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EXHIBIT 10.6
MEMBERSHIP INTEREST PURCHASE AGREEMENT
THIS
MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "AGREEMENT") is
entered
into as of the 26th day of June, 2008, by and among Blackwater
Midstream Corp.,
a Nevada corporation ("PURCHASER"), and each of those Persons
listed on the
signature page hereto under the heading "Sellers" (collectively,
the "SELLERS").
RECITALS
WHEREAS,
the Sellers hold all of the issued and outstanding membership
interests of Safeland Storage, L.L.C., a Louisiana limited
liability company
("SAFELAND"), represented by 1,000 Company Securities (the
"ORIGINAL
SECURITIES");
WHEREAS,
Purchaser desires to acquire from the Sellers, and each Seller
desires to sell to Purchaser, seven percent (7%) of the membership
interests of
Safeland;
WHEREAS,
at the Closing, Safeland shall reconstitute its authorized
membership interests from 1,000 Company Securities into 70,000
Class A Units,
all of which will be held by Purchaser, and 930,000 Class B Units,
all of which
will be held by the Sellers in proportion to their ownership of the
Original
Securities; and
WHEREAS,
in connection with the transactions contemplated by this
Agreement, Purchaser desires to acquire from Safeland and Future
Energy
Investments, LLC, a Louisiana limited liability company and
wholly-owned
subsidiary of Safeland ("FEI"), and Safeland and FEI desire to sell
to
Purchaser, certain tracts of land owned by Safeland and FEI,
respectively, and
described on EXHIBIT A attached hereto (the "LAND"), and Purchaser
desires to
assume from Safeland, and Safeland desires to assign to Purchaser,
those permits
described on EXHIBIT B attached hereto (the "PERMITS").
NOW,
THEREFORE, in consideration of the premises and mutual
covenants
contained herein and other good and valuable consideration, the
receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
-------------------------------------
SECTION
1.1 DEFINITIONS. As used herein, the following terms shall have
the following meanings:
"AFFILIATE" means, with respect to any Person, any other Person
that,
directly or indirectly, controls, is controlled by or is under
common control
with, such specified Person through one or more intermediaries or
otherwise. For
the purposes of this definition, "CONTROL" means, where used with
respect to any
Person, the possession, directly or indirectly, of the power to
direct or cause
the direction of the management and policies of such Person,
whether through the
ownership of voting securities, by contract or otherwise, and the
terms
"CONTROLLING" and "CONTROLLED" have correlative meanings.
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"CONTRACT"
means any contract, agreement, indenture, note, bond, mortgage,
loan, instrument, lease, license, commitment or other
arrangement,
understanding, undertaking, commitment or obligation.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal, local
or
similar governmental authority, regulatory or administrative
agency, court or
arbitral body.
"LAW"
means any applicable law, rule, regulation, ordinance, order,
judgment or decree of a Governmental Authority, in each case as in
effect on and
as interpreted on the date of this Agreement.
"LEGAL
PROCEEDING" means any judicial, administrative or arbitral
actions,
suits or proceedings (public or private) by or before a
Governmental Authority.
"LIENS"
mean any lien, security interest, claim, mortgage, assessment,
equitable interest, option, pledge, right of first refusal or other
encumbrances
or restrictions of any kind, including any restrictions on use,
voting,
transfer, receipt of income or exercise of any other attribute of
ownership, but
excluding any Permitted Liens.
"ORDER"
means any order, injunction, judgment, doctrine, decree,
ruling,
writ, assessment or arbitration award of a Governmental Entity or
arbitral
tribunal.
"ORGANIZATIONAL DOCUMENTS" means any charter, certificate of
incorporation, articles of organization, articles of association,
bylaws,
operating agreement or similar formation or governing documents and
instruments.
