CONCHO RESOURCES INC. 2,500,000 Shares of Common Stock Underwriting Agreement
Exhibit 1.1
EXECUTION VERSION
2,500,000 Shares of Common Stock
Underwriting Agreement
December 8, 2010
Xxxxxxx, Xxxxx & Co.
as Representative of the
several Underwriters listed
in Schedule 1 hereto
c/o Goldman, Sachs & Co.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
as Representative of the
several Underwriters listed
in Schedule 1 hereto
c/o Goldman, Sachs & Co.
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 representative (the “Representative”), an aggregate of 2,500,000 shares of common stock, par
value $0.001 per share, of the Company (the “Underwritten Shares”) and, at the option of the
Underwriters, up to an additional 375,000 shares of common stock, par value $0.001 per share, of
the Company (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 referred to herein as the “Stock.”
The Company hereby confirms its agreement with the several Underwriters concerning the
purchase and sale of the Shares, as follows:
1. Registration Statement. The Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “Securities Act”), a registration statement on Form S-3
(File No. 333-161809), including a prospectus, relating to the Shares. Such registration
statement, including the information, if any, deemed pursuant to Rule 430A, 430B or 430C under the
Securities Act to be part of the registration statement at the time of its effectiveness (“Rule 430
Information”), is referred to herein as the “Registration Statement”; and as used herein, the term
“Preliminary Prospectus” means the prospectus dated September 9, 2009 included in such registration
statement that omits Rule 430 Information and the preliminary prospectus supplement filed with the
Commission pursuant to Rule 424(b) under the Securities Act on December 7, 2010 and the term
“Prospectus” means the prospectus in the form first used (or made available upon request of
purchasers pursuant to Rule 173 under the Securities Act) in connection with confirmation of sales
of the Shares. Any reference in this Agreement to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item
12 of Form S-3 under the Securities Act, as of the effective date of the Registration
Statement or the date of such Preliminary Prospectus or the Prospectus, as the case may be and any
reference to “amend”, “amendment” or “supplement” with respect to the Registration Statement, any
2
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents
filed after such date under the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (collectively, the “Exchange Act”) that are deemed to be
incorporated by reference therein. 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 B, the “Time of Sale Information”): a Preliminary Prospectus dated December 7, 2010, and
each “free-writing prospectus” (as defined pursuant to Rule 405 under the Securities Act), if any,
listed on Annex B hereto.
2. Purchase of the Shares by the Underwriters.
(a) The Company agrees to issue and sell the 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 the respective number of Shares set forth opposite such
Underwriter’s name in Schedule 1 hereto at a price per share (the “Purchase Price”) of $79.20.
In addition, the Company agrees to issue and sell the Option Shares to the several
Underwriters as provided in this Agreement, and the Underwriters, on the basis of the
representations, warranties and agreements set forth herein and subject to the conditions set forth
herein, shall have the option to purchase, severally and not jointly, from the Company the Option
Shares at the Purchase Price less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Underwritten Shares but not payable on the Option
Shares.
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 10
hereof) bears to the aggregate number of Underwritten Shares being purchased from the Company by
the several Underwriters, subject, however, to such adjustments to eliminate any fractional Shares
as the Representative in its sole discretion shall make.
The Underwriters may exercise the option to purchase Option Shares at any time in whole, or
from time to time in part, on or before the thirtieth day following the date of the Prospectus, by
written notice from the Representative 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 or later than the
tenth full business day (as hereinafter defined) after the date of such notice (unless such time
and date are postponed in accordance with the provisions of Section 10 hereof). Any such notice
shall be given at least two business days prior to the date and time of delivery specified therein.
3
The Company understands 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 Representative is
advisable, and initially to offer the Shares on the terms set forth in the Prospectus. The Company
acknowledges and agrees 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.
(b) Payment for the Shares shall be made by wire transfer in immediately available funds to
the account specified by the Company to the Representative in the case of the Underwritten Shares,
at the offices of Xxxxxx & Xxxxxx LLP, 0000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000 at 10:00 A.M., New
York City time, on December 14, 2010, or at such other time or place on the same or such other
date, not later than the fifth business day thereafter, as the Representative and the Company 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 Representative 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.”
(c) 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 Representative 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 Representative 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.
(d) The Company acknowledges and agrees that the Underwriters are acting solely in the
capacity of an arm’s length contractual counterparty to the Company 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 or any other person.
Additionally, neither the Representative nor any other Underwriter is advising the Company or any
other person as to any legal, tax, investment, accounting or regulatory matters in any
jurisdiction. The Company shall consult with its own advisors concerning such matters and shall be
responsible for making its own independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriters shall have no responsibility or liability to the Company
with respect thereto. Any review by the Underwriters of the Company, 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.
3. Representations and Warranties of the Company. The Company represents and warrants
to each Underwriter that:
(a) Preliminary Prospectus. No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, complied in all material respects with the
4
Securities Act and did 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 Representative expressly for use in any Preliminary Prospectus.
(b) 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 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 Representative expressly for use in such Time of
Sale Information.
(c) Issuer Free Writing Prospectus. Other than the Preliminary Prospectus and the
Prospectus, the Company (including its agents and representatives, other than the
Underwriters in their capacity as such) has not prepared, made, used, authorized, approved
or referred to and will not prepare, make, use, authorize, approve or refer to any “written
communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer
to sell or solicitation of an offer to buy the Shares (each such communication by the
Company or its agents and representatives (other than a communication referred to in clause
(i) below) an “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 B hereto and any other written
communications, in each case approved in writing in advance by the Representative. Each
such Issuer Free Writing Prospectus complied in all material respects with the Securities
Act, has been or will be (within the time period specified in Rule 433) filed in accordance
with the Securities Act (to the extent required thereby), does not conflict with the
information contained in the Registration Statement or the Prospectus and, when taken
together with the Preliminary Prospectus accompanying, or delivered prior to delivery of,
such Issuer Free Writing Prospectus, 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 that the Company makes no representation and warranty with respect to any
statements or omissions made in each such Issuer Free Writing Prospectus in reliance upon
and in conformity with information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Representative expressly for use in any Issuer Free
Writing Prospectus.
