Exhibit 10.1

MASTER REORGANIZATION AGREEMENT

This Master Reorganization Agreement (this “Agreement”), dated as of May 2,
2014, is entered into by and among Parsley Energy Inc., a Delaware corporation
(“PubCo”), NGP X US Holdings, L.P., a Delaware limited partnership (“NGP”),
Parsley Energy, LLC, a Delaware limited liability company (“Parsley LLC”), the
persons identified on the signature page hereto as Existing Members (the
“Existing Members”) and Parsley Energy Employee Holdings, LLC, a Delaware
limited liability company (“PEEH” and, together with PubCo, NGP, Parsley LLC and
the Existing Members, collectively, the “Parties”).

RECITALS

WHEREAS, Parsley LLC formed PubCo as a wholly owned subsidiary and, in
connection therewith, contributed cash in the amount of $10 to PubCo in exchange
for 1,000 shares of common stock of PubCo, par value $0.01 per share (the “PubCo
Shares”);

WHEREAS, in connection with, and prior to the completion of, an initial public
offering of PubCo’s Class A Common Stock (the “IPO”) pursuant to, and as more
fully described in, a registration statement filed with the U.S. Securities and
Exchange Commission, Registration No. 333-195230 (the “Registration Statement”),
certain restructuring transactions will be undertaken, as more fully described
in the Registration Statement (the “Reorganization”);

WHEREAS, the Board of Managers of Parsley LLC has determined that it is in the
best interests of the members of Parsley LLC to undertake the Reorganization;

WHEREAS, the Parties acknowledge and agree that the Board of Directors of PubCo,
in its sole discretion, has the authority to determine the terms of the IPO,
including the number of shares of Class A Common Stock to be sold to the public
and the IPO Price (as defined herein); and

WHEREAS, in connection with the IPO and the Reorganization, the Parties desire
to, among other things, (a) establish the economic terms of the Reorganization,
and (b) enter into certain agreements to effectuate the foregoing.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the Parties hereby agree as follows, and
further agree that the actions set forth in Article II shall be deemed to have
been taken and become effective in the order set forth therein.

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:

“A&R Parsley LLC Agreement” has the meaning set forth in Section 2.2.

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

“Agreement” has the meaning set forth in the preamble hereto.

“Claims” has the meaning set forth in Section 6.1.

“Class A Common Stock” means shares of PubCo’s Class A common stock, par value
$0.01 per share, as further described in the Registration Statement.

“Class B Common Stock” means shares of PubCo’s Class B common stock, par value
$0.01 per share, as further described in the Registration Statement.

“Code” has the meaning set forth in Section 5.1.

“Common Stock” means shares of Class A Common Stock and Class B Common Stock.

“Continuing Members” means each of the persons set forth on Schedule A hereto.

“Contributing Members” has the meaning set forth in Section 5.4(e).

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

“Existing Members” has the meaning set forth in the preamble hereto.

“Indemnifying Party” has the meaning set forth in Section 6,2.

“Indemnitees” has the meaning set forth in Section 6.2.

“Interest Contribution” has the meaning set forth in Section 5.1.

“IPO” has the meaning set forth in the Recitals.

“IPO Price” has the meaning set forth in Section 2.2.

“Lock-Up Agreement” has the meaning set forth in Section 5.2(b).

“Merger Agreement” means the Agreement and Plan of Merger, by and among PubCo
and PEEH, in the form attached hereto as Schedule B.

“Meter” has the meaning ascribed to such term in the Parsley LLC Agreement.

“NGP” has the meaning set forth in the preamble hereto.

“NGP Units” has the meaning set forth in Section 2.3(a).

“Option Shares” means the shares of Class A Common Stock that PubCo will agree
to issue upon an exercise of the Over Allotment Option.

“Over Allotment Option” means the option to purchase additional shares of
Class A Common Stock granted by PubCo to the Underwriters pursuant to the
Underwriting Agreement.

 

2

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

“Parsley Equity” means membership interests in Parsley LLC prior to entry into
the A&R Parsley LLC Agreement.

“Parsley LLC” has the meaning set forth in the preamble hereto.

“Parsley LLC Agreement” means the Limited Liability Company Agreement of Parsley
LLC, dated June 11, 2013, as in effect immediately prior to the Effective Time.

“Parties” has the meaning set forth in the preamble hereto.

“PE Units” means units issued pursuant to the A&R Parsley LLC Agreement.

“PEEH” has the meaning set forth in the preamble hereto.

“PEEH Member” has the meaning set forth in Section 2.3(d).

“PEEH Merger” has the meaning set forth in Section 2.3(d).

“Preferred Return Units” means, with respect to NGP and each of the PSP Members,
such number of PE Units held by NGP or any PSP Member equal to the product of
(i) (A) the aggregate Meter due and payable on the date of closing of the IPO,
divided by (B) the IPO Price and (ii) the percentage set across from NGP’s and
each PSP Member’s name on Schedule D hereto, rounded down for fractional
interests.

