CONCHO RESOURCES INC. 20,887,107 Shares of Common Stock Underwriting Agreement
20,887,107 Shares of Common Stock
August 2, 2007
X.X. Xxxxxx Securities Inc.
Banc of America Securities LLC
Banc of America Securities LLC
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
several Underwriters listed
in Schedule 1 hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Concho Resources Inc., a Delaware corporation (“the Company”) proposes to issue and sell to
the several Underwriters listed in Schedule 1 hereto (the “Underwriters”), for whom you are acting
as representatives (collectively, the “Representatives”), an aggregate of 13,332,851 shares of
Common Stock, par value $0.001 per share, of the Company, and Chase Oil Corporation and Caza Energy
LLC (together, the “Chase Stockholders”) and certain other stockholders (collectively, the
“Non-Chase Stockholders,” and together with Chase Stockholders, the “Selling Stockholders”) of the
Company named in Schedules 3 and 4 hereto propose to sell to the Underwriters an aggregate of
7,554,256 shares of Common Stock of the Company. At the option of the Underwriters, the Company
proposes to sell up to an additional 3,133,066 shares of Common Stock of the Company. The
aggregate of 20,887,107 shares which may be sold by the Company and the Selling Stockholders is
herein called the “Underwritten Shares,” and the aggregate of 3,133,066 additional shares to be
sold by the Company is herein called the “Option Shares.” The Underwritten Shares and the Option
Shares are herein referred to as the “Shares”. The shares of Common Stock of the Company to be
outstanding after giving effect to the sale of the Shares are herein referred to as the “Stock”.
The Company hereby confirms its agreement with the several Underwriters concerning the
purchase and sale of the Underwritten Shares to be sold by the Company, the Selling Stockholders
hereby confirm their agreement with the several Underwriters concerning the purchase and sale of
the Underwritten Shares to be sold by the Selling Stockholders, and the Company hereby confirms its
agreement with the several Underwriters concerning the purchase and sale of the Option Shares which
may be sold by the Company as follows:
Statement at the time of its effectiveness that omits Rule 430 Information, and the term
“Prospectus” means the prospectus in the form first used (or made available upon the request of
purchasers pursuant to Rule 173 under the Securities Act) in connection with confirmation of sales
of the Shares. If the Company has filed an abbreviated registration statement pursuant to Rule
462(b) under the Securities Act (the “Rule 462 Registration Statement”), then any reference herein
to the term “Registration Statement” shall be deemed to include such Rule 462 Registration
Statement. Capitalized terms used but not defined herein shall have the meanings given to such
terms in the Registration Statement and the Prospectus.
At or prior to the time when sales of the Shares were first made (the “Time of Sale”), the
Company had prepared the following information (collectively with the pricing information set forth
on Annex D hereto, the “Time of Sale Information”): a Preliminary Prospectus dated July 18, 2007
(the “Marketing Preliminary Prospectus”), and each “free-writing prospectus” (as defined pursuant
to Rule 405 under the Securities Act) listed on Annex C hereto.
(a) The Company and each Selling Stockholder agrees, severally and not jointly, to sell the
Underwritten Shares to the several Underwriters as provided in this Agreement, and each
Underwriter, on the basis of the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the
Company and from each Selling Stockholder at a price per share of $10.7812 (the “Purchase Price”)
the number of Underwritten Shares (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying the aggregate number of Underwritten Shares to be sold by the Company or
such Selling Stockholder, as the case may be, as set forth opposite their respective names in
Schedule 2 hereto by a fraction, the numerator of which is the aggregate number of Underwritten
Shares to be purchased by such Underwriter as set forth opposite the name of such Underwriter in
Schedule 1 hereto and the denominator of which is the aggregate number of Underwritten Shares to be
purchased by all the Underwriters from the Company and all the Selling Stockholders hereunder.
In addition, the Company, as and to the extent indicated in Schedule 1 hereto, agrees, to sell
the Option Shares to the several Underwriters and the Underwriters shall have the option to
purchase at their election all or any portion of the Option Shares at the Purchase Price. The
Underwriters, on the basis of the representations and warranties and agreements herein contained
and subject to the conditions set forth herein, shall have the option to purchase, severally and
not jointly, from the Company all or any portion of the Option Shares at the Purchase Price. If
any Option Shares are to be purchased, the number of Option Shares to be purchased by each
Underwriter shall be the number of Option Shares which bears the same ratio to the aggregate number
of Option Shares being purchased as the number of Underwritten Shares set forth opposite the name
of such Underwriter in Schedule 1 hereto (or such number increased as set forth in Section 12
hereof) bears to the aggregate number of Underwritten Shares being purchased from the Company and
the Selling Stockholders by the several Underwriters, subject, however, to such adjustments to
eliminate any fractional Shares as the Representatives in their sole discretion shall make. Any
such election to purchase Option Shares shall be made accordance with the percentages of the total
amount of Option Shares to be sold by the Company as set forth in Schedule 1 hereto.
The Underwriters may exercise the option to purchase the Option Shares at any time in whole,
or from time to time in part, on or before the thirtieth day following the date of this Agreement,
by written notice from the Representatives to the Company. Such notice shall set forth the
aggregate number of Option Shares as to which the option is being exercised and the date and time
when the Option Shares are to be delivered and paid for which may be the same date and time as the
Closing Date (as hereinafter defined) but shall not be earlier than the Closing Date nor later than
the tenth full business day (as hereinaf-
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ter defined) after the date of such notice (unless such time and date are postponed in
accordance with the provisions of Section 12 hereof). Any such notice shall be given at least two
Business Days prior to the date and time of delivery specified therein.
(b) The Company and the Selling Stockholders understand that the Underwriters intend to make a
public offering of the Shares as soon after the effectiveness of this Agreement as in the judgment
of the Representatives is advisable, and initially to offer the Shares on the terms set forth in
the Prospectus. The Company and the Selling Stockholders acknowledge and agree that the
Underwriters may offer and sell Shares to or through any affiliate of an Underwriter and that any
such affiliate may offer and sell Shares purchased by it to or through any Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately available funds to
the accounts specified by the Company and the Selling Stockholders to the Representatives in the
case of the Underwritten Shares, at the offices of Xxxxxx & Xxxxxx L.L.P., 0000 Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxx, 00000 at 10:00 A.M. Houston time on August 7, 2007, or at such other time or place
on the same or such other date, not later than the fifth business day thereafter, as the
Representatives, the Company and the Selling Stockholders may agree upon in writing or, in the case
of the Option Shares, on the date and at the time and place specified by the Representatives in the
written notice of the Underwriters’ election to purchase such Option Shares. The time and date of
such payment for the Underwritten Shares is referred to herein as the “Closing Date” and the time
and date for such payment for the Option Shares, if other than the Closing Date, is herein referred
to as the “Additional Closing Date”.
Payment for the Shares to be purchased on the Closing Date or the Additional Closing Date, as
the case may be, shall be made against delivery through the facilities of the Depository Trust
Company (“DTC”) to the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date in definitive form registered in such names and in such
denominations as the Representatives shall request in writing not later than two full business days
prior to the Closing Date or the Additional Closing Date, as the case may be, with any transfer
taxes payable in connection with the sale of the Shares duly paid by the Company or the Selling
Stockholders. Any certificates for the Shares will be made available for inspection and packaging
by the Representatives at the office of DTC or its designated custodian not later than 1:00 P.M.,
Houston time, on the business day prior to the Closing Date or the Additional Closing Date, as the
case may be.
(d) The Company and the Selling Stockholders acknowledge and agree that the Underwriters are
acting solely in the capacity of an arm’s length contractual counterparty to the Company and the
Selling Stockholders with respect to the offering of Shares contemplated hereby (including in
connection with determining the terms of the offering) and not as a financial advisor or a
fiduciary to, or an agent of, the Company, the Selling Stockholders or any other person.
Additionally, neither the Representatives nor any other Underwriter is advising the Company, the
Selling Stockholders or any other person as to any legal, tax, investment, accounting or
regulatory matters in any jurisdiction. The Company and the Selling Stockholders shall consult
with their own advisors concerning such matters and shall be responsible for making their own
independent investigation and appraisal of the transactions contemplated hereby, and the
Underwriters shall have no responsibility or liability to the Company or the Selling Stockholders
with respect thereto. Any review by the Underwriters of the Company or the Selling Stockholders,
the transactions contemplated hereby or other matters relating to such transactions will be
performed solely for the benefit of the Underwriters and shall not be on behalf of the Company or
the Selling Stockholders.
