Exhibit 10.1

 

 

 

 

 

 

 

 

 

 

 

 

MANAGEMENT SERVICES AGREEMENT

 

by and among

 

KIMBELL ROYALTY PARTNERS, LP,

 

KIMBELL ROYALTY GP, LLC,

 

KIMBELL ROYALTY HOLDINGS, LLC

 

AND

 

KIMBELL OPERATING COMPANY, LLC

 

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MANAGEMENT SERVICES AGREEMENT

 

This Management Services Agreement (this “Agreement”) is effective as of
February 8, 2017 (“Effective Date”) by and among Kimbell Royalty Partners, LP, a
Delaware limited partnership (the “Partnership”), Kimbell Royalty GP, LLC, a
Delaware limited liability company and the general partner of the Partnership
(“GP LLC” and, together with the Partnership, the “Partnership Parties”),
Kimbell Royalty Holdings, LLC, a Delaware limited liability company, solely for
the limited purposes set forth in Section 2.7 of this Agreement (“Holdings”),
and Kimbell Operating Company, LLC, a Delaware limited liability company
(“Kimbell Operating”). The Partnership Parties, on the one hand, and Kimbell
Operating, on the other hand, are sometimes referred to in this Agreement each
as a “Party” and collectively as the “Parties.”

 

WHEREAS, during the Term (as defined herein), the Partnership Parties desire to
engage Kimbell Operating to provide or cause to be provided (i) certain
Management Services (as defined herein) and (ii) certain Acquisition Services
(as defined herein), and Kimbell Operating is willing to undertake such
Management Services and such Acquisition Services, in each case subject to the
terms and conditions of this Agreement;

 

NOW, THEREFORE, in consideration of the premises set forth above and the
respective covenants, agreements and conditions contained in this Agreement, as
well as other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:

 

Article I
Definitions

 

As used in this Agreement, the following capitalized terms have the meanings set
forth below:

 

“Acquisition” shall mean any acquisition or series of acquisitions by any member
of the Partnership Group of (a) all or substantially all of the interest in any
company or business (whether by a purchase of assets, purchase of equity, merger
or otherwise) or (b) any mineral and royalty interests in oil and natural gas
properties, in each case, occurring after the Effective Date.

 

“Acquisition Services” shall mean, with respect to the identification,
evaluation and recommendation of opportunities for an Acquisition and any
related negotiation of such opportunities, including those services described in
Schedule A.

 

“Additional Properties” shall mean any oil and natural gas assets or related
interests that are acquired by any member of the Partnership Group pursuant to
an Acquisition.

 

“Adjusted Services Fee” is defined in Section 3.5(a).

 

“Adjustment Period” is defined in Section 3.5(a).

 

“Affected Party” is defined in Article X.

 

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“Affiliate” shall mean with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term “control” shall mean the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise. Notwithstanding anything in the foregoing to the contrary, for
purposes of this Agreement, Kimbell Operating will not be deemed to be an
Affiliate of the Partnership Parties hereunder, and vice versa.

 

“Agreement” is defined in the preamble.

 

“BJF” shall mean BJF Royalties, LLC.

 

“BJF MSA” shall mean that certain Management Services Agreement, dated as of the
date hereof, by and between BJF and Kimbell Operating.

 

“Business Day” shall mean any day on which commercial banks are generally open
for business in New York, New York other than a Saturday, a Sunday or a day
observed as a holiday in New York, New York under the Laws of the State of
New York or the federal Laws of the United States of America.

 

“Confidential Information” shall mean information regarded by that Party or the
Partnership Group as proprietary or confidential, including, but not limited to,
information relating to such Person’s business affairs, financial information
and prospects; future projects or purchases; proprietary products, materials or
methodologies; data; customer lists; system or network configurations; passwords
and access rights; and any other information marked as confidential or, in the
case of information verbally disclosed, verbally designated as confidential.

 

“Conflicts Committee” has the meaning set forth in the Partnership Agreement.

 

“Damages” is defined in Section 8.1.

 

“Direct Expenses” is defined in Section 2.2(b).

 

“Documents” is defined in Schedule A.

 

“Duncan” shall mean Duncan Management, LLC.

 

“Duncan MSA” shall mean that certain Management Services Agreement, dated as of
the date hereof, by and between Duncan and Kimbell Operating.

 

“Effective Date” is defined in the preamble.

 

“Existing Services Fee” is defined in Section 3.5(a).

 

“Extension” is defined in Section 4.1.

 

“Force Majeure” shall mean an event or circumstance that prevents a Party from
performing its obligations under this Agreement, but only if the event or
circumstance: (a) is not within the reasonable control of the affected Party;
(b) is not the result of the fault or negligence of the affected Party; and
(c) could not, by the exercise of due diligence, have been overcome or avoided.
“Force Majeure” excludes: lack of a market; unfavorable market conditions; and
economic hardship.

 

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“GP LLC” is defined in the preamble.

 

“Governmental Entity” shall mean any (a) multinational, federal, national,
provincial, territorial, state, regional, municipal, local or other government,
governmental or public department, central bank, court, tribunal, arbitral body,
commission, administrative agency, board, bureau or agency, domestic or foreign,
(b) subdivision, agent, commission, board, or authority of any of the foregoing,
or (c) quasi-governmental or private body exercising any regulatory,
expropriation or taxing authority under, or for the account of, any of the
foregoing, in each case, that has jurisdiction or authority with respect to the
applicable Party.

 

“Holdings” is defined in the preamble.

 

“Indemnified Party” is defined in Section 8.3(a).

 

“Indemnifying Party” is defined in Section 8.3(a).

 

“Initial Serviced Properties” shall mean any oil and natural gas assets or
related interests that are acquired by the Partnership Group on and as of the
Effective Date.

 

“Initial Term” is defined in Section 4.1.

 

“K3” shall mean K3 Royalties, LLC.

 

“K3 MSA” shall mean that certain Management Services Agreement, dated as of the
date hereof, by and between K3 and Kimbell Operating.

 

“Kimbell Operating” is defined in the preamble.

 

“Kimbell Operating Indemnitees” is defined in Section 8.1.

 

“Law” shall mean all statutes, regulations, statutory rules, orders, judgments,
decrees and terms and conditions of any grant of approval, permission,
authority, permit or license of any court, Governmental Entity, statutory body
or self-regulatory authority (including the New York Stock Exchange).

 

“Manager Entities” shall mean, collectively, BJF, Duncan, K3, Nail Bay, Steward
and Taylor.

 

“Manager MSAs” shall mean, collectively, the BJF MSA, the Duncan MSA, the K3
MSA, the Nail Bay MSA, the Steward MSA and the Taylor MSA.

 

“Management Services” shall mean those services described Schedule A.

 

“Nail Bay” shall mean Nail Bay Royalties, LLC.

 

“Nail Bay MSA” shall mean that certain Management Services Agreement, dated as
of the date hereof, by and between Nail Bay and Kimbell Operating.

 

“New Services Fee” is defined in Section 3.5(b).

 

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“New Services Fee Effective Date” is defined in Section 3.5(b).

 

“Notice” is defined in Article XII.

