UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934


Date of report (date of earliest event reported): November 19, 2009


SEMGROUP ENERGY PARTNERS, L.P.
(Exact name of Registrant as specified in its charter)


DELAWARE
001-33503
20-8536826
(State of incorporation
or organization)
(Commission file number)
(I.R.S. employer identification number)


Two Warren Place
6120 South Yale Avenue, Suite 500
Tulsa, Oklahoma
 
74136
(Address of principal executive offices)
(Zip code)

Registrant’s telephone number, including area code:  (918) 237-4000

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
 

 
[ ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 


 
 
 

Item 1.01.
Entry into a Material Definitive Agreement.
 
     In connection with the Vitol Change of Control described under Item 5.01 below, SemGroup Energy Partners, L.P. (the “Partnership”) entered into an Amendment to Credit Agreement (the “Amendment”) with its lenders on November 19, 2009.  The Amendment allowed for the Vitol Change of Control.  In addition, among other things, the Amendment (i) permanently reduced the Partnership’s revolving credit facility under the Credit Agreement from $50.0 million to $40.0 million, (ii) requires the Partnership to make annual prepayments with 75% of excess cash flow, (iii) prohibits the Partnership from entering into any contract or arrangement for the purpose of hedging or speculating in the price of any commodity and (iv) eliminates the Partnership’s ability to repurchase amounts outstanding under the Credit Agreement via a Dutch auction process.  The Partnership paid the Lenders executing the Amendment a fee equal to 0.10% of the aggregate commitments of such Lenders under the Credit Agreement after the above described commitment reduction.

     After giving effect to the Amendment, the Partnership is expected to have $422.5 million in outstanding borrowings under its credit facility (including $22.5 million under its revolving credit facility and $400.0 million under its term loan facility), with an aggregate unused credit availability under its revolving credit facility and cash on hand of approximately $19.3 million. Amounts outstanding under the Partnership’s revolving credit facility will never exceed $40.0 million.

     This description of the Amendment is qualified in its entirety by reference to the Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated into this Item 1.01 by reference.
 
Item 5.01.
Changes in Control of Registrant.
 
     As previously disclosed in a Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 8, 2009, Vitol, Inc. (“Vitol”) and Manchester Securities Corp. entered into an agreement pursuant to which Vitol would acquire 100% of the membership interests in SemGroup Energy Partners G.P., L.L.C., the Partnership’s general partner (the “General Partner”), and the Partnership’s subordinated units.  On November 24, 2009, the transactions contemplated by the agreement were consummated and Vitol acquired 100% of the membership interests in the General Partner and the Partnership’s subordinated units (the “Vitol Change of Control”).  As owner of 100% of the membership interests in the General Partner, Vitol effectively controls the General Partner and the Partnership, and SemGroup, L.P., the Partnership’s former parent, no longer has any ownership interest in the General Partner.

 


 
 
 
 
Item 5.02.
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
 
Reorganization of the Board

     In connection with the Vitol Change of Control, the Board of Directors of the General Partner (the “Board”) was reconstituted.  Pursuant to notices given on November 20, 2009, Messrs. Edward F. Kosnik and Gabriel Hammond resigned from the Board effective as of the closing of the Vitol Change of Control, which occurred on November 24, 2009.  In addition, on November 24, 2009, Messrs. David N. Bernfeld and Dave Miller resigned from the Board.  The resignations by Messrs. Kosnik, Hammond, Bernfeld and Miller were not due to any disagreements with the Partnership or the General Partner.

     In addition, on November 24, 2009, Messrs. Miguel A. (“Mike”) Loya, Javed Ahmed, James C. Dyer, IV, Christopher G. Brown, Steven M. Bradshaw and John A. Shapiro were appointed to the Board.  Messrs. Loya, Ahmed, Dyer and Brown are affiliated with Vitol.  Messrs. Bradshaw and Shapiro will serve as independent members of the Board and will be members of the Conflicts Committee, Audit Committee and Compensation Committee of the Board.  Mr. Bradshaw will chair the Conflicts Committee while Mr. Shapiro will chair the Compensation Committee.  Mr. Duke R. Ligon will continue to serve on the Board and will remain as the Chairman of the Board, the chair of the Audit Committee and a member of the Compensation Committee and the Conflicts Committee of the Board.
 
     As independent members of the Board, Messrs. Bradshaw, Shapiro and Ligon will receive the following compensation: (i) $75,000 per year as an annual retainer fee, (ii) $5,000 per year for serving on each committee of the Board (except that the chairperson of each committee will receive $10,000 per year for serving as chairperson of such committee), (iii) $10,000 per year if Chairman of the Board, (iv) $2,000 per diem for each Board or committee meeting attended, (v) 5,000 restricted common units upon becoming a director, vesting in one-third increments over a three-year period, (vi) 2,500 restricted common units on each anniversary of becoming a director, vesting in one-third increments over a three-year period, (vii) reimbursement for out-of-pocket expenses associated with attending Board or committee meetings and (viii) director and officer liability insurance coverage.  The initial grants of restricted common units to Messrs. Bradshaw and Shapiro were made pursuant to a restricted common unit agreement, the form of which is filed as Exhibit 10.9 to the Partnership’s Registration Statement on Form S-1 (Reg. No. 333-141196), filed May 25, 2007.

     Mr. Loya has served as a director of Vitol since 1997 and as the President of Vitol, Inc. since 1999.  As such, he is Vitol’s senior shareholder responsible for the management of the Vitol Group’s trading activities, companies and assets in North and South America.  Previously, Mr. Loya has enjoyed positions with Transworld Oil U.S.A., Inc., Tenneco Inc. and Exxon Mobile Corporation. He currently serves on the board of OTC Global Holdings Co., Yes Prep Public Schools and Pilot Travel Centers LLC.  Mr. Loya holds an MBA from Harvard University and a Bachelors degree in mechanical engineering from the University of Texas at El Paso.



 
 
 

     Mr. Ahmed has served as the Head of Acquisitions and Investments for the Vitol Group since June 2009.  Prior to joining Vitol, Mr. Ahmed was at Morgan Stanley from 1997 to 2009, and was a Managing Director in that firm’s Commodities Group.  Mr. Ahmed currently serves on the board of directors of Vitol Tank Terminals International, which owns and controls significant oil products tankage globally.  He has previously served on the board of directors of Heidmar Group Inc., TransMontaigne Inc. and TransMontaigne GP L.L.C., the general partner of TransMontaigne Partners L.P.  Mr. Ahmed holds a Juris Doctor degree and an MBA from Harvard University and a Bachelors degree from Yale University.

     Mr. Dyer has served as a director and Vice President, Projects and Business Development, of Vitol, Inc. since 2005.  Mr. Dyer first joined Vitol in 1990, where he was responsible for structured financing and project development.  From 2001 to 2003, Mr. Dyer served as Corporate Senior Vice President and Chief Commercial Officer for El Paso Merchant Petroleum, and from 1998 to 2001 he served as an officer in various capacities at Engage Energy US, L.P., a natural gas and electric power marketing joint venture between the Coastal Corporation and Westcoast Energy (Canada).  From 1996 to 1998, he was President and CEO of Euromin, Inc., a Vitol subsidiary engaged in trading aluminum and other nonferrous metals.  Prior to that time, he was Chief Economist for Texas Commerce Bank.  Mr. Dyer is a Chartered Financial Analyst and a Financial Analysts Federation, Fellow and holds degrees in accounting and economics.

     Mr. Brown has served as a crude oil trader at Vitol since February 2005.  Prior to joining Vitol, Mr. Brown had served as a crude oil trader for Koch Supply and Trading, LP since 1997.  Previously, he had served in various positions with Koch Oil Company and Koch Refining Company.  Mr. Brown holds a Bachelors degree in chemical engineering from the University of Minnesota.

     Mr. Bradshaw has over 30 years of experience in the global logistics and transportation industry and currently serves as the Managing Director at Global Logistics Solutions.  From 2005 to 2009, he served as Vice President - Administration of Premium Drilling, Inc., an offshore drilling contractor that provides jack-up drilling services to the oil and gas industry in the United States and internationally.  Previously, he served as Executive Vice President of Skaugen PetroTrans, Inc. from 2001 to 2003 and as President, Refined Products Division at Kirby Corporation, from 1992 to 1996.  Mr. Bradshaw also served as an officer in the United States Navy and holds an MBA from Harvard University and a Bachelors degree in mathematics from the University of Missouri-Columbia.  There is no arrangement or understanding between Mr. Bradshaw and any other persons or entities pursuant to which Mr. Bradshaw was appointed as a director.

     Mr. Shapiro recently retired as an officer at Morgan Stanley & Co. where he had served for more than 24 years in various capacities, most recently as Global Head of Commodities.  While an officer at Morgan Stanley, Mr. Shapiro participated in the successful acquisitions of TransMontaigne Inc. and Heidmar Inc. and served as a member of the board of directors of both companies.  Prior to joining Morgan Stanley & Co., Mr. Shapiro worked for Conoco, Inc. and New England Merchants National Bank.  Mr. Shapiro has been a lecturer at Princeton University, Harvard University School of Government, HEC Business School (Paris, France) and Oxford University Energy Program (Oxford, UK).  In addition, he serves on the board of directors of Citymeals-on-Wheels and holds an MBA from Harvard University and a Bachelors degree in economics from Princeton University.  There is no arrangement or understanding between Mr. Shapiro and any other persons or entities pursuant to which Mr. Shapiro was appointed as a director.