"PERMITTED
LIENS" mean (a) statutory Liens not yet delinquent or the
validity of which are being contested in good faith by appropriate
actions
(provided that in the event a contested statutory Lien exceeds
$5,000.00, an
escrow or cash reserve account has been established for the full
amount of the
potential liability), (b) purchase money Liens arising in the
ordinary course,
(c) Liens for Taxes not yet delinquent, (d) mechanics', carriers',
workers',
repairers' and similar Liens arising or incurred in the ordinary
course of
business that are not material to the business, operations or
financial
condition of the property of Safeland so encumbered and that do not
result from
a breach, default or violation by Safeland of any Contract or Law,
and (e) such
imperfections of title, easements, encumbrances and mortgages or
other liens as
are not substantial in character, amount or extent, do not and will
not
materially detract from the value or interfere with the present use
of the
properties subject thereto or affected thereby or otherwise
materially impair
business operations.
"PERSON"
means any individual, firm, corporation, partnership, limited
liability company, incorporated or unincorporated association,
joint venture,
joint stock company, Governmental Authority or other entity of any
kind.
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"PROPOSED
TERMINAL" means the terminalling and storage facilities for
refined petroleum products and appurtenant pipelines and facilities
that the
parties propose to construct and operate on the Safeland Tract.
"TAX
AUTHORITY" means any Governmental Authority having jurisdiction
over
the assessment, determination, collection or imposition of any
Tax.
"TAX
RETURNS" means any report, return, election, document, estimated
tax
filing, declaration or other filing provided to any Tax Authority
including any
amendments thereto.
"TAXES"
means all taxes, assessments, charges, duties, fees, levies,
imposts or other similar charges imposed by a Governmental
Authority, including
all income, franchise, profits, capital gains, capital stock,
transfer, gross
receipts, sales, use, transfer, service, occupation, ad valorem,
property,
excise, severance, windfall profits, premium, stamp, license,
payroll,
employment, social security, unemployment, disability,
environmental (including
taxes under Code Section 59A), alternative minimum, add-on,
value-added,
withholding and other taxes, assessments, charges, duties, fees,
levies, imposts
or other similar charges of any kind whatsoever (whether payable
directly or by
withholding and whether or not requiring the filing of a Tax
Return), and all
estimated taxes, deficiency assessments, additions to tax,
additional amounts
imposed by any Governmental Authority, penalties and interest.
SECTION
1.2 TERMS DEFINED ELSEWHERE IN THIS AGREEMENT. For purposes of
this Agreement, the following terms have meanings set forth in the
sections
indicated:
TERM
SECTION
----
-------
Agreement
...................................... Preamble
Amended Operating Agreement
..................................... 2.3(a)(ii)
Closing
..................................... 2.2
Closing Date
..................................... 2.2
Damages
..................................... 6.2(a)
FEI
..................................... Recitals
Indemnified Party
..................................... 6.5(a)
Indemnifying Party
..................................... 6.5(a)
Land
..................................... Recitals
Original Securities
..................................... Recitals
Permits
..................................... Recitals
PSA
..................................... 2.3(b)(iii)
Purchase Price
..................................... 2.1
Purchaser
..................................... Preamble
Purchaser Documents
..................................... 5.2
Purchaser
Indemnitees
..................................... 6.2(a)
Safeland
..................................... Recitals
Safeland Permits
..................................... 4.7
Securities Act
..................................... 5.6
Seller Documents
..................................... 3.1
Seller Indemnitees
..................................... 6.3
Sellers
..................................... Preamble
Third Party Claim
..................................... 6.5(a)
Transferred Securities
..................................... 2.1
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SECTION
1.3 RULES OF INTERPRETATION. Unless otherwise expressly
provided
hereby, for purposes of this Agreement, the following rules of
interpretation
shall apply:
(a) All article, section, schedule and exhibit references used
in
this Agreement are to articles, sections, schedules and exhibits to
this
Agreement unless otherwise specified. The schedules and exhibits
attached to
this Agreement constitute a part of this Agreement and are
incorporated herein
for all purposes.
