Document:

exv10w1

Exhibit 10.1

Execution
Version

COMMON STOCK PURCHASE AGREEMENT

BY AND AMONG

CONCHO RESOURCES INC.

AND

THE PURCHASERS NAMED HEREIN

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS

	 
	 	 	 	 
	Section 1.01. Definitions
	 	 	1	 
	Section 1.02. Accounting Procedures and Interpretation
	 	 	5	 
	 
	 	 	 	 
	ARTICLE II SALE AND PURCHASE

	 
	 	 	 	 
	Section 2.01. Sale and Purchase
	 	 	5	 
	Section 2.02. Closing
	 	 	6	 
	Section 2.03. Nature of Purchasers’ Obligations and Rights
	 	 	6	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF CONCHO

	 
	 	 	 	 
	Section 3.01. Corporate Existence
	 	 	6	 
	Section 3.02. Capitalization and Valid Issuance of Purchased Common Stock
	 	 	7	 
	Section 3.03. Concho SEC Documents
	 	 	8	 
	Section 3.04. No Material Adverse Change
	 	 	8	 
	Section 3.05. Litigation
	 	 	9	 
	Section 3.06. No Breach
	 	 	9	 
	Section 3.07. Authority
	 	 	9	 
	Section 3.08. Approvals
	 	 	9	 
	Section 3.09. Investment Company Status
	 	 	10	 
	Section 3.10. Offering
	 	 	10	 
	Section 3.11. Certain Fees
	 	 	10	 
	Section 3.12. No Side Agreements
	 	 	10	 
	Section 3.13. Internal Accounting Controls
	 	 	10	 
	Section 3.14. Registration Rights
	 	 	10	 
	Section 3.15. Insurance
	 	 	11	 
	Section 3.16. Acknowledgment
	 	 	11	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER

	 
	 	 	 	 
	Section 4.01. Valid Existence
	 	 	11	 
	Section 4.02. Authorization, Enforceability
	 	 	11	 
	Section 4.03. No Breach
	 	 	11	 
	Section 4.04. Certain Fees
	 	 	12	 
	Section 4.05. Unregistered Securities
	 	 	12	 
	Section 4.06. No Side Agreements
	 	 	13	 
	Section 4.07. Short Selling
	 	 	13	 
	Section 4.08. Concho Information
	 	 	14	 

i

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE V COVENANTS

	 
	 	 	 	 
	Section 5.01. Subsequent Public Offerings
	 	 	14	 
	Section 5.02. Taking of Necessary Action
	 	 	14	 
	Section 5.03. Non-Disclosure; Interim Public Filings
	 	 	14	 
	Section 5.04. Use of Proceeds
	 	 	15	 
	Section 5.05. Tax Information
	 	 	15	 
	Section 5.06. Short Selling Acknowledgement and Agreement
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VI CLOSING CONDITIONS

	 
	 	 	 	 
	Section 6.01. Conditions to the Closing
	 	 	15	 
	Section 6.02. Concho Deliveries
	 	 	17	 
	Section 6.03. Purchaser Deliveries
	 	 	18	 
	 
	 	 	 	 
	ARTICLE VII INDEMNIFICATION, COSTS AND EXPENSES

	 
	 	 	 	 
	Section 7.01. Indemnification by Concho
	 	 	18	 
	Section 7.02. Indemnification by Purchasers
	 	 	18	 
	Section 7.03. Indemnification Procedure
	 	 	19	 
	 
	 	 	 	 
	ARTICLE VIII MISCELLANEOUS

	 
	 	 	 	 
	Section 8.01. Interpretation
	 	 	20	 
	Section 8.02. Survival of Provisions
	 	 	20	 
	Section 8.03. No Waiver; Modifications in Writing
	 	 	20	 
	Section 8.04. Binding Effect; Assignment
	 	 	21	 
	Section 8.05. Confidentiality and Non-Disclosure
	 	 	21	 
	Section 8.06. Communications
	 	 	21	 
	Section 8.07. Removal of Legend
	 	 	24	 
	Section 8.08. Entire Agreement
	 	 	25	 
	Section 8.09. Governing Law
	 	 	25	 
	Section 8.10. Execution in Counterparts
	 	 	25	 
	Section 8.11. Termination
	 	 	25	 
	Section 8.12. Recapitalization, Exchanges, Etc. Affecting the Purchased Common Stock
	 	 	26	 
	Section 8.13. Obligations Limited to Parties to Agreement
	 	 	27	 
	 
	 	 	 	 
	Schedules and Exhibits:
	 	 	 	 
	 
	 	 	 	 
	Schedule 2.01 Purchasers and Commitment Amounts
	 	 	 	 
	 
	 	 	 	 
	Exhibit A     Registration Rights Agreement
	 	 	 	 
	Exhibit B     Forms of Opinion
	 	 	 	 
	Exhibit C     Concho Resources Inc. Officer’s Certificate
	 	 	 	 
	Exhibit D     Purchasers’ Officer’s Certificate
	 	 	 	 
	Exhibit E     Concho Resources Inc. Secretary’s Certificate
	 	 	 	 
	Exhibit F     Cross Receipt
	 	 	 	 
	Exhibit G     Marbob Acquisition Agreement
	 	 	 	 

ii

 

COMMON STOCK PURCHASE AGREEMENT

     This COMMON STOCK PURCHASE AGREEMENT, dated as of July 19, 2010 (this “Agreement”), by
and among CONCHO RESOURCES INC., a Delaware corporation (“Concho”), and each of the
purchasers named in Schedule 2.01 to this Agreement (each such purchaser a
“Purchaser” and, collectively, the “Purchasers”).

     WHEREAS, simultaneously with the execution of this Agreement, Concho is entering into a
definitive purchase agreement to acquire indirectly all of Marbob’s right, title and interest in
and to certain oil and gas properties and related assets described in the Marbob Acquisition
Agreement upon the terms and conditions and for the consideration set forth in the Marbob
Acquisition Agreement (the “Marbob Acquisition”);

     WHEREAS, Concho desires to finance a portion of the Marbob Acquisition through the sale of an
aggregate of $300,000,020.10 of Common Stock, and the Purchasers desire to purchase severally an
aggregate of $300,000,020.10 of Common Stock from Concho, each in accordance with the provisions of
this Agreement;

     WHEREAS, it is a condition to the obligations of the Purchasers and Concho under this
Agreement that all closing conditions (other than the payment of the purchase price) required to
consummate the Marbob Acquisition have been satisfied or waived, and the parties to the Marbob
Acquisition Agreement are prepared to consummate the Marbob Acquisition substantially on the terms
set forth therein; and

     WHEREAS, Concho has agreed to provide the Purchasers with certain registration rights with
respect to the Purchased Common Stock acquired pursuant to this Agreement.

     NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.01. Definitions. As used in this Agreement, and unless the context requires
a different meaning, the following terms have the meanings indicated:

     “2006 Registration Rights Agreement” shall have the meaning specified in Section 3.14.

     “2006 Stock Incentive Plan” means the Concho Resources Inc. 2006 Stock Incentive Plan.

     “8-K Filing” shall have the meaning specified in Section 5.03.

     “Action” against a Person means any lawsuit, action, proceeding, investigation or
complaint before any Governmental Authority, mediator or arbitrator.

 

 

     “Affiliate” means, with respect to a specified Person, any other Person, whether now
in existence or hereafter created, directly or indirectly controlling, controlled by or under
direct or indirect common control with such specified Person. For purposes of this definition,
“control” (including, with correlative meanings, “controlling,” “controlled by” and “under common
control with”) means the power to direct or cause the direction of the management and policies of
such Person, directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.

     “Agreement” shall have the meaning specified in the introductory paragraph.

     “Basic Documents” means, collectively, this Agreement, the Registration Rights
Agreement, the Marbob Acquisition Agreement and any and all other material agreements or
instruments executed and delivered by the Parties to evidence the execution, delivery and
performance of this Agreement, and any amendments, supplements, continuations or modifications
thereto.

     “Board of Directors” means the board of directors of Concho.

     “Business Day” means any day other than a Saturday, a Sunday, or a legal holiday for
commercial banks in Houston, Texas or New York, New York.

     “Buy-In” shall have the meaning specified in Section 8.07.

     “Buy-In Price” shall have the meaning specified in Section 8.07.

     “Closing” shall have the meaning specified in Section 2.02.

     “Closing Date” shall have the meaning specified in Section 2.02.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     “Commission” means the United States Securities and Exchange Commission.

     “Commitment Amount” means the dollar amount set forth opposite each Purchaser’s name
on Schedule 2.01 to this Agreement under the heading “Gross Proceeds to Issuer.”

     “Common Stock Price” shall have the meaning specified in Section 2.01(b).

     “Common Stockholders” means the Common Stockholders of Concho.

     “Common Stock” means the common stock, $0.001 par value, of Concho.

     “Concho” shall have the meaning specified in the introductory paragraph.

     “Concho Financial Statements” shall have the meaning specified in Section 3.03.

     “Concho Material Adverse Effect” means any material and adverse effect on (i) the
assets, liabilities, financial condition, business, or operations of Concho and its Subsidiaries,
taken as a whole, measured against those assets, liabilities, financial condition, business, or

2

 

operations reflected in the Concho SEC Documents, other than those occurring as a result of
general economic or financial conditions or other developments that are not unique to and do not
have a material disproportionate impact on Concho and its Subsidiaries but also affect other
Persons who participate in or are engaged in the lines of business of which Concho and its
Subsidiaries participate or are engaged, (ii) the ability of Concho and its Subsidiaries, taken as
a whole, to carry out their business as of the date of this Agreement or to meet their obligations
under the Basic Documents on a timely basis or (iii) the ability of Concho to consummate the
transactions under any Basic Document.

     “Concho Related Parties” shall have the meaning specified in Section 7.02.

     “Concho SEC Documents” shall have the meaning specified in Section 3.03.

     “DGCL” means Delaware General Corporation Law.

     “EDGAR” means the Commission’s Electronic Data-Gathering, Analysis, and Retrieval
filing system.

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

     “GAAP” means generally accepted accounting principles in the United States of America
in effect from time to time; provided, however, that for purposes of the Concho Financial
Statements prepared as of a certain date, GAAP referenced therein shall be GAAP as of the date of
the Concho Financial Statements.

     “Governmental Authority” shall include the country, state, county, city and political
subdivisions in which any Person or such Person’s Property is located or that exercises valid
jurisdiction over any such Person or such Person’s Property, and any court, agency, department,
commission, board, bureau or instrumentality of any of them and any monetary authorities, stock
exchanges and self regulatory organizations that exercise valid jurisdiction over any such Person
or such Person’s Property. Unless otherwise specified, all references to Governmental Authority
herein shall mean a Governmental Authority having jurisdiction over, where applicable, Concho, its
Subsidiaries or any of their Property or any of the Purchasers.

     “Indemnified Party” shall have the meaning specified in Section 7.03.

     “Indemnifying Party” shall have the meaning specified in Section 7.03.

     “Law” or “Laws” means any federal, state or local order, writ, injunction,
judgment, settlement, award, decree, statute, law, rule or regulation.

     “Lien” means any interest in Property securing an obligation owed to, or a claim by, a
Person other than the owner of the Property, whether such interest is based on the common law,
statute or contract, and whether such obligation or claim is fixed or contingent, and including the
lien or security interest arising from a mortgage, encumbrance, pledge, security agreement,
conditional sale or trust receipt or a lease, consignment or bailment for security purposes.

3

 

     “Lock-Up Date” means forty-five (45) days following the Closing Date.

     “Marbob” means collectively Marbob Energy Corporation, a New Mexico corporation, Pitch
Energy Corporation, a New Mexico corporation, Costaplenty Energy Corporation, a New Mexico
corporation, and John R. Gray, LLC, a New Mexico limited liability company.

     “Marbob Acquisition” shall have the meaning specified in the recitals.

     “Marbob Acquisition Agreement” means that certain Purchase Agreement dated July 19,
2010, by and among Concho and Marbob, which is attached to this Agreement as Exhibit G.

     “Marbob Closing Date” means the date on which the Marbob Acquisition is consummated.

     “Organizational Documents” means the Restated Certificate of Incorporation and Amended
and Restated Bylaws of Concho.

     “Party” or “Parties” means Concho and the Purchasers, individually or
collectively, as the case may be.

     “Person” means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated organization,
Governmental Authority or any agency, instrumentality or political subdivision thereof, or any
other form of entity.

     “Placement Agent” means Merrill, Lynch, Pierce, Fenner & Smith Incorporated.

     “Placement Agent Fees” means the fees that Concho is obligated to pay to the Placement
Agent within one Business Day of the Closing Date.

     “Property” means any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.

     “Purchase Price” means the aggregate of each Purchaser’s Commitment Amount set forth
opposite the Purchaser’s name on Schedule 2.01 to this Agreement under the heading “Gross
Proceeds to Issuer.”

     “Purchased Common Stock” means the Common Stock to be issued and sold to the
Purchasers pursuant to this Agreement.

     “Purchaser” shall have the meaning specified in the introductory paragraph.

     “Purchaser Material Adverse Effect” means any material and adverse effect on (i) the
ability of a Purchaser to meet its obligations under the Basic Documents on a timely basis or (ii)
the ability of a Purchaser to consummate the transactions under any Basic Document.

     “Purchaser Related Parties” shall have the meaning specified in Section 7.01.

     “Purchasers” shall have the meaning specified in the introductory paragraph.

4

 

     “Registration Rights Agreement” means the Registration Rights Agreement, substantially
in the form attached to this Agreement as Exhibit A, to be entered into at the Closing,
among Concho and each of the Purchasers.

     “Representatives” of any Person means the officers, members, managers, directors,
employees, agents, legal counsel, accountants, financial advisors or any other representatives of
such Person.

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

     “Short Sales” means, without limitation, all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act, whether or not against the box, and
forward sale contracts, options, puts, calls, short sales, “put equivalent positions” (as defined
in Rule 16a-1(h) under the Exchange Act) and similar arrangements, and sales and other transactions
through non-U.S. broker dealers or foreign regulated brokers.

     “Subsidiary” means, as to any Person, any corporation or other entity of which a
majority of the outstanding equity interest having by the terms thereof ordinary voting power to
elect a majority of the board of directors of such corporation or other entity (irrespective of
whether or not at the time any equity interest of any other class or classes of such corporation or
other entity shall have or might have voting power by reason of the happening of any contingency)
is at the time directly or indirectly owned or controlled by such Person or one or more of its
Subsidiaries.

     “Transfer Agent” means American Stock Transfer & Trust Company in its capacity as
transfer agent for the Common Stock.

     Section 1.02. Accounting Procedures and Interpretation. Unless otherwise specified in
this Agreement, all accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters under this Agreement shall be made, and all financial statements and
certificates and reports as to financial matters required to be furnished to the Purchasers under
this Agreement shall be prepared, in accordance with GAAP applied on a consistent basis during the
periods involved (except, in the case of unaudited financial statements, as permitted by Form 10-Q
promulgated by the Commission) and in compliance as to form in all material respects with
applicable accounting requirements and with the published rules and regulations of the Commission
with respect thereto.

ARTICLE II

SALE AND PURCHASE

     Section 2.01. Sale and Purchase. Contemporaneously with the consummation of the
Marbob Acquisition and subject to the terms and conditions of this Agreement, at the Closing,
Concho hereby agrees to issue and sell to each Purchaser, and each Purchaser hereby agrees,
severally and not jointly, to purchase from Concho, the dollar amount of Purchased Common Stock set
forth opposite its name on Schedule 2.01 of this Agreement. Each Purchaser agrees to pay
Concho the Common Stock Price for each share of Purchased Common Stock as set forth in Section
2.01(b).

5

 

          (a) Common Stock. The amount of Purchased Common Stock to be issued and sold to each
Purchaser shall be equal to the amount next to such Purchaser’s name under the column entitled
“Common Stock” in Schedule 2.01 of this Agreement. The Purchased Common Stock shall have
those rights, preferences, privileges and restrictions governing the Common Stock as set forth in
the Organizational Documents.

          (b) Consideration. The amount per share of Common Stock each Purchaser will pay to
Concho as consideration for the Purchased Common Stock shall be $45.30 (the “Common Stock
Price”).

     Section 2.02. Closing. The execution and delivery of the Basic Documents (other than
this Agreement), the delivery of certificates representing the Purchased Common Stock, the payment
of the Common Stock Price for each share of Purchased Common Stock, and the execution and delivery
of all other instruments, agreements and other documents required by this Agreement (the
“Closing”) shall take place on a date (the “Closing Date”) concurrent with the
Marbob Closing Date, but on or prior to November 30, 2010, provided that Concho shall have given
each Purchaser five (5) Business Days (or such shorter period as shall be agreeable to the Parties)
prior notice of such designated Closing Date, at the offices of Vinson & Elkins L.L.P., 1001 Fannin
Street, Suite 2500, Houston, Texas 77002.

     Section 2.03. Nature of Purchasers’ Obligations and Rights. The respective
obligations of each Purchaser under this Agreement are several and not joint with the obligations
of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser under this Agreement. The failure or waiver of performance
under this Agreement by any Purchaser, or on its behalf, does not excuse performance by any other
Purchaser. Nothing contained herein or in any other Basic Document, and no action taken by any
Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by any Basic Document. Except as otherwise provided in the Basic
Documents, each Purchaser shall be entitled to independently protect and enforce its rights,
including the rights arising out of the Basic Documents, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such purpose.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF CONCHO

     Concho represents and warrants to the Purchasers, on and as of the date of this Agreement and
on and as of the Closing Date, as follows:

     Section 3.01. Corporate Existence. Concho: (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware, has requisite power
and authority to conduct its business as currently conducted and to own and lease its Property and
other assets as now owned or leased, and has all material governmental licenses, authorizations,
consents and approvals necessary to own its Property and to conduct its business as its business is
currently conducted as described in the Concho SEC Documents, except where the failure to obtain
such licenses, authorizations, consents and approvals would not reasonably be expected to

6

 

have a Concho Material Adverse Effect; and (ii) is qualified to do business in all
jurisdictions in which the nature of the business conducted by Concho makes such qualifications
necessary, except where failure so to qualify would not reasonably be expected to have a Concho
Material Adverse Effect.

     Section 3.02. Capitalization and Valid Issuance of Purchased Common Stock.

          (a) As of the date of this Agreement, and prior to the issuance and sale of the Purchased
Common Stock, the issued and outstanding shares of Common Stock consists of 91,834,122 shares. All
of the outstanding shares of Common Stock have been duly authorized and validly issued in
accordance with applicable Law and the Organizational Documents and are fully paid and
non-assessable.

          (b) Other than Concho’s existing 2006 Stock Incentive Plan, Concho has no equity compensation
plans that contemplate the issuance of Common Stock (or securities convertible into or exchangeable
for Common Stock). Concho has no outstanding indebtedness having the right to vote (or convertible
into or exchangeable for securities having the right to vote) on any matters on which the Common
Stockholders may vote. Except as set forth in the first sentence of this Section 3.02(b) or as
contemplated by the Basic Documents, there are no outstanding or authorized (i) options, warrants,
preemptive rights, subscriptions, calls or other rights, convertible securities, agreements, claims
or commitments of any character obligating Concho or any of its Subsidiaries to issue, transfer or
sell any equity interests in Concho or any of its Subsidiaries or securities convertible into or
exchangeable for such equity interests, (ii) obligations of Concho or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any equity interests in Concho or any of its Subsidiaries
or any such securities or agreements listed in clause (i) of this sentence or (iii) voting trusts
or similar agreements to which Concho or any of its Subsidiaries is a party with respect to the
voting of the equity interests of Concho or any of its Subsidiaries.

          (c) (i) All of the issued and outstanding equity interests of each of Concho’s Subsidiaries
are owned, directly or indirectly, by Concho free and clear of any Liens (except for such
restrictions as may exist under applicable Law and except for such Liens as may be imposed under
Concho’s or Concho’s Subsidiaries’ credit facilities filed as exhibits to the Concho SEC
Documents), and all such ownership interests have been duly authorized and validly issued in
accordance with applicable Law and the Organizational Documents and are fully paid (to the extent
required by the organizational documents of Concho’s Subsidiaries, as applicable) and
non-assessable (except as non-assessability may be affected by the organizational documents of
Concho’s Subsidiaries), and (ii) except as disclosed in the Concho SEC Documents, neither Concho
nor any of its Subsidiaries owns any shares of capital stock or other securities of, or interest
in, any other Person, or is obligated to make any capital contribution to or other investment in
any other Person.

          (d) The offer and sale of the Purchased Common Stock will be duly authorized by Concho
pursuant to the Organizational Documents and when issued and delivered to the Purchasers against
payment therefor in accordance with the terms of this Agreement, will be validly issued in
accordance with applicable Law and the Organizational Documents, fully paid and non-assessable and
will be free of any and all Liens and restrictions on transfer, other

7

 

than restrictions on transfer under the Registration Rights Agreement and applicable state and
federal securities Laws and other than such Liens as are created by the Purchasers.

          (e) The Purchased Common Stock will be issued in compliance with all applicable rules of The
New York Stock Exchange. Prior to the Closing Date, Concho will submit to The New York Stock
Exchange a Subsequent Listing Application with respect to the Purchased Common Stock. Concho’s
currently outstanding Common Stock is listed on The New York Stock Exchange, and Concho has not
received any notice of delisting.

          (f) The Purchased Common Stock shall have those rights, preferences, privileges and
restrictions governing the Common Stock as set forth in the Organizational Documents. A true and
correct copy of the Organizational Documents, as amended through the date hereof, has been filed by
Concho with the Commission on August 8, 2007 as Exhibit 3.1 and Exhibit 3.2 to Concho’s Current
Report on Form 8-K.

     Section 3.03. Concho SEC Documents. Concho has timely filed or furnished with the
Commission all reports, schedules, forms, statements and other documents (including exhibits and
other information incorporated therein) required to be filed or furnished by it under the Exchange
Act or the Securities Act since January 1, 2009 (all such documents collectively, the “Concho
SEC Documents”). The Concho SEC Documents, including any audited or unaudited financial
statements and any notes thereto or schedules included therein (the “Concho Financial
Statements”), at the time filed or furnished (except to the extent corrected by a subsequently
filed Concho SEC Document filed prior to the date of this Agreement) (i) 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 light of the circumstances under which they
were made, not misleading, (ii) complied in all material respects with the applicable requirements
of the Exchange Act and the Securities Act, as the case may be, (iii) complied as to form in all
material respects with applicable accounting requirements and with the published rules and
regulations of the Commission with respect thereto, (iv) were prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except as may be indicated in the notes
thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the Commission) and
(v) fairly present (subject in the case of unaudited statements to normal, recurring and year-end
audit adjustments) in all material respects the consolidated financial position of the business of
Concho as of the dates thereof and the consolidated results of its operations and cash flows for
the periods then ended. Grant Thornton LLP is an independent registered public accounting firm with
respect to Concho and has not resigned or been dismissed as independent registered public
accountants of Concho as a result of or in connection with any disagreement with Concho on any
matter of accounting principles or practices, financial statement disclosure or auditing scope or
procedures.

