Exhibit 10.1

CONTRIBUTION AGREEMENT

by and between

Gulfport Energy Corporation

and

Diamondback Energy, Inc.

Dated as of

May 7, 2012

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

TABLE OF CONTENTS

 

ARTICLE 1 CONTRIBUTION

     1      1.1    Contribution of Permian Assets      1      1.2    Retained
and Assumed Obligations      1      1.3    Consideration      2      1.4   
Closing Date Adjustment      2      1.5    Tax Treatment      3      1.6   
Unwind      3   

ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF DIAMONDBACK

     3      2.1    Organization of Diamondback      3      2.2    Power and
Authority; Enforceability      4      2.3    No Violation; Necessary Approvals
     4      2.4    Brokers’ Fees      5      2.5    Capitalization      5     
2.6    Issuance of Common Stock      5      2.7    Records      5      2.8   
Diamondback S-1; Financial Statements      6   

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR

     6      3.1    Organization of Contributor      6      3.2    Power and
Authority; Enforceability      6      3.3    No Violation; Necessary Approvals
     7      3.4    Title to Permian Assets      7      3.5    Accredited
Investor      7   

ARTICLE 4 COVENANTS

     8      4.1    General      8      4.2    Covenants of Contributor      8   
  4.3    Covenants of Diamondback      9      4.4    Confidentiality      9     
4.5    Notice      10      4.6    Form S-1      10      4.7    HSR Filing     
11      4.8    Termination of Certain Agreements      11      4.9    Access     
12   

ARTICLE 5 CLOSING

     12      5.1    Conditions Precedent      12      5.2    Time and Place;
Closing      14      5.3    Contributor’s Closing Deliveries      14      5.4   
Diamondback’s Closing Deliveries      14   

 

Gulfport—Diamondback Contribution Agreement

i

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

ARTICLE 6 TERMINATION

     15       6.1    Termination      15       6.2    Effect of Termination     
15   

ARTICLE 7 INDEMNIFICATION

     15       7.1    Indemnification      15       7.2    Indemnification Claim
Procedures      16   

ARTICLE 8 MISCELLANEOUS

     17       8.1    Definitions      17       8.2    Entire Agreement      21
      8.3    Assignment; Binding Effect      21       8.4    Notices      21   
   8.5    Specific Performance; Remedies      21       8.6    Headings      22
      8.7    Governing Law      22       8.8    Amendment; Extensions; Waivers
     22       8.9    Severability      22       8.10    Expenses      22      
8.11    Counterparts; Effectiveness      23       8.12    Construction      23
  

Schedules

Schedule 2.5—Outstanding Equity Rights

Exhibits

Exhibit A – Form of Promissory Note

Exhibit B – Form of Assignment

Exhibit C – Form of Investor Rights Agreement

 

Gulfport—Diamondback Contribution Agreement

ii

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

CONTRIBUTION AGREEMENT

This Contribution Agreement (this “Agreement”), dated as of May 7, 2012 (the
“Effective Date”), is by and between Gulfport Energy Corporation, a Delaware
corporation (“Contributor”), and Diamondback Energy, Inc., a Delaware
corporation (“Diamondback”). Contributor and Diamondback are hereinafter
sometimes referred to individually as a “Party” and together as the “Parties”.

RECITALS

A. Contributor owns certain oil, gas and mineral interests in the Permian Basin
in West Texas and related assets and contracts (the “Permian Assets”).

B. Contributor desires to contribute the Permian Assets to Diamondback for
shares of common stock, par value $0.01 per share, of Diamondback (the “Common
Stock”) and other consideration upon the terms and conditions hereinafter set
forth.

AGREEMENT

NOW, THEREFORE, in consideration of the premises, the respective
representations, warranties, covenants and agreements contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the Parties agree as follows:

ARTICLE 1

CONTRIBUTION

1.1 Contribution of Permian Assets. At the Closing and subject to the terms and
conditions contained in this Agreement, Contributor shall contribute, transfer,
assign, convey and deliver to Diamondback (or a wholly-owned Subsidiary of
Diamondback as directed by Diamondback), and Diamondback (or such Subsidiary)
shall acquire and accept, all of Contributor’s right, title and interest held in
the Permian Assets. The Parties shall work together to prepare a mutually
agreeable schedule of the Permian Assets as soon as practicable after the
Effective Date.

1.2 Retained and Assumed Obligations. Upon the Closing, Diamondback shall assume
and agree to fulfill, perform, pay and discharge all duties, obligations, claims
and liabilities of every kind and character with respect to the Permian Assets
or ownership or operation thereof attributable to periods after the Closing
Date, including without limitation, (a) those incurred in the ordinary course of
business or otherwise, (b) ad valorem, property, severance and other similar
taxes or assessments based upon or measured by the ownership of the Permian
Assets or the production therefrom, and (c) those related to the condition of
the Permian Assets, including, without limitation, obligations to properly plug
and abandon or re-plug or re-abandon or remove wells, flowlines, gathering lines
and other facilities, equipment or other personal property or fixtures
comprising part of the Permian Assets, obligations to restore the surface of the
Permian Assets, obligations to bring the Permian Assets into compliance with
applicable Laws and liabilities related to any of the foregoing, other than
duties, obligations and

 

1

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

liabilities of the Contributor arising under a JOA and billed or billable prior
to the Closing Date (the “Assumed Obligations”); provided, however, that upon
the Closing, the Contributor shall retain all of Contributor’s duties,
obligations, claims and liabilities of every kind and character with respect to
the Permian Assets or ownership or operation thereof attributable to periods
prior to the Closing Date, including without limitation (i) those incurred in
the ordinary course of business or otherwise; and (ii) ad valorem, property,
severance and other similar taxes or assessments based upon or measured by the
ownership of the Permian Assets or the production therefrom except to the extent
specified in clause (c) above.

1.3 Consideration. At the Closing, Diamondback shall, in exchange for the
transfer of the Permian Assets, issue to Contributor the following (the “Closing
Consideration”):

(i) (a) that number of shares of Common Stock such that Contributor holds
thirty-five percent (35%), of the number of shares of Common Stock outstanding
immediately prior to the closing of the IPO after giving effect to the issuance
of shares of Common Stock in connection with the Gulfport Contribution and the
Wexford Contribution. The remaining shares of Common Stock outstanding
immediately prior to the closing of the IPO and after giving effect to the
Wexford Contribution and the Gulfport Contribution will be held by DB Holdings.
No fractional shares of Common Stock shall be issued to Contributor pursuant to
this Agreement; and

(ii) (b) a promissory note in the principal amount of $63,590,050.00
substantially in the form attached hereto as Exhibit A (the “Promissory Note”).

1.4 Closing Date Adjustment. Following the Closing, the Closing Consideration
shall be reduced or increased in accordance with this Section 1.4 by an amount
equal to the difference between the Initial Capital Amount and the Final Capital
Amount, divided by sixty-five percent (65%), and then multiplied by thirty-five
percent (35%) (the “Capital Adjustment Amount”). For purposes of this Agreement,
“Final Capital Amount” shall mean Windsor’s (a) total current assets, consisting
of cash, trade accounts receivable (net of an appropriate allowance for doubtful
accounts), inventory, prepaid expenses, other current assets, and other assets,
less (b) total current liabilities, consisting of trade accounts payable,
accounts payable to related parties, accrued capital and other expenses,
long-term debt and asset retirement obligations, in each case as of the Closing
Date determined in accordance with GAAP, consistently applied. As soon as
practicable after the Closing, but in no event later than sixty (60) days after
Closing, Diamondback will cause to be prepared and delivered to the Contributor
the final settlement statement (the “Final Settlement Statement”) setting forth
Windsor’s calculation of the Final Capital Amount on the Closing Date, which
Final Settlement Statement shall identify with specificity each component
thereof and be prepared in a manner consistent with the preparation of the
Initial Capital Amount. As soon as practicable after receipt of the Final
Settlement Statement but in no event later than thirty (30) days after receipt
of such statement and the supporting documentation with respect thereto as may
be requested by the Contributor, the Contributor shall deliver to Diamondback a
written report containing any changes that the Contributor proposes to make to
the Final Settlement Statement. The Contributor’s failure to deliver to
Diamondback a written report detailing proposed changes to the Final Settlement
Statement by that date shall be deemed an acceptance by the Contributor of the
Final Settlement

 

2

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

Statement as submitted by Diamondback. The Parties shall agree with respect to
the changes proposed by the Contributor, if any, no later than sixty (60) days
after receipt of Diamondback’s proposed Final Settlement Statement. If
Diamondback disputes the Contributor’s exceptions, then Diamondback and the
Contributor will negotiate in good faith to resolve such dispute. If Diamondback
and the Contributor are unable to resolve the dispute within thirty (30) days
after the date of the Contributor’s dispute notice, then the dispute shall be
submitted to a mutually agreed upon arbitrator (the “Arbitrator”) for resolution
and the Arbitrator’s decision shall be final and binding on the Parties and
there shall be no right of appeal therefrom. The costs of the Arbitrator shall
be paid by Diamondback and the Contributor proportionate to the success of the
claims made. No later than five (5) days after reaching such agreement, the
Capital Adjustment Amount shall be paid, if positive, by Diamondback to the
Contributor, and if negative, by the Contributor to Diamondback by wire transfer
in immediately available funds.

1.5 Tax Treatment.

(a) The Parties intend for the transactions between them contemplated in this
Agreement to qualify as a tax-free exchange under Section 351 of the Code and in
accordance therewith, the Parties acknowledge that Contributor and DB Holdings
together will own one-hundred percent (100%) of all of the issued and
outstanding capital stock of Diamondback immediately following the consummation
of the Gulfport Contribution and the Wexford Contribution and immediately prior
to the consummation of the IPO.

(b) Contributor and Diamondback hereby agree to the U.S. federal income tax
treatment described in this Section 1.5, and neither Contributor nor Diamondback
shall maintain a position on their respective U.S. federal income tax returns or
otherwise that is inconsistent therewith.