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tional Closing Date, as the case may be, the Prospectus will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading; provided that the Company makes no representation and warranty with respect
to any statements or omissions made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter through the Representatives
expressly for use in the Registration Statement and the Prospectus and any amendment or supplement
thereto.
(ii) The statements of revenue and direct operating expenses and the related notes thereto of
the Xxxx Properties included in the Registration Statement, the Time of Sale Information and the
Prospectus comply in all material respects with the applicable requirements of the Securities Act
and the Securities Exchange Act, as applicable, and present fairly in all material respects the
revenues and direct operating expenses of the Xxxx Properties for the periods specified; such
financial statements have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods covered thereby; the other financial
information included in the Registration Statement, the Time of Sale Information and the Prospectus
of the Xxxx Properties has been derived from the accounting records of the Xxxx Properties and
presents fairly in all material respects the information shown thereby; and
(iii) The financial statements and the related notes thereto of the Chase Group Properties
included in the Registration Statement, the Time of Sale Information and the Prospectus (and as
defined therein) comply in all material respects with the applicable requirements of the Securities
Act and the Exchange Act, as applicable, and present fairly in all material respects the financial
position of the Chase Group Properties as of the dates indicated and the results of their
operations and the changes in their cash flows for the periods specified; such financial statements
have been prepared in conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods covered thereby, the other financial information of the
Chase Group Properties included in the Registration Statement, the Time of Sale Information and the
Prospectus has been derived from the accounting records of the Chase Group Properties and presents
fairly in all material respects the information shown thereby.
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(i) Due Authorization. The Company has full corporate, power and authority to execute and
deliver this Agreement and to perform its obligations hereunder; and all corporate action required
to be
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taken for the due and proper authorization, execution and delivery by it of this Agreement and
the consummation by it of the transactions contemplated hereby has been duly and validly taken.
(j) Underwriting Agreement. This Agreement has been duly authorized, executed and delivered
by the Company.
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suits or proceedings pending to which the Company or any of its subsidiaries is or may be a
party or to which any property of the Company or any of its subsidiaries is or may be the subject
that, individually or in the aggregate, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have a Material Adverse Effect or materially and
adversely affect the ability of the Company to perform its obligations under this Agreement; to the
knowledge of the Company, no such investigations, actions, suits or proceedings are threatened or
contemplated by any governmental or regulatory authority or others; and (i) there are no current or
pending legal, governmental or regulatory actions, suits or proceedings that are required under the
Securities Act to be described in the Registration Statement that are not so described in the
Registration Statement, the Time of Sale Information and the Prospectus and (ii) there are no
statutes, regulations or contracts or other documents that are required under the Securities Act to
be filed as exhibits to the Registration Statement or described in the Registration Statement or
the Prospectus that are not so filed as exhibits to the Registration Statement or described in the
Registration Statement, the Time of Sale Information and the Prospectus.
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disclosed in the Registration Statement, the Time of Sale Information and the Prospectus or as
would not, individually or in the aggregate, have a Material Adverse Effect, there is no tax
deficiency that has been, or could reasonably be expected to be, asserted against the Company or
any of its subsidiaries or any of their respective properties or assets.
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to ensure that information which will be required to be disclosed by the Company in reports
that it files or submits under the Exchange Act will be recorded, processed, summarized and
reported within the time periods specified in the Commission’s rules and forms, including controls
and procedures designed to ensure that such information will be accumulated and communicated to the
Company’s management as appropriate to allow timely decisions regarding required disclosure.
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(mm) Status under the Securities Act. The Company is not an ineligible issuer as defined
under the Securities Act, at the times specified in the Securities Act in connection with the
offering of the Shares.
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audited by, either (a) Netherland, Xxxxxx & Associates, Inc. or (b) Xxxxxx, Xxxxxxxxx &
Associates, Inc., as set forth and to the extent indicated therein, and such estimates fairly
reflect the oil and natural gas reserves of the Company and its subsidiaries, as applicable, at the
dates indicated therein and are in accordance, in all material respects, with Commission guidelines
applied on a consistent basis throughout the periods involved; and
(oo) The oil and natural gas reserve estimates of the Chase Group Properties as of December
31, 2003, 2004 and 2005 contained in the Registration Statement, the Time of Sale Information and
the Prospectus are derived from reports that have been prepared by, or have been audited by Xxxxxx,
Xxxxxxxxx & Associates, Inc., as set forth therein, and such estimates fairly reflect the oil and
natural gas reserves of the Chase Group Properties, at the dates indicated therein and are in
accordance, in all material respects, with Commission guidelines applied on a consistent basis
throughout the periods involved.
(pp) Independent Petroleum Engineers. Each of Netherland, Xxxxxx & Associates, Inc. and
Xxxxxx, Xxxxxxxxx & Associates, Inc. have represented to the Company that they are, and the Company
believes them to be, independent petroleum engineers with respect to the Company and its
subsidiaries and for the periods set forth in the Registration Statement, the Time of Sale
Information and the Prospectus.
(a) Required Consents; Authority. All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Chase Stockholder of this Agreement and the Power
of Attorney (the “Power of Attorney”) and the Custody Agreement (the “Custody Agreement”)
hereinafter referred to, and for the sale and delivery of the Shares to be sold by such Chase
Stockholder hereunder, have been obtained; and such Chase Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the Custody Agreement and to
sell, assign, transfer and deliver the Shares to be sold by such Chase Stockholder hereunder; this
Agreement, the Power of Attorney and the Custody Agreement have each been duly authorized, executed
and delivered by such Chase Stockholder.
(b) No Conflicts. The execution, delivery and performance by such Chase Stockholder of this
Agreement, the Power of Attorney and the Custody Agreement, the sale of the Shares to be sold by
such Chase Stockholder and the consummation by such Chase Stockholder of the transactions herein
and therein contemplated will not (i) conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of such Chase Stockholder pursuant
to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to
which such Chase Stockholder is a party or by which such Chase Stockholder is bound or to which any
of the property or assets of such Chase Stockholder is subject, (ii) result in any violation of the
provisions of the charter or by-laws or similar organizational documents of such Chase Stockholder
or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation
of any court or arbitrator or governmental or regulatory agency.
(c) Title to Shares. Such Chase Stockholder has good and valid title to the Shares to be sold
at the Closing Date or the Additional Closing Date, as the case may be, by such Chase Stockholder
hereunder, free and clear of all liens, encumbrances, equities or adverse claims; such Chase
Stockholder will have, immediately prior to the Closing Date or the Additional Closing Date, as the
case may be, good and valid title to the Shares to be sold at the Closing Date or the Additional
Closing Date, as the case may be, by such Chase Stockholder, free and clear of all liens,
encumbrances, equities or adverse claims; and, upon delivery of the certificates representing such
Shares and payment therefor pursuant hereto, good and
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valid title to such Shares, free and clear of all liens, encumbrances, equities or adverse
claims, will pass to the several Underwriters.
(d) No Stabilization. Such Chase Stockholder has not taken and will not take, directly or
indirectly, any action designed to or that could reasonably be expected to cause or result in any
stabilization or manipulation of the price of the Shares.
(e) Time of Sale Information. The Time of Sale Information, at the Time of Sale did not, and
at the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain
any untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties set forth in
this paragraph are limited to statements or omissions made in reliance upon information relating to
Chase Oil Corporation, Caza Energy LLC, their stockholders and affiliates (other than the Company
and its subsidiaries), the Chase Group Properties and the Chase Group Properties financial
statements (collectively, the “Time of Sale Chase Information”).
(f) Issuer Free Writing Prospectus. Other than the Preliminary Prospectus and the Prospectus,
such Chase Stockholder (including its agents and representatives) has not made, used, prepared,
authorized, approved or referred to and will not prepare, make, use, authorize, approve or refer to
any Issuer Free Writing Prospectus, other than (i) any document not constituting a prospectus
pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act or (ii)
the documents listed on Annex C hereto and other written communications approved in writing in
advance by the Company and the Representatives.
