Exhibit 10.2

 

 

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

BRIGHAM EQUITY HOLDINGS, LLC

a Delaware limited liability company

April 23, 2019

 

 

THE LIMITED LIABILITY COMPANY INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER JURISDICTION. SUCH LIMITED LIABILITY COMPANY INTERESTS ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE, AND MAY NOT BE
TRANSFERRED OR RESOLD, EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT AND
APPLICABLE STATE OR OTHER SECURITIES LAWS, PURSUANT TO REGISTRATION THEREUNDER
OR EXEMPTION THEREFROM. IN ADDITION, TRANSFER OR OTHER DISPOSITION OF SUCH
LIMITED LIABILITY COMPANY INTERESTS IS FURTHER RESTRICTED AS PROVIDED IN THIS
AGREEMENT. PURCHASERS OF SUCH LIMITED LIABILITY COMPANY INTERESTS SHOULD BE
AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THEIR INVESTMENT
FOR AN INDEFINITE PERIOD OF TIME.

CERTAIN OF THE LIMITED LIABILITY COMPANY INTERESTS EVIDENCED BY THIS AGREEMENT
MAY BE SUBJECT TO ONE OR MORE EQUITY GRANT AGREEMENTS AS MAY BE AMENDED FROM
TIME TO TIME BY AND BETWEEN THE ISSUER OR ITS AFFILIATES AND ONE OR MORE OF THE
MEMBERS.

 

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TABLE OF CONTENTS

 

ARTICLE 1    ORGANIZATION   

1.1

  Formation      4  

1.2

  Name      4  

1.3

  Business      4  

1.4

  Places of Business; Registered Agent      4  

1.5

  Term      4  

1.6

  Qualification in Other Jurisdictions      4  

1.7

  No State Law Partnership      5  

1.8

  Title to Company Property      5   ARTICLE 2    Definitions and References   

2.1

  Defined Terms      5  

2.2

  References, Titles and Other Rules of Construction      15   ARTICLE 3   
CAPITALIZATION AND MEMBERS   

3.1

  Members      15  

3.2

  Units      15  

3.3

  Series M Units; Series M-R Units      16  

3.4

  Series Z Units; Series Z-R Units      17  

3.5

  Fractional Units      18  

3.6

  Compliance with Transfer Restrictions      18  

3.7

  Return of Contributions      19   ARTICLE 4    DISTRIBUTIONS; ALLOCATIONS AND
WITHHOLDING   

4.1

  Distribution      19  

4.2

  Allocations      20  

4.3

  Withholding      25   ARTICLE 5    Management of the Company   

5.1

  Manager Managed Company      27  

5.2

  Replacement of the Manager      27  

5.3

  Indemnification; Advancement of Expenses; Insurance; Limitation of Liability
     27  

5.4

  Insurance      29  

5.5

  Tax Elections      29  

5.6

  Tax Returns      30  

5.7

  Company Representative      30  

5.8

  Classification      30  

5.9

  Subsidiaries      30  

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ARTICLE 6    Rights of Members   

6.1

  Rights of Members      31  

6.2

  Liability to Third Parties      31  

6.3

  Action by Members      31   ARTICLE 7    Books, Reports, Budget, Expenses AND
Confidentiality   

7.1

  Books and Records; Capital Accounts      31  

7.2

  Bank Accounts      31  

7.3

  Confidentiality      32   ARTICLE 8    Winding Up, Liquidation and Termination
  

8.1

  Winding Up      32  

8.2

  Liquidation and Termination      32   ARTICLE 9    Transfer of Interests   

9.1

  Limitation on Transfer      34  

9.2

  Transferees      34   ARTICLE 10    Miscellaneous   

10.1

  No Fiduciary Duties      34  

10.2

  Notices      35  

10.3

  Entire Agreement      35  

10.4

  Governing Law and Waiver of Jury Trial      35  

10.5

  Waiver of Action for Partition      35  

10.6

  Successors and Assigns      35  

10.7

  Amendment      35  

10.8

  Counterparts      36  

10.9

  Further Assurances      36  

10.10

  No Waiver      36  

10.11

  Severability      36  

10.12

  Public Statements      36  

10.13

  No Third-Party Beneficiaries      36  

10.14

  Execution in Writing      36  

10.15

  Reimbursement of Expenses      36  

 

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SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

BRIGHAM EQUITY HOLDINGS, LLC

This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this
“Agreement”) of Brigham Equity Holdings, LLC, a Delaware limited liability
company (the “Company”), is executed and agreed to as of April 23, 2019 (the
“Effective Date”) by and among the Manager (as defined herein) and the Members
(as defined herein) of the Company. Capitalized terms used herein shall have the
meanings set forth in Article 2 unless otherwise defined herein.

WHEREAS, the Company was formed pursuant to a Certificate of Formation filed in
the office of the Secretary of State of the State of Delaware on October 15,
2018 (the “Certificate”) and immediately prior to the adoption of this Agreement
was governed by a First Amended and Restated Limited Liability Company Agreement
dated as of November 20, 2018 (the “Existing LLC Agreement”);

WHEREAS, on November 20, 2018, as part of a restructuring, Brigham Resources,
LLC, a Delaware limited liability company (“Brigham Resources”), merged with and
into Brigham Merger Sub, LLC, a Delaware limited liability company and (prior to
such merger) an indirect wholly owned subsidiary of Brigham Resources, with
Brigham Resources as the surviving entity (the “Flip Merger”) and, as a result
of the Flip Merger, (i) Brigham Resources became a wholly owned subsidiary of
Brigham Minerals Holdings, LLC, a Delaware limited liability company (“Brigham
Minerals Holdings”), which is (prior to the consummation of the transactions
described below) and was (prior to the Flip Merger) a wholly owned subsidiary of
the Company, and (ii) in exchange for their Units (as defined in the Brigham
Resources Second A&R LLC Agreement) in Brigham Resources, each Member (as
defined in the Brigham Resources Second A&R LLC Agreement) of Brigham Resources
immediately prior to the Flip Merger received Units (as defined in the Existing
LLC Agreement) in the Company having substantially the same rights, powers,
privileges, duties and obligations;

WHEREAS, immediately prior to the effectiveness of the Master Reorganization
Agreement (as defined below), the Company issued certain Series M Units and
Series Z Units (each as defined in the Existing LLC Agreement) to Brigham
Minerals, Inc., a Delaware corporation (“PubCo”), and certain former service
providers of the Company or one or more of its Affiliates that are callable by
PubCo (the “Pre-IPO Units”);

WHEREAS, as part of an additional restructuring in anticipation of the initial
public offering of shares of Class A Common Stock of PubCo, par value $0.01 per
share (“PubCo Class A Common Stock”), the Company desires for the holders of its
Series A Units (as defined in the Existing LLC Agreement), Series A-M Units (as
defined in the Existing LLC Agreement), Series A-Z Units (as defined in the
Existing LLC Agreement), Initially Vested Series M Units and Initially Vested
Series Z Units and PubCo, as the holder of all of the Pre-IPO Units following
completion of certain transactions contemplated by the Master Reorganization
Agreement, to hold equity interests in Brigham Minerals Holdings directly rather
than indirectly through the Company and, therefore, simultaneously with the
effectiveness of this Agreement, the Company entered into a Master
Reorganization Agreement with certain of its members (the “Master Reorganization
Agreement”);

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WHEREAS, pursuant to the Master Reorganization Agreement the following
reorganization transactions are being consummated on the date hereof in
accordance with the terms of the Master Reorganization Agreement (the
“Reorganization”):

 

  (i)

the equity interests in Brigham Minerals Holdings are being recapitalized into
the Units (as defined in the Brigham Minerals Holdings A&R LLC Agreement, the
“Brigham Minerals Holdings Units”);

 

  (ii)

the Company is distributing in-kind to each of its members that holds Capital
Units (as defined in the Existing LLC Agreement), Vested Incentive Units (as
defined in the Existing LLC Agreement) or Pre-IPO Units (whether vested or
unvested) such number of Brigham Minerals Holdings Units having a value
(assuming each such Brigham Minerals Holdings Unit has a value equal to the
Brigham Minerals Holdings Unit Value (as defined below)) equal to the amount of
cash such member would have received pursuant to Section 6.2 and, to the extent
related to distributions of Tier II Minerals Available Cash (as defined in the
Existing LLC Agreement), Section 6.3 of the Existing LLC Agreement if the
Company were to make a cash distribution to its members in an aggregate amount
(the “Pre-IPO Value”) equal to (a) the product of (i) 34,100,000 and (ii) the
per share initial public offering price of the PubCo Class A Common Stock to be
sold in the Offering (as defined in the Master Reorganization Agreement) before
underwriting discounts and commissions or other offering expenses (the “Gross
IPO Price”), less (b) the sum of (i) the aggregate underwriting discounts and
commissions to be paid in connection with the initial public offering of the
PubCo Class A Common Stock (excluding any underwriting discounts and commissions
to be paid in connection with any exercise of the underwriters’ 30-day option to
purchase additional shares) and (ii) $4,700,000 in estimated offering expenses
(the Pre-IPO Value divided by 34,100,000 being referred to herein as the
“Brigham Minerals Holdings Unit Value”) in (x) complete redemption of such
Capital Units in the Company, (y) partial redemption of such Vested Incentive
Units in the Company that do not constitute Pre-IPO Units (with such Vested
Incentive Units being reclassified into the Residual Units as provided below)
and (z) complete redemption of such Pre-IPO Units (collectively, the
“Distributions”);

 

  (iii)

the Company is retaining 284,613 Brigham Minerals Holdings Units, which is the
number of Brigham Minerals Holdings Units that would have been distributed in
respect of the Initially Unvested Series M-1 Units, Initially Unvested Series
M-2 Units, Initially Unvested Series M-3 Units, Initially Unvested Series M-4
Units, Initially Unvested Series Z-1 Units, Initially Unvested Series Z-2 Units,
Initially Unvested Series Z-3 Units and the Initially Unvested Series Z-4 Units
had such Units been vested as of the date of the Distributions;

 

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  (iv)

the Company is reclassifying (A) each Initially Vested Series M-1 Unit into
81.8953 Series M-1-R Units, (B) each Initially Vested Series M-2 Unit into
27.9431 Series M- 2-R Units, (C) each Initially Vested Series M-3 Unit into zero
Series M-3-R Units, (D) each Initially Vested Series M-4 Unit into zero
Series M-4-R Units, (E) each Initially Vested Series Z-1 Unit into 332.8401
Series Z-1-R Units, (F) each Initially Vested Series Z-2 Unit into 142.0783
Series Z-2-R Units, (G) each Initially Vested Series Z-3 Unit into 22.1531
Series Z-3-R Units, (H) each Initially Vested Series Z-4 Unit into zero
Series Z-4-R Units, (I) each Initially Unvested Series M-1 Unit into
81.8953 Series M-1 Units, (I) each Initially Unvested Series M-2 Unit into
27.9431 Series M-2 Units, (J) each Initially Unvested Series M-3 Unit into
zero Series M-3 Units, (K) each Initially Unvested Series M-4 Unit into
zero Series M-4 Units, (L) each Initially Unvested Series Z-1 Unit into
332.8401 Series Z-1 Units, (M) each Initially Unvested Series Z-2 Unit into
142.0783 Series Z-2 Units, (N) each Initially Unvested Series Z-3 Unit into
22.1531 Series Z-3 Units and (O) each Initially Unvested Series Z-4 Unit into
zero Series Z-4 Units; and

 

  (v)

PubCo, through its wholly owned subsidiary, is contributing shares of its
Class B Common Stock, par value $0.01 per share (the “PubCo Class B Common
Stock”), to Brigham Minerals Holdings, and Brigham Minerals Holdings is
distributing such shares of PubCo Class B Common Stock to each of its members
other than PubCo and its wholly owned subsidiaries pro rata in proportion to the
number of Brigham Minerals Holdings Units held by each such member (including
the Company);

WHEREAS, as a result of the Reorganization, the holders of Unvested Incentive
Units and Vested Incentive Units (other than Pre-IPO Units) shall be, after such
Reorganization, the sole Members of the Company as of the date hereof;

WHEREAS, the sole purpose of the Company is to preserve certain economic rights
of the holders of certain Series M Units and Series Z Units (each as defined in
the Existing LLC Agreement) with respect to the Brigham Minerals Holdings Units
and shares of PubCo Class B Common Stock retained by the Company following the
Distributions;

WHEREAS, the parties agree that, for U.S. federal and applicable state and local
tax purposes, the Distributions are treated as distributions of property by the
Company pursuant to Section 731(a) of the Code; and

WHEREAS, pursuant to the Master Reorganization Agreement, this Agreement, having
received the necessary Board Approval (as defined in the Existing LLC
Agreement), the approval of the Management Directors (as defined in the Existing
LLC Agreement) and the Supermajority Investor Approval (as defined in the
Existing LLC Agreement), in each case, in accordance with and to the extent
required by Section 13.5 of the Existing LLC Agreement, amends and restates the
Existing LLC Agreement in its entirety as set forth below.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Existing LLC Agreement is hereby amended and restated in its entirety and this
Agreement is hereby adopted as the limited liability company agreement of the
Company, with effect from the date first set forth above:

 

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ARTICLE 1

ORGANIZATION

1.1 Formation. The Company has been organized as a Delaware limited liability
company pursuant to the DLLCA.

1.2 Name. The name of the Company shall be “Brigham Equity Holdings, LLC.”
Subject to all applicable laws, all business of the Company shall be conducted
in such name or under such other name or names as the Manager shall determine to
be necessary. The officers of the Company shall cause to be filed on behalf of
the Company such assumed or fictitious name certificates or similar instruments
as may from time to time be required by law.