“PSP Members” means any of David Smith, Frank Cremer, Rob Crumpler, Shack
Ventures, LP, Buck Horn, L.P., OSO Capital II, L.P., Hedloc Investment Company,
L.P., Parsley Interests, L.P., Kirk Fritschen, Justin Clark, SD Gray Family
Partnership, LP, Ryan Dalton, Michael Hinson, Colin Roberts, Kara Wood, Mike
Senich, Brad Sublett, Stephanie Reed, Landon Martin, Kristin McClure, Isaac
Hayes, PLZ Properties, LLC, Marbella Interests, LLC, and KMG Energy, LLC.

“PubCo” has the meaning set forth in the preamble hereto.

“PubCo Contributor(s)” has the meaning set forth in Section 5.1.

“PubCo Shares” has the meaning set forth in the Recitals.

“Registration Statement” has the meaning set forth in the Recitals.

“Released Claims” has the meaning set forth in Section 6.1.

“Released Parties” has the meaning set forth in Section 6.1.

“Releasing Parties” has the meaning set forth in Section 6.1.

“Reorganization” has the meaning set forth in the Recitals.

 

3

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

“Representatives” has the meaning given such term in the Underwriting Agreement.

“Securities Act” has the meaning set forth in Article IV.

“Selling Stockholders” means Bryan Sheffield, Sheffield Energy Management, LLC,
Michael Hinson, Matt Gallagher, Paul Treadwell, Ryan Dalton, Diamond K
Interests, LP, Parsley Interests, LP, One Putt Oil & Gas Ltd., Back Nine Oil &
Gas Ltd., Nine Iron Oil & Gas Ltd., HowJan Properties, Inc., David Askew and NGP
X US Holdings, L.P.

“Underwriting Agreement” means a firm commitment underwriting agreement to be
entered into between PubCo, NGP, the Selling Stockholders and the underwriters
named in the Registration Statement.

“Tax Treatment” has the meaning set forth in Section 5.1.

“Transactions” has the meaning set forth in Section 5.1.

ARTICLE II

CONTRIBUTIONS AND ACKNOWLEDGEMENTS

Section 2.1. Underwriting Agreement. After the date hereof and prior to the
Effective Time, PubCo, NGP, the Selling Stockholders and the Representatives
shall enter into the Underwriting Agreement, pursuant to which PubCo shall issue
and sell, and the Selling Stockholders shall sell, shares of Class A Common
Stock to the Underwriters at a price per share equal to the IPO Price (as
defined herein), less underwriting discounts and commissions as set forth in the
Underwriting Agreement; each of the Selling Stockholders has requested to
include in the Registration Statement a number of shares of Class A Common Stock
equal to the dollar amount set forth next to each such person’s name on Schedule
F; each of the Selling Stockholders understands, acknowledges and agrees that
the number of shares of Class A Common Stock that may ultimately be sold by such
person may be reduced as determined by the Pricing Committee of the Board of
Directors of PubCo, in its sole discretion, following consultation with the
Representatives provided that any such reduction shall be pro rata among the
Selling Stockholders unless otherwise agreed to by any such person that is
disproportionately cut back

Section 2.2. Recapitalization. Effective immediately prior to the Effective
Time, the Parsley LLC Agreement shall be amended and restated substantially in
the form attached hereto as Schedule C (the “A&R Parsley LLC Agreement”) and
Parsley LLC shall be recapitalized such that the Parsley Equity is restated to
consist solely of a single class of units, which are referred to herein as the
“PE Units,” and each member of Parsley LLC shall receive such number of PE Units
as such member would have received pursuant to Section 4.4 of the Parsley LLC
Agreement if Parsley LLC were to make distributions to such members in an
aggregate amount equal to the implied pre-offering equity value of Parsley LLC
(the “Recapitalization”) based on the per share initial public offering price of
the Class A Common Stock to be sold in the IPO, before the gross spread paid to
the underwriters along with related fees and expenses in connection with the
offering (the “IPO Price”) and valuing such PE Units at the IPO Price. The
aggregate number of PE Units to be distributed to the members of Parsley LLC
shall be determined by the Board of Managers of Parsley LLC and shall be set in
a manner designed so that each PE Unit is economically equivalent to one share
of Class A Common Stock, as described in the Registration Statement.

