Exhibit 10.3

 

COMMON UNIT

 

PURCHASE AGREEMENT

 

by and among

 

EMERGE ENERGY SERVICES LP

 

and

 

THE PURCHASERS PARTY HERETO

 

January 5, 2018

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I

DEFINITIONS

1

 

 

 

Section 1.01

Definitions

1

Section 1.02

Accounting Procedures and Interpretation

5

 

 

 

ARTICLE II

AGREEMENT TO SELL AND PURCHASE

5

 

 

 

Section 2.01

Sale and Purchase

5

Section 2.02

Deliveries of the Parties

5

 

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES AND COVENANTS RELATED TO THE PARTNERSHIP

7

 

 

 

Section 3.01

Organization and Good Standing

7

Section 3.02

Capitalization

7

Section 3.03

Partnership SEC Documents

8

Section 3.04

Financial Statements

8

Section 3.05

Independent Accountants

8

Section 3.06

No Material Adverse Effect

8

Section 3.07

No Registration Required

9

Section 3.08

No Default

9

Section 3.09

No Conflicts

9

Section 3.10

Authority

10

Section 3.11

Approvals

10

Section 3.12

Valid Issuance

10

Section 3.13

No Preemptive Rights; No Registration Rights

10

Section 3.14

MLP Status

11

Section 3.15

Investment Company Status

11

Section 3.16

Certain Fees

11

Section 3.17

Internal Controls

11

Section 3.18

Disclosure Controls and Procedures

11

Section 3.19

Litigation

12

Section 3.20

No Integration

12

Section 3.23

Form S-3 Eligibility

12

 

 

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE PURCHASERS

12

 

 

 

Section 4.01

Existence

12

Section 4.02

Authorization; Enforceability

12

Section 4.03

No Breach

12

Section 4.04

Certain Fees

13

Section 4.05

Unregistered Securities

13

 

i

--------------------------------------------------------------------------------

 

Section 4.06

No Prohibited Trading

14

 

 

 

ARTICLE V

INDEMNIFICATION, COSTS AND EXPENSES

14

 

 

 

Section 5.01

Indemnification by the Partnership

14

Section 5.02

Indemnification by the Purchasers

15

Section 5.03

Indemnification Procedure

16

Section 5.04

Tax Matters

17

 

 

 

ARTICLE VI

MISCELLANEOUS

17

 

 

 

Section 6.01

Expenses

17

Section 6.02

Interpretation

17

Section 6.03

Survival of Provisions

18

Section 6.04

No Waiver; Modifications in Writing

18

Section 6.05

Binding Effect

19

Section 6.06

Non-Disclosure

19

Section 6.07

Communications

19

Section 6.08

Removal of Legend

20

Section 6.09

Entire Agreement

21

Section 6.10

Assignment

21

Section 6.11

Governing Law; Submission to Jurisdiction

21

Section 6.12

Waiver of Jury Trial

22

Section 6.13

Exclusive Remedy

22

Section 6.14

No Recourse Against Others

22

Section 6.15

No Third-Party Beneficiaries

23

Section 6.16

Execution in Counterparts

23

Section 6.17

Recapitalization, Exchanges, Etc.

23

 

 

Schedule A — Purchasers; Purchased Units; Funding Obligation

 

 

ii

--------------------------------------------------------------------------------

 

COMMON UNIT
PURCHASE AGREEMENT

 

This COMMON UNIT PURCHASE AGREEMENT, dated as of January 5, 2018
(this “Agreement”), is entered into by and among EMERGE ENERGY SERVICES LP, a
Delaware limited partnership (the “Partnership”), and the purchasers set forth
on Schedule A hereto (the “Purchasers”).

 

WHEREAS, on the date hereof, the Partnership and certain Affiliates (as defined
below) of the Purchasers entered into that certain Second Lien Note Purchase
Agreement (the “Secured Notes Facility”);

 

WHEREAS, in connection with entry into the Secured Notes Facility, the
Partnership desires to issue and sell to the Purchasers, and the Purchasers
desire to purchase from the Partnership, the Purchased Units (as defined below),
in accordance with the provisions of this Agreement; and

 

WHEREAS, the Partnership has agreed to provide the Purchasers with certain
registration rights with respect to the Purchased Units.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.01                                        Definitions.  As used in
this Agreement, the following terms have the meanings indicated:

 

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by or is
under common control with, the Person in question. As used herein, the term
“control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise. For the avoidance of
doubt, for purposes of this Agreement, none of the Partnership Entities, on the
one hand, and any Purchaser, on the other hand, shall be deemed to be Affiliates
of each other.

 

“Agreement” has the meaning set forth in the introductory paragraph of this
Agreement.

 

“Business Day” means any day other than a Saturday, Sunday, any federal legal
holiday or day on which banking institutions in the State of New York or the
State of Texas are authorized or required by Law or other governmental action to
close.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Units” means common units representing limited partner interests in the
Partnership having the terms set forth in the Partnership Agreement.

 

--------------------------------------------------------------------------------

 

“Confidentiality Agreements” means the confidentiality agreements entered into
by the Partnership and each of the Purchasers or their Affiliates, as
applicable, as may be amended from time to time.

 

“Consent” has the meaning specified in Section 3.11.

 

“Contract” means any contract, agreement, indenture, note, bond, mortgage, deed
of trust, loan, instrument, lease, license, commitment or other arrangement,
understanding, undertaking, commitment or obligation, whether written or oral.

 

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

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and the rules and regulations of the Commission promulgated thereunder.

 

“Funding Obligation” means, with respect to a particular Purchaser, an amount
equal to the Unit Purchase Price multiplied by the number of Purchased Units to
be purchased by such Purchaser pursuant to Section 2.01.

 

“Fully Diluted Capitalization” means the number of issued and
outstanding Common Units as of the date hereof, assuming (without duplication):
(a) the conversion or exercise into Common Units of all of the Partnership’s
outstanding convertible or exercisable securities, including all
outstanding vested or unvested options or warrants to purchase Common Units
(including the Warrants); and (b) the issuance of all Common Units (whether
restricted, phantom, distribution equivalent rights, unit appreciation rights,
unit award, profits interest units, other unit-based awards or otherwise) that
have been awarded as of the date hereof under long-term incentive plans,
management incentive plans or similar plans of the Partnership (including the
LTIP).

 

“GAAP” means generally accepted accounting principles in the United States of
America as of the date hereof; provided, however, that for the financial
statements of the Partnership prepared as of a certain date, GAAP referenced
therein shall be GAAP as of the date of such financial statements.

 

“General Partner” means Emerge Energy Services GP LLC, a Delaware limited
liability company.

 

“Governmental Authority” means, with respect to a particular Person, any
country, state, county, city and political subdivision in which such Person or
such Person’s property is located or which exercises valid jurisdiction over any
such Person or such Person’s property, and any court, agency, department,
commission, board, bureau or instrumentality of any of them and any monetary
authority which exercises valid jurisdiction over any such Person or such
Person’s property. Unless otherwise specified, all references to Governmental
Authority herein with respect to the Partnership mean a Governmental Authority
having jurisdiction over the Partnership Entities or any of their respective
properties.

 

“Indemnified Party” has the meaning specified in Section 5.03(b).

 

2

--------------------------------------------------------------------------------

 

“Indemnifying Party” has the meaning specified in Section 5.03(b).

 

“Law” means any federal, state, local or foreign order, writ, injunction,
judgment, settlement, award, decree, statute, law (including common law),
rule or regulation.

 

“Lien” means any security interest, lien, deed of trust, mortgage, pledge,
charge, claim, restriction, easement, encumbrance, right of first refusal, right
of first offer, preemptive right or other similar interest or right.

 

“LTIP” means the 2013 Long-Term Incentive Plan adopted by the Partnership on
May 14, 2013.

