Exhibit 10.6

 

NGL ENERGY PARTNERS LP

 

SERIES A 2019 WARRANT TO PURCHASE COMMON UNITS

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.  THIS WARRANT
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD OR
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION THEREUNDER, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OR OTHER JURISDICTIONS, AND IN THE CASE OF A
TRANSACTION EXEMPT FROM REGISTRATION, SUCH WARRANTS AND THE SECURITIES ISSUABLE
UPON EXERCISE OF SUCH WARRANTS MAY ONLY BE TRANSFERRED IF THE TRANSFER AGENT FOR
SUCH WARRANTS AND THE SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS HAS
RECEIVED DOCUMENTATION SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE
REGISTRATION UNDER THE SECURITIES ACT.

 

Original Issue Date: July 2, 2019

Warrant Certificate No.: [·]

 

FOR VALUE RECEIVED, NGL Energy Partners LP, a Delaware limited partnership (the
“Partnership”), hereby certifies that
                                                                     , a
                                                                 , or its
registered assigns (the “Holder”) is entitled to purchase from the Partnership
                      Common Units at a purchase price per Common Unit of $14.54
(the “Exercise Price”), all subject to the terms, conditions and adjustments set
forth below in this Warrant.  Certain capitalized terms used herein are defined
in Section 1 hereof.  This Warrant is one of a series of like tenor issued by
the Partnership pursuant to the terms of the Class D Preferred Unit and Warrant
Purchase Agreement dated as of July 2, 2019 (the “Purchase Agreement”) between
the Partnership and the Purchasers named on Schedule A thereto.

 

1.                                      Definitions.  As used in this Warrant,
the following terms have the respective meanings set forth below:

 

“Aggregate Exercise Price” means an amount equal to the product of (a) the
number of Warrant Units in respect of which this Warrant is being exercised
pursuant to Section 3 hereof, multiplied by (b) the Exercise Price.

 

“Board” means the board of directors of the General Partner.

 

“Business Day” means any day, except a Saturday, Sunday or legal holiday, on
which banking institutions in the cities of New York, New York or Tulsa,
Oklahoma are authorized or obligated by law or executive order to close.

 

“Buy-In” has the meaning set forth in Section 3(h).

 

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“Buy-In Price” has the meaning set forth in Section 3(h).

 

“Class D Change of Control” has the meaning set forth in the Partnership
Agreement as in effect on the date hereof.

 

“Common Units” means common units representing limited partner interests in the
Partnership, the terms of which are set forth in the Partnership Agreement.

 

“Common Units Deemed Outstanding” means, at any given time, the sum of (a) the
number of Common Units actually outstanding at such time, plus (b) the number of
Common Units issuable upon conversion, exercise or exchange of Convertible
Securities actually outstanding at such time, including without limitation
Warrants in the series issued by the Partnership pursuant to the Purchase
Agreement, in each case, regardless of whether the Convertible Securities are
actually convertible, exercisable or exchangeable at such time; provided, that
Common Units Deemed Outstanding at any given time shall not include units owned
or held by or for the account of the Partnership.

 

“Convertible Securities” means any warrants or other rights exercisable to
subscribe for or to purchase Common Units, or any security convertible into or
exchangeable for Common Units, regardless of whether the right to exercise,
convert or exchange any such Convertible Securities is immediately exercisable,
including without limitation Warrants in the series issued by the Partnership
pursuant to the Purchase Agreement.

 

“Delaware LP Act” means the Delaware Revised Uniform Limited Partnership Act.

 

“Exercise Agreement” has the meaning set forth in Section 3(a)(i).

 

“Exercise Date” means, for any given exercise of this Warrant, the date on which
the conditions to such exercise as set forth in Section 3 shall have been
satisfied at or prior to 5:00 p.m., Central Time, on a Business Day, including,
without limitation, the receipt by the Partnership of the Exercise Agreement,
the Warrant and the Aggregate Exercise Price.

 

“Exercise Period” has the meaning set forth in Section 2.

 

“Exercise Price” has the meaning set forth in the preamble of this Warrant.

 

“Fair Market Value” means, as of the Business Day (the “Reference Date”)
immediately preceding the date of determination or, if resulting in a greater
amount, for a period (the “Reference Period”) measured over the three
consecutive Business Days ending on the Reference Date: (a) the average closing
sale price of the Common Units on the Reference Date or the VWAP Price for the
Reference Period, as applicable, on all domestic securities exchanges on which
the Common Units may at the time be listed; (b) if there have been no sales of
the Common Units on any such exchange on the Reference Date or over the
Reference Period, as applicable, the average of the highest bid and lowest asked
prices for the Common Units on all such exchanges at the end of the Reference
Date or the Reference Period, as applicable; (c) if on the Reference Date or
over the Reference Period, as applicable, the Common Units are not listed on a
domestic securities exchange, the closing sales price of the Common Units as
quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation
system or association for the

