Concho
Resources Inc.
550 West Texas Ave., Suite 100
Midland, Texas 79701
Attention: Darin G. Holderness
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Re:
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Limited Consent and
Waiver
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We refer to that
certain Amended and Restated Credit Agreement, dated as of
July 31, 2008, among Concho Resources Inc. (the “
Borrower ”), the lenders from time to time party
thereto (the “ Lenders ”), and JPMorgan Chase
Bank, N.A., as administrative agent for the Lenders (in such
capacity, the “ Administrative Agent ”) (as the
same has been and may hereafter be amended, restated, supplemented
or otherwise modified from time to time, the “ Credit
Agreement ”). Capitalized terms used and not otherwise
defined herein shall have the meanings given such terms in the
Credit Agreement. References herein to any Section or Article shall
be to a Section or Article of the Credit Agreement unless otherwise
specifically provided.
We understand that
on or before September 30, 2009, and in accordance with
Section 7.03(f), the Borrower intends to issue Senior Notes in
an aggregate principal amount not to exceed $300,000,000 (the
“ 2009 Senior Notes ”). Pursuant to
Section 3.05, upon the issuance of the 2009 Senior Notes, the
Borrowing Base and the Conforming Borrowing Base then in effect
must be reduced by $300 for every $1,000 in stated amount of the
2009 Senior Notes and consequently, the Aggregate Commitments will
be reduced by an amount equal to the reduction in the Borrowing
Base. Currently, the Borrowing Base is equal to the Conforming
Borrowing Base. The Borrower has requested that the Lenders waive
the reductions of the Borrowing Base and the Conforming Borrowing
Base required as a result of the issuance of the 2009 Senior Notes
and that each Lender consent to the postponement of any reduction
in its Commitment resulting from any reduction in the Borrowing
Base. Subject to the conditions described herein, each Lender a
party hereto is willing to waive the adjustments to the Borrowing
Base and Conforming Borrowing Base required as a result of the
issuance of the 2009 Senior Notes and consent to the postponement
of any such reduction in its Commitment as a result of any
reduction in the Borrowing Base.
Accordingly, each
Lender a party hereto hereby waives the adjustments to the
Borrowing Base and Conforming Borrowing Base required as a result
of the issuance of the 2009 Senior Notes and consents to the
postponement of any reduction in its Commitment as a result of any
such reduction in the Borrowing Base; provided , that,
(i) no Default or Event of Default has occurred and is
continuing on the date the 2009 Senior Notes are issued,
(ii) the 2009 Senior Notes are issued in accordance with
Section 7.03(f), (iii) the issuance of the 2009 Senior
Notes occurs on or before September 30, 2009 and (iv) on
the date the proceeds from the issuance of
the 2009 Senior
Notes are received by Borrower, Borrower pays to the Administrative
Agent any amounts required to eliminate any Borrowing Base
Deficiency arising as a result of the issuance of the 2009 Senior
Notes.
By its signature
below, the Borrower agrees that nothing herein shall be construed
as a continuing waiver of the provisions of Section 3.05 or of
a waiver of Section 7.03(f) or any other provision of the
Credit Agreement or any other Loan Document. The waiver and consent
set forth herein is expressly limited as follows: (i) such
waiver and consent is limited solely to the adjustments to the
Borrowing Base and Conforming Borrowing Base required as a
resul
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