(g) Registration Statement and Prospectus. As of the applicable effective date of the
Registration Statement and any amendment thereto, the Registration Statement complied and will
comply in all material respects with the Securities Act, and did not and will not contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading; and as of the date of the
Prospectus and any amendment or supplement thereto and as of the Closing Date and as of the
Additional Closing Date, as the case may be, the Prospectus will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the representations and warranties set
forth in this paragraph are limited to information contained in the Registration Statement,
Prospectus (or any amendment or supplement thereto) or any Issuer Free Writing Prospectus relating
to Chase Oil Corporation, Caza Energy LLC, their stockholders and affiliates, the Chase Group
Properties and the Chase Group Properties financial statements included in the Prospectus
(collectively, the “Registration Statement Chase Information,” and together with the Time of Sale
Chase Information, the “Chase Information”).
(h) Material Information. As of the date hereof, as of the Closing Date and as of the
Additional Closing Date, as the case may be, the sale of the Shares by such Chase Stockholder is
not and will not be prompted by any material information concerning the Company which is not set
forth in the Registration Statement, the Time of Sale Information or the Prospectus.
(ii) Each Chase Stockholder represents and warrants to each Underwriter and the
Company that certificates in negotiable form representing all of the Shares to be sold by such
Chase Stockholder hereunder have been placed in custody under a Custody Agreement relating to such
Shares, in the form heretofore furnished to you, duly executed and delivered by such Chase
Stockholder to American Stock Transfer & Trust Company, as custodian (the “Custodian”), and that
such Chase Stockholder has duly
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executed and delivered a Power of Attorney, in the form heretofore furnished to you, appointing the
person or persons indicated in Schedule 3 hereto, and each of them, as such Chase Stockholder’s
Attorneys-in-fact (the “Chase Attorneys-in-Fact” or any one of them, the “Chase Attorney-in-Fact”)
with authority to execute and deliver this Agreement on behalf of such Chase Stockholder, to
determine the purchase price to be paid by the Underwriters to the Chase Stockholders as provided
herein, to authorize the delivery of the Shares to be sold by such Chase Stockholder hereunder and
otherwise to act on behalf of such Chase Stockholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement.
(iii) Each Chase Stockholder specifically agrees that the Shares represented by the
certificates held in custody for such Chase Stockholder under the Custody Agreement are subject to
the interests of the Underwriters hereunder, and that the arrangements made by such Chase
Stockholder for such custody, and the appointment by such Chase Stockholder of the Chase
Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable. Each Chase Stockholder
specifically agrees that the obligations of such Chase Stockholder hereunder shall not be
terminated by operation of law, whether by the death or incapacity of any individual Chase
Stockholder, or, in the case of an estate or trust, by the death or incapacity of any executor or
trustee or the termination of such estate or trust, or in the case of a partnership, corporation or
similar organization, by the dissolution of such partnership, corporation or organization, or by
the occurrence of any other event. If any individual Chase Stockholder or any such executor or
trustee should die or become incapacitated, or if any such estate or trust should be terminated, or
if any such partnership, corporation or similar organization should be dissolved, or if any other
such event should occur, before the delivery of the Shares hereunder, certificates representing
such Shares shall be delivered by or on behalf of such Chase Stockholder in accordance with the
terms and conditions of this Agreement and the Custody Agreement, and actions taken by the Chase
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not occurred, regardless of whether or not
the Custodian, the Chase Attorneys-in-Fact, or any of them, shall have received notice of such
death, incapacity, termination, dissolution or other event.
(iv) Each Non-Chase Stockholder represents and warrants severally and not jointly to each
Underwriter and the Company that:
(a) Required Consents; Authority. All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Non-Chase Stockholder of this Agreement and the
Power of Attorney (the “Power of Attorney”) and the Custody Agreement (the “Custody Agreement”)
hereinafter referred to, and for the sale and delivery of the Shares to be sold by such Non-Chase
Stockholder hereunder, have been obtained; and such Non-Chase Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the Custody Agreement and to
sell, assign, transfer and deliver the Shares to be sold by such Non-Chase Stockholder hereunder;
this Agreement, the Power of Attorney and the Custody Agreement have each been duly authorized,
executed and delivered by such Non-Chase Stockholder.
(b) No Conflicts. The execution, delivery and performance by such Non-Chase Stockholder of
this Agreement, the Power of Attorney and the Custody Agreement, the sale of the Shares to be sold
by such Non-Chase Stockholder and the consummation by such Non-Chase Stockholder of the
transactions herein and therein contemplated will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or assets of such
Non-Chase Stockholder pursuant to, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Non-Chase Stockholder is a party or by which such Non-Chase
Stockholder is bound or to which any of the property or assets of such Non-Chase Stockholder is
subject or (ii) result in the violation of any law or
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statute or any judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory agency applicable to such Non-Chase Stockholder, except, in the case of clauses (i)
and (ii) above, for any such conflict, breach or violation that would not, individually or in the
aggregate, have a Material Adverse Effect.
(c) Title to Shares. Such Non-Chase Stockholder has good and valid title to the Shares to be
sold at the Closing Date or the Additional Closing Date, as the case may be, by such Non-Chase
Stockholder hereunder, free and clear of all liens, encumbrances, equities or adverse claims; such
Non-Chase Stockholder will have, immediately prior to the Closing Date or the Additional Closing
Date, as the case may be, good and valid title to the Shares to be sold at the Closing Date or the
Additional Closing Date, as the case may be, by such Non-Chase Stockholder, free and clear of all
liens, encumbrances, equities or adverse claims; and, upon delivery of the certificates
representing such Shares and payment therefor pursuant hereto, good and valid title to such Shares,
free and clear of all liens, encumbrances, equities or adverse claims, will pass to the several
Underwriters.
(d) No Stabilization. Such Non-Chase Stockholder has not taken and will not take, directly or
indirectly, any action designed to or that could reasonably be expected to cause or result in any
stabilization or manipulation of the price of the Shares.
(e) Time of Sale Information. The Time of Sale Information, at the Time of Sale did not, and
at the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain
any untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties set forth in
this paragraph are limited to statements or omissions made in reliance upon information relating to
such Non-Chase Stockholder furnished to the Company in writing by such Non-Chase Stockholder
expressly for use in the Time of Sale Information (the “ Non-Chase Stockholder Time of Sale
Information”).
(f) Issuer Free Writing Prospectus. Other than the Preliminary Prospectus and the Prospectus,
such Non-Chase Stockholder (including its agents and representatives, other than the Underwriters
in their capacity as such) has not made, used, prepared, authorized, approved or referred to and
will not prepare, make, use, authorize, approve or refer to any Issuer Free Writing Prospectus,
other than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the
Securities Act or Rule 134 under the Securities Act or (ii) the documents listed on Annex C hereto
and other written communications approved in writing in advance by the Company and the
Representatives.
(g) Registration Statement and Prospectus. As of the applicable effective date of the
Registration Statement and any amendment thereto, the Registration Statement complied and will
comply in all material respects with the Securities Act, and did not and will not contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading; and as of the date of the
Prospectus and any amendment or supplement thereto and as of the Closing Date and as of the
Additional Closing Date, as the case may be, the Prospectus will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the representations and warranties set
forth in this paragraph are limited to statements or omissions made in reliance upon information
relating to such Non-Chase Stockholder furnished to the Company in writing by such Non-Chase
Stockholder expressly for the use in the Registration Statement, Prospectus (or any amendment or
supplement thereto) or any Issuer Free Writing Prospectus (the “Non-Chase Stockholder Registration
Statement Information”,
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and together with the Non-Chase Stockholder Time of Sale Information, the “Non-Chase
Stockholder Information”).
(h) Material Information. As of the date hereof, as of the Closing Date and as of the
Additional Closing Date, as the case may be, the sale of the Shares by such Non-Chase Stockholder
is not and will not be prompted by any material information concerning the Company which is not set
forth in the Registration Statement, the Time of Sale Information or the Prospectus.
(v) Each Non-Chase Stockholder represents and warrants to each Underwriter and the
Company that certificates in negotiable form representing all of the Shares to be sold by such
Non-Chase Stockholder hereunder have been placed in custody under a Custody Agreement relating to
such Shares, in the form heretofore furnished to you, duly executed and delivered by such Non-Chase
Stockholder to American Stock Transfer & Trust Company, as custodian (the “Custodian”), and that
such Non-Chase Stockholder has duly executed and delivered a Power of Attorney, in the form
heretofore furnished to you, appointing the person or persons indicated in Schedule 4 hereto, and
each of them, as such Non-Chase Stockholder’s Attorneys-in-fact (the “Non-Chase Attorneys-in-Fact”
or any one of them the “Non-Chase Attorney-in Fact”) with authority to execute and deliver this
Agreement on behalf of such Non-Chase Stockholder, to determine the purchase price to be paid by
the Underwriters to the Non-Chase Stockholders as provided herein, to authorize the delivery of the
Shares to be sold by such Non-Chase Stockholder hereunder and otherwise to act on behalf of such
Non-Chase Stockholder in connection with the transactions contemplated by this Agreement and the
Custody Agreement.
