Document:

exhibit10-9.htm

    Exhibit 10.9

     

    WAIVER
AND AMENDMENT TO CREDIT AGREEMENT

    

    This
Waiver and Amendment to Credit Agreement (this “Amendment”), dated as
of March 29, 2010, is among BLUEKNIGHT ENERGY PARTNERS, L.P., a Delaware limited
partnership (the “Borrower”), the
Guarantors (as defined in the Credit Agreement referred to below) party hereto
(collectively, the “Guarantors”), WELLS
FARGO BANK, N.A., as Administrative Agent (the “Administrative
Agent”), L/C Issuer and Swing Line Lender under the Credit Agreement
referred to below, and the Lenders (as defined below) signatory
hereto.

    

    R
E C I T A L S:

    

    A. The
Borrower, the Administrative Agent and the Lenders that are parties thereto (the
“Lenders”)
entered into that certain Amended and Restated Credit Agreement dated as of
February 20, 2008 (as amended, modified, supplemented and waived from time to
time, the “Credit
Agreement”).

     

    B. The
Guarantors have guaranteed the obligations of the Borrower under the Credit
Agreement pursuant to that certain Amended and Restated Guaranty, dated as of
February 20, 2008, in favor of the Administrative Agent (as amended,
supplemented or modified, the “Guaranty”).

     

    C. Section
6.01(a) of the Credit Agreement requires the Borrower to deliver within 90 days
of the end of the preceding fiscal year, among other things, certain
Consolidated financial statements (all as further described in Section 6.01(a)),
to be audited and accompanied by a report and opinion of an independent
certified public accountant of nationally recognized standing reasonably
acceptable to the Required Lenders (as used herein, the “Auditor’s Report and
Opinion”, and such accountant, the “Auditor”), which
Auditor’s Report and Opinion shall be prepared in accordance with generally
accepted auditing standards and shall not be subject to any “going concern”
(such a qualification or exception, a “Going Concern
Qualification”) or like qualification or exception or any qualification
or exception as to the scope of such audit.

     

    D. The
Borrower has been informed by the Auditor, and has informed the Administrative
Agent, that (i) the Auditor’s Report and Opinion to be delivered by the Auditor
with respect to the fiscal year ended December 31, 2009 will contain a Going
Concern Qualification, (ii) the Auditor’s Report and Opinion to be delivered by
the Auditor with respect to the fiscal year ending  December 31, 2010
may contain a Going Concern Qualification, and, accordingly, has requested that
the Administrative Agent and the Lenders agree to waive compliance by the
Borrower with Section 6.01(a) of the Credit Agreement, solely to the extent
set forth herein.

     

    E. The
Administrative Agent and the Lenders party hereto are willing to waive
compliance with such provisions of the Credit Agreement subject to and upon the
terms and conditions set forth in this Amendment.

     

    F. The
Administrative Agent and the Lenders party hereto have agreed to amend the
Credit Agreement subject to and upon the terms and conditions set forth in this
Amendment.

     

    
      
         

      

      
        1

        
        

      

      
         

      

    

    NOW,
THEREFORE, the parties agree as follows:

    

    1. Definitions.  All
capitalized terms used in this Amendment which are not otherwise defined shall
have the meanings given to those terms in the Credit Agreement (after taking
into account any amendments contained herein).

     

    2. Amendment to Section 1.01 of
the Credit Agreement.

     

    (a) Section
1.01 of the Credit Agreement is hereby amended by deleting the definition of
“Applicable Rate” in its entirety and replacing it with the
following:

     

      “Applicable Rate” means, from and after
the March  2010 Waiver Effective Date, (i) with respect to any Base Rate
Loan, 7.50% per annum, (ii) with respect to any Eurodollar Rate Loan, 8.50% per
annum, and (iii) with respect to any commitment fee, 1.50%.

     

    (b) Section
1.01 of the Credit Agreement is hereby further amended by adding the following
language to the definition of “Consolidated EBITDA” before the “,” at the end of
clause (a)(i):

     

    “and all
Deferred Interest and Deferred Letter of Credit Fees for such
period”.

     

    (c) Section
1.01 of the Credit Agreement is hereby further amended by deleting the term
“interest expense” from clause (b)(i) of the definition of “Excess Cash Flow”
and replacing it with the term “Interest Expense”.

     

    (d) Section
1.01 of the Credit Agreement is hereby further amended by adding the following
language to the definition of “Interest Expense” before the “;” at the end of
clause (a):

     

    “, but
excluding any Deferred Interest accrued on the Loans pursuant to Section
2.08(c)”.

     

    (e) Section
1.01 of the Credit Agreement is hereby further amended by adding the following
language to the definition of “Interest Expense” before the “;” at the end of
clause (b):

     

    “, but
excluding any Deferred Letter of Credit Fees accrued on the Loans pursuant to
Section
2.09(a)”.

     

    (f) Section
1.01 of the Credit Agreement is hereby further amended by inserting the
following defined terms in their appropriate alphabetical order:

     

    “Deferred Interest”
has the meaning specified in Section
2.08(c).

     

    “Deferred Interest Payment
Date” has the meaning specified in Section
2.08(c).

     

    “Deferred Letter of Credit
Fee” has the meaning specified in Section
2.09(a).

     

     

    
      
         

      

      
        2

        
        

      

      
         

      

    

    “March 2010 Waiver and
Amendment” shall mean that certain Waiver and Amendment to Credit
Agreement, dated as of the March 2010 Waiver Effective Date, by and among the
Borrower, the Guarantors, the Administrative Agent and each Lender party
thereto.

     

    “March 2010 Waiver Effective
Date” shall mean March 30, 2010.

     

    “Refinancing” shall
mean the repayment in full of the Loans, together with any accrued interest
thereon (other than the Deferred Interest), and the termination of all Revolver
Commitments pursuant to Section 2.06 of the Credit Agreement on or before the
Refinancing Deadline.

     

    “Refinancing Deadline”
shall mean January 6, 2011.

     

    3. Amendment to Section 2.08 of
the Credit Agreement.  Subsection 2.08(c) of the Credit
Agreement is hereby amended by inserting the following prior to the “.” at the
end of the first sentence thereof:

     

    “; provided, however, that,
beginning on the March 2010 Waiver Effective Date through and including the
Interest Payment Date immediately prior to the Maturity Date, on each Interest
Payment Date, with respect to each Loan, Borrower shall pay in cash an amount of
interest equal to the Applicable Rate, less 2.00% per
annum.  The remaining 2.00% per annum shall have, and shall be deemed
to have, accrued; provided, however, that the
payment thereof shall be deferred (the aggregate amount of such deferred
payments of interest, the “Deferred Interest”)
and not be payable until the earlier of (i) the Maturity Date and (ii) the
repayment in full of the Loans and the termination of all Revolver Commitments
pursuant to Section 2.06 of the Credit Agreement (such date, the “Deferred Interest Payment
Date”).  Notwithstanding anything to the contrary contained
herein or in any other Loan Document, if the Borrower completes a Refinancing,
all Deferred Interest accrued through the date of such Refinancing shall be
automatically forgiven.  Notwithstanding anything to the contrary
contained herein or in any other Loan Document, the Deferred Interest is not
payable until the Deferred Interest Payment Date, and the Deferred Interest
accrues as simple interest such that no interest accrues on the Deferred
Interest.”

