Document:

exv10w5

Exhibit 10.5

Execution Version

FIRST AMENDMENT

TO

AMENDED AND RESTATED CREDIT AGREEMENT AND CONSENT

Dated as of June 3, 2010

among

OASIS PETROLEUM NORTH AMERICA LLC,

as Borrower,

THE GUARANTORS PARTY HERETO,

BNP PARIBAS

as Administrative Agent,

and

THE LENDERS PARTY HERETO

 

 

FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND CONSENT

     THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND CONSENT (this “First
Amendment”) dated as of June 3, 2010, among OASIS PETROLEUM NORTH AMERICA LLC, a Delaware
limited liability company (the “Borrower”), the Guarantors party hereto (the
“Guarantors” and collectively with the Borrower, the “Obligors”); each of the
lenders party to the Credit Agreement referred to below (collectively, the “Lenders”); and
BNP PARIBAS, as administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative Agent”).

R E C I T A L S

     A. The Parent, the Borrower, the Administrative Agent and the Lenders are parties to that
certain Amended and Restated Credit Agreement dated as of February 26, 2010 (as amended, the
“Credit Agreement”), pursuant to which the Lenders have made certain credit available to
and on behalf of the Borrower.

     B. Concurrently with the effectiveness hereof, Oasis Petroleum Inc. is consummating an initial
public offering of its Equity Interests.

     C. The Borrower, the Guarantors, the Administrative Agent and the Lenders have agreed to amend
certain provisions of the Credit Agreement and consent to certain other matters.

     D. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

Section 1. Defined Terms. Each capitalized term used herein but not otherwise defined
herein has the meaning given such term in the Credit Agreement, as amended by this First Amendment.
Unless otherwise indicated, all section references in this First Amendment refer to sections of
the Credit Agreement.

Section 2. Amendments to Credit Agreement.

     2.1 Amendment to Introductory Paragraph. The definition of “Parent”, as defined in
the introductory paragraph of the Credit Agreement, is hereby amended to refer to each of Oasis
Petroleum LLC, a Delaware limited liability company, and Oasis Petroleum Inc., a Delaware
corporation, and all references in the Credit Agreement and other Loan Documents to “the Parent”
shall be deemed to be a reference to each of such entities mutatis mutandis.

     2.2 Amendments to Section 1.02.

     (a) The definition of “Agreement” is hereby amended in its entirety to read as
follows:

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     “Agreement” means this Credit Agreement, as amended by the First
Amendment, as the same may be amended or supplemented from time to time.

     (b) The definition of “Change in Control” is hereby amended in its entirety to read as
follows:

     “Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the meaning of
the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect
on the date hereof) other than Permitted Holders, of Equity Interests representing
more than 35% of the aggregate ordinary voting power represented by the issued and
outstanding Equity Interests of Oasis Petroleum Inc., (b) occupation of a majority
of the seats (other than vacant seats) on the board of directors of Oasis Petroleum
Inc. by Persons who were not (i) initial members of the board of directors of Oasis
Petroleum Inc., (ii) nominated by the board of directors of Oasis Petroleum Inc. or
(iii) appointed by directors so nominated or (c) Oasis Petroleum Inc. fails to own
directly or indirectly all of the Equity Interests of the Borrower.

     (c) The following definition of “First Amendment” is hereby added where alphabetically
appropriate to read as follows:

     “First Amendment” means that certain First Amendment to Amended and
Restated Credit Agreement and Consent, dated as of June 3, 2010, among the Borrower,
the Guarantors, the Administrative Agent and the Lenders party thereto.

     (d) The definition of “Initial Public Offering” is hereby amended in its entirety to
read as follows:

     “Initial Public Offering” means a primary offering to the public for
cash of any Equity Interests (other than Disqualified Capital Stock) of Oasis
Petroleum Inc. resulting in the receipt by Oasis Petroleum Inc. of net cash proceeds
of at least $200,000,000; provided that issuances of securities pursuant to employee
benefit plans shall not be considered an “Initial Public Offering”.

     (e) The definition of “Parent LLC Agreement” is hereby deleted in its entirety.

     (f) The definition of “Permitted Holders” is hereby amended in its entirety to read as
follows:

     “Permitted Holders” means Oasis Petroleum Management LLC, a Delaware
limited liability company, OAS Holding Company LLC, a Delaware limited liability
company (“Holdings”), Encap Energy Capital Fund VI, L.P., a Texas limited
partnership (“Encap Capital VI”), Encap VI-B Acquisitions, L.P., a Texas
limited partnership (“Encap Acquisitions”) and Encap Energy Capital Fund
VII, L.P., a Texas limited partnership (“Encap Capital VII”, and together
with

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Encap Capital VI and Encap Acquisitions, the “Encap Members”), any
general partner or managing member of any Encap Member or Holdings or any Person
formed and managed or Controlled by such Encap Member, its general partner or
managing member or an Affiliate of its general partner or managing member as a
vehicle for purposes of making investments.

     (g) The following definition of “Senior Notes” is hereby added where alphabetically
appropriate to read as follows:

     “Senior Notes” means any unsecured senior or senior subordinated Debt
securities (whether registered or privately placed) incurred pursuant to a Senior
Notes Indenture.

     (h) The following definition of “Senior Notes Indenture” is hereby added where
alphabetically appropriate to read as follows:

     “Senior Notes Indenture” means any indenture among Oasis Petroleum
Inc., as issuer, the subsidiary guarantors party thereto and the trustee named
therein, pursuant to which the Senior Notes are issued, as the same may be amended
or supplemented in accordance with Section 9.04(e).

     2.3 Amendment to Section 2.07. Section 2.07 is hereby amended by inserting the
following sub-section (e) immediately following the existing sub-section (d) therein:

(e) Reduction of Borrowing Base Upon Issuance of Senior Notes.
Notwithstanding anything to the contrary contained herein, if Oasis Petroleum Inc.
issues any Senior Notes during the period between Scheduled Redetermination dates or
not in conjunction with an Interim Redetermination, then on the date on which such
Senior Notes are issued, the Borrowing Base then in effect shall be reduced by an
amount equal to the product of 0.25 multiplied by the stated principal amount of
such Senior Notes. The Borrowing Base as so reduced shall become the new Borrowing
Base immediately upon the date of such issuance, effective and applicable to the
Borrower, the Agents, the Issuing Bank and the Lenders on such date until the next
redetermination or modification thereof hereunder. For purposes of this Section
2.07(e), if any such Debt is issued at a discount or otherwise sold for less than
“par”, the reduction shall be calculated based upon the stated principal amount
without reference to such discount.

     2.4 Amendment to Section 3.04(c). Section 3.04(c) is hereby amended by inserting the
following sub-section (iv) immediately following the existing sub-section (iii) therein and
renumbering the existing sub-sections (iv) and (v) as sub-sections (v) and (vi) respectively:

(iv) Upon any adjustments to the Borrowing Base pursuant to Section 2.07(e), if the
total Revolving Credit Exposures exceeds the Borrowing Base as adjusted, then the
Borrower shall (a) prepay the Borrowings in an aggregate principal amount equal to
such excess, and (b) if any excess remains after prepaying all of

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the Borrowings as a result of an LC Exposure, pay to the Administrative Agent on
behalf of the Lenders an amount equal to such excess to be held as cash collateral
as provided in Section 2.08(j). The Borrower shall be obligated to make such
prepayment and/or deposit of cash collateral, if required, on the date it issues
such Senior Notes; provided that all payments required to be made pursuant to this
Section 3.04(c)(iv) must be made on or prior to the Termination Date.

     2.5 Amendment to Section 7.02. Section 7.02 is hereby amended in its entirety to read
as follows:

Section 7.02 Authority; Enforceability. The Transactions are within the
Parent’s, the Borrower’s and each Guarantor’s corporate, limited liability company
or partnership, as applicable, powers and have been duly authorized by all necessary
corporate, limited liability company, partnership and, if required, shareholder,
member or partner action (including, without limitation, any action required to be
taken by any class of directors of the Parent, the Borrower or any other Person,
whether interested or disinterested, in order to ensure the due authorization of the
Transactions). Each Loan Document to which the Parent, the Borrower and each
Guarantor is a party has been duly executed and delivered by the Borrower and such
Guarantor and constitutes a legal, valid and binding obligation of the Parent, the
Borrower and such Guarantor, as applicable, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general principles
of equity, regardless of whether considered in a proceeding in equity or at law.

     2.6 Amendment to Section 7.04. Sections 7.04(a) and (b) are hereby amended in its
entirety to read as follows:

(a) Oasis Petroleum LLC has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders equity and cash flows (1) as of
and for the fiscal year ended December 31, 2008, reported on by
PricewaterhouseCoopers LLP, independent public accountants, and (2) as of and for
the fiscal quarter and the portion of the fiscal year ended September 30, 2009,
certified by its chief financial officer. Such financial statements present fairly,
in all material respects, the financial position and results of operations and cash
flows of Oasis Petroleum LLC and its consolidated subsidiaries as of such dates and
for such periods in accordance with GAAP, subject to year-end audit adjustments and
the absence of footnotes in the case of the unaudited quarterly financial
statements.

(b) Since December 31, 2008, (i) there has been no event, development or
circumstance that has had or could reasonably be expected to have a Material Adverse
Effect except, with respect only to events or circumstances contemplated by clause
(a) of the definition of “Material Adverse Effect”, for the Initial Public Offering
or actions undertaken in preparation of or in connection with the Initial

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Public Offering and (ii) the business of the Parent, the Borrower and the
Subsidiaries has been conducted only in the ordinary course, in all material
respects, consistent with past business practices.

     2.7 Amendment to Section 7.12. Section 7.12 is hereby amended in its entirety to read
as follows:

Section 7.12 Insurance. The Parent and the Borrower have, and have caused
all of their respective Subsidiaries to have, (a) all insurance policies sufficient
for the compliance by each of them with all material Governmental Requirements and
all material agreements and (b) insurance coverage in at least amounts and against
such risk (including, without limitation, public liability) that are usually insured
against by companies similarly situated and engaged in the same or a similar
business for the assets and operations of the Parent, the Borrower and their
respective Subsidiaries. The Administrative Agent and the Lenders have been named
as additional insureds in respect of such liability insurance policies and the
Administrative Agent has been named as loss payee with respect to Property loss
insurance.

     2.8 Amendment to Section 7.15. Section 7.15 is hereby amended in its entirety to read
as follows:

Section 7.15 Location of Business and Offices. The Borrower’s jurisdiction
of organization is the State of Delaware; the name of the Borrower as listed in the
public records of its jurisdiction of organization is “Oasis Petroleum North America
LLC”; and the organizational identification number of the Borrower in its
jurisdiction of organization is 4354265 (or, in each case, as set forth in a notice
delivered to the Administrative Agent pursuant to Section 8.01(m) in accordance with
Section 12.01). The Borrower’s principal place of business and chief executive
offices are located at the address specified in Section 12.01 (or as set forth in a
notice delivered pursuant to Section 8.01(m) and Section 12.01(c)). The
jurisdiction of organization of Oasis Petroleum LLC is the State of Delaware; the
name of Oasis Petroleum LLC as listed in the public records of its jurisdiction of
organization is “Oasis Petroleum LLC”, and the organizational identification number
of Oasis Petroleum LLC in its jurisdiction of organization is 4307625 (or, in each
case, as set forth in a notice delivered to the Administrative Agent pursuant to
Section 8.01(m) in accordance with Section 12.01). The principal place of business
and chief executive offices of Oasis Petroleum LLC are located at the address
specified in Section 12.01 (or as set forth in a notice delivered pursuant to
Section 8.01(m) and Section 12.01(c)). The jurisdiction of organization of Oasis
Petroleum Inc. is the State of Delaware; the name of Oasis Petroleum Inc. as listed
in the public records of its jurisdiction of organization is “Oasis Petroleum Inc.”,
and the organizational identification number of Oasis Petroleum Inc. in its
jurisdiction of organization is 4793429 (or, in each case, as set forth in a notice
delivered to the Administrative Agent pursuant to Section 8.01(m) in accordance with
Section 12.01). The principal place of business and

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chief executive offices of Oasis Petroleum Inc. are located at the address specified
in Section 12.01 (or as set forth in a notice delivered pursuant to Section 8.01(m)
and Section 12.01(c)). Each Subsidiary’s jurisdiction of organization, name as
listed in the public records of its jurisdiction of organization, organizational
identification number in its jurisdiction of organization, and the location of its
principal place of business and chief executive office is stated on Schedule 7.14
(or as set forth in a notice delivered pursuant to Section 8.01(m)).

