Preview
2023-16913 / Court: 269
EXHIBIT 1IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
TEXAS PACIFIC LAND
CORPORATION,
Plaintiff,
Vv. C.A. No. 2022-
HORIZON KINETICS LLC,
HORIZON KINETICS ASSET
MANAGEMENT LLC, SOFTVEST
ADVISORS, LLC, AND SOFTVEST,
LP.,
we SS WS SS SH SH SH SS SH SD
Defendants.
VERIFIED COMPLAINT.
Plaintiff Texas Pacific Land Corporation (the “Company”), by and through its
undersigned counsel, for its Verified Complaint against Defendants Horizon
Kinetics LLC, Horizon Kinetics Asset Management LLC (together with Horizon
Kinetics LLC, “Horizon Kinetics”), SoftVest Advisors LLC, and SoftVest, L.P.
(together with SoftVest Advisors LLC, “SoftVest,” and collectively with Horizon
Kinetics, “Defendants” alleges as follows:INTRODUCTION
1. In 2019, Horizon Kinetics and SoftVest launched a proxy contest
against Texas Pacific Land Trust (the “Trust’’), the Company’s predecessor. On
June 11, 2020, the parties settled the proxy contest and entered into a Stockholders’
Agreement (attached hereto as Exhibit A, the “Stockholders’ Agreement”).
2. In the Stockholders’ Agreement, the Trust agreed that Horizon Kinetics
and SoftVest—who in the aggregate beneficially owned roughly 24% of the
Company’s outstanding common stock at that time—would each be permitted to
appoint a member of the Company’s board of directors (the “Board”) after it
reorganized as a Delaware corporation. In exchange, Horizon Kinetics and SoftVest
agreed, among other things, to a standstill provision and to vote in accordance with
the Board’s recommendation on all matters except for limited carve-outs.
3. The Company has held up its end of the bargain. Horizon Kinetics and
SoftVest have not.
4. On October 7, 2022, the Company filed its definitive proxy statement
(the “Definitive Proxy Statement’’) for its 2022 annual meeting of stockholders (the
“2022 Annual Meeting”), which set a meeting date for November 16, 2022. The
Definitive Proxy Statement provided notice of ten proposals for the meeting. As
relevant here, Proposal 4 asked the Company’s stockholders to vote on the
“Ta]pproval of an amendment to the Company’s Certificate of Incorporation toincrease the authorized shares of common stock from 7,756,156 shares to
46,536,936 shares.” The Board recommended that the Company’s stockholders vote
“FOR” Proposal 4.
5. In early November 2022, Horizon Kinetics and SoftVest submitted
their proxies in connection with the 2022 Annual Meeting. Horizon Kinetics and
SoftVest submitted proxies to correctly vote their shares in accordance with certain
of the Board’s recommendations, but did not do so for all of them. Horizon Kinetics
instructed its proxy to vote its shares (i) against a director candidate named in
Proposal 1 and (ii) for Proposal 8, each counter to the Board’s recommendation.
SoftVest directed its proxy to vote its shares against Proposal 4, also counter to the
Board’s recommendation. Each of these actions breached the voting commitments
under the Stockholders’ Agreement.
6. On November 8, 2022, the Company sent letters to Horizon Kinetics
and SoftVest, demanding confirmation that they would change their votes in
accordance with their voting commitments under the Stockholders’ Agreement. The
Company requested a response by November 10.
7. On or about November 11, 2022, the Company became aware that
Horizon Kinetics had changed its vote (i) from against to for a director candidate
named in Proposal 1, and (ii) from for to against Proposal 8, each consistent withthe Board’s recommendation. However, Horizon Kinetics had also changed its vote
from for to against Proposal 4, counter to the Board’s recommendation.
8. SoftVest did not change its vote on Proposal 4.
9. The Company’s 2022 Annual Meeting opened on November 16, 2022.
Defendants breached the Stockholders’ Agreement by voting “AGAINST” the
Board’s recommendation that stockholders vote “FOR” Proposal 4. Those votes
were outcome determinative with respect to Proposal 4. In other words, but for
Defendants’ breaches, the Company’s stockholders would have approved
Proposal 4.
10. In this action under Section 225(b) of the Delaware General
Corporation Law, the Company seeks to enforce its rights under the Stockholders’
Agreement and to secure a declaration that the Company’s stockholders have
adopted Proposal 4 (or, alternatively, requiring Defendants to specifically perform
their obligations under the Stockholders’ Agreement).
RELEVANT PARTIES
11. Plaintiff Texas Pacific Land Corporation was organized under
Delaware law on April 28, 2020. On January 11, 2021 it became the successor to
the Trust.
12. Defendant Horizon Kinetics LLC is organized under the laws of the
State of Delaware and is a party to the Stockholders’ Agreement.13. Defendant Horizon Kinetics Asset Management LLC is organized
under the laws of the State of Delaware and is a party to the Stockholders’
Agreement.
14. Defendant SoftVest Advisors, LLC is organized under the laws of the
State of Delaware and is a party to the Stockholders’ Agreement.
15. Defendant SoftVest, L.P. is organized under the laws of the State of
Delaware and is a party to the Stockholders’ Agreement.
JURISDICTION
16. This Court has subject matter jurisdiction over this action pursuant to
10 Del. C. § 341.
17. The Court also has personal jurisdiction over Defendants. In the
Stockholders’ Agreement, each party agreed that “exclusive jurisdiction and venue
for any Legal Proceeding arising out of or related to this Agreement shall exclusively
lie. ..in the Court of Chancery of the State of Delaware” and that “each party waives
any objection it may now or hereafter have to the laying of venue of any such Legal
Proceeding, and irrevocably submits to personal jurisdiction in any such court in any
such Legal Proceeding and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any court that any such Legal Proceeding brought
in any such court has been brought in any inconvenient forum.” Stockholders’
Agreement § 13.SUBSTANTIVE ALLEGATIONS
L The Formation of the Company and Execution of the
Stockholders’ Agreement
18. Texas Pacific Land Trust (the “Trust”) was organized pursuant to a
Declaration of Trust dated February 1, 1888. The Trust was managed by three
trustees (the “Trustees”) that, as set forth in the Declaration of Trust, were elected
until their death, resignation, or disqualification. In February 2019, one of the three
Trustees resigned for health reasons and subsequently passed away, necessitating an
election.
19. In March 2019, Horizon Kinetics and SoftVest launched a proxy
contest to elect their preferred candidate, Eric L. Oliver, as Trustee. Oliver is the
Founder of SoftVest, L.P. and the President of SoftVest Advisors LLC. The Trust
nominated four-star General Donald G. Cook, USAF (Retired) as Trustee.
20. In connection with that contest, litigation arose between the Company
and the dissident stockholders in the U.S. District Court for the Northern District of
Texas styled Texas Pacific Land Trust et al. vy. Oliver, No. 19-cy-01224 (the
“Securities Action”).
21. The Securities Action was resolved months later by a Settlement
Agreement, dated July 30, 2019. As part of that agreement, the Company formed a
Conversion Exploration Committee “to assist the Trustees in their evaluation, from
a corporate, corporate governance, tax, accounting and business perspective, of
6whether the Trust should be converted into a C-corporation or, in the alternative,
whether the Trust should remain a business trust... .”
22. The members of the Conversion Exploration Committee included
representatives for each of Horizon Kinetics and SoftVest.
23. On March 23, 2020, at the Conversion Exploration Committee’s
recommendation, the Trustees announced that they had approved a plan to
reorganize the Trust into a corporation organized under Delaware law.
24. Inconnection with the planned corporate reorganization and as part of
resolving the proxy contest, the parties entered into the Stockholders’ Agreement.!
25. The Stockholders’ Agreement sets forth certain obligations of the Trust
(and, once formed, the Company). It also requires that the Defendants undertake, or
refrain from, certain actions.
26. Stockholders’ Agreement Paragraph 1, titled “Board Composition and
Related Matters,” reflects the agreement regarding the composition of the Trust’s
future board of directors following its planned reorganization. It mandates that the
Board would be divided into three classes of directors, with the signatory
stockholder groups appointing one director in each class. The Stockholders’
! The parties to the Stockholders’ Agreement also included another investor, Mission
Advisors, LP (“Mission Advisors”). Mission Advisors was not aligned with
Defendants, and its obligations under the Stockholders’ Agreement have ceased.
7Agreement provides that SoftVest would designate Eric L. Oliver as a Class II
director and Horizon Kinetics would designate Murray Stahl as a Class III director.
27. Stockholders’ Agreement Paragraph 2, titled “Voting Commitments
and Restrictions,” reflects the Defendants’ commitment regarding the conduct of
stockholder meetings. Defendants each agreed that they:
shall, or shall cause their Representatives to, appear in person or by
proxy at each Stockholder Meeting and vote all shares of Common
Stock beneficially owned by such Stockholder and over which such
Stockholder has voting authority at each Stockholder Meeting in
accordance with the Board’s recommendations as such
recommendations of the Board are set forth in the applicable definitive
proxy statement filed with the SEC (the “Board Recommendations”).
For the avoidance of doubt, each of the Stockholders shall take all
actions necessary (including by calling back loaned out shares) to
ensure that they have the voting power for each share beneficially
owned by such Stockholder on the record date for each Stockholder
Meeting.
Stockholders’ Agreement § 2(a).
28. Section 2(b) of the Stockholders Agreement modifies Defendants’
broad voting commitment by carving out certain limited exceptions, including those
“(i) related to an Extraordinary Transaction or (ii) related to governance,
environmental or social matters... .” Jd. § 2(b).
29. The Stockholders’ Agreement limits “Extraordinary Transaction[s]” to
“any tender offer, exchange offer, share exchange, merger, consolidation,
acquisition, business combination, sale, recapitalization, restructuring, or othermatters involving a corporate transaction that require a stockholder vote.” Jd. §
16(a)(v).
30. The Stockholders’ Agreement also contains provisions (1) designating
Delaware law as governing the Stockholders’ Agreement and “any disputes arising
out of or related [there]to” (§ 13); (2) reflecting the parties’ agreement that “equitable
relief by way of injunction or otherwise and specific performance” is the appropriate
remedy for a “breach” or “threaten[ed]” breach of the Stockholders’ Agreement
(§ 15); (3) providing that any amendment or waiver to the Stockholders’ Agreement
must “be agreed to in a writing signed by each party” (§ 17(e)); and (4) confirming
that upon its formation the Company “shall have accepted and assumed all rights,
obligations and liabilities of the Trust” under the Stockholders’ Agreement (§ 17(a)).
31. The Stockholders’ Agreement further contains standstill provisions,
including a non-solicitation provision pursuant to which Defendants agreed not to
“initiate, encourage or participate in any solicitation of proxies in respect of any
stockholder proposal for consideration at, or other business brought before, any
Stockholder Meeting.” § 3(a).