 

“Partnership” is defined in the preamble.

 

“Partnership Parties” is defined in the preamble.

 

“Partnership Agreement” shall mean that certain First Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of the date
hereof, as amended from time to time.

 

“Partnership Group” shall mean the Partnership and its Affiliates (excluding,
for the avoidance of doubt, Kimbell Operating); provided, that “Partnership
Group” and any reference to a “member of the Partnership Group” shall not
include any partner, member or owner of the Partnership.

 

“Party” and “Parties” are defined in the preamble.

 

“Payment Amount” is defined in Section 2.2(b).

 

“Person” shall mean any individual, firm, partnership, joint venture, venture
capital fund, limited liability company, association, trust, estate, group,
corporate body, corporation, unincorporated association or organization,
Governmental Entity, syndicate or other entity.

 

“Redetermination Date” is defined in Section 3.5(a).

 

“Serviced Properties” shall mean those the Initial Serviced Properties and any
Additional Properties.

 

“Services” is defined in Section 2.1(a).

 

“Services Fee” is defined in Section 2.2(a).

 

“Sponsors” shall mean Rochelle Royalties, LLC, BGT Investments LLC and Double
Eagle Interests, LLC.

 

“Steward” shall mean Steward Royalties, LLC.

 

“Steward MSA” shall mean that certain Management Services Agreement, dated as of
the date hereof, by and between Steward and Kimbell Operating.

 

“Subsidiary” or “Subsidiaries” shall mean, with respect to any Person, (a) a
corporation of which more than 50% of the voting power of shares entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors or other governing body of such corporation is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person or a combination thereof; (b) a partnership (whether
general or limited) in which such Person or a Subsidiary of such Person is, at
the date of determination, a general partner of such partnership, but only if
such Person, one or more Subsidiaries of such

 

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Person, or a combination thereof, controls such partnership on the date of
determination; or (c) any other Person (other than a corporation or a
partnership) in which such Person, one or more Subsidiaries of such Person, or a
combination thereof, directly or indirectly, at the date of determination, has
(i) at least a majority ownership interest or (ii) the power to elect or direct
the election of a majority of the directors or other governing body of such
Person.

 

“Taylor” shall mean Taylor Companies Mineral Management, LLC.

 

“Taylor MSA” shall mean that certain Management Services Agreement, dated as of
the date hereof, by and between Taylor and Kimbell Operating.

 

“Tax” is defined in Section 3.4.

 

“Term” is defined in Section 4.1.

 

“Termination Amount” is defined in Section 4.6.

 

Article II
Services

 

Section 2.1                        Scope of Services; Standard of Care.

 

(a)                               Upon the terms and subject to the conditions
set forth in this Agreement, the Partnership Parties hereby engage Kimbell
Operating, acting directly or through its Affiliates and their respective
employees, agents, contractors (including, for the avoidance of doubt, the
Manager Entities) or independent third parties, to provide or cause to be
provided the Management Services and the Acquisition Services (collectively, the
“Services”), and Kimbell Operating hereby accepts such engagement and agrees to
perform or cause to be performed the Services consistent with the terms and
conditions of this Agreement.  The Services to be provided hereunder shall be
performed with that degree of care, diligence and skill that a reasonably
prudent Person involved in the acquisition, development and management of
mineral and royalty interests in oil and natural gas properties comparable to
those of the Serviced Properties would exercise.

 

(b)                              During the Term of this Agreement, Kimbell
Operating shall provide, and shall have the right to grant to the Manager
Entities or their respective Affiliates designated by them the exclusive right
to provide, any Acquisition Services necessary in connection with any potential
Acquisitions by any member of the Partnership Group, and the Partnership Group
shall refrain from employing, engaging or using any other Person to perform such
Acquisition Services without the prior written consent of Kimbell Operating.

 

(c)                               In the event any member of the Partnership
Group acquires any Additional Properties, the scope of the Management Services
set forth in Schedule A shall be expanded to encompass, and Kimbell Operating
shall provide, and shall have the right to grant to the Manager Entities or
their respective Affiliates designated by them the exclusive right to provide,
any additional Management Services reasonably required with respect to such
Additional Properties, and the Partnership Group shall refrain from employing,
engaging or using any other

 

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Person to perform such additional Management Services without the prior written
consent of Kimbell Operating.

 

Section 2.2                        Payment Amount.

 

(a)                               As consideration for the Services rendered
hereunder, the Partnership Parties shall pay to Kimbell Operating each month, in
advance, a fee that shall represent a reasonable allocation of all projected
costs (including its own overhead and general and administrative costs and
expenses and those of its Affiliates) to be incurred by Kimbell Operating in
providing (or causing to be provided) such Services and that may be adjusted
pursuant to Section 3.5 (the “Services Fee”).  The initial Services Fee shall be
$327,667 per month.  For the avoidance of doubt, in no event shall the Services
Fee include any Tax passed on to the Partnership Parties pursuant to Section 3.4
hereof.

 

(b)                              To the extent not otherwise reimbursed or paid
to Kimbell Operating, the Partnership Parties shall also reimburse Kimbell
Operating for all other reasonable third party out-of-pocket costs and expenses
(including, but not limited to, third-party expenses and expenditures) that
Kimbell Operating incurs on behalf of the Partnership Group in providing  (or
causing to be provided) the Services, excluding, however, Kimbell Operating’s or
its Affiliates’ overhead or general or administrative expenses (the “Direct
Expenses” and, together with the Services Fee, the “Payment Amount”).

 

Section 2.3                        Scope. Except as provided in Schedule A, in
providing, or causing to be provided, the Services, in no event shall Kimbell
Operating be obligated to do any of the following: (i) maintain the employment
of any specific employee or hire additional employees; (ii) purchase, lease or
license any additional equipment (including computer equipment, furniture,
furnishings, fixtures, machinery, vehicles, tools and other tangible personal
property) or software; (iii) make modifications to its existing systems or
software; or (iv) pay any costs related to the transfer or conversion of data of
the Partnership Group; provided, however, that, in the event that any employees
that are engaged in the provision of Services cease working for Kimbell
Operating or are reassigned to other work by Kimbell Operating, Kimbell
Operating shall make reasonable efforts to replace such employees or otherwise
to have the duties performed by such employees in connection with the Services
continue to be provided, and that Kimbell Operating shall make or cause to be
made such repairs or modifications as are reasonably necessary to keep the
equipment, systems or software used in providing the Services in working order.
Kimbell Operating shall not be required to perform Services hereunder that
conflict with any applicable Law, contract or permit or policies of Kimbell
Operating or to which Kimbell Operating is subject relating to business conduct
and ethical practices.

 

Section 2.4                        Prohibited Activities.  Kimbell Operating
shall not undertake any activity that would (a) violate any applicable Law in
any material respect that would result in adverse consequences for the
Partnership Group or any Serviced Property or (b) violate, in any material
respect, any contracts, leases, orders, security instruments and other
agreements to which, to Kimbell Operating’s knowledge, a member of the
Partnership Group is bound.