     2.9 Amendment to Section 8.01.

          (a) Sub-Sections 8.01(a) and (b) are hereby amended in their entirety to read as follows:

(a) Annual Financial Statements. As soon as available, but in any event in
accordance with then applicable law and not later than 90 days after the end of each
fiscal year of Oasis Petroleum Inc., (i) its audited consolidated balance sheet and
related statements of operations, members’ equity and cash flows as of the end of
and for such year, setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on by independent public accountants of
recognized national standing (without a “going concern” or like qualification or
exception and without any qualification or exception as to the scope of such audit)
to the effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of Oasis
Petroleum Inc. and its Consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied.

(b) Quarterly Financial Statements. As soon as available, but in any event
in accordance with then applicable law and not later than 60 days after the end of
each of the first three fiscal quarters of each fiscal year of Oasis Petroleum Inc.,
its consolidated balance sheet and related statements of operations, members’ equity
and cash flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year, all certified by one of its
Financial Officers as presenting fairly in all material respects the financial
condition and results of operations of Oasis Petroleum Inc. and its Consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of footnotes.

          (b) Section 8.01 is hereby amended by inserting the following sub-section (r) immediately
following the existing sub-section (q):

(r) Issuance of Senior Notes. In the event Oasis Petroleum Inc. decides to
issue Senior Notes as contemplated by Section 9.02(i), 10 days prior written notice
of such offering therefor, the amount thereof and the anticipated date of

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closing and a copy of the preliminary offering memorandum (if any) and the final
offering memorandum (if any) and any other material documents relating to such
offering of Senior Notes.

     2.10 Amendment to Section 8.07. Section 8.07 is hereby amended in its entirety to
read as follows:

Section 8.07 Insurance. The Parent and the Borrower will, and will cause
each of their respective Subsidiaries to, maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks as
are customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations. The loss payable clauses or provisions
in said insurance policy or policies insuring any of the collateral for the Loans
shall be endorsed in favor of and made payable to the Administrative Agent as its
interests may appear and such policies shall name the Administrative Agent and the
Lenders as “additional insureds” and provide that the insurer will endeavor to give
at least 30 days prior notice of any cancellation to the Administrative Agent.

     2.11 Amendment to Section 8.14. Section 8.14 is hereby amended by amending the
existing sub-section (b) in its entirety, inserting the following new subsection (c) immediately
following sub-section (b) and amending the existing sub-section (c) in its entirety to be
sub-section (d), with such sub-sections to read as set forth below:

(b) The Parent and the Borrower shall promptly cause each Domestic Subsidiary of
either thereof to guarantee the Indebtedness pursuant to the Guaranty Agreement. In
connection with any such guaranty, the Borrower shall, or shall cause such Domestic
Subsidiary to (a) execute and deliver a supplement to the Guaranty Agreement
executed by such Subsidiary, (b) pledge all of the Equity Interests of such new
Subsidiary (including, without limitation, delivery (if applicable) of original
certificates evidencing the Equity Interests of such Subsidiary, together with an
appropriate undated stock powers for each certificate duly executed in blank by the
registered owner thereof) and (c) execute and deliver such other additional closing
documents, certificates and legal opinions as shall reasonably be requested by the
Administrative Agent.

(c) In the event that the Borrower or any Domestic Subsidiary becomes the owner of a
Foreign Subsidiary which has total assets in excess of $1,000,000, then the Borrower
shall promptly, or shall cause such Domestic Subsidiary to promptly, pledge 65% of
all the Equity Interests of such Foreign Subsidiary (including, without limitation,
delivery of original stock certificates evidencing such Equity Interests of such
Foreign Subsidiary, together with appropriate stock powers for each certificate duly
executed in blank by the registered owner thereof) and execute and deliver such
other additional closing documents, certificates and legal opinions as shall
reasonably be requested by the Administrative Agent.

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(d) If any Event of Default shall occur and be continuing, then the Parent and the
Borrower shall, and shall cause each Domestic Subsidiary of either thereof to,
within ten (10) Business Days after notice by Administrative Agent, grant to the
Administrative Agent as security for the Indebtedness a first-priority Lien interest
(provided Excepted Liens of the type described in clauses (a) to (d) and (f) of the
definition thereof may exist, but subject to the provisos at the end of such
definition) on all of their Oil and Gas Properties not already subject to a Lien of
the Security Instruments such that after giving effect thereto, the Mortgaged
Properties will represent substantially all of the Oil and Gas Properties of the
Borrower and the Domestic Subsidiaries. All such Liens will be created and
perfected by and in accordance with the provisions of deeds of trust, security
agreements and financing statements or other Security Instruments, all in form and
substance reasonably satisfactory to the Administrative Agent and in sufficiently
executed (and acknowledged where necessary or appropriate) counterparts for
recording purposes.

     2.12 Amendment to Section 8.15. Section 8.15 is hereby amended in its entirety to
read as follows:

Section 8.15 ERISA Compliance. The Parent and the Borrower will promptly
furnish and will cause their respective Subsidiaries and any ERISA Affiliate to
promptly furnish to the Administrative Agent (a) promptly after the filing thereof
with the United Stated Secretary of Labor or the Internal Revenue Service, copies of
each annual and other report with respect to each Plan or any trust created
therunder, and (b) immediately upon becoming aware of the occurrence of any
“prohibited transaction,” as described in section 406 of ERISA or in section 4975 of
the Code, in connection with any Plan or any trust created thereunder, a written
notice signed by the President or the principal Financial Officer, the Parent, the
Subsidiary or the ERISA Affiliate, as the case may be, specifying the nature
thereof, what action the Borrower, the Parent, the Subsidiary or the ERISA Affiliate
is taking or proposes to take with respect thereto, and, when known, any action
taken or proposed by the Internal Revenue Service or the Department of Labor with
respect thereto.

2.13 Amendment to Section 9.02.

(a) Section 9.02(h) is hereby amended in its entirety to read as follows:

(h) other Debt (excluding Debt of Foreign Subsidiaries) not to exceed $2,500,000 in
the aggregate at any one time outstanding.

     (b) Section 9.02 is hereby amended by inserting the following sub-section (i) and (j)
immediately following the existing sub-section (h):

(i) Debt of Foreign Subsidiaries to non-Affiliated Persons that is not secured

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by liens on any property of, not guaranteed by and not other otherwise of recourse
to the Borrower or any Guarantor.

(i) unsecured Senior Notes of Oasis Petroleum Inc., the principal amount of which
does not exceed $200,000,000 and any guarantees thereof; provided that (i) the
Borrower shall have complied with Section 8.01(r), (ii) at the time of incurring
such Senior Notes (A) no Default has occurred and is then continuing and (B) no
Default would result from the incurrence of such Senior Notes after giving effect to
the incurrence of such Senior Notes (and any concurrent repayment of Debt with the
proceeds of such incurrence, if any), (iii) on the same day as the incurrence of
such Debt, the Borrowing Base shall be adjusted to the extent required by Section
2.07(e) and prepayment is made to the extent required by Section 3.04(c)(iv), (iv)
such Senior Notes do not have any scheduled principal amortization prior to the date
which is one year after the Maturity Date, (v) such Senior Notes does not mature
sooner than the date which is one year after the Maturity Date, (vi) such Senior
Notes and any guarantees thereof are on terms, taken as a whole, at least as
favorable to the Borrower and the Guarantors as market terms for issuers of similar
size and credit quality given the then prevailing market conditions as determined by
the Administrative Agent and (vii) such Senior Notes do not have any mandatory
prepayment or redemption provisions (other than customary change of control or asset
sale tender offer provisions) which would require a mandatory prepayment or
redemption in priority to the Indebtedness.

     2.14 Amendment to Section 9.04. Section 9.04 is hereby in its entirety to read as
follows:

9.04 Dividends, Distributions and Redemptions; Repayment of Senior Notes and Amendment
to Terms of Senior Notes.

(a) Restricted Payments. The Parent and the Borrower will not, and will not
permit any of their respective Subsidiaries to, declare or make, or agree to pay or
make, directly or indirectly, any Restricted Payment, return any capital or make any
distribution of its Property to its Equity Interest holders, except (i) Oasis
Petroleum Inc. may declare and pay dividends with respect to its Equity Interests
payable solely in additional shares of its Equity Interests (other than Disqualified
Capital Stock), (ii) Subsidiaries of Oasis Petroleum Inc. may declare and pay
dividends ratably with respect to their Equity Interests, (iii) Oasis Petroleum Inc.
may make Restricted Payments pursuant to and in accordance with stock option plans
or other benefit plans for management or employees of the Borrower and its
Subsidiaries and (iv) Oasis Petroleum Inc. may make payments to former employees in
connection with the termination of such former employee’s employment in an aggregate
amount not to exceed $250,000 in any calendar year for the purpose of repurchasing
Equity Interests in any member of the Parent issued to such former employee pursuant
to stock option plans or other benefit plans for management or employees of the
Borrower and its Subsidiaries.

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(b) Repayment of Senior Notes; Amendment to Terms of Senior Notes. The
Parent and the Borrower will not, and will not permit any of their respective
Subsidiaries to, prior to the date that is ninety-one (91) days after the Maturity
Date: (i) call, make or offer to make any optional or voluntary Redemption of or
otherwise optionally or voluntarily Redeem (whether in whole or in part) the Senior
Notes; provided that Oasis Petroleum Inc. may prepay the Senior Notes with the net
cash proceeds of any sale of Equity Interests (other than Disqualified Capital
Stock) of Oasis Petroleum Inc., (ii) amend, modify, waive or otherwise change,
consent or agree to any amendment, modification, waiver or other change to, any of
the terms of the Senior Notes or the Senior Notes Indenture if (A) the effect
thereof would be to shorten its maturity or average life or increase the amount of
any payment of principal thereof or increase the rate or shorten any period for
payment of interest thereon or (B) such action requires the payment of a consent fee
(howsoever described), provided that the foregoing shall not prohibit the execution
of supplemental indentures associated with the incurrence of additional Senior Notes
to the extent permitted by Section 9.02(i) or the execution of supplemental
indentures to add guarantors if required by the terms of any Senior Notes Indenture
provided such Person complies with Section 8.14(b) or (C) with respect to Senior
Notes that are subordinated to the Indebtedness or any other Debt, designate any
Debt (other than obligations of the Borrower and the Subsidiaries pursuant to the
Loan Documents) as “Specified Senior Indebtedness” or “Specified Guarantor Senior
Indebtedness” or give any such other Debt any other similar designation for the
purposes of any Indenture related to Senior Notes that are subordinated to the
Indebtedness or any other Debt.

2.15 Amendments to Section 9.05.

     (a) The lead-in to Section 9.05 is hereby amended by deleting “The Borrower will not, and will
not permit any Subsidiary to” and replacing it with “The Parent and the Borrower will not, and will
not permit any of their respective Subsidiaries to”.

     (b) Section 9.05(e) is hereby amended in its entirety to read as follows:

     (e) deposits maturing within one year from the date of creation thereof with,
including certificates of deposit issued by, any Lender or any office located in the
United States of any other bank or trust company which is organized under the laws
of the United States or any state thereof, has capital, surplus and undivided
profits aggregating at least $100,000,000 (as of the date of such bank or trust
company’s most recent financial reports) and has a short term deposit rating of no
lower than A2 or P2, as such rating is set forth from time to time, by S&P or
Moody’s, respectively or, in the case of any Foreign Subsidiary, a bank organized in
a jurisdiction in which the Foreign Subsidiary conducts operations having assets in
excess of $500,000,000 (or its equivalent in another currency).

     (c) Section 9.05(g) is hereby amended in its entirety to read as follows:

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     (g) Investments (i) made by the Borrower in or to the Guarantors, (ii) made by
any Subsidiary in or to the Borrower or any Guarantor that is a Subsidiary, (iii)
made by the Borrower or any Subsidiary in or to Domestic Subsidiaries that are not
Guarantors, provided that the aggregate of all Investments made by the Borrower and
the Guarantors in or to all Domestic Subsidiaries that are not Guarantors shall not
exceed $2,500,000 at any time, and (iv) made by the Borrower or any Domestic
Subsidiary in or to any Foreign Subsidiary in an aggregate amount at any one time
outstanding not to exceed $50,000,000, provided that, with respect to this clause
(iv), no such Investment shall be made unless (A) both prior to and after giving
effect to such Investment no Default or Event of Default exists and (B) after giving
effect to such Investment the Borrowing Base then in effect exceeds the total
Revolving Credit Exposures by at least an amount equal to ten percent (10%) of the
then current Borrowing Base less cash then maintained by the Borrower.

