Exhibit 10.1

 

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”) is made and
entered into on January 2, 2020, by and between Ergon Terminaling, Inc.
(“Ergon”) and Blueknight Energy Partners, L. P. (“BKEP”).

 

W I T N E S S E T H:

 

WHEREAS, Ergon owns all of the issued and outstanding membership interests of
DEVCO; and

 

WHEREAS, Ergon desires to sell, and BKEP desires to purchase in exchange for
cash, all of the issued and outstanding membership interests of DEVCO owned by
Ergon (“Membership Interests”).

 

NOW, THEREFORE, in consideration of the mutual covenants, agreements and
understandings contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound, the Parties hereto hereby agree as follows:

 

 

1.

Membership Interest Purchase.

 

(a)     On the terms and subject to the conditions set forth in this Agreement,
on the Closing Date, BEKP shall purchase from Ergon and Ergon shall sell, assign
convey, and transfer to BKEP, all of the Membership Interests, free and clear of
any liens, restrictions on transfer (other than restrictions arising under the
law), options, rights, calls commitments, proxies or other contract rights.

 

(b)     In consideration of the purchase of the Membership Interest by BKEP,
BKEP shall pay to Ergon the Purchase Price as calculated in the formula set
forth on Schedule 1.

 

 

2.

Purchase Price.

 

(a)     The Purchase Price for the Membership Interests shall be computed by
taking Ergon’s total investment in the STACK Pipeline Project including, but not
limited to, working capital, cash, out-of-pocket expenses, engineering, project
management, legal and accounting costs, plus interest at the rate of nine
percent (9%) per annum compounded annually on each component from the last day
of the month in which the expenditure is made less any distributions from the
Cimarron Express Pipeline, LLC (adjusted for income taxes)( the “Purchase
Price”). Reasonable compensation for the time reasonably expended by Ergon
personnel on the STACK Pipeline Project shall be a component of the Purchase
Price and shall be computed in accordance with Schedule 1.

 

(b)     Not later than five (5) Business Days prior to the Closing Date, Ergon
shall deliver to BKEP a written statement showing Ergon’s good faith calculation
of the Purchase Price.

 

(c)     The Purchase Price shall not include any working capital in DEVCO.
Immediately prior to the Closing, Ergon may cause DEVCO to distribute to Ergon
all cash or cash equivalents held and owned by DEVCO.

 

 

3.

Closing.

 

(a)     Closing Date. The closing of the transactions contemplated by this
Agreement (the “Closing”) shall take place by the electronic exchange of the
appropriate documentation, with any originals as may be required to be exchanged
by mail promptly following the electronic closing, not later than the sixtieth
(60th) day following exercise of the Put or the Call as defined in that certain
Agreement between the parties dated May 9th, 2018 or at such other place or on
such other date as may be mutually agreeable to BKEP and Ergon. The date and
time of the Closing are herein referred to as the “Closing Date”.

 

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(b)     Closing Deliveries. Subject to the conditions set forth in this
Agreement, each of the Parties shall deliver to the other the following on the
Closing Date (the “Closing Deliveries”):

 

(i)     Ergon Deliveries. At Closing, Ergon shall deliver to BKEP:

 

 

(1)

all corporate books and records of the DEVCO;

 

 

(2)

a copy of the signed entry into the Members’ Registry Book of DEVCO, duly
recorded into such book, certifying the transfer of ownership of all of DEVCO’s
Membership Interests to Buyer;

 

 

(3)

a resolution duly adopted at a meeting or by unanimous written consent of Ergon
pursuant to which Ergon, approved the transfer to BKEP of the Membership
Interests held by Ergon;

 

 

(4)

the resignation letters of the managers of DEVCO duly signed and effective as of
the Closing Date;

 

(ii)     BKEP Deliveries. At Closing, BKEP shall deliver to Ergon:

 

 

(1)

duly adopted corporate resolutions of DEVCO electing managers to succeed Ergon’s
resigning managers effective as of the Closing Date;

 

 

(2)

the Purchase Price by wire transfer of immediately available funds to an account
or accounts designated by Ergon.

 

 

4.

Conditions to BKEP's Obligation to Close.

 

The obligation of BKEP to consummate the transactions contemplated by this
Agreement is subject to the fulfillment of the following conditions as of the
Closing Date:

 

(a)     Ergon representations shall be true and correct in all material respects
as of the date of this Agreement and as of the Closing Date.