1.6 Unwind. If the Gulfport Contribution is made but the IPO does not close for
any reason, the Permian Assets shall be returned to Contributor and Contributor
shall return the Closing Consideration and this Agreement shall be null and
void.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF DIAMONDBACK

Diamondback hereby represents and warrants to Contributor as of the Effective
Date and as of the Closing Date (except to the extent that any such
representation or warranty expressly relates to another date, in which case such
representation or warranty shall be as of such date) as follows:

2.1 Organization of Diamondback. Diamondback (a) is a corporation duly
organized, validly existing and in good standing under the Laws (as defined
below) of the State of Delaware, (b) is duly qualified to do business as a
foreign corporation and is in good standing under the Laws of each jurisdiction
in which either the ownership or use of the properties owned or used by it, or
the nature of the activities conducted by it, requires such qualification,
(c) has the corporate power and authority necessary to own or lease its
properties and to carry on its business as currently conducted and (d) is not in
breach or violation of, or default under, any

 

3

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

provision of its Organizational Documents. Diamondback has not approved or taken
any action, and there is not pending or (to Diamondback’s knowledge) threatened
any action, suit, arbitration, mediation, investigation or similar proceeding
(an “Action”) for the dissolution, liquidation, insolvency or rehabilitation of
Diamondback.

2.2 Power and Authority; Enforceability. Diamondback has the relevant corporate
power and authority necessary to execute and deliver this Agreement and each
such other document contemplated hereby and any amendments or supplements to any
of the foregoing (collectively, the “Transaction Documents”) to which
Diamondback is a party, and to perform and consummate the transactions
contemplated by the Gulfport Contribution (the “Transactions”). Diamondback has
taken all action necessary to authorize the execution and delivery by
Diamondback of each Transaction Document to which it is a party, the performance
of Diamondback’s obligations thereunder, and the consummation by Diamondback of
the Transactions, the Wexford Contribution and the IPO (subject to final
authorization of the Pricing Committee of the Board of Directors of
Diamondback). Each Transaction Document to which Diamondback is a party has been
duly authorized, executed and delivered by Diamondback, and constitutes the
legal, valid and binding obligation of Diamondback, enforceable against
Diamondback in accordance with its terms except as such enforceability may be
subject to the effects of bankruptcy, insolvency, reorganization, moratorium or
other Laws relating to or affecting the rights of creditors and general
principles of equity (the “Enforceability Exception”).

2.3 No Violation; Necessary Approvals. The execution and the delivery by
Diamondback of this Agreement and the other Transaction Documents to which it is
a party, the performance by Diamondback of its obligations hereunder and
thereunder, and consummation of the Transactions, the Wexford Contribution and
the IPO by Diamondback will not (i) with or without notice or lapse of time,
constitute, create or result in a breach or violation of, default under, loss of
benefit or right under or acceleration of performance of any obligation required
under any (A) law (statutory, common or otherwise), constitution, ordinance,
rule, regulation, executive order or other similar authority (“Law”) enacted,
adopted, promulgated or applied by any legislature, agency, bureau, branch,
department, division, commission, court, tribunal or other similar recognized
organization or body of any federal, state, county, municipal, local or foreign
government or other similar recognized organization or body exercising similar
powers or authority (a “Governmental Body”), (B) order, ruling, decision, award,
judgment, injunction or other similar determination or finding by, before or
under the supervision of any Governmental Body or arbitrator (an “Order”),
(C) contract, agreement, arrangement, commitment, instrument, document or
similar understanding (whether written or oral), including a lease, sublease and
rights thereunder (“Contract”) or permit, license, certificate, waiver, notice
and similar authorization (“Permit”) to which, in the case of (A), (B) or (C),
Diamondback is a party or by which Diamondback is bound or any of its assets are
subject, or (D) any provision of the Organizational Documents of Diamondback as
in effect on the Closing Date; (ii) result in the imposition of any Lien upon
any assets owned by Diamondback, or any shares of Common Stock owned by any of
the stockholders of Diamondback; (iii) require any Consent under any Contract or
Organizational Document to which Diamondback is a party or by which it is bound
or any of its assets are subject, except for any such Consents as have been
obtained; (iv) require any Permit under any Law or Order other than (A) required
filings, if any, with the Commission

 

4

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

and (B) notifications or other filings with state or federal regulatory agencies
after the Closing that are necessary or convenient and do not require approval
of the agency as a condition to the validity of the Transactions, the Wexford
Contribution or the IPO; or (v) trigger any rights of first refusal,
preferential purchase or similar rights with respect to any equity interest in
Diamondback, which have not been validly waived.

2.4 Brokers’ Fees. Diamondback has no liability or obligation to pay any
compensation to any broker, finder or agent with respect to the Transactions,
the Wexford Contribution or the IPO for which Contributor could become directly
or indirectly liable, other than any underwriter discounts incurred in
connection with any sale of shares of Common Stock by Contributor.

2.5 Capitalization. As of the Effective Date, the authorized capital stock of
Diamondback consists of 100 shares of common stock, of which, 100 shares were
issued and outstanding. All of the issued and outstanding equity interests in
Diamondback: (a) have been duly authorized and are validly issued, fully paid
and nonassessable; (b) were issued in compliance with all applicable state and
federal securities Laws; and (c) were not issued in breach or violation of, or
did not cause as a result of the issuance thereof a default under, any Contract
with or right granted to any other person. Except as set forth on Schedule 2.5,
Diamondback has no outstanding options, warrants, exchangeable or convertible
securities, subscription rights, exchange rights, statutory pre-emptive rights,
preemptive rights granted under its Organizational Documents, stock appreciation
rights, phantom stock, profit participation or similar rights, or any other
right or instrument pursuant to which any person may be entitled to purchase any
security interests in Diamondback, and has no obligation to issue any rights or
instruments (“Equity Rights”). There are no Contracts with respect to the voting
or transfer of any of the equity interest in Diamondback. Diamondback is not
obligated to redeem or otherwise acquire any of its outstanding shares of Common
Stock or other equity interests. Diamondback does not, directly or indirectly,
control, own or have any Equity Interest in any Person.

2.6 Issuance of Common Stock. The shares of Common Stock, when issued and
delivered in accordance with the terms of this Agreement for the consideration
described in this Agreement, will have been (i) duly authorized by Diamondback
and when issued against the consideration therefor, will be validly issued by
Diamondback, (ii) fully paid and non-assessable, (iii) not subject to any
preemptive or similar rights created by any Law or Order to which Diamondback is
a party or by which it is bound and (iv) free and clear of all Liens, other than
those created by Contributor, including but not limited to those, if any, in
favor of its lenders under the Loan Documents, arising from the Underwriting
Agreement and arising under U.S. securities Laws.

2.7 Records. The copies of the Organizational Documents of Diamondback that were
provided to Contributor are accurate and complete and reflect all amendments
made through the date hereof. Except as set forth in the S-1, no steps have been
taken by Diamondback or its officers, directors, or stockholder to effect or
authorize any further amendment or modification thereto. The minute books of
Diamondback and the other records made available to Contributor for review were
correct and complete as of the date of such

 

5

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

review, no further entries have been made through the Effective Date, such
minute books and records contain the true signatures of the persons purporting
to have signed them, and such minute books and records contain an accurate
record of all actions of the members, managers or any other governing body of
each Diamondback taken by written consent, at a meeting, or otherwise since
formation.

2.8 Diamondback S-1; Financial Statements. Diamondback has filed with the
Securities and Exchange Commission (the “Commission”) a Registration Statement
on Form S-1, File No. 333-179502 (the “S-1”). The consolidated financial
statements of Windsor included in the S-1 comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the Commission with respect thereto and fairly present, in
conformity in all material respects with generally accepted accounting
principles (“GAAP”) applied on a consistent basis (except as may be indicated in
the notes thereto), the consolidated financial position of Windsor and its
consolidated subsidiaries as of the dates thereof and their consolidated results
of operations and changes in financial position for the periods then ended.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR

Contributor hereby represents and warrants to Diamondback as of the Effective
Date and as of the Closing Date (except to the extent that any such
representation or warranty expressly relates to another date, in which case such
representation or warranty shall be as of such date) as follows:

3.1 Organization of Contributor. Contributor (a) is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware, (b) is duly qualified to do business as a foreign corporation and is
in good standing under the Laws of the State of Texas, (c) has the corporate
power and authority necessary to own or lease its properties and to carry on its
business as currently conducted and (d) is not in breach or violation of, or
default under, any provision of its Organizational Documents. Contributor has
not approved or taken any action, and there is not pending or (to Contributor’s
knowledge) threatened Action for the dissolution, liquidation, insolvency or
rehabilitation of Contributor.

3.2 Power and Authority; Enforceability. Contributor has the relevant corporate
power and authority necessary to execute and deliver each Transaction Document
to which it is a party and to perform and consummate the Transactions.
Contributor has taken all action necessary to authorize its execution and
delivery by Contributor of each Transaction Document to which Contributor is a
party, the performance of its obligations thereunder and the consummation by
Contributor of the Transactions. Each Transaction Document to which Contributor
is a party has been duly authorized, executed and delivered by Contributor, and
constitutes the legal, valid and binding obligation of Contributor, enforceable
against Contributor in accordance with its terms, subject to the Enforceability
Exception.

 

6

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

3.3 No Violation; Necessary Approvals. The execution and the delivery by
Contributor of this Agreement and the other Transaction Documents to which
Contributor is a party, the performance by Contributor of its obligations
hereunder and thereunder and the consummation of the Transactions by Contributor
will not (i) with or without notice or lapse of time, constitute, create or
result in a breach or violation of, default under, loss of benefit or right
under or acceleration of performance of any obligation required under any Law,
Order, Contract or Permit to which Contributor is a party or by which it is
bound or any of its assets is subject, or any provision of Contributor’s
Organizational Documents as in effect on the Closing Date; (ii) result in the
imposition of any Lien upon any assets owned by Contributor, including without
limitation the Permian Assets; (iii) require any Consent under any Contract or
organizational document to which Contributor is a party or by which it is bound,
other than such Consents that have been obtained and the Consent of the lenders
under the Loan Documents; or (iv) require any Permit under any Law or Order
other than (A) required filings, if any, with the Commission and
(B) notifications or other filings with state or federal regulatory agencies
after the Closing that are necessary or convenient and do not require approval
of the agency as a condition to the validity of the Transactions.