32. On January 11, 2021, the Trust completed its reorganization and the
Company became a corporation (the Texas Pacific Land Corporation) organized
under the laws of the State of Delaware. In accordance with the Stockholders’
Agreement, Horizon Kinetics’ and SoftVest’s representatives (Stahl and Oliver,respectively) were appointed to the Board, which at the time had nine directors, and
they remain on the Board to this day.
II. The Company’s 2022 Annual Meeting and Defendants’ Breaches of the
Stockholder Agreement
33. On October 7, 2022, the Company filed its Definitive Proxy Statement,
which set a record date of September 22 for the 2022 Annual Meeting. As of
September 22, the Company had (i) 7,710,932 shares of common stock issued and
outstanding and (ii) 45,224 shares of common stock held in treasury.
34. The Definitive Proxy Statement sets forth the ten proposals on which
the Company’s stockholders would vote at the 2022 Annual Meeting, and the
Board’s recommendation for each, as follows:
E What are the matters $0 be voted on ar the Annual Meeting and what ave the Board's voting recommendations?
Boards
Propesals
Recommendation
Propersl 2 FOR each Nawinee
Propocal 2 FOR
Proposal3 FOR
Proposal 4 FOR
Properal 5 FOR
Propocal 6 AGAINST
Proposal? AGAINST
ig the selease of all cemaining
Proposal AGAINST
Properal
fhe stockhotders” est AGSINST
Propocal 10 ‘Considecation of a non-binding stockholder ps Gisector election and vesignstion policy AGAINST
35. On or around October 18, 2022, the New York Stock Exchange
(“NYSE”) categorized Proposal 4 as routine under NYSE Rule 452, meaning that
10brokers have discretionary voting rights and can vote shares on behalf of beneficial
owners of such shares absent specific instructions.
36. On November 1, 2022, Glass, Lewis & Co. published a report
recommending that the Company’s stockholders vote “FOR” Proposal 4
37. On November 3, 2022, Institutional Shareholder Services Inc.
published a report recommending that the Company’s stockholders vote “FOR”
Proposal 4.
38. On or about November 3, 2022, the Company learned that, contrary to
the voting commitment in the Stockholders’ Agreement, SoftVest had submitted a
proxy directing that its shares be voted against Proposal 4, counter to the Board’s
recommendation (“FOR”). The Company also learned that, with respect to the
remaining proposals, SoftVest had submitted a proxy directing that its shares be
voted in accordance with the Board’s recommendations. As of the record date,
SoftVest beneficially owned 130,500 shares (or approximately 1.69%) of the
Company’s common stock.
39. On or about November 4, 2022, the Company learned that, contrary to
the voting commitment in the Stockholders’ Agreement, Horizon Kinetics had
submitted a proxy directing that its shares be voted (i) against General Cook, a
director candidate named in Proposal | and the Trust’s candidate in the 2019 proxy
contest, counter to the Board’s recommendation (“FOR each nominee”), and (ii) for
11Proposal 8, also counter to the Board’s recommendation (“AGAINST”). The
Company also learned that, with respect to the remaining proposals, Horizon
Kinetics had submitted a proxy directing that its shares be voted in accordance with
the Board’s recommendations. As of the record date, Horizon Kinetics beneficially
owned approximately 1,641,571 shares (or approximately 21%) of the Company’s
common stock.
40. On November 8, 2022, the Company sent letters to Horizon Kinetics
and SoftVest explaining the Company’s understanding with respect to Horizon
Kinetics’ and SoftVest’s proxy votes, and reminding them that voting at the
2022 Annual Meeting contrary to the Board’s recommendations would constitute a
breach of the Stockholders’ Agreement. The Company sought confirmation:
on or before 5:00 p.m. on November 10, 2022 that [each] will change
its vote in accordance with each of the Board’s recommendations for
the Annual Meeting, as [each] agreed to do in the Stockholders’
Agreement. If [you] refus[e] to vote in accordance with the Board’s
recommendations for any Annual Meeting proposal . . ., please confirm
as much and explain in detail any purported basis for doing so under
the Stockholders Agreement. For the avoidance of doubt, the Company
reserves all rights and waives none, including enforcement of the
Stockholders Agreement in court.
41. On November 9, 2022, the General Counsel of Horizon Kinetics
responded by email to “confirm we will vote FOR Donald Cook,” but did not address
its vote regarding Proposal 8.
1242. On or about November 11, 2022, the Company learned that Horizon
Kinetics had changed its vote (i) from against to for General Cook, and (ii) from for
to against Proposal 8, each consistent with the Board’s recommendation, but
Horizon Kinetics had also changed its vote from for to against Proposal 4, counter
to the Board’s recommendation.
43. SoftVest did not change its previous vote against Proposal 4.
44. Accordingly, as of November 11, 2022, Defendants’ votes were
uniformly submitted against Proposal 4, in breach of the Stockholders’ Agreement.
45. On the morning of November 15, 2022, the Company filed additional
Schedule 14A materials with the SEC announcing that it:
was informed that Horizon Kinetics LLC, Horizon Kinetics Asset
Management LLC, SoftVest Advisors LLC, and SoftVest, L.P.
(collectively, the “Investor Group”) have submitted proxies to vote
against Proposal 4, which is the proposal to approve an amendment to
the Company’s Certificate of Incorporation increasing the amount of
authorized shares of TPL common stock (the “Share Authorization
Proposal”), at the Company’s upcoming 2022 annual meeting and that
they do not intend to change their vote. The Company believes that the
Investor Group is required to vote for the Share Authorization Proposal
pursuant to the voting commitments in their stockholders’ agreement
with the Company. The Company reserves all rights and remedies, and
waives none, under such stockholders’ agreement.
46. On November 16, 2022, prior to the 2022 Annual Meeting, the
Company issued additional Schedule 14A materials announcing that it:
intends to adjourn its upcoming 2022 annual meeting (the “Annual
Meeting”) only with respect to Proposal 4, which is the proposal to
approve an amendment to the Company’s Certificate of Incorporation
13increasing the amount of authorized shares of TPL common stock (the
“Share Authorization Proposal”), if the Share Authorization Proposal
does not receive the requisite number of votes at the Annual Meeting
and the failure of Horizon Kinetics LLC, Horizon Kinetics Asset
Management LLC, SoftVest Advisors LLC, and SoftVest, L.P.
(collectively, the “Investor Group”) to vote in support of the Share
Authorization Proposal is determinative of such outcome. The
Company intends to open and close the polls with respect to all of the
other proposals put forth at the Annual Meeting. This adjournment is
intended to provide the Company with time to resolve its disagreement
with the Investor Group over their voting commitments pursuant to
their stockholders’ agreement with the Company. The Company
reserves all rights and remedies, and waives none, under such
stockholders’ agreement.
47. The 2022 Annual Meeting commenced on November 16, 2022. David
Barry, one of the Co-Chairs of the Company’s Board of Directors, acted as Chair of
the meeting (the “Chair”), and the Company’s General Counsel and Secretary acted
as Secretary (the “Secretary”).
48. Consistent with the Company’s November 16 proxy filing, at the outset
of the meeting the Chair announced the Company’s intent to adjourn the meeting
with respect to Proposal 4 to provide the Company time to resolve a disagreement
over voting commitments pursuant to the Stockholders’ Agreement.
49. Following this announcement, the polls opened with respect to all
matters. Although many shares were voted in favor of Proposal 4, it did not pass
without Defendants’ shares voting in favor, which were outcome determinative.
1450. The Chair announced the closing of the polls with respect to all
proposals other than Proposal 4. The Secretary announced that the inspector of
election would tabulate the votes on all proposals other than Proposal 4.
51. Consistent with the Company’s November 16 proxy filing, the Chair
adjourned the 2022 Annual Meeting to February 14, 2023. The Chair informed
stockholders that the polls would remain open with respect to Proposal 4 until the
Annual Meeting reconvened, and stockholders could continue to vote on Proposal 4
in the interim.
52. On November 18, 2022, the Company asked Horizon Kinetics to
confirm by November 20 that there was no avenue to resolve the dispute short of
litigation. Horizon Kinetics failed to respond.
53. On November 21, 2022, the Company filed a proxy announcing notice
of the reconvened 2022 Annual Meeting:
The Annual Meeting was adjourned, only with respect to the Share
Authorization Proposal, to be reconvened on February 14, 2023... .
This adjournment will provide the Company with time to resolve a
disagreement with Horizon Kinetics LLC, Horizon Kinetics Asset
Management LLC, SoftVest Advisors LLC, and SoftVest, L.P. over
their voting commitments pursuant to a stockholders’ agreement with
the Company.
The record date for the adjourned Annual Meeting remains the close of
business on September 22, 2022 (the “Record Date”). Stockholders
who have already voted do not need to recast their votes unless they
wish to change their votes on the Share Authorization Proposal.
Stockholders of record who have not already voted or wish to change
their vote on the Share Authorization Proposal may do so by following
15the instructions provided in the voting instruction form or proxy card
accompanying the Proxy Statement.
COUNTI
Breach of Contract — Determine Validity of Proposal Under Section 225(b)
(Against Defendants)
54. The allegations above are incorporated and restated herein.
55. Defendants are parties to the Stockholders’ Agreement, which is a valid
and enforceable contract governed by Delaware law.
56. In violation of the Stockholders’ Agreement, Defendants have voted
against one of the Board’s recommendations in connection with the 2022 Annual
Meeting. Specifically, Defendants voted against Proposal 4, which was counter to
the Board’s recommendation.
57. Defendants have thereby breached the Stockholders’ Agreement.
Those breaches have caused harm: but for Defendants’ breaches, the Company’s
stockholders would have approved Proposal 4.
58. The Company has no adequate remedy at law and is suffering and will
continue to suffer irreparable harm and injury unless the Court grants equitable
relief.
59. Indeed, Defendants agreed in the Stockholders’ Agreement that in the
event that a party “breach[es] or threaten[s] to breach any provision of this
Agreement,” each other party “shall be entitled to equitable relief by way of
16injunction or otherwise and specific performance of the provisions hereof... .”
>
Stockholders’ Agreement § 9.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff demands judgment and relief in its favor and against
Defendants as follows:
a.
Declaring that the Defendants have breached the Stockholders’
Agreement;
Declaring under Section 225(b) of the Delaware General Corporation
Law, Defendants’ votes at the 2022 Annual Meeting should have been
made in accordance with the Board’s recommendation on Proposal 4;
Determining and declaring that the shares of Company’s common stock
beneficially held by Defendants have been deemed to have been voted
in accordance with the Board’s recommendation on Proposal 4 and
Proposal 4 was approved by holders of a majority of the Company’s
common stock;
Alternatively, ordering Defendants to specifically perform their
obligations pursuant to the Stockholders’ Agreement by voting in
accordance with the Board’s recommendations on Proposal 4;
Awarding the Company its costs and expenses, including attorneys’
fees in connection with this action; and
17f. Granting the Company such further relief as the Court deems just and
proper.
