Exhibit 10.1

 

EXCHANGE AGREEMENT

 

BY AND AMONG

 

KIMBELL ROYALTY PARTNERS, LP

 

KIMBELL ROYALTY GP, LLC

 

KIMBELL ROYALTY OPERATING, LLC

 

KIMBELL ART FOUNDATION

 

HAYMAKER MINERALS & ROYALTIES, LLC

 

EIGF AGGREGATOR III LLC

 

TE DRILLING AGGREGATOR LLC

 

AND

 

HAYMAKER MANAGEMENT, LLC

 

Dated as of September 23, 2018

 

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TABLE OF CONTENTS

 

 

 

Page

ARTICLE I DEFINITIONS

1

 

 

Section 1.1

Definitions

1

Section 1.2

Gender

2

 

 

 

ARTICLE II EXCHANGE

3

 

 

 

Section 2.1

Redemption and Purchase Rights

3

Section 2.2

Expiration

5

Section 2.3

Adjustment

5

 

 

 

ARTICLE III MISCELLANEOUS PROVISIONS

6

 

 

 

Section 3.1

Notices

6

Section 3.2

Time Is of the Essence

8

Section 3.3

Assignment; Additional Participating Holders

8

Section 3.4

Rights of Third Parties

8

Section 3.5

Headings

8

Section 3.6

Governing Law; Jurisdiction

8

Section 3.7

Severability

9

Section 3.8

Entire Agreement

9

Section 3.9

Amendment

9

Section 3.10

Waiver

9

Section 3.11

Specific Performance; Remedies

9

Section 3.12

Counterparts

10

Section 3.13

Construction

10

Section 3.14

Tax Matters

10

 

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This EXCHANGE AGREEMENT (this “Agreement”), dated as of September 23, 2018, is
by and among (i) Kimbell Royalty Partners, LP, a Delaware limited partnership
(the “Partnership”); (ii) Kimbell Royalty GP, LLC, a Delaware limited liability
company (the “General Partner”); (iii) Kimbell Royalty Operating, LLC, a
Delaware limited liability company (the “Operating Company”); (iv) the Kimbell
Art Foundation, a Texas non-profit corporation; (v) Haymaker Minerals &
Royalties, LLC, a Delaware limited liability company; (vi) EIGF Aggregator III
LLC, a Delaware limited liability company; (vii) TE Drilling Aggregator LLC, a
Delaware limited liability company; and (viii) Haymaker Management, LLC, a Texas
limited liability company (each of (iv)-(viii), a “Participating Holder,” and
together, the “Participating Holders”). The above-named entities are sometimes
referred to in this Agreement as a “Party” and collectively as the “Parties.”

 

WHEREAS, the Parties desire to provide for the possible future exchange by the
Participating Holders of OpCo Common Units and Class B Units for Common Units or
cash, on the terms and subject to the conditions set forth herein; and

 

WHEREAS, the Parties intend that an Exchange (as defined below) consummated
hereunder be treated for federal income tax purposes, to the extent permitted by
law, as a taxable exchange of OpCo Common Units and Class B Units by
Participating Holders.

 

NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1  Definitions.  Capitalized terms used herein but not defined shall
have the meanings ascribed to them in the Partnership Agreement (as defined
below). As used in this Agreement, the following terms shall have the following
meanings:

 

“Agreement” has the meaning set forth in the preamble to this Agreement.

 

“Applicable Percentage” has the meaning set forth in Section 2.1(b).

 

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

 

“Cash Amount” means an amount of cash equal to the Redemption Amount plus an
amount equal to the product of (i) the number of Tendered Units and (ii) the
Current Market Price as of the date of the Notice of Redemption.

 

“Cash Purchase Price” has the meaning set forth in Section 2.1(b).

 

“Common Unit Amount” means a number of Common Units equal to the number of
Tendered Units and an amount of cash equal to the applicable Redemption Amount.

 

“Cut-Off Date” means the second Business Day after the date on which a Notice of
Redemption is delivered to each of the Operating Company and the Partnership.

 

“Delaware LLC Act” means the Delaware Limited Liability Company Act, 6 Del C.
Section 18-101, et seq., as amended, supplemented or restated from time to time,
and any successor to such statute.

 

“Exchange” means (i) a Redemption by the Operating Company of Tendered Units
for, at the election of the Operating Company, the Common Unit Amount or the
Cash Amount as described in Section 2.1(a) of this Agreement and (ii) the
purchase of Tendered Units by the Partnership from a Participating Holder for,
at the election of the Partnership, the Unit Purchase Price or the Cash Purchase
Price.

 

“Exchange Right” means the rights of each Participating Holder and the
Partnership pursuant to Section 2.1(a) and (b), respectively, of this Agreement.

 

“Exercise Notice” has the meaning set forth in Section 2.1(b)(i).

 

“Financing Party” means any and all Persons, or the agents or trustees
representing them, providing senior or subordinated debt financing or
refinancing (including letters of credit, bank guaranties or other credit
support).

 

“General Partner” has the meaning set forth in the preamble to this Agreement.

 

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“Governmental Entity” means 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, agency or other statutory
body, 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 (including the New York Stock Exchange and
NASDAQ Stock Market), in each case, that has jurisdiction or authority with
respect to the applicable Party.

 

“Laws” means any and all applicable (a) laws, constitutions, treaties, statutes,
codes, ordinances, principles of common law and equity, rules, regulations and
municipal bylaws whether domestic, foreign or international, (b) judicial,
arbitral, administrative, ministerial, departmental and regulatory judgments,
orders, writs, injunctions, decisions, and awards of any Governmental Entity,
and (c) policies, practices and guidelines of any Governmental Entity which,
although not actually having the force of law, are considered by such
Governmental Entity as requiring compliance as if having the force of law, and
the term “applicable,” with respect to such Laws and in the context that refers
to one or more Persons, means such Laws that apply to such Person or Persons or
its or their business, undertaking, property or securities at the relevant time
and that emanate from a Governmental Entity having jurisdiction over the Person
or Persons or its or their business, undertaking, property or securities.

 

“Notice of Redemption” has the meaning set forth in Section 2.1(a)(i).

