NGL NGL Energy Partners LP

Item 1.01                    Entry into a Material Definitive Agreement

Class D Preferred Unit and Warrant Purchase Agreement

On July 2, 2019 (the “ Closing Date ”), NGL Energy Partners LP, a Delaware limited partnership (the “ Partnership ”), entered into a Class D Preferred Unit and Warrant Purchase Agreement (the “ Purchase Agreement ”) with EIG Neptune Equity Aggregator, L.P. and FS Energy and Power Fund (together, the “ Purchasers ”), pursuant to which the Partnership agreed to issue and sell to the Purchasers in a private placement (the “ Private Placement ”) $400 million in aggregate initial liquidation preference of the Partnership’s Class D Preferred Units (the “ Preferred Units ”) and warrants (the “ Warrants ”) to purchase 17,000,000 common units representing limited partner interests in the Partnership (“ Common Units ”).  The aggregate purchase price for the Preferred Units and Warrants was $400 million.  The Warrants are subject to vesting and exercise terms described in Item 3.02 hereof.

Pursuant to the terms of the Purchase Agreement, the Partnership will pay a cash closing fee in the amount of $8 million to affiliates of the Purchasers. The Purchase Agreement contains customary representations and warranties by the Partnership and the Purchasers, and each of the Partnership and the Purchasers have agreed to indemnify the other for losses resulting from a breach of any of their respective representations, warranties or covenants.

The information regarding the Preferred Units and the Warrants set forth in Item 3.02 hereof is incorporated by reference into this Item 1.01.

The description of the Purchase Agreement is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed as Exhibit 10.1 hereto, and is incorporated into this Item 1.01 by reference.

Warrants

On July 2, 2019, pursuant to the Purchase Agreement, the Partnership issued to the Purchasers Warrants exercisable in the aggregate for 17,000,000 Common Units .  The information regarding the Warrants set forth in Item 3.02 hereof is incorporated by reference into this Item 1.01.

Registration Rights Agreement

On July 2, 2019, in connection with the Purchase Agreement and the closing of the Private Placement, the Partnership entered into a Registration Rights Agreement (the “ Registration Rights Agreement ”), by and among the Partnership and the Purchasers.

Pursuant to the Registration Rights Agreement, the Partnership is required to prepare and file a registration statement (the “ Registration Statement ”) within 180 days of the Closing Date (as defined in the Registration Rights Agreement), to permit the public resale of (i) the Preferred Units, (ii) the Common Units issued or issuable upon the exercise of the Warrants, (iii) the Common Units that are issuable pursuant to the terms of the Preferred Units in connection with a redemption of the Preferred Units and (iv) any Common Units issued in lieu of cash as liquidated damages under the Registration Rights Agreement.  The Partnership is also required to use its commercially reasonable efforts to cause the Registration Statement to become effective no later than 360 days after the Closing Date (the “ Registration Statement Deadline ”).

The 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

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Purchasers for liquidated damages in accordance with a formula, subject to the limitations set forth in the Registration Rights Agreement.  Such liquidated damages would be payable in cash, or if payment in cash would breach any covenant or a 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 Registration Rights Agreement grants the Purchasers piggyback registration rights.  These registration rights are transferable to affiliates of the Purchasers and, in certain circumstances, to third parties.

The description of the Registration Rights Agreement is qualified in its entirety by reference to the full text of the Registration Rights Agreement, which is filed as Exhibit 4.1 hereto, and is incorporated into this Item 1.01 by reference.

Board Rights Agreement

On July 2, 2019, pursuant to the Purchase Agreement, the Partnership entered into a Board Representation Rights Agreement by and among the General Partner, the Partnership and certain affiliates of the Purchasers (the “ Board Rights Agreement ”). Under the terms of the Board Rights Agreement, affiliates of the Purchasers will have the right to designate up to one director on the board of directors of the General Partner, so long as the Purchasers and their respective affiliates, in the aggregate, own either at least (i) (A) 50% of the number of Preferred Units issued on the Closing Date or (B) 50% of the aggregate liquidation preference of any class or series of Class D Parity Securities (as defined in the Amended and Restated Partnership Agreement (as defined below)), or (ii) Warrants and/or Common Units that, in the aggregate, comprise 10% or more of the then-outstanding Common Units.

The description of the Board Rights Agreement is qualified in its entirety by reference to the full text of the Board Rights Agreement, which is filed as Exhibit 10.2 hereto, and is incorporated into this Item 1.01 by reference.

Voting Agreement

On July 2, 2019, members of the General Partner holding a majority of the membership interests of the General Partner entered into a Voting Agreement (the “ Voting Agreement ”) pursuant to which the members of the General Partner named therein agreed to vote their respective membership interests of the General Partner in accordance with the terms of the Board Rights Agreement. In addition, under the Voting Agreement, the members of the General Partner named therein agreed to use reasonable best efforts to cause the approval of an amendment to the Third Amended and Restated Limited Liability Company Agreement of the General Partner to give effect to the terms of the Board Rights Agreement.