     Section 3.04. No Material Adverse Change. Except as set forth in or contemplated by
the Concho SEC Documents filed or furnished with the Commission after January 1, 2010 and prior to
the date hereof, and except for the proposed Marbob Acquisition, which has been disclosed to, and
discussed with, each of the Purchasers, since December 31, 2009, Concho and its Subsidiaries have
conducted their business in the ordinary course, consistent with past practice, and there has been
no (i) change that has had or would reasonably be expected to have a Concho Material Adverse
Effect, (ii) acquisition or disposition of any material asset by Concho

8

 

or any of its Subsidiaries or any contract or arrangement therefor, otherwise than for fair
value in the ordinary course of business, (iii) material change in Concho’s accounting principles,
practices or methods or (iv) incurrence of material indebtedness (other than the incurrence of such
indebtedness as is contemplated in connection with the Marbob Acquisition).

     Section 3.05. Litigation. Except as set forth in the Concho SEC Documents, there is
no Action pending or, to the knowledge of Concho, contemplated or threatened, against Concho or any
of its Subsidiaries or any of their respective officers, directors or Properties, which
(individually or in the aggregate) reasonably would be expected to have a Concho Material Adverse
Effect, or which challenges the validity of this Agreement.

     Section 3.06. No Breach. The execution, delivery and performance by Concho of each
Basic Document to which it is a party and all other agreements and instruments in connection with
the transactions contemplated by the Basic Documents, and compliance by Concho with the terms and
provisions hereof and thereof, do not and will not (i) violate any provision of any Law,
governmental permit, determination or award applicable to Concho or any of its Subsidiaries or any
of their respective Properties, (ii) conflict with or result in a violation of any provision of the
Organizational Documents or any organizational documents of any of Concho’s Subsidiaries, (iii)
require any consent, approval or notice under or result in a violation or breach of or constitute
(with or without due notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under (A) any note, bond, mortgage, license, or loan or
credit agreement to which Concho or any of its Subsidiaries is a party or by which Concho or any of
its Subsidiaries or any of their respective Properties may be bound or (B) any other agreement,
instrument or obligation, or (iv) result in or require the creation or imposition of any Lien upon
or with respect to any of the Properties now owned or hereafter acquired by Concho or any of its
Subsidiaries, except in the cases of clauses (i) and (iii) where such violation, default, breach,
termination, cancellation, failure to receive consent or approval, or acceleration with respect to
the foregoing provisions of this Section 3.06 would not, individually or in the aggregate,
reasonably be expected to have a Concho Material Adverse Effect.

     Section 3.07. Authority and Enforceability. Concho has all necessary corporate power
and authority to execute, deliver and perform its obligations under each Basic Document to which it
is a party and to consummate the transactions contemplated thereby. the execution, delivery and
performance by Concho of each of the Basic Documents to which it is a party, and the consummation
of the transactions contemplated thereby, have been duly authorized by all necessary action on its
part and, when duly executed and delivered by the parties thereto in accordance with their terms,
each of the Basic Documents will constitute the legal, valid and binding obligations of Concho,
enforceable in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer and similar Laws affecting creditors’ rights generally
or by general principles of equity. Except as contemplated by this Agreement, no approval by the
Common Stockholders is required as a result of Concho’s issuance and sale of the Purchased Common
Stock.

     Section 3.08. Approvals. Except as contemplated by this Agreement or as required by
the Commission in connection with Concho’s obligations under the Registration Rights Agreement, no
authorization, consent, approval, waiver, license, qualification or written exemption from, nor any
filing, declaration, qualification or registration with, any Governmental

9

 

Authority or any other Person is required in connection with the execution, delivery or
performance by Concho of each of the Basic Documents to which it is a party, except where the
failure to receive such authorization, consent, approval, waiver, license, qualification or written
exemption or to make such filing, declaration, qualification or registration would not,
individually or in the aggregate, reasonably be expected to have a Concho Material Adverse Effect.

     Section 3.09. Investment Company Status. Concho is not an “investment company” within
the meaning of the Investment Company Act of 1940, as amended.

     Section 3.10. Offering. Assuming the accuracy of the representations and warranties
of the Purchasers contained in this Agreement, the sale and issuance of the Purchased Common Stock
pursuant to this Agreement are exempt from the registration requirements of the Securities Act, and
neither Concho nor any authorized Representative acting on its behalf has taken or will take any
action hereafter that would cause the loss of such exemption.

     Section 3.11. Certain Fees. Except for the Placement Agent Fees, no fees or
commissions will be payable by Concho to brokers, finders or investment bankers with respect to the
sale of any of the Purchased Common Stock or the consummation of the transactions contemplated by
this Agreement. Concho agrees that it will indemnify and hold harmless each of the Purchasers from
and against any and all claims, demands or liabilities for broker’s, finder’s, placement or other
similar fees or commissions incurred by Concho or alleged to have been incurred by Concho in
connection with the sale of the Purchased Common Stock or the consummation of the transactions
contemplated by this Agreement.

     Section 3.12. No Side Agreements. Except for the confidentiality agreements entered
into by and between each of the Purchasers and Concho or the Placement Agent, there are no other
agreements by, among or between the Purchasers and any of their respective Affiliates, on the one
hand, and Concho or any of its Affiliates, on the other hand, with respect to the transactions
contemplated hereby (other than the Basic Documents), and there are no promises or inducements for
future transactions by, among or between the Purchasers and any of their respective Affiliates, on
the one hand, and Concho and any of its Affiliates, on the other hand.

     Section 3.13. Internal Accounting Controls. Except as disclosed in the Concho SEC
Documents, Concho and its Subsidiaries maintain a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any differences.

     Section 3.14. Registration Rights. Except for the registration rights agreement dated
February 27, 2006 and filed with the Commission on April 24, 2007 as Exhibit 10.12 to Concho’s
Registration Statement on Form S-1 (File No. 333-142315) (“2006 Registration Rights
Agreement”), neither the execution of this Agreement nor the issuance of the Purchased

10

 

Common Stock as contemplated by this Agreement gives rise to any rights for or relating to the
registration of any securities of Concho, other than pursuant to the Registration Rights Agreement.

     Section 3.15. Insurance. Concho and its Subsidiaries are insured against such losses
and risks and in such amounts as Concho believes in its sole discretion to be prudent for its
businesses. Concho does not have any reason to believe that it or any Subsidiary will not be able
to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business as currently conducted
and as will be conducted following the Marbob Acquisition.

     Section 3.16. Acknowledgment. Concho acknowledges that no Purchaser is acting or has
acted as an advisor, agent or fiduciary of Concho (or in any similar capacity) with respect to the
Basic Documents and any advice given by any Purchaser or any of its respective Representatives in
connection with the Basic Documents is merely incidental to the Purchasers’ purchase of Purchased
Common Stock. Concho further acknowledges to each Purchaser that Concho’s decision to enter into
this Agreement has been based solely on the independent evaluation of the transactions contemplated
by this Agreement by Concho and its Representatives.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER

     Each Purchaser, severally and not jointly, represents and warrants to Concho with respect to
itself, on and as of the date of this Agreement and on and as of the Closing Date, as follows:

     Section 4.01. Valid Existence. Such Purchaser is duly organized, validly existing and
in good standing under the Laws of its respective jurisdiction of organization and (ii) has all
requisite power and authority to own its Properties and carry on its business as currently
conducted.

     Section 4.02. Authority and Enforceability. Such Purchaser has all necessary legal
power and authority to execute, deliver and perform its obligations under each of the Basic
Documents to which it is a party and to consummate the transactions contemplated thereby. The
execution, delivery and performance by such Purchaser of each of the Basic Documents to which it is
a party, and the consummation of the transactions contemplated thereby, have been duly authorized
by all legal action on its part and, when duly executed and delivered by the parties thereto in
accordance with their terms, each of the Basic Documents to which such Purchaser is a party will
constitute the legal, valid and binding obligations of such Purchaser, enforceable in accordance
with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer and similar Laws affecting creditors’ rights generally or by general principles of equity.

     Section 4.03. No Breach. The execution, delivery and performance by such Purchaser of
each of the Basic Documents to which it is a party by such Purchaser and the consummation of the
transactions contemplated thereby 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, any material

11

 

agreement to which such Purchaser is a party or by which such Purchaser is bound or to which
any of the property or assets of such Purchaser are subject, (ii) conflict with or result in any
violation of the provisions of the organizational documents of such Purchaser, or (iii) violate any
statute, order, rule or regulation of any Governmental Authority having jurisdiction over such
Purchaser or the property or assets of such Purchaser, except in the case of clauses (i) and (iii),
for such conflicts, breaches, violations or defaults as would not reasonably be expected to have a
Purchaser Material Adverse Effect.

     Section 4.04. Certain Fees. No fees or commissions are or will be payable by such
Purchaser to brokers, finders or investment bankers with respect to the purchase of any of the
Purchased Common Stock or the consummation of the transactions contemplated by the Basic Documents.
Such Purchaser agrees that it will indemnify and hold harmless Concho from and against any and all
claims, demands or liabilities for broker’s, finder’s, placement or other similar fees or
commissions incurred by such Purchaser or alleged to have been incurred by such Purchaser in
connection with the purchase of the Purchased Common Stock or the consummation of the transactions
contemplated by the Basic Documents.

     Section 4.05. Unregistered Securities.

          (a) Accredited Investor Status; Sophisticated Purchasers. Such Purchaser is an
“accredited investor” within the meaning of Rule 501 under the Securities Act and is able to bear
the risk of its investment in the Purchased Common Stock. Such Purchaser has knowledge and
experience in financial and business matters such that it is capable of evaluating the merits and
risks of the purchase of the Purchased Common Stock.

          (b) Information. Such Purchaser or its Representatives have been furnished with all
materials relating to the business, finances and operations of Concho and relating to the offer and
sale of the Purchased Common Stock that have been requested by such Purchaser. Such Purchaser or
its Representatives have been afforded the opportunity to ask questions of Concho or its
Representatives. Neither such inquiries nor any other due diligence investigations conducted at
any time by such Purchaser or its Representatives shall modify, amend or affect such Purchaser’s
right (i) to rely on Concho’s representations and warranties contained in Article III above or (ii)
to indemnification or any other remedy based on, or with respect to the accuracy or inaccuracy of,
or compliance with, the representations, warranties, covenants and agreements in any Basic
Document. Such Purchaser understands and acknowledges that its purchase of the Purchased Common
Stock involves a high degree of risk and uncertainty. Such Purchaser has sought such accounting,
legal and tax advice as it has considered necessary to make an informed investment decision with
respect to its purchase of the Purchased Common Stock.

          (c) Legends. Such Purchaser understands and acknowledges that, until such time as the
Purchased Common Stock has been registered pursuant to the provisions of the Securities Act, or the
Purchased Common Stock is eligible for resale pursuant to Rule 144 promulgated under the Securities
Act without any restriction as to the number of securities as of a particular date that can then be
immediately sold, the Purchased Common Stock will bear the following restrictive legend:

12

 

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO
THE SECURITIES UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
THEREUNDER AND, IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS SOLD
PURSUANT TO RULE 144 UNDER SUCH ACT OR THE ISSUER HAS RECEIVED DOCUMENTATION
REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION
UNDER SUCH ACT.”

          (d) Purchase Representation. Such Purchaser is purchasing the Purchased Common Stock
for its own account and not with a view to distribution in violation of any securities laws. Such
Purchaser understands and acknowledges that the shares of Purchased Common Stock it is purchasing
are characterized as “restricted securities” under the federal securities Laws inasmuch as they are
being acquired from Concho in a transaction not involving a public offering. Such Purchaser has
been advised and understands and acknowledges that the Purchased Common Stock has not been
registered under the Securities Act or under the “blue sky” laws of any jurisdiction and may be
resold only if registered pursuant to the provisions of the Securities Act (or if eligible,
pursuant to the provisions of Rule 144 promulgated under the Securities Act or pursuant to another
available exemption from the registration requirements of the Securities Act).

          (e) Reliance Upon Purchaser’s Representations and Warranties. Such Purchaser
understands and acknowledges that the Purchased Common Stock is being offered and sold in reliance
on a transactional exemption from the registration requirements of federal and state securities
laws, and that Concho, the Placement Agent and Vinson & Elkins L.L.P., counsel to Concho, are
relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments
and understandings of such Purchaser set forth in this Agreement (i) in concluding that the offer
and sale of the Purchased Common Stock is a “private offering” and, as such, is exempt from the
registration requirements of the Securities Act, and (ii) to determine the applicability of such
exemptions in evaluating the suitability of such Purchaser to purchase the Purchased Common Stock.

     Section 4.06. No Side Agreements. Except for the confidentiality agreements entered
into by and between such Purchaser and Concho or the Placement Agent, there are no other agreements
by, among or between such Purchaser and any of its Affiliates, on the one hand, and Concho or any
of its Affiliates, on the other hand, with respect to the transactions contemplated hereby (other
than the Basic Documents), and there are no promises or inducements for future transactions by,
among or between such Purchaser and any of its Affiliates, on the one hand, and Concho and any of
its Affiliates, on the other hand.

     Section 4.07. Short Selling. Such Purchaser represents and warrants that it has not
entered into any Short Sales of the Common Stock owned by it between the time it first began
discussions with Concho or the Placement Agent about the transactions contemplated by this
Agreement and the date hereof.

13

 

     Section 4.08. Financial Resources. Such Purchaser has, and will have at the Closing,
the financial resources available to purchase the Purchased Common Stock set forth opposite its
name on Schedule 2.01 of this Agreement, to close the transactions contemplated by this
Agreement on the Closing Date without any financing contingency and to perform its post-Closing
obligations hereunder.

ARTICLE V

COVENANTS

     Section 5.01. Subsequent Public Offerings. Without the written consent of the holders
of a majority of the Purchased Common Stock, taken as a whole, from the date of this Agreement
until the Lock-Up Date, Concho shall not, and shall cause its directors, officers and Affiliates
that are under the control of Concho not to, grant, issue or sell any Common Stock or other equity
or voting securities of Concho, any securities convertible into or exchangeable therefore or take
any other action that may result in the issuance of any of the foregoing, other than (i) the
issuance of the Purchased Common Stock, (ii) the issuance of Awards (as defined in Concho’s 2006
Stock Incentive Plan) or the issuance of Common Stock upon the exercise of options to purchase
Common Stock granted pursuant to Concho’s existing 2006 Stock Incentive Plan, (iii) the entrance by
any of Concho’s officers or directors into any Rule 10b5-1 plans, so long as no sales occur under
such Rule 10b5-1 plans prior to the Lock-Up Date, (iv) sales by any of Concho’s officers or
directors of shares of Common Stock in accordance with Rule 10b5-1 plans in existence as of the
date of this Agreement or (v) sales of Common Stock for the purposes of satisfying tax liabilities
associated with the vesting or exercise of awards of Common Stock granted pursuant to Concho’s
existing 2006 Stock Incentive Plan. Notwithstanding the foregoing, Concho shall not, and shall
cause its directors, officers and Affiliates not to, sell, offer for sale or solicit offers to buy
any security (as defined in the Securities Act) that would be integrated with the sale of the
Purchased Common Stock in a manner that would require the registration under the Securities Act of
the sale of the Purchased Common Stock to the Purchasers.

     Section 5.02. Taking of Necessary Action. Each of the Parties hereto shall use its
commercially reasonable efforts promptly to take or cause to be taken all action and promptly to do
or cause to be done all things necessary, proper or advisable under applicable Law and regulations
to consummate and make effective the transactions contemplated by this Agreement. Without limiting
the foregoing, Concho and each Purchaser will, and Concho shall cause each of its Subsidiaries to,
use its commercially reasonable efforts to make all filings and obtain all consents of Governmental
Authorities that may be necessary or, in the reasonable opinion of the Purchasers or Concho, as the
case may be, advisable for the consummation of the transactions contemplated by the Basic
Documents.

     Section 5.03. Non-Disclosure; Interim Public Filings. Concho shall, on or before 9:00
a.m., New York time, on or before the first Business Day following the date of this Agreement,
issue a press release disclosing the terms of the transactions contemplated by this Agreement and
the Marbob Acquisition Agreement. Before 9:00 a.m., New York time, on or before the first Business
Day following the date of this Agreement, Concho shall file a Current Report on Form 8-K with the
Commission (the “8-K Filing”) describing the terms of the transactions contemplated by the
Basic Documents and including as exhibits to such 8-K Filing this

14

 

Agreement and the Marbob Acquisition Agreement, in the form required by the Exchange Act.
Thereafter, Concho shall timely file any filings and notices required by the Commission or
applicable Law with respect to the transactions contemplated by this Agreement and provide copies
thereof to the Purchasers promptly after filing if such filings or policies are not available to
the Purchasers through EDGAR. Except with respect to the 8-K Filing and the press release
referenced above (a copy of which will be provided to the Purchasers for their review as early as
practicable prior to its issuance), Concho shall, at least two (2) Business Days prior to the
filing or dissemination of any disclosure required by this Section 5.03, provide a copy thereof to
the Purchasers for their review. Concho and the Purchasers shall consult with each other in
issuing any press releases or otherwise making public statements or filings and other
communications with the Commission or any regulatory agency or The New York Stock Exchange (or
other exchange on which securities of Concho are listed or traded) with respect to the transactions
contemplated by this Agreement. Notwithstanding the foregoing, Concho shall not publicly disclose
the name of any Purchaser, or include the name of any Purchaser in any press release, without the
prior written consent of such Purchaser except to the extent the names of the Purchasers are
included in this Agreement (including Schedules and Exhibits to this Agreement) filed as an exhibit
to the 8-K Filing and the press release referred to in the first sentence of this Section 5.03.
Concho shall not, and shall cause each of its Representatives not to, provide any Purchaser with
any material non-public information regarding Concho from and after the issuance of the
above-referenced press release without the express written consent of such Purchaser.

     Section 5.04. Use of Proceeds. Concho shall use the collective proceeds from the sale
of the Purchased Common Stock to partially finance the Marbob Acquisition.

     Section 5.05. Tax Information. Concho shall cooperate with the Purchasers and provide
the Purchasers with any reasonably requested tax information related to their ownership of the
Purchased Common Stock.

     Section 5.06. Short Selling Acknowledgement and Agreement. Each Purchaser understands
and acknowledges, severally and not jointly with any other Purchaser, that the Commission currently
takes the position that coverage of Short Sales of securities “against the box” prior to the
effective date of a registration statement is a violation of Section 5 of the Securities Act. Each
Purchaser agrees, severally and not jointly, that it will not engage in any Short Sales that result
in the disposition of the Common Stock acquired hereunder by the Purchaser until such time as the
Registration Statement (as defined in the Registration Rights Agreement) is declared or deemed
effective by the Commission. No Purchaser makes any representation, warranty or covenant hereby
that it will not engage in Short Sales in the securities of Concho (other than with respect to the
Common Stock acquired hereunder) owned by such Purchaser or borrowed from a broker after the date
the press release contemplated by Section 5.03 of this Agreement is issued by Concho.

ARTICLE VI

CLOSING CONDITIONS

     Section 6.01. Conditions to the Closing.

15

 

          (a) Mutual Conditions. The respective obligation of each Party to consummate the
purchase and issuance and sale of the Purchased Common Stock shall be subject to the satisfaction
on or prior to the Closing Date of each of the following conditions (any or all of which may be
waived by a particular Party on behalf of itself in writing, in whole or in part, to the extent
permitted by applicable Law):

     (i) no Law shall have been enacted or promulgated, and no action shall have been taken,
by any Governmental Authority of competent jurisdiction which temporarily, preliminarily or
permanently restrains, precludes, enjoins or otherwise prohibits the consummation of the
transactions contemplated by this Agreement or makes the transactions contemplated by this
Agreement illegal;

     (ii) there shall not be pending any Action by any Governmental Authority seeking to
restrain, preclude, enjoin or prohibit the transactions contemplated by this Agreement; and

     (iii) all closing conditions (other than payment of the purchase price) required to
consummate the Marbob Acquisition have been satisfied or waived, and the parties to the
Marbob Acquisition Agreement are prepared to consummate the Marbob Acquisition substantially
on the terms set forth therein.

          (b) Each Purchaser’s Conditions. The respective obligation of each Purchaser to
consummate the purchase of its Purchased Common Stock shall be subject to the satisfaction on or
prior to the Closing Date of each of the following conditions (any or all of which may be waived by
a particular Purchaser on behalf of itself in writing, in whole or in part, to the extent permitted
by applicable Law):

     (i) Concho shall have performed and complied with the covenants and agreements
contained in this Agreement in all material respects that are required to be performed and
complied with by Concho on or prior to the Closing Date;

     (ii) the representations and warranties of Concho contained in this Agreement that are
qualified by materiality or Concho Material Adverse Effect shall be true and correct when
made and as of the Closing Date and all other representations and warranties shall be true
and correct in all material respects when made and as of the Closing Date, in each case as
though made at and as of the Closing Date (except that representations made as of a specific
date shall be required to be true and correct as of such date only);

     (iii) since the date of this Agreement, no Concho Material Adverse Effect shall have
occurred and be continuing;

     (iv) the Purchased Common Stock shall have been approved for listing on The New York
Stock Exchange, and no notice of delisting from The New York Stock Exchange shall have been
received by Concho with respect to the Common Stock; and

     (v) Concho shall have delivered, or caused to be delivered, to the Purchasers at the
Closing, Concho’s closing deliveries described in Section 6.02 of this Agreement.