3.4 Title to Permian Assets. Contributor warrants and shall forever defend the
title to the Permian Assets unto Diamondback against every Person whomsoever
lawfully claiming or to claim the same or any part thereof by, through, or under
Contributor, but not otherwise, subject, however, to the Permitted Liens
(regardless of whether they are released on or prior to Closing pursuant to
Article 5) and to any other Liens created, imposed, modified, amended or
extended under or pursuant to the Loan Documents which will be released on or
prior to Closing pursuant to Article 5; it being the intent (without modifying,
amending or expanding the scope of the preceding warranty of title) that, as of
Closing pursuant to Article 5, the Permian Assets will not be encumbered by
Liens or other defects in title to which the Permian Assets were not encumbered
as of the time the Permian Assets were originally assigned and conveyed to
Contributor, save and except for the Permitted Liens (regardless of whether they
are released on or prior to Closing pursuant to Article 5) and any other Liens
created, imposed, modified, amended or extended under or pursuant to the Loan
Documents which will be released on or prior to Closing pursuant to Article 5.
Contributor further warrants that any conveyance of the Permian Assets at
Closing pursuant to Section 5.3(a) also conveys, assigns and transfers to
Diamondback, its successors and assigns, as of Closing, all warranties, claims
and causes of action of whatsoever type or character, in contract or in tort,
that Contributor now has or may hereafter acquire from its predecessors-in-title
to the Permian Assets, with respect to title to the Permian Assets. Except for
the limited warranty expressed in the preceding sentence(s) of this Section 3.4,
no warranty or representation, express, implied, statutory, or otherwise, with
respect to Contributor’s title to any of the Permian Assets is provided in this
Agreement or shall be contained in the instruments of conveyance and assignment
to be delivered by Contributor to Diamondback on the Closing Date pursuant to
Section 5.3(a).

3.5 Accredited Investor. Contributor is an “accredited investor,” as such term
is defined in Regulation D of the Securities Act, and will acquire the Common
Stock for its own account and not with a view to a sale or distribution thereof
in violation of the Securities Act, and the rules and regulations thereunder,
any applicable state blue sky Laws or any other applicable securities Laws.
Contributor acknowledges that the Common Stock will not be registered under the
Securities Act or any applicable state securities law, and that the Common Stock
may not be transferred or sold except pursuant to the registration provisions of
the Securities Act or pursuant to an applicable exemption therefrom and pursuant
to state securities laws and regulations as applicable.

 

7

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

ARTICLE 4

COVENANTS

4.1 General.

(a) Subject to the terms and conditions provided in this Agreement, each Party
covenants and agrees to use commercially reasonable efforts and cooperate with
each other in (a) promptly determining whether any filings are required to be
made or consents, approvals, waivers, permits or authorizations are required to
be obtained (under any applicable Laws or from any Governmental Body or third
party) in connection with the Transactions, (b) promptly making any such
filings, furnishing information required in connection therewith and timely
seeking to obtain any such consents, approvals, waivers, permits or
authorizations and (c) taking all actions and doing, or causing to be done, all
things necessary, proper and/or appropriate to consummate and make effective the
Transactions.

(b) If any time after the Closing any further action is necessary or desirable
to carry out this Agreement’s purposes, each Party will take such further action
(including executing and delivering any further instruments and documents,
obtaining any Permits and Consents and providing any reasonably requested
information) as any other Party may reasonably request, all at the requesting
Party’s sole cost and expense (unless the requesting Party is entitled to
indemnification therefor under Article 7).

4.2 Covenants of Contributor. From the Effective Date through the Closing, and
except in the ordinary course of business, as contemplated by the AMIA, JOAs or
the JDA and as contemplated by or specified in this Agreement or the
Transactions, the Contributor will not, without the prior written consent of
Diamondback:

(a) sell, transfer (or agree to sell or transfer) or otherwise dispose of, or
cause the sale, transfer or disposition of (or agree to do any of the foregoing)
all or any portion of the Permian Assets;

(b) pledge, hypothecate or encumber all or any portion of the Permian Assets; or

(c) cause or take any action that would render any of the representations or
warranties set forth in Article 3 untrue in any material respect.

(d) Notwithstanding anything in this Agreement to the contrary, Contributor
shall be permitted to (i) participate in negotiations or discussions with any
person or group of persons other than Diamondback and its affiliates that has
made (and not withdrawn) an unsolicited offer, indication of interest, proposal
or inquiry relating to an alternative transaction that the Special Committee
believes in good faith would reasonably be expected to result in a transaction
more favorable to the stockholders of

 

8

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

Contributor than the Transactions, (ii) thereafter furnish to such third party
non-public information relating to the Permian Assets and afford access to the
Permian Assets to such third party, in all cases for the purpose of assisting
with or facilitating an alternative transaction, and (iii) after the termination
of this Agreement pursuant to Section 6.1 enter into an alternative transaction
or any agreement, arrangement or understanding, including, without limitation,
any letter of intent, term sheet or other similar document, relating to an
alternative transaction with such third party.

4.3 Covenants of Diamondback. From the Effective Date through the Closing, and
except as contemplated by or specified in this Agreement, the Transactions, the
IPO or the S-1, Diamondback will not, without the prior written consent of the
Contributor:

(a) amend its Organizational Documents;

(b) authorize for issuance, issue, sell, deliver or agree or commit to issue,
sell or deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any stock of any
class or any other debt or equity securities or equity equivalents (including
any stock options or stock appreciation rights);

(c) split, combine or reclassify any shares of its capital stock, declare, set
aside or pay any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock, make any
other actual, constructive or deemed distribution in respect of its capital
stock or otherwise make any payments to stockholders in their capacity as such,
or redeem or otherwise acquire any of its securities or any securities of any of
its subsidiaries;

(d) sell, lease, license, transfer, distribute or otherwise dispose of any
material assets in any single transaction or series of related transactions or
permit or cause Windsor to do so;

(e) except as may be required as a result of a change in law or in GAAP,
materially change any of the accounting principles, practices or methods used by
it; or

(f) cause or take any action that would render any of the representations and
warranties set forth in Article 2 untrue in any material respect.

4.4 Confidentiality. Each Party will, and will cause each of its respective
Affiliates, directors, officers, employees, agents, representatives and
similarly situated persons to treat and hold as confidential, and not use or
disclose, all of the information possessed by such person concerning the
Transactions, the Wexford Contribution, the IPO, Diamondback, its business, the
negotiation or existence and terms of this Agreement and the business affairs of
Contributor, except for disclosures (i) to the person’s professional advisors,
the actions for which the disclosing person will be responsible, (ii) required
for such person to perform obligations it may have under this Agreement, or
(iii) required by applicable Law or securities exchange regulations.

 

9

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

4.5 Notice. From the Effective Date through the Closing, each Party shall give
prompt written notice to the other Party of (i) any representation or warranty
made by it contained in this Agreement that is qualified as to materiality
becoming untrue or inaccurate in any respect or any such representation or
warranty that is not so qualified becoming untrue or inaccurate in any material
respect, or (ii) the failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement; provided, however, that no such notification shall
affect the representations, warranties, covenants or agreements of the Parties
or the conditions to the obligations of the Parties under this Agreement.

4.6 Form S-1.

(a) Diamondback shall prepare an amendment to the S-1 and Contributor shall
prepare a Current Report on Form 8-K, each of which shall include descriptions
of this Agreement and the Transactions and such forms shall be filed
simultaneously with the Commission. The Parties shall cooperate and consult with
each other with respect to the disclosure of the Transactions contained in the
Form 8-K and the S-1. Diamondback shall promptly provide copies or all written
comments received from the Commission, and consult with Contributor with respect
to any comments received from the Commission regarding the Transaction, and make
available to Contributor upon its request a complete and correct copy of any
amendments that are filed with the Commission. At its effective time, the S-1
shall comply as to form in all material respects with the rules and regulations
promulgated by the Commission under the Securities Act and shall not contain any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein in
light of the circumstances under which they were made not misleading.
Diamondback will advise Contributor, after it receives notice thereof, of the
time when S-1 has become effective or any supplement or amendment has been
filed, or the issuance of any stop order.

(b) Diamondback shall use its commercially reasonable efforts to include the
shares of Common Stock of Contributor requested by Contributor to be included in
the S-1 as a selling stockholder and such shares of Common Stock shall be
included in the underwriting on the same terms and conditions as the shares of
Common Stock being offered by Diamondback. If the managing underwriters advise
Diamondback that in their good faith judgment the number of shares of Common
Stock requested to be included in the S-1 by Contributor and DB Holdings exceeds
the number which can be sold in the IPO without materially and adversely
affecting the marketability of the IPO, then the S-1 shall include the maximum
number of shares that the managing underwriters advise can be sold in the IPO by
Contributor and DB Holdings allocated as follows: (i) first, the shares of
Common Stock that Diamondback proposes to sell, and (ii) second, to the extent
that any other shares of Common Stock may be included without exceeding the
limitations recommended by the underwriters as aforesaid, shares of Common Stock
to be included in the S-1 by Contributor and DB Holdings will be included on a
pro rata basis (or in such other proportion mutually agreed between Contributor
and DB Holdings), based on the number shares of Common Stock held by Contributor
and DB Holdings.

 

10

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

4.7 HSR Filing. Each of the Contributor and Diamondback shall, to the extent
required, file or cause to be filed any Notification and Report Forms and
related material with the Federal Trade Commission and the Antitrust Division of
the United States Department of Justice under the HSR Act within five Business
Days following the Effective Date. Each of the Parties will use commercially
reasonable efforts to obtain a waiver of the applicable waiting period with
respect to the HSR Act and will promptly make any further filings pursuant
thereto that may be necessary, proper or advisable in connection therewith. The
Parties will cooperate with each other in connection with the making of all such
filings or responses, including providing copies of all such documents to the
non-filing or non-responding Party and its advisors prior to filing or
responding to allow such other Party reasonable time to review and comment on
such filings or responses. The filing fees for all such filings after the
Effective Date will be paid by Diamondback. Any other fees or expenses that
arise in connection with the making of all such filings or responses with
respect to the HSR Act will be paid by the Person that incurs such fees or
expenses.