(d) Registration Statement and Prospectus. The Registration Statement is an “automatic
shelf registration statement” as defined under Rule 405 of the Securities Act that has been
filed with the Commission not earlier than three years prior to the date
5
hereof; and no notice of objection of the Commission to the use of such registration
statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the
Securities Act has been received by the Company. No order suspending the effectiveness of
the Registration Statement has been issued by the Commission and no proceeding for that
purpose or pursuant to Section 8A of the Securities Act against the Company or related to
the offering of the Shares has been initiated or, to the knowledge of the Company,
threatened by the Commission; as of the applicable effective date of the Registration
Statement and any post-effective amendment thereto, the Registration Statement and any such
post-effective amendment complied and will comply in all material respects with the
Securities Act and the Trust Indenture Act of 1939, as amended, and the rules and
regulations of the Commission thereunder (collectively, the “Trust Indenture 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 that the Company makes no representation and warranty with respect to (i) that
part of the Registration Statement that constitutes the Statement of Eligibility and
Qualification (Form T-1) of the Trustee under the Trust Indenture Act or (ii) 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
Representative expressly for use in the Registration Statement and the Prospectus and any
amendment or supplement thereto.
(e) Incorporated Documents. The documents incorporated by reference in the
Registration Statement, the Prospectus and the Time of Sale Information, when they became
effective or were filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the Exchange Act and none of such documents contained any
untrue statement of a material fact or omitted 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; and any further documents so filed
and incorporated by reference in the Registration Statement, the Prospectus or the Time of
Sale Information, when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, 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, in the light of the circumstances under which they
were made, not misleading.
(f) Financial Statements.
(i) | The financial statements and the related notes thereto of the Company and its consolidated subsidiaries included or incorporated by reference in the Registration Statement, the Time of Sale Information and the Prospectus comply in all material respects with the applicable requirements of the |
6
Securities Act and the Exchange Act, as applicable, and present fairly in all material respects the financial position of the Company and its subsidiaries 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, and the supporting schedules included or incorporated by reference in the Registration Statement present fairly in all material respects the information required to be stated therein; and the other financial information included or incorporated by reference in the Registration Statement, the Time of Sale Information and the Prospectus has been derived from the accounting records of the Company and its subsidiaries and presents fairly in all material respects the information shown thereby; and the pro forma financial information and the related notes thereto included or incorporated by reference in the Registration Statement, the Time of Sale Information and the Prospectus have been prepared in all material respects in accordance with the applicable requirements of the Securities Act and the Exchange Act, as applicable, the assumptions used in preparing the pro forma financial information included or incorporated by reference in the Registration Statement, the Time of Sale Information and the Prospectus provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma columns therein reflect the proper application of those adjustments to the corresponding historical financial statement amounts. |
(ii) | The financial statements and the related notes thereto of the Marbob Group included or incorporated by reference 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 Marbob Group 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 Marbob Group included or incorporated by reference in the Registration Statement, the Time of Sale Information and the Prospectus has been derived from the accounting records of the Marbob Group and presents fairly in all material respects the information shown thereby. |
(iii) | The financial information of the Chase Group Properties included or incorporated by reference in the Registration Statement, the Time of Sale Information and the Prospectus complies in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as |
7
applicable, and presents 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 and presents fairly in all material respects the information shown thereby. |
(g) No Material Adverse Change. Since the date of the most recent financial statements
of the Company included or incorporated by reference in the Registration Statement, the Time
of Sale Information and the Prospectus, (i) there has not been any change in the capital
stock or material change in the long-term debt of the Company or any of its subsidiaries, or
any dividend or distribution of any kind declared, set aside for payment, paid or made by
the Company on any class of capital stock, or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the business,
properties, management, financial position, stockholders’ equity, results of operations or
prospects of the Company and its subsidiaries taken as a whole; (ii) neither the Company nor
any of its subsidiaries has entered into any transaction or agreement that is material to
the Company and its subsidiaries taken as a whole or incurred any liability or obligation,
direct or contingent, that is material to the Company and its subsidiaries taken as a whole;
and (iii) neither the Company nor any of its subsidiaries has sustained any material loss or
interference with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority, except in each
case as otherwise disclosed in the Registration Statement, the Time of Sale Information and
the Prospectus.
(h) Organization and Good Standing. 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 so qualified, in good
standing or have such power or authority would not, individually or in the aggregate, have a
material adverse effect on the business, properties, management, financial position,
stockholders’ equity, results of operations or prospects of the Company and its subsidiaries
taken as a whole (a “Material Adverse Effect”). The Company does not own or control,
directly or indirectly, any corporation, association or other entity other than COG
Operating LLC, COG Realty LLC, Concho Energy Services LLC, Quail Ranch LLC, Concho Oil & Gas
LLC, COG Holdings LLC and COG Exchange Properties LLC.
(i) Capitalization. The Company has an authorized capitalization as set forth in the
Registration Statement, the Time of Sale Information and the Prospectus under the heading
“Capitalization”; all the outstanding shares of capital stock of the Company have been duly
and validly authorized and issued and are fully paid and non-assessable and are not subject
to any pre-emptive or similar rights; except as described in or expressly contemplated by
the Time of Sale Information and the Prospectus, there are no
8
outstanding rights (including, without limitation, pre-emptive rights), warrants or
options to acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its subsidiaries, or any
contract, commitment, agreement, understanding or arrangement of any kind relating to the
issuance of any capital stock of the Company or any such subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options; 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; and all the
outstanding shares of capital stock or other equity interests of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and non-assessable
(except as otherwise described in the Registration Statement, the Time of Sale Information
and the Prospectus) and are owned directly or indirectly by the Company, free and clear of
any lien, charge, encumbrance, security interest, restriction on voting or transfer or any
other claim of any third party, other than those arising under the Company’s Amended and
Restated Credit Agreement, dated as of July 31, 2008 (as amended from time to time).
(j) 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 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.
(k) The Shares. The Shares to be issued and sold by the Company hereunder have been
duly authorized by the Company and, when issued and delivered and paid for as provided
herein, will be fully paid, nonassessable and conform to the descriptions thereof in the
Registration Statement, the Time of Sale Information and the Prospectus; and the issuance of
the Shares is not subject to any preemptive or similar rights.
(l) Underwriting Agreement. This Agreement has been duly authorized, executed and
delivered by the Company.
(m) No Violation or Default. Neither the Company nor any of its subsidiaries is (i) in
violation of its charter or by-laws or similar organizational documents; (ii) in default,
and no event has occurred that, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject; or (iii) in violation of any law or statute or any judgment,
order, rule or regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a Material Adverse Effect.