 

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Reference Date or the Reference Period, as applicable; or (d) if there have been
no sales of the Common Units on the OTC Bulletin Board, the Pink OTC Markets or
similar quotation system or association on the Reference Date or over the
Reference Period, as applicable, the average of the highest bid and lowest asked
prices for Common Units quoted on the OTC Bulletin Board, the Pink OTC Markets
or similar quotation system or association at the end of the Reference Date or
the Reference Period, as applicable; provided, that if the Common Units are
listed on any domestic securities exchange, the term “Business Day” as used in
this sentence means Business Days on which such exchange is open for trading. 
If at any time the Common Units are not listed on any domestic securities
exchange or quoted on the OTC Bulletin Board, the Pink OTC Markets or similar
quotation system or association, the “Fair Market Value” of the Common Units
shall be the fair market value per unit as determined in good faith by the
Board.

 

“General Partner” means NGL Energy Holdings LLC, a Delaware limited liability
company and the general partner of the Partnership.

 

“Holder” has the meaning set forth in the preamble of this Warrant.

 

“Original Issue Date” means July 2, 2019, the date on which this Warrant was
issued to the first Holder by the Partnership pursuant to the Purchase
Agreement.

 

“OTC Bulletin Board” means the Financial Industry Regulatory Authority OTC
Bulletin Board electronic inter-dealer quotation system.

 

“Other Warrants” has the meaning set forth in Section 19.

 

“Partnership” has the meaning set forth in the preamble of this Warrant.

 

“Partnership Agreement” means the Sixth Amended and Restated Agreement of
Limited Partnership of the Partnership, as amended from time to time.

 

“Person” means any individual, sole proprietorship, partnership, limited
liability company, corporation, joint venture, trust, incorporated organization
or government or department or agency thereof.

 

“Pink OTC Markets” means the OTC Markets Group Inc. electronic inter-dealer
quotation system, including OTCQX, OTCQB and OTC Pink.

 

“Preferred Units” means the Class D Preferred Units representing limited partner
interests in the Partnership, the terms of which are to be set forth in the
Partnership Agreement.

 

“Purchase Agreement” has the meaning set forth in the preamble of this Warrant.

 

“VWAP Price” as of a particular date means the volume-weighted average trading
price, as adjusted for splits, combinations and other similar transactions, of a
Common Unit.

 

“Warrant” means this Warrant and all warrants issued upon division or
combination of, or in substitution for, this Warrant.

 

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“Warrant Unit Adjustment” has the meaning set forth in Section 4(e).

 

“Warrant Units” means the Common Units purchasable upon exercise of this Warrant
in accordance with the terms of this Warrant (without taking into account any
limitations or restrictions on the exercisability of this Warrant, other than
with respect to Section 2 or Section 3 of this Warrant).

 

2.                                      Term of Warrant.  Subject to the terms
and conditions hereof, at any time or from time to time during the period
beginning on the first anniversary of the Original Issue Date and ending at
5:00 p.m., Central Time, on the tenth anniversary of the Original Issue Date or,
if such day is not a Business Day, on the next Business Day (the “Exercise
Period”), the Holder of this Warrant may exercise this Warrant for the Warrant
Units purchasable hereunder (subject to adjustment as provided herein) as
provided in Section 3.  Holders may not exercise this Warrant except during the
Exercise Period.

 

3.                                      Exercise of Warrant.

 

(a)                                 Vesting and Exercise Procedure. 
Notwithstanding anything to the contrary herein, including the vesting
provisions of Section 2, the Holder may purchase all or any part of the Warrant
Units purchasable upon exercise of this Warrant beginning on the earlier of
(i) the first anniversary of the Original Issue Date, (ii) the consummation of a
Class D Change of Control and (iii) the voluntary or involuntary dissolution,
liquidation or winding-up of the Partnership.  The Holder may exercise this
Warrant only upon:

 

(i)                                     surrender of this Warrant to the
Partnership at its then principal executive offices (or an indemnification
undertaking with respect to this Warrant in the case of its loss, theft or
destruction), together with an Exercise Agreement in the form attached hereto as
Exhibit A (each, an “Exercise Agreement”), duly completed (including specifying
the number of Warrant Units to be purchased) and executed; and

 

(ii)                                  payment to the Partnership of the
Aggregate Exercise Price in accordance with Section 3(b).

 

(b)                                 Payment of the Aggregate Exercise Price. 
Payment of the Aggregate Exercise Price shall be made, at the option of the
Holder as expressed in the Exercise Agreement, only by the following methods:

 

(i)                                     by delivery to the Partnership of a
certified or official bank check payable to the order of the Partnership or by
wire transfer of immediately available funds to an account designated in writing
by the Partnership, in the amount of such Aggregate Exercise Price;

 

(ii)                                  by instructing the Partnership to withhold
a number of Warrant Units in an amount equal to the quotient of (A) the
Aggregate Exercise Price and (B) the Fair Market Value of one Warrant Unit as of
the Exercise Date; or

 

(iii)                               any combination of the foregoing.

