheld from any payment hereunder any tax withholding required
by law or regulations, including, in the case of any withholding obligation arising from income
that does not give rise to any cash or property from which any applicable withholding tax could be
satisfied, by way of set off against any subsequent payment of cash or property hereunder.

     9.10 Counterparts; Termination.

     (a) Multiple counterparts of this Conveyance have been recorded in the counties of the States
of Kansas and Texas where the Subject Interests are located. The counterparts are identical except
that, to facilitate recordation, the counterpart recorded in each county may

-28-

 

contain property descriptions relating only to the Subject Interests located in that county.
A counterpart of this Conveyance containing all property descriptions of Subject Interests will be
filed for record in each of Stafford County, Kansas and Brazos County, Texas.

     (b) If any Subject Interests are located in more than one county, the description of such
Subject Interests may be included in any one or more counterparts prepared for recordation in
separate counties, but the inclusion of the same property description in more than one counterpart
of this Conveyance shall not be construed as having effected any cumulative, multiple, or
overlapping interest in the Subject Interests in question.

     (c) On the Termination Date, Grantee shall, on request, execute, acknowledge and deliver to
Grantor a recordable instrument (reasonably acceptable to Grantor) that terminates and releases the
Net Profits Interest with respect to the Subject Interests.

     9.11 Binding Effect. All the covenants and agreements of Grantor herein contained
shall be deemed to be covenants running with Grantor’s interest in the Subject Interests and the
lands affected thereby. All of the provisions hereof shall inure to the benefit of Grantee and its
successors and assigns and shall be binding upon Grantor and its successors and assigns and all
other owners of the Subject Interests or any part thereof or any interest therein.

[Signature page follows]

-29-

 

     EXECUTED effective for all purposes as of the Effective Time.

	 	 	 	 	 	 	 

	 	 	GRANTOR:	 	 
	 
	 	 	 	 	 	 
	 	 	VOC BRAZOS ENERGY PARTNERS, L.P.	 	 
	 
	 	 	 	 	 	 
	 	 	By: Vess Texas Partners, LLC, its general partner	 	 
	 
	 	 	 	 	 	 
	 	 	By: Vess Holding Corporation, its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

J. Michael Vess
	 	 
	 

	 	Title:
	 	Designated Representative	 	 
	 
	 	 	 	 	 	 
	 	 	VOC KANSAS ENERGY PARTNERS, LLC	 	 
	 
	 	 	 	 	 	 
	 	 	By: Vess Holding Corporation, its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

J. Michael Vess
	 	 
	 

	 	Title:
	 	Designated Representative	 	 
	 
	 	 	 	 	 	 
	 	 	GRANTEE:	 	 
	 
	 	 	 	 	 	 
	 	 	VOC ENERGY TRUST	 	 
	 
	 	 	 	 	 	 
	 	 	By its Trustee, The Bank of New York Mellon	 	 
	 	 	Trust Company, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

Signature Page to Conveyance of Net Profits Interest

 

 

	 	 	 

	STATE OF ________

	 	§
	 

	 	§
	COUNTY OF _________

	 	§

     BE IT REMEMBERED, THAT I, the undersigned authority, a notary public duly qualified,
commissioned, sworn and acting in and for the county and state aforesaid, and being authorized in
such county and state to take acknowledgments, hereby certify that, on this _____ day of
_____________, 2011, there personally appeared before me J. Michael Vess, Designated Representative
of Vess Holding Corporation, the Manager of Vess Texas Partners, LLC, the general partner of VOC
Brazos Energy Partners, L.P., a Texas limited partnership, known to me to be such officer, such
limited partnership being a party to the foregoing instrument and duly acknowledged the execution
of same.

     IN WITNESS WHEREOF, I have hereunto set my hand and official seal in the City of ______,
_________ County, _______, on the day and year first above written.

	 	 	 	 	 

	 

	 	 

	 	 
	 

	 	Notary Public in and for	 	 
	 

	 	the State of ________	 	 
	 

	 	Printed Name of Notary:____________	 	 
	 

	 	Commission Expires: ________________	 	 

 

 

	 	 	 

	STATE OF ________

	 	§
	 

	 	§
	COUNTY OF _________

	 	§

     BE IT REMEMBERED, THAT I, the undersigned authority, a notary public duly qualified,
commissioned, sworn and acting in and for the county and state aforesaid, and being authorized in
such county and state to take acknowledgments, hereby certify that, on this _____ day of
_____________, 2011, there personally appeared before me J. Michael Vess, Designated Representative
of Vess Holding Corporation, the Manager of VOC Kansas Energy Partners, LLC, a Kansas limited
liability company, known to me to be such officer, such limited liability company being a party to
the foregoing instrument and duly acknowledged the execution of same.

     IN WITNESS WHEREOF, I have hereunto set my hand and official seal in the City of ______,
_________ County, _______, on the day and year first above written.

	 	 	 	 	 

	 

	 	 

	 	 
	 

	 	Notary Public in and for	 	 
	 

	 	the State of ________	 	 
	 

	 	Printed Name of Notary:____________	 	 
	 

	 	Commission Expires: ________________	 	 

Signature Page to Conveyance of Net Profits Interest

 

 

	 	 	 

	STATE OF ________

	 	§
	 

	 	§
	COUNTY OF _________

	 	§

     BE IT REMEMBERED, THAT I, the undersigned authority, a notary public duly qualified,
commissioned, sworn and acting in and for the county and state aforesaid, and being authorized in
such county and state to take acknowledgments, hereby certify that, on this _____ day of
_____________, 2011, there personally appeared before me _______________________,
_______________________ of The Bank of New York Mellon Trust Company, N.A., as trustee of VOC
Energy Trust, known to me to be such officer of such trustee being a party to the foregoing
instrument and duly acknowledged the execution of same.

     IN WITNESS WHEREOF, I have hereunto set my hand and official seal in the City of __________,
_________ County, _______, on the day and year first above written.

	 	 	 	 	 

	 

	 	 

	 	 
	 

	 	Notary Public in and for	 	 
	 

	 	the State of ________	 	 
	 

	 	Printed Name of Notary:____________	 	 
	 

	 	Commission Expires: ________________	 	 

Signature Page to Conveyance of Net Profits Interest

 

 

EXHIBIT A

LEASES

Exhibit A — Page 1

 

 

EXHIBIT B

SUBJECT WELLS/SUBJECT LEASES

Exhibit B — Page 1

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