(b) If a term is defined as one part of speech (such as a noun),
it
shall have a corresponding meaning when used as another part of
speech (such as
a verb). Terms defined in the singular have the corresponding
meanings in the
plural, and vice versa. Unless the context of this Agreement
clearly requires
otherwise, words importing the masculine gender shall include the
feminine and
neutral genders and vice versa. The term "includes" or "including"
shall mean
"including without limitation." The words "hereof," "hereto,"
"hereby,"
"herein," "hereunder" and words of similar import, when used in
this Agreement,
shall refer to this Agreement as a whole and not to any particular
section or
article in which such words appear.
(c) The parties acknowledge that each party and its attorneys
have
reviewed this Agreement and that any rule of construction to the
effect that any
ambiguities are to be resolved against the drafting party, or any
similar rule
operating against the drafter of an agreement, shall not be
applicable to the
construction or interpretation of this Agreement.
(d) The captions in this Agreement are for convenience only and
shall not be considered a part of or affect the construction or
interpretation
of any provision of this Agreement.
ARTICLE II
PURCHASE AND SALE
-----------------
SECTION
2.1 PURCHASE AND SALE. Subject to the terms and conditions of
this
Agreement, the Sellers will sell, convey, transfer, assign and
deliver to
Purchaser, free and clear of any Liens, those Original Securities
held by the
Sellers and set forth opposite such Seller's name on SCHEDULE 2.1
(the
"TRANSFERRED SECURITIES") for an aggregate purchase price of
$1,500,000 (the
"PURCHASE PRICE"). From and after the Closing, as a result of the
reconstitution
of Safeland's membership interests, the Original Securities shall
automatically
be converted into 70,000 Class A Units, all of which will be held
by Purchaser,
and 930,000 Class B Units, all of which will be held by the Sellers
in
proportion to their ownership of the Original Securities.
SECTION
2.2 CLOSING. The closing of the purchase and sale of the
Transferred Securities (the "CLOSING") shall take place at the
offices of
Purchaser's counsel, Milling Benson Woodward L.L.P., 909 Poydras
Street, Suite
2300, New Orleans, Louisiana 70112, simultaneously with the
execution and
delivery of this Agreement (the "CLOSING DATE").
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SECTION
2.3 CLOSING DELIVERIES. At the Closing:
(a)
Each Seller
shall:
(i) deliver to
Purchaser certificates representing the Transferred
Securities owned by such Seller;
(ii) execute and
deliver to Safeland the Amended and Restated
Operating Agreement of Safeland in the form attached hereto as
EXHIBIT C (the "AMENDED OPERATING Agreement"); and
(iii) cause Safeland and FEI to execute and deliver that
certain
Purchase and Sale Agreement in the form attached hereto as
EXHIBIT D (the "PSA").
(b)
Purchaser
shall:
(i) deliver to
each Seller that portion of the Purchase Price
payable to such Seller for the Transferred Securities being
sold by such Seller, by wire transfer of immediately available
funds to the account(s) designated by such Seller in writing;
(ii) execute and
deliver to Safeland the Amended Operating
Agreement; and
(iii) execute and deliver to Safeland and FEI the PSA.
ARTICLE III
SELLER'S INDIVIDUAL REPRESENTATIONS AND WARRANTIES
--------------------------------------------------
Each
Seller, severally but not jointly, hereby represents and warrants
to
Purchaser that the following representations and warranties are
true and
correct:
SECTION
3.1 AUTHORIZATION OF AGREEMENT. Such Seller has all requisite
power, authority and legal capacity to execute and deliver this
Agreement and
each other agreement, document, instrument or certificate to be
executed by such
Seller in connection with the consummation of the transactions
contemplated by
this Agreement (the "SELLER DOCUMENTS"), and to consummate the
transactions
contemplated hereby and thereby. The execution, delivery and
performance of this
Agreement and each of the Seller Documents, and the consummation of
the
transactions contemplated hereby and thereby, has been duly
authorized and
approved by all required action on the part of such Seller. This
Agreement has
been, and each of the Seller Documents will be at or prior to the
Closing, duly
and validly executed and delivered by such Seller and (assuming
due
authorization, execution and delivery by Purchaser) this Agreement
constitutes,
and each of the Seller Documents when so executed and delivered
will constitute,
legal, valid and binding obligations of such Seller, enforceable
against such
Seller in accordance with its terms.