4.8 Termination of Certain Agreements.

(a) The Parties shall cause the AMIA, JOAs and JDA (the “Terminated Agreements”)
to be terminated effective as of the Closing Date; provided, such termination
shall not affect the obligations of Contributor or the rights of the Windsor
Entity counterparty against Contributor under the Terminated Agreements
attributable to the period prior to the Closing Date; and provided, further that
Contributor hereby waives any and all requirements of Windsor under the AMIA to
have assigned any portion of any oil, gas and mineral lease, working interest,
leasehold interest or other oil and gas interest thereunder to Contributor.

(b) For the avoidance of doubt, such termination of the Terminated Agreements
(i) shall not affect the Contributor’s right to receive production revenues
attributable to its ownership of the Permian Assets during the period prior to
the Closing Date, and (ii) shall not relieve Contributor of (x) any obligation
for the payment of money or for indemnity under any Terminated Agreement for the
period prior to the Closing Date, or (y) the obligation to convey any oil, gas
and mineral lease, working interest, leasehold interest or other oil and gas
interest covered by the AMIA acquired by Contributor, an Affiliate of
Contributor, or an agent or representative of Contributor or any such Affiliate,
or which Contributor, Affiliate or agent or representative had the right to
acquire prior to the Closing Date.

(c) For the avoidance of doubt, such termination of the Terminated Agreement
(i) shall not affect the Windsor Entity counterparty’s right to receive
production revenues attributable to its ownership of oil and gas interests
during the period prior to the Closing Date, and (ii) shall not relieve the
Windsor Entity counterparty of any obligation for the payment of money or for
indemnity under any Terminated Agreement for the period prior to the Closing
Date.

 

11

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

(d) All of the rights corresponding to the obligations of Contributor under
clause (b) above shall be assigned by the Windsor Entity counterparty to
Diamondback, or if applicable, its permitted assigns pursuant to Section 5.3(a)
of this Agreement.

4.9 Access. Diamondback will cause or permit representatives of Contributor to
have full access at all reasonable times, and in a manner so as not to interfere
with the normal business operations of Diamondback, to all premises, properties,
personnel, books, records, Contracts, and documents pertaining to the Wexford
Contribution, the IPO, the Transactions and such other information to enable
Contributor to determine the satisfaction of the conditions to closing set forth
in Section 5.1 and will furnish copies of all such books, records, Contracts,
and documents and all financial, operating and other data, and other information
as Contributor may reasonably request; provided, however, that no investigation
pursuant to this Section 4.9 will affect any representations or warranties made
herein or the conditions to the Parties’ obligations to consummate the
Transactions.

ARTICLE 5

CLOSING

5.1 Conditions Precedent.

(a) Conditions to Each Party’s Obligations. The obligations of each Party to
effect the Transactions shall be subject to the satisfaction or waiver of the
following conditions:

(i) No Law or Order shall have been enacted, issued, entered, promulgated or
enforced by any Governmental Body that prohibits the consummation of the
Transactions, the Wexford Contribution or the IPO (which condition may not be
waived by any Party), nor shall any proceeding brought by a Governmental Body of
competent jurisdiction be pending that seeks the foregoing;

(ii) The Commission shall have advised Diamondback that it has no further
comments on the S-1 and each Party shall be satisfied that the offering will be
completed;

(iii) Any applicable waiting period under the HSR Act relating to the
Transactions and the Wexford Contribution shall have expired or been terminated;
and

(iv) Any other governmental or regulatory notices, approvals or other
requirements necessary to consummate the Transactions, the Wexford Contribution
and the IPO shall have been given, obtained or complied with, as applicable.

 

12

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

(b) Conditions to Obligations of Diamondback. The obligations of Diamondback to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction (or waiver by it in writing) of the following
conditions:

(i) The representations and warranties of the Contributor contained in this
Agreement shall be true and correct in all material respects at the Closing Date
as if made at that time (except to the extent that any representation or
warranty speaks as of an earlier date, in which case it must be true and correct
only as of that earlier date);

(ii) Contributor shall have performed in all material respects all agreements
and covenants required by this Agreement to be performed or complied with by it
on or prior to the Closing Date;

(iii) Contributor shall have delivered to Diamondback written evidence of the
termination of each of the Terminated Agreements;

(iv) Contributor shall have executed and delivered to Diamondback the documents
required to be delivered by it pursuant to Section 5.3 hereof; and

(v) All Liens on the Permian Assets created by the Loan Documents shall have
been released by the lenders thereunder.

Any or all of the foregoing conditions may be waived by Diamondback in its sole
and absolute discretion.

(c) Conditions to Obligations of the Contributor. The obligations of the
Contributor to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction (or waiver by it in writing) of the
following conditions:

(i) The representations and warranties of Diamondback contained in this
Agreement shall be true and correct in all material respects at the Closing Date
as if made again at that time (except to the extent that any representation or
warranty speaks as of an earlier date, in which case it must be true and correct
only as of that earlier date);

(ii) Diamondback shall have performed in all material respects all agreements
and covenants required by this Agreement to be performed or complied with by it
on or prior to the Closing Date;

(iii) Contributor shall have determined that the terms and conditions of the
Wexford Contribution, including, without limitation, matters relating to title
to the assets held by Windsor, and the IPO, including, without limitation, the
IPO Price and the net proceeds of the IPO, are acceptable to Contributor in its
sole and absolute discretion (as determined by the Special Committee);

 

13

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

(iv) The Common Stock shall have been approved for listing on The NASDAQ Global
Market or another national securities exchange, subject only to official notice
of issuance;

(v) The Wexford Contribution shall have occurred;

(vi) Diamondback shall have delivered to Contributor written evidence of the
termination of each of the Terminated Agreements; and

(vii) Diamondback shall have executed and delivered to the Contributor the
documents required to be delivered pursuant to Section 5.4 hereof.

5.2 Time and Place; Closing. Unless this Agreement shall have terminated
pursuant to Article 6, the closing of the Transactions (the “Closing”) shall
occur upon the satisfaction or waiver of the conditions in Section 5.1 (the
“Closing Date”). The Closing shall take place at a place as determined by
Contributor and Diamondback.

5.3 Contributor’s Closing Deliveries. On the Closing Date, Contributor shall
deliver or cause to be delivered to Diamondback the following closing documents:

(a) Instruments of conveyance and assignment, substantially in the form attached
hereto as Exhibit B (the “Assignments”) and any other documents that are in the
possession of Contributor which are reasonably requested by Diamondback and are
reasonably necessary or desirable to assign, transfer, convey, contribute and
deliver the Permian Assets to Diamondback (or, as instructed in writing by
Diamondback, a wholly-owned subsidiary of Diamondback) and effectuate the
transactions contemplated hereby;

(b) A certification regarding the accuracy in all material respects of
Contributor’s representations and warranties in this Agreement at the Closing
Date (except to the extent that any representation or warranty speaks as of an
earlier date, in which case it must be true and correct only as of that earlier
date); and

(c) The Investor Rights Agreement, substantially in the form attached hereto as
Exhibit C (the “Investor Rights Agreement”) duly executed and delivered by the
Contributor.

5.4 Diamondback’s Closing Deliveries. On the Closing Date, Diamondback shall
deliver or cause to be delivered to the Contributor the following closing
documents:

(a) Diamondback shall have issued shares of the Common Stock to Contributor
either in the form of one or more certificates, in such names as Contributor
shall direct or through the electronic registration of such Common Stock with
the Depository Trust Company, a New York corporation;

(b) A certification regarding the accuracy in all material respects of each of
their respective representations and warranties in this Agreement at the Closing
Date (except to the extent that any representation or warranty speaks as of an
earlier date, in which case it must be true and correct only as of that earlier
date); and

 

14

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

(c) The Investor Rights Agreement duly executed and delivered by Diamondback.

(d) The Promissory Note duly executed and delivered by Diamondback.

ARTICLE 6

TERMINATION

6.1 Termination. This Agreement may be terminated as follows:

(a) by mutual written consent of the Parties;

(b) by either Party if any court of competent jurisdiction in the United States
or other United States federal or state Governmental Body shall have issued a
final Order or taken any other final action, restraining, enjoining or otherwise
prohibiting the Transactions, the Gulfport Contribution, the Wexford
Contribution or the IPO and such order, decree, ruling or other action is or
shall have become nonappealable;

(c) by Diamondback, upon a breach of any representation, warranty, covenant or
agreement on the part of the Contributor set forth in this Agreement such that
the conditions set forth in Section 5.1(a) and (b) shall have become incapable
of fulfillment and such breach shall not have been waived by Diamondback;

(d) by Contributor, upon a breach of any representation, warranty, covenant or
agreement on the part of Diamondback set forth in this Agreement such that the
conditions set forth in Section 5.1(a) and (c) shall have become incapable of
fulfillment and such breach shall not have been waived by Contributor; or

(e) by either Party if the Closing does not occur by July 31, 2012, or at such
earlier time as Diamondback determines not to proceed with or otherwise
terminates the IPO.

6.2 Effect of Termination. In the event of the termination and abandonment of
this Agreement pursuant to Section 6.1, this Agreement shall forthwith become
void and have no effect without any liability on the part of any party hereto or
its Affiliates, directors, officers or stockholders other than the provisions of
this Section 6.2 and Article 7 hereof. Nothing contained in this Section 6.2
shall relieve any party from liability for any breach of this Agreement prior to
such termination.

ARTICLE 7

INDEMNIFICATION

7.1 Indemnification.

(a) Contributor shall indemnify and hold Diamondback and its Affiliates, and
their respective officers, directors, managers, employees, agents,
representatives, controlling persons, members, stockholders and similarly
situated persons, harmless from

 

15

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

and pay any and all Damages directly or indirectly, resulting from, relating to,
arising out of or attributable to (i) any breach of any representation or
warranty the Contributor has made in this Agreement; or (ii) any breach,
violation or default by Contributor of any covenant, agreement or obligation of
Contributor in this Agreement. “Damages” means all losses (including diminution
in value), damages and other costs and expenses of any kind or nature
whatsoever, whether known or unknown, contingent or vested, matured or
unmatured, and whether or not resulting from third-party claims, including costs
(including reasonable fees and expenses of attorneys, other professional
advisors and expert witnesses and the allocable portion of the relevant person’s
internal costs) of investigation, preparation and litigation in connection with
any Action or threatened Action.