OF COUNSEL:
SIDLEY AUSTIN LLP
Yolanda C. Garcia
2021 McKinney Ave. Ste. 2000
Dallas, TX 75201
(214) 981-3300
Alex J. Kaplan
Charlotte K. Newell (#5853)
Robert M. Garsson
787 Seventh Avenue
New York, NY 10019
(212) 839-5300
Dated: November 22, 2022
£s/ A. Thompson Bayliss
A. Thompson Bayliss (#4379)
Adam K. Schulman (#5700)
ABRAMS & BAYLISS LLP
20 Montchanin Road, Suite 200
Wilmington, Delaware 19807
(302) 778-1000
Attorneys for Plaintiff
18VERIFICATION
STATE OF florid ¢ )
COUNTY OF ¢@¢- } °s
I, David Barry, being duly sworn according to law, depose and say as
follows:
1, Tam a director of Texas Pacific Land Corporation, the plaintiff in this
matter. I am authorized to make this verification on behalf of Plaintiff Texas
Pacific Land Corporation.
2. I have reviewed the verified complaint in this action (the
“Complaint”) and the exhibits attached thereto.
3. To the extent the allegations in the Complaint concern my actions, I
know those allegations to be true and correct.
4. To the extent the allegations in the Complaint concern the actions of
others, I believe those allegations to be true and correct.
f
MDa [Birra
David Barry
SWORN TO AND SUBSCRIBED before me
this 22 day of November, 2022
Leche he. Daomes—
Notary Publi¢
sero.
BECKY A. THOMAS
MY COMMISSION # GG 944311
EXPIRES: January 6, 2024
jonded Thru Notsry Public UndarvnttersEXHIBIT ASTOCKHOLDERS’ AGREEMENT
This STOCKHOLDERS’ AGREEMENT (this “Agreement”) is made and entered into as of June 11, 2020 (the ‘Effective
Date”), by and among Texas Pacific Land Trust (the “Lrust”), on the one hand, and Horizon Kinetics LLC (“Horizon Kinetics”)
and Horizon Kinetics Asset Management LLC (together with Horizon Kinetics and collectively with their Affiliates, ““ Horizon”),
SoftVest Advisors, LLC (“SoftVest Advisors”) and SoftVest, L.P. (together with SoftVest Advisors and collectively with their
Affiliates “SoftVest”, and together with Horizon, the “Investor Group”), and Mission Advisors, LP (“Mission” and together with
the Investor Group and its members, collectively, the “Stockholders”), on the other hand. The Trust and the Stockholders are each
herein referred to as a “party” and collectively, the “parties.”
WHEREAS, the Trust intends to take steps to become a corporation domiciled in the State of Delaware (“IPL Corp”),
with shares publicly traded on the New York Stock Exchange (the “NYSE”) (the “Proposed Transaction”);
WHEREAS, to implement the Proposed Transaction, the Trust intends to (a) transfer all of its assets to a wholly owned
subsidiary of the Trust (“HoldCo”), (b) contribute all of the equity in HoldCo to TPL Corp, which at such time shall be a wholly
owned subsidiary of the Trust, and (c) distribute all of the shares of common stock of TPL Corp (the “Common Stock”), to holders
of Sub-share Certificates of Proprietary Interest of the Trust (“Sub-share Certificates”), on a pro rata basis in accordance with their
interests in the Trust (such distribution, the “Distribution”, and the time of such Distribution, the “Distribution Time”);
WHEREAS, Horizon is the beneficial owner of approximately 22.1% of the outstanding Sub-share Certificates, which
percentage does not include an additional approximately 23,479 Sub-share Certificates held directly by senior portfolio managers
of Horizon and their families;
WHEREAS, SoftVest is the beneficial owner of approximately 1.7% of the outstanding Sub-share Certificates;
WHEREAS, John R. Norris III and David E. Barry (together, the “Trustees”), the Trust and the Investor Group are parties
to that certain Settlement Agreement, dated July 30, 2019, as amended on February 20, 2020 and March 6, 2020 (the “Settlement
Agreement”);
WHEREAS, pursuant to the Settlement Agreement, the Trust, the Trustees and the Investor Group have committed to
grant mutual general releases in one another’s favor effective at the Distribution Time;
WHEREAS, prior to the date hereof, Murray Stahl and Eric L. Oliver have provided completed director questionnaires to
the Trustees and, based on the information available to the Trustees (including responses to the director questionnaires and follow-
up questions thereto), the Trustees believe that, as of the date hereof, each of Murray Stahl and Eric L. Oliver qualify as an
Independent Director and satisfy the conditions to serving as a director of TPL Corp set forth in Section 1(d) hereof; andWHEREAS, the parties have determined to form an agreement with respect to the composition of the future board of
directors of TPL Corp (the “Board”) and certain other matters, as provided in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound hereby, agree as follows:
1. Board Composition and Related Matters.
(a) Immediately following the Distribution Time, TPL Corp shall take all actions necessary to appoint Murray Stahl
(together with any replacement designated pursuant to this Section 1(a), the “Horizon Designee”) and Eric L. Oliver (together with
any replacement designated pursuant to this Section l(a), the “SoftVest Designee”, and together with the Horizon Designee, each
an “Investor Group Designee” and, collectively, the “Investor Group Designees”) to the Board if each Investor Group Designee
fulfills each of the conditions set forth in Section 1(d) below (the “Appointment Conditions”) as of the Distribution Time. Based on
the information available to the Trustees (including responses to the director questionnaires and follow-up questions thereto), the
Trustees believe that Murray Stahl and Eric L. Oliver satisfy the Appointment Conditions as of the Effective Date. In the event that,
prior to the Distribution Time, either of Murray Stahl or Eric L. Oliver fails to satisfy the Appointment Conditions, the Investor
Group shall have the right to designate replacement candidates for the Horizon Designee or SoftVest Designee, as applicable, until
two candidates satisfy the Appointment Conditions and have been approved as Investor Group Designees by the Trustees (such
approval not to be unreasonably withheld).
(b) Immediately following the Distribution Time, TPL Corp shall take all actions necessary to appoint Dana F. McGinnis
(together with any replacement designated pursuant to this Section 1(b), the “Mission Designee” and together with the Investor
Group Designees, each a “Stockholder Designee” and, collectively, the “Stockholder Designees”) to the Board if the Mission
Designee fulfills each of the Appointment Conditions as of the Distribution Time. Based on the information available to the
Trustees (including responses to the director questionnaires and follow-up questions thereto), the Trustees believe that Dana F.
McGinnis satisfies the Appointment Conditions as of the Effective Date. In the event that, prior to the Distribution Time, Dana F.
McGinnis fails to satisfy the Appointment Conditions, the Trustees and Murray Stahl shall agree on a replacement candidate for the
Mission Designee, who satisfies the Appointment Conditions (such agreement not to be unreasonably withheld).
(c) Effective immediately following the Distribution Time, (i) the Board shall be divided into three classes of directors, as
nearly equal in number as reasonably possible in accordance with the Certificate of Incorporation of TPL Corp (as amended from
time to time, the “Charter”), and (ii) the Trust and TPL Corp, as applicable, shall have taken and completed all actions necessary to
cause the Mission Designee to be appointed to Class I of the Board (with a term expiring in 2021), the SoftVest Designee to be
appointed to Class II of the Board (with a term expiring in 2022) and the Horizon Designee to be appointed to Class III of the
Board (with a term expiring in 2023).(d) As conditions to being appointed to the Board pursuant toSections l(a) or_1(b) and 1(c) (and in addition to the
conditions for appointment set forth therein), any director candidate for the Board shall (i) provide the Trust with (A) a completed
and accurate questionnaire and complete and accurate responses to any reasonable follow-up questions to the questionnaire posed
by the Trust; (B) a signed consent to be named as (1) a director of TPL Corp in the registration statement to be filed with the SEC
by TPL Corp in connection with the Proposed Transaction (or any amendment thereof) and (2) a nominee in any proxy statement of
TPL Corp for any meeting of the stockholders of TPL Corp at which such person may be nominated for election by the Board; (C)
an executed agreement to abide by the terms of the Charter, the Bylaws of TPL Corp (as amended and restated from time to time,
the “Bylaws”), committee charters, corporate governance guidelines or similar publicly-disclosed governance documents of TPL
Corp (collectively, the “Governance Documents”), in the same form as executed by all director candidates; (D) an executed
Confidentiality Agreement (defined below); (E) such other information reasonably required by the Governance Documents or as
may be reasonably requested by the Trustees; and (F) for Investor Group Designees, an executed conditional resignation letter,
addressed to the Board, to become effective upon (1) in the case of the Horizon Designee, the earlier of (x) Horizon ceasing to
beneficially own, in the aggregate, a Net Long Position of at least 10% of the issued and outstanding shares of the Common Stock
(the “Minimum Ownership Event”), and (y) the Termination Date, and (2) in the case of the SoftVest Designee, the earlier of (x)
the Minimum Ownership Event, (y) the Horizon Designee ceasing to serve on the Board, and (z) the Termination Date; (ii) qualify
as an Independent Director; (iii) agree to take all necessary action to not be considered to be “overboarded” under the applicable
policies of Institutional Shareholder Services, Inc. and Glass Lewis & Co., LLC as a result of his or her appointment to the Board;
and (iv) not be otherwise disqualified from serving as a member of a board of directors of a public company with shares traded on
the NYSE.
(e) As promptly as practicable after the Distribution Time, the Board shall appoint at least one Stockholder Designee to
serve on each committee of the Board.
2. Voting Commitments and Restrictions.
(a) The Stockholders shall, or shall cause their Representatives to, appear in person or by proxy at each Stockholder
Meeting and vote all shares of Common Stock beneficially owned by such Stockholder and over which such Stockholder has
voting authority at each Stockholder Meeting in accordance with the Board’s recommendations as such recommendations of the
Board are set forth in the applicable definitive proxy statement filed with the SEC (the “Board Recommendations”). For the
avoidance of doubt, each of the Stockholders shall take all actions necessary (including by calling back loaned out shares) to
ensure that they have the voting power for each share beneficially owned by such Stockholder on the record date for each
Stockholder Meeting.
(b) Notwithstanding Section 2(a), the Stockholders shall not be required to vote in accordance with the Board
Recommendation for any proposals (i) related to an Extraordinary Transaction or (ii) related to governance, environmental or
social matters; provided, however, that the Stockholders shall be required to vote in accordance with the Board Recommendation
for any proposal relating to any corporate governance terms that would have the effect of changing any of the corporate governance
terms set forth in the plan of conversion recommended by the Conversion Exploration Committee of the Trust on January 21,
2020.(c) Subject to Section 3(b) (including the provisos therein), and notwithstanding Section 2(b), if, as a result of a Share
Reduction Event, a Stockholder has ownership or control of, or other beneficial ownership interest in, Excess Shares, then such
Stockholder shall vote or cause to be voted such Excess Shares in accordance with the Board Recommendations at any Stockholder
Meeting for which the Trust or TPL Corp has given notice at such time as which such Stockholder has ownership or control of, or
other beneficial ownership interest in, such Excess Shares. Any planned divestment of Excess Shares pursuant to Section 3(b), or
any actual divestment of Excess Shares occurring after the Trust or TPL Corp has given such notice of a Stockholder Meeting,
shall not relieve the Stockholder of its voting commitment under this Section 3(c).