16

 

          (c) Concho’s Conditions. The obligation of Concho to consummate the sale of the
Purchased Common Stock to each of the Purchasers shall be subject to the satisfaction on or prior
to the Closing Date of the following conditions with respect to each Purchaser individually and not
the Purchasers jointly (which may be waived by Concho in writing, in whole or in part, to the
extent permitted by applicable Law):

     (i) such Purchaser shall have performed and complied with the covenants and agreements
contained in this Agreement in all material respects that are required to be performed and
complied with by that Purchaser on or prior to the Closing Date;

     (ii) the representations and warranties of such Purchaser contained in this Agreement
that are qualified by materiality or Purchaser Material Adverse Effect shall be true and
correct when made and as of the Closing Date and all other representations and warranties
shall be true and correct in all material respects when made and as of the Closing Date, in
each case as though made at and as of the Closing Date (except that representations made as
of a specific date shall be required to be true and correct as of such date only);

     (iii) since the date of this Agreement, no Purchaser Material Adverse Effect with
respect to such Purchaser shall have occurred and be continuing; and

     (iv) such Purchaser shall have delivered, or caused to be delivered, to Concho at the
Closing, its closing deliveries described in Section 6.03 of this Agreement.

     Section 6.02. Concho Deliveries. At the Closing, subject to the terms and conditions
of this Agreement, Concho will deliver, or cause to be delivered, to each Purchaser:

          (a) the Purchased Common Stock by delivering certificates (bearing the legend set forth in
Section 4.05(c)) evidencing such Purchased Common Stock at the Closing, all free and clear of any
Liens, encumbrances or interests of any other party;

          (b) the Officer’s Certificate substantially in the form attached to this Agreement as
Exhibit C;

          (c) opinions addressed to the Purchasers from Vinson & Elkins L.L.P., counsel to Concho, and
from the General Counsel of Concho, each dated the Closing Date, substantially similar in substance
to the form of opinions attached to this Agreement as Exhibit B;

          (d) the Registration Rights Agreement in substantially the form attached to this Agreement as
Exhibit A, which shall have been duly executed by Concho;

          (e) a certificate of the Secretary of Concho dated as of the Closing Date substantially in the
form attached to this Agreement as Exhibit E;

          (f) a certificate dated as of a recent date of the Secretary of State of the State of Delaware
with respect to the due organization and good standing in the State of Delaware of Concho; and

17

 

          (g) a cross receipt, dated the Closing Date, executed by Concho and delivered to each
Purchaser, certifying that Concho has received the Purchase Price with respect to the Purchased
Common Stock issued and sold to all Purchasers, substantially in the form attached to this
Agreement as Exhibit F.

          Section 6.03. Purchaser Deliveries. At the Closing, subject to the terms and
conditions of this Agreement, each Purchaser will deliver, or cause to be delivered, to Concho:

          (a) the Registration Rights Agreement in substantially the form attached to this Agreement as
Exhibit A, which shall have been duly executed by such Purchaser;

          (b) an Officer’s Certificate substantially in the form attached to this Agreement as
Exhibit D;

          (c) payment of the Common Stock Price for each share of Purchased Common Stock being purchased
by such Purchaser by wire transfer of immediately available funds to an account designated by
Concho at least twenty four (24) hours prior to 9:30 a.m., New York time, on the Closing Date; and

          (d) a cross receipt, dated the Closing Date, executed by such Purchaser and delivered to
Concho, certifying that such Purchaser has received its Purchased Common Stock, substantially in
the form attached to this Agreement as Exhibit F.

ARTICLE VII

INDEMNIFICATION, COSTS AND EXPENSES

     Section 7.01. Indemnification by Concho. Concho agrees to indemnify each Purchaser
and its Representatives (collectively, “Purchaser Related Parties”) from, and hold each of
them harmless against, any and all losses, actions, suits, proceedings (including any
investigations, litigation or inquiries), demands and causes of action, and, in connection
therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses,
liabilities, damages or expenses of any kind or nature whatsoever, including the reasonable fees
and disbursements of counsel and all other reasonable expenses incurred in connection with
investigating, defending or preparing to defend any such matter that may be incurred by them or
asserted against or involve any of them, whether or not involving a third party claim, as a result
of, arising out of or in any way related to (i) any actual or proposed use by Concho of the
proceeds of any sale of the Purchased Common Stock or (ii) the breach of any of the
representations, warranties or covenants of Concho contained herein; provided that such claim for
indemnification relating to a breach of a representation or warranty is made prior to the
expiration of such representation or warranty.

     Section 7.02. Indemnification by the Purchasers. Each Purchaser agrees, severally and
not jointly, to indemnify Concho and its Representatives (collectively, “Concho Related
Parties”) from, and hold each of them harmless against, any and all losses, actions, suits,
proceedings (including any investigations, litigation or inquiries), demands and causes of action,
and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all
costs, losses, liabilities, damages or expenses of any kind or nature whatsoever, including the
reasonable fees and disbursements of counsel and all other reasonable expenses incurred in

18

 

connection with investigating, defending or preparing to defend any such matter that may be
incurred by them or asserted against or involve any of them, whether or not involving a third party
claim, as a result of, arising out of or in any way related to the breach of any of the
representations, warranties or covenants of such Purchaser contained herein; provided that such
claim related to indemnification relating to a breach of a representation or warranty is made prior
to the expiration of such representation or warranty.

     Section 7.03. Indemnification Procedure. Promptly after any Concho Related Party or
Purchaser Related Party (hereinafter, the “Indemnified Party”) has received notice of any
indemnifiable claim hereunder, or the commencement of any action or proceeding by a third party,
which the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement,
the Indemnified Party shall give the indemnitor hereunder (the “Indemnifying Party”)
written notice of such claim or the commencement of such action or proceeding, but failure to so
notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may
have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is
materially prejudiced by such failure. Such notice shall state the nature and the basis of such
claim to the extent then known. The Indemnifying Party shall have the right to defend and settle,
at its own expense and by its own counsel, who shall be reasonably acceptable to the Indemnified
Party, any such matter as long as the Indemnifying Party pursues the same diligently and in good
faith. If the Indemnifying Party undertakes to defend or settle, it shall promptly notify the
Indemnified Party of its intention to do so, and the Indemnified Party shall cooperate with the
Indemnifying Party and its counsel in all commercially reasonable respects in the defense thereof
and the settlement thereof. Such cooperation shall include furnishing the Indemnifying Party with
any books, records and other information reasonably requested by the Indemnifying Party and in the
Indemnified Party’s possession or control. Such cooperation of the Indemnified Party shall be at
the cost of the Indemnifying Party. After the Indemnifying Party has notified the Indemnified
Party of its intention to undertake to defend or settle any such asserted liability, and for so
long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be
liable for any additional legal expenses incurred by the Indemnified Party in connection with any
defense or settlement of such asserted liability; provided, however, that the Indemnified Party
shall be entitled (i) at its expense, to participate in the defense of such asserted liability and
the negotiations of the settlement thereof and (ii) if (A) the Indemnifying Party has failed to
assume the defense or employ counsel reasonably acceptable to the Indemnified Party or (B) if the
defendants in any such action include both the Indemnified Party and the Indemnifying Party and
counsel to the Indemnified Party shall have concluded that there may be reasonable defenses
available to the Indemnified Party that are different from or in addition to those available to the
Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Indemnifying Party, then the Indemnified Party shall have the
right to select a separate counsel and to assume such legal defense and otherwise to participate in
the defense of such action, with the expenses and fees of such separate counsel and other expenses
related to such participation to be reimbursed by the Indemnifying Party as incurred.
Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not settle any
indemnified claim without the consent of the Indemnified Party, unless the settlement thereof
imposes no liability or obligation on, involves no admission of wrongdoing or malfeasance by, and
includes a complete release from liability of, the Indemnified Party.

19

 

ARTICLE VIII

MISCELLANEOUS

     Section 8.01. Interpretation. Article, Section, Schedule and Exhibit references are
to this Agreement, unless otherwise specified. All references to instruments, documents, contracts
and agreements are references to such instruments, documents, contracts and agreements as the same
may be amended, supplemented and otherwise modified from time to time, unless otherwise specified.
The word “including” shall mean “including but not limited to.” Whenever Concho has an obligation
under the Basic Documents, the expense of complying with such obligation shall be an expense of
Concho unless otherwise specified. Whenever any determination, consent or approval is to be made
or given by a Purchaser under this Agreement, such action shall be in such Purchaser’s sole
discretion unless otherwise specified. If any provision in the Basic Documents is held to be
illegal, invalid, not binding or unenforceable, such provision shall be fully severable, and the
Basic Documents shall be construed and enforced as if such illegal, invalid, not binding or
unenforceable provision had never comprised a part of the Basic Documents, and the remaining
provisions shall remain in full force and effect. The Basic Documents have been reviewed and
negotiated by sophisticated parties with access to legal counsel and shall not be construed against
the drafter.

     Section 8.02. Survival of Provisions. The representations and warranties set forth in
this Agreement shall survive the execution and delivery of this Agreement indefinitely. The
covenants made in this Agreement or any other Basic Document shall survive the closing of the
transactions described herein and remain operative and in full force and effect regardless of
acceptance of any of the Purchased Common Stock and payment therefor and repayment, conversion,
exercise or repurchase thereof. All indemnification obligations of Concho and the Purchasers
pursuant to Section 3.11, Section 4.04 and Article VII of this Agreement shall remain operative and
in full force and effect unless such obligations are expressly terminated in a writing by the
Parties referencing the particular Article or Section, regardless of any purported general
termination of this Agreement.

     Section 8.03. No Waiver; Modifications in Writing.

          (a) Delay. No failure or delay on the part of any Party in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further exercise thereof or the
exercise of any right, power or remedy. The remedies provided for herein are cumulative and are
not exclusive of any remedies that may be available to a Party at Law or in equity or otherwise.

          (b) Specific Waiver. Except as otherwise provided in this Agreement or the
Registration Rights Agreement, no amendment, waiver, consent, modification or termination of any
provision of this Agreement or any other Basic Document shall be effective unless signed by each of
the Parties or each of the original signatories thereto affected by such amendment, waiver,
consent, modification or termination. Any amendment, supplement or modification of or to any
provision of this Agreement or any other Basic Document, any waiver of any provision of this
Agreement or any other Basic Document and any consent to any departure by Concho from the terms of
any provision of this Agreement or any other Basic Document shall be effective only in the specific
instance and for the specific purpose for which made or given. Except where

20

 

notice is specifically required by this Agreement, no notice to or demand on any Party in any
case shall entitle any Party to any other or further notice or demand in similar or other
circumstances.

     Section 8.04. Binding Effect; Assignment.

          (a) Binding Effect. This Agreement shall be binding upon Concho, each Purchaser, and
their respective successors and permitted assigns. Except as expressly provided in this Agreement,
this Agreement shall not be construed so as to confer any right or benefit upon any Person other
than the Parties to this Agreement and as provided in Article VII, and their respective successors
and permitted assigns.

          (b) Assignment of Purchased Common Stock. All or any portion of a Purchaser’s
Purchased Common Stock purchased pursuant to this Agreement may be sold, assigned or pledged by
such Purchaser, subject to compliance with applicable securities Laws and the Registration Rights
Agreement.

          (c) Assignment of Rights. Each Purchaser may assign all or any portion of its rights
and obligations under this Agreement without the consent of Concho to any Affiliate of such
Purchaser, and the assignee shall be deemed to be a Purchaser hereunder with respect to such
assigned rights or obligations and shall agree to be bound by the provisions of this Agreement.
Except as expressly permitted by this Section 8.04(c), such rights and obligations may not
otherwise be transferred except with the prior written consent of Concho (which consent shall not
be unreasonably withheld), in which case the assignee shall be deemed to be a Purchaser hereunder
with respect to such assigned rights or obligations and shall agree to be bound by the provisions
of this Agreement.

     Section 8.05. Confidentiality and Non-Disclosure. Notwithstanding anything herein to
the contrary, each Purchaser that has executed a confidentiality agreement in favor of Concho shall
continue to be bound by such confidentiality agreement in accordance with the terms thereof until
the 8-K Filing required by Section 5.03 of this Agreement.

     Section 8.06. Communications. All notices and demands provided for hereunder shall be
in writing and shall be given by regular mail, registered or certified mail, return receipt
requested, facsimile, air courier guaranteeing overnight delivery, electronic mail or personal
delivery to the following addresses:

21

 

	 	(a)	 	If to Capital World:
	 
	 	 	 	Name: The Growth Fund of America, Inc. c/o Capital Research and
Management Company

	 	 	 	Address: 333 South Hope Street, 55th Floor

Los Angeles, CA 90071

	 	 	 	Attention: Mike Downer/Michael Triessl

Telephone: (213) 486-9200

Email: md@capgroup.com; mcjt@capgroup.com
	 
	 	(b)	 	If to Fidelity:
	 
	 	 	 	Name: Andrew Boyd
	 	 	 	Address: 82 Devonshire Street, V13H
Boston, MA 02109

	 	 	 	Attention: Andrew Boyd

Telephone: (617) 563-5144

Email: andrew.boyd@fmr.com
	 
	 	(c)	 	
If to Fred Alger:

Name: Eric Roberts

Address: 111 Fifth Avenue

                New York, New York 10003

 Attention: Chief Financial Officer

 Telephone: (212) 806-2948

 Email: erichards@alger.com

	 
	 	(d)	 	
If to Canada Pension Plan Investment Board:

 Name: Edwin Cass

 Address: 1 Queen St. East, Suite 2600, PO Box 101

                Toronto, Ontario Canada, M5C 2W5

 Attention: Chief Financial Officer

 Telephone: (416) 874-5278

Email: ecass@cppib.ca
	 
	 	(e)	 	If to S.A.C. Capital Associates, LLC or CR Intrinsic Investments, LLC:

 Name: c/o S.A.C. Capital Advisors, L.P.

 Address: 72 Cummings Point Road

                Stamford, CT 06902

Attention: General Counsel/Chief Financial Officer

 Telephone: (203) 890-2000

 Email: petern@sac.com; dan.berkowitz@sac.com
	 
	 	(f)	 	If to T. Rowe Price Associates Inc.:

 Name: T. Rowe Price Associates, Inc.

22

 

	 	 	 	Address: 100 East Pratt Street

                 Baltimore, Maryland 21202

 Attention: Andrew Baek, Vice President and Senior Legal Counsel

 Telephone: (410) 345-2090

Email: andrew_baek@troweprice.com
	 
	 	(g)	 	If to Baron Asset Fund:

 Name: Baron Asset Fund, c/o BAMCO, Inc.

 Address: 767 Fifth Avenue, 49th Floor

                New York, NY 10153

 Attention: General Counsel

Telephone: (212) 583-2119

Email: ppatalino@baronfunds.com
	 
	 	(h)	 	If to Eton Park Fund, LP or Eton Park Master Fund, Ltd.:

 Name: Eton Park Capital Management, LP

 Address: 399 Park Avenue, 10th Floor

                New York, NY 10022

Attention: Marcy Engel

Telephone: (212) 756-5390

Email: marcy.engel@etonpark.com
	 
	 	(i)	 	If to Trafelet:
	 
	 	 	 	Name: Trafelet & Company, LLC
	 	 	 	Address: 26th Floor, 590 Madison Avenue
New York, NY 10022

	 	 	 	Attention: Jeff Faber, Chief Financial Officer

Telephone: (212) 201-7856

Email: jfaber@trafelet.com
	 
	 	(j)	 	If to Citadel Global Equities Master Fund Ltd. or LMA SPC for and on behalf of Map 86
Segregated Portfolio:
	 
	 	 	 	Name: c/o Citadel LLC
	 	 	 	Address: 131 South Dearborn Street
Chicago, IL 60603

	 	 	 	Attention: Legal Department

Telephone: (312) 395-2100

Fax: (312) 267-7300

Email: with a mandatory copy sent via email to:

CitadelAgreementNotice@citadelgroup.com

23

 

	 	(k)	 	If to Concho:

 Concho Resources Inc.

 550 West Texas Avenue, Suite 100

 Midland, Texas 79701

 Attention: Darin G. Holderness

 Facsimile: (432) 683-7443

 Email: dholderness@conchoresources.com

 with a copy to:

 Vinson & Elkins L.L.P.

 2500 First City Tower

 1001 Fannin Street, Suite 2500

 Houston, Texas 77002

 Attention: Jeffery K. Malonson, Esq.

 Facsimile: (713) 615-5627

 Email: jmalonson@velaw.com

or to such other address as Concho or such Purchaser may designate in writing. All notices and
communications shall be deemed to have been duly given: (i) at the time delivered by hand, if
personally delivered; (ii) upon actual receipt, if sent by registered or certified mail, return
receipt requested, or regular mail, if mailed; (iii) when receipt acknowledged, if sent via
facsimile; and (iv) upon actual receipt when delivered to an air courier guaranteeing overnight
delivery or via electronic mail.

     Section 8.07. Removal of Legend. Concho shall remove the legend described in Section
4.05(c) from the certificates evidencing the Purchased Common Stock at the request of a Purchaser
submitting to Concho such certificates, together with such other documentation as may be reasonably
requested by Concho or required by its transfer agent, unless Concho, with the advice of counsel,
reasonably determines that such removal is inappropriate; provided that no opinion of counsel from
such Purchaser shall be required in the event a Purchaser is effecting a sale of such Purchased
Common Stock pursuant to Rule 144 under the Securities Act or an effective registration statement.
Concho shall cooperate with such Purchaser to effect removal of such legend. The legend described
in Section 4.05(c) shall be removed and Concho shall cause the Transfer Agent to issue a
certificate without such legend to the holder of Purchased Common Stock upon which it is stamped,
if, unless otherwise required by state securities Laws, (i) such shares of Purchased Common Stock
are sold pursuant to an effective Registration Statement, (ii) in connection with a sale,
assignment or other transfer, such holder provides Concho with an opinion of a law firm reasonably
acceptable to Concho (with any law firm set forth under Section 8.06 being deemed acceptable), in a
generally acceptable form, to the effect that such sale, assignment or transfer of such Purchased
Common Stock may be made without registration under the applicable requirements of the Securities
Act, or (iii) such holder provides Concho with reasonable assurance that such Purchased Common
Stock can be sold, assigned or transferred pursuant to Rule 144 under the Securities Act. If
Concho shall fail for any reason or for no reason to issue to the holder of such Purchased Common
Stock within three (3) trading days after the occurrence of any of clause (i), clause (ii) or
clause (iii) above a certificate without

24

 

such legend or if Concho fails to deliver unlegended Purchased Common Stock within three (3)
trading days of the Purchaser’s election to receive such unlegended Purchased Common Stock pursuant
to clause (y) below, and if on or after such trading day the holder purchases (in an open market
transaction or otherwise) Common Stock to deliver in satisfaction of a sale by the holder of such
Purchased Common Stock that the holder anticipated receiving without legend from Concho (a
“Buy-In”), then Concho shall, within three (3) Business Days after the holder’s request and
in the holder’s discretion, either (x) pay cash to the holder in an amount equal to the holder’s
total purchase price (including brokerage commissions, if any) for the Common Stock so purchased
(the “Buy-In Price”), at which point Concho’s obligation to deliver such unlegended
Purchased Common Stock shall terminate, or (y) promptly honor its obligation to deliver to the
holder such unlegended Purchased Common Stock as provided above and pay cash to the holder in an
amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of
shares of Common Stock and (B) the closing bid price on the date of such holder’s purchase.

     Section 8.08. Entire Agreement. The Basic Documents are intended by the Parties as a
final expression of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the Parties hereto and thereto in respect of the subject matter
contained herein and therein. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein or therein with respect to the rights granted by
Concho or a Purchaser set forth herein or therein. The Basic Documents supersede all prior
agreements and understandings between the Parties with respect to such subject matter.

     Section 8.09. Governing Law. This Agreement will be construed in accordance with and
governed by the Laws of the State of Delaware without regard to principles of conflicts of Laws.

     Section 8.10. Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different Parties hereto in separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute the same Agreement.

     Section 8.11. Termination.

          (a) This Agreement may be terminated:

     (i) by mutual written consent of Concho and the Purchasers entitled to purchase a
majority of the Purchased Common Stock based on the total Commitment Amounts at any time
prior to the Closing;

     (ii) by either Concho or the Purchasers entitled to purchase a majority of the
Purchased Common Stock based on the total Commitment Amounts if the Closing has not been
consummated on or before November 30, 2010; provided, that no Party may terminate this
Agreement pursuant to this Section 8.11(a)(ii) if such Party’s failure to fulfill any of its
obligations under this Agreement shall have been the reason that the Closing shall not have
occurred on or before such date;

25

 

     (iii) by either Concho or the Purchasers entitled to purchase a majority of the
Purchased Common Stock based on the total Commitment Amounts if any court of competent
jurisdiction in the United States or any other Governmental Authority shall have issued a
final order, decree or ruling or taken any other financial action restraining, enjoining or
otherwise prohibiting the transactions contemplated hereby and such order, decree, ruling or
other action is or shall have become final and nonappealable;

     (iv) by Concho if there shall have been a breach of any representation, warranty or
covenant on the part of any Purchaser set forth in this Agreement, or if any such
representation or warranty of a Purchaser shall have become untrue, in either case, such
that the conditions set forth in Section 6.01(c) would be incapable of being satisfied by
November 30, 2010 and such Purchaser has not cured such breach or inaccuracy within twenty
(20) Business Days after receipt of written notice thereof from Concho; provided, that
Concho is not then in breach of any of its obligations under this Agreement; and

     (v) by the Purchasers entitled to purchase a majority of the Purchased Common Stock
based on the total Commitment Amounts if there shall have been a breach of any
representation, warranty or covenant on the part of Concho set forth in this Agreement, or
if any such representation or warranty of Concho shall have become untrue, in either case,
such that the conditions set forth in Section 6.01(b) would be incapable of being satisfied
by November 30, 2010 and Concho has not cured such breach or inaccuracy within twenty (20)
Business Days after receipt of written notice thereof from the Purchasers; provided, that no
Purchaser is then in breach of any of its obligations under this Agreement.

          (b) Notwithstanding anything herein to the contrary, this Agreement shall automatically
terminate on or any time prior to the Closing if the Marbob Acquisition Agreement shall have been
terminated pursuant to its terms.

          (c) In the event of the termination of this Agreement by either Concho or the Purchasers as
provided in Section 8.11(a) or in accordance with Section 8.11(b):

     (i) except as set forth in Section 8.02, this Agreement shall become null and void and
have no further force or effect, but the Parties shall not be released from any liability
arising from or in connection with any breach hereof occurring prior to such termination;
and

     (ii) the confidentiality agreements entered into by and between each of the Purchasers
and Concho shall remain in effect.

     Section 8.12. Recapitalization, Exchanges, Etc. Affecting the Purchased Common Stock.
The provisions of this Agreement shall apply to the full extent set forth herein with respect to
any and all Common Stock of Concho or any successor or assign of Concho (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for or
in substitution of the Purchased Common Stock, and shall be appropriately

26

 

adjusted for combinations, stock splits, recapitalizations and the like occurring after the
date of this Agreement.