 

“OpCo Limited Liability Company Agreement” means the First Amended and Restated
Limited Liability Company Agreement of the Operating Company, dated as of
September 23, 2018, as may be amended from time to time.

 

“Operating Company” has the meaning set forth in the preamble to this Agreement.

 

“Participating Holder” or “Participating Holders” has the meaning set forth in
the preamble to this Agreement.

 

“Partnership” has the meaning set forth in the preamble to this Agreement.

 

“Partnership Agreement” means the Third Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of September 23, 2018, as may
be amended from time to time.

 

“Party” or “Parties” has the meaning set forth in the preamble to this
Agreement.

 

“Redemption” has the meaning set forth in Section 2.1(a).

 

“Redemption Amount” means a cash amount equal to the product of the number of
Tendered Units multiplied by the Class B Capital Contribution Per Unit Amount
(as defined in the Partnership Agreement).

 

“Registration Rights Agreements” means (i) the Registration Rights Agreement
attached as Exhibit K to the Contribution, Conveyance, Assignment and Assumption
Agreement, dated as of December 20, 2016, by and among the Partnership, the
General Partner, Kimbell Intermediate GP, LLC, Kimbell Intermediate Holdings,
LLC, Kimbell Royalty Holdings, LLC, and the other parties thereto, and (ii) the
Registration Rights Agreement, dated as of July 12, 2018, by and among the
Partnership, Haymaker Minerals & Royalties, LLC, EIGF Aggregator III LLC, TE
Drilling Aggregator LLC, Haymaker Management, LLC and the other parties thereto.

 

“Retraction Notice” has the meaning set forth in Section 2.1(a)(ii).

 

“Settlement Method Notice” has the meaning set forth in Section 2.1(a)(iii).

 

“Specified Redemption Date” means the date specified in either the Settlement
Method Notice or the Exercise Notice, as applicable, which shall be on or prior
to the third Business Day after the delivery to the Operating Company and the
Partnership of a Notice of Redemption, subject to extension as agreed to in
writing by the Operating Company, the Partnership and the tendering
Participating Holder; provided that if such Settlement Method Notice or Exercise
Notice, as applicable, provides for the settlement of the Exchange by payment of
the Cash Amount or the Cash Purchase Price, as applicable, such date shall be on
or prior to the 10th Business Day after the delivery to the Operating Company
and the Partnership of such Notice of Redemption.

 

“Tendered Units” has the meaning set forth in Section 2.1(a).

 

“Unit Purchase Price” has the meaning set forth in Section 2.1(b).

 

Section 1.2  Gender.  For the purposes of this Agreement, the words “it,” “he,”
“his” or “himself” shall be interpreted to include the masculine, feminine and
corporate, other entity or trust form.

 

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ARTICLE II

EXCHANGE

 

Section 2.1  Redemption and Purchase Rights.

 

(a)                                 Each Participating Holder shall have the
right (subject to the terms and conditions set forth herein) to require the
Operating Company to redeem (each, a “Redemption”) all or a portion of the OpCo
Common Units held by such Participating Holder and an equal number of Class B
Units held by such Participating Holder (one OpCo Common Unit and one Class B
Unit, together, a “Unit,” and collectively “Units,” such Units that have in fact
been tendered for redemption being hereafter referred to as “Tendered Units”) in
exchange for, at the election of the Operating Company in accordance with
Section 2.1(a)(iii), on the Specified Redemption Date, (i) the Common Unit
Amount or, (ii) subject to Section 2.1(a)(iv) and Section 2.1(c), the Cash
Amount.

 

(i)                                     If a Participating Holder desires to
exercise its right to require a Redemption, it shall deliver a written notice to
the Operating Company and the Partnership specifying the number of Tendered
Units such Participating Holder desires to tender for redemption, substantially
in the form attached hereto as Exhibit A (the “Notice of Redemption”). The
Operating Company shall not be obligated to effect a Redemption until the
Specified Redemption Date (it being understood that the Operating Company will
not be required to consummate such Redemption with respect to any Tendered Units
that are purchased by the Partnership pursuant to Section 2.1(b)).

 

(ii)                                  If (A) the Operating Company has elected,
pursuant to the Settlement Method Notice (as defined below), to settle the
Exchange by payment of the Common Unit Amount and/or (B) the Partnership has
elected, pursuant to the Exercise Notice (as defined below), to purchase some or
all of the Tendered Units by payment of the Unit Purchase Price in accordance
with Section 2.1(b), then, in each case, the Participating Holder may retract
its Notice of Redemption by delivering written notice, substantially in the form
attached hereto as Exhibit B (the “Retraction Notice”), to the Operating Company
and the Partnership at any time prior to 8:00 am central standard time on the
Specified Redemption Date. The timely delivery of a Retraction Notice shall
terminate all of the Parties’ rights and obligations under this Agreement with
respect to the subject of the Notice of Redemption. For avoidance of doubt, the
Participating Holder shall be entitled to deliver a subsequent Notice of
Redemption pursuant to this Section 2.1(a)(ii) at any time following delivery of
a Retraction Notice.

 

(iii)                               On or before the Cut-Off Date, the Operating
Company shall deliver written notice, substantially in the form attached hereto
as Exhibit C (the “Settlement Method Notice”), to the applicable Participating
Holder of (A) its election to settle the Exchange by payment of the Common Unit
Amount or the Cash Amount and (B) the Specified Redemption Date on which it will
settle the Exchange; provided, that if the Operating Company does not timely
deliver a Settlement Method Notice, the Operating Company shall be deemed to
have elected to settle the Exchange by payment of the Common Unit Amount on the
third Business Day after the delivery to the Operating Company and the
Partnership of a Notice of Redemption.

 

(iv)                              If the Operating Company elects to exchange
for the Cash Amount pursuant to a Notice of Redemption, the Cash Amount shall be
delivered as a certified or bank check payable or, in the Operating Company’s
sole and absolute discretion, by wire transfer of immediately available funds,
in each case to such Participating Holder on the Specified Redemption Date.

