SC 13D

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON

WITH

Sole Voting Power

-0-

Shared Voting Power

723,800 (1)

Sole Dispositive Power

-0-

Shared Dispositive Power

723,800 (1)

0001193125-19-097909.txt : 20190404 0001193125-19-097909.hdr.sgml : 20190404 20190404161633 ACCESSION NUMBER: 0001193125-19-097909 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20190404 DATE AS OF CHANGE: 20190404 GROUP MEMBERS: ENCAP ENERGY CAPITAL FUND VI, L.P. GROUP MEMBERS: ENCAP ENERGY CAPITAL FUND VII, L.P. GROUP MEMBERS: ENCAP ENERGY CAPITAL FUND VIII, L.P. GROUP MEMBERS: ENCAP PARTNERS GP, LLC GROUP MEMBERS: ENCAP VI-B ACQUISITIONS, L.P. GROUP MEMBERS: PEP II HOLDINGS, LLC GROUP MEMBERS: PEP III HOLDINGS, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Kimbell Royalty Partners, LP CENTRAL INDEX KEY: 0001657788 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 475505475 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-89885 FILM NUMBER: 19732456 BUSINESS ADDRESS: STREET 1: 777 TAYLOR ST., SUITE 810 CITY: FORT WORTH STATE: TX ZIP: 76102 BUSINESS PHONE: 817-887-9976 MAIL ADDRESS: STREET 1: 777 TAYLOR ST., SUITE 810 CITY: FORT WORTH STATE: TX ZIP: 76102 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PEP I Holdings, LLC CENTRAL INDEX KEY: 0001772462 IRS NUMBER: 833427077 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O ENCAP INVESTMENTS L.P. STREET 2: 1100 LOUISIANA STREET, SUITE 4900 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: (713) 659-6100 MAIL ADDRESS: STREET 1: C/O ENCAP INVESTMENTS L.P. STREET 2: 1100 LOUISIANA STREET, SUITE 4900 CITY: HOUSTON STATE: TX ZIP: 77002 SC 13D 1 d870752dsc13d.htm SC 13D SC 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. )*

KIMBELL ROYALTY PARTNERS, LP

(Name of Issuer)

Common Units Representing Limited Partner Interests

(Title of Class of Securities)

49435R102

(CUSIP Number)

D. Martin Phillips

EnCap Investments L.P.

1100 Louisiana Street, Suite 4900

Houston, Texas 77002

(713) 659-6100

with a copy to:

David P. Oelman

Thomas G. Zentner III

Vinson & Elkins L.L.P.

1001 Fannin Street, Suite 2500

Houston, Texas 77002

(713) 758-2222

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

March 25, 2019

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

*	The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 49435R102


1		Name of Reporting Person PEP I Holdings, LLC
2		Check the Appropriate Box if a Member of a Group (A): ☐ (B): ☐
3		SEC Use Only
4		Source of Funds Other (Not Applicable, See Item 3)
5		Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E) ☐
6		Citizen or Place of Organization Delaware

(1)

PEP I Holdings, LLC, a Delaware limited liability company (“Phillips I”), is the record holder of 723,800 common units (“OpCo Common Units”) representing limited liability company interests in Kimbell Royalty Operating, LLC, a Delaware limited liability company (“OpCo”), and an equivalent number of Class B units (“Class B Units”) representing limited partner interests in Kimbell Royalty Partners, LP, a Delaware limited partnership (the “Issuer”), which together are exchangeable for an equal number of common units representing limited partner interests (“Common Units”) in the Issuer. OpCo Common Units, Class B Units and Common Units are collectively referred to herein as “Securities.”

(2)

This calculation is based on a combined total of 20,219,203 Common Units. This combined total consists of (a) 19,495,403 Common Units outstanding as of March 1, 2019, and (b) assumes that all 723,800 OpCo Common Units beneficially owned by the Reporting Person (along with an equivalent number of Class B Units, and no other OpCo Common Units or Class B Units) were exchanged for newly issued Common Units on a one-for-one basis. There were a total of 18,014,342 OpCo Common Units and an equivalent number of Class B Units outstanding on March 1, 2019.

CUSIP No. 49435R102


1		Name of Reporting Person PEP II Holdings, LLC
2		Check the Appropriate Box if a Member of a Group (A): ☐ (B): ☐
3		SEC Use Only
4		Source of Funds Other (Not Applicable, See Item 3)
5		Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E) ☐
6		Citizen or Place of Organization Delaware

(1)	PEP II Holdings, LLC, a Delaware limited liability company (“Phillips II”), is the record holder of 3,318,200 OpCo Common Units and an equal number of Class B Units, which together are exchangeable for an equivalent number of Common Units.

(2)

This calculation is based on a combined total of 22,813,603 Common Units. This combined total consists of (a) 19,495,403 Common Units outstanding as of March 1, 2019, and (b) assumes that all 3,318,200 OpCo Common Units beneficially owned by the Reporting Person (along with an equivalent number of Class B Units, and no other OpCo Common Units or Class B Units) were exchanged for newly issued Common Units on a one-for-one basis. There were a total of 18,014,342 OpCo Common Units and an equivalent number of Class B Units outstanding on March 1, 2019.

CUSIP No. 49435R102


1		Name of Reporting Person PEP III Holdings, LLC
2		Check the Appropriate Box if a Member of a Group (A): ☐ (B): ☐
3		SEC Use Only
4		Source of Funds Other (Not Applicable, See Item 3)
5		Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E) ☐
6		Citizen or Place of Organization Delaware

(1)

PEP III Holdings, LLC, a Delaware limited liability company (“Phillips III” and, together with Phillips I and Phillips II, the “Phillips Holders”), is the record holder of 5,358,000 OpCo Common Units and an equal number of Class B Units, which together are exchangeable for an equivalent number of Common Units.

(2)

This calculation is based on a combined total of 24,853,403 Common Units. This combined total consists of (a) 19,495,403 Common Units outstanding as of March 1, 2019, and (b) assumes that all 5,358,000 OpCo Common Units beneficially owned by the Reporting Person (along with an equivalent number of Class B Units, and no other OpCo Common Units or Class B Units) were exchanged for newly issued Common Units on a one-for-one basis. There were a total of 18,014,342 OpCo Common Units and an equivalent number of Class B Units outstanding on March 1, 2019.

CUSIP No. 49435R102


1		Name of Reporting Person EnCap Energy Capital Fund VI, L.P.
2		Check the Appropriate Box if a Member of a Group (A): ☐ (B): ☐
3		SEC Use Only
4		Source of Funds Other (Not Applicable, See Item 3)
5		Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E) ☐
6		Citizen or Place of Organization Texas

(1)

EnCap Energy Capital Fund VI, L.P. (“EnCap Fund VI”) and EnCap VI-B Acquisitions, L.P. (“EnCap VI-B”) are the managing members of Phillips I. Therefore, EnCap Fund VI may be deemed to beneficially own all of the reported Securities that are deemed to be beneficially owned by Phillips I. EnCap Fund VI disclaims beneficial ownership of the reported Securities except to the extent of its pecuniary interest therein, and this statement shall not be deemed an admission that it is the beneficial owner of the reported Securities for the purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or any other purpose.

(2)

This calculation is based on a combined total of 20,219,203 Common Units. This combined total consists of (a) 19,495,403 Common Units outstanding as of March 1, 2019, and (b) assumes that all 723,800 OpCo Common Units that are held of record by Phillips I and may be deemed to be beneficially owned by the Reporting Person (along with an equivalent number of Class B Units, and no other OpCo Common Units or Class B Units) were exchanged for newly issued Common Units on a one-for-one basis. There were a total of 18,014,342 OpCo Common Units and an equivalent number of Class B Units outstanding on March 1, 2019.

CUSIP No. 49435R102


1		Name of Reporting Person EnCap VI-B Acquisitions, L.P.
2		Check the Appropriate Box if a Member of a Group (A): ☐ (B): ☐
3		SEC Use Only
4		Source of Funds Other (Not Applicable, See Item 3)
5		Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E) ☐
6		Citizen or Place of Organization Texas

(1)

EnCap VI-B and EnCap Fund VI are the managing members of Phillips I. Therefore, EnCap VI-B may be deemed to beneficially own all of the reported Securities that are deemed to be beneficially owned by Phillips I. EnCap VI-B disclaims beneficial ownership of the reported Securities except to the extent of its pecuniary interest therein, and this statement shall not be deemed an admission that it is the beneficial owner of the reported Securities for the purposes of Section 13(d) of the Exchange Act or any other purpose.

(2)

This calculation is based on a combined total of 20,219,203 Common Units. This combined total consists of (a) 19,495,403 Common Units outstanding as of March 1, 2019, and (b) assumes that all 723,800 OpCo Common Units that are held of record by Phillips I and may be deemed to be beneficially owned by the Reporting Person (along with an equivalent number of Class B Units, and no other OpCo Common Units or Class B Units) were exchanged for newly issued Common Units on a one-for-one basis. There were a total of 18,014,342 OpCo Common Units and an equivalent number of Class B Units outstanding on March 1, 2019.

CUSIP No. 49435R102


1		Name of Reporting Person EnCap Energy Capital Fund VII, L.P.
2		Check the Appropriate Box if a Member of a Group (A): ☐ (B): ☐
3		SEC Use Only
4		Source of Funds Other (Not Applicable, See Item 3)
5		Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E) ☐
6		Citizen or Place of Organization Texas

(1)

EnCap Energy Capital Fund VII, L.P. (“EnCap Fund VII”) is the managing member of Phillips II. Therefore, EnCap Fund VII may be deemed to beneficially own all of the reported Securities that are deemed to be beneficially owned by Phillips II. EnCap Fund VII disclaims beneficial ownership of the reported Securities except to the extent of its pecuniary interest therein, and this statement shall not be deemed an admission that it is the beneficial owner of the reported Securities for the purposes of Section 13(d) of the Exchange Act or any other purpose.