(vi) Each Non-Chase Stockholder specifically agrees that the Shares represented by the
certificates held in custody for such Non-Chase Stockholder under the Custody Agreement are subject
to the interests of the Underwriters hereunder, and that the arrangements made by such Non-Chase
Stockholder for such custody, and the appointment by such Non-Chase Stockholder of the Non-Chase
Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable. Each Non-Chase
Stockholder specifically agrees that the obligations of such Non-Chase Stockholder hereunder shall
not be terminated by operation of law, whether by the death or incapacity of any individual
Non-Chase Stockholder, or, in the case of an estate or trust, by the death or incapacity of any
executor or trustee or the termination of such estate or trust, or in the case of a partnership,
corporation or similar organization, by the dissolution of such partnership, corporation or
organization, or by the occurrence of any other event. If any individual Non-Chase Stockholder or
any such executor or trustee should die or become incapacitated, or if any such estate or trust
should be terminated, or if any such partnership, corporation or similar organization should be
dissolved, or if any other such event should occur, before the delivery of the Shares hereunder,
certificates representing such Shares shall be delivered by or on behalf of such Non-Chase
Stockholder in accordance with the terms and conditions of this Agreement and the Custody
Agreement, and actions taken by the Non-Chase Attorneys-in-Fact pursuant to the Powers of Attorney
shall be as valid as if such death, incapacity, termination, dissolution or other event had not
occurred, regardless of whether or not the Custodian, the Non-Chase Attorneys-in-Fact, or any of
them, shall have received notice of such death, incapacity, termination, dissolution or other
event.
(a) Required Filings. The Company will file the final Prospectus with the Commission within
the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act,
will file any Issuer Free Writing Prospectus to the extent required by Rule 433 under the
Securities Act; and the Company will furnish copies of the Prospectus and each Issuer Free Writing
Prospectus (to the extent not previously delivered) to the Underwriters in New York City prior to
10:00 A.M., New York
-16-
City time, on the business day next succeeding the date of this Agreement in such quantities
as the Representatives may reasonably request.
-17-
ment the Prospectus to comply with law, the Company will immediately notify the Underwriters
thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission and
furnish to the Underwriters and to such dealers as the Representatives may designate, such
amendments or supplements to the Prospectus as may be necessary so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the circumstances existing when
the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply
with law and (2) if at any time prior to the Closing Date (i) any event shall occur or condition
shall exist as a result of which the Time of Sale Information as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances, not misleading or (ii) it
is necessary to amend or supplement the Time of Sale Information to comply with law, the Company
will immediately notify the Underwriters thereof and forthwith prepare and, subject to paragraph
(c) above, file with the Commission (to the extent required) and furnish to the Underwriters and to
such dealers as the Representatives may designate, such amendments or supplements to the Time of
Sale Information as may be necessary so that the statements in the Time of Sale Information as so
amended or supplemented will not, in the light of the circumstances, be misleading or so that the
Time of Sale Information will comply with law.
-18-
of the 18-day period beginning on the issuance of the earnings release or the occurrence of
the material news or material event, provided, however, that in no event shall such restrictions
extend past 214 days from the date of the Prospectus.
(k) Exchange Listing. The Company will use its best efforts to list, subject to notice of
issuance, the Shares on the New York Stock Exchange (the “Exchange”).
-19-
the 180-day restricted period, the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (ii) prior to the expiration of the 180-day
restricted period, the Company announces that it will release earnings results during the 16-day
period beginning on the last day of the 180-day period, the restrictions imposed by this Agreement
shall continue to apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event; provided, however, that
in no event shall such restrictions extend past 214 days from the date of the Prospectus.
(a) It has not and will not use, authorize use of, refer to, or participate in the planning
for use of, any “free writing prospectus”, as defined in Rule 405 under the Securities Act (which
term includes use of any written information furnished to the Commission by the Company and not
incorporated by reference into the Registration Statement and any press release issued by the
Company) other than (i) a free writing prospectus that contains no “issuer information” (as defined
in Rule 433(h)(2) under the Securities Act) that was not included (including through incorporation
by reference) in the Preliminary Prospectus or a previously filed Issuer Free Writing Prospectus,
(ii) any Issuer Free Writing Prospectus listed on Annex C or prepared pursuant to Section 3(c) or
Section 5(c) above, or (iii) any free writing prospectus prepared by such underwriter and approved
by the Company in advance in writing (each such free writing prospectus referred to in clauses (i)
or (iii), an “Underwriter Free Writing Prospectus”).
(b) It has not and will not distribute any Underwriter Free Writing Prospectus referred to in
clause (a)(i) in a manner reasonably designed to lead to its broad unrestricted dissemination.
(c) It has not and will not, without the prior written consent of the Company, use any free
writing prospectus that contains the final terms of the Shares unless such terms have previously
been included in a free writing prospectus filed with the Commission; provided that
Underwriters may use a term sheet substantially in the form of Annex D hereto without the consent
of the Company; provided further that any Underwriter using such term sheet shall
notify the Company, and provide a copy of such term sheet to the Company, prior to, or
substantially concurrently with, the first use of such term sheet.
(d) It will, pursuant to reasonable procedures developed in good faith, retain copies of each
free writing prospectus used or referred to by it, in accordance with Rule 433 under the Securities
Act.
(e) It is not subject to any pending proceeding under Section 8A of the Securities Act with
respect to the offering (and will promptly notify the Company and the Selling Stockholders if any
such proceeding against it is initiated during the Prospectus Delivery Period).
-20-
-21-
Underwriters, in form and substance reasonably satisfactory to the Representatives, containing
statements and information of the type customarily included in accountants’ “comfort letters” to
underwriters with respect to the financial statements and certain financial information contained
in the Registration Statement, the Time of Sale Information and the Prospectus; provided, that the
letter delivered on the Closing Date or the Additional Closing Date, as the case may be, shall use
a “cut-off” date no more than three business days prior to such Closing Date or such Additional
Closing Date, as the case may be.
-22-
All opinions, letters, certificates and evidence mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriters.
The Company also agrees to indemnify and hold harmless UBS Securities LLC (“UBS Securities”),
its affiliates, directors and officers and each person, if any, who controls UBS Securities within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against
any and all losses, claims, damages and liabilities incurred as a result of UBS Securities’
participation as a “qualified independent underwriter” within the meaning of the Rules of Conduct
of the National Association of Securities Dealers, Inc. in connection with the offering of the
Shares.
-23-
Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in
paragraph (a) above for any and all Non-Chase Stockholder Information relating to such Non-Chase
Stockholder.
(ii) (A) Each of the Chase Stockholders agrees to indemnify and hold harmless each
Underwriter, its affiliates, directors and officers and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the indemnity set forth in paragraph (a) above for any and all Chase
Information relating to such Chase Stockholder; and (B) the Chase Stockholders also agree, jointly
and severally, to indemnify and hold harmless each Underwriter, its affiliates, directors and
officers and each person, if any, who controls such Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth
in paragraph (a) above for any and all Chase Information, provided, however, that the indemnity of
each Chase Stockholder under this clause (B) shall be limited to 50% of the net proceeds (after
deducting underwriting discounts but before deducting any other expenses) received by such Chase
Stockholder pursuant to its sale of Shares to the Underwriters pursuant to this Agreement.
-24-
to retain counsel reasonably satisfactory to the Indemnified Person. It is understood and
agreed that the Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and
expenses shall be paid or reimbursed as they are incurred; provided, however, that
if indemnity may be sought pursuant to the second paragraph of Section 9(a) above in respect of
such proceeding, then in addition to such separate firm of the Underwriters, their affiliates and
such control persons of the Underwriters the indemnifying party shall be liable for the fees and
expenses of not more than one separate firm (in addition to any local counsel) for UBS Securities
in its capacity as a “qualified independent underwriter”, its affiliates and all persons, if any,
who control UBS Securities within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act. Any such separate firm for any Underwriter, its affiliates, directors and
officers and any control persons of such Underwriter shall be designated in writing by JPMorgan and
any such separate firm for the Company, its directors, its officers who signed the Registration
Statement and any control persons of the Company shall be designated in writing by the Company.