(b) Diamondback shall indemnify and hold the Contributor and its Affiliates, and
their respective officers, directors, managers, employees, agents,
representatives, controlling persons, members, stockholders and similarly
situated persons, harmless from and pay any and all Damages directly or
indirectly, resulting from, relating to, arising out of or attributable to
(i) any breach of any representation or warranty Diamondback has made in this
Agreement; (ii) any breach, violation or default by Diamondback of any covenant,
agreement or obligation of Diamondback in this Agreement; or (iii) the Assumed
Obligations.

7.2 Indemnification Claim Procedures.

(a) If any Action is commenced or threatened that may give rise to a claim for
indemnification (an “Indemnification Claim”) by any person entitled to
indemnification under this Agreement (each, an “Indemnified Party”) against any
person obligated to indemnify an Indemnified Party (an “Indemnitor”), then such
Indemnified Party will promptly give notice to the Indemnitor. Failure to notify
the Indemnitor will not relieve the Indemnitor of any liability that it may have
to the Indemnified Party, except to the extent the defense of such Action is
materially and irrevocably prejudiced by the Indemnified Party’s failure to give
such notice. An Indemnitor may elect at any time to assume and thereafter
conduct the defense of the Indemnification Claim with counsel of the
Indemnitor’s choice reasonably satisfactory to the Indemnified Party; provided,
however, that the Indemnitor will not approve of the entry of any judgment or
enter into any settlement with respect to the Indemnification Claim without the
Indemnified Party’s prior written approval (which must not be withheld
unreasonably). Until an Indemnitor assumes the defense of the Indemnification
Claim, the Indemnified Party may defend against the Indemnification Claim in any
manner the Indemnified Party reasonably deems appropriate. If the Indemnified
Party gives an Indemnitor notice of an Indemnification Claim and the Indemnitor
does not, within ten (10) days after such notice is given, give notice to the
Indemnified Party of its election to assume the defense of such Indemnification
Claim and thereafter promptly assume such defense, then the Indemnitor will be
bound by any judicial determination made with respect to such Indemnification
Claim or any compromise or settlement of such Indemnification Claim effected by
the Indemnified Party.

 

16

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

(b) A claim for any matter not involving a third party may be asserted by notice
to the Party from whom indemnification is sought.

ARTICLE 8

MISCELLANEOUS

8.1 Definitions. For the purposes of this Agreement, the following terms have
the meanings set forth below.

“Action” has the meaning set forth in Section 2.1.

“Affiliate” means, with respect to any Person, a Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with the specified Person. For the purposes of this
definition, “control” (including, with correlative meanings, the terms
“controlled by” and “under common control with”) as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise.

“Agreement” has the meaning set forth in the introductory paragraph hereto.

“AMIA” means that certain Area of Mutual Interest Agreement by and between
Windsor and Contributor dated November 1, 2007, as amended by that certain First
Supplement to Area of Mutual Interest Agreement by and between Windsor and
Contributor dated as of March 20, 2008, and that certain Second Supplement to
Area of Mutual Interest Agreement by and between Windsor and Contributor dated
as of October 31, 2008.

“Arbitrator” has the meaning set forth in Section 1.4.

“Assignments” has the meaning set forth in Section 5.3(a).

“Assumed Obligations” has the meaning set forth in Section 1.2.

“Business Day” means any day that is not a Saturday, Sunday or legal holiday in
the State of Oklahoma and the State of Texas.

“Capital Adjustment Amount” has the meaning set forth in Section 1.4.

“Closing” or “Closing Date” has the meaning set forth in Section 5.2.

“Closing Consideration” has the meaning set forth in Section 1.3.

“Commission” has the meaning set forth in Section 2.8.

“Common Stock” has the meaning set forth in the Recitals hereto.

“Consent” means any consent, order, waiver, approval or authorization of, or
registration, qualification, designation, declaration or filing with, any Person
or Governmental Body or under any applicable Laws.

“Contract” has the meaning set forth in Section 2.3.

 

17

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

“Contributor” has the meaning set forth in the introductory paragraph hereto.

“Damages” has the meaning set forth in Section 7.1(a).

“Diamondback” has the meaning set forth in the introductory paragraph hereto.

“Effective Date” has the meaning set forth in the introductory paragraph hereto.

“Enforceability Exception” has the meaning set forth in Section 2.2.

“Equity Interest” means (a) with respect to a corporation, any and all shares of
capital stock and any Equity Rights with respect thereto, (b) with respect to a
partnership, limited liability company, trust, or similar Person, any and all
units, interests or other partnership/limited liability company interests, and
any Equity Rights with respect thereto, and (c) any other direct or indirect
equity ownership or participation in a Person.

“Equity Rights” has the meaning set forth in Section 2.5.

“Final Capital Amount” has the meaning set forth in Section 1.4.

“Final Settlement Statement” has the meaning set forth in Section 1.4.

“GAAP” has the meaning set forth in Section 2.8.

“Governmental Body” has the meaning set forth in Section 2.3.

“Gulfport Contribution” means the Contributor’s contributions of the Permian
Assets to Diamondback in return for shares of Common Stock pursuant to this
Agreement.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

“Indebtedness” means, with respect to any Person, as of a specified date, the
sum of (i) all indebtedness of such Person, whether or not contingent, whether
secured or unsecured, for borrowed money; (ii) all obligations and liabilities
of such Person for the deferred purchase price of property or services;
(iii) all indebtedness and obligations of such Person evidenced by notes, bonds,
debentures, finance leases or other similar instruments and liabilities, whether
contingent or not contingent, for reimbursement in respect of any letter of
credit, banker’s acceptance or similar credit transaction; (iv) all obligations
and liabilities in respect of any lease of (or other arrangements conveying the
right to use) real or personal property, or a combination thereof, which
liabilities are required to be classified and accounted for under GAAP as
capital leases; (v) all obligations and liabilities with respect to hedging,
swaps or similar arrangements; and (vi) all guarantees, pledges and grants of a
security interest by such Person in respect of or securing obligations with
respect to the indebtedness (as referred to in clauses (i) through (v) above) of
others.

“Indemnification Claim” has the meaning set forth in Section 7.2(a).

“Indemnified Party” has the meaning set forth in Section 7.2(a).

“Indemnitor” has the meaning set forth in Section 7.2(a).

“Initial Capital Amount” means as of February 29, 2012 the amount of
($118,095,807.00).

 

18

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

“IPO” means the underwritten initial public offering of Diamondback in which it
will issue shares of Common Stock pursuant to the S-1.

“IPO Price” means the price per share of Common Stock in the IPO, as set forth
on the cover page of the final Prospectus relating to the IPO.

“JDA” means that certain Development Agreement by and between Windsor,
Contributor and Windsor Energy Group, L.L.C. dated November 1, 2007, as amended
by that certain First Amendment to the Development Agreement dated November 1,
2007 and to each of the Joint Operating Agreements dated as of November 1, 2007
for the East Bloxom, Georgetown, Kelly, Shelley-Michelle, Tori and West Bloxom
Prospects by and between Windsor, Contributor and Windsor Energy Group, L.L.C.
dated November 1, 2008.

“JOAs” means (i) that certain Joint Operating Agreement dated November 1, 2007
for Shelley/Michelle Contract Area by and between Windsor Energy Group, L.L.C.,
Windsor and Contributor, (ii) that certain Joint Operating Agreement for dated
November 1, 2007 for East Bloxom Contract Area by and between Windsor Energy
Group, L.L.C., Windsor and Contributor, (iii) that certain Joint Operating
Agreement dated November 1, 2007 for Georgetown Contract Area by and between
Windsor Energy Group, L.L.C., Windsor and Contributor, (iv) that certain Joint
Operating Agreement dated November 1, 2007 for Tori Contract Area by and between
Windsor Energy Group, L.L.C., Windsor and Contributor, (v) that certain Joint
Operating Agreement dated November 1, 2007 for West Bloxom Contract Area by and
between Windsor Energy Group, L.L.C., Windsor and Contributor, and (vi) that
certain Joint Operating Agreement dated November 1, 2007 for Kelly Contract Area
by and between Windsor Energy Group, L.L.C., Windsor and Contributor, as such
agreements have been amended by that certain First Amendment to the Development
Agreement dated November 1, 2007 and to each of the Joint Operating Agreements
dated as of November 1, 2007 for the East Bloxom, Georgetown, Kelly,
Shelley-Michelle, Tori and West Bloxom Prospects by and between Windsor,
Contributor and Windsor Energy Group, L.L.C. dated November 1, 2008.

“Law” has the meaning set forth in Section 2.3.

“Lien” means all pledges, claims, liens, charges, restrictions, controls,
easements, rights of way, exceptions, reservations, leases, licenses, grants,
covenants and conditions, encumbrances and security interests of any kind or
nature whatsoever.

“Loan Documents” means the Credit Agreement, dated as of September 30, 2010, by
and among the Contributor, as borrower, the Bank of Nova Scotia, as
administrative agent, letter of credit issuer and lead arranger, and Amegy Bank
National Association as amended from time to time.

“Order” has the meaning set forth in Section 2.3.

“Organizational Documents” means with respect to any entity, the certificate of
formation, limited liability company agreement or operating agreement,
participating agreements, certificate of incorporation, bylaws, certificate of
limited partnership, limited partnership agreement and any other governing
instrument, as applicable.

“Party” or “Parties” has the meaning set forth in the introductory paragraph
hereto.

 

19

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

“Permian Assets” has the meaning set forth in the Recitals hereto.

“Permit” has the meaning set forth in Section 2.3.

“Permitted Liens” means (a) Liens (including mechanics’, workers’, repairers’,
materialmens’, warehousemens’, landlord’s and other similar Liens) arising in
the ordinary course of business that would not individually or in the aggregate
materially adversely affect the value of, or materially adversely interfere with
the use of, the property subject to them and (b) Liens arising under, or in
connection with, the Loan Documents.

“Person” means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or other
entity.

“Promissory Note” has the meaning set forth in Section 1.3.

“Prospectus” means Diamondback’s final prospectus as filed pursuant to Rule 424
under the Securities Act with the Commission.