 

(v)                                 If the Operating Company elects to exchange
for the Common Unit Amount pursuant to a Notice of Redemption, the Common Unit
Amount shall be delivered by the Partnership (on behalf of the Operating
Company) to such Participating Holder on the Specified Redemption Date as duly
authorized, validly issued, fully paid and nonassessable Common Units (except as
such nonassessability may be affected by Sections 17-303, 17-607 or 17-804 of
the Delaware Act), free of any pledge, lien, encumbrance or restriction, other
than the restrictions provided in the Partnership Agreement, the Securities Act
and relevant state securities or “blue sky” laws. Neither a Participating
Holder, any Partner, nor any other interested Person shall have any right to
require or cause the Partnership to register, qualify or list any Common Units
owned or held by such Person, whether or not such Common Units are issued
pursuant to this Section 2.1(a)(v), with the Commission, with any state
securities commissioner, department or agency, under the Securities Act or the
Exchange Act or with any stock exchange; provided, however, that this limitation
shall not be in derogation of any registration or similar rights granted
pursuant to any other

 

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written agreement between the Partnership and any such Person (including,
without limitation, the Registration Rights Agreements). Notwithstanding any
delay in such delivery, a Participating Holder shall be deemed the owner of such
Common Units for all purposes, including, without limitation, rights to vote and
consent, receive distributions, and exercise rights, as of the Specified
Redemption Date. Common Units issued upon a Redemption pursuant to this
Section 2.1(a) may contain such legends regarding restrictions under the
Securities Act and applicable state securities laws as the Partnership in good
faith determines to be necessary or advisable in order to ensure compliance with
such laws.

 

(b)                                 In lieu of the Redemption described in
Section 2.1(a), following delivery of a Notice of Redemption, the Partnership
may, in its sole and absolute discretion (but subject to the delivery of a
Retraction Notice, if applicable), elect to purchase some or all of the Tendered
Units (such amount, expressed as a percentage of the total number of Tendered
Units rounded up to the nearest Unit, being referred to as the “Applicable
Percentage”) from the Participating Holders by delivering an Exercise Notice on
or before the close of business on the Cut-Off Date. If the Partnership so
elects, on the Specified Redemption Date, the Participating Holders shall sell
such number of the Tendered Units to the Partnership (subject to the delivery of
a Retraction Notice, if applicable) in exchange for, as elected by the
Partnership in the Exercise Notice, (i) a number of Common Units (and, solely
with respect to the applicable Redemption Amount, cash) equal to the product of
the Common Unit Amount (excluding for this calculation the Redemption Amount)
and the Applicable Percentage (the “Unit Purchase Price”), or (ii) subject to
Section 2.1(c), a cash sum (the “Cash Purchase Price”) equal to the product of
the Cash Amount and the Applicable Percentage.

 

(i)                                     In the event the Partnership elects to
exercise its rights pursuant to Section 2.1(b), the Partnership shall deliver
written notice of its intent to exercise its rights under Section 2.1(b),
substantially in the form attached hereto as Exhibit D (an “Exercise Notice”),
to the Operating Company and each Participating Holder exercising a Redemption
on or before the close of business on the Cut-Off Date. Such Exercise Notice
shall set forth (A) the Applicable Percentage of Tendered Units subject to
purchase by the Partnership, (B) the Partnership’s election to pay either the
Unit Purchase Price or the Cash Purchase Price and (C) the Specified Redemption
Date. The failure of the Partnership to deliver an Exercise Notice with respect
to any number of the Tendered Units by the close of business on the Cut-Off Date
shall be deemed to be an election by the Partnership not to purchase that
respective number of Tendered Units. Any Tendered Units that the Partnership has
elected not to purchase shall remain subject to Redemption by the Operating
Company in accordance with Section 2.1(a) and subject to the Specified
Redemption Date, as set forth in the applicable Settlement Method Notice or as
determined pursuant to Section 2.1(a)(iii).

 

(ii)                                  If the Partnership elects to purchase for
the Cash Purchase Price pursuant to an Exercise Notice, the Cash Purchase Price
shall be delivered as a certified or bank check payable or, in the Partnership’s
sole and absolute discretion, by wire transfer of immediately available funds,
in each case to such Participating Holder on the Specified Redemption Date.

 

(iii)                               If the Partnership elects to purchase for
the Unit Purchase Price pursuant to an Exercise Notice, the Unit Purchase Price
shall be delivered by the Partnership to such Participating Holder on the
Specified Redemption Date as duly authorized, validly issued, fully paid and
nonassessable Common Units (except as such nonassessability may be affected by
Section 17-303, 17-607 or 17-804 of the Delaware Act), free of any pledge, lien,
encumbrance or restriction, other than the restrictions provided in the
Partnership Agreement, the Securities Act and relevant state securities or “blue
sky” laws. Neither a Participating Holder, any Partner, nor any other interested
Person shall have any right to require or cause the Partnership to register,
qualify or list any Common Units owned or held by such Person, whether or not
such Common Units are issued pursuant to this Section 2.1(b), with the
Commission, with any state securities commissioner, department or agency, under
the Securities Act or the Exchange Act or with any stock exchange; provided,
however, that this limitation shall not be in derogation of any registration or
similar rights granted pursuant to any other written agreement between the
Partnership and any such Person (including, without limitation, the Registration
Rights Agreements). Notwithstanding any delay in such delivery, a Participating
Holder shall be deemed the owner of such Common Units for all purposes,
including, without limitation, rights to vote and consent, receive
distributions, and exercise rights, as of the Specified Redemption Date. Common
Units issued upon a purchase of the Tendered Units by the Partnership pursuant
to this Section 2.1(b) may contain such legends regarding restrictions under the
Securities Act and applicable state securities laws as the Partnership in good
faith determines to be necessary or advisable in order to ensure compliance with
such laws.

 

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(c)                                  Notwithstanding anything to the contrary,
(i) the Operating Company may not elect to exchange for the Cash Amount under
Section 2.1(a) and (ii) the Partnership may not elect to purchase the Tendered
Units under Section 2.1(b) for the Cash Purchase Price, unless the Operating
Company and/or the Partnership (as applicable) shall have available to it
sufficient immediately available funds to pay the Cash Amount or the Cash
Purchase Price, as applicable.

 

(d)                                 Notwithstanding anything herein to the
contrary, with respect to any Redemption pursuant to Section 2.1(a) or purchase
of Tendered Units by the Partnership pursuant to Section 2.1(b) hereof:

 

(i)                                     Without the consent of the Partnership,
a Participating Holder may not effect a Redemption for less than two thousand
(2,000) Units or, if such Participating Holder holds less than two thousand
(2,000) Units, all of the Units held by such Participating Holder.