The Indemnifying Person shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final judgment for the
plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person
reimburse the Indemnified Person for fees and expenses of counsel as contemplated by this
paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30 days after receipt
by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person,
effect any settlement of any pending or threatened proceeding in respect of which any Indemnified
Person is or could have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional release of such
Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from
all liability on claims that are the subject matter of such proceeding and (y) does not include any
statement as to or any admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Person.
-25-
as a “qualified independent underwriter”, as the case may be, bear to the aggregate offering
price of the Shares. The relative fault of the Company and the Selling Stockholders, on the one
hand, and the Underwriters or UBS Securities in its capacity as a “qualified independent
underwriter”, as the case may be, on the other, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the Company and the
Selling Stockholders or by the Underwriters or UBS Securities in its capacity as a “qualified
independent underwriter”, as the case may be, and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
11. Termination. This Agreement may be terminated in the absolute discretion of the
Representatives, by notice to the Company and the Selling Stockholders, if after the execution and
delivery of this Agreement and prior to the Closing Date or, in the case of the Option Shares,
prior to the Additional Closing Date (i) trading generally shall have been suspended or materially
limited on or by any of the New York Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile Exchange or the Chicago
Board of Trade; (ii) trading of any securities issued or guaranteed by the Company shall have been
suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on
commercial banking activities shall have been declared by federal or New York State authorities; or
(iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis, either within or outside the United States, that, in the
judgment of the Representatives, is material and adverse and makes it impracticable or
-26-
inadvisable to proceed with the offering, sale or delivery of the Shares on the Closing Date
or the Additional Closing Date, as the case may be, on the terms and in the manner contemplated by
this Agreement, the Time of Sale Information and the Prospectus.
(a) If, on the Closing Date or the Additional Closing Date, as the case may be, any
Underwriter defaults on its obligation to purchase the Shares that it has agreed to purchase
hereunder on such date, the non-defaulting Underwriters may in their discretion arrange for the
purchase of such Shares by other persons satisfactory to the Company and the Selling Stockholders
on the terms contained in this Agreement. If, within 36 hours after any such default by any
Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Shares, then
the Company and the Selling Stockholders shall be entitled to a further period of 36 hours within
which to procure other persons satisfactory to the non-defaulting Underwriters to purchase such
Shares on such terms. If other persons become obligated or agree to purchase the Shares of a
defaulting Underwriter, either the non-defaulting Underwriters or the Company and the Selling
Stockholders may postpone the Closing Date or the Additional Closing Date, as the case may be, for
up to five full business days in order to effect any changes that in the opinion of counsel for the
Company, counsel for the Selling Stockholders or counsel for the Underwriters may be necessary in
the Registration Statement and the Prospectus or in any other document or arrangement, and the
Company agrees to promptly prepare any amendment or supplement to the Registration Statement and
the Prospectus that effects any such changes. As used in this Agreement, the term “Underwriter”
includes, for all purposes of this Agreement unless the context otherwise requires, any person not
listed in Schedule 1 hereto that, pursuant to this Section 12, purchases Shares that a defaulting
Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters and the Company and the Selling
Stockholders as provided in paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case may be does not exceed
one-eleventh of the aggregate number of Shares to be purchased on such date, then the Company and
the Selling Stockholders shall have the right to require each non-defaulting Underwriter to
purchase the number of Shares that such Underwriter agreed to purchase hereunder on such date plus
such Underwriter’s pro rata share (based on the number of Shares that such Underwriter agreed to
purchase on such date) of the Shares of such defaulting Underwriter or Underwriters for which such
arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters and the Company and the Selling
Stockholders as provided in paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case may be, exceeds
one-eleventh of the aggregate amount of Shares to be purchased on such date, or if the Company and
the Selling Stockholders shall not exercise the right described in paragraph (b) above, then this
Agreement or, with respect to any Additional Closing Date, the obligation of the Underwriters to
purchase Shares on the Additional Closing Date, as the case may be, shall terminate without
liability on the part of the non-defaulting Underwriters. Any termination of this Agreement
pursuant to this Section 12 shall be without liability on the part of the Company, except that the
Company will continue to be liable for the payment of expenses as set forth in Section 13 hereof
and except that the provisions of Section 9 hereof shall not terminate and shall remain in effect.
-27-
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may
have to the Company, the Selling Stockholders or any non-defaulting Underwriter for damages caused
by its default.
13. Payment of Expenses. (a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay or cause to be paid
all costs and expenses incident to the performance of its obligations hereunder, including without
limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery
of the Shares and any taxes payable in that connection; (ii) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement, the Preliminary
Prospectus, any Issuer Free Writing Prospectus, any Time of Sale Information and the Prospectus
(including all exhibits, amendments and supplements thereto) and the distribution thereof; (iii)
the costs of reproducing and distributing this Agreement; (iv) the fees and expenses of the
Company’s counsel and independent accountants; (v) the fees and expenses incurred in connection
with the registration or qualification and determination of eligibility for investment of the
Shares under the laws of such jurisdictions as the Representatives may designate (including the
related reasonable fees and expenses of counsel for the Underwriters); (vi) the cost of preparing
stock certificates; (vii) the costs and charges of any transfer agent and any registrar; (viii) all
expenses and application fees incurred in connection with any filing with, and clearance of the
offering by, the National Association of Securities Dealers, Inc; (ix) all expenses incurred by the
Company in connection with any “road show” presentation to potential investors; and (x) all
expenses and application fees related to the listing of the Shares on the New York Stock Exchange;
provided that notwithstanding clause (ix) above, the Underwriters shall pay one-half of the lease
expenses associated with any airplane which is used for the purposes of such “road show”
presentations. Notwithstanding the foregoing, in the event that the transactions contemplated by
this Agreement shall have been consummated pursuant to Section 2 hereof, the Underwriters shall
reimburse the Company for $600,504 on the Closing Date (or $690,580 if the Option Shares are
purchased in full, with such difference to be paid on the Additional Closing Date) for expenses
incurred in connection with the offering of Shares.
(b) If (i) the Company or the Selling Stockholders for any reason fails to tender the Shares
for delivery to the Underwriters or (ii) the Underwriters decline to purchase the Shares for any
reason permitted under this Agreement (other than Section 11), the Company agrees to reimburse the
Underwriters for all out-of-pocket costs and expenses (including the fees and expenses of their
counsel) reasonably incurred by the Underwriters in connection with this Agreement and the offering
contemplated hereby.
-28-
the term “business day” means any day other than a day on which banks are permitted or
required to be closed in New York City; and (c) the term “subsidiary” has the meaning set forth in
Rule 405 under the Securities Act .
(b) Notices. All notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted and confirmed by any standard form of
telecommunication. Notices to the Underwriters shall be given to the Representatives c/o X.X.
Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: (000) 000-0000); Attention:
Equity Syndicate Desk, with a copy to Xxxxxx X. Xxxxxxxxx, Xxxxxx Xxxxxx & Xxxxxxx LLP, 00
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: (000) 000-0000). Notices to the Company shall be
given to it at Concho Resources Inc., 000 X. Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, (fax:
(000) 000-0000); Attention: Xxxxx X. Xxxxxxxx, Vice President and General Counsel, with a copy to
T. Xxxx Xxxxx, Xxxxxx & Xxxxxx L.L.P., 0000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 (fax: (000)
000-0000). Notice to the Chase Stockholders shall be given to the Chase Attorney-in-Fact to Xxxxxx
Xxxxx, Xxxx Xxxxxx and Xxxxxx Xxxxx, c/x Xxxx Energy Corporation, X.X. Xxx 000, Xxxxxxx, XX
00000-0000, with a copy to Xxxxxxx X. Xxxxxxxx, Bracewell & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx 00000 (fax: (000) 000-0000). Notice to the Non-Chase Stockholders
shall be given to the Non-Chase Attorney-in-Fact Xxxxx X. Xxxxxxxx, 000 X. Xxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxx 00000, (fax: (000) 000-0000).