 
 
 

Reorganization of the Management Team

     On November 24, 2009, Mr. J. Michael Cockrell was appointed as the President and Chief Operating Officer of the General Partner.  In addition, Messrs. Kevin L. Foxx and Michael J. Brochetti are stepping down from their current positions as President and Chief Executive Officer of the General Partner and Executive Vice President—Corporate Development and Treasurer of the General Partner, respectively, but are expected to remain as consultants to the General Partner until March 1, 2010 to facilitate an orderly transition.  The General Partner expects to enter into consulting agreements with Messrs. Foxx and Brochetti in the near future.

     Mr. Cockrell, age 62, has extensive experience in the crude oil industry and prior to joining the General Partner served as Senior Vice President, Commercial Upstream, of the general partner of TEPPCO Partners, L.P. from February 2003 until November 2009. Previously he had served in various positions with the general partner of TEPPCO Partners, L.P. including serving as Vice President, Commercial Upstream.

     In connection with his appointment as the President and Chief Operating Officer of the General Partner, Mr. Cockrell will enter into an employment agreement substantially in the form attached hereto as Exhibit 10.2 (the “Employment Agreement”) and the General Partner’s customary indemnification agreement substantially in the form filed as Exhibit 10.7 to the Partnership’s Registration Statement on Form S-1 (Reg. No. 333-141196), filed May 25, 2007.

     Pursuant to the Employment Agreement, Mr. Cockrell will be paid an initial annual base salary of $282,000. The Employment Agreement has a five year term. In addition, during the period from 2010 to 2013, Mr. Cockrell is entitled to certain deferred payments as compensation for long-term incentive awards which he forfeited upon leaving his prior employer, which payments will total $2,080,377, and may be made in the form of cash or equity incentives.  These deferred payment amounts will be accelerated upon a Change of Control (as defined below), or upon his termination without Cause (as defined below), for Good Reason (as defined below) or due to death or disability.  Mr. Cockrell is also eligible for discretionary bonus awards and long-term incentives which may be made from time to time in the sole discretion of the Board.  The Employment Agreement also provides that Mr. Cockrell is eligible to participate in any employee benefit plans maintained by the General Partner and is entitled to reimbursement for certain out-of-pocket expenses.  Mr. Cockrell has agreed not to disclose any confidential information obtained by him while employed under the Employment Agreement and has agreed to a one year non-solicitation covenant, which in no event will continue past the 5th anniversary of the effective date of the agreement.

     Except in the event of termination for Cause (as defined below), termination by Mr. Cockrell other than for Good Reason (as defined below), termination after the expiration of the term of the Employment Agreement or termination due to death or disability, the Employment Agreement provides for payment of any unpaid base salary and vested benefits under any incentive plans, a lump sum payment equal to his base salary for the lesser of (i) two years or (ii) the remainder of the employment term, and Mr. Cockrell will also be entitled to continued participation in the General Partner’s welfare benefit programs for the same period of time. Based upon Mr. Cockrell's current base salary, the maximum amount of the lump sum severance payment would be $564,000, in addition to continued participation in the General Partner’s welfare benefit programs and the amounts of unpaid base salary and benefits under any incentive plans.  Furthermore, the deferred payment amounts described above would be accelerated and paid in a lump sum.  Upon termination of his employment due to death or disability, Mr. Cockrell and/or his dependents would be entitled to the benefits continuation described above, his unpaid base salary and accelerated payment of the deferred payment amounts described above.



 
 
 

     For purposes of the Employment Agreement:

     “Cause” means (i) conviction of the officer by a court of competent jurisdiction of any felony or a crime involving moral turpitude; (ii) the officer’s willful and intentional failure or willful intentional refusal to follow reasonable and lawful instructions of the Board; (iii) the officer’s material breach or default in the performance of his obligations under the Employment Agreement; or (iv) the officer’s act of misappropriation, embezzlement, intentional fraud or similar conduct involving the General Partner.

     “Good Reason” means (i) a material reduction in the officer’s base salary; (ii) a material diminution of the officer’s duties, authority or responsibilities as in effect immediately prior to such diminution; or (iii) the relocation of the officer’s principal work location to a location more than 100 miles from its current location.
 
     “Change of Control” means any of the following events: (i) any person or group other than SemGroup, L.P. or Vitol, Inc., or their respective affiliates, shall become the beneficial owner, by way of merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the combined voting power of the equity interests in the Partnership or in the General Partner; (ii) the Partnership’s limited partners approve, in one or a series of transactions, a plan of complete liquidation of the Partnership; (iii) the sale or other disposition by either the General Partner or the Partnership of all or substantially all of the assets of the General Partner or the Partnership in one or more transactions to any person other than the General Partner and its affiliates; or (iv) a transaction resulting in a person other than the General Partner or an affiliate of the General Partner being the Partnership’s general partner.

     This description of the Employment Agreement is qualified in its entirety by reference to the Employment Agreement a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated into this Item 5.02 by reference.

Acceleration of Awards and Payments

     The Vitol Change of Control constituted a change of control under the General Partner’s Long-Term Incentive Plan (the “LTIP”), which resulted in the vesting of all outstanding awards under the LTIP at the time of the change of control.

     In addition, the Vitol Change of Control resulted in a change of control under the employment agreements of Messrs. Foxx, Brochetti, Schwiering, Alex G. Stallings and Jerry A. Parsons. If within one year after the Vitol Change of Control any such officer is terminated by the General Partner without Cause (as defined in the employment agreements) or such officer terminates the agreement for Good Reason (as defined in the employment agreements), he will be entitled to payment of any unpaid base salary and vested benefits under any incentive plans, a lump sum payment equal to 24 months of base salary and continued participation in the General Partner’s welfare benefit programs for the longer of the remainder of the term of the employment agreement or one year after termination. Upon such an event, Messrs Foxx, Brochetti, Stallings, Schwiering and Parsons would be entitled to lump sum payments of $900,000, $600,000, $600,000, $500,000 and $500,000, respectively, in addition to continued participation in the general partner’s welfare benefit programs and the amounts of unpaid base salary and benefits under any incentive plans.  It is anticipated that Messrs. Foxx and Brochetti will be paid these amounts at the termination of their service as consultants to the General Partner on March 1, 2010.

 
 

 
 
 

     The Vitol Change of Control also constituted a change of control under the General Partner’s 2009 Executive Cash Bonus Plan (the “Executive Cash Bonus Plan”).  As such, awards under the Executive Cash Bonus Plan will be determined on a pro-rata basis as of the date of the Vitol Change of Control with the actual earnings before interest, taxes, depreciation and amortization, and restructuring and certain other non-cash charges (“EBITDA”) of the Partnership, the crude business and the asphalt business, respectively, being calculated as of the most recently completed month prior to the Vitol Change of Control (the “Change of Control Period”) for which financial statements are available and the target performance measures being adjusted for the Change of Control Period as described in “Part II. Item 9B. Other Information” in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission on July 2, 2009.  The Partnership currently estimates such payments to be approximately $270,000, $180,000, $180,000, $193,750 and $150,000 to Messrs. Foxx, Brochetti, Stallings, Schwiering and Parsons, respectively.

Item 5.03.
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
 
     Effective December 1, 2009, the Board approved a change to the name of the Partnership from SemGroup Energy Partners, L.P. to Blueknight Energy Partners, L.P.  The name change was effected by a Certificate of Amendment to the Certificate of Limited Partnership of the Partnership (the “Certificate”), as filed with the Secretary of State of the State of Delaware on November 19, 2009.
 
     Additionally, effective December 1, 2009, the General Partner approved a change to the name of the General Partner from SemGroup Energy Partners G.P., L.L.C. to Blueknight Energy Partners G.P., L.L.C.  The name change was effected by a Certificate of Amendment to the Certificate of Formation of the General Partner (the “General Partner Certificate”), as filed with the Secretary of State of the State of Delaware on November 20, 2009.
 
     Copies of the Certificate and the General Partner Certificate are filed herewith as Exhibits 3.1 and 3.2, respectively, and incorporated herein by reference.

Item 7.01.
Regulation FD Disclosure.
 
     On November 24, 2009, the Partnership issued a press release announcing the Vitol Change of Control and the reconstitution of the Board and the management team.  A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

     Baker Botts L.L.P. has been counsel to the Partnership and will continue as counsel subsequent to the Vitol Change of Control.

     In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 7.01 and in the attached exhibit shall be deemed to be “furnished” and shall not be deemed to be “filed” for purposes of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).


 
 
 
 

Item 9.01.
Financial Statements and Exhibits.

(d)            Exhibits

In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of the Exchange Act.