 

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In the event of any withholding of Warrant Units pursuant to clause (ii) or
(iii) above where the number of units whose value is equal to the Aggregate
Exercise Price is not a whole number, the number of units withheld by or
surrendered to the Partnership shall be rounded up to the nearest whole unit and
the Partnership shall make a cash payment to the Holder (by delivery of a
certified or official bank check or by wire transfer of immediately available
funds) based on the incremental fraction of a unit being so withheld by or
surrendered to the Partnership in an amount equal to the product of (x) such
incremental fraction of a Warrant Unit being so withheld or surrendered
multiplied by (y) the Fair Market Value per Warrant Unit as of the Exercise
Date.

 

(c)                                  Delivery of Certificates.  Upon receipt by
the Partnership of the Exercise Agreement, surrender of this Warrant and payment
of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the
Partnership shall, within three Business Days thereafter, execute (or cause to
be executed) and deliver (or cause to be delivered) to the Holder a certificate
or certificates representing the Warrant Units issuable upon such exercise,
together with cash in lieu of any fraction of a unit, as provided in
Section 3(d) hereof.  Certificates shall be transmitted by the Partnership’s
transfer agent by crediting the account of the Holder’s prime broker with The
Depository Trust Company through its Deposit / Withdrawal At Custodian system if
the Holder is a participant in such system, and otherwise by physical delivery
to the address specified by the Holder in the Exercise Agreement. The
certificate or certificates so delivered shall be, to the extent possible, in
such denomination or denominations as the exercising Holder shall reasonably
request in the Exercise Agreement and shall be registered in the name of the
Holder or, subject to compliance with Section 6 below, such other Person’s name
as shall be designated in the Exercise Agreement.  This Warrant shall be deemed
to have been exercised and such certificate or certificates of Warrant Units
shall be deemed to have been issued, and the Holder or any other Person so
designated to be named therein shall be deemed to have become a holder of record
of such Warrant Units for all purposes, as of the Exercise Date.

 

(d)                                 Fractional Units.  The Partnership shall not
be required to issue a fractional Warrant Unit upon exercise of any Warrant.  As
to any fraction of a Warrant Unit that the Holder would otherwise be entitled to
purchase upon such exercise, the Partnership shall pay to such Holder an amount
in cash (by delivery of a certified or official bank check or by wire transfer
of immediately available funds) equal to the product of (i) such fraction
multiplied by (ii) the Fair Market Value of one Warrant Unit on the Exercise
Date.

 

(e)                                  Delivery of New Warrant.  Unless the
purchase rights represented by this Warrant shall have expired or shall have
been fully exercised, the Partnership shall, at the time of delivery of the
certificate or certificates representing the Warrant Units being issued in
accordance with Section 3(c) hereof, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unexpired and unexercised
Warrant Units called for by this Warrant.  Such new Warrant shall in all other
respects be identical to this Warrant.

 

(f)                                   Valid Issuance of Warrant and Warrant
Units; Payment of Taxes.  With respect to the exercise of this Warrant, the
Partnership hereby represents, covenants and agrees:

 

(i)                                     This Warrant is, and any Warrant issued
in substitution for or replacement of this Warrant shall be, upon issuance, duly
authorized and validly issued.

 

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(ii)                                  All Warrant Units issuable upon the
exercise of this Warrant pursuant to the terms hereof shall be, upon issuance,
and the Partnership shall take all such actions as may be necessary or
appropriate in order that such Warrant Units are, validly issued, fully paid (to
the extent required under applicable law and the Partnership Agreement) and
non-assessable (except as such nonassessability may be affected by Sections
17-303, 17-607 and 17-804 of the Delaware LP Act), issued without violation of
any preemptive or similar rights of any unitholder of the Partnership and free
and clear of all taxes, liens and charges.

 

(iii)                               The Partnership shall take all such actions
as may be necessary to ensure that all such Warrant Units are issued without
violation by the Partnership of any applicable law or governmental regulation or
any requirements of any domestic securities exchange upon which Common Units or
other securities constituting Warrant Units may be listed at the time of such
exercise (except for official notice of issuance which shall be immediately
delivered by the Partnership upon each such issuance).

 

(iv)                              The Partnership shall use its reasonable best
efforts to cause the Warrant Units, immediately upon such exercise, to be listed
on any domestic securities exchange upon which Common Units or other securities
constituting Warrant Units are listed at the time of such exercise.