(c) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
-29-
If the foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided below.
| Very truly yours, CONCHO RESOURCES INC. |
||||
| By | /s/ XXXXX X. XXXXXXXX | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| Title: | Vice President — General Counsel and Secretary | |||
S-1
| Chase Oil Corporation |
||||
| By: | /s/ XXXXXX X. XXXXX | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | President | |||
| Caza Energy LLC |
||||
| By: | /s/ XXXXXX X. XXXXX | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Manager | |||
| Xxxxxx X. Xxxxx |
||||
| /s/ XXXXXX X. XXXXX | ||||
| Xxxxxxx X. Xxxxx |
||||
| By: | /s XXXXXX X. XXXXX | |||
| Name: | Xxxxxx X. Xxxxx, Attorney-in-Fact | |||
| Xxxxxx Xxxxxx Xxxxx Xxxxxxxx |
||||
| By: | /s/ XXXXXX X. XXXXX | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Attorney-in-Fact acting on behalf of such Selling Stockholder | |||
S-2
| SELLING STOCKHOLDERS |
||||
| By: | /s/ XXXXX X. XXXXXXXX | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| As Attorney-in-Fact acting on behalf of each of the Selling Stockholders named in Schedule 4 to this Agreement |
||||
S-1
| Accepted: August 2, 2007 X.X. XXXXXX SECURITIES INC. BANC OF AMERICA SECURITIES LLC For themselves and on behalf of the several Underwriters listed in Schedule 1 hereto. |
||||
|
X.X. XXXXXX SECURITIES INC. |
||||
| By | /s/ Xxxxx Xxxxxxxxxx | |||
| Authorized Signatory | ||||
| BANC OF AMERICA SECURITIES LLC |
||||
| By | /s/ Xxxxxxx Xxxxx | |||
| Authorized Signatory | ||||
S-1
Schedule 1
| Number of Underwritten | Number of Option | |||||||
| Underwriter | Shares | Shares | ||||||
X.X. Xxxxxx Securities Inc. |
6,788,310 | 1,108,246 | ||||||
Banc of America Securities LLC |
6,788,310 | 1,108,246 | ||||||
Xxxxxx Brothers Inc. |
3,550,809 | 532,622 | ||||||
BNP Paribas Securities Corp. |
313,306 | 234,980 | ||||||
Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated |
1,566,533 | 234,980 | ||||||
UBS Securities LLC |
1,566,533 | 46,996 | ||||||
Wachovia Capital Markets, LLC |
313,306 | 46,996 | ||||||
Total |
20,887,107 | 3,133,066 | ||||||
Sch 1-1
Schedule 2
| Number of Underwritten Shares: | ||||
| 13,332,851 | ||||
Chase Oil Corporation |
5,382,988 | |||
Caza Energy LLC |
480,524 | |||
Xxxxxxx X. Xxxxx |
240,742 | |||
Xxxxxx X. Xxxxx |
384,709 | |||
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx |
177,704 | |||
Xxxxxxx X. Xxxxx |
126,358 | |||
Xxxxxx X. Xxxx |
137,500 | |||
Xxxxx X. Xxxxxxxx |
60,000 | |||
Xxxx X.Xxxxxxx |
155,000 | |||
Xxxxx X. Xxxxxx III |
208,731 | |||
E. Xxxxxx Xxxxxx |
200,000 | |||
Sch 2-1
Schedule 3
| Chase Stockholders | Attorney-in-Fact | |
Chase Oil Corporation
|
Xxxxxx Xxxxx, Xxxx Xxxxxx and Xxxxxx Xxxxx | |
Caza Energy LLC
|
Xxxxxx Xxxxx, Xxxx Xxxxxx and Xxxxxx Xxxxx | |
Xxxxxxx X. Xxxxx
|
Xxxxxx Xxxxx, Xxxx Xxxxxx and Xxxxxx Xxxxx | |
Xxxxxx X. Xxxxx
|
Xxxxxx Xxxxx, Xxxx Xxxxxx and Xxxxxx Xxxxx | |
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
|
Xxxxxx Xxxxx, Xxxx Xxxxxx and Xxxxxx Xxxxx |
Sch 3-1
Schedule 4
| Each Non-Chase Stockholder | Attorney-in-fact | |
Xxxxxxx X. Xxxxx
|
Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxx and Xxxxx X. Xxxxxxxx | |
Xxxxxx X. Xxxx
|
Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxx and Xxxxx X. Xxxxxxxx | |
Xxxxx X. Xxxxxxxx
|
Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxx and Xxxxx X. Xxxxxxxx | |
Xxxx X. Xxxxxxx
|
Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxx and Xxxxx X. Xxxxxxxx | |
Xxxxx X. Xxxxxx III
|
Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxx and Xxxxx X. Xxxxxxxx | |
E. Xxxxxx Xxxxxx
|
Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxx and Xxxxx X. Xxxxxxxx |
Sch 4-1
Annex A-1
[Form of Opinion of Counsel for the Company]
(-) The Registration Statement was declared effective under the Securities Act as of the date
and time specified in such opinion; the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) under the Securities Act specified in such opinion on the date
specified therein; and, to such counsel’s knowledge, no order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose or pursuant to Section 8A
of the Securities Act against the Company or in connection with the offering is pending or
threatened by the Commission.
(-) The Registration Statement, the Marketing Preliminary Prospectus, each Issuer Free Writing
Prospectus included in the Time of Sale Information and the Prospectus (other than the financial
statements and notes and related schedules and other financial and accounting data and the oil and
natural gas reserve estimates included therein or omitted therefrom as to which such counsel need
express no opinion) appear on their face to comply as to form in all material respects with the
requirements of the Securities Act.
(-) The Company has the requisite corporate power and authority to execute and deliver the
Underwriting Agreement and to perform its obligations thereunder.
(-) The Underwriting Agreement has been duly authorized, executed and delivered by the
Company.
(-) The Shares to be issued and sold by the Company hereunder have been duly authorized, and
when delivered to and paid for by the Underwriters in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable and the issuance of the Shares is not subject
to any preemptive rights granted under its Certificate of Incorporation or Bylaws of the Delaware
General Corporation Law.
(-) The execution, delivery and performance by the Company of the Underwriting Agreement, the
issuance and sale of the Shares by the Company being delivered on the Closing Date or the
Additional Closing Date, as the case may be, and compliance by the Company with the terms of, and
the consummation of the transactions contemplated by, the Underwriting Agreement will not (i)
conflict with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any
document filed as an exhibit to the Registration Statement, (ii) result in any violation of the
provisions of the charter or by-laws or similar organizational documents of the Company or any of
its subsidiaries or (iii) result in the violation of any law or statute or any judgment, order or
regulation of any court or arbitrator or governmental or regulatory authority known to such counsel
except, in the case of clauses (i) and (iii) above, for such conflict, breach or violation that
would not, individually or in the aggregate, have a Material Adverse Effect. With respect to
clause (iii) above, we express no opinion as to the application of any state securities or Blue Sky
laws or federal or state antifraud laws, rules or regulations.
(-) No consent, approval, authorization, order, registration or qualification of or with any
court or arbitrator or governmental or regulatory authority is required for the execution, delivery
and performance by the Company of each of the Underwriting Agreement, the issuance and sale of the
Shares by the Company being delivered on the Closing Date or the Additional Closing Date, as the
case may be, and compliance by the Company with the terms thereof and the consummation of the
transactions contemplated by the Underwriting Agreement, except for the registration of the Shares
under the Securities Act
A-1
and such consents, approvals, authorizations, orders and registrations or
qualifications as may be required under applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters, and any consent, approval,
authorization, order, registration or qualification that either has been, or prior to the Closing
Date will have been, obtained or made, or which if not obtained or made, would not, individually or
in the aggregate, have a Material Adverse Effect.
(-) The descriptions in the Registration Statement, the Time of Sale Information and the
Prospectus under the headings “Material U.S. federal tax consequences for non-U.S. holders of our
common stock,” “Description of Capital Stock”, “Business – Applicable laws and regulations” (other
than the description under the heading “Grayburg— Xxxxxxx West Cooperative Unit Regulatory Matter”)
and “Underwriting”, and in the Registration Statement in item 14, to the extent that they
constitute summaries of the terms of stock, matters of law or regulation or legal conclusions, are
accurate in all material respects.
(-) The Company is not and, after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Registration Statement, the Time of Sale
Information and the Prospectus, will not be required to register as an “investment company” within
the meaning of the Investment Company Act.