     2.16 Amendment to Section 9.11. Section 9.11 is hereby amended in its entirety to
read as follows:

Section 9.11. Mergers, Etc. The Parent and the Borrower will not, and will
not permit any Subsidiary to, merge into or with or consolidate with any other
Person, or sell, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its Property to any other
Person, except that (a) any Wholly-Owned Domestic Subsidiary may merge with any
other Wholly-Owned Domestic Subsidiary, (b) the Parent and/or Borrower may merge
with any Wholly-Owned Domestic Subsidiary so long as the Parent and/or Borrower is
the survivor and (c) any Foreign Subsidiary may merge with any other Foreign
Subsidiary; provided that if one of such Foreign Subsidiaries is a Wholly-Owned
Subsidiary, the survivor shall be a Wholly-Owned Subsidiary.

     2.17 Amendment to Section 9.15. Section 9.15 is hereby amended in its entirety to
read as follows:

Section 9.15. Subsidiaries. The Parent and the Borrower will not, and will
not permit any of their respective Subsidiaries to, create or acquire any additional
Subsidiary unless the Borrower gives written notice to the Administrative Agent of
such creation or acquisition and complies with Section 8.14(b), Section 8.14(c) and
Section 8.14(d). The Borrower shall not, and shall not permit any of its
Subsidiaries to, sell, assign or otherwise dispose of any Equity Interests in any
Subsidiary except in compliance with Section 9.12(d). The Parent shall not, and
shall not permit any of its Domestic Subsidiaries to, sell, assign or otherwise
dispose of any Equity Interests in any Domestic Subsidiary except in compliance with
Section 9.12(d).

     2.18 Amendment to Section 10.01. Section 10.01(g) is hereby amended by inserting in
line 1 thereof after the phrase “any event or condition” the phrase “(other than customary change

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of control or asset sale tender offer provisions of the Senior Notes Indenture which would
require a mandatory prepayment or redemption of the Debt arising thereunder)”.

Section 3. Consent.

     3.1 Initial Public Offering. Subject to the terms and conditions set forth herein,
the Lenders hereby consent to the actions of the Parent, the Borrower, all of their respective
Subsidiaries and Affiliates undertaken in preparation of or in connection with the initial public
offering for Oasis Petroleum Inc., including (a) the corporate reorganization, including the
transfer of the Equity Interests in Oasis Petroleum LLC to Oasis Petroleum Inc. and (b) all other
actions contemplated by (i) that certain Contribution Agreement among Oasis Petroleum Inc., Oasis
Petroleum LLC, OAS Holding Company LLC, OAS Mergerco LLC and Encap Energy Capital Fund VI, L.P. to
be executed in connection with the Initial Public Offering and substantially in the form attached
hereto as Exhibit A and (ii) that certain Agreement and Plan of Merger among Oasis Petroleum LLC,
OAS Holding Company LLC and OAS Mergerco LLC to be executed in connection with the Initial Public
Offering and substantially in the form attached hereto as Exhibit B notwithstanding the
requirements of any provision of the Credit Agreement. The consent set forth in the preceding
sentence is limited to the extent specifically set forth therein and no other terms, covenants or
provisions of the Credit Agreement or any other Loan Document are intended to be effected by such
consent.

     3.2 October 1, 2010 Scheduled Redetermination. Subject to the terms and conditions
set forth herein, the Lenders hereby consent to the use of a Reserve Report dated as of June 1,
2010 in connection with the October 1, 2010 Scheduled Redetermination of the Borrowing Base
notwithstanding the requirement in section 8.12(a) of the Credit Agreement that such Reserve Report
be dated as of July 1, 2010.

Section 4. Conditions Precedent. Except as specifically set forth below with respect to
the consent contained in Section 3.2, this First Amendment shall become effective as of the date
when each of the following conditions is satisfied (or waived in accordance with Section 12.02 of
the Credit Agreement):

     4.1 The Administrative Agent shall have received from the Majority Lenders, each Guarantor and
the Borrower, counterparts (in such number as may be requested by the Administrative Agent) of this
First Amendment signed on behalf of such Person.

     4.2 The Administrative Agent shall have received a certificate of the Secretary or an
Assistant Secretary of Oasis Petroleum Inc. setting forth (a) resolutions of its board of directors
with respect to the authorization of such Person to execute and deliver the Loan Documents to which
it is a party and to enter into the transactions contemplated in those documents, (b) the officers
of Oasis Petroleum Inc. (i) who are authorized to sign the Loan Documents to which it is a party
and (ii) who will, until replaced by another officer or officers duly authorized for that purpose,
act as its representative for the purposes of signing documents and giving notices and other
communications in connection with the Credit Agreement and the transactions contemplated hereby,
(c) specimen signatures of such authorized officers, and (d) the articles or certificate of
incorporation and by-laws or other applicable organizational documents of Oasis

12

 

Petroleum Inc., certified as being true and complete. The Administrative Agent and the
Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in
writing from the Borrower to the contrary.

     4.3 The Administrative Agent shall have received (a) an executed Assumption Agreement relating
to the Guaranty Agreement and (b) an executed Supplement to the Guaranty Agreement, in each case,
from Oasis Petroleum Inc.

     4.4 The Administrative Agent shall have received confirmation of (a) the acquisition by Oasis
Petroleum Inc. of 100% of the Equity Interests in Oasis Petroleum LLC and (b) the consummation of
the Initial Public Offering of Oasis Petroleum Inc.

     4.5 The Administrative Agent shall have received any prepayment of Borrowings required
pursuant to Section 3.04(c)(iv).

     4.6 The Administrative Agent and the Lenders shall have received all fees and other amounts
due and payable on or prior to the date hereof.

     4.7 No Default shall have occurred and be continuing as of the date hereof, after giving
effect to the terms of this First Amendment.

     4.8 The Administrative Agent shall have received such other documents as the Administrative
Agent or its special counsel may reasonably require.

     Irrespective of whether or not the remainder of this Fourth Amendment becomes effective, the
consent contained in Section 3.2 of this First Amendment shall automatically become effective upon
the satisfaction of the condition precedent set forth in Section 4.1 hereof.

     The Administrative Agent is hereby authorized and directed to declare this First Amendment to
be effective when it has received documents confirming or certifying, to the satisfaction of the
Administrative Agent, compliance with the conditions set forth in this Section 4 or the waiver of
such conditions as permitted hereby. Such declaration shall be final, conclusive and binding upon
all parties to the Credit Agreement for all purposes. Notwithstanding the foregoing, except with
respect to the consent contained in Section 3.2 hereof, this First Amendment shall not become
effective unless each of the foregoing conditions is satisfied or waived prior to the earlier of
(a) 2:00 p.m., New York City time, on October 1, 2010 and (b) receipt by the Administrative Agent
of notification from the Borrower that an Initial Public Offering has been abandoned or is no
longer actively being pursued.

Section 5. Miscellaneous.

     5.1 Confirmation. The provisions of the Credit Agreement, as amended by this First
Amendment, shall remain in full force and effect following the effectiveness of this First
Amendment.

     5.2 Limited Consent. Except as expressly set forth in Section 3 hereof, the execution,
delivery, performance and effectiveness of this First Amendment shall not operate nor

13

 

be deemed to be nor construed as a consent to deviation from, or waiver of, any term,
provision, condition, representation, warranty or covenant contained in the Credit Agreement, the
other Loan Documents, or any other contract or instrument.

     5.3 No Waiver. Neither the execution by the Administrative Agent or the Lenders of
this First Amendment, nor any other act or omission by the Administrative Agent or the Lenders or
their officers in connection herewith, shall be deemed a waiver by the Administrative Agent or the
Lenders of any Defaults or Events of Default which may exist, which may have occurred prior to the
date of the effectiveness of this First Amendment or which may occur in the future under the Credit
Agreement and/or the other Loan Documents. Similarly, nothing contained in this First Amendment
shall directly or indirectly in any way whatsoever either: (a) impair, prejudice or otherwise
adversely affect the Administrative Agent’s or the Lenders’ right at any time to exercise any
right, privilege or remedy in connection with the Loan Documents with respect to any Default or
Event of Default, (b) except as expressly provided herein, amend or alter any provision of the
Credit Agreement, the other Loan Documents, or any other contract or instrument, or (c) constitute
any course of dealing or other basis for altering any obligation of the Borrower or any right,
privilege or remedy of the Administrative Agent or the Lenders under the Credit Agreement, the
other Loan Documents, or any other contract or instrument. Each reference in the Credit Agreement
to “this Agreement”, “hereunder”, “hereof”, “herein” or any other word or words of similar import
shall mean and be a reference to the Credit Agreement as amended hereby, and each reference in any
other Loan Document to the Credit Agreement or any word or words of similar import shall be and
mean a reference to the Credit Agreement as amended hereby.

     5.4 Ratification and Affirmation; Representations and Warranties. Each Obligor hereby
(a) acknowledges the terms of this First Amendment; (b) ratifies and affirms its obligations under,
and acknowledges its continued liability under, each Loan Document to which it is a party and
agrees that each Loan Document to which it is a party remains in full force and effect as expressly
amended hereby and (c) represents and warrants to the Lenders that as of the date hereof, after
giving effect to the terms of this First Amendment: (i) all of the representations and warranties
contained in each Loan Document to which it is a party are true and correct, except to the extent
any such representations and warranties are expressly limited to an earlier date, in which case,
such representations and warranties shall continue to be true and correct as of such specified
earlier date, (ii) no Default or Event of Default has occurred and is continuing and (iii) no event
or events have occurred which individually or in the aggregate could reasonably be expected to have
a Material Adverse Effect.

     5.5 Counterparts. This First Amendment may be executed by one or more of the parties
hereto in any number of separate counterparts, and all of such counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of this First Amendment by facsimile
transmission shall be effective as delivery of a manually executed counterpart hereof.

     5.6 No Oral Agreement. This First Amendment, the Credit Agreement and the other Loan
Documents executed in connection herewith and therewith represent the final agreement between the
parties and may not be contradicted by evidence of prior, contemporaneous, or

14

 

unwritten oral agreements of the parties. There are no subsequent oral agreements between the
parties.

     5.7 GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     5.8 Payment of Expenses. In accordance with Section 12.03 of the Credit Agreement,
the Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable
out-of-pocket costs and reasonable expenses incurred in connection with this First Amendment, any
other documents prepared in connection herewith and the transactions contemplated hereby,
including, without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.

     5.9 Severability. Any provision of this First Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     5.10 Successors and Assigns. This First Amendment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.

[SIGNATURES BEGIN NEXT PAGE]

15

 

     IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed as
of the date first written above.

	 	 	 	 	 
	BORROWER: 	OASIS PETROLEUM NORTH AMERICA LLC

 	 
	 	By:  	/s/ Thomas B. Nusz
 	 
	 	 	Thomas B. Nusz 	 
	 	 	President and Chief Executive Officer 	 
	 
	GUARANTORS: 	OASIS PETROLEUM LLC

 	 
	 	By:  	/s/ Thomas B. Nusz
 	 
	 	 	Thomas B. Nusz 	 
	 	 	President and Chief Executive Officer 	 
	 
	 	OASIS PETROLEUM INC.

 	 
	 	By:  	/s/ Thomas B. Nusz
 	 
	 	 	Thomas B. Nusz 	 
	 	 	President and Chief Executive Officer 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	ADMINISTRATIVE AGENT AND LENDER: 	BNP PARIBAS

 	 
	 	By:  	

/s/ Edward Pak
 	 
	 	 	Name:  	Edward Pak 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	                                       /s/ Juan Carlos Sandoval
 	 
	 	 	Name:  	Juan Carlos Sandoval 	 
	 	 	Title:  	Vice President 	 
	 
	LENDERS: 	JPMORGAN CHASE BANK, N.A.

 	 
	 	By:  	/s/ Stephen Lescher
 	 
	 	 	Name:  	Stephen Lescher 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	UBS LOAN FINANCE, LLC

 	 
	 	By:  	/s/ Mary E. Evans
 	 
	 	 	Name:  	Mary E. Evans 	 
	 	 	Title:  	Associate Director 	 
	 
	 	 	 
	 	By:  	                                       /s/ Michael Cerniglia
 	 
	 	 	Name:  	Michael Cerniglia 	 
	 	 	Title:  	Director 	 
	 
	 	WELLS FARGO BANK, N.A.