 

“Material Adverse Effect” means any change, event or effect that, individually
or together with any other changes, would have a material adverse effect on
(a) the business, properties, financial condition or results of operations of
the Partnership Entities, taken as a whole or (b) the ability of any of the
Partnership Entities, as applicable, to perform its obligations under the
Transaction Documents; provided, however, that a Material Adverse Effect shall
not include any adverse effect on the foregoing to the extent such adverse
effect results from, arises out of, or relates to (i) a general deterioration in
the economy or changes in the general state of the markets or industries in
which any of the Partnership Entities operates (including, for the avoidance of
doubt, adverse changes (A) in commodity prices, (B) in capital spending by
energy sector participants or their customers, (C) in production profiles in oil
and gas producing basins in North America and (D) otherwise associated with the
effects of distress in the energy sector as of the date of this Agreement and
the resulting effect on the Partnership Entities, taken as a whole), except,
with respect to this clause (i), to the extent that such Partnership Entities,
taken as a whole, are adversely affected in a disproportionate manner as
compared to other industry participants, (ii) any deterioration in the condition
of the capital markets or any inability on the part of the Partnership Entities
to access the capital markets, (iii) the outbreak or escalation of hostilities
involving the United States, the declaration by the United States of a national
emergency, acts of war (whether or not declared) or the occurrence of any other
calamity or crisis, including acts of terrorism, hurricane, flood, tornado,
earthquake or other natural disaster, (iv) any change in accounting requirements
or principles imposed upon the Partnership Entities or their respective
businesses or any change in applicable Law, or the interpretation thereof,
(v) any change in the credit rating and/or outlook of any of the Partnership
Entities or any of their securities (except that the underlying causes of any
such changes may be considered in determining whether a Material Adverse Effect
has occurred), (vi) changes in the market price or trading volume of the Common
Units (except that the underlying causes of any such changes may be considered
in determining whether a Material Adverse Effect has occurred) or (vii) any
failure of the Partnership to meet any internal or external projections,
forecasts or estimates of revenue or earnings for any period (except that the
underlying causes of any such failures may be considered in determining whether
a Material Adverse Effect has occurred).

 

“NYSE” means the New York Stock Exchange.

 

“Organizational Documents” means, as applicable, an entity’s agreement or
certificate of limited partnership, limited liability company agreement,
certificate of formation, certificate or articles of incorporation, bylaws or
other similar organizational documents.

 

3

--------------------------------------------------------------------------------

 

“Partnership” has the meaning set forth in the introductory paragraph of this
Agreement.

 

“Partnership Agreement” means the First Amended and Restated Agreement of
Limited Partnership of the Partnership, dated May 14, 2013, as amended from time
to time in accordance with the terms thereof.

 

“Partnership Entities” means, collectively, the Partnership, the General
Partner, and each of the Partnership’s majority owned Subsidiaries.

 

“Partnership Indemnified Parties” has the meaning specified in Section 5.02.

 

“Partnership SEC Documents” means the Partnership’s forms, registration
statements, reports, schedules and statements filed by it under the Exchange Act
or the Securities Act, as applicable.

 

“Person” means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated
organization, government or any agency, instrumentality or political subdivision
thereof or any other form of entity.

 

“Purchased Units” has the meaning specified in Section 2.01(a).

 

“Purchaser Indemnified Party” has the meaning specified in Section 5.01.

 

“Purchasers” has the meaning specified in the introductory paragraph of this
Agreement.

 

“Registration Rights Agreement” means the Registration Rights Agreement dated
the date hereof by and among the Partnership and the Purchasers.

 

“Representatives” means, with respect to a specified Person, the investors,
officers, directors, partners, members, managers, employees, agents, advisors,
counsel, accountants, investment bankers and other representatives of such
Person.

 

“Secured Notes Facility” has the meaning set forth in the recitals to this
Agreement.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations of the Commission promulgated thereunder.

 

“Subsidiaries” and “Subsidiary” means, with respect to any Person, another
Person in which such first Person owns, directly or indirectly, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its board of directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of such Person).

 

“Third-Party Claim” has the meaning specified in Section 5.03(b).

 

“Total Funding Obligation” means the aggregate amount of the Funding Obligations
of all of the Purchasers.

 

4

--------------------------------------------------------------------------------

 

“Transaction Documents” means, collectively, this Agreement, the Registration
Rights Agreement and any and all other agreements or instruments executed and
delivered to the Purchasers by the Partnership or the General Partner hereunder
or thereunder, as applicable.

 

“Unit Purchase Price” means an amount equal to $7.39.

 

“Warrants” means Warrant No. 1 issued to Trinity Industries Leasing Company on
June 2, 2016, Warrant No. 2 issued to Trinity Industries Leasing Company on
June 2, 2016, Warrant No. 3 issued to TRIP Rail Master Funding LLC on June 2,
2016, Warrant No. 4 issued to Element Rail Leasing I LLC on June 2, 2016,
Warrant No. 5 issued to Element Rail Leasing II LLC on June 2, 2016, and Warrant
No. W-1 issued to SIG Strategic Investments, LLLP on August 15, 2016.

 

Section 1.02                                        Accounting Procedures and
Interpretation.  Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all financial statements of the Partnership
and certificates and reports as to financial matters required to be furnished to
the Purchasers hereunder shall be prepared, in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q
promulgated by the Commission) and in compliance as to form in all material
respects with applicable accounting requirements and with the published
rules and regulations of the Commission with respect thereto.

 

ARTICLE II
AGREEMENT TO SELL AND PURCHASE

 

Section 2.01                                        Sale and Purchase.

 

(a)                                 Subject to the terms hereof, each Purchaser
hereby agrees to purchase from the Partnership the number of Common Units set
forth opposite such Purchaser’s name on Schedule A (collectively, the “Purchased
Units”).

 

(b)                                 Subject to the terms hereof, the Partnership
hereby agrees to issue and sell to the Purchasers the Purchased Units.

 

(c)                                  The Purchasers shall purchase the Purchased
Units for a cash purchase price equal to the Unit Purchase Price per Common
Unit, and the Purchasers shall be bound by the terms and provisions of the
Partnership Agreement.

 

Section 2.02                                        Deliveries of the Parties.

 

(a)                                 Deliveries of the Partnership.  The
Partnership hereby delivers to the Purchasers:

 

(i)                                     an executed counterpart of the
Registration Rights Agreement;

 

(ii)                                  a fully executed “Supplemental Listing
Application” evidencing the approval of the Common Units for listing by the
NYSE;

 

5

--------------------------------------------------------------------------------

 

(iii)                               evidence of issuance of the Purchased Units
credited to book-entry accounts maintained by the transfer agent of the
Partnership, bearing a restrictive notation meeting the requirements of the
Partnership Agreement, free and clear of any Liens, other than transfer
restrictions under this Agreement, the Partnership Agreement, the Registration
Rights Agreement or the Delaware LP Act and applicable federal and state
securities Laws and those created by the Purchasers;

 

(iv)                              a certificate of the Chief Financial Officer
of the General Partner, on behalf of the Partnership, dated the date hereof,
certifying as to and attaching (A) the certificate of limited partnership of the
Partnership, (B) the Partnership Agreement, (C)  resolutions of the board of
directors of the General Partner authorizing the execution and delivery of the
Transaction Documents and the consummation of the transactions contemplated
thereby, including the issuance of the Purchased Units, and (D) the incumbency
of the officers authorized to execute the Transaction Documents on behalf of the
Partnership or the General Partner (on its own behalf or on behalf of the
Partnership), as applicable, setting forth the name and title and bearing the
signatures of such officers;

 

(v)                                 a certificate of the Secretary of State of
each applicable state to the effect that each of the Partnership Entities is in
good standing in its respective jurisdiction of formation;

 

(vi)                              a cross-receipt executed by the Partnership
and delivered to the Purchasers certifying as to the amounts that it has
received from the Purchasers; and

 

(vii)                           such other documents relating to the
transactions contemplated by this Agreement as the Purchasers or their
respective counsel may reasonably request.

 

(b)                                 Deliveries of Each Purchaser.  Each
Purchaser hereby delivers to the Partnership:

 

(i)                                     payment of such Purchaser’s respective
Funding Obligation payable by wire transfer of immediately available funds to an
account designated by the Partnership;

 

(ii)                                  a counterpart of the Registration Rights
Agreement, which shall have been duly executed by such Purchaser;

 

(iii)                               a duly executed Internal Revenue Service
Form W-9 from such Purchaser;

 

(iv)                              a cross-receipt executed by such Purchaser and
delivered to the Partnership certifying that it has received from the
Partnership the number of Purchased Units to be received by such Purchaser
pursuant to this Agreement; and

 

(v)                                 such other documents relating to the
transactions contemplated by this Agreement as the Partnership or its counsel
may reasonably request.