(n) No Conflicts. The execution, delivery and performance by the Company of this
Agreement, the issuance and sale of the Shares and the consummation of the
9
transactions contemplated by this 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 indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is subject,
(ii) result in any violation of the provisions of the charter or by-laws 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, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of clauses (i) and
(iii) above, for any such conflict, breach, violation, default, lien, charge or encumbrance
that would not, individually or in the aggregate, have a Material Adverse Effect.
(o) No Consents Required. 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 this Agreement, the
issuance and sale of the Shares and the consummation of the transactions contemplated by
this Agreement, except for the registration of the Shares under the Securities Act 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 and would not adversely affect the Company’s
ability to fulfill its obligations under this Agreement.
(p) Legal Proceedings. 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 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 or the Prospectus 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.
10
(q) Independent Accountants. Xxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company and its subsidiaries and of the Marbob Group, is an independent
registered public accounting firm with respect to the Company and its subsidiaries and with
respect to the Marbob Group within the applicable rules and regulations adopted by the
Commission and the Public Company Accounting Oversight Board (United States) and as required
by the Securities Act.
(r) Title to Real and Personal Property. The Company and its subsidiaries have good
and marketable title to all real and other property they own, in each case free and clear of
all liens, encumbrances and defects except those (i) described in the Registration
Statement, the Time of Sale Information and the Prospectus or (ii) that could not reasonably
be expected, individually or in the aggregate, to have a Material Adverse Effect. Except as
described in the Registration Statement, the Time of Sale Information and the Prospectus,
all items of real and other property leased by the Company and its subsidiaries are leased
under valid and enforceable leases, except as could not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect.
(s) No Undisclosed Relationships. No relationship, direct or indirect, exists between
or among the Company or any of its subsidiaries, on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its subsidiaries, on
the other, that is required by the Securities Act to be described in the Registration
Statement and the Prospectus and that is not so described in such documents and in the Time
of Sale Information.
(t) Investment Company Act. 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, an
“investment company” or an entity “controlled” by an “investment company” within the meaning
of the Investment Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder (collectively, “Investment Company Act”).
(u) Taxes. The Company and its subsidiaries have paid all federal, state, local and
foreign taxes and filed all tax returns required to be paid or filed through the date
hereof; and except as otherwise 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.
(v) Licenses and Permits. The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by, and have made all declarations and
filings with, the appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their respective properties or
the conduct of their respective businesses as described in the Registration Statement, the
Time of Sale Information and the Prospectus, except where the failure to possess or make the
same would not, individually or in the aggregate, have a Material
11
Adverse Effect; and except as described 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, neither the Company nor any of its subsidiaries has received notice
of any revocation or modification of any such license, certificate, permit or authorization
or has any reason to believe that any such license, certificate, permit or authorization
will not be renewed in the ordinary course.
(w) No Labor Disputes. No labor disturbance by or dispute with employees of the
Company or any of its subsidiaries exists or, to the knowledge of the Company, is
contemplated or threatened and neither the Company nor any of its subsidiaries is aware of
any existing or imminent labor disturbance by, or dispute with, the employees of any of the
Company’s or the Company’s subsidiaries’ principal suppliers, contractors or customers,
except as would not have a Material Adverse Effect.
(x) Compliance With Environmental Laws. (i) The Company and its subsidiaries (x) are
in compliance with any and all applicable federal, state, local and foreign laws, rules,
regulations, requirements, decisions and orders relating to the protection of human health
and safety, the environment, hazardous or toxic substances or wastes, pollutants or
contaminants (collectively, “Environmental Laws”); (y) have received and are in compliance
with all permits, licenses, certificates or other authorizations or approvals required of
them under applicable Environmental Laws to conduct their respective businesses; and (z)
except as described in the Registration Statement, the Time of Sale Information and the
Prospectus, 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, and (ii) there are no costs or liabilities associated
with Environmental Laws of or relating to the Company or its subsidiaries, except in the
case of each of (i) and (ii) above, for any such failure to comply, or failure to receive
required permits, licenses or approvals, or cost or liability, as would not, individually or
in the aggregate, have a Material Adverse Effect.
(y) Compliance With ERISA. Each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is
maintained, administered or contributed to by the Company or any of its affiliates for
employees or former employees of the Company and its affiliates has been maintained in
compliance in all material respects with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including, but not limited to, ERISA and the
Internal Revenue Code of 1986, as amended (the “Code”); no prohibited transaction, within
the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect
to any such plan excluding transactions effected pursuant to a statutory or administrative
exemption; and transactions which, individually or in the aggregate, would not have a
Material Adverse Effect, and no such plan is subject to the funding rules of Section 412 of
the Code or Section 302 of ERISA.
(z) Disclosure Controls. The Company and its subsidiaries maintain an effective system
of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act)
that is designed to ensure that information required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is recorded,
12
processed, summarized and reported within the time periods specified in the
Commission’s rules and forms, including controls and procedures designed to provide
reasonable assurance that such information is accumulated and communicated to the Company’s
management as appropriate to allow timely decisions regarding required disclosure.
(aa) Accounting Controls. The Company and its subsidiaries maintain a system of
“internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange
Act) that comply with the requirements of the Exchange Act and have been designed by, or
under the supervision of, the Company’s principal executive and principal financial
officers, and effected by the Company’s board of directors, management and other personnel
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles, including those policies and procedures that (i) pertain to
the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of the assets of the Company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles and that receipts and
expenditures of the Company are being made in accordance with and authorizations of
management and directors of the Company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition of the
Company’s assets that could have a material effect on the Company’s financial statements.
Except as disclosed in the Registration Statement, the Time of Sale Information and the
Prospectus, there are no material weaknesses in the Company’s internal control over
financial reporting.
(bb) Insurance. The Company and its subsidiaries have insurance covering their
respective properties, operations, personnel and businesses, which insurance is in
reasonable amounts and insures against such losses and risks as are reasonably adequate to
protect the Company and its subsidiaries and their respective businesses; and neither the
Company nor any of its subsidiaries has (i) received notice from any insurer or agent of
such insurer that capital improvements or other expenditures are required or necessary to be
made in order to continue such insurance or (ii) any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage at reasonable cost from similar insurers as may be necessary to continue
its business.