 

(ii)                                  If (A) a Participating Holder surrenders
Tendered Units during the period after the Record Date with respect to a
distribution payable to Record Holders (as such term is defined in the OpCo
Limited Liability Company Agreement) of OpCo Common Units, and before the record
date established by the Partnership for a distribution to its unitholders of
some or all of its portion of such Operating Company distribution, and (B) the
Partnership elects to purchase any of such Tendered Units pursuant to
Section 2.1(b), then such Participating Holder shall pay to the Partnership on
the Specified Redemption Date an amount in cash equal to such Operating Company
distribution paid or payable in respect of such Tendered Units.

 

(iii)                               Notwithstanding anything to the contrary
herein, the consummation of such Redemption pursuant to Section 2.1(a) hereof or
a purchase of Tendered Units by the Partnership pursuant to
Section 2.1(b) hereof, as the case may be, shall not be permitted to the extent
the Partnership reasonably determines that such Redemption or purchase would be
prohibited by applicable law or regulation (including, without limitation, the
Securities Act, the Delaware Act or the Delaware LLC Act).

 

(e)                                  The Partnership, the Operating Company and
each Participating Holder shall bear their own expenses in connection with the
consummation of any Exchange, whether or not any such Exchange is ultimately
consummated, except that the Operating Company shall bear any transfer taxes,
stamp taxes or duties, or other similar taxes in connection with, or arising by
reason of, any Exchange; provided, however, that if any Common Units are to be
delivered in a name other than that of a Participating Holder, then such
Participating Holder and/or the person in whose name such units are to be
delivered shall pay to the Operating Company the amount of any transfer taxes,
stamp taxes or duties, or other similar taxes in connection with, or arising by
reason of, such Exchange or shall establish to the reasonable satisfaction of
the Partnership that such tax has been paid or is not payable.

 

Section 2.2  Expiration.  In the event that the Operating Company is dissolved
pursuant to the OpCo Limited Liability Company Agreement, any Exchange Right
pursuant to Section 2.1 of this Agreement shall terminate upon final
distribution of the assets of the Operating Company pursuant to the terms and
conditions of the OpCo Limited Liability Company Agreement.

 

Section 2.3  Adjustment.  If there is any reclassification, reorganization,
recapitalization or other similar transaction in which the OpCo Common Units,
Common Units or Class B Units, as applicable, are converted or changed into
another security, securities or other property, then upon any subsequent
Exchange, each Participating Holder shall be entitled to receive the amount of
such security, securities or other property that such Participating Holder would
have received if such Exchange had occurred immediately prior to the effective
date of such reclassification, reorganization, recapitalization or other similar
transaction, taking 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 such security, securities or
other property that occurs after the effective time of such reclassification,
reorganization, recapitalization or other similar transaction. For the avoidance
of doubt, if there is any reclassification, reorganization, recapitalization or
other similar transaction in which the OpCo Common Units, Common Units or
Class B Units, as applicable, are converted or changed into another security,
securities or other property, this Section 2.3 shall continue to be applicable,
mutatis mutandis, with respect to such security or other property. This
Agreement shall apply to, mutatis mutandis, and all references to “OpCo Common
Units,” “Common Units” or “Class B Units” shall be deemed to include, any
security, securities or other property of the Operating Company or the
Partnership, as applicable, which may be issued in respect of, in exchange for
or in substitution of the OpCo Common Units, Common Units or Class B Units, as
applicable, by reason of any distribution or dividend, split, reverse split,
combination, reclassification, reorganization, recapitalization, merger,
exchange (other than an Exchange) or other transaction.

 

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ARTICLE III

MISCELLANEOUS PROVISIONS

 

Section 3.1  Notices.  All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing addressed as
indicated below, and any communication or delivery hereunder shall be deemed to
have been duly delivered upon the earliest of: (a) actual receipt by the Party
to be notified if delivered by hand; (b) if sent by U.S. certified mail, postage
prepaid, return receipt requested, then the date shown as received on the return
notice; (c) if by email, then upon the earlier of (i) a reply by the intended
recipient whether by email or otherwise; provided that such intended recipient
shall have an affirmative duty to reply promptly upon receipt if received during
business hours; and provided further, that an automated response from the email
account or server of the intended recipient shall not constitute an affirmative
reply or (ii) on the first Business Day after transmission (and sender shall
bear the burden of proof of delivery); or (d) if by Federal Express overnight
delivery (or other reputable overnight delivery service), the date shown on the
notice of delivery. In any case hereunder in which a Party is required or
permitted to respond to a notice from another Party within a specified period,
such period shall run from the date on which the notice was deemed duly given as
above provided, and the response shall be considered to be timely given if given
as above provided by the last day of the period provided for such response.
Addresses for all such notices and communication shall be as follows:

 

If to the Partnership:

 

Kimbell Royalty Partners, LP

777 Taylor Street, Suite 810

Fort Worth, TX 76102

Email: davis@kimbellrp.com

Attention: R. Davis Ravnaas

 

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

 

Baker Botts L.L.P.

910 Louisiana Street

Houston, TX 77002

Email: jason.rocha@bakerbotts.com and

joshua.davidson@bakerbotts.com

Attention: Jason A. Rocha and Josh Davidson

 

If to the General Partner:

 

Kimbell Royalty Partners, LP

777 Taylor Street, Suite 810

Fort Worth, TX 76102

Email: davis@kimbellrp.com

Attention: R. Davis Ravnaas

 

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

 

Baker Botts L.L.P.

910 Louisiana Street

Houston, TX 77002

Email: jason.rocha@bakerbotts.com and

joshua.davidson@bakerbotts.com

Attention: Jason A. Rocha and Josh Davidson

 

If to the Operating Company:

 

Kimbell Royalty Partners, LP

777 Taylor Street, Suite 810

Fort Worth, TX 76102

Email: davis@kimbellrp.com

Attention: R. Davis Ravnaas

 

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

 

Baker Botts L.L.P.

