Exhibit 10.1
Execution Version
REGISTRATION RIGHTS AGREEMENT
     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered
into as of June 22, 2010, by and between Oasis Petroleum Inc., a Delaware
corporation (the “Company”), and OAS Holding Company LLC, a Delaware limited
liability company (“Holding”).
W I T N E S S E T H :
     WHEREAS, the Company and Holding have entered into a Contribution Agreement
dated the date hereof (the “Contribution Agreement”) pursuant to which, among
other things, Holding will contribute to the Company 100% of the membership
interests in Oasis Petroleum LLC in exchange for common stock of the Company,
$0.01 per share par value (“Common Stock”);
     WHEREAS, Holding would not enter into the transactions contemplated by the
Contribution Agreement without this Agreement which requires the Company to
register for resale to the public the Common Stock that it receives in the
transactions contemplated by the Contribution Agreement.
     NOW, THEREFORE, in consideration of the premises and the mutual covenants
of the parties hereto, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. Unless otherwise defined herein, as used in this Agreement, the
following terms shall have the following meanings:
     “Affiliate” means, as to any specified Person, (i) any Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the specified Person, (ii) any
executive officer, director, trustee or general partner of the specified Person
and (iii) any legal entity for which the specified Person acts as an executive
officer, director, trustee or general partner. For purposes of this definition,
“control” (including the correlative meanings of the terms “controlled by” and
“under common control with”), as used with respect to any Person, means the
possession, directly, or indirectly through one or more intermediaries, of the
power to direct or cause the direction of the management and policies of such
Person, whether by contract, through the ownership of voting securities,
partnership interests or other equity interests or otherwise.
     “Agreement” is defined in the introductory paragraph of this Agreement.
     “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York are
authorized or obligated by applicable law, regulation or executive order to
close.
     “Commission” means the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

     “Common Stock” is defined in the recitals of this Agreement.
     “Company” is defined in the introductory paragraph of this Agreement, and
includes any successor thereto.
     “Controlling Person” is defined in Section 5(a).
     “Demand Date” is the date that Holding demands mandatory shelf registration
rights pursuant to Section 2(a).
     “End of Suspension Notice” is defined in Section 4(b).
     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission pursuant thereto.
     “FINRA” means the Financial Industry Regulatory Authority.
     “Free Writing Prospectus” means a free writing prospectus, as defined in
Rule 405 under the Securities Act.
     “Holding” is defined in the recitals of this Agreement.
     “Indemnified Party” is defined in Section 5(c).
     “Indemnifying Party” is defined in Section 5(c).
     “Issuer Free Writing Prospectus” means an issuer free writing prospectus,
as defined in Rule 433 under the Securities Act.
     “Liabilities” is defined in Section 5(a).
     “Lock-up Expiration Date” is defined in Section 2(a).
     “Mandatory Shelf Registration Statement” is defined in Section 2(a).
     “No Objections Letter” is defined in Section 3(t).
     “Permitted Free Writing Prospectus” is defined in Section 3.
     “Person” means an individual, limited liability company, partnership,
corporation, trust, unincorporated organization, government or agency or
political subdivision thereof, or any other legal entity.
     “Piggyback Registration Statement” is defined in Section 2(b).
     “Prospectus” means the prospectus included in any Registration Statement,
including any preliminary prospectus, and all other amendments and supplements
to any such prospectus,

2

--------------------------------------------------------------------------------

 

including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference, if any, in such prospectus.
     “Purchaser Indemnitee” is defined in Section 5(a).
     “Registrable Shares” means the shares of Common Stock issued to Holding in
connection with the Transaction, and any shares or other securities issued in
respect of such Registrable Shares because of or in connection with any stock
dividend, stock distribution, stock split, purchase in any rights offering or in
connection with any exchange for or replacement of such Registrable Shares or
any combination of shares, recapitalization, merger or consolidation, or any
other equity securities issued pursuant to any other pro rata distribution with
respect to the Common Stock, until, with respect to a Registrable Share, the
earliest to occur of:
     (i) the date on which it has been sold pursuant to a Registration Statement
or eligible for sale pursuant to Rule 144 (or any successor provision) under the
Securities Act without restriction pursuant to such rule on the volume of
securities that may be sold in any single transaction; or
     (ii) the date on which it is sold to the Company or its subsidiaries.
     “Registration Expenses” means any and all expenses incident to the
performance of or compliance with this Agreement, including: (i) all Commission,
securities exchange, FINRA registration, listing, inclusion and filing fees,
(ii) all fees and expenses incurred in connection with compliance with
international, federal or state securities or blue sky laws (including any
registration, listing and filing fees and reasonable fees and disbursements of
counsel in connection with blue sky qualification of any of the Registrable
Shares and the preparation of a blue sky memorandum and compliance with the
rules of FINRA), (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, duplicating, printing, delivering and distributing
any Registration Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, securities sales agreements, certificates
and any other documents relating to the performance under and compliance with
this Agreement, (iv) all fees and expenses incurred in connection with the
listing or inclusion of any of the Registrable Shares on the New York Stock
Exchange pursuant to Section 3(n), (v) the fees and disbursements of counsel for
the Company and of the independent public accountants of the Company (including
the expenses of any special audit and “cold comfort” letters required by or
incident to such performance) and (vi) any fees and disbursements customarily
paid in issues and sales of securities (including the fees and expenses of any
experts retained by the Company in connection with any Registration Statement),
provided, however, that Registration Expenses shall exclude brokers’ or
underwriters’ discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Registrable Shares by Holding and the fees and
disbursements of any counsel to Holding other than as provided for in clause
(v) above.
     “Registration Statement” means any Mandatory Shelf Registration Statement
or Piggyback Registration Statement.