(cc) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or other person associated
with or acting on behalf of the Company or any of its subsidiaries has (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii) violated or
is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made
any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
13
(dd) Compliance with Money Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of all 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.
(ee) Compliance with OFAC. None of the Company, any of its subsidiaries or, 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. Department of the Treasury (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering of the Shares
hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.
(ff) No Restrictions on Subsidiaries. No subsidiary of the Company is currently
prohibited, directly or indirectly, under any agreement or other instrument to which it is a
party or is subject, 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
properties or assets to the Company or any other subsidiary of the Company.
(gg) No Broker’s Fees. Neither the Company nor any of its subsidiaries is a party to
any contract, agreement or understanding with any person (other than this Agreement) that
would give rise to a valid claim against the Company or any of its subsidiaries or any
Underwriter for a brokerage commission, finder’s fee or like payment in connection with the
offering and sale of the Shares.
(hh) No Registration Rights. Except as disclosed in the Registration Statement, the
Time of Sale Information and the Prospectus, no person has the right to require the Company
or any of its subsidiaries to register any securities for sale under the Securities Act by
reason of the filing of the Registration Statement with the Commission or the issuance and
sale of the Shares.
(ii) No Stabilization. The Company has not taken, 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.
(jj) Forward-Looking Statements. No material forward-looking statement (within the
meaning of Section 27A of the Securities Act and Xxxxxxx 00X xx xxx
00
Xxxxxxxx Xxx) contained or incorporated by reference in the Registration Statement, the
Time of Sale Information and the Prospectus has been made or reaffirmed without a reasonable
basis or has been disclosed other than in good faith.
(kk) Xxxxxxxx-Xxxxx 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 with
any applicable provision of the Xxxxxxxx-Xxxxx Act of 2002 and any applicable rules and
regulations promulgated in connection therewith (the “Xxxxxxxx-Xxxxx Act”), including
Section 402 related to loans and Sections 302 and 906 related to certifications.
(ll) Status under the Securities Act. The Company is not an ineligible issuer and is a
well-known seasoned issuer, in each case as defined under the Securities Act, in each case
at the times specified in the Securities Act in connection with the offering of the Shares.
(mm) Reserve Data. The oil and natural gas reserve estimates of the Company and its
subsidiaries (i) as of December 31, 2007, 2008 and 2009 contained or incorporated by
reference 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, either (a)
Netherland, Xxxxxx & Associates, Inc. or (b) Xxxxxx, Xxxxxxxxx & Associates, Inc., and (ii)
as of June 30, 2010 contained or incorporated by reference in the Registration Statement,
the Time of Sale Information and the Prospectus are derived from the Company’s internal
estimates, in each case as set forth and to the extent indicated therein, and such estimates
fairly reflect, in all material respects, 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. The oil and natural gas reserve estimates of Marbob Energy
Corporation and its affiliate interests as of December 31, 2006, 2007, 2008 and 2009 are
derived from reports that have been prepared by Xxxxxx, Xxxxxxxxx & Associates, Inc. as set
forth and to the extent indicated therein, and such estimates fairly reflect, in all
material respects, the oil and natural gas reserves of Marbob Energy Corporation and its
affiliate interests 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.
(nn) 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 Time of Sale Information and the
Prospectus.
4. Further
Agreements of the Company. The Company covenants and agrees with each
Underwriter that:
(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
15
under the Securities Act, will file any Issuer Free Writing Prospectus to the extent required
by Rule 433 under the Securities Act; and will file promptly all reports and any definitive proxy
or information statements required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and
for so long as the delivery of a prospectus is required in connection with the offering or sale of
the Shares; 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 City time, on the business day next succeeding the date of this Agreement in
such quantities as the Representative may reasonably request.
(b) Delivery of Copies. The Company will make available to each Underwriter electronically
through XXXXX the Registration Statement as originally filed and each amendment thereto, in each
case including all exhibits and consents filed therewith and documents incorporated by reference
therein, and (ii) make available to each Underwriter electronically through XXXXX (A) a conformed
copy of the Registration Statement as originally filed and each amendment thereto filed prior to
the later of (x) the Closing Date or (y) the expiration of the Prospectus Delivery Period (as
defined below) or otherwise relating to the Shares, in each case including all exhibits and
consents filed therewith and (B) deliver, without charge, during the Prospectus Delivery Period (as
defined below), as many copies of the Prospectus (including all amendments and supplements thereto)
and each Issuer Free Writing Prospectus as the Representative may reasonably request. As used
herein, the term “Prospectus Delivery Period” means such period of time after the first date of the
public offering of the Shares as in the opinion of counsel for the Underwriters a prospectus
relating to the Shares is required by law to be delivered (or required to be delivered but for Rule
172 under the Securities Act) in connection with sales of the Shares by any Underwriter or dealer.
(c) Amendments or Supplements; Issuer Free Writing Prospectuses. Prior to the later of (i)
the Closing Date or (ii) the expiration of the Prospectus Delivery Period, before preparing, using,
authorizing, approving, referring to or filing any Issuer Free Writing Prospectus, and before
filing any amendment or supplement to the Registration Statement or the Prospectus, the Company
will furnish to the Representative and counsel for the Underwriters a copy of the proposed Issuer
Free Writing Prospectus, amendment or supplement for review and will not prepare, use, authorize,
approve, refer to or file any such Issuer Free Writing Prospectus or file any such proposed
amendment or supplement to which the Representative reasonably objects.
(d) Notice to the Representative. The Company will advise the Representative promptly, and
confirm such advice in writing, (i) when any amendment to the Registration Statement has been filed
or becomes effective until the later of (i) the Closing Date and (ii) the expiration of the
Prospectus Delivery Period; (ii) when any supplement to the Prospectus or any amendment to the
Prospectus or any Issuer Free Writing Prospectus relating to the Shares has been filed; (iii) of
any request by the Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or the receipt of any comments from the Commission relating to the
Registration Statement or any other request by the Commission for any additional information
relating to the Registration Statement or any document incorporated therein until the later of (x)
the Closing Date and (y) the expiration of the Prospectus Delivery Period; (iv) of the issuance by
the Commission of any order suspending the effectiveness of the Registration Statement or
preventing or suspending the use of any
16
Preliminary Prospectus or the Prospectus or the initiation or threatening of any proceeding
for that purpose or pursuant to Section 8A of the Securities Act; (v) of the occurrence of any
event within the Prospectus Delivery Period as a result of which the Prospectus, the Time of Sale
Information or any Issuer Free Writing Prospectus as then amended or supplemented would include 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 existing
when the Prospectus, the Time of Sale Information or any such Issuer Free Writing Prospectus is
delivered to a purchaser, not misleading; (vi) of the receipt by the Company of any notice of
objection of the Commission to the use of the Registration Statement or any post-effective
amendment thereto pursuant to Rule 401(g)(2) under the Securities Act; and (vii) of the receipt by
the Company of any notice with respect to any suspension of the qualification of the Shares for
offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such
purpose; and the Company will use its reasonable best efforts to prevent the issuance of any such
order suspending the effectiveness of the Registration Statement, preventing or suspending the use
of any Preliminary Prospectus or the Prospectus or suspending any such qualification of the Shares
and, if any such order is issued, will obtain as soon as possible the withdrawal thereof.