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SECTION
3.2 NO CONFLICTS. None of the execution and delivery by such
Seller of this Agreement or the Seller Documents, the consummation
of the
transactions contemplated hereby or thereby, or compliance by such
Seller with
any of the provisions hereof or thereof will conflict with, or
result in any
violation of or default (with or without notice or lapse of time,
or both)
under, or give rise to a right of termination or cancellation under
any
provision of (a) the Organizational Documents of such Seller (if
not a natural
person); (b) any Contract to which such Seller is a party or by
which any of the
properties or assets of such Seller are bound (c) any Order of any
Governmental
Authority applicable to such Seller or by which any of the
properties or assets
of such Seller are bound; or (d) any applicable Law.
SECTION
3.3 CONSENTS AND APPROVALS. No consent, waiver, approval, Order
or
authorization of, or declaration or filing with, or notification
to, any
Governmental Authority or third party is required on the part of
such Seller in
connection with the execution and delivery of this Agreement, the
Seller
Documents, the compliance by such Seller with any of the provisions
hereof, or
the consummation of the transactions contemplated hereby.
SECTION
3.4 OWNERSHIP AND TRANSFER OF MEMBERSHIP INTEREST. Such Seller
is
the owner of the Original Securities designated as owned by it on
SCHEDULE 2.1,
free and clear of any and all Liens. Upon the sale of the
Transferred Securities
sold by such Seller pursuant to this Agreement, Purchaser will
possess good and
marketable title to such Transferred Securities, free and clear of
any and all
Liens.
SECTION
3.5 LITIGATION. There is no Legal Proceeding pending or, to the
knowledge of such Seller, threatened against such Seller or to
which such Seller
is otherwise a party relating to the Original Securities, this
Agreement, the
Seller Documents or the transactions contemplated hereby or
thereby.
SECTION
3.6 FINANCIAL ADVISOR. Except for Simmons & Company,
International, the fees and expenses of which will be paid for by
the Sellers,
and not by Safeland, FEI or Purchaser, no financial advisor,
broker, finder or
investment bank is entitled to any brokerage, finder's fee or other
fee or
commission or expense reimbursement in connection with the
transactions
contemplated by this Agreement based upon arrangements made by such
Seller or
any of its Affiliates.
SECTION
3.7 ORGANIZATION AND GOOD STANDING. As to each Seller that is
not
a natural person, such Seller is an entity duly organized, validly
existing and
in good standing under the laws of the jurisdiction of its
organization and has
all requisite organizational power and authority to own, lease and
operate its
properties and to carry on its business as now conducted.
ARTICLE IV
SELLERS' REPRESENTATIONS AND WARRANTIES AS TO SAFELAND AND FEI
--------------------------------------------------------------
The
Sellers jointly and severally hereby represent and warrant to
Purchaser that the following representations and warranties are
true and
correct:
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SECTION
4.1 ORGANIZATION AND QUALIFICATION. Safeland and FEI are
limited
liability companies duly organized and validly existing under the
Laws of the
State of Louisiana and have all requisite limited liability company
power and
authority to own, lease and operate their properties and to carry
on their
respective businesses as now conducted and to consummate the
transactions
contemplated hereby and by the PSA. Each of Safeland and FEI is
duly qualified
or licensed and in good standing to do business in each
jurisdiction in which
the property owned, leased, or operated by it or the nature of the
business
conducted by it makes such qualification or licensing necessary.
Safeland and
FEI have made available to Purchaser accurate and complete copies
of its
Organizational Documents, each as currently in effect.
SECTION
4.2 NO CONFLICTS. None of the execution and delivery of this
Agreement by the Sellers, the consummation of the transactions
contemplated
hereby, or compliance by the Sellers with any of the provisions
hereof will
conflict with, or result in any violation of or default (with or
without notice
or lapse of time, or both) under, or give rise to a right of
termination or
cancellation under any provision of