910 Louisiana Street

Houston, TX 77002

Email: jason.rocha@bakerbotts.com and

joshua.davidson@bakerbotts.com

Attention: Jason A. Rocha and Josh Davidson

 

If to the Kimbell Art Foundation:

 

Kimbell Art Foundation

301 Commerce Street, Suite 2300

Fort Worth, TX 76102

Email: kafinvest@kimbellmuseum.org,

bcline@kimbellmuseum.org and mrich@kimbellmuseum.org

Attention: Ben J. Fortson

 

If to Haymaker Minerals & Royalties, LLC:

 

c/o Kayne Anderson Capital Advisors

811 Main Street, 14th Floor

Houston, TX 77002

Email: kbrophy@kaynecapital.com

Attention: Kevin Brophy—General Counsel

 

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

 

DLA Piper LLP (US)

1000 Louisiana Street, Suite 2800

Houston, TX 77002

Email: jack.langlois@dlapiper.com

Attention: Jack Langlois

 

If to EIGF Aggregator III LLC:

 

c/o Kohlberg Kravis Roberts & Co. L.P.

600 Travis Street, Suite 7200

Houston, TX 77002

Email: dash.lane@kkr.com

Attention: Dahiell Lane

 

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

 

Kirkland & Ellis LLP

609 Main Street, Suite 4500

Houston, TX 77002

Email: john.pitts@kirkland.com and

david.castro@kirkland.com

Attention: John D. Pitts, P.C. and David M. Castro, Jr., P.C.

 

If to TE Drilling Aggregator LLC:

 

c/o Kohlberg Kravis Roberts & Co. L.P.

600 Travis Street, Suite 7200

Houston, TX 77002

Email: dash.lane@kkr.com

Attention: Dahiell Lane

 

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

 

Kirkland & Ellis LLP

609 Main Street, Suite 4500

Houston, TX 77002

Email: john.pitts@kirkland.com and

david.castro@kirkland.com

Attention: John D. Pitts, P.C. and David M. Castro, Jr., P.C.

 

7

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

 

If to Haymaker Management, LLC:

 

5300 Memorial Drive, Suite 500

Houston, TX 77007

Email: vm@haymakerllc.com

Attention: Vasilis Mouratoff

 

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

 

Kirkland & Ellis LLP

609 Main Street, Suite 4500

Houston, TX 77002

Email: john.pitts@kirkland.com and

david.castro@kirkland.com

Attention: John D. Pitts, P.C. and David M. Castro, Jr., P.C.

 

or to such other address or addresses as the Parties may from time to time
designate in writing.

 

Section 3.2  Time Is of the Essence.  Time is of the essence of this Agreement;
provided, however, and notwithstanding anything to the contrary in this
Agreement, if the time period for the performance of any covenant or obligation,
satisfaction of any condition or delivery of any notice or item required under
this Agreement shall expire on a day other than a Business Day, such time period
shall be extended automatically to the next Business Day.

 

Section 3.3  Assignment; Additional Participating Holders.  No Party may assign
either this Agreement or any of its rights, interests or obligations hereunder
without the prior written approval of the other Parties, and any such assignment
by a Party without prior written approval of the other Parties shall be deemed
invalid and not binding on such other Parties. Notwithstanding the foregoing,
nothing contained in this Agreement shall preclude or require the prior written
approval of the other Parties for (i) any transfer or other assignment of a
Participating Holder’s rights, title, interests and obligations under this
Agreement to one or more assignees of such Participating Holder in a transfer or
other assignment permitted pursuant to Article IV of the Partnership Agreement
and Article IV of the OpCo Limited Liability Company Agreement, subject to such
assignees’ execution and delivery to the Operating Company and the Partnership
of a joinder in substantially the form attached hereto as Annex A; provided,
that not withstanding the foregoing, Haymaker Management, LLC’s consent rights
with respect to amendments of this Agreement pursuant to Section 3.9(v) shall
not be assignable; (ii) any pledge, hypothecation or other transfer or
assignment of a Party’s rights, title and interest under this Agreement,
including any amounts payable to such Party under this Agreement, to a bona fide
Financing Party as security for debt financing to such Party or one of its
Affiliates; or (iii) the assignment of such rights, title and interest under
this Agreement upon exercise of remedies by a Financing Party following a
default by such Party or one of its Affiliates under the financing agreements
entered into with the Financing Parties. To the extent the Operating Company
issues OpCo Common Units and the Partnership issues Class B Units in the future,
then the holder of such OpCo Common Units and Class B Units shall have the right
to execute and deliver a joinder to this Agreement, substantially in the form
attached hereto as Annex A, whereupon such holder shall become a Participating
Holder hereunder.

 

Section 3.4  Rights of Third Parties.  Nothing expressed or implied in this
Agreement is intended to or shall be construed to confer upon or give any
Person, other than the Parties, any right or remedies under or by reason of this
Agreement.

 

Section 3.5  Headings.  The article and section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.

 

Section 3.6  Governing Law; Jurisdiction.

 

(a)                                 This Agreement shall be governed and
construed in accordance with the Laws of the State of Delaware, without regard
to the Laws that might be applicable under conflicts of laws principles that
would require the application of the Laws of another jurisdiction.

 

(b)                                 The Parties agree that the appropriate,
exclusive and convenient forum for any disputes between any of the Parties
hereto arising out of this Agreement or the transactions contemplated hereby
shall be in any state or federal court in Harris County, Texas, and each of the
Parties hereto irrevocably submits to the jurisdiction of such courts in respect
of any legal proceeding arising out of or related to this Agreement. The Parties
further agree that the Parties shall not bring suit with respect to any disputes
arising out of this Agreement or the transactions

 

8

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

 

contemplated hereby in any court or jurisdiction other than the above-specified
courts. The Parties further agree, to the extent permitted by Law, that a final
and non-appealable judgment against a Party in any action or proceeding
contemplated above shall be conclusive and may be enforced in any other
jurisdiction within or outside the United States by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of the fact
and amount of such judgment.

 

(c)                                  To the extent that any Party hereto has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, each such Party hereby irrevocably (i) waives such immunity in
respect of its obligations with respect to this Agreement, and (ii) submits to
the personal jurisdiction of any court described in Section 3.6(b).