(e) Time of Sale Information. 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 promptly 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 Representative 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.
(f) Ongoing Compliance. If during the Prospectus Delivery Period (i) any event shall occur or
condition shall exist as a result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii) it
is necessary to amend or supplement the Prospectus to comply with law, the Company will promptly
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 Representative 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.
(g) Blue Sky Compliance. The Company will qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representative shall reasonably request
and will continue such qualifications in effect so long as required for distribution of the
17
Shares; provided that the Company shall not be required to (i) qualify as a foreign
corporation or other entity or as a dealer in securities in any such jurisdiction where it would
not otherwise be required to so qualify, (ii) file any general consent to service of process in any
such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not
otherwise so subject.
(h) Earning Statement. The Company will make generally available to its security holders and
the Representative as soon as practicable an earning statement that satisfies the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder covering
a period of at least twelve months beginning with the first fiscal quarter of the Company occurring
after the “effective date” (as defined in Rule 158) of the Registration Statement.
(i) Clear Market. For a period of 60 days after the date of the Prospectus, the Company will
not (i) 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 Stock or any
securities convertible into or exercisable or exchangeable for Stock or (ii) enter into any swap or
other agreement that transfers, in whole or in part, any of the economic consequences of ownership
of the Stock, whether any such transaction described in clause (i) or (ii) above is to be settled
by delivery of Stock or such other securities, in cash or otherwise, without the prior written
consent of Xxxxxxx, Xxxxx & Co., other than (A) the Shares to be sold hereunder, (B) any shares of
Stock of the Company issued upon the exercise of options granted under existing employee stock
option plans, (C) grants by the Company of any employee stock options or restricted stock in
accordance with the terms of the 2006 Stock Incentive Plan as in effect on the date hereof (the
“Plan”) and (D) the filing by the Company of any registration statement with the Commission on Form
S-8 relating to the offering of securities pursuant to the terms of the Plan.
(j) Use of Proceeds. The Company will apply the net proceeds from the sale of the Shares as
described in the Registration Statement, the Time of Sale Information and the Prospectus under the
heading “Use of Proceeds”.
(k) No Stabilization. The Company 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.
(l) Record Retention. The Company will, pursuant to reasonable procedures developed in good
faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the Commission
in accordance with Rule 433 under the Securities Act.
5. Certain Agreements of the Underwriters. Each Underwriter hereby represents and
agrees that:
(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, solely as a result of use by such
18
underwriter, would not trigger an obligation to file such free writing prospectus with the
Commission pursuant to Rule 433, (ii) any Issuer Free Writing Prospectus listed on Annex B or
prepared pursuant to Section 3(c) or Section 4(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 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 if any such proceeding against it is
initiated during the Prospectus Delivery Period).
6. Conditions of Underwriters’ Obligations. The obligation of each Underwriter to
purchase the Underwritten Shares on the Closing Date or the Option Shares on the Additional Closing
Date, as the case may be, as provided herein is subject to the performance by the Company of its
covenants and other obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. No order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceeding for such purpose, pursuant to Rule
401(g)(2) or pursuant to Section 8A under the Securities Act shall be pending before or threatened
by the Commission; the Prospectus and each Issuer Free Writing Prospectus shall have been timely
filed with the Commission under the Securities Act (in the case of an Issuer Free Writing
Prospectus, to the extent required by Rule 433 under the Securities Act) and in accordance with
Section 4(a) hereof; and all requests by the Commission for additional information shall have been
complied with to the reasonable satisfaction of the Representative.
(b) Representations and Warranties. The representations and warranties of the Company
contained herein shall be true and correct on the date hereof and on and as of the Closing Date or
the Additional Closing Date, as the case may be; and the statements of the Company and its officers
made in any certificates delivered pursuant to this Agreement shall be true and correct on and as
of the Closing Date or the Additional Closing Date, as the case may be.
(c) No Downgrade. Subsequent to the earlier of (A) the Time of Sale and (B) the execution and
delivery of this Agreement, if there are any debt securities or preferred stock of or guaranteed by
the Company or any of its subsidiaries that are rated by a “nationally recognized statistical
rating organization,” as such term is defined by the Commission for purposes of Rule 436(g)(2)
under the Securities Act, (i) no downgrading shall have occurred in the rating accorded any such
debt securities or preferred stock and (ii) no such organization shall have publicly announced that
it has under surveillance or review, or has changed its outlook with respect to, its rating of any
such debt securities or preferred stock of or guaranteed by the Company or any of its subsidiaries
(other than an announcement with positive implications of a possible upgrading).
(d) No Material Adverse Change. No event or condition of a type described in Section 3(g)
hereof shall have occurred or shall exist, which event or condition is not described in the Time of
Sale Information (excluding any amendment or supplement thereto) and the Prospectus (excluding any
amendment or supplement thereto) and the effect of which in the
19
judgment of the Representative makes it impracticable or 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.
(e) Officer’s Certificate. The Representative shall have received on and as of the Closing
Date, or the Additional Closing Date, as the case may be, a certificate of an executive officer of
the Company who has specific knowledge of the Company’s financial matters and is satisfactory to
the Representative (i) confirming that such officer has carefully reviewed the Registration
Statement, the Time of Sale Information and the Prospectus and, to the knowledge of such officer,
the representations set forth in Sections 3(b) or 3(d) hereof are true and correct, (ii) confirming
that the other representations and warranties of the Company in this Agreement are true and correct
and that the Company has complied with all agreements and satisfied all conditions on its part to
be performed or satisfied hereunder at or prior to the Closing Date or the Additional Closing Date,
as the case may be, and (iii) to the effect set forth in paragraphs (a), (c) and (d) above.