Such counsel shall also state that they have participated in conferences with representatives
of the Company and with representatives of its independent accountants and counsel at which
conferences the contents of the Registration Statement, the Time of Sale Information and the
Prospectus and any amendment and supplement thereto and related matters were discussed and,
although such counsel assume no responsibility for, or express any opinion regarding (other than as
listed in opinion [ ] above), the accuracy, completeness or fairness of the Registration
Statement, the Time of Sale Information, the Prospectus and any amendment or supplement thereto
(except as expressly provided above), based upon the participation described above (relying as to
factual matters in respect to the determination by us of materiality to the extent we deem
reasonable upon statements of fact made to us by representatives of the Company) and subject to the
next succeeding sentence, nothing has come to the attention of such counsel to cause such counsel
to believe that the Registration Statement, at the time of its effective date (including the
information, if any, deemed pursuant to Rule 430A, 430B or 430C to be part of the Registration
Statement at the time of effectiveness), contained any 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 Time of Sale Information, at the Time of Sale (which such counsel
may assume to be the date of the Underwriting Agreement) contained any untrue statement of a
material fact or omitted to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading or that the Prospectus or any
amendment or supplement thereto as of its date and the Closing Date contains any untrue statement
of a material fact or omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading . In making the
foregoing statement, such counsel will not express any comment or belief with respect to the
financial statements and notes and related schedules (and other financial and accounting data
derived therefrom), and the oil and natural gas reserve estimates included in or omitted from the
Registration Statement, the Time of Sale Information or the Prospectus.
In rendering such opinion, such counsel may rely as to matters of fact on certificates of
responsible officers of the Company and public officials that are furnished to the Underwriters.
The opinion of Xxxxxx & Xxxxxx L.L.P. described above shall be rendered to the Underwriters at
the request of the Company and shall so state therein.
X-0
Xxxxx X-0
[Form of Opinion of General Counsel of the Company]
(-) The Company and each of its subsidiaries have been duly organized and are validly existing
and in good standing under the laws of their respective jurisdictions of organization, are duly
qualified to do business and are in good standing in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged, except where the failure to be
in good standing or so qualified or have such power or authority would not, individually or in the
aggregate, have a Material Adverse Effect.
(-) The Company has authorized capital stock as set forth in the Registration Statement, the
Time of Sale Information and the Prospectus under the heading “Capitalization”; all of the
outstanding shares of capital stock of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Registration Statement, the Time of Sale
Information and the Prospectus.
(-) To the knowledge of such counsel, the issuance of the Shares to be sold by the Company
will not conflict with or result in the breach or violation of any of the terms or provisions of,
or constitute a default under any contract to which the Company is a party.
(-) To the knowledge of such counsel, except as described in the Registration Statement, the
Time of Sale Information and the Prospectus, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company or any of its
subsidiaries is or is reasonably expected to be a party or to which any property of the Company or
any of its subsidiaries is or is reasonably expected to be the subject which, individually or in
the aggregate, if determined adversely to the Company or any of its subsidiaries, could reasonably
be expected to have a Material Adverse Effect; and to the knowledge of such counsel, no such
investigations, actions, suits or proceedings are threatened or contemplated by any governmental or
regulatory authority or threatened by others.
X-0
Xxxxx X-0
[Form of Opinion of Counsel For
The Non-Chase Selling Stockholders]
The Non-Chase Selling Stockholders]
( ) The Underwriting Agreement has been duly authorized, executed and delivered by or on
behalf of each of the Selling Stockholders.
( ) A Power of Attorney and a Custody Agreement have been duly authorized, executed and
delivered by each Selling Stockholder and constitute valid and binding agreements of each Selling
Stockholder in accordance with their terms.
( ) Upon payment for the Selling Stockholder Shares to be sold by the Selling Stockholder to
the Underwriters as provided in the Underwriting Agreement, the delivery of the certificates
representing such Selling Stockholder Shares to Cede & Co. (“Cede”) or such other nominee as may be
designated by The Depository Trust Company (“DTC”), the registration of such Selling Stockholder
Shares in the name of Cede or such other nominee and the crediting of such Selling Stockholder
Shares by book entry on the records of DTC (acting in its capacity as a securities intermediary, as
such term is defined in Section 8-102 of the Uniform Commercial Code as in effect in the State of
New York (the “NYUCC”)) to security accounts ( as such term defined in Section 8-501 of the Uniform
Commercial Code (the “UCC”)) in the name of the Underwriters (assuming that neither DTC nor any of
the Underwriters has notice of any adverse claim (as such phrase is defined in Section 8-102 of the
UCC) to such Selling Stockholder Shares or any security entitlement in respect thereof), (i) DTC
shall be a “protected purchaser” of such Selling Stockholder Shares within the meaning of Section
8-303 of the UCC, (ii) under Section 8-501 of the UCC, the Underwriters will acquire a security
entitlement in respect of such Selling Stockholder Shares and (iii) to the extent governed by
Article 8 of the UCC, no action based on any “adverse claim” (as defined in Section 8-102 of the
UCC) to such Selling Stockholder Shares may be asserted against the Underwriters; it being
understood that for purposes of this opinion, such counsel may assume that when such payment,
delivery and crediting occur, (A) such Selling Stockholder Shares will have been registered in the
name of Cede or such other nominee as may be designated by DTC, in each case on the Company’s share
registry in accordance with its certificate of incorporation, bylaws and applicable law, (B) DTC
will be registered as a “clearing corporation” within the meaning of Section 8-102 of the UCC and
(C) appropriate entries to the securities account or accounts in the names of the Underwriters on
the records of DTC will have been made pursuant to the UCC.
The opinion of counsel described above shall be rendered to the Underwriters at the request of
the Selling Stockholders and shall so state therein.
X-0
Xxxxx X-0
[Form of Opinion of Counsel For
The Chase Selling Stockholders]
The Chase Selling Stockholders]
( ) The Underwriting Agreement has been duly executed and delivered by or on behalf of
each of the Selling Stockholders.
( ) A Power of Attorney and Custody Agreement has been duly executed and delivered by
each of the Selling Stockholders and, assuming the due authorization, execution and
delivery thereof by each of the attorneys-in-fact named therein and the Custodian,
constitutes a valid and binding agreement of each such Selling Stockholder enforceable
against each such Selling Stockholder in accordance with its terms.
( ) Upon payment by each Underwriter for the Secondary Stock that is to be
purchased by it as provided in the Underwriting Agreement, delivery of such Secondary
Stock, as directed by such Underwriter, to Cede & Co. or such other nominee as may be
designated by The Depository Trust Company (“DTC”), registration of such Secondary
Stock in the name of Cede & Co. or such other nominee and the crediting of such
Secondary Stock on the records of DTC to a “securities account” (as defined in Section
8-501 of the Uniform Commercial Code as in effect in the State of New York (the “NY
UCC”)) of such Underwriter with DTC under Section 8-501 of the NY UCC, (A) DTC shall be
a “protected purchaser”, within the meaning of Section 8-303 of the NY UCC, of such
Secondary Stock, (B) under Section 8-501 of the NY UCC, such Underwriter will acquire a
“security entitlement” (as defined in Section 8-102 of the NY UCC) in respect of the
Secondary Stock so purchased by it and (C) no action based on any “adverse claim”,
within the meaning of Section 8-102 of the NY UCC, to such Secondary Stock may be
asserted against such Underwriter with respect to such security entitlement.
The opinion of counsel described above shall be rendered to the Underwriters at the request of
the Selling Stockholders and shall so state therein.
X-0
Xxxxx X-0
[Form of Opinion of Local Counsel For
The Chase Selling Stockholders]
The Chase Selling Stockholders]
( ) The Underwriting Agreement has been duly authorized by or on behalf of each of the
Selling Stockholders.
( ) A Power of Attorney and a Custody Agreement have been duly authorized, executed and
delivered by each Selling Stockholder.
The opinion of counsel described above shall be rendered to the Underwriters at the request of
the Selling Stockholders and shall so state therein.