3. Standstill. Except as otherwise provided in this Agreement, without the prior written consent of the Trustees (or following the
Distribution Time, the Board), the Stockholders and the Stockholder Designees shall not, and shall cause their Affiliates and
controlled Associates not to, directly or indirectly (in each case, except as permitted by this Agreement):
(a) (i) other than pursuant toSections 1(a) and 1(b) of this Agreement, nominate, recommend for nomination or give
notice of an intent to nominate or recommend for nomination a person for election at any Stockholder Meeting at which directors
are to be elected; (ii) initiate, encourage or participate in any solicitation of proxies in respect of any election contest or removal
contest with respect to directors; (iii) submit, initiate, make or be a proponent of any stockholder proposal for consideration at, or
bring any other business before, any Stockholder Meeting; (iv) initiate, encourage or participate in any solicitation of proxies in
respect of any stockholder proposal for consideration at, or other business brought before, any Stockholder Meeting; or (v) initiate,
encourage or participate in any “withhold” or similar campaign with respect to any Stockholder Meeting;
(b) acquire, offer or seek to acquire, agree to acquire or acquire rights to acquire or otherwise beneficially own (except by
way of stock dividends or other distributions or offerings made available to holders of voting securities of the Trust or TPL Corp
generally on a pro rata basis), directly or indirectly, whether by purchase, tender or exchange offer, through the acquisition of
control of another person, by joining a group, through swap or hedging transactions or otherwise, any voting securities of the Trust
or TPL Corp (other than through a broad-based market basket or index) or any voting rights decoupled from the underlying voting
securities which would result in (i) Horizon having ownership or control of, or other beneficial ownership interest in, 23.5% or
more, in the aggregate, of the then-outstanding Sub-share Certificates or shares of the Common Stock (the “Horizon Cap”), (ii)
SoftVest having ownership or control of, or other beneficial ownership interest in, 4.0% or more, in the aggregate, of the then-
outstanding Sub-share Certificates or shares of the Common Stock (the “SoftVest Cap”) or (iii) Mission having ownership or
control of, or other beneficial ownership interest in, 5% or more, in the aggregate, of the then-outstanding Sub-share Certificates or
shares of the Common Stock (the “Mission Cap”, and each of the Horizon Cap, the SoftVest Cap and the Mission Cap,
individually, an “ ership Cap”); provided, however, that, subject to Section 3(c), in the event that the Trust or TPL Corp (A)
acquires through share purchases Sub-share Certificates or shares of the Common Stock or (B) undertakes a reverse share split,
and any of such actions reduces the number of securities of the Trust or TPL Corp outstanding and thereby increases the
proportionate number of Sub-share Certificates or shares of Common Stock that a Stockholder has ownership or control of, or
otherwise beneficially owns, to a proportion of Sub-share Certificates or shares of the Common Stock that is equal to or greater
than the applicable Ownership Cap for such Stockholder (such event, a “Share Reduction Event”), then such Stockholder shall not
be deemed to have acquired or otherwise beneficially own an amount of Sub-share Certificates or shares of the Common Stock
that is greater than the number of shares permitted pursuant to such Stockholder’s applicable Ownership Cap (such amount of
securities in excess of a Stockholder’s Ownership Cap, the “Excess Shares”) in violation of this Section 3(b) as a result of such
Share Reduction Event; provided, further, that such Stockholder shall divest its Excess Shares within a reasonable time period (but
in any event, within 30 calendar days of becoming aware of such Share Reduction Event) so that such Stockholder No longer has
ownership or control of, or otherwise holds a beneficial ownership interest in, such Excess Shares;(c) sell or transfer shares of Common Stock, other than in open market sale transactions where the identity of the
purchaser or transferee is not known and in underwritten widely dispersed public offerings, to any Third Party that (i) would result
in such Third Party, together with its Affiliates and Associates, owning, controlling or otherwise having any beneficial or other
ownership interest in the aggregate of 5.0% or more of the shares of Common Stock outstanding at such time or (ii) would increase
the beneficial ownership interest of any Third Party who, together with its Affiliates and Associates, has a beneficial or other
ownership interest in the aggregate of 5.0% or more of the shares of Common Stock outstanding at such time, in each case, unless
such Third Party is a passive investor that has not been a “reporting person” on a Schedule 13D and would not, in connection with
purchasing or holding of securities of TPL Corp, be required to file a Schedule 13D;
(d) (i) form, join or in any way participate in any group or agreement of any kind with respect to any voting securities of
the Trust or TPL Corp (except any such group or agreement as disclosed on a Schedule 13D filing with the SEC prior to the
Effective Date, provided that any such group or agreement shall be terminated as of the Distribution Time), or (ii) deposit any
voting securities of the Trust or TPL Corp in any voting trust or subjecting any Trust or TPL Corp voting securities to any
arrangement or agreement with respect to the voting thereof;
(e) seek publicly, alone or in concert with others, to amend any provision of the Governance Documents;
(f) demand an inspection of the Trust’s or TPL Corp’s books and records;
(g) make any (i) public or private (other than to the Trustees or the Board) proposal with respect to or (ii) public
statement or otherwise seek to encourage, advise or assist any person in so encouraging or advising with respect to, in each case:
(A) any change in the number or term of directors serving on the Board or the filling of any vacancies on the Board, (B) any
change in the capitalization, dividend or share repurchase policy of TPL Corp, (C) any other change in the Trust’s or TPL Corp’s
business, operations, strategy, management, governance, corporate structure, or other affairs or policies, (D) any Extraordinary
Transaction, (E) causing a class of securities of the Trust or TPL Corp to be delisted from, or to cease to be authorized to be quoted
on, any securities exchange or (F) causing a class of equity securities of TPL Corp to become eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act;(h) initiate, make, effect, seek to effect, offer or propose to effect, cause or participate in, or in any way knowingly assist
any (i) Extraordinary Transaction, (ii) material acquisition of any assets or businesses of the Trust, TPL Corp or any of either the
Trust’s or TPL Corp’s subsidiaries, (iii) tender offer or exchange offer, merger, acquisition, share exchange or other business
combination involving any of the voting securities or any of the material assets or businesses of the Trust or TPL Corp or any of
their subsidiaries, (iv) recapitalization, restructuring, liquidation, dissolution or other material transaction with respect to the Trust
or TPL Corp or any of their subsidiaries or any material portion of its or their businesses, or (v) proposal, either alone or in concert
with others, to the Trust or TPL Corp that would reasonably be expected to require a public announcement or disclosure regarding
any such matter;
(i) enter into any negotiations, agreements or understandings with any Third Party with respect to the foregoing, or advise,
assist, encourage or seek to persuade any Third Party to take any action with respect to any of the foregoing, or otherwise take or
cause any action inconsistent with any of the foregoing;
(j) publicly make or in any way advance publicly any request or proposal that the Trust or the Board amend, modify or
waive any provision of this Agreement; or
(k) take any action challenging the validity or enforceability of this Section 3 or this Agreement, unless TPL Corp is
challenging the validity or enforceability of this Agreement;
provided, however, that (i) nothing in this Agreement shall prevent the Stockholders or Stockholder Designees from
making (A) any factual statement in response to a Legal Requirement, (B) any communication to the Trust or TPL Corp, or (C) any
private communication to investors or prospective investors in any of the Stockholders or any of their Affiliates, provided that, in
each case, such statement or communication (1) is based on publicly available information; (2) is not reasonably expected to be
required to be publicly disclosed by any person and is understood by all parties to be confidential communication; and (3) is not
made with an intent to circumvent any of the restrictions listed in paragraphs (a) through (k) of this Section 3 or Section 4; and
(ii) the restrictions in this Section 3 shall not restrict the Stockholders or Stockholder Designees from tendering shares, receiving
payment for shares or otherwise participating in any such transaction on the same basis as the other stockholders of the Trust or
TPL Corp or from participating in any such transaction that has been approved by the Trustees or the Board, as applicable, subject
to the other terms of this Agreement. Nothing in this Agreement shall limit the exercise in good faith by any Stockholder Designee
of his fiduciary duties under applicable law in his capacity as a director of TPL Corp.4, Mutual Non-Disparagement. Without the prior written consent of the other parties, No party shall, nor shall it permit any of its
Representatives to, make any public or private statement that undermines, disparages or otherwise reflects detrimentally on (a)
another party, (b) another party’s current or former trustees (including the Trustees) or directors in their capacity as such, (c)
another party’s officers or employees (including with respect to such persons’ service at the other party), (d) another party’s
subsidiaries, or (e) the business of another party or another party’s subsidiaries or any of its or its subsidiaries’ current directors,
officers or employees, including the business and current or former directors, officers and employees of the other party’s controlled
Affiliates, as applicable. The restrictions in this Section 4 shall not (i) apply (A) in any compelled testimony or production of
information in response to a Legal Requirement, or (B) to any disclosure that such party reasonably believes, after consultation
with its outside counsel, to be legally required by applicable law, rules or regulations; or (ii) prohibit any party from reporting
what it reasonably believes, after consultation with its outside counsel, to be violations of federal law or regulation to any
governmental authority pursuant to Section 21F of the Exchange Act or Rule 21F promulgated thereunder.
5. Mutual Releases. Effective at the Distribution Time, and as a condition to the appointment of the Stockholder Designees to the
Board, the Trust, the Trustees, and all members of the Investor Group (as defined in the Settlement Agreement) shall execute an
agreement substantially in the form attached as Exhibit C to the Settlement Agreement (the “Form of Mutual General Release
Agreement”), provided, however, that the Form of Mutual General Release Agreement shall, prior to execution, be modified to
expressly provide that such agreement shall be effective upon the Distribution Time.
6. No Litigation. Each party hereby covenants and agrees that it shall not, and shall not permit any of its Representatives to,
directly or indirectly, alone or in concert with others, encourage, pursue or assist any other person to threaten or initiate, any
lawsuit, claim or proceeding before any court (each, a “Legal Proceeding”) against the other party or any of its Representatives,
except for (a) any Legal Proceeding initiated primarily to remedy a breach of or to enforce this Agreement and (b) counterclaims
with respect to any proceeding initiated by, or on behalf of one party or its Affiliates against the other party or its Affiliates;
provided, however, that the foregoing shall not prevent any party or any of its Representatives from responding to oral questions,
interrogatories, requests for information or documents, subpoenas, civil investigative demands or similar processes (each, a “Legal
Requirement”) in connection with any Legal Proceeding if such Legal Proceeding has not been initiated by, on behalf of or at the
direct or indirect suggestion of such party or any of its Representatives; provided, further that in the event any party or any of its
Representatives receives such Legal Requirement, such party shall give prompt written notice of such Legal Requirement to the
other party (except where such notice would be legally prohibited or not practicable). Each party represents and warrants that
neither it nor any assignee has filed any pending Legal Proceeding against any other party.