1.3 Business. The business of the Company shall be to preserve certain economic
rights of the holders of certain Series M Units and Series Z Units (each as
defined in the Existing LLC Agreement) with respect to the Brigham Minerals
Holdings Units retained by the Company and shares of PubCo Class B Common Stock
received by the Company, which shall include (a) to hold and distribute in
accordance with the terms of this Agreement such Brigham Minerals Holdings Units
and shares of PubCo Class B Common Stock (together with certain other securities
of Brigham Minerals Holdings or PubCo or cash or other assets received by the
Company as a result of the ownership of such Brigham Minerals Holdings Units)
and (b) take all such other actions incidental or ancillary to the foregoing as
the Manager may determine to be necessary or desirable. This Agreement shall not
constitute an “employee benefit plan” for purposes of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended.

1.4 Places of Business; Registered Agent. The address of the principal office
and place of business of the Company shall be 5914 W. Courtyard Dr. #100,
Austin, TX 78730. The Manager may change the location of the Company’s principal
place of business and may establish such additional place or places of business
of the Company as it deems advisable. The registered office of the Company
required by the DLLCA to be maintained in the State of Delaware shall be the
registered office named in the Certificate or such other office (which need not
be a place of business of the Company) as the Manager may designate from time to
time in the manner provided by law. The registered agent of the Company in the
State of Delaware shall be the registered agent named in the Certificate or such
other Person as the Manager may designate from time to time in the manner
provided by law. The Manager may designate additional offices and/or agents and
may change any registered office or agent of the Company at any time as deemed
advisable.

1.5 Term. Pursuant to the DLLCA, the existence of the Company began on the date
of the filing of the Certificate with the Secretary of State of Delaware and
shall continue until it is terminated in accordance with Article 8.

1.6 Qualification in Other Jurisdictions. The Manager shall have authority to
cause the Company to do business in any jurisdiction only if such jurisdiction
recognizes the limited liability of the Members to substantially the same extent
as would be recognized for a limited liability company organized under the laws
of the State of Delaware. The Company will be qualified, formed, reformed or
registered under assumed or fictitious name statutes or similar laws in any
jurisdiction in which the Company transacts business if such qualification,
formation, reformation or registration is necessary or desirable in order to
protect the limited liability of the Members or to permit the Company lawfully
to transact business.

 

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1.7 No State Law Partnership. No provision of this Agreement shall be
interpreted so as to deem or construe the Company as a partnership (including a
limited partnership) or joint venture or any Member as a partner or joint
venturer of any other Member for any purposes other than federal and state tax
purposes.

1.8 Title to Company Property. All property initially contributed to the Company
or thereafter acquired by the Company, whether real or personal, tangible or
intangible, shall be deemed to be owned by the Company as an entity, and no
Member, individually, shall have any ownership interest in such property in his
or its separate name or right. The Company may hold its property in its own name
or in the name of a nominee determined by the Manager.

ARTICLE 2

Definitions and References

2.1 Defined Terms. When used in this Agreement, the following terms shall have
the respective meanings set forth below:

“Adjusted Capital Account Deficit” means the deficit balance, if any, in such
Member’s Capital Account at the end of any Fiscal Year or other taxable period,
with the following adjustments:

 

  (a)

credit to such Capital Account any amount that such Member is obligated to
restore under Treasury Regulations Section 1.704-1(b)(2)(ii)(c), as well as any
addition thereto pursuant to the next to last sentences of Treasury Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5) after taking into account thereunder
any changes during such year in Company Minimum Gain and Member Minimum Gain;
and

 

  (b)

debit to such Capital Account the items described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

This definition of Adjusted Capital Account Deficit is intended to comply with
the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.

“Affiliate” means (a) any Person directly or indirectly owning, controlling or
holding with power to vote 10% or more of the outstanding voting securities of
another Person, (b) any Person, 10% or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held by another
Person with power to vote such securities, (c) any Person directly or indirectly
Controlling, Controlled by or under common Control with another Person, and
(d) any officer, director, member or partner of, or any Person related by blood
or marriage to, another Person or any Person described in clauses (a), (b) or
(c) of this definition. For purposes of this Agreement, no Member shall be
deemed to be an Affiliate of the Company.

 

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“Brigham Minerals Holdings A&R LLC Agreement” means the Amended and Restated
Limited Liability Company Agreement of Brigham Minerals Holdings, dated as of
the date hereof, as it may be amended from time to time.

“Brigham Resources Second A&R LLC Agreement” means the Second Amended and
Restated Limited Liability Company Agreement of Brigham Resources, dated as of
May 8, 2015, as amended from time to time prior to the Flip Merger.

“Business Day” means each day of the week except Saturdays, Sundays and days on
which banking institutions are authorized by law to close in the State of Texas.

“Capital Account” means the account to be maintained by the Company for each
Member pursuant to Section 7.1(b).

“Capital Interest Percentage” means, at any time of determination and as to any
Member, the percentage of the total distributions that would be made to such
Member if all of the Series M Units and Series Z Units became Vested Units, the
assets of the Company were sold for their fair market values, all liabilities of
the Company were paid in accordance with their terms, all items of Company
income, gain, loss and deduction were allocated to the Members in accordance
with Article 4, and the resulting net proceeds were distributed to the Members
in accordance with the terms of this Agreement. The foregoing definition of
Capital Interest Percentage is intended to result in a percentage that
corresponds with that defined as “partner’s proportionate interest in
partnership capital” in Treasury Regulation Section 1.613A-3(e)(2)(ii), and
Capital Interest Percentage shall be interpreted consistently therewith.

“Code” means the Internal Revenue Code of 1986, as amended and in effect from
time to time. All references herein to sections of the Code shall include any
corresponding provision or provisions of succeeding Law.

“Company Level Taxes” means any federal, state or local taxes, additions to tax,
penalties and interest payable by the Company or any of its subsidiaries as a
result of any examination of the Company’s or any of its subsidiaries’ affairs
by any federal, state or local tax authorities, including resulting
administrative and judicial proceedings under the Partnership Tax Audit Rules.

“Company Minimum Gain” has the meaning of “partnership minimum gain” set forth
in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d). It is further
understood that Company Minimum Gain shall be determined in a manner consistent
with the rules of Treasury Regulations Section 1.704-2(b)(2), including the
requirement that if the adjusted Gross Asset Value of property subject to one or
more nonrecourse liabilities differs from its adjusted tax basis, Company
Minimum Gain shall be determined with reference to such Gross Asset Value.

“Company Representative” has, with respect to taxable periods beginning after
December 31, 2017, the meaning assigned to the term “partnership representative”
in Code Section 6223 and any Treasury Regulations or other administrative or
judicial pronouncements promulgated thereunder, and with respect to taxable
periods beginning on or before December 31, 2017, the meaning assigned to the
term “tax matters partner” as defined in Code Section 6231(a)(7) prior to its
amendment by Title XI of the Bipartisan Budget Act of 2015, in each case as
appointed pursuant to Section 5.7.

 

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“Confidential Information” means any information that is obtained by or on
behalf of a Member from the Company relating to economic, financial, management
or other aspects of the business of the Company, whether oral or in written
form, but shall exclude any information that (a) has become generally available
to the public (other than from wrongful disclosure in violation of this
Agreement or any other applicable confidentiality agreement), or (b) was
rightfully in the possession, from a source unrelated to the Company or its
Affiliates, of a Member, the Manager or officer of the Company prior to the date
such Member, Manager or officer first became such.

“Control”, “Controlling” or “Controlled” means the possession, directly or
indirectly, through one or more intermediaries, of the following: (a) in the
case of a corporation, more than 50% of the outstanding voting securities
thereof, (b) in the case of a limited liability company, partnership, limited
partnership or joint venture, the right to more than 50% of the distributions
therefrom (including liquidating distributions), (c) in the case of a trust or
estate, more than 50% of the beneficial interest therein, (d) in the case of any
other Entity, more than 50% of the economic or beneficial interest therein or
(e) in the case of any Entity, the power or authority, through ownership of
voting securities, by contract or otherwise, to direct the management,
activities or policies of the Entity.

“Covered Audit Adjustment” means an adjustment to any partnership-related item
(within the meaning of Code Section 6241(2)(B)) to the extent such adjustment
results in an “imputed underpayment” as described in Code Section 6225(b) or any
analogous provision of state or local Law.

“Depletable Property” means each separate oil and gas property as defined in
Code Section 614.

“Depreciation” means, for each Fiscal Year or other taxable period, an amount
equal to the depreciation, amortization or other cost recovery deduction
(excluding depletion) allowable with respect to an asset for such Fiscal Year or
other taxable period, except that (a) with respect to any such property the
Gross Asset Value of which differs from its adjusted basis for U.S. federal
income tax purposes and which difference is being eliminated by use of the
“remedial method” pursuant to Treasury Regulations Section 1.704-3(d),
Depreciation for such Fiscal Year or other taxable period shall be the amount of
book basis recovered for such Fiscal Year or other taxable period under the
rules prescribed by Treasury Regulations Section 1.704-3(d)(2), and (b) with
respect to any other such property the Gross Asset Value of which differs from
its adjusted basis for U.S. federal income tax purposes at the beginning of such
Fiscal Year or other taxable period, Depreciation shall be an amount that bears
the same ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization or other cost recovery deduction for such Fiscal Year
or other taxable period bears to such beginning Adjusted Basis; provided,
however, that if the adjusted basis for U.S. federal income tax purposes of an
asset at the beginning of such Fiscal Year or other taxable period is zero,
Depreciation with respect to such asset shall be determined with reference to
such beginning Gross Asset Value using any reasonable method selected by the
Manager.

“DLLCA” means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et.
seq., as it may be amended from time to time, and any successor to the DLLCA.

 

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“Entity” means any Person other than a natural person.

“Equity Grant Agreement” means any grant agreement (including the restricted
unit agreements) that the Company or any of its subsidiaries has entered into
with respect to the original issuance of Units (including, for the avoidance of
doubt, any such agreement entered into prior to the Reorganization, Flip Merger
and other reorganization transactions in respect of limited liability company
interests in respect of which the Units were issued).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any
successor statute thereto and the rules and regulations of the United States
Securities and Exchange Commission promulgated thereunder.

“Fiscal Year” means the 12-month period ending December 31 of each year;
provided, however, that the last Fiscal Year shall be the period beginning on
January 1 of the calendar year in which the final liquidation and termination of
the Company is completed and ending on the date such final liquidation and
termination is completed (to the extent any computation or other provision
hereof provides for an action to be taken on a Fiscal Year basis, an appropriate
proration or other adjustment shall be made in respect of the final Fiscal Year
to reflect that such period is less than a full calendar year period).

“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis
for U.S. federal income tax purposes (which, in the case of any Depletable
Property, shall be determined pursuant to Treasury Regulations
Section 1.613A-3(e)(3)(iii)(c)), except as follows:

(a) the initial Gross Asset Value of any asset contributed by a Member to the
Company shall be the gross fair market value of such asset as of the date of
such contribution;

(b) the Gross Asset Values of all Company assets shall be adjusted to equal
their respective gross fair market values as of the following times: (i) the
acquisition of an interest (or additional interest) in the Company by any new or
existing Member in exchange for more than a de minimis capital contribution to
the Company or in exchange for the performance of more than a de minimis amount
of services to or for the benefit of the Company; (ii) the distribution by the
Company to a Member of more than a de minimis amount of Company assets as
consideration for an interest in the Company; (iii) the liquidation of the
Company within the meaning of Treasury Regulations
Section 1.704-1(b)(2)(ii)(g)(1), (iv) the acquisition of an interest in the
Company by any new or existing Member upon the exercise of a noncompensatory
option in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(s); or
(v) any other event to the extent determined by the Manager to be permitted and
necessary or appropriate to properly reflect Gross Asset Values in accordance
with the standards set forth in Treasury Regulations
Section 1.704-1(b)(2)(iv)(q); provided, however, that adjustments pursuant to
clauses (i), (ii) and (iv) above shall be made only if the Manager reasonably
determines that such adjustments are necessary or appropriate to reflect the
relative economic interests of the Members in the Company. If any
noncompensatory options are outstanding upon the occurrence of an event
described in this paragraph (b)(i) through (b)(v), the Company shall adjust the
Gross Asset Values of its properties in accordance with Treasury Regulations
Sections 1.704-1(b)(2)(iv)(f)(1) and 1.704-1(b)(2)(iv)(h)(2);

 

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(c) the Gross Asset Value of any Company asset distributed to any Member shall
be adjusted to equal the gross fair market value of such asset on the date of
such distribution;

(d) the Gross Asset Values of Company assets shall be increased (or decreased)
to reflect any adjustments to the adjusted basis of such assets pursuant to Code
Section 734(b) or Code Section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital Accounts pursuant to
Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and clause (g) in the
definition of “Profits” or “Losses” below or Section 4.2(b)(viii); provided,
however, that the Gross Asset Value of a Company asset shall not be adjusted
pursuant to this subsection to the extent the Manager determines that an
adjustment pursuant to clause (b) of this definition is necessary or appropriate
in connection with a transaction that would otherwise result in an adjustment
pursuant to this clause (d); and

(e) if the Gross Asset Value of a Company asset has been determined or adjusted
pursuant to clauses (a), (b) or (d) of this definition of Gross Asset Value,
such Gross Asset Value shall thereafter be adjusted by the Depreciation taken
into account with respect to such asset for purposes of computing Profits,
Losses, Simulated Depletion and other items allocated pursuant to Section 4.2.