     Section 8.13. Obligations Limited to Parties to Agreement. Each of the parties hereto
covenants, agrees and acknowledges that no Person other than the Purchasers (and their permitted
assignees) and Concho shall have any obligation hereunder and that, notwithstanding that one or
more of the Purchasers may be a corporation, partnership or limited liability company, no recourse
under the Basic Documents or under any documents or instruments delivered in connection therewith
shall be had against any former, current or future director, officer, employee, agent, general or
limited partner, manager, member, stockholder or Affiliate of any of the Purchasers or Concho or
any former, current or future director, officer, employee, agent, general or limited partner,
manager, member, stockholder or Affiliate of any of the foregoing, whether by the enforcement of
any assessment or by any legal or equitable proceeding, or by virtue of any applicable Law, it
being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be
imposed on or otherwise be incurred by any former, current or future director, officer, employee,
agent, general or limited partner, manager, member, stockholder or Affiliate of any of the
Purchasers or Concho or any former, current or future director, officer, employee, agent, general
or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, as such, for
any obligations of the Purchasers and Concho under the Basic Documents or any documents or
instruments delivered in connection therewith or for any claim based on, in respect of or by reason
of such obligation or its creation.

[The remainder of this page is intentionally left blank.]

27

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date
first above written.

	 	 	 	 	 
	 	CONCHO RESOURCES INC.

 	 
	 	By:  	/s/ Timothy A. Leach
 	 
	 	 	Timothy A. Leach 	 
	 	 	Chief Executive Officer and President 	 
	 

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date
first above written.

	 	 	 	 	 
	 	Capital World:

THE GROWTH FUND OF AMERICA, INC.

 	 
	 	By:  	/s/ Michael J. Downer
 	 
	 	Name:  	Michael J. Downer 	 
	 	Title:  	Senior Vice President and Secretary,
Capital Research and Management Company 	 

Signature Page to Common Stock Purchase Agreement

 

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 
	 	Fidelity:

FIDELITY CONTRAFUND: FIDELITY CONTRAFUND

 	 
	 	By:  	/s/ Jeffrey Christian
 	 
	 	Name:  	Jeffrey Christian 	 
	 	Title:  	Deputy Treasurer 	 

Signature Page to Common Stock Purchase Agreement

 

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 
	 	FIDELITY CONTRAFUND: FIDELITY ADVISORS NEW
INSIGHTS FUND

 	 
	 	By:  	/s/ Jeffrey Christian
 	 
	 	Name:  	Jeffrey Christian 	 
	 	Title:  	Deputy Treasurer 	 

Signature Page to Common Stock Purchase Agreement

 

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 
	 	VARIABLE INSURANCE PRODUCTS FUND III: BALANCED
PORTFOLIO

 	 
	 	By:  	/s/ Jeffrey Christian
 	 
	 	Name:  	Jeffrey Christian 	 
	 	Title:  	Deputy Treasurer 	 

Signature Page to Common Stock Purchase Agreement

 

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 
	 	FIDELITY ADVISOR SERIES: FIDELITY ADVISOR
DIVIDEND GROWTH FUND

 	 
	 	By:  	/s/ Jeffrey Christian
 	 
	 	Name:  	Jeffrey Christian 	 
	 	Title:  	Deputy Treasurer 	 

Signature Page to Common Stock Purchase Agreement

 

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 
	 	FIDELITY SECURITIES FUND: FIDELITY DIVIDEND
GROWTH FUND

 	 
	 	By:  	/s/ Jeffrey Christian
 	 
	 	Name:  	Jeffrey Christian 	 
	 	Title:  	Deputy Treasurer 	 

Signature Page to Common Stock Purchase Agreement

 

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 
	 	FIDELITY SELECT PORTFOLIOS: NATURAL GAS
PORTFOLIO

 	 
	 	By:  	/s/ Jeffrey Christian
 	 
	 	Name:  	Jeffrey Christian 	 
	 	Title:  	Deputy Treasurer 	 

Signature Page to Common Stock Purchase Agreement

 

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 
	 	FIDELITY ADVISOR SERIES I: FIDELITY ADVISOR
BALANCED FUND

 	 
	 	By:  	/s/ Jeffrey Christian
 	 
	 	Name:  	Jeffrey Christian 	 
	 	Title:  	Deputy Treasurer 	 

Signature Page to Common Stock Purchase Agreement

 

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 
	 	FIDELITY PURITAN TRUST: FIDELITY BALANCED FUND

 	 
	 	By:  	/s/ Jeffrey Christian
 	 
	 	Name:  	Jeffrey Christian 	 
	 	Title:  	Deputy Treasurer 	 

Signature Page to Common Stock Purchase Agreement

 

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 
	 	FIDELITY DEVONSHIRE TRUST: FIDELITY SERIES
ALL-SECTOR EQUITY FUND

 	 
	 	By:  	/s/ Jeffrey Christian
 	 
	 	Name:  	Jeffrey Christian 	 
	 	Title:  	Deputy Treasurer 	 

Signature Page to Common Stock Purchase Agreement

 

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 
	 	VARIABLE INSURANCE PRODUCTS FUND II:
CONTRAFUND PORTFOLIO

 	 
	 	By:  	/s/ Jeffrey Christian
 	 
	 	Name:  	Jeffrey Christian 	 
	 	Title:  	Deputy Treasurer 	 
	 

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 	 	 	 	 

	 	 	FIDELITY ADVISOR SERIES I:
 FIDELITY ADVISOR
BALANCED FUND

	 
	 	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Jeffrey Christian
 

Jeffrey Christian
	 	 	 	 
	 

	 	Title:
	 	Deputy Treasurer	 	 	 	 

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 	 	 	 	 

	 	 	FIDELITY PURITAN TRUST: FIDELITY
 BALANCED FUND

	 
	 	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Jeffrey Christian
 

Jeffrey Christian
	 	 	 	 
	 

	 	Title:
	 	Deputy Treasurer	 	 	 	 

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 	 	 	 	 

	 	 	FIDELITY DEVONSHIRE TRUST:
 FIDELITY SERIES
ALL-SECTOR
 EQUITY FUND

	 
	 	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Jeffrey Christian
 

Jeffrey Christian
	 	 	 	 
	 

	 	Title:
	 	Deputy Treasurer	 	 	 	 

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 	 	 	 	 

	 	 	VARIABLE INSURANCE PRODUCTS
 FUND II:
CONTRAFUND PORTFOLIO

	 
	 	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Jeffrey Christian
 

Jeffrey Christian
	 	 	 	 
	 

	 	Title:
	 	Deputy Treasurer	 	 	 	 

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 	 	 	 	 

	 	 	FIDELITY CAPITAL TRUST: FIDELITY
 VALUE FUND

	 
	 	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Jeffrey Christian
 

Jeffrey Christian
	 	 	 	 
	 

	 	Title:
	 	Deputy Treasurer	 	 	 	 

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 	 	 	 	 

	 	 	Fred Alger:
	 
	 	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Barry J. Mueller
 

Barry J. Mueller
	 	 	 	 
	 

	 	Title:
	 	SVP	 	 	 	 

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 	 	 	 	 

	 	 	Canada Pension Plan Investment Board:
	 
	 	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Edwin Cass
 

Edwin Cass
	 	 	 	 
	 

	 	Title:
	 	Vice President	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Norman Jackson
 

Norman Jackson
	 	 	 	 
	 

	 	Title:
	 	Senior Portfolio Manager	 	 	 	 

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 	 	 	 	 

	 	 	S.A.C. Capital Associates, LLC:
	 
	 	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Peter Nussbaum
 

Peter Nussbaum
	 	 	 	 
	 

	 	Title:
	 	Authorized Signatory	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	CR Intrinsic Investments, LLC:
	 
	 	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Peter Nussbaum
 

Peter Nussbaum
	 	 	 	 
	 

	 	Title:
	 	Authorized Signatory	 	 	 	 

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 	 	 	 	 

	 	 	T. ROWE PRICE ASSOCIATES, INC.

Investment Advisor for and on Behalf of
the 
Funds and Accounts on Attachment A:
	 
	 	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Michael F. Blandino
 

Michael F. Blandino
	 	 	 	 
	 

	 	Title:
	 	Vice President	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	T. Rowe Price Associates, Inc.

100 East Pratt Street 

Baltimore, Maryland 21202

Attn: Andrew Baek, Vice President and Senior
Legal Counsel 

Phone: 410-345-2090

Email: andrew_baek@troweprice.com
	 
	 	 	 	 	 	 	 	 
	 	 	Attachment A:
	 
	 	 	 	 	 	 	 	 
	 	 	T. Rowe Price New Era Fund, Inc.

John S. and James L. Knight Foundation — Natural Resources

Advanced Series Trust — AST T. Rowe Price Natural Resources Portfolio

Memorial Sloan-Kettering Cancer Center — Natural Resources

Syngenta Corporation Pension Plan — NRIS

IAM National Pension Fund Global Natural
Resources

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 	 	 	 	 

	 	 	BAMCO, Inc., on behalf of its investment 

advisory client, Baron Asset Fund:
	 
	 	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Patrick M. Patalino
 

Patrick M. Patalino
	 	 	 	 
	 

	 	Title:
	 	General Counsel	 	 	 	 

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 	 	 	 	 

	 	 	Eton Park Capital Management, LP on 
behalf
of Eton Park Fund, LP:
	 
	 

	 	By:

Name:
	 	/s/ Marcy Engel
 

Marcy Engel
	 	 	 	 
	 

	 	Title:
	 	Chief Operating Officer and General
Counsel	 	 	 	 

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 	 	 	 	 

	 	 	Eton Park Capital Management, LP on
 behalf
of Eton Park Master Fund, Ltd.:
	 
	 	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Marcy Engel
 

Marcy Engel
	 	 	 	 
	 

	 	Title:
	 	Chief Operating Officer and General
Counsel	 	 	 	 

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 

	 	 	Trafelet:
	 
	 	 	 	 
	 	 	Delta Institutional, LP
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Jeff Faber
	 

	 	 	 	 
	 

	 	Name:
	 	Jeff Faber
	 

	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 
	 	 	Delta Onshore, LP
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Jeff Faber
	 

	 	 	 	 
	 

	 	Name:
	 	Jeff Faber
	 

	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 
	 	 	Delta Pleiades, LP
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Jeff Faber
	 

	 	 	 	 
	 

	 	Name:
	 	Jeff Faber
	 

	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 
	 	 	Delta Offshore, Ltd
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Jeff Faber
	 

	 	 	 	 
	 

	 	Name:
	 	Jeff Faber
	 

	 	Title:
	 	Chief Financial Officer

Signature Page to Common Stock Purchase Agreement

 

 

     IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.

	 	 	 	 	 

	 	 	Citadel Global Equities Master Fund Ltd.
	 

	 	By:
	 	Citadel Advisors LLC, its Portfolio

Manager
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Erica L. Tarpey
	 

	 	 	 	 
	 

	 	Name:
	 	Erica L. Tarpey
	 

	 	Title:
	 	Authorized Signatory
	 
	 	 	 	 
	 

	 	LMA
	 	SPC, for and on behalf of Map 86
Segregated Portfolio
	 

	 	By:
	 	Citadel Advisors LLC, its
Investment Manager
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Erica L. Tarpey
	 

	 	 	 	 
	 

	 	Name:
	 	Erica L. Tarpey
	 

	 	Title:
	 	Authorized Signatory

Signature Page to Common Stock Purchase Agreement

 

 

Schedule 2.01

PURCHASERS AND COMMITMENT AMOUNTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Gross	 
	 	 	 	 	 	 	Proceeds	 
	Purchaser	 	Common Stock	 	 	to Issuer	 
	Capital World (The Growth Fund of America, Inc.)
	 	 	2,207,506	 	 	$	100,000,021.80	 
	Fidelity
	 	 	1,660,000	 	 	$	75,198,000.00	 
	Fred Alger
	 	 	900,000	 	 	$	40,770,000.00	 
	Canada Pension Plan Investment Board
	 	 	350,000	 	 	$	15,855,000.00	 
	S.A.C. Capital Associates, LLC
	 	 	325,000	 	 	$	14,722,500.00	 
	T. Rowe Price Associates Inc.
	 	 	309,800	 	 	$	14,033,940.00	 
	Baron Asset Fund
	 	 	250,000	 	 	$	11,325,000.00	 
	Trafelet & Company LLC
	 	 	200,000	 	 	$	9,060,000.00	 
	Eton Park Master Fund, Ltd.
	 	 	159,387	 	 	$	7,220,231.10	 
	Citadel Global Equities Master Fund Ltd.
	 	 	139,965	 	 	$	6,340,414.50	 
	Eton Park Fund, L.P.
	 	 	85,824	 	 	$	3,887,827.20	 
	CR Intrinsic Investments, LLC
	 	 	25,000	 	 	$	1,132,500.00	 
	LMA SPC, for and on behalf of Map 86 Segregated
Portfolio
	 	 	10,035	 	 	$	454,585.50	 
	 
	 	 	 	 	 	 
	Total
	 	 	6,622,517	 	 	$	300,000,020.10	 
	 
	 	 	 	 	 	 

Schedule 2.01

 

 

Exhibit A

REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

CONCHO RESOURCES INC.

AND

THE PURCHASERS NAMED HEREIN

Exhibit A

 

 

REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of
[•], 2010 by and among Concho Resources Inc., a Delaware corporation (“Concho”), and the
purchasers named in Schedule A to this Agreement (each such purchaser a “Purchaser” and,
collectively, the “Purchasers”).

     WHEREAS, this Agreement is made in connection with the Closing of the issuance and sale of the
Purchased Common Stock pursuant to the Common Stock Purchase Agreement, dated as of July 19, 2010,
by and among Concho and the Purchasers (the “Purchase Agreement”);

     WHEREAS, Concho has agreed to provide the registration and other rights set forth in this
Agreement for the benefit of the Purchasers pursuant to the Purchase Agreement; and

     WHEREAS, it is a condition to the obligations of each Purchaser and Concho under the Purchase
Agreement that this Agreement be executed and delivered.

     NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged
by each party hereto, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.01 Definitions. Capitalized terms used herein without definition shall have the
meanings given to them in the Purchase Agreement. The terms set forth below are used herein as so
defined:

     “Agreement” has the meaning specified therefor in the introductory paragraph.

     “Concho” has the meaning specified therefor in the introductory paragraph.

     “Effectiveness Period” has the meaning specified therefor in Section 2.01(a)(i) of
this Agreement.

     “File Date” has the meaning specified in Section 2.01(a)(1) of this Agreement.

     “Holder” means the record holder of any Registrable Securities.

     “Liquidated Damages” has the meaning specified therefor in Section 2.01(a)(ii) of this
Agreement.

     “Liquidated Damages Multiplier” means the product of $45.30 times the number of shares
of Common Stock purchased by such Purchaser.

     “Losses” has the meaning specified therefor in Section 2.07(a) of this Agreement.

     “Managing Underwriter” means, with respect to any Underwritten Offering, the
book-running lead manager(s) of such Underwritten Offering.

Exhibit A-1

 

     “Placement Agent” means Merrill, Lynch, Pierce, Fenner & Smith Incorporated.

     “Primary Offering” has the meaning specified therefor in Section 2.03(o) of this
Agreement.

     “Purchase Agreement” has the meaning specified therefor in the Recitals of this
Agreement.

     “Purchaser” and “Purchasers” have the meanings specified therefor in the
introductory paragraph of this Agreement.

     “Registrable Securities” means: (i) the Purchased Common Stock and (ii) any shares of
Common Stock issued as Liquidated Damages pursuant to this Agreement, all of which Registrable
Securities are subject to the rights provided herein until such rights terminate pursuant to the
provisions hereof.

     “Registration Expenses” has the meaning specified therefor in Section 2.06(a) of this
Agreement.

     “Registration Statement” has the meaning specified therefor in Section 2.01(a)(i) of
this Agreement.

     “Selling Expenses” has the meaning specified therefor in Section 2.06(a) of this
Agreement.

     “Selling Holder” means a Holder who is selling Registrable Securities pursuant to a
registration statement.

     “Underwritten Offering” means an offering (including an offering pursuant to a
Registration Statement) in which shares of Common Stock are sold to an underwriter on a firm
commitment basis for reoffering to the public or an offering that is a “bought deal” with one or
more investment banks.

     Section 1.02 Registrable Securities. Any Registrable Security will cease to be a
Registrable Security when: (a) a registration statement covering such Registrable Security has been
declared or deemed effective by the Commission and such Registrable Security has been sold or
disposed of pursuant to such effective registration statement; (b) such Registrable Security has
been disposed of pursuant to any section of Rule 144 (or any similar provision then in force) under
the Securities Act; (c) such Registrable Security can be disposed of pursuant to Rule 144(b) (or
any similar provision then in force) under the Securities Act; (d) such Registrable Security is
held by Concho or one of its Subsidiaries; or (e) such Registrable Security has been sold in a
private transaction in which the transferor’s rights under this Agreement are not assigned to the
transferee of such securities.

Exhibit A-2

 

ARTICLE II

REGISTRATION RIGHTS

     Section 2.01 Registration.

          (a) Registration.

               (i) Deadline To Go Effective. Within 90 days of the Closing (the “File Date”), Concho
shall prepare and file a registration statement under the Securities Act to permit the resale of
the Registrable Securities from time to time, including as permitted by Rule 415 under the
Securities Act (or any similar provision then in force) under the Securities Act with respect to
all of the Registrable Securities (the “Registration Statement”). A Registration Statement
filed pursuant to this Section 2.01 shall be on such appropriate registration form of the
Commission as shall be selected by Concho. Concho will use its commercially reasonable efforts to
cause the Registration Statement filed pursuant to this Section 2.01 to be continuously effective
under the Securities Act until the earlier of (i) the date as of which all such Registrable
Securities are sold by the Purchasers or (ii) the date when such Registrable Securities become
eligible for resale under Rule 144(b) (or any similar provision then in force) under the Securities
Act (the “Effectiveness Period”). The Registration Statement when declared or deemed
effective by the Commission (including the documents incorporated therein by reference) shall
comply as to form with all applicable requirements of the Securities Act and the Exchange Act and
shall not contain an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading.

               (ii) Failure To Go Effective. If the Registration Statement required by Section 2.01 of this
Agreement is not declared effective within 30 days after the File Date, then each Purchaser shall
be entitled to a payment with respect to the Purchased Common Stock of each such Purchaser, as
liquidated damages and not as a penalty, of 0.25% of the Liquidated Damages Multiplier per 30-day
period for the first 30 days following the 30th day after the File Date, increasing by
an additional 0.25% of the Liquidated Damages Multiplier per 30-day period for each subsequent 30
days, up to a maximum of 1.00% of the Liquidated Damages Multiplier per 30-day period (the
“Liquidated Damages”). Initially there shall be no limitation on the aggregate amount of
the Liquidated Damages payable by Concho under this Agreement to each Purchaser; provided, however,
that if there is a change in the Law or accounting principles generally accepted in the United
States that would result in the Purchased Common Stock being treated as debt securities instead of
equity securities for purposes of Concho’s financial statements, then the aggregate amount of the
Liquidated Damages payable by Concho under this Agreement to each Purchaser shall not exceed the
maximum amount of the Liquidated Damages Multiplier with respect to such Purchaser allowed for the
Purchased Common Stock not to be treated as debt securities for purposes of Concho’s financial
statements. The Liquidated Damages payable pursuant to the immediately preceding sentence, accrued
on a daily basis, shall be payable within ten (10) Business Days of the end of each such 30-day
period. Any Liquidated Damages shall be paid to each Purchaser in cash or immediately available
funds; provided, however, if Concho certifies that it is unable to pay Liquidated Damages in cash
or immediately available funds because such payment would result in a breach under any of Concho’s
or Concho’s Subsidiaries’ credit facilities or other indebtedness filed as exhibits to the Concho
SEC Documents, then, to the extent not payable in cash, Concho may pay the Liquidated Damages in

Exhibit A-3

 

kind in the form of the issuance of additional shares of Common Stock. Upon any issuance of
Common Stock as Liquidated Damages, Concho shall promptly prepare and file an amendment to the
Registration Statement prior to its effectiveness adding such Common Stock to such Registration
Statement as additional Registrable Securities. The determination of the amount of Common Stock to
be issued as Liquidated Damages shall be equal to the amount of Liquidated Damages divided by the
volume weighted average closing price of the Common Stock (as reported by The New York Stock
Exchange) for the ten (10) trading days immediately preceding the date on which the Liquidated
Damages payment is due. The payment of Liquidated Damages to a Purchaser shall cease at such time
as the Purchased Common Stock of such Purchaser cease to be Registrable Securities pursuant to
Section 1.02 of this Agreement. As soon as practicable following the date that the Registration
Statement becomes effective, but in any event within two Business Days of such date, Concho shall
provide the Purchasers with written notice of the effectiveness of the Registration Statement.

               (iii) Waiver of Liquidated Damages. Concho may request a waiver of its obligation to pay any
Liquidated Damages, which may be granted or withheld by the consent of the Holders of a majority of
the Purchased Common Stock, taken as a whole, in their sole discretion. A Purchaser’s rights (and
any transferee’s rights pursuant to Section 2.09 of this Agreement) under this Section 2.01 other
than Liquidated Damages owing but not yet paid shall terminate at such time as the Purchased Common
Stock of such Purchaser cease to be Registrable Securities pursuant to Section 1.02 of this
Agreement.

          (b) Delay Rights. Notwithstanding anything to the contrary contained herein, Concho
may, upon written notice to any Selling Holder whose Registrable Securities are included in the
Registration Statement, suspend such Selling Holder’s use of any prospectus which is a part of the
Registration Statement (in which event the Selling Holder shall discontinue sales of the
Registrable Securities pursuant to the Registration Statement, but such Selling Holder may settle
any such sales of Registrable Securities) if (i) Concho is pursuing an acquisition, merger,
reorganization, disposition or other similar transaction and Concho determines in good faith that
Concho’s ability to pursue or consummate such a transaction would be materially adversely affected
by any required disclosure of such transaction in the Registration Statement or (ii) Concho has
experienced some other material non-public event the disclosure of which at such time, in the good
faith judgment of Concho, would materially adversely affect Concho; provided, however, in no event
shall the Purchasers be suspended for a period that exceeds an aggregate of 60 days in any 180-day
period or 120 days in any 365-day period. Upon disclosure of such information or the termination
of the condition described above, Concho shall provide prompt notice to the Selling Holders whose
Registrable Securities are included in the Registration Statement, shall promptly terminate any
suspension of sales it has put into effect and shall take such other actions to permit registered
sales of Registrable Securities as contemplated in this Agreement.