7. Press Release; SEC Filings; Public Statements
(a) No later than two Business Days following the date of this Agreement, the Trust shall issue a
Preview
2023-16913 / Court: 269 EXHIBIT 1IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE TEXAS PACIFIC LAND CORPORATION, Plaintiff, Vv. C.A. No. 2022- HORIZON KINETICS LLC, HORIZON KINETICS ASSET MANAGEMENT LLC, SOFTVEST ADVISORS, LLC, AND SOFTVEST, LP., we SS WS SS SH SH SH SS SH SD Defendants. VERIFIED COMPLAINT. Plaintiff Texas Pacific Land Corporation (the “Company”), by and through its undersigned counsel, for its Verified Complaint against Defendants Horizon Kinetics LLC, Horizon Kinetics Asset Management LLC (together with Horizon Kinetics LLC, “Horizon Kinetics”), SoftVest Advisors LLC, and SoftVest, L.P. (together with SoftVest Advisors LLC, “SoftVest,” and collectively with Horizon Kinetics, “Defendants” alleges as follows:INTRODUCTION 1. In 2019, Horizon Kinetics and SoftVest launched a proxy contest against Texas Pacific Land Trust (the “Trust’’), the Company’s predecessor. On June 11, 2020, the parties settled the proxy contest and entered into a Stockholders’ Agreement (attached hereto as Exhibit A, the “Stockholders’ Agreement”). 2. In the Stockholders’ Agreement, the Trust agreed that Horizon Kinetics and SoftVest—who in the aggregate beneficially owned roughly 24% of the Company’s outstanding common stock at that time—would each be permitted to appoint a member of the Company’s board of directors (the “Board”) after it reorganized as a Delaware corporation. In exchange, Horizon Kinetics and SoftVest agreed, among other things, to a standstill provision and to vote in accordance with the Board’s recommendation on all matters except for limited carve-outs. 3. The Company has held up its end of the bargain. Horizon Kinetics and SoftVest have not. 4. On October 7, 2022, the Company filed its definitive proxy statement (the “Definitive Proxy Statement’’) for its 2022 annual meeting of stockholders (the “2022 Annual Meeting”), which set a meeting date for November 16, 2022. The Definitive Proxy Statement provided notice of ten proposals for the meeting. As relevant here, Proposal 4 asked the Company’s stockholders to vote on the “Ta]pproval of an amendment to the Company’s Certificate of Incorporation toincrease the authorized shares of common stock from 7,756,156 shares to 46,536,936 shares.” The Board recommended that the Company’s stockholders vote “FOR” Proposal 4. 5. In early November 2022, Horizon Kinetics and SoftVest submitted their proxies in connection with the 2022 Annual Meeting. Horizon Kinetics and SoftVest submitted proxies to correctly vote their shares in accordance with certain of the Board’s recommendations, but did not do so for all of them. Horizon Kinetics instructed its proxy to vote its shares (i) against a director candidate named in Proposal 1 and (ii) for Proposal 8, each counter to the Board’s recommendation. SoftVest directed its proxy to vote its shares against Proposal 4, also counter to the Board’s recommendation. Each of these actions breached the voting commitments under the Stockholders’ Agreement. 6. On November 8, 2022, the Company sent letters to Horizon Kinetics and SoftVest, demanding confirmation that they would change their votes in accordance with their voting commitments under the Stockholders’ Agreement. The Company requested a response by November 10. 7. On or about November 11, 2022, the Company became aware that Horizon Kinetics had changed its vote (i) from against to for a director candidate named in Proposal 1, and (ii) from for to against Proposal 8, each consistent withthe Board’s recommendation. However, Horizon Kinetics had also changed its vote from for to against Proposal 4, counter to the Board’s recommendation. 8. SoftVest did not change its vote on Proposal 4. 9. The Company’s 2022 Annual Meeting opened on November 16, 2022. Defendants breached the Stockholders’ Agreement by voting “AGAINST” the Board’s recommendation that stockholders vote “FOR” Proposal 4. Those votes were outcome determinative with respect to Proposal 4. In other words, but for Defendants’ breaches, the Company’s stockholders would have approved Proposal 4. 10. In this action under Section 225(b) of the Delaware General Corporation Law, the Company seeks to enforce its rights under the Stockholders’ Agreement and to secure a declaration that the Company’s stockholders have adopted Proposal 4 (or, alternatively, requiring Defendants to specifically perform their obligations under the Stockholders’ Agreement). RELEVANT PARTIES 11. Plaintiff Texas Pacific Land Corporation was organized under Delaware law on April 28, 2020. On January 11, 2021 it became the successor to the Trust. 12. Defendant Horizon Kinetics LLC is organized under the laws of the State of Delaware and is a party to the Stockholders’ Agreement.13. Defendant Horizon Kinetics Asset Management LLC is organized under the laws of the State of Delaware and is a party to the Stockholders’ Agreement. 14. Defendant SoftVest Advisors, LLC is organized under the laws of the State of Delaware and is a party to the Stockholders’ Agreement. 15. Defendant SoftVest, L.P. is organized under the laws of the State of Delaware and is a party to the Stockholders’ Agreement. JURISDICTION 16. This Court has subject matter jurisdiction over this action pursuant to 10 Del. C. § 341. 17. The Court also has personal jurisdiction over Defendants. In the Stockholders’ Agreement, each party agreed that “exclusive jurisdiction and venue for any Legal Proceeding arising out of or related to this Agreement shall exclusively lie. ..in the Court of Chancery of the State of Delaware” and that “each party waives any objection it may now or hereafter have to the laying of venue of any such Legal Proceeding, and irrevocably submits to personal jurisdiction in any such court in any such Legal Proceeding and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any court that any such Legal Proceeding brought in any such court has been brought in any inconvenient forum.” Stockholders’ Agreement § 13.SUBSTANTIVE ALLEGATIONS L The Formation of the Company and Execution of the Stockholders’ Agreement 18. Texas Pacific Land Trust (the “Trust”) was organized pursuant to a Declaration of Trust dated February 1, 1888. The Trust was managed by three trustees (the “Trustees”) that, as set forth in the Declaration of Trust, were elected until their death, resignation, or disqualification. In February 2019, one of the three Trustees resigned for health reasons and subsequently passed away, necessitating an election. 19. In March 2019, Horizon Kinetics and SoftVest launched a proxy contest to elect their preferred candidate, Eric L. Oliver, as Trustee. Oliver is the Founder of SoftVest, L.P. and the President of SoftVest Advisors LLC. The Trust nominated four-star General Donald G. Cook, USAF (Retired) as Trustee. 20. In connection with that contest, litigation arose between the Company and the dissident stockholders in the U.S. District Court for the Northern District of Texas styled Texas Pacific Land Trust et al. vy. Oliver, No. 19-cy-01224 (the “Securities Action”). 21. The Securities Action was resolved months later by a Settlement Agreement, dated July 30, 2019. As part of that agreement, the Company formed a Conversion Exploration Committee “to assist the Trustees in their evaluation, from a corporate, corporate governance, tax, accounting and business perspective, of 6whether the Trust should be converted into a C-corporation or, in the alternative, whether the Trust should remain a business trust... .” 22. The members of the Conversion Exploration Committee included representatives for each of Horizon Kinetics and SoftVest. 23. On March 23, 2020, at the Conversion Exploration Committee’s recommendation, the Trustees announced that they had approved a plan to reorganize the Trust into a corporation organized under Delaware law. 24. Inconnection with the planned corporate reorganization and as part of resolving the proxy contest, the parties entered into the Stockholders’ Agreement.! 25. The Stockholders’ Agreement sets forth certain obligations of the Trust (and, once formed, the Company). It also requires that the Defendants undertake, or refrain from, certain actions. 26. Stockholders’ Agreement Paragraph 1, titled “Board Composition and Related Matters,” reflects the agreement regarding the composition of the Trust’s future board of directors following its planned reorganization. It mandates that the Board would be divided into three classes of directors, with the signatory stockholder groups appointing one director in each class. The Stockholders’ ! The parties to the Stockholders’ Agreement also included another investor, Mission Advisors, LP (“Mission Advisors”). Mission Advisors was not aligned with Defendants, and its obligations under the Stockholders’ Agreement have ceased. 7Agreement provides that SoftVest would designate Eric L. Oliver as a Class II director and Horizon Kinetics would designate Murray Stahl as a Class III director. 27. Stockholders’ Agreement Paragraph 2, titled “Voting Commitments and Restrictions,” reflects the Defendants’ commitment regarding the conduct of stockholder meetings. Defendants each agreed that they: shall, or shall cause their Representatives to, appear in person or by proxy at each Stockholder Meeting and vote all shares of Common Stock beneficially owned by such Stockholder and over which such Stockholder has voting authority at each Stockholder Meeting in accordance with the Board’s recommendations as such recommendations of the Board are set forth in the applicable definitive proxy statement filed with the SEC (the “Board Recommendations”). For the avoidance of doubt, each of the Stockholders shall take all actions necessary (including by calling back loaned out shares) to ensure that they have the voting power for each share beneficially owned by such Stockholder on the record date for each Stockholder Meeting. Stockholders’ Agreement § 2(a). 28. Section 2(b) of the Stockholders Agreement modifies Defendants’ broad voting commitment by carving out certain limited exceptions, including those “(i) related to an Extraordinary Transaction or (ii) related to governance, environmental or social matters... .” Jd. § 2(b). 29. The Stockholders’ Agreement limits “Extraordinary Transaction[s]” to “any tender offer, exchange offer, share exchange, merger, consolidation, acquisition, business combination, sale, recapitalization, restructuring, or othermatters involving a corporate transaction that require a stockholder vote.” Jd. § 16(a)(v). 30. The Stockholders’ Agreement also contains provisions (1) designating Delaware law as governing the Stockholders’ Agreement and “any disputes arising out of or related [there]to” (§ 13); (2) reflecting the parties’ agreement that “equitable relief by way of injunction or otherwise and specific performance” is the appropriate remedy for a “breach” or “threaten[ed]” breach of the Stockholders’ Agreement (§ 15); (3) providing that any amendment or waiver to the Stockholders’ Agreement must “be agreed to in a writing signed by each party” (§ 17(e)); and (4) confirming that upon its formation the Company “shall have accepted and assumed all rights, obligations and liabilities of the Trust” under the Stockholders’ Agreement (§ 17(a)). 31. The Stockholders’ Agreement further contains standstill provisions, including a non-solicitation provision pursuant to which Defendants agreed not to “initiate, encourage or participate in any solicitation of proxies in respect of any stockholder proposal for consideration at, or other business brought before, any Stockholder Meeting.” § 3(a). 32. On January 11, 2021, the Trust completed its reorganization and the Company became a corporation (the Texas Pacific Land Corporation) organized under the laws of the State of Delaware. In accordance with the Stockholders’ Agreement, Horizon Kinetics’ and SoftVest’s representatives (Stahl and Oliver,respectively) were appointed to the Board, which at the time had nine directors, and they remain on the Board to this day. II. The Company’s 2022 Annual Meeting and Defendants’ Breaches of the Stockholder Agreement 33. On October 7, 2022, the Company filed its Definitive Proxy Statement, which set a record date of September 22 for the 2022 Annual Meeting. As of September 22, the Company had (i) 7,710,932 shares of common stock issued and outstanding and (ii) 45,224 shares of common stock held in treasury. 