 

4

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

Section 2.3. Interest Contribution. Effective immediately following the
Effective Time and in connection with the IPO:

(a) NGP shall contribute, transfer, assign and deliver all of its right, title
and interest in the PE Units held by it, less any Preferred Return Units held by
NGP, to PubCo (the “NGP Units”), and in exchange for such contribution,
transfer, assignment and delivery, PubCo shall issue such number of shares of
Class A Common Stock to NGP equal to the number of NGP Units contributed
pursuant to this Section 2.3(a);

(b) each of the Existing Members, other than the Continuing Members and Parsley
Energy Employee Holdings, LLC (“PEEH”), shall contribute, transfer, assign and
deliver such Existing Member’s right, title and interest in all of the PE Units
held by them, other than any Preferred Return Units held by any such Existing
Member, to PubCo and in exchange for such contribution, transfer, assignment and
delivery, PubCo shall issue such number of shares of Class A Common Stock to
such Existing Member equal to the number of PE Units contributed by such
Existing Member to PubCo pursuant to this Section 2.3(b);

(c) each of the Continuing Members shall contribute, transfer, assign and
deliver such Continuing Member’s right, title and interest in the PE Units held
by them, other than any Preferred Return Units held by such Continuing Member,
in an amount equal to the product of (i) the percentage set forth opposite their
name on Schedule A (expressed as a decimal) and (ii) the number of PE Units,
other than any Preferred Return Units, held by such Continuing Member, to PubCo
and in exchange for such contribution, transfer, assignment and delivery, PubCo
shall issue such number of shares of Class A Common Stock to such Existing
Member equal to the number of PE Units contributed by such Existing Member to
PubCo pursuant to this Section 2.3(c);

(d) PEEH shall merge with and into PubCo (with PubCo as the surviving entity) in
accordance with the Merger Agreement (the “PEEH Merger”) and PubCo shall issue
to each member of PEEH (each a “PEEH Member”) the Merger Consideration (as such
term is defined in the Merger Agreement, and the aggregate of which consists of
a number of shares of Class A Common Stock equal to the number of PE Units held
by PEEH immediately prior to the PEEH Merger); and

(e) PubCo shall redeem the PubCo Shares from Parsley LLC for a cash payment in
the amount of $10.00.

Section 2.4. Contribution of Class B Common Stock; Payment of Meter. Following
the effectiveness of the transactions contemplated by Section 2.3 on the date of
the closing of the IPO:

(a) PubCo shall issue and sell, and the Selling Stockholders shall sell, shares
of Class A Common Stock to the Underwriters at a price per share equal to the
IPO Price, less underwriting discounts and commissions, as set forth in the
Underwriting Agreement;

 

5

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

(b) PubCo shall contribute all of the net proceeds from the IPO received by
PubCo to Parsley LLC in exchange for the issuance by Parsley LLC to PubCo of
such number of PE Units equal to the number of shares of Class A Common Stock
sold by PubCo to the public in the IPO;

(c) Parsley LLC shall make a cash payment to NGP and each PSP Member equal to
the product of (i) the IPO Price and (ii) the number of Preferred Return Units
held by NGP and each such PSP Member, to redeem such Preferred Return Units in
satisfaction of the right to payment of the Meter (as such term is defined in
the Parsley LLC Agreement);

(d) PubCo shall issue such number of shares of Class B Common Stock to Parsley
LLC equal to (i) the number of PE Units outstanding immediately after the
redemption pursuant to Section 2.4(c) less (ii) the number of PE Units to be
issued to PubCo pursuant to Section 2.4(b);

(e) Parsley LLC shall distribute to each holder of PE Units (other than PubCo)
one share of Class B Common Stock for each PE Unit such PE Unit holder owns;

(f) the Parties hereto shall execute an amendment and restatement to that
certain Registration Rights Agreement, dated as of June 11, 2013 (the
“Registration Rights Agreement”), by and among Parsley LLC, NGP and the parties
set forth on the signature pages thereto, which agreement is substantially in
the form attached hereto as Schedule E, and the parties thereto hereby waive any
rights under the Registration Rights Agreement as it relates to the IPO;

(g) the Parties hereto acknowledge and agree that, effective as of the closing
date of the IPO, that certain Voting and Transfer Restriction Agreement, dated
as of June 11, 2013, by and between Parsley LLC, NGP and the parties set forth
on the signature pages thereto, shall be terminated and no longer in effect, and
the parties thereto hereby waive any future rights under that agreement; and

(h) in the event that the Over Allotment Option is exercised, PubCo shall issue
the Option Shares to the Underwriters at a price per share equal to the IPO
Price, less underwriting discounts and commissions as set forth in the
Underwriting Agreement, and PubCo shall contribute all of the net proceeds from
the exercise of the Over Allotment Option received by PubCo to Parsley LLC in
exchange for the issuance by Parsley LLC to PubCo of such number of PE Units
equal to the number of shares of Class A Common Stock sold by PubCo to the
public pursuant to the Over Allotment Option.

