FIFTH AMENDMENT TO THE SETTLEMENT AGREEMENT
Exhibit 10.1
FIFTH AMENDMENT TO THE SETTLEMENT AGREEMENT
This Fifth Amendment to the Settlement Agreement
(this “Fifth
Amendment”), dated as of
May 6, 2019, is by and between Lazarus Energy, LLC, a Delaware
limited liability company (“Lazarus”);
Blue Dolphin Energy Company, a
Delaware corporation (“BDEC”); Lazarus Energy Holdings,
LLC, a Delaware limited liability company (“LEH”);
Xxxxx Product Storage, LLC, a Delaware limited liability company
(“Xxxxx”); Xxxxxxx & Company Financial Holdings,
L.P. (“C&C”); Xxxxxxxx Xxxxxxx (“Xxxxxxx”
and, together with Lazarus, BDEC, LEH,
Nixon, and C&C the “Lazarus
Parties”); and GEL Tex
Marketing, LLC, a Delaware limited liability company
(“GEL
Tex”) (each, a
“Party”
and, collectively, the
“Parties”).
RECITALS
WHEREAS, on July 20, 2018, the Parties executed
the Settlement Agreement1
in order to provide for a settlement
between the Lazarus Parties and GEL Tex regarding the Final Award
that resolves the Arbitration and the District Court Action
contingent upon the Lazarus Parties obtaining the Settlement
Financing to fund a settlement in accordance with the terms of the
Settlement Agreement;
WHEREAS,
paragraph 15(d) of the Settlement Agreement requires the Lazarus
Parties to achieve certain milestones in connection with obtaining
the Settlement Financing;
WHEREAS,
paragraph 17(a) of the Settlement Agreement provides that the
Settlement Agreement shall terminate automatically on December 31,
2018 unless otherwise extended in writing by GEL Tex;
WHEREAS, on October 17, 2018, the Parties executed
the First Amendment to the Settlement Agreement (the
“First
Amendment”) to amend the
Settlement Agreement;
WHEREAS, on November 15, 2018, the Parties
executed the Second Amendment to the Settlement Agreement
(the “Second
Amendment”) to further
amend the Settlement Agreement;
WHEREAS, on December 19, 2018, the Parties
executed the Third Amendment to the Settlement Agreement
(the “Third
Amendment”) to further
amend the Settlement Agreement;
WHEREAS, on March 19, 2019, the Parties executed
the Fourth Amendment to the Settlement Agreement (the
“Fourth
Amendment”) to further
amend the Settlement Agreement;
WHEREAS, on April 19, 2019, the Lazarus Parties
provided GEL Tex with that certain letter from Pilot Travel Centers
LLC d/b/a Pilot Flying J (“Pilot”)
to Lazarus Energy Holdings LLC dated
April 18, 2019, in compliance with the Settlement Financing
Milestone detailed in Paragraph 15(d)(i) of the Settlement
Agreement;
1 All
capitalized terms used but not otherwise defined in this Fifth
Amendment shall have the meanings given to such terms in the
Settlement Agreement.
1
WHEREAS, Pilot, as Lender, and Xxxxx Product
Storage, LLC, Lazarus Refining & Marketing, LLC, Lazarus Energy
Holdings LLC, Lazarus Energy, LLC, Blue Dolphin Energy Company, as
Loan Parties, intend to enter into that certain Line of Credit,
Guarantee and Security Agreement in the form annexed hereto
as Exhibit
E (the “Pilot
Settlement Financing”);
WHEREAS,
in order to facilitate the Lazarus Parties’ entry into the
Pilot Settlement Financing, GEL Tex and the Lazarus Parties hereby
agree to further amend the Settlement Agreement;
NOW,
THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth in the Settlement Agreement and
this Fifth Amendment, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Parties, intending to be legally bound, agree as
follows:
AGREEMENT
1.A
new Paragraph 2A is inserted in the Settlement Agreement
immediately
following Paragraph 2 and immediately before Paragraph 3, which new
Paragraph 2A shall state:
“2A. Pilot Settlement
Financing. Notwithstanding
anything to the contrary in this Settlement
Agreement:
(a)
GEL Tex consents to the Lazarus Parties entering
into and taking all actions expressly required by the Pilot
Settlement Financing (as defined below) to consummate the
Settlement Financing contemplated under that certain Line of
Credit, Guarantee and Security Agreement between Pilot Travel
Centers, LLC (“Pilot”), Lazarus, Lazarus Energy, BDEC,
Xxxxx and Xxxxxxx Refining & Marketing, LLC, in the form
annexed hereto as Exhibit
E (the “Pilot
Settlement Financing”);
(b)
(i)The
Lazarus Parties shall pay GEL Tex in cash the Interim
Payment
of $500,000 due on the last business day of April 2019
(i.e., April 30, 2019) pursuant to Paragraph 2 of this
Settlement Agreement (the “Deferred
Interim Payment”) in one
or more installments of no less than $100,000 (each, a
“Deferred
Interim Installment Payment,” and collectively, the “Deferred
Interim Installment Payments”) as set forth in Section 2A(b)(ii)
below.