(2)

This calculation is based on a combined total of 22,813,603 Common Units. This combined total consists of (a) 19,495,403 Common Units outstanding as of March 1, 2019, and (b) assumes that all 3,318,200 OpCo Common Units that are held of record by Phillips II and may be deemed to be beneficially owned by the Reporting Person (along with an equivalent number of Class B Units, and no other OpCo Common Units or Class B Units) were exchanged for newly issued Common Units on a one-for-one basis. There were a total of 18,014,342 OpCo Common Units and an equivalent number of Class B Units outstanding on March 1, 2019.

CUSIP No. 49435R102


1		Name of Reporting Person EnCap Energy Capital Fund VIII, L.P.
2		Check the Appropriate Box if a Member of a Group (A): ☐ (B): ☐
3		SEC Use Only
4		Source of Funds Other (Not Applicable, See Item 3)
5		Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E) ☐
6		Citizen or Place of Organization Texas

(1)

EnCap Energy Capital Fund VIII, L.P. (“EnCap Fund VIII” and, together with EnCap Fund VI, EnCap VI-B and EnCap Fund VII, the “EnCap Funds”) is the managing member of Phillips III. Therefore, EnCap Fund VIII may be deemed to beneficially own all of the reported Securities that are deemed to be beneficially owned by Phillips III. EnCap Fund VIII disclaims beneficial ownership of the reported Securities except to the extent of its pecuniary interest therein, and this statement shall not be deemed an admission that it is the beneficial owner of the reported Securities for the purposes of Section 13(d) of the Exchange Act or any other purpose.

(2)

This calculation is based on a combined total of 24,853,403 Common Units. This combined total consists of (a) 19,495,403 Common Units outstanding as of March 1, 2019, and (b) assumes that all 5,358,000 OpCo Common Units that are held of record by Phillips III and may be deemed to be beneficially owned by the Reporting Person (along with an equivalent number of Class B Units, and no other OpCo Common Units or Class B Units) were exchanged for newly issued Common Units on a one-for-one basis. There were a total of 18,014,342 OpCo Common Units and an equivalent number of Class B Units outstanding on March 1, 2019.

CUSIP No. 49435R102


1		Name of Reporting Person EnCap Partners GP, LLC
2		Check the Appropriate Box if a Member of a Group (A): ☐ (B): ☐
3		SEC Use Only
4		Source of Funds Other (Not Applicable, See Item 3)
5		Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E) ☒
6		Citizen or Place of Organization Delaware

(1)

EnCap Partners GP, LLC, a Delaware limited liability company (“EnCap Partners GP”), is the sole general partner of EnCap Partners, LP, which is the managing member of EnCap Investments Holdings, LLC, a Delaware limited liability company, which is the sole member of EnCap Investments GP, L.L.C., a Delaware limited liability company, which is the general partner of EnCap Investments L.P, which is the general partner of EnCap Equity Fund VI GP, L.P. (“EnCap Fund VI GP”), EnCap Equity Fund VII GP, L.P. and EnCap Equity Fund VIII GP, L.P., which are the general partners of EnCap Fund VI, EnCap Fund VII and EnCap Fund VIII, respectively. Additionally, EnCap Fund VI GP is the general partner of EnCap Energy Capital Fund VI-B, L.P., which is the sole member of EnCap VI-B Acquisitions GP, LLC, which is the general partner of EnCap VI-B. Therefore, EnCap Partners GP, through its indirect ownership and management of the Phillips Holders and the EnCap Funds, may be deemed to share the right to direct the vote or disposition of the reported Securities. EnCap Partners GP disclaims beneficial ownership of the reported Securities except to the extent of its pecuniary interest therein, and this statement shall not be deemed an admission that it is the beneficial owner of the reported Securities for the purposes of Section 13(d) of the Exchange Act or any other purpose.

(2)

This calculation is based on a combined total of 28,895,403 Common Units. This combined total consists of (a) 19,495,403 Common Units outstanding as of March 1, 2019, and (b) assumes that all 9,400,000 OpCo Common Units that are held of record by the Phillips Holders and may be deemed to be beneficially owned by the Reporting Person (along with an equivalent number of Class B Units, and no other OpCo Common Units or Class B Units) were exchanged for newly issued Common Units on a one-for-one basis. There were a total of 18,014,342 OpCo Common Units and an equivalent number of Class B Units outstanding on March 1, 2019.

Item 1. Security and Issuer

This statement on Schedule 13D (this “Schedule 13D”) relates to common units representing limited partner interests (“Common Units”) in Kimbell Royalty Partners, LP, a Delaware limited partnership (the “Issuer”). The address of the principal executive office of the Issuer is 777 Taylor Street, Suite 810, Fort Worth, Texas 76102.

Item 2. Identity and Background

This Schedule 13D is being filed by PEP I Holdings, LLC (“Phillips I”), PEP II Holdings, LLC (“Phillips II”) and PEP III Holdings, LLC, each a Delaware limited liability company (“Phillips III” and, together with Phillips I and Phillips II, the “Phillips Holders”), EnCap Partners GP, LLC, a Delaware limited liability company (“EnCap Partners GP”) and EnCap Energy Capital Fund VI, L.P. (“EnCap Fund VI”), EnCap VI-B Acquisitions, L.P. (“EnCap VI-B”), EnCap Energy Capital Fund VII, L.P. (“EnCap Fund VII”) and EnCap Energy Capital Fund VIII, L.P., each a Texas limited partnership (“EnCap Fund VIII” and, together with EnCap Fund VI, EnCap VI-B and EnCap Fund VII, the “EnCap Funds”). The Phillips Holders, EnCap Partners GP and the EnCap Funds (collectively, the “EnCap Entities”) are sometimes referred to in this Schedule 13D individually as a “Reporting Person” and, collectively, they are referred to herein as the “Reporting Persons.”

The address of the principal office of the EnCap Entities is 1100 Louisiana Street, Suite 4900, Houston, Texas 77002. The principal business of each of the Phillips Holders is investing in securities of energy companies and oil and gas interests ancillary thereto. The principal business of each of the EnCap Funds is investing in securities of energy companies. The principal business of EnCap Partners GP is indirectly managing the EnCap Funds.

Information regarding the executive officers, managers or other control persons of the Phillips Holders, the EnCap Funds and EnCap Partners GP is set forth on Schedule A, Schedule B and Schedule C, respectively, attached hereto. Schedule A, Schedule B and Schedule C attached hereto set forth the following information as to each such person:

(i). name;

(ii). residence or business address;

(iii). present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted; and

(iv). citizenship.

Other than as set forth on Schedule B attached hereto, during the last five years, to the best of the Reporting Person’s knowledge, no person named on Schedule A, Schedule B or Schedule C attached hereto, has been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration

The information set forth in Item 6 of this Schedule 13D is incorporated by reference in its entirety into this Item 3.

On February 6, 2019, the Issuer entered into a Securities Purchase Agreement (as amended, the “Purchase Agreement”) with the Phillips Holders and Kimbell Royalty Operating, LLC, a Delaware limited liability company (“OpCo” and, together with the Issuer, the “Purchasers”). Pursuant to the Purchase Agreement and in connection with the closing of the transactions contemplated thereby (the “Acquisition”) on March 25, 2019, the Purchasers acquired all of the equity interests previously held by the Phillips Holders in certain entities that own certain oil and natural gas mineral and royalty interests (the “Acquired Subsidiaries”) for aggregate consideration consisting of 9,400,000 common units representing limited liability company interests in OpCo (“OpCo Common Units”) and an equal number of Class B units (“Class B Units”) representing limited partner interests in the Issuer (such OpCo Common Units and Class B Common Units, collectively, the “Consideration Units”). The OpCo Common Units, together with an equivalent number of Class B Units, are exchangeable, at the holder’s election, for Common Units on a one-for-one basis. The consideration for the Acquisition is subject to certain adjustments described in part below and as set forth in the Purchase Agreement.

On March 25, 2019, in connection with the closing of the Acquisition and pursuant to the Purchase Agreement, the Purchasers placed into escrow certain of the Consideration Units pending the outcome of potential claims for indemnification by the Purchasers against the Phillips Holders (such Consideration Units held in escrow, the “Indemnity Units”). The Indemnity Units are comprised of (i) 72,380 OpCo Common Units and an equivalent number of Class B Units constituting a portion of Consideration Units otherwise payable to Phillips I for the Acquisition, (ii) 331,820 OpCo Common Units and an equivalent number of Class B Units constituting a portion of Consideration Units otherwise payable to Phillips II for the Acquisition and (iii) 535,800 OpCo Common Units and an equivalent number of Class B Units constituting a portion of Consideration Units otherwise payable to Phillips III for the Acquisition. Depending on the determination of any such potential claims for indemnification and in accordance with the applicable terms of the Purchase Agreement, the Indemnity Units are to be released to either the Purchasers or the Phillips Holders that would otherwise have been issued such Indemnity Units in connection with the closing of the Acquisition.

Also on March 25, 2019, in connection with the closing of the Acquisition, the Purchasers entered into Amendment No. 1 to the Purchase Agreement (the “Purchase Agreement Amendment”) with the Phillips Holders in order to adjust the balance between the cash amount, on the one hand, and the Consideration Units, on the other hand, to be held in escrow pending the outcome of ongoing litigation involving certain of the Acquired Subsidiaries (such cash and Consideration Units held in escrow, the “Cash Holdback” and the “Holdback Units,” respectively). The Holdback Units are comprised of (i) 42,081 OpCo Common Units and an equivalent number of Class B Units constituting a portion of Consideration Units otherwise payable to Phillips II for the Acquisition and (ii) 9,709 OpCo Common Units and an equivalent number of Class B Units constituting a portion of the Consideration Units otherwise payable to Phillips III for the Acquisition. The Cash Holdback is cash in an amount equal to $5,275,518.