(f) Comfort Letters. On the date of this Agreement and on the Closing Date or the Additional
Closing Date, as the case may be, Xxxxx Xxxxxxxx LLP shall have furnished to the Representative, at
the request of the Company, letters, dated the respective dates of delivery thereof and addressed
to the Underwriters, in form and substance reasonably satisfactory to the Representative,
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 and incorporated by reference 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 the Closing Date or the Additional Closing Date, as the case may be.
(g) Reserve Letters. On the date of this Agreement and on the Closing Date and the Additional
Closing Date, as the case may be, each of Netherland, Xxxxxx & Associates, Inc. and Xxxxxx,
Xxxxxxxxx & Associates, Inc. shall have furnished to the Representative, at the request of the
Company, reserve report confirmation letters, dated the respective dates of delivery thereof and
addressed to the Underwriters, in form and substance reasonably satisfactory to the Representative,
containing statements and information of the type customarily included in such letters to
underwriters with respect to the reserve and other operational information contained in the
Registration Statement, the Time of Sale Information and the Prospectus.
(h) Opinion of Counsel for the Company. Each of (i) Xxxxxx & Xxxxxx L.L.P., counsel for the
Company, and (ii) C. Xxxxxxx Xxxxxx, General Counsel of the Company, shall have furnished to the
Representative, at the request of the Company, their respective written opinions, dated the Closing
Date or the Additional Closing Date, as the case may be, and addressed to the Underwriters, in form
and substance reasonably satisfactory to the Representative, to the effect set forth in Annex A-1
and A-2 hereto, respectively.
(i) Opinion and 10b-5 Statement of Counsel for the Underwriters. The Representative shall
have received on and as of the Closing Date or the Additional Closing Date, as the case may be, an
opinion and 10b-5 statement of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel
20
for the Underwriters, with respect to such matters as the Representative may reasonably
request, and such counsel shall have received such documents and information as they may reasonably
request to enable them to pass upon such matters.
(j) No Legal Impediment to Issuance. No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority that would, as of the Closing Date or the Additional Closing
Date, as the case may be, prevent the issuance or sale of the Shares; and no injunction or order of
any federal, state or foreign court shall have been issued that would, as of the Closing Date or
the Additional Closing Date, as the case may be, prevent the issuance or sale of the Shares.
(k) Good Standing. The Representative shall have received on and as of the Closing Date or
the Additional Closing Date, as the case may be, satisfactory evidence of the good standing of the
Company and its subsidiaries in their respective jurisdictions of organization and their good
standing in such other jurisdictions as the Representative may reasonably request, in each case in
writing or any standard form of telecommunication from the appropriate governmental authorities of
such jurisdictions.
(l) Exchange Listing. The Shares to be delivered on the Closing Date or Additional Closing
Date, as the case may be, shall be listed on the New York Stock Exchange.
(m) Lock-up Agreements. The “lock-up” agreements, each substantially in the form of Exhibit A
hereto, between you and certain officers and directors of the Company set forth on Schedule 2
hereto relating to sales and certain other dispositions of shares of Stock or certain other
securities, delivered to you on or before the date hereof, shall be in full force and effect on the
Closing Date or the Additional Closing Date, as the case may be.
(n) Additional Documents. On or prior to the Closing Date, the Company shall have furnished
to the Representative such further certificates and documents as the Representative may reasonably
request.
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.
7. Indemnification and Contribution.
(a) Indemnification of the Underwriters. The Company 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, from and against any and all losses, claims, damages and liabilities (including, without
limitation, reasonable legal fees and other expenses incurred in connection with any suit, action
or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several,
that arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary in order to make the
statements therein, not misleading, (ii) or any untrue statement or
21
alleged untrue statement of a material fact contained in the Prospectus (or any amendment or
supplement thereto), any Issuer Free Writing Prospectus or any Time of Sale Information, or caused
by any omission or alleged omission to state therein a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading, in
each case except insofar as such losses, claims, damages or liabilities arise out of, or are based
upon, any untrue statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with any information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Representative expressly for use therein, it being
understood and agreed that the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below.
(b) Indemnification of the Company. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, its officers who signed the
Registration Statement and each person, if any, who controls the Company 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, but only with respect to any losses, claims, damages or
liabilities that arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any information relating
to such Underwriter furnished to the Company in writing by such Underwriter through the
Representative expressly for use in the Registration Statement, the Prospectus (or any amendment or
supplement thereto), any Issuer Free Writing Prospectus or any Time of Sale Information, it being
understood and agreed that the only such information consists of the following: the concession
figure and the reallowance figure appearing in the fifth paragraph under the caption “Underwriting”
and the second sentence of the first paragraph, the second paragraph and the third paragraph
appearing under the caption “Underwriting— Price Stabilization, Short Positions.”
(c) Notice and Procedures. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against any person in
respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such
person (the “Indemnified Person”) shall promptly notify the person against whom such
indemnification may be sought (the “Indemnifying Person”) in writing; provided that the
failure to notify the Indemnifying Person shall not relieve it from any liability that it may
otherwise have under such paragraphs except to the extent that it has been materially prejudiced
(through the forfeiture of substantive rights or defenses) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person pursuant to Section 7(d). If any such
proceeding shall be brought or asserted against an Indemnified Person and it shall have notified
the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably
satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified
Person, be counsel to the Indemnifying Person) to represent the Indemnified Person in such
proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have
reasonably
22
concluded that there may be legal defenses available to it that are different from or in
addition to those available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. 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
reimbursed as they are incurred. 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 Xxxxxxx, Sachs & Co. 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. 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.
(d) Contribution. If the indemnification provided for in paragraphs (a), (b) and (c) above is
unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or liabilities (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 from the offering of the Shares 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) but also the relative fault of the
Company on the one hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, 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 shall be deemed to be in the same respective proportions as the
net proceeds (before deducting expenses) received by the Company from the sale of the Shares and
the total underwriting discounts and commissions received by the Underwriters in connection
therewith, in each case as set forth in the table on the cover of the Prospectus, bear to the
aggregate offering price of the Shares. The relative fault of the Company on the one hand and the
Underwriters 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 or by the Underwriters and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
23
(e) Limitation on Liability. 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 that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or other expenses incurred
by such Indemnified Person in connection with any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall an Underwriter be required to contribute any amount
in excess of the amount by which the total underwriting discounts and commissions received by such
Underwriter with respect to the offering of the Shares exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to
contribute pursuant to this Section 7 are several in proportion to their respective purchase
obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any Indemnified Person
at law or in equity.