EXHIBIT NUMBER
 
DESCRIPTION
     
3.1
—
Amended and Restated Certificate of Limited Partnership of the Registrant, dated as of November 19, 2009, to be effective as of December 1, 2009.
3.2
—
Amended and Restated Certificate of Formation of the General Partner dated as of November 20, 2009, to be effective as of December 1, 2009.
10.1
—
Amendment to Credit Agreement, dated as of November 19, 2009, by and among SemGroup Energy Partners, L.P., as Borrower, SemGroup Energy Partners Operating, L.L.C., SemGroup Energy Partners, L.L.C., SemGroup Crude Storage, L.L.C., SemPipe, L.P., SemPipe G.P., L.L.C., SGLP Management, Inc., SemMaterials Energy Partners, L.L.C. and SGLP Asphalt, L.L.C., as Guarantors, Wachovia Bank, National Association, as Administrative Agent, L/C Issuer and Swing Line Lender, and the Lenders party thereto.
10.2
—
Form of Employment Agreement.
99.1
—
Press release dated November 24, 2009.
 

 
 
 
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SEMGROUP ENERGY PARTNERS, L.P.

By:  SemGroup Energy Partners G.P., L.L.C.
        its General Partner


Date:  November 24, 2009                                            By:   /s/ Alex G. Stallings                                                                 
Alex G. Stallings
Chief Financial Officer and Secretary



 
 
 

INDEX TO EXHIBITS


EXHIBIT NUMBER
 
DESCRIPTION
     
3.1
—
Amended and Restated Certificate of Limited Partnership of the Registrant, dated as of November 19, 2009.
3.2
—
Amended and Restated Certificate of Formation of the General Partner dated as of November 20, 2009.
10.1
—
Amendment to Credit Agreement, dated as of November 19, 2009, by and among SemGroup Energy Partners, L.P., as Borrower, SemGroup Energy Partners Operating, L.L.C., SemGroup Energy Partners, L.L.C., SemGroup Crude Storage, L.L.C., SemPipe, L.P., SemPipe G.P., L.L.C., SGLP Management, Inc., SemMaterials Energy Partners, L.L.C. and SGLP Asphalt, L.L.C., as Guarantors, Wachovia Bank, National Association, as Administrative Agent, L/C Issuer and Swing Line Lender, and the Lenders party thereto.
10.2
—
Form of Employment Agreement.
99.1
—
Press release dated November 24, 2009.

Exhibit 3.1

AMENDED AND RESTATED
CERTIFICATE OF LIMITED PARTNERSHIP

OF
 
 
SEMGROUP ENERGY PARTNERS, L.P.

This Amended and Restated Certificate of Limited Partnership, dated November 19, 2009 (as the same may be further amended, supplemented or otherwise modified and in effect from time to time, this “ Certificate of Limited Partnership ”), of SEMGROUP ENERGY PARTNERS, L.P. (the “ Partnership ”) has been duly executed and is being filed by the undersigned in accordance with Section 17-210 of the Delaware Revised Uniform Limited Partnership Act (the “ Act ”), to amend and restate the original certificate of limited partnership of SemGroup Energy Partners, L.P., which was filed on February 22, 2007 with the Secretary of State of the State of Delaware (the “ Original Certificate ”), to form a limited partnership under the Act.

The Original Certificate is hereby amended and restated in its entirety, effective as of December 1, 2009, to read as follows:

1.            Name.   The name of the limited partnership is Blueknight Energy Partners, L.P. (the “Partnership”).

2.            Registered Office and Registered Agent.   The address of the registered office of the Partnership, as required by Section 17-104 of the Act, is Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.  The name and address of the registered agent for service of process on the Partnership in the State of Delaware, as required by Section 17-104 of the Act, are as follows:

The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801

3.            General Partner.   The name and business address of the sole general partner of the Partnership are as follows:

Blueknight Energy Partners G.P., L.L.C.
6120 South Yale Avenue, Suite 500
Tulsa, Oklahoma 74136

 
 
 

 
 

IN WITNESS WHEREOF, the undersigned sole general partner of the Partnership has executed this Amended and Restated Certificate of Limited Partnership to be effective as of December 1, 2009.

BLUEKNIGHT ENERGY PARTNERS G.P., L.L.C.

By: /s/ Alex G. Stallings                                                                 
Name:          Alex G. Stallings
Title:           Chief Financial Officer
Exhibit 3.2

AMENDED AND RESTATED
CERTIFICATE OF FORMATION
of
SEMGROUP ENERGY PARTNERS G.P., L.L.C.

AMENDED AND RESTATED CERTIFICATE OF FORMATION, dated November 20, 2009 (as the same may be further amended, supplemented or otherwise modified and in effect from time to time, this “ Certificate of Formation ”), of SEMGROUP ENERGY PARTNERS   G.P., L.L.C., a Delaware limited liability company (the “ Company ”), having its principal office at Two Warren Place, 6120 South Yale Avenue, Suite 500,Tulsa OK 74136.
 
This Certificate of Formation has been duly executed and is being filed by the undersigned, as an authorized person, in accordance with the provisions of 6 Del. C. §18-208, to amend and restate the original Certificate of Formation of the Company, which was filed under the name of SemGroup Energy Partners G.P., L.L.C. on February 22, 2007, with the Secretary of State of the State of Delaware (the “ Original Certificate ”), to form a limited liability company under the Delaware Limited Liability Company Act (6 Del. C. §18-101, et seq.).
 
The Original Certificate is hereby amended and restated in its entirety, effective as of December 1, 2009, to read as follows:
 
1 .             Name.   The name of the limited liability company is Blueknight   Energy Partners G.P., L.L.C. (the “Company”).
 
2.            Registered Office and Registered Agent .  The address of the Company’s registered office and the name and address of its registered agent for service of process are as follows:
 
The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
 

 
 
 

IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Certificate of Formation to be effective as of December 1, 2009.

By: /s/ Alex G. Stallings ______________
Name:           Alex G. Stallings
Title:           Authorized Person

Exhibit 10.1
 
AMENDMENT TO CREDIT AGREEMENT

This Amendment to Credit Agreement (this “ Amendment ”), dated as of November 19, 2009, is among SEMGROUP 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 ”), WACHOVIA BANK, NATIONAL ASSOCIATION, 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 Borrower, 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.
 
NOW, THEREFORE, the parties agree as follows:

1.   Amendment to Section 1.01 of the Credit Agreement .   Section 1.01 of the Credit Agreement is hereby amended, effective upon the consummation of the Vitol Transaction, as follows:
 
1.1   The definition of “ Change of Control ” is hereby amended by (a) changing the reference to “Qualifying Owners” in clause (b) thereof to “Qualifying Owner” and (b) deleting clause (c) in its entirety and replacing it with the following:
 
“(c) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of General Partner ceases to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; provided that, notwithstanding the foregoing, any changes to the composition of individuals serving as members of the board of directors or other equivalent governing body of General Partner approved by any Qualifying Owner shall not constitute a “Change of Control” hereunder.  As used herein, “ Qualifying Owner ” means Vitol Inc. or any Affiliate of Vitol Inc.”
 

 
 
 

1.2   The definition of “ Costs of Restructuring ” is hereby amended by deleting clause (c) in its entirety, and replacing it with the following:
 
“plus (c) all other restructuring expenses in an amount not to exceed, in the aggregate, through the Maturity Date, the sum of (i) $6.5 million, (ii) the cost incurred by the Borrower for the purchase of new directors’ and officers’ liability insurance coverage in November 2009 in connection with the Vitol Transaction; and (iii) fees paid to the Lenders (including fees for Lenders’ counsel and advisors) in connection with the Amendment to Credit Agreement dated as of November 19, 2009, among the Borrower, the Guarantors, the Administrative Agent and the Lenders parties thereto, which aggregate cap on Costs of Restructuring under this clause (c) shall be calculated on a net basis after giving effect to Costs of Restructuring that are reimbursed to the Borrower by insurance providers.”
 
1.3   The definition of “ Eligible Assignee ” is hereby deleted in its entirety and replaced with the following:
 
“ “ Eligible Assignee ” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, the L/C Issuer and the Swing Line Lender and (ii) unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.”
 
1.4   The definition of “ Net Cash Proceeds ” is hereby amended, effective as of April 7, 2009, by inserting the following language in clause (i) immediately after the word “Disposition”:
 
“(other than a Disposition permitted by Section 7.06(a), (b), (d), (e) or (f))”.
 
1.5   The following defined term is hereby inserted in its appropriate alphabetical order:
 
“ “ Vitol Transaction ” means the acquisition by Vitol Inc. or one or more Affiliates thereof (collectively, “ Vitol ”) of (i) 100% of the membership interests in the General Partner and (ii) the subordinated units of Borrower presently held by or pledged to Manchester Securities Corp.”
 
1.6   The following defined terms are hereby deleted in their entirety:  “Borrower Assignment Agreement”, “Borrower Assignment Effective Date”, Borrower Loan Purchase”, “Clearing Price”, “Expiration Time”, “Maximum Offer Amount”, “Maximum Permitted Offer”, “Maximum Purchase Price”, “Offer”, “Offer Document”, “Purchase Notice”.
 
2.   Amendment to Section 2.05 of the Credit Agreement .
 
2.1   Subsection 2.05(h) of the Credit Agreement is hereby amended by deleting the words “and may be used for the purchase of outstanding Term Loans as permitted by Section 10.06(i)” from the third sentence thereof.
 

 
2
 

2.2   Subsection 2.05(j) of the Credit Agreement is hereby amended by (i) changing the percentage referenced on the third line thereof from “50%” to “75%” and (ii) by deleting the words “and may be used for the purchase of outstanding Term Loans as permitted by Section 10.06(i)” from the second sentence thereof.
 