 	 
	 	By:  	/s/ Doug McDowell
 	 
	 	 	Name:  	Doug McDowell 	 
	 	 	Title:  	Vice President Senior Portfolio Manager 	 

 

 

	 	 	 	 	 

Exhibit A

Form of Contribution Agreement

 

 

FORM OF

CONTRIBUTION AGREEMENT

By and Among

OASIS PETROLEUM INC.

OASIS PETROLEUM LLC

OAS HOLDING COMPANY LLC

OAS MERGERCO LLC

And

ENCAP ENERGY CAPITAL FUND VI, L.P.

Dated as of       , 2010

 

 

CONTRIBUTION AGREEMENT

This Contribution Agreement, dated as of       , 2010 (this “Agreement”), is by and among Oasis
Petroleum Inc., a Delaware corporation (“Oasis”), Oasis Petroleum LLC, a Delaware limited liability
company (“Oasis LLC”), OAS Holding Company LLC, a Delaware limited liability company (“Oasis
Holdings”), OAS Mergerco LLC, a Delaware limited liability company (“Merger LLC”) and Encap Energy
Capital Fund VI, L.P., a Delaware limited partnership (“Encap”). The above-named entities are
sometimes referred to in this Agreement each as a “Party” and collectively as the
“Parties.” Capitalized terms used herein shall have the meanings assigned to such terms in
Article I.

RECITALS

WHEREAS, Oasis LLC formed Oasis Holdings as a limited liability company under the Delaware Limited
Liability Company Act, as amended (the “Act”) and owns all of the equity interests in Oasis
Holdings.

WHEREAS, pursuant to the terms of the Limited Liability Company Agreement of Oasis Holdings dated
as of February 26, 2010 (the “New Holdings Agreement”), the various parties to the New Holdings
Agreement agreed that the transactions and actions being consummated by the terms of this Agreement
were transactions that the parties were obligated to consummate subsequent to the formation of
Oasis Holdings and, as a consequence, this Agreement is in furtherance of the terms and obligations
of the parties under the New Holdings Agreement;

WHEREAS, Oasis Holdings formed Merger LLC as a limited liability company under the Act and owns all
of the equity interests in Merger LLC.

WHEREAS, Oasis Holdings incorporated Oasis as a corporation under the Delaware General Corporation
Law, as amended, and contributed $10.00 to Oasis in exchange for 1,000 shares of Common Stock.

WHEREAS, as contemplated by that certain Registration Statement on Form S-1 (Registration No.
333-165212) filed by Oasis with the Securities and Exchange Commission to register the public
offering and sale of common stock of Oasis (the “IPO”), the Parties intend to cause various
transactions to occur at or prior to the initial closing of the IPO.

WHEREAS, concurrently with the consummation of the transactions contemplated hereby, each of the
following transactions shall occur:

	 	1.	 	Oasis LLC will contribute to Oasis Holdings $7,222 in cash in exchange for a
10% membership interest in Oasis Holdings.
	 
	 	2.	 	Encap will contribute to Oasis Holdings membership interests in Oasis LLC
representing a 0.01% interest in Oasis LLC in exchange for a 90% membership interest in
Oasis Holdings.
	 
	 	3.	 	Merger LLC will, pursuant to the Agreement and Plan of Merger, dated the date
hereof (the “Merger Agreement”), merge with and into Oasis LLC, the separate

 

 

	 	 	 	organizational existence of Merger LLC shall cease, and Oasis LLC shall continue as
the surviving entity (the “Merger”).

	 	4.	 	By virtue of the Merger, all of the membership interests in Oasis LLC shall be
converted into membership interests in Oasis Holdings, whereby Oasis LLC will become a
wholly-owned subsidiary of Oasis Holdings and the former members of Oasis LLC will be
admitted to and become the members of Oasis Holdings, owning the same percentage
interests in Oasis Holdings that were owned in Oasis LLC (the “Conversion”).
	 
	 	5.	 	Oasis Holdings will contribute to Oasis all of the membership interests in
Oasis LLC in exchange for shares of Common Stock, representing 100% of the
outstanding capital stock of Oasis.
	 
	 	6.	 	The limited liability company agreements of Oasis Holdings and Oasis LLC will
be amended and restated to the extent necessary to reflect the applicable matters set
forth above and contained in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and
agreements herein contained, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

The terms set forth below in this Article I shall have the meanings ascribed to them below or in
the part of this Agreement referred to below:

“Common Stock” means the common stock of Oasis, par value $0.01 per share.

“Effective Time” means 12:01 a.m. Central Standard Time on the date of the closing of the
IPO.

“Underwriters” means those underwriters listed in the Underwriting Agreement.

“Underwriting Agreement” means that certain Underwriting Agreement between Morgan Stanley
and UBS Securities LLC, as representatives of the Underwriters, Oasis and Oasis Holdings, dated as
of      , 2010.

ARTICLE II

CONTRIBUTIONS AND ACKNOWLEDGEMENTS

     Section 2.1 Contribution to Oasis Holdings by Oasis LLC. Effective immediately
following the Effective Time, Oasis LLC hereby contributes to Oasis Holdings, as a capital
contribution, cash in an amount of $7,222, in exchange for a 10% membership interest in Oasis
Holdings.

     Section 2.2 Contribution to Oasis Holdings by Encap. Effective immediately following
the Effective Time, Encap hereby contributes to Oasis Holdings, as a capital

 

 

contribution, membership interests in Oasis LLC representing a 0.01% interest in Oasis LLC, in
exchange for a 90% membership interest in Oasis Holdings.

     Section 2.3 Acknowledgement of Merger and Conversion. Effective immediately following
the consummation of the transaction described in Section 2.2, the Parties hereto hereby
acknowledge, pursuant to the Merger Agreement, the completion of the Merger and the Conversion.

     Section 2.4 Contribution of Oasis LLC by Oasis Holdings to Oasis. Effective
immediately following the consummation of the transaction described in Section 2.3, Oasis Holdings
hereby contributes, conveys, assigns and transfers to Oasis all of the membership interests in
Oasis LLC, in exchange for shares of Common Stock.

     Section 2.5 Amended and Restated Limited Liability Company Agreement of Oasis LLC.
Effective immediately following the consummation of the transaction described in Section 2.4, Oasis
shall enter into an Amended and Restated Limited Liability Company Agreement of Oasis LLC to admit
Oasis as the sole member of Oasis LLC.

ARTICLE III

FURTHER ASSURANCES

From time to time after the Effective Time, and without any further consideration, the Parties
agree to execute, acknowledge and deliver all such additional, assignments, conveyances,
instruments, notices and other documents, and to do all such other acts and things, all in
accordance with applicable law, as may be necessary or appropriate (a) more fully to assure that
the applicable Parties own all of the properties, rights, titles, interests, estates, remedies,
powers and privileges granted by this Agreement, or which are intended to be so granted, (b) more
fully and effectively to vest in the applicable Parties and their respective successors and assigns
beneficial and record title to the interests contributed and assigned by this Agreement or intended
to be so and (c) more fully and effectively to carry out the purposes and intent of this Agreement.

ARTICLE IV

EFFECTIVE TIME

Notwithstanding anything contained in this Agreement to the contrary, the provisions of Article II
and Article III shall not be binding or have any effect until Oasis and Oasis Holdings execute the
Underwriting Agreement, at which time all such provisions shall be effective and operative without
further action by any Party hereto.

ARTICLE V

MISCELLANEOUS

     Section 5.1 Order of Completion of Transactions. The transactions provided for in
Article II of this Agreement shall be completed in the order and at the times set forth in Article
II.

     Section 5.2 Headings; References; Interpretation. All Article and Section headings in
this Agreement are for convenience only and shall not be deemed to control or affect

 

 

the meaning or construction of any of the provisions hereof. The words “hereof,” “herein” and
“hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement
as a whole, and not to any particular provision of this Agreement. All references herein to
Articles and Sections shall, unless the context requires a different construction, be deemed to be
references to the Articles and Sections of this Agreement. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender, shall include all other
genders, and the singular shall include the plural and vice versa. The use herein of the word
“including” following any general statement, term or matter shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately following such
word or to similar items or matters, whether or not non-limiting language (such as “without
limitation”, “but not limited to”, or words of similar import) is used with reference thereto, but
rather shall be deemed to refer to all other items or matters that could reasonably fall within the
broadest possible scope of such general statement, term or matter.

     Section 5.3 Assignment of Agreement; Successors and Assigns. Neither this Agreement
nor any of the rights, interests or obligations hereunder may be assigned by any Party without the
prior consent of each of the Parties. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors and assigns.

     Section 5.4 No Third Party Rights. The provisions of this Agreement are intended to
bind the Parties as to each other and are not intended to and do not create rights in any other
person or confer upon any other person any benefits, rights or remedies, and no person is or is
intended to be a third party beneficiary of any of the provisions of this Agreement.

     Section 5.5 Counterparts. This Agreement may be executed in any number of counterparts
with the same effect as if all signatory Parties had signed the same document. All counterparts
shall be construed together and shall constitute one and the same instrument.

     Section 5.6 Choice of Law. This Agreement shall be subject to and governed by the laws
of the State of Texas. Each Party hereby submits to the jurisdiction of the state and federal
courts in the State of Texas and to venue in Houston, Texas.

     Section 5.7 Severability. If any of the provisions of this Agreement are held by any
court of competent jurisdiction to contravene, or to be invalid under, the laws of any political
body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not
invalidate the entire Agreement. Instead, this Agreement shall be construed as if it did not
contain the particular provisions or provisions held to be invalid and an equitable adjustment
shall be made and necessary provision added so as to give effect to the intention of the Parties as
expressed in this Agreement at the time of execution of this Agreement.

     Section 5.8 Amendment or Modification. This Agreement may be amended or modified from
time to time only by the written agreement of all the Parties. Each such instrument shall be
reduced to writing and shall be designated on its face as an amendment to this Agreement.

     Section 5.9 Integration. This Agreement and the instruments referenced herein
supersede all previous understandings or agreements among the Parties, whether oral or written,

 

 

with respect to the specific transactions effected pursuant to this Agreement and such
instruments.

     Section 5.10 Deed; Bill of Sale; Assignment. To the extent required and permitted by
applicable law, this Agreement shall also constitute a “deed,” “bill of sale” or “assignment” of
the assets and interests referenced herein.

[Signature Pages Follow]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have caused it to be duly executed as of the date
first above written.

	 	 	 	 	 
	 	OASIS PETROLEUM INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	OASIS PETROLEUM LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	OASIS HOLDING COMPANY LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	OAS MERGERCO LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	ENCAP ENERGY CAPITAL FUND VI, L.P.

 	 
	 	By:  	EnCap Equity Fund VI GP, L.P.,
 	 
	 	 	General Partner of EnCap Energy Capital Fund VI, L.P. 	 
	 	 	 	 
	 	By:  	             EnCap Investments, L.P.,
 	 
	 	 	General Partner of EnCap Equity Fund VI GP, L.P. 	 
	 	 	 	 
	 	By:  	             EnCap Investments GP, L.L.C.,
 	 
	 	 	General Partner of EnCap Investments L.P. 	 
	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

Exhibit B

Form of Agreement and Plan of Merger

 

 

FORM OF

AGREEMENT AND PLAN OF MERGER

     This AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of      , 2010 and
effective as of the Effective Time (as defined below), pursuant to Section 18-209 of the Delaware
Limited Liability Company Act (the “Act”) is made and entered into by and among Oasis Petroleum
LLC, a Delaware limited liability company (“Oasis LLC”), OAS Holding Company LLC, a Delaware
limited liability company (“Oasis Holdings”), and OAS Mergerco LLC, a Delaware limited liability
company (“Merger LLC”, and together with Oasis LLC and Oasis Holdings, the “Parties”).