34. The Definitive Proxy Statement sets forth the ten proposals on which the Company’s stockholders would vote at the 2022 Annual Meeting, and the Board’s recommendation for each, as follows: E What are the matters $0 be voted on ar the Annual Meeting and what ave the Board's voting recommendations? Boards Propesals Recommendation Propersl 2 FOR each Nawinee Propocal 2 FOR Proposal3 FOR Proposal 4 FOR Properal 5 FOR Propocal 6 AGAINST Proposal? AGAINST ig the selease of all cemaining Proposal AGAINST Properal fhe stockhotders” est AGSINST Propocal 10 ‘Considecation of a non-binding stockholder ps Gisector election and vesignstion policy AGAINST 35. On or around October 18, 2022, the New York Stock Exchange (“NYSE”) categorized Proposal 4 as routine under NYSE Rule 452, meaning that 10brokers have discretionary voting rights and can vote shares on behalf of beneficial owners of such shares absent specific instructions. 36. On November 1, 2022, Glass, Lewis & Co. published a report recommending that the Company’s stockholders vote “FOR” Proposal 4 37. On November 3, 2022, Institutional Shareholder Services Inc. published a report recommending that the Company’s stockholders vote “FOR” Proposal 4. 38. On or about November 3, 2022, the Company learned that, contrary to the voting commitment in the Stockholders’ Agreement, SoftVest had submitted a proxy directing that its shares be voted against Proposal 4, counter to the Board’s recommendation (“FOR”). The Company also learned that, with respect to the remaining proposals, SoftVest had submitted a proxy directing that its shares be voted in accordance with the Board’s recommendations. As of the record date, SoftVest beneficially owned 130,500 shares (or approximately 1.69%) of the Company’s common stock. 39. On or about November 4, 2022, the Company learned that, contrary to the voting commitment in the Stockholders’ Agreement, Horizon Kinetics had submitted a proxy directing that its shares be voted (i) against General Cook, a director candidate named in Proposal | and the Trust’s candidate in the 2019 proxy contest, counter to the Board’s recommendation (“FOR each nominee”), and (ii) for 11Proposal 8, also counter to the Board’s recommendation (“AGAINST”). The Company also learned that, with respect to the remaining proposals, Horizon Kinetics had submitted a proxy directing that its shares be voted in accordance with the Board’s recommendations. As of the record date, Horizon Kinetics beneficially owned approximately 1,641,571 shares (or approximately 21%) of the Company’s common stock. 40. On November 8, 2022, the Company sent letters to Horizon Kinetics and SoftVest explaining the Company’s understanding with respect to Horizon Kinetics’ and SoftVest’s proxy votes, and reminding them that voting at the 2022 Annual Meeting contrary to the Board’s recommendations would constitute a breach of the Stockholders’ Agreement. The Company sought confirmation: on or before 5:00 p.m. on November 10, 2022 that [each] will change its vote in accordance with each of the Board’s recommendations for the Annual Meeting, as [each] agreed to do in the Stockholders’ Agreement. If [you] refus[e] to vote in accordance with the Board’s recommendations for any Annual Meeting proposal . . ., please confirm as much and explain in detail any purported basis for doing so under the Stockholders Agreement. For the avoidance of doubt, the Company reserves all rights and waives none, including enforcement of the Stockholders Agreement in court. 41. On November 9, 2022, the General Counsel of Horizon Kinetics responded by email to “confirm we will vote FOR Donald Cook,” but did not address its vote regarding Proposal 8. 1242. On or about November 11, 2022, the Company learned that Horizon Kinetics had changed its vote (i) from against to for General Cook, and (ii) from for to against Proposal 8, each consistent with the Board’s recommendation, but Horizon Kinetics had also changed its vote from for to against Proposal 4, counter to the Board’s recommendation. 43. SoftVest did not change its previous vote against Proposal 4. 44. Accordingly, as of November 11, 2022, Defendants’ votes were uniformly submitted against Proposal 4, in breach of the Stockholders’ Agreement. 45. On the morning of November 15, 2022, the Company filed additional Schedule 14A materials with the SEC announcing that it: was informed that Horizon Kinetics LLC, Horizon Kinetics Asset Management LLC, SoftVest Advisors LLC, and SoftVest, L.P. (collectively, the “Investor Group”) have submitted proxies to vote against Proposal 4, which is the proposal to approve an amendment to the Company’s Certificate of Incorporation increasing the amount of authorized shares of TPL common stock (the “Share Authorization Proposal”), at the Company’s upcoming 2022 annual meeting and that they do not intend to change their vote. The Company believes that the Investor Group is required to vote for the Share Authorization Proposal pursuant to the voting commitments in their stockholders’ agreement with the Company. The Company reserves all rights and remedies, and waives none, under such stockholders’ agreement. 46. On November 16, 2022, prior to the 2022 Annual Meeting, the Company issued additional Schedule 14A materials announcing that it: intends to adjourn its upcoming 2022 annual meeting (the “Annual Meeting”) only with respect to Proposal 4, which is the proposal to approve an amendment to the Company’s Certificate of Incorporation 13increasing the amount of authorized shares of TPL common stock (the “Share Authorization Proposal”), if the Share Authorization Proposal does not receive the requisite number of votes at the Annual Meeting and the failure of Horizon Kinetics LLC, Horizon Kinetics Asset Management LLC, SoftVest Advisors LLC, and SoftVest, L.P. (collectively, the “Investor Group”) to vote in support of the Share Authorization Proposal is determinative of such outcome. The Company intends to open and close the polls with respect to all of the other proposals put forth at the Annual Meeting. This adjournment is intended to provide the Company with time to resolve its disagreement with the Investor Group over their voting commitments pursuant to their stockholders’ agreement with the Company. The Company reserves all rights and remedies, and waives none, under such stockholders’ agreement. 47. The 2022 Annual Meeting commenced on November 16, 2022. David Barry, one of the Co-Chairs of the Company’s Board of Directors, acted as Chair of the meeting (the “Chair”), and the Company’s General Counsel and Secretary acted as Secretary (the “Secretary”). 48. Consistent with the Company’s November 16 proxy filing, at the outset of the meeting the Chair announced the Company’s intent to adjourn the meeting with respect to Proposal 4 to provide the Company time to resolve a disagreement over voting commitments pursuant to the Stockholders’ Agreement. 49. Following this announcement, the polls opened with respect to all matters. Although many shares were voted in favor of Proposal 4, it did not pass without Defendants’ shares voting in favor, which were outcome determinative. 1450. The Chair announced the closing of the polls with respect to all proposals other than Proposal 4. The Secretary announced that the inspector of election would tabulate the votes on all proposals other than Proposal 4. 51. Consistent with the Company’s November 16 proxy filing, the Chair adjourned the 2022 Annual Meeting to February 14, 2023. The Chair informed stockholders that the polls would remain open with respect to Proposal 4 until the Annual Meeting reconvened, and stockholders could continue to vote on Proposal 4 in the interim. 52. On November 18, 2022, the Company asked Horizon Kinetics to confirm by November 20 that there was no avenue to resolve the dispute short of litigation. Horizon Kinetics failed to respond. 53. On November 21, 2022, the Company filed a proxy announcing notice of the reconvened 2022 Annual Meeting: The Annual Meeting was adjourned, only with respect to the Share Authorization Proposal, to be reconvened on February 14, 2023... . This adjournment will provide the Company with time to resolve a disagreement with Horizon Kinetics LLC, Horizon Kinetics Asset Management LLC, SoftVest Advisors LLC, and SoftVest, L.P. over their voting commitments pursuant to a stockholders’ agreement with the Company. The record date for the adjourned Annual Meeting remains the close of business on September 22, 2022 (the “Record Date”). Stockholders who have already voted do not need to recast their votes unless they wish to change their votes on the Share Authorization Proposal. Stockholders of record who have not already voted or wish to change their vote on the Share Authorization Proposal may do so by following 15the instructions provided in the voting instruction form or proxy card accompanying the Proxy Statement. COUNTI Breach of Contract — Determine Validity of Proposal Under Section 225(b) (Against Defendants) 54. The allegations above are incorporated and restated herein. 55. Defendants are parties to the Stockholders’ Agreement, which is a valid and enforceable contract governed by Delaware law. 56. In violation of the Stockholders’ Agreement, Defendants have voted against one of the Board’s recommendations in connection with the 2022 Annual Meeting. Specifically, Defendants voted against Proposal 4, which was counter to the Board’s recommendation. 57. Defendants have thereby breached the Stockholders’ Agreement. Those breaches have caused harm: but for Defendants’ breaches, the Company’s stockholders would have approved Proposal 4. 58. The Company has no adequate remedy at law and is suffering and will continue to suffer irreparable harm and injury unless the Court grants equitable relief. 59. Indeed, Defendants agreed in the Stockholders’ Agreement that in the event that a party “breach[es] or threaten[s] to breach any provision of this Agreement,” each other party “shall be entitled to equitable relief by way of 16injunction or otherwise and specific performance of the provisions hereof... .” > Stockholders’ Agreement § 9. PRAYER FOR RELIEF WHEREFORE, Plaintiff demands judgment and relief in its favor and against Defendants as follows: a. Declaring that the Defendants have breached the Stockholders’ Agreement; Declaring under Section 225(b) of the Delaware General Corporation Law, Defendants’ votes at the 2022 Annual Meeting should have been made in accordance with the Board’s recommendation on Proposal 4; Determining and declaring that the shares of Company’s common stock beneficially held by Defendants have been deemed to have been voted in accordance with the Board’s recommendation on Proposal 4 and Proposal 4 was approved by holders of a majority of the Company’s common stock; Alternatively, ordering Defendants to specifically perform their obligations pursuant to the Stockholders’ Agreement by voting in accordance with the Board’s recommendations on Proposal 4; Awarding the Company its costs and expenses, including attorneys’ fees in connection with this action; and 17f. Granting the Company such further relief as the Court deems just and proper. OF COUNSEL: SIDLEY AUSTIN LLP Yolanda C. Garcia 2021 McKinney Ave. Ste. 2000 Dallas, TX 75201 (214) 981-3300 Alex J. Kaplan Charlotte K. Newell (#5853) Robert M. Garsson 787 Seventh Avenue New York, NY 10019 (212) 839-5300 Dated: November 22, 2022 £s/ A. Thompson Bayliss A. Thompson Bayliss (#4379) Adam K. Schulman (#5700) ABRAMS & BAYLISS LLP 20 Montchanin Road, Suite 200 Wilmington, Delaware 19807 (302) 778-1000 Attorneys for Plaintiff 18VERIFICATION STATE OF florid ¢ ) COUNTY OF ¢@¢- } °s I, David Barry, being duly sworn according to law, depose and say as follows: 1, Tam a director of Texas Pacific Land Corporation, the plaintiff in this matter. I am authorized to make this verification on behalf of Plaintiff Texas Pacific Land Corporation. 2. I have reviewed the verified complaint in this action (the “Complaint”) and the exhibits attached thereto. 3. To the extent the allegations in the Complaint concern my actions, I know those allegations to be true and correct. 