Unless and until surrendered to the Purchasers in accordance with the Purchase Agreement, each of the Phillips Holders is the record holder of, and has sole and exclusive voting power over, the Indemnity Units and the Holdback Units that would otherwise have been issued to such Phillips Holder in connection with the closing of the Acquisition.

Item 4. Purpose of Transaction

The information set forth in Items 3 and 6 of this Schedule 13D is incorporated by reference in its entirety into this Item 4.

The Reporting Persons acquired the securities covered by this Schedule 13D for investment purposes and intend to review their investment in the Issuer on a continuing basis. Subject to the terms of the Purchase Agreement and the Registration Rights Agreement, discussed in Item 6 of this Schedule 13D, depending on various factors, including but not limited to the Issuer’s financial position and strategic direction, price levels of Common Units, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take actions with respect to their investment in the Issuer as they deem appropriate, including changing their current intentions, with respect to any or all matters required to be disclosed in this Schedule 13D. Without limiting the foregoing, the Reporting Persons may, from time to time, acquire or cause affiliates to acquire additional Common Units or other securities of the Issuer, dispose, or cause affiliates to dispose, of some or all of their Common Units or other securities of the Issuer or continue to hold, or cause affiliates to hold, Common Units or other securities of the Issuer (or any combination or derivative thereof).

In addition, without limitation, the Reporting Persons may engage in discussions with management, the board of directors, unitholders of the Issuer and other relevant parties or take other actions concerning any extraordinary limited partnership transaction (including but not limited to a merger, reorganization or liquidation) or the business, operations, assets, strategy, future plans, prospects, corporate structure, board composition, management, capitalization, dividend policy, charter, bylaws, corporate documents, agreements, de-listing or de-registration of the Issuer.

Except as set forth in this Schedule 13D, or as would occur upon completion of any of the matters discussed in this Schedule 13D, the Reporting Persons and, to the best knowledge of the Reporting Persons or any of the other individuals named in Item 2 of this Schedule 13D or the Schedules attached hereto, have no present plans or proposals that would relate to or result in any of the matters set forth in clauses (a) through (j) of Item 4 of Schedule 13D. Although the foregoing reflects activities presently contemplated by such persons with respect to the Issuer, the foregoing is subject to change at any time.

Item 5. Interest in Securities of the Issuer

a) The aggregate number and percentage of Common Units beneficially owned by each Reporting Person is set forth in Items 7, 8, 9, 10, 11 and 13 of the cover pages to this Schedule 13D relating to such Reporting Person and is incorporated by reference into this Item 5.

(b) For purposes of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), EnCap Partners GP, through its direct and indirect ownership and management of the Phillips Holders and the EnCap Funds, may be deemed to share the right to direct the vote or the disposition of the Common Units held of record by the Phillips Holders, and thus, for the purposes of Rule 13d-3 promulgated under the Exchange Act, may be deemed to beneficially own the Common Units held by the Phillips Holders. The Common Units held by the Phillips Holders represent approximately 32.53% of the outstanding Common Units (a combined total of 28,895,403 Common Units consisting of (a) 19,495,403 Common Units outstanding as of March 1, 2019, and (b) 9,400,000 OpCo Common Units that are held by the Phillips Holders and may be deemed to be beneficially owned by the other Reporting Persons, assuming that such OpCo Common Units (along with an equivalent number of Class B Units, and no other OpCo Common Units or Class B Units) were exchanged for newly issued Common Units on a one-for-one basis). Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission by any Reporting Person that it is the beneficial owner of any Common Units for purposes of Section 13(d) of the Exchange Act, or for any other purpose, and such beneficial ownership is expressly disclaimed.

(c) Except as set forth in this Schedule 13D, none of the Reporting Persons or, to their knowledge, any of its directors, executive officers or other control persons named on Schedule A, Schedule B or Schedule C, attached hereto, has effected any transaction in the Common Units during the past 60 days.

(d) No person other than the Reporting Persons has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Units reported on this Schedule 13D.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The information provided in Items 3 and 4 of this Schedule 13D is incorporated by reference in its entirety into this Item 6.

Purchase Agreement

Pursuant to the Purchase Agreement, the Purchasers, on the one hand, and the Phillips Holders, on the other hand, agreed to indemnify each other and their respective affiliates, equity holders, officers, directors, employees, agents, advisors, representatives, accountants, attorneys and consultants against certain losses resulting from breaches of their respective representations, warranties and covenants, subject to certain negotiated limitations and survival periods set forth in the Purchase Agreement. In addition, pursuant to the terms of the Purchase Agreement, the Phillips Holders have agreed, subject to certain exceptions, not to dispose of any Consideration Units for a period of 120 days following the closing of the Acquisition on March 25, 2019 without the prior written consent of the Purchasers.

Amendment No. 1 to the Purchase Agreement

Under the terms of the Purchase Agreement, as amended by the Purchase Agreement Amendment, within five business days of a final and non-appealable determination having been reached with respect to litigation involving certain of the Acquired Subsidiaries, certain of the Holdback Units are to be released from escrow and transferred to (a) the applicable Phillips Holder, in the event such litigation is decided in favor of such Phillips Holder, or (b) the Purchasers, in the event such litigation is decided against the Phillips Holder party to such litigation.

Escrow Agreement

On March 25, 2019, in connection with the closing of the Acquisition and pursuant to the Purchase Agreement, the Phillips Holders entered into an Escrow Agreement (the “Escrow Agreement”) with the Purchasers and Citibank, N.A., as escrow agent, pursuant to which the Holdback Units were deposited into an escrow account in order to provide a source of recovery with respect to the Purchasers’ rights to indemnification pursuant to the Purchase Agreement, if any, and which governs the terms by which the Holdback Units, the Cash Holdback and any dividends or distributions with respect to the Holdback Units will be held in and released from escrow.

Exchange Agreement

On March 25, 2019, in connection with the closing of the Acquisition and pursuant to the Purchase Agreement, each of the Phillips Holders entered into Joinders to Exchange Agreement (collectively, the “Joinders”), pursuant to which the Phillips Holders each agreed to become a party to the Exchange Agreement, dated as of September 23, 2018 (the “Exchange Agreement”), by and among the Purchasers, Kimbell Royalty GP, LLC and the other parties thereto.

Pursuant to the terms of the Exchange Agreement, each of the Phillips Holders has the right to tender its OpCo Common Units, together with an equal number of Class B Units (together, “Tendered Units”), for redemption to OpCo. Each of the Phillips Holders has the right to receive, at the election of OpCo, either a number of Common Units equal to the number of Tendered Units or a cash payment equal to the number of Tendered Units multiplied by the current market price of the Common Units. In addition, the Issuer has the right, but not the obligation, to directly purchase all or a portion of such Tendered Units for either a number of Common Units equal to the number of Tendered Units the Issuer elects to purchase or a cash payment equal to the number of Tendered Units the Issuer elects to purchase multiplied by the current market price of the Common Units.

If the OpCo elects to require the delivery of Common Units in exchange for any Tendered Units or the Issuer elects to purchase any Tendered Units using Common Units as consideration, the exchange will be on a one-for-one basis, subject to adjustment in the event of splits or combinations of units, distributions of warrants or other unit purchase rights, specified extraordinary distributions and similar events. The Exchange Agreement provides that no party will have the right to exchange its OpCo Common Units if the Issuer reasonably determines that such exchange would be prohibited by applicable law or regulation.

First Amended and Restated Limited Liability Company Agreement of OpCo

On March 25, 2019, in connection with the closing of the Acquisition and pursuant to the Purchase Agreement, each of the Phillips Holders entered into an Adoption Agreement (collectively, the “Adoption Agreements”), pursuant to which the Phillips Holders each agreed to become a party to the First Amended and Restated Limited Liability Company Agreement of OpCo, dated as of September 23, 2018 (the “OpCo LLC Agreement”), by and among the Purchasers and the other parties thereto.

Pursuant to the OpCo LLC Agreement, the Issuer is the managing member of OpCo and the Phillips Holders and the other unitholders of OpCo are each non-managing members. The non-managing members have limited voting rights and are entitled to distributions.

The OpCo LLC Agreement requires that, after setting aside such reserves as the Issuer, in its capacity as the managing member of OpCo, determines, within 45 days after the end of each quarter, OpCo will distribute its available cash to its unitholders of record on the applicable record date.

Registration Rights Agreement

On March 25, 2019, in connection with the closing of the Acquisition, the Issuer entered into an Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”) with the Phillips Holders and the other parties thereto (such parties, together with the Phillips Holders, the “RRA Parties”), pursuant to which, among other things, the Issuer has agreed to (i) prepare a shelf registration statement, or an amendment to its existing shelf registration statement (the “Shelf Registration Statement”), covering the resale of Common Units issued or issuable upon the conversion of the Consideration Units and the other OpCo Common Units and Class B Units issued to the other RRA Parties in connection with certain previously consummated transactions (collectively, the “Registrable Securities”), (ii) file the Shelf Registration Statement with the United States Securities and Exchange Commission (the “SEC”) within 30 days of the execution of the Registration Rights Agreement and (iii) use its reasonable best efforts to cause the Shelf Registration Statement to become effective as soon as reasonably practicable following such filing but, in any event, within 120 days of the execution of the Registration Rights Agreement. As of March 25, 2019, the Issuer had previously satisfied its obligations regarding the filing of a Shelf Registration Statement with respect to all RRA Parties other than the Phillips Holders.