RECITALS

     WHEREAS, pursuant to the terms of the Limited Liability Company Agreement of Oasis Holdings
dated as of February 26, 2010 (the “New Holdings Agreement”), the various parties to the New
Holdings Agreement agreed that the transactions and actions being consummated by the terms of this
Agreement were transactions that the parties were obligated to consummate subsequent to the
formation of Oasis Holdings and, as a consequence, this Agreement is in furtherance of the terms
and obligations of the parties under the New Holdings Agreement;

     WHEREAS, the Board of Managers of Oasis LLC, pursuant to the Liability Company Agreement of
Oasis LLC dated March 5, 2007, as amended by Amendment No. 1 to Limited Liability Company Agreement
effective November 1, 2007, as further amended by Amendment to Amendment No. 1 to Limited Liability
Company Agreement dated June 24, 2008, as further amended by Amendment No. 2 to Limited Liability
Company Agreement dated December 1, 2009 (as amended, the “Oasis LLC Agreement”), have adopted by
unanimous written consent, resolutions recommending and approving the Merger (as defined below)
upon the terms and conditions hereinafter set forth;

     WHEREAS, Oasis Holdings, as the sole member of Merger LLC, has adopted, by its unanimous
written consent, resolutions recommending and approving the Merger upon the terms and conditions
hereinafter set;

     WHEREAS, the Parties desire to enter into this Agreement to set forth the terms and conditions
upon which the Merger shall take place; and

     WHEREAS, Oasis Holdings shall issue interests to the members of Oasis LLC (other than Oasis
Holdings) in connection with the Merger described herein and has entered into this Agreement to
acknowledge its obligations herein;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
herein contained, and for the purpose of prescribing the terms and conditions of the Merger and the
mode of carrying the same into effect, the Parties hereby covenant and agree as follows:

 

 

AGREEMENTS

     1. Effective Time. The Merger shall become effective upon the filing of a Certificate
of Merger, in substantially the form of the Certificate of Merger attached hereto as Annex
A, with the Secretary of State of the State of Delaware, or at such later date specified in
such Certificate of Merger (such time being referred to herein as the “Effective Time”).

     2. Name; Type of Entity; Jurisdiction. The name, type of entity and jurisdiction of
formation of the parties to the Merger are as follows:

	 	 	 	 	 
	Name of Entity	 	Type of Entity	 	Jurisdiction of Formation
	Oasis Petroleum LLC
	 	limited liability company
	 	Delaware
	 	 	 	 	 
	OAS Mergerco LLC
	 	limited liability company
	 	Delaware

     3. Merger. In accordance with Section 18-209 of the Act and subject to and upon the
terms and conditions of this Agreement, Merger LLC shall, at the Effective Time, be merged with and
into Oasis LLC, the separate organizational existence of Merger LLC shall cease and Oasis LLC shall
continue as the surviving entity (the “Merger”). Oasis LLC, as the entity surviving the Merger
(the “Surviving Entity”), shall continue its existence as a limited liability company under the
laws of the State of Delaware and operate under a new amended and restated limited liability
company agreement to be effective as of the Effective Time, the form of which is attached hereto as
Annex B.

     4. Conversion of Ownership Interests. At the Effective Time, by virtue of the Merger,
all of the interests in Oasis LLC issued and outstanding immediately prior to the Effective Time
(other than those owned by Oasis Holdings) shall be converted into interests in Oasis Holdings, as
set forth on Schedule I, so that, after giving effect to such conversion, (i) Oasis
Holdings is the sole holder of all of the issued and outstanding interests in Oasis LLC and
therefore the sole member thereof and (ii) the holders of interests in Oasis LLC issued and
outstanding immediately prior to the Effective Time (other than those owned by Oasis Holdings)
shall constitute the members of Oasis Holdings as set forth on Schedule I.

     5. Oasis Holdings Signature to this Agreement. Oasis Holdings is a signatory hereto
solely for the purposes of agreeing to (i) issue the interests described in Section 4
above, (ii) admit the holders of such interests as members and (iii) amend and restate its Limited
Liability Company Agreement, dated February 26, 2010 (the “Original Holdings Agreement”), as
described in Section 6 below.

     6. Constituent Documents of the Surviving Entity. At the Effective Time, upon the
Merger becoming effective, Oasis LLC’s certificate of formation, as existing and constituted
immediately prior to the Effective Time of the Merger, shall be and constitute the certificate of
formation of the Surviving Entity until amended in the manner provided by law, and the New Holdings
Agreement shall become effective in accordance with its terms, be deemed to amend

 

 

and restate the Original Holdings Agreement in its entirety and thereafter continue as the
effective limited liability agreement of Oasis Holdings until thereafter amended.

     7. Amendment. At any time prior to the Effective Time, this Agreement may, to the
extent permitted by the Act, be supplemented, amended or modified by the mutual consent of Oasis
Holdings, on its own behalf and as the sole member of Merger LLC and Oasis LLC.

     8. Counterparts. This Agreement may be executed in one or more counterparts, each of
which when executed shall be deemed to be an original but all of which shall constitute one and the
same agreement.

     9. Governing Law. This Agreement shall be governed by and construed and enforced
under the laws of the State of Delaware.

     10. Entire Agreement; No Third Party Beneficiaries. This Agreement (including the
Annexes and Schedules hereto and the documents and instruments referred to herein) constitutes the
entire agreement and supersedes all prior agreements and understandings, both written and oral,
among the Parties with respect to the subject matter hereof, and is not intended to confer upon any
person other than the Parties any rights or remedies hereunder..

     11. Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the Parties without the prior written consent of
the other Parties. Subject to the preceding sentence, this Agreement will be binding upon, inure
to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.

     12. Severability. If any provision of this Agreement is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full
force and effect. The parties further agree that if any provision contained herein is, to any
extent, held invalid or unenforceable in any respect under the laws governing this Agreement, they
shall take any actions necessary to render the remaining provisions of this Agreement valid and
enforceable to the fullest extent permitted by law and, to the extent necessary, shall amend or
otherwise modify this Agreement to replace any provision contained herein that is held invalid or
unenforceable with a valid and enforceable provision giving effect to the intent of the parties to
the greatest extent legally permissible.

[Signature page follows.]

 

 

     IN WITNESS WHEREOF, Oasis LLC and Merger LLC have caused this Agreement to be executed as of
the date first written above.

	 	 	 	 	 
	SURVIVING ENTITY: 	OASIS PETROLEUM LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Thomas B. Nusz 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 
	MERGING ENTITY: 	OAS MERGERCO LLC

 	 
	 	By:  	OAS HOLDING COMPANY LLC,
 	 
	 	 	its sole member 	 
	 	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Thomas B. Nusz 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	AGREED TO AND ACKNOWLEDGED BY:

OAS HOLDING COMPANY LLC

 	 
	By:  	 	 
	 	Name:  	Thomas B. Nusz 	 
	 	Title:  	President and Chief Executive Officer 	 

 

 

	 	 	 	 	 

ANNEX A

 

 

ANNEX B

 

 

SCHEDULE Iexv10w6

Exhibit 10.6

FINAL

EMPLOYMENT AGREEMENT

     This Employment Agreement (this “Agreement”) is made by and between Oasis Petroleum Inc., a
Delaware corporation (the “Company”), and Thomas B. Nusz (“Employee”) effective as of June 18, 2010
(the “Effective Date”).

     WHEREAS, the Company currently employs Employee as its Chairman and Chief Executive Officer;

     WHEREAS, the Company desires to continue to employ Employee and Employee desires to continue
to be employed by the Company and to commit himself to serve the Company on the terms herein
provided.

     NOW, THERFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

     1. Employment. The Company shall continue to employ Employee, and Employee accepts
continued employment with the Company, upon the terms and conditions set forth in this Agreement.
Unless earlier terminated pursuant to Section 4 below, the initial term of this Agreement shall
begin on the Effective Date and end on the third anniversary of the Effective Date (the “Initial
Term”), provided, however, that the term shall be automatically renewed for
successive one-year periods (each such period an “Extension Term”) unless the Company provides a
written notice of non-renewal to the Employee more than 60 days before the end of the Initial Term
or, if applicable, the current Extension Term. The Initial Term together with each Extension Term,
if any, shall be the “Term.” If the Company gives timely notice of non-renewal, then Employee’s
employment shall end on the last day of the Term. A termination of Employee’s employment and the
Term by reason of notice of non-renewal given by the Company shall be considered a termination
without Cause for purposes of Section 4.

     2. Position and Duties; Exclusive Compensation and Services.

          (a) During the Term, Employee shall hold the title of Chairman and Chief Executive Officer.
The Company and Employee agree that the Employee shall have duties and responsibilities consistent
with the position set forth above in a company the size and of the nature of the Company, and such
other duties and authority that are assigned to Employee from time to time by the Company’s Board
of Directors (the “Board”), or such other officer of the Company as shall be designated by the
Board. Employee shall report to the Board, or to such other officer of the Company as shall be
designated by the Board. All services that Employee may render to the Company or any of its
Affiliates in any capacity during the Term shall be deemed to be services required by this
Agreement and the consideration for such services is that provided for in this Agreement.

          (b) During the Term, Employee agrees to devote his full business time and attention to the
business and affairs of the Company, unless Employee notifies the Board in advance of Employee’s
intent to engage in other paid work and receives the Board’s express written consent to do so.
Notwithstanding the foregoing, so long as such activities do not conflict with the Company’s
interests, interfere with Employee’s duties and responsibilities or

 

 

violate Employee’s obligations hereunder, Employee will not be prohibited from (i) managing
his personal, financial, and legal affairs; (ii) engaging in professional, charitable or community
activities or organizations or (iii) serving on the boards of directors, or advisory boards of
directors, of not-for-profit charitable organizations, not-for-profit professional organizations,
or for-profit corporations, so long as Employee secures the Board’s express written consent for
Employee to serve on such boards prior to undertaking such service.

          (c) During the Term, Employee agrees to comply with and, where applicable, enforce the
policies of the Company, including without limitation such policies with respect to legal
compliance, conflicts of interest, confidentiality, professional conduct and business ethics as are
from time to time in effect. Employee shall cooperate with any investigation or inquiry authorized
by the Board or conducted by a governmental authority related to the Company’s or an Affiliate’s
business or the Employee’s conduct related to the Company or an Affiliate.

     3. Compensation.

          (a) Base Salary. During the Term, Employee’s base salary shall be $325,000 per annum,
which salary may be increased (but not decreased without the Employee’s written consent) by the
Board (or a designated committee thereof) in its discretion (the “Base Salary”), which Base Salary
shall be payable in regular installments in accordance with the Company’s general payroll
practices.

          (b) Annual Bonus. During the Term, Employee shall be eligible to receive an annual
performance bonus payment (a “Performance Bonus”) for each calendar year pursuant to an annual cash
performance bonus program (the “Bonus Plan”). Pursuant to the terms of the Bonus Plan, each annual
Performance Bonus shall be payable based on the achievement of reasonable performance targets
established in accordance herewith, and for each calendar year Employee’s target Performance Bonus
shall be equal to 80% of Employee’s annual Base Salary in effect on the last day of the applicable
calendar year (the “Target Performance Bonus”). For each calendar year, the Board and the Employee
will mutually determine and will establish in writing (i) the applicable performance targets, (ii)
the percentage of annual Base Salary payable to Employee if some lesser or greater percentage of
the target annual performance is achieved, and (iii) such other applicable terms and conditions of
the Bonus Plan necessary to satisfy the requirements of Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”). Except as otherwise provided in Section 5, any Performance Bonus
that Employee becomes entitled to receive (as a result of the applicable performance targets
ultimately being achieved) will be deemed earned on the last day of the calendar year to which such
bonus relates and will be paid to Employee as soon as administratively feasible following
preparation of the Company’s unaudited financial statements for the applicable calendar year, but
in no event later than March 15 of the calendar year following the calendar year to which such
Performance Bonus relates.

          (c) Employee Benefits. Employee will be entitled during the Term to receive such
welfare benefits and other fringe benefits (including, but not limited to vacation, financial and
tax planning assistance, medical, dental, life insurance, 401(k) and other employee benefits and
perquisites, such as club membership dues) as the Company may offer from time to time to similarly
situated executive level employees, subject to applicable eligibility requirements. The

2

 

Company shall not, however, by reason of this Section 3(c), be obligated to refrain from
changing, amending, or discontinuing any such benefit plan or program, on a prospective basis, so
long as any such changes are similarly applicable to similarly situated employees of the Company.

          (d) Business Expenses. The Company shall reimburse Employee for all reasonable
expenses incurred by him in the course of performing his duties during the Term to the extent
consistent with the Company’s written policies in effect from time to time with respect to travel,
entertainment and other business expenses, subject to the Company’s requirements with respect to
reporting and documentation of such expenses (“Business Expenses”). Notwithstanding any provision
in this Agreement to the contrary, the amount of Business Expenses for which Employee is eligible
to receive reimbursement during any calendar year shall not affect the amount of Business Expenses
for which Employee is eligible to receive reimbursement during any other calendar year within the
Term. Reimbursement of Business Expenses under this Section 3(d) shall generally be made within
two weeks of Employee’s submission of expense reports pursuant to Company policy, but in no event
later than March 15 of the calendar year following the calendar year in which the expense was
incurred. Employee is not permitted to receive a payment or other benefit in lieu of reimbursement
under this Section 3(d).