“S-1” has the meaning set forth in Section 2.8.

“Securities Act” means Securities Act of 1933, as amended.

“Special Committee” means the Special Committee of the Board of Directors of the
Contributor, currently composed of David L. Houston, Donald Dillingham, Craig
Groeschel and Scott E. Steller and formed for the purpose of, among other
things, reviewing and evaluating the terms and conditions of, and determine the
advisability of, the Gulfport Contribution and whether to approve or reject the
Gulfport Contribution.

“Subsidiary” means any corporation, partnership, limited liability company,
joint venture, trust or other legal entity which the applicable Person owns
(either directly or through or together with another Subsidiary) either (i) a
general partner, managing member or other similar interest or (ii) (A) more than
50% of the equity interests or (B) more than 50% of the outstanding voting
capital stock or other voting equity interests of such corporation, partnership,
limited liability company, joint venture or other legal entity.

“Taxes” means all applicable U.S. federal, state, local and foreign income,
withholding, property, sales, franchise, employment, transfer, excise and other
taxes, tariffs or governmental charges of any nature whatsoever, including
estimated taxes, together with penalties, interest or additions to taxes with
respect thereto.

“Terminated Agreements” has the meaning set forth in Section 4.8.

“Transaction Documents” has the meaning set forth in Section 2.2.

“Transactions” has the meaning set forth in Section 2.2.

“Underwriting Agreement” means that certain underwriting agreement to be entered
into in connection with the IPO by and among Diamondback and the underwriters in
the IPO.

 

20

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

“Wexford Contribution” means a transaction or series of related transactions
pursuant to which DB Energy Holdings LLC (“DB Holdings”), an entity controlled
by Wexford Capital LP (“Wexford”), contributes all of the outstanding equity
interests in Windsor Permian LLC (“Windsor”) to Diamondback in return for shares
of Common Stock. For the avoidance of doubt, at the time all the outstanding
equity interests in Windsor are contributed to Diamondback, Windsor shall own
all of the outstanding equity interests of Windsor UT LLC.

“Windsor Entity” means Windsor and Windsor Energy Group, L.L.C.

8.2 Entire Agreement. This Agreement, together with the other Transaction
Documents and all schedules, exhibits, annexes or other attachments hereto or
thereto, and the certificates, documents, instruments and writings that are
delivered pursuant hereto or thereto, constitutes the entire agreement and
understanding of the Parties in respect of the subject matter hereof and
supersedes all prior understandings, agreements or representations by or among
the Parties, written or oral, to the extent they relate in any way to the
subject matter hereof. Except as provided in Article 7, there are no third party
beneficiaries having rights under or with respect to this Agreement.

8.3 Assignment; Binding Effect. No Party may assign either this Agreement or any
of its rights, interests or obligations hereunder without the prior written
approval of the other Party, and any such assignment by a Party without prior
written approval of the other Party will be deemed invalid and not binding on
such other Party. All of the terms, agreements, covenants, representations,
warranties and conditions of this Agreement are binding upon, inure to the
benefit of and are enforceable by, the Parties and their respective successors
and permitted assigns.

8.4 Notices. All notices, requests and other communications provided for or
permitted to be given under this Agreement must be in writing and must be given
by personal delivery, by certified or registered United States mail (postage
prepaid, return receipt requested), by a nationally recognized overnight
delivery service for next day delivery, or by facsimile transmission, to the
intended recipient at the address set forth for the recipient on the signature
page (or to such other address as any Party may give in a notice given in
accordance with the provisions hereof). All notices, requests or other
communications will be effective and deemed given only as follows: (i) if given
by personal delivery, upon such personal delivery, (ii) if sent by certified or
registered mail, on the fifth Business Day after being deposited in the United
States mail, (iii) if sent for next day delivery by overnight delivery service,
on the date of delivery as confirmed by written confirmation of delivery, or
(iv) if sent by facsimile, upon the transmitter’s confirmation of receipt of
such facsimile transmission, except that if such confirmation is received after
5:00 p.m. (in the recipient’s time zone) on a Business Day, or is received on a
day that is not a Business Day, then such notice, request or communication will
not be deemed effective or given until the next succeeding Business Day.
Notices, requests and other communications sent in any other manner, including
by electronic mail, will not be effective.

8.5 Specific Performance; Remedies. Each Party acknowledges and agrees that the
other Party would be damaged irreparably if any provision of this Agreement were
not performed in accordance with its specific terms or were otherwise breached.
Accordingly, the Parties will be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and its provisions in any action or

 

21

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

proceeding instituted in any state or federal court sitting in Oklahoma City,
Oklahoma having jurisdiction over the Parties and the matter, in addition to any
other remedy to which they may be entitled, at law or in equity. Except as
expressly provided herein, the rights, obligations and remedies created by this
Agreement are cumulative and in addition to any other rights, obligations or
remedies otherwise available at law or in equity. Nothing herein will be
considered an election of remedies.

8.6 Headings. The article and section headings contained in this Agreement are
inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.

8.7 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to any
choice of law principles.

8.8 Amendment; Extensions; Waivers. No amendment, modification, replacement,
termination or cancellation of any provision of this Agreement will be valid,
unless the same is in writing, makes reference to this Agreement and the
provision(s) to be amended, modified, replaced, terminated or canceled and is
signed by Contributor and Diamondback. Each waiver of a right hereunder does not
extend beyond the specific event or circumstance giving rise to the right. No
waiver by any Party of any default, misrepresentation or breach of warranty or
covenant hereunder, whether intentional or not, may be deemed to extend to any
prior or subsequent default, misrepresentation or breach of warranty or covenant
hereunder or affect in any way any rights arising because of any prior or
subsequent such occurrence. Neither the failure nor any delay on the part of any
Party to exercise any right or remedy under this Agreement will operate as a
waiver thereof, nor does any single or partial exercise of any right or remedy
preclude any other or further exercise of the same or of any other right or
remedy.

8.9 Severability. The provisions of this Agreement will be deemed severable and
the invalidity or unenforceability of any provision will not affect the validity
or enforceability of the other provisions hereof.

8.10 Expenses. Except as otherwise expressly provided in this Agreement, each
Party will bear its own costs and expenses incurred in connection with the
preparation, execution and performance of this Agreement and the Transactions,
including all fees and expenses of agents, representatives, financial advisors,
legal counsel and accountants. Windsor and any other parties to the Wexford
Contribution will bear their own respective costs and expenses incurred in
connection with the preparation, execution and performance of the transactions
contemplated by the Wexford Contribution, including all fees and expenses of
agents, representatives, financial advisors, legal counsel and accountants and
Contributor shall have no liability or responsibilities for any such costs or
expenses. All fees and expenses incurred in connection with the IPO, including,
without limitation, the preparation and filings of the S-1 shall be borne solely
and entirely by Diamondback with the exception of any underwriter discounts
incurred in connection with any sale of shares of Common Stock by Contributor in
the IPO which such discounts and commissions shall borne by the Contributor.

 

22

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

8.11 Counterparts; Effectiveness. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument. This Agreement will become
effective when one or more counterparts have been signed by each Party and
delivered to the other Party.

8.12 Construction. This Agreement has been freely and fairly negotiated among
the Parties. If an ambiguity or question of intent or interpretation arises,
this Agreement will be construed as if drafted jointly by the Parties and no
presumption or burden of proof will arise favoring or disfavoring any Party
because of the authorship of any provision of this Agreement.

[SIGNATURE PAGE FOLLOWS]

 

23

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

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
the date stated in the introductory paragraph of this Agreement.

 

CONTRIBUTOR:

 

GULFPORT ENERGY CORPORATION

By:   /s/ James D. Palm Name:   James D. Palm Title:   Chief Executive Officer

Address for Notices:

 

Gulfport Energy Corporation

Attention: Special Committee

14313 N. May Avenue, Suite 100

Oklahoma City, Oklahoma 73134

Fax: (405) 848-8816

 

With a copy to (which shall not constitute notice):

 

Jackson Walker L.L.P.

c/o Alex Frutos

901 Main Street, Suite 6000

Dallas, Texas 75202

Fax: (214) 661-6617

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

DIAMONDBACK:

 

DIAMONDBACK ENERGY, INC.

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

Address for Notices:

 

Diamondback Energy, Inc.

14301 Caliber Drive, Suite 300

Oklahoma City, Oklahoma 73134

Fax: (405) 463-6982

 

With a copy to (which shall not constitute notice):

 

Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C.

c/o Stephen W. Ray

320 S. Boston Ave., Suite 200

Tulsa, Oklahoma

Fax: (918) 594-0505

 

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

SCHEDULE 2.5

Outstanding Equity Rights

Options to acquire an aggregate of 3.7% of the Common Stock issued and
outstanding after giving effect to the IPO have been reserved for issuance to
certain key employees of Diamondback and its subsidiaries.

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

EXHIBIT A

Form of Promissory Note

[attached]

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

PROMISSORY NOTE

 

$

              , 2012

FOR VALUE RECEIVED, the undersigned, Diamondback Energy, Inc., a Delaware
corporation (“Maker”), promises to pay to the order of Gulfport Energy
Corporation, a Delaware corporation (“Payee”), at 14313 N. May Avenue, Suite
100, Oklahoma City, Oklahoma 73134, or any other place as the Payee or any other
holder hereof shall designate in writing to Maker, the principal sum of
            ($            ) in lawful money of the United States of America,
with interest on the principal balance remaining unpaid from time to time
(a) from the date of this Note until the Maturity Date at zero percent per annum
and (b) at any time after the Maturity Date at the rate equal to the lesser of
(i) the maximum rate permitted by applicable law (the “Maximum Rate”), and
(ii) ten percent (10%) per annum. Interest shall be computed on a per annum
basis of a year of 360 days and for the actual number of days elapsed unless
such calculation would result in a rate greater than the Maximum Rate, in which
case interest shall be computed on a per annum basis of a year of 365 days.

The principal balance of this Note together with all accrued and unpaid interest
shall be due and payable on the earliest to occur of (such date the “Maturity
Date”): (a) funding of the IPO; (b)             , 2012 [the fifth business day
after the date of the note]; and (c) acceleration of the principal balance
hereof pursuant to the terms of this Note. As used herein “IPO” shall have the
meaning given such term in that certain Contribution Agreement, dated as of
            , 2012, by and between Maker and Payee, as the same may be amended
from time to time (the “Contribution Agreement”).