If the Shelf Registration Statement is not effective prior to the 180th day after the execution of the Registration Rights Agreement, then certain RRA Parties, including the Phillips Holders, will be entitled to liquidated damages as set forth in the Registration Rights Agreement.

In addition, the Registration Rights Agreement permits, among other things, the Phillips Holders and certain other RRA Parties to request to sell any or all of their respective Registrable Securities in an underwritten offering that is registered pursuant to a Shelf Registration Statement, subject to certain exceptions, including, among other things, that the gross proceeds from the sale are reasonably expected to exceed $50 million in the aggregate. The Registration Rights Agreement also sets forth the priority and respective rights of the Phillips Holders and the other RRA Parties with regard to the inclusion of Registrable Securities in any underwritten offering.

The foregoing descriptions of the Purchase Agreement, the Purchase Agreement Amendment, the Escrow Agreement, the Joinders, the Exchange Agreement, the Adoption Agreements, the OpCo LLC Agreement and the Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the Purchase Agreement, the Purchase Agreement Amendment, the Escrow Agreement, the Joinders, the Exchange Agreement, the Adoption Agreements, the OpCo LLC Agreement and the Registration Rights Agreement, which are attached hereto as Exhibits 10.1 through 10.12, respectively, and incorporated herein by reference in their entirety.

Item 7. Material to be Filed as Exhibits


Exhibit Number		Description of Exhibit

1.1		Joint Filing Agreement, dated as of April 4, 2019.

10.1		Securities Purchase Agreement, dated as of February 6, 2019, by and among PEP I Holdings, LLC, PEP II Holdings, LLC, PEP III Holdings, LLC, Kimbell Royalty Partners, LP and Kimbell Royalty Operating, LLC (filed as Exhibit 2.1 to the Issuer’s Current Report on Form 8-K filed with the SEC on February 12, 2019 and incorporated herein in its entirety by reference).

10.2		Amendment No. 1 to Securities Purchase Agreement, dated as of March 25, 2019, by and among PEP I Holdings, LLC, PEP II Holdings, LLC, PEP III Holdings, LLC, Kimbell Royalty Partners, LP and Kimbell Royalty Operating, LLC (filed as Exhibit 2.1 to the Issuer’s Current Report on Form 8-K filed with the SEC on March 26, 2019 and incorporated herein in its entirety by reference).

10.3		Escrow Agreement, dated as of March 25, 2019, by and among PEP I Holdings, LLC, PEP II Holdings, LLC, PEP III Holdings, LLC, Kimbell Royalty Partners, LP, Kimbell Royalty Operating, LLC and Citibank, National Association.

10.4		Joinder to Exchange Agreement, dated as of March 25, 2019, executed by PEP I Holdings, LLC.


Exhibit Number		Description of Exhibit

10.5		Joinder to Exchange Agreement, dated as of March 25, 2019, executed by PEP II Holdings, LLC.

10.6		Joinder to Exchange Agreement, dated as of March 25, 2019, executed by PEP III Holdings, LLC.

10.7		Exchange Agreement, dated as of September 23, 2018, by and among Kimbell Royalty Partners, LP, Kimbell Royalty GP, LLC, Kimbell Royalty Operating, LLC, the Kimbell Art Foundation, Haymaker Minerals & Royalties, LLC, EIGF Aggregator III LLC, TE Drilling Aggregator LLC and Haymaker Management, LLC (filed as Exhibit 10.1 to the Issuer’s Current Report on Form 8-K filed with the SEC on September 25, 2018 and incorporated herein in its entirety by reference).

10.8		Adoption Agreement, dated as of March 25, 2019, executed by PEP I Holdings, LLC.

10.9		Adoption Agreement, dated as of March 25, 2019, executed by PEP II Holdings, LLC.

10.10		Adoption Agreement, dated as of March 25, 2019, executed by PEP III Holdings, LLC.

10.11		First Amended and Restated Limited Liability Company Agreement of Kimbell Royalty Operating, LLC, dated as of September 23, 2018, by and among Kimbell Royalty Partners, LP, Haymaker Minerals & Royalties, LLC, EIGF Aggregator III LLC, TE Drilling Aggregator LLC, Haymaker Management, LLC, and the Kimbell Art Foundation (filed as Exhibit 3.2 to the Issuer’s Current Report on Form 8-K filed with the SEC on September 25, 2018 and incorporated herein in its entirety by reference).

10.12		Amended and Restated Registration Rights Agreement, dated as of March 25, 2019, by and among Kimbell Royalty Partners, LP, EIGF Aggregator III LLC, TE Drilling Aggregator LLC, Haymaker Management, LLC, Haymaker Minerals & Royalties, LLC, AP KRP Holdings, L.P., ATCF SPV, L.P., Zeus Investments, L.P., Apollo Kings Alley Credit SPV, L.P., Apollo Thunder Partners, L.P., AIE III Investments, L.P., Apollo Union Street SPV, L.P., Apollo Lincoln Private Credit Fund, L.P., Apollo SPN Investments I (Credit), LLC, AA Direct, L.P., PEP I Holdings, LLC, PEP II Holdings, LLC, PEP III Holdings, LLC, Cupola Royalty Direct, LLC, Kimbell Art Foundation and Rivercrest Capital Partners LP (filed as Exhibit 4.1 to the Issuer’s Current Report on Form 8-K filed with the SEC on March 26, 2019 and incorporated herein in its entirety by reference).

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: April 4, 2019


PEP I Holdings, LLC

By:		EnCap Energy Capital Fund VI, L.P.,
		its Managing Member

By:		EnCap Equity Fund VI GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

By:		/s/ D. Martin Phillips
Name:		D. Martin Phillips
Title:		Managing Partner

PEP II Holdings, LLC

By:		EnCap Energy Capital Fund VII, L.P.,
		its Managing Member

By:		EnCap Equity Fund VII GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

By:		/s/ D. Martin Phillips
Name:		D. Martin Phillips
Title:		Managing Partner


PEP III Holdings, LLC

By:		EnCap Energy Capital Fund VIII, L.P.,
		its Managing Member

By:		EnCap Equity Fund VIII GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

By:		/s/ D. Martin Phillips
Name:		D. Martin Phillips
Title:		Managing Partner


EnCap Energy Capital Fund VI, L.P.

By:		EnCap Equity Fund VI GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

By:		/s/ Robert L. Zorich
Name:		Robert L. Zorich
Title:		Managing Partner


EnCap VI-B Acquisitions, L.P.

By:		EnCap VI-B Acquisitions GP, LLC,
		its General Partner

By:		EnCap Energy Capital Fund VI-B, L.P.,
		its Sole Member

By:		EnCap Equity Fund VI GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner


By:		/s/ Robert L. Zorich
Name:		Robert L. Zorich
Title:		Managing Partner


EnCap Energy Capital Fund VII, L.P.

By:		EnCap Equity Fund VII GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

By:		/s/ Robert L. Zorich
Name:		Robert L. Zorich
Title:		Managing Partner

EnCap Energy Capital Fund VIII, L.P.

By:		EnCap Equity Fund VIII GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

By:		/s/ Robert L. Zorich
Name:		Robert L. Zorich
Title:		Managing Partner

EnCap Partners GP, LLC

By:		/s/ Robert L. Zorich
Name:		Robert L. Zorich
Title:		Managing Partner

Schedule A

CONTROL PERSONS OF THE PHILLIPS HOLDERS

The name, business address, present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted, of each of the general partner and other control persons of the Phillips Holders are set forth below:


Name and Business Address	Capacity in which Serves	Principal Occupation	Name, Principal Business and Address of Organization in which Principal Occupation is Conducted
EnCap Energy Capital Fund VI, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Member of PEP I Holdings, LLC	n/a	n/a

EnCap VI-B Acquisitions, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Member of PEP I Holdings, LLC	n/a	n/a

EnCap VI-B Acquisitions GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap VI-B Acquisitions, L.P.	n/a	n/a

EnCap Energy Capital Fund VI-B, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Sole Member of EnCap VI-B Acquisitions GP, LLC	n/a	n/a

EnCap Energy Capital Fund VII, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Member of PEP II Holdings, LLC	n/a	n/a

EnCap Energy Capital Fund VIII, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Member of PEP III Holdings, LLC	n/a	n/a

EnCap Equity Fund VI GP, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Energy Capital Fund VI, L.P. and EnCap Energy Capital Fund VI-B, L.P.	n/a	n/a

EnCap Equity Fund VII GP, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Energy Capital Fund VII, L.P.	n/a	n/a

EnCap Equity Fund VIII GP, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Energy Capital Fund VIII, L.P.	n/a	n/a

EnCap Investments L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Equity Fund VI GP, L.P., EnCap Equity Fund VII GP, L.P. and EnCap Equity Fund VIII GP, L.P.	n/a	n/a

A-1


EnCap Investments GP, L.L.C. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Investments L.P.	n/a	n/a

EnCap Investments Holdings, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Sole Member of EnCap Investments GP, L.L.C.	n/a	n/a

EnCap Partners, LP 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Member of EnCap Investments Holdings, LLC	n/a	n/a

EnCap Partners GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Partners, LP	n/a	n/a

A-2

Schedule B

CONTROL PERSONS OF THE ENCAP FUNDS


Name and Business Address	Capacity in which Serves	Principal Occupation	Name, Principal Business and Address of Organization in which Principal Occupation is Conducted
EnCap VI-B Acquisitions GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap VI-B Acquisitions, L.P.	n/a	n/a

EnCap Energy Capital Fund VI-B, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Sole Member of EnCap VI-B Acquisitions GP, LLC	n/a	n/a