3.   Amendment to Section 6.02 of the Credit Agreement .   Section 6.02 of the Credit Agreement is hereby amended by deleting the word “and” at the end of clause (m) and inserting the following at the end of clause (n):
 
“; and
 
(o) no later than December 1, 2009, a forecast for calendar years 2010 and 2011 which sets forth (i) the Borrower’s updated business outlook for such period and (ii) the anticipated strategic and financial benefits of the Vitol Transaction to the Borrower during such period”.
 
4.   Amendment to Section 7.06 of the Credit Agreement .
 
4.1   Subsection 7.06(b) of the Credit Agreement is hereby amended by deleting such subsection in its entirety and replacing it with the following:
 
“Dispositions of Cash Equivalents in the ordinary course of business and Dispositions of inventory arising from normal imbalances on the gathering system relating to loss allowance provisions and measurement variability”.
 
4.2   Subsection 7.06(f) of the Credit Agreement is hereby amended by adding the following language before the “;” at the end of such subsection:
 
“excluding leases which in accordance with GAAP constitute a constructive sale, including any sale/leaseback transaction”.
 
5.   Amendment to Section 7.11 of the Credit Agreement .  Section 7.11 of the Credit Agreement is hereby amended by: (a) replacing the phrase “Other than those listed on Schedule 7.11” with “Neither Borrower nor any Restricted Subsidiary thereof may”, (b) deleting the word “or” at the end of clause (b) thereof, and (c) by inserting the following at the end of clause (c) thereof:
 
“; or
 
(d) enter into any contract or arrangement for the purpose of hedging or speculating in the price of any commodity”.
 
6.   Amendment to Section 10.06 of the Credit Agreement .  Subsection 10.06(i) of the Credit Agreement is hereby deleted in its entirety and replaced with the following: “[Intentionally omitted.]”.
 

 
3
 

7.   Amendment to Schedules and Exhibits .
 
7.1   Amendment to Schedule 2.01 of the Credit Agreement .  Schedule 2.01 of the Credit Agreement is hereby deleted in its entirety and replaced with Schedule 2.01 attached hereto.
 
7.2   Amendment to Exhibits H, I and J of the Credit Agreement .  Each of Exhibits H, I and J to the Credit Agreement is hereby deleted in its entirety and replaced with the following: “[Intentionally omitted.]”
 
8.   Conditions to Effectiveness .  This Amendment shall be effective on the date when and if each of the following conditions is satisfied:
 
(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 the amendment shall have been obtained.
 
(d)   Expense Reimbursements .  The Borrower shall have paid all reasonable invoices presented to the Borrower 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.
 
(e)   Fees .  The Borrower shall have 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 November 19, 2009, a fee equal to 0.1% of the sum of the outstanding Term Loan and Revolver Commitment for each of such Lenders (after giving effect to the Revolver Commitment reductions provided for herein).
 
(f)   Representation by Vitol .  The Administrative Agent shall have received an executed letter from Vitol Inc. in the form annexed hereto as Exhibit A .
 
(g)   Reimbursement of Borrower by Vitol .  The Administrative Agent shall have received a copy of an executed reimbursement agreement between Vitol Inc. and the Borrower in the form annexed hereto as Exhibit B .
 

 
4
 

9.   Release .  For purposes of this Section 9 , 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).
 
10.   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 9 of this Amendment) other than as provided in Section 9 of this Amendment.
 
11.   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.
 
12.   Mutual Representation .  As of the effective date of this Amendment, 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.
 
13.   GOVERNING LAW .  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
14.   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.
 
15.   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.
 

 
5
 

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


By: SemGroup Energy Partners GP, L.L.C.
       its General Partner

By: /s/ Michael J. Brochetti                                                                   
       Name: Michael J. Brochetti
       Title:  EVP—Corporate Development and Treasurer



SemGroup Energy Partners Operating, L.L.C.


By: /s/ Michael J. Brochetti                                                                   
       Name: Michael J. Brochetti
       Title:  EVP—Corporate Development and Treasurer


SemMaterials Energy Partners, L.L.C.


By: /s/ Michael J. Brochetti                                                                   
       Name: Michael J. Brochetti
       Title:  EVP—Corporate Development and Treasurer


SemGroup Energy Partners, L.L.C.


By: /s/ Michael J. Brochetti                                                                   
       Name: Michael J. Brochetti
       Title:  EVP—Corporate Development and Treasurer


 
6
 


SemGroup Crude Storage, L.L.C.


By: /s/ Michael J. Brochetti                                                                   
       Name: Michael J. Brochetti
       Title:  EVP—Corporate Development and Treasurer


SemPipe, L.P.
    By:  SemPipe, G.P., L.L.C., its General Partner


By: /s/ Michael J. Brochetti                                                                   
       Name: Michael J. Brochetti
       Title:  EVP—Corporate Development and Treasurer


SemPipe, G.P., L.L.C.


By: /s/ Michael J. Brochetti                                                                   
       Name: Michael J. Brochetti
       Title:  EVP—Corporate Development and Treasurer


SGLP Management, Inc.


By: /s/ Michael J. Brochetti                                                                   
       Name: Michael J. Brochetti
       Title:  EVP—Corporate Development and Treasurer


SGLP Asphalt, L.L.C.


By: /s/ Michael J. Brochetti                                                                   
       Name: Michael J. Brochetti
       Title:  EVP—Corporate Development and Treasurer


 
7
 

Lenders:


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:   Vice President


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/ David C. Mills ______________
Name: David C. Mills
Title:   Managing Director


Bank of Scotland PLC, as a Lender


By: /s/ Julia R. Franklin ____________
Name: Julia R. Franklin
Title:   Assistant Vice President


 
8
 


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/ Thomas E. McGraw __________
Name: Thomas E. McGraw
Title:   Managing Director

Calyon New York Branch, as a Lender


By: /s/ Anne G. Shean ______________
Name: Anee G. Shean
Title:   Managing Director

By: /s/ Alan Sidrane    ______________
Name: Alan Sidrane
Title:   Managing Director


Citibank, N.A., as a Lender


By: /s/ John Mugno _______________
Name: John Mugno
Title:   Vice President


Fortis Capital Corporation, as a Lender


By: /s/ Harry T. Nullet _____________
Name: Harry T. Nullet
Title:   Director

By: /s/ Courouble _________________
Name: Courouble
Title:   CRO




 
9
 

Guaranty Bank and Trust Company, as a Lender


By: /s/ Gail J. Nofsinger ______________
Name: Gail J. Nofsinger
Title:   Senior Vice President


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., fka Merrill Lynch Business Financial Services, Inc., as a Lender


By: /s/ Ranlatt F. Hernick _____________
Name: Ranlatt F. Hernick
Title:   Duly Authorized Signatory


One East Liquidity Master LP, as a Lender


By: /s/ Sina Toussi ___________________
Name: Sina Toussi
Title:   Authorized Signatory


One East Partners Master LP, as a Lender


By: /s/ Sina Toussi ___________________
Name: Sina Toussi
Title:   Authorized Signatory


Raymond James Bank FSB, as a Lender


By: /s/ Garrett McKinnon _____________
Name: Garrett McKinnon
Title:   Senior Vice President



 
10
 

Royal Bank of Canada, as a Lender


By: /s/ Jay T. Sartaln _______________
Name: Jay T. Sartaln
Title:   Authorized Signatory


SunTrust Bank, N.A., as a Lender


By:_____________________________
Name:
Title:


UBS Loan Finance LLC, as a Lender


By: /s/ Marie Haddad _______________
Name: Marie Haddad
Title:   Associate Director

By: /s/ Irja R. Otsa      _______________
Name: Irja R. Otsa
Title:   Associate Director


Evergreen High Income Fund , as a Lender


By: /s/ Robert J. McLaughlin _________
Name: Robert J. McLaughlin
Title:   Vice President

Evergreen Utilities & High Inc. , as a Lender


By: /s/ Robert J. McLaughlin _________
Name: Robert J. McLaughlin
Title:   Vice President







 
11
 

Evergreen Income Advantage Fund , as a Lender


By: /s/ Robert J. McLaughlin _________
Name: Robert J. McLaughlin
Title:   Vice President

Evergreen Multi-Sector Income , as a Lender


By: /s/ Robert J. McLaughlin _________
Name: Robert J. McLaughlin
Title:   Vice President

Evergreen VA High Income Fund , as a Lender


By: /s/ Robert J. McLaughlin _________
Name: Robert J. McLaughlin
Title:   Vice President

Solus Core Opportunities Master Fund , as a Lender


By: /s/ Chris Bondy _________________
Name: Chris Bondy
Title:   Attorney-in-Fact

Woodlands Commercial Bank , as a Lender


By: /s/ Gary Murray _________________
Name: Gary Murray
Title:   Chief Credit Officer




Acknowledged:

Wachovia Bank, National Association,
     as Administrative Agent


By: /s/ D. Paul Hulbert III         ________
Name: D. Paul Hulbert III
Title:   Vice President