     

    4. Amendment to Section 2.09 of
the Credit Agreement.  Subsection 2.09(a) of the Credit
Agreement is hereby amended by inserting the following prior to the “.” at the
end of the third sentence thereof:

     

    
      
         

      

      
        3

        
        

      

      
         

      

    

    “provided, however, that,
beginning on the March 2010 Waiver Effective Date, with respect to each Letter
of Credit Fee, Borrower shall pay in cash Letter of Credit Fees equal to the
Applicable Rate, less 2.00% per
annum.  The remaining 2.00% per annum shall have, and shall be deemed
to have, accrued; provided, however, that the
payment thereof shall be deferred (for each Letter of Credit, the aggregate
amount of such deferred payments, the “Deferred Letter of Credit
Fee”) and not be payable until the Deferred Interest Payment
Date.  Notwithstanding anything to the contrary contained herein or in
any other Loan Document, if the Borrower completes a Refinancing, all Deferred
Letter of Credit Fees accrued through the date of such Refinancing shall be
automatically forgiven.  Notwithstanding anything to the contrary
contained herein or in any other Loan Document, the Deferred Letter of Credit
Fees are not payable until the Deferred Interest Payment Date, and the Deferred
Letter of Credit Fees accrue as simple interest such that no interest accrues on
the Deferred Letter of Credit Fees.”

     

    5. Amendment to Section 6.01 of
the Credit Agreement.  Subsection 6.01(c) is hereby amended by
inserting the following sentence at the end of such subsection:

     

    “Within
three Business Days after each delivery of monthly financial information
pursuant to this subsection (c), the Borrower shall deliver to the
Administrative Agent a written report, to be certified by a Responsible Officer,
which shall provide a narrative description of such financial information,
including, without limitation, a summary and review of the business operations
of the Borrower and the Guarantors for such month.”

     

    6. Waiver of Section 6.01 of
the Credit Agreement.  Subject to the terms and conditions set
forth herein, effective on, and subject to the occurrence of, the Effective Date
(as hereinafter defined), the Administrative Agent and the Lenders hereby waive,
for the benefit of the Borrower and the Guarantors, compliance by the Borrower
with Section 6.01(a) of the Credit Agreement, (a) with respect to the fiscal
year ended December 31, 2009 solely to the extent
that such Section requires that the Auditor’s Report and Opinion to be delivered
by the Auditor shall not be subject to a Going Concern Qualification or like
qualification or exception (the “2009 Going Concern
Waiver”), provided that the
2009 Going Concern Waiver is limited to a Going Concern Qualification or like
qualification or exception relating to the following: (i) inability to raise
sufficient capital or revenues to meet obligations; (ii) increased
expenses as a result of events surrounding the bankruptcy of the Borrower’s
former parent; (iii) the securities
class action and other actions currently pending against the Borrower and/or
(iv) the Borrower’s potential inability to comply with the financial covenants
in the Credit Agreement as a result of the foregoing (the foregoing (i) through
(iv), the “Permitted
Qualifications”); and (b) with respect to the fiscal year ending December
31, 2010, solely to the extent
that such Section requires that the Auditor’s Report and Opinion to be delivered
by the Auditor shall not be subject to any Going Concern Qualification (the
“2010 Going Concern
Waiver”), provided that the
2010 Going Concern Waiver is limited to a Going Concern Qualification (but not any like
qualification or exception) related to (i) the Permitted
Qualifications and/or (ii) amounts coming
due under the Credit Agreement upon reaching the Maturity Date (i.e., the Loans
being classified under GAAP as current maturities of long-term
debt).  For the avoidance of doubt, except as expressly set forth in
this Section, the Lenders have not waived, and do not hereby waive (i) the
Borrower’s future obligation to comply with the provisions of Section 6.01(a)
waived hereby or (ii) the Borrower’s present and future obligation to comply
with each other provision of the Credit Agreement (as amended hereby), including
without limitation all other requirements of Section 6.01(a) and Article VII
thereof.

     

    
      
         

      

      
        4

        
        

      

      
         

      

    

    7. Excess Cash Flow
Prepayment.  The parties hereto hereby agree that the amount of
Excess Cash Flow to be paid on March 31, 2010 by Borrower to the Administrative
Agent for the benefit of the Lenders to ratably prepay the Loans pursuant to
Section 2.05(j) of the Credit Agreement shall be an amount equal to
$3,793,394.00, as further set forth on Schedule I, attached hereto and made a
part hereof.

     

    8. Representations and
Warranties.  The Borrower represents and warrants to the
Administrative Agent and the Lenders that the following statements are true,
correct and complete:

     

    (a) Representations and
Warranties.  After giving effect to this Amendment, each of the
representations and warranties made by the Borrower and the Guarantors pursuant
to the Credit Agreement, as amended hereby, and the other Loan Documents is true
and correct in all material respects on and as of the date of this Amendment,
except to the extent such representations and warranties expressly relate to an
earlier date.

     

    (b) No Default or Event of
Default.  After giving effect to this Amendment, no Default or
Event of Default has occurred and is continuing.

     

    (c) Execution, Delivery and
Enforceability.  This Amendment has been duly and validly
executed and delivered by the Borrower and the Guarantors and constitutes their
legal, valid and binding obligations, enforceable against the Borrower and the
Guarantors in accordance with its terms, except as such enforceability may be
limited by applicable Debtor Relief Laws and by general principles of
equity.

     

    9. Conditions to
Effectiveness.  This Amendment shall be effective on the date
when and if each of the following conditions is satisfied (such date, the “Effective
Date”):

     

    (a) Execution and
Delivery.  The Administrative Agent shall have received a
counterpart of this Amendment executed and delivered by the Borrower, each of
the Guarantors and the Required Lenders.

     

    (b) No Default or Event of Default;
Accuracy of Representations and Warranties.  The Borrower shall
deliver to the Administrative Agent a certificate of a Responsible Officer
certifying that, after giving effect to this Amendment, no Default or Event of
Default shall exist and each of the representations and warranties made by the
Borrower and the Guarantors herein and in or pursuant to the Credit Agreement
and the other Loan Documents shall be true and correct in all material respects
as if made on and as of the date on which this Amendment becomes effective,
except to the extent such representations and warranties expressly relate to an
earlier date.

     

    (c) Consents and Approvals. All necessary consents
and approvals to this Amendment shall have been obtained.

     

    (d) Expense
Reimbursements.  The Borrower shall have paid all reasonable
invoices presented to the Borrower on or before 5 p.m. (Eastern Time) on March
26, 2010 for expense reimbursements (including reasonable attorneys’ and
financial advisors’ fees and disbursements) due to the Administrative Agent and
the Lenders in accordance with Section 10.04 of the Credit
Agreement.  The payment of invoices presented to the Borrower after 5
p.m. (Eastern Time) on March 26, 2010 shall not be a condition to the
effectiveness of this Amendment, provided, that the
failure of the Administrative Agent or any Lender to present such an invoice by
such time shall not be a waiver of the Borrower’s obligation to pay all such
invoices as soon as is reasonably practicable after the Effective
Date.

     

    
      
         

      

      
        5

        
        

      

      
         

      

    

    (e) Fees.  The Borrower
shall have, and shall be deemed to have, accrued, a fee equal to $1,000,000.00,
which shall be paid to the Administrative Agent for the benefit of the Lenders
who execute and deliver a counterpart of this Amendment to the Administrative
Agent by 5 p.m. (Eastern Time) on March 29, 2010, and allocated pro rata among
such Lenders as follows: (i) $500,000.00 by 5 p.m. (Eastern Time) on the
Effective Date (the “Effective Date
Payment”) and (ii) $500,000 by 5 p.m. (Eastern Time) on June 30,
2010.  For the avoidance of doubt, payment by the Borrower of the
Effective Date Payment shall be a condition to the effectiveness of this
Amendment.

     

    10. Release.  For
purposes of this Section 
10, the
following terms shall have the following definitions:

     

    “Related Parties”
shall mean, with respect to any released party, such party’s parents,
subsidiaries, affiliates, successors, assigns, predecessors in interest,
officers, directors, employees, agents, representatives, attorneys, financial
advisors, accountants and shareholders, if any.

     

    “Claims” shall
mean  any and all claims, losses, debts, liabilities, demands,
obligations, promises, acts, omissions, agreements, costs, expenses, damages,
injuries, suits, actions, causes of action, including without limitation, any
and all rights of setoff, recoupment or counterclaim of any kind or nature
whatsoever, in law or in equity, known or unknown, suspected or unsuspected,
contingent or fixed.