          (c) Additional Rights to Liquidated Damages. During the Effectiveness Period, if (i)
the Holders shall be prohibited from selling their Registrable Securities under the Registration
Statement as a result of a suspension pursuant to Section 2.01(b) of this Agreement in excess of
the periods permitted therein or (ii) the Registration Statement is filed and declared effective
but shall thereafter cease to be effective or fail to be usable for its intended purpose without
being succeeded by a post-effective amendment to the Registration Statement, a

Exhibit A-4

 

supplement to the prospectus or a report filed with the Commission pursuant to Section 13(a),
13(c), 14 or l5(d) of the Exchange Act, then, until the suspension is lifted or a post-effective
amendment, supplement or report is filed with the Commission, but not including any day on which a
suspension is lifted or such amendment, supplement or report is filed and declared effective, if
applicable, Concho shall owe the Holders an amount equal to the Liquidated Damages, following (x)
the date on which the suspension period exceeded the permitted period under 2.01(b) of this
Agreement or (y) the day after the Registration Statement ceased to be effective or failed to be
useable for its intended purposes, as liquidated damages and not as a penalty. For purposes of
this Section 2.01(c), a suspension shall be deemed lifted on the date that notice that the
suspension has been lifted is delivered to the Holders pursuant to Section 3.01 of this Agreement.

     Section 2.02 Underwritten Offering. Any one or more Holders that collectively hold
greater than $100 million of Registrable Securities, based on the purchase price per share of
Common Stock under the Purchase Agreement, may deliver written notice to Concho that such Holders
wish to dispose of an aggregate of at least $100 million of Registrable Securities, based on the
purchase price per share of Common Stock under the Purchase Agreement, in an Underwritten Offering.
Upon receipt of any such written request, Concho shall retain underwriters, effect such sale
though an Underwritten Offering, including entering into an underwriting agreement in customary
form with the Managing Underwriter, which shall include, among other provisions, indemnities to the
effect and to the extent provided in Section 2.07, and take all reasonable and customary actions as
are requested by the Managing Underwriter or Underwriters to expedite or facilitate the disposition
of such Registrable Securities; provided, however, Concho management shall not be required to
participate in any roadshow or similar marketing effort on behalf of any such Holder; provided,
further, that Concho shall not be required to effect more than two (2) Underwritten Offerings
pursuant to this Section 2.02, and the Holders shall be limited to one Underwritten Offering
request in any 365 day period. Additionally, Concho shall notify all Holders of Registrable
Securities of the demand no later than ten (10) days after receipt thereof. Such Holders shall be
permitted to participate in the Underwritten Offering.

     Section 2.03 Sale Procedures. In connection with its obligations under this Article II,
Concho will, as expeditiously as possible:

          (a) prepare and file with the Commission such amendments and supplements to the Registration
Statement and the prospectus used in connection therewith as may be necessary to keep the
Registration Statement effective for the Effectiveness Period and as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition of all securities covered
by the Registration Statement;

          (b) if a prospectus supplement will be used in connection with the marketing of an
Underwritten Offering from the Registration Statement and the Managing Underwriter at any time
shall notify Concho in writing that, in the sole judgment of such Managing Underwriter, inclusion
of detailed information to be used in such prospectus supplement is of material importance to the
success of the Underwritten Offering of such Registrable Securities, use its commercially
reasonable efforts to include such information in such prospectus supplement;

Exhibit A-5

 

          (c) furnish to each Selling Holder (i) as far in advance as reasonably practicable before
filing the Registration Statement or any other registration statement contemplated by this
Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete
drafts of all such documents proposed to be filed (including exhibits to the extent then required
by the rules and regulations of the Commission), and provide each such Selling Holder the
opportunity to object to any information pertaining to such Selling Holder and its plan of
distribution that is contained therein and make the corrections reasonably requested by such
Selling Holder with respect to such information prior to filing the Registration Statement or such
other registration statement or supplement or amendment thereto, and (ii) an electronic copy of the
Registration Statement or such other registration statement and the prospectus included therein and
any supplements and amendments thereto in order to facilitate the public sale or other disposition
of the Registrable Securities covered by such Registration Statement or other registration
statement;

          (d) if applicable, use its commercially reasonable efforts to register or qualify the
Registrable Securities covered by the Registration Statement or any other registration statement
contemplated by this Agreement under the securities or “blue sky” laws of such jurisdictions as the
Selling Holders or, in the case of an Underwritten Offering, the Managing Underwriter, shall
reasonably request; provided, however, that Concho will not be required to qualify generally to
transact business in any jurisdiction where it is not then required to so qualify or to take any
action which would subject it to general service of process in any such jurisdiction where it is
not then so subject;

          (e) promptly notify each Selling Holder and each underwriter of Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered by any of them under the
Securities Act, of (i) the filing of the Registration Statement or any other registration statement
contemplated by this Agreement or any prospectus or prospectus supplement to be used in connection
therewith, or any amendment or supplement thereto, and, with respect to such Registration Statement
or any other registration statement or any post-effective amendment thereto, when the same has
become effective; and (ii) any written comments from the Commission with respect to any filing
referred to in clause (i) and any written request by the Commission for amendments or supplements
to the Registration Statement or any other registration statement or any prospectus or prospectus
supplement thereto;

          (f) immediately notify each Selling Holder and each underwriter of Registrable Securities, at
any time when a prospectus relating thereto is required to be delivered under the Securities Act,
of (i) the happening of any event as a result of which the prospectus or prospectus supplement
contained in the Registration Statement or any other registration statement contemplated by this
Agreement, as then in effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; (ii) the issuance or threat of issuance
by the Commission of any stop order suspending the effectiveness of the Registration Statement or
any other registration statement contemplated by this Agreement, or the initiation of any
proceedings for that purpose; or (iii) the receipt by Concho of any notification with respect to
the suspension of the qualification of any Registrable Securities for sale under the applicable
securities or blue sky laws of any jurisdiction. Following the provision of such notice, Concho
agrees to as promptly as practicable amend or supplement the

Exhibit A-6

 

prospectus or prospectus supplement or take other appropriate action so that the prospectus or
prospectus supplement does not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing and to take such other action as is
necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;

          (g) upon request and subject to appropriate confidentiality obligations, furnish to each
Selling Holder copies of any and all transmittal letters or other correspondence with the
Commission or any other Governmental Authority relating to such offering of Registrable Securities;

          (h) in the case of an Underwritten Offering, furnish upon request, (i) an opinion of counsel
for Concho dated the date of the closing under the underwriting agreement and (ii) “cold comfort”
letters, dated the pricing date of such Underwritten Offering and bring-down letters of like kind
dated the date of the closing under the underwriting agreement, in each case as applicable, signed
by (x) counsel for Concho, (y) the independent public accountants who have certified Concho’s
financial statements and (z) the independent reserve engineers who have reviewed Concho’s reserves,
as applicable; each of the opinion and the “cold comfort” letters shall be in customary form and
covering substantially the same matters with respect to such Underwritten Offering as are
customarily covered in opinions of issuer’s counsel and in accountants’ and reserve engineers’
letters delivered to the underwriters in Underwritten Offerings of securities and such other
matters as such underwriters or Selling Holders may reasonably request;

          (i) otherwise use its commercially reasonable efforts to comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

          (j) make available to the appropriate representatives of the Managing Underwriter and Selling
Holders access to such information and Concho personnel as is reasonable and customary to enable
such parties to establish a due diligence defense under the Securities Act; provided, however, that
Concho need not disclose any such information to any such representative unless and until such
representative has entered into or is otherwise subject to a confidentiality agreement with Concho
satisfactory to Concho (including any confidentiality agreement referenced in Section 8.05 of the
Purchase Agreement);

          (k) cause all such Registrable Securities registered pursuant to this Agreement to be listed
on each securities exchange on which similar securities issued by Concho are then listed;

          (l) use its commercially reasonable efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of Concho to enable the Selling Holders to consummate the
disposition of such Registrable Securities;

Exhibit A-7

 

          (m) provide a transfer agent and registrar for all Registrable Securities covered by such
registration statement not later than the effective date of such registration statement; and

          (n) enter into customary agreements and take such other actions as are reasonably requested by
the Selling Holders or the underwriters, if any, in order to expedite or facilitate the disposition
of such Registrable Securities.

          (o) Concho agrees that, if any Purchaser could reasonably be deemed to be an “underwriter,” as
defined in Section 2(a)(11) of the Securities Act, in connection with any Registration Statement
covered by Section 2.01, and any amendment or supplement thereof (any such registration statement
or amendment or supplement a “Primary Offering”), then Concho will cooperate with such
Purchaser in allowing such Purchaser to conduct customary “underwriter’s due diligence” with
respect to Concho and satisfy its obligations in respect thereof. In addition, at any Purchaser’s
request, Concho will furnish to such Purchaser, on the date of the effectiveness of any Primary
Offering and thereafter from time to time on such dates as such Purchaser may reasonably request,
(i) a letter, dated such date, from Concho’s independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to underwriters in an
underwritten public offering, addressed to such Purchaser, (ii) a letter, dated such date, from
Concho’s independent reserve engineers in form and substance as is customarily given by independent
reserve engineers in an underwritten public offering, addressed to such Purchaser, and (iii) an
opinion, dated as of such date, of counsel representing Concho for purposes of such Primary
Offering, in form, scope and substance as is customarily given in an underwritten public offering,
including a standard “10b-5” opinion for such offering, addressed to such Purchaser. Concho will
also permit legal counsel to such Purchaser to review and comment upon any such Primary Offering at
least five Business Days prior to its filing with the Commission and all amendments and supplements
to any such Primary Offering within a reasonable number of days prior to their filing with the
Commission and not file any Primary Offering or amendment or supplement thereto in a form to which
such Purchaser’s legal counsel reasonably objects in writing.

     Each Selling Holder, upon receipt of notice from Concho of the happening of any event of the
kind described in Section 2.03(e) of this Agreement, shall forthwith discontinue disposition of the
Registrable Securities until such Selling Holder’s receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2.03(e) of this Agreement or until it is advised in
writing by Concho that the use of the prospectus may be resumed, and has received copies of any
additional or supplemental filings incorporated by reference in the prospectus, and, if so directed
by Concho, such Selling Holder will, or will request the managing underwriter or underwriters, if
any, to deliver to Concho (at Concho’s expense) all copies in their possession or control, other
than permanent file copies then in such Selling Holder’s possession, of the prospectus covering
such Registrable Securities current at the time of receipt of such notice.

     If requested by a Purchaser, Concho shall: (i) as soon as practicable incorporate in a
prospectus supplement or post-effective amendment such information as such Purchaser reasonably
requests to be included therein relating to the sale and distribution of Registrable Securities,
including information with respect to the number of Registrable Securities being offered or sold,
the purchase price being paid therefor and any other terms of the offering of the

Exhibit A-8

 

Registrable Securities to be sold in such offering; (ii) as soon as practicable make all
required filings of such prospectus supplement or post-effective amendment after being notified of
the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii)
as soon as practicable, supplement or make amendments to any Registration Statement.

     Section 2.04 Cooperation by Holders. Concho shall have no obligation to include in the
Registration Statement Common Stock of a Holder who has failed to timely furnish such information
that, in the opinion of counsel to Concho, is reasonably required for the registration statement or
prospectus supplement, as applicable, to comply with the Securities Act.

     Section 2.05 Restrictions on Public Sale by Holders of Registrable Securities. For a
period of 365 days from the Closing Date, each Holder of Registrable Securities who is included in
the Registration Statement agrees not to effect any public sale or distribution of the Registrable
Securities during the 30-day period following completion of an Underwritten Offering of equity
securities by Concho; provided, however, that the duration of the foregoing restrictions shall be
no longer than the duration of the shortest restriction generally imposed by the underwriters on
the officers or directors or any other Common Stockholder of Concho on whom a restriction is
imposed in connection with such public offering. In addition, the provisions of this Section 2.05
shall not apply with respect to a Holder that owns less than $10 million of Purchased Common Stock,
based on the Commitment Amounts.

     Section 2.06 Expenses.

          (a) Certain Definitions. “Registration Expenses” means all expenses incident
to Concho’s performance under or compliance with this Agreement to effect the registration of
Registrable Securities on the Registration Statement pursuant to Section 2.01 hereof or an
Underwritten Offering covered under this Agreement, and the disposition of such securities,
including, without limitation, all registration, filing, securities exchange listing and The New
York Stock Exchange fees, all registration, filing, qualification and other fees and expenses of
complying with securities or blue sky laws, fees of the Financial Industry Regulatory Authority,
Inc. and fees of transfer agents and registrars, all word processing, duplicating and printing
expenses and the fees and disbursements of counsel and independent public accountants for Concho,
including the expenses of any special audits or “cold comfort” letters required by or incident to
such performance and compliance. “Selling Expenses” means all underwriting fees, discounts
and selling commissions allocable to the sale of the Registrable Securities.

          (b) Expenses. Concho will pay all reasonable Registration Expenses as determined in
good faith, including, in the case of an Underwritten Offering, whether or not any sale is made
pursuant to such Underwritten Offering. In addition, except as otherwise provided in Section 2.08
hereof, Concho shall not be responsible for legal fees incurred by Holders in connection with the
exercise of such Holders’ rights hereunder. Each Selling Holder shall pay all Selling Expenses in
connection with any sale of its Registrable Securities hereunder.

     Section 2.07 Indemnification.

          (a) By Concho. In the event of an offering of any Registrable Securities under the
Securities Act pursuant to this Agreement, Concho will indemnify and hold harmless each

Exhibit A-9

 

Selling Holder thereunder, its officers, members, managers, directors, employees, agents and
other representatives, and each underwriter, pursuant to the applicable underwriting agreement with
such underwriter, of Registrable Securities thereunder and each Person, if any, who controls such
Selling Holder or underwriter within the meaning of the Securities Act and the Exchange Act, and
its officers, members, managers, directors, employees, agents and other representatives, against
any losses, claims, damages, expenses or liabilities (including reasonable attorneys’ fees and
expenses) (collectively, “Losses”), joint or several, to which such Selling Holder,
officer, member, manager, director, employee, agent, other representative, underwriter or
controlling Person may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any other registration statement
contemplated by this Agreement, any preliminary prospectus, free writing prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading, and will reimburse each such Selling
Holder, its directors and officers, each such underwriter and each such controlling Person for any
legal or other expenses reasonably incurred by them in connection with investigating or defending
any such Loss or actions or proceedings; provided, however, that Concho will not be liable in any
such case if and to the extent that any such Loss arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in strict conformity
with information furnished by such Selling Holder, its directors or officers or any underwriter or
controlling Person in writing specifically for use in the Registration Statement or such other
registration statement, or prospectus supplement, as applicable. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of such Selling Holder
or any such Selling Holder, its directors or officers or any underwriter or controlling Person, and
shall survive the transfer of such securities by such Selling Holder.

          (b) By Each Selling Holder. Each Selling Holder agrees severally and not jointly to
indemnify and hold harmless Concho, its directors and officers, and each Person, if any, who
controls Concho within the meaning of the Securities Act or of the Exchange Act, and its directors
and officers, to the same extent as the foregoing indemnity from Concho to the Selling Holders, but
only with respect to information regarding such Selling Holder furnished in writing by or on behalf
of such Selling Holder expressly for inclusion in the Registration Statement or any preliminary
prospectus or final prospectus included therein, or any amendment or supplement thereto; provided,
however, that the liability of each Selling Holder shall not be greater in amount than the dollar
amount of the net proceeds received by such Selling Holder from the sale of the Registrable
Securities giving rise to such indemnification.

          (c) Notice. Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party hereunder, notify the indemnifying party in writing thereof,
but the omission so to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party other than under this Section 2.07. In any action brought
against any indemnified party, it shall notify the indemnifying party of the commencement thereof.
The indemnifying party shall be entitled to participate in and, to the

Exhibit A-10

 

extent it shall wish, to assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 2.07 for any legal expenses
subsequently incurred by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation and of liaison with counsel so selected; provided, however, that,
(i) if the indemnifying party has failed to assume the defense or employ counsel reasonably
acceptable to the indemnified party or (ii) if the defendants in any such action include both the
indemnified party and the indemnifying party and counsel to the indemnified party shall have
concluded that there may be reasonable defenses available to the indemnified party that are
different from or additional to those available to the indemnifying party, or if the interests of
the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying
party, then the indemnified party shall have the right to select a separate counsel and to assume
such legal defense and otherwise to participate in the defense of such action, with the reasonable
expenses and fees of such separate counsel and other reasonable expenses related to such
participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any other
provision of this Agreement, the indemnifying party shall not settle any indemnified claim without
the consent of the indemnified party, unless the settlement thereof imposes no liability or
obligation on, and includes a complete and unconditional release from all liability of, the
indemnified party.

          (d) Contribution. If the indemnification provided for in this Section 2.07 is held by
a court or government agency of competent jurisdiction to be unavailable to any indemnified party
or is insufficient to hold them harmless in respect of any Losses, then each such indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such Loss in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of such indemnified party
on the other in connection with the statements or omissions which resulted in such Losses, as well
as any other relevant equitable considerations; provided, however, that in no event shall such
Selling Holder be required to contribute an aggregate amount in excess of the dollar amount of net
proceeds received by such Selling Holder from the sale of Registrable Securities giving rise to
such indemnification. The relative fault of the indemnifying party on the one hand and the
indemnified party 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 has been made by, or relates to, information supplied by such party, and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just and equitable if
contributions pursuant to this paragraph were to be determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable considerations referred to
herein. The amount paid by an indemnified party as a result of the Losses referred to in the first
sentence of this paragraph shall be deemed to include any legal and other expenses reasonably
incurred by such indemnified party in connection with investigating or defending any Loss which is
the subject of this paragraph. 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 is not guilty of such fraudulent misrepresentation.

Exhibit A-11

 

          (e) Other Indemnification. The provisions of this Section 2.07 shall be in addition
to any other rights to indemnification or contribution which an indemnified party may have pursuant
to law, equity, contract or otherwise.

     Section 2.08 Rule 144 Reporting. With a view to making available the benefits of certain
rules and regulations of the Commission that may permit the sale of the Registrable Securities to
the public without registration, Concho agrees to use its commercially reasonable efforts to:

          (a) make and keep public information regarding Concho available, as those terms are understood
and defined in Rule 144 under the Securities Act, at all times from and after the date hereof;

          (b) file with the Commission in a timely manner all reports and other documents required of
Concho under the Securities Act and the Exchange Act at all times from and after the date hereof;
and

          (c) so long as a Holder owns any Registrable Securities, furnish, unless otherwise available
at no charge by access electronically to the Commission’s EDGAR filing system, to such Holder
forthwith upon request a copy of the most recent annual or quarterly report of Concho, and such
other reports and documents so filed as such Holder may reasonably request in availing itself of
any rule or regulation of the Commission allowing such Holder to sell any such securities without
registration.

     Section 2.09 Transfer or Assignment of Registration Rights. The rights to cause Concho to
register Registrable Securities granted to the Purchasers by Concho under this Article II may be
transferred or assigned by any Purchaser to one or more transferee(s) or assignee(s) of such
Registrable Securities; provided, however, that, (a) unless such transferee is an Affiliate of such
Purchaser, each such transferee or assignee holds Registrable Securities representing at least $20
million of the Purchased Common Stock, based on the Commitment Amounts, (b) Concho is given written
notice prior to any said transfer or assignment, stating the name and address of each such
transferee and identifying the securities with respect to which such registration rights are being
transferred or assigned, and (c) each such transferee assumes in writing responsibility for its
portion of the obligations of such Purchaser under this Agreement.

     Section 2.10 Limitation on Subsequent Registration Rights. From and after the date hereof,
Concho shall not, without the prior written consent of the Holders of a majority of the outstanding
Registrable Securities, grant registration rights to any other Person that would be superior to the
Purchasers’ registration rights under Section 2.01 of this Agreement.

ARTICLE III

MISCELLANEOUS

     Section 3.01 Communications. All notices and other communications provided for or
permitted hereunder shall be made in writing by facsimile, electronic mail, courier service or
personal delivery:

Exhibit A-12

 

          (a) if to Purchaser, to the address set forth under that Purchaser’s signature block in
accordance with the provisions of this Section 3.01;

          (b) if to a transferee of Purchaser, to such Holder at the address provided pursuant to
Section 2.10 hereof; and

          (c) if to Concho, at 550 West Texas Avenue, Suite 100, Midland, Texas 79701 (facsimile:
432.683.8012), notice of which is given in accordance with the provisions of this Section 3.01.

     All such notices and communications shall be deemed to have been received: at the time
delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or
electronic mail; and when actually received, if sent by courier service or any other means.

     Section 3.02 Successor and Assigns This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties, including subsequent Holders of
Registrable Securities to the extent permitted herein.

     Section 3.03 Recapitalization, Exchanges, Etc. Affecting the Common Stock The provisions
of this Agreement shall apply to the full extent set forth herein with respect to any and all stock
of Concho or any successor or assign of Concho (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for or in substitution of, the
Registrable Securities, and shall be appropriately adjusted for combinations, stock splits,
recapitalizations and the like occurring after the date of this Agreement.

     Section 3.04 Specific Performance. Damages in the event of breach of this Agreement by a
party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that
each such Person, in addition to and without limiting any other remedy or right it may have, will
have the right to an injunction or other equitable relief in any court of competent jurisdiction,
enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of
the parties hereto hereby waives any and all defenses it may have on the ground of lack of
jurisdiction or competence of the court to grant such an injunction or other equitable relief. The
existence of this right will not preclude any such Person from pursuing any other rights and
remedies at law or in equity which such Person may have.

     Section 3.05 Counterparts. This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which counterparts, taken
together, shall constitute the same Agreement.

     Section 3.06 Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

     Section 3.07 Governing Law. The Laws of the State of Delaware shall govern this Agreement
without regard to principles of conflict of Laws.

     Section 3.08 Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the

Exhibit A-13

 

extent of such prohibition or unenforceability without invalidating the remaining provisions hereof
or affecting or impairing the validity or enforceability of such provision in any other
jurisdiction.

     Section 3.09 Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the rights granted by Concho set forth herein. This
Agreement, the Purchase Agreement and the confidentiality agreements entered into between Concho or
the Placement Agent and the Purchasers pertaining to the sale of the Purchased Common Stock
supersede all prior agreements and understandings between the parties with respect to such subject
matter.

     Section 3.10 Amendment. This Agreement may be amended only by means of a written amendment
signed by Concho and the Holders of a majority of the then-outstanding Registrable Securities;
provided, however, that no such amendment shall materially and adversely affect the rights of any
Holder hereunder without the consent of such Holder.