 
12
 


Schedule 2.01
to
Credit Agreement

Schedule of Commitments

LENDER
 
REVOLVER
   
TERM LOAN
   
TOTAL COMMITMENT
 
UBS LOAN FINANCE LLC
  $ 1,142,857.14     $ 4,285,714.28     $ 5,428,571.42  
SOLUS CORE OPPORTUNITIES MASTER FUND
  $ 0.00     $ 2,000,000.00     $ 2,000,000.00  
BMO CAPITAL MARKETS
  $ 2,666,666.66     $ 26,666,666.67     $ 29,333,333.33  
WBNA
  $ 3,290,476.20     $ 28,976,190.49     $ 32,266,666.69  
BANK OF AMERICA
  $ 3,423,809.53     $ 29,139,523.81     $ 32,563,333.34  
SUNTRUST
  $ 1,133,333.34     $ 11,333,333.33     $ 12,466,666.67  
ONE EAST LIQUIDITY MASTER LP
  $ 205,714.29     $ 2,021,428.57     $ 2,227,142.86  
ABN AMRO
  $ 2,800,000.00     $ 28,000,000.00     $ 30,800,000.00  
CITIBANK
  $ 2,666,666.66     $ 26,666,666.67     $ 29,333,333.33  
JPMORGAN CHASE
  $ 1,133,333.34     $ 11,333,333.33     $ 12,466,666.67  
WOODLANDS COMMERCIAL BANK
  $ 1,942,857.14     $ 27,285,714.28     $ 29,228,571.42  
BLUE RIDGE INVESTMENTS LLC
  $ 1,033,333.34     $ 3,976,190.47     $ 5,009,523.81  
GE BUS FINCL SVC (FKA ML BFS)
  $ 1,333,333.34     $ 13,333,333.33     $ 14,666,666.67  
EVERGREEN MULTI-SECTOR INCOME
  $ 0.00     $ 2,925,000.00     $ 2,925,000.00  
EVERGREEN UTILITIES & HIGH INC
  $ 0.00     $ 155,000.00     $ 155,000.00  
EVERGREEN HIGH INCOME FUND
  $ 0.00     $ 4,040,000.00     $ 4,040,000.00  
EVERGREEN INCOME ADVANTAGE FUND
  $ 0.00     $ 5,385,000.00     $ 5,385,000.00  
EVERGREEN VA HIGH INCOME FUND
  $ 0.00     $ 165,000.00     $ 165,000.00  
RAYMOND JAMES BANK
  $ 2,666,666.66     $ 26,666,666.67     $ 29,333,333.33  
ROYAL BANK OF CANADA
  $ 2,666,666.66     $ 26,666,666.67     $ 29,333,333.33  
FORTIS CAPITAL CORPORATION
  $ 1,133,333.34     $ 11,333,333.33     $ 12,466,666.67  
ONE EAST PARTNERS MASTER LP
  $ 1,627,619.04     $ 16,311,904.77     $ 17,939,523.81  
BANK OF SCOTLAND
  $ 2,800,000.00     $ 28,000,000.00     $ 30,800,000.00  
GUARANTY BANK AND TRUST
  $ 1,333,333.34     $ 13,333,333.33     $ 14,666,666.67  
BANK OF NOVA SCOTIA
  $ 1,666,666.66     $ 16,666,666.67     $ 18,333,333.33  
CALYON NEW YORK BRANCH
  $ 3,333,333.34     $ 33,333,333.33     $ 36,666,666.67  
                         
TOTAL
  $ 40,000,000.00     $ 400,000,000.00     $ 440,000,000.00  


 
13
 
Exhibit “A” to Amendment

[Letterhead of Vitol Inc.]
 

 
November [__], 2009
 

 
Wachovia Bank, National Association, as Administrative Agent (as defined below)
[address]
[address]
Attn:

 
Re:  SemGroup Energy Partners G.P., L.L.C.
 
Ladies and Gentlemen:
 
Reference is made to 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 ”), among SemGroup Energy Group Partners, L.P., as Borrower, the Guarantors parties thereto, Wachovia Bank, National Association, as Administrative Agent (the “ Administrative Agent ”), L/C Issuer and Swing Line Lender, and the Lenders parties thereto.  Defined terms used herein with definition shall have the meanings assigned them in the Credit Agreement.
 
Pursuant to Section 8(f) of the Amendment to Credit Agreement, dated as of November __, 2009, among the Borrower, the Guarantors, the Administrative Agent and the Lenders parties thereto, the undersigned hereby certifies as follows:
 
Vitol Inc. or one or more of its Affiliates (collectively, “ Vitol ”) has acquired, or will acquire, from Manchester Securities Corp. (“ Manchester ”), (i) one hundred percent (100%) of the membership interests in the General Partner of Borrower and (ii) one hundred percent (100%) of the subordinated units of Borrower held or previously held by and/or pledged or previously pledged to Manchester, in a transaction that vests in Vitol absolute title to such general partnership interests and subordinated units, and neither Manchester nor any Affiliate thereof has any right or obligation to reacquire such general partner interests or subordinated units under any circumstances.
 
Very truly yours,
 

 
VITOL INC.
 

 
By:                                                                
 
Name:
 
Title:
 

 

 
 
 
Exhibit “B” to Amendment


 
[Letterhead of Vitol Inc.]
 

 
November [__], 2009
 

 
SemGroup Energy Partners, L.P.
[address]
[address]
Attn:

 
Re:  SemGroup Energy Partners G.P., L.L.C.
 
Ladies and Gentlemen:
 
Reference is made to 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 ”), among SemGroup Energy Group Partners, L.P., as Borrower, the Guarantors parties thereto, Wachovia Bank, National Association, as Administrative Agent (the “ Administrative Agent ”), L/C Issuer and Swing Line Lender, and the Lenders parties thereto.  Defined terms used herein with definition shall have the meanings assigned them in the Credit Agreement.
 
Pursuant to Section 8(g) of the Amendment to Credit Agreement, dated as of November __, 2009, among the Borrower, the Guarantors, the Administrative Agent and the Lenders parties thereto, the undersigned hereby agrees as follows:
 
From and after the closing of the Vitol Transaction, Vitol Inc. shall, or shall cause one or more of its Affiliates to, reimburse the Borrower for fifty percent (50%) of any and all payment obligations incurred by Borrower pursuant to any employee severance, termination or similar arrangement that becomes due in connection with the termination of one or more of Borrower’s employees, if and to the extent that any such employee is hired, employed or engaged by Vitol Inc. or any Affiliate thereof within the later of (i) one year of the date of the closing of the Vitol Transaction or (ii) six (6) months of the termination by the Borrower of such employee.  Vitol Inc. shall, or shall cause one or more of its Affiliates to, make such payment to Borrower within five (5) Business Days of the first day of each such employee’s employment with Vitol Inc. or the applicable Affiliate.
 

 

 
 
 


 
Very truly yours,
 

 
VITOL INC.
 

 
By:                                                                
 
Name:
 
Title:
 

 

 
ACKNOWLEDGED AND AGREED:
 

 
SEMGROUP ENERGY PARTNERS, L.P.
 

 
By:                                                                       
 
Name:
 
Title:
 

 

 
 
 


Exhibit 10.2
 
FORM OF EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (“Agreement”) made and entered into this __________ day of __________, 2009 (the “Effective Date”), by and between SGLP Management, Inc., a Delaware corporation (the “Company”), and ____________ (the “Executive”).
 
W I T N E S S E T H:
 
WHEREAS, the Company wishes to secure the services of the Executive subject to the contractual terms and conditions set forth herein; and
 
WHEREAS, the Executive is willing to enter into this Agreement upon the terms and conditions set forth herein.
 
NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the parties hereto agree as follows:
 
1.   Employment . The Company hereby agrees to employ the Executive, and the Executive hereby agrees to accept such employment with the Company, all upon the terms and conditions set forth herein.
 
2.   Term of Employment .  Subject to the terms and conditions of this Agreement, the Executive shall be employed for a term commencing on the Effective Date and ending on the fifth (5th) anniversary of the Effective Date (the “Term”) unless sooner terminated as provided for herein.
 
3.   Duties and Responsibilities .
 
A.   Capacity .  During the Term, the Executive shall serve in the capacity of Chief Operating Officer subject to the supervision of the Board of Directors (the “Board”) of SemGroup Energy Partners, G.P., L.L.C. (the “General Partner”).
 
B.   Duties .  During the Term, and excluding any periods of disability, vacation or sick leave to which the Executive is entitled, the Executive shall devote his full business time to the management of the business and affairs of the Company, the General Partner and SemGroup Energy Partners, L.P. (the “MLP”).  The Executive may be required by the Board to provide services to, or otherwise serve as an officer or director of any direct or indirect subsidiary of the Company, the General Partner or the MLP.  During the Term, it shall not be a violation of this Agreement for the Executive to (i) serve on corporate, civic or charitable boards or committees and (ii) deliver lectures or fulfill speaking engagements, provided that such activities do not unreasonably interfere with the performance of the Executive’s duties hereunder.
 
C.   Standard of Performance .  The Executive will perform his duties under this Agreement with fidelity and loyalty, to the best of his ability, experience and talent and in a manner consistent with his duties and responsibilities.
 

 
 
 

4.   Compensation .
 
A.   Base Salary .  The Company shall pay the Executive a salary (the “Base Salary”) of $23,500.00 per month, prorated for partial months of employment.  The Base Salary shall be payable in accordance with the general payroll practices of the Company in effect from time to time.  During the Term, the Base Salary shall be reviewed at least annually by the Board after consultation with the Executive and may from time to time be increased (but not decreased) as solely determined by the Board.  Effective as of the date of any such increase, the Base Salary as so increased shall be considered the new Base Salary for all purposes of this Agreement and may not thereafter be reduced.  Any increase in the Base Salary shall not limit or reduce any other obligation of the Company to the Executive under this Agreement.
 