          (e) Long Term Incentive Compensation. Employee may, as determined by the Board (or a
designated committee thereof) in its sole discretion, periodically receive grants of stock options
or other equity or non-equity related awards pursuant to the Company’s long-term incentive plan(s),
subject to the terms and conditions thereof. Any grants previously awarded to Employee pursuant to
the Company’s long-term incentive plan(s) that are outstanding on the Effective Date hereof shall
continue to be governed by the terms and conditions of such plan(s).

     4. Termination of Employment. Unless otherwise agreed to in writing by the Company
and Employee, Employee’s employment hereunder may be terminated under the following circumstances:

          (a) Death. Employee’s employment hereunder shall terminate upon his death.

          (b) Inability to Perform. Employee’s employment may be terminated by the Company if
Employee has incurred a Disability. For purposes of this Agreement, “Disability” means Employee’s
inability to perform the essential functions of Employee’s position with or without reasonable
accommodation, if required by law, due to physical or mental impairment. The existence of any such
Disability shall be certified by a physician acceptable to both the Company and Employee. If the
parties are not able to agree on the choice of a physician, each party shall select a physician
who, in turn, shall select a third physician to render such certification. In no event will
Employee’s employment be terminated as a result of Disability pursuant to this Section 4(b) until
at least 180 consecutive days of paid leave have elapsed and the Company has provided Employee with
at least thirty days’ advance written notice of termination. During the 180 days of paid leave,
the Company may offset the payment of Employee’s Base Salary then in effect by the amount of any
short-term or long-term disability benefits Employee receives pursuant to Section 3(c) above.

3

 

          (c) Termination by the Company. The Company may terminate Employee’s employment with
or without Cause. For purposes of this Agreement, the term “Cause” means Employee (i) has been
convicted of a misdemeanor involving moral turpitude or a felony, (ii) has engaged in grossly
negligent or willful misconduct in the performance of his duties for the Company, which actions
have had a material detrimental effect on the Company, (iii) has breached any material provision of
this Agreement, (iv) has engaged in conduct which is materially injurious to the Company
(including, without limitation, misuse or misappropriation of the Company’s funds or other
property), or (v) has committed an act of fraud, provided, however, that the Company must give
Employee written notice of the acts or omissions constituting Cause within 60 days after an officer
of the Company (other than Employee) first learns of the occurrence of such event, and no
termination shall be for Cause under clauses (ii), (iii), (iv), or (v) contained in this Section
4(c) unless and until Employee fails to cure such acts or omissions within 30 days following
receipt of such written notice.

          (d) Termination by Employee. Employee may, upon giving the Company no less than 30
days’ advance written notice, terminate Employee’s employment without Good Reason or for Good
Reason. For purposes of this Agreement, the term “Good Reason” shall mean, without the express
written consent of Employee, the occurrence of one of the following arising on or after the
Effective Date, as determined in a manner consistent with Treasury Regulation § 1.409A-1(n)(2)(ii):
(i) a material reduction in Employee’s base compensation, (ii) a material diminution in Employee’s
authority, duties or responsibilities, (iii) a permanent relocation in the geographic location at
which Employee must perform services to a location more than 50 miles from the location at which
Employee normally performed services immediately before the relocation; (iv) a requirement that
Employee report to an officer or employee instead of the Board; or (v) any other action or inaction
that constitutes a material breach by the Company of this Agreement. Neither a transfer of
employment among the Company and any of its Affiliates nor the Company or an Affiliate entering
into a co-employer relationship with a personnel services organization constitutes Good Reason. In
the case of Employee’s allegation of Good Reason, (A) Employee shall provide notice to the Company
of the event alleged to constitute Good Reason within 60 days after the occurrence of such event,
and (B) the Company shall have the opportunity to remedy the alleged Good Reason event within 30
days from receipt of notice of such allegation. If not remedied within that 30-day period,
Employee may submit a Notice of Termination pursuant to Section 5(e), provided that the Notice of
Termination must be given no later than 100 days after the expiration of such 30 day period;
otherwise, Employee is deemed to have accepted such event, or the Company’s remedy of such event,
that may have given rise to the existence of Good Reason; provided, however, such acceptance shall
be limited to the occurrence of such event and shall not waive Employee’s right to claim Good
Reason with respect to future similar events.

          (e) Investigation; Suspension. The Company may suspend Employee with pay pending an
investigation authorized by the Company or a governmental authority or a determination by the
Company whether Employee has engaged in acts or omissions constituting Cause, and such paid
suspension shall not constitute Good Reason or a termination of this Agreement or Employee’s
employment.

4

 

     5. Compensation Upon Termination.

          (a) For Cause or Without Good Reason. In the event Employee’s employment is
terminated by the Company for Cause or by the Employee without Good Reason, the Company shall pay
to Employee (i) any unpaid portion of the Base Salary through the Date of Termination at the rate
then in effect, (ii) any unpaid Performance Bonus earned in the calendar year prior to the Date of
Termination, (iii) unreimbursed Business Expenses through the Date of Termination, and (iv) such
employee benefits, if any, as to which Employee may be entitled pursuant to the terms governing
such benefits. The amounts, if any, set forth in (i), (ii), (iii), and (iv) shall be collectively
referred to herein as the “Accrued Payments”. The Accrued Payments shall be paid at the time and
in the manner required by applicable law but in no event later than 30 business days after the Date
of Termination, with the exception of (ii), which shall be paid at the time provided in and in
accordance with Section 3(b).

          (b) Without Cause or For Good Reason. In addition to the Accrued Payments, in the
event Employee’s employment is terminated by the Company without Cause or by Employee for Good
Reason and such termination constitutes a “separation from service” (as defined in Section 5(i)),
the Company shall pay to Employee a pro-rata portion of the Performance Bonus that Employee would
have been entitled to receive pursuant to Section 3(b) hereof for the calendar year of termination,
multiplied by a fraction, the numerator of which is the number of days during which Employee was
employed by the Company in the calendar year of Employee’s termination, and the denominator of
which is 365 (the “Pro-Rata Bonus”), payable as soon as administratively feasible following
preparation of the Company’s unaudited financial statements for the applicable calendar year, but
in no event later than March 15 of the calendar year following the calendar year to which such
Performance Bonus relates. In addition, the Company shall provide Employee with the following (the
“Severance Package”), contingent upon Employee satisfying the Severance Conditions, as defined
below:

          (i) Payment of an amount (the “Separation Payment”) equal to the greater of either (1)
the aggregate amount of Base Salary as of the Date of Termination or, if greater, before any
reduction not consented to by Employee, that would have been paid to Employee if he had
continued performing services pursuant to this Agreement for the remainder of the
then-current Term or (2) the equivalent of twelve months of Employee’s Base Salary as of the
Date of Termination or, if greater, before any reduction not consented to by Employee,
payable at the time and in the manner provided in this Section 5(b) below; plus

          (ii) Pay or reimburse on a monthly basis the premiums required to continue Employee’s
group health care coverage for a period of 18 months following Employee’s Date of
Termination, under the applicable provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”), provided that Employee elects to continue and remains
eligible for these benefits under COBRA; plus

          (iii) (A) if the Date of Termination occurs during the Initial Term, an amount equal to
the aggregate of each Target Performance Bonus that Employee would have been eligible to
receive if he had continued performing services pursuant to this Agreement for the remainder
of the then-current Term, calculated based on Employee’s

5

 

Base Salary in effect on the Date of Termination or, if greater, before any reduction
not consented to by Employee or (B) if the Date of Termination occurs during any Extension
Term, an amount equal to 80% of the aggregate amount of Base Salary as of the Date of
Termination or, if greater, before any reduction not consented to by Employee, that would
have been paid to Employee if he had continued performing services pursuant to this
Agreement for the remainder of the then-current Term, minus any Pro-Rata Bonus received by
the Employee pursuant to section 5(b) above, payable as soon as administratively feasible
following preparation of the Company’s unaudited financial statements for the applicable
calendar year, but in no event later than March 15 of the calendar year following the
calendar year to which such Target Performance Bonus relates; plus

          (iv) immediate vesting of all unvested equity awards under the Company’s 2010 Long Term
Incentive Plan or other plans of the Company as of the Date of Termination, regardless of
any other established vesting schedule, such that all remaining unvested equity awards shall
be fully vested on the Date of Termination.

To receive the Severance Package, Employee must execute and return to the Company on or prior to
the 60th day following the Date of Termination a waiver and release of claims agreement in the
Company’s customary form, which shall exclude claims for indemnification, claims for coverage under
officer and director policies, and claims as a stockholder of the Company and which may be amended
by the Company to reflect changes in applicable laws and regulations (the “Release”), and where
applicable, not timely revoke such Release (the “Severance Conditions”).

     The Separation Payment shall be paid as follows:

          (A) If the Separation Payment is greater than the Section 409A Exempt Amount (defined below),
then —

               (1) the Section 409A Exempt Amount shall be paid in substantially equal monthly installments
over a period of twelve (12) months beginning on the first payroll date which occurs on or after
the 60th day following the Date of Termination, and

               (2) the excess of the Separation Payment over the Section 409A Exempt Amount shall be paid in
a single lump sum no later than 60 days after the Date of Termination.

For purposes of this Agreement, the “Section 409A Exempt Amount” is two times the lesser of (x)
Employee’s annualized compensation based upon the annual rate of pay for services provided to the
Company for the calendar year preceding the calendar year in which Employee has a “separation from
service” (as defined in Section 5(i)) with the Company (adjusted for any increase during that year
that was expected to continue indefinitely if Employee had not separated from service) or (y) the
maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17)
of the Code for the year in which Employee has a separation from service.

6

 

          (B) If the Separation Payment is equal to or less than the Section 409A Exempt Amount, then
the Separation Payment shall be paid in equal monthly installments over a period of months (limited
to 24 such months) determined by dividing (x) the Separation Payment by (y) the Employee’s Monthly
Base Salary as of the Date of Termination, commencing in payment on the first day of the third
month following the Date of Termination, provided that the Date of Termination constitutes a
“separation from service” (as defined in Section 5(i)).

          (c) Death or Disability. In the event Employee’s employment terminates by reason of
his death or Disability, Employee (or his estate) shall be entitled to receive:

          (i) the Accrued Payments;

          (ii) a Pro-Rata Bonus for the calendar year of termination, payable as soon as
administratively feasible following preparation of the Company’s unaudited financial
statements for the applicable calendar year, but in no event later than March 15 of the
calendar year following the calendar year to which such Performance Bonus relates; and

          (iii) provided Employee satisfies the Severance Conditions, (1) an amount equivalent to
twelve (12) months of Employee’s Base Salary as of the Date of Termination, or, if greater,
before any reduction not consented to by Employee, payable in a lump sum within 60 days of
the Date of Termination; and (2) pay or reimburse on a monthly basis the premiums required
to continue Employee’s group health care coverage for a period of 18 months following
Employee’s Date of Termination, under the applicable provisions of COBRA, provided that
Employee or his dependents, as applicable, elect to continue and remain eligible for these
benefits under COBRA.

          (d) Exclusive Compensation and Benefits. The compensation and benefits described in
this Section 5 or in Section 6 as applicable, along with the associated terms for payment,
constitute all of the Company’s obligations to Employee with respect to the termination of
Employee’s employment. Nothing in this Agreement, however, is intended to limit any earned, vested
benefits (other than any entitlement to severance or separation pay, if any) that Employee may have
under the applicable provisions of any benefit plan of the Company in which Employee is
participating on the Date of Termination, any rights Employee may have to continue or convert
coverage under certain employee benefit plans in accordance with the terms of those plans and
applicable law, or any rights Employee may have under long-term incentive or equity compensation
plan.

          (e) Notice of Termination. Any termination of Employee’s employment occurring in
accordance with the terms of this Section 5 (other than by reason of Employee’s death) shall be
communicated to the other party by written notice that (i) indicates the specific termination
provisions of this Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for the termination, and (iii) specifies the Date of
Termination (a “Notice of Termination”), and that is delivered to the other party in accordance
with Section 9(i) of this Agreement.

