Proceeds of the Exit Facility can be used by the Debtors to, among other things, make capital expenditures, to fund the Debtors’ general business purposes, including working capital requirements and to pay certain fees and expenses related to the consummation of the Exit Facility and the Plan, in each case subject to certain limitations provided in the Exit Facility.

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

Item 1.02. Termination of Material Definitive Agreement.

Equity Interests

On the Effective Date, by operation of the Plan, all agreements, instruments, and other documents evidencing, relating to or connected with any equity interests of the Partnership issued and outstanding immediately prior to the Effective Date, and any rights of any holder in respect thereof, were deemed cancelled, discharged and of no force or effect.

DIP Credit Agreement

On the Effective Date, the senior secured priming and superpriority debtor-in-possession credit and security agreement (the “DIP Credit Agreement”) the Partnership previously entered into with the Emerge LP Subsidiaries party thereto, HPS Investment Partners, LLC, as administrative agent, and the lenders party thereto was paid in full and terminated.

Senior Notes and Credit Agreement

On the Effective Date, by operation of the Plan, all outstanding obligations under each of the following debt instruments were cancelled and the applicable agreements governing such obligations were terminated.

· Second Amended and Restated Revolving Credit and Security Agreement, dated as of January 5, 2018, by and among the Partnership, the Emerge LP Subsidiaries party thereto, the Prepetition Credit Agreement Agent and the Prepetition Credit Agreement Lenders, as amended, supplemented, or modified from time to time prior to the Petition Date;

· Senior Secured Notes due 2023, issued under that certain Second Lien Note Purchase Agreement, dated as of January 5, 2018, by and among the Partnership, the Emerge LP Subsidiaries party thereto, the Prepetition Notes Agent and the Prepetition Noteholders (each as defined therein), as amended, supplemented or modified from time to time prior to the Petition Date;

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in the Introductory Note and Item 1.01 above relating to the Exit Facility is incorporated herein by reference into this Item 2.03.

Item 3.02. Unregistered Sale of Equity Securities.

to the Plan and following the cancellation of the Partnership’s outstanding common units, on the Effective Date the Partnership issued 123,941,380 New Limited Partner Interests and 135,000,000 Preferred Interests for the benefit of (a) holders of claims under the Partnership’s Prepetition Credit Agreement in full satisfaction of their allowed prepetition claims, and (b) the holders of claims under the Partnership’s Prepetition Notes in partial satisfaction of their allowed prepetition claims. The issuance of the New Limited Partner Interests and the Preferred Interests were exempt from registration under the Securities Act to section 1145 of the Bankruptcy Code.

Item 3.03. Material Modification to Rights of Security Holders.

The information set forth under the Introductory Note and Items 1.01, 1.02, 3.02, 5.01 and 5.03 of this Current Report on Form 8-K is incorporated herein by reference.

Item 5.01. Changes in Control of Registrant

On the Effective Date, all previously issued and outstanding equity interests in the Partnership were cancelled, the general partner interest in the Partnership held by the Old General Partner was cancelled and EES GP, LLC, the new general partner of the Partnership (the “New General Partner”), was admitted as the new general partner of the Partnership. The Partnership issued the New Limited Partner Interests and the Preferred Interests and the New General Partner issued the New Emerge GP Equity Interests to the terms of the Plan and/or the Amended/New Organizational Documents (as set forth in the Plan). For further information, see items 1.01, 1.02, 3.02 and 3.03 of this Current Report on Form 8-K, which are incorporated herein by reference, and the Limited Liability Company Agreement and the Certificate of Formation of the New General Partner, which are filed as Exhibits 3.2 and 3.3 hereto, respectively.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On and effective as of December 20, 2019, the New General Partner, executed the Second Amended and Restated Limited Partnership Agreement of the Partnership (the “Partnership Agreement”) for the purpose of authorizing the issuance of preferred units representing limited partner interests in the Partnership (the “Preferred Interests”).

to the Partnership Agreement, holders of the Preferred Interests will receive annual distributions of 12% in cash, paid quarterly. The Preferred Interests rank senior to the Common Units with respect to the payment of distributions and distribution of assets upon liquidation, dissolution and winding up. The Preferred Interests have no stated maturity and are not subject to mandatory redemption or nay sinking fund and will remain outstanding indefinitely unless redeemed by the Partnership. The Preferred Interests may be redeemed by the Partnership at any time after December 20, 2024.

The Preferred Interests are not convertible and have no voting rights.

The description of the Partnership Agreement contained in this Item 5.03 is qualified in its entirety by reference to the full text of the Partnership Agreement, which is filed as Exhibit 3.1 hereto and is incorporated by reference herein. The information regarding the Preferred Interests set forth in items 1.03 and 3.03 hereof is incorporated by reference into this Item 5.03.

Item 8.01. Other Events.

A summary of the Plan was previously filed by the Partnership in the Current Report on Form 8-K filed on December 26, 2019. By consent of the holders of relevant claims, certain of the Plan consideration described therein was distributed as follows:

· Holders of claims under the Partnership’s DIP Credit Agreement received payment in full in cash on the Effective Date; and

· Holders of claims under the Partnership’s Prepetition Credit Agreement received Preferred Interests sufficient to repay in full all claims under the Partnership’s Prepetition Credit Agreement on the Effective Date.

Unless otherwise specified, the treatment set forth in the Plan and Confirmation Order, including as modified by consent as described in the preceding paragraph, is in full satisfaction of all claims against and interests in the Partnership, which were discharged on the Effective Date.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Emerge Energy Services LP Exhibit
EX-3.1 2 a19-27538_1ex3d1.htm EX-3.1 Exhibit 3.1       SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP   of   EMERGE ENERGY SERVICES LP   A Delaware limited partnership   Dated as of December 20,…
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About EMERGE ENERGY SERVICES LP (NYSE:EMES)

Emerge Energy Services LP owns, operates, acquires and develops a portfolio of energy service assets. The Company’s segments include Sand segment, Fuel segment and Corporate. The Company’s Sand segment consists of the production and sale of various grades of industrial sand primarily used in the extraction of oil and natural gas, as well as the production of building products and foundry materials. Its Fuel segment operates approximately two terminals and over two transmix processing facilities that are located in the Dallas-Fort Worth, Texas area and Birmingham, Alabama. In addition to refining transmix, the Fuel segment sells a suite of complementary fuel products and services, including third-party terminaling services, certain reclamation services and blending of renewable fuels. The Company’s other services include blending of renewable fuels into petroleum products, and the manufacture of biodiesel at its Birmingham facility.