(ii)The
Deferred Interim Installment Payments shall be paid by
the
Lazarus Parties to GEL Tex on or before the
following dates (each, a “Deferred
Interim Installment Payment Date”) and according to the following
schedule:
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Deferred Interim Installment
Payment Date
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Deferred Interim Installment
Payment Amount Due
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6/28/2019
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$100,000
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7/31/2019
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$100,000
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2
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Deferred Interim Installment
Payment Date
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Deferred Interim Installment
Payment Amount Due
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8/30/2019
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$100,000
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9/30/2019
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$100,000
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10/31/2019
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$100,000
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;
(c)
(i) The
Lazarus Parties shall pay GEL Tex one or more payments in cash in
an aggregate amount of no less than $10,000,000 (each, a
“Settlement
Installment Payment,” and
collectively, the “Settlement
Installment Payments”). The sum of all Settlement Installment Payments
shall constitute the “Settlement
Payment.” For the
avoidance of doubt, the Settlement Payment is exclusive of any
Retained Payments, any Interim Payments, the Deferred Interim
Payment, or any other amounts paid to GEL Tex by any Lazarus Party
prior to May 6, 2019.
(ii)
The Lazarus Parties shall pay the Settlement
Installment Payments to GEL Tex on or before the following dates
(each, a “Settlement
Installment Payment Date”) according to the following
schedule:
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Settlement Installment Payment
Date
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Settlement Installment Payment Amount Due
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5/7/2019
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$1,000,000
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5/8/2019
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$1,000,000
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5/9/2019
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$1,000,000
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5/10/2019
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$3,000,000
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5/13/2019
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$1,000,000
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5/14/2019
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$1,000,000
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5/15/2019
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$1,000,000
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5/16/2019
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$1,000,000
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;
and
(d)
at
such time as the Lazarus Parties have paid the Settlement Payment
to
GEL Tex as contemplated under Section 2A(c)
above (and, for the avoidance of
doubt, whether or not the Deferred Interim Payment has been paid in
full at the time such Settlement Payment is made, so long as the
Lazarus Parties have timely made each Settlement Installment
Payment on the Settlement Installment Payment Date), no additional
Interim Payments shall be due under Section 2 above, except that
this Section 2A(d) shall not affect the obligations of the Lazarus
Parties in respect of any Interim Payment representing a Deferred
Interim Payment under Section 2A(b) above, which shall continue to
be due and payable on the Deferred Interim Installment Payment
Dates as provided in Section 2A(b)(ii); provided
that, in the event the Lazarus
Parties fail for any reason to make any of (i) a Deferred Interim
Installment Payment by the applicable Deferred Interim Installment
Payment Date or (ii) a Settlement Installment Payment by
the
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applicable Settlement Installment Payment Date,
then (x) the Deferred Interim Payment for April 2019 and all
Interim Payments that would have been due on the last business day
of each month under Paragraph 2 of this Settlement Agreement but
for the execution of this Fifth Amendment shall become immediately
due and payable, and (y) the Lazarus Parties shall continue to make
monthly Interim Payments until the earlier of (I) the Termination
Date or (II) the date the Lazarus Parties pays to GEL Tex the
entire Settlement Payment, the Deferred Interim Payment, and all
accrued Interim Payments as contemplated under this Paragraph
2A(d)(x) that have arisen prior to such date of payment;
provided further
that the outstanding balance of
the Final Award shall be reduced by all payments by the Lazarus
Parties to GEL Tex, whether made with respect to an Interim
Payment, the Deferred Interim Payment, the Deferred Interim
Installment Payments, the Settlement Payment, or the Settlement
Installment Payments.”