3

--------------------------------------------------------------------------------

 

     “Rule 144”, “Rule 158”, “Rule 415”, or “Rule 424”, respectively, means such
specified rule promulgated by the Commission pursuant to the Securities Act, as
such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.
     “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the Commission thereunder.
     “Suspension Event” is defined in Section 4(b).
     “Suspension Notice” is defined in Section 4(b).
     “Underwriting Agreement” is defined in Section 2(a).
     “Underwritten Offering” means a sale of securities of the Company to an
underwriter or underwriters for reoffering to the public.
2. Registration Rights.
     (a) Mandatory Shelf Registration Rights. At any time after the expiration
of the restrictions set forth in Section 3 of the Underwriting Agreement (the
“Underwriting Agreement”), dated June 16, 2010, by and among the Company,
Holding, and the Underwriters party thereto (the “Lock-up Expiration Date”),
Holding may demand that the Company file with the Commission a shelf
registration statement on Form S-1 or such other form under the Securities Act
then available to the Company providing for the resale of the Registrable Shares
pursuant to Rule 415 of the Securities Act from time to time by Holding
(including the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto and all material incorporated by reference or deemed to be
incorporated by reference, if any, in such registration statement, the
“Mandatory Shelf Registration Statement”). If the Company has an effective
Mandatory Shelf Registration Statement on Form S-1 under the Securities Act and
becomes eligible to use Form S-3 or such other short-form registration statement
form under the Securities Act, the Company shall promptly give notice of such
eligibility to Holding and may, in its sole discretion, convert such Mandatory
Shelf Registration Statement on Form S-1 to a registration statement on Form S-3
or such other short-form registration statement by means of a post-effective
amendment or otherwise, unless Holding notifies the Company within 10 Business
Days of receipt of the Company notice that such conversion would interfere with
its distribution of Registrable Shares already in progress and provides a
reasonable explanation therefor, in which case the Company will delay the
conversion of the Mandatory Shelf Registration Statement for a reasonable time
after receipt of the first such notice, not to exceed 30 days in the aggregate.
          (i) Effectiveness and Scope. The Company shall use its commercially
reasonable efforts to cause the Mandatory Registration Statement to be declared
effective by the Commission within 120 days following the Demand Date and to
remain effective until the date on which all Shares in respect thereof cease to
be Registrable Shares. The Mandatory Shelf Registration Statement shall provide
for the resale from time to time, and pursuant to any method or combination of
methods legally available (including an Underwritten Offering, a direct sale to

4

--------------------------------------------------------------------------------

 

purchasers, a sale through brokers or agents, or a sale over the internet), by
Holding, as agreed to by Holding and its counsel.
          (ii) Underwriting. If Holding proposes to conduct an Underwritten
Offering under the Mandatory Shelf Registration Statement, Holding shall advise
the Company of the managing underwriters for such proposed Underwritten
Offerings. In such event, the Company shall enter into an underwriting agreement
in customary form with the managing underwriters, which shall include, among
other provisions, indemnities to the effect and to the extent provided in
Section 5 and shall take all such other reasonable actions as are requested by
the managing underwriter in order to expedite or facilitate the registration and
disposition of the Registrable Shares included in such Underwritten Offering;
provided, however, that the Company shall be required to cause appropriate
officers of the Company or its Affiliates to participate in a “road show” or
similar marketing effort being conducted by such underwriter with respect to
such Underwritten Offering only if Holding and any other Persons, if any, who
are participating in the Underwritten Offering reasonably anticipate gross
proceeds from such Underwritten Offering of at least $20 million; provided,
further, the Company shall not be required to cause such officers of the Company
or its Affiliates to participate in a “road show” or similar marketing effort
being conducted by such underwriter with respect to such Underwritten Offering
more than twice in a 365 day period. If Holding proposes to distribute its
Registrable Shares through such Underwritten Offering, it shall enter into an
underwriting agreement in customary form with the managing underwriters selected
for such underwriting and complete and execute any questionnaires, powers of
attorney, indemnities, securities escrow agreements and other documents
reasonably required under the terms of such underwriting, and furnish to the
Company such information in writing as the Company may reasonably request for
inclusion in the Registration Statement; provided, however, that Holding shall
not be required to make any representations or warranties to or agreements with
the Company or the underwriters other than representations, warranties or
agreements as are customary and reasonably requested by the underwriters.
Notwithstanding any other provision of this Agreement, with respect to an
Underwritten Offering in connection with the Mandatory Shelf Registration
Statement, if the managing underwriters determine in good faith that marketing
factors require a limitation on the number of shares to be included in such
Underwritten Offering, then the managing underwriters may exclude shares
(including Registrable Shares) from the Underwritten Offering, and any shares
included in the Underwritten Offering shall be allocated to Holding to the
extent of its requested amount of Registrable Shares to be included in the
Underwritten Offering.
     (b) Piggyback Registration Rights.
          (i) Piggyback Registration. If, after the date hereof, the Company
proposes (A) to file a registration statement under the Securities Act providing
for a public offering of the Company’s equity securities, other than a
registration statement on Form S-8 or Form S-4 or any similar form hereafter
adopted by the Commission as a replacement therefor (including the Prospectus,
amendments and supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto and all
material incorporated by reference or deemed to be incorporated by reference, if
any, in such registration statement, the “Piggyback Registration Statement”) or
(B) conduct and Underwritten Offering pursuant to a Piggyback Registration
Statement, the Company will notify Holding of the proposed filing and Holding
shall be given an opportunity to include in such Piggyback Registration
Statement or

5

--------------------------------------------------------------------------------

 