B.   Make-Whole Payments .  The Executive shall be entitled to payments (each, a “Make-Whole Payment”) on the dates (each, a “Payment Date”) and in the amounts specified in Schedule A.  The Make-Whole Payments may be paid, in the Company’s sole discretion, to the Executive in (i) cash, (ii) unit grants, restricted units and/or other forms of equity based compensation or (iii) any combination thereof.  Except as otherwise provided in Sections 6.B., 6.C. or 6.D., the Executive shall only be entitled to a Make-Whole Payment if he has been continuously employed in good standing by the Company from the Effective Date until each applicable Payment Date.
 
Notwithstanding the foregoing, the Executive shall be entitled to a lump-sum payment, within 10 days following the occurrence of a Change of Control, equal to all unpaid Make-Whole Payments with a Payment Date (as specified on Schedule A) after the date of the Change of Control.  The Executive shall not be entitled to any additional Make-Whole Payments pursuant to this Agreement following the receipt of such lump-sum payment.  For purposes of this Agreement, “Change of Control” means, and shall be deemed to have occurred upon the occurrence of one or more of the following events: (i) any “person” or “group” within the meaning of those terms as used in Sections 13(d) and 14(d)(2) of the Exchange Act, other than SemGroup, L.P. or Vitol, Inc., or their/its respective Affiliates, shall become the beneficial owner, by way of merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the combined voting power of the equity interests in the General Partner or the MLP; (ii) the limited partners of the MLP approve, in one or a series of transactions, a plan of complete liquidation of the MLP; (iii) the sale or other disposition by either the General Partner or the MLP of all or substantially all of its assets in one or more transactions to any individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity (a “Person”) other than the General Partner or an Affiliate of the General Partner; or (iv) a transaction resulting in a Person other than the General Partner or an Affiliate of the General Partner being the general partner of the MLP.  For purposes of this Agreement, “Affiliate” means with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise
 

 
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C.   Performance Bonus .  The Executive shall be eligible for discretionary bonus awards payable in cash or common units of the MLP, as so determined solely by the Board, based on performance objectives determined by the Board.
 
D.   Long-Term Incentives.   Awards of unit options, unit grants, restricted units and/or other forms of equity based compensation to the Executive may be made from time to time during the Term by the Board in its sole discretion, whose decision will be based upon performance and award guidelines for senior executives of the Company established periodically by the Board in its sole discretion.
 
E.   Benefits .
 
(1)  
If and to the extent that the Company maintains employee benefit plans (including, but not limited to, pension, profit-sharing, disability, accident, medical, life insurance, and hospitalization plans) (it being understood that the Company may but shall not be obligated to do so), the Executive shall be entitled to participate therein in accordance with the Company’s regular practices with respect to similarly situated senior executives.  The Company will have the right to amend or terminate any such benefit plans it may choose to establish.
 
(2)  
The Executive shall be entitled to prompt reimbursement from the Company for reasonable out-of-pocket expenses incurred by him in the course of the performance of his duties hereunder, upon the submission of appropriate documentation in accordance with the practices, policies and procedures applicable to other senior executives of the Company.
 
(3)  
The Executive shall be entitled to such vacation, holidays and other paid or unpaid leaves of absence as are consistent with the Company’s normal policies available to other senior executives of the Company or as are otherwise approved by the Board;
 
F.   Payment by Affiliates .  Compensation and benefits provided under this Agreement may, at the election of the Company, be provided for administrative convenience by any of the Company’s Affiliates.
 
5.   Termination of Employment .
 
Notwithstanding the provisions of Section 2 hereof, the Executive’s employment hereunder shall terminate under any of the following conditions:
 
A.   Death .  The Executive’s employment under this Agreement shall terminate automatically upon his death.
 
B.   Total Disability .  The Company shall have the right to terminate this Agreement if the Executive becomes Totally Disabled.  For purposes of this Agreement, “Totally Disabled” means that either (i) the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months or (ii) the Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company or any entity that would be considered a single “service recipient” with the Company pursuant to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).  Prior to a determination that the Executive is Totally Disabled, but after the Executive has exhausted all sick leave and vacation benefits provided by the Company, the Executive shall continue to receive his Base Salary, offset by any disability benefits he may be eligible to receive.
 

 
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C.   Termination by Company for Cause .  The Executive’s employment hereunder may be terminated for Cause upon written notice by the Company.  For purposes of this Agreement, “Cause” shall mean:
 
(1)  
conviction of the Executive by a court of competent jurisdiction of any felony or a crime involving moral turpitude;
 
(2)  
the Executive’s willful and intentional failure or willful and intentional refusal to follow reasonable and lawful instructions of the Board;
 
(3)  
the Executive’s material breach or default in the performance of his obligations under this Agreement; or
 
(4)  
the Executive’s act of misappropriation, embezzlement, intentional fraud or similar conduct involving the Company.
 
The Executive may not be terminated for Cause pursuant to subsections (2) and (3) above unless the Executive is given written notice of the circumstances constituting “Cause” and a reasonable period to cure such circumstances, which period shall be no less than thirty (30) days.
 
D.   Termination for Good Reason .  The Executive’s employment hereunder may be terminated by the Executive for Good Reason on written notice by the Executive to the Company.  For purposes of this Agreement, “Good Reason” means the occurrence of any of the following circumstances without the Executive’s consent:
 
(1)  
a material reduction in the Executive’s Base Salary;
 
(2)  
a material diminution of the Executive’s duties, authority or responsibilities as in effect immediately prior to such diminution; or
 
(3)  
the relocation of the Executive’s principal work location to a location more than 100 miles from its current location.
 
In order to be eligible for payment on account of a Good Reason termination, the Executive must: (i) provide written notice to the Company within 90 days following the first event or condition which gives rise to his claim of Good Reason under this section (the “Initial Breach”); (ii) provide the Company 30 days from the date of such notice in which to “cure” such event or condition and (iii) actually terminate employment within 2 years of the date of the Initial Breach.
 
6.   Payments Upon Termination .
 
A.   Upon termination of the Executive’s employment hereunder, the Company shall be obligated to pay and the Executive shall be entitled to receive, within 10 days of termination, the Base Salary which has accrued for services performed to the date of termination and which has not yet been paid.  In addition, the Executive shall be entitled to any vested benefits to which he is entitled under the terms of any applicable benefit plan or program, long-term incentive plan, restricted unit plan and unit option plan of the Company, and, to the extent applicable, short-term or long-term disability plan or program with respect to any disability, or any life insurance policies and the benefits provided by such plan, program or policies, or applicable law as duly adopted from time to time by the Board, and in all events subject to the payment timing and other restrictions as may be set forth in such plan or program.
 

 
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B.   Upon termination of the Executive’s employment by the Company without Cause or by the Executive for Good Reason, the Company shall be obligated to pay and the Executive shall be entitled to receive:
 
(1)  
all of the amounts and benefits described in Section 6.A. hereof;
 
(2)  
a lump-sum payment, within 10 days of termination, equal to the amount of the Executive’s Base Salary that would have been payable for the lesser of (i) a 24-month period or (ii) the remainder of the Term;
 
(3)  
a lump-sum payment, within 10 days of termination, equal to the Make-Whole Payments that would have been made in accordance with Section 4.B. had the Executive remained employed with the Company, to the extent not already paid as of the date of termination; and
 
(4)  
continued participation by the Executive and his dependents in all group health plans (medical, dental and vision), if any, of the Company for the remainder of the Term or, if shorter, until the second anniversary of the Executive’s termination of employment, as if there had been no termination of employment.
 
Payments under Section 6.B., with the exception of amounts due pursuant to Section 6.B(1), are conditioned on the execution by the Executive of a release of all employment-related claims; provided , however , that such release shall be contingent upon the Company’s satisfaction of all terms and conditions of this Section.
 
C.   Upon termination of the Executive’s employment upon the death of the Executive pursuant to Section 5.A., the Company shall be obligated to pay, and the Executive shall be entitled to receive:
 
(1)  
all of the amounts and benefits described in Section 6.A.;
 
(2)  
a lump-sum payment, within 10 days of death, equal to the Make-Whole Payments that would have been made in accordance with Section 4.B. had the Executive remained employed with the Company, to the extent not already paid as of the date of death;
 
(3)  
any death benefit payable under a plan or policy provided by the Company; and
 
(4)  
continued participation by the Executive’s dependents in all group health plans (medical, dental and vision), if any, of the Company for the remainder of the Term or, if shorter, until the second anniversary of the Executive’s termination of employment, as if there had been no termination of employment.
 

 
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D.   Upon termination of the Executive’s employment upon the Executive’s becoming Totally Disabled pursuant to Section 5.B., the Company shall be obligated to pay, and the Executive shall be entitled to receive:
 
(1)  
all of the amounts and benefits described in Section 6.A.;
 
(2)  
a lump-sum payment, within 10 days of termination, equal to the Make-Whole Payments that would have been made in accordance with Section 4.B. had the Executive remained employed with the Company, to the extent not already paid as of the date of termination; and
 
(3)  
continued participation by the Executive and his dependents in all group health plans (medical, dental and vision), if any, of the Company for the remainder of the Term or, if shorter, until the second anniversary of the Executive’s termination of employment, as if there had been no termination of employment.
 