 

Section 2.5                        Cooperation; Access.  Kimbell Operating and
the Partnership Parties shall cooperate with one another and provide such
further assistance as the other Party may reasonably

 

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request in connection with the provision of Services hereunder.  During the Term
and for so long as any Services are being provided by Kimbell Operating, each of
the Parties will provide the other Party and its authorized representatives
reasonable access, during regular business hours upon reasonable notice, to it
and its employees, representatives, facilities and books and records as the
other Party and its representatives may reasonably request in order to perform
and receive the Services.

 

Section 2.6                        No Comingling of Assets; Remittance of
Amounts Collected.  To the extent Kimbell Operating shall have charge or
possession of any of the Partnership Group’s assets in connection with the
provision of the Services pursuant to this Agreement, Kimbell Operating shall
(a) hold such assets in the name and for the benefit of the appropriate member
of the Partnership Group and (b) separately maintain, and not commingle, such
assets with any assets of Kimbell Operating or any other Person.  Kimbell
Operating shall remit to the applicable member of the Partnership Group any and
all amounts collected with respect to the Serviced Properties within no later
than 30 days of receipt of such amounts.

 

Section 2.7                        Limited Power of Attorney.  Holdings hereby
appoints Kimbell Operating or a manager to one of the Manager MSAs as Holdings’
agent for the purposes set forth herein and in the Manager MSAs during the Term
and in accordance with the terms and conditions set forth herein. Kimbell
Operating hereby accepts (on behalf of itself or a manager to one of the Manager
MSAs) such appointment as Holdings’ agent during the Term and in accordance with
the terms and conditions set forth herein. Holdings and Kimbell Operating agree
that the agency created by this Agreement is coupled with an interest and is
terminable only in accordance with the express provisions of this Agreement. To
evidence the foregoing, Holdings shall execute a limited power of attorney in
the form of Schedule C.

 

Article III
Invoicing and Payment

 

Section 3.1                        Invoicing. Within 30 days after the end of
each month, Kimbell Operating will provide the Partnership Parties with an
invoice reflecting the Direct Expenses incurred in such month. The invoice shall
set forth in reasonable detail for the period covered by such invoice the
following information: (a) all Direct Expenses incurred or payments made by
Kimbell Operating on behalf of the Partnership Group or the Serviced Properties
and (b) the basis, in reasonable detail, for the calculation of such Direct
Expenses.  On or before the first day of each month during the Term, the
Partnership Parties shall remit to Kimbell Operating the Services Fee for such
month and all Direct Expenses, if any, invoiced to the Partnership Parties in
the immediately preceding month; provided, that with respect to the payment to
be made for the first month of the Term, the Partnership Parties shall remit to
Kimbell Operating, on or before the Effective Date, the pro-rated portion of the
Services Fee for such month for the period of time from and including the
Effective Date to the end of such month. Neither Party shall have a right of
set-off against the other Party for any amounts due or to become due hereunder.

 

Section 3.2                        Objection. The Partnership Parties may object
to any expense or cost included on an invoice, including on the ground that the
same was not a reasonable or appropriate cost incurred by Kimbell Operating in
connection with the Services; provided, that such objection is made in writing
to Kimbell Operating within 30 days following the date of the Partnership
Parties’ receipt of the disputed invoice. The Parties shall, during the 15 days
after

 

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such notice, use their commercially reasonable efforts to reach agreement on the
disputed items or amounts. If the Parties are unable to reach agreement within
such period, the issue shall be determined pursuant to the dispute resolution
procedures set forth in Section 3.6. Notwithstanding the forgoing, the
Partnership Parties shall pay Kimbell Operating the Payment Amount owed to
Kimbell Operating when due. Such payment shall not be deemed a waiver of the
right of the Partnership Parties to recoup any contested portion of any amount
so paid.

 

Section 3.3                        Error Correction.  Kimbell Operating shall
make adjustments to charges as required to reflect the discovery of errors or
omissions in charges; provided, however, that any errors or omissions the
correction of which would result in additional or increased charges or fees for
Services must be corrected within one year after the date of the related
invoice.

 

Section 3.4                        Taxes.  All transfer taxes, excises, fees or
other charges (including value added, sales, use or receipts taxes, but not
including a tax on or measured by the income, net or gross revenues, business
activity or capital of Kimbell Operating), or any increase therein, now or
hereafter imposed directly or indirectly by Law, which Kimbell Operating is
required to pay or incur in connection with the provision of Services hereunder
(“Tax”), shall be passed on to the Partnership Parties as an explicit surcharge
and shall be paid by the Partnership Parties in addition to any payment to cover
expenses and costs related to Services provided. If the Partnership Parties
submit to Kimbell Operating a timely and valid resale or other exemption
certificate reasonably acceptable to Kimbell Operating and sufficient to support
the exemption from Tax, then such Tax will not be added to the fee pursuant to
Section 3.1; provided, however, that if Kimbell Operating is ever required to
pay such Tax, the Partnership Parties will promptly reimburse Kimbell Operating
for such Tax, including any interest, penalties and attorney’s fees related
thereto.  The Parties will cooperate to minimize the imposition of any Taxes.

 

Section 3.5                        Adjustment to Services Fee.

 

(a)                               The Services Fee shall be subject to
redetermination and adjustment, which may result in an increase or decrease of
the Services Fee, on January 1, 2018 and subsequently thereafter on each
January 1 of each calendar year beginning January 1, 2019 (each such date, a
“Redetermination Date”). On or about 30 days prior to each Redetermination Date,
Kimbell Operating shall prepare and deliver to the Partnership Parties a written
proposal for the Services Fee to be utilized during the next succeeding period,
together with all appropriate backup material and documents supporting the
recommendation for the proposed Services Fee.  Kimbell Operating and the
Partnership Parties agree to negotiate in good faith to determine the proposed
Services Fee to be utilized during the next succeeding period, which Services
Fee shall represent a reasonable allocation of all projected costs and expenses
to be incurred by Kimbell Operating in providing (or causing to be provided)
such Services to the Partnership Group. Pending the final determination of the
Services Fee for the next succeeding period, the Partnership Parties shall pay
monthly the Services Fee payable for the month immediately preceding the
Redetermination Date (the “Existing Services Fee”).  No later than 15 days
following the date of the final determination of the Services Fee for the
succeeding period (such fee, the “Adjusted Services Fee”), the Parties hereby
agree that (A) if such Adjusted Services Fee is greater than the Existing
Services Fee, then the Partnership Parties shall promptly pay Kimbell Operating
an amount equal to (1) the Adjusted Services Fee that would have been payable
for the period starting on the Redetermination Date if the Parties had agreed on
such fee

 

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prior to the applicable Redetermination Date and ending on the date of final
determination of the Adjusted Services Fee (the “Adjustment Period”) minus
(2) the Existing Services Fee actually paid for such Adjustment Period or (B) if
such Adjusted Services Fee is less than the Existing Services Fee, then Kimbell
Operating shall promptly pay the Partnership Parties an amount equal to (1) the
Existing Services Fee actually paid for such Adjustment Period minus (2) the
Adjusted Services Fee that would have been payable for such Adjustment Period if
the Parties had agreed on such fee prior to the applicable Redetermination
Date.  The Services Fee (as adjusted pursuant to the immediately preceding
sentence) will remain in effect until such time as it is subsequently adjusted
pursuant to this Section 3.5(a).  In the event that the Parties are unable to
agree upon the Services Fee for the next succeeding period pursuant to this
Section 3.5(a) within 30 days following the Redetermination Date, the issue and
the amount of the Adjusted Services Fee shall be determined pursuant to the
dispute resolution procedures set forth in Section 3.6.

