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Item 1.01
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Entry into a Material Definitive Agreement
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Preferred Units and Warrants
Pursuant
to the Class D Preferred Unit and Warrant Purchase Agreement dated September 25, 2019 (the “Class D
Purchase Agreement”) by and among EIG Neptune Equity Aggregator, L.P., FS Energy and Power Fund and Foundation
Infrastructure Partners through GCM Pellit Holdings, LLC (together, the “Investors”) and NGL Energy
Partners LP, a Delaware limited partnership (the “Partnership”), the Partnership, on October 31, 2019,
consummated the issuance and sale to the Investors of $200 million (in aggregate initial liquidation preference) of the Partnership’s
Class D Preferred Units (the “Class D Preferred Units”) and warrants (the “Warrants”)
to purchase an aggregate of 8,500,000 common units representing limited partner interests in the Partnership (“Common
Units”), for an aggregate purchase price of $200 million.
The Warrants are subject to vesting and
exercise terms described in Item 3.02 hereof. The Partnership used the net proceeds from the issuance and sale of the Class D
Preferred Units and Warrants to fund a portion of the purchase price for the Hillstone Acquisition (as defined below).
The information regarding the Warrants set
forth in Item 3.02 hereof is incorporated by reference into this Item 1.01.
Amended and Restated Registration Rights Agreement
Upon the closing of the issuance and sale
of the Class D Preferred Units and the Warrants pursuant to the Class D Purchase Agreement, the Partnership and the Investors
entered into an Amended and Restated Registration Rights Agreement dated as of October 31, 2019 (the “Amended
Registration Rights Agreement”), which amended and restated the Registration Rights Agreement dated as of July 2, 2019
previously entered by and among the Partnership and certain of the Investors.
Pursuant to the Amended Registration Rights
Agreement, the Partnership agreed to prepare and file a registration statement (the “Registration Statement”)
within 180 days of the Initial Closing Date (July 2, 2019), to permit the public resale of (i) the outstanding Class D
Preferred Units of the Partnership held by the Investors, (ii) the Common Units issued or issuable to the Investors upon the
exercise of the Warrants and (iii) any Common Units issued to the Investors in lieu of cash, as liquidated damages under the
Amended Registration Rights Agreement. The Partnership also agreed to use its commercially reasonable efforts to cause the Registration
Statement to become effective no later than 360 days after the Initial Closing Date (the “Registration Statement Deadline”).
The Amended Registration Rights Agreement
provides that if the Registration Statement is not declared effective on or prior to the Registration Statement Deadline, the Partnership
will be liable to the Investors for liquidated damages in accordance with a formula, subject to the limitations set forth in the
Amended Registration Rights Agreement. Such liquidated damages would be payable in cash, or if payment in cash would breach any
covenant or cause a default under a credit facility or any other debt instrument filed by the Partnership as an exhibit to a
periodic report filed with the United States Securities and Exchange Commission (the “SEC”), then such
liquidated damages would be payable in the form of newly issued Common Units. In addition, the Amended Registration Rights Agreement
grants the Investors piggyback registration rights. These registration rights are transferable to affiliates of the Investors and,
in certain circumstances, to third parties.
The description of the Amended Registration
Rights Agreement is qualified in its entirety by reference to the full text of the Amended Registration Rights Agreement, which
is filed as Exhibit 4.1 hereto, and is incorporated into this Item 1.01 by reference.
Amendment to Revolving Credit Agreement
On October 30, 2019,
the Partnership, NGL Energy Operating LLC, in its capacity as borrowers’ agent, and the other subsidiary borrowers
party thereto entered into Amendment No. 9 (the “Credit Agreement Amendment”) to
the Partnership’s Amended and Restated Credit Agreement with Deutsche Bank Trust Company Americas, as administrative
agent, and the other financial institutions party thereto (the “Credit Agreement”). The Credit
Agreement Amendment amended the Credit Agreement to, among other things, adjust the allocation of the commitments of the
lenders to make revolving loans thereunder and, effective with the fiscal quarter ending December 31, 2019, eliminate
the leverage ratio financial covenant and adjust the senior secured leverage ratio, total leverage indebtedness ratio and
interest coverage ratio financial covenants set forth therein. As amended by the Credit Agreement Amendment, the Credit
Agreement provides for up to $1.790 billion in aggregate lending commitments, consisting of (i) a $600 million
revolving credit facility for the Partnership’s working capital requirements and other general corporate purposes
and (ii) a $1.190 billion revolving credit facility for acquisitions, internal growth projects, other
capital expenditures and general corporate purposes.
The Credit Agreement Amendment is filed
as Exhibit 10.3 hereto and incorporated into this Item 1.01 by reference. The above description of the material terms
of the Credit Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to Exhibit 10.3.
Amendment to Term Credit Agreement
On October 30, 2019, the
Partnership and NGL Energy Operating LLC, in its capacity as borrower, entered into Amendment No. 1 (the “Term Credit Agreement Amendment”) to the
Partnership’s Term Credit Agreement with Toronto Dominion (Texas) LLC, as administrative agent, and the other financial
institutions party thereto (the “Term Credit Agreement”). The Term Credit Agreement Amendment
amended the Term Credit Agreement to, among other things, conform the financial covenants in the Term Credit Agreement to the
financial covenants set forth in the Credit Agreement, as amended by the Credit Agreement Amendment.
The Term Credit Agreement Amendment is filed
as Exhibit 10.4 hereto and incorporated into this Item 1.01 by reference. The above description of the material terms of the
Term Credit Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to Exhibit 10.4.