Payments under Section 6.D., with the exception of amounts due pursuant to Section 6.D(1), are conditioned on the execution by the Executive or the Executive’s representative of a release of all employment-related claims; provided , however , that such release shall be contingent upon the Company’s satisfaction of all terms and conditions of this Section.
 
E.   Upon voluntary termination of employment by the Executive for any reason whatsoever (other than for Good Reason as described in Section 6.B.), termination by the Company for Cause or any termination following the expiration of the Term, the Company shall have no further liability under or in connection with this Agreement, except to provide the amounts set forth in Section 6.A and the Executive shall not be entitled to any Make-Whole Payments with a Payment Date after the date of the Executive’s termination of employment.
 
F.   Upon voluntary or involuntary termination of employment of the Executive for any reason whatsoever or expiration of the Term, the Executive shall continue to be subject to the provisions of Sections 7 and 8, hereof (it being understood and agreed that such provisions shall survive any termination or expiration of the Executive’s employment hereunder for any reason whatsoever).
 
G.   For the avoidance of doubt, while termination of employment with the Company will end the Company’s obligations pursuant to Section 4, termination of employment for purposes of rights to severance payments under Sections 6.B., 6.C. or 6.D. of this Agreement shall not be deemed to have occurred until the Executive has terminated employment with the Company and all of its Affiliates, for so long as such entities are considered a single service recipient for purposes of determining whether a ‘separation from service’ has occurred under Section 409A of the Code.
 

 
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7.   Confidentiality and Return of Property .
 
A.   Confidential   Information .
 
(1)  
Company Information .  The Company agrees that it will provide the Executive with Confidential Information that will enable the Executive to optimize the performance of the Executive’s duties to the Company.  In exchange, the Executive agrees to use such Confidential Information solely for the Company’s benefit.  The Company and the Executive agree and acknowledge that its provision of such Confidential Information is not contingent on the Executive’s continued employment with the Company.  Notwithstanding the preceding sentence, upon the termination of the Executive’s employment for any reason, the Company shall have no obligation to provide the Executive with its Confidential Information.  “Confidential Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products services, customer lists and customers (including, but not limited to, customers of the Company on whom the Executive called or with whom the Executive became acquainted during the term of the Executive’s employment), markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing finances or other business information disclosed to the Executive by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment.  Confidential Information does not include any of the foregoing items which has become publicly known and made generally available through no wrongful act of the Executive or of others who were under confidentiality obligations as to the item or items involved or improvements or new versions.  For purposes of this Section 7, references to the Company include the General Partner or any Affiliate.
 
 
The Executive agrees at all times during the Term and thereafter, to hold in strictest confidence, and not to use, except for the exclusive benefit of the Company, or to disclose to any person or entity without written authorization of the Board, any Confidential Information of the Company.
 
(2)  
Third Party Information .  The Executive recognizes that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  The Executive shall hold all such confidential or proprietary information in the strictest confidence and not disclose it to any person or entity or use it except as necessary in carrying out the Executive’s work for the Company consistent with the Company’s agreement with such third party.
 
B.   Returning Company Documents .  At the time of leaving the employ of the Company, the Executive will deliver to the Company (and will not keep in the Executive’s possession) specifications, drawings blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by the Executive pursuant to the Executive’s employment with the Company or otherwise belonging to the Company, its successors or assigns.
 

 
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C.   Notification of New Employer .  In the event that the Executive leaves the employ of the Company, the Executive hereby grants consent to notification by the Company to the Executive’s new employer about the Executive’s rights and obligations under this Agreement.
 
D.   Representations .  The Executive agrees to execute any proper oath or verify any proper document required to carry out the terms of this Agreement.  The Executive represents that his performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by the Executive in confidence or in trust prior to the Executive’s employment by the Company.  The Executive has not entered into, and the Executive agrees that he will not enter into, any oral or written agreement in conflict herewith.
 
8.   Protective Covenants .  In return for the Company’s provision of Confidential Information and the other consideration provided under this Agreement, the Executive agrees to the following:
 
A.   Restriction on Interfering with Employee Relationships .  During the Executive’s employment with the Company, and for a period of 12 months following the termination of the Executive’s employment with the Company, but in no event later than the fifth anniversary of the Effective Date, the Executive will not, either directly or indirectly, hire, call on, solicit, or take away, or attempt to call on, solicit or take away any of the employees or officers of the Company or encourage any employees or officers of the Company to terminate their relationship with the Company.
 
B.   Restriction on Interfering with Customer Relationships .   During the Executive’s employment with the Company, the Executive will not, directly or indirectly, except in connection with the Executive’s employment with the Company, service, call on, solicit, or take away, or attempt to call on, solicit, or take away any of those customer entities and/or persons who conduct business with the Company.  For a period of 12 months following the termination of the Executive’s employment with the Company, but in no event later than the fifth anniversary of the Effective Date, the Executive will not directly service, call on, solicit, or take away, or attempt to call on, solicit, or take away any of the Company’s established customers.
 
C.   The Executive understands that the nonsolicitation covenants of this Section 8 may limit his ability to earn a livelihood in a business similar to the business of the Company, but as an executive officer of the Company he nevertheless agrees and hereby acknowledges that:  (i) the terms and provisions of this Agreement are reasonable and necessary to protect the Company’s interests; (ii) the consideration provided by the Company under this Agreement is not illusory; (iii) the consideration given by the Company under this Agreement, including, without limitation, any amounts or benefits contemplated to be provided to the Executive hereunder following the Executive’s termination of employment other than for Cause or by the Executive’s resignation for Good Reason, gives rise to the Company’s interest in restraining and prohibiting the Executive from interfering with the Company’s employee relationships or customer relationships as provided under this Section 8; (iv) the Executive’s covenant not to interfere with the Company’s employee relationships or customer relationships pursuant to this Section 8 is designed to enforce the Executive’s consideration (or return promises), including, without limitation, the Executive’s promise to not disclose Confidential Information under this Agreement; and (v) such provisions do not impose a greater restraint than is necessary to protect the goodwill or other business interests of the Company.  In consideration of the foregoing, and in light of the Executive’s education, skills, and abilities, the Executive agrees that he will not assert that, and it should not be considered that, any provisions of Section 8 hereof are otherwise void, voidable, or unenforceable or should be voided or held unenforceable.
 

 
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D.   The Executive agrees that the period during which the covenants contained in this Section 8 shall be effective shall be computed by excluding from such computation any time during which the Executive is in violation of any provision of this Section 8.
 
E.   The covenants on the part of the Executive in this Section 8 shall be construed as an agreement independent of any other agreement and independent of any other provision of this Agreement, and the existence of any claim or cause of action by the Executive against the Company, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of such covenants.
 
F.   In the event that the Executive breaches any provisions of Section 7 or this Section 8 or there is a threatened breach, then, in addition to any other rights which the Company may have, the Company shall (i) be entitled, without the posting of a bond or other security, to injunctive relief to enforce the restrictions contained in such Sections and (ii) have the right to require the Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments and other benefits (collectively, “Benefits”) derived or received by the Executive as a result of any transaction constituting a breach of any of the provisions of Sections 7 or 8 and the Executive hereby agrees to account for and pay over such Benefits to the Company.
 
G.   Each of the rights and remedies enumerated in Section 8.F. shall be independent of the others and shall be in addition to and not in lieu of any other rights and remedies available to the Company at law or in equity.  If any of the covenants contained in this Section 8, or any part of any of them, is hereafter construed or adjudicated to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants or rights or remedies which shall be given full effect without regard to the invalid portions.  If any of the covenants contained in this Section 8 is held to be invalid or unenforceable because of the duration of such provision or the area covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision and in its reduced form such provision shall then be enforceable.  No such holding of invalidity or unenforceability in one jurisdiction shall bar or in any way affect the Company’s right to the relief provided in this Section 8 or otherwise in the courts of any other state or jurisdiction as to breaches of such covenants in such other states or jurisdictions, such covenants being, for this purpose, severable into diverse and independent covenants.
 
H.   In the event that an actual proceeding is brought in equity to enforce the provisions of Section 7 or this Section 8, the Executive shall not urge as a defense that there is an adequate remedy at law nor shall the Company be prevented from seeking any other remedies which may be available.
 
9.   Agreements and Representations by the Executive . The Executive represents that (i) he is under no contractual obligation to a previous third party based on a restrictive covenant or confidentiality or non-competition agreement (“Third Party Agreement”) that would prevent him in any way from accepting employment with the Company as set forth in this Agreement, or (ii) such third party has expressly waived in writing the provisions of such Third Party Agreement, or has otherwise consented in writing to the Executive’s accepting employment with the Company notwithstanding such Third Party Agreement, and the Executive has provided a copy of such waiver or consent to the Company.
 

 
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10.   Notices .  All notices and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by registered or certified mail (return receipt requested and with postage prepaid thereon) or by facsimile transmission to the respective parties at the following addresses (or at such other address as either party shall have previously furnished to the other in accordance with the terms of this Section):
 
if to the Company:
 
SGLP Management, Inc.
 