7

 

          (f) Date of Termination. For purposes of this Agreement, “Date of Termination” means
the date of receipt of the Notice of Termination or any later date specified therein, as the case
may be; provided, however that if Employee’s employment is terminated by reason of his death, the
Date of Termination shall be the date of death of Employee.

          (g) Deemed Resignations. Unless otherwise agreed to in writing by the Company and
Employee prior to termination of Employee’s employment, any termination of Employee’s employment
shall constitute an automatic resignation of Employee from all positions he then holds as an
employee, officer, director, manager or other service provider of the Company and each Affiliate of
the Company.

          (h) Offset. Employee agrees that the Company may set off against, and Employee
authorizes the Company to deduct from, any payments due to Employee, or to his estate, heirs, legal
representatives, or successors, any amounts which may be due and owing to the Company or an
Affiliate by Employee, whether arising under this Agreement or otherwise; provided that no such
offset may be made with respect to amounts payable that are subject to the requirements of Section
409A of the Code unless the offset would not result in a violation of the requirements of Section
409A of the Code.

          (i) Application of Section 409A. The amounts payable pursuant to Sections 5 and 6 of
this Agreement are intended to comply with the short-term deferral exception and/or separation pay
exception to Section 409A of the Code. Notwithstanding the foregoing, no amount payable pursuant
to this Agreement which constitutes a “deferral of compensation” within the meaning of the Treasury
Regulations issued pursuant to Section 409A of the Code (the “Section 409A Regulations”) shall be
paid unless and until Employee has incurred a “separation from service” within the meaning of the
Section 409A Regulations. Furthermore, to the extent that Employee is a “specified employee”
within the meaning of the Section 409A Regulations as of the date of Employee’s separation from
service, no amount that constitutes a deferral of compensation which is payable on account of
Employee’s separation from service shall be paid to Employee before the date (the “Delayed Payment
Date”) which is first day of the seventh month after the date of Employee’s separation from service
or, if earlier, the date of Employee’s death following such separation from service. All such
amounts that would, but for this Section 5(i), become payable prior to the Delayed Payment Date
will be accumulated and paid on the Delayed Payment Date. No interest will be paid by the Company
with respect to any such delayed payments. For purposes of Section 409A of the Code, each payment
or amount due under this Agreement shall be considered a separate payment, and Employee’s
entitlement to a series of payments under this Agreement is to be treated as an entitlement to a
series of separate payments.

     6. Change in Control.

          (a) Upon the occurrence of a Change in Control (as defined in the Company’s 2010 Long Term
Incentive Plan) during the Term, all unvested equity awards under the Company’s 2010 Long Term
Incentive Plan or other plans of the Company as of such date shall become immediately vested,
regardless of any other established vesting schedule, such that all remaining unvested equity
awards shall be fully vested on the date of such Change in Control. In addition, if a Change in
Control occurs during the Term and (x) Employee is terminated by the

8

 

Company for any reason other than for Cause within one year following such Change in Control
or (y) Employee terminates employment for Good Reason within one year following such Change in
Control, and any such termination constitutes a separation from service (as defined in Section
5(i)), then, the Company shall:

     (i) Pay Employee within 60 days following the Date of Termination, a lump sum payment
equal to two (2) times the sum of (i) Employee’s annual rate of Base Salary as of the Date
of Termination or, if greater, before any reduction not consented to by Employee, plus (ii)
(A) if the Date of Termination occurs during the Initial Term, the maximum Performance Bonus
Employee is eligible to receive for the calendar year in which the Change in Control occurs
or (B) if the Date of Termination occurs during any Extension Term, Employee’s Target
Performance Bonus, calculated based on Employee’s Base Salary as of the Date of Termination
or, if greater, before any reduction not consented to by Employee; plus

     (ii) pay or reimburse on a monthly basis the premiums required to continue Employee’s
group health care coverage for a period of 18 months following Employee’s separation date,
under COBRA, provided that Employee elects to continue and remains eligible for these
benefits under COBRA.

provided, that, nothing in this Section 6 shall relieve the Company or any successor-in-interest
thereof of its obligation to continue, following any Change in Control, to provide Employee with
the compensation due pursuant to Section 3 of this Agreement or to otherwise comply with its
obligations hereunder in the event Employee’s service continues pursuant to this Agreement
following the occurrence of such Change in Control; provided, further, that, in the event Employee
is terminated simultaneously with the occurrence of a Change in Control or within one year thereof,
Employee shall be entitled to receive the greater of the payments or benefits provided under
Section 5(b) of this Agreement and this Section 6(a), which receipt shall be conditioned upon
Employee’s satisfaction of the Severance Conditions.

          (b) In the event it shall be determined that any payment, benefit or distribution (or
combination thereof) by the Company or any of its wholly-owned subsidiaries or any other affiliate
(as that term is used in Treas. Reg. § 1.280G-1, Q/A-46) to or for the benefit of Employee (whether
paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise) (a “Payment”) is subject to the excise tax imposed by Section 4999 of the Code, or any
interest and penalties are incurred by Employee with respect to such excise tax (such excise tax,
together with any such interest and penalties, hereinafter collectively referred to as the “Excise
Tax”), Employee shall be entitled to receive, in accordance with Exhibit A hereof, an
additional payment (a “Gross-Up Payment”) in an amount such that after payment by Employee of all
taxes (including any interest or penalties imposed with respect to such taxes), including, without
limitation, any federal, state and local income taxes and employment taxes (and any interest and
penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment,
Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.

          Notwithstanding the foregoing provisions of this Section 6(b), if it is determined that
Employee is entitled to a Gross-Up Payment, but that the value of the Parachute Payments

9

 

(as defined below) does not exceed 110% of the Safe Harbor Amount (as defined below), then no
Gross-Up Payment shall be made to Employee and the Payments, in the aggregate, will be reduced to
the Safe Harbor Amount. The reduction of the Payments to the Safe Harbor Amount will be made in
the following order:

     (i) First, by reducing the cash amounts of Parachute Payments that would not constitute
deferred compensation (within the meaning of Section 409A of the Code) subject to Section
409A of the Code (with the Payments subject to such reduction to be determined by Employee),
to the extent necessary to decrease the Payments that would otherwise constitute Parachute
Payments to the Safe Harbor Amount.

     (ii) Next, if after the reduction to zero of the amounts described in paragraph (i)
above, the remaining scheduled Parachute Payments are greater than the Safe Harbor Amount,
then by reducing the cash amounts of Payments that constitute deferred compensation (within
the meaning of Section 409A of the Code) subject to Section 409A of the Code, with the
reductions to be applied first to the Payments scheduled for the latest distribution date,
and then applied to distributions scheduled for progressively earlier distribution dates, to
the extent necessary to decrease the Payments that would otherwise constitute Parachute
Payments to the Safe Harbor Amount.

     (iii) Next, if after the reduction to zero of the amounts described in paragraphs (i)
and (ii) above, the remaining scheduled Parachute Payments are greater than the Safe Harbor
Amount, then, by reducing any of the remaining scheduled Payments, in an order to be
determined by the Company, to the extent necessary to decrease the Payments that would
otherwise constitute Parachute Payments to the Safe Harbor Amount.

The term “Parachute Payment” is the portion of the Payments that would be treated as parachute
payments under Section 280G of the Code. The “Safe Harbor Amount” is the maximum amount of
Payments that could be made to Employee without giving rise to any Excise Tax.

     7. Protection of Information.

          (a) Disclosure to and Property of the Company. All information, trade secrets,
designs, ideas, concepts, improvements, product developments, discoveries and inventions, whether
patentable or not, that are conceived, made, developed or acquired by Employee, individually or in
conjunction with others, during the term of his employment (whether during business hours or
otherwise and whether on the Company’s premises or otherwise) that relate to the Company’s or any
of its wholly-owned subsidiaries’ business, products or services and all writings or materials of
any type embodying any such matters (collectively, “Confidential Information”) shall be disclosed
to the Company, and are and shall be the sole and exclusive property of the Company. Confidential
Information does not, however, include any information that is available to the public other than
as a result of any unauthorized act of Employee.

          (b) No Unauthorized Use or Disclosure. Employee agrees that Employee will preserve
and protect the confidentiality of all Confidential Information and work product of the Company and
its wholly-owned subsidiaries, and will not, at any time during or after the

10

 

termination of Employee’s employment with the Company, make any unauthorized disclosure of,
and shall not remove from the Company premises, and will use reasonable efforts to prevent the
removal from the Company premises of, Confidential Information or work product of the Company or
its wholly-owned subsidiaries, or make any use thereof, in each case, except in the carrying out of
Employee’s responsibilities hereunder. Employee shall have no obligation hereunder to keep
confidential any Confidential Information if and to the extent disclosure thereof is specifically
required by law; provided, however, that in the event disclosure is required by applicable law and
Employee is making such disclosure, Employee shall provide the Company with prompt notice of such
requirement, and shall use commercially reasonable efforts to give such notice prior to making any
disclosure so that the Company may seek an appropriate protective order.

          (c) Remedies. Employee acknowledges that money damages would not be a sufficient
remedy for any breach of this Section 7 by Employee, and the Company or its wholly-owned
subsidiaries shall be entitled to enforce the provisions of this Section 7 by obtaining an order
for specific performance and/or injunctive relief as remedies for any such breach or threatened
breach, including but not limited to an order terminating payments owing to Employee under this
Agreement. Such remedies shall not be deemed the exclusive remedies for a breach of this Section
7, but shall be in addition to all remedies available at law or in equity to the Company, including
the recovery of damages from Employee and remedies available to the Company pursuant to other
agreements with Employee.

          (d) No Prohibition. Nothing in this Section 7 shall be construed as prohibiting
Employee, following the termination of the Prohibited Period (as defined below), from being
employed by any Competing Business (as defined below) or engaging in any Prohibited Activity (as
defined below); provided, that during such employment or engagement Employee complies with his
obligations under this Section 7.

     8. Non-Competition and Non-Solicitation.

          (a) Definitions. As used in this Agreement, the following terms shall have the
following meanings:

          (i) “Affiliate” shall mean an individual or entity that, directly or indirectly through
one or more intermediaries, controls or is controlled by or is under common control with a
specified individual or entity.

          (ii) “Competing Business” means any business, individual, partnership, firm,
corporation or other entity engaged in oil and gas exploration and production.

          (iii) “Prohibited Activity” means any service or activity on behalf of a Competing
Business that involves the planning, management, supervision, or providing of services that
are substantially similar to those services Employee provided to the Company within the last
12 months of Employee’s employment with the Company.

          (iv) “Prohibited Period” means the Term and the 12 month period following the
termination of Employee’s employment with the Company.

11

 

          (v) “Restricted Area” means any area within a six (6) mile radius of the boundary of
any existing leasehold or other property of the Company or its Affiliates, either during the
Term or as of the Employee’s Date of Termination. The parties stipulate that the forgoing
is a reasonable area restriction because the area identified is the market area with respect
to which Employee will help the Company provide its products and services, help analyze,
and/or receive access to Confidential Information.

          (b) Protective Covenants and Restrictions. Acknowledging delivery of Confidential
Information and that such Confidential Information is vital to Employee’s continued performance of
services to the Company and acknowledging that the Company is delivering and will deliver the
Confidential Information partly in reliance on the protective covenants and restrictions set forth
herein, Employee agrees that the following protective covenants are reasonable and necessary for
the protection of the Company’s legitimate business interests, do not create any undue hardship on
Employee, and are not contrary to the public interest:

          (i) Non-compete. Employee expressly covenants and agrees that, during the
Prohibited Period, he will not engage in any Prohibited Activity in the Restricted Area.
Notwithstanding the foregoing, in the event Employee resigns his employment or is
terminated, for any reason, on or after a Change in Control, Employee shall have no
obligations to comply with this Section 8(b)(i).

          (ii) Non-solicitation. Employee further expressly covenants and agrees that
during the Prohibited Period, he will not (A) solicit any individual who, on the Date of
Termination, is an employee of the Company, to leave such employment, provided that Employee
will not be deemed to have violated this provision if employees of the Company directly
contact Employee regarding employment or respond to general advertisements for employment,
or (B) solicit any client or customer of the Company, with whom Employee has had direct
contact with, to terminate or modify its relationship with Company that exists on the Date
of Termination. Notwithstanding the foregoing, in the event Employee resigns his employment
or is terminated, for any reason, on or after a Change in Control, Employee shall have no
obligations to comply with this Section 8(b)(ii).