Maker shall have the right to prepay, at any time and from time to time without
premium or penalty, the entire unpaid principal balance of this Note or any
portion thereof. All payments under this Note shall be applied first to any
accrued and unpaid interest as of such date and second to the outstanding
principal balance.

All agreements between Maker and the holder of this Note, whether now existing
or hereafter arising and whether written or oral, are expressly limited so that
in no contingency or event whatsoever, whether by acceleration of this Note or
otherwise, shall the amount paid, or agreed to be paid, to the holder hereof for
the use, forbearance or detention of the money to be loaned hereunder or
otherwise, exceed the Maximum Rate. If from any circumstances whatsoever
fulfillment of any provision of this Note or of any other document evidencing,
securing or pertaining to the indebtedness evidenced hereby, at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by law, then, ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity, and if from any such
circumstances the holder of this Note shall ever receive as interest under this
Note or any other document evidencing, securing or pertaining to the
indebtedness evidenced hereby or otherwise an amount that would exceed the
Maximum Rate, such amount that would be excessive interest shall be applied to
the reduction of the principal amount owing under this Note or on account of any
other indebtedness of Maker to the holder hereof relating to this Note, and not
to the payment of interest, or if such excessive interest exceeds the unpaid
balance of principal of this Note and such other indebtedness, such excess shall
be refunded to Maker. In

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

determining whether or not the interest paid or payable with respect to any
indebtedness of Maker to the holder hereof, under any specific contingency,
exceeds the Maximum Rate, Maker and the holder hereof shall, to the maximum
extent permitted by applicable law, (a) characterize any nonprincipal payment as
an expense, fee or premium rather than as interest, (b) exclude voluntary
prepayments and the effects thereof, (c) amortize, prorate, allocate and spread
the total amount of interest throughout the full term of such indebtedness so
that the actual rate of interest on account of such indebtedness is uniform
throughout the term thereof, and/or (d) allocate interest between portions of
such indebtedness, to the end that no such portion shall bear interest at a rate
greater than that permitted by law.

The entire unpaid principal balance of, and all accrued and unpaid interest on,
this Note shall immediately be due and payable upon the occurrence of any of the
following: (a) failure by Maker to pay any principal amount when due;
(b) commencement of a voluntary case against Maker under Title 11 of the United
States Code; or (c) the filing of an answer or other pleading admitting or
failing to deny the material allegations of a petition filed against Maker
commencing an involuntary case under said Title 11 or failure to timely
controvert the material allegations of such petition.

If Payee or any other holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder hereunder,
or if this Note is placed in the hands of any attorney for collection, or if it
is collected through any legal proceedings, Maker agrees to pay all collection
costs and fees incurred by the holder, including attorneys’ fees.

All notices, requests and other communications under this Note will be effective
and deemed given if delivered in accordance with Section 8.4 of the Contribution
Agreement.

This Note shall be governed by and construed in accordance with the laws of the
State of Delaware and the applicable laws of the United States of America.

DIAMONDBACK ENERGY, INC.

By:                                                             
                                             

Name:                                                            
                                     

Title:                                                            
                                       

 

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

EXHIBIT B

Form of Assignment

[attached]

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

ASSIGNMENT, CONVEYANCE AND BILL OF SALE

STATE OF TEXAS                 )

                                                   ) ss.            KNOW ALL MEN
BY THESE PRESENTS

COUNTY OF                           )

THIS ASSIGNMENT, CONVEYANCE AND BILL OF SALE (“Assignment”) is effective as of
            , 2012, at 7:00 a.m. Central Time (“Effective Time”), and is from
Gulfport Energy Corporation, a Delaware corporation, with an address of 14313 N.
May Avenue, Suite 100, Oklahoma City, Oklahoma 73134 (“Assignor”), to
            , a             , whose address is 14301 Caliber Drive, Suite 300,
Oklahoma City, Oklahoma 73134 (“Assignee”).

WHEREAS, Assignor and Diamondback Energy, Inc. have entered into that certain
Contribution Agreement dated May 7, 2012 (the “Contribution Agreement”);

WHEREAS, pursuant to the Contribution Agreement, Assignor has agreed to
contribute, transfer, assign, convey and deliver to Assignee, and Assignee has
agreed to acquire and accept, all of Assignor’s right, title and interest held
in the Permian Assets (as defined in the Contribution Agreement);

WHEREAS, the Permian Assets are comprised of all Assignor’s oil and gas
interests and properties located in Andrews, Crockett, Ector, Howard, Midland,
Reagan, Sutton and Upton Counties, Texas (the “Lands”); and

WHEREAS, capitalized terms used herein but not defined herein shall have the
meaning given such terms in the Contribution Agreement.

NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS:

Section 1. Assignment. For One Hundred Dollars ($100.00) and other good and
valuable consideration, the receipt and sufficiency of which Assignor
acknowledges, Assignor bargains, sells, assigns, and conveys to Assignee and its
successors and assigns, all of Assignor’s right, title, and interest in and to
the Lands which include the following real and personal properties
(collectively, “Properties”), subject to the terms and conditions of this
Assignment and all applicable instruments of record in Andrews, Crockett, Ector,
Howard, Midland, Reagan, Sutton and Upton Counties, Texas:

(a) The oil, gas and minerals leases described on Exhibit “A” and all other oil,
gas and minerals leases (including subleases), together with all operating
rights, working interests, leasehold interests, oil and gas interests, net
revenue interests, reversionary rights, payments out of production, contractual
rights to explore for, develop and produce oil and gas, and other similar rights
and agreements, whether producing or non-producing, and any other oil, gas or
other leasehold or mineral rights of any type covering or pertaining to the
Lands (the “Leases”).

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

(b) All oil, gas, water, injection, disposal and other wells located or bottomed
or completed in, on or under the Lands, whether producing, shut-in or
temporarily abandoned, including, but not limited to, those wells described on
Exhibit “B” (the “Wells”).

(c) All rights, titles and interests arising under unitization, pooling and/or
unitization agreements, pooling declarations or designations and statutorily,
judicially or administratively created drilling, spacing and/or production units
or field wide units related to the Leases or the Lands or to the Wells (with
respect to any of the foregoing, whether recorded or unrecorded), insofar as the
same are attributable or allocated to the Leases, the Lands, or the Wells (the
“Units,” the Units, together with the Leases, the Lands and the Wells, the “Real
Property Interests”).

(d) All tangible personal property, equipment, fixtures and improvements
situated upon the lands covered by the Real Property Interests or lands pooled
or unitized therewith or used or obtained in connection therewith, including,
but not limited to, pumps, well equipment (surface and subsurface), casing,
tanks, lines and facilities, sulfur recovery facilities, compressors, compressor
stations, dehydration facilities, treating facilities, pipeline gathering lines,
flow lines, transportation lines (including long lines and laterals), valves,
meters, separators, tanks, tank batteries, and other fixtures and inventory (the
“Equipment”).

(e) All saltwater disposal systems related to the Leases and/or the Wells,
including, but not limited to, all wells, pumps, tanks, pipes, facilities and
other equipment and property held or used for the handling, processing,
treating, storing and/or disposal of saltwater produced from any of the Wells,
whether or not located on the Leases or the Lands (the “Disposal Facilities,”
which together with the Equipment are described in part on Exhibit “C”).

(f) All easements, surface leases, fee lands, rights of way, disposal permits
and agreements and all other rights, privileges, benefits and powers with
respect to the use and occupation of the surface or the subsurface applicable to
the Leases or the Lands, or relating or pertaining to the Wells, to the
Equipment, or the Disposal Facilities, and all permits, licenses, certificates,
authorizations, registrations, orders, waivers, variances and approvals granted
by, or which have been applied for or are otherwise pending before, governmental
authority pertaining to the ownership and/or operation of the Real Property
Interests, the Equipment or the Disposal Facilities or otherwise relating
thereto (the foregoing being described in part on Exhibit “D”).

(g) To the extent assignable, all of the following which pertain or are
applicable to the Leases, the Wells and the Disposal Facilities (or any of them)
or the oil, condensate, gas, casinghead gas and other liquid or gaseous
hydrocarbons (the “Hydrocarbons”) produced from the Lands, the Leases or Wells,
including, but not limited to, those described on Exhibit “E”, to wit: (i) all
operating agreements and unit agreements; (ii) all agreements for the marketing,
gathering, transportation and/or processing of Hydrocarbons, including interests
and rights, if any, with respect to any prepayments, take-or-pay, buydown and
buyout agreements; (iii) contracts and contractual rights constituting a part of
the chain of title to Assignor’s rights or interests in the Leases or by which
Assignor’s rights in the Leases were acquired (to the extent any portion of said
agreements remain executory), including (where applicable) farmout agreements
and the like; (iv) all bottomhole agreements, area of mutual interest
agreements, acreage contribution agreements, options, leases of equipment or
facilities, joint venture agreements, pooling agreements, and gas balancing
agreements; and (v) those other contracts and agreements pertaining to the
Leases, the Wells or the Disposal Facilities and which are listed on Exhibit “E”
(but not otherwise) (any or all of the foregoing, the “Related Contracts”).

 

2

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

(h) All Hydrocarbons in, on, under or produced from the Real Property Interests
or any interests pooled or unitized therewith from and after the Effective Time,
including Hydrocarbons in storage severed after the Effective Time.

(i) To the extent the same are assignable or transferable and, further, to the
extent the same are related to the Real Property Interests, all claims, rights
and causes of action against third parties, asserted and unasserted, known and
unknown, but only to the extent such claims, rights and causes of action are
attributable to the Real Property Interests and to the period after the
Effective Time, and where necessary to give effect to the assignment of such
rights, claims and causes of action, Assignor grants to Assignee the right to be
subrogated to such rights, claims and causes of action.

(j) All other rights and interests in, to or under or derived from the Real
Property Interests, the lands covered thereby or pooled, unitized or directly
used or held for use in connection therewith.

(k) Copies of the data and records relating to the foregoing that have been or
will be delivered by Assignor to Assignee (“Documents”) subject to the
requirements set forth below.

