ADVISORY SERVICES AGREEMENT
ADVISORY SERVICES AGREEMENT dated as of October 11, 2012 (this “Agreement”),
between DIAMONDBACK ENERGY, INC., a Delaware corporation (the “Company”),
and WEXFORD CAPITAL LP, a Delaware limited partnership (“Wexford”).
WHEREAS, during the period from the formation of Windsor Permian LLC (“Windsor
Permian”) through the Company’s initial public offering (the “Offering”),
Wexford served as the manager of Windsor Permian and certain of its affiliates
and, as a result, has extensive background and familiarity with the Company, its
business and assets; and
WHEREAS, Wexford has extensive knowledge and experience with respect to managing
public and private businesses, capital markets transactions, financing
transactions, long range planning and business development and other matters
that are significant to the future business and operations of the Company; and
WHEREAS, the Company desires to benefit from Wexford’s expertise and has
requested that Wexford provide assistance and advise to the Company from time to
time with respect to certain financial and strategic matters related to the
business and affairs of the Company and its subsidiaries; and
WHEREAS, Wexford has agreed to the Company’s request on the terms and conditions
specified herein.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged the Company and Wexford agree as follows:
Section 1. Retention of Wexford.
The Company hereby retains Wexford, and Wexford accepts such retention, upon the
terms and conditions set forth in this Agreement.
Section 2. Term; Termination.
(a)    Term. This Agreement shall commence on the closing date of the Offering
and shall terminate on the second anniversary thereof (the “Initial Term”). Upon
expiration of the Initial Term this Agreement shall automatically continue for
additional one-year periods unless terminated in writing by either party at
least ten days prior to the expiration of the then current Term (each extension
period being referred to herein as the “Extension Term,” and together with the
Initial Term, the “Term”).

(b)    Termination. This Agreement may be terminated by either party at any
time, with or without cause, upon 30 days’ prior written notice to the other
party. In the event of termination by the Company, the Company shall be
obligated to pay all amounts due to Wexford through the remaining Term of the
Agreement. The provisions set forth in Section 5 of this Agreement shall survive
any termination of this Agreement.

Section 3. Advisory Services.
(a)    Wexford shall advise the Company concerning such matters that relate to
financial and strategic matters of the Company and its subsidiaries (the
“Services”), in each case as the Company shall reasonably request by way of
notice to Wexford. The Services shall not extend to the day-to-day business or
operations of the Company and shall not include any services provided by
officers or employees in their capacity as directors of the Company. If
requested to provide Services, Wexford shall devote such time to any such
request as Wexford shall deem, in its sole discretion, necessary. Such Services,
in Wexford’s sole discretion, shall be rendered in person or by telephone or
other communication. Wexford shall have no obligation to the Company as to the
manner of rendering the Services hereunder, and the Company shall not have any
right to dictate or direct the details of the Services rendered hereunder.

(b)    Wexford shall perform all Services to be provided hereunder as an
independent contractor to the Company and not as an employee, agent or
representative of the Company. Wexford shall have no authority to act for

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or to bind the Company without its prior written consent. Nothing in this
Agreement is intended nor shall be deemed to create any partnership, agency or
joint venture relationship by or between the parties.

(c)    This Agreement shall not prohibit, restrict or limit in any manner
Wexford or any of its partners or Affiliates or any director, officer, partner
or employee of Wexford or any of its partners or Affiliates (collectively,
“Wexford Persons”) from engaging in other activities, whether or not competitive
with any business of the Company or any of its respective subsidiaries or
Affiliates. This Agreement shall not require Wexford or any Wexford Person to
make available to the Company any investment or investment opportunity about
which Wexford or any Wexford Person shall become aware.

(d)    In the event the Company is dissatisfied in any manner with the Services
provided by Wexford hereunder or with Wexford’s performance under this
Agreement, the Company’s sole remedy shall be to terminate this Agreement. Under
no circumstances shall the Company have any claim for damages against Wexford or
any Wexford Person arising out of or relating to this Agreement.
Section 4. Compensation.
(a)    Advisory Fee. As consideration for the Services provided by Wexford
hereunder, the Company agrees to pay to Wexford an annual fee in the amount of
$500,000 payable in advance in equal monthly installments, on the first business
day of each month during the Term and prorated for any partial calendar month
(the “Consulting Fee”).