EnCap Equity Fund VI GP, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Energy Capital Fund VI, L.P. and EnCap Energy Capital Fund VI-B, L.P.	n/a	n/a

EnCap Equity Fund VII GP, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Energy Capital Fund VII, L.P.	n/a	n/a

EnCap Equity Fund VIII GP, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Energy Capital Fund VIII, L.P.	n/a	n/a

EnCap Investments L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Equity Fund VI GP, L.P., EnCap Equity Fund VII GP, L.P. and EnCap Equity Fund VIII GP, L.P.	n/a	n/a

EnCap Investments GP, L.L.C. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Investments L.P.	n/a	n/a

EnCap Investments Holdings, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Sole Member of EnCap Investments GP, L.L.C.	n/a	n/a

EnCap Partners, LP 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Member of EnCap Investments Holdings, LLC	n/a	n/a

EnCap Partners GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Partners, LP	n/a	n/a

On July 10, 2018, EnCap Investments L.P. (“EnCap”) entered into a settlement with the United States Securities and Exchange Commission (the “SEC”) under which EnCap consented to the entry of an order (the “Order”) that finds that EnCap violated Section 206(4) under the Investment Advisers Act of 1940 (the “Advisers Act”) and Rule 206(4)-5 thereunder. Solely for the purpose of settling these proceedings, EnCap admitted to the SEC’s jurisdiction, the subject matter of these proceedings and consented to the Order. The Order required EnCap to cease and desist from committing or causing any violations and any future violations of Section 206(4) of the Advisers Act and Rule 206(4)-5 thereunder, to be censured, and to pay a civil monetary penalty in the amount of $500,000 to the SEC.

B-1

Schedule C

CONTROL PERSONS OF ENCAP PARTNERS GP


Name and Business Address	Capacity in which Serves	Principal Occupation	Name, Principal Business and Address of Organization in which Principal Occupation is Conducted
David B. Miller 3811 Turtle Creek Blvd., Suite 2100 Dallas, Texas 75219	Managing Partner	Managing Partner	EnCap Partners GP, LLC 3811 Turtle Creek Blvd., Suite 2100 Dallas, Texas 75219

Gary R. Petersen 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Partner	Managing Partner	EnCap Partners GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002

D. Martin Phillips 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Partner	Managing Partner	EnCap Partners GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002

Robert L. Zorich 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Partner	Managing Partner	EnCap Partners GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002

Jason M. DeLorenzo 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Partner	Managing Partner	EnCap Partners GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002

Douglas E. Swanson, Jr. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Partner	Managing Partner	EnCap Partners GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002

C-1

EX-99.1.1 2 d870752dex9911.htm EX-99.1.1 EX-99.1.1

Exhibit 1.1

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned persons hereby agree to the joint filing on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the common units representing limited partner interests in Kimbell Royalty Partners, LP, and further agree that this Joint Filing Agreement be included as an Exhibit to such joint filing. In evidence thereof each of the undersigned, being duly authorized, hereby execute this Joint Filing Agreement on the date set forth below.

Date: April 4, 2019


PEP I Holdings, LLC

By:		EnCap Energy Capital Fund VI, L.P.,
		its Managing Member

By:		EnCap Equity Fund VI GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

By:		/s/ D. Martin Phillips
Name:		D. Martin Phillips
Title:		Managing Partner

PEP II Holdings, LLC

By:		EnCap Energy Capital Fund VII, L.P.,
		its Managing Member

By:		EnCap Equity Fund VII GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

By:		/s/ D. Martin Phillips
Name:		D. Martin Phillips
Title:		Managing Partner


PEP III Holdings, LLC

By:		EnCap Energy Capital Fund VIII, L.P.,
		its Managing Member

By:		EnCap Equity Fund VIII GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

By:		/s/ D. Martin Phillips
Name:		D. Martin Phillips
Title:		Managing Partner

EnCap Energy Capital Fund VI, L.P.

By:		EnCap Equity Fund VI GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

By:		/s/ Robert L. Zorich
Name:		Robert L. Zorich
Title:		Managing Partner

EnCap VI-B Acquisitions, L.P.

By:		EnCap VI-B Acquisitions GP, LLC,
		its General Partner

By:		EnCap Energy Capital Fund VI-B, L.P.,
		its Sole Member

By:		EnCap Equity Fund VI GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

By:		/s/ Robert L. Zorich
Name:		Robert L. Zorich
Title:		Managing Partner


EnCap Energy Capital Fund VII, L.P.

By:		EnCap Equity Fund VII GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

By:		/s/ Robert L. Zorich
Name:		Robert L. Zorich
Title:		Managing Partner


EnCap Energy Capital Fund VIII, L.P.

By:		EnCap Equity Fund VIII GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

By:		/s/ Robert L. Zorich
Name:		Robert L. Zorich
Title:		Managing Partner


EnCap Partners GP, LLC

By:		/s/ Robert L. Zorich
Name:		Robert L. Zorich
Title:		Managing Partner

EX-99.10.3 3 d870752dex99103.htm EX-99.10.3 EX-99.10.3

Exhibit 10.3

ESCROW AGREEMENT

THIS ESCROW AGREEMENT (this “Agreement”) is made and entered into as of March 25, 2019, by and among PEP I Holdings, LLC, a Delaware limited liability company, PEP II Holdings, LLC, a Delaware limited liability company, and PEP III Holdings, LLC, a Delaware limited liability company (each, a “Seller” and, together, “Sellers”), Kimbell Royalty Partners, LP, a Delaware limited partnership, and Kimbell Royalty Operating, LLC, a Delaware limited liability company (each, a “Buyer” and, together, “Buyers” and, together with Sellers, each individually, a “Party” and, collectively, the “Parties”), and Citibank, National Association, as escrow agent (the “Escrow Agent”), effective as of the Closing of that certain Securities Purchase Agreement, dated as of February 6, 2019, by and among the Parties (the “Purchase Agreement”). Capitalized terms not defined herein shall have the meanings assigned to them in the Purchase Agreement; provided, however, that the Escrow Agent shall not be deemed to have any knowledge of or duty to ascertain the meaning of any capitalized term not otherwise defined in this Agreement.

RECITALS

WHEREAS, the Parties entered into the Purchase Agreement, which contemplates that, upon the terms and subject to the conditions set forth therein, Sellers shall sell and the Buyers shall purchase one hundred percent (100%) of the issued and outstanding limited liability company interests of Phillips Energy Partners, LLC, a Delaware limited liability company, Phillips Energy Partners II, LLC, a Delaware limited liability company, and Phillips Energy Partners III, LLC, a Delaware limited liability company (collectively, the “Subject Companies”), in exchange for 9,400,000 Opco Common Units and 9,400,000 Class B Units (the “Units”);

WHEREAS, as of the Closing, the Subject Companies and certain of their Assets are subject to the following unresolved litigation matters: Apperson, Jr. et al. v. EOG Resources, Inc., et al., Cause No. 18-07-00183-CVK and Houston Trust Company, as Trustee of the Fredricka H. Crain Trust Amended and Restated v. Mustang Minerals, LLC, Cause No. 03-17-00152-CV, Appeal No. 18-0452 (individually and collectively, the “Litigation”);

WHEREAS, as a result of the Litigation, at Closing, Buyers have agreed to issue and credit to the applicable Seller in book entry form, certain Units attributable to the Assets subject to the Litigation which shall be held in custody by the Transfer Agent and disbursed in accordance with the provisions of the Purchase Agreement following a Final Determination (the “Litigation Units”); and

WHEREAS, as a result of the Litigation, at Closing, (a) Sellers have agreed to place in escrow a cash amount equal to $5,275,518 (the “Litigation Escrow Amount”), which amount plus all proceeds from the Litigation Escrow Amount, including all interest, dividends, gains and other income earned with respect thereto (collectively, the “Litigation Escrow Earnings,” together with the Litigation Escrow Amount, the “Litigation Escrow Funds” or the “Litigation Escrow Fund”); and (b) Buyers have agreed to place in escrow all dividend and distributions that occur and are attributable to the Litigation Units after the Closing but prior to the release of the Litigation Units by the Transfer Agent pursuant to the terms of the Purchase Agreement (the “Dividend Escrow Amount”), which amount plus all products and proceeds from the Dividend Escrow

Amount, including all interest, dividends, gains and other income earned with respect thereto (collectively, the “Dividend Escrow Earnings,” together with the Dividend Escrow Amount, the “Dividend Escrow Funds” or the “Dividend Escrow Fund”; the Dividend Escrow Amount together with the Litigation Escrow Amount, the “Escrow Amount”; the Dividend Escrow Earnings together with the Litigation Escrow Earnings, the “Escrow Earnings”; and the Dividend Escrow Funds or the Dividend Escrow Fund together with the Litigation Escrow Funds or the Litigation Escrow Fund, the “Escrow Funds” or the “Escrow Fund”), and in each case of (a) and (b), the Escrow Agent intends to hold and distribute the Escrow Funds in accordance with the terms of this Agreement.

NOW THEREFORE, in consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Appointment. The Parties hereby appoint the Escrow Agent as their escrow agent for the purposes set forth herein, and the Escrow Agent hereby accepts such appointment and agrees to act as escrow agent in accordance with the terms and conditions set forth herein.

2. Escrow Funds.

(a) Simultaneously with the execution and delivery of this Agreement, Sellers are depositing with the Escrow Agent the Litigation Escrow Amount by wire transfer of immediately available funds. The Escrow Agent shall acknowledge receipt of the Litigation Escrow Amount on the date hereof, which amount shall be deposited in one separate and distinct account (the “Escrow Account”), subject to the terms and conditions of this Agreement.