     

    Excluding
only the continuing obligations of the Lenders and the Administrative Agent
under the Credit Agreement, the Loan Documents and this Agreement, the Borrower
and each Guarantor, effective as of the effective date of this Amendment, hereby
releases, acquits and forever discharges the Lenders and the Administrative
Agent, and each of them, and their respective Related Parties, of and from any
and all Claims arising out of, related or in any way connected with the Credit
Agreement, the Loan Documents or the transactions contemplated by any thereof,
including, without limitation, any action or failure to act, prior to the
effective date of this Amendment, in response to or otherwise in connection with
the events or circumstances arising under or otherwise related to the Credit
Agreement, the Loan Documents or any Defaults or Events of Default occurring
under the Credit Agreement or the Loan Documents, in each case to the extent,
and only to the extent, that (i) such Claims arose prior to the effective date
of this Amendment, (ii) such Claims result or derive from actions taken or not
taken by a releasee in its capacity(ies) as a Lender(s) or as Administrative
Agent under the Credit Agreement or the Loan Documents; and (iii) such Claims do
not result or derive from actions taken or not taken by a releasee with respect
to or in relation to SemGroup, SemCrude L.P., SemMaterials, L.P., K.C. Asphalt,
L.L.C. or any of their affiliates (other than the Borrower and the
Guarantors).

     

    11. Acknowledgement.  The
Borrower hereby confirms and acknowledges as of the date hereof that it is
validly and justly indebted to the Administrative Agent and the Lenders for the
payment of all obligations under the Credit Agreement without offset, defense,
cause of action or counterclaim of any kind or nature whatsoever, and the Loan
Parties hereby release the Administrative Agent and the Lenders from any and all
Claims (as defined in Section 
10 of this Amendment) other than as provided in Section 
10 of this Amendment.

     

    
      
         

      

      
        6

        
        

      

      
         

      

    

    12. Confirmation of Credit
Agreement and Security Documents.  Except as amended by this
Amendment, all the provisions of the Credit Agreement remain in full force and
effect from and after the date hereof, and each Loan Party hereby ratifies and
confirms each Loan Document to which it is a party.  This Amendment
shall be limited precisely as written and shall not, except as set forth herein,
be deemed (a) to be a consent granted pursuant to, or a waiver or modification
of, any other term or condition of the Credit Agreement or any of the
instruments or agreements referred to therein or (b) to prejudice any right or
rights which the Administrative Agent or the Lenders may now have or have in the
future under or in connection with the Credit Agreement or any of the
instruments or agreements referred to therein.  From and after the
date hereof, all references in the Credit Agreement to “this Agreement”,
“hereof”, “herein”, or similar terms, shall refer to the Credit Agreement as
amended by this Amendment.  Each of the Borrower and the Guarantors
also hereby ratifies and confirms that the Security Documents remain in full
force and effect in accordance with their terms and are not impaired or affected
by this Amendment.

     

    13. Mutual
Representation.  As of the Effective Date, and after giving
effect hereto, neither the Lenders parties hereto nor the Borrower nor any
Guarantor is aware of the existence of any Default or Event of Default under the
Loan Documents.

     

    14. Material Weakness and
Restatement.  Reference is made to the Borrower’s Form 8-K
filed with the SEC on March 12, 2010, relating to a material weakness in
internal control over financial reporting related to the Partnership’s process
for analyzing and applying complex accounting associated with debt arrangements,
and the Borrower’s need to restate its unaudited financial statements previously
filed by the Borrower with the SEC as part of the June 30, 2009 and September
30, 2009 quarterly reports on Form 10-Q (the matters disclosed in such Form 8-K,
including the restatement of such financial statements, being hereinafter
referred to as the “Material Weakness and Restatement”).  Subject to
the terms and conditions set forth herein, effective on, and subject to the
occurrence of, the Effective Date, for the avoidance of doubt the Administrative
Agent and the Lenders hereby agree that the Material Weakness and Restatement do
not constitute a Default or an Event of Default under the Loan
Documents.

     

    15. GOVERNING
LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

     

    16. Loan
Document.  This Amendment shall constitute a Loan Document
under the Credit Agreement, and all obligations included in this Amendment
(including, without limitation, all obligations for the payment of principal,
interest, fees and other amounts and expenses) shall constitute Obligations
under the Credit Agreement and shall be secured by the Collateral.

     

    17. Counterparts.  This
Amendment may be signed in any number of counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument.  Delivery of an executed signature page to this
Amendment by facsimile transmission or electronic photocopy (e.g. a “.pdf”)
shall be as effective as delivery of a manually signed counterpart.

     

    
      
         

      

      
        7

        
        

      

      
         

      

    

        IN WITNESS WHEREOF, the parties
have caused this Amendment to be duly executed as of the day and year first
above written.

    

      
        	 
      	
                BLUEKNIGHT
      ENERGY PARTNERS L.P.

              
	 
      	
                (f/k/a
      SemGroup Energy Partners, L.P.)

              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	
                Blueknight
      Energy Partners G.P., L.L.C.,

              
	 
      	 
      	
                its
      general partner (f/k/a SemGroup Energy Partners, G.P.,
    L.L.C.)

              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                By:

              	/s/
      Alex G. Stallings
	 
      	 
      	 
      	
                Name:
      Alex G. Stallings

              
	 
      	 
      	 
      	
                Title: 
       Chief Financial Officer and Secretary

              
	 
      	 
      	 
      	 
      
	 
      	
                Guarantors:

              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                BKEP PIPELINE, L.P.
      (f/k/a SemPipe, L.P.)

              
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	
                BKEP
      Pipeline G.P., L.L.C.,

              
	 
      	 
      	
                its
      general partner (f/k/a SemPipe G.P., L.L.C.)

              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                By:

              	/s/ Alex G.
  Stallings
	 
      	 
      	 
      	
                Name:
      Alex G. Stallings

              
	 
      	 
      	 
      	
                Title:  
      Chief Financial Officer and Secretary 

              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                BKEP PIPELINE G.P., L.L.C.
      (f/k/a SemPipe G.P., L.L.C.)

              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Alex G. Stallings
	 
      	 
      	
                Name:

              	Alex
      G. Stallings
	 
      	 
      	
                Title:

              	Chief
      Financial Officer and Secretary
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                BKEP CRUDE, L.L.C.
      (f/k/a SemGroup Energy Partners, L.L.C.)

              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Alex G. Stallings 
	 
      	 
      	
                Name:

              	Alex
      G. Stallings
	 
      	 
      	
                Title:

              	Chief
      Financial Officer and Secretary
	 
      	 
      	 
      	 
      

      

      
        
           

        

        
           

          
          

        

        
           

        

      

      
        	 
      	
                BKEP OPERATING, L.L.C.
      (f/k/a SemGroup Energy Partners Operating,
  L.L.C.)

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/ Alex G.
      Stallings
	 
      	 
      	
                Name:
      

              	Alex
      G. Stallings	 
      
	 
      	 
      	
                Title:

              	Chief
      Financial Officer and Secretary	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                BKEP MATERIALS, L.L.C.
      (f/k/a SemMaterials Energy Partners, L.L.C.)

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/ Alex G.
      Stallings
	 
      	 
      	
                Name:

              	Alex
      G. Stallings	 
      
	 
      	 
      	
                Title:

              	Chief
      Financial Officer and Secretary	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                BKEP STORAGE, L.L.C.
      (f/k/a SemGroup Crude Storage, L.L.C.)