2. “Settlement
Payment Date” as defined in Paragraph 3 of the Settlement
Agreement shall be amended and replaced in its entirety and shall
now state:
The “Settlement
Payment Date” shall be
the first date upon which the Lazarus Parties pay GEL Tex all of
the following: (i) the Settlement Installment Payments totaling $10
million; (ii) the Deferred Interim Payments totaling $500,000; and
(iii) all Interim Payments described in Paragraph 2A(d)(x) and
(y).
3. Paragraph
15(a) of the Settlement Agreement shall be amended and replaced in
its entirety and shall now state:
Payment Default.
The failure, refusal or neglect of the
Lazarus Parties to pay any Interim Payment when due to GEL
Tex.
4. Paragraph
15(d)(ii) of the Settlement Agreement shall be amended and replaced
in its entirety and shall now state:
Provide
GEL Tex with copies of the fully executed loan documents for the
Pilot Settlement Financing by no later than May 6, 2019, unless
otherwise extended in writing by GEL Tex;
5. Paragraph
17(a) of the Settlement Agreement shall be amended and replaced in
its entirety and shall now state:
October
31, 2019, unless otherwise extended in writing by GEL Tex, if the
Settlement Payment Date has not occurred on or before such date;
or
6. The
following is inserted in the Settlement Agreement to Paragraph 15
“Events of Default” immediately following Paragraph
15(d) and immediately before Paragraph 16, which new Paragraphs
15(e) and 15(f) shall state:
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“(e)
Failure to Pay the Deferred
Interim Payment. The failure,
refusal or neglect of the Lazarus Parties to pay any of the
Deferred Interim Installment Payments by the respective Deferred
Interim Installment Payment Date or the failure to pay the entire
Deferred Interim Payment by October 31, 2019.
(f)
Failure to Pay the Settlement
Installment Payments. The
failure, refusal or neglect of the Lazarus Parties to pay any of
the Settlement Installment Payments by the respective Settlement
Installment Payment Date or the failure to pay the entire
Settlement Payment by May 16, 2019.”
7. GEL
Tex and the Lazarus Parties agree that this Fifth Amendment may be
executed in separate parts delivered by electronic means that,
taken together, will be deemed to be one instrument. GEL Tex and
each Lazarus Party represent and warrant that this Fifth Amendment
has been approved and authorized by all necessary action and the
execution hereof does not violate any agreement to which it is a
party.
8. Except
as set forth in this Fifth Amendment, the Settlement Agreement, the
First Amendment, the Second Amendment, the Third Amendment, and the
Fourth Amendment are unaffected and shall continue in full force
and effect in accordance with their terms. If there is a conflict
between this Fifth Amendment, the Fourth Amendment, the Third
Amendment, the Second Amendment, the First Amendment, and the
Settlement Agreement, the terms of this Fifth Amendment will
prevail.
[Signature Pages Follow]
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IN
WITNESS WHEREOF, the undersigned have caused this Fifth Amendment
to the Settlement Agreement to be duly executed and delivered as of
the date first set forth above.
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GEL TEX
MARKETING, LLC
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By:
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/s/
R.V. DEERE
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Name:
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R.V.
Deere
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Title:
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CFO
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LAZARUS
ENERGY, LLC
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By:
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/s/
XXXXXXXX XXXXXXX
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Name:
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Xxxxxxxx
Xxxxxxx
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Title:
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President
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By:
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/s/
XXXXXXXX XXXXXXX
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Name:
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Xxxxxxxx
Xxxxxxx
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Title:
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President
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LAZARUS
ENERGY HOLDINGS, LLC
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By:
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/s/
XXXXXXXX XXXXXXX
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Name:
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Xxxxxxxx
Xxxxxxx
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Title:
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President
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XXXXX
PRODUCT STORAGE, LLC
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By:
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/s/
XXXXXXXX XXXXXXX
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Name:
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Xxxxxxxx
Xxxxxxx
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Title:
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President
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XXXXXXX &
COMPANY FINANCIAL HOLDINGS, L.P.
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By:
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/s/
XXXXXXXX XXXXXXX
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Name:
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Xxxxxxxx
Xxxxxxx
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Title:
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President
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By:
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/s/
XXXXXXXX XXXXXXX
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Xxxxxxxx
Xxxxxxx
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[Signature Page to Fifth Amendment to Settlement
Agreement]
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