 

6

--------------------------------------------------------------------------------

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES AND
COVENANTS RELATED TO THE PARTNERSHIP

 

The Partnership represents and warrants to and covenants with the Purchasers as
follows:

 

Section 3.01                                        Organization and Good
Standing.

 

(a)                                 Each of the Partnership Entities has been
duly formed and is validly existing as a limited partnership or limited
liability company, as applicable, in good standing under the laws of its
jurisdiction of formation or organization with full power and authority to enter
into and perform its obligations under this Agreement, to own or lease, as the
case may be, and to operate its properties currently owned or leased or to be
owned or leased and conduct its business as currently conducted or as to be
conducted, in each case in all material respects as described in the Partnership
SEC Documents. Each of the Partnership Entities is duly registered or qualified
to transact business as a foreign limited partnership or limited liability
company, as applicable, in and is in good standing under the laws of each
jurisdiction which requires such registration or qualification, except where the
failure to be so registered or qualified would not (i) have a Material Adverse
Effect or (ii) subject the limited partners of the Partnership to any material
liability or disability. The General Partner has full power and authority to
serve as general partner of the Partnership in all material respects as
described in the Partnership SEC Documents.

 

Section 3.02                                        Capitalization.

 

(a)                                 The General Partner is the sole general
partner of the Partnership and owns a non-economic general partner interest in
the Partnership; such general partner interest has been duly authorized and
validly issued in accordance with the Partnership Agreement; and the General
Partner owns such general partner interest free and clear of any Liens.

 

(b)                                 Immediately prior to the sale of the
Purchased Units contemplated by this Agreement, the issued and outstanding
limited partner interests of the Partnership consist of 30,191,878 Common Units.

 

(c)                                  All outstanding Common Units and the
limited partner interests represented thereby have been duly authorized and
validly issued in accordance with applicable Law and the Partnership Agreement
and are fully paid (to the extent required under applicable Law and the
Partnership Agreement) and nonassessable (except as such nonassessability may be
affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP Act) and
conform in all material respects to the description of the Common Units in the
Partnership SEC Documents.

 

(d)                                 Except for Common Units exercisable under
the Warrants and Common Units issuable pursuant to the LTIP, no options,
warrants or other rights to purchase, agreements or other obligations to issue,
or rights to convert any obligations into or exchange any securities for,
securities or ownership interests in the Partnership are outstanding.

 

(e)                                  The Common Units are quoted on the NYSE,
and the Partnership has not received any notice of delisting.

 

7

--------------------------------------------------------------------------------

 

(f)                                   The Purchased Units have those rights,
preferences, privileges and restrictions governing the Common Units as reflected
in the Partnership Agreement and conform in all material respects to the
description of the Common Units in the Partnership SEC Documents.

 

(g)                                  Immediately prior to the sale of the
Purchased Units contemplated by this Agreement, the Fully Diluted Capitalization
consists of 31,757,523 Common Units.  The Purchased Units, when issued and sold
hereunder, represent 2.5% of the Fully Diluted Capitalization (including the
Purchased Units in the calculation thereof).

 

Section 3.03                                        Partnership SEC Documents. 
The Partnership SEC Documents when filed with the Commission conformed in all
material respects to the requirements of the Securities Act and the Exchange
Act, and none of such documents contained any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and any further documents so filed and incorporated by reference in
the Partnership SEC Documents, when such documents are filed with the
Commission, will conform in all material respects to the requirements of the
Exchange Act and will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

 

Section 3.04                                        Financial Statements.  The
financial statements (including the related notes thereto) of the Partnership
and its consolidated Subsidiaries included or incorporated by reference in the
Partnership SEC Documents comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as applicable, and
present fairly the financial position of the Partnership Entities as of the
dates indicated and the results of their operations and the changes in their
cash flows for the periods specified; and such financial statements have been
prepared in conformity with GAAP in the United States applied on a consistent
basis throughout the periods covered thereby, and any supporting schedules
included or incorporated by reference in the Partnership SEC Documents present
fairly the information required to be stated therein; and the other financial
information included or incorporated by reference in the Partnership SEC
Documents has been derived from the accounting records of the Partnership
Entities and presents fairly the information shown thereby.

 

Section 3.05                                        Independent Accountants. 
BDO USA, LLP, who have certified certain financial statements of the Partnership
and its Subsidiaries, is an independent registered public accounting firm with
respect to the Partnership and its Subsidiaries within the applicable rules and
regulations adopted by the Commission and the Public Partnership Accounting
Oversight Board (United States) and as required by the Securities Act.

 

Section 3.06                                        No Material Adverse Effect. 
Since the date of the latest audited financial statements included in the
Partnership SEC Documents, the Partnership Entities have not sustained any loss
or interference from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
investigation, order or decree, otherwise than as set forth or contemplated in
the Partnership SEC Documents and other than as would not reasonably be expected
to have a Material Adverse Effect. Subsequent to the respective dates as of
which information is given in the Partnership SEC Documents, in each case
excluding any amendments or supplements to the foregoing made

 

8

--------------------------------------------------------------------------------

 

after the execution of this Agreement, there has not been (a) any material
adverse change, or any development involving, individually or in the aggregate,
a prospective material adverse change, in or affecting the condition (financial
or otherwise), management, earnings, business or properties of the Partnership
Entities, whether or not arising from transactions in the ordinary course of
business, except as described in the Partnership SEC Documents (exclusive of any
amendment or supplement thereto) or (b) any dividend or distribution of any kind
declared, paid or made by any Partnership Entity, in each case other than as
described in the Partnership SEC Documents.

 

Section 3.07                                        No Registration Required. 
Assuming the accuracy of the representations and warranties of the applicable
Purchaser contained in Article IV, the issuance and sale of the Purchased Units
to such Purchaser pursuant to this Agreement is exempt from registration
requirements of the Securities Act, and neither the Partnership nor, to the
knowledge of the Partnership, any Person acting on its behalf, has taken nor
will take any action hereafter that would cause the loss of such exemption.

 

Section 3.08                                        No Default.  None of the
Partnership Entities is (a) in violation of any provision of its Organizational
Documents, (b) in violation of any statute, law, rule, regulation, judgment,
order, decree or injunction of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having jurisdiction
over such Partnership Entity or any of its properties, as applicable, or (c) in
breach, default (or an event that, with notice or lapse of time or both, would
constitute such a breach or default) or violation in the performance of the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or by which it or any of its properties is
bound or subject, which breach, default or violation in the case of clauses
(b) or (c) would reasonably be expected to have a Material Adverse Effect.

 

Section 3.09                                        No Conflicts.  None of
(a) the offering, issuance or sale by the Partnership of the Purchased Units,
(b) the execution, delivery and performance of this Agreement by the Partnership
and the General Partner or (c) the consummation of any other transactions
contemplated by this Agreement, (i) conflicts or will conflict with, or
constitutes or will constitute a violation of, the Organizational Documents of
any of the Partnership Entities, (ii) conflicts or will conflict with, or
constitutes or will constitute a breach or violation of, or a default under (or
an event that, with notice or lapse of time or both would constitute such a
default), the terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which any Partnership Entity is a party or bound or to
which any of its properties is subject, (iii) violates or will violate any
statute, law, rule, regulation, judgment, order, decree or injunction of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over any Partnership Entity or any of its
properties in a proceeding to which such Partnership Entity or its property is a
party or (iv) results or will result in the creation or imposition of any Lien
upon any property or assets of any of the Partnership Entities (other than Liens
created pursuant to the Secured Notes Facility), which conflicts, breaches,
violations, defaults or, in the case of clauses (ii), (iii) or (iv), would
reasonably be expected to have a Material Adverse Effect or materially impair
the ability of any of the Partnership Entities to consummate the transactions
contemplated by this Agreement.

 

9

--------------------------------------------------------------------------------

 

Section 3.10                                        Authority.  Each of the
Partnership and the General Partner has all requisite power and authority to
execute and deliver this Agreement and the other Transaction Documents and to
perform its respective obligations hereunder and thereunder. This Agreement and
the other Transaction Documents have been duly authorized, executed and
delivered by each of the Partnership and the General Partner, and the
consummation of the transactions contemplated under this Agreement and the other
Transaction Documents have been duly authorized by all necessary action by the
Partnership and the General Partner.  Assuming the due authorization, execution
and delivery by the other parties thereto, the Agreement and the other
Transaction Documents will constitute the legal, valid and binding obligations
of the Partnership, enforceable in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and
similar Laws affecting creditors’ rights generally or by general principles of
equity, including principles of commercial reasonableness, fair dealing, and
good faith.  No approval from the holders of outstanding Common Units is
required under the Partnership Agreement or the rules of the NYSE in connection
with the Partnership’s issuance and sale of the Purchased Units to the
Purchasers.