“Initially Unvested Series M-1 Unit” means a Series M-1 Unit (as defined in the
Existing LLC Agreement) that is an Unvested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Initially Unvested Series M-2 Unit” means a Series M-2 Unit (as defined in the
Existing LLC Agreement) that is an Unvested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Initially Unvested Series M-3 Unit” means a Series M-3 Unit (as defined in the
Existing LLC Agreement) that is an Unvested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Initially Unvested Series M-4 Unit” means a Series M-4 Unit (as defined in the
Existing LLC Agreement) that is an Unvested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Initially Unvested Series Z-1 Unit” means a Series Z-1 Unit (as defined in the
Existing LLC Agreement) that is an Unvested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Initially Unvested Series Z-2 Unit” means a Series Z-2 Unit (as defined in the
Existing LLC Agreement) that is an Unvested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

 

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“Initially Unvested Series Z-3 Unit” means a Series Z-3 Unit (as defined in the
Existing LLC Agreement) that is an Unvested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Initially Unvested Series Z-4 Unit” means a Series Z-4 Unit (as defined in the
Existing LLC Agreement) that is an Unvested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Initially Vested Series M-1 Unit” means a Series M-1 Unit (as defined in the
Existing LLC Agreement) that is a Vested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Initially Vested Series M-2 Unit” means a Series M-2 Unit (as defined in the
Existing LLC Agreement) that is a Vested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Initially Vested Series M-3 Unit” means a Series M-3 Unit (as defined in the
Existing LLC Agreement) that is a Vested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Initially Vested Series M-4 Unit” means a Series M-4 Unit (as defined in the
Existing LLC Agreement) that is a Vested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Initially Vested Series Z-1 Unit” means a Series Z-1 Unit (as defined in the
Existing LLC Agreement) that is a Vested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Initially Vested Series Z-2 Unit” means a Series Z-2 Unit (as defined in the
Existing LLC Agreement) that is a Vested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Initially Vested Series Z-3 Unit” means a Series Z-3 Unit (as defined in the
Existing LLC Agreement) that is a Vested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Initially Vested Series Z-4 Unit” means a Series Z-4 Unit (as defined in the
Existing LLC Agreement) that is a Vested Unit as of immediately prior to the
Effective Time other than a Pre-IPO Unit.

“Interest” means a membership interest of any class in the Company with all the
rights and interests of a Member in any class in the Company under this
Agreement and the DLLCA, including (a) the right, if any, of a Member to receive
allocations of income and loss and distributions or liquidation proceeds under
this Agreement and (b) all management rights, voting rights or rights to
consent, if any.

 

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“Liquidation Sharing Ratio” means, with respect to any holder of a Unit as of
the date of determination, the quotient of (i) the fractional number of Brigham
Minerals Holdings Units that have not been distributed to such holder as of such
date as a result of Section 3.5 or Section 3.6, divided by (ii) the sum of the
fractional number of Brigham Minerals Holdings Units that have not been
distributed to all holders of Units as of such date as a result of Section 3.5
and Section 3.6.

“Manager” means the Person designated to manage the business of the Company in
the capacity as Manager pursuant to Article 5.

“Members” means any holder of Units.

“Member Minimum Gain” has the meaning ascribed to “partner nonrecourse debt
minimum gain” set forth in Treasury Regulations Section 1.704-2(i). It is
further understood that the determination of Member Minimum Gain and the net
increase or decrease in Member Minimum Gain shall be made in the same manner as
required for such determination of Company Minimum Gain under Treasury
Regulations Sections 1.704-2(d) and 1.704-2(g)(3).

“Member Nonrecourse Debt” has the meaning of “partner nonrecourse debt” set
forth in Treasury Regulations Section 1.704-2(b)(4).

“Member Nonrecourse Deductions” has the meaning of “partner nonrecourse
deductions” set forth in Treasury Regulations Sections 1.704-2(i)(1) and
1.704-2(i)(2).

“Nonrecourse Deductions” has the meaning assigned that term in Treasury
Regulations Section 1.704-2(b).

“Partnership Tax Audit Rules” means Sections 6221 through 6241 of the Code, as
amended, together with any final or temporary Treasury Regulations, Revenue
Rulings and case law interpreting Sections 6221 through 6241 of the Code, as
amended (and any analogous provision of state or local tax Law).

“Permitted Transferee” means:

(a) in the case of a Member that is an individual, (i) such Member’s spouse,
(ii) such Member’s legally adopted or natural-born descendants of whatsoever
generation, (iii) such other Persons as may be approved by the Manager and
(iv) an Entity Controlled by such Member whose only owners or beneficiaries are
one or more of (x) such Member, (y) such Member’s spouse and (z) such Member’s
legally adopted or natural-born descendants of whatsoever generation; and

(b) in the case of a Member that is an Entity, (i) any trust, family partnership
or family limited liability company, the sole beneficiaries, partners or members
of which are the natural person that is the beneficial owner (as such term is
defined in Rule 13d-3 under the Exchange Act) of a majority of either (A) the
outstanding shares of common stock (or similar securities or interests in the
case of an entity other than a corporation) of such Member or (B) the combined
voting power of the outstanding equity interests entitled to vote under ordinary
circumstances in the election of directors (or in the selection of any other
similar governing body in the case of an entity other than a corporation) of
such Member, (ii) the spouse or adopted or natural-born descendants of the
natural person described in clause (b)(i) of this definition or (iii) such
natural person.

 

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

“Profits” or “Losses” means, for each Fiscal Year or other taxable period, an
amount equal to the Company’s taxable income or loss for such year or period,
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments (without duplication):

(a) any income or gain of the Company that is exempt from U.S. federal income
tax and not otherwise taken into account in computing Profits or Losses shall be
added to such taxable income or loss;

(b) any expenditures of the Company described in Code Section 705(a)(2)(B) or
treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Profits or Losses, shall be subtracted from such taxable income or
loss;

(c) in the event the Gross Asset Value of any Company asset is adjusted pursuant
to clause (b) or (c) of the definition of Gross Asset Value above, the amount of
such adjustment shall be treated as an item of gain (if the adjustment increases
the Gross Asset Value of the Company asset) or an item of loss (if the
adjustment decreases the Gross Asset Value of the Company asset) from the
disposition of such asset and shall, except to the extent allocated pursuant to
Section 4.2, be taken into account for purposes of computing Profits or Losses;

(d) gain or loss resulting from any disposition of Company assets (other than
Depletable Property) with respect to which gain or loss is recognized for U.S.
federal income tax purposes shall be computed with reference to the Gross Asset
Value of the asset disposed of, notwithstanding that the adjusted tax basis of
such asset differs from its Gross Asset Value;

(e) gain resulting from any disposition of Depletable Property with respect to
which gain is recognized for U.S. federal income tax purposes shall be treated
as being equal to the corresponding Simulated Gain;

(f) in lieu of the depreciation, amortization and other cost recovery deductions
(excluding depletion) taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation;

(g) to the extent an adjustment to the adjusted tax basis of any asset pursuant
to Code Section 734(b) is required, pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Account balances as a result of a distribution other than in liquidation of a
Member’s interest in the Company, the amount of such adjustment shall be treated
as an item of gain (if the adjustment increases the basis of the asset) or an
item of loss (if the adjustment decreases such basis) from the disposition of
such asset and shall be taken into account for purposes of computing Profits or
Losses; and

 

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(h) any items of income, gain, loss or deduction that are specifically allocated
pursuant to the provisions of Section 4.2(b) shall not be taken into account in
computing Profits or Losses for any taxable year, but such items available to be
specially allocated pursuant to Section 4.2(b) will be determined by applying
rules analogous to those set forth in clauses (a) through (g) above.

“Pro Rata Number” means

(a) in respect of a holder’s Series M-1 Units or Series M-1-R Units, the product
of (i) the number of Series M-1 Units forfeited to the Company with respect to
which such Pro Rata Number is being calculated, times (ii) the quotient of
(A) the number of such Series M-1 Units or Series M-1-R Units, as applicable,
divided by (B) the total number of Series M-1 Units and Series M-1-R Units
outstanding;

(b) in respect of a holder’s Series M-2 Units or Series M-2-R Units, the product
of (i) the number of Series M-2 Units forfeited to the Company with respect to
which such Pro Rata Number is being calculated, times (ii) the quotient of
(A) the number of such Series M-2 Units or Series M-2-R Units, as applicable,
divided by (B) the total number of Series M-2 Units and Series M-2-R Units
outstanding;

(c) in respect of a holder’s Series M-3 Units or Series M-3-R Units, the product
of (i) the number of Series M-3 Units forfeited to the Company with respect to
which such Pro Rata Number is being calculated, times (ii) the quotient of
(A) the number of such Series M-3 Units and Series M-3-R Units, as applicable,
divided by (B) the total number of Series M-3 Units and Series M-3-R Units
outstanding;

(d) in respect of a holder’s Series M-4 Units or Series M-4-R Units, the product
of (i) the number of Series M-4 Units forfeited to the Company with respect to
which such Pro Rata Number is being calculated, times (ii) the quotient of
(A) the number of such Series M-4 Units or Series M-4-R Units, as applicable,
divided by (B) the total number of Series M-4 Units and Series M-4-R Units
outstanding;

(e) in respect of a holder’s Series Z-1 Units or Series Z-1-R Units, the product
of (i) the number of Series Z-1 Units forfeited to the Company with respect to
which such Pro Rata Number is being calculated, times (ii) the quotient of
(A) the number of such Series Z-1 Units or Series Z-1-R Units, as applicable,
divided by (B) the total number of Series Z-1 Units and Series Z-1-R Units
outstanding;

(f) in respect of a holder’s Series Z-2 Units or Series Z-2-R Units, the product
of (i) the number of Series Z-2 Units forfeited to the Company with respect to
which such Pro Rata Number is being calculated, times (ii) the quotient of
(A) the number of such Series Z-2 Units or Series Z-2-R Units, as applicable,
divided by (B) the total number of Series Z-2 Units and Series Z-2-R Units
outstanding;

 

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(g) in respect of a holder’s Series Z-3 Units or Series Z-3-R Units, the product
of (i) the number of Series Z-3 Units forfeited to the Company with respect to
which such Pro Rata Number is being calculated, times (ii) the quotient of
(A) the number of such Series Z-3 Units or Series Z-3-R Units, as applicable,
divided by (B) the total number of Series Z-3 Units and Series Z-3-R Units
outstanding; and

(h) in respect of a holder’s Series Z-4 Units or Series Z-4-R Units, the product
of (i) the number of Series Z-4 Units forfeited to the Company with respect to
which such Pro Rata Number is being calculated, times (ii) the quotient of
(A) the number of such Series Z-4 Units or Series Z-4-R Units, as applicable,
divided by (B) the total number of Series Z-4 Units and Series Z-4-R Units
outstanding.

“Residual Units” means the Series M-R Units and the Series Z-R Units.

“Simulated Basis” means the Gross Asset Value of any Depletable Property. The
Simulated Basis of each Depletable Property shall be allocated to each Member in
accordance with such Member’s Capital Interest Percentage as of the time such
Depletable Property is acquired by the Company (and any additions to such
Simulated Basis resulting from expenditures required to be capitalized in such
Simulated Basis shall be allocated among the Members in a manner designed to
cause the Members’ proportionate shares of such Simulated Basis to be in
accordance with their Capital Interest Percentages as determined at the time of
any such additions), and shall be reallocated among the Members in accordance
with the Members’ Capital Interest Percentages as determined immediately
following the occurrence of an event giving rise to an adjustment to the Gross
Asset Values of the Company’s Depletable Properties pursuant to clause (b) of
the definition of Gross Asset Value.

“Simulated Depletion” means, with respect to each Depletable Property, a
depletion allowance computed in accordance with federal income tax principles
(as if the Simulated Basis of the property were its adjusted basis) and in the
manner specified in the Treasury Regulations Section 1.704-1(b)(2)(iv)(k)(2).
For purposes of computing Simulated Depletion with respect to any Depletable
Property, the Simulated Basis of such property shall be deemed to be the Gross
Asset Value of such property, and in no event shall such allowance, in the
aggregate, exceed such Simulated Basis.