(b) All Escrow Earnings shall be retained by the Escrow Agent and reinvested in the Escrow Funds and shall become part of the Escrow Funds; and shall be disbursed as part of the Escrow Funds in accordance with the terms and conditions of this Agreement.

3. Investment of Escrow Funds.

(a) Unless otherwise instructed in writing by an Authorized Representative of both Parties, the Escrow Agent shall invest and reinvest the Escrow Funds in a “noninterest-bearing deposit account” insured by the Federal Deposit Insurance Corporation (“FDIC”) to the applicable limits. The Escrow Funds shall at all times remain available for distribution in accordance with Section 4 below.

(b) The Escrow Agent shall send an account statement to each of the Parties on a monthly basis reflecting activity in the Escrow Account for the preceding month.

4. Disposition and Termination of the Escrow Funds.

(a) Escrow Funds. The Parties, subject in all respects, as solely between the Parties, to the terms and conditions of the Purchase Agreement, shall act in accordance with, and the Escrow Agent shall hold and release the Escrow Funds as provided in, this Section 4(a), as follows:

(i) Within five (5) Business Days following a Final Determination, the Parties shall execute and deliver to the Escrow Agent a Joint Release Instruction (as defined below) with respect to the applicable Escrow Funds, and the Escrow Agent shall promptly, but in any event within three (3) Business Days after receipt of a Joint Release Instruction, disburse all of the Escrow Fund in accordance with such Joint Release Instruction.

(ii) The payment of the applicable Escrow Funds by the Escrow Agent shall be made by wire transfer of immediately available funds as set forth in a Joint Release Instruction.

(iii) Any Joint Release Instruction delivered to the Escrow Agent must be in writing, executed by the appropriate Party or Parties as evidenced by the signatures of the person or persons set forth on Exhibits A-1 and/or A-2, as applicable, and delivered in a manner consistent with the notice requirements set forth in Section 11 below. In the event a Joint Release Instruction is delivered to the Escrow Agent, the Escrow Agent is authorized to seek confirmation of such instruction from the appropriate Party or Parties identified as having executed such Joint Release Instruction by telephone call to any of the Persons designated in Exhibits A-1 and/or A-2 annexed hereto (the “Authorized Representatives”), and the Escrow Agent may rely upon the confirmation of any Authorized Representative. To assure accuracy of the instructions it receives, the Escrow Agent may record such telephone conversations. If the Escrow Agent is unable to verify the instructions, or is not satisfied with the verification it receives, it will not execute the instruction until all such issues have been resolved, it being understood that the Escrow Agent shall use its commercially reasonable efforts to resolve all such issues. The Persons and telephone numbers for the Authorized Representatives may be changed only in writing, executed by an authorized signor or the applicable Party set forth on Exhibits A-1 and/or A-2, actually received and acknowledged by the Escrow Agent.

(b) Certain Definitions.

(i) “Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are not required or authorized by law to be closed in New York, New York.

(ii) “Final Determination” means a final, non-appealable determination (including a compromise or settlement) of a Litigation.

(iii) “Joint Release Instruction” means a joint written instruction executed by an Authorized Representative of both Parties to the Escrow Agent directing the Escrow Agent to disburse the applicable Escrow Funds. A Joint Release Instruction shall set forth (i) the amounts to be disbursed, (ii) the recipients of the disbursement and (iii) the manner of disbursement and delivery instructions.

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

5. Escrow Agent. The Escrow Agent undertakes to perform only such duties as are expressly set forth herein, which shall be deemed purely ministerial in nature, and no duties shall be implied. The Escrow Agent shall neither be responsible for, nor chargeable with, knowledge of, nor have any requirements to comply with, the terms and conditions of any other agreement, instrument or document between the Parties, in connection herewith, if any (including, without limitation, the Purchase Agreement), nor shall the Escrow Agent be required to determine if any Person has complied with any such agreements, nor shall any additional obligations of the Escrow Agent be inferred from the terms of such agreements, even though reference thereto may be made in this Agreement. Notwithstanding the terms of any other agreement between the Parties, the terms and conditions of this Agreement will control the actions of the Escrow Agent. The Escrow Agent may rely upon and shall not be liable for acting or refraining from acting upon a Joint Release Instruction furnished to it hereunder and believed by it to be genuine and to have been signed and presented by the Authorized Representatives, except in the event of the Escrow Agent’s fraud, gross negligence or willful misconduct. Concurrently with the execution of this Agreement, the Parties shall deliver to the Escrow Agent authorized signers’ forms in the form of Exhibit A-1 and Exhibit A-2 attached hereto. The Escrow Agent shall be under no duty to inquire into or investigate the validity, accuracy or content of any such document, notice, instruction or request. The Escrow Agent shall have no duty to solicit any payments which may be due pursuant to the terms of the Purchase Agreement or this Agreement. In the event that the Escrow Agent, acting reasonably, shall be uncertain as to its duties or rights hereunder or shall receive instructions, claims or demands from any Party hereto which, in its opinion, conflict with any of the provisions of this Agreement, it shall be entitled to refrain from taking any action and its sole obligation shall be to keep safely all property held in escrow until it shall be directed otherwise in a Joint Release Instruction. The Escrow Agent may interplead all of the assets held hereunder into a court of competent jurisdiction or may seek a declaratory judgment with respect to certain circumstances, and thereafter be fully relieved from any and all liability or obligation with respect to such interpleaded assets or any action or non-action based on such declaratory judgment. The Escrow Agent may consult with legal counsel of its selection in the event of any dispute or question as to the meaning or construction of any of the provisions hereof or its duties hereunder. The Escrow Agent will not be liable for any action taken, suffered or omitted to be taken by it in good faith except to the extent that the Escrow Agent’s fraud, willful misconduct or gross negligence was the cause of any loss to either Party. To the extent practicable, the Parties agree to pursue any redress or recourse in connection with any dispute (other than with respect to a dispute involving the Escrow Agent) without making the Escrow Agent a party to the same. Notwithstanding anything in this Agreement to the contrary, in no event shall the Escrow Agent be liable for any special, indirect, punitive, incidental or consequential losses or damages of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has been advised of the likelihood of such losses or damages and regardless of the form of action, other than any such losses or damages which result from the Escrow Agent’s fraud, gross negligence or willful misconduct.

6. Resignation and Removal of the Escrow Agent. The Escrow Agent (a) may resign and be discharged from its duties or obligations hereunder by giving thirty (30) calendar days advance notice in writing of such resignation to Buyers and Sellers specifying a date when such resignation shall take effect or (b) may be removed, with or without cause, by the Parties acting jointly at any time by providing written notice executed by an Authorized Representative of both Parties to the Escrow Agent. Any corporation or association into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any corporation or association to which all or substantially all of the escrow business of the Escrow Agent’s line of business may be transferred, shall be the Escrow Agent under this Agreement without further act. The Escrow

Agent’s sole responsibility after such thirty (30) calendar day notice period expires or after receipt of written notice of removal shall be to hold and safeguard the Escrow Funds (without any obligation to reinvest the same) and to deliver the same (i) to a substitute or successor escrow agent pursuant to a joint written designation from the Parties or (ii) as set forth in a Joint Release Instruction, at which time of delivery Escrow Agent’s obligations hereunder shall cease and terminate. In the event the Escrow Agent resigns, if the Parties have failed to appoint a successor escrow agent prior to the expiration of thirty (30) calendar days following receipt of the notice of resignation, the Escrow Agent may petition any court of competent jurisdiction for the appointment of such a successor escrow agent or for other appropriate relief, and any such resulting appointment shall be binding upon all of the Parties hereto.

7. Fees and Expenses. All fees and expenses of the Escrow Agent are described in Schedule 1 attached hereto and shall be paid fifty percent by Sellers and fifty percent by Buyers. The fees agreed upon for the services to be rendered hereunder are intended as full compensation for the Escrow Agent services as contemplated by this Agreement.

8. Indemnity. Each Party shall, severally and not jointly, indemnify, defend and hold harmless the Escrow Agent and its affiliates and their respective successors, assigns, directors, officers, agents and employees (the “Escrow Indemnitees”) from and against any and all losses, damages, claims, liabilities, penalties, judgments, settlements, actions, suits, proceedings, litigation, investigations, costs or expenses (including the reasonable fees and expenses of one outside counsel and experts and their staffs and all expenses for document location, duplication and shipment) (collectively “Escrow Agent Losses”) arising out of or in connection with (a) the Escrow Agent’s execution and performance of this Agreement, tax reporting or withholding, the enforcement of any rights or remedies under or in connection with this Agreement, or as may arise by reason of any act, omission or error of the Escrow Indemnitee, except to the extent that such Escrow Agent Losses have been caused by the fraud, gross negligence or willful misconduct of the Escrow Agent or any such Escrow Indemnitee, or (b) its following any written instructions or other directions from the Parties. It is understood and agreed that the Escrow Agent does not have a contractual right of set off or a contractual security interest under the Agreement; provided, however, that nothing herein shall be construed as a waiver of any statutory or common law rights to which the Escrow Agent may otherwise be entitled with respect thereto. Notwithstanding anything to the contrary herein, the Parties agree, solely as between themselves, that any obligation for indemnification under this Section 8 (or for reasonable fees and expenses of the Escrow Agent described in Section 7) shall be borne by the party or parties determined by a court of competent jurisdiction to be responsible for causing the loss, damage, liability, cost or expense against which the Escrow Agent is entitled to indemnification or, if no such determination is made, then one-half by Buyers and one-half by Sellers. The provisions of this Section 8 shall survive the resignation or removal of the Escrow Agent and the termination of this Agreement.