          (c) Permitted Ownership. Notwithstanding any of the foregoing, Employee shall not be
prohibited from owning 2.5% or less of the outstanding equity securities of any entity whose equity
securities are listed on a national securities exchange or publicly traded in any over-the-counter
market, provided that neither Employee nor any of his Affiliates, together or alone, has the power,
directly or indirectly, to control or direct or is involved in the management or affairs of any
such corporation that is a Competing Business.

          (d) Reasonableness. Employee and the Company agree and acknowledge that the
limitations as to time, geographical area and scope of activity to be restrained as set forth in
this Section 8 are the result of arm’s-length bargaining, are fair and reasonable, and do not
impose any greater restraint than is necessary to protect the legitimate business interests of the
Company in light of (i) the nature and geographic scope of the Company’s operations; (ii)
Employee’s level of control over and contact with the Company’s business in the Restricted

12

 

Area; (iii) the fact that the Company’s business is conducted throughout the Restricted Area;
and (iv) the amount of compensation that Employee is receiving in connection with the performance
of his duties hereunder.

          (e) Relief and Enforcement. Employee hereby represents to the Company that he has
read and understands, and agrees to be bound by, the terms of this Section 8. It is the desire and
intent of the parties hereto that the provisions of this Section 8 be enforced to the fullest
extent permitted under applicable law, whether now or hereafter in effect. However, to the extent
that any part of this Section 8 may be found invalid, illegal or unenforceable for any reason, it
is intended that such part shall be enforceable to the extent that a court of competent
jurisdiction shall determine that such part, if more limited in scope, would have been enforceable,
and such part shall be deemed to have been so written and the remaining parts shall as written be
effective and enforceable in all events. Employee and the Company further agree and acknowledge
that, in the event of a breach or threatened breach of any of the provisions of this Section 8, the
Company shall be entitled to immediate injunctive relief, as any such breach would cause the
Company irreparable injury for which it would have no adequate remedy at law. Nothing herein shall
be construed so as to prohibit the Company from pursuing any other remedies available to it
hereunder, at law or in equity, for any such breach or threatened breach.

     9. General Provisions.

          (a) Amendments and Waiver. Other than pursuant to Section 4(d), (i) the terms and
provisions of this Agreement may not be modified or amended, nor may any of the provisions hereof
be waived, temporarily or permanently, unless such modification or amendment is agreed to in
writing and signed by Employee and by a duly authorized officer of the Company, and such waiver is
set out in writing and signed by the party to be bound by waiver, and (ii) the failure of any party
to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms, and a waiver on one occasion shall not be
deemed to be a waiver of the same or any other type of breach on a future occasion.

          (b) Withholding and Deductions. With respect to any payment to be made to Employee,
the Company shall deduct, where applicable, any amounts authorized by Employee, and shall withhold
and report all amounts required to be withheld and reported by applicable law.

          (c) Mitigation. Employee shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of
any payment provided for in this Agreement be reduced by any compensation earned by Employee as the
result of employment by another employer after the Date of Termination, or otherwise.

          (d) Survival. The termination of Employee’s employment shall not impair the rights or
obligations of any party that have accrued prior to such termination or which by their nature or
terms survive termination of the Term, including without limitation the Company’s obligations under
Sections 5 and 6 and Employee’s obligations under Sections 7 and 8.

13

 

          (e) No Obligation to Pay. With regard to any payment due to Employee under this
Agreement, it shall not be a breach of any provision of this Agreement for the Company to fail to
make such payment to Employee if by doing so, the Company violates applicable law.

          (f) Validity. The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

          (g) Entire Agreement. This Agreement constitutes the entire agreement of the parties
with regard to the subject matter hereof, and contains all the covenants, promises,
representations, warranties and agreements between the parties with respect to employment of
Employee by the Company. Without limiting the scope of the preceding sentence, all understandings
and agreements preceding the date of execution of this Agreement and relating to the subject matter
hereof are hereby null and void and of no further force and effect.

          (h) Successors and Assigns; Binding Agreement. This Agreement shall bind and inure to
the benefit of and be enforceable by the parties hereto and their respective successors, permitted
assigns, heirs and personal representatives and estates, as the case may be. Neither this
Agreement nor any right or obligation hereunder of any party may be assigned or delegated without
the prior written consent of the other party hereto; provided, however, that the Company may assign
this Agreement to any of its Affiliates and Employee may direct payment of any benefits that will
accrue upon death. Employee shall not have any right to pledge, hypothecate, anticipate, or in any
way create a lien upon any payments or other benefits provided under this Agreement; and no
benefits payable under this Agreement shall be assignable in anticipation of payment either by
voluntary or involuntary acts, or by operation of law, except by will or pursuant to the laws of
descent and distribution. This Agreement shall not confer any rights or remedies upon any person
or legal entity other than the parties hereto and their respective successors and permitted
assigns.

          (i) Notices. For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly given (i) when
received, if delivered personally or by courier, (ii) on the date receipt is acknowledged, if
delivered by certified mail, postage prepaid, return receipt requested, or (iii) one day after
transmission, if sent by facsimile transmission with confirmation of transmission, as follows:

	 	 	 	 	 	 	 

	 

	 	If to Employee, at:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	If to the Company, at:
	 	Oasis Petroleum Inc.	 	 
	 

	 	 	 	Attn:                                         	 	 
	 

	 	 	 	1001 Fannin Street, Suite 202	 	 
	 

	 	 	 	Houston, Texas 77002	 	 

14

 

or to such other address as either party may furnish to the other in writing in accordance
herewith, except that notices or changes of address shall be effective only upon receipt.

          (j) Construction. Where specific language is used to clarify by example a general
statement contained herein, such specific language shall not be deemed to modify, limit or restrict
in any manner the construction of the general statement to which it relates. The language used in
this Agreement shall be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction shall be applied against any party. The section
headings in this Agreement are for convenience of reference only, and they form no part of this
Agreement and shall not affect its construction.

          (k) Assistance in Litigation. During the Term and for a period of four years
following the Date of Termination, Employee shall, if given at least two (2) weeks notice, furnish
such information and proper assistance to the Company or any of its Affiliates as may reasonably be
required by the Company in connection with any litigation, investigations, arbitrations, and/or any
other fact-finding or adjudicative proceedings involving the Company or any of its Affiliates,
provided that if such assistance is requested after the Date of Termination: (i) such assistance
not unreasonably interfere with Employee’s employment or other activities or endeavors; and (ii)
such assistance not exceed forty hours in any twelve month period, unless otherwise agreed in
writing by the parties. This obligation shall include, without limitation, to meet with counsel
for the Company or any of its Affiliates and provide truthful testimony at the request of the
Company or as otherwise required by law or valid legal process. The Company shall reimburse
Employee for all reasonable out-of-pocket expenses incurred by Employee and approved in advance by
the Company in rendering such assistance (such as travel, parking, and meals but not attorney’s
fees). In addition, following the Date of Termination, the Company shall pay the Employee $300/hr
for his time in providing information and assistance in accordance with this Section 9(k).

          (l) Governing Law; Construction; Venue; Jury-Trial Waiver. The parties (i) agree that
this Agreement is governed by and shall be construed and enforced in accordance with Texas law,
excluding its choice-of-law principles, except where federal law may preempt the application of
state law; (ii) agree that this Agreement is to be construed as a whole, according to its fair
meaning, and not strictly for or against any of the parties; (iii) submit and consent to the
exclusive jurisdiction, including removal jurisdiction, of the state and federal courts located in
Harris County, Texas (or the county where the Company’s principal executive offices are located if
different) for any action or proceeding relating to this Agreement or Employee’s employment; (iv)
waive any objection to such venue; (v) agree that any judgment in any such action or proceeding may
be enforced in other jurisdictions; and (vi) irrevocably waive the right to trial by jury and agree
not to ask for a jury in any such proceeding.

          (m) Mutual Contribution. The parties to this Agreement have mutually contributed to
its drafting. Consequently, no provision of this Agreement shall be construed against any party on
the grounds that such party drafted the provision or caused it to be drafted.

15

 

     IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the
Effective Date.

	 	 	 	 	 
	 	OASIS PETROLEUM INC.

 	 
	 	By:  	/s/ Michael H. Lou
 	 
	 	 	Name:  	Michael H. Lou 	 
	 	 	Title:  	SVP - Finance 	 
	 
	 	EMPLOYEE:

 	 
	 	/s/ Thomas B. Nusz
 	 
	 	Thomas B. Nusz 	 
	 	 	 

 

 

	 	 	 	 	 

EXHIBIT A

GROSS-UP PAYMENT

This Exhibit A shall govern the Gross-Up Payment described in Section 6 of the Agreement.
Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such
terms in the Agreement.

Section 1. All determinations required to be made under this Exhibit A, including whether
and when a Gross-Up Payment is required and the amount of such Gross-Up Payment, whether a
reduction to the Safe Harbor Amount is required and, if so, the amount of the reduction, and the
assumptions to be utilized in arriving at such determination, shall be made by a nationally
recognized accounting firm designated by the Company (the “Accounting Firm”), which shall provide
detailed supporting calculations both to the Company and Employee within ten (10) business days of
the receipt of notice from Employee that there has been a Payment, or such earlier time as is
requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by
the Company. Any Gross-Up Payment, as determined pursuant to this Exhibit A, shall be paid
by the Company to Employee (or to the appropriate taxing authority on Employee’s behalf) when the
tax is due. If the Accounting Firm determines that no Excise Tax is payable by Employee, it shall
so indicate to Employee in writing. Any determination by the Accounting Firm shall be binding upon
the Company and Employee (subject to Section 2 hereof). As a result of the uncertainty in the
application of Section 4999 of the Code, it is possible that Gross-Up Payments determined by the
Accounting Firm to be due to (or on behalf of) Employee was lower than the amount actually due
(“Underpayment”). In the event that the Company exhausts its remedies pursuant to Section 2 of this
Exhibit A and Employee thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred, and any such
Underpayment shall be promptly paid by the Company to or for the benefit of Employee (but in any
case no later than the calendar year following the calendar year in which such tax was payable).

Section 2. Employee shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of any Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than ten (10) business days after
Employee is informed in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. Employee shall not pay such claim
prior to the expiration of the thirty (30) day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies Employee in writing prior to the expiration
of such period that it desires to contest such claim, Employee shall (i) give the Company any
information reasonably requested by the Company relating to such claim, (ii) take such action in
connection with contesting such claim as the Company shall reasonably request in writing from time
to time, including, without limitation, accepting legal representation with respect to such claim
by an attorney reasonably selected by the Company, (iii) cooperate with the Company in good faith
in order to effectively contest such claim, and (iv) permit the Company to participate in any
proceedings relating to such claim; provided, however, that the Company shall bear and pay directly
all costs and expenses (including additional interest and penalties) incurred in connection with
such contest and shall indemnify and hold Employee

Exhibit A

1

 

harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties
with respect thereto) imposed as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this Section 2, the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct Employee to pay the tax claimed
and sue for a refund or contest the claim in any permissible manner, and Employee agrees to
prosecute such contest to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one (1) or more appellate courts, as the Company shall determine; provided that
if the Company directs Employee to pay such claim and sue for a refund, the Company shall advance
the amount of such payment to Employee, on an interest-free basis, and shall indemnify and hold
Employee harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; provided, further, that if Employee is required to extend the
statute of limitations to enable the Company to contest such claim, Employee may limit this
extension solely to such contested amount. The Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and Employee shall be
entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

Section 3. If, after the receipt by Employee of an amount paid or advanced by the Company pursuant
to this Exhibit A, Employee becomes entitled to receive any refund with respect to a
Gross-Up Payment, Employee shall (subject to the Company’s complying with the requirements of
Section 2 of this Exhibit A) promptly pay to the Company the amount of such refund received
(together with any interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by Employee of an amount advanced by the Company pursuant to Section 2 of this Exhibit
A, a determination is made that Employee shall not be entitled to any refund with respect to
such claim, and the Company does not notify Employee in writing of its intent to contest such
denial of refund prior to the expiration of thirty (30) days after such determination, then such
advance shall be forgiven and shall not be required to be repaid, and the amount of such advance
shall offset, to the extent thereof, the amount of the Gross-Up Payment required to be paid.

Section 4. For the avoidance of doubt, all payments to or for the benefit of Employee provided for
in this Exhibit A shall be made no later than the end of the calendar year in which the
applicable Excise Tax has become due, or if as a result a tax audit or litigation, it is determined
that no additional Excise Tax has become due, the end of the calendar year in which the audit is
completed or there is a final and non-appealable settlement or other resolution.

Exhibit A

2

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