     Section 3.11 No Presumption. If any claim is made by a party relating to any conflict,
omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be
implied by virtue of the fact that this Agreement was prepared by or at the request of a particular
party or its counsel.

     Section 3.12 Obligations Limited to Parties to Agreement. Each of the Parties hereto
covenants, agrees and acknowledges that no Person other than the Purchasers (and their permitted
assignees) and Concho shall have any obligation hereunder and that, notwithstanding that one or
more of the Purchasers may be a corporation, partnership or limited liability company, no recourse
under this Agreement or the Purchase Agreement or under any documents or instruments delivered in
connection herewith or therewith shall be had against any former, current or future director,
officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of
any of the Purchasers or any former, current or future director, officer, employee, agent, general
or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, whether by
the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any
applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever
shall attach to, be imposed on or otherwise be incurred by any former, current or future director,
officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of
any of the Purchasers or any former, current or future director, officer, employee, agent, general
or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, as such, for
any obligations of the Purchasers under this Agreement or the Purchase Agreement or any documents
or instruments delivered in connection herewith or therewith or for any claim based on, in respect
of or by reason of such obligation or its creation.

[The remainder of this page is intentionally left blank]

Exhibit A-14

 

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

	 	 	 	 	 
	 	CONCHO RESOURCES INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[PURCHASERS]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[Signature Page to Registration Rights Agreement]

Exhibit A-15

 

Exhibit B

     Capitalized terms used but not defined herein have the meaning assigned to such terms in the
Common Stock Purchase Agreement dated as of July 19, 2010 (the “Purchase Agreement”).
Concho shall cause Vinson & Elkins L.L.P., counsel for Concho, to furnish to the Purchasers at the
Closing an opinion letter addressed to the Purchasers and dated the Closing Date opining as to the
following matters:

     (i) Concho: (A) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, has requisite power and authority
to carry on its business as now conducted and to own and lease its properties and
other assets as now owned or leased, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its properties and carry on
its business as its business is now being conducted as described in the Concho SEC
Documents, except where the failure to obtain such licenses, authorizations,
consents and approvals would not reasonably be expected to have a Concho Material
Adverse Effect; and (B) is duly qualified to do business in the jurisdictions listed
in Annex A hereto, except where failure so to qualify would not reasonably
be expected to have a Concho Material Adverse Effect.

     (ii) To our knowledge, except as described in the Concho SEC Documents filed
prior to the date hereof, for options granted pursuant to Concho’s existing 2006
Stock Incentive Plan or as contemplated by the Purchase Agreement, there are no
outstanding or authorized (A) options, warrants, preemptive rights, subscriptions,
calls or other rights, convertible securities, agreements, claims or commitments of
any character obligating Concho or any of its Subsidiaries to issue, transfer or
sell any equity interests in Concho or any of its Subsidiaries or securities
convertible into or exchangeable for such equity interests, (B) obligations of
Concho or any of its Subsidiaries to repurchase, redeem or otherwise acquire any
equity interests in Concho or any of its Subsidiaries or any such securities or
agreements listed in clause (A) of this sentence or (C) voting trusts or similar
agreements to which Concho or any of its Subsidiaries is a party with respect to the
voting of the equity interests of Concho or any of its Subsidiaries.

     (iii) The Purchased Common Stock has been duly authorized by Concho pursuant to
the Organizational Documents and, when issued and delivered to the Purchasers
against payment therefor in accordance with the terms of the Purchase Agreement,
will be validly issued, fully paid and non-assessable.

     (iv) None of the offering, issuance and sale by Concho of the Purchased Common
Stock or the execution, delivery and performance of the Basic Documents by Concho
(A) constitutes or will constitute a violation of the Organizational Documents, (B)
without duplication of clause (A), constitutes or will constitute a breach or
violation of, or a default under (or an event which, with notice or lapse of time or
both, would constitute such an event) any agreement

Exhibit B

 

 

filed as an exhibit to the Concho SEC Documents, or (C) results or will result
in any violation of the DGCL or U.S. federal Law, which in the case of clause (B) or
(C) of this paragraph (iv) would be reasonably expected to have a Concho Material
Adverse Effect; provided, however, that no opinion is expressed pursuant to this
paragraph (iv) with respect to federal or state securities or anti-fraud statutes,
rules or regulations.

     (v) Each of the Basic Documents to which Concho is a party has been duly
authorized and validly executed and delivered on behalf of Concho, and, assuming due
authorization, valid execution and delivery by the other parties to each of the
Basic Documents, is enforceable against Concho in accordance with its respective
terms, except as such enforceability may be limited by (A) applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar Laws from
time to time in effect affecting creditors’ rights and remedies generally and by
general principles of equity (regardless of whether such principles are considered
in a proceeding in equity or at law) and (B) public policy, applicable Law relating
to fiduciary duties and indemnification and an implied covenant of good faith and
fair dealing.

     (vi) Except for the approvals required by the Commission in connection with
Concho’s obligations under the Registration Rights Agreement (including the
registration statement referenced therein), no authorization, consent, approval,
waiver, license, qualification or written exemption from, nor any filing,
declaration, qualification or registration with, any Governmental Authority is
required in connection with the execution, delivery or performance by Concho of any
of the Basic Documents to which it is a party, except those that have been obtained
or may be required under the state securities or “blue sky” laws, as to which we do
not express any opinion.

     (vii) Concho is not an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

     (viii) Assuming the accuracy of the representations and warranties of each
Purchaser contained in the Purchase Agreement, the issuance and sale of the
Purchased Common Stock pursuant to the Purchase Agreement are exempt from the
registration requirements of the Securities Act of 1933, as amended.

     Concho shall furnish to the Purchasers at the Closing an opinion letter of C. William Giraud,
General Counsel of Concho, addressed to the Purchasers and dated the Closing Date opining as to the
following matters:

     (i) None of the offering, issuance and sale by Concho of the Purchased Common
Stock or the execution, delivery and performance of the Basic Documents by Concho
(A) constitutes or will constitute a violation of any organizational documents of
any of Concho’s Subsidiaries or (B) will result in a breach or violation (and, to
such counsel’s knowledge, no event has occurred that, with notice or lapse of time
or otherwise, would constitute such an event) or

Exhibit B-2

 

imposition of any lien, charge or encumbrance upon any Property of Concho or
its Subsidiaries pursuant to (i) any agreement, lease or other instrument known to
such counsel (excluding any agreement filed as an exhibit to the Concho SEC
Documents) or (ii) to the knowledge of such counsel, any order, judgment, decree or
injunction of any federal, Delaware or Texas court or government agency or body
directed to any of Concho or its Subsidiaries or any of its respective Properties in
a proceeding to which any of them or such Property is a party, which breaches,
violations or liens would reasonably be expected to have a Concho Material Adverse
Effect; provided, however, that no opinion is expressed pursuant hereto with respect
to federal or state securities Laws or other anti-fraud Laws.

     (ii) All of the issued and outstanding equity interests of each of Concho’s
Subsidiaries are owned, directly or indirectly, by Concho free and clear of any
Liens (A) in respect of which a financing statement under the Uniform Commercial
Code naming Concho or any of its Subsidiaries as debtors is on file in the office of
the Secretary of State of the State of Delaware or Texas, (B) otherwise known to
such counsel without independent investigation, other than those created under
applicable Law and (C) except for such Liens as may be imposed under Concho’s or its
Subsidiaries’ credit facilities; and all such ownership interests have been duly
authorized and validly issued and are fully paid (to the extent required by the
organizational documents of Concho’s Subsidiaries, as applicable) and non-assessable
(except as non-assessability may be affected by the organizational documents of
Concho’s Subsidiaries) and free of preemptive rights, and, to our knowledge, except
as disclosed in the Concho SEC Documents, neither Concho nor any of its Subsidiaries
owns any shares of capital stock or other securities of, or interests in, any other
Person or is obligated to make any capital contribution to or other investment in
any other Person.

Exhibit B-3

 

Exhibit C

CONCHO RESOURCES INC.

Officer’s Certificate

     Pursuant to Section 6.02(b) of the Common Stock Purchase Agreement, dated as of July 19, 2010
(the “Purchase Agreement”) by and among Concho Resources Inc., a Delaware corporation (the
“Company”), and each of the Purchasers named in Schedule 2.01 to the Purchase
Agreement relating to the issuance and sale by the Company to the Purchasers of an aggregate of
6,622,517 shares of Common Stock, the undersigned hereby certifies on behalf of the Company as
follows:

     (A) The Company has performed and complied in all material respects with the covenants and
agreements contained in the Purchase Agreement that are required to be performed and complied with
by the Company on or prior to the date hereof.

     (B) The representations and warranties of the Company contained in the Purchase Agreement that
are qualified by materiality or Concho Material Adverse Effect (as defined in the Purchase
Agreement) are true and correct in all respects as written as of the date of the Purchase Agreement
and as of the date hereof, and all other representations and warranties are true and correct in all
material respects as of the date of the Purchase Agreement and as of the date hereof, except that
representations and warranties made as of a specific date are true and correct in all material
respects as of such date only.

     (C) Since the date of the Purchase Agreement, no Concho Material Adverse Effect has occurred
and is continuing.

     Dated: [•], 2010

	 	 	 	 	 

	 	 	CONCHO RESOURCES INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:
	 	Darin G. Holderness
	 

	 	Title:
	 	Vice President, Chief Financial Officer and Treasurer

Exhibit C

 

 

Exhibit D

PURCHASERS’

Officer’s Certificate

     Pursuant to Section 6.03(c) of the Common Stock Purchase Agreement, dated as of July 19, 2010
(the “Purchase Agreement”), by and among Concho Resources Inc., a Delaware corporation (the
“Company”), and each of the Purchasers named in Schedule 2.01 to the Purchase
Agreement relating to the issuance and sale by the Company to the Purchasers of an aggregate of
6,622,517 shares of Common Stock, each of the undersigned hereby certifies solely on behalf of
itself as follows:

     (A) Such Purchaser has performed and complied in all material respects with the covenants and
agreements contained in the Purchase Agreement that are required to be performed and complied with
by such Purchaser on or prior to the date hereof.

     (B) The representations and warranties of such Purchaser contained in the Purchase Agreement
that are qualified by materiality or Purchaser Material Adverse Effect (as defined in the Purchase
Agreement) are true and correct in all respects as written as of the date of the Purchase Agreement
and as of the date hereof, and all other representations and warranties are true and correct in all
material respects as of the date of the Purchase Agreement and as of the date hereof, except that
representations and warranties made as of a specific date are true and correct in all material
respects as of such date only.

     (C) Since the date of the Purchase Agreement, no Purchaser Material Adverse Effect has
occurred and is continuing.

     Dated: [•], 2010

	 	 	 	 	 
	 	[PURCHASER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Exhibit D

 

 

Exhibit E

CONCHO RESOURCES INC.

SECRETARY’S CERTIFICATE

[•], 2010

     Reference is made to that certain Common Stock Purchase Agreement, dated as of July 19, 2010,
by and among Concho Resources Inc., a Delaware corporation (the “Company”) and the
Purchasers party thereto (the “Purchase Agreement”). Terms that are defined in the
Purchase Agreement and that are used but not defined herein have the respective meanings given to
them in the Purchase Agreement. I, C. William Giraud, hereby certify that I am the duly elected,
qualified and acting Vice President, General Counsel and Secretary of the Company; and that as such
I am familiar with the facts herein certified and am authorized to certify the same and do further
certify, in such capacity, that:

     1. Attached hereto as Exhibit 1 is a true, correct and complete copy of the Amended
and Restated Certificate of Incorporation of the Company (including all amendments, if any,
thereto), certified by the Secretary of State of the State of Delaware, as in effect on August
January 26, 2010 and at all times thereafter to and including the date hereof (the “Certification
of Incorporation”). No other amendments to such Certificate of Incorporation have been authorized
by the members or Board of Directors of the Company and such Certificate of Incorporation is in
full force and effect as of the date hereof.

     2. No proceedings have been instituted or are pending, or, to the best of my knowledge, are
contemplated, for the dissolution or liquidation of the Company or that would threaten its
corporate existence or forfeit its limited corporate rights or franchises.

     3. Attached hereto as Exhibit 2 is a true, correct and complete copy of resolutions
duly and validly adopted by the Board of Directors of the Company at a meeting on July [•], 2010, a
copy of which has been duly filed with the minutes of the proceedings of such Board of Directors.
Such resolutions have not been modified, amended, rescinded or revoked, and the same are in full
force and effect on the date hereof and are within the power of the Board of Directors to pass as
provided in the Certification of Incorporation.

     4. The following persons are duly elected or appointed and acting officers of the Company,
holding the respective offices set forth opposite their names below, and the signatures set forth
opposite their names below are their true and genuine signatures:

Exhibit E-1

 

	 	 	 	 	 
	Name	 	Office	 	Specimen Signature
	Timothy A. Leach

	 	Chairman and Chief
Executive Officer	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	C. William Giraud

	 	Vice President, General
Counsel and Corporate
Secretary	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Darin G. Holderness

	 	Vice President, Chief
Financial Officer and
Treasurer	 	 
	 

	 	 	 	 

     5. Each of the foregoing officers and the undersigned is authorized pursuant to the
resolutions attached hereto, as officers of the Company, to execute and deliver, for and on behalf
of the Company, the Purchase Agreement, the Registration Rights Agreement and all certificates,
notices, communications and other documents required or permitted to be given by or on behalf of
the Company in connection with the transactions contemplated thereby.

     6. This certificate and the specimen signatures contained herein may be executed in one or
more counterparts, none of which need contain the signatures of all persons, each of which shall be
deemed an original, and all of which together shall constitute one and the same instrument.

Exhibit E-2

 

     IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first set
forth above.

	 	 	 	 	 
	 	CONCHO RESOURCES INC.

 	 
	 	By:  	 	 
	 	 	C. William Giraud 	 
	 	 	Vice President, General Counsel and Secretary 	 
	 

     I, Darin G. Holderness, Vice President, Chief Financial Officer and Treasurer of the Company,
hereby certify that the signature of C. William Giraud set forth above is a true, correct and
genuine signature of such person, and that such person is the duly elected or appointed, qualified
and acting Vice President, General Counsel and Secretary of the Company.

	 	 	 	 	 
	 	
Darin G. Holderness

Vice President, Chief Financial Officer and Treasurer

 	 
	 	 	 
	 	 	 
	 	 	 
	 

[Signature Page to Concho Resources Inc. Secretary’s Certificate]

Exhibit E-3

 

EXHIBIT 1

CERTIFICATE OF INCORPORATION

Exhibit E-4

 

EXHIBIT 2

RESOLUTIONS

Exhibit E-5

 

Exhibit F

CONCHO RESOURCES INC.

Cross Receipt

     Concho Resources Inc. (“Concho”) hereby acknowledges receipt from the Purchasers (as
defined in the Purchase Agreement) of a wire transfer to Concho’s account (Account No. [•]) with
[•] (Routing No. [•]) in the amount of $[•] as full payment for the [•] shares of Concho’s Common
Stock purchased by the Purchasers pursuant to that certain Common Stock Purchase Agreement, dated
July 19, 2010, by and among Concho and the Purchasers.

	 	 	 	 	 

	Dated: [•], 2010	 	Concho Resources Inc.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:
	 	Darin G. Holderness
	 

	 	Title:
	 	Vice President, Chief Financial Officer and Treasurer

Exhibit F

 

 

[PURCHASER]

CROSS RECEIPT

     [•], pursuant to that certain Common Stock Purchase Agreement, dated July 19, 2010 (the
“Purchase Agreement”), by and among Concho Resources Inc. (“Concho”) and the
purchasers named therein, hereby acknowledges receipt of [•] shares of Concho’s Common Stock
purchased by it pursuant to the Purchase Agreement.

Dated: [•], 2010

[PURCHASER]

By:                                                             

Name:

Title:

Exhibit F-2

 

 

Exhibit G

MARBOB ACQUISITION AGREEMENT

Exhibit GExhibit 10.1

Exhibit 10.1

RegeneRx Biopharmaceuticals, Inc.

2010 Equity Incentive Plan

Adopted by the Board of Directors Effective as of & 

Approved by the Stockholders: July 14, 2010

Termination Date: July 13, 2020

1. General.

(a) Eligible Award Recipients. The persons eligible to receive Awards are Employees,
Directors and Consultants.

(b) Available Awards. The Plan provides for the grant of the following Awards: (i) Incentive
Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights, (iv) Restricted
Stock Awards, (v) Restricted Stock Unit Awards, (vi) Performance Stock Awards, (vii) Performance
Cash Awards, and (viii) Other Stock Awards.

(c) Purpose. The Company, by means of the Plan, seeks to secure and retain the services of
the group of persons eligible to receive Awards as set forth in Section 1(a), to provide incentives
for such persons to exert maximum efforts for the success of the Company and any Affiliate and to
provide a means by which such eligible recipients may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of Awards.

2. Administration.

(a) Administration by Board. The Board shall administer the Plan unless and until the Board
delegates administration of the Plan to a Committee or Committees, as provided in Section 2(c).

(b) Powers of Board. The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:

(i) To determine from time to time (A) which of the persons eligible under the Plan shall be
granted Awards; (B) when and how each Award shall be granted; (C) what type or combination of types
of Award shall be granted; (D) the provisions of each Award granted (which need not be identical),
including the time or times when a person shall be permitted to receive cash or Common Stock
pursuant to a Stock Award; (E) the number of shares of Common Stock with respect to which a Stock
Award shall be granted to each such person; and (F) the Fair Market Value applicable to a Stock
Award.

(ii) To construe and interpret the Plan and Awards granted under it, and to establish, amend
and revoke rules and regulations for its administration. The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement or in
the written terms of a Performance Cash Award, in a manner and to the extent it shall deem
necessary or expedient to make the Plan or Award fully effective.

 

 

 

(iii) To settle all controversies regarding the Plan and Awards granted under it.

(iv) To accelerate the time at which an Award may first be exercised or the time during which
an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions
in the Award stating the time at which it may first be exercised or the time during which it will
vest.

(v) To suspend or terminate the Plan at any time. Suspension or termination of the Plan shall
not impair rights and obligations under any Award granted while the Plan is in effect except with
the written consent of the affected Participant.

(vi) To amend the Plan in any respect the Board deems necessary or advisable. However, except
as provided in Section 9(a) relating to Capitalization Adjustments, to the extent required by
applicable law or listing requirements, stockholder approval shall be required for any amendment of
the Plan that either (A) materially increases the number of shares of Common Stock available for
issuance under the Plan, (B) materially expands the class of individuals eligible to receive Awards
under the Plan, (C) materially increases the benefits accruing to Participants under the Plan or
materially reduces the price at which shares of Common Stock may be issued or purchased under the
Plan, (D) materially extends the term of the Plan, or (E) expands the types of Awards available for
issuance under the Plan. Except as provided above, rights under any Award granted before amendment
of the Plan shall not be impaired by any amendment of the Plan unless (1) the Company requests the
consent of the affected Participant, and (2) such Participant consents in writing.

(vii) To submit any amendment to the Plan for stockholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of (A) Section 162(m) of the Code
regarding the exclusion of performance-based compensation from the limit on corporate deductibility
of compensation paid to Covered Employees, (B) Section 422 of the Code regarding incentive stock
options or (C) Rule 16b-3.

(viii) To approve forms of Award Agreements for use under the Plan and to amend the terms of
any one or more Awards, including, but not limited to, amendments to provide terms more favorable
to the Participant than previously provided in the Award Agreement, subject to any specified limits
in the Plan that are not subject to Board discretion; provided however, that except with respect to
amendments that disqualify or impair the status of an Incentive Stock Option, a Participant’s
rights under any Award shall not be impaired by any such amendment unless (A) the Company requests
the consent of the affected Participant, and (B) such Participant consents in writing.
Notwithstanding the foregoing, subject to the limitations of applicable law, if any, the Board may
amend the terms of any one or more Awards without the affected Participant’s consent if necessary
to maintain the qualified status of the Award as an Incentive Stock Option or to bring the Award
into compliance with Section 409A of the Code.

(ix) Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company and that are not in conflict with the
provisions of the Plan or Awards.

(x) To adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees, Directors or Consultants who are foreign nationals or
employed outside the United States.

 

2

 

(c) Delegation to Committee.

(i) General. The Board may delegate some or all of the administration of the Plan to a
Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers theretofore possessed by
the Board that have been delegated to the Committee, including the power to delegate to a
subcommittee of the Committee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the
Plan, as may be adopted from time to time by the Board. The Committee may, at any time, abolish
the subcommittee and/or revest in the Committee any powers delegated to the subcommittee. The
Board may retain the authority to concurrently administer the Plan with the Committee and may, at
any time, revest in the Board some or all of the powers previously delegated.

(ii) Section 162(m) and Rule 16b-3 Compliance. The Committee may consist solely of two or
more Outside Directors, in accordance with Section 162(m) of the Code, and solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3.

(d) Delegation to an Officer. The Board may delegate to one (1) or more Officers the
authority to do one or both of the following (i) designate Employees who are providing Continuous
Service to the Company or any of its Subsidiaries who are not Officers to be recipients of Options
and Stock Appreciation Rights (and, to the extent permitted by applicable law, other Stock Awards)
and the terms thereof, and (ii) determine the number of shares of Common Stock to be subject to
such Stock Awards granted to such Employees; provided, however, that the Board resolutions
regarding such delegation shall specify the total number of shares of Common Stock that may be
subject to the Stock Awards granted by such Officer and that such Officer may not grant a Stock
Award to himself or herself. Notwithstanding the foregoing, the Board may not delegate authority
to an Officer to determine the Fair Market Value pursuant to Section 13(w)(iii) below.

(e) Effect of Board’s Decision. All determinations, interpretations and constructions made by
the Board in good faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.

(f) Cancellation and Re-Grant of Stock Awards. Neither the Board nor any Committee shall have
the authority to: (i) reduce the exercise price of any outstanding Options or Stock Appreciation
Rights under the Plan, or (ii) cancel any outstanding Options or Stock Appreciation Rights that
have an exercise price or strike price greater than the current Fair Market Value of the Common
Stock in exchange for cash or other Stock Awards under the Plan, unless the stockholders of the
Company have approved such an action within twelve (12) months prior to such an event.