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/ Alex G.
      Stallings
	 
      	 
      	
                Name:

              	Alex
      G. Stallings	 
      
	 
      	 
      	
                Title:

              	Chief
      Financial Officer and Secretary	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                BKEP ASPHALT, L.L.C.
      (f/k/a SGLP Asphalt, L.L.C)

              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/ Alex G.
      Stallings
	 
      	 
      	
                Name:

              	Alex
      G. Stallings	 
      
	 
      	 
      	
                Title:

              	Chief
      Financial Officer and Secretary	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                BKEP MANAGEMENT, INC.
      (f/k/a SGLP Management, Inc.)

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/ Alex G.
      Stallings
	 
      	 
      	
                Name:

              	Alex
      G. Stallings	 
      
	 
      	 
      	
                Title:

              	Chief
      Financial Officer and Secretary	 
      
	 
      	 
      	 
      	 
      	 
      

      

      
        
           

        

        
           

          
          

        

        
           

        

      

      
        	 
      	
                Lenders:

              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                Wells
      Fargo Bank, N.A.

              
	 
      	
                (f/k/a
      Wachovia Bank, National Association),

              
	 
      	 
      	
                as
      L/C Issuer,

              	 
      
	 
      	 
      	
                Swing
      Line Lender and Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      D. Paul Hulbert III
	 
      	 
      	
                Name:

              	D.
      Paul Hulbert III	 
      
	 
      	 
      	
                Title:

              	Director	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 	The
      Royal Bank of Scotland N.V.
	 
      	
                (f/k/a ABN AMRO Bank N.V.), as a
      Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Parker H. Douglas
	 
      	 
      	
                Name:

              	Parker
      H. Douglas	 
      
	 
      	 
      	
                Title:

              	Managing
      Director	 
      
	 	 	 	 	 
	 	 	 	 	 
	 	By:	/s/
      David W. Stack
	 	 	Name:	David
      W. Stack	 
	 
      	 
      	Title: 
      	Senior
      Vice President	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                Bank of America, N.A.,
      as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Cameron D. Taylor
	 
      	 
      	
                Name:

              	Cameron
      D. Taylor	 
      
	 
      	 
      	
                Title:

              	Senior
      Vice President	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                The Bank of Nova Scotia,
      as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/ Marc Graham
	 
      	 
      	
                Name:

              	Marc
      Graham	 
      
	 
      	 
      	
                Title:

              	Director	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                Bank of Scotland PLC, as
      a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Julia R. Franklin
	 
      	 
      	
                Name:

              	Julia
      R. Franklin	 
      
	 
      	 
      	
                Title:

              	Assistant
      Vice President	 
      
	 
      	 
      	 
      	 
      	 
      

      

      
        
           

        

        
           

          
          

        

        
           

        

      

      
        	 
      	
                Blue Ridge Investments LLC,
      as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      John Hlebendahl	 
      
	 
      	 
      	
                Name:

              	John
      Hlebendahl	 
      
	 
      	 
      	
                Title:

              	VP;
      Controller	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                BMO Capital Markets Financing
      Inc., as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Richard A. Garcia	 
      
	 
      	 
      	
                Name:

              	Richard
      A. Garcia	 
      
	 
      	 
      	
                Title:

              	Vice
      President	 
      
	 
      	 
      	 
      	 
      	 
      
	 	 	 	 	 
	 
      	Credit
      Agricole Corporate and Investment Bank	 
      
	 
      	
                (f/k/a Caylon New York Branch), as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Anne G. Shean	 
      
	 
      	 
      	
                Name:

              	Anne
      G. Shean	 
      
	 
      	 
      	
                Title:

              	Managing
      Director	 
      
	 	 	 	 	 
	 	 	 	 	 
	 	By:	/s/
      Richard Teitelbaum	 
	 	 	Name:	Richard
      Teitelbaum	 
	 
      	 
      	Title:	Director	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                Citibank, N.A., as a
      Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	________________________________ 	 
      
	 
      	 
      	
                Name:

              	 
      	 
      
	 
      	 
      	
                Title:

              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                Evergreen High Income Fund,
      as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/ Authorized
      Signatory	 
      
	 
      	 
      	
                Name:

              	Authorized
      Signatory	 
      
	 
      	 
      	
                Title:

              	Authorized
      Signatory	 
      
	 
      	 
      	 
      	 
      	 
      

      

      
        
           

        

        
           

          
          

        

        
           

        

      

      
        	 
      	
                Evergreen Income Advantage
      Fund, as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/ Authorized
      Signatory	 
      
	 
      	 
      	
                Name:

              	Authorized
      Signatory	 
      
	 
      	 
      	
                Title:

              	Authorized
      Signatory	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                Evergreen Multi-Sector Income,
      as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/ Authorized
      Signatory 	 
      
	 
      	 
      	
                Name:

              	Authorized
      Signatory	 
      
	 
      	 
      	
                Title:

              	Authorized
      Signatory	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                Evergreen Utilities & High
      Income Fund, as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/ Authorized
      Signatory	 
      
	 
      	 
      	
                Name:

              	Authorized
      Signatory	 
      
	 
      	 
      	
                Title:

              	Authorized
      Signatory	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                Fortis Capital Corporation,
      as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	________________________________ 
      	 
      
	 
      	 
      	
                Name:

              	 
      	 
      
	 
      	 
      	
                Title:

              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                Guaranty Bank And Trust
      Company, as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	________________________________ 
      	 
      
	 
      	 
      	
                Name:

              	 
      	 
      
	 
      	 
      	
                Title:

              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

      

      
        
           

        

        
           

          
          

        

        
           

        

      

      
        	 
      	
                JPMorgan Chase Bank, N.A.,
      as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/ Phillip D. Martin	 
      
	 
      	 
      	
                Name:

              	Phillip
      D. Martin	 
      
	 
      	 
      	
                Title:

              	Senior
      Vice President	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                GE
      Business Financial Services, Inc.,

              
	 
      	
                (f/k/a
      Merrill Lynch Business Financial Services, Inc), as a
    Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Stephen P. Lenihan	 
      
	 
      	 
      	
                Name:

              	Stephen
      P. Lenihan	 
      
	 
      	 
      	
                Title:

              	Authorized
      Signatory	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                One East Liquidity Master LP,
      as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/ Siuu Toussi	 
      
	 
      	 
      	
                Name:

              	Siuu
      Toussi	 
      
	 
      	 
      	
                Title:

              	Partner
      and Authorized Signatory	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                One East Partners Master LP,
      as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/ Siuu Toussi	 
      
	 
      	 
      	
                Name:

              	Siuu
      Toussi	 
      
	 
      	 
      	
                Title:

              	Partner
      and Authorized Signatory	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                Raymond James Bank FSB,
      as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Garrett McKinnon	 
      
	 
      	 
      	
                Name:

              	Garrett
      McKinnon	 
      
	 
      	 
      	
                Title:

              	Senior
      Vice President	 
      
	 
      	 
      	 
      	 
      	 
      

      

      
        
           

        

        
           

          
          

        

        
           

        

      

      
        	 
      	
                Royal Bank of Canada, as
      a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Leslie P. Vowell	 
      
	 
      	 
      	
                Name:

              	Leslie
      P. Vowell	 
      
	 
      	 
      	
                Title:

              	Atoerney-In-Fact	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                Solus Core Opportunities Master
      Fund, as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	________________________________	 
      
	 
      	 
      	
                Name:

              	 
      	 
      
	 
      	 
      	
                Title:

              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                SunTrust Bank, N.A., as
      a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Katherine Bass	 
      
	 
      	 
      	
                Name:

              	Katherine
      Bass	 
      
	 
      	 
      	
                Title:

              	First
      Vice President	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                UBS Loan Financial LLC,
      as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	________________________________	 
      
	 
      	 
      	
                Name:

              	 
      	 
      
	 
      	 
      	
                Title:

              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                Woodsland Commercial Bank,
      as a Lender

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Brian Halbeisen	 
      
	 
      	 
      	
                Name:

              	Brian
      Halbeisen	 
      
	 
      	 
      	
                Title:

              	Vice
      President	 
      

      

      
        
           

        

        
           

          
          

        

        
           

        

      

    Acknowledged:

    

    Wells
Fargo Bank, N.A.