 

(b)     Ergon shall have performed and complied in all material respects with
all of the covenants and agreement required to be performed under this
Agreement.

 

 

5.

Conditions to Ergon's Obligation to Close.

 

The obligation of Ergon to consummate the transactions contemplated by this
Agreement is subject to the fulfillment of the following conditions as of the
Closing Date:

 

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(a)     BKEP representations shall be true and correct in all material respects
as of the date of this Agreement and as of the Closing Date.

 

(b)     BKEP shall have performed and complied in all material respects with all
of the covenants and agreement required to be performed under this Agreement
including delivery of the Purchase Price.

 

 

6.

Ergon Representations.

 

Ergon represents and warrants as follows:

 

(a)     DEVCO is duly organized, validly existing, and in good standing under
the laws of the State of Delaware.

 

(b)     The execution, delivery and performance by Ergon of this Agreement, and
the consummation of the transactions contemplated hereby, do not and will not
(i) result in a violation or breach of any provision of the respective
organizational documents of Ergon or DEVCO, (ii) result in a violation or breach
of any provision of any law or governmental order applicable to Ergon or DEVCO;
or (iii) require the consent, notice or other action by any Person under,
conflict with, result in a violation or breach of, constitute a default under or
result in the acceleration of any material contract. No consent, approval,
license, governmental order, declaration or filing with, or notice to, any
governmental authority is required by or with respect to Ergon or DEVCO in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.

 

(c)     DEVCO owns fifty percent (50%) of the authorized and outstanding member
interests in Cimarron Express Pipeline, LLC. The limited liability company
agreement of Cimarron Express Pipeline, LLC has not been materially amended,
modified, or otherwise changed since it was executed.

 

 

7.

BKEP Representations.

 

BKEP represents and warrants as follows:

 

(a)      BKEP is duly organized, validly existing, and in good standing under
the laws of the State of Delaware, with full power and authority to enter into
this Agreement and to perform its obligations hereunder.

 

(b)      BKEP has all requisite power, authority and legal capacity to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby and thereby. Each of the Conflicts Committee of the Board of Directors
and the Board of Directors of the General Partner of BKEP has duly approved this
Agreement and has duly authorized the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby. No other corporate
proceedings on the part of BKEP is necessary to approve and authorize the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by BKEP and constitutes the valid and binding agreement of BKEP,
enforceable against BKEP in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar applicable law affecting creditors’ rights generally and
by general principles of equity (regardless of whether enforcement is sought in
a proceeding at law or in equity).

 

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8.

Indemnification.

 

(a)      The representation and warranties contained herein shall survive
Closing and shall remain in full force and effect for six (6) months from the
Closing Date.

 

(b)      Ergon shall indemnify BKEP against and shall hold BKEP harmless from an
against any and all losses incurred or sustained by or imposed upon BKEP based
upon, arising out of with respect to or by reason of any material inaccuracy in
or breach any representation set forth in Section 6.

 

(c)      BKEP shall indemnify Ergon against and shall hold Ergon harmless from
an against any and all losses incurred or sustained by or imposed upon Ergon
based upon, arising out of with respect to or by reason of any material
inaccuracy in or breach any representation set forth in Section 7.

 

 

9.

Notices

 

All notices and communications required or permitted to be given hereunder shall
be sufficient in all respects (a) if given in writing and delivered personally,
(b) if sent by overnight courier, (c) if mailed by U.S. Express Mail or by
certified or registered United States Mail with all postage fully prepaid, or
(d) sent by electronic transmission (provided any such electronic transmission
is confirmed either orally or by written confirmation) and, in each case,
addressed to the appropriate Party hereto at the address for such Party shown
below or at such other address as such Party shall have theretofore designated
by written notice delivered to the Party giving such notice:

 

BKEP:

 

Blueknight Energy Partners, L. P.
6060 American Plaza, Suite 600
Tulsa, OK 74135
Attention:     Mark Hurley
Telephone: 713-632-8805
E-mail:      mhurley@bkep.com

 

With a copy to:

 

Blueknight Energy Partners, L.P.
6060 American Plaza, Suite 600
Tulsa, OK 74135
Attention:     Joel W. Kanvik
Telephone:     918-237-4030
E-mail: jkanvik@bkep.com

 

 

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Ergon:

Ergon Terminaling, Inc.
Attention:     Emmitte J. Haddox

2829 Lakeland Drive, Suite 2000

Flowood, MS 39232
Telephone:     601-933-3000

E-mail: Emmitte.Haddox@ergon.com

 

With a copy to:

 

Watson Heidelberg, PLLC
2829 Lakeland Drive, Suite 1502

Flowood, MS 39232

Attention:     J. Kevin Watson                    
Telephone:     601-939-8900
E-Mail: kwatson@whjpllc.com

 

 

10.