 

(d)                                 EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, LEGAL
PROCEEDING OR CLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT
OF OR IN ANY WAY RELATING TO THIS AGREEMENT.

 

Section 3.7  Severability.  If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement shall remain in full force and effect. The Parties further agree
that if any provision contained herein is, to any extent, held invalid or
unenforceable in any respect under the Laws governing this Agreement, they shall
take any actions necessary to render the remaining provisions of this Agreement
valid and enforceable to the fullest extent permitted by Law and, to the extent
necessary, shall amend or otherwise modify this Agreement to replace any
provision contained herein that is held invalid or unenforceable with a valid
and enforceable provision giving effect to the intent of the Parties to the
greatest extent legally permissible.

 

Section 3.8  Entire Agreement.  This Agreement, together with each such other
document contemplated hereby or in connection herewith and any amendments or
supplements to any of the foregoing to which the Operating Company or
Partnership are a party and all schedules, exhibits, annexes or other
attachments hereto or thereto, and the certificates, documents, instruments and
writings that are delivered pursuant hereto or thereto, constitute the entire
agreement and understanding of the Parties in respect of the subject matter
hereof and supersedes all prior understandings, agreements or representations by
or among the Parties, written or oral, to the extent they relate in any way to
the subject matter hereof.

 

Section 3.9  Amendment.  This Agreement may be amended or modified in whole or
in part, and terms and conditions may be waived, only by a duly authorized
agreement in writing which makes reference to this Agreement and is executed by
(i) the Partnership, (ii) the Operating Company, (iii) Participating Holders
holding a majority of the then outstanding OpCo Common Units (excluding OpCo
Common Units held by the Partnership), (iv) the Participating Holders affiliated
with (A) Kohlberg Kravis Roberts & Co. L.P. and (B) Kayne Anderson Capital
Advisors for so long as such Participating Holders hold OpCo Common Units and
(v) Haymaker Management, LLC for so long as it or its members (who were members
at the time of their receipt of OpCo Common Units) hold OpCo Common Units.

 

Section 3.10  Waiver.  No delay on the part of any Party in exercising any
right, power or privilege hereunder will operate as a waiver thereof, nor will
any waiver on the part of any Party of any right, power or privilege hereunder
operate as a waiver of any other right, power or privilege hereunder, nor will
any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.

 

Section 3.11  Specific Performance; Remedies.  The Parties acknowledge and agree
(a) that each Party would be irreparably harmed by a breach by any other Party
of any of such other Party’s obligations under this Agreement and that the
Parties would not have any adequate remedy at law if any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached and (b) that each non-breaching Party shall be entitled
to injunctive relief, specific performance, and other equitable remedies against
the breaching Party to enforce the performance by the breaching Party of its
obligations under this Agreement (this being in addition to any other remedy to
which the non-breaching Party may be entitled at law or in equity), and the
Parties hereby consent and agree to such injunctive relief, specific
performance, and other equitable remedies. Accordingly, each Party waives
(i) any defenses in any action for specific performance pursuant to this
Agreement that a remedy at law would be adequate and (ii) any requirement under
any Law to post a bond or other security as a prerequisite to obtaining
equitable relief.

 

9

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Section 3.12  Counterparts; Effectiveness.  This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Any electronic
transmittal (PDF) copies hereof or signature hereon shall, for all purposes, be
deemed originals.

 

Section 3.13  Construction.  This Agreement has been freely and fairly
negotiated among the Parties. If an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party because of the authorship of any provision of this
Agreement.

 

Section 3.14  Tax Matters.

 

(a)                                 If the Partnership or the Operating Company
shall be required to withhold any amounts by reason of any federal, state, local
or foreign tax rules or regulations in respect of any Exchange, the Partnership
or the Operating Company, as the case may be, shall be entitled to take any
action that may be required in order to ensure compliance with such withholding
requirements, including, without limitation, at its option withholding from, and
paying over to the appropriate taxing authority, any consideration otherwise
payable to a Participating Holder under this Agreement, and any such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the person in respect of which such deduction and withholding was made.
Notwithstanding anything to the contrary herein, each of the Partnership and the
Operating Company may withhold taxes pursuant to Sections 1445 and 1446(f) as a
result of an Exchange unless such exchanging holder of Tendered Units delivers
to the Partnership or the Operating Company, as the case may be, a certification
or affidavit of non-foreign status in accordance with Treasury Regulation
Section 1.1445-2(b) and Section 1446(f) of the Code.

 

(b)                                 This Agreement shall be treated as part of
the OpCo Limited Liability Company Agreement as described in Section 761(c) of
the Code and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury
Regulations.

 

[Signature Pages Follow]

 

10

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

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
and delivered, all as of the date first set forth above.

 

 

 

KIMBELL ROYALTY PARTNERS, LP

 

 

 

By:

Kimbell Royalty GP, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

/s/ Matthew S. Daly

 

 

Name:

Matthew S. Daly

 

 

Title:

Chief Operating Officer

 

 

 

 

KIMBELL ROYALTY GP, LLC

 

 

 

 

 

 

 

By:

/s/ Matthew S. Daly

 

 

Name:

Matthew S. Daly

 

 

Title:

Chief Operating Officer

 

[Signature Page to Exchange Agreement]

 

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

 

 

KIMBELL ROYALTY OPERATING, LLC

 

 

 

 

 

 

 

By:

/s/ Matthew S. Daly

 

 

Name:

Matthew S. Daly

 

 

Title:

Chief Operating Officer

 

 

 

 

KIMBELL ART FOUNDATION

 

 

 

 

 

 

 

By:

/s/ Ben J. Fortson

 

 

Name:

Ben J. Fortson

 

 

Title:

Vice President and Chief Investment Officer

 

 

 

 

HAYMAKER MINERALS & ROYALTIES, LLC

 

 

 

 

 

 

 

By:

/s/ Vasilis Mouratoff

 

 

Name:

Vasilis Mouratoff

 

 

Title:

Chief Financial Officer and General Counsel

 

[Signature Page to Exchange Agreement]

 

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

 

 

EIGF AGGREGATOR III LLC

 

 

 

 

By:

EIGF Aggregator LLC

 

Its:

Managing Member

 

 

 

 

 

 

 

By:

/s/ David Rockecharlie

 

 

Name:

David Rockecharlie

 

 

Title:

Vice President

 

 

 

 

TE DRILLING AGGREGATOR LLC

 

 

 

 

By:

KKR Energy Income and Growth Fund I-TE L.P.