“Simulated Gain” means the amount of gain realized from the sale or other
disposition of Depletable Property as calculated in Treasury Regulations
Section 1.704-1(b)(2)(iv)(k)(2).

“Simulated Loss” means the amount of loss realized from the sale or other
disposition of Depletable Property as calculated in Treasury Regulations
Section 1.704-1(b)(2)(iv)(k)(2).

“Transfer” means to transfer, sell, assign, pledge, hypothecate, give, create a
security interest in or lien on, place in trust (voting or otherwise), assign or
in any other way encumber or dispose of, directly or indirectly and whether or
not by operation of law or for value, any Interest. Correlative terms have
correlative meanings.

“Treasury Regulation” means the regulations promulgated by the United States
Department of the Treasury pursuant to and in respect of provisions of the Code.
All references herein to sections of Treasury Regulations shall include any
corresponding provision or provisions of succeeding, similar or substitute
proposed or final Treasury Regulations.

 

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“Unvested Units” means any Unit that has not vested in accordance with the terms
of the Equity Grant Agreement to which such Unit is subject.

“Vested Unit” any Unit that has vested in accordance with the terms of the
Equity Grant Agreement to which such Unit is subject.

2.2 References, Titles and Other Rules of Construction. All references in this
Agreement to articles, sections, subsections, other subdivisions and exhibits
refer to corresponding articles, sections, subsections, other subdivisions and
exhibits of this Agreement unless expressly provided otherwise. All exhibits and
schedules attached to this Agreement shall be deemed a part of this Agreement
for all purposes. Titles appearing at the beginning of any of such subdivisions
are for convenience only and shall not constitute part of such subdivisions and
shall be disregarded in construing the language contained in such subdivisions.
The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder” and words
of similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. Any reference to any contract or
agreement (including schedules, exhibits and other attachments thereto),
including this Agreement, will be deemed also to refer to such agreement, as
amended, restated or otherwise modified, unless the context requires otherwise.
The term “including” shall in all instances be deemed followed by the words,
“without limitation.” Pronouns in masculine, feminine and neuter genders shall
be construed to include any other gender, and words in the singular form shall
be construed to include the plural and vice versa, unless the context otherwise
requires.

ARTICLE 3

CAPITALIZATION AND MEMBERS

3.1 Members. The Members of the Company as of the Effective Date are reflected
in the books and records of the Company.

3.2 Units.

(a) Unit Designations and Authorized Units. Each Member’s relative rights,
privileges, preferences and obligations with respect to the Company are
represented by such Member’s Interest. The Interests in the Company shall be
designated as “Units” and shall be divided into four classes of Units referred
to as the “Series M Units,” the “Series Z Units,” the “Series M-R Units” and the
“Series Z-R Units.” The Series M Units shall be further designated into
sub-series referred to as “Series M-1 Units,” “Series M-2 Units,” “Series M-3
Units” and “Series M-4 Units.” The Series Z Units shall be further designated
into sub-series referred to as “Series Z-1 Units,” “Series Z-2 Units,”
“Series Z-3 Units” and “Series Z-4 Units.” The Series M-R Units shall be further
designated into sub-series referred to as “Series M-1-R Units,” “Series M-2-R
Units,” “Series M-3-R Units” and “Series M-4-R Units.” The Series Z-R Units
shall be further designated into sub-series referred to as “Series Z-1-R Units,”
“Series Z-2-R Units,” “Series Z-3-R Units” and “Series Z-4-R Units.” Each
sub-series of Series M-R Units corresponds to the same numbered sub-series of
the Series M Units, and each sub-series of Series Z-R Units corresponds to the
same numbered sub-series of the Series Z Units. The Company is authorized

 

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to issue 90,506 Units designated as the Series M Units, 194,107 Units designated
as the Series Z Units, 939,122 Units designated as the Series M-R Units and
2,332,516 Units designated as the Series Z-R Units. Of the aggregate number of
Series M Units, 67,480 are designated as the Series M-1 Units, 23,026 are
designated as the Series M-2 Units, zero are designated as the Series M-3 Units
and zero are designated as the Series M-4 Units. Of the aggregate number of
Series Z Units, 129,974 are designated as the Series Z-1 Units, 55,481 are
designated as the Series Z-2 Units, 8,652 are designated as the Series Z-3 Units
and zero are designated as the Series Z-4 Units. Of the aggregate number of
Series M-R Units, 700,206 are designated as the Series M-1-R Units, 238,916 are
designated as the Series M-2-R Units, zero are designated as the Series M-3-R
Units and zero are designated as the Series M-4-R Units. Of the aggregate number
of Series Z-R Units, 1,561,854 are designated as the Series Z-1-R Units,
666,703 are designated as the Series Z-2-R Units, 103,959 are designated as the
Series Z-3-R Units and zero are designated as the Series Z-4-R Units.
Notwithstanding the foregoing, for the avoidance of doubt, all Series M Units
and Series Z Units outstanding on the Effective Date are Unvested Units. Other
than as required to implement the terms of this Agreement, the number of
authorized Units shall not be increased without the prior written consent of the
Manager and the holders of at least a majority of the outstanding Units. Upon
the vesting, forfeiture, reallocation or conversion of any Units pursuant to
Section 3.3 or Section 3.4, if applicable, the Manager shall, without the
consent of any other Person, update the Company’s books and records to reflect
the names of and number of Units held by the Members after giving effect to the
provisions of Section 3.3 and Section 3.4.

(b) Equity Grant Agreements. The Members hereby agree that (i) provisions in any
applicable Equity Grant Agreement (including with respect to vesting) that
relate to any Unit in the Company held by a Member as of immediately prior to
the recapitalization contemplated by the Master Reorganization Agreement and
this Agreement (the “Prior Company Units”) shall apply mutatis mutandis to the
associated Units in the Company into which such Member’s Prior Company Units
were recapitalized (such that all such provisions that applied to the Prior
Company Units shall apply to the Units issued to such Member hereunder in
respect thereof in an equivalent fashion) and (ii) the Manager shall have the
right to take all actions as it deems reasonably necessary to enforce all such
provisions, including by way of effecting forfeitures, redemptions or
repurchases of Units; provided, that the Members acknowledge and agree that all
Threshold Values (as defined in the Existing LLC Agreement) with respect to such
Units are no longer applicable as they were accounted for in the Reorganization.
Further, each Member who acquires Unvested Units agrees to consult with such
Member’s tax advisor to determine the tax consequences of such acquisition and,
at the time of such acquisition, agrees to make a timely election under Code
Section 83(b) with respect to such Units. Each such Member acknowledges that it
is the sole responsibility of such Member, and not the Company, to file the
election under Code Section 83(b) even if such Member requests the Company or
its representatives to assist in making such filing. Each Member who files an
election under Code Section 83(b) with respect to such Units agrees to provide a
copy of such election to the Company on or before the due date for filing of
such election.

3.3 Series M Units; Series M-R Units.

(a) The Series M Units outstanding on the Effective Date are initially Unvested
Units. The Series M-R Units are not subject to vesting. The Members holding
Series M Units and Series M-R Units as of the Effective Date are reflected in
the books and records of the Company. The Series M Units shall vest in
accordance with the terms of the Equity Grant Agreement to which such Series M
Units are subject.

 

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(b) At such time that any Series M Unit becomes a Vested Unit, subject to
Section 3.5 and Section 3.6, (i) the Company shall distribute one Brigham
Minerals Holdings Unit and one share of PubCo Class B Common Stock to the holder
of such Series M Unit, together with the Brigham Minerals Holdings Units, shares
of PubCo Class B Common Stock, other securities in Brigham Minerals Holdings or
PubCo, cash, assets and any other rights distributed by Brigham Minerals
Holdings to the Company in respect of such share of Brigham Minerals Holdings
Units or shares of PubCo Class B Common Stock after the Effective Date and prior
to the time of such distribution (such distribution to be appropriately adjusted
by the Manager to take into account any adjustment as a result of any
subdivision (by any split, distribution or dividend, reclassification,
reorganization, recapitalization or otherwise) or combination (by reverse split,
reclassification, recapitalization or otherwise) of the Brigham Minerals
Holdings Units or shares of PubCo Class B Common Stock) (collectively, the
“Other Distributable Property”), net of any applicable withholding taxes owed as
a result of such Series M Unit becoming a Vested Unit or otherwise, and
(ii) such Series M Unit shall immediately be reclassified as a Series M-R Unit
of the corresponding sub-series without any further action on the part of the
Company or the holder thereof. The Company shall take such actions as are
reasonably necessary to cause any Brigham Minerals Holdings Units or shares of
PubCo Class B Common Stock (or other security of Brigham Minerals Holdings or
PubCo) distributed pursuant to this Section 3.3(b) to be held of record in the
name of the recipient thereof.

(c) Upon the forfeiture of any Series M Units to the Company pursuant to the
terms of the Equity Grant Agreement to which such Series M Unit is subject, the
Company shall issue or distribute, as the case may be, (i) to each other holder
of Series M Units of the same sub-series as of such date, a Pro Rata Number of
Series M Units of such sub-series and (ii) subject to Section 3.5 and
Section 3.6, to each holder of Series M-R Units of the corresponding sub-series
as of such date, a Pro Rata Number of Brigham Minerals Holdings Units, a Pro
Rata Number of shares of PubCo Class B Common Stock, a Pro Rata Number of Other
Distributable Property attributable to such forfeited Series M Units and a Pro
Rata Number of Series M-R Units of such corresponding sub-series. Any Series M
Units issued or distributed pursuant to Section 3.3(c)(i) shall become subject
to the terms and conditions of the Equity Grant Agreement to which the Series M
Unit in respect of which such issuance or distribution was made is subject.

3.4 Series Z Units; Series Z-R Units.

(a) The Series Z Units outstanding on the Effective Date are initially Unvested
Units. The Members holding Series Z Units and Series Z-R Units as of the
Effective Date are reflected in the books and records of the Company. The
Series Z Units shall vest in accordance with the terms of the Equity Grant
Agreement to which such Series Z Units are subject.

(b) At such time that any Series Z Unit becomes a Vested Unit, subject to
Section 3.5 and Section 3.6, (i) the Company shall distribute one Brigham
Minerals Holdings Unit and one share of PubCo Class B Common Stock to the holder
of such Series Z Unit, together with the Other Distributable Property
attributable to such Brigham Minerals Holdings Units and shares of PubCo Class B
Common Stock, net of any applicable withholding taxes owed as a result of such

 

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Series Z Unit becoming a Vested Unit or otherwise, and (ii) such Series Z Unit
shall immediately be reclassified as a Series Z-R Unit of the corresponding
sub-series without any further action on the part of the Company or the holder
thereof. The Company shall take such actions as are reasonably necessary to
cause any Brigham Minerals Holdings Units or shares of PubCo Class B Common
Stock (or other security of Brigham Minerals Holdings or PubCo) distributed
pursuant to this Section 3.4(b) to be held of record in the name of the
recipient thereof.

(c) Upon the forfeiture of any Series Z Units to the Company pursuant to the
terms of the Equity Grant Agreement to which such Series Z Unit is subject, the
Company shall issue or distribute, as the case may be, (i) to each other holder
of Series Z Units of the same sub-series as of such date, a Pro Rata Number of
Series Z Units of such sub-series and (ii) subject to Section 3.5 and
Section 3.6, to each holder of Series Z-R Units of the corresponding sub-series
as of such date, a Pro Rata Number of Brigham Minerals Holdings Units, a Pro
Rata Number of shares of PubCo Class B Common Stock, a Pro Rata Number of Other
Distributable Property attributable to such forfeited Series Z Units and a Pro
Rata Number of Series Z-R Units of such corresponding sub-series. Any Series Z
Units issued or distributed pursuant to Section 3.4(c)(i) shall become subject
to the terms and conditions of the Equity Grant Agreement to which the Series Z
Unit in respect of which such issuance or distribution was made is subject.

3.5 Fractional Units. Notwithstanding Section 3.3 and Section 3.4, if at any
time a Member is entitled to receive a fractional number of Brigham Minerals
Holdings Units or a fractional number of shares of PubCo Class B Common Stock
(including as a result of any forfeitures or reallocations described in this
Article 3), (a) the Company shall instead distribute to such Member the largest
number of whole Brigham Minerals Holdings Units and whole shares of PubCo
Class B Common Stock to which such Member is then entitled and (b) such
fractional number of Brigham Minerals Holdings Units and such fractional number
of shares of PubCo Class B Common Stock shall be added to the next number of
Brigham Minerals Holdings Units and shares of PubCo Class B Common Stock,
respectively, to which such Member shall become entitled (such that such
fractional number of Brigham Minerals Holdings Units and such fractional number
of shares of PubCo Class B Common Stock shall be carried forward to each
subsequent distribution pursuant to this Section 3.5, with any fractional number
of Brigham Minerals Holdings Units or fractional shares of PubCo Class B Common
Stock remaining at liquidation paid in cash pursuant to Section 4.1(b)). The
Company shall be authorized to issue fractional shares of Series M Units,
Series M-R Units, Series Z Units and Series Z-R Units. If at any time the
Company receives a distribution of Other Distributable Property from Brigham
Minerals Holdings in respect of any Brigham Minerals Holdings Units or shares of
PubCo Class B Common Stock that are being held by the Company on account of this
Section 3.5, such Other Distributable Property shall be retained by the Company
and distributed with the underlying Brigham Minerals Holdings Units or shares of
PubCo Class B Common Stock (or the proceeds received pursuant to Section 3.6(b)
or Section 4.1(b)(ii)) pursuant to clause (b) above.