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 to (a) more fully to assure

 

6

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

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

REPRESENTATIONS

Each of the Parties hereby represents and warrants to each other Party:

(a) that such Party is an “Accredited Investor” as defined in the Securities Act
of 1933 (the “Securities Act”), and is acquiring its shares of Class A Common
Stock or PE Units, as applicable, for its own account for investment, and not
with a view to any distribution, resale, subdivision or fractionalization
thereof in violation of the Securities Act or any other applicable domestic or
foreign securities law, and such Party does not have any present plan to enter
into any contract, undertaking, agreement or arrangement for any such
distribution, resale, subdivision or fractionalization, except as described in
the Registration Statement. Such Party has had an opportunity to discuss PubCo’s
and Parsley LLC’s business, management, financial affairs and the terms and
conditions of this Agreement with PubCo’s and Parsley LLC’s management. Such
Party acknowledges and agrees that PubCo or Parsley LLC, as applicable, shall
place a legend in substantially the following form on certificates or by
notation on book-entry positions representing the shares of Class A Common Stock
or PE Units, as applicable, other than with respect to any shares of Class A
Common Stock that are contemplated to be sold under the Registration Statement:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, NOR UNDER APPLICABLE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.”

(b) that the execution, delivery and performance by such Party of this
Agreement, and the consummation of the transactions contemplated hereby, do not
and will not (i) conflict with or violate the certificate of incorporation,
bylaws, certificate of formation, operating agreement or similar organizational
document of such Party, as in effect on the date hereof (ii) conflict with or
violate any law applicable to such Party, or (iii) result in any breach of,
constitute a default (or an event that, with notice or lapse of time or both,
would become a default) under, require any consent of or notice to any person
pursuant to, give to others any right of termination, amendment, modification,
acceleration or cancellation of, allow the imposition of any fees or penalties,
require the offering or making of any payment or redemption, give rise to any
increased, guaranteed, accelerated or additional rights or entitlements of any
person or otherwise adversely affect any rights of such Party under or pursuant
to, any note, bond, mortgage, indenture, agreement, lease, license, permit,
franchise, instrument, obligation or other contract to which such Party is a
party or by which such Party or its assets may be bound or affected;

 

7

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

(c) that such Party owns all interests contributed hereby free and clear of all
liens, encumbrances, security interests, equities, charges or claims;

(d) that such Party reviewed with, or has had opportunity to consult with, their
own independent legal and tax advisors regarding the transactions contemplated
hereby, including the U.S. federal, state, local, foreign and other tax
consequences of the transactions contemplated hereby and hereby acknowledges
that neither PubCo or Parsley LLC nor their advisors (including Vinson & Elkins
L.L.P) has provided to such Party any such legal or tax advice regarding the
transactions contemplated hereby; and

(e) that Parsley LLC and PubCo are making no representation or warranty as to
the U.S. federal, state, local, foreign or other tax consequences to the
Existing Members, NGP or PEEH as a result of the transactions contemplated by
this Agreement. The Existing Members, NGP and PEEH understand that each of them
(and not Parsley LLC or PubCo) will be responsible for such person’s own tax
liability that may arise as a result of the transactions contemplated hereby.

ARTICLE V

TAXES

Section 5.1. Tax Treatment. Unless required to do so as a result of a final
determination (as defined in Section 1313 of the Internal Revenue Code of 1986,
as amended (the “Code”)), each of NGP and each Existing Member (each a “PubCo
Contributor,” and collectively, the “PubCo Contributors”), PEEH and PubCo agrees
that it will not make any tax filing or otherwise take any position inconsistent
with the qualification of the transactions described in Section 2.3 (the
“Interest Contribution”) and the IPO (collectively, the “Transactions”) as a
transaction described in Section 351 of the Code. The U.S. federal income tax
treatment of the Transactions described in the preceding sentence is referred to
herein as the “Tax Treatment.” If any Party becomes aware of any audit, inquiry,
litigation or other proceeding relevant to the Tax Treatment, such person shall
promptly notify the other Parties of such proceeding, and all Parties shall use
reasonable efforts to cooperate with respect to such proceeding.

Section 5.2. Tax Warranties by the PubCo Contributors. Each PubCo Contributor
represents and warrants to all other PubCo Contributors and PEEH that the
statements as set forth below, solely as they relate to the Tax Treatment, are
true, correct and complete as of the date hereof and as of the effective time of
the Transactions with respect to such PubCo Contributor:

(a) Such PubCo Contributor does not have any current plan, intention, agreement,
arrangement or understanding, and has not engaged in any material negotiations,
related to:

(i) engaging in the Transactions, other than pursuant to this Agreement, any
agreements referenced herein and the Registration Statement,

 

8

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

(ii) selling, exchanging, hedging, constructively selling or otherwise disposing
of the Common Stock to be received by such PubCo Contributor pursuant to the
Interest Contribution, except as contemplated by this Agreement and the
Registration Statement,

(iii) acquiring or retaining any rights in the PE Units contributed to PubCo
pursuant to this Agreement,

(iv) allowing any person other than such PubCo Contributor to exercise control
over the voting of the Common Stock received by such PubCo Contributor in
connection with the Interest Contribution,

(v) placing any Common Stock to be issued to such PubCo Contributor in escrow or
issuing such Common Stock after the completion of the Transactions under a
conditional or contingent stock or similar arrangement,

