FIRST AMENDMENT TO
LOAN AGREEMENT DATED JANUARY 14, 1994
BY AND AMONG BLUE DOLPHIN ENERGY COMPANY,
BLUE DOLPHIN PIPE LINE COMPANY, BUCCANEER PIPE LINE CO.,
MISSION ENERGY, INC. D/B/A/ MEI MISSION ENERGY, INC.,
IVORY PRODUCTION CO., BLUE DOLPHIN SERVICES CO.,
AND BANK ONE, TEXAS, N.A.
This First Amendment to Loan Agreement dated January 14,
1994 (this "First Amendment") by and among BLUE DOLPHIN ENERGY
COMPANY, BLUE DOLPHIN PIPE LINE COMPANY, BUCCANEER PIPE LINE CO.,
MISSION ENERGY, INC. D/B/A/ MEI MISSION ENERGY, INC., IVORY
PRODUCTION CO., AND BLUE DOLPHIN SERVICES CO. (collectively, the
"Borrower") and BANK ONE, TEXAS, N.A., a national banking
association (the "Bank") is entered into on this 7th day of
February, 1995.
W I T N E S S E T H:
Borrower and Bank entered into a Loan Agreement dated
January 14, 1994 (the "Loan Agreement").
Borrower has requested that Bank amend certain covenants
in the Loan Agreement so that Blue Dolphin Energy Company may form
a wholly owned Subsidiary, Blue Dolphin Acquisition Company, a
Delaware corporation, and Blue Dolphin Acquisition Company may then
merge with Petroport L.C., a Texas limited liability company, with
Blue Dolphin Acquisition Company being the survivor of such merger.
Bank is willing to enter into the requested amendment
subject to and conditioned upon the amendment of certain other
provisions of the Loan Agreement.
NOW, THEREFORE, in consideration of the promises herein
contained, and each intending to be legally bound hereby, the
parties agree as follows:
I. AMENDMENTS TO LOAN AGREEMENT.
SECTION 1.01 is amended by adding the following definitions
thereto:
"BDAC" shall mean Blue Dolphin Acquisition Company,
a Delaware corporation to be formed as a wholly
owned subsidiary of the Parent Company, as permitted
by Sections 7.03 and 7.13.
"First Amendment" shall mean that certain First
Amendment to the Loan Agreement, entered into by
Bank and Borrower on February 7, 1995.
"MERGER AGREEMENT" shall mean that certain agreement
entitled "A Plan and Agreement of Merger" to be
entered into by and among the Parent Company, BDAC,
Petroport L.C., a Texas limited liability company,
and the current owners of Petroport L.C., which
shall be in substantially the form attached as
Exhibit "A" to the First Amendment.
SECTION 5.25 is amended to read:
SUBSIDIARIES. The Parent Company has no
Subsidiaries other than the Dolphin Subsidiaries and
BDAC, which is the surviving entity resulting from
the merger of BDAC and Petroport L.C. pursuant to
the Merger Agreement, the name of which may be
changed from BDAC to Petroport, Inc. following the
merger.
SECTION 5.27, which reads as follows, is hereby added to the
Loan Agreement:
Section 5.27 REPRESENTATIONS AND WARRANTIES
REGARDING SUBSIDIARIES. The representations and
warranties stated in Sections 5.01, 5.04, 5.06,
5.07, 5.08, 5.12, 5.14, 5.17, and 5.20 are true not
only as to each Borrower, but are also true with
respect to each of its Subsidiaries that is not a
party to this Loan Agreement, to the same extent as
if such representations and warranties had also been
made by and with respect to such Subsidiary.
SECTION 6.38, which reads as follows, is hereby added to the
Loan Agreement:
Section 6.38 AFFIRMATIVE COVENANTS REGARDING
SUBSIDIARIES. Each Borrower will cause each of its
Subsidiaries that is not a party to this Loan
Agreement to perform the covenants stated in the
following enumerated Sections of the Loan Agreement
with the same effect as if said covenants had also
been entered into by and with respect to each such
Subsidiary: Sections 6.02 through 6.06, 6.08, 6.10
through 6.12, 6.14 through 6.17, 6.20 through 6.28,
6.30, and 6.37.