3.6 Compliance with Transfer Restrictions. Notwithstanding Section 3.3 and
Section 3.4, no distribution of Brigham Minerals Holdings Units (or
corresponding shares of PubCo Class B Common Stock) shall be made to the extent
such distribution would not be permissible pursuant to any provision of the
Brigham Minerals Holdings A&R LLC Agreement. To the extent a distribution of
Brigham Minerals Holdings Units to a Member is not permissible under the Brigham
Minerals Holdings A&R LLC Agreement, the Company shall (a) retain and

 

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carry forward such Brigham Minerals Holdings Units until the Company is
permitted to distribute such Brigham Minerals Holdings Units to such Member
under the Brigham Minerals Holdings A&R LLC Agreement or (b) exercise its right
to require Brigham Minerals Holdings to redeem all such Brigham Minerals
Holdings Units and corresponding shares of PubCo Class B Common Stock in
exchange for shares of PubCo Class A Common Stock pursuant to Section 4.6(a) of
the Brigham Minerals Holdings A&R LLC Agreement and distribute such shares of
PubCo Class A Common Stock (or, to the extent Brigham Minerals Holdings or PubCo
exercises its cash election pursuant to Section 4.6(a) or Section 4.6(f) of the
Brigham Minerals Holdings A&R LLC Agreement, as applicable, such cash) to such
Member.

3.7 Return of Contributions. No interest shall accrue on any contributions to
the capital of the Company, and no Member shall have the right to withdraw or to
be repaid any capital contributed by such Member, except as otherwise
specifically provided in this Agreement. Loans by a Member to the Company shall
not be considered capital contributions.

ARTICLE 4

DISTRIBUTIONS; ALLOCATIONS AND WITHHOLDING

4.1 Distribution.

(a) Distributions by Brigham Minerals Holdings. Subject to Section 4.1(c), the
Company shall retain all Other Distributable Property received by the Company
from Brigham Minerals Holdings until the Brigham Minerals Holdings Unit or share
of PubCo Class B Common Stock (or the proceeds received pursuant to
Section 3.6(b) or Section (b)(ii)) to which such Other Distributable Property is
attributable is distributed pursuant to Article 3, and the terms and provisions
of this Agreement shall be applied in a manner consistent with such intent.

(b) Liquidating Distribution. Upon the date that all Units have either been
forfeited to the Company pursuant to the applicable Equity Grant Agreement or
have become Vested Units and redeemed or reclassified into either Series M-R
Units or Series Z-R Units, as applicable, and following the application of the
provisions of Article 3 (including Section 3.5 and Section 3.6), the Company
shall (i) exercise its right to require Brigham Minerals Holdings to redeem all
remaining Brigham Minerals Holdings Units and shares of PubCo Class B Common
Stock then held by the Company in exchange for shares of PubCo Class A Common
Stock pursuant to Section 4.6(a) of the Brigham Minerals Holdings A&R LLC
Agreement, (ii) unless Brigham Minerals Holdings or PubCo exercises its cash
election pursuant to Section 4.6(a) or Section 4.6(f) of the Brigham Minerals
Holdings A&R LLC Agreement, as applicable, sell such shares of PubCo Class A
Common Stock and (iii) distribute the proceeds received pursuant to
clause (ii) to the holders of Series M-R Units and Series Z-R Units in
accordance with each such holders’ Liquidation Sharing Ratio.

(c) Tax-Related Distributions. The Company shall, subject to the availability of
distributable cash as reasonably determined by the Manager, distribute, on each
Tax Distribution Date, to each Member in cash an amount equal to such Member’s
Assumed Tax Liability, if any. “Tax Distribution Date” means any date that is
five Business Days prior to the date on which quarterly estimated income tax
payments are required to be made by calendar year individual taxpayers and each
due date for the income tax return of an individual calendar year taxpayer

 

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(without regard to extensions). “Assumed Tax Liability” of each Member means an
amount equal to (i) the cumulative amount of federal, state and local income
Taxes (including any applicable estimated Taxes) determined from the Effective
Date through the next occurring quarterly estimated income tax payment due date
following the applicable Tax Distribution Date taking into account the character
of income and loss allocated by the Company to such Member as it affects the
applicable Tax that the Manager estimates would be due from such Member as of
the next occurring quarterly estimated income tax payment due date following
such Tax Distribution Date, (w) assuming such Member is an individual who earned
solely the items of income, gain, deduction, loss or credit allocated or to be
allocated to such Member pursuant to Section 4.2 (and each such Member made the
same elections as each other Member), (x) after taking proper account of loss
carryforwards available to individual taxpayers resulting from losses allocated
to the Members by the Company, to the extent not taken into account in prior
periods, (y) taking into account depletion and other items determined at the
Member level and (z) assuming that such Member is subject to Tax at the highest
applicable rate, reduced by (ii) all previous distributions of cash made to such
Member pursuant to Article 3. The Manager will make its determination of the
Assumed Tax Liability of all Members, assuming that each such holder is a
resident of Austin, Texas. Distributions to holders of Series M Units or
Series Z Units pursuant to this Section 4.1(c) shall be treated as an advance of
and shall offset (A) distributions available to such holders of Series M Units
or Series Z Units under Section 3.3(b) or Section 3.4(b), as applicable, if such
Units become Vested Units, or (B) if such Series M Units or Series Z Units are
forfeited, distributions available to the holders of the corresponding Series M
Units, Series Z Units, Series M-R Units or Series Z-R Units distributed in
respect of such forfeited Series M Units or Series Z Units under Section 3.3(c)
or Section 3.4(c), as applicable, with the amount of such offset being
attributed as among the holders of each series of Series M Units and/or Series Z
Units as determined in the reasonable discretion of the Manager. For purposes of
the foregoing, to the extent necessary, any Brigham Minerals Holdings Unit or
share of PubCo Class B Common Stock or Other Distributable Property (other than
cash) shall be taken into account at fair market value as determined in the
reasonable discretion of the Manager. If on a Tax Distribution Date there are
not sufficient funds on hand to distribute to each Member the full amount of
such Member’s Assumed Tax Liability, distributions pursuant to this
Section 4.1(c) shall be made to the Members to the extent of available cash in
proportion to each Member’s Assumed Tax Liability, and the Company shall make
future distributions as soon as cash becomes available to pay the remaining
portion of such Member’s Assumed Tax Liability.

4.2 Allocations.

(a) General Profit and Loss Allocations. After giving effect to the allocations
under Section 4.2(b) and subject to Section 4.2(e), Profits and Losses (and, to
the extent determined by the Manager to be necessary and appropriate to achieve
the resulting Capital Account balances described below, any allocable items of
income, gain, loss, deduction or credit includable in the computation of Profits
and Losses) for each Fiscal Year or other taxable period shall be allocated
among the Members during such Fiscal Year or other taxable period in a manner
such that, after giving effect to the special allocations set forth in
Section 4.2(b) and all distributions through the end of such Fiscal Year or
other taxable period, the Capital Account balance of each Member, immediately
after making such allocation, is, as nearly as possible, equal to (i) the amount
such Member would receive if all assets of the Company on hand at the end of
such Fiscal Year or other taxable period were sold for cash equal to their Gross
Asset Values, all liabilities of the Company

 

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were satisfied in cash in accordance with their terms (limited with respect to
each nonrecourse liability to the Gross Asset Value of the assets securing such
liability), all Units become Vested Units and all remaining or resulting cash
was distributed, in accordance with Article 3, to the Members immediately after
making such allocation, minus (ii) such Member’s share of Company Minimum Gain
and Member Minimum Gain, computed immediately prior to the hypothetical sale of
assets, and the amount any such Member is treated as obligated to contribute to
the Company, computed immediately after the hypothetical sale of assets.

(b) Special Allocations.

(i) Nonrecourse Deductions for any Fiscal Year or other taxable period shall be
specially allocated to the Members on a pro rata basis, in accordance with the
number of Series M Units and Series Z Units owned by each Member as of the last
day of such Fiscal Year or other taxable period. The amount of Nonrecourse
Deductions for a Fiscal Year or other taxable period shall equal the excess, if
any, of the net increase, if any, in the amount of Company Minimum Gain during
that Fiscal Year or other taxable period over the aggregate amount of any
distributions during that Fiscal Year or other taxable period of proceeds of a
nonrecourse liability that are allocable to an increase in Company Minimum Gain,
determined in accordance with the provisions of Treasury Regulations
Section 1.704-2(d).

(ii) Any Member Nonrecourse Deductions for any Fiscal Year or other taxable
period shall be specially allocated to the Member who bears economic risk of
loss with respect to the Member Nonrecourse Debt to which such Member
Nonrecourse Deductions are attributable in accordance with Treasury Regulations
Section 1.704-2(i). If more than one Member bears the economic risk of loss for
such Member Nonrecourse Debt, the Member Nonrecourse Deductions attributable to
such Member Nonrecourse Debt shall be allocated among the Members according to
the ratio in which they bear the economic risk of loss. This Section 4.2(b)(ii)
is intended to comply with the provisions of Treasury Regulations
Section 1.704-2(i) and shall be interpreted consistently therewith.

(iii) Notwithstanding any other provision of this Agreement to the contrary, if
there is a net decrease in Company Minimum Gain during any Fiscal Year or other
taxable period (or if there was a net decrease in Company Minimum Gain for a
prior Fiscal Year or other taxable period and the Company did not have
sufficient amounts of income and gain during prior periods to allocate among the
Members under this Section 4.2(b)(iii)), each Member shall be specially
allocated items of Company income and gain for such Fiscal Year or other taxable
period in an amount equal to such Member’s share of the net decrease in Company
Minimum Gain during such year (as determined pursuant to Treasury Regulations
Section 1.704-2(g)(2)). This Section 4.2(b)(iii) is intended to constitute a
minimum gain chargeback under Treasury Regulations Section 1.704-2(f) and shall
be interpreted consistently therewith.

(iv) Notwithstanding any other provision of this Agreement except
Section 4.2(b)(iii), if there is a net decrease in Member Minimum Gain during
any Fiscal Year or other taxable period (or if there was a net decrease in
Member Minimum Gain for a prior Fiscal Year or other taxable period and the
Company did not have sufficient amounts of income and gain during prior periods
to allocate among the Members under this Section 4.2(b)(iv)), each Member shall
be specially allocated items of Company income and gain for such year in an
amount equal to such Member’s share of the net decrease in Member Minimum Gain
(as determined pursuant to Treasury Regulations Section 1.704-2(i)(4)). This
Section 4.2(b)(iv) is intended to constitute a partner nonrecourse debt minimum
gain chargeback under Treasury Regulations Section 1.704-2(i)(4) and shall be
interpreted consistently therewith.

 

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(v) Notwithstanding any provision hereof to the contrary except
Section 4.2(b)(i) and Section 4.2(b)(ii), no Losses or other items of loss or
expense shall be allocated to any Member to the extent that such allocation
would cause such Member to have an Adjusted Capital Account Deficit (or increase
any existing Adjusted Capital Account Deficit) at the end of such Fiscal Year or
other taxable period. All Losses and other items of loss and expense in excess
of the limitation set forth in this Section 4.2(b)(v) shall be allocated to the
Members who do not have an Adjusted Capital Account Deficit in proportion to
their relative positive Capital Accounts but only to the extent that such Losses
and other items of loss and expense do not cause any such Member to have an
Adjusted Capital Account Deficit.

(vi) Notwithstanding any provision hereof to the contrary except
Section 4.2(b)(iii) and Section 4.2(b)(iv), in the event any Member unexpectedly
receives any adjustment, allocation or distribution described in paragraph (4),
(5) or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d), items of income
and gain (consisting of a pro rata portion of each item of income, including
gross income, and gain for the Fiscal Year or other taxable period) shall be
specially allocated to such Member in an amount and manner sufficient to
eliminate any Adjusted Capital Account Deficit of that Member as quickly as
possible; provided that an allocation pursuant to this Section 4.2(b)(vi) shall
be made only if and to the extent that such Member would have an Adjusted
Capital Account Deficit after all other allocations provided for in this
Section 4.2 have been tentatively made as if this Section 4.2(b)(vi) were not in
this Agreement. This Section 4.2(b)(vi) is intended to constitute a qualified
income offset under Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.

(vii) If any Member has a deficit balance in its Capital Account at the end of
any Fiscal Year or other taxable period that is in excess of the sum of (i) the
amount that such Member is obligated to restore and (ii) the amount that the
Member is deemed to be obligated to restore pursuant to the penultimate sentence
of Treasury Regulations Sections 1.704-2(g)(1) and (i)(5), that Member shall be
specially allocated items of Company income and gain and Simulated Gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.2(b)(vii) shall be made only if and to the extent
that such Member would have a deficit balance in its Capital Account in excess
of such sum after all other allocations provided for in this Section 4.2 have
been made as if Section 4.2(b)(vi) and this Section 4.2(b)(vii) were not in this
Agreement.