The description of the Voting Agreement is qualified in its entirety by reference to the full text of the Voting Agreement, which is filed as Exhibit 10.3 hereto, and is incorporated into this Item 1.01 by reference.

Amendment to Mesquite Acquisition Agreement

On July 2, 2019, the parties to that certain Asset Purchase and Sale Agreement, dated as of May 13, 2019 (the “ Mesquite Acquisition Agreement ”), by and among a wholly owned subsidiary of the Partnership, Mesquite Disposals Unlimited, LLC (“ Mesquite ”) and Mesquite SWD, Inc., entered into a letter agreement (the “ Letter Agreement Amendment ”) to amend the terms of the Mesquite Acquisition

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Agreement (as amended by the Letter Agreement Amendment, the “ Amended Mesquite Acquisition Agreement ”). Under the Letter Agreement Amendment, the cash portion of the purchase price due at closing was amended to $592,500,000. In addition, the Partnership agreed to pay Mesquite up to $200,000,000 in cash to be paid in two installments contingent on certain performance metrics of the assets being acquired by the Partnership pursuant to the Amended Mesquite Acquisition Agreement.

The description of the Letter Agreement Amendment is qualified in its entirety by reference to the full text of the Letter Agreement Amendment, which is filed as Exhibit 10.4 hereto, and is incorporated into this Item 1.01 by reference.

Term Credit Agreement

On July 2, 2019, the Partnership and its wholly owned subsidiary, NGL Energy Operating LLC, a Delaware limited liability company (the “ Borrower ”), entered into a Term Credit Agreement (the “ Term Credit Agreement ”) with Toronto Dominion (Texas) LLC, as administrative agent, and the financial institutions party thereto as lenders, that provides for a $250,000,000 term loan facility.  Toronto Dominion (Texas) LLC and certain of its affiliates are also lenders under the Borrower’s revolving credit facility.  The term loans will mature on July 2, 2024 and will be subject to customary mandatory prepayment events, including with the proceeds of certain asset sales, equity issuances and debt incurrences.

The obligations of Borrower under the Term Credit Agreement are guaranteed by the Partnership and certain of the Borrower’s wholly owned subsidiaries. The term loans will be secured by substantially all of the assets of the Borrower, the Partnership and the other subsidiary guarantors subject to certain customary exclusions.

All borrowings under the Term Credit Agreement bear interest, at the Borrower’s option, at (a) an alternate base rate plus (i) during the first three-month period after the closing date, margin equal to the applicable margin for alternate base rate loans calculated under the Borrower’s existing revolving credit facility, (ii) 2.00% per annum for the second three-month period after the Closing Date, (iii) 2.25% per annum for the third three-month period after the Closing Date, (iv) 2.50% per annum for the fourth three-month period after the Closing Date, and (v) thereafter, such rate per annum such that the alternate base rate equals to a rate of interest agreed to among the Borrower and the administrative agent, or (b) an adjusted LIBOR rate plus (i) during the first three-month period after the closing date, margin equal to the applicable margin for LIBOR rate loans calculated under the Borrower’s existing revolving credit facility, (ii) 3.00% per annum for the second three-month period after the Closing Date, (iii) 3.25% per annum for the third three-month period after the Closing Date, (iv) 3.50% per annum for the fourth three-month period after the Closing Date, and (v) thereafter, such rate per annum such that the adjusted LIBOR rate equals to a rate of interest agreed to among the Borrower and the administrative agent.

The Term Credit Agreement contains various customary representations, warranties and covenants by the Partnership and its subsidiaries, including, without limitation, (i) commencing September 30, 2019, the Partnership, the Borrower and the subsidiary guarantors will be subject to financial covenants limiting leverage, including senior leverage, secured leverage and total leverage, and requiring a minimum interest coverage, (ii)  negative covenants limiting indebtedness, liens, equity distributions and fundamental changes involving the Partnership or its subsidiaries and (iii) affirmative covenants requiring, among other things, reporting of financial information and material events and covenants to maintain existence and pay taxes, in each case substantially consistent with the Borrower’s existing revolving credit facility.

Substantially consistent with the Borrower’s existing revolving facility, the Partnership’s and its subsidiaries’ obligations under the Term Credit Agreement may be accelerated following certain events of default (subject to applicable cure periods), including, without limitation, (i) the failure to pay principal or interest when due, (ii) a breach by the Partnership or its subsidiaries of any material representation or warranty or any covenant made in the Term Credit Agreement or (iii) certain events of bankruptcy or insolvency.

The description of the Term Credit Agreement is qualified in its entirety by reference to the full text of the Term Credit Agreement, which is filed as Exhibit 10.5 hereto and is incorporated into this Item 1.01 by reference.