 

Section 3.11                                        Approvals.  No permit,
consent, approval, authorization, order, registration, filing or qualification
(“Consent”) of or with any court, governmental agency or body having
jurisdiction over any of the Partnership Entities or any of their properties or
assets is required in connection with (a) the offering, issuance or sale of the
Purchased Units as described in this Agreement, (b) the execution, delivery and
performance of this Agreement by the Partnership and the General Partner,
(c) the consummation of any other transactions contemplated by this Agreement
other than (i) registration of the re-sale of the Purchased Units under the
Securities Act under the Registration Rights Agreement, (ii) any necessary
qualification under the securities or blue sky laws of various jurisdictions
required for the re-sale of the Purchased Units under the Registration Rights
Agreement, (iii) Consents that have been obtained and (iv) Consents that, if not
obtained, would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or materially impair the ability of any of
the Partnership Entities to consummate the transactions contemplated by this
Agreement.

 

Section 3.12                                        Valid Issuance.  The offer
and sale of the Purchased Units and the limited partner interests represented
thereby have been duly authorized by the Partnership pursuant to the Partnership
Agreement and, when issued and delivered to the Purchasers against payment
therefor in accordance with the terms of this Agreement, will be validly issued,
fully paid (to the extent required by applicable Law and the Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by
Sections 17-303, 17-607 and 17-804 of the Delaware LP Act) and will be free of
any and all Liens and restrictions on transfer, other than restrictions on
transfer under the Partnership Agreement and under applicable state and federal
securities Laws.

 

Section 3.13                                        No Preemptive Rights; No
Registration Rights.  Except as contemplated by the Partnership Agreement, none
of the holders of outstanding Common Units are entitled to statutory, preemptive
or other similar contractual rights to subscribe for Common Units. Except as
disclosed in the Partnership SEC Documents or as contemplated by this Agreement,
the Partnership Agreement and the Registration Rights Agreement, there are no
contracts, agreements or understandings between the Partnership and any Person
granting such Person the right to require the Partnership to file a registration
statement under the Securities Act

 

10

--------------------------------------------------------------------------------

 

with respect to any securities of the Partnership or to require the Partnership
to include such securities in any securities registered or to be registered
pursuant to any registration statement filed by or required to be filed by the
Partnership under the Securities Act.

 

Section 3.14                                        MLP Status.  The Partnership
is properly treated as a partnership for United States federal income Tax
purposes and more than 90% of the Partnership’s current gross income is
qualifying income under Section 7704(d) of the Internal Revenue Code of 1986, as
amended.

 

Section 3.15                                        Investment Company Status. 
Neither the Partnership nor the General Partner is now, nor immediately
following the sale of the Purchased Units hereunder, will be an “investment
company” or a company “controlled by” an “investment company” within the meaning
of the Investment Company Act of 1940, as amended.

 

Section 3.16                                        Certain Fees.  Neither the
Partnership nor any of its Subsidiaries is a party to any contract, agreement or
understanding with any person (other than those certain engagement letters, each
dated July 10, 2017, by and between the Partnership, Houlihan Lokey
Capital, Inc. and Piper Jaffray & Co.) that would give rise to a valid claim
against any of them or any Purchaser for a brokerage commission, finder’s fee or
like payment in connection with the offering and sale of the Purchased Units. 
The payment of any brokerage commission, finder’s fee or like payment to
Houlihan Lokey Capital, Inc. and Piper Jaffray & Co. in connection with the
offering and sale of the Purchased Units shall be the sole responsibility of the
Partnership.

 

Section 3.17                                        Internal Controls.  The
Partnership Entities maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (a) transactions are executed in
accordance with management’s general or specific authorizations;
(b) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability;
(c) access to assets is permitted only in accordance with management’s general
or specific authorization; (d) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences; and (e) interactive data in eXtensible
Business Reporting Language included or incorporated by reference in the
Partnership SEC Documents fairly presents the information called for in all
material respects and has been prepared in accordance with the Commission’s
rules and guidelines applicable thereto. The Partnership Entities’ internal
controls over financial reporting are effective and, except as disclosed in the
Partnership SEC Documents, none of the Partnership Entities are aware of any
material weaknesses in the Partnership Entities’ internal controls over
financial reporting.

 

Section 3.18                                        Disclosure Controls and
Procedures.  The Partnership has established and maintains “disclosure controls
and procedures” (to the extent required by and as such term is defined in
Rule 13a-15(e) under the Exchange Act); and (a) such disclosure controls and
procedures are designed to ensure that the information required to be disclosed
by the Partnership in the reports it files or will file or submit under the
Exchange Act, as applicable, is accumulated and communicated to management of
the General Partner, including its principal executive officer and principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosure to be made and (b) such disclosure controls and procedures are

 

11

--------------------------------------------------------------------------------

 

effective in all material respects to perform the functions for which they were
established to the extent required by Rule 13a-15 of the Exchange Act.

 

Section 3.19                                        Litigation.  There are no
legal or governmental proceedings pending to which any Partnership Entity is a
party or to which any of their properties is subject that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect or
which challenges the validity of any of the Transaction Documents or the right
of the Partnership and the General Partner to enter into the Transaction
Documents or to consummate the transactions contemplated hereby and thereby and,
to the knowledge of the Partnership, no such proceedings are threatened by
Governmental Authorities or others.

 

Section 3.20                                        No Integration.  Neither the
Partnership nor any of its Affiliates has, directly or indirectly through any
agent, made any offers or sales of any security of the Partnership or solicited
any offers to buy any security that is or will be integrated with the sale of
the Purchased Units in a manner that would require such registration under the
Securities Act.

 

Section 3.21                                        Form S-3 Eligibility.  The
Partnership is eligible to register the Purchased Units for resale by the
Purchasers under Form S-3 promulgated under the Securities Act.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES AND
COVENANTS OF THE PURCHASERS

 

Each of the Purchasers, severally but not jointly, represents and warrants and
covenants to the Partnership as follows:

 

Section 4.01                                        Existence.  Such Purchaser
has been duly formed and is validly existing as a corporation, limited
partnership or limited liability company, as applicable, in good standing under
the laws of its jurisdiction of formation or organization.

 

Section 4.02                                        Authorization;
Enforceability.  Such Purchaser has all requisite power and authority to execute
and deliver this Agreement and perform its respective obligations hereunder.
This Agreement has been duly authorized, executed and delivered by each of the
Purchasers.

 

Section 4.03                                        No Breach.  None of (a) the
execution, delivery and performance of this Agreement by such Purchaser or
(b) the consummation of any other transactions contemplated by this Agreement
(i) conflicts or will conflict with, or constitutes or will constitute a
violation of, the Organizational Documents of such Purchaser, (ii) conflicts or
will conflict with, or constitutes or will constitute a breach or violation of,
or a default under (or an event that, with notice or lapse of time or both would
constitute such a default), the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which such Purchaser is a party
or bound or to which any of its properties is subject, (iii) violates or will
violate any statute, law, rule, regulation, judgment, order, decree or
injunction of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over such Purchaser or
any of its properties in a proceeding to which such Purchaser or its property is
a party or (iv)

 

12

--------------------------------------------------------------------------------

 

results or will result in the creation or imposition of any Lien upon any
property or assets of such Purchaser, which conflicts, breaches, violations,
defaults or, in the case of clauses (ii), (iii) or (iv), would reasonably be
expected to materially impair the ability of such Purchaser to consummate the
transactions contemplated by this Agreement.

 

Section 4.04                                        Certain Fees.  Neither such
Purchaser nor any of its Subsidiaries is a party to any contract, agreement or
understanding with any person that would give rise to a valid claim against any
of them for a brokerage commission, finder’s fee or like payment in connection
with the offering and sale of the Purchased Units, except for fees or
commissions for which no Partnership Entity shall be responsible.

 

Section 4.05                                        Unregistered Securities.