 

Its:

Sole Member

 

 

 

 

By:

KKR Associates EIGF TE L.P.

 

Its:

General Partner

 

 

 

 

By:

KKR EIGF LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

/s/ David Rochecharlie

 

 

Name:

David Rockecharlie

 

 

Title:

Vice President

 

 

 

 

HAYMAKER MANAGEMENT, LLC

 

 

 

 

 

 

 

By:

/s/ Vasilis Mouratoff

 

 

Name:

Vasilis Mouratoff

 

 

Title:

Chief Financial Officer and General Counsel

 

[Signature Page to Exchange Agreement]

 

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

 

Annex A

 

FORM OF JOINDER TO EXCHANGE AGREEMENT

 

The undersigned is executing and delivering this joinder (this “Joinder”) to
that certain Exchange Agreement, dated as of September 23, 2018 (as the same may
be amended or supplemented from time to time hereafter, the “Exchange
Agreement”), by and among Kimbell Royalty Partners, LP, a Delaware limited
partnership (the “Partnership”), Kimbell Royalty GP, LLC, a Delaware limited
liability company, Kimbell Royalty Operating, LLC, a Delaware limited liability
company (the “Operating Company”), and the Kimbell Art Foundation, a Texas
non-profit corporation, Haymaker Minerals & Royalties, LLC, a Delaware limited
liability company, EIGF Aggregator III LLC, a Delaware limited liability
company, TE Drilling Aggregator LLC, a Delaware limited liability company, and
Haymaker Management, LLC, a Texas limited liability company.

 

By executing and delivering this Joinder to the Operating Company and the
Partnership, the undersigned hereby agrees to become a party to the Exchange
Agreement, and accepts, has the rights of and agrees to be bound by and subject
to, and to comply with, the terms, conditions and provisions of the Exchange
Agreement as a “Participating Holder” thereunder, as such term is defined
therein, in the same manner as if the undersigned were an original signatory to
the Exchange Agreement.

 

Accordingly, the undersigned has executed and delivered this Joinder to the
Exchange Agreement effective as of                 , 201          .

 

Accepted and Agreed:

 

By:

 

Name:

 

 

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

 

EXHIBIT A

 

Form of Notice of Redemption

 

A-1

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

 

NOTICE OF REDEMPTION

 

Kimbell Royalty Partners, LP

777 Taylor Street, Suite 810

Fort Worth, TX 76102

Email: davis@kimbellrp.com

Attention: R. Davis Ravnaas

 

and

 

Kimbell Royalty Operating, LLC

c/o Kimbell Royalty Partners, LP

777 Taylor Street, Suite 810

Fort Worth, TX 76102

Email: davis@kimbellrp.com

Attention: R. Davis Ravnaas

 

[·], 20

 

Re: Notice of Redemption Pursuant to Exchange Agreement

 

Ladies and Gentlemen:

 

Reference is made to that certain Exchange Agreement, dated as of September 23,
2018 (as amended, restated, supplemented, waived or otherwise modified from time
to time, the “Exchange Agreement”), by and among (i) Kimbell Royalty Partners,
LP, a Delaware limited partnership (the “Partnership”); (ii) Kimbell Royalty GP,
LLC, a Delaware limited liability company; (iii) Kimbell Royalty Operating, LLC,
a Delaware limited liability company (the “Operating Company”); (iv) the Kimbell
Art Foundation, a Texas non-profit corporation; (v) Haymaker Minerals &
Royalties, LLC, a Delaware limited liability company; (vi) EIGF Aggregator III
LLC, a Delaware limited liability company; (vii) TE Drilling Aggregator LLC, a
Delaware limited liability company; and (viii) Haymaker Management, LLC, a Texas
limited liability company (each of (iv)-(viii), a “Participating Holder”).
Capitalized terms used in this Notice of Redemption but not otherwise defined in
this Notice of Redemption shall have the respective meanings assigned to such
terms in the Exchange Agreement.

 

Pursuant to Section 2.1(a)(i) of the Exchange Agreement, the undersigned
Participating Holder hereby exercises its right to require a Redemption of the
Tendered Units set forth on Schedule A to this Notice of Redemption and notifies
the Partnership and the Operating Company of the same.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

A-2

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

 

 

Sincerely,

 

 

 

 

PARTICIPATING HOLDER

 

 

 

 

[·]

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[Signature Page to Notice of Redemption]

 

A-3

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

 

Schedule A

 

Tendered Units

 

Participating Holder

 

OpCo
Common
Units

 

Class B Units

[·]

 

[·]

 

[·]

 

A-4

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

 

EXHIBIT B

 

Form of Retraction Notice

 

B-1

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

 

RETRACTION NOTICE

 

Kimbell Royalty Partners, LP

777 Taylor Street, Suite 810

Fort Worth, TX 76102

Email: davis@kimbellrp.com

Attention: R. Davis Ravnaas

 

and

 

Kimbell Royalty Operating, LLC

c/o Kimbell Royalty Partners, LP

777 Taylor Street, Suite 810

Fort Worth, TX 76102

Email: davis@kimbellrp.com

Attention: R. Davis Ravnaas

 

[·], 20

 

Re: Retraction Notice Pursuant to Exchange Agreement

 

Ladies and Gentlemen:

 

Reference is made to that certain Exchange Agreement, dated as of September 23,
2018 (as amended, restated, supplemented, waived or otherwise modified from time
to time, the “Exchange Agreement”), by and among (i) Kimbell Royalty Partners,
LP, a Delaware limited partnership (the “Partnership”); (ii) Kimbell Royalty GP,
LLC, a Delaware limited liability company; (iii) Kimbell Royalty Operating, LLC,
a Delaware limited liability company (the “Operating Company”); (iv) the Kimbell
Art Foundation, a Texas non-profit corporation; (v) Haymaker Minerals &
Royalties, LLC, a Delaware limited liability company; (vi) EIGF Aggregator III
LLC, a Delaware limited liability company; (vii) TE Drilling Aggregator LLC, a
Delaware limited liability company; and (viii) Haymaker Management, LLC, a Texas
limited liability company (each of (iv)-(viii), a “Participating Holder”).
Capitalized terms used in this Retraction Notice but not otherwise defined in
this Retraction Notice shall have the respective meanings assigned to such terms
in the Exchange Agreement.