 

(v)                                 The Partnership shall pay all expenses in
connection with, and all taxes and other governmental charges that may be
imposed with respect to, the issuance or delivery of Warrant Units upon exercise
of this Warrant; provided, that the Partnership shall not be required to pay any
tax or governmental charge that may be imposed with respect to any applicable
withholding or the issuance or delivery of the Warrant Units to any Person other
than the Holder, and no such issuance or delivery shall be made unless and until
the Person requesting such issuance has paid to the Partnership the amount of
any such tax, or has established to the satisfaction of the Partnership that
such tax has been paid.

 

(g)                                  Conditional Exercise.  Notwithstanding any
other provision hereof, if an exercise of any portion of this Warrant is to be
made in connection with (i) a sale of the Partnership (pursuant to a merger,
sale of units, or otherwise), (ii) a sale of Common Units pursuant to a
registered offering under the Securities Act or (iii) a Class D Change of
Control, such exercise may at the election of the Holder be conditioned upon the
consummation of such transaction, registered offering or Class D Change of
Control, in which case such exercise shall not be deemed to be effective until
immediately prior to the consummation of such transaction, registered offering
or Class D Change of Control.

 

(h)                                 Buy-In.  In addition to any other rights
available to the Holder, if the Partnership fails to deliver to the Holder a
certificate or certificates representing the Warrant Units in accordance with
Section 3(c) hereof within seven Business Days of receipt by the Partnership of
the Exercise Agreement and surrender of this Warrant (in accordance with
Section 3(a) hereof) and payment of the Aggregate Exercise Price, and if after
such date the Holder is required by its broker to purchase (in an open market
transaction or otherwise) Common Units to deliver in satisfaction of a sale by
the Holder of the Warrant Units which the Holder anticipated receiving

 

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upon such exercise (a “Buy-In”), then the Partnership shall, at the Holder’s
option, either (i) pay cash to the Holder in an amount equal to the Holder’s
total purchase price (including brokerage commissions, if any) for the Common
Units so purchased (the “Buy-In Price”), at which point the Partnership’s
obligation to deliver such certificate (and to issue such Common Units) shall
terminate, or (ii) promptly honor its obligation to deliver to the Holder a
certificate or certificates representing such Common Units and pay cash to the
Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of Common Units, times (B) the closing bid price on
the date of exercise.  The Holder shall provide the Partnership written notice
indicating the amounts payable to the Holder in respect of the Buy-In, together
with applicable confirmations and other evidence reasonably requested by the
Partnership.  Nothing herein shall limit a Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Partnership’s failure to timely deliver certificates representing
Common Units upon exercise of this Warrant as required pursuant to the terms
hereof.

 

4.                                      Adjustment to Number of Warrant Units. 
The number of Warrant Units issuable upon exercise of this Warrant shall be
subject to adjustment from time to time as provided in this Section 4 (in each
case, after taking into consideration any prior adjustments pursuant to this
Section 4).

 

(a)                                 Adjustment to Number of Warrant Units Upon
Dividend, Distribution, Subdivision or Combination of Common Units.  If the
Partnership shall, at any time or from time to time after the Original Issue
Date, (i) pay a dividend or make any other distribution upon the Common Units or
any other limited partner interests of the Partnership payable in Common Units
or Convertible Securities, or (ii) subdivide (by any split, recapitalization or
otherwise) its outstanding Common Units into a greater number of units, the
number of Warrant Units issuable upon exercise of this Warrant immediately prior
to any such dividend, distribution or subdivision shall be proportionately
increased.  If the Partnership at any time combines (by combination, reverse
split or otherwise) its outstanding Common Units into a smaller number of units,
the number of Warrant Units issuable upon exercise of this Warrant immediately
prior to such combination shall be proportionately decreased.  Any adjustment
under this Section 4(a) shall become effective at the close of business on the
date the dividend, distribution, subdivision or combination becomes effective.

 

(b)                                 Adjustment to Number of Warrant Units Upon a
Class D Change of Control.  In the event of any Class D Change of Control, each
Warrant shall, immediately after such Class D Change of Control, remain
outstanding and shall thereafter, in lieu of or in addition to (as the case may
be) the number of Warrant Units then exercisable under this Warrant, be
exercisable for the kind and number of other securities or assets of the
Partnership or of the successor Person resulting from such Class D Change of
Control, with appropriate adjustment made to the number of Warrant Units and
Exercise Price as required by reference to the applicable exchange ratio or
other similar mechanic that provides for the allocation of consideration, if
any, to the holders of Common Units in such Class D Change of Control; and, in
such case, appropriate adjustment (in form and substance satisfactory to the
Holder) shall be made with respect to the Holder’s rights under this Warrant to
ensure that the provisions of this Section 4(b) shall thereafter be applicable,
as nearly as possible, to this Warrant in relation to any securities or assets
thereafter acquirable upon exercise of this Warrant.  The provisions of this
Section 4(b) shall similarly apply to

 