(vi) creating, extinguishing or modifying any indebtedness between such PubCo
Contributor and PubCo or Parsley LLC as a result of the Transactions, except for
any de minimis advances made in connection with joint operations and the
development of wells, or

(vii) issuing Class A Common Stock to such PubCo Contributor other than solely
for the PE Units contributed (or deemed contributed in the PEEH Merger) by such
PubCo Contributor to PubCo in connection with the Interest Contribution;

(b) To the extent such PubCo Contributor is subject to a lock-up letter
agreement (the “Lock-Up Agreement”) pursuant to the Underwriting Agreement, such
PubCo Contributor does not have any current plan, intention, agreement,
arrangement or understanding to request, and has not engaged in material
negotiations with respect to, a release or waiver of any of the restrictions set
forth in the Lock-Up Agreement with respect to such PubCo Contributor;

(c) The aggregate fair market value of the PE Units to be contributed by such
PubCo Contributor to PubCo in connection with the Interest Contribution exceeds
the sum of any liabilities that will be assumed or deemed to be assumed by PubCo
for U.S. federal income tax purposes with respect to such PE Units, including
any expenses paid by PubCo on behalf of such PubCo Contributor in connection
with the Transactions;

(d) Such PubCo Contributor is not under the jurisdiction of a court in a Title
11 or similar case (within the meaning of Section 368(a)(3)(A) of the Code);

(e) To such PubCo Contributor’s knowledge, the Transactions will occur pursuant
to and in accordance with the terms of this Agreement, any agreements referenced
herein and the Registration Statement; and

(f) If such PubCo Contributor is an entity, to such PubCo Contributor’s
knowledge, no direct or indirect member, partner or owner of such PubCo
Contributor has any current plan, intention, agreement, arrangement or
understanding to sell, exchange, hedge, constructively sell or otherwise dispose
of its direct or indirect interests in such PubCo Contributor.

 

9

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

Section 5.3. Tax Warranties by PEEH. PEEH represents and warrants to the PubCo
Contributors that, to the knowledge of PEEH, the statements as set forth below,
solely as they relate to the Tax Treatment, are true, correct and complete as of
the date hereof and as of the effective time of the Transactions with respect to
each PEEH Member:

(a) Such PEEH Member does not have any current plan, intention, agreement,
arrangement or understanding, and has not engaged in any material negotiations,
related to:

(i) selling, exchanging, hedging, constructively selling or otherwise disposing
of the Common Stock to be received by such PEEH Member pursuant to the PEEH
Merger,

(ii) acquiring or retaining any rights in the PE Units received pursuant to the
PEEH Merger,

(iii) allowing any person other than such PEEH Member to exercise control over
the voting of the Common Stock received by such PEEH Member in connection with
the PEEH Merger,

(iv) placing any Common Stock to be issued to such PEEH Member in escrow or
issuing such Common Stock after the completion of the IPO under a conditional or
contingent stock or similar arrangement,

(v) creating, extinguishing or modifying any indebtedness between such PEEH
Member and PubCo or Parsley LLC as a result of the Transactions, except for any
de minimis advances made in connection with joint operations and the development
of wells, or

(vi) issuing Class A Common Stock to such PEEH Member other than solely for the
PE Units deemed to be contributed by such PEEH Member to PubCo in connection
with the PEEH Merger;

(b) The aggregate fair market value of the PE Units deemed to be contributed by
the PEEH Members to PubCo in connection with the PEEH Merger exceeds the sum of
any liabilities that will be assumed or deemed to be assumed by PubCo for U.S.
federal income tax purposes with respect to such PE Units, including any
expenses paid by PubCo on behalf of PEEH or any PEEH Member in connection with
the Transactions; and

(c) Such PEEH Member is not under the jurisdiction of a court in a Title 11 or
similar case (within the meaning of Section 368(a)(3)(A) of the Code).

 

10

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

Section 5.4. Tax Warranties by PubCo. PubCo represents and warrants to the PubCo
Contributors that the statements as set forth below, solely as they relate to
the Tax Treatment, are true, correct and complete as of the date hereof and as
of the effective time of the Transactions:

(a) To PubCo’s knowledge, there is no agreement, arrangement or understanding
relating to rights or obligations to vote its Common Stock;

(b) There is no current plan, intention, agreement, arrangement or understanding
for: (i) PubCo to issue any shares of Common Stock or other interests in its
equity other than Common Stock issued pursuant to the Transactions; (ii) PubCo
or, to PubCo’s knowledge, the NGP, Existing Members or any other person
affiliated with PubCo to redeem or otherwise reacquire any Common Stock to be
issued in connection with the Transactions; or (iii) PubCo or, to PubCo’s
knowledge, any underwriter to release or waive any of the restrictions set forth
in the Lock-Up Agreements;