(b)    Expenses. Upon presentation by Wexford to the Company of such
documentation as may be reasonably requested by the Company, the Company shall
reimburse Wexford for all reasonable out-of-pocket expenses, including, without
limitation, reasonable legal fees and expenses, and other disbursements incurred
by Wexford or any Wexford Person in the performance of Wexford’s obligations
hereunder.
(c)    Additional Services. If the Company requests that Wexford provide
services in addition to the Services, such as those relating to proposed
acquisitions or divestitures, and Wexford agrees to provide such additional
services, the Company and Wexford shall negotiate the additional market-based
fees to be paid by the Company to Wexford or its Affiliates for such additional
services, which fees shall be approved by the Company’s independent directors.

(d)    Non-Exclusive. Nothing in this Agreement shall have the effect of
prohibiting Wexford or any of its Affiliates from receiving from the Company or
any of its subsidiaries or Affiliates any other fees.
Section 5. Indemnification.
(a)    The Company will indemnify and hold harmless Wexford and each Wexford
Person (each such person, an “Indemnified Party”) from and against any and all
losses, claims, damages, liabilities, costs and expenses, whether joint or
several (the “Liabilities”), related to, arising out of or in connection with
this Agreement or the Services contemplated by this Agreement or the engagement
of Wexford pursuant to, and the performance Wexford of the Services contemplated
by, this Agreement, whether or not pending or threatened, whether or not an
Indemnified Party is a party, whether or not resulting in any liability and
whether or not such action, claim, suit, investigation or proceeding is
initiated or brought by or on behalf of the Company. The Company will reimburse
any Indemnified Party for all reasonable costs and expenses (including
attorneys’ fees and expenses) as they are incurred in connection with
investigating, preparing, pursuing, defending or assisting in the defense of any
action, claim, suit, investigation or proceeding for which the Indemnified Party
would be entitled to indemnification under the terms of the previous sentence,
or any action or proceeding arising therefrom, whether or not such Indemnified
Party is a party thereto. The Company will not be liable under the foregoing
indemnification provision with respect to any particular Liability of an
Indemnified Party solely to the extent that such is determined by a court, in a
final judgment from which no further appeal may be taken, to have resulted
primarily from the gross negligence or willful misconduct of such Indemnified
Party. The attorneys’ fees and other expenses of an Indemnified Party shall be
paid by the Company as they are incurred upon receipt of an agreement by or on
behalf of the Indemnified Party to repay such amounts if it is finally
judicially determined that the Liabilities in question resulted primarily from
the gross negligence or willful misconduct of such Indemnified Party.

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(b)    The Company acknowledges and agrees that the Indemnified Parties have
certain rights to indemnification and/or insurance provided by Wexford and
certain of its affiliates and that such additional rights to indemnification
and/or insurance are intended to be secondary to the primary obligation of the
Company to indemnify the Indemnified Parties hereunder. The Company’s
obligations to provide indemnification hereunder shall not be limited in any
manner by the availability of such additional indemnification and/or insurance
that may be available to the Indemnified Parties.
Section 6. Accuracy of Information.
The Company shall furnish or cause to be furnished to Wexford such information
as Wexford believes reasonably appropriate in connection with providing the
services contemplated by this Agreement (all such information so furnished, the
“Information”). The Company recognizes and confirms that Wexford (a) will use
and rely primarily on the Information and on information available from
generally recognized public sources in performing the services contemplated by
this Agreement without independent verification, (b) does not assume
responsibility for the accuracy or completeness of the Information and such
other information and (c) is entitled to rely upon the Information without
independent verification.
Section 7. Notices.
All notices, requests, consents and other communications hereunder shall be in
writing and shall be deemed sufficient if personally delivered, sent by
nationally-recognized overnight courier, or by registered or certified mail,
return receipt requested and postage prepaid, addressed as follows:
 
 
(a)
if to Wexford, to:
 
 
Wexford Capital LP
 
 
411 West Putnam Avenue
 
 
Greenwich, CT 06830
 
 
Attention: Jay Maymudes, CFO
 
 
Telephone: (203) 862-7050
 
 
with a copy to:
 
 
Wexford Capital LP
 
 
411 West Putnam Avenue
 
 
Greenwich, CT 06830
 
 
Attention: Arthur Amron, General Counsel
 
 
Telephone: (203) 862-7012

 

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(b)
if to the Company, to:
 
 
Diamondback Energy, Inc.
 