 

(b)                              In the event of (x) the sale or disposition of
any of the Serviced Properties or (y) the provision of additional Management
Services by Kimbell Operating (including with respect to any Additional
Properties), the Services Fee shall be reduced, in the case of a sale or
disposition of Serviced Properties, or increased, in the case of the provision
of additional Management Services (such fee, the “New Services Fee”).  Kimbell
Operating and the Partnership Parties agree to negotiate in good faith to
determine the New Services Fee, which shall become effective in the month
(i) immediately following the consummation of any such sale or disposition or
(ii) during which the provision of additional Management Services commences, as
applicable (the “New Services Fee Effective Date”).  If the Parties have not
agreed upon the New Services Fee prior to the New Services Fee Effective Date,
the Partnership Parties shall pay monthly the Services Fee payable for the month
immediately preceding the New Services Fee Effective Date.  No later than 15
days following the date of the final determination of the New Services Fee, the
Parties hereby agree that (A) if such New Services Fee is greater than the
Services Fee actually paid to Kimbell Operating following the New Services Fee
Effective Date, then the Partnership Parties shall promptly pay Kimbell
Operating an amount equal to (1) the New Services Fee that would have been
payable for such period if the Parties had agreed on such fee prior to the
applicable New Services Fee Effective Date minus (2) the Services Fee actually
paid to Kimbell Operating following the New Services Fee Effective Date or
(B) if such New Services Fee is less than the Services Fee actually paid to
Kimbell Operating following the New Services Fee Effective Date, then Kimbell
Operating shall promptly pay the Partnership Parties an amount equal to (1) the
Services Fee actually paid to Kimbell Operating following the New Services Fee
Effective Date minus (2) the New Services Fee that would have been payable for
such period if the Parties had agreed on such fee prior to the applicable New
Services Fee Effective Date. The New Services Fee will remain in effect until
such time as it is subsequently adjusted pursuant to Section 3.5(b).  In the
event that the Parties are unable to agree upon the New Services Fee pursuant to
this Section 3.5(b) within 30 days following the New Services Fee Effective
Date, the issue and the New Services Fee shall be determined pursuant to the
dispute resolution procedures set forth in Section 3.6.

 

(c)                               Notwithstanding the foregoing and for the
avoidance of doubt, if the Partnership Parties and Kimbell Operating agree to
increase the Services Fee pursuant to this Section 3.5, any such increase shall
be subject to approval by the Conflicts Committee.

 

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Section 3.6                        Dispute Resolution.  If the Parties are
unable to resolve a dispute regarding (a) the objection to any expense or cost
included on an invoice pursuant to Section 3.2 or (b) the amount of an
adjustment to the Services Fee pursuant to Section 3.5, any Party may refer the
matter to arbitration in Tarrant County, Texas before one arbitrator. The
arbitration shall be administered by JAMS pursuant to its Comprehensive
Arbitration Rules and Procedures.  Arbitration pursuant to this Section 3.6
shall be the sole and exclusive remedy for any dispute arising pursuant to
Section 3.2 and Section 3.5 of this Agreement.  All other disputes arising out
of or relating to this Agreement shall be governed by Section 13.8 hereof.

 

Article IV
Term and Termination

 

Section 4.1                        Term.  The initial term of this Agreement
will be for a period of five years, commencing on the Effective Date and ending
on the fifth anniversary of the Effective Date (“Initial Term”). At the
conclusion of the Initial Term, the term of this Agreement will automatically
extend from year-to-year (each, an “Extension”) (the Initial Term and any
Extension(s), the “Term”), unless terminated by either Party with at least 90
days’ notice prior to the end of such term, as extended.

 

Section 4.2                        Termination for Convenience.  Subject to
Section 4.7, Kimbell Operating may, effective any time after the second
anniversary of the Effective Date and upon at least 180 days’ notice to the
Partnership Parties, terminate this Agreement or the provision of any Service.

 

Section 4.3                        Termination upon Change of Control.  Subject
to Section 4.7, the Partnership Parties or Kimbell Operating may terminate this
Agreement if, at any time, the Sponsors or their respective Affiliates no longer
control GP LLC by providing the other Party with at least 90 days’ notice of its
election to terminate this Agreement.

 

Section 4.4                        Termination for Default.

 

(a)                               The Partnership Parties will be in default if:

 

(i)                                  either Partnership Party fails to perform
any of its material obligations set forth in this Agreement and such failure is
not cured within 15 Business Days after notice thereof (which notice will
describe such failure in reasonable detail) is received by the Partnership
Parties; or

 

(ii)                              either Partnership Party (A) files a petition
or otherwise commences, authorizes or acquiesces in the commencement of a
proceeding or cause of action under any bankruptcy, insolvency, reorganization
or similar Law, or has any such petition filed or commenced against it,
(B) makes an assignment or any general arrangement for the benefit of creditors,
(C) otherwise becomes bankrupt or insolvent (however evidenced), (D) has a
liquidator, administrator, receiver, trustee, conservator or similar official
appointed with respect to it or any substantial portion of its property or
assets, or (E) is generally unable to pay its debts as they fall due.

 

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(b)                              Kimbell Operating will be in default upon the
occurrence of any gross negligence or willful misconduct of Kimbell Operating in
performing the Services resulting in material harm to the Partnership Group,
following 15 Business Days’ notice from the Partnership Parties to Kimbell
Operating.

 

(c)                               If the Partnership Parties are in default as
described in Section 4.4(a), Kimbell Operating may: (i) terminate this Agreement
upon notice to the Partnership Parties (subject to Section 4.7); (ii) withhold
any payments due to the Partnership Parties under this Agreement; and
(iii) pursue any other remedy at law or in equity.  If Kimbell Operating is in
default as described in Section 4.4(b), the Partnership Parties may: 
(x) terminate this Agreement upon notice to Kimbell Operating (subject to
Section 4.7); and (y) withhold any payments due to Kimbell Operating under this
Agreement.

 

Section 4.5                        Effect of Termination.  Upon termination of
this Agreement, all rights and obligations of the Parties under this Agreement
will terminate; provided, however, termination will not affect or excuse the
performance of either Party under any provision of this Agreement that by its
terms survives termination. The following provisions of this Agreement will
survive the termination of this Agreement indefinitely: Article VII,
Article VIII, Article IX, Article XI and Article XIII.

 

Section 4.6                        Costs of Termination. If this Agreement is
terminated by the Partnership Parties for any reason other than Kimbell
Operating’s default pursuant to Section 4.4, then any reasonable costs and
expenses actually incurred by Kimbell Operating in connection with such
termination (the “Termination Amount”) shall be reimbursed to Kimbell Operating
by the Partnership Parties; provided, however, that Kimbell Operating shall
provide (i) reasonable advance notice to the Partnership Parties of the
incurrence of any such costs and expenses and (ii) reasonable detail regarding
the calculation of such costs and expenses.