    (f/k/a
Wachovia Bank, National Association),

        as
Administrative Agent

    

    

    By: D. Paul Hulbert III

    Name: D. Paul Hulbert III

    Title:  
Directorexhibit10-52.htm

Exhibit 10.52

 

 

***  Where this marking appears throughout this Exhibit 10.52, information has been omitted pursuant to a request for confidential treatment and such information has been filed with the Securities and Exchange Commission separately.

CRUDE OIL STORAGE SERVICES AGREEMENT

    THIS CRUDE OIL STORAGE SERVICES AGREEMENT (this “Agreement”) is entered into effective as of June 1, 2008 (the “Effective Date”) by and between SemCrude, L.P., a Delaware limited partnership (“Operator”), with offices at 11501 South I-44 Service Road, Oklahoma City, Oklahoma 73173, and VITOL INC., a Delaware corporation (“Customer”), with offices at 1100 Louisiana, Houston, Texas 77002 (each referred to individually as “Party” or collectively as “Parties”).

W I T N E S S E T H:

 

    In consideration of the mutual covenants and agreements hereinafter available to the Customer set forth, the Parties hereby agree as follows:

	
     1.

	
Storage Services: Operator hereby agrees to provide to the Customer, crude oil storage services (“Storage Services”) in the Operator’s Cushing, Oklahoma North terminal located at 908 East Deep Rock Road in Cushing, Oklahoma (the “Facility”).  During the Term (hereinafter defined) of this Agreement, Operator agrees to make two million (2,000,000) barrels of dedicated storage capacity (the “Operating Capacity”) available and provide Storage Services for the storage of Customer’s Crude Oil (hereinafter defined) under the terms and conditions of this Agreement.  The two million (2,000,000) barrels of dedicated storage capacity in no case will consist of any one tank having a shell capacity of less than two hundred and fifty thousand (250,000) barrels during the term. The crude oil/condensates of Customer that are the subject of the Storage Services hereunder shall have a true vapor pressure not to exceed 10.9 psia (“Crude Oil”).

 

	
  

	
Operator warrants that it has title to the Facility free of liens or encumbrances, which either now or hereafter will interfere with or prevent Customer’s enjoyment of the Storage Services to be provided to it under this Agreement; provided, however, that Operator has granted, may have granted and/or may grant mortgages or security interests to its lenders in and to the Facility; provided that no such mortgage or security interest shall encumber or apply to Customer’s Crude Oil.

 

	
     2.

	
Term:  This Agreement shall have an initial term of twenty five (25) months commencing on the Effective Date and shall thereafter automatically renew for successive three (3) month terms until terminated by either party by delivering notice of such termination to the other party at least sixty (60) days prior to expiration of the then-current term (collectively, the “Term”).

  

1

 

  

 

	
     3.

	
Payments:  For and during the Term, Customer shall pay Operator, for the Storage Services as follows:

	
  

	
A.

	
For each month of the Term, a monthly storage fee of *** per barrel of Operating Capacity (the “Monthly Storage Fee”), for a total of *** per month, regardless of the actual volume of Crude Oil placed in the Facility;

	
  

	
B.

	
For each month of the Term in which Operator accepts Crude Oil volumes in excess of the Operating Capacity, if any, a monthly storage fee equal to *** per barrel of actual volume placed in the Facility in excess of the Operating Capacity during said month; and

	
  

	
C.

	
A pump over fee equal to *** per barrel of actual volume of Crude Oil moved by Operator from the Facility to a third party connecting carrier.

 

	
  

	

Operator shall invoice Customer monthly for the foregoing fees, invoicing the Monthly Storage Fee in advance and the other fees in arrears.  Such fees shall be due and payable by Customer to Operator within ten (10) days after delivery of the invoice.  The Monthly Storage Fee shall be nonrefundable regardless of whether Customer ever actually uses the Storage Services.  If amounts payable by Customer to Operator under this Agreement are not paid by the due date specified herein, Customer shall pay interest on such past due amount(s) from the due date thereof until such amount(s) is paid in full at the rate equal to the lesser of the prime rate as published in the Wall Street Journal plus two percent (2%) or the maximum interest rate allowed by Applicable Laws.  For purposes of this Agreement, “Applicable Laws” means and includes any and all federal, state and local laws (including environmental laws), ordinances, orders, rules, and regulations of all governmental bodies (state, federal and municipal) applicable to or having jurisdiction over the use, occupancy, operation and maintenance of the Facility, as such laws may be amended, modified, enacted or promulgated from time to time.

 

	
     4.

	
Measurement: Operator shall keep records of receipts into and withdrawals from the Facility and the quantities of Customer’s Crude Oil stored in the Facility.  The data reflected on such records shall be furnished to Customer on a monthly basis in a mutually agreeable report format. All receipts of Customer’s Crude Oil into and out of the Facility shall be measured by custody transfer meters on the inlet and outlet flanges on Operator’s pipelines serving the Facility. Customer may witness the custody transfer meter proving by providing written notification to Operator’s Facility supervisor of its desire to have an independent inspector witness such proving.

 

  

2

 

  

	
     5.

	
Maintenance: Operator shall maintain the portions of the Facility associated with the Storage Services and related services provided to Customer hereunder in proper operating condition in accordance with Applicable Laws and industry standards, including API 653 standards for tank inspection and maintenance.  Operator shall coordinate scheduled inspections or maintenance with Customer to minimize any negative impact on Customer’s operations.  Notice shall be given by Operator to Customer not less than ninety (90) days before beginning any scheduled procedure making the Storage Services unavailable to Customer.  Operator shall make commercially reasonable efforts to minimize the time Storage Services are unavailable to Customer and endeavor to continue the provision of such Storage Services as quickly as reasonably possible.  If the Operating Capacity is unavailable for use by Customer hereunder for more than ten (10) consecutive days due to scheduled maintenance, then for each ten (10) consecutive day period of downtime, Customer’s subsequent Monthly Storage Fee shall be reduced by an amount equal to the portion of the Monthly Storage Fee allocable to the unavailable Storage Services, which shall be based on the ratio of the amount of Storage Services unavailable during such time period to the Operating Capacity times the Monthly Storage Fee.

	
     6.

	
Title to Crude Oil; Taxes.   Title to all of Customer’s Crude Oil placed in the Facility for storage hereunder shall remain in Customer.  Customer shall pay any taxes, including ad valorem taxes, assessments or charges that may be assessed against the Crude Oil stored by Customer under this Agreement.  Customer agrees to reimburse Operator for any such taxes, assessments or charges paid by Operator for the benefit of Customer or, as required by law, on behalf of Customer within thirty (30) days of Operator’s written invoice therefor; provided that such invoice shall include supporting documentation showing the basis of Customer’s responsibility for such taxes, assessments or charges.  Operator shall report and pay all franchise and property taxes assessed against the Facility including all real and personal property associated therewith.

	
     7.

	
Shipment of Crude Oil To and From the Facility; Scheduling.  Operator shall operate the Facility in a manner that allows shipments of Crude Oil into and out of the Facility twenty-four (24) hours per day, seven (7) days per week subject to the requirements of the next paragraph.  Customer and its employees shall be subject to and abide by the rules of the Facility, and shall instruct its contractors to abide by such rules, which shall not substantially deviate from standard industry practice.  Customer will be solely responsible for any pump over fees charged by third party carriers for movements of Customer’s Crude Oil to and from the Facility.