Underwritten Offering, as applicable, all or any part of Holding’s Registrable
Shares; provided, however, that the Company shall not be required to provide
such notice and Holding shall not be given an opportunity to include in such
Piggyback Registration Statement to the extent Company has been advised by the
managing underwriter of such Underwritten Offering that the inclusion of any
Registrable Shares for sale for the benefit of Holding will have a materially
adverse effect on the price, timing, marketing or distribution of the Common
Stock. If EnCap Energy Capital Fund VI, L.P. (“EnCap”) has an Affiliate who is
an officer or director of the Company, within ten (10) Business Days after
delivery of the above-described notice by the Company, Holding has the right to
notify the Company in writing of its intention to include Registrable Shares in
the Piggyback Registration Statement or Underwritten Offering, as applicable,
and, in such notice, shall inform the Company of the number of Registrable
Shares Holding wishes to include in such Piggyback Registration Statement or
Underwritten Offering, as applicable, and provide, as a condition to such
inclusion, such information regarding itself and its Registrable Shares as is
required pursuant to Regulation S-K promulgated under the Securities Act to
effect the registration of the Registrable Shares; provided, however, if EnCap
does not have an Affiliate who is an officer or director of the Company, Holding
shall provide such notice within three (3) Business Days (or one (1) Business
Day in the case of an “overnight” offering or “bought deal”) after delivery of
the above-described notice by the Company. If such written notification of
Holding’s intent to include shares in such Piggyback Registration Statement or
Underwritten Offering, as applicable, is not received by the Company within the
time-frame specified in the immediately preceding sentence, Holding shall have
no right to include Registrable Shares in such Piggyback Registration Statement
or Underwritten Offering, as applicable. Inclusion of any Registrable Shares in
such Piggyback Registration Statement will not affect the inclusion of such
Registrable Shares in the Mandatory Shelf Registration Statement until such
Registrable Shares have been sold under the Piggyback Registration Statement, at
which time the Company may remove from the Mandatory Shelf Registration
Statement such Registrable Shares.
               (A) Right to Terminate Piggyback Registration. At any time, the
Company may terminate or withdraw any Piggyback Registration Statement referred
to in this Section 2(b)(i), and without any obligation to Holding whether or not
Holding has elected to include Registrable Shares in such registration. The
Company may suspend the effectiveness and use of any Piggyback Registration
Statement at any time for an unlimited amount of time whether or not Holding has
elected to include Registrable Shares in such registration.
               (B) Underwriting. Any notice provided to Holding by the Company
pursuant to Section 2(b)(i) in connection with an Underwritten Offering shall
advise Holding of the managing underwriters for any Underwritten Offering
proposed under the Piggyback Registration Statement. The right of Holding’s
Registrable Shares to be included in any Piggyback Registration Statement
pursuant to this Section 2(b)(i) shall be conditioned upon participation in such
Underwritten Offering and the inclusion of Holding’s Registrable Shares in the
Underwritten Offering to the extent provided herein. Holding, if distributing
Registrable Shares through such Underwritten Offering shall enter into an
underwriting agreement in customary form with the managing underwriters selected
for such underwriting and complete and execute any questionnaires, powers of
attorney, indemnities, securities escrow agreements and other documents
reasonably required under the terms of such underwriting, and furnish to the
Company such information in writing as the Company may reasonably request for
inclusion

6

--------------------------------------------------------------------------------

 

in the Registration Statement; provided, however, that Holding shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or agreements
as are customary and reasonably requested by the underwriters. Notwithstanding
any other provision of this Agreement, if the managing underwriters determine in
good faith that marketing factors require a limitation on the number of shares
to be included, then the managing underwriters may exclude shares (including
Registrable Shares) from the Piggyback Registration Statement and the
Underwritten Offering, and any Shares included in the Piggyback Registration
Statement and the Underwritten Offering shall be allocated, first, to the
Company, and second, to Holding, and third, to any other Person included in such
Piggyback Registration Statement. If Holding disapproves of the terms of any
Underwritten Offering, Holding may elect to withdraw therefrom by written notice
to the Company and the underwriter, delivered at least 10 Business Days before
the effective date of the Piggyback Registration Statement. Any Registrable
Shares excluded or withdrawn from such Underwritten Offering shall be excluded
and withdrawn from the Piggyback Registration Statement.
               (C) Hold-Back Agreement. By electing to include Registrable
Shares in an Underwritten Offering pursuant to a Piggyback Registration
Statement, Holding shall be deemed to have agreed not to effect any sale or
distribution of securities of the Company of the same or similar class or
classes of the securities included in the Registration Statement or any
securities convertible into or exchangeable or exercisable for such securities,
including a sale pursuant to Rule 144 under the Securities Act, during such
periods as reasonably requested (but in no event longer than 30 days before or
60 days following the pricing of such Underwritten Offering, provided each of
the executive officers and directors of the Company who holds shares of Common
Stock of the Company or securities convertible into or exchangeable or
exercisable for shares of Common Stock of the Company is subject to the same
restriction for the entire time period required of Holding hereunder) by the
representatives of the underwriters.
               (D) Termination of Piggyback Registration Rights. The Piggyback
Registration rights granted pursuant to this Section 2(b) shall terminate on the
third anniversary of the Lock-up Expiration Date.
               (E) Mandatory Shelf Registration not Impacted by Piggyback
Registration Statement. The Company’s obligation to file any Mandatory Shelf
Registration Statement shall not be affected by the filing or effectiveness of
the Piggyback Registration Statement.
     (c) Expenses. The Company shall pay all Registration Expenses in connection
with the registration of the Registrable Shares pursuant to this Agreement.
Holding, if participating in a registration pursuant to this Section 2, shall
bear all discounts and commissions payable to underwriters or brokers and all
transfer taxes in connection with a registration of Holding’s Registrable Shares
pursuant to this Agreement and any other expense of Holding not specifically
allocated to the Company pursuant to this Agreement relating to the sale or
disposition of Holding’s Registrable Shares pursuant to any Registration
Statement. Nothing herein shall require the Company to pay any expenses, fees,
or costs relating to counsel for Holding unless required pursuant to
Section 5(c).