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successive Class D Changes of Control.  The Partnership shall not effect any
such Class D Change of Control unless, prior to the consummation thereof, the
successor Person (if other than the Partnership) resulting from such Class D
Change of Control, shall assume, by written instrument substantially similar in
form and substance to this Warrant and satisfactory to the Holder, the
obligation to deliver to the Holder such securities or assets which, in
accordance with the foregoing provisions, such Holder shall be entitled to
receive upon exercise of this Warrant.  Notwithstanding anything to the contrary
contained herein, including the vesting provisions of Section 2, with respect to
any Class D Change of Control or other transaction contemplated by the
provisions of this Section 4(b), the Holder shall have the right to elect prior
to the consummation of such event or transaction, to give effect to the exercise
rights contained in Section 3 instead of giving effect to the provisions
contained in this Section 4(b) with respect to this Warrant.

 

(c)                                  Certain Events.  If any event of the type
contemplated by the provisions of this Section 4 but not expressly provided for
by such provisions (including, without limitation, the granting of unit
appreciation rights, phantom unit rights or other rights with equity features)
occurs, then the Board shall make an appropriate adjustment in the number of
Warrant Units issuable upon exercise of this Warrant so as to protect the rights
of the Holder in a manner consistent with the provisions of this Section 4;
provided, that no such adjustment pursuant to this Section 4(c) shall decrease
the number of Warrant Units issuable as otherwise determined pursuant to this
Section 4.

 

(d)                                 Certificate as to Adjustment.

 

(i)                                     As promptly as reasonably practicable
following any adjustment of the number of Warrant Units pursuant to the
provisions of this Section 4, but in any event not later than five Business Days
thereafter, the Partnership shall furnish to the Holder a certificate of an
executive officer setting forth in reasonable detail such adjustment and the
facts upon which it is based and certifying the calculation thereof.

 

(ii)                                  As promptly as reasonably practicable
following the receipt by the Partnership of a written request by the Holder, but
in any event not later than five Business Days thereafter, the Partnership shall
furnish to the Holder a certificate of an executive officer certifying the
number of Warrant Units or the amount, if any, of other, securities or assets
then issuable upon exercise of the Warrant.

 

(e)                                  Adjustment in Exercise Price. Upon any
adjustment to the number of Warrant Units issuable upon exercise of this Warrant
pursuant to this Section 4 (each, a “Warrant Unit Adjustment”), the Aggregate
Exercise Price upon the exercise of this Warrant thereafter shall be adjusted by
multiplying the Aggregate Exercise Price applicable prior to such Warrant Unit
Adjustment by a fraction: the numerator of which shall be the number of Warrants
Units issuable upon exercise of this Warrant immediately prior to such Warrant
Unit Adjustment and the denominator of which shall be the number of Warrant
Units issuable upon exercise of this Warrant immediately after such Warrant Unit
Adjustment.

 

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(f)                                   Notices.  In the event:

 

(i)                                     that the Partnership shall take a record
of the holders of its Common Units (or other securities at the time issuable
upon exercise of the Warrant) for the purpose of entitling or enabling them to
receive any dividend or any other distribution, to vote at a meeting (or by
written consent), to receive any right to subscribe for or purchase any class or
any other securities, or to receive any other security; or

 

(ii)                                  of the voluntary or involuntary
dissolution, liquidation or winding-up of the Partnership; or

 

(iii)                               of any Class D Change of Control;

 

then, and in each such case, the Partnership shall send or cause to be sent to
the Holder at least 10 days prior to the applicable record date or the
applicable expected effective date, as the case may be, for the event, a written
notice specifying, as the case may be, (A) the record date for such dividend,
distribution, meeting or consent or other right or action, and a description of
such dividend, distribution or other right or action to be taken at such meeting
or by written consent, or (B) the effective date on which such Class D Change of
Control or dissolution, liquidation or winding-up is proposed to take place, and
the date, if any is to be fixed, as of which the books of the Partnership shall
close or a record shall be taken with respect to which the holders of record of
Common Units (or securities at the time issuable upon exercise of the Warrant)
shall be entitled to exchange their Common Units (or such other securities) for
securities or other property deliverable upon such Class D Change of Control or
dissolution, liquidation or winding-up, and the amount per unit and character of
such exchange applicable to the Warrant and the Warrant Units.

 

5.                                      Purchase Rights.  In addition to any
adjustments pursuant to Section 4 above, if at any time the Partnership grants,
issues or sells any Common Units, Convertible Securities or rights to purchase
units, warrants, securities or other property exclusively pro rata to the record
holders of Common Units (the “Purchase Rights”), then the Holder shall be
entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which the Holder would have acquired if the Holder had
held the number of Warrant Units acquirable upon complete exercise of this
Warrant immediately before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of Common Units are to be determined for the
grant, issue or sale of such Purchase Rights.