	
  

	
Customer shall provide Operator with a shipment schedule on or before the twenty-fifth (25th) day of each calendar month advising Operator as to the nominations and quantity of Crude Oil Customer expects to be delivered to and from the Facility during the following calendar month and including the approximate dates of each shipment.  Operator shall, by written notice to Customer given no later than the thirtieth (30th) day of the month in which such shipment schedule is received, confirm the shipment schedule as proposed or notify Customer of any necessary revisions to such shipment schedule.  If revisions are necessary, Customer shall then furnish Operator with a final shipment schedule.  Customer and Operator shall coordinate deliveries and receipts of Crude Oil and each shall provide the other with such notices and information as may be necessary to assure the delivery of Crude Oil to and from the Facility in accordance with each shipment schedule.  Shipment schedules may be modified in writing by mutual agreement of the Parties from time to time, as reasonably requested by either Party.

 

  

3

 

  

	
     8.

	
Insurance.  Operator will not insure the Crude Oil.  If Customer desires to insure the Crude Oil while it is in storage at the Facility, Customer will bear the cost of such insurance.  Each Party will obtain and maintain in full force and effect during the Term of this Agreement insurance coverages of the following types and amounts and with insurance companies rated not less than A-, IX by A.M. Best, or otherwise reasonably satisfactory to the other Party: (a) worker’s compensation insurance complying with Applicable Law and employer’s liability insurance with limits of $1,000,000 each accident, $1,000,000 disease each employee, and $1,000,000 disease policy limit; (b) commercial or comprehensive general liability insurance on an occurrence form with a combined single limit of $1,000,000 each occurrence, and annual aggregates of $2,000,000, for bodily injury and property damage, including coverage for blanket contractual liability, broad form property damage, personal injury liability, independent contractors, products/completed operations, and sudden and accidental pollution, and, where applicable, the explosion, collapse, and underground exclusion will be deleted; (c) automobile liability insurance complying with Applicable Law with a combined single limit of $1,000,000 each occurrence for bodily injury and property damage to include coverage for all owned, non-owned, and hired vehicles; (d) excess or umbrella liability insurance with a combined single limit of $10,000,000 each occurrence, and annual aggregates of $10,000,000, for bodily injury and property damage covering excess of the required employer’s liability insurance, commercial or comprehensive general liability insurance, and automobile liability insurance; and (e) sudden and accidental pollution legal liability coverage in a minimum amount of $5,000,000 per occurrence, $10,000,000 aggregate, for injury to persons or damage to property resulting from any release, spillage, leak or discharge of Crude Oil from the Facility into the ambient air, surface water, groundwater, land surface or subsurface strata.  Such insurance shall include coverage for clean up and remediation expenses that is not subject to sub-limits.

 

	
  

	
Each Party will provide the other Party certificates showing evidence of the required insurance coverage as of the Effective Date of this Agreement. The required limits are minimum limits and will not be construed to limit the Parties’ liability.  Each Party will bear the cost of its respective insurance policies required above.  For purposes of this Agreement, “Affiliate” means, with respect to any entity, any other entity controlling, controlled by or under common control with such entity, whether directly or indirectly through one or more intermediaries.  As used in the preceding definition, “control” and its derivatives mean legal, beneficial or equitable ownership, directly or indirectly, of more than fifty percent (50%) of the outstanding voting capital stock (or other ownership interest, if not a corporation) of an entity or management or operational control over such entity.

	
     9.

	
Indemnification.  Operator will indemnify, defend, and hold harmless Customer, its Affiliates, and its and their respective officers, directors, members, partners, shareholders, employees and agents (“Operator Indemnified Entities”)  from and against any claims, actions, judgments, liabilities, losses, costs, damages, fines, penalties and expenses (“Liabilities”) in connection with this Agreement to the extent arising from: (a) the negligence or willful misconduct of Operator, its Affiliates or their respective employees, agents or contractors; (b) the failure of Operator to comply with the terms and conditions of this Agreement; or (c) any environmental losses such as Crude Oil discharges or violations of environmental laws caused by Operator or its employees, representatives, agents or contractors, in performing its obligations under this Agreement.

 

  

4

 

  

 

	
  

	
Customer will indemnify, defend, and hold harmless Operator, its Affiliates, and its and their respective partners, officers, directors, members, shareholders, employees and agents (“Customer Indemnified Entities”) from and against any Liabilities in connection with this Agreement to the extent arising from: (a) the negligence or willful misconduct of Customer, its Affiliates or their respective employees, agents or contractors; (b) the failure of Customer to comply with the terms and conditions of this Agreement; or (c) any environmental losses such as Crude Oil discharges or violations of environmental laws caused by Customer or its employees, representatives, agents or contractors, in performing its obligations under this Agreement.  The indemnities expressed in this Agreement will survive the expiration or termination of this Agreement.

 

	
  

	
The Customer Indemnified Entities or Operator Indemnified Entities, as the case may be, agree to notify the indemnifying Party as soon as practicable after receiving notice of the assertion of any claim brought against it within the indemnities of this Agreement, shall furnish the other Party with complete details within its knowledge and each Party shall render all reasonable assistance requested by the other in the defense.  The indemnifying Party shall have the right to conduct the defense of any asserted claims. If the indemnifying Party fails to assume the defense promptly after a claim is brought against the other Party or any other party entitled to indemnification by the indemnifying Party under this Section, such other Party may conduct such defense with all costs, including reasonable attorneys’ fees, at the indemnifying Party’s expense.  The non-indemnifying Party is not authorized to compromise or settle any claim without the indemnifying Party’s approval which shall not be unreasonably withheld.

	
     10.

	
Default; Remedies:

	
  

	
A.

	
The occurrence of any of the following shall constitute an “Event of Default” under this Agreement:

	
  

	
i.

	
Any failure by Customer to make any payment required hereunder on or before the specified due date, where such failure continues for five (5) days after receipt of written notice from Operator;

 

	
  

	
ii.

	
A failure by either Party to observe and perform any other material provision or covenant of this Agreement to be observed or performed by such Party other than obligations to make any payment, where such failure continues for ten (10) business days after receipt of written notice thereof from the other Party, except that the non-defaulting Party shall agree to extend the cure period for a reasonable period of time (within its discretion) if the alleged default is not reasonably capable of cure within the ten (10) business day period and the defaulting Party proceeds diligently to cure the default; or

 

  

5

 

  

	
  

	
iii.

	
Either Party (a) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (b) becomes insolvent or is generally unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (c) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (d) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (1) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (2) is not dismissed, discharged, stayed or restrained within thirty (30) days; (e) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (f) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for all or substantially all its assets; (g) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained within thirty days; (h) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (a) to (g) inclusive; or, (i) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

 

	
  

	
B.

	

Upon an Event of Default, the non-defaulting Party may terminate this Agreement upon notice to the defaulting Party and/or pursue other rights or remedies available under Applicable Law.

 

	
     10A.

	
Warehouseman’s Lien.  Operator will have a warehouseman’s lien upon such amount of Crude Oil in the Facility whose market value equals any amounts owed to Operator hereunder which have not been or are not paid when due under this Agreement (regardless of  whether such amounts are owed for the Crude Oil then in the Facility).  Customer shall provide ten (10) days’ advance written notice to Operator if it intends to transfer title to any  Crude Oil at the Facility to a third party and promptly shall notify Operator in writing upon learning that a third party claims an interest in the Crude Oil in the Facility.  Such notice will set forth the name and business address of the third party and the interest claimed.

 

	
     11.

	
Expiration/Termination of Term:  Upon expiration of the Term or termination of this Agreement for any reason, Customer shall remove all its Crude Oil from the Facility not later than the last day of the term or within ten (10) days after any earlier termination of this Agreement pursuant to the terms hereof.

 

  

6

 

  

 

	
  

	
In the event all Crude Oil cannot be delivered to or removed by Customer, Operator shall purchase the remaining Crude Oil from Customer and/or its permitted assignee at a current market price to be mutually agreed between the Parties.  Operator shall be entitled to deduct amounts owed by Customer under this Agreement from the price paid to Customer.  Any remaining Crude Oil shall be independently gauged and measured by an independent inspection company, the cost of which shall be borne by Customer, and the measurements determined by the independent inspection company shall be binding on the Parties.

 

	
     12.