If originals or copies of the Documents have been provided to Assignee, Assignor
shall have access to them at reasonable times and upon reasonable notice during
regular business hours for as long as any Lease is in effect after the Effective
Time. Assignor may, during this period and at its expense, make copies of the
Documents upon reasonable request. Without limiting the generality of the two
preceding sentences, for a period as long as any Lease is in effect after the
Effective Time, Assignee shall not destroy or give up possession of any original
or last remaining copy of the Documents without first offering Assignor the
opportunity, at Assignor’s expense, to obtain such original or copy.

If any of the above-described interests are excluded from Section 1 of this
Assignment because they are not assignable, then, with respect thereto, Assignor
will use its commercially reasonable efforts to obtain a waiver of any
restrictions on assignment, and if obtained, such interests will thereupon
become a part of the Properties.

Section 2. Limited Title Warranty. Assignor warrants and shall forever defend
the title to the Properties unto Assignee against every Person whomsoever
lawfully claiming or to claim the same or any part thereof by, through, or under
Assignor but not otherwise, subject, however, to the Permitted Liens (regardless
of whether they are released on or prior to the Effective Time pursuant to the
Contribution Agreement) and to any other Liens created, imposed, modified,
amended or extended under or pursuant to the Loan Documents which will be
released on or prior to the Effective Time pursuant to the Contribution
Agreement; it being the intent (without modifying, amending or expanding the
scope of the preceding warranty of title) that, as of the Effective Time
pursuant to the Contribution Agreement, the Properties will not be encumbered by
Liens or other defects in title to which the Properties were not encumbered

 

3

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

as of the time the Properties were originally assigned and conveyed to Assignor,
save and except for the Permitted Liens (regardless of whether they are released
on or prior to the Effective Time pursuant to the Contribution Agreement) and
any other Liens created, imposed, modified, amended or extended under or
pursuant to the Loan Documents which will be released on or prior to the
Effective Time pursuant to the Contribution Agreement. Assignor further warrants
that any conveyance of the Properties at the Effective Time pursuant to this
Assignment also conveys, assigns and transfers to Assignor, its successors and
assigns, as of the Effective Time, all warranties, claims and causes of action
of whatsoever type or character, in contract or in tort, that Assignor now has
or may hereafter acquire from its predecessors-in-title to the Properties, with
respect to title to the Properties. EXCEPT FOR THE LIMITED WARRANTY EXPRESSED IN
THE PRECEDING SENTENCE(S) OF THIS SECTION 2, NO WARRANTY OR REPRESENTATION,
EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, WITH RESPECT TO ASSIGNOR’S TITLE TO
ANY OF THE PROPERTIES IS PROVIDED IN THIS ASSIGNMENT.

Section 3. Disclaimer of Other Warranties. EXCEPT FOR THE LIMITED WARRANTY OF
TITLE ABOVE MADE, ASSIGNOR MAKES NO WARRANTY OF ANY TYPE IN THIS ASSIGNMENT,
WHETHER EXPRESS, STATUTORY, OR IMPLIED. ASSIGNEE HAS INSPECTED AND HAS SATISFIED
ITSELF AS TO THE CONDITION OF THE PROPERTIES. THIS ASSIGNMENT IS MADE BY AND
ACCEPTED BY ASSIGNEE ON AN “AS IS, WHERE IS” BASIS. ASSIGNOR DISCLAIMS ALL
WARRANTIES, INCLUDING:

AS TO THE FITNESS OR CONDITION OR MERCHANTABILITY OF THE WELLS, EQUIPMENT OR
DISPOSAL FACILITIES CONVEYED;

AS TO THE PHYSICAL, OPERATIONAL, OR ENVIRONMENTAL CONDITION OF THE PROPERTIES;

AS TO THE OIL, GAS, AND OTHER HYDROCARBON OPERATIONS OF THE PROPERTIES COVERED
BY THE TERMS AND CONDITIONS OF ANY LEASES OR OTHER AGREEMENTS THAT ARE A PART OF
THE PROPERTIES; AND

AS TO THE ISSUANCE, REISSUANCE, OR TRANSFER OF ANY PERMITS RELATING TO ANY OF
THE PROPERTIES.

Section 4. Covered Interests. Notwithstanding any contrary provision of this
Assignment or the Contribution Agreement, to the extent that the assignment or
conveyance of all or any part of the Properties shall be subject to any consent
or approval requirements that are not satisfied or waived prior to the Effective
Time, this Assignment shall not convey or be deemed to convey (until such
consent or approval requirement has been satisfied or waived) any right, title
or interest in and to the Properties to which such requirement relates (herein,
a “Covered Interest”); however, (a) the full benefits of ownership of the
Covered Interest shall be bargained, sold, conveyed, assigned and transferred
unto Assignee hereunder as of the Effective Time, (b) Assignor shall hold legal
title to the Covered Interest as nominee for the benefit of Assignee until such
consent or approval requirement has been satisfied or waived, (c) Assignor

 

4

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

and Assignee shall each continue to use their respective commercially reasonable
efforts to procure all required consents and approvals affecting the Covered
Interest as soon as reasonably practicable after the Effective Time, and
(d) immediately upon procurement of all required consents and approvals
affecting the Covered Interest, all right, title and interest of Assignor in and
to the Covered Interest shall thereupon automatically be bargained, sold,
conveyed and assigned to Assignee hereunder, effective as of the Effective Time;
it being expressly understood and agreed that no retention of any right, title
or interest in and to any Covered Interest under this Section 4 or any consents
or approvals affecting any Covered Interest shall be deemed or construed to be a
breach or default of the limited warranty of title expressed in Section 2 of
this Assignment or any provision of the Contribution Agreement.

Section 5. Effective Time Allocations. This Assignment shall be effective for
all purposes as of the Effective Time. All production from or attributable to
the Properties and all products and proceeds attributable thereto, and all other
income, proceeds, receipts and credits with respect to the Properties pertaining
to the period prior to the Effective Time shall be owned by and belong to
Assignor, and all production from or attributable to the Properties and all
products and proceeds attributable thereto and all other income, proceeds,
receipts and credits respecting the same pertaining to the period from and after
the Effective Time shall be owned by and belong to Assignee. Except as otherwise
provided in the Contribution Agreement, all costs, expenses, liabilities and
obligations attributable or chargeable to the Properties pertaining to the
period prior to the Effective Time shall be retained by and shall remain the
sole liability and obligation of Assignor and borne and discharged by Assignor,
and all costs, expenses, liabilities and obligations attributable to the
Properties pertaining to the period after the Effective Time are hereby assumed
by and shall be the sole liability and obligation of Assignee and assumed and
discharged by Assignee.

Section 6. The Contribution Agreement. This Assignment is made pursuant and
subject to all of the terms and conditions of the Contribution Agreement. Except
as otherwise provided in the Contribution Agreement, said terms and provisions
shall survive the execution and delivery of this Assignment and shall not be
merged therein. All terms and conditions of the Contribution Agreement are
hereby incorporated in this Assignment by reference and made a part hereof for
all purposes.

Section 7. Further Assurances. After the execution hereof, Assignor, without
further consideration, will use its commercially reasonable efforts to execute,
deliver and (if applicable) file or record or cause to be executed, delivered
and filed or recorded, such good and sufficient instruments of conveyance and
transfer and take such other action as may be reasonably required of Assignor to
effectively vest in Assignee beneficial and record title to the Properties and,
if applicable, to put Assignee in actual possession of the Properties. With
respect to interests in Leases issued by the state or a subdivision thereof
included within the Properties and that require filings with governmental
agencies before they may be assigned, Assignor and Assignee will each use its
commercially reasonable efforts to file the appropriate documents and take any
other steps necessary to obtain official approval of the assignments. With
respect to any Lease issued by the state or any agency thereof requiring consent
to transfer, Assignor shall hold title thereto for the express benefit of
Assignee until agency approval of such transfer has been obtained.

 

5

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

Section 8. Miscellaneous.

(a) The provisions of this Assignment will be deemed severable and the
invalidity or unenforceability of any provision will not affect the validity or
enforceability of the other provisions hereof.

(b) All covenants and agreements in this Assignment bind and inure to the
benefit of the heirs, successors, and assigns of Assignor and Assignee; are
covenants running with the Lands; and are effective as stated whether or not the
covenants and agreements are memorialized in assignments and other conveyances
executed and delivered by the parties and their respective heirs, successors,
and assigns from time to time.

(c) Recitation of or reference to any agreement or other instrument in this
Assignment, including, without limitation, its exhibits, does not operate to
ratify, confirm, revise, or reinstate the agreement or instrument if it has
previously lapsed or expired.

(d) This Assignment will be governed by and construed in accordance with the
Laws of the State of Texas, without giving effect to any choice of law
principles.

(e) The word includes and its syntactical variants mean “includes, but not
limited to” and its corresponding syntactical variants. The rule of ejusdem
generis may not be invoked to restrict or limit the scope of the general term or
phrase followed or preceded by an enumeration of particular examples.

(f) All exhibits referenced in and attached to this Assignment are incorporated
into it.

(g) This Assignment may be executed in counterparts, all of which together will
be considered one instrument.

[SIGNATURE PAGE FOLLOWS]

 

6

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

IN WITNESS WHEREOF, the parties have caused this Assignment to be executed as of
the date stated in the introductory paragraph of this Assignment.

 

ASSIGNOR:

 

GULFPORT ENERGY CORPORATION

By:       Name:       Title:    

 

ASSIGNEE:

 

By:       Name:       Title:    

 

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

STATE OF                     )

                                         ) ss.

COUNTY OF                 )

This instrument was acknowledged before me on this             day of
            , 2012 by             , as             of GULFPORT ENERGY
CORPORATION, on behalf of said corporation.

   Notary Public, State of                             

 

My Commission No.:    My Commission Expires:   (SEAL)

STATE OF                     )

                                         ) ss.

COUNTY OF                 )

This instrument was acknowledged before me on this             day of
            , 2012 by             , as             of             , on behalf of
said             .

   Notary Public, State of                             

 

My Commission No.:    My Commission Expires:   (SEAL)

 

8

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

EXHIBIT C

Form of Investor Rights Agreement

[attached]