Governing Law.

 

THIS AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, EXCLUDING ANY
CONFLICTS OF LAW RULE OR PRINCIPLE THAT MIGHT REFER CONSTRUCTION OF SUCH
PROVISIONS TO THE LAWS OF ANOTHER JURISDICTION.

 

 

11.

Entirety of Agreement.

 

THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES REGARDING
THE INVESTMENT IN DEVCO AND SUPERSEDES ALL OTHER PRIOR AND CONTEMPORANEOUS
AGREEMENTS, WHETHER WRITTEN OR ORAL, BETWEEN THE PARTIES AND RELATED THERETO. NO
VARIATIONS, MODIFICATIONS, OR CHANGES SHALL BE BINDING UPON A PARTY UNLESS
EFFECTUATED BY AN INSTRUMENT IN WRITING EXECUTED BY A DULY AUTHORIZED OFFICER OR
A DULY AUTHORIZED AGENT FOR IT.

 

 

12.

Captions or Headings.

 

The headings appearing at the beginning of each Section are all inserted and
included solely for convenience and shall never be considered or given any
effect in construing this Agreement, or any provision or provisions hereof, or
in connection with determining the duties, obligations, or liabilities of the
Parties or in ascertaining intent, if any question of intent should arise.

 

 

13.

Assignment.

 

This Agreement and its attendant rights may not be assigned, transferred,
subcontracted, or otherwise conveyed by either Party without the express written
consent of the other Party; provided however, a Party may assign its rights and
obligations under this Agreement to an Affiliate with the prior consent of the
other Party, which consent shall not be unreasonably withheld, conditioned or
delayed. Any such assignment without consent shall be void.

 

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14.

Duplicate Originals.

 

This Agreement is executed in duplicate originals, with one original to be
retained by Ergon and one original to be retained by BKEP.

 

 

 

15.

No Third-Party Beneficiary.

 

Nothing in this Agreement, express or implied, shall entitle any Person other
than the Parties or their respective successors and permitted assigns to any
claim, remedy or right of any kind; provided that only a Party and its
successors and permitted assigns will have the right to enforce the provisions
of this Agreement on its own behalf.

 

 

 

16.

Severability.

 

If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of Law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not materially affected in any manner adverse to any
Party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.

 

 

17.

Waiver.

 

No waiver by either Party of the performance of any provision, condition or
requirement in this Agreement will be deemed to be a waiver of, or in any manner
release the other Party from performance of any other provision, condition or
requirement in this Agreement; and it will not be deemed to be a waiver of, or
in any manner release the other Party from, future performance of the same
provision, condition or requirement; and no delay or omission of a Party in
exercising any right under this Agreement will in any manner impair the exercise
of any such right or any like right accruing to it thereafter. No waiver will be
effective unless made in writing and signed by the Party to be charged with such
waiver.

 

 

18.

Exhibits and Schedules.

 

In the event of any conflict between the terms and conditions of this Agreement
and the terms and conditions of any Exhibit or Schedule, the terms and
conditions of this Agreement govern and control.

 

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19.

Joint Efforts.

 

This Agreement will be considered for all purposes as prepared through the joint
efforts of the Parties and will not be construed against one Party or the other
as a result of the preparation, submittal or other event of negotiation,
drafting or execution of the Agreement.

 

 

20.

Counterparts.

 

This Agreement may be executed in any number of counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all of such
counterparts shall constitute for all purposes one agreement. Any signature
hereto delivered by a Party by facsimile or other electronic transmission shall
be deemed an original signature hereto.

 

IN TESTIMONY WHEREOF, witness the hands and seals of the Parties as of the date
of this Agreement.

 

 

Blueknight Energy Partners, L. P.    

By:

/s/ Mark A. Hurley

Name:

Mark A. Hurley Title: CEO

 

 

Ergon Terminaling, Inc.

   

By:

/s/ Kris Patrick

Name:

Kris Patrick Title: EVP-COO

 

 

 

 

 

 

 

 

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