BLUEKNIGHT ENERGY PARTNERS, L.P. (NASDAQ:BKEP) Files An 8-K Entry into a Material Definitive Agreement

BLUEKNIGHT ENERGY PARTNERS, L.P. (NASDAQ:BKEP) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.

Entry into a Material Definitive Agreement.

First Amendment to Second Amended and Restated Credit Agreement

On June 28, 2018, Blueknight Energy Partners, L.P. (the “Partnership”) entered into a First Amendment to Second Amended and Restated Credit Agreement (the “Credit Agreement Amendment”), which amended the Second Amended and Restated Credit Agreement, dated as of May 11, 2017, among the Partnership, Wells Fargo Bank, National Association, as Administrative Agent, and the lenders from time to time party thereto (the “Credit Agreement” and, together with the Credit Agreement Amendment, the “Amended Credit Agreement”).

The Credit Agreement Amendment amends the Credit Agreement to, among other things:

Upon the closing of the Credit Agreement Amendment, the Partnership had $348.6 million of outstanding borrowings and $3.4 million in outstanding letters of credit under the Amended Credit Agreement, leaving the Partnership with approximately $48.0 million available capacity for additional borrowings and letters of credit under the Amended Credit Agreement.

The description set forth above is qualified in its entirety by reference to (i) the Credit Agreement, a copy of which is filed as Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed on May 12, 2017, and (ii) the Credit Agreement Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Asset Purchase Agreement

On June 29, 2018, BKEP Materials, L.L.C. (“BKEP Materials”), BKEP Terminalling, L.L.C. (“BKEP Terminalling”), BKEP Asphalt, L.L.C. (“BKEP Asphalt,” together with BKEP Materials and BKEP Terminalling, the “BKEP Sellers”) entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Ergon Asphalt &

Emulsions, Inc. (“Ergon A&E”). Under the terms of the Purchase Agreement, the BKEP Sellers are selling three asphalt terminals and certain storage tanks and real property, contracts, permits, assets, and other interests (the “Terminal Assets”) located in Lubbock and Saginaw, Texas and Memphis, Tennessee to Ergon A&E for a purchase price of $90.0 million in cash. The purchase price was based on the fair market value of the assets being sold.

Under the Purchase Agreement, (i) Ergon A&E provided the BKEP Sellers customary representations and warranties, including with regard to Ergon A&E’s authority to enter into and perform its obligations under the Purchase Agreement, and (ii) the BKEP Sellers provided Ergon A&E customary representations and warranties, including with regard to the BKEP Sellers’ ability to enter into and perform its obligations under the Purchase Agreement and the status and operation of the Terminal Assets prior to closing of the Purchase Agreement (the “Closing”). The Closing is subject to a number of conditions, including (i) the expiration of the applicable waiting period under the Hart Scott Rodino Antitrust Improvement Act of 1976, as amended, (ii) entry by Ergon A&E, on one hand, and BKEP Materials, BKEP Terminalling and BKEP Asphalt, on the other hand, into an amendment to the Storage, Throughput and Handling Agreement, dated October 5, 2016, to which the asphalt terminal located in Memphis, Tennessee will be deleted from the definition of “Terminals” thereunder and (iii) entry by Ergon A&E, on one hand, and Blueknight Energy Partners G.P., L.L.C., the general partner (the “General Partner”) of the Partnership, the Partnership, BKEP Asphalt, BKEP Materials and BKEP Terminalling, L.L.C., on the other hand, into an amendment to the Omnibus Agreement, dated October 5, 2016, to which, among other things, Ergon A&E will grant the BKEP Sellers a right of first refusal with respect to the Terminal Assets and the BKEP Sellers will grant Ergon A&E a right of first refusal with respect to certain terminal facilities and real property located in Wolcott, KS, Ennis, TX, Chandler, AZ, Mt. Pleasant, TX, Pleasanton, TX, Birmingport, AL, Nashville, TN, Yellow Creek, MS, Las Vegas, NV and Fontana, CA, as applicable.

Ergon A&E is an affiliate of Ergon, which indirectly owns (i) 50% of the General Partner of the Partnership and (ii) 27.5% of the limited partnership interests in the Partnership. Accordingly, the Conflicts Committee of the Board of Directors of the General Partner (the “Conflicts Committee”) reviewed and evaluated the Purchase Agreement for the purpose of determining whether to grant special approval of the Purchase Agreement and the transactions contemplated thereby. The Conflicts Committee retained independent legal and financial advisors to assist in evaluating the terms of the transaction and the Purchase Agreement. The Conflicts Committee unanimously granted approval of the Purchase Agreement and the transactions contemplated thereby.

The description set forth above is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference.

On June 29, 2018, the Partnership issued a press release announcing the entry into the transactions described in Item 1.01 above. In addition, the Partnership announced it has completed work addressing a pipeline exposure due to the erosion of a riverbed in southern Oklahoma which caused portions of the Partnership’s Oklahoma mainline system to be out of service since the second quarter of 2016. The Partnership expects to begin service on the restored pipeline in July, which will increase the transportation capacity of the Oklahoma mainline system by approximately 20,000 barrels per day. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

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 are deemed to be furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

(d)Exhibits

*Schedules (or similar attachments) to the Asset Purchase Agreement have been omitted from this filing to Item 601(b)(2) of Regulation S-K. The Partnership will furnish supplementary copies of such omitted schedules (or similar attachments) to the Securities and Exchange Commission upon request.

Blueknight Energy Partners, L.P. ExhibitEX-10.1 2 firstamendmenttoamendedand.htm EXHIBIT 10.1 Exhibit Exhibit 10.1FIRST AMENDMENT TOSECOND AMENDED AND RESTATED CREDIT AGREEMENTThis First Amendment to Second Amended and Restated Credit Agreement (this “First Amendment”) is executed as of June 28,…To view the full exhibit click here
About BLUEKNIGHT ENERGY PARTNERS, L.P. (NASDAQ:BKEP)
Blueknight Energy Partners, L.P. is a master limited partnership company. The Company provides integrated terminalling, storage, gathering and transportation services for companies engaged in the production, distribution and marketing of crude oil and liquid asphalt cement. It operates in four segments: asphalt terminalling services, which provides asphalt product and residual fuel terminalling, storage and blending services at its terminalling and storage facilities; crude oil terminalling and storage services, which provides crude oil terminalling and storage services at its terminalling and storage facilities; crude oil pipeline services, which owns and operates pipeline systems, the Mid-Continent system, the East Texas system and Eagle North system, that gather crude oil purchased by its customers and transports it to refiners, and crude oil trucking and producer field services, which uses its owned and leased tanker trucks to gather crude oil for its customers.