 

6.                                      Transfer of Warrant.  Subject to the
transfer conditions referred to in the legend endorsed hereon, this Warrant and
all rights hereunder are transferable, in whole or in part, by the Holder
without charge to the Holder, upon surrender of this Warrant to the Partnership
at its then principal executive offices with a properly completed and duly
executed Assignment in the form attached hereto as Exhibit B, together with
funds sufficient to pay any transfer taxes described in Section 3(f)(v) in
connection with the making of such transfer.  Upon such compliance, surrender
and delivery and, if required, such payment, the Partnership shall execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees and
in the denominations specified in such instrument of assignment, and shall issue
to the assignor a new

 

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Warrant evidencing the portion of this Warrant, if any, not so assigned and this
Warrant shall promptly be cancelled.  Warrants may be transferred separately
from Preferred Units.

 

7.                                      Holder Not Deemed a Unitholder;
Limitations on Liability.  Prior to the issuance to the Holder of the Warrant
Units to which the Holder is then entitled to receive upon the due exercise of
this Warrant, the Holder shall not be entitled to vote or receive dividends or
any other distribution or be deemed the holder of limited partner interests of
the Partnership for any purpose, nor shall anything contained in this Warrant be
construed to confer upon the Holder, as such, any of the rights of a unitholder
of the Partnership or any right to vote, give or withhold consent to any
partnership action (whether any reorganization, issue of limited partner
interests, reclassification of limited partner interests, consolidation, merger,
conveyance or otherwise), receive notice of meetings, receive dividends,
distributions or subscription rights, or otherwise.  In addition, nothing
contained in this Warrant shall be construed as imposing any liabilities on the
Holder to purchase any securities (upon exercise of this Warrant or otherwise)
or as a unitholder of the Partnership, whether such liabilities are asserted by
the Partnership or by creditors of the Partnership.  Notwithstanding this
Section 7, (i) the Partnership shall provide the Holder with copies of the same
notices and other information given to the unitholders of the Partnership
generally, contemporaneously with the giving thereof to the unitholders and
(ii) the Partnership shall not amend or modify its Partnership Agreement in a
manner adverse to any rights or benefits applicable to the Warrant Units
thereunder.

 

8.                                      Replacement on Loss; Division and
Combination.

 

(a)                                 Replacement of Warrant on Loss.  Upon
receipt of evidence reasonably satisfactory to the Partnership of the loss,
theft, destruction or mutilation of this Warrant and upon delivery of an
indemnity reasonably satisfactory to it (it being understood that a written
indemnification agreement with an affidavit of loss of the Holder shall be a
sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant
for cancellation to the Partnership, the Partnership at its own expense shall
execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor
and exercisable for an equivalent number of Warrant Units as the Warrant so
lost, stolen, mutilated or destroyed; provided, that, in the case of mutilation,
no indemnity shall be required if this Warrant in identifiable form is
surrendered to the Partnership for cancellation.

 

(b)                                 Division and Combination of Warrant. 
Subject to compliance with the applicable provisions of this Warrant as to any
transfer or other assignment which may be involved in such division or
combination, this Warrant may be divided or, following any such division of this
Warrant, subsequently combined with other Warrants, upon the surrender of this
Warrant or Warrants to the Partnership at its then principal executive offices,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the respective Holders or their agents
or attorneys.  Subject to compliance with the applicable provisions of this
Warrant as to any transfer or assignment which may be involved in such division
or combination, the Partnership shall at its own expense execute and deliver a
new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered
in accordance with such notice.  Such new Warrant or Warrants shall be of like
tenor to the surrendered Warrant or Warrants and shall be exercisable in the
aggregate for an equivalent number of Warrant Units as the Warrant or Warrants
so surrendered in accordance with such notice.

 

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9.                                      No Impairment.  The Partnership shall
not, by amendment of its Certificate of Formation or Partnership Agreement, or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but shall at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the Holder in order
to protect the exercise rights of the Holder against dilution or other
impairment, consistent with the tenor and purpose of this Warrant.

 

10.                               Agreement to Comply with the Securities Act;
Legend.  The Holder, by acceptance of this Warrant, agrees to comply in all
respects with the provisions of this Section 10 and the restrictive legend
requirements set forth on the face of this Warrant and further agrees that such
Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant
Units to be issued upon exercise hereof except under circumstances that will not
result in a violation of the Securities Act.  All Warrant Units issued upon
exercise of this Warrant (unless registered under the Securities Act or the
conditions for the removal of the legend set forth in Section 8.06 of the
Partnership Agreement are otherwise satisfied) shall be stamped or imprinted
with a legend in substantially the following form:

 

“These securities have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”), or the securities laws of any state or other
jurisdiction. These securities may not be sold or offered for sale, pledged or
hypothecated except pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption from registration thereunder, in each
case in accordance with all applicable securities laws of the states or other
jurisdictions, and in the case of a transaction exempt from registration, such
securities may only be transferred if the transfer agent for such securities has
received documentation satisfactory to it that such transaction does not require
registration under the Securities Act.”