 

(a)                                 Accredited Investor Status; Sophisticated
Purchaser.  Such Purchaser is an “accredited investor” within the meaning of
Rule 501 of Regulation D under the Securities Act and is able to bear the risk
of its investment in the Purchased Units. Such Purchaser has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the purchase of and investment in the Purchased Units.

 

(b)                                 Institutional Account.  If such Purchaser is
not an “accredited investor” within the meaning of Rule 501 of Regulation D
under the Securities Act, then such Purchaser is an Institutional Account as
defined in Financial Industry Regulation Authority, Inc. Rule 4512(c) and a
sophisticated institutional investor, experienced in investing in private equity
transactions and capable of evaluating investment risks independently, both in
general and with regard to all transactions and investment strategies involving
a security or securities, including the transactions contemplated hereby.

 

(c)                                  Information.  Such Purchaser and its
Representatives have been furnished with all materials relating to the business,
finances and operations of the Partnership that have been requested and
materials relating to the offer and sale of, and investment in, the Purchased
Units that have been requested by such Purchaser. Such Purchaser and its
Representatives have been afforded the opportunity to ask questions of the
Partnership and its Representatives. Neither such inquiries nor any other due
diligence investigations conducted at any time by such Purchasers and its
Representatives shall modify, amend or affect such Purchaser’s right (a) to rely
on the Partnership’s representations and warranties contained in Article III
above or (b) to indemnification or any other remedy based on, or with respect to
the accuracy or inaccuracy of, or compliance with, the representations,
warranties, covenants and agreements in any Transaction Document. Such Purchaser
understands that its purchase of the Purchased Units involves a high degree of
risk. Such Purchaser has sought such accounting, legal and Tax advice as it has
considered necessary to make an informed investment decision with respect to its
acquisition of the Purchased Units.

 

(d)                                 Residency.  Such Purchaser shall cooperate
with the Partnership to provide any information reasonably necessary for any
applicable securities filings.

 

(e)                                  Legends.  Such Purchaser understands that,
until such time as the Purchased Units have been sold pursuant to an effective
registration statement under the Securities Act, or the

 

13

--------------------------------------------------------------------------------

 

Purchased Units are eligible for resale pursuant to Rule 144 promulgated under
the Securities Act without any restriction as to the number of securities as of
a particular date that can then be immediately sold, the Purchased Units will
bear a restrictive legend as provided in the Partnership Agreement.

 

(f)                                   Purchase Representation.  Such Purchaser
is purchasing the Purchased Units for its own account and not with a view to
distribution in violation of any securities laws. Such Purchaser has been
advised and understands that the Purchased Units have not been registered under
the Securities Act or under the “blue sky” laws of any jurisdiction and may be
resold only if registered pursuant to the provisions of the Securities Act (or
if eligible, pursuant to the provisions of Rule 144 promulgated under the
Securities Act or pursuant to another available exemption from the registration
requirements of the Securities Act). Such Purchaser has been advised and
understands that the Partnership, in issuing the Purchased Units, is relying
upon, among other things, the representations and warranties of such Purchaser
contained in this Article IV in concluding that such issuance is a “private
offering” and is exempt from the registration provisions of the Securities Act.

 

(g)                                  Rule 144.  Such Purchaser understands that
the Purchased Units are characterized as “restricted securities” under the
federal securities Laws and that the Purchased Units must be held indefinitely
unless and until the Purchased Units are registered under the Securities Act or
an exemption from registration is available. Such Purchaser has been advised of
and is knowledgeable with respect to the provisions of Rule 144 promulgated
under the Securities Act.

 

(h)                                 Reliance by the Partnership.  Such Purchaser
understands that the Purchased Units are being offered and sold in reliance on a
transactional exemption from the registration requirements of federal and state
securities Laws and that the Partnership is relying upon the truth and accuracy
of the representations, warranties, agreements, acknowledgments and
understandings of such Purchaser set forth herein in order to determine the
applicability of such exemptions and the suitability of such Purchaser to
acquire the Purchased Units.

 

Section 4.06                                        No Prohibited Trading.  Such
Purchaser has not (a) offered, sold, contracted to sell, sold any option or
contract to purchase, purchased any option or contract to sell, granted any
option, right or warrant to purchase, lent, or otherwise transferred or disposed
of, directly or indirectly, any of the Purchased Units or (b) directly or
indirectly engaged in any short sales or other derivative or hedging
transactions with respect to Purchased Units or any Common Units, including by
means of any swap or other transaction or arrangement that transfers or that is
designed to, or that might reasonably be expected to, result in the transfer to
another, in whole or in part, of any of the economic consequences of ownership
of any Purchased Units or Common Units, regardless of whether any transaction
described in this Section 4.06 is to be settled by delivery of Common Units or
other securities, in cash or otherwise.

 

ARTICLE V
INDEMNIFICATION, COSTS AND EXPENSES

 

Section 5.01                                        Indemnification by the
Partnership.  The Partnership agrees to indemnify each Purchaser and its
Representatives (collectively, “Purchaser Indemnified Parties”) from costs,
losses, liabilities, damages or expenses of any kind or nature whatsoever,

 

14

--------------------------------------------------------------------------------

 

and hold each of them harmless against any and all actions, suits, proceedings
(including any investigations, litigation or inquiries), demands and causes of
action, and, in connection therewith, promptly upon demand, pay or reimburse
each of them for, any and all costs, losses, damages, liabilities or expenses of
any kind or nature whatsoever (including, without limitation, legal fees and
other expenses reasonably incurred in connection with any suit, action or
proceeding or any claim asserted), joint or several, that the Purchaser
Indemnified Party may incur, whether or not involving a Third-Party Claim,
insofar as such loss, claim, damage or liability arises out of, or is based
upon, (a) the failure of any of the representations or warranties made by the
Partnership contained herein to be true and correct in all material respects
(other than those representations and warranties contained in Section 3.01,
Section 3.02, Section 3.07, Section 3.10 Section 3.12 or Section 3.13 or other
representations and warranties that are qualified by materiality or Material
Adverse Effect, which, in each case, shall be true and correct in all
respects) when made as of the date hereof or (b) the breach of any covenants of
the Partnership contained herein, provided that, in the case of the immediately
preceding clause (a), such claim for indemnification is made prior to the
expiration of the survival period of such representation or warranty; provided
further that (x) for purposes of determining when an indemnification claim has
been made, the date upon which a Purchaser Indemnified Party shall have given
notice (stating in reasonable detail the basis of the claim for
indemnification) to the Partnership shall constitute the date upon which such
claim has been made and (y) the aggregate liability of the Partnership (i) to
each Purchaser pursuant to this Section 5.01 shall not be greater in amount than
such Purchaser’s respective Funding Obligation and (ii) to all Purchasers
pursuant to this Section 5.01 shall not exceed the Total Funding Obligation. To
the fullest extent permitted by Law, no Purchaser Indemnified Party shall be
entitled to recover indirect, exemplary, speculative or punitive damages under
this Section 5.01; provided, however, that such limitation shall not prevent any
Purchaser Indemnified Party from recovering under this Section 5.01 for any such
damages to the extent that such damages are payable to a third party in
connection with any Third-Party Claims.

 

Section 5.02                                        Indemnification by the
Purchasers.  Each Purchaser agrees, severally and not jointly, to indemnify the
Partnership, the General Partner and their respective Representatives
(collectively, “Partnership Indemnified Parties”) from costs, losses,
liabilities, damages, or expenses of any kind or nature whatsoever, and hold
each of them harmless against, any and all actions, suits, proceedings
(including any investigations, litigation or inquiries), demands, and causes of
action, and, in connection therewith, promptly upon demand, pay or reimburse
each of them for, any and all costs, losses, damages, liabilities or expenses of
any kind or nature whatsoever (including, without limitation, legal fees and
other expenses reasonably incurred in connection with any suit, action or
proceeding or any claim asserted), joint or several, that the Partnership
Indemnified Party may incur, whether or not involving a Third-Party Claim,
insofar as such loss, claim, damage or liability arises out of, or is based
upon, (a) the failure of any of the representations or warranties made by such
Purchaser contained herein to be true and correct in all material respects
(other than those representations and warranties contained in Section 4.01,
Section 4.02, Section 4.04, Section 4.05 or other representations and warranties
that are qualified by materiality or Material Adverse Effect or words of similar
import, with respect to which such representation or warranty, or applicable
portions thereof, which, in each case, shall be true and correct in all
respects) when made as of the date hereof and (b) the breach of any of the
covenants of such Purchaser contained herein, provided that, in the case of the
immediately preceding clause (a), such claim for indemnification relating to a
breach of any

 

15

--------------------------------------------------------------------------------

 

representation or warranty is made prior to the expiration of the survival
period of such representation or warranty; provided further that (x) for
purposes of determining when an indemnification claim has been made, the date
upon which a Partnership Indemnified Party shall have given notice (stating in
reasonable detail the basis of the claim for indemnification) to such Purchaser
shall constitute the date upon which such claim has been made and (y) the
liability of each such Purchaser shall not be greater in amount than the sum of
such Purchaser’s respective Funding Obligation plus any distributions paid to
such Purchaser with respect to the Purchased Units. To the fullest extent
permitted by Law, no Partnership Indemnified Party shall be entitled to recover
indirect, exemplary, speculative or punitive damages under this Section 5.02;
provided, however, that such limitation shall not prevent any Partnership
Indemnified Party from recovering under this Section 5.02 for any such damages
to the extent that such damages are payable to a third party in connection with
any Third-Party Claims.