	
Force Majeure and Abatement:  In the event either Party hereto is rendered unable, wholly or in part, by Force Majeure, to carry out its obligations hereunder (except for an obligation to pay money), then by such Party giving written notice and full particulars of such Force Majeure to the other Party as soon as reasonably possible after the occurrence thereof, the obligation of the Party giving such notice, so far as it is affected by such Force Majeure, shall be suspended during the continuance of any inability so caused but for no longer period and in no event beyond the expiration of the Term of this Agreement; and such cause shall, as far as possible, be remedied with all reasonable dispatch.

 

	
  

	
The term “Force Majeure” as employed herein shall mean acts of God, strikes, lockouts, or other industrial disturbances, acts of the public enemy, wars, terrorism, vandalism, insurrections, riots, lightning, epidemics, earthquakes, fires, floods, storms, washouts, explosions, and any governmental, commission or agency regulation, order, restraint or prohibition having jurisdiction of the Parties hereto, or jurisdiction of parties supplying labor, material, or any item or items necessary or desirable for the performance of this Agreement, and any other causes, not within the control of the Party claiming a suspension which, by the exercise of due diligence, such Party shall not have been able to avoid or overcome.

 

	
  

	
In the event that all or any substantial part of the Facility is destroyed by fire or other casualty or is rendered partially or wholly unusable by a Force Majeure event, the Monthly Storage Fee hereunder, or a fair and just proportion thereof according to the nature and extent of the damage sustained in loss of use of the Operating Capacity for Storage Services hereunder, shall at the time of such injury abate, without extending the Term of this Agreement, until said Storage, shall have been fully restored.  If such damage to the Facility causes fifty percent (50%) or more of the Operating Capacity for Storage Services to be unusable, then either Party shall have the option to terminate this Agreement exercisable by notice to the other Party within thirty (30) days after the date of the casualty.  If this Agreement is not so terminated within such time period, then Operator shall be deemed to have agreed to repair and restore the Facility and/or provide reasonable replacement Operating Capacity within the Facility.  The length of time that Operator shall have to make such repairs hereunder shall in no event exceed a period of six (6) months from the date of casualty.  If Operator fails to complete such repairs within said six (6) month period, Customer shall have the option (i) to terminate this Agreement as of the date of such casualty by giving written notice to Operator not later than thirty (30) days after said six (6) month period or (ii) to exercise any and all rights necessary to cause Operator to complete such repairs.

 

  

7

 

  

	
     13.

	
Limitation of Liability; Disclaimer of Warranty:

	
  

	
A.

	
EXCEPT WITH RESPECT TO CLAIMS MADE BY THIRD PARTIES FOR WHICH A PARTY MUST INDEMNIFY THE OTHER PARTY PURSUANT TO SECTION 9 ABOVE, OR UNLESS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, THE PARTIES’ LIABILITY FOR DAMAGES IS LIMITED TO DIRECT, ACTUAL DAMAGES ONLY AND NEITHER PARTY SHALL BE LIABLE FOR SPECIFIC PERFORMANCE, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, OR SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, IN TORT, CONTRACT OR OTHERWISE, OF ANY KIND, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE PERFORMANCE, THE SUSPENSION OF PERFORMANCE, THE FAILURE TO PERFORM, OR THE TERMINATION OF THIS AGREEMENT.

	
  

	
B.

	
Title to Crude Oil will not pass to Operator, and Operator will not be liable as an insurer of Crude Oil.  Operator will not be liable to Customer for chemical deterioration of Crude Oil caused by stagnant storage or normal evaporation.  except as expressly provided in this Agreement, Operator makes no representations or warranties, express or implied, including any implied warranty of merchantability or fitness for a particular purpose.

	
     14.

	
Compliance With Laws:

 

	
  

	
A.

	
Operator represents, warrants and covenants as of the Effective Date of this Agreement that:

 

	
  

	
i.

	
Operator is in material compliance with all laws, regulations, ordinances, orders, judgments and decrees involving all Applicable Laws, including all environmental Applicable Laws, pertaining to operation of the Facility and has not received any notification that it is not presently in such compliance;

 

	
  

	
ii.

	
The Facility is structurally sound and safe and Operator does not know of any leaks in the storage tanks, pipelines, injection stations, loading facilities or other equipment or any other situation at the Facility that could cause environmental danger, generate environmental Liabilities or be detrimental to the environment;

 

	
  

	
iii.

	
During the Term of this Agreement, Operator shall maintain and operate the Facility in good serviceable condition and in a manner that materially complies with all reasonable and prudent industry standards adopted and used in commercial, high quality crude oil storage facility and with all Applicable Laws, including all environmental Applicable Laws; and

 

  

8

 

  

	
  

	
iv.

	
It is in material compliance with all Applicable Laws regarding worker occupational safety and training.

 

	
  

	
Without limiting the applicability of Section 10A(ii) of this Agreement to any other representation, warranty or covenant set forth in this Agreement, any breach or alleged breach of the foregoing representations is subject to the notice and cure period provisions set forth in Section 10A(ii).

	
  

	
B.

	
In the event of any spill or discharge of Crude Oil or other hazardous substance reportable under Applicable Laws occurring at the Facility, Operator shall take all steps (if any) required under Applicable Laws including undertaking measures to prevent or mitigate resulting pollution damage.  Operator shall notify Customer within 24 hours of any such clean-up or remediation operations, and shall perform such operations in accordance with Applicable Laws or as may be directed by any governmental authority.

	
  

	
C.

	
All reports or documents rendered by Operator to Customer shall, to the best of its knowledge and belief, accurately and completely reflect the facts about the activities and transactions to which they relate.  Operator promptly shall notify Customer if at any time it has reason to believe that the records or documents previously furnished no longer are accurate or complete.

	
   15.

	
Notices:  All invoices, notices, requests and other communications given pursuant to this Agreement shall be in writing and sent by facsimile or overnight courier to the respective Party’s address set forth below and to the attention of the person or department indicated.  A notice given by facsimile shall be deemed to have been received when transmitted to the other Party (if confirmed by the notifying Party’s transmission report), or on the following business day if received after 5:00 p.m. local time.  A notice given by overnight courier shall be deemed to have been received when the notice is actually delivered to or refused by the other Party, as reflected in the courier company’s delivery records.  A Party may change its address or facsimile number by giving written notice in accordance with this Section, which is effective upon delivery.

If to Operator to:

SemCrude, L.P.

11501 South I-44 Service Road

Oklahoma City, Oklahoma 73173

Attn:  Jeff Matthews

Facsimile:  (405) 691-5192

With a copy to:

 

Hall, Estill, Hardwick, Gable, Golden & Nelson

320 South Boston, Suite 400

Tulsa, OK 74103-3708

Attn:  Michael D. Cooke, Esq.

Facsimile:  (918) 594-0505

 

  

9

 

  

If to Customer to:

Vitol Inc.

1100 Louisiana

Suite 5500

Houston, Texas 77002

Attn:  Michael McGowan, Mickey Barrett

Facsimile:  (713) 230-1200

 

	
     16.

	
Confidentiality:

	
  

	
A.

	
The specific terms and conditions of this Agreement are confidential and neither Party shall disclose them to any third party except (i) as may be required by court order, Applicable Laws or a governmental authority, or (ii) to such Party’s or its Affiliates’ employees, auditors, consultants, banks, financial advisors and legal advisors.  The confidentiality obligations under this Agreement shall survive termination of this Agreement for a period of one (1) years following termination.

	
  

	
B.

	
In the case of disclosure covered by Section 16A(i) and if the disclosing Party’s counsel advises that it is legally obligated to do so, the disclosing Party shall notify the other Party in writing of any proceeding of which it is aware which may result in disclosure, and use reasonable efforts to prevent or limit such disclosure.  The Parties shall be entitled to all remedies available at law, or in equity, to enforce or seek relief in connection with the confidentiality obligations contained herein.