 

11.                               Warrant Register.  The Partnership (or the
General Partner on its behalf) shall keep and properly maintain at its principal
executive offices books for the registration of the Warrant and any transfers
thereof.  The Partnership may deem and treat the Person in whose name the
Warrant is registered on such register as the Holder thereof for all purposes,
and the Partnership shall not be affected by any notice to the contrary, except
any assignment, division, combination or other transfer of the Warrant effected
in accordance with the provisions of this Warrant.

 

12.                               Notices.  All notices, requests, consents,
claims, demands, waivers and other communications hereunder shall be in writing
and shall be deemed to have been given: (a) when delivered by hand (with written
confirmation of receipt); (b) when received by the addressee if sent by a
nationally recognized overnight courier (receipt requested); (c) on the date
sent by facsimile or e-mail of a portable document format (pdf) document (with
confirmation of transmission) if sent during normal business hours of the
recipient, and on the next Business Day if sent after normal business hours of
the recipient; or (d) on the third day after the date mailed, by certified or
registered mail, return receipt requested, postage prepaid.  Such communications

 

11

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must be sent to the respective parties at the addresses indicated below (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 12).

 

If to the
Partnership:                                                                                                                               
NGL Energy Partners LP
6120 South Yale Avenue
Suite 805
Tulsa, Oklahoma 74316
Attention: Kurston P. McMurray, General Counsel
Facsimile:  (918) 481-5896
Email:  Kurston.McMurray@nglep.com

 

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

 

Hunton Andrews Kurth LLP

600 Travis St., Suite 4200

Houston, Texas 77002

Attention: G. Michael O’Leary and Henry Havre

Facsimile: (713) 220-4285

Email: gmoleary@huntonak.com

Email: henryhavre@huntonak.com

 

If to the
Holder:                                                                                                                                                       
[·]

 

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

 

Kirkland & Ellis LLP

609 Main Street

Houston, TX 77002

Attention:  John Pitts and Julian Seiguer

Facsimile: (713) 835-3601

Email:            john.pitts@kirkland.com

Email: julian.seiguer@kirkland.com

 

13.                               Cumulative Remedies.  Except to the extent
expressly provided in Section 7 to the contrary, the rights and remedies
provided in this Warrant are cumulative and are not exclusive of, and are in
addition to and not in substitution for, any other rights or remedies available
at law, in equity or otherwise.

 

14.                               Equitable Relief.  Each of the Partnership and
the Holder acknowledges that a breach or threatened breach by such party of any
of its obligations under this Warrant would give rise to irreparable harm to the
other party hereto for which monetary damages would not be an adequate remedy
and hereby agrees that in the event of a breach or a threatened breach by such
party of any such obligations, the other party hereto shall, in addition to any
and all other rights and remedies that may be available to it in respect of such
breach, be entitled to equitable relief,

 

12

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including a restraining order, an injunction, specific performance and any other
relief that may be available from a court of competent jurisdiction.

 

15.                               Entire Agreement.  This Warrant, together with
the Purchase Agreement, constitutes the sole and entire agreement of the parties
to this Warrant with respect to the subject matter contained herein, and
supersedes all prior and contemporaneous understandings and agreements, both
written and oral, with respect to such subject matter.  In the event of any
inconsistency between the statements in the body of this Warrant and the
Purchase Agreement, the statements in the body of this Warrant shall control.

 

16.                               Successor and Assigns.  This Warrant and the
rights evidenced hereby shall be binding upon and shall inure to the benefit of
the parties hereto and the successors of the Partnership and the successors and
permitted assigns of the Holder.  Such successors and/or permitted assigns of
the Holder shall be deemed to be a Holder for all purposes hereunder.

 

17.                               No Third-Party Beneficiaries.  This Warrant is
for the sole benefit of the Partnership and the Holder and their respective
successors and, in the case of the Holder, permitted assigns and nothing herein,
express or implied, is intended to or shall confer upon any other Person any
legal or equitable right, benefit or remedy of any nature whatsoever, under or
by reason of this Warrant.

 

18.                               Headings.  The headings in this Warrant are
for reference only and shall not affect the interpretation of this Warrant.

 

19.                               Amendment and Modification; Waiver.  Except as
otherwise provided herein, this Warrant may only be amended, modified or
supplemented by an agreement in writing signed by each party hereto.  No waiver
by the Partnership or the Holder of any of the provisions hereof shall be
effective unless explicitly set forth in writing and signed by the party so
waiving.  No waiver by any party shall operate or be construed as a waiver in
respect of any failure, breach or default not expressly identified by such
written waiver, whether of a similar or different character, and whether
occurring before or after that waiver.  No failure to exercise, or delay in
exercising, any rights, remedy, power or privilege arising from this Warrant
shall operate or be construed as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.  The Partnership shall not amend, modify or supplement, or
waive any provision of, any other warrant issued concurrently with this Warrant
under the Purchase Agreement (the “Other Warrants”), unless the Partnership has
(i) provided 10 Business Days’ prior written notice to the Holder of any such
amendment, modification, supplement or waiver of any Other Warrants and (ii) if
elected by the Holder, amended, modified, supplemented or waived the
corresponding provision or provisions of this Warrant.