8. Effectiveness of Agreement. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
9. Termination. This Agreement may be terminated in the absolute discretion of the
Representative, by notice to the Company, 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 or the over-the-counter market; (ii) trading of any securities issued or
guaranteed by the Company shall have been suspended on any exchange; (iii) a general moratorium on
commercial banking activities shall have been declared by federal or New York State authorities or
a material disruption in commercial banking or securities settlement or clearance services in the
United States; 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 Representative, is material and adverse and makes it impracticable or
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.
10. Defaulting Underwriter. (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 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 shall be entitled to a further period of 36 hours within which to procure other
24
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 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 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 10, 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 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 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 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 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 shall terminate
without liability on the part of the non-defaulting Underwriters. Any termination of this
Agreement pursuant to this Section 10 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 11
hereof and except that the provisions of Section 7 hereof shall not terminate and shall remain in
effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may
have to the Company or any non-defaulting Underwriter for damages caused by its default.
11. Payment of Expenses. (a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company agrees to 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 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
25
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 Securities under the laws of such jurisdictions as the Representative may
designate and the preparation, printing and distribution of a Blue Sky Memorandum (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, FINRA; (ix) all expenses and application fees related to the listing of the Shares on
the New York Stock Exchange; and (x) all expenses incurred by the Company in connection with any
“road show” presentation to potential investors; provided that notwithstanding clause (x) 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.
(b) If (i) the Company 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 9, but excluding any termination of this Agreement by the
Representative pursuant to clause (ii) thereof), the Company agrees to reimburse the Underwriters
for all out-of-pocket costs and expenses (including the reasonable fees and expenses of their
counsel) reasonably incurred by the Underwriters in connection with this Agreement and the offering
contemplated hereby.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective successors and the officers
and directors and any controlling persons referred to herein, and the affiliates of each
Underwriter referred to in Section 7 hereof. Nothing in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein. No purchaser of Shares from any
Underwriter shall be deemed to be a successor merely by reason of such purchase.
13. Survival. The respective indemnities, rights of contribution, representations,
warranties and agreements of the Company and the Underwriters contained in this Agreement or made
by or on behalf of the Company or the Underwriters pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the Shares and shall remain
in full force and effect, regardless of any termination of this Agreement or any investigation made
by or on behalf of the Company or the Underwriters.
14. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise
expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities
Act; (b) 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.
15. Miscellaneous. (a) Authority of the Representative. Any action by the
Underwriters hereunder may be taken by Xxxxxxx, Xxxxx & Co. on behalf of the Underwriters, and any
such action taken by Xxxxxxx, Sachs & Co. shall be binding upon the Underwriters.
26
(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 Representative c/o Goldman,
Xxxxx & Co., 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Registration Department. Notices to
the Company shall be given to it at Concho Resources Inc., 000 X. Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxx 00000, (fax: (000) 000-0000), Attention: C. Xxxxxxx Xxxxxx, Vice President and General
Counsel, with a copy to T. Xxxx Xxxxx, Xxxxxx & Xxxxxx L.L.P., 0000 Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxx 00000 (fax: (000) 000-0000).
In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), the underwriters are required to obtain, verify and record
information that identifies their respective clients, including the Company, which information may
include the name and address of their respective clients, as well as other information that will
allow the underwriters to properly identify their respective clients.
(c) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which may include
counterparts delivered by any standard form of telecommunication), each of which shall be an
original and all of which together shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any
consent or approval to any departure therefrom, shall in any event be effective unless the same
shall be in writing and signed by the parties hereto.
(f) Headings. The headings herein are included for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
27
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/ Xxx Xxxxx | |||
Name: | Xxx Xxxxx | |||
Title: | Chief Executive Officer and President | |||
Accepted: December 8, 2010
XXXXXXX, XXXXX & CO.
By:
|
/s/ Xxxxxxx, Sachs & Co.
|
For itself and on behalf of the
several Underwriters listed
in Schedule 1 hereto.
several Underwriters listed
in Schedule 1 hereto.
Schedule 1
Underwriter | Number of Underwritten Shares | |||
Xxxxxxx, Sachs & Co. |
749,998 | |||
Barclays Capital Inc. |
275,000 | |||
X.X. Xxxxxx Securities LLC |
275,000 | |||
Xxxxxxx Xxxxx & Associates, Inc. |
275,000 | |||
Canaccord Genuity Inc. |
112,500 | |||
Lazard Capital Markets LLC |
112,500 | |||
KeyBanc Capital Markets Inc. |
112,500 | |||
RBC Capital Markets Corporation |
112,500 | |||
Tudor, Pickering, Xxxx & Co. Securities, Inc. |
112,500 | |||
BMO Capital Markets Corp. |
51,786 | |||
Xxxxxxx Xxxx & Company, LLC |
51,786 | |||
Ladenburg Xxxxxxxx & Co. Inc. |
51,786 | |||
Xxxxxx Xxxx Incorporated |
51,786 | |||
Xxxxxxxxx Capital Partners, LLC |
51,786 | |||
Xxxxxxx & Company International |
51,786 | |||
Boenning & Scattergood Inc. |
51,786 | |||
Total |
2,500,000 |
S-1
Schedule 2
Directors and Officers
Xxxxxxx X. Xxxxx
C. Xxxxxxx Xxxxxx
Xxxxxx X. Xxxx
Xxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxx
E. Xxxxxx Xxxxxx
Xxx X. XxXxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx III
W. Xxxxxx Xxxxxx, Xx.
Xxx X. Xxxxx
Xxxx X. Xxxxxxx
A. Xxxxxxxx Xxxxx
C. Xxxxxxx Xxxxxx
Xxxxxx X. Xxxx
Xxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxx
E. Xxxxxx Xxxxxx
Xxx X. XxXxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx III
W. Xxxxxx Xxxxxx, Xx.
Xxx X. Xxxxx
Xxxx X. Xxxxxxx
A. Xxxxxxxx Xxxxx
S-2
Annex A
Form of Opinion of Xxxxxx & Xxxxxx L.L.P.