 

Pursuant to Section 2.1(a)(ii) of the Exchange Agreement, the undersigned
Participating Holder hereby exercises its right to retract the previously
delivered Notice of Redemption, dated as of [·], 20           and notifies the
Partnership and the Operating Company of the same.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

B-2

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

 

 

Sincerely,

 

 

 

 

PARTICIPATING HOLDER

 

 

 

 

[·]

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[Signature Page to Notice of Retraction]

 

B-3

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

 

EXHIBIT C

 

Form of Settlement Method Notice

 

C-1

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

 

SETTLEMENT METHOD NOTICE

 

[Participating Holder]

[·]

[·]

Email: [·]

Attention: [·]

 

[·], 20

 

Re: Notice of Settlement Method Pursuant to Exchange Agreement

 

Ladies and Gentlemen:

 

Reference is made to that certain Exchange Agreement, dated as of September 23,
2018 (as amended, restated, supplemented, waived or otherwise modified from time
to time, the “Exchange Agreement”), by and among (i) Kimbell Royalty Partners,
LP, a Delaware limited partnership (the “Partnership”); (ii) Kimbell Royalty GP,
LLC, a Delaware limited liability company; (iii) Kimbell Royalty Operating, LLC,
a Delaware limited liability company (the “Operating Company”); (iv) the Kimbell
Art Foundation, a Texas non-profit corporation; (v) Haymaker Minerals &
Royalties, LLC, a Delaware limited liability company; (vi) EIGF Aggregator III
LLC, a Delaware limited liability company; (vii) TE Drilling Aggregator LLC, a
Delaware limited liability company; and (viii) Haymaker Management, LLC, a Texas
limited liability company (each of (iv)-(viii), a “Participating Holder”).
Capitalized terms used in this Settlement Method Notice but not otherwise
defined in this Settlement Method Notice shall have the respective meanings
assigned to such terms in the Exchange Agreement.

 

Pursuant to Section 2.1(a)(iii) of the Exchange Agreement, in response to the
Notice of Redemption, dated as of [·], 20     delivered by the applicable
Participating Holder to which this Settlement Method Notice is addressed, the
Operating Company hereby elects to settle the Exchange by payment of either the
Common Unit Amount or the Cash Amount on the Specified Redemption Date as set
forth on Schedule A to this Settlement Method Notice and notifies such
Participating Holder of the same.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

C-2

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

 

 

Sincerely,

 

 

 

 

 

 

 

OPERATING COMPANY:

 

 

 

 

 

KIMBELL ROYALTY OPERATING, LLC

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

R. Davis Ravnaas

 

 

Title:

President and Chief Financial Officer

 

[Signature Page to Settlement Method Notice]

 

C-3

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

 

Schedule A

 

Settlement Method and Specified Redemption Date

 

Participating Holder

 

Tendered
Units

 

Common Unit
Amount or
Cash Amount

 

Amount of
Consideration

 

Specified
Redemption
Date

 

[·]

 

[·]

 

[Common Unit Amount] / / [Cash Amount]

 

[Units] / / $[·]

 

[·]

 

 

C-4

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

 

EXHIBIT D

 

Form of Exercise Notice

 

D-1

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

 

EXERCISE NOTICE

 

Kimbell Royalty Operating, LLC

c/o Kimbell Royalty Partners, LP

777 Taylor Street, Suite 810

Fort Worth, TX 76102

Email: davis@kimbellrp.com

Attention: R. Davis Ravnaas

 

and

 

[Participating Holder]

[·]

[·]

Email: [·]

Attention: [·]

 

[·], 20

 

Re: Exercise Notice Pursuant to Exchange Agreement

 

Ladies and Gentlemen:

 

Reference is made to that certain Exchange Agreement, dated as of September 23,
2018 (as amended, restated, supplemented, waived or otherwise modified from time
to time, the “Exchange Agreement”), by and among (i) Kimbell Royalty Partners,
LP, a Delaware limited partnership (the “Partnership”); (ii) Kimbell Royalty GP,
LLC, a Delaware limited liability company; (iii) Kimbell Royalty Operating, LLC,
a Delaware limited liability company (the “Operating Company”); (iv) the Kimbell
Art Foundation, a Texas non-profit corporation; (v) Haymaker Minerals &
Royalties, LLC, a Delaware limited liability company; (vi) EIGF Aggregator III
LLC, a Delaware limited liability company; (vii) TE Drilling Aggregator LLC, a
Delaware limited liability company; and (viii) Haymaker Management, LLC, a Texas
limited liability company (each of (iv)-(viii), a “Participating Holder”).
Capitalized terms used in this Exercise Notice but not otherwise defined in this
Exercise Notice shall have the respective meanings assigned to such terms in the
Exchange Agreement.

 

Pursuant to Section 2.1(b) of the Exchange Agreement, the Partnership hereby
exercises its right to purchase an Applicable Percentage of Tendered Units by
payment of either the Unit Purchase Price or Cash Purchase Price on the
Specified Redemption Date as set forth on Schedule A to this Exercise Notice and
notifies the Operating Company and the applicable Participating Holder of the
same.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

D-2

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

 

 

Sincerely,

 

 

 

 

 

 

 

PARTNERSHIP:

 

 

 

 

 

KIMBELL ROYALTY PARTNERS, LP

 

 

 

 

 

By:

Kimbell Royalty GP, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

R. Davis Ravnaas

 

 

Title:

President and Chief Financial Officer

 

[Signature Page to Exercise Notice]

 

D-3

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

 

Schedule A

 

Election to Purchase Tendered Units

 

 

Participating Holder

 

Applicable
Percentage of
Tendered
Units

 

Unit Purchase
Price or Cash
Purchase Price

 

Amount of
Consideration

 

Specified
Redemption
Date

 

[·]

 

[·]

 

[Unit Purchase Price] / / [Cash Purchase Price]

 

[Units] / / $[·]

 

[·]

 

 

D-4

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