9. Tax Matters.

(a) The Parties agree that, for U.S. federal and applicable state income tax purposes, Sellers shall be treated as the owners of the Escrow Funds. The Escrow Agent shall report the Escrow Earnings on Internal Revenue Service (“IRS”) Form 1099 showing the Escrow Agent as payor and each applicable Seller as payee as of the end of each calendar year and, to the extent required by the United States Internal Revenue Code of 1986, as amended (the “Code”) and the regulations promulgated thereunder, whether or not such Escrow Earnings were disbursed during such calendar year.

(b) Prior to the date hereof, the Parties shall provide the Escrow Agent with certified tax identification numbers by furnishing appropriate IRS Forms W-9 or W-8 (as applicable) and such other forms and documents that the Escrow Agent may reasonably request.

(c) The Escrow Agent shall be responsible only for income reporting to the IRS with respect to income earned on the Escrow Funds. The Escrow Agent shall withhold any taxes required to be withheld by applicable law, including but not limited to required withholding in the absence of proper tax documentation, and shall remit such taxes to the appropriate authorities. Other than in connection with any required withholding, the Parties acknowledge and agree that the Escrow Agent shall have no responsibility for the preparation and/or filing of any tax return with respect to the Escrow Funds or any income earned on the Escrow Funds.

(d) Should the Escrow Agent be engaged to perform annual tax information reporting for principal payments, all such reporting will be completed at the written direction of the Parties acting jointly. The Escrow Agent will, in accordance with such written instructions, file, print and mail information returns to Persons or entities receiving disbursements pursuant to the Agreement and transmit withholding amounts as directed by the Parties in writing.

(e) The Escrow Agent, its affiliates, and its employees are not in the business of providing tax or legal advice to any taxpayer outside of Citigroup, Inc. and its affiliates. This Agreement and any amendments or attachments are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

10. Covenant of the Escrow Agent. The Escrow Agent hereby agrees and covenants with the Parties that it shall perform all of its obligations under this Agreement and shall not deliver custody or possession of any of the Escrow Funds to anyone except pursuant to the express terms of this Agreement or as otherwise required by law.

11. Notices. All notices, requests, demands and other communications required under this Agreement shall be in writing, in English, and shall be deemed to have been duly given to the intended recipient if delivered to such Party’s Authorized Representative: (i) personally, (ii) on the day of transmission if sent by electronic mail (“e-mail”) with a PDF attachment executed by an authorized signor of the Party or Parties to the e-mail address given below, and written confirmation of receipt is obtained promptly after completion of the transmission, (iii) by overnight delivery with a reputable national overnight delivery service, or (iv) by mail or by certified mail, return receipt requested, and postage prepaid. If any notice is mailed, it shall be deemed given three (3) Business Days after the date such notice is deposited in the mail. If notice is given to a Party, it shall be given at the address for such Party set forth below. It shall be the responsibility of the Parties to notify the Escrow Agent and the other Party in writing of any name or address changes.

If to any Buyer, then to:

Kimbell Royalty Partners, LP

777 Taylor Street, Suite 810

Fort Worth, Texas 76102

Attn: Robert D. Ravnaas

Email: Robert@kimbellrp.com

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

Baker Botts L.L.P.

910 Louisiana Street

Houston, Texas 77002

Attn: Jason A. Rocha

Erin Hopkins

Email: jason.rocha@bakerbotts.com

erin.hopkins@bakerbotts.com

or, if to any Seller, then to:

EnCap Investments L.P.

1100 Louisiana Street

Suite 4900

Houston, Texas 77002

Attn: Brooks Despot

Email: bdespot@encapinvestments.com

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

Vinson & Elkins LLP

1001 Fannin Street, Suite 2500

Houston, Texas 77002-6760

Attn: Bryan Edward Loocke

Email: bloocke@velaw.com

or, if to the Escrow Agent, then to:

Citibank, N.A.

Agency & Trust

388 Greenwich Street,

New York, NY 10013

Attn.: Nerlie Delly

Telephone: (212) 816-6846

E-mail: cts.spag@citi.com / nerlie.delly@citi.com

Payments to the Escrow Agent shall be sent by wire transfer pursuant to the following instructions: Citibank, N.A., ABA: 0210-0008-9; Account Name: Escrow Concentration Account; A/C#.: 36855852; Ref: A/C # Litigation Escrow Amount 12237700.

Notwithstanding the above, in the case of communications delivered to the Escrow Agent pursuant to the foregoing clauses (iii) or (iv) of this Section 11, such communications shall be deemed to have been given on the date received by the Escrow Agent. In the event that the Escrow Agent, in its sole discretion, shall determine that an emergency exists, the Escrow Agent may use such other means of communication as the Escrow Agent deems appropriate.

12. Termination. This Agreement shall terminate on the first to occur of (a) the distribution of all of the amounts in the Escrow Funds in accordance with this Agreement or (b) delivery to the Escrow Agent of a written notice of termination executed jointly by an Authorized Representative of both Parties after which this Agreement shall be of no further force and effect except that the provisions of Section 8 shall survive termination.

13. Miscellaneous. The provisions of this Agreement may be waived, altered, amended or supplemented, in whole or in part, only by a writing signed by all of the parties hereto. Except as otherwise provided for herein, neither this Agreement nor any right or interest hereunder may be assigned in whole or in part by any party hereto, without the prior consent of the other parties hereto. This Agreement shall be governed by and construed under the laws of the State of New York. Each party hereto irrevocably waives any objection on the grounds of venue, forum non-conveniens or any similar grounds and irrevocably consents to service of process by mail or in any other manner permitted by applicable law and consents to the jurisdiction of the courts located in the State of New York. The parties hereto hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Agreement. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. All signatures of the parties to this Agreement may be transmitted by electronic transmission in portable document format (“.pdf”), and such .pdf will, for all purposes, be deemed to be the original signature of such party whose signature it reproduces, and will be binding upon such party. If any provision of this Agreement is determined to be prohibited or unenforceable by reason of any applicable law of a jurisdiction, then such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in such jurisdiction shall not invalidate or render unenforceable such provisions in any other jurisdiction. The Parties represent, warrant and covenant that each document, notice, instruction or request provided by such Party to Escrow Agent shall comply with applicable laws and regulations. Where, however, the conflicting provisions of any such applicable law may be waived, they are hereby irrevocably waived by the parties hereto to the fullest extent permitted by law, to the end that this Agreement shall be enforced as written. Except as expressly provided in Section 8, nothing in this Agreement, whether express or implied, shall be construed to give to any Person other than the Escrow Agent and the Parties any legal or equitable right, remedy, interest or claim under or in respect of this Agreement or any funds escrowed hereunder. As between the Parties, (a) nothing in this Agreement waives or modifies any right or obligation under the Purchase Agreement, and (b) in the event of any inconsistency between this Agreement and the Purchase Agreement, the Purchase Agreement shall control.

14. Compliance with Court Orders. In the event that any Escrow Funds shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court of competent jurisdiction, or any order, judgment or decree shall be made or entered by any court order of a court of competent jurisdiction affecting the property deposited under this Agreement, the Escrow Agent is hereby expressly authorized, in its sole discretion, to obey and comply with all writs, orders or decrees so entered or issued, which it is advised by legal counsel of its own choosing is binding upon it, whether with or without jurisdiction, and in the event that the Escrow Agent obeys or complies with any such writ, order or decree it shall not be liable to any of the Parties or to any other Person, by reason of such compliance notwithstanding such writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated.

15. Further Assurances. Following the date hereof, each party shall deliver to the other parties hereto such further information and documents and shall execute and deliver to the other parties hereto such further instruments and agreements as any other party hereto shall reasonably request to consummate or confirm the transactions provided for herein, to accomplish the purpose hereof or to assure to any other party hereto the benefits hereof.

16. Assignment. No Party shall assign any of its interests or rights under this Agreement without the prior written consent of the other Parties (such consent not to be unreasonably withheld), and no assignment of the interests or rights of any Party shall be binding upon the Escrow Agent unless and until written notice of such assignment shall be filed with and consented to by the Escrow Agent (such consent not to be unreasonably withheld). To comply with Federal law including USA Patriot Act requirements, assignees shall provide to the Escrow Agent the appropriate IRS Form W-9 or W-8 (as applicable) and such other forms and documentation that the Escrow Agent may request to verify identification and authorization to act. Any transfer or assignment of the rights, interests or obligations hereunder in violation of the terms hereof shall be void and of no force or effect.

17. Force Majeure. The Escrow Agent shall not incur any liability for not performing any act or fulfilling any obligation hereunder by reason of any occurrence beyond its control (including, but not limited to, any provision of any present or future law or regulation or any act of any governmental authority, any act of God or war or terrorism, or the unavailability of the Federal Reserve Bank wire services or any electronic communication facility), it being understood that the Escrow Agent shall use commercially reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as reasonably practicable under the circumstances.

18. Compliance with Federal Law. To help the U.S. Government fight the funding of terrorism and money laundering activities and to comply with Federal law requiring financial institutions to obtain, verify and record information on the source of funds deposited to an account, the Parties agree to provide the Escrow Agent with the name, address, taxpayer identification number, and remitting bank for all Parties depositing funds at Citibank pursuant to the terms and conditions of this Agreement. For a non-individual Person such as a business entity, a charity, a trust or other legal entity, the Escrow Agent will ask for documentation to verify its formation and existence as a legal entity. The Escrow Agent may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation.

19. Use of Citibank Name. No publicly distributed printed or other material in any language, including prospectuses, notices, reports, and promotional material which mentions “Citibank” by name or the rights, powers, or duties of the Escrow Agent under this Agreement shall be issued by any other parties hereto, or on such party’s behalf, without the prior written consent of the Escrow Agent.