 

20.                               Severability.  If any term or provision of
this Warrant is invalid, illegal or unenforceable in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other term or
provision of this Warrant or invalidate or render unenforceable such term or
provision in any other jurisdiction.

 

13

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21.                               Governing Law.  This Warrant shall be governed
by and construed in accordance with the laws of the State of New York.

 

22.                               Submission to Jurisdiction.  The parties
hereby submit to the exclusive jurisdiction of any U.S. federal or state court
located in the Borough of Manhattan, the City and County of New York in any
legal suit, action or proceeding arising out of or based upon this Warrant or
the transactions contemplated hereby, and each party irrevocably submits to the
exclusive jurisdiction of such courts in any such suit, action or proceeding. 
Service of process, summons, notice or other document by certified or registered
mail to such party’s address for receipt of notices pursuant to Section 12 shall
be effective service of process for any suit, action or other proceeding brought
in any such court.  The parties irrevocably and unconditionally waive any
objection to the laying of venue of any suit, action or any proceeding in such
courts and irrevocably waive and agree not to plead or claim in any such court
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.

 

23.                               WAIVER OF JURY TRIAL.  Each party acknowledges
and agrees that any controversy which may arise under this Warrant is likely to
involve complicated and difficult issues and, therefore, each such party
irrevocably and unconditionally waives any right it may have to a trial by jury
in respect of any legal action arising out of or relating to this Warrant or the
transactions contemplated hereby.

 

24.                               Counterparts.  This Warrant may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall be deemed to be one and the same agreement.  A signed copy of
this Warrant delivered by facsimile, e-mail or other means of electronic
transmission shall be deemed to have the same legal effect as delivery of an
original signed copy of this Warrant.

 

25.                               No Strict Construction.  This Warrant shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting an instrument or causing any
instrument to be drafted.

 

(SIGNATURE PAGE FOLLOWS)

 

14

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IN WITNESS WHEREOF, the Partnership has duly executed this Warrant on the
Original Issue Date.

 

 

NGL ENERGY PARTNERS LP

 

 

 

By:

NGL Energy Holdings LLC,

 

 

its general partner

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

Accepted and agreed,

 

 

 

[HOLDER NAME]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

SIGNATURE PAGE
TO
WARRANT AGREEMENT

 

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EXHIBIT A

 

NGL ENERGY PARTNERS LP
EXERCISE AGREEMENT

 

To [Name]:

 

The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the Warrant to which this Exercise Agreement is attached (the
“Warrant”) for, and to purchase thereunder by the payment of the Aggregate
Exercise Price and surrender of the Warrant, Common Units (“Warrant Units”)
provided for therein, and requests that certificates for the Warrant Units be
issued as follows:

 

Name

 

 

 

 

 

 

 

Address

 

 

 

 

 

 

 

Federal Tax or Social Security No.

 

 

 

 

and delivered by

(certified mail to the above address), or

 

 

 

(electronically           (provide DWAC
Instructions:               )), or

 

 

 

(other                ) (specify):.

 

and, if the number of Warrant Units shall not be all the Warrant Units
purchasable upon exercise of this Warrant, that a new Warrant for the balance of
the Warrant Units purchasable upon exercise of this Warrant be registered in the
name of the undersigned Holder or the undersigned’s Assignee as below indicated
and delivered to the address stated below.

 

Dated:                                                   ,

 

Note:                                          The signature must correspond
with

 

A-1

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Signature:

 

 

 

 

 

 

the name of the Holder as written on the first page of this Warrant in every
particular, without alteration or enlargement or any change whatever, unless
this Warrant has been assigned.

 

Name (please print)

 

 

 

 

 

 

 

 

Address

 

 

 

 

 

 

 

 

Federal Identification or Social Security No.

 

 

 

 

 

 

 

 

Assignee:

 

 

 

 

 

 

 

A-2

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EXHIBIT B

 

NGL ENERGY PARTNERS LP
ASSIGNMENT

 

For value received                                    hereby sells, assigns and
transfers unto                                          the within Warrant(1),
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint attorney, to transfer said Warrant on the books of the
within-named Partnership, with full power of substitution in the premises.

 

Date:

 

 

 

 

 

Signature:

 

 

 

Note:  The above signature must correspond with the name as written upon the
face of this Warrant in every particular, without alteration or enlargement or
any change whatever.

 

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(1)  For partial assignment, indicate portion assigned.

 

B-1

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