4. To the extent the allegations in the Complaint concern the actions of others, I believe those allegations to be true and correct. f MDa [Birra David Barry SWORN TO AND SUBSCRIBED before me this 22 day of November, 2022 Leche he. Daomes— Notary Publi¢ sero. BECKY A. THOMAS MY COMMISSION # GG 944311 EXPIRES: January 6, 2024 jonded Thru Notsry Public UndarvnttersEXHIBIT ASTOCKHOLDERS’ AGREEMENT This STOCKHOLDERS’ AGREEMENT (this “Agreement”) is made and entered into as of June 11, 2020 (the ‘Effective Date”), by and among Texas Pacific Land Trust (the “Lrust”), on the one hand, and Horizon Kinetics LLC (“Horizon Kinetics”) and Horizon Kinetics Asset Management LLC (together with Horizon Kinetics and collectively with their Affiliates, ““ Horizon”), SoftVest Advisors, LLC (“SoftVest Advisors”) and SoftVest, L.P. (together with SoftVest Advisors and collectively with their Affiliates “SoftVest”, and together with Horizon, the “Investor Group”), and Mission Advisors, LP (“Mission” and together with the Investor Group and its members, collectively, the “Stockholders”), on the other hand. The Trust and the Stockholders are each herein referred to as a “party” and collectively, the “parties.” WHEREAS, the Trust intends to take steps to become a corporation domiciled in the State of Delaware (“IPL Corp”), with shares publicly traded on the New York Stock Exchange (the “NYSE”) (the “Proposed Transaction”); WHEREAS, to implement the Proposed Transaction, the Trust intends to (a) transfer all of its assets to a wholly owned subsidiary of the Trust (“HoldCo”), (b) contribute all of the equity in HoldCo to TPL Corp, which at such time shall be a wholly owned subsidiary of the Trust, and (c) distribute all of the shares of common stock of TPL Corp (the “Common Stock”), to holders of Sub-share Certificates of Proprietary Interest of the Trust (“Sub-share Certificates”), on a pro rata basis in accordance with their interests in the Trust (such distribution, the “Distribution”, and the time of such Distribution, the “Distribution Time”); WHEREAS, Horizon is the beneficial owner of approximately 22.1% of the outstanding Sub-share Certificates, which percentage does not include an additional approximately 23,479 Sub-share Certificates held directly by senior portfolio managers of Horizon and their families; WHEREAS, SoftVest is the beneficial owner of approximately 1.7% of the outstanding Sub-share Certificates; WHEREAS, John R. Norris III and David E. Barry (together, the “Trustees”), the Trust and the Investor Group are parties to that certain Settlement Agreement, dated July 30, 2019, as amended on February 20, 2020 and March 6, 2020 (the “Settlement Agreement”); WHEREAS, pursuant to the Settlement Agreement, the Trust, the Trustees and the Investor Group have committed to grant mutual general releases in one another’s favor effective at the Distribution Time; WHEREAS, prior to the date hereof, Murray Stahl and Eric L. Oliver have provided completed director questionnaires to the Trustees and, based on the information available to the Trustees (including responses to the director questionnaires and follow- up questions thereto), the Trustees believe that, as of the date hereof, each of Murray Stahl and Eric L. Oliver qualify as an Independent Director and satisfy the conditions to serving as a director of TPL Corp set forth in Section 1(d) hereof; andWHEREAS, the parties have determined to form an agreement with respect to the composition of the future board of directors of TPL Corp (the “Board”) and certain other matters, as provided in this Agreement. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound hereby, agree as follows: 1. Board Composition and Related Matters. (a) Immediately following the Distribution Time, TPL Corp shall take all actions necessary to appoint Murray Stahl (together with any replacement designated pursuant to this Section 1(a), the “Horizon Designee”) and Eric L. Oliver (together with any replacement designated pursuant to this Section l(a), the “SoftVest Designee”, and together with the Horizon Designee, each an “Investor Group Designee” and, collectively, the “Investor Group Designees”) to the Board if each Investor Group Designee fulfills each of the conditions set forth in Section 1(d) below (the “Appointment Conditions”) as of the Distribution Time. Based on the information available to the Trustees (including responses to the director questionnaires and follow-up questions thereto), the Trustees believe that Murray Stahl and Eric L. Oliver satisfy the Appointment Conditions as of the Effective Date. In the event that, prior to the Distribution Time, either of Murray Stahl or Eric L. Oliver fails to satisfy the Appointment Conditions, the Investor Group shall have the right to designate replacement candidates for the Horizon Designee or SoftVest Designee, as applicable, until two candidates satisfy the Appointment Conditions and have been approved as Investor Group Designees by the Trustees (such approval not to be unreasonably withheld). (b) Immediately following the Distribution Time, TPL Corp shall take all actions necessary to appoint Dana F. McGinnis (together with any replacement designated pursuant to this Section 1(b), the “Mission Designee” and together with the Investor Group Designees, each a “Stockholder Designee” and, collectively, the “Stockholder Designees”) to the Board if the Mission Designee fulfills each of the Appointment Conditions as of the Distribution Time. Based on the information available to the Trustees (including responses to the director questionnaires and follow-up questions thereto), the Trustees believe that Dana F. McGinnis satisfies the Appointment Conditions as of the Effective Date. In the event that, prior to the Distribution Time, Dana F. McGinnis fails to satisfy the Appointment Conditions, the Trustees and Murray Stahl shall agree on a replacement candidate for the Mission Designee, who satisfies the Appointment Conditions (such agreement not to be unreasonably withheld). (c) Effective immediately following the Distribution Time, (i) the Board shall be divided into three classes of directors, as nearly equal in number as reasonably possible in accordance with the Certificate of Incorporation of TPL Corp (as amended from time to time, the “Charter”), and (ii) the Trust and TPL Corp, as applicable, shall have taken and completed all actions necessary to cause the Mission Designee to be appointed to Class I of the Board (with a term expiring in 2021), the SoftVest Designee to be appointed to Class II of the Board (with a term expiring in 2022) and the Horizon Designee to be appointed to Class III of the Board (with a term expiring in 2023).(d) As conditions to being appointed to the Board pursuant toSections l(a) or_1(b) and 1(c) (and in addition to the conditions for appointment set forth therein), any director candidate for the Board shall (i) provide the Trust with (A) a completed and accurate questionnaire and complete and accurate responses to any reasonable follow-up questions to the questionnaire posed by the Trust; (B) a signed consent to be named as (1) a director of TPL Corp in the registration statement to be filed with the SEC by TPL Corp in connection with the Proposed Transaction (or any amendment thereof) and (2) a nominee in any proxy statement of TPL Corp for any meeting of the stockholders of TPL Corp at which such person may be nominated for election by the Board; (C) an executed agreement to abide by the terms of the Charter, the Bylaws of TPL Corp (as amended and restated from time to time, the “Bylaws”), committee charters, corporate governance guidelines or similar publicly-disclosed governance documents of TPL Corp (collectively, the “Governance Documents”), in the same form as executed by all director candidates; (D) an executed Confidentiality Agreement (defined below); (E) such other information reasonably required by the Governance Documents or as may be reasonably requested by the Trustees; and (F) for Investor Group Designees, an executed conditional resignation letter, addressed to the Board, to become effective upon (1) in the case of the Horizon Designee, the earlier of (x) Horizon ceasing to beneficially own, in the aggregate, a Net Long Position of at least 10% of the issued and outstanding shares of the Common Stock (the “Minimum Ownership Event”), and (y) the Termination Date, and (2) in the case of the SoftVest Designee, the earlier of (x) the Minimum Ownership Event, (y) the Horizon Designee ceasing to serve on the Board, and (z) the Termination Date; (ii) qualify as an Independent Director; (iii) agree to take all necessary action to not be considered to be “overboarded” under the applicable policies of Institutional Shareholder Services, Inc. and Glass Lewis & Co., LLC as a result of his or her appointment to the Board; and (iv) not be otherwise disqualified from serving as a member of a board of directors of a public company with shares traded on the NYSE. (e) As promptly as practicable after the Distribution Time, the Board shall appoint at least one Stockholder Designee to serve on each committee of the Board. 2. Voting Commitments and Restrictions. (a) The Stockholders shall, or shall cause their Representatives to, appear in person or by proxy at each Stockholder Meeting and vote all shares of Common Stock beneficially owned by such Stockholder and over which such Stockholder has voting authority at each Stockholder Meeting in accordance with the Board’s recommendations as such recommendations of the Board are set forth in the applicable definitive proxy statement filed with the SEC (the “Board Recommendations”). For the avoidance of doubt, each of the Stockholders shall take all actions necessary (including by calling back loaned out shares) to ensure that they have the voting power for each share beneficially owned by such Stockholder on the record date for each Stockholder Meeting. (b) Notwithstanding Section 2(a), the Stockholders shall not be required to vote in accordance with the Board Recommendation for any proposals (i) related to an Extraordinary Transaction or (ii) related to governance, environmental or social matters; provided, however, that the Stockholders shall be required to vote in accordance with the Board Recommendation for any proposal relating to any corporate governance terms that would have the effect of changing any of the corporate governance terms set forth in the plan of conversion recommended by the Conversion Exploration Committee of the Trust on January 21, 2020.(c) Subject to Section 3(b) (including the provisos therein), and notwithstanding Section 2(b), if, as a result of a Share Reduction Event, a Stockholder has ownership or control of, or other beneficial ownership interest in, Excess Shares, then such Stockholder shall vote or cause to be voted such Excess Shares in accordance with the Board Recommendations at any Stockholder Meeting for which the Trust or TPL Corp has given notice at such time as which such Stockholder has ownership or control of, or other beneficial ownership interest in, such Excess Shares. Any planned divestment of Excess Shares pursuant to Section 3(b), or any actual divestment of Excess Shares occurring after the Trust or TPL Corp has given such notice of a Stockholder Meeting, shall not relieve the Stockholder of its voting commitment under this Section 3(c). 