 

Section 4.7                        Limit on Termination. Notwithstanding
anything to the contrary set forth in this Agreement, neither Party may
terminate this Agreement or the provision of any Service unless all of the
Manager MSAs have terminated.

 

Article V
Representations and Warranties

 

Section 5.1                        Representations and Warranties of Kimbell
Operating.  Kimbell Operating represents and warrants that as of the Effective
Date and the first day of each Extension:

 

(a)                               It is duly formed, validly existing and in
good standing under the Laws of the state of its formation;

 

(b)                              This Agreement constitutes a legal, valid and
binding obligation enforceable against it in accordance with its terms, except
as enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting the rights of creditors
generally and (ii) general principles of equity; and

 

(c)                               The execution, delivery and performance of
this Agreement have been duly authorized by all requisite action and do not and
will not conflict with or result in the

 

11

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violation of: (i) any provisions of its organizational documents, (ii) any Law
to which it is subject or (iii) any material agreement or instrument to which it
is a party or by which it, its property or its assets are bound or affected.

 

Section 5.2                        Representations and Warranties of the
Partnership Parties.  Each of the Partnership Parties represents and warrants
that as of the Effective Date and the first day of each Extension:

 

(a)                               It is duly formed, validly existing and in
good standing under the laws of the state of its formation;

 

(b)                              This Agreement constitutes a legal, valid and
binding obligation enforceable against it in accordance with its terms, except
as enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting the rights of creditors
generally and (ii) general principles of equity; and

 

(c)                               The execution, delivery and performance of
this Agreement have been duly authorized by all requisite action and do not and
will not conflict with or result in the violation of: (i) any provisions of its
organizational documents, (ii) any Law to which it is subject or (iii) any
material agreement or instrument to which it is a party or by which it, its
property or its assets are bound or affected.

 

Article VI
Relationship of the Parties

 

This Agreement does not form a partnership or joint venture between the
Parties.  Except as set forth in Section 2.7, this Agreement does not make
Kimbell Operating an agent or a legal representative of the Partnership Parties
and Kimbell Operating will not assume or create any obligation, liability or
responsibility, expressed or implied, on behalf of or in the name of the
Partnership Parties.  It is the intent of the Parties that with respect to
performing the Services hereunder, Kimbell Operating is an independent
contractor, and shall provide the Services in accordance with the reasonable
instructions provided by authorized representatives of the Partnership Parties,
subject to the provisions of this Agreement.

 

Article VII
Audit

 

Kimbell Operating will maintain in good order any and all books and records
regarding the Services for a period of two years following the date such
Services are rendered.  Each of the Partnership Parties may, at its sole cost
and expense, review or audit, or cause to be reviewed or audited, the books and
records of Kimbell Operating related to this Agreement; provided, however, that
all invoices provided to the Partnership Parties pursuant to this Agreement
shall be paid when due regardless of whether such invoices are under review or
audit pursuant to this Article VII.  Kimbell Operating will make available its
relevant books and records and use commercially reasonable efforts to assist the
Partnership Parties in conducting such review or audit.  Kimbell Operating shall
cooperate fully and timely, and cause its accountants and other advisors to
cooperate fully and timely, with any reasonable request by the Partnership
Parties to produce financial statements for, or other information and materials
regarding, the Serviced

 

12

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Properties that is necessary or appropriate for the Partnership to fully comply
with the rules and regulations of the Securities and Exchange Commission and any
national securities exchange on which securities of the Partnership are listed
or are proposed to be listed.  The Partnership Parties shall bear all costs and
expenses incurred by Kimbell Operating in complying with any such request,
including with respect to any inspection, examination or audit performed on the
Partnership Group pursuant to this Article VII and including the reasonable fees
and expenses of any legal counsel or financial or accounting, professional
engaged by Kimbell Operating.  The Partnership Parties shall make payment of
such invoiced expenses to Kimbell Operating as provided for pursuant to
Section 3.1.

 

Article VIII
Indemnification

 

Section 8.1                        The Partnership Parties’ Agreement to
Indemnify.  THE PARTNERSHIP PARTIES SHALL ASSUME ALL LIABILITY FOR AND SHALL
RELEASE, DEFEND, INDEMNIFY AND HOLD KIMBELL OPERATING, ITS AFFILIATES AND THEIR
RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS AND AGENTS (COLLECTIVELY, THE “KIMBELL
OPERATING INDEMNITEES”) HARMLESS FROM AND AGAINST ALL LIABILITY, DEMANDS,
CLAIMS, ACTIONS OR CAUSES OF ACTION, ASSESSMENTS, LOSSES, DAMAGES, COSTS AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS’, EXPERTS’ AND CONSULTANTS’ FEES AND
EXPENSES AS WELL AS REASONABLE COSTS OF INVESTIGATION, SAMPLING AND DEFENSE)
(COLLECTIVELY, “DAMAGES”) RESULTING FROM OR ARISING OUT OF (A) ANY MATERIAL
BREACH BY THE PARTNERSHIP PARTIES OF THIS AGREEMENT OR (B) THE PERSONAL INJURY,
DEATH, DAMAGE TO PROPERTY OF OR LIABILITY OF ANY MEMBER OF THE PARTNERSHIP
GROUP, ANY THIRD PARTY OR ANY OF THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS
AND AGENTS AND ARISING FROM, CONNECTED WITH OR UNDER THIS AGREEMENT.  FOR THE
AVOIDANCE OF DOUBT, THE PARTNERSHIP PARTIES’ ONLY REMEDY FOR BREACH OF THIS
AGREEMENT OR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR ANY OTHER FAULT OF
KIMBELL OPERATING PURSUANT TO THIS AGREEMENT SHALL BE TERMINATION OF THIS
AGREEMENT PURSUANT TO SECTION 4.4.

 

Section 8.2                        Adverse Claims.  To the extent that any
indemnification claim under this Article VIII involves a claim in which Kimbell
Operating and the Partnership are adverse, the Partnership’s rights and
obligations shall be controlled by the Conflicts Committee.

 

Section 8.3                        Indemnification Procedures.

 

(a)                               If any Kimbell Operating Indemnitee is
entitled to indemnification under this Agreement (an “Indemnified Party”), it
will promptly after it becomes aware of facts giving rise to a claim for
indemnification provide notice to the Partnership Parties (the “Indemnifying
Party”) specifying the nature of and the specific basis for such claim.  Failure
to so notify the Indemnifying Party shall not relieve such Indemnifying Party
from any liability which such Indemnifying Party may have to any Indemnified
Party or otherwise, except to the extent that the

 

13

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Indemnifying Party has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure.

 

(b)                              The Indemnifying Party will have the right to
control all aspects of the defense of (and any counterclaims with respect to)
any claims brought against the Indemnified Party that are covered by the
indemnification set forth in this Agreement, including the selection of counsel,
determination of whether to appeal any decision of any court or similar
authority and the settling of any such matter or any issues relating thereto;
provided, however, that no such settlement will be entered into without the
consent of the Indemnified Party unless it includes a full release of the
Indemnified Party for such matter or issues, as the case may be.