[The remainder of this page is intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above.

SELLERS:


PEP I HOLDINGS, LLC

By:		EnCap Energy Capital Fund VI, L.P.,
		its Managing Member

By:		EnCap Equity Fund VI GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

Name:		/s/ D. Martin Phillips
By:		D. Martin Phillips
Title:		Managing Partner

PEP II HOLDINGS, LLC

By:		EnCap Energy Capital Fund II, L.P.,
		its Managing Member

By:		EnCap Equity Fund VII GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

Name:		/s/ D. Martin Phillips
By:		D. Martin Phillips
Title:		Managing Partner

Signature Page to Escrow Agreement


PEP III HOLDINGS, LLC

By:		EnCap Energy Capital Fund VIII, L.P.,
		its Managing Member

By:		EnCap Equity Fund VIII GP, L.P.,
		its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP, L.L.C.,
		its General Partner

Name:		/s/ D. Martin Phillips
By:		D. Martin Phillips
Title:		Managing Partner

Signature Page to Escrow Agreement

BUYERS:


KIMBELL ROYALTY PARTNERS, LP

By:		Kimbell Royalty GP, LLC, its general partner

Name:		/s/ R. Davis Ravnaas
By:		R. Davis Ravnaas
Title:		President and Chief Financial Officer

KIMBELL ROYALTY OPERATING, LLC

Name:		/s/ R. Davis Ravnaas
By:		R. Davis Ravnaas
Title:		President and Chief Financial Officer

Signature Page to Escrow Agreement

ESCROW AGENT:

CITIBANK, N.A.


Name:		/s/ Miriam Molina
By:		Miriam Molina
Title:		Senior Trust Officer

Signature Page to Escrow Agreement

Schedule 1

ESCROW AGENT FEE SCHEDULE

Citibank, N.A., Escrow Agent


Escrow Agent	Fees
Acceptance Fee
To cover the acceptance under the pertinent document(s), including all relevant roles and appointments as well as the review of the supporting documents submitted in connection with the execution and delivery thereof, and communication with other members of the working group, as necessary.		Waived
Annual Administration Fee
To cover the administrative functions of the Agent under the Agreement, including the establishment and maintenance of the account, safekeeping of assets, maintenance of the records, execution and administration of the Agreement provisions, and other duties required of the agent under the terms of the Agreement.		$5,000
Legal Fee
To cover the review of legal documents by Citibank’s Agency & Trust outside counsel, if necessary.		At Cost
Amendment Fee
To cover the administrative and legal functions of amending the Agreements. Fee to be mutually agreed upon prior to review by Citi of any amendment.		At Cost

EX-99.10.4 4 d870752dex99104.htm EX-99.10.4 EX-99.10.4

Exhibit 10.4

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 March 25, 2019.


Accepted and Agreed:

PEP I HOLDINGS, LLC

By:		EnCap Energy Capital Fund VI,
		L.P., its Managing Member

By:		EnCap Equity Fund VI GP,
		L.P., its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP,
		L.L.C., its General Partner

By:		/s/ D. Martin Phillips
Name: D. Martin Phillips
Title: Managing Partner

EX-99.10.5 5 d870752dex99105.htm EX-99.10.5 EX-99.10.5

Exhibit 10.5

JOINDER TO EXCHANGE AGREEMENT

Accordingly, the undersigned has executed and delivered this Joinder to the Exchange Agreement effective as of March 25, 2019.


Accepted and Agreed:

PEP II HOLDINGS, LLC

By:		EnCap Energy Capital Fund VII,
		L.P., its Managing Member

By:		EnCap Equity Fund VII GP,
		L.P., its General Partner

By:		EnCap Investments L.P.,
		its General Partner

By:		EnCap Investments GP,
		L.L.C., its General Partner

By:		/s/ D. Martin Phillips
Name: D. Martin Phillips
Title: Managing Partner

EX-99.10.6 6 d870752dex99106.htm EX-99.10.6 EX-99.10.6

Exhibit 10.6

JOINDER TO EXCHANGE AGREEMENT

Accordingly, the undersigned has executed and delivered this Joinder to the Exchange Agreement effective as of March 25, 2019.


Accepted and Agreed:

PEP III HOLDINGS, LLC

By:		EnCap Energy Capital Fund VIII, L.P., its Managing Member



By:		EnCap Equity Fund VIII GP, L.P., its General Partner



By:		EnCap Investments L.P., its General Partner



By:		EnCap Investments GP, L.L.C., its General Partner


By:		/s/ D. Martin Phillips


Name:		D. Martin Phillips
Title:		Managing Partner

EX-99.10.8 7 d870752dex99108.htm EX-99.10.8 EX-99.10.8

Exhibit 10.8

ADOPTION AGREEMENT

This Adoption Agreement is executed by the undersigned pursuant to the First Amended and Restated Limited Liability Company Agreement of Kimbell Royalty Operating, LLC (the “Company”), dated as of September 23, 2018, as amended, restated or supplemented from time to time, a copy of which is attached hereto and is incorporated herein by reference (the “Agreement”). By the execution of this Adoption Agreement, the undersigned agrees as follows:

Acknowledgment. The undersigned acknowledges that PEP I Holdings, LLC is acquiring 723,800 Common Units of the Company as a Member, subject to the terms and conditions of the Agreement (including the Exhibits thereto), as amended from time to time. Capitalized terms used herein without definition are defined in the Agreement and are used herein with the same meanings set forth therein.

Agreement. The undersigned hereby joins in, and agrees to be bound by, subject to and enjoy the benefit of the applicable rights set forth in, the Agreement (including the Exhibits thereto), as amended from time to time, with the same force and effect as if it were originally a party thereto.

Notice. Any notice required or permitted by the Agreement shall be given to the undersigned at the address listed below.

[Remainder of Page Intentionally Left Blank. Signature Page to Follow.]

EXECUTED AND DATED on this 25^th day of March 2019.


PEP I HOLDINGS, LLC

By:		EnCap Energy Capital Fund VI, L.P. its Managing Member


By:		EnCap Equity Fund VI GP, L.P., its General Partner


By:		EnCap Investments L.P., its General Partner


By:		EnCap Investments GP, L.L.C., its General Partner


By:		/s/ D. Martin Phillips
Name: D. Martin Phillips
Title: Managing Partner



Notice Address:		1100 Louisiana Street, Suite 4900
		Houston, Texas 77002
		Attn: D. Martin Phillips
		Email: BDespot@encapinvestments.com


With a copy to:		Vinson & Elkins LLP
		1001 Fannin Street, Suite 2500
		Houston, Texas 77002-6760
		Attn: Bryan Edward Loocke
		Email: bloocke@velaw.com

Signature Page to Adoption Agreement

EX-99.10.9 8 d870752dex99109.htm EX-99.10.9 EX-99.10.9

Exhibit 10.9

ADOPTION AGREEMENT

Acknowledgment. The undersigned acknowledges that PEP II Holdings, LLC is acquiring 3,318,200 Common Units of the Company as a Member, subject to the terms and conditions of the Agreement (including the Exhibits thereto), as amended from time to time. Capitalized terms used herein without definition are defined in the Agreement and are used herein with the same meanings set forth therein.

Notice. Any notice required or permitted by the Agreement shall be given to the undersigned at the address listed below.

[Remainder of Page Intentionally Left Blank. Signature Page to Follow.]

EXECUTED AND DATED on this 25th day of March 2019.


PEP II HOLDINGS, LLC

By:		EnCap Energy Capital Fund VII, L.P., its Managing Member

By:		EnCap Equity Fund VII GP, L.P., its General Partner

By:		EnCap Investments L.P., its General Partner

By:		EnCap Investments GP, L.L.C., its General Partner


By:		/s/ D. Martin Phillips


Name: D. Martin Phillips
Title: Managing Partner



Notice Address:		1100 Louisiana Street, Suite 4900 Houston, Texas 77002 Attn: D. Martin Phillips Email: BDespot@encapinvestments.com

With a copy to:		Vinson & Elkins LLP 1001 Fannin Street, Suite 2500 Houston, Texas 77002-6760 Attn: Bryan Edward Loocke Email: bloocke@velaw.com

Signature Page to Adoption Agreement

EX-99.10.10 9 d870752dex991010.htm EX-99.10.10 EX-99.10.10

Exhibit 10.10

ADOPTION AGREEMENT

Acknowledgment. The undersigned acknowledges that PEP III Holdings, LLC is acquiring 5,358,000 Common Units of the Company as a Member, subject to the terms and conditions of the Agreement (including the Exhibits thereto), as amended from time to time. Capitalized terms used herein without definition are defined in the Agreement and are used herein with the same meanings set forth therein.

Notice. Any notice required or permitted by the Agreement shall be given to the undersigned at the address listed below.

[Remainder of Page Intentionally Left Blank. Signature Page to Follow.]

EXECUTED AND DATED on this 25^th day of March 2019.


PEP III HOLDINGS, LLC

By:		EnCap Energy Capital Fund VIII, L.P., its Managing Member


By:		EnCap Equity Fund VIII GP, L.P., its General Partner


By:		EnCap Investments L.P., its General Partner


By:		EnCap Investments GP, L.L.C., its General Partner


By:		/s/ D. Martin Phillips
Name: D. Martin Phillips
Title: Managing Partner



Notice Address:		1100 Louisiana Street, Suite 4900
		Houston, Texas 77002
		Attn: D. Martin Phillips
		Email: BDespot@encapinvestments.com


With a copy to:		Vinson & Elkins LLP
		1001 Fannin, Suite 2500
		Houston, Texas 77002-6760
		Attn: Bryan Edward Loocke
		Email: bloocke@velaw.com

Signature Page to Adoption Agreement