SECTION 7.01 is amended to read:
"OTHER INDEBTEDNESS. No Borrower will incur,
create, assume or permit to exist, or permit any of
its Subsidiaries to incur, create, assume or permit
to exist, any Indebtedness, except (i) Indebtedness
to Bank, (ii) existing Indebtedness among or between
any of the Borrowers, as described on the Financial
Statements dated September 30, 1993, (iii) accounts
payable in the ordinary course of business, (iv)
letters of credit or performance bonds required to
be obtained by any Borrower or any of its
Subsidiaries in the normal course of its business to
assure the proper plugging and abandonment of oil
and gas drilling or production locations,
(v) Indebtedness among the Borrowers as described in
Section 7.06, and (vi) Indebtedness arising from the
endorsement of instruments for collection in the
ordinary course of business. Notwithstanding
anything to the contrary set forth in this Agreement
or in any other Loan Document, the Bank agrees that
it will permit the Borrowers to establish the
Newfield/MMS Funding Arrangement (defined herein as
defined in Schedule 2 hereto), and shall execute
such partial releases, subordination agreements, and
other documents as are reasonably necessary to
enable Ivory to establish the Newfield/MMS Funding
Arrangement."
SECTION 7.03 is amended by deleting the first sentence of
that Section and inserting the following text in its place:
No Borrower will make any advance, loan, extension
of credit, capital contribution to, or investment in
any person, except: (a) as permitted elsewhere in
this Agreement (including, but not limited to
Section 7.06), and (b) a loan or capital
contribution from the Parent Company to BDAC in an
amount not to exceed $300,000.00 for purposes of
forming BDAC, as permitted by Section 7.13,
consummating the Merger Agreement, and paying costs
and expenses generally relating to or associated
with such activities and/or transactions.
SECTION 7.08 is amended to read:
NATURE OF BUSINESS. No Borrower will engage in any
business concerning the Borrowing Base Assets or the
Collateral Property other than the business in which
it is engaged as of the date hereof; provided that
this covenant shall not preclude BDAC from
continuing the business of Petroport L.C. following
the consummation of the merger contemplated by the
Merger Agreement.
SECTION 7.13 is amended to read:
CHANGES IN CORPORATE STRUCTURE. Consolidate, merge
with, or purchase (for cash or securities) all or
part of the assets or capital stock of any
corporation, firm, association or enterprise, or
allow any such entity to be merged into the Parent
Company or any of its Subsidiaries, nor shall the
Parent Company or any of its Subsidiaries cause or
permit any change to occur in the ownership of the
capital stock of the Subsidiaries or the basic
business operations of the Parent Company or any of
its Subsidiaries; except that: (a) the Parent
Company shall be permitted, within thirty (30) days
from the date of the First Amendment, to form as a
wholly owned subsidiary a new Delaware corporation
to be named Blue Dolphin Acquisition Company, using
funding from a loan or capital contribution made by
the Parent Company as permitted by Section 7.03, and
(b) the Parent Company and BDAC shall be permitted,
for a period of thirty (30) days from the date of
the First Amendment, to enter into the Merger
Agreement with Petroport L.C. and the owners of
Petroport L.C., provided the Merger Agreement is
executed by all intended signatory parties, as
designated therein, within thirty (30) days from the
date of the First Amendment.
SECTION 7.16, which reads as follows, is hereby added to the
Loan Agreement:
Section 7.16 NEGATIVE COVENANTS REGARDING
SUBSIDIARIES. Each Borrower will cause each of its
Subsidiaries that is not a party to this Loan
Agreement to perform and observe the negative
covenants stated in the following enumerated
Sections of the Loan Agreement with the same effect
as if said covenants had also been entered into by
and with respect to each such Subsidiary: Sections
7.01 through 7.08, 7.10, 7.12 through 7.14; provided
that the Subsidiaries which are not Borrowers shall
not be entitled to receive any of the short term
cash advances referred to in Section 7.06; and
provided further that Section 7.13 shall not be
deemed to preclude the consummation of the
transactions contemplated by the Merger Agreement.
II. EXTENT OF AMENDMENTS. This First Amendment shall not be
deemed to be a waiver by Bank of any covenant, condition or
obligation on the part of the Borrower under the Loan Agreement, as
amended hereby, except as expressly set forth herein. In addition,
this First Amendment shall in no respect evidence any commitment by
the Bank to grant any future waivers of any covenant, condition or
obligation on the part of the Borrower under the Loan Agreement, as
amended hereby. Any further waivers or consents must be
specifically agreed to in writing in accordance with Section 9.10
of the Loan Agreement.
III. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. To induce
the Bank to enter into this First Amendment, each Borrower hereby
reaffirms, represents, and warrants that as of the date hereof and
after taking into consideration the consummation of the
transactions contemplated under the Merger Agreement and in all
other documents executed pursuant thereto:
A. The execution and delivery of this First Amendment and
the performance by the Borrower of its obligations under this
First Amendment are within the Borrower's power, have been
duly authorized by all necessary corporate action, have
received all necessary governmental approval (if any shall be
required), and do not and will not contravene or conflict
with any provision of law or of the charter or by-laws of the
Borrower or of any agreement binding upon the Borrower.
B. This First Amendment represents the legal, valid and
binding obligations of the Borrower enforceable against the
Borrower in accordance with its terms subject as to
enforcement only to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally.
C. Since the date of the Loan Agreement, no change, event or
state of affairs has occurred and is continuing which would
constitute an Event of Default or an Unmatured Event of
Default.
D. The form of Merger Agreement attached hereto as Exhibit
"A" is a true and complete copy of the form of Merger
Agreement that has been negotiated, to date, among the
parties designated therein, and promptly after the Parent
Company and BDAC have entered into the Merger Agreement with
the other parties designated therein, the Parent Company
shall provide to the Bank true and complete copies of the
fully executed Merger Agreement and of all agreements and
instruments to be executed or entered into in connection
therewith.
IV. DEFINED TERMS. Terms used herein that are defined in the
Loan Agreement shall have the same meanings herein, unless the
context otherwise requires.
V. REAFFIRMATION OF LOAN AGREEMENT. This First Amendment shall
be deemed to be an amendment to the Loan Agreement, and the Loan
Agreement, as amended hereby, is hereby ratified, adopted and
confirmed in each and every respect.
VI. GOVERNING LAW. THIS First Amendment SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. This First
Amendment has been entered into in Xxxxxx County, Texas, and it
shall be performable for all purposes in Xxxxxx County, Texas.
Courts within the State of Texas shall have jurisdiction over any
and all disputes between the Borrower and the Bank, whether in law
or equity, including, but not limited to, any and all disputes
arising out of or relating to this First Amendment or any other
Loan Documents; and venue in any such dispute whether in federal or
state court shall be laid in Xxxxxx County, Texas.
VII. SEVERABILITY. Whenever possible each provision of this First
Amendment shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this First
Amendment shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this First Amendment.
VIII. EXECUTION IN COUNTERPARTS. This First Amendment may be
executed in any number of counterparts and by the different parties
on separate counterparts on different dates, and each such
counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same
agreement.
IX. SECTION CAPTIONS. Section captions used in this First
Amendment are for convenience of reference only, and shall not
affect the construction of this First Amendment.
X. SUCCESSORS AND ASSIGNS. This First Amendment shall be
binding upon the Borrower, the Bank and its respective successors
and assigns, and shall inure to the benefit of the Borrower, the
Bank and the respective successors and assigns of the Bank.
XI. NON-APPLICATION OF CHAPTER 15 OF TEXAS CREDIT CODE. The
provisions of Chapter 15 of the Texas Credit Code (Vernon's Texas
Civil Statutes, Article 5069-15) are specifically declared by the
parties hereto not to be applicable to this First Amendment or any
of the other Loan Documents or to the transactions contemplated
hereby.
XII. NOTICE. THE LOAN AGREEMENT, AS HEREBY AMENDED, EMBODIES THE
ENTIRE AGREEMENT BETWEEN THE BORROWER AND THE BANK AND SUPERSEDES
ALL PRIOR PROPOSALS, AGREEMENTS AND UNDERSTANDINGS RELATING TO THE
SUBJECT MATTER HEREOF. THE BORROWER CERTIFIES THAT IT IS RELYING
ON NO REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT EXCEPT FOR
THOSE SET FORTH IN THE LOAN AGREEMENT, AS HEREBY AMENDED, AND THE
OTHER DOCUMENTS PREVIOUSLY EXECUTED IN CONNECTION THEREWITH.
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be duly executed as of the day and year first above
written.
BORROWERS:
BLUE DOLPHIN ENERGY COMPANY
By: Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
President
BLUE DOLPHIN PIPE LINE COMPANY
By: Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
President
BUCCANEER PIPE LINE CO.
By: Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
President
MISSION ENERGY, INC. dba
MEI MISSION ENERGY, INC.
By: Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
President
IVORY PRODUCTION CO.
By: Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
President
BLUE DOLPHIN SERVICES CO.
By: Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
President
BANK:
BANK ONE, TEXAS, N.A.
By: Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Vice President