 

(c)                               The Indemnified Party agrees to cooperate
fully with the Indemnifying Party with respect to all aspects of the defense of
any claims covered by the indemnification set forth in this Agreement, including
the prompt furnishing to the Indemnifying Party of any correspondence or other
notice relating thereto that the Indemnified Party may receive, permitting the
names of the Indemnified Party to be utilized in connection with such defense,
the making available to the Indemnifying Party of any files, records or other
information of the Indemnified Party that the Indemnifying Party considers
relevant to such defense and the making available to the Indemnifying Party of
any employees of the Indemnified Party; provided, however, that in connection
therewith the Indemnifying Party agrees to use reasonable efforts to minimize
the impact thereof on the operations of the Indemnified Party and further agrees
to maintain the confidentiality of all files, records and other information
furnished by the Indemnified Party pursuant to this Section 8.3(c). In no event
shall the obligation of the Indemnified Party to cooperate with the Indemnifying
Party be construed as imposing an obligation on the Indemnified Party to hire
and pay for counsel in connection with the defense of any claims covered by the
indemnification set forth in this Agreement; provided, however, that the
Indemnified Party may, at its own option, cost and expense, hire and pay for
counsel in connection with any such defense. The Indemnifying Party agrees to
keep any such counsel hired by the Indemnified Party informed as to the status
of any such defense, but the Indemnifying Party shall have the right to retain
sole control over such defense.

 

(d)                             In determining the amount of any losses for
which the Indemnified Party is entitled to indemnification under this Agreement,
the gross amount of the indemnification will be reduced by (i) any cash
insurance proceeds realized by the Indemnified Party, and such correlative
insurance benefit shall be net of any incremental insurance premiums that become
due and payable by the Indemnified Party as a result of such claim and (ii) all
cash amounts recovered by the Indemnified Party under contractual indemnities
from third Persons.

 

Section 8.4                        Express Negligence Waiver.  THE FOREGOING
INDEMNITIES ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTNERSHIP PARTIES IN
ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS
NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT
INDEMNITIES BECAUSE OF THE SOLE, CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE,
STRICT LIABILITY OR FAULT OF ANY OF THE INDEMNIFIED PARTIES.

 

14

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Article IX
Limitation of Liability

 

NO PARTY SHALL BE LIABLE UNDER THIS AGREEMENT FOR ANY EXEMPLARY, SPECIAL,
PUNITIVE, INDIRECT, INCIDENTAL, REMOTE, SPECULATIVE OR CONSEQUENTIAL DAMAGES
(INCLUDING FOR LOST REVENUES OR LOST PROFITS), INCLUDING LOSS OF FUTURE REVENUE
OR INCOME, LOSS OF BUSINESS, REPUTATION OR OPPORTUNITY OR DIMINUTION  IN VALUE,
WHETHER IN PERSONAL INJURY OR OTHER TORT (INCLUDING ANY NEGLIGENCE), STRICT
LIABILITY, BY CONTRACT OR STATUTE, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES, EXCEPT FOR THE LIABILITY OF THE PARTNERSHIP
PARTIES IN RESPECT OF THIRD PARTY DAMAGES PURSUANT TO THE INDEMNITY IN
SECTION 8.1.

 

Article X
Force Majeure

 

To the extent either Party is prevented by Force Majeure from performing its
obligations, in whole or in part, under this Agreement, and if such Party
(“Affected Party”) gives notice and details of the Force Majeure to the other
Party as soon as reasonably practicable, then the Affected Party will be excused
from the performance with respect to any such obligations (other than the
obligation to make payments when due). Each notice of Force Majeure sent by an
Affected Party to the other Party will specify the event or circumstance of
Force Majeure, the extent to which the Affected Party is unable to perform its
obligations under this Agreement and the steps being taken by the Affected Party
to mitigate and to overcome the effects of such event or circumstances. The
non-Affected Party will not be required to perform its obligations to the
Affected Party corresponding to the obligations of the Affected Party excused by
Force Majeure. A Party prevented from performing its obligations due to Force
Majeure will use commercially reasonable efforts to mitigate and to overcome the
effects of such event or circumstances and will resume performance of its
obligations as soon as practicable.

 

Article XI
Confidentiality

 

Section 11.1                Confidentiality.  Kimbell Operating shall hold in
strict confidence any Confidential Information it receives from the Partnership
Group and may not disclose any Confidential Information to any Person, and the
Partnership Parties shall hold in strict confidence any Confidential Information
it receives from Kimbell Operating and may not disclose any Confidential
Information to any Person, except in each case for disclosures (a) to comply
with applicable Laws, (b) to such Party’s Affiliates, officers, directors,
employees, agents, advisers or representatives and, in the case of Kimbell
Operating, the Manager Entities, but only if the recipients of such information
have agreed to be bound by the provisions of this Article XI, (c) of information
that such Party has received from a source independent of the other Party and
that such Party reasonably believes such source obtained without breach of any
obligation of confidentiality, (d) to such Party’s existing and prospective
lenders, existing and prospective investors, attorneys, accountants, consultants
and other representatives with a need to know such information (including a need
to know for such Party’s own purposes), provided, however, that such Party shall
be responsible for such person’s use and disclosure of any such information, or

 

15

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(e) of information that is already known to the public through no violation of
this Agreement or any other confidentiality agreement of the disclosing Party.

 

Section 11.2                Return of Confidential Information.  Upon
termination of this Agreement for any reason, each Party shall, and shall cause
its employees and representatives to, promptly return to the other Party all
Confidential Information it received from such other Party, including all copies
thereof, in its possession or control, or destroy or purge its own system and
files of any such Confidential Information (to the extent practicable) and
deliver to such other Party a written certificate signed by an officer of such
Party that such destruction and purging have been carried out.

 

Article XII
Notices

 

Any notice, request, instruction, correspondence or other document to be given
hereunder by any Party to another Party (each, a “Notice”) shall be in writing
and delivered in person or by courier service requiring acknowledgment of
receipt of delivery or mailed by U.S. registered or certified mail, postage
prepaid and return receipt requested, or by e-mail, as follows, provided that
copies to be delivered below shall not be required for effective notice and
shall not constitute notice:

 

If to the Partnership Parties, addressed to:

 

Kimbell Royalty Partners, LP

c/o Kimbell Royalty GP, LLC

777 Taylor Street, Suite 810

Fort Worth, Texas 76102

Attention: Robert D. Ravnaas

Email: robert@kimbellrp.com

 

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

 

Baker Botts L.L.P.

910 Louisiana Street

Houston, Texas  77002

Attention: Jason A. Rocha

Email: jason.rocha@bakerbotts.com

 

If to Kimbell Operating, addressed to:

 

Kimbell Operating Company, LLC

777 Taylor Street, Suite 810

Fort Worth, Texas 76102

Attention: R. Davis Ravnaas

Email: davis@kimbellrp.com

 

16

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

 

Baker Botts L.L.P.