7

--------------------------------------------------------------------------------

 

     (d) No Additional Demand Registration Rights. Unless otherwise consented to
by Holding, which consent shall be unreasonably withheld, the Company shall not
grant to any other Person a demand registration right to register Common Stock
for sale to the public in an Underwritten Offering or a continuous offering
under Rule 415 of the Securities Act.
3. Registration Procedures. In connection with the obligations of the Company
with respect to any registration pursuant to this Agreement, the Company shall:
     (a) prepare and file with the Commission, as specified in this Agreement,
each Registration Statement, which Registration Statement shall comply as to
form in all material respects with the requirements of the applicable form and
include all financial statements required by the Commission to be filed
therewith, and use its commercially reasonable efforts to cause such
Registration Statement to become effective as soon as practicable after filing
and to remain effective as appropriate;
     (b) subject to Section 3(i), (i) prepare and file with the Commission such
amendments and post-effective amendments to each such Registration Statement as
may be necessary to keep such Registration Statement effective and accurate as
appropriate, (ii) cause each Prospectus contained therein to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 or any similar rule that may be adopted under the Securities Act,
(iii) promptly amend or supplement each such Registration Statement to include
the Company’s quarterly and annual financial information and other material
developments (until the Company is eligible to incorporate such information by
reference into the Registration Statement), during which time sales of the
Registrable Shares under the Registration Statement will be suspended until such
amendment or supplement is filed and effective, and (iv) comply in all material
respects with the provisions of the Securities Act with respect to the
disposition of all securities covered by each Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by Holding;
     (c) furnish to Holding, without charge, as many copies of each Prospectus,
including each preliminary Prospectus, any Permitted Issuer Free Writing
Prospectus, and any amendment or supplement thereto and such other documents as
Holding may reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Shares; the Company hereby consents to the use of
such Prospectus, including each preliminary Prospectus, and any Permitted Issuer
Free Writing Prospectus by Holding in connection with the offering and sale of
the Registrable Shares covered by any such Prospectus;
     (d) use its commercially reasonable efforts to register or qualify, or
obtain exemption from registration or qualification for, all Registrable Shares
by the time the applicable Registration Statement is declared effective by the
Commission under all applicable state securities or “blue sky” laws of such
domestic jurisdictions as Holding shall reasonably request in writing, keep each
such registration or qualification or exemption effective during the period such
Registration Statement is required to be kept effective pursuant to this
Agreement and do any and all other acts and things that may be reasonably
necessary or advisable to enable Holding to consummate the disposition in each
such jurisdiction of such Registrable Shares owned by Holding; provided,
however, that the Company shall not be required to (i) qualify generally to do
business in any jurisdiction or to register as a broker or dealer in such
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (ii) subject itself to

8

--------------------------------------------------------------------------------

 

taxation in any such jurisdiction, or (iii) submit to the general service of
process in any such jurisdiction;
     (e) use its commercially reasonable efforts to cause all Registrable Shares
covered by such Registration Statement to be registered and approved by such
other domestic governmental agencies or authorities, if any, as may be necessary
to enable Holding to consummate the disposition of such Registrable Shares;
     (f) notify Holding promptly (i) when such Registration Statement has become
effective and when any post-effective amendments and supplements thereto become
effective, (ii) of the issuance by the Commission or any state securities
authority of any stop order suspending the effectiveness of such Registration
Statement or the initiation of any proceedings for that purpose, (iii) of any
request by the Commission or any other federal or state governmental authority
for amendments or supplements to such Registration Statement or related
Prospectus or any Issuer Free Writing Prospectus or for additional information,
and (iv) of the happening of any event during the period such Registration
Statement is effective as a result of which such Registration Statement or the
related Prospectus or any Permitted Issuer Free Writing Prospectus or any
document incorporated by reference therein contains any 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 (which information
shall be accompanied by an instruction to suspend the use of the Registration
Statement and the Prospectus and such Permitted Issuer Free Writing Prospectus
until the requisite changes have been made);
     (g) use its commercially reasonable efforts to avoid the issuance of, or if
issued, to obtain the withdrawal of, any order enjoining or suspending the use
or effectiveness of a Registration Statement or suspending the qualification (or
exemption from qualification) of any of the Registrable Shares for sale in any
jurisdiction, as promptly as practicable;
     (h) upon written request, furnish to Holding, without charge, at least one
conformed copy of such Registration Statement and any post-effective amendment
or supplement thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
     (i) except as provided in Section 4, upon the occurrence of any event
contemplated by Section 3(f)(iv), use its commercially reasonable efforts to
promptly prepare a supplement or post-effective amendment to a Registration
Statement or the related Prospectus or any Permitted Issuer Free Writing
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of the
Registrable Shares, such Prospectus or Permitted Issuer Free Writing Prospectus
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and, upon request, promptly furnish to Holding a reasonable number
of copies of each such supplement or post-effective amendment;
     (j) if requested by the representative of the underwriters, if any, or
Holding, (i) promptly incorporate in a Prospectus supplement or post-effective
amendment such material information as the representative of the underwriters,
if any, or Holding indicate relates to them or otherwise reasonably request be
included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;

9

--------------------------------------------------------------------------------

 