(viii) To the extent an adjustment to the adjusted tax basis of any Company
asset pursuant to Code Sections 734(b) or 743(b) is required, pursuant to
Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4),
to be taken into account in determining Capital Accounts as a result of a
distribution to any Member in complete liquidation of such Member’s Interest in
the Company, the amount of such adjustment to the Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases such basis) and such item of gain or loss
shall be allocated to the Members in accordance with Treasury Regulations
Section 1.704-1(b)(2)(iv)(m)(2) if such section applies or to the Member to whom
such distribution was made if Treasury Regulations
Section 1.704-1(b)(2)(iv)(m)(4) applies.

 

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(ix) Simulated Depletion for each Depletable Property, and Simulated Loss for
Depletable Property upon the disposition of such Depletable Property, shall be
allocated among the Members in proportion to their shares of Simulated Basis in
such Depletable Property.

(x) The allocations set forth in Sections 4.2(b)(i) through 4.2(b)(ix) (the
“Regulatory Allocations”) are intended to comply with certain requirements of
Treasury Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding any other
provision of this Section 4.2 (other than the Regulatory Allocations), the
Regulatory Allocations (and anticipated future Regulatory Allocations) shall be
taken into account in allocating other items of income, gain, loss and deduction
among the Members so that, to the extent possible, the net amount of such
allocation of other items and the Regulatory Allocations to each Member should
be equal to the net amount that would have been allocated to each such Member if
the Regulatory Allocations had not occurred. This Section 4.2(b)(x) is intended
to minimize to the extent possible and to the extent necessary any economic
distortions that may result from application of the Regulatory Allocations and
shall be interpreted in a manner consistent therewith.

(xi) Items of income, gain, loss, expense or credit resulting from a Covered
Audit Adjustment shall be allocated to the Members in accordance with the
applicable provisions of the Partnership Tax Audit Rules.

(c) Allocations for Tax Purposes in General.

(i) Except as otherwise provided in this Section 4.2(c) or Section 4.2(d), each
item of income, gain, loss and deduction of the Company for U.S. federal income
tax purposes shall be allocated among the Members in the same manner as such
item is allocated under Sections 4.2(a) and 4.2(b).

(ii) In accordance with Code Section 704(c) and the Treasury Regulations
thereunder (including the Treasury Regulations applying the principles of Code
Section 704(c) to changes in Gross Asset Values), items of income, gain, loss
and deduction with respect to any Company property having a Gross Asset Value
that differs from such property’s adjusted U.S. federal income tax basis shall,
solely for U.S. federal income tax purposes, be allocated among the Members to
account for any such difference using the “remedial method” under Treasury
Regulations Section 1.704-3(d) or such other method or methods as determined by
the Manager to be appropriate and in accordance with the applicable Treasury
Regulations.

(iii) Any (i) recapture of depreciation or any other item of deduction shall be
allocated, in accordance with Treasury Regulations Sections 1.1245-1(e) and
1.1254-5, to the Members who received the benefit of such deductions, and
(ii) recapture of credits shall be allocated to the Members in accordance with
applicable law.

(iv) Allocations pursuant to this Section 4.2(c) are solely for purposes of U.S.
federal, state and local taxes and shall not affect or in any way be taken into
account in computing any Member’s Capital Account or share of Profits, Losses,
other items or distributions pursuant to any provision of this Agreement.

 

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(v) If, as a result of an exercise of a noncompensatory option to acquire an
interest in the Company, a Capital Account reallocation is required under
Treasury Regulations Section 1.704-1(b)(2)(iv)(s)(3), the Company shall make
corrective allocations pursuant to Treasury Regulations
Section 1.704-1(b)(4)(x).

(d) Income Tax Allocations with Respect to Depletable Properties.

(i) Cost and percentage depletion deductions with respect to any Depletable
Property shall be computed separately by the Members rather than the Company.
For purposes of such computations, the federal income tax basis of each
Depletable Property shall be allocated to each Member in accordance with such
Member’s Capital Interest Percentage as of the time such Depletable Property is
acquired by the Company (and any additions to such U.S. federal income tax basis
resulting from expenditures required to be capitalized in such basis shall be
allocated among the Members in a manner designed to cause the Members’
proportionate shares of such adjusted U.S. federal income tax basis to be in
accordance with their Capital Interest Percentages as determined at the time of
any such additions), and shall be reallocated among the Members in accordance
with the Members’ Capital Interest Percentages as determined immediately
following the occurrence of an event giving rise to an adjustment to the Gross
Asset Values of the Company’s Depletable Properties pursuant to clause (b) of
the definition of Gross Asset Value. The Company shall inform each Member of
such Member’s allocable share of the federal income tax basis of each Depletable
Property promptly following the acquisition of such Depletable Property by the
Company, any adjustment resulting from expenditures required to be capitalized
in such basis, and any reallocation of such basis as provided in the previous
sentence.

(ii) For purposes of the separate computation of gain or loss by each Member on
the taxable disposition of Depletable Property, the amount realized from such
disposition shall be allocated (i) first, to the Members in an amount equal to
the Simulated Basis in such Depletable Property in proportion to their allocable
shares thereof and (ii) second, any remaining amount realized shall be allocated
consistent with the allocation of Simulated Gains.

(iii) The allocations described in this Section 4.2(d) are intended to be
applied in accordance with the Members’ “interests in partnership capital” under
Code Section 613A(c)(7)(D); provided that the Members understand and agree that
the Manager may authorize special allocations of federal income tax basis,
income, gain, deduction or loss, as computed for federal income tax purposes, in
order to eliminate differences between Simulated Basis and adjusted federal
income tax basis with respect to Depletable Properties, in such manner as
determined consistent with the principles outlined in Section 4.2(c)(ii). The
provisions of this Section 4.2(d)(iii) and the other provisions of this
Agreement relating to allocations under Code Section 613A(c)(7)(D) are intended
to comply with Treasury Regulations Section 1.704-1(b)(4)(v) and shall be
interpreted and applied in a manner consistent with such Treasury Regulations.

(iv) Each Member, with the assistance of the Company, shall separately keep
records of its share of the adjusted tax basis in each Depletable Property,
adjust such share of the adjusted tax basis for any cost or percentage depletion
allowable with respect to such property and use such adjusted tax basis in the
computation of its cost depletion or in the computation of its gain or loss on
the disposition of such property by the Company. Upon the reasonable request of

 

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the Company, each Member shall advise the Company of its adjusted tax basis in
each Depletable Property and any depletion computed with respect thereto, both
as computed in accordance with the provisions of this subsection for purposes of
allowing the Company to make adjustments to the tax basis of its assets as a
result of certain transfers of interests in the Company or distributions by the
Company. The Company may rely on such information and, if it is not provided by
the Member, may make such reasonable assumptions as it shall determine with
respect thereto.

(e) Other Allocation Rules.

(i) The Members are aware of the income tax consequences of the allocations made
by this Section 4.2 and the economic impact of the allocations on the amounts
receivable by them under this Agreement. The Members hereby agree to be bound by
the provisions of this Section 4.2 in reporting their share of Company income
and loss for income tax purposes.

(ii) The provisions regarding the establishment and maintenance for each Member
of a Capital Account as provided by Section 7.1(b) and the allocations set forth
in Sections 4.2(a), 4.2(b), 4.2(c) and 4.2(d) are intended to comply with the
Treasury Regulations and to reflect the intended economic entitlement of the
Members. If the Manager determines, in its sole discretion, that the application
of the provisions in Sections 7.1(b), 4.2(a), 4.2(b), 4.2(c) or 4.2(d) would
result in non-compliance with the Treasury Regulations or would be inconsistent
with the intended economic entitlement of the Members, the Manager is authorized
to make any appropriate adjustments to such provisions.

(iii) All items of income, gain, loss, deduction and credit allocable to an
interest in the Company that may have been Transferred shall be allocated
between the transferor and the transferee based on the portion of the Fiscal
Year or other taxable period during which each was recognized as the owner of
such interest, without regard to the results of Company operations during any
particular portion of that year and without regard to whether cash distributions
were made to the transferor or the transferee during that year; provided,
however, that this allocation must be made in accordance with a method
determined by the Manager and permissible under Code Section 706 and the
Treasury Regulations thereunder.

(iv) The Members’ proportionate shares of the “excess nonrecourse liabilities”
of the Company, within the meaning of Treasury Regulations
Section 1.752-3(a)(3), shall be allocated to the Members on a pro rata basis, in
accordance with the number of Units owned by each Member.

4.3 Withholding.

(a) Withholding Tax Payments. Each of the Company and its subsidiaries may
withhold from distributions, allocations or portions thereof if it is required
to do so by any applicable rule, regulation or law, and each Member hereby
authorizes the Company and its subsidiaries to withhold or pay on behalf of or
with respect to such Member, any amount of U.S. federal, state or local or
non-U.S. taxes that the Manager determines, in good faith, that the Company or
any of its subsidiaries is required to withhold or pay with respect to any
amount distributable or allocable to such Member pursuant to this Agreement.

 

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(b) Tax Audits. To the extent that any income tax is paid by the Company or any
of its subsidiaries as a result of an audit or other proceeding with respect to
such tax and the Manager determines, in good faith, that such tax relates to one
or more specific Members (including any Company Level Taxes), such tax shall be
treated as an amount of taxes withheld or paid with respect to such Member
pursuant to this Section 4.3(b). Notwithstanding any provision to the contrary
in this Section 4.3(b), the payment by the Company of Company Level Taxes shall,
consistent with the Partnership Tax Audit Rules, be treated as the payment of a
Company obligation and shall be treated as paid with respect to a Member to the
extent the deduction with respect to such payment is allocated to such Member
pursuant to Section 4.2(b)(xi) and such payment shall not be treated as a
withholding from distributions, allocations or portions thereof with respect to
a Member.

(c) Tax Contribution and Indemnity Obligation. Any amounts withheld or paid with
respect to a Member pursuant to Section 4.3(a) or (b) shall be offset against
any distributions to which such Member is entitled concurrently with such
withholding or payment (a “Tax Offset”); provided that the amount of any
distribution subject to a Tax Offset shall be treated as having been distributed
to such Member pursuant to Article 3, Section 4.1 or Section 8.2(b) at the time
such Tax Offset is made. To the extent that (i) there is a payment of Company
Level Taxes relating to a Member or (ii) the amount of such Tax Offset exceeds
the distributions to which such Member is entitled during the same Fiscal Year
as such withholding or payment (“Excess Tax Amount”), the amount of such
(i) Company Level Taxes or (ii) Excess Tax Amount, as applicable, shall, upon
notification to such Member by the Manager, give rise to an obligation of such
Member to make a capital contribution to the Company (a “Tax Contribution
Obligation”), which Tax Contribution Obligation shall be immediately due and
payable. In the event a Member defaults with respect to its obligation under the
prior sentence, the Company shall be entitled to offset the amount of a Member’s
Tax Contribution Obligation against distributions to which such Member would
otherwise be subsequently entitled until the full amount of such Tax
Contribution Obligation has been contributed to the Company or has been
recovered through offset against distributions, and any such offset shall not
reduce such Member’s Capital Account. Any contribution by a Member with respect
to a Tax Contribution Obligation shall increase such Member’s Capital Account
but shall not reduce the amount (if any) that a Member is otherwise obligated to
contribute to the Company. Each Member hereby unconditionally and irrevocably
grants to the Company a security interest in such Member’s Units to secure such
Member’s obligation to pay the Company any amounts required to be paid pursuant
to this Section 4.3. Each Member shall take such actions as the Company may
reasonably request in order to perfect or enforce the security interest created
hereunder. Each Member hereby agrees to indemnify and hold harmless the Company,
the other Members, the Company Representative and the Manager from and against
any liability (including any liability for Company Level Taxes) with respect to
income attributable to or distributions or other payments to such Member.

(d) Continued Obligations of Former Members. Any Person who ceases to be a
Member shall be deemed to be a Member solely for purposes of this Section 4.3,
and the obligations of a Member pursuant to this Section 4.3 shall survive until
30 days after the closing of the applicable statute of limitations on assessment
with respect to the taxes withheld or paid by the Company or a subsidiary that
relate to the period during which such Person was actually a Member.

 

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(e) Manager Discretion Regarding Recovery of Taxes. Notwithstanding the
foregoing, the Manager may choose not to recover an amount of Company Level
Taxes or other taxes withheld or paid with respect to a Member under this
Section 4.3 to the extent that there are no distributions to which such Member
is entitled that may be offset by such amounts if the Manager determines, in its
reasonable discretion, that such a decision would be in the best interests of
the Members (e.g., where the cost of recovering the amount of taxes withheld or
paid with respect to such Member is not justified in light of the amount that
may be recovered from such Member).