Two Warren Place
 
6120 South Yale Avenue, Suite 500
 
Tulsa, Oklahoma 74136
 
Attention:  Chairman of the Board
 
with a copy to:
 
Vitol, Inc.
1100 Louisiana St, Suite 5500
Houston, TX 77002-5255
Attention:  M.A. Loya

if to the Executive:
 
J. Michael Cockrell
 
1819 Drury Lane
 
Oklahoma City, Oklahoma  73116
 
11.   Amendment; Waiver .  The terms and provisions of this Agreement may be modified or amended only by a written instrument executed by each of the parties hereto, and compliance with the terms and provisions hereof may be waived only by a written instrument executed by each party entitled to the benefits thereof.  No failure or delay on the part of any party in exercising any right, power or privilege granted hereunder shall constitute a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege granted hereunder.
 
12.   Entire Agreement .  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersede all prior written or oral agreements or understandings between the parties relating thereto.
 
13.   Severability .  In the event that any term or provision of this Agreement is found to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining terms and provisions hereof shall not be in any way affected or impaired thereby, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained therein.
 

 
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14.   Binding Effect; Assignment .  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns (it being understood and agreed that, except as expressly provided herein, nothing contained in this Agreement is intended to confer upon any other person or entity any rights, benefits or remedies of any kind or character whatsoever).  The Executive may not assign this Agreement without the prior written consent of the Company.  Except as otherwise provided in this Agreement, the Company may assign this Agreement to any of its Affiliates or to any successor (whether by operation of law or otherwise) to all or substantially all of its business and assets without the consent of the Executive.
 
15.   Governing Law .  This Agreement shall be governed by and construed in accordance with the laws of the State of Oklahoma (except that no effect shall be given to any conflicts of law principles thereof that would require the application of the laws of another jurisdiction).
 
16.   Headings .  The headings of the sections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement.
 
17.   Section 409A .  Each payment under this Agreement, including each payment in a series of installment payments, is intended to be a separate payment for purposes of Treas. Reg. § 1.409A-2(b), and is intended to be: (i) exempt from Section 409A of the Internal Revenue Code of 1986, the regulations and other binding guidance promulgated thereunder (“Section 409A”), including, but not limited to, by compliance with the short-term deferral exemption as specified in Treas. Reg. § 1.409A-1(b)(4), or (ii) in compliance with Section 409A, including, but not limited to, being paid pursuant to a fixed schedule or specified date pursuant to Treas. Reg. § 1.409A-3(a) and to the extent required by Section 409A(a)(2)(B)(i), delayed until a date which is at least 6 months after the date of Executive’s separation from service, and the provisions of this Agreement will be administered, interpreted and construed accordingly.
 
18.   Counterparts .  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
 
 
 

 
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Executive has signed this Agreement as of the Effective Date.
 
SGLP MANAGEMENT, INC.



By:


EXECUTIVE





Signature Page to Employment Agreement
 
 
 

SCHEDULE A

Payment Date
 
Make-Whole Payment
 
March 1, 2010
  $ 102,167  
May 30, 2010
  $ 65,907  
May 22, 2011
  $ 211,939  
November 30, 2012
  $ 520,050  
May 19, 2012
  $ 274,525  
February 23, 2013
  $ 339,566  
May 11, 2013
  $ 566,224  
Total
  $ 2,080,377  


 
 
 

Exhibit 99.1
SGLP LOGO
 
SGLP Announces Close of Vitol Transaction and Reorganization of
 
Board and Management Team
 
Tulsa, Okla. – November 24, 2009: SemGroup Energy Partners, L.P. (“SGLP”) (Pink Sheets: SGLP.PK) today announced that Vitol, Inc., part of the Vitol Group of companies (“Vitol”), has completed its acquisition (the “Vitol Change of Control”) of the membership interests of SemGroup Energy Partners G.P., L.L.C., SGLP’s  general partner, and SGLP’s subordinated units from Manchester Securities Corp., an affiliate of Elliott Management Corporation.  In connection with the Vitol Change of Control, the board of directors of SGLP’s general partner (the “Board”) and the management team of SGLP’s general partner were reorganized.  Further, SemGroup, L.P., SGLP’s former parent, no longer has any ownership interest in SGLP’s general partner, and, as previously announced, SGLP will change its name to Blueknight Energy Partners, L.P. effective December 1, 2009.
 
Mr. Miguel A. (“Mike”) Loya, Vitol, Inc.’s President, stated, “We are pleased to have completed our acquisition of SGLP’s general partner.  This acquisition is the culmination of the efforts of many individuals, both from Vitol and SGLP, and we are grateful for these contributions.  We look forward to new opportunities with SGLP.”
 
Reorganization of the Board
 
In connection with the Vitol Change of Control, Messrs. Loya, Javed Ahmed, Christopher G. Brown,  James C. Dyer, IV, Steven M. Bradshaw and John A. Shapiro were appointed to the Board.   Messrs. Ahmed, Loya, Dyer and Brown are affiliated with Vitol.  Messrs. Bradshaw and Shapiro will serve as independent members of the Board and will be members of the Conflicts Committee, Audit Committee and Compensation Committee of the Board.  Mr. Bradshaw will chair the Conflicts Committee while Mr. Shapiro will chair the Compensation Committee.  Mr. Duke R. Ligon will continue to serve on the Board and will remain as the Chairman of the Board, the chair of the Audit Committee and a member of the Compensation Committee and the Conflicts Committee of the Board.  Messrs. Edward F. Kosnik, Gabriel Hammond, David N. Bernfeld and Dave Miller have resigned from the Board effective today.
 
Mr. Bradshaw has over 30 years of experience in the global logistics and transportation industry and currently serves as the Managing Director at Global Logistics Solutions.  Mr. Shapiro recently retired as an officer at Morgan Stanley & Co. where he had served for more than 24 years in various capacities, most recently as Global Head of Commodities.
 
Mr. Ligon, Chairman of the Board of SGLP’s general partner, stated, “We are grateful for the efforts of Ed Kosnik, Gabriel Hammond, David Bernfeld and Dave Miller in helping to stabilize SGLP’s business during challenging times.  Their contributions will be missed.  At the same time, we are excited for the opportunity to continue to strengthen and rebuild SGLP’s operations with Vitol as the owner of SGLP’s general partner.  We are pleased to have Steven Bradshaw and John Shapiro join as independent members of the Board.  They each have extensive experience that will be invaluable as we continue to rebuild SGLP.”
 

 
 
 

Reorganization of the Management Team
 
In connection with the Vitol Change of Control, Mr. J. Michael Cockrell was appointed as the President and Chief Operating Officer of SGLP’s general partner.  Mr. Cockrell has extensive experience in the crude oil industry and prior to joining SGLP’s general partner served as Senior Vice President, Commercial Upstream, of the general partner of TEPPCO Partners, L.P. from February 2003 until November 2009.  Previously he had served in various positions with the general partner of TEPPCO Partners, L.P. including serving as Vice President, Commercial Upstream.  Mr. Ligon stated, “We look forward to Michael’s leadership in directing SGLP’s business.  His knowledge of the industry and contacts with industry partners will add great value to SGLP’s management team.”
 
In addition, Messrs. Kevin L. Foxx and Michael J. Brochetti have informed SGLP that they will be leaving the company to pursue other opportunities.  Messrs. Foxx and Brochetti are stepping down from their current positions as President and Chief Executive Officer and Executive Vice President—Corporate Development and Treasurer, respectively, but are expected to remain as consultants to SGLP’s general partner until March 1, 2010 to facilitate an orderly transition.  Mr. Ligon explained, “Kevin Foxx and Mike Brochetti have led SGLP during a time of great challenge and worked to rebuild value in SGLP.  Their diligent efforts during the transition of control to Vitol were instrumental in the successful conclusion announced today.  We wish them success in their future opportunities.”

About Vitol

Vitol Inc. is the principal U.S. subsidiary of the Vitol Group.  Vitol is engaged in the global physical supply and distribution of crude oil, petroleum products, coal, natural gas, and other commodities.  Vitol was founded in 1966, and is headquartered in the Netherlands. Vitol moves over 5 million barrels of crude oil and petroleum products every day throughout the world, charters more than 3000 ships annually and had annual revenues of $191 billion in 2008.

About SemGroup Energy Partners, L.P.
 
SGLP owns and operates a diversified portfolio of complementary midstream energy assets consisting of approximately 8.2 million barrels of crude oil storage located in Oklahoma and Texas, approximately 6.7 million barrels of which are located at the Cushing, Oklahoma interchange, approximately 1,150 miles of crude oil pipeline located primarily in Oklahoma and Texas, over 200 crude oil transportation and oilfield services vehicles deployed in Kansas, Colorado, New Mexico, Oklahoma and Texas and approximately 7.4 million barrels of combined asphalt and residual fuel storage located at 46 terminals in 23 states. SGLP provides crude oil terminalling and storage services, crude oil gathering and transportation services and asphalt services.  SGLP is based in Tulsa, Oklahoma. Effective December 1, 2009, SGLP will change its name to Blueknight Energy Partners, L.P.  For more information, visit SGLP’s web site at www.SGLP.com.
 

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SGLP Investor Relations Contact:
Bailey Jones
918.237.4032
investor@sglpenergy.com