 

3

 

3. Shares Subject to the Plan.

(a) Share Reserve. Subject to Section 9(a) relating to Capitalization Adjustments, the
aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards from and
after the Effective Date shall not exceed five million (5,000,000) shares. For clarity, the Share
Reserve in this Section 3(a) is a limitation on the number of shares of the Common Stock that may
be issued pursuant to the Plan and does not limit the granting of Stock Awards except as provided
in Section 7(a). Shares may be issued in connection with a merger or acquisition as permitted by,
as applicable, NASDAQ Listing Rule 5635(c) or, if applicable, NYSE Listed Company Manual Section
303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance shall not
reduce the number of shares available for issuance under the Plan. Furthermore, if a Stock Award
or any portion thereof (i) expires or otherwise terminates without all of the shares covered by
such Stock Award having been issued or (ii) is settled in cash (i.e., the Participant receives cash
rather than stock), such expiration, termination or settlement shall not reduce (or otherwise
offset) the number of shares of Common Stock that may be available for issuance under the Plan.

(b) Reversion of Shares to the Share Reserve. If any shares of Common Stock issued pursuant
to a Stock Award are forfeited back to the Company because of the failure to meet a contingency or
condition required to vest such shares in the Participant, then the shares that are forfeited shall
revert to and again become available for issuance under the Plan. Any shares reacquired by the
Company pursuant to Section 8(g) or as consideration for the exercise of an Option shall again
become available for issuance under the Plan.

(c) Incentive Stock Option Limit. Notwithstanding anything to the contrary in this Section 3
and, subject to the provisions of Section 9(a) relating to Capitalization Adjustments, the
aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of
Incentive Stock Options shall be five million (5,000,000) shares of Common Stock.

(d) Section 162(m)
 Limitation on Annual Grants.  Subject to the provisions of Section 9(a)
relating to Capitalization Adjustments, at such time as the Company may be subject to the
applicable provisions of Section 162(m) of the Code, a maximum of one million (1,000,000) shares of
Common Stock subject to Options, Stock Appreciation Rights and Other Stock Awards whose value is
determined by reference to an increase over an exercise or strike price of at least one hundred
percent (100%) of the Fair Market Value on the date any such Stock Award is granted may be granted
to any Participant during any calendar year. Notwithstanding the foregoing, if any additional
Options, Stock Appreciation Rights or Other Stock Awards whose value is determined by reference to
an increase over an exercise or strike price of at least one hundred percent (100%) of the Fair
Market Value on the date the Stock Award are granted to any Participant during any calendar year,
compensation attributable to the exercise of such additional Stock Awards shall not satisfy the
requirements to be considered “qualified performance-based compensation” under Section 162(m) of
the Code unless such additional Stock Award is approved by the Company’s stockholders.

(e) Source of Shares. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the Company on the open market
or otherwise.

 

4

 

4. Eligibility.

(a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to
employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such
terms are defined in Sections 424(e) and (f) of the Code). Stock Awards other than Incentive Stock
Options may be granted to Employees, Directors and Consultants; provided, however, Nonstatutory
Stock Options and SARs may not be granted to Employees, Directors and Consultants who are providing
Continuous Service only to any “parent” of the Company, as such term is defined in Rule 405
promulgated under the Securities Act, unless the stock underlying such Stock Awards is treated as
“service recipient stock” under Section 409A of the Code because the Stock Awards are granted
pursuant to a corporate transaction (such as a spin off transaction) or unless such Stock Awards
comply with the distribution requirements of Section 409A of the Code.

(b) Ten Percent Stockholders. A Ten Percent Stockholder shall not be granted an Incentive
Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of
the Fair Market Value on the date of grant and the Option is not exercisable after the expiration
of five (5) years from the date of grant.

5. Provisions Relating to Options and Stock Appreciation Rights.

Each Option or SAR shall be in such form and shall contain such terms and conditions as the
Board shall deem appropriate. All Options shall be separately designated Incentive Stock Options
or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates shall be issued for shares of Common Stock purchased on exercise of
each type of Option. If an Option is not specifically designated as an Incentive Stock Option, then
the Option shall be a Nonstatutory Stock Option. The provisions of separate Options or SARs need
not be identical; provided, however, that each Option Agreement or Stock Appreciation Right
Agreement shall conform to (through incorporation of provisions hereof by reference in the
applicable Award Agreement or otherwise) the substance of each of the following provisions:

(a) Term. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no
Option or SAR shall be exercisable after the expiration of ten (10) years from the date of its
grant or such shorter period specified in the Award Agreement.

(b) Exercise Price. Subject to the provisions of Section 4(b) regarding Ten Percent
Stockholders, the exercise price (or strike price) of each Option or SAR shall be not less than one
hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option or SAR on
the date the Option or SAR is granted. Notwithstanding the foregoing, an Option or SAR may be
granted with an exercise price (or strike price) lower than one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the Option or SAR if such Option or SAR is granted
pursuant to an assumption of or substitution for another option or stock appreciation right
pursuant to a Corporate Transaction and in a manner consistent with the provisions of Sections 409A
and, if applicable, 424(a) of the Code. Each SAR will be denominated in shares of Common Stock
equivalents.

 

5

 

(c) Purchase Price for Options. The purchase price of Common Stock acquired pursuant to the
exercise of an Option shall be paid, to the extent permitted by applicable law and as determined by
the Board in its sole discretion, by any combination of the methods of payment set forth below.
The Board shall have the authority to grant Options that do not permit all of the following methods
of payment (or otherwise restrict the ability to use certain methods) and to grant Options that
require the consent of the Company to utilize a particular method of payment. The permitted
methods of payment are as follows:

(i) by cash, check, bank draft or money order payable to the Company;

(ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of the stock subject to the Option, results in either the receipt
of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds;

(iii) by delivery to the Company (either by actual delivery or attestation) of shares of
Common Stock;

(iv) if the option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to
which the Company will reduce the number of shares of Common Stock issuable upon exercise by the
largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise
price; provided, however, that the Company shall accept a cash or other payment from the
Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by
such reduction in the number of whole shares to be issued; provided, further, that shares of Common
Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent
that (A) shares issuable upon exercise are reduced to pay the exercise price pursuant to the “net
exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares
are withheld to satisfy tax withholding obligations; or

(v) in any other form of legal consideration that may be acceptable to the Board.

(d) Exercise and Payment of a SAR. To exercise any outstanding Stock Appreciation Right, the
Participant must provide written notice of exercise to the Company in compliance with the
provisions of the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. The
appreciation distribution payable on the exercise of a Stock Appreciation Right will be not greater
than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the
exercise of the Stock Appreciation Right) of a number of shares of Common Stock equal to the number
of Common Stock equivalents in which the Participant is vested under such Stock Appreciation Right,
and with respect to which the Participant is exercising the Stock Appreciation Right on such date,
over (B) the strike price that will be determined by the Board at the time of grant of the Stock
Appreciation Right. The appreciation distribution in respect to a Stock Appreciation Right may be
paid in Common Stock, in cash, in any combination of the two or in any other form of consideration,
as determined by the Board and contained in the Stock Appreciation Right Agreement evidencing such
Stock Appreciation Right.

 

6

 

(e) Transferability of Options and SARs. The Board may, in its sole discretion, impose such
limitations on the transferability of Options and SARs as the Board shall determine. In the
absence of such a determination by the Board to the contrary, the following restrictions on the
transferability of Options and SARs shall apply:

(i) Restrictions on Transfer. An Option or SAR shall not be transferable except by will or by
the laws of descent and distribution and shall be exercisable during the lifetime of the
Participant only by the Participant; provided, however, that the Board may, in its sole discretion,
permit transfer of the Option or SAR in a manner that is not prohibited by applicable tax and
securities laws upon the Participant’s request. Except as explicitly provided herein, neither an
Option nor a SAR may be transferred for consideration.

(ii) Domestic Relations Orders. Notwithstanding the foregoing, an Option or SAR may be
transferred pursuant to a domestic relations order; provided, however, that if an Option is an
Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of
such transfer.

(iii) Beneficiary Designation. Notwithstanding the foregoing, the Participant may, by
delivering written notice to the Company, in a form provided by or otherwise satisfactory to the
Company, designate a third party who, in the event of the death of the Participant, shall
thereafter be entitled to exercise the Option or SAR and receive the Common Stock or other
consideration resulting from such exercise. In the absence of such a designation, the executor or
administrator of the Participant’s estate shall be entitled to exercise the Option or SAR and
receive the Common Stock or other consideration resulting from such exercise.

(f) Vesting Generally. The total number of shares of Common Stock subject to an Option or SAR
may vest and therefore become exercisable in periodic installments that may or may not be equal.
The Option or SAR may be subject to such other terms and conditions on the time or times when it
may or may not be exercised (which may be based on the satisfaction of Performance Goals or other
criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs
may vary. The provisions of this Section 5(f) are subject to any Option or SAR provisions
governing the minimum number of shares of Common Stock as to which an Option or SAR may be
exercised.

(g) Termination of Continuous Service. Except as otherwise provided in the applicable Award
Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous
Service terminates (other than for Cause or upon the Participant’s death or Disability), the
Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled
to exercise such Award as of the date of termination of Continuous Service) but only within such
period of time ending on the earlier of (i) the date three (3) months following the termination of
the Participant’s Continuous Service (or such longer or shorter period specified in the applicable
Award Agreement), or (ii) the expiration of the term of the Option or SAR as set forth in the Award
Agreement. If, after termination of Continuous Service, the Participant does not exercise his or
her Option or SAR within the time specified herein or in the Award Agreement (as applicable), the
Option or SAR shall terminate.

 

7

 

(h) Extension of Termination Date. If the exercise of an Option or SAR following the
termination of the Participant’s Continuous Service (other than for Cause or upon the Participant’s
death or Disability) would be prohibited at any time solely because the issuance of shares of
Common Stock would violate the registration requirements under the Securities Act, then the Option
or SAR shall terminate on the earlier of (i) the expiration of a total period of three (3) months
(that need not be consecutive) after the termination of the Participant’s Continuous Service during
which the exercise of the Option or SAR would not be in violation of such registration
requirements, or (ii) the expiration of the term of the Option or SAR as set forth in the
applicable Award Agreement. In addition, unless otherwise provided in a Participant’s Award
Agreement, if the sale of any Common Stock received upon exercise of an Option or SAR following the
termination of the Participant’s Continuous Service (other than for Cause) would violate the
Company’s insider trading policy, then the Option or SAR shall terminate on the earlier of (i) the
expiration of a period equal to the applicable post-termination exercise period after the
termination of the Participant’s Continuous Service during which the sale of the Common Stock
received upon exercise of the Option or SAR would not be in violation of the Company’s insider
trading policy, or (ii) the expiration of the term of the Option or SAR as set forth in the
applicable Award Agreement.

(i) Disability of Participant. Except as otherwise provided in the applicable Award Agreement
or other agreement between the Participant and the Company, if a Participant’s Continuous Service
terminates as a result of the Participant’s Disability, the Participant may exercise his or her
Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of
the date of termination of Continuous Service), but only within such period of time ending on the
earlier of (i) the date twelve (12) months following such termination of Continuous Service (or
such longer or shorter period specified in the Award Agreement), or (ii) the expiration of the term
of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous
Service, the Participant does not exercise his or her Option or SAR within the time specified
herein or in the Award Agreement (as applicable), the Option or SAR (as applicable) shall
terminate.

(j) Death of Participant. Except as otherwise provided in the applicable Award Agreement or
other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service
terminates as a result of the Participant’s death, or (ii) the Participant dies within the period
(if any) specified in the Award Agreement for exercisability after the termination of the
Participant’s Continuous Service (for a reason other than death), then the Option or SAR may be
exercised (to the extent the Participant was entitled to exercise such Option or SAR as of the date
of death) by the Participant’s estate, by a person who acquired the right to exercise the Option or
SAR by bequest or inheritance or by a person designated to exercise the Option or SAR upon the
Participant’s death, but only within the period ending on the earlier of (i) the date eighteen (18)
months following the date of death (or such longer or shorter period specified in the Award
Agreement), or (ii) the expiration of the term of such Option or SAR as set forth in the Award
Agreement. If, after the Participant’s death, the Option or SAR is not exercised within the time
specified herein or in the Award Agreement (as applicable), the Option or SAR shall terminate.

 

8

 

(k) Termination for Cause. Except as explicitly provided otherwise in a Participant’s Award
Agreement or other individual written agreement between the Company or
any Affiliate and the Participant, if a Participant’s Continuous Service is terminated for
Cause, the Option or SAR shall terminate immediately upon such Participant’s termination of
Continuous Service, and the Participant shall be prohibited from exercising his or her Option or
SAR from and after the time of such termination of Continuous Service.

(l) Non-Exempt
Employees.  No Option or SAR, whether or not vested, granted to an Employee who
is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, shall be
first exercisable for any shares of Common Stock until at least six months following the date of
grant of the Option or SAR. Notwithstanding the foregoing, consistent with the provisions of the
Worker Economic Opportunity Act, (i) in the event of the Participant’s death or Disability, (ii)
upon a Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted,
(iii) upon a Change in Control, or (iv) upon the Participant’s retirement (as such term may be
defined in the Participant’s Award Agreement or in another applicable agreement or in accordance
with the Company’s then current employment policies and guidelines), any such vested Options and
SARs may be exercised earlier than six months following the date of grant. The foregoing provision
is intended to operate so that any income derived by a non-exempt employee in connection with the
exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay.

6. Provisions of Stock Awards other than Options and SARs.

(a) Restricted Stock Awards. Each Restricted Stock Award Agreement shall be in such form and
shall contain such terms and conditions as the Board shall deem appropriate. To the extent
consistent with the Company’s Bylaws, at the Board’s election, shares of Common Stock may be (i)
held in book entry form subject to the Company’s instructions until any restrictions relating to
the Restricted Stock Award lapse; or (ii) evidenced by a certificate, which certificate shall be
held in such form and manner as determined by the Board. The terms and conditions of Restricted
Stock Award Agreements may change from time to time, and the terms and conditions of separate
Restricted Stock Award Agreements need not be identical; provided, however, that each Restricted
Stock Award Agreement shall conform to (through incorporation of the provisions hereof by reference
in the agreement or otherwise) the substance of each of the following provisions:

(i) Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash,
check, bank draft or money order payable to the Company, (B) past services to the Company or an
Affiliate, or (C) any other form of legal consideration (including future services) that may be
acceptable to the Board, in its sole discretion, and permissible under applicable law.

(ii) Vesting. Shares of Common Stock awarded under the Restricted Stock Award Agreement may
be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by
the Board.

(iii) Termination of Participant’s Continuous Service. If a Participant’s Continuous Service
terminates, the Company may receive through a forfeiture condition or a repurchase right any or all
of the shares of Common Stock held by the Participant that have not
vested as of the date of termination of Continuous Service under the terms of the Restricted
Stock Award Agreement.

 

9

 

(iv) Transferability. Rights to acquire shares of Common Stock under the Restricted Stock
Award Agreement shall be transferable by the Participant only upon such terms and conditions as are
set forth in the Restricted Stock Award Agreement, as the Board shall determine in its sole
discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains
subject to the terms of the Restricted Stock Award Agreement.

(v) Dividends. A Restricted Stock Award Agreement may provide that any dividends paid on
Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the
shares subject to the Restricted Stock Award to which they relate.

(b) Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem appropriate. The terms
and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the
terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical;
provided, however, that each Restricted Stock Unit Award Agreement shall conform to (through
incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of
each of the following provisions:

(i) Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will
determine the consideration, if any, to be paid by the Participant upon delivery of each share of
Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by
the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid
in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and
permissible under applicable law.

(ii) Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose
such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its
sole discretion, deems appropriate.

(iii) Payment.
 A Restricted Stock Unit Award may be settled by the delivery of shares of
Common Stock, their cash equivalent, any combination thereof or in any other form of consideration,
as determined by the Board and contained in the Restricted Stock Unit Award Agreement.

(iv) Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the
Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery
of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award
to a time after the vesting of such Restricted Stock Unit Award.

(v) Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common
Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the
Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend
equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock
Unit Award in such manner as determined by the Board. Any additional shares covered by the
Restricted Stock Unit Award credited by reason of such
dividend equivalents will be subject to all of the same terms and conditions of the underlying
Restricted Stock Unit Award Agreement to which they relate.

 

10

 

(vi) Termination of Participant’s Continuous Service. Except as otherwise provided in the
applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award
that has not vested will be forfeited upon the Participant’s termination of Continuous Service.

(c) Performance Awards.

(i) Performance Stock Awards. A Performance Stock Award is a Stock Award that may vest or may
be exercised contingent upon the attainment during a Performance Period of certain Performance
Goals. A Performance Stock Award may, but need not, require the completion of a specified period
of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved
during the Performance Period, and the measure of whether and to what degree such Performance Goals
have been attained shall be conclusively determined by the Committee, in its sole discretion. The
maximum number of shares covered by an Award that may be granted to any Participant in a calendar
year attributable to Stock Awards described in this Section 6(c)(i) (whether the grant, vesting or
exercise is contingent upon the attainment during a Performance Period of the Performance Goals)
shall not exceed one million (1,000,000) shares of Common Stock. The Board may provide for or,
subject to such terms and conditions as the Board may specify, may permit a Participant to elect
for, the payment of any Performance Stock Award to be deferred to a specified date or event. In
addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board
may determine that cash may be used in payment of Performance Stock Awards.

(ii) Performance Cash Awards. A Performance Cash Award is a cash award that may be paid
contingent upon the attainment during a Performance Period of certain Performance Goals. A
Performance Cash Award may also require the completion of a specified period of Continuous Service.
At the time of grant of a Performance Cash Award, the length of any Performance Period, the
Performance Goals to be achieved during the Performance Period, and the measure of whether and to
what degree such Performance Goals have been attained shall be conclusively determined by the
Committee, in its sole discretion. In any calendar year, the Committee may not grant a Performance
Cash Award that has a maximum value that may be paid to any Participant in excess of five hundred
thousand dollars ($500,000). The Board may provide for or, subject to such terms and conditions as
the Board may specify, may permit a Participant to elect for, the payment of any Performance Cash
Award to be deferred to a specified date or event. The Committee may specify the form of payment
of Performance Cash Awards, which may be cash or other property, or may provide for a Participant
to have the option for his or her Performance Cash Award, or such portion thereof as the Board may
specify, to be paid in whole or in part in cash or other property.

(iii) Board Discretion. The Board retains the discretion to reduce or eliminate the
compensation or economic benefit due upon attainment of Performance Goals and to define the manner
of calculating the Performance Criteria it selects to use for a Performance Period.

 

11

 

(iv) Section 162(m) Compliance. Unless otherwise permitted in compliance with the
requirements of Section 162(m) of the Code with respect to an Award intended to qualify as
“performance-based compensation” thereunder, the Committee shall establish the Performance Goals
applicable to, and the formula for calculating the amount payable under, the Award no later than
the earlier of (a) the date ninety (90) days after the commencement of the applicable Performance
Period, or (b) the date on which twenty-five percent (25%) of the Performance Period has elapsed,
and in either event at a time when the achievement of the applicable Performance Goals remains
substantially uncertain. Prior to the payment of any compensation under an Award intended to
qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee shall
certify the extent to which any Performance Goals and any other material terms under such Award
have been satisfied (other than in cases where such relate solely to the increase in the value of
the Common Stock). Notwithstanding satisfaction of any completion of any Performance Goals, to the
extent specified at the time of grant of an Award to “covered employees” within the meaning of
Section 162(m) of the Code, the number of shares of Common Stock, Options, cash or other benefits
granted, issued, retainable and/or vested under an Award on account of satisfaction of such
Performance Goals may be reduced by the Committee on the basis of such further considerations as
the Committee, in its sole discretion, shall determine.

(d) Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference
to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options
or stock rights with an exercise price or strike price less than 100% of the Fair Market Value of
the Common Stock at the time of grant) may be granted either alone or in addition to Stock Awards
provided for under Section 5 and the preceding provisions of this Section 6. Subject to the
provisions of the Plan, the Board shall have sole and complete authority to determine the persons
to whom and the time or times at which such Other Stock Awards will be granted, the number of
shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock
Awards and all other terms and conditions of such Other Stock Awards.

7. Covenants of the Company.

(a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Common Stock reasonably required to satisfy such
Stock Awards.

(b) Securities Law Compliance. The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority that counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and
until such authority is obtained. A Participant shall not be eligible for the grant of a Stock
Award or the subsequent issuance of Common Stock pursuant
to the Stock Award if such grant or issuance would be in violation of any applicable
securities law.

 

12

 

(c) No Obligation to Notify or Minimize Taxes. The Company shall have no duty or obligation
to any Participant to advise such holder as to the time or manner of exercising such Stock Award.
Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such holder
of a pending termination or expiration of a Stock Award or a possible period in which the Stock
Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences
of a Stock Award to the holder of such Stock Award.

8. Miscellaneous.

(a) Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common
Stock pursuant to Stock Awards shall constitute general funds of the Company.

(b) Corporate Action Constituting Grant of Stock Awards. Corporate action constituting a
grant by the Company of a Stock Award to any Participant shall be deemed completed as of the date
of such corporate action, unless otherwise determined by the Board, regardless of when the
instrument, certificate, or letter evidencing the Stock Award is communicated to, or actually
received or accepted by, the Participant.

(c) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until (i) such Participant has satisfied all requirements for exercise of the Stock
Award pursuant to its terms, if applicable, and (ii) the issuance of the Common Stock subject to
such Stock Award has been entered into the books and records of the Company.

(d) No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any
other instrument executed thereunder or in connection with any Award granted pursuant thereto shall
confer upon any Participant any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Award was granted or shall affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee with or without notice and with or without
cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with
the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the
Company or an Affiliate, and any applicable provisions of the corporate law of the state in which
the Company or the Affiliate is incorporated, as the case may be.

(e) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any calendar year (under all
plans of the Company and any Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof that exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of
the applicable Option Agreement(s).

 

13

 

(f) Investment Assurances. The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably satisfactory to the Company
who is knowledgeable and experienced in financial and business matters and that he or she is
capable of evaluating, alone or together with the purchaser representative, the merits and risks of
exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating
that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own
account and not with any present intention of selling or otherwise distributing the Common Stock.
The foregoing requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (A) the issuance of the shares upon the exercise or acquisition of Common Stock
under the Stock Award has been registered under a then currently effective registration statement
under the Securities Act, or (B) as to any particular requirement, a determination is made by
counsel for the Company that such requirement need not be met in the circumstances under the then
applicable securities laws. The Company may, upon advice of counsel to the Company, place legends
on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order
to comply with applicable securities laws, including, but not limited to, legends restricting the
transfer of the Common Stock.