3. Standstill. Except as otherwise provided in this Agreement, without the prior written consent of the Trustees (or following the Distribution Time, the Board), the Stockholders and the Stockholder Designees shall not, and shall cause their Affiliates and controlled Associates not to, directly or indirectly (in each case, except as permitted by this Agreement): (a) (i) other than pursuant toSections 1(a) and 1(b) of this Agreement, nominate, recommend for nomination or give notice of an intent to nominate or recommend for nomination a person for election at any Stockholder Meeting at which directors are to be elected; (ii) initiate, encourage or participate in any solicitation of proxies in respect of any election contest or removal contest with respect to directors; (iii) submit, initiate, make or be a proponent of any stockholder proposal for consideration at, or bring any other business before, any Stockholder Meeting; (iv) initiate, encourage or participate in any solicitation of proxies in respect of any stockholder proposal for consideration at, or other business brought before, any Stockholder Meeting; or (v) initiate, encourage or participate in any “withhold” or similar campaign with respect to any Stockholder Meeting; (b) acquire, offer or seek to acquire, agree to acquire or acquire rights to acquire or otherwise beneficially own (except by way of stock dividends or other distributions or offerings made available to holders of voting securities of the Trust or TPL Corp generally on a pro rata basis), directly or indirectly, whether by purchase, tender or exchange offer, through the acquisition of control of another person, by joining a group, through swap or hedging transactions or otherwise, any voting securities of the Trust or TPL Corp (other than through a broad-based market basket or index) or any voting rights decoupled from the underlying voting securities which would result in (i) Horizon having ownership or control of, or other beneficial ownership interest in, 23.5% or more, in the aggregate, of the then-outstanding Sub-share Certificates or shares of the Common Stock (the “Horizon Cap”), (ii) SoftVest having ownership or control of, or other beneficial ownership interest in, 4.0% or more, in the aggregate, of the then- outstanding Sub-share Certificates or shares of the Common Stock (the “SoftVest Cap”) or (iii) Mission having ownership or control of, or other beneficial ownership interest in, 5% or more, in the aggregate, of the then-outstanding Sub-share Certificates or shares of the Common Stock (the “Mission Cap”, and each of the Horizon Cap, the SoftVest Cap and the Mission Cap, individually, an “ ership Cap”); provided, however, that, subject to Section 3(c), in the event that the Trust or TPL Corp (A) acquires through share purchases Sub-share Certificates or shares of the Common Stock or (B) undertakes a reverse share split, and any of such actions reduces the number of securities of the Trust or TPL Corp outstanding and thereby increases the proportionate number of Sub-share Certificates or shares of Common Stock that a Stockholder has ownership or control of, or otherwise beneficially owns, to a proportion of Sub-share Certificates or shares of the Common Stock that is equal to or greater than the applicable Ownership Cap for such Stockholder (such event, a “Share Reduction Event”), then such Stockholder shall not be deemed to have acquired or otherwise beneficially own an amount of Sub-share Certificates or shares of the Common Stock that is greater than the number of shares permitted pursuant to such Stockholder’s applicable Ownership Cap (such amount of securities in excess of a Stockholder’s Ownership Cap, the “Excess Shares”) in violation of this Section 3(b) as a result of such Share Reduction Event; provided, further, that such Stockholder shall divest its Excess Shares within a reasonable time period (but in any event, within 30 calendar days of becoming aware of such Share Reduction Event) so that such Stockholder No longer has ownership or control of, or otherwise holds a beneficial ownership interest in, such Excess Shares;(c) sell or transfer shares of Common Stock, other than in open market sale transactions where the identity of the purchaser or transferee is not known and in underwritten widely dispersed public offerings, to any Third Party that (i) would result in such Third Party, together with its Affiliates and Associates, owning, controlling or otherwise having any beneficial or other ownership interest in the aggregate of 5.0% or more of the shares of Common Stock outstanding at such time or (ii) would increase the beneficial ownership interest of any Third Party who, together with its Affiliates and Associates, has a beneficial or other ownership interest in the aggregate of 5.0% or more of the shares of Common Stock outstanding at such time, in each case, unless such Third Party is a passive investor that has not been a “reporting person” on a Schedule 13D and would not, in connection with purchasing or holding of securities of TPL Corp, be required to file a Schedule 13D; (d) (i) form, join or in any way participate in any group or agreement of any kind with respect to any voting securities of the Trust or TPL Corp (except any such group or agreement as disclosed on a Schedule 13D filing with the SEC prior to the Effective Date, provided that any such group or agreement shall be terminated as of the Distribution Time), or (ii) deposit any voting securities of the Trust or TPL Corp in any voting trust or subjecting any Trust or TPL Corp voting securities to any arrangement or agreement with respect to the voting thereof; (e) seek publicly, alone or in concert with others, to amend any provision of the Governance Documents; (f) demand an inspection of the Trust’s or TPL Corp’s books and records; (g) make any (i) public or private (other than to the Trustees or the Board) proposal with respect to or (ii) public statement or otherwise seek to encourage, advise or assist any person in so encouraging or advising with respect to, in each case: (A) any change in the number or term of directors serving on the Board or the filling of any vacancies on the Board, (B) any change in the capitalization, dividend or share repurchase policy of TPL Corp, (C) any other change in the Trust’s or TPL Corp’s business, operations, strategy, management, governance, corporate structure, or other affairs or policies, (D) any Extraordinary Transaction, (E) causing a class of securities of the Trust or TPL Corp to be delisted from, or to cease to be authorized to be quoted on, any securities exchange or (F) causing a class of equity securities of TPL Corp to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act;(h) initiate, make, effect, seek to effect, offer or propose to effect, cause or participate in, or in any way knowingly assist any (i) Extraordinary Transaction, (ii) material acquisition of any assets or businesses of the Trust, TPL Corp or any of either the Trust’s or TPL Corp’s subsidiaries, (iii) tender offer or exchange offer, merger, acquisition, share exchange or other business combination involving any of the voting securities or any of the material assets or businesses of the Trust or TPL Corp or any of their subsidiaries, (iv) recapitalization, restructuring, liquidation, dissolution or other material transaction with respect to the Trust or TPL Corp or any of their subsidiaries or any material portion of its or their businesses, or (v) proposal, either alone or in concert with others, to the Trust or TPL Corp that would reasonably be expected to require a public announcement or disclosure regarding any such matter; (i) enter into any negotiations, agreements or understandings with any Third Party with respect to the foregoing, or advise, assist, encourage or seek to persuade any Third Party to take any action with respect to any of the foregoing, or otherwise take or cause any action inconsistent with any of the foregoing; (j) publicly make or in any way advance publicly any request or proposal that the Trust or the Board amend, modify or waive any provision of this Agreement; or (k) take any action challenging the validity or enforceability of this Section 3 or this Agreement, unless TPL Corp is challenging the validity or enforceability of this Agreement; provided, however, that (i) nothing in this Agreement shall prevent the Stockholders or Stockholder Designees from making (A) any factual statement in response to a Legal Requirement, (B) any communication to the Trust or TPL Corp, or (C) any private communication to investors or prospective investors in any of the Stockholders or any of their Affiliates, provided that, in each case, such statement or communication (1) is based on publicly available information; (2) is not reasonably expected to be required to be publicly disclosed by any person and is understood by all parties to be confidential communication; and (3) is not made with an intent to circumvent any of the restrictions listed in paragraphs (a) through (k) of this Section 3 or Section 4; and (ii) the restrictions in this Section 3 shall not restrict the Stockholders or Stockholder Designees from tendering shares, receiving payment for shares or otherwise participating in any such transaction on the same basis as the other stockholders of the Trust or TPL Corp or from participating in any such transaction that has been approved by the Trustees or the Board, as applicable, subject to the other terms of this Agreement. Nothing in this Agreement shall limit the exercise in good faith by any Stockholder Designee of his fiduciary duties under applicable law in his capacity as a director of TPL Corp.4, Mutual Non-Disparagement. Without the prior written consent of the other parties, No party shall, nor shall it permit any of its Representatives to, make any public or private statement that undermines, disparages or otherwise reflects detrimentally on (a) another party, (b) another party’s current or former trustees (including the Trustees) or directors in their capacity as such, (c) another party’s officers or employees (including with respect to such persons’ service at the other party), (d) another party’s subsidiaries, or (e) the business of another party or another party’s subsidiaries or any of its or its subsidiaries’ current directors, officers or employees, including the business and current or former directors, officers and employees of the other party’s controlled Affiliates, as applicable. The restrictions in this Section 4 shall not (i) apply (A) in any compelled testimony or production of information in response to a Legal Requirement, or (B) to any disclosure that such party reasonably believes, after consultation with its outside counsel, to be legally required by applicable law, rules or regulations; or (ii) prohibit any party from reporting what it reasonably believes, after consultation with its outside counsel, to be violations of federal law or regulation to any governmental authority pursuant to Section 21F of the Exchange Act or Rule 21F promulgated thereunder. 5. Mutual Releases. Effective at the Distribution Time, and as a condition to the appointment of the Stockholder Designees to the Board, the Trust, the Trustees, and all members of the Investor Group (as defined in the Settlement Agreement) shall execute an agreement substantially in the form attached as Exhibit C to the Settlement Agreement (the “Form of Mutual General Release Agreement”), provided, however, that the Form of Mutual General Release Agreement shall, prior to execution, be modified to expressly provide that such agreement shall be effective upon the Distribution Time. 6. No Litigation. Each party hereby covenants and agrees that it shall not, and shall not permit any of its Representatives to, directly or indirectly, alone or in concert with others, encourage, pursue or assist any other person to threaten or initiate, any lawsuit, claim or proceeding before any court (each, a “Legal Proceeding”) against the other party or any of its Representatives, except for (a) any Legal Proceeding initiated primarily to remedy a breach of or to enforce this Agreement and (b) counterclaims with respect to any proceeding initiated by, or on behalf of one party or its Affiliates against the other party or its Affiliates; provided, however, that the foregoing shall not prevent any party or any of its Representatives from responding to oral questions, interrogatories, requests for information or documents, subpoenas, civil investigative demands or similar processes (each, a “Legal Requirement”) in connection with any Legal Proceeding if such Legal Proceeding has not been initiated by, on behalf of or at the direct or indirect suggestion of such party or any of its Representatives; provided, further that in the event any party or any of its Representatives receives such Legal Requirement, such party shall give prompt written notice of such Legal Requirement to the other party (except where such notice would be legally prohibited or not practicable). Each party represents and warrants that neither it nor any assignee has filed any pending Legal Proceeding against any other party. 7. Press Release; SEC Filings; Public Statements (a) No later than two Business Days following the date of this Agreement, the Trust shall issue a