 

Section 5.03                                        Indemnification Procedure.

 

(a)                                 A claim for indemnification for any matter
not involving a Third-Party Claim may be asserted by notice to the party from
whom indemnification is sought; provided, however, that failure to so notify the
indemnifying party shall not preclude the indemnified party from any
indemnification which it may claim in accordance with this Article V, except as
otherwise provided in Section 5.01 and Section 5.02.

 

(b)                                 Promptly after any Partnership Indemnified
Party or Purchaser Indemnified Party (hereinafter, the “Indemnified Party”) has
received notice of any indemnifiable claim hereunder, or the commencement of any
action, suit or proceeding by a third person, which the Indemnified Party
believes in good faith is an indemnifiable claim under this Agreement (each a
“Third-Party Claim”), the Indemnified Party shall give the indemnitor hereunder
(the “Indemnifying Party”) written notice of such Third-Party Claim, but failure
to so notify the Indemnifying Party will not relieve the Indemnifying Party from
any liability it may have to such Indemnified Party hereunder except to the
extent that the Indemnifying Party is materially prejudiced by such failure.
Such notice shall state the nature and the basis of such Third-Party Claim to
the extent then known. The Indemnifying Party shall have the right to defend and
settle, at its own expense and by its own counsel, who shall be reasonably
acceptable to the Indemnified Party, any such matter as long as the Indemnifying
Party pursues the same diligently and in good faith. If the Indemnifying Party
undertakes to defend or settle, it shall promptly, and in no event later than 10
Business Days, notify the Indemnified Party of its intention to do so, and the
Indemnified Party shall cooperate with the Indemnifying Party and its counsel in
all commercially reasonable respects in the defense thereof and the settlement
thereof. Such cooperation shall include, but shall not be limited to, furnishing
the Indemnifying Party with any books, records and other information reasonably
requested by the Indemnifying Party and in the Indemnified Party’s possession or
control. Such cooperation of the Indemnified Party shall be at the cost of the
Indemnifying Party. After the Indemnifying Party has notified the Indemnified
Party of its intention to undertake to defend or settle any such asserted
liability, and for so long as the Indemnifying Party diligently pursues such
defense, the Indemnifying Party shall not be liable for any additional legal
expenses incurred by the Indemnified Party in connection with any defense or
settlement of such asserted liability; provided, however, that the Indemnified
Party shall be entitled (i) at its expense, to participate in the defense of
such asserted liability and the negotiations of the settlement thereof and
(ii) if (A) the Indemnifying Party has, within 10

 

16

--------------------------------------------------------------------------------

 

Business Days of when the Indemnified Party provides written notice of a
Third-Party Claim, failed (1) to assume the defense or employ counsel reasonably
acceptable to the Indemnified Party or (2) to notify the Indemnified Party of
such assumption or (B) if the defendants in any such action include both the
Indemnified Party and the Indemnifying Party and counsel to the Indemnified
Party shall have concluded that there may be reasonable defenses available to
the Indemnified Party that are different from or in addition to those available
to the Indemnifying Party or if the interests of the Indemnified Party
reasonably may be deemed to conflict with the interests of the Indemnifying
Party, then the Indemnified Party shall have the right to select a separate
counsel and to assume such legal defense and otherwise to participate in the
defense of such action, with the expenses and fees of such separate counsel and
other expenses related to such participation to be reimbursed by the
Indemnifying Party as incurred. Notwithstanding any other provision of this
Agreement, the Indemnifying Party shall not settle any indemnified claim without
the consent of the Indemnified Party, unless the settlement thereof imposes no
liability or obligation on, and includes a complete release from liability of,
and does not include any admission of wrongdoing or malfeasance by, the
Indemnified Party.

 

Section 5.04             Tax Matters.  All indemnification payments under this
Article V shall be adjustments to the applicable Purchaser’s Funding Obligation
except as otherwise required by applicable Law.

 

ARTICLE VI
MISCELLANEOUS

 

Section 6.01             Expenses.  Except as set forth in that certain Letter
Agreement between the Partnership and HPS Investment Partners, LLC dated
October 18, 2017 as amended by the Letter Agreement dated on or about
November 20, 2017, all costs and expenses, including fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with the
Transaction Documents and the transactions contemplated thereby shall be paid by
the party incurring such costs and expenses. Notwithstanding anything to the
contrary in this Section 6.01, all reasonable and documented due diligence and
legal expenses incurred by the Purchasers in connection with the Transaction
Documents and the transactions contemplated thereby shall be paid by the
Partnership.

 

Section 6.02             Interpretation.  Article, Section and Schedule
references in this Agreement are references to the corresponding Article,
Section or Schedule to this Agreement, unless otherwise specified. The Schedule
to this Agreement is hereby incorporated and made a part hereof as if set forth
in full herein and is an integral part of this Agreement. All references to
instruments, documents, Contracts and agreements are references to such
instruments, documents, Contracts and agreements as the same may be amended,
supplemented and otherwise modified from time to time, unless otherwise
specified. The word “including” shall mean “including but not limited to” and
shall not be construed to limit any general statement that it follows to the
specific or similar items or matters immediately following it. Whenever the
Partnership has an obligation under the Transaction Documents, the expense of
complying with that obligation shall be an expense of the Partnership unless
otherwise specified. Any reference in this Agreement to “$” shall mean U.S.
dollars. Whenever any determination, consent or approval is to be made or given
by a Purchaser, such action shall be in such Purchaser’s sole discretion, unless
otherwise specified in this Agreement. If any provision in the Transaction

 

17

--------------------------------------------------------------------------------

 

Documents is held to be illegal, invalid, not binding or unenforceable, (a) such
provision shall be fully severable and the Transaction Documents shall be
construed and enforced as if such illegal, invalid, not binding or unenforceable
provision had never comprised a part of the Transaction Documents, and the
remaining provisions shall remain in full force and effect, and (b) the parties
hereto shall negotiate in good faith to modify the Transaction Documents so as
to effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are
consummated as originally contemplated to the greatest extent possible. When
calculating the period of time before which, within which or following which any
act is to be done or step taken pursuant to the Transaction Documents, the date
that is the reference date in calculating such period shall be excluded. If the
last day of such period is not a Business Day, the period in question shall end
on the next succeeding Business Day. Any words imparting the singular number
only shall include the plural and vice versa. The words such as “herein,”
“hereinafter,” “hereof” and “hereunder” refer to this Agreement as a whole and
not merely to a subdivision in which such words appear unless the context
otherwise requires. The provision of a Table of Contents, the division of this
Agreement into Articles, Sections and other subdivisions and the insertion of
headings are for convenience of reference only and shall not affect or be
utilized in construing or interpreting this Agreement.