(g) Withholding Obligations. Unless prohibited by the terms of a Stock Award Agreement, the
Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation
relating to an Award by any of the following means or by a combination of such means: (i) causing
the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares
of Common Stock issued or otherwise issuable to the Participant in connection with the Award;
provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum
amount of tax required to be withheld by law (or such lesser amount as may be necessary to avoid
classification of the Stock Award as a liability for financial accounting purposes); (iii)
withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise
payable to the Participant; or (v) by such other method as may be set forth in the Award Agreement.

(h) Electronic Delivery. Any reference herein to a “written” agreement or document shall
include any agreement or document delivered electronically or posted on the Company’s intranet (or
other shared electronic medium controlled by the Company to which the Participant has access).

(i) Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion,
may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting
or settlement of all or a portion of any Award may be deferred and may establish programs and
procedures for deferral elections to be made by Participants. Deferrals by Participants will be
made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the
Board may provide for distributions while a Participant is still an employee or otherwise providing
services to the Company. The Board is authorized to make deferrals of Awards and determine when,
and in what annual percentages, Participants may receive payments, including lump sum payments,
following the Participant’s termination of Continuous Service, and implement such other terms and
conditions consistent with the provisions of the Plan and in accordance with applicable law.

 

14

 

(j) Compliance with Section 409A. To the extent that the Board determines that any Award
granted hereunder is subject to Section 409A of the Code, the Award Agreement evidencing such Award
shall incorporate the terms and conditions necessary to avoid the consequences specified in Section
409A(a)(1) of the Code. To the extent applicable, the Plan and Award Agreements shall be
interpreted in accordance with Section 409A of the Code. Notwithstanding anything to the contrary
in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of
Common Stock are publicly traded and a Participant holding an Award that constitutes “deferred
compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A
of the Code, no distribution or payment of any amount shall be made upon a “separation from
service” before a date that is six (6) months following the date of such Participant’s “separation
from service” (as defined in Section 409A of the Code without regard to alternative definitions
thereunder) or, if earlier, the date of the Participant’s death.

9. Adjustments upon Changes in Common Stock; Other Corporate Events.

(a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board shall
appropriately and proportionately adjust: (i) the class(es) and maximum number of securities
subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities
that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c),
(iii) the class(es) and maximum number of securities that may be awarded to any person pursuant to
Sections 3(d) and 6(c)(i), and (iv) the class(es) and number of securities and price per share of
stock subject to outstanding Stock Awards. The Board shall make such adjustments, and its
determination shall be final, binding and conclusive.

(b) Dissolution or Liquidation. Except as otherwise provided in the Stock Award Agreement, in
the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than
Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a
forfeiture condition or the Company’s right of repurchase) shall terminate immediately prior to the
completion of such dissolution or liquidation, and the shares of Common Stock subject to the
Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired
by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous
Service; provided, however, that the Board may, in its sole discretion, cause some or all Stock
Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to
the extent such Stock Awards have not previously expired or terminated) before the dissolution or
liquidation is completed but contingent on its completion.

 

15

 

(c) Corporate Transaction. The following provisions shall apply to Stock Awards in the event
of a Corporate Transaction unless otherwise provided in the instrument evidencing the Stock Award
or any other written agreement between the Company or any Affiliate and the Participant or unless
otherwise expressly provided by the Board at the time of grant of a Stock Award.

(i) Stock Awards May Be Assumed, Continued or Substituted. In the event of a Corporate
Transaction, any surviving corporation or acquiring corporation (or the surviving or acquiring
corporation’s parent company) may assume or continue any or all Stock
Awards outstanding under the Plan or may substitute similar stock awards for Stock Awards
outstanding under the Plan (including but not limited to, awards to acquire the same consideration
paid to the stockholders of the Company pursuant to the Corporate Transaction), and any
reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant
to Stock Awards may be assigned by the Company to the successor of the Company (or the successor’s
parent company, if any), in connection with such Corporate Transaction. A surviving corporation or
acquiring corporation (or its parent) may choose to assume or continue only a portion of a Stock
Award or substitute a similar stock award for only a portion of a Stock Award, or may choose to
assume or continue the Stock Awards held by some, but not all Participants. The terms of any
assumption, continuation or substitution shall be set by the Board.

(ii) Stock Awards Not Assumed, Continued or Substituted. In the event of a Corporate
Transaction in which the surviving corporation or acquiring corporation (or its parent company)
does not assume or continue such outstanding Stock Awards or substitute similar stock awards for
such outstanding Stock Awards, then with respect to Stock Awards that have not been assumed,
continued or substituted, the vesting of such Stock Awards (and, with respect to Options and Stock
Appreciation Rights, the time when such Stock Awards may be exercised) shall be accelerated in full
to a date prior to the effective time of such Corporate Transaction (contingent upon the
effectiveness of the Corporate Transaction) as the Board shall determine (or, if the Board shall
not determine such a date, to the date that is five (5) days prior to the effective time of the
Corporate Transaction), and such Stock Awards shall terminate if not exercised (if applicable) at
or prior to the effective time of the Corporate Transaction, and any reacquisition or repurchase
rights held by the Company with respect to such Stock Awards shall lapse (contingent upon the
effectiveness of the Corporate Transaction); provided, however, that the Board may require
Participants to complete and deliver to the Company a notice of exercise before the effective date
of a Corporate Transaction, which is contingent upon the effectiveness of such Corporate
Transaction.

(iii) Payment for Stock Awards in Lieu of Exercise. Notwithstanding the foregoing, in the
event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or
its parent company) does not assume or continue such outstanding Stock Awards or substitute similar
stock awards for such outstanding Stock Awards and the Stock Award will terminate if not exercised
at or prior to the effective time of a Corporate Transaction in accordance with Section 9(c)(ii),
the Board may provide, in its sole discretion, that the holder of such Stock Award may not exercise
such Stock Award but will receive a payment, in such form as may be determined by the Board, equal
in value, at the effective time, to the excess, if any, of (A) the value of the property the
Participant would have received upon the exercise of the Stock Award, over (B) any exercise price
payable by such holder in connection with such exercise. For purposes of clarity, this payment may
be zero ($0) if the value of the property is equal to or less than the exercise price. Payments
under this provision may be delayed to the same extent that payment of consideration to the holders
of the Company’s Common Stock in connection with the Corporate Transaction is delayed as a result
of escrows, earn outs, holdbacks, or any other contingencies.

 

16

 

The Board need not take the same action or actions with respect to all Stock Awards or portions
thereof or with respect to all Participants. The Board may take different actions with respect to
the vested and unvested portions of a Stock Award.

(d) Change in Control. In the event of a Change in Control, then, as of the effective time of
such Change in Control, the vesting of all outstanding Stock Awards (and, with respect to Options
and Stock Appreciation Rights, the time when such Stock Awards may be exercised) shall be
accelerated in full and any reacquisition or repurchase rights held by the Company with respect to
such Stock Awards shall lapse.

10. Termination or Suspension of the Plan.

(a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless terminated
sooner by the Board, the Plan shall automatically terminate on the day before the tenth (10th)
anniversary of the Effective Date. No Awards may be granted under the Plan while the Plan is
suspended or after it is terminated.

(b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights
and obligations under any Award granted while the Plan is in effect except with the written consent
of the affected Participant.

11. Effective Date of Plan.

This Plan shall become effective on the Effective Date.

12. Choice of Law.

The law of the State of Delaware shall govern all questions concerning the construction, validity
and interpretation of this Plan, without regard to that state’s conflict of laws rules.

13. Definitions. As used in the Plan, the following definitions shall apply to the
capitalized terms indicated below:

(a) “Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the
Company as such terms are defined in Rule 405 promulgated under the Securities Act. The Board
shall have the authority to determine the time or times at which “parent” or “subsidiary” status is
determined within the foregoing definition.

(b) “Award” means a Stock Award or a Performance Cash Award.

(c) “Award Agreement” means a written agreement between the Company and a Participant
evidencing the terms and conditions of an Award.

(d) “Board” means the Board of Directors of the Company.

 

17

 

(e) “Capitalization Adjustment” means any change that is made in, or other events that occur
with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the
Effective Date without the receipt of consideration by the Company through merger,
consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, large nonrecurring cash dividend, stock split, liquidating dividend,
combination of shares, exchange of shares, change in corporate structure or any similar equity
restructuring transaction, as that term is used in Statement of Financial Accounting Standards No.
123 (revised). Notwithstanding the foregoing, the conversion of any convertible securities of the
Company shall not be treated as a Capitalization Adjustment.

(f) “Cause” shall have the meaning ascribed to such term in any written agreement between the
Participant and the Company in effect at the time of the termination of the Participant’s
Continuous Service defining such term and, in the absence of such agreement, such term shall mean,
with respect to a Participant, the occurrence of any of the following events that has a material
negative impact on the business or reputation of the Company: (i) such Participant’s commission of
any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United
States or any state thereof; (ii) such Participant’s attempted commission of, or participation in,
a fraud or act of dishonesty against the Company; (iii) such Participant’s intentional, material
violation of any contract or agreement between the Participant and the Company or of any statutory
duty owed to the Company; (iv) such Participant’s unauthorized use or disclosure of the Company’s
confidential information or trade secrets; or (v) such Participant’s gross misconduct. The
determination that a termination of the Participant’s Continuous Service is either for Cause or
without Cause shall be made by the Company in its sole discretion. Any determination by the
Company that the Continuous Service of a Participant was terminated with or without Cause for the
purposes of outstanding Awards held by such Participant shall have no effect upon any determination
of the rights or obligations of the Company or such Participant for any other purpose.

(g) “Change in Control” means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:

(i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the combined voting power of the Company’s
then outstanding securities other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of
the acquisition of securities of the Company by an investor, any affiliate thereof or any other
Exchange Act Person that acquires the Company’s securities in a transaction or series of related
transactions the primary purpose of which is to obtain financing for the Company through the
issuance of equity securities (which includes an offering of Common Stock to the general public
through a registration statement filed with the Securities and Exchange Commission), or (B) solely
because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the
designated percentage threshold of the outstanding voting securities as a result of a repurchase or
other acquisition of voting securities by the Company reducing the number of shares outstanding,
provided that if a Change in Control would occur (but for the operation of this subsection (B)) as
a result of the acquisition of voting securities by the Company, and after such share acquisition,
the Subject Person becomes the Owner of any additional voting securities that, assuming the
repurchase or other acquisition had not occurred, increases the percentage of the then outstanding
voting securities Owned by the Subject Person over the designated percentage threshold, then a
Change in Control shall be deemed to occur;

 

18

 

(ii) there is consummated a merger, consolidation or similar transaction involving (directly
or indirectly) the Company and, immediately after the consummation of such merger, consolidation or
similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly
or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%)
of the combined outstanding voting power of the surviving Entity in such merger, consolidation or
similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power
of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each
case in substantially the same proportions as their Ownership of the outstanding voting securities
of the Company immediately prior to such transaction;

(iii) there is consummated a sale, lease, exclusive license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries, other than a
sale, lease, license or other disposition of all or substantially all of the consolidated assets of
the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting
power of the voting securities of which are Owned by stockholders of the Company in substantially
the same proportions as their Ownership of the outstanding voting securities of the Company
immediately prior to such sale, lease, license or other disposition; or

(iv) individuals who, on the date the Plan is adopted by the Board, are members of the Board
(the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of
the Board; provided, however, that if the appointment or election (or nomination for election) of
any new Board member was approved or recommended by a majority vote of the members of the Incumbent
Board then still in office, such new member shall, for purposes of this Plan, be considered as a
member of the Incumbent Board.

Notwithstanding the foregoing or any other provision of this Plan, the term Change in Control
shall not include a sale of assets, merger or other transaction effected exclusively for the
purpose of changing the domicile of the Company.

(h) “Code” means the Internal Revenue Code of 1986, as amended, including any applicable
regulations and guidance thereunder.

(i) “Committee” means a committee of one or more Directors to whom authority has been
delegated by the Board in accordance with Section 2(c).

(j) “Common Stock” means the common stock of the Company.

(k) “Company” means RegeneRx Biopharmaceuticals, Inc., a Delaware corporation.

(l) “Consultant” means any natural person, including an advisor, who is (i) engaged by the
Company or an Affiliate to render consulting or advisory services and is compensated for such
services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated
for such services. However, service solely as a Director, or payment of a fee for such service,
shall not cause a Director to be considered a “Consultant” for purposes of the Plan.
Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form
S-8 Registration Statement under the Securities Act is available to register either the offer or
the sale of the Company’s securities to such person.

 

19

 

(m) “Continuous Service” means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A
change in the capacity in which the Participant renders service to the Company or an Affiliate as
an Employee, Consultant or Director or a change in the entity for which the Participant renders
such service, provided that there is no interruption or termination of the Participant’s service
with the Company or an Affiliate, shall not terminate a Participant’s Continuous Service; provided,
however, if the Entity for which a Participant is rendering services ceases to qualify as an
Affiliate, as determined by the Board, in its sole discretion, such Participant’s Continuous
Service shall be considered to have terminated on the date such Entity ceases to qualify as an
Affiliate. To the extent permitted by law, the Board or the chief executive officer of the
Company, in that party’s sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of (i) any leave of absence approved by the Board or chief
executive officer, including sick leave, military leave or any other personal leave, or (ii)
transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a
leave of absence shall be treated as Continuous Service for purposes of vesting in a Stock Award
only to such extent as may be provided in the Company’s leave of absence policy, in the written
terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise
required by law.

(n) “Corporate Transaction” means the consummation, in a single transaction or in a series of
related transactions, of any one or more of the following events:

(i) a sale or other disposition of all or substantially all, as determined by the Board, in
its sole discretion, of the consolidated assets of the Company and its Subsidiaries;

(ii) a sale or other disposition of at least fifty percent (50%) of the outstanding securities
of the Company;

(iii) a merger, consolidation or similar transaction following which the Company is not the
surviving corporation; or

(iv) a merger, consolidation or similar transaction following which the Company is the
surviving corporation but the shares of Common Stock outstanding immediately preceding the merger,
consolidation or similar transaction are converted or exchanged by virtue of the merger,
consolidation or similar transaction into other property, whether in the form of securities, cash
or otherwise.

(o) “Covered Employee” shall have the meaning provided in Section 162(m)(3) of the Code.

(p) “Director” means a member of the Board.

(q) “Disability” means, with respect to a Participant, the inability of such Participant to
engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve (12) months, as provided in Sections
22(e)(3) and 409A(a)(2)(c)(i) of the Code, and shall be determined by the Board on the basis of
such medical evidence as the Board deems warranted under the circumstances.

 

20

 

(r) “Effective Date” means the effective date of this Plan document, which is the date of the
annual meeting of stockholders of the Company held in 2010 provided this Plan is approved by the
Company’s stockholders at such meeting.

(s) “Employee” means any person employed by the Company or an Affiliate. However, service
solely as a Director, or payment of a fee for such services, shall not cause a Director to be
considered an “Employee” for purposes of the Plan.

(t) “Entity” means a corporation, partnership, limited liability company or other entity.

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

(v) “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” shall not include
(i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or
any Subsidiary of the Company or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter
temporarily holding securities pursuant to a registered public offering of such securities, (iv) an
Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same
proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or
“group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the
Effective Date, is the Owner, directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the combined voting power of the Company’s then outstanding
securities.

(w) “Fair Market Value” means, as of any date, the value of the Common Stock determined as
follows:

(i) If the Common Stock is listed on any established stock exchange or traded on any
established market, the Fair Market Value of a share of Common Stock, unless otherwise determined
by the Board, shall be the closing sales price for such stock as quoted on such exchange or market
(or the exchange or market with the greatest volume of trading in the Common Stock) on the date of
determination, as reported in a source the Board deems reliable.

(ii) Unless otherwise provided by the Board, if there is no closing sales price for the Common
Stock on the date of determination, then the Fair Market Value shall be the closing selling price
on the last preceding date for which such quotation exists.

(iii) In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of
the Code.

(x) “Incentive Stock Option” means an option granted pursuant to Section 5 of the Plan that is
intended to be, and qualifies as, an “incentive stock option” within the meaning of Section 422 of
the Code.

 

21

 

(y) “Non-Employee Director” means a Director who either (i) is not a current employee or
officer of the Company or an Affiliate, does not receive compensation, either directly or
indirectly, from the Company or an Affiliate for services rendered as a consultant or in any
capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure
would be required under Item 404(a) of Regulation S-K, and is not engaged in a business
relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or
(ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.

(z) “Nonstatutory Stock Option” means any option granted pursuant to Section 5 of the Plan
that does not qualify as an Incentive Stock Option.

(aa) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act.

(bb) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase
shares of Common Stock granted pursuant to the Plan.

(cc) “Option Agreement” means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an Option grant. Each Option Agreement shall be subject to
the terms and conditions of the Plan.

(dd) “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.

(ee) “Other Stock Award” means an award based in whole or in part by reference to the Common
Stock which is granted pursuant to the terms and conditions of Section 6(d).

(ff) “Other Stock Award Agreement” means a written agreement between the Company and a holder
of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each
Other Stock Award Agreement shall be subject to the terms and conditions of the Plan.

(gg) “Outside Director” means a Director who either (i) is not a current employee of the
Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated
corporation” who receives compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the taxable year, has not been an officer of the Company or
an “affiliated corporation,” and does not receive remuneration from the Company or an “affiliated
corporation,” either directly or indirectly, in any capacity other than as a Director, or (ii) is
otherwise considered an “outside director” for purposes of Section 162(m) of the Code.

(hh) “Own,” “Owned,” “Owner,” “Ownership” A person or Entity shall be deemed to “Own,” to
have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or
Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power, which includes the power to vote or to direct the voting,
with respect to such securities.

 

22

 

(ii) “Participant” means a person to whom an Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.

(jj) “Performance Cash Award” means an award of cash granted pursuant to the terms and
conditions of Section 6(c)(ii).

(kk) “Performance Criteria” means the one or more criteria that the Committee shall select for
purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria
that shall be used to establish such Performance Goals may be based on any one of, or combination
of, the following as determined by the Committee: (i) earnings (including earnings per share and
net earnings); (ii) earnings before interest, taxes and depreciation; (iii) earnings before
interest, taxes, depreciation and amortization; (iv) total stockholder return; (v) return on equity
or average stockholder’s equity; (vi) return on assets, investment, or capital employed; (vii)
stock price; (viii) margin (including gross margin); (ix) income (before or after taxes); (x)
operating income; (xi) operating income after taxes; (xii) pre-tax profit; (xiii) operating cash
flow; (xiv) sales or revenue targets; (xv) increases in revenue or product revenue; (xvi) expenses
and cost reduction goals; (xvii) improvement in or attainment of working capital levels; (xviii)
economic value added (or an equivalent metric); (xix) market share; (xx) cash flow; (xxi) cash flow
per share; (xxii) share price performance; (xxiii) debt reduction; (xxiv) implementation or
completion of projects or processes; (xxv) customer satisfaction; (xxvi) stockholders’ equity;
(xxvii) capital expenditures; (xxviii) debt levels; (xxix) operating profit or net operating
profit; (xxx) workforce diversity; (xxxi) growth of net income or operating income; (xxxii)
billings; (xxxiii) achievement of clinical trial milestones, such as patient enrollment or
successful completion of the trial; (xxxiv) execution of a new licensor agreement; (xxxv) receipt
of a milestone payment under a licensor agreement and (xxxvi) to the extent that an Award is not
intended to comply with Section 162(m) of the Code, other measures of performance selected by the
Board or the Committee.

(ll) “Performance Goals” means, for a Performance Period, the one or more goals established by
the committee for the Performance Period based upon the Performance Criteria. Performance Goals
may be based on a Company-wide basis, with respect to one or more business units, divisions,
Affiliates, or business segments, and in either absolute terms or relative to the performance of
one or more comparable companies or the performance of one or more relevant indices. Unless
specified otherwise by the Committee (i) in the Award Agreement at the time the Award is granted or
(ii) in such other document setting forth the Performance Goals at the time the Performance Goals
are established, the Committee shall appropriately make adjustments in the method of calculating
the attainment of Performance Goals for a Performance Period as follows: (1) to exclude
restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects, as
applicable, for non-U.S. dollar denominated Performance Goals; (3) to exclude the effects of
changes to generally accepted accounting principles; (4) to exclude the effects of any statutory
adjustments to corporate tax rates; and (5) to exclude the effects of any “extraordinary items” as
determined under generally accepted accounting principles.

(mm) “Performance Period” means the period of time selected by the Committee over which the
attainment of one or more Performance Goals will be measured for the purpose of determining a
Participant’s right to and the payment of a Stock Award or a Performance Cash
Award. Performance Periods may be of varying and overlapping duration, at the sole discretion
of the Board.

 

23

 

(nn) “Performance Stock Award” means a Stock Award granted under the terms and conditions of
Section 6(c)(i).

(oo) “Plan” means this RegeneRx Biopharmaceuticals, Inc. 2010 Equity Incentive Plan.

(pp) “Restricted Stock Award” means an award of shares of Common Stock which is granted
pursuant to the terms and conditions of Section 6(a).

(qq) “Restricted Stock Award Agreement” means a written agreement between the Company and a
holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award
grant. Each Restricted Stock Award Agreement shall be subject to the terms and conditions of the
Plan.

(rr) “Restricted Stock Unit Award” means a right to receive shares of Common Stock which is
granted pursuant to the terms and conditions of Section 6(b).

(ss) “Restricted Stock Unit Award Agreement” means a written agreement between the Company and
a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock
Unit Award grant. Each Restricted Stock Unit Award Agreement shall be subject to the terms and
conditions of the Plan.

(tt) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule
16b-3, as in effect from time to time.

(uu) “Securities Act” means the Securities Act of 1933, as amended.

(vv) “Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Common
Stock that is granted pursuant to the terms and conditions of Section 5.

(ww) “Stock Appreciation Right Agreement” means a written agreement between the Company and a
holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation
Right grant. Each Stock Appreciation Right Agreement shall be subject to the terms and conditions
of the Plan.

(xx) “Stock Award” means any right to receive Common Stock granted under the Plan, including
an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted
Stock Unit Award, a Stock Appreciation Right, a Performance Stock Award or any Other Stock Award.

(yy) “Stock Award Agreement” means a written agreement between the Company and a Participant
evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be
subject to the terms and conditions of the Plan.

 

24

 

(zz) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than
fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether, at the time, stock
of any other class or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company,
and (ii) any partnership, limited liability company or other entity in which the Company has a
direct or indirect interest (whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%).

(aaa) “Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any Affiliate.

 

25

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}]]