EMES Emerge Energy Services LP Common Units Representing Limited Partner Interests

Item 1.01.     Entry into a Material Definitive Agreement.

As previously disclosed, on July 15, 2019, Emerge Energy Services LP (the “Partnership”), along with its parent Emerge Energy Services GP, LLC (“GP”) and certain of the Partnership’s subsidiaries (collectively, the “Debtors”), filed voluntary petitions for relief (collectively, the “Petitions” and, the cases commenced thereby and jointly administered under case number 19-11563, the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).

In connection with the Chapter 11 Cases, on July 17, 2019, the Debtors received interim authorization from the Bankruptcy Court to enter into the DIP Facility (as defined below).

DIP Facility

In connection with the Chapter 11 Cases, on July 19, 2019 (the “Closing Date”), the Debtors entered into a senior secured priming and superpriority debtor-in-possession credit and security agreement (the “DIP Facility”) with HPS Investment Partners, LLC, as administrative agent and collateral agent (the “DIP Administrative Agent”) and the financial institutions from time to time party thereto.

The DIP Facility is in an amount of up to $35 million (the “Commitment Amount”), and roll-up loans in an aggregate principal amount equal to the proceeds of the collateral received on and from the closing date of the DIP Facility. Interest on the DIP Facility will accrue at a rate per year equal to the LIBOR rate (with a floor of 2.00%) plus 8.00% or alternate base rate plus 7.00%.

The Company is required to pay fees in relation to the DIP Facility, including the following:

·                   Closing Fee:  3.0% of the aggregate Commitment Amount, which was due and payable, and was paid in full, on the Closing Date;

·                   Unused Commitment Fee: 1.0% per annum on the amount by which $35 million exceeds the average daily unpaid balance (other than the roll-up loans) for each day of such quarter; and

·                   Agent Fees: separately agreed upon between the Debtors and the DIP Administrative Agent;

The DIP Facility will mature on the earlier of: (i) six months after the Closing Date; (ii) the date any Debtor enters into (or files a motion with the Bankruptcy Court or otherwise takes action to seek the Bankruptcy Court’s authorization of) any agreement for the sale or transfer of all or any material portion of the Debtors’ assets unless such agreement and any related orders provide for the indefeasible payment of the obligations under the DIP Facility on or prior to the closing of such proposed sale or transfer; (iii) the date which is the closing date of any sale or transfer of all or any material portion of the Debtors’ assets, other than sales or transfers of inventory in the ordinary course of business; (iv) the filing or support by any Debtor of a Chapter 11 plan that (x) does not provide for indefeasible payment in full of the obligations under the DIP Facility and (y) is not otherwise acceptable to the required lenders; (v) the effective date of Chapter 11 plan of reorganization or liquidation filed in any of the Chapter 11 Cases that is confirmed pursuant to an order entered by the Bankruptcy Court; (vi) 30 days after the entry of the interim order by the Bankruptcy Court, if the final order shall not have been entered by the Bankruptcy Court on or prior to such date; (vii) the date the Bankruptcy Court orders any Chapter 11 Case be converted to a case filed under Chapter 7 of the Bankruptcy Court or the dismissal of the Chapter 11 Case of any Debtor; (viii) the date of termination of the commitments under the DIP Facility and the acceleration of the loans (including the occurrence of an event of default or any default under the interim order or final order); or (ix) the termination of the restructuring support agreement by the Debtors or the consenting creditors under the restructuring support agreement.

Proceeds of the DIP Facility can be used by the Debtors to, among other things,  fund the Debtors’ general business purposes, including working capital requirements during the pendency of the Chapter 11 Cases and to pay

2

certain fees and expenses of professionals retained by the Debtors, in each case subject to certain limitations provided in the DIP Facility.

The foregoing description of the DIP Facility does not purport to be complete and is qualified in its entirety by reference to the full text of the DIP Facility, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.