ARTICLE 5

Management of the Company

5.1 Manager Managed Company. Except to the extent otherwise provided in this
Agreement, the management, control and direction of the Company and its
operations, business and affairs shall be vested in the Manager, which shall
have the right, power and authority to carry out any and all of the purposes of
the Company and to perform or refrain from performing any and all acts that the
Manager may deem necessary, desirable, appropriate or incidental thereto, in its
sole discretion. The Members hereby designate PubCo as the Manager. The Manager
may appoint such other officers as the Manager may determine. Such officers
shall have such responsibilities and authorities as designated by the Manager,
subject to the applicable restrictions set forth herein and to the direction of
the Manager. Except as otherwise set forth in this Agreement and other than in
connection with a transaction pursuant to which all of the outstanding Brigham
Minerals Holdings Units not held by PubCo are converted into cash, property or
securities of another Person (and in which case the holders of Units will have
the right to receive the same cash, property or other securities that received
by the other holders of Brigham Minerals Holdings Units (other than PubCo) upon
the vesting of Units), the Company shall not be entitled to (and the Manager may
not authorize the Company to) Transfer any Brigham Minerals Holdings Units,
shares of PubCo Class B Common Stock, other securities of Brigham Minerals
Holdings or PubCo or Other Distributable Property held by the Company without
the prior written consent of the Manager and the holders of a majority of the
outstanding Units.

5.2 Replacement of the Manager. The Members may not remove the Person designated
as the Manager without such Person’s prior written consent. In the event the
Manager resigns, the holders of a majority of the outstanding Units may select a
replacement Manager.

5.3 Indemnification; Advancement of Expenses; Insurance; Limitation of
Liability.

(a) Except as limited by applicable law and subject to the provisions of this
Section 5.3, each Manager, Member, Company Representative and officer of the
Company (each an “Indemnitee”) shall be entitled to be indemnified and held
harmless against any and all losses, liabilities and reasonable expenses,
including attorneys’ fees, arising from proceedings in which such Indemnitee may
be involved, as a party or otherwise, by reason of its being a Manager, Member
or officer of the Company, or by reason of its involvement in the management of
the affairs of the Company, whether or not it continues to be such at the time
any such loss, liability or expense is paid or incurred; provided, however, that
no Indemnitee shall be indemnified under this Section 5.3 for any losses,
liabilities or expenses arising out of the fraud, intentional

 

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misconduct, gross negligence or willful or wanton misconduct of such Indemnitee.
The rights of indemnification provided in this Section 5.3 shall be in addition
to any rights to which an Indemnitee may otherwise be entitled by contract or as
a matter of law and shall extend to such Indemnitee’s successors and assigns. In
particular, and without limitation of the foregoing, an Indemnitee shall be
entitled to indemnification by the Company against reasonable expenses (as
incurred), including attorneys’ fees, incurred by the Indemnitee in connection
with the defense of any action to which the Indemnitee may be made a party
(without regard to the success of such defense), to the fullest extent permitted
under the provisions of the DLLCA or any other applicable statute.

(b) Except as limited by applicable law, expenses incurred by an Indemnitee in
defending any proceeding, including a proceeding by or in the right of the
Company (except a proceeding by or in the right of the Company against such
Indemnitee), shall be paid by the Company in advance of the final disposition of
the proceeding upon receipt of a written undertaking by or on behalf of such
Indemnitee to repay such amount if such Indemnitee is determined pursuant to
this Section 5.3 or adjudicated to be ineligible for indemnification, which
undertaking shall be an unlimited general obligation of the Indemnitee but need
not be secured and shall be accepted without regard to the financial ability of
the Indemnitee to make repayment.

(c) The indemnification provided by this Section 5.3 shall inure to the benefit
of the heirs and personal representatives of each Indemnitee.

(d) No amendment or repeal of the provisions of this Section 5.3 that adversely
affects the rights of any Indemnitee under this Section 5.3 with respect to the
acts or omissions of such Indemnitee at any time prior to such amendment or
repeal shall apply to such Indemnitee without the written consent of such
Indemnitee.

(e) Any indemnification pursuant to this Section 5.3 shall be made only out of
the assets of the Company and shall in no event cause the Members to incur any
personal liability nor shall it result in any liability of the Members to any
third party.

(f) None of the Manager, Members, Company Representative or any of their
respective Affiliates or any of their respective employees, agents, directors,
managers and officers shall be liable to the Company for errors in judgment or
for any acts or omissions that do not constitute fraud, intentional misconduct,
gross negligence or willful or wanton misconduct. THE MEMBERS RECOGNIZE THAT
SUCH EXCULPATION FROM LIABILITY RELATES TO ACTS OR OMISSIONS THAT MAY GIVE RISE
TO ORDINARY, CONCURRENT OR COMPARATIVE NEGLIGENCE. The termination of a
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere, or its equivalent, shall not, of itself, create a presumption that
any Person engaged in fraud or willful misconduct, was grossly negligent or was
guilty of willful or wanton misconduct.

(g) The Company hereby acknowledges that an Indemnitee may have certain rights
to indemnification, advancement of expenses and/or insurance provided by such
Indemnitee or its Affiliates (collectively, the “Other Indemnitors”). The
Company hereby agrees and acknowledges (i) that it is the indemnitor of first
resort (i.e., its obligations to any Indemnitee hereunder are primary and any
obligation of the Other Indemnitors to advance expenses or to

 

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provide indemnification for the same expenses or liabilities incurred by
Indemnitee are secondary to the Company), (ii) that it shall be required to
advance the full amount of expenses incurred by Indemnitee and shall be liable
for the full amount of all expenses, judgments, penalties, fines and amounts
paid in settlement to the extent legally permitted and as required by the terms
of this Agreement (or any other agreement between the Company and Indemnitee),
without regard to any rights Indemnitee may have against the Other Indemnitors,
and (iii) that it irrevocably waives, relinquishes and releases the Other
Indemnitors from any and all claims against the Other Indemnitors for
contribution, subrogation or any other recovery of any kind in respect thereof.
The Company further agrees that no advancement or payment by the Other
Indemnitors on behalf of Indemnitee with respect to any claim for which
Indemnitee has sought indemnification from the Company shall affect the
foregoing, and the Other Indemnitors shall have a right of contribution and/or
be subrogated to the extent of such advancement or payment to all of the rights
of recovery of Indemnitee against the Company. The Other Indemnitors are express
third-party beneficiaries of the terms of this Section 5.3(g).

5.4 Insurance. The Company shall acquire and maintain insurance, including D&O
insurance, covering such risks and in such amounts as the Manager shall from
time to time determine to be necessary or appropriate.

5.5 Tax Elections. The Company shall make the following elections for tax
purposes on the appropriate returns:

(a) to the extent permitted by law, to adopt the calendar year as the Company’s
Fiscal Year;

(b) to the extent permitted by law, to adopt the accrual method of accounting
and to keep the Company’s books and records on such method;

(c) if a distribution of the Company’s property as described in Section 734 of
the Code occurs or upon a Transfer of an Interest as described in Section 743 of
the Code, on request by notice from any Member, to elect, pursuant to
Section 754 of the Code, to adjust the basis of the Company’s properties;

(d) to elect to deduct and amortize the organizational expenses of the Company
as permitted by Section 709(b) of the Code;

(e) except where the Manager elects to apply Section 4.3(e), to elect out of the
application of the partnership-level audit and adjustment rules of the
Partnership Tax Audit Rules by making an election under Section 6226(a) of the
Code, commonly known as the “push out” election, or any analogous election under
state or local tax law, if applicable; and

(f) any other tax election the Manager deems appropriate and in the best
interests of the Members.

 

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5.6 Tax Returns. The Company shall prepare and file or cause to be prepared and
filed all federal, state and local income and other tax returns that the Company
is required to file. The Company shall deliver to each Member a copy of each
approved return and statement, together with any schedules (including Schedule
K-1) or other information that a Member may require in connection with such
Member’s own tax affairs as soon as practicable (but in no event more than
90 days after the end of each Fiscal Year or such longer period of time not in
excess of 120 days after the end of the applicable Fiscal Year as is approved by
the Manager). The Members agree to (a) take all actions reasonably requested by
the Company or the Company Representative to comply with the Partnership Tax
Audit Rules, including where applicable, filing amended returns as provided in
Sections 6225 or 6226 of the Code and providing confirmation thereof to the
Company Representative and (b) furnish to the Company (i) all reasonably
requested certificates or statements relating to the tax matters of the Company
(including without limitation an affidavit of non-foreign status pursuant to
Section 1446(f)(2) of the Code), and (ii) all pertinent information in its
possession relating to the Company’s operations that is reasonably necessary to
enable the Company’s tax returns to be prepared and timely filed. The Company
shall bear the costs of the preparation and filing of its tax returns.

5.7 Company Representative. The Manager is specially authorized and appointed to
act as the Company Representative and in any similar capacity under state or
local law. The Company and the Members (including any Member designated as the
Company Representative prior to the date hereof) shall cooperate fully with each
other and shall use reasonable best efforts to cause the Manager (or any other
Person subsequently designated) to become the Company Representative with
respect to any taxable period of the Company with respect to which the statute
of limitations has not yet expired, including (as applicable) by filing
certifications pursuant to Treasury Regulations Section 301.6231(a)(7)-1(d). In
acting as Company Representative, the Manager shall act, to the maximum extent
possible, to cause income, gain, loss, deduction, credit of the Company and
adjustments thereto, to be allocated or borne by the Members in the same manner
as such items or adjustments would have been borne if the Company could have
effectively made an election under Section 6221(b) of the Code (commonly known
as the “election out”) or similar state or local provision with respect to the
taxable period at issue. The Company Representative may retain, at the Company’s
expense, such outside counsel, accountants and other professional consultants as
it may reasonably deem necessary in the course of fulfilling its obligations as
Company Representative.

5.8 Classification. The Company intends to be classified as a partnership for
federal income tax purposes under Treasury Regulations Section 301.7701-3(c).
Neither the Company nor any Member may make an election under Treasury
Regulations Section 301.7701-3(c) to treat the Company as an association taxable
as a corporation or to be excluded from the application of the provisions of
Subchapter K of Chapter 1 of Subtitle A of the Code or any similar provisions of
applicable state law and no provision of this Agreement shall be construed to
sanction or approve such an election.

5.9 Subsidiaries. The Company, the Manager and each Member acknowledge and agree
that the Company shall not form or acquire any subsidiaries unless otherwise
agreed by the Manager and the holders of a majority of the outstanding Units.

 

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ARTICLE 6

Rights of Members

6.1 Rights of Members. Each Member shall have the right to all information to
which a Member is entitled to have access to pursuant to the DLLCA. Any demand
for such information shall be made in writing and shall specify the purpose of
such demand. Any information provided in response to such demand shall be
subject to the confidentiality provisions of this Agreement and such other
restrictions as the Manager may determine is necessary or advisable to protect
the Company’s interests in such information.

6.2 Liability to Third Parties. No Member shall be liable for the debts,
obligations or liabilities of the Company, including under a judgment decree or
order of a court.

6.3 Action by Members. Except as expressly otherwise provided in this Agreement,
all actions and decisions of the Members required hereunder in their capacity as
such shall require approval of Members holding a majority of the outstanding
Units. If there is any matter that requires the approval of the Manager, such
approval will be sufficient to authorize the Company to take that action and no
further vote or approval of the Members of the Company will be necessary or
required under the terms of this Agreement. The Members entitled to vote may
make any decision or take any action at a meeting, by conference telephone call,
by written consent, by oral agreement or by any other method they elect.

ARTICLE 7

Books, Reports, Budget, Expenses AND Confidentiality

7.1 Books and Records; Capital Accounts.

(a) Books and Records. The Company shall keep the books of account for the
Company in accordance with the terms of this Agreement and the DLLCA. Such books
shall be maintained at the principal office of the Company.

(b) Capital Accounts. A Capital Account shall be maintained for each Member in
accordance with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv)
and, to the extent consistent with such regulations, the other provisions of
this Agreement. Each Member’s Capital Account shall be (a) increased by
(i) allocations to such Member of Profits pursuant to Section 4.2(a) and any
other items of income or gain allocated to such Member pursuant to
Section 4.2(b), (ii) the amount of cash or the initial Gross Asset Value of any
asset (net of any liabilities assumed by the Company and any liabilities to
which the asset is subject) contributed to the Company by such Member, and
(iii) any other increases allowed or required by Treasury Regulations
Section 1.704-1(b)(2)(iv), and (b) decreased by (i) allocations to such Member
of Losses pursuant to Section 4.2(a) and any other items of deduction or loss
allocated to such Member pursuant to the provisions of Section 4.2(b), (ii) the
amount of any cash or the Gross Asset Value of any asset (net of any liabilities
assumed by the Member and any liabilities to which the asset is subject)
distributed to such Member, and (iii) any other decreases allowed or required by
Treasury Regulations Section 1.704-1(b)(2)(iv). In the event of a Transfer of
Units made in accordance with this Agreement, the Capital Account of the
transferor that is attributable to the Transferred Units shall carry over to the
transferee Member in accordance with the provisions of Treasury Regulations
Section 1.704-1(b)(2)(iv)(l).

7.2 Bank Accounts. The Manager may cause one or more accounts to be maintained
in a bank (or banks) that is a member of the Federal Deposit Insurance
Corporation, which accounts shall be used for the payment of the expenditures
incurred by the Company in connection with the business of the Company, and in
which shall be deposited any and all receipts of the Company.