(1) The Registration Statement is an “automatic shelf registration statement” as defined under
Rule 405 of the Securities Act that has been filed with the Commission not earlier than three years
prior to the date of the Underwriting Agreement; each of the Preliminary Prospectus and 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, no
notice of objection of the Commission to the use of such registration statement or any
post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act has been
received by the Company 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.
(2) The Registration Statement, the Preliminary Prospectus, each Issuer Free Writing
Prospectus included in the Time of Sale Information and the Prospectus (other than the financial
statements and related schedules , including the notes and schedules thereto and the auditor’s
report thereon, and any other financial, accounting and oil and gas reserve and related net revenue
or discounted cash flow information 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.
(3) The Company is in good standing as a corporation under the laws of the State of Delaware,
with corporate power and authority to execute and deliver the Underwriting Agreement and to perform
its obligations thereunder.
(4) The Underwriting Agreement has been duly authorized, executed and delivered by the
Company.
(5) 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 or similar rights pursuant to the terms of the Restated charter or by-laws of the
Company.
(6) The execution, delivery and performance by the Company of the Underwriting Agreement and
compliance by the Company with the terms thereof, the issuance and sale of the Shares being
delivered on the Closing Date or the Additional Closing Date, as the case may be, 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
A-1
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 any such conflict, breach,
violation, default, lien, charge or encumbrance that would not, individually or in the aggregate,
have a Material Adverse Effect. With respect to clause (iii) above, such counsel expresses no
opinion as to the application of any state securities or Blue Sky laws or federal or state
antifraud laws, rules or regulations.
(7) 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 and compliance by the Company
with the terms thereof, the issuance and sale of the Shares being delivered on the Closing Date or
the Additional Closing Date, as the case may be, and the consummation of the transactions
contemplated by the Underwriting Agreement, except 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; such counsel need not express any opinion with respect to consents,
approvals, authorizations, orders and registrations or qualifications as may be required under
applicable state securities or federal or state antifraud laws, rules or regulations.
(8) The Shares conform in all material respects with the description thereof contained in the
Registration Statement, the Time of Sale Information and the Prospectus.
(9) The descriptions in the Registration Statement, the Time of Sale Information and the
Prospectus under the headings “Certain United States Federal Income Tax Consequences for Non-U.S.
Holders of our Common Stock” and “Description of Capital Stock” to the extent that they constitute
summaries of the terms of capital stock, matters of law or regulation or legal conclusions, are
accurate in all material respects.
(10) The Company is not, and, after giving effect to the application of the proceeds received
by the Company from the offering and sale of the Shares as described in the Registration Statement,
the Time of Sale Information and the Prospectus, will not be an “investment company” within the
meaning of the Investment Company Act.
(11) The documents incorporated by reference in the Time of Sale Information and the
Prospectus or any further amendment or supplement thereto made by the Company prior to the Closing
Date or the Additional Closing Date, as the case may be, (other than the financial statements and
related schedules, including the notes and schedules thereto and the auditor’s report thereon, and
any other financial, accounting and oil and gas reserve and related net revenue or discounted cash
flow information included therein or omitted therefrom, as to which such counsel need express no
opinion), when they were filed with the Commission, appeared on their face to have complied as to
form in all material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder.
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
A-2
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 (9) 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 such counsel of materiality
to the extent such counsel deems reasonable upon statements of fact made to such counsel 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 contained or contains any untrue statement of a material fact or omitted 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 Form T-1 and the financial
statements and related schedules, including the notes and schedules thereto and the auditor’s
report thereon, and any other financial, accounting and oil and gas reserve and related net revenue
or discounted cash flow information, 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 C. Xxxxxxx Xxxxxx
(1) 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 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 have such
power or authority would not, individually or in the aggregate, have a Material Adverse Effect.
(2) The Company has an authorized equity capitalization as set forth in the Registration
Statement, the Time of Sale Information and the Prospectus under the heading “Capitalization.”
(3) 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, 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 by
any governmental or regulatory authority or threatened by others.
A-4
Annex B
a. Time of Sale Information
None.
b. Pricing Information Provided Orally by Underwriters
Number of shares: 2,500,000 Underwritten Shares or, if the Underwriters exercise in full their
option to purchase Option Shares granted in Section 2 hereof, 2,875,000 Shares.
Price per share of common stock: $82.50 per share.
B-1
Exhibit A
, 2010
Xxxxxxx, Xxxxx & Co.
As Representative of the
several Underwriters listed
in Schedule 1 to the Underwriting Agreement referred to below
c/o Goldman, Sachs & Co.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the
several Underwriters listed
in Schedule 1 to the Underwriting Agreement referred to below
c/o Goldman, Sachs & Co.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Concho Resources Inc. — Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representative 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 1 to the Underwriting Agreement (the
“Underwriters”) of common stock, par value $0.001 per share, 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 Xxxxxxx, Xxxxx & Co., on
behalf of the Underwriters, the undersigned will not, during the period ending 60 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 (3) 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 Xxxxxxx, Xxxxx & Co., in each case
other than (A) transfers of shares of Common Stock as a bona fide gift or gifts; (B) distributions
of shares of Common Stock to members or stockholders of the undersigned; (C) transfers of shares of
Common Stock in accordance with Rule 10b5-1 trading plans in existence on the date of the
Prospectus; (D) the entrance into any new, or the renewal or amendment any existing, Rule 10b5-1
trading plan,
Ex A-1
provided that in connection with such entry, renewal or amendment, no shares of Common Stock shall
be scheduled for sale thereunder during the 60-day period after to the date of the Prospectus; and
(E) forfeitures of Common Stock to the Company for the purpose of satisfying tax withholding
obligations of the undersigned associated with the vesting of certain restricted stock awards
granted pursuant to the Company’s 2006 Stock Incentive Plan; provided, further, that in the case of
any transfer or distribution pursuant to clause (A) or (B) (other than bona fide gifts pursuant to
clause (B) to a “charitable organization,” as such term is described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, by the undersigned in an aggregate amount taken together
with all other such gifts by the undersigned not to exceed 5% of the undersigned’s total ownership
of Securities as of the date hereof), each donee, transferee or distribute shall execute and
deliver to the Representative 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 (A) or (B), 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
such transfer or distribution (other than a filing on a Form 5 made).
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 Securities 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.
Very truly yours, |
||||
By: | ||||
Name: | ||||
Title: | ||||
Ex A-2