(c) PubCo has not engaged in any material negotiations with respect to any
release or waiver of any of the restrictions set forth in the Lock-Up
Agreements, except with respect to any Contributor Pledge;

(d) To PubCo’s knowledge, there is no current plan, intention, agreement,
arrangement or understanding for any person to exercise any PubCo stock rights,
warrants or subscriptions with respect to Common Stock other than pursuant to
the Transactions;

(e) The Class A Common Stock to be issued to the PubCo Contributors and the PEEH
Members (together, the “Contributing Parties”) as described in Section 2.3 of
this Agreement will be issued and paid in exchange for solely the PE Units
contributed (or deemed contributed in the PEEH Merger) by such Contributing
Parties to PubCo in connection with the Transactions;

(f) There is no indebtedness between any Contributing Party and PubCo, and there
will be no such indebtedness created in favor of any Contributing Party as a
result of the Transactions, except for any de minimis advances made in
connection with joint operations and the development of wells;

(g) PubCo has no stock issued or outstanding other than the Common Stock;

(h) To PubCo’s knowledge, there are no agreements, arrangements or
understandings between or among any of the Parties relating to the Transactions,
including any agreement to place any Common Stock to be issued to any
Contributing Party in escrow or to issue such Common Stock after the completion
of the Transactions under a conditional or contingent stock or similar
arrangement, other than this Agreement, any agreements referenced herein and the
Registration Statement;

(i) PubCo is not an investment company within the meaning of Section 351(e)(1)
of the Code and Treasury Regulation §1.351-1(c)(1)(ii); and

(j) To PubCo’s knowledge, the Transactions will occur pursuant to and in
accordance with the terms of this Agreement, any agreements referenced herein
and the Registration Statement.

 

11

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

ARTICLE VI

MISCELLANEOUS

Section 6.1. Release. Effective as of the Effective Date, each of the Parties,
on behalf of himself (or herself or itself) and his (or her or its assigns),
heirs, beneficiaries, representatives, agents and affiliates (the “Releasing
Parties”), hereby fully and finally releases, acquits and forever discharges
each of the other Parties and each of their respective present and former
officers, directors, employees, agents, predecessors, successors, assigns,
insurers and attorneys (the “Released Parties”) from any and all claims, causes
of action, liabilities, losses, costs, damages, penalties, charges, expenses and
all other forms of liability or obligation whatsoever, in law or equity, whether
asserted or unasserted, known or unknown, foreseen or unforeseen (“Claims”),
arising prior to the Effective Date and relating to such Releasing Party’s
ownership of equity of Parsley LLC prior to the Effective Date or otherwise
arising from or relating to the transactions contemplated by this Agreement,
including, but not limited to, the right to have the shares of Class A Common
Stock received pursuant to the Reorganization registered for sale pursuant to
the Registration Statement (collectively, the “Released Claims”); provided,
however, that the Released Claims shall exclude any Claims arising from or
relating to or in connection with (a) rights or obligations expressly set forth
in this Agreement and (b) any claim or right to indemnification or advancement
of expenses under the Parsley LLC Agreement as in effect prior to the Effective
Date. Each Releasing Party expressly acknowledges that the release contained
herein applies to all Released Claims, whether such Released Claims are known or
unknown, and include Released Claims that if known by the Releasing Party might
materially affect its decision to effect the release contained herein. Each
Releasing Party has considered and taken into account the possible existence of
such Released Claims in determining to execute and deliver this Agreement.
Without limiting the generality of the foregoing, solely with respect to the
Released Claims, each Releasing Party expressly waives any and all rights
conferred upon it by any statute or rule of law that provides that a release
does not extend to claims that the Releasing Party does not know or suspect to
exist in its favor at the time of executing the release, which if known by the
Releasing Party would have materially affected the Releasing Party’s release
with the Released Parties. This Agreement constitutes a complete defense of any
and all Released Claims. Each Releasing Party further agrees not to initiate any
litigation, lawsuit, claim or action against any Released Party with respect to
any Released Claim, except that the Releasing Party shall not be limited hereby
from responding to, joining, prosecuting or being involved in any litigation,
lawsuit, claim or action brought against such Releasing Party in respect of a
Released Claim, nor from adjudicating whether or not a Claim constitutes a
Released Claim.

Section 6.2. Tax Indemnification. From and after the Effective Time, each Party
(the “Indemnifying Party”) shall indemnify, defend and hold harmless each other
Party and such other Party’s affiliates, and its and its affiliates’ respective
directors, officers, managers, members, partners, stockholders, employees,
agents and representatives, as applicable (the “Indemnitees”), from any and all
damages, losses, obligations, liabilities, payments, costs and expenses
(including reasonable fees and expenses of outside attorneys, accountants and
other professional advisors and expert witnesses), whether known or unknown,
contingent or vested, matured or unmatured, that are or may be suffered or
incurred by any such Indemnitee arising out or relating to a breach of any
representation, warranty, covenant, agreement or obligation of the Indemnifying
Party set forth in Article V; provided that the indemnity described in this

 

12

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

Section 6.2 shall apply only to the extent that such breach adversely affects
the Tax Treatment and such adverse effect results in damages, losses,
obligations, liabilities, payments, costs and/or expenses that are suffered or
incurred by an Indemnitee.