	
  

	
C.

	
Each Party shall obtain the review and approval, which approval shall not be unreasonably withheld or delayed, by the other Party of any press release that refers to such other Party or that describes this Agreement.

	
     17.

	
Assignment:

	
  

	
A.

	
This Agreement shall inure to the benefit of and be binding upon the Parties hereto, their respective successors and permitted assigns.

 

	
  

	
B.

	
Either Party may assign this Agreement or its rights or interests hereunder in whole or in part, or delegate its obligations hereunder in whole or in part, with the prior written consent of the other Party, which consent shall not be unreasonably withheld.  If written consent is given for any assignment, the assignor shall remain jointly and severally liable with the assignee for the full performance of the all obligations under this Agreement unless the Parties otherwise agree in writing.  In the event written consent to a partial assignment by Customer of its right to receive Storage Services under this Agreement is given by Operator, Customer shall (i) be the sole contact for Operator under this Agreement, (ii) continue to pay all sums due under this Agreement on behalf of itself and its partial assignee regardless of whether Customer’s partial assignee pays amounts due to Customer, and (iii) be solely responsible for collecting all sums due to Customer from its partial assignee as a result of such partial assignment.  Notwithstanding the foregoing, Operator shall have the right to assign this Agreement without Customer’s consent to SemGroup Energy Partners, L.P. or a controlled subsidiary thereof at any time.

 

  

10

 

  

	
  

	
C.

	
Any attempted assignment in violation of this Article shall be null and void ab initio.

 

	
  

	
D.

	
If requested by Customer, Operator will: (i) disclaim any interest in Customer’s Crude Oil in the Facility except for its right to assert a warehouseman’s lien as described in Section 10B; (ii) grant Customer the right to make a UCC-1 notice filing on the Crude Oil; (iii) make commercially reasonable efforts to obtain lender waivers acknowledging Customer’s priority interest in the Crude Oil from all present or future lenders with a security interest in Operator’s Facility or other oil assets.  If requested by Operator, Customer will disclaim any interest in the Facility other than the rights granted Customer under this Agreement.

 

	
     18.

	
Inspection.  Upon reasonable advance notice to Operator, Customer requires ingress/egress to the tanks containing its Crude Oil at all times for the purpose of performing independent inspections, independent measurements, and sealing the inlet and outlet shell valves to the tanks containing Customer’s Crude Oil.  During any such access, Customer’s employees, contractors and agents shall abide by and comply with Operator’s reasonable security and safety policies and procedures for the Facility.

 

	
     19.

	
Nature of the Transaction and Relationship of Parties.   This Agreement shall not be construed as creating a partnership, association, joint venture or lease between the Parties.  It is understood that each Party has complete charge of its employees and agents in the performance of its duties hereunder, and nothing herein shall be construed to make either Party, or any employee or agent of the either Party, an agent or employee of the other Party.

 

	
     20.

	
No Third Party Beneficiary: Nothing contained in this Agreement shall be considered or construed as conferring any right or benefit on a person not a Party to this Agreement and neither this Agreement nor the performance hereunder shall be deemed to have created a joint venture or partnership between the Parties.

	
     21.

	
No Waiver; Cumulative Remedies.

	
  

	
A.

	
The failure of a Party hereunder to assert a right or enforce an obligation of the other Party shall not be deemed a waiver of such right or obligation.  The waiver by any Party of a breach of any provision of, or Event of Default under, this Agreement, shall not operate or be construed as a waiver of any other breach of that provision or as a waiver of any breach of another provision of, or Event of Default under, this Agreement, whether of a like kind or different nature.

 

	
  

	
B.

	
Each and every right granted to the Parties under this Agreement or allowed it by law or equity shall be cumulative and may be exercised from time to time in accordance with the terms thereof and Applicable Law.

 

  

11

 

  

	
   22.

	
Governing Law:

	
  

	
A.

	
This Agreement shall be governed by, construed and enforced under the laws of the State of Oklahoma without giving effect to its conflicts of laws principles.

 

	
  

	
B.

	
Each of the Parties hereby irrevocably submits to the exclusive jurisdiction of any federal court of competent jurisdiction situated in the Northern District of Oklahoma, or, if such federal court declines to exercise or does not have jurisdiction, in any Oklahoma State Court in Tulsa County, Oklahoma (without recourse to arbitration unless both Parties agree in writing), and to service of process by certified mail, delivered to the Party at the address indicated above.  Each Party hereby irrevocably waives, to the fullest extent permitted by Applicable Law, any objection to personal jurisdiction, whether on grounds of venue, residence or domicile.

 

	
  

	
C.

	
Each Party waives, to the fullest extent permitted by Applicable Law, any right it may have to a trial by jury in any proceedings relating to this Agreement.

 

	
   23.

	
Miscellaneous:

	
  

	
A.

	
If any Article, Section or provision of this Agreement shall be determined to be null and void, invalid or unenforceable by a court of competent jurisdiction, then for such period that the same is void, invalid or unenforceable, the remaining portions of this Agreement shall remain in full force and effect and, if appropriate, such void, invalid or unenforceable provision shall be modified or replaced to give effect to the underlying intent of the Parties hereto and to the intended economic benefits of the Parties.

 

	
  

	
B.

	
The terms of this Agreement constitute the entire agreement between the Parties with respect to the matters set forth in this Agreement, and no representations or warranties shall be implied or provisions added in the absence of a written agreement to such effect between the Parties.  This Agreement shall not be modified or changed except by written instrument executed by the Parties’ duly authorized representatives.

 

	
  

	
C.

	
No promise, representation or inducement has been made by either Party that is not embodied in this Agreement, and neither Party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

 

	
  

	
D.

	
All audit rights, payment, confidentiality and indemnification obligations shall survive the expiration or termination of this Agreement.

 

	
  

	
E.

	
Each Party shall exercise reasonable care and diligence to prevent any illegal or unethical actions or conditions that could result in a conflict with the other Party’s best interests.

 

	
  

	
F.

	
This Agreement may be executed by the Parties in separate counterparts and initially delivered by facsimile transmission or otherwise, with original signature pages to follow, and all such counterparts shall together constitute one and the same instrument.

 

  

12

 

  

	
  

	
G.

	
References in this Agreement to “days,” “months” or “years” will mean to calendar days, months and years unless otherwise indicated.  The word “including” does not limit the preceding words or terms.  The words “hereof”, “herein”, “hereunder” and words of similar import refer to this Agreement as a whole and not to any specific Section, paragraph or provision.  All section titles and headings in this Agreement are merely for convenience, and will not limit in any way the interpretation of this Agreement.  No provision of this Agreement will be construed against or interpreted to the disadvantage of any Party by reason of such Party’s having drafted such provision.

	
  

	
H.

	
Each Party warrants that it has full corporate power to execute, deliver and perform this Agreement, and has all the consents, authorizations and approval to do so.  Each Party warrants that the execution, delivery and performance of this  Agreement does not contravene or constitute a default under any provision of its articles of incorporation  or by-laws or any contractual restriction binding on the Party.  Each Party is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation (or formation) and is duly qualified and in good standing as a foreign entity in the State of Oklahoma.

(Signature Page Follows)

  

13

 

  

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed effective as of the Effective Date.

 

	  	
“Operator”:

	  
	  	  	  
	  	
SEMCRUDE, L.P., a Delaware Limited Partnership

	  	  	  
	  	  	  
	  	  	  
	  	
By:

	
/s/ Peter L. Schwiering

	  	
Print Name:

	
Peter L. Schwiering

	  	
Title:

	
V.P.

	  	  	  
	  	  	  
	  	
“Customer”:

	  
	  	  	  
	  	
VITOL INC.

	  
	  	  	  
	  	  	  
	  	  	  
	  	
By:

	
/s/ Jeffery Hepper

	  	
Print Name:

	
Jeffery Hepper

	  	
Title:

	
Sr. V.P.

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