B-1
Annex C
Time of Sale Information
Free Writing Prospectus as set forth on Annex D
C-1
Annex D
Issuer Free Writing Prospectus
Filed Pursuant to Rule 433
August 2, 2007
Registration Statement No. 333-142315
Filed Pursuant to Rule 433
August 2, 2007
Registration Statement No. 333-142315
Final Term Sheet
Issuer: |
Concho Resources Inc. | |
Common stock offered by the issuer: |
13,332,851 shares | |
Common stock offered by the selling
stockholders: |
7,554,256 shares | |
Public offering price: |
$11.50 per share | |
Net proceeds to the issuer, after
deducting underwriting discounts and
commissions and estimated offering
expenses: |
$139.3 million |
The following restates the “Capitalization” section contained in our preliminary prospectus dated
July 18, 2007 in order to reflect the public offering price set forth above and the application of
the net proceeds as described in “Use of proceeds.” A copy of our preliminary prospectus can be
accessed through the following link:
xxxx://xxx.xxx.xxx/Xxxxxxxx/xxxxx/xxxx/0000000/000000000000000000/x00000x0xx0xx.xx m.
Capitalization
The following table shows our cash and cash equivalents and our total capitalization as of
March 31, 2007 on an actual basis and on an as adjusted basis to reflect the following events:
| • | the repayment by our executive officers of certain loans made by our company to our executive officers prior to the filing of the registration statement of which this prospectus is a part and the application of the proceeds to the repayment of a portion of our revolving credit facility; and | |
| • | the closing of this offering and the application of the net proceeds from this offering as described above. |
We derived this table from, and it should be read in conjunction with and is qualified in its
entirety by reference to, the historical consolidated financial statements and the accompanying
notes included elsewhere in this prospectus. You should read this information in conjunction with
these consolidated financial statements and “Management’s discussion and analysis of financial
condition and results of operations.”
D-1
| As of March 31, 2007 | ||||||||
| (in thousands, except share and per share data) | Actual | As adjusted | ||||||
Cash and cash equivalents |
$ | 2,573 | $ | 2,573 | ||||
Long-term debt, including current maturities |
$ | 505,000 | $ | 355,289 | ||||
Stockholders’ equity: |
||||||||
Series A preferred stock, $.01 par value; 30,000,000 shares authorized, zero shares issued and outstanding, actual and as adjusted |
— | — | ||||||
Preferred stock, $.001 par value; 10,000,000 shares authorized, zero shares issued and outstanding, actual and as adjusted |
— | — | ||||||
Common stock, $.001 par value; 300,000,000 shares authorized, 59,092,830 shares issued and outstanding, actual and 72,425,681 shares issued and outstanding as adjusted(1) |
59 | 72 | ||||||
Additional paid-in capital |
576,214 | 715,483 | ||||||
Notes receivable from officers and employees |
(13,028 | ) | (2,599 | ) | ||||
Retained earnings |
16,734 | 16,161 | ||||||
Accumulated other comprehensive loss, net of taxes |
(5,188 | ) | (5,188 | ) | ||||
Total stockholders’ equity |
574,791 | 723,929 | ||||||
Total capitalization |
$ | 1,079,791 | $ | 1,079,218 | ||||
| (1) | The number of shares of common stock issued and outstanding on an actual and an as adjusted basis includes shares of common stock outstanding and awards of restricted stock, but does not include shares of common stock subject to outstanding options. |
In addition, due to our increased long-term debt that will remain outstanding following the
completion of this offering (and the related increased interest expense) compared to the amount of
our long-term debt as previously reflected in our preliminary prospectus dated July 18, 2007, our
pro forma as adjusted net income applicable to common shareholders for the three months ended March
31, 2006, the year ended December 31, 2006 and the three months ended March 31, 2007 is as follows:
| Pro forma as adjusted | ||||||||||||
| Three Months | Year Ended | Three Months | ||||||||||
| Ended March 31, | December 31, | Ended March 31, | ||||||||||
| (In thousands) | 2006 | 2006 | 2007 | |||||||||
Net income applicable to common
shareholders |
$ | 4,139 | $ | 29,565 | $ | 6,622 | ||||||
Concho Resources Inc., the issuer, has filed a registration statement (including a prospectus) with
the SEC for the offering to which this communication relates. Before you invest, you should read
the prospectus in that registration statement and other documents the issuer has filed with the SEC
for more complete information about the issuer and this offering. You may get these documents for
free by visiting XXXXX on the SEC Web site at xxx.xxx.xxx. Alternatively, the issuer, any
underwriter or any dealer participating in the offering will arrange to send you the prospectus if
you request it by calling toll-free 0-000-000-0000.
D-2
Exhibit A
FORM OF LOCK-UP AGREEMENT
, 2007
X.X. XXXXXX SECURITIES INC.
BANK OF AMERICA SECURITIES LLC
BANK OF AMERICA SECURITIES LLC
As Representatives of
the several Underwriters listed in
Schedule I to the Underwriting
Agreement referred to below
the several Underwriters listed in
Schedule I to the Underwriting
Agreement referred to below
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Concho Resources Inc. — Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of the several Underwriters, propose
to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Concho Resources Inc.,
a Delaware corporation (the “Company”), providing for the public offering (the “Public Offering”)
by the several Underwriters to be named in Schedule I to the Underwriting Agreement (the
“Underwriters”) of common stock of the Company (the “Securities”).
In consideration of the Underwriters’ agreement to purchase and make the Public Offering of
the Securities, and for other good and valuable consideration receipt of which is hereby
acknowledged, the undersigned hereby agrees that, without the prior written consent of X.X. Xxxxxx
Securities Inc. and Bank of America Securities LLC, on behalf of the Underwriters, the undersigned
will not, during the period ending 180 days after the date of the prospectus relating to the Public
Offering (the “Prospectus”), (1) offer, pledge, announce the intention to sell, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock, par value $0.001 per share, of the Company (the “Common Stock”) or any
securities convertible into or exercisable or exchangeable for Common Stock (including, without
limitation, Common Stock which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations of the Securities and Exchange Commission and securities
which may be issued upon exercise of a stock option or warrant) or (2) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences of ownership of the
Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise or (iii) make any demand
for or exercise any right with respect to the registration of any shares of Stock or any security
convertible into or exercisable or exchangeable for Stock without the prior written consent of the
Representatives, in each case other than (A) the Shares to be sold by the undersigned hereunder,
(B) transfers of shares of Stock as a bona fide gift or gifts, including to the Chase Foundation,
(C) transfers of shares of Stock or other securities to directors, officers or employees of Chase
Oil Corporation or its subsidiaries or affiliates and (D) distributions of shares of Stock to
members or stockholders of such Selling Stockholder; provided that in the case of any transfer or
distribution pursuant to clause (B), (C), or (D) each donee, transferee or distributee shall
execute and deliver to the Representatives a lock-up letter in the form of this paragraph and
provided, further, that in the case of any transfer or distribution pursuant to clause (B) or (D)
no filing by any party (donor, donee, transferor or transferee) under Section 16(a) of the
Securities Exchange Act of 1934, as amended, shall be required or shall be made voluntarily in connection with
Ex A-1
such transfer or distribution (other than a filing on a Form 5 made after the
expiration of the 180-day period referred to above). In addition, the undersigned agrees that,
without the prior written consent of X.X. Xxxxxx Securities Inc. and Bank of America Securities LLC
on behalf of the Underwriters, it will not, during the period ending 180 days after the date of the
Prospectus, make any demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exercisable or exchangeable for Common
Stock.
Notwithstanding the foregoing, if (1) during the last 17 days of the 180-day restricted
period, the Company issues an earnings release or material news or a material event relating to the
Company occurs; or (2) prior to the expiration of the 180-day restricted period, the Company
announces that it will release earnings results during the 16-day period beginning on the last day
of the 180-day period, the restrictions imposed by this Letter Agreement shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event; provided, however, that in no event shall such
restrictions extend past 214 days from the date of the Prospectus.
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the
registration or transfer of the securities described herein, are hereby authorized to decline to
make any transfer of securities if such transfer would constitute a violation or breach of this
Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Letter Agreement. All authority herein conferred or agreed to be
conferred and any obligations of the undersigned shall be binding upon the successors, assigns,
heirs or personal representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not become effective, or
if the Underwriting Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Common Stock to be sold
thereunder, the undersigned shall be released form all obligations under this Letter Agreement.
The undersigned understands that to the extent the Underwriters enter into the Underwriting
Agreement and proceed with the Public Offering, they will be doing so in reliance upon this Letter
Agreement.
This Letter Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the conflict of laws principles thereof.
| Very truly yours, | ||||||
| Name: | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Ex A-2