 

Section 6.03             Survival of Provisions.  To the fullest extent
permitted by Law, the representations and warranties set forth in Section 3.01,
Section 3.02, Section 3.07, Section 3.10, Section 3.12, Section 3.13,
Section 4.01, Section 4.02, Section 4.04, and Section 4.05 hereunder shall
survive the execution and delivery of this Agreement indefinitely and the other
representations and warranties set forth herein shall survive for a period of 12
months following the date hereof, regardless of any investigation made by or on
behalf of the Partnership or the Purchasers. The covenants made in this
Agreement or in any other Transaction Document shall survive the purchase and
sale of the Purchased Units and remain operative and in full force and effect in
accordance with their respective terms until fully performed. Regardless of any
purported general termination of this Agreement, the provisions of Article V and
all indemnification rights and obligations of the Partnership and the Purchasers
thereunder, and this Article VI shall remain operative and in full force and
effect as between the Partnership and each Purchaser, unless the Partnership and
the applicable Purchaser execute a writing that expressly (with specific
references to the applicable Section or subsection of this Agreement) terminates
such rights and obligations as between the Partnership and such Purchaser.

 

Section 6.04             No Waiver; Modifications in Writing.

 

(a)           Delay.  No failure or delay on the part of any party in exercising
any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy. The remedies provided for herein are cumulative and are not exclusive
of any remedies that may be available to a party at law or in equity or
otherwise.

 

(b)           Specific Waiver.  Except as otherwise provided herein, no
amendment, waiver, consent, modification or termination of any provision of this
Agreement shall be effective unless signed by each of the parties thereto
affected by such amendment, waiver, consent, modification or termination. Any
waiver, amendment, supplement or modification of or to any provision of this
Agreement shall be effective only in the specific instance and for the specific
purpose for

 

18

--------------------------------------------------------------------------------

 

which made or given. Except where notice is specifically required by this
Agreement, no notice to or demand on the Partnership in any case shall entitle
the Partnership to any other or further notice or demand in similar or other
circumstances. Any investigation by or on behalf of any party shall not be
deemed to constitute a waiver by the party taking such action of compliance with
any representation, warranty, covenant or agreement contained herein.

 

Section 6.05             Binding Effect.  This Agreement shall be binding upon
the Partnership, each of the Purchasers and their respective successors and
permitted assigns. Except as expressly provided in this Agreement, this
Agreement shall not be construed so as to confer any right or benefit upon any
Person other than the parties to this Agreement and their respective successors
and permitted assigns.

 

Section 6.06             Non-Disclosure.

 

(a)           Any Purchaser may share Evaluation Material (as defined in each of
the Confidentiality Agreements) with any of the limited partners of the private
equity fund vehicles that indirectly own such Purchaser at any time, provided
that any such limited partner will be deemed to be a “Representative” of such
Purchaser under its Confidentiality Agreement. Except as set forth in the
preceding sentence, this Agreement shall not impact the terms and provisions of
any of the Confidentiality Agreements. The Confidentiality Agreements shall
continue to be in full force and effect, pursuant to the terms and conditions
thereof, but for the avoidance of doubt, Evaluation Material (as defined in each
of the Confidentiality Agreements) refers only to information furnished by or on
behalf of the Partnership prior to the date hereof.

 

(b)           Other than filings made by the Partnership with the Commission or
as required by Law, the Partnership and any of its Representatives may disclose
the identity of, or any other information concerning, the Purchasers or any of
their respective Affiliates only after obtaining the prior written consent of
the Purchasers; provided, however, that nothing in this Section 6.06 shall delay
any required filing or other disclosure with the NYSE or any Governmental
Authority or otherwise hinder the Partnership Entities’ or their
Representatives’ ability to timely comply with all Laws or rules and regulations
of the NYSE or other Governmental Authority.

 

(c)           Notwithstanding anything to the contrary in this Section 6.06, the
Partnership and the General Partner agree that each Purchaser may (i) publicize
its ownership in the Partnership, as well as the identity of the Partnership,
the size of the investment and its pricing terms with respect to Purchased Units
on its internet site or in marketing materials, press releases, published
“tombstone” announcements or any other print or electronic medium and
(ii) display the Partnership’s corporate logo in conjunction with any such
reference.

 

Section 6.07             Communications.  All notices and demands provided for
hereunder shall be in writing and shall be given by registered or certified
mail, return receipt requested, telecopy, electronic mail, air courier
guaranteeing overnight delivery or personal delivery to the following addresses:

 

(a)           if to the Purchasers, to the addresses set forth on Schedule A.

 

19

--------------------------------------------------------------------------------

 

(b)           if to the Partnership, to:

 

Emerge Energy Services LP

6000 Western Place, Suite 465

Fort Worth, Texas 76107

Attention: Deborah Deibert

Facsimile: (817) 488-7739

Email: DDeibert@emergelp.com

 

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

 

Latham & Watkins LLP

811 Main Street, Suite 3700

Houston, Texas 77002

Attention: Ryan J. Maierson

 

or to such other address as the Partnership or the Purchasers may designate in
writing.  All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; upon actual
receipt if sent by certified or registered mail, return receipt requested, or
regular mail, if mailed; upon actual receipt of the facsimile, if sent via
facsimile; when sent, if sent by electronic mail prior to 5:00 p.m. Houston,
Texas time on a Business Day, or on the next succeeding Business Day, if not;
and upon actual receipt when delivered to an air courier guaranteeing overnight
delivery.

 

Section 6.08             Removal of Legend.  In connection with a sale of
Purchased Units by a Purchaser in reliance on Rule 144 promulgated under the
Securities Act, the applicable Purchaser or its broker shall deliver to the
Partnership a broker representation letter providing to the Partnership any
information the Partnership deems necessary to determine that the sale of such
Purchased Units is made in compliance with Rule 144 promulgated under the
Securities Act, including, as may be appropriate, a certification that the
Purchaser is not an affiliate (as defined in Rule 144 promulgated under the
Securities Act) of the Partnership and a certification as to the length of time
the such units have been held. Upon receipt of such representation letter, the
Partnership shall promptly remove the notation of a restrictive legend in such
Purchaser’s book-entry account maintained by the Partnership, including the
legend referred to in Section 4.05, and the Partnership shall bear all costs
associated with the removal of such legend in the Partnership’s books. Upon the
request of a Purchaser or its permitted assignee, the Partnership shall take all
steps necessary to promptly effect the removal of the legend described in
Section 4.05, and the Partnership shall bear all costs associated with the
removal of such legend in the Partnership’s books (other than costs and expenses
of any outside counsel of the Purchaser) if the applicable Purchased Units have
been sold pursuant to an effective registration statement under the Securities
Act; are eligible for sale, transfer or other disposition under Rule 144
promulgated under the Securities Act; or otherwise may be sold, transferred or
disposed of in accordance with the Securities Act, so long as such Purchaser or
its permitted assignee provides to the Partnership any information the
Partnership deems reasonably necessary to determine that the legend is no longer
required under the Securities Act or applicable state Laws, including (if there
is no such registration statement) a certification that the holder is not an
affiliate (as defined in Rule 144 promulgated under the Securities Act) of the
Partnership, a covenant to inform the Partnership if

 

20

--------------------------------------------------------------------------------

 

it should thereafter become an affiliate (as defined in Rule 144 promulgated
under the Securities Act) and to consent to the notation of an appropriate
restriction, and a certification as to the length of time such units have been
held. The Partnership shall cooperate with each Purchaser to effect the removal
of the legend referred to in Section 4.05 at any time such legend is no longer
appropriate.

 

Section 6.09             Entire Agreement.  This Agreement, the other
Transaction Documents, the Confidentiality Agreements and the other agreements
and documents referred to herein or therein are intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein. There are no restrictions,
promises, representations, warranties or undertakings, other than those set
forth in this Agreement, the other Transaction Documents or the Confidentiality
Agreements with respect to the rights granted by the Partnership or the
Purchasers or any of their respective Affiliates. This Agreement, the other
Transaction Documents, the Confidentiality Agreements and the other agreements
and documents referred to herein or therein supersede all prior agreements and
understandings among the parties with respect to such subject matter.

 

Section 6.10             Assignment.  The Partnership may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Purchasers.  A Purchaser may assign some or all of its rights
hereunder to any Affiliate of such Purchaser in connection with any transfer of
any of its Purchased Units that is permitted under this Agreement without the
consent of the Partnership, in which event such assignee shall be deemed to be a
Purchaser hereunder with respect to such assigned rights.