     (k) in the case of an Underwritten Offering, use its commercially
reasonable efforts to furnish or caused to be furnished to Holding and the
underwriters a signed counterpart, addressed to Holding and the underwriters,
of: (i) an opinion of counsel for the Company, dated the date of each closing
under the underwriting agreement, reasonably satisfactory to the underwriters;
(ii) a “comfort” letter, dated the date of the Underwriting Agreement and the
date of each closing under the underwriting agreement, signed by the independent
public accountants who have certified the Company’s financial statements
included in such Registration Statement, covering substantially the same matters
with respect to such Registration Statement (and the Prospectus included
therein) and with respect to events subsequent to the date of such financial
statements, as are customarily covered in accountants’ letters delivered to
underwriters in underwritten public offerings of securities, and such other
financial matters as the underwriters may reasonably request and customarily
obtained by underwriters in underwritten offerings, provided that, to be an
addressee of the comfort letter, Holding may be required to confirm that it is
in the category of persons to whom a comfort letter may be delivered in
accordance with applicable accounting literature; and (iii) a “comfort” letter,
dated the date of the Underwriting Agreement and the date of each closing under
the underwriting agreement, signed by the independent petroleum engineering
consultants who have evaluated the Company’s oil and gas reserves included in
such Registration Statement, covering substantially the same matters with
respect to such Registration Statement (and the Prospectus included therein) and
with respect to events subsequent to the date of its evaluation of such oil and
gas reserves, as are customarily covered in engineers’ letters delivered to
underwriters in underwritten public offerings of securities, and such other
related matters as the underwriters may reasonably request and customarily
obtained by underwriters in underwritten offerings;
     (l) enter into customary agreements (including in the case of an
Underwritten Offering, an underwriting agreement in customary form) and take all
other action in connection therewith to expedite or facilitate the distribution
of the Registrable Shares included in such Registration Statement and, in the
case of an Underwritten Offering, make representations and warranties to the
underwriters in such form and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same to the extent
customary if and when requested;
     (m) in connection with an Underwritten Offering, use its commercially
reasonable efforts to make available for inspection by the representative of any
underwriters participating in any disposition pursuant to a Registration
Statement, all financial and other records, pertinent corporate documents and
properties of the Company and cause the respective officers, directors and
employees of the Company to supply all information reasonably requested by any
such representatives, the representative of the underwriters, counsel thereto or
accountants in connection with a Registration Statement; provided, however, that
such records, documents or information that the Company determines, in good
faith, to be confidential and notifies such representatives, representative of
the underwriters, counsel thereto or accountants are confidential shall not be
disclosed by the representatives, representative of the underwriters, counsel
thereto or accountants unless (i) the disclosure of such records, documents or
information is necessary to avoid or correct a misstatement or omission in a
Registration Statement or Prospectus, (ii) the release of such records,
documents or information is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction, or (iii) such records, documents or information
have been generally made available to the public; provided further, that to the
extent practicable, the foregoing inspection and information gathering shall be

10

--------------------------------------------------------------------------------

 

coordinated on behalf of Holding and the other parties entitled thereto by one
counsel designated by and on behalf of Holding and the other parties, which
counsel the Company determines in good faith is reasonably acceptable;
     (n) use its commercially reasonable efforts (including seeking to cure in
the Company’s listing or inclusion application any deficiencies cited by the
exchange or market) to list or include all Registrable Shares on the New York
Stock Exchange and thereafter maintain the listing on such exchange or market
when such Registrable Shares are included in a Registration Statement;
     (o) use its commercially reasonable efforts to prepare and file in a timely
manner all documents and reports required by the Exchange Act and, to the extent
the Company’s obligation to file such reports pursuant to Section 15(d) of the
Exchange Act expires before the expiration of the effectiveness period of the
Registration Statement as required by Section 2(a)(i), the Company shall
register the Registrable Shares under the Exchange Act and shall maintain such
registration through the effectiveness period required by Section 2(a)(i);
     (p) provide a CUSIP number for all Registrable Shares not later than the
effective date of the Registration Statement;
     (q) (i) otherwise use its commercially reasonable efforts to comply in all
material respects with all applicable rules and regulations of the Commission,
(ii) make generally available to its stockholders, as soon as reasonably
practicable, earnings statements covering at least 12 months that satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder, and
(iii) delay filing any Registration Statement or Prospectus or amendment or
supplement to such Registration Statement or Prospectus to which Holding shall
have reasonably objected on the grounds that such Registration Statement or
Prospectus or amendment or supplement does not comply in all material respects
with the requirements of the Securities Act, Holding having been furnished with
a copy thereof at least three Business Days before the filing thereof, provided
that the Company may file such Registration Statement or Prospectus or amendment
or supplement following such time as the Company shall have made a good faith
effort to resolve any such issue with Holding and shall have advised Holding in
writing of its reasonable belief that such filing complies in all material
respects with the requirements of the Securities Act;
     (r) cause to be maintained a registrar and transfer agent for all
Registrable Shares covered by any Registration Statement from and after a date
not later than the effective date of such Registration Statement;
     (s) in connection with any sale or transfer of the Registrable Shares
(whether or not pursuant to a Registration Statement) that will result in the
securities being delivered no longer constituting Registrable Shares, cooperate
with Holding and the representative of the underwriters, if any, to facilitate
the timely preparation and delivery of certificates representing the Registrable
Shares to be sold, which certificates shall not bear any transfer restrictive
legends (other than as required by the Company’s charter), and to enable such
Registrable Shares to be in such denominations and registered in such names as
the representative of the underwriters, if any, or Holding may request at least
three Business Days before any sale of the Registrable Shares;

11

--------------------------------------------------------------------------------

 