910 Louisiana Street

Houston, Texas  77002

Attention: Jason A. Rocha

Email: jason.rocha@bakerbotts.com

 

Notice given by personal delivery, courier service or mail shall be effective
upon actual receipt.  Notice sent by e-mail (including e-mail of a PDF
attachment) shall be deemed to have been given and received at the time of
transmission.  Any Party may change any address to which Notice is to be given
to it by giving Notice as provided above of such change of address.

 

Article XIII
Miscellaneous

 

Section 13.1                No Waiver.  No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (regardless of whether similar), nor shall any such waiver
constitute a continuing waiver unless otherwise expressly provided.

 

Section 13.2                Amendment.  No amendment to this Agreement will be
effective unless made in writing and signed by both of the Parties.

 

Section 13.3                Severability.  If any provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of applicable Law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement are not affected in
any manner materially adverse to any Party.  Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
Parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the Parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this Agreement
are consummated as originally contemplated to the fullest extent possible.

 

Section 13.4                Assignment.  Neither Party may assign, transfer or
otherwise alienate this Agreement or any of its rights, interests or obligations
under this Agreement (whether by operation of Law or otherwise) without the
consent of the other Party.  Any attempted assignment, transfer or alienation in
violation of this Agreement shall be null, void and ineffective.

 

Section 13.5                Further Assurances.  Each Party will, at the request
of the other Party, execute and deliver, or cause to be executed and delivered,
such document and instruments as may be necessary to make effective the
transactions contemplated by this Agreement.

 

Section 13.6                Counterparts.  This Agreement may be executed in one
or more counterparts (including by facsimile or other electronic transmission),
each of which shall be deemed an original, but all of which together shall
constitute one instrument.

 

17

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Section 13.7                Construction.

 

(a)                               The division of this Agreement into articles,
sections and other portions and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation hereof. 
Unless otherwise indicated, all references to an “Article” or “Section” followed
by a number or a letter refer to the specified Article or Section of this
Agreement.  The Schedules attached to this Agreement are hereby incorporated by
reference into this Agreement and form part hereof.  Unless otherwise indicated,
all references to a “Schedule” followed by a letter refer to the specified
Schedule to this Agreement.  The terms “this Agreement,” “hereof,” “herein” and
“hereunder” and similar expressions refer to this Agreement and not to any
particular Article, Section or other portion hereof.

 

(b)                              Unless otherwise specifically indicated or the
context otherwise requires, (i) all references to “dollars” or “$” mean United
States dollars, (ii) words importing the singular shall include the plural and
vice versa, and words importing any gender shall include all genders,
(iii) “include,” “includes” and “including” shall be deemed to be followed by
the words “without limitation,” and (iv) all words used as accounting terms
shall have the meanings assigned to them under United States generally accepted
accounting principles applied on a consistent basis and as amended from time to
time.  If any date on which any action is required to be taken hereunder by any
of the Parties hereto is not a Business Day, such action shall be required to be
taken on the next succeeding day that is a Business Day.  Reference to any Party
hereto is also a reference to such Party’s permitted successors and assigns.

 

(c)                               The Parties hereto have participated jointly
in the negotiation and drafting of this Agreement.  No provision of this
Agreement will be interpreted in favor of, or against, any of the Parties to
this Agreement by reason of the extent to which any such Party or its counsel
participated in the drafting thereof or by reason of the extent to which any
such provision is inconsistent with any prior draft of this Agreement, and no
rule of strict construction will be applied against any Party hereto.  This
Agreement will not be interpreted or construed to require any Person to take any
action, or fail to take any action, if to do so would violate any applicable
Law.

 

Section 13.8                Governing Law; Jurisdiction; Waiver of Jury Trial. 
This Agreement is governed by and will be construed in accordance with the Laws
of the State of Texas, excluding any conflict of Laws rule or principle that
might refer the governance or the construction of this Agreement to the Law of
another jurisdiction.  If any provision of this Agreement or its application to
any Person or circumstance is held invalid or unenforceable to any extent, the
remainder of this Agreement and the application of such provision to other
Persons or circumstances will not be affected thereby, and such provision will
be enforced to the greatest extent permitted by Law.  IN RESPECT OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, EACH OF THE PARTIES
HERETO CONSENTS TO THE JURISDICTION AND VENUE OF ANY FEDERAL OR STATE COURT
LOCATED IN TARRANT COUNTY, TEXAS, WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT, CONSENT THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY FIRST
CLASS REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED,
DIRECTED TO IT AS THE ADDRESS SPECIFIED PURSUANT TO ARTICLE XII, AGREES THAT
SUCH SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT
THEREOF, AND WAIVES ANY OBJECTION TO JURISDICTION OR VENUE OF, AND WAIVES ANY
MOTION TO TRANSFER VENUE FROM, ANY OF THE AFORESAID COURTS. THE PARTIES HERETO
WAIVE

 

18

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ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT AND ANY DOCUMENT EXECUTED IN CONNECTION HEREWITH.

 

Section 13.9                No Third Party Beneficiaries.  Except for the rights
of Indemnified Parties hereunder, nothing in this Agreement, express or implied,
is intended to or shall confer upon any Person (other than the Partnership
Parties, Kimbell Operating, any Subsidiary or Affiliate of Kimbell Operating
providing Services hereunder, and Subsidiaries or Affiliates of the Partnership
receiving Services hereunder, or their respective successors or permitted
assigns) any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, and no Person (except as so
specified) shall be deemed a third-party beneficiary under or by reason of this
Agreement.

 

Section 13.10        Entire Agreement.  This Agreement and the Schedules hereto
constitute the entire agreement among the Parties pertaining to the subject
matter hereof.

 

[Signatures of the Parties follow on the next page.]

 

19

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IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective
as of, the date first written above:

 

 

KIMBELL ROYALTY PARTNERS, LP

 

 

 

 

 

 

 

By: Kimbell Royalty GP, LLC, its general partner

 

 

 

 

 

By:

/s/ R. Davis Ravnaas

 

 

 

Name:

R. Davis Ravnaas

 

 

 

Title:

President and Chief Financial Officer

 

 

 

 

 

 

 

 

KIMBELL ROYALTY GP, LLC

 

 

 

 

 

By:

/s/ R. Davis Ravnaas

 

 

 

Name:

R. Davis Ravnaas

 

 

 

Title:

President and Chief Financial Officer

 

 

 

 

 

 

 

 

KIMBELL OPERATING COMPANY, LLC

 

 

 

 

 

By:

/s/ R. Davis Ravnaas

 

 

 

Name:

R. Davis Ravnaas

 

 

 

Title:

President and Chief Financial Officer

 

 

 

 

With respect to and limited to the conditions set forth in Section 2.7,

 

 

 

KIMBELL ROYALTY HOLDINGS, LLC

 

 

 

 

 

By:

/s/ R. Davis Ravnaas

 

 

Name:  R. Davis Ravnaas

 

Title:    President and Chief Financial Officer

 

 

 

Signature Page to Management Services Agreement

 

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SCHEDULE A

 

SERVICES

 

This schedule sets forth certain Services that may be required from Kimbell
Operating with respect to the Serviced Properties and the identification,
evaluation and recommendation of opportunities for an Acquisition and any
related negotiation of such opportunities.  The provision of any Services shall
in all respects be subject to the terms and conditions set forth in this
Agreement.