Section 6.3. Delivery of FIRPTA Certificate. Prior to the Effective Time, each
PubCo Contributor will deliver to PubCo a certificate meeting the requirements
of Treasury Regulation § 1.1445-2(b)(2) certifying that such PubCo Contributor
is not a “foreign person” within the meaning of Section 1445 of the Code, duly
executed by such PubCo Contributor.

Section 6.4. Termination. This Agreement shall terminate and be of no further
force or effect if the IPO has not been completed by 11:59 p.m. New York time on
December 31, 2014.

Section 6.5. Successors and Assigns; No Third Party Rights. The Agreement shall
be binding upon and inure to the benefit of the Parties and their respective
successors and assigns. Except as set forth in Section 5.1 for the Released
Parties, this Agreement is not intended to, and does not create, rights in any
other person and no person is or is intended to be a third-party beneficiary of
any of the provisions of this Agreement.

Section 6.6. 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 provision 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 6.7. Waivers and Amendments. Any waiver of any term or condition of this
Agreement, or any amendment or supplement to this Agreement, shall be effective
only if in writing and signed by the Parties. A waiver of any breach or failure
to enforce any of the terms or conditions of this Agreement shall not in any way
affect, limit or waive a Party’s rights hereunder at any time to enforce strict
compliance thereafter with every term or condition of this Agreement.

Section 6.8. Entire Agreement. This Agreement, together with the A&R Parsley LLC
Agreement, constitute the entire agreement among the Parties pertaining to the
transactions contemplated hereby, and together supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
Parties pertaining thereto.

Section 6.9. Governing Law. The Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware.

Section 6.10. Counterparts. This Agreement may be executed in any number of
counterparts (including by facsimile or other electronic means) with the same
effect as if all Parties had signed the same document.

*        *        *         *        *

 

13

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

IN WITNESS WHEREOF, this Agreement has been duly executed by each of the Parties
as of the date first written above.

 

PARSLEY ENERGY, LLC By:   /s/ Bryan Sheffield Name:   Bryan Sheffield Title:  
President

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

PARSLEY ENERGY, INC. By:   /s/ Bryan Sheffield Name:   Bryan Sheffield Title:  
President and Chief Executive Officer

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

PARSLEY ENERGY EMPLOYEE HOLDINGS, LLC By:   /s/ Bryan Sheffield Name:   Bryan
Sheffield Title:   President

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

NGP X US HOLDINGS, L.P. By:   NGP X Holdings GP, L.L.C.   Its General Partner
By:   /s/ Kenneth A. Hersh Name:   Kenneth A. Hersh Title:   Authorized Person

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

EXISTING MEMBERS By:  

/s/ Bryan Sheffield

  Bryan Sheffield

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

SHEFFIELD ENERGY MANAGEMENT, L.L.C. By:  

/s/ Bryan Sheffield

Name:   Bryan Sheffield Title:   President

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Matt Gallagher

Matt Gallagher

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Michael Hinson

Michael Hinson

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Ryan Dalton

Ryan Dalton

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Paul Treadwell

Paul Treadwell

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Colin Roberts

Colin Roberts

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

PARSLEY INTERESTS, L.P. By:  

/s/ Joe M. Parsley

Name:   Joe M. Parsley Its:   President of IOMO Oil Corp. GP of Parsley
Interests LP

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

ONE PUTT OIL & GAS, LTD. By:   /s/ Howard W. Parker Name:   Sure Putt, Inc. GP
Its:   President

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

BACK NINE OIL & GAS, LTD. By:   /s/ Howard W. Parker Name:   Sure Putt, Inc. GP
Its:   President

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

NINE-IRON OIL & GAS, LTD. By:   /s/ Howard W. Parker Name:   Sure Putt, Inc. GP
Its:   President

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

HOWJAN PROPERTIES, INC. By:   /s/ Howard W. Parker Name:   Howard W. Parker
Title:   President

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

DIAMOND K INTERESTS, L.P. By:  

/s/ Christopher O. Kayem

Name:   Christopher O. Kayem Title:   Vice President

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ David Askew

David Askew

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ David Smith

David Smith

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Frank Cremer

Frank Cremer

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Rob Crumpler

Rob Crumpler

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

SHACK VENTURES, LP By:   /s/ Jack Harper Name:   Jack Harper Its:   Manager

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

BUCK HORN, L.P. By:   /s/ Dan Hord Name:   Dan Hord Its:   General Partner

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

OSO CAPITAL II, L.P. By:   /s/ Dan Hord Name:   Dan Hord Its:   President

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

HEDLOC INVESTMENT COMPANY, L.P. By:  