 
500 West Texas
 
 
Suite 1225
 
 
Midland, TX 79701
 
 
Attention: Travis Stice
 
 
Telephone: (432) 221-7400
 
 
with a copy to:
 
 
Diamondback Energy, Inc.
 
 
14301 Caliber Drive
 
 
Suite 300
 
 
Oklahoma City, OK 73134
 
 
Attention: Randall Holder
 
 
Telephone: (405) 463-6932

                
or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such notice
or communication shall be deemed to have been received (i) in the case of
personal delivery, on the date of such delivery, (ii) in the case of
nationally-recognized overnight courier guaranteeing next day delivery, on the
next business day after the date when sent, and (iii) in the case of mailing, on
the fifth business day following that on which the piece of mail containing such
communication is posted.
Section 8. Benefits of Agreement.
This Agreement shall bind and inure to the benefit of Wexford, the Company, the
Indemnified Persons and any successors to or assigns of Wexford and the Company;
provided, however, that this Agreement may not be assigned by the Company
without the prior written consent of Wexford.
Section 9. Governing Law.
This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York (without giving effect to principles of
conflicts of laws).
Section 10. Headings.
Section headings are used for convenience only and shall in no way affect the
construction of this Agreement.
Section 11. Entire Agreement; Amendments.
This Agreement contains the entire understanding of the parties with respect to
its subject matter and supersedes any and all prior agreements, and neither it
nor any part of it may in any way be altered, amended, extended, waived,
discharged or terminated except by a written agreement that specifically
references this Agreement and the provisions to be so altered, amended,
extended, waived, discharged or terminated is signed by each of the parties
hereto and specifically states that it is intended to alter, amend, extend,
waive, discharge or terminate this agreement or a provision hereof.
Section 12. Counterparts.
This Agreement may be executed and delivered (including by facsimile
transmission) in any number of counterparts, and each such counterpart shall be
deemed to be an original instrument, but all such counterparts together shall
constitute but one agreement. This Agreement shall become effective when each
party hereto shall have received a counterpart hereof signed by the other party
hereto.

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Section 13. Confidentiality.
Wexford agrees to maintain the confidentiality of the Confidential Information
(as defined below), except that Wexford may disclose Confidential Information
(a) to its partners, members, directors, officers, employees and advisors (and
those of its Affiliates), including accountants, legal counsel and other
advisors (it being understood that the person to whom such disclosure is made
will be informed of the confidential nature of such Confidential Information and
instructed to keep such Confidential Information confidential), (b) to the
extent required by any subpoena or similar legal process, (c) in connection with
the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder, (d) with the
consent of the Company, or (e) to the extent such Confidential Information
(i) becomes publicly available other than as a result of a breach of this
Agreement, or (ii) becomes available to Wexford on a non-confidential basis from
a source other than the Company. For the purposes of this Agreement,
“Confidential Information” means all non-public information received from the
Company relating to the Company or its business, other than any such information
that is available to Wexford on a non-confidential basis from a source other
than the Company.
Section 14. Further Assurances
The Company and Wexford shall execute such documents and other papers and take
such further actions as the other may reasonably request in order to carry out
the provisions hereof and provide the services hereunder.
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IN WITNESS WHEREOF, the parties have duly executed this Advisory Services
Agreement as of the date first above written.
 

DIAMONDBACK ENERGY, INC.

By:    /s/ Travis D. Stice            
Name:    Travis D. Stice            
Title:    Chief Executive Officer    

WEXFORD CAPITAL LP

By:    /s/ Paul Jacobi            
Name:    Paul Jacobi            
Title:    Vice President         

Signature Page to Advisory Services Agreement
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