     (t) if required under the rules of FINRA, in connection with the initial
filing of a Shelf Registration Statement and each amendment thereto with the
Commission pursuant to Section 2(a), cooperate with underwriter’s or other FINRA
member’s counsel as reasonably necessary to prepare and, within one Business Day
of such filing with the Commission, to file with FINRA all forms and information
required or requested by FINRA in order to obtain written confirmation from
FINRA that FINRA does not object to the fairness and reasonableness of the
underwriting terms and arrangements (or any deemed underwriting terms and
arrangements) (each such written confirmation, a “No Objections Letter”)
relating to the resale of Registrable Shares pursuant to the Shelf Registration
Statement, including, without limitation, information provided to FINRA through
its COBRADesk system, and shall pay all costs, fees and expenses incident to
FINRA’s review of the Shelf Registration Statement and the related underwriting
terms and arrangements, including, without limitation, all filing fees
associated with any filings or submissions to FINRA and the legal expenses,
filing fees and other disbursements of any other FINRA member that is the holder
of, or is affiliated or associated with an owner of, Registrable Shares included
in the Shelf Registration Statement (including in connection with any initial or
subsequent member filing); and
     (u) upon effectiveness of the first Registration Statement filed under this
Agreement, if necessary, the Company will take such actions and make such
filings as are necessary to effect the registration of the Common Stock under
the Exchange Act simultaneously with or immediately following the effectiveness
of the Registration Statement.
     The Company may require Holding to furnish to the Company such information
regarding the proposed distribution by Holding as the Company may from time to
time reasonably request in writing or as shall be required to effect the
registration of the Registrable Shares, and Holding shall not be entitled to be
named as a selling stockholder in any Registration Statement and Holding shall
be entitled to use the Prospectus forming a part thereof if Holding does not
provide such information to the Company. Holding further agrees to furnish
promptly to the Company in writing all information required from time to time to
make the information previously furnished by Holding not misleading.
     Holding agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(f)(ii), 3(f)(iii) or
3(f)(iv), Holding will immediately discontinue disposition of Registrable Shares
pursuant to a Registration Statement until (i) any such stop order is vacated or
(ii) if an event described in Section 3(f)(iii) or 3(f)(iv) occurs, Holding’s
receipt of the copies of the supplemented or amended Prospectus. If so directed
by the Company, Holding will deliver to the Company (at the reasonable expense
of the Company) all copies in its possession, other than permanent file copies
then in Holding’s possession, of the Prospectus covering such Registrable Shares
current at the time of receipt of such notice.
     Holding represents that it has not prepared or had prepared on its behalf
or used or referred to, and agrees that it will not prepare or have prepared on
its behalf or use or refer to, any Free Writing Prospectus, and has not
distributed and will not distribute any written materials in connection with the
offer or sale of the Registrable Shares without the prior express written
consent of the Company and, in connection with any Underwritten Offering, the
underwriters. Any such Free Writing Prospectus consented to by the Company and
the underwriters, as the case may be, is hereinafter referred to as a “Permitted
Free Writing Prospectus.” The Company represents and agrees that it has treated
and will treat, as the case may be, each Permitted Free

12

--------------------------------------------------------------------------------

 

Writing Prospectus as an Issuer Free Writing Prospectus, including in respect of
timely filing with the Commission, legending and record keeping.
4. Suspension Period.
     (a) Subject to the provisions of this Section 4, following the
effectiveness of a Registration Statement (and the filings with any
international, federal or state securities commissions), the Company may direct
Holding, in accordance with Section 4(b), to suspend sales of the Registrable
Shares pursuant to a Registration Statement for such times as the Company
reasonably may determine is necessary and advisable (but in no event, (A) in the
case of clause (i) below, for more than 45 consecutive days and (B) in the case
of clauses (i), (ii) and (iii) below, for more than an aggregate of 90 days in
any consecutive 12-month period commencing on the Closing Time or more than
60 days in any consecutive 90-day period, except (in the case of clause (B)) as
a result of a review of any post-effective amendment by the Commission before
declaring any post-effective amendment to the Registration Statement effective,
provided that the Company has used its commercially reasonable efforts to cause
such post-effective amendment to be declared effective), if any of the following
events shall occur: (i) the representative of the underwriters of an
Underwritten Offering of primary shares by the Company has advised the Company
that the sale of Registrable Shares pursuant to the Registration Statement would
have a material adverse effect on the price, timing, marketing or distribution
of such Underwritten Offering; (ii) the majority of the members of the Board of
Directors of the Company shall have determined in good faith that (1) the offer
or sale of any Registrable Shares would materially impede, delay or interfere
with any proposed financing, offer or sale of securities, acquisition, merger,
tender offer, business combination, corporate reorganization, consolidation or
other significant transaction involving the Company, (2) upon the advice of
counsel, the sale of Registrable Shares pursuant to the Registration Statement
would require disclosure of non-public material information not otherwise
required to be disclosed under applicable law, and (3) either (x) the Company
has a bona fide business purpose for preserving the confidentiality of such
transaction, (y) disclosure would have a material adverse effect on the Company
or the Company’s ability to consummate such transaction, or (z) the proposed
transaction renders the Company unable to comply with Commission requirements,
in each case under circumstances that would make it impractical or inadvisable
to cause the Registration Statement (or such filings) to become effective or to
promptly amend or supplement the Registration Statement on a post-effective
basis, as applicable; or (iii) the majority of the members of the Board of
Directors of the Company shall have determined in good faith, upon the advice of
counsel, that it is required by law, rule or regulation to supplement the
Registration Statement or file a post-effective amendment to the Registration
Statement in order to incorporate information into the Registration Statement
for the purpose of (1) including in the Registration Statement any prospectus
required under Section 10(a)(3) of the Securities Act; (2) reflecting in the
prospectus included in the Registration Statement any facts or events arising
after the effective date of the Registration Statement (or of the most-recent
post-effective amendment) that, individually or in the aggregate, represents a
fundamental change in the information set forth therein; or (3) including in the
prospectus included in the Registration Statement any material information with
respect to the plan of distribution not disclosed in the Registration Statement
or any material change to such information. Upon the occurrence of any such
suspension, the Company shall use its commercially reasonable efforts to cause
the Registration Statement to become effective or to promptly amend or
supplement the Registration Statement on a post-effective basis or to take such
action as is necessary

13

--------------------------------------------------------------------------------

 