 

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7.3 Confidentiality.

(a) No Member shall use, publish, disseminate or otherwise disclose, directly or
indirectly, any Confidential Information that should come into the possession of
such Member other than for the purpose of conducting the business of the Company
or performing its duties and obligations hereunder or under an applicable
employment or consulting agreement, or to the extent a Member is required to
disclose such Confidential Information (i) due to a subpoena or court order or
other legal process, (ii) if such Member testifies in a judicial or regulatory
proceeding pursuant to the order of a judge or administrative law judge after
such Member requests confidential treatment for such Confidential Information,
or (iii) in order to enforce his, her or its rights under this Agreement. Each
Member shall, and shall cause each of its Affiliates, and its and their
respective directors, officers, members, partners, investors, employees,
representatives and agents (x) to comply with this Section 7.3, (y) to refrain
from using any Confidential Information other than in connection with the
conduct of the business of the Company, and (z) to refrain from disclosing any
Confidential Information to a Person known to be a competitor of the Company. If
a Member is required by law or court order to disclose information that would
otherwise be Confidential Information under this Agreement, such Member shall
immediately notify the Manager of such notice and provide the Manager the
opportunity to resist such disclosure by appropriate proceedings.

(b) No Member shall disclose to any other party (excluding such Member’s spouse,
accountants, financial advisors, lenders, legal counsel and Permitted
Transferees) any information relating to the terms of this Agreement without the
prior written consent of the Manager.

ARTICLE 8

Winding Up, Liquidation and Termination

8.1 Winding Up. The Company shall be wound up upon the earliest to occur of any
of the following:

(a) at the election of the Manager and the holders of a majority of the
outstanding Units at any time;

(b) at such time as all Series M Units and Series Z Units have vested and
converted into Series M-R Units and Series Z-R Units, as applicable; or

(c) the entry of a decree of judicial dissolution of the Company under the
DLLCA.

8.2 Liquidation and Termination. Upon the occurrence of an event requiring the
winding up of the Company, unless it is reconstituted pursuant to the DLLCA, all
Unvested Units shall immediately vest in full and become Vested Units, and the
Manager or a Person or Persons selected by the Manager shall act as liquidator
or shall appoint one or more liquidators who shall have full authority to wind
up the affairs of the Company and make final distribution as provided herein.
The steps to be accomplished by the liquidator are as follows:

 

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(a) As promptly as possible after an event requiring the winding up of the
Company and again after final liquidation, the liquidator shall cause a proper
accounting to be made by the Company’s independent accountants of the Company’s
assets, liabilities and operations through the last day of the month in which an
event requiring the winding up of the Company occurs or the final liquidation is
completed, as appropriate.

(b) The liquidator shall pay all of the debts and liabilities of the Company
(including all expenses incurred in liquidation) or otherwise make adequate
provision therefor (including the establishment of a cash escrow fund for
contingent liabilities in such amount and for such term as the liquidator may
reasonably determine). After making payment or provision for all debts and
liabilities of the Company, all remaining assets of the Company shall be
distributed to the Members as follows:

(i) the liquidator may sell all properties and assets of the Company for cash as
promptly as is consistent with obtaining the best price therefor, and any
resulting gain or loss from such sales shall be allocated to the Members as
provided in Section 4.2, and the Capital Accounts of the Members shall be
adjusted accordingly;

(ii) upon the consent of the Manager, the liquidator may distribute Company
properties in kind, in which case the fair market value of that property shall
be determined and the Capital Accounts of the Members shall be adjusted to
reflect the manner in which the unrealized income, gain, loss and deduction
inherent in property that has not been reflected in the Capital Accounts
previously would be allocated among the Members if there were a taxable
distribution of that property for the fair market value of that property on the
date of distribution; and

(iii) Company property shall be distributed among the Members in accordance with
Article 3 and Section 4.1(b), and those distributions shall be made by the end
of the taxable year of the Company during which the liquidation of the Company
occurs (or, if later, 90 days after the date of the liquidation).

(c) Except as expressly provided herein, the liquidator shall comply with any
applicable requirements of the DLLCA and all other applicable laws pertaining to
the winding up of the affairs of the Company and the final distribution of its
assets. Upon the completion of the distribution of Company cash and property as
provided in this Section 8.2 in connection with the liquidation of the Company,
the Certificate and all qualifications of the Company as a foreign limited
liability company in jurisdictions other than the State of Delaware shall be
cancelled and such other activities as may be necessary to terminate the Company
shall be taken by the liquidator.

(d) Notwithstanding any provision in this Agreement to the contrary, no Member
shall be obligated to restore a deficit balance in its Capital Account at any
time.

 

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ARTICLE 9

Transfer of Interests

9.1 Limitation on Transfer.

(a) No Member, nor its successors, transferees or assigns, shall, directly or
indirectly, voluntarily or involuntarily, Transfer all or any portion of its
Interest without compliance with the terms and conditions of this Agreement, and
any attempted Transfer of an Interest that is not made in accordance with this
Agreement shall be null and void and shall have no effect. No Member may
Transfer all or any portion of its Interest without the prior written consent of
the Manager, in its sole discretion, except, subject to the limitations on
Transfer otherwise expressly provided in this Agreement, in the case of a
Transfer to a Permitted Transferee.

(b) No Transfer (including to a Permitted Transferee) shall be permitted
(i) unless and until the purchaser, assignee, donee or transferee thereof agrees
in writing to take and accept such Interest subject to all of the restrictions,
terms and conditions contained in the Certificate and this Agreement, the same
as if it were a signatory party thereto and hereto or (ii) if such Transfer
would cause the Company or Brigham Minerals Holdings to be unable to maintain
its status as a partnership for federal income tax purposes. The Company will
not be required to recognize any permitted assignment of an Interest until the
instrument conveying such Interest and assuming all obligations under this
Agreement has been delivered to the Company and is satisfactory to the Company
in its reasonable discretion.

9.2 Transferees. A Person who receives a Transfer of a Member’s Interest in
accordance with the terms of this Agreement shall be entitled to receive the
share of Company income, gains, losses, deductions, credits and distributions to
which its transferor would have been entitled. However, the transferee of any
Interest shall not become a Member of the Company unless: (a) the instrument of
assignment so provides and (b) such transferee agrees in writing to be bound as
a Member by this Agreement, the Certificate and any other agreements then
existing by and among the Members. Upon becoming a Member, such transferee shall
have all of the rights and powers of, shall be subject to all of the
restrictions applicable to, shall assume all of the obligations of, and shall
succeed to the status of, its predecessor, and shall in all respects be a Member
under this Agreement. The use of the term “Member” in this Agreement shall be
deemed to include any such additional Members. Until such transferee is admitted
as a Member pursuant to this Section 9.2, (a) such transferee shall not be
entitled to participate in the management of the Company or to exercise any
voting or other rights or powers of a Member, except for the rights described in
the first sentence of this Section 9.2, and (b) the transferor Member shall
continue to be a Member and to be entitled to exercise any rights or powers of a
Member with respect to the Interest Transferred.

ARTICLE 10

Miscellaneous

10.1 No Fiduciary Duties. Nothing contained in this Agreement shall be deemed to
create for any purpose whatsoever any fiduciary or other similar duties between
the Members, or any fiduciary or other similar duties by the Manager to the
Members or to the Company that may be imposed by law upon the Manager or a
Member by virtue of its status as a “manager” or “member” (as such terms are
used in the DLLCA) of a Delaware limited liability company (in each case other
than the implied contractual covenant of good faith and fair dealing).

 

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10.2 Notices. Any notice or communication given pursuant this Agreement must be
in writing and may be given by registered or certified mail, and if given by
registered or certified mail, shall be deemed to have been given and received on
the third day after a registered or certified letter containing such notice,
properly addressed with postage prepaid is deposited in the United States mail;
and, if given otherwise than by registered or certified mail, it shall be deemed
to have been given when delivered to and received by the party to whom
addressed. Such notices or communications to be sent to a Member shall be given
to such Member at the address given for such Member as set forth in the
Company’s books and records. Such notices or communications to be sent to the
Company shall be given at the following address: 5914 W. Courtyard Dr. #100,
Austin, TX 78730, Attention: Chief Executive Officer, with a copy to 1001 Fannin
Street, Suite 2600, Houston, TX 77002, Attention: Douglas E. McWilliams and
Thomas G. Zentner. Any party hereto may designate any other address in
substitution for the foregoing address to which such notice shall be given by
five days’ notice duly given hereunder to the other parties.

10.3 Entire Agreement. This Agreement and any ancillary agreement relating
hereto, including the Master Reorganization Agreement any Equity Grant
Agreement, is the entire agreement between the parties hereto concerning the
subject matter hereof and no warranties, representations, promises or agreements
have been made between the parties other than as expressly set forth herein.
This Agreement supersedes any previous agreement or understanding between the
parties hereto relating to the subject matter hereof.

10.4 Governing Law and Waiver of Jury Trial. This Agreement shall be construed
in accordance with and governed by the laws of the State of Delaware without
regard to principles of conflict of laws. This Agreement is intended to comply
with the requirements of the DLLCA and the Certificate. In the event of a direct
conflict between the provisions of this Agreement and the mandatory provisions
of the DLLCA or any provision of the Certificate, the DLLCA and the Certificate,
in that order of priority, will control. TO THE FULLEST EXTENT PERMITTED BY LAW,
THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES ARISING UNDER OR IN
CONNECTION WITH THIS AGREEMENT.

10.5 Waiver of Action for Partition. Each of the Members irrevocably waives
during the term of the Company any right that such Member may have to maintain
an action for partition with respect to the property of the Company.

10.6 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the Members and their respective permitted heirs, legal
representatives, successors and assigns.

10.7 Amendment. This Agreement may be amended only by the written agreement of
the Manager and the holders of a majority of the outstanding Units.

 

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10.8 Counterparts. This Agreement may be executed in one or more counterparts,
including by electronic means, each of which shall be an original, but all of
which taken together shall constitute a single document.

10.9 Further Assurances. In connection with this Agreement and the transactions
contemplated hereby, each Member shall execute and deliver any additional
documents and instruments and perform any additional acts that may be necessary
or appropriate to effectuate and perform the provisions of this Agreement and
those transactions.

10.10 No Waiver. The failure of any Member to insist upon strict performance of
a covenant hereunder or of any obligation hereunder, irrespective of the length
of time for which such failure continues, shall not constitute a waiver of such
Member’s right to demand strict compliance in the future. No consent or waiver,
express or implied, to or of any breach or default in the performance of any
obligation hereunder shall constitute a consent or waiver to or of any other
breach or default in the performance of the same or any other obligation
hereunder.

10.11 Severability. If any provision of this Agreement or the application
thereof to any Person or circumstances is for any reason and to any extent
invalid or unenforceable, the remainder of this Agreement and the application of
such provision to the other Persons or circumstances will not be affected
thereby, but rather are to be enforced to the greatest extent permitted by law.

10.12 Public Statements. The Members shall consult with one another with regard
to all publicity and other releases concerning this Agreement and, except as
required by applicable law or the applicable rules or regulations of any
governmental body or stock exchange, no Member shall issue any publicity or
other press release concerning this Agreement without the approval of the
Manager.

10.13 No Third-Party Beneficiaries. This Agreement is intended for the exclusive
benefit of the Members and their respective personal representatives, successors
and permitted assigns, and nothing contained in this Agreement shall be
construed as creating any rights or benefits in or to any third party.

10.14 Execution in Writing. A facsimile, telex or similar transmission by a
Member or the Manager, or a photographic, photostatic, facsimile or similar
reproduction of a writing executed by a Member or the Manager, shall be treated
as an execution in writing for purposes of this Agreement.

10.15 Reimbursement of Expenses. Brigham Minerals Holdings hereby agrees to pay
or otherwise reimburse the Company for all costs and expenses incurred by
Company. Brigham Minerals Holdings shall have the right to review all source
documentation concerning such costs and expenses upon a reasonable notice and
during regular business hours.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, each undersigned has executed or caused to be executed on
its behalf this Second Amended and Restated Limited Liability Company Agreement
as of the date first written above.

 

COMPANY: BRIGHAM EQUITY HOLDINGS, LLC By:   Brigham Minerals, Inc., Manager By:
  /s/ Robert M. Roosa Name:   Robert M. Roosa Title:   Chief Executive Officer
MANAGER: BRIGHAM MINERALS, INC. By:   /s/ Robert M. Roosa Name:   Robert M.
Roosa Title:   Chief Executive Officer

SIGNATURE PAGE TO

SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF

BRIGHAM EQUITY HOLDINGS, LLC

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

IN WITNESS WHEREOF, each undersigned has executed or caused to be executed on
its behalf this Second Amended and Restated Limited Liability Company Agreement
as of the date first written above.

 

MEMBERS: By: Robert M. Roosa, as attorney-in-fact of each of the Members
pursuant to Section 13.5(d) of the Existing LLC Agreement /s/ Robert M. Roosa
Robert M. Roosa, attorney-in-fact

SIGNATURE PAGE TO

SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF

BRIGHAM EQUITY HOLDINGS, LLC