/s/ Jack Harper

Name:   Jack Harper Its:   Manager

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Kirk Fritschen

Kirk Fritschen

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Justin Clark

Justin Clark

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

SD GRAY FAMILY PARTNERSHIP, LP By:   SD Gray Management, LLC   Its General
Partner By:  

/s/ Steven D. Gray

  Steven D. Gray, Manager

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Kara Wood

Kara Wood

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Mike Senich

Mike Senich

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Brad Sublett

Brad Sublett

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Stephanie Reed

Stephanie Reed

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Landon Martin

Landon Martin

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Kristin McClure

Kristin McClure

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

/s/ Isaac Hayes

Isaac Hayes

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

PLZ PROPERTIES, LLC By:  

/s/ Paul Treadwell

Name:   Paul Treadwell Title:   Managing Owner

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

MARBELLA INTERESTS, LLC By:  

/s/ Bryan Sheffield

  Bryan Sheffield, President

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

KMG ENERGY, LLC By:  

/s/ Matt Gallagher

Name:   Matt Gallagher Title:   Member

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

BUTTE FAMILY PARTNERS, LLC By:  

/s/ Ryan Dalton

Name:   Ryan Dalton Title:   Member

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

Cecilia Camarillo Self Directed IRA By:   /s/ Cecilia Camarillo Name:   Cecilia
Camarillo Title:  

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

Cecilia Camarillo By:  

/s/ Cecilia Camarillo

Name:   Cecilia Camarillo, Individually

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

Paul Treadwell By:  

/s/ Paul Treadwell

Name:   Paul Treadwell, Individually

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

HHR Energy, LLC By:  

/s/ Colin Roberts

Name:   Colin Roberts Title:   Member

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

Kara Wood IRA By:  

/s/ Kara Wood

Name:   Kara Wood Title:  

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

Stephanie Reed By:  

/s/ Stephanie Reed

Name:   Stephanie Reed, Individually

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

Mike Senich By:  

/s/ Mike Senich

Name:   Mike Senich, Individually

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

Brad Sublett By:  

/s/ Brad Sublett

Name:   Brad Sublett, Individually

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

Landon Martin By:  

/s/ Landon Martin

Name:   Landon Martin, Individually

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

Blackbear Resources, LLC By:  

/s/ Isaac Hayes

Name:   Isaac Hayes Title:  

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

1993 Little Inter Vivos Trust By:   /s/ Mike O’Donnel Name:   Mike O’Donnel
Title:   Trustee

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

Franco Services, Inc. By:  

/s/ Gary P. Little

Name:   Gary P. Little Title:  

[SIGNATURE PAGES TO MASTER REORGANIZATION AGREEMENT]

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

Schedule A

 

Continuing Members

   % PE Units
Contributed to PubCo  

Bryan Sheffield

     40 % 

Sheffield Energy Management, LLC

     50 % 

Michael Hinson

     50 % 

Matt Gallagher

     20 % 

Paul Treadwell

     50 % 

Ryan Dalton

     30 % 

Diamond K Interests, LP

     100 % 

Parsley Interests, LP

     50 % 

One Put Oil & Gas, Ltd.

     40 % 

Back Nine Oil & Gas, Ltd.

     40 % 

Nine Iron Oil & Gas, Ltd.

     40 % 

How-Jan Properties, Inc.

     40 % 

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

Schedule B

Form of Merger Agreement

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

Schedule C

Form of A&R Parsley LLC Agreement

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

Schedule D

Preferred Return Units

 

Name

   Percentage  

David Smith

     0.0680 % 

Frank Cremer

     0.0680 % 

Rob Crumpler

     0.0680 % 

Shack Ventures, LP

     1.0199 % 

Buck Horn, L.P.

     1.0199 % 

OSO Capital II, L.P.

     1.0199 % 

Hedloc Investment Company, L.P.

     2.7196 % 

Parsley Interests, L.P.

     0.6799 % 

Kirk Fritschen

     0.1360 % 

Justin Clark

     0.0680 % 

SD Gray Family Partnership, LP

     1.0199 % 

Ryan Dalton

     0.4759 % 

Michael Hinson

     0.5439 % 

Colin Roberts

     0.1700 % 

Kara Wood

     0.0680 % 

Mike Senich

     0.0680 % 

Brad Sublett

     0.0680 % 

Stephanie Reed

     0.3400 % 

Landon Martin

     0.1700 % 

Kristin McClure

     0.0680 % 

Isaac Hayes

     0.1224 % 

PLZ Properties, LLC

     0.2720 % 

Marbella Interests, LLC

     0.6799 % 

KMG Energy, LLC

     0.6799 % 

NGP X US Holdings, L.P.

     88.3873 % 

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

Schedule E

Form of Amended and Restated Registration Rights Agreement

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

Schedule F

Proposed Secondary Sales