to make resumed use of the Registration Statement compatible with the Company’s
best interests, as applicable, so as to permit Holding to resume sales of the
Registrable Shares as soon as possible.
     (b) In the case of an event that causes the Company to suspend the use of a
Registration Statement (a “Suspension Event”), the Company shall give written
notice (a “Suspension Notice”) to Holding to suspend sales of the Registrable
Shares and such notice shall state generally the basis for the notice and that
such suspension shall continue only for so long as the Suspension Event or its
effect is continuing and the Company is using its best efforts and taking all
reasonable steps to terminate suspension of the use of the Registration
Statement as promptly as possible. Holding shall not effect any sales of the
Registrable Shares pursuant to such Registration Statement (or such filings) at
any time after it has received a Suspension Notice from the Company and before
receipt of an End of Suspension Notice (as defined below). If so directed by the
Company, Holding will deliver to the Company (at the expense of the Company) all
copies other than permanent file copies then in Holding’s possession of the
Prospectus and any Issuer Free Writing Prospectus covering the Registrable
Shares at the time of receipt of the Suspension Notice. Holding may recommence
effecting sales of the Registrable Shares pursuant to the Registration Statement
(or such filings) following further notice to such effect (an “End of Suspension
Notice”) from the Company, which End of Suspension Notice shall be given by the
Company to Holding in the manner described above promptly following the
conclusion of any Suspension Event and its effect.
     (c) Notwithstanding any provision herein to the contrary, subject to any
Suspension Events or as contemplated by Section 3(f)(iv), each Registration
Statement shall be maintained effective pursuant to this Agreement until the
Registrable Shares are not Registrable Shares.
5. Indemnification and Contribution.
     (a) The Company agrees to indemnify and hold harmless (i) Holding and any
underwriter (as determined in the Securities Act) for Holding, (ii) each Person,
if any, who controls (within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act) any of the foregoing (a “Controlling
Person”), and (iii) the respective officers, directors, partners, members,
employees, representatives and agents of any such Person or any Controlling
Person (any Person referred to in clause (i), (ii) or (iii) may hereinafter be
referred to as an “Purchaser Indemnitee”) from and against any and all losses,
claims, damages, judgments, actions, reasonable out-of-pocket expenses, and
other liabilities, including, as incurred, reimbursement of all reasonable costs
of investigating, preparing, pursuing or defending any claim or action, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of outside counsel to any
Purchaser Indemnitee, joint or several (the “Liabilities”), directly or
indirectly related to, based upon, arising out of or in connection with any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or Issuer Free Writing Prospectus (as amended
or supplemented), or any preliminary Prospectus or any other document prepared
by the Company used to sell the Registrable Shares, or any 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, except insofar
as such Liabilities arise out of or are based upon (i) any untrue statement or
omission or alleged untrue statement or omission made in reliance upon

14

--------------------------------------------------------------------------------

 

and in conformity with information relating to any Purchaser Indemnitee
furnished to the Company or any underwriter in writing by such Purchaser
Indemnitee expressly for use therein, (ii) any untrue statement contained in or
omitted from a preliminary Prospectus if such untrue statement is cured by
delivery to Holding of an amended preliminary Prospectus or a Free Writing
Prospectus prior to pricing of the sale of securities, if an Underwritten
Offering, or the effectiveness of the Mandatory Shelf Registration Statement to
which the preliminary Prospectus relates, or (iii) any sales by Holding after
the delivery by the Company to Holding of a Suspension Notice and before the
delivery by the Company of an End of Suspension Notice. The Company shall notify
Holding promptly of the institution, threat or assertion of any claim,
proceeding (including any governmental investigation), or litigation which it
shall have become aware in connection with the matters addressed by this
Agreement which involves the Company or a Purchaser Indemnitee. The indemnity
provided for herein shall remain in full force and effect regardless of any
investigation made by or on behalf of any Purchaser Indemnitee.
     (b) In connection with any Registration Statement in which Holding is
participating, Holding agrees to indemnify and hold harmless the Company, each
Person who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, and the respective
officers, directors, partners, members, representatives, employees and agents of
such Person or Controlling Person to the same extent as the foregoing indemnity
from the Company to each Purchaser Indemnitee, but only with reference to
(i) untrue statements or omissions or alleged untrue statements or omissions
made in reliance upon and in strict conformity with information relating to
Holding furnished to the Company in writing by Holding expressly for use in any
Registration Statement or Prospectus, any amendment or supplement thereto, or
any preliminary Prospectus and (ii) any sales by Holding after the delivery by
the Company to Holding of a Suspension Notice and before the delivery by the
Company of an End of Suspension Notice. The liability of Holding pursuant to
clause (i) of the immediately preceding sentence shall in no event exceed the
net proceeds received by Holding from sales of Registrable Shares giving rise to
such obligations. If Holding elects to include Registrable Shares in an
Underwritten Offering, Holding shall be required to agree to such customary
indemnification provisions as may reasonably be required by the underwriter in
connection with such Underwritten Offering.
     (c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to Section 5(a)
or 5(b), such Person (the “Indemnified Party”), shall promptly notify the Person
against whom such indemnity may be sought (the “Indemnifying Party”), in writing
(to the extent legally advisable) of the commencement thereof (but the failure
to so notify an Indemnifying Party shall not relieve it from any Liability which
it may have under this Section 5, except to the extent the Indemnifying Party is
materially prejudiced by the failure to give notice), and the Indemnifying
Party, upon request of the Indemnified Party, shall retain counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party and any
others the Indemnifying Party may reasonably designate in such proceeding and
shall assume the defense of such proceeding and pay the fees and expenses
actually incurred by such counsel related to such proceeding. Notwithstanding
the foregoing, in any such proceeding, any Indemnified Party may retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party, unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed in writing to the

15

--------------------------------------------------------------------------------

 

contrary, (ii) the Indemnifying Party failed within a reasonable time after
notice of commencement of the action to assume the defense and employ counsel
reasonably satisfactory to the Indemnified Party, (iii) the Indemnifying Party
and its counsel do not pursue in a reasonable manner the defense of such action
or (iv) the named parties to any such action (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, or any Affiliate
of the Indemnifying Party, and such Indemnified Party shall have been reasonably
advised by counsel that, either (x) there may be one or more legal defenses
available to it which are different from or additional to those available to the
Indemnifying Party or such Affiliate of the Indemnifying Party or (y) a conflict
may exist between such Indemnified Party and the Indemnifying Party or such
Affiliate of the Indemnifying Party, in which event the Indemnifying Party may
not assume or direct the defense of such action on behalf of such Indemnified
Party, it being understood, however, that the Indemnifying Party shall not, in
connection with any one such action or separate but substantially similar or
related actions arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all such Indemnified Parties, which firm
shall be designated in writing by those Indemnified Parties who sold a majority
of the Registrable Shares sold by all such Indemnified Parties under the
particular Registration Statement and any such separate firm for the Company,
the directors, the officers and such control Persons of the Company as shall be
designated in writing by the Company. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent, which
consent shall not be unreasonably withheld or delayed, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Party agrees to indemnify any Indemnified Party from and against any Liability
by reason of such settlement or judgment to the extent provided in this
Section 5 without reference to this sentence. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all Liability on claims
that are the subject matter of such proceeding.
     (d) If the indemnification provided for in Section 5(a) or 5(b) is for any
reason held to be unavailable to an Indemnified Party in respect of any
Liabilities referred to therein (other than by reason of the exceptions provided
therein) or is insufficient to hold harmless a party indemnified thereunder,
then each Indemnifying Party under such sections, in lieu of indemnifying such
Indemnified Party thereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such Liabilities (i) in such proportion as
is appropriate to reflect the relative benefits of the Indemnified Party on the
one hand and the Indemnifying Parties on the other in connection with the
statements or omissions that resulted in such Liabilities, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Indemnifying
Parties and the Indemnified Party, as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and any
Purchaser Indemnitees, on the other, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by such Purchaser Indemnitees and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