 

Section 6.11             Governing Law; Submission to Jurisdiction.  This
Agreement, and all claims or causes of action (whether in contract or tort) that
may be based upon, arise out of or relate to this Agreement or the negotiation,
execution or performance of this Agreement (including any claim or cause of
action based upon, arising out of or related to any representation or warranty
made in or in connection with this Agreement), will be construed in accordance
with and governed by the Laws of the State of New York without regard to
principles of conflicts of laws. Any action against any party relating to the
foregoing shall be brought in any federal or state court of competent
jurisdiction located within the State of New York, and the parties hereto hereby
irrevocably submit to the exclusive jurisdiction of any federal or state court
located within the State of New York over any such action. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable Law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum for the
maintenance of such dispute. Each of the parties hereto agrees that a judgment
in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by Law. Each of the parties hereto
consents to process being served in any such action by mailing, certified mail,
return receipt requested, a copy thereof to such party at the address in effect
for notices hereunder, and agrees that such service shall, to the fullest extent
permitted by Law, constitute good and sufficient service of process and notice
thereof; provided, however, that nothing in the foregoing shall affect or limit
any right to serve process in any other manner permitted by Law.

 

21

--------------------------------------------------------------------------------

 

Section 6.12             Waiver of Jury Trial.  THE PARTIES TO THIS AGREEMENT
EACH HEREBY WAIVES, AND AGREES TO CAUSE (1) IN THE CASE OF THE PURCHASER, ITS
AFFILIATES AND (2) IN THE CASE OF THE PARTNERSHIP, THE PARTNERSHIP ENTITIES, TO
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT OR
(b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED
HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY OR OTHERWISE. THE PARTIES TO THIS AGREEMENT EACH HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT
MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

Section 6.13             Exclusive Remedy.

 

(a)            Each party hereto hereby acknowledges and agrees that the rights
of each party to consummate the transactions contemplated hereby are special,
unique and of extraordinary character and that, if any party violates or fails
or refuses to perform any covenant or agreement made by it herein, the
non-breaching party may be without an adequate remedy at law. If any party
violates or fails or refuses to perform any covenant or agreement made by such
party herein, the non-breaching party subject to the terms hereof and in
addition to any remedy at law for damages or other relief, may institute and
prosecute an action in any court of competent jurisdiction to enforce specific
performance of such covenant or agreement or seek any other equitable relief.

 

(b)           The sole and exclusive remedy for any and all claims arising
under, out of, or related to this Agreement or the transactions contemplated
hereby, shall be the rights of indemnification set forth in Article V only and,
to the fullest extent permitted by Law, no Person will have any other
entitlement, remedy or recourse, whether in contract, tort or otherwise, it
being agreed that all of such other remedies, entitlements and recourse are
expressly waived and released by the parties hereto to the fullest extent
permitted by Law. Notwithstanding anything in the foregoing to the contrary,
nothing in this Agreement shall limit or otherwise restrict a fraud claim
brought by any party hereto or the right to seek specific performance pursuant
to Section 6.13(a).

 

Section 6.14             No Recourse Against Others.

 

(a)           All claims, obligations, liabilities or causes of action (whether
in contract or in tort, in law or in equity, or granted by statute) that may be
based upon, in respect of, arise under, out or by reason of, be connected with
or relate in any manner to this Agreement, or the negotiation, execution or
performance of this Agreement (including any representation or warranty made in,
in connection with, or as an inducement to, this Agreement), may be made only
against (and are expressly limited to) the Partnership and the Purchasers. To
the fullest

 

22

--------------------------------------------------------------------------------

 

extent permitted by Law, no Person other than the Partnership or the Purchasers,
including no stockholder, Affiliate or Representative thereof, nor any
stockholder, Affiliate or Representative of any of the foregoing, shall have any
liability (whether in contract or in tort, in law or in equity, or granted by
statute) for any claims, causes of action, obligations or liabilities arising
under, out of, in connection with or related in any manner to this Agreement or
based on, in respect of or by reason of this Agreement or its negotiation,
execution, performance or breach; and, to the maximum extent permitted by Law,
each of the Partnership and the Purchasers hereby waives and releases all such
liabilities, claims, causes of action and obligations against any such third
Person.

 

(b)           Without limiting the foregoing, to the maximum extent permitted by
Law, (i) each of the Partnership and the Purchasers hereby waives and releases
any and all rights, claims, demands or causes of action that may otherwise be
available at law or in equity, or granted by statute, to avoid or disregard the
entity form of the other or otherwise impose liability of the other on any third
Person in respect of the transactions contemplated hereby, whether granted by
statute or based on theories of equity, agency, control, instrumentality, alter
ego, domination, sham, single business enterprise, piercing the veil,
unfairness, undercapitalization or otherwise; and (ii) each of the Partnership
and the Purchasers disclaims any reliance upon any third Person with respect to
the performance of this Agreement or any representation or warranty made in, in
connection with or as an inducement to this Agreement.

 

Section 6.15             No Third-Party Beneficiaries.  Nothing in this
Agreement, express or implied, is intended to or shall confer upon any Person,
other than the Partnership and the Purchasers, (and (a) for purposes of
Article V only, the Purchaser Indemnified Parties and the Partnership
Indemnified Parties; and (c) for purposes of Section 6.14 only, any stockholder,
or Representative of the Partnership or the Purchasers, or any stockholder,
Affiliate of the Purchasers or Representative of any of the foregoing), any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.

 

Section 6.16             Execution in Counterparts.  This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same agreement.

 

Section 6.17             Recapitalization, Exchanges, Etc.  The provisions of
this Agreement shall apply to the full extent set forth herein with respect to
any and all equity interests of the Partnership or any successor or assign of
the Partnership (whether by merger, consolidation, sale of assets or otherwise)
that may be issued in respect of, in exchange for or in substitution of, the
Purchased Units, and shall be appropriately adjusted for combinations, unit
splits, recapitalizations and the like occurring after the date of this
Agreement.

 

[Signature Page Follows]

 

23

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of
the date first above written.

 

EMERGE ENERGY SERVICES LP

 

 

 

 

By:

Emerge Energy Services GP LLC, its general partner

 

 

 

 

 

 

 

By:

/s/ Warren Bonham

 

Name:

 Warren Bonham

 

Title:

Vice President

 

 

[Signature page to Common Unit Purchase Agreement]

 

--------------------------------------------------------------------------------

 

EES OFFSHORE, LLC

 

 

By:

HPS Investment Partners, LLC, its sole manager

 

 

 

 

 

 

 

 

 

 

By:

/s/ Marcus Colwell

 

 

Name:

Marcus Colwell

 

 

Title:

Managing Director

 

 

 

[Signature page to Common Unit Purchase Agreement]

 

--------------------------------------------------------------------------------

 

MEZZANINE PARTNERS III, L.P.

 

By:

HPS Mezzanine Management III, LLC, as

 

investment manager

 

 

 

By:

HPS Investment Partners, LLC, its sole and

 

managing member

 

 

 

 

 

By:

/s/ Marcus Colwell

 

Name:

 Marcus Colwell

 

Title:

Managing Director

 

 

[Signature page to Common Unit Purchase Agreement]

 

--------------------------------------------------------------------------------

 

AP MEZZANINE PARTNERS III, L.P.

 

By:

HPS Mezzanine Management III, LLC, as

 

investment manager

 

 

 

 

By:

HPS Investment Partners, LLC, its sole and

 

managing member

 

 

 

 

 

 

 

By:

/s/ Marcus Colwell

 

Name:

Marcus Colwell

 

Title:

Managing Director

 

 

[Signature page to Common Unit Purchase Agreement]

 

--------------------------------------------------------------------------------

 

OC II AIV II LP

 

 

 

 

By:

/s/ Adam L. Gubner

 

Name:

Adam L. Gubner

 

Title:

Authorized Person

 

 

[Signature page to Common Unit Purchase Agreement]

 

--------------------------------------------------------------------------------

 

Schedule A

 

Purchaser

 

Allocation %

 

Purchased
Units

 

Funding
Obligation

 

Mezzanine Partners III, L.P.

 

22.6265

%

184,246

 

$

1,361,577.94

 

AP Mezzanine Partners III, L.P.

 

4.0280

%

32,800

 

$

242,392.00

 

EES Offshore, LLC

 

52.4153

%

426,815

 

$

3,154,162.85

 

OC II AIV II LP

 

20.9302

%

170,434

 

$

1,259,507.26

 

Total:

 

 

 

814,295

 

$

6,017,640.05

 

 

Schedule A to Common Unit Purchase Agreement

 

--------------------------------------------------------------------------------