 

Kimbell Operating shall have the authority to perform or to arrange for the
provision of the following Services:

 

1.            All services described on Schedule A to the BJF MSA, as it may be
from time to time amended, restated, modified or supplemented; provided,
however, that if the BJF MSA terminates for any reason, the services provided
pursuant to this Section 1 of Schedule A shall be such services provided
pursuant to the BJF MSA as of the date immediately preceding the date of such
termination.

 

2.            All services described on Schedule A to the Duncan MSA, as it may
be from time to time amended, restated, modified or supplemented; provided,
however, that if the Duncan MSA terminates for any reason, the services provided
pursuant to this Section 2 of Schedule A shall be such services provided
pursuant to the Duncan MSA as of the date immediately preceding the date of such
termination.

 

3.            All services described on Schedule A to the K3 MSA, as it may be
from time to time amended, restated, modified or supplemented; provided,
however, that if the K3 MSA terminates for any reason, the services provided
pursuant to this Section 3 of Schedule A shall be such services provided
pursuant to the K3 MSA as of the date immediately preceding the date of such
termination.

 

4.            All services described on Schedule A to the Nail Bay MSA, as it
may be from time to time amended, restated, modified or supplemented; provided,
however, that if the Nail Bay MSA terminates for any reason, the services
provided pursuant to this Section 4 of Schedule A shall be such services
provided pursuant to the Nail Bay MSA as of the date immediately preceding the
date of such termination.

 

5.            All services described on Schedule A to the Steward MSA, as it may
be from time to time amended, restated, modified or supplemented; provided,
however, that if the Steward MSA terminates for any reason, the services
provided pursuant to this Section 5 of Schedule A shall be such services
provided pursuant to the Steward MSA as of the date immediately preceding the
date of such termination.

 

6.            All services described on Schedule A to the Taylor MSA, as it may
be from time to time amended, restated, modified or supplemented; provided,
however, that if the Taylor MSA terminates for any reason, the services provided
pursuant to this Section 6 of Schedule A shall be such services provided
pursuant to the Taylor MSA as of the date immediately preceding the date of such
termination.

 

A-1

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7.            The following categories of management, administrative and
operational services, in each case to the extent not otherwise provided pursuant
to the foregoing Sections 1 through 6 of Schedule A:

 

a.             Accounting

 

b.            Information Technology

 

c.             Business Development / Deal Sourcing and Negotiations

 

d.           Real Property and Land

 

e.             Legal and Diligence

 

f.              Securities and Exchange Commission Reporting

 

g.            Administrative Services

 

h.            Financial Services

 

i.                Insurance Services

 

j.                Risk Management

 

k.            Corporate Development

 

l.                Commercial and Marketing

 

m.        Treasury

 

n.            Tax

 

o.            Audit

 

p.            Sarbanes-Oxley Compliance

 

q.            Investor Relations

 

A-2

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SCHEDULE B

 

SERVICED PROPERTIES

 

All assets of the Partnership Group.

 

B-1

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SCHEDULE C

 

FORM OF LIMITED POWER OF ATTORNEY

 

This Limited Power of Attorney (this “POA”) is made and entered into by and
between KIMBELL ROYALTY HOLDINGS, LLC, a Delaware limited liability company, on
behalf of itself (“Principal”), and [                       ], a
[                       ] (“Agent”), to be effective for all purposes as of
[_______], 201[_] (the “Effective Date”).

 

WHEREAS, Principal has engaged Agent to perform certain management services with
respect to certain assets (the “Serviced Properties”, which, for the avoidance
of doubt, include those assets described in the assignment or conveyance to
which this POA is attached) for Principal.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged and confessed, and the mutual benefits to be
derived by each party hereunder and the mutual covenants contained herein,
Principal and Agent hereby agree as follows:

 

1.            Limited Powers.

 

a.             Subject to Paragraph (b) below, Agent may (i) assist in resolving
certain title issues with respect to the Serviced Properties, including
negotiating and entering into any corrective assignment or deed, affidavit,
amended lease or stipulation of interests; (ii) execute, negotiate, acknowledge
and deliver on behalf of such the Principal oil, gas and/or mineral leases,
release of oil, gas and/or mineral leases, easements and right-of-way
agreements, pooling agreements, unitization agreements, communitization
agreements, production sharing agreements, seismic permits, or stipulations of
interests,  (iii) execute, negotiate, acknowledge and deliver on behalf of such
the Principal division orders, corrective assignments or deeds, affidavits,
amended leases, stipulations of interest or any other similar instruments
necessary for the payment of royalty interests, overriding royalty interests or
other proceeds of production owned by such the Principal for which the proceeds
are payable to the Principal and are related to the Serviced Properties or any
part thereof; (iv) execute, acknowledge and deliver on behalf of the Principal
transfer orders or any other similar instruments necessary for the transfer of
royalty interests, overriding royalty interests or other proceeds of production
owned by the Principal for which the proceeds are payable to the Principal and
are related to the Serviced Properties or any part thereof; provided that such
instruments direct payment of such proceeds to the Principal at such address as
the Principal may direct; and (v) Agent is empowered to receive and disburse to
the Principal all royalty and other production payments, bonus payments, delay
rentals or any other payments related to the Serviced Properties.

 

b.            Notwithstanding the provisions of Paragraph 1, above, Agent shall
not:

 

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i.                incur indebtedness, borrow or lend money for the Serviced
Properties;

 

ii.            create any lien or encumbrance on the Serviced Properties or any
proceeds therefrom except those arising under any operating agreements, division
orders, oil and gas leases (“Documents”) or other similar documents which are
usual and customary and are intended to perform the same basic functions as the
Documents;

 

iii.        sell, convey, assign, transfer or otherwise dispose of any Serviced
Property;

 

iv.        execute any indemnification agreement binding on the Principal or the
Serviced Properties in any way except those arising under any Documents or other
similar documents which are usual and customary and in the ordinary course of
business;

 

v.            make any elections or take any actions, without the Principal’s
prior written approval, that would result in any member of the Principal
acquiring a working interest or cost-bearing interest in any property;

 

vi.        take any other action not in the ordinary course of business; or

 

vii.    agree to do any of the foregoing.

 

2.              Revocation and Termination. Principal has the power to revoke
this POA at any time by Principal’s written revocation delivered to Agent.

3.              No General Power of Appointment. Any authority granted to Agent
herein shall be limited so as to prevent this Agent to be subject to or be taxed
on Principal’s income.

4.              Ratification. Principal hereby ratifies and confirms all that
Agent shall lawfully do or cause to be done by virtue of this POA and the rights
and powers granted herein.

 

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IN WITNESS WHEREOF, this POA has been executed by the undersigned duly
authorized representatives of Principal to be effective for all purposes as of
the Effective Date set forth above.

 

 

PRINCIPAL:

 

 

 

KIMBELL ROYALTY HOLDINGS, LLC

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

AGENT:

 

 

 

[                                                                  ]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

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