16

--------------------------------------------------------------------------------

 

     (e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 5 were determined by pro rata allocation
(even if such Indemnified Parties were treated as one entity for such purpose),
or by any other method of allocation that does not take account of the equitable
considerations referred to in Section 5(d). The amount paid or payable by an
Indemnified Party as a result of any Liabilities referred to in Section 5(d)
shall be deemed to include, subject to the limitations set forth above, any
reasonable legal or other expenses actually incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5, in no event shall a Purchaser
Indemnitee be required to contribute any amount in excess of the amount by which
proceeds received by such Purchaser Indemnitee from sales of Registrable Shares
exceeds the amount of any damages that such Purchaser Indemnitee has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. For purposes of this Section 5, each Person, if
any, who controls (within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act) Holding shall have the same rights to
contribution as Holding, as the case may be, and each Person, if any, who
controls (within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act) the Company, and each officer, director, partner,
member, employee, representative, agent or manager of the Company shall have the
same rights to contribution as the Company. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 5 or otherwise, except to
the extent that any party is materially prejudiced by the failure to give
notice. No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act), shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
     (f) The indemnity and contribution agreements contained in this Section 5
will be in addition to any Liability which any Indemnifying Party may otherwise
have to any Indemnified Party referred to above. Each Purchaser Indemnitee’s
obligations to contribute pursuant to this Section 5 are not joint but are
several in the proportion that the number of Shares sold by such Purchaser
Indemnitee bears to the number of Shares sold by all Purchaser Indemnities.
6. Termination of the Company’s Obligations. The Company shall have no further
obligations pursuant to this Agreement at such time as no Registrable Shares are
outstanding after their original issuance, provided, however, that the Company’s
obligations under Sections 5 and 7 (and any related definitions) shall remain in
full force and effect following such time.

17

--------------------------------------------------------------------------------

 

7. Miscellaneous.
     (a) Amendments and Waivers. This Agreement may not be amended, modified or
supplemented, and waivers or consents to or departures from the provisions
hereof may not be given, without the written consent of the Company and Holding;
provided, however, that for purposes of this Agreement, Registrable Shares
owned, directly or indirectly, by an entity that is an Affiliate of the Company
due to the Company’s owning an interest in such entity shall not be deemed to be
outstanding.
     (b) Notices. All notices and other communications, provided for or
permitted hereunder shall be made by press release publicly disseminated or in
writing and delivered by electronic transmission, facsimile (with receipt
confirmed), overnight courier or registered or certified mail, return receipt
requested, or by telegram, addressed as follows:
          (i) if to Holding, at the most current address given by the transfer
agent and registrar of the Shares to the Company (including by email); and
          (ii) if to the Company, at the offices of the Company at 1001 Fannin,
Suite 202, Houston, TX 77002, Attn: Chief Executive Officer; with a copy to
Vinson & Elkins LLP, 1001 Fannin, Suite 2500, Houston, Texas 77022, Attention:
David P. Oelman.
     (c) Successors and Assigns; Third Party Beneficiaries. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto and shall inure to the benefit of Holding. The
registration rights granted by this Agreement may not be transferred or assigned
by operation of law or in connection with any transfer or assignment Registrable
Securities to a transferee unless, immediately following such transfer or
assignment, such transferee will hold an amount of Registrable Shares greater
than 10% of the Common Stock outstanding on the date of such transfer or
assignment, and then only upon notification to the Company in writing and
agreement by such transferee to the rights and obligations of this Agreement.
References to Holding in this Agreement shall be deemed to include any such
transferee or assignee permitted by this Section 7(c).
     (d) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
     (e) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
     (f) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision,

18

--------------------------------------------------------------------------------

 

covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties hereto that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
     (g) Entire Agreement. This Agreement is intended by the parties hereto as a
final expression of their agreement, and is 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 and therein.
     (h) Survival. The indemnification and contribution obligations under
Section 5 shall survive the termination of the Company’s obligations under
Section 2.
     (i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the provisions of this
Agreement. All references made in this Agreement to “Section” refer to such
Section of this Agreement, unless expressly stated otherwise.
     (j) Adjustment for Stock Splits, etc. Wherever in this Agreement there is a
reference to a specific number of shares with respect to any securities, then
upon the occurrence of any subdivision, combination, or stock dividend of such
shares, the specific number of shares with respect to any securities so
referenced in this Agreement shall automatically be proportionally adjusted to
reflect the effect on the outstanding shares of such class or series of stock by
such subdivision, combination, or stock dividend.
[Remainder of this Page Intentionally Left Blank]

19

--------------------------------------------------------------------------------

 

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

            OASIS PETROLEUM INC.
      By:   /s/ Thomas B. Nusz         Name:   Thomas B. Nusz        Title:  
President and Chief Executive Officer        OAS HOLDING COMPANY LLC
      By:   /s/ Thomas B. Nusz         Name:   Thomas B. Nusz        Title:  
President and Chief Executive Officer