SECOND 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.,
BLUE DOLPHIN EXPLORATION COMPANY, PREVIOUSLY KNOWN AS
IVORY PRODUCTION CO., BLUE DOLPHIN SERVICES CO.,
AND BANK ONE, TEXAS, N.A.
This Second Amendment to Loan Agreement dated January 14, 1994
(this "Second 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., BLUE DOLPHIN EXPLORATION COMPANY,
PREVIOUSLY KNOWN AS IVORY PRODUCTION CO., AND BLUE DOLPHIN SERVICES CO.
(collectively, the "Borrowers") and BANK ONE, TEXAS, N.A., a national
banking association (the "Bank") is entered into on this 22nd day of
December, 1995.
W I T N E S S E T H:
Borrowers and Bank entered into a Loan Agreement dated January
14, 1994, which was amended by that certain First Amendment thereto
dated February 7, 1995 (the "Loan Agreement").
Borrowers have requested that Bank (i) increase the Borrowing
Base and the Revolving Commitment Limit to $3,335,000.00, (ii) waive
compliance by the Borrowers with certain of the financial covenants
contained in the Loan Agreement for certain accounting periods, and
(iii) make certain other modifications to the Loan Agreement.
Bank is willing to enter into the requested amendment subject
to and conditioned upon the amendment of and/or addition to 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:
"ASSET PURCHASE AGREEMENT" shall mean that certain Asset
Purchase Agreement dated August 31, 1995, entered into by and
among Blue Dolphin, Buccaneer and Mission Energy, as sellers,
and CoEnergy Offshore Pipeline & Processing Company, a
Michigan corporation ("COPPC"), as purchaser.
"COPPC AGREEMENTS" shall mean the Asset Purchase Agreement,
the Operating Agreements, and the Purchase Rights Agreement.
"OPERATING AGREEMENTS" shall mean those certain Operating
Agreements as hereinafter described each dated effective
August 1, 1995 as follows: (i) by and between Mission Energy
as Operator and Owner, and COPPC as Owner, (ii) by and between
Blue Dolphin as Operator and Owner, and COPPC as Owner, and
(iii) by and between Buccaneer as Owner and Operator, and
COPPC as Owner.
"PURCHASE RIGHTS AGREEMENT" shall mean that certain Purchase
Rights and Participation Agreement dated effective August 1,
1995 entered into by and among Blue Dolphin, Buccaneer,
Mission Energy and the Parent Company and COPPC and Pipeline &
Processing Group, Inc.
"SECOND AMENDMENT" shall mean that certain Second Amendment to
the Loan Agreement, entered into by and among Bank and
Borrowers on December 22, 1995.
The first sentence of SECTION 2.04 is amended to read as follows:
The Borrowing Base is hereby established at $3,335,000.00
effective as of the execution date of the Second Amendment,
declining in the amount of $155,000.00, monthly, beginning on
January 1, 1996, and at the beginning of each successive month
thereafter until the effective date of the next
redetermination of the Borrowing Base as set forth in this
Section.
The first sentence of SECTION 5.17 is amended to read as follows:
Other than the Contracts and the COPPC Agreements, no Borrower
is a party to, nor bound by any agreement, condition, contract
or arrangement which might in the future have a material
adverse effect on the business, operations, or financial
condition of such Borrower.
SECTION 6.11 is amended by adding the following text at the end of
that section: "Each Borrower that is currently the operator of any
pipeline system or other facilities that comprise a part of the
Collateral Property shall at all times continue to be the operator
thereof."
SECTION 6.25 is amended by adding the following text at the end of
that section: ", including, but not limited to, the COPPC
Agreements. In addition, the Borrowers, or any of them, shall use
reasonable efforts to cause COPPC to comply in all material
respects with the terms and provisions of the COPPC Agreements."
SECTION 6.39, which reads as follows, is hereby added to the Loan
Agreement:
Section 6.39 ADDITIONAL REPORTING REQUIRE-MENTS.
Deliver to the Bank a copy of the annual budgets prepared in
accordance with Section 4.02 of each of the Operating
Agreements as approved by the Budget Committee (defined in the
Operating Agreements) within five (5) Business Days of their
completion, provided that the most recent of such budgets
existing as of the date of execution of the Second Amendment
shall be provided to the Bank contemporaneously therewith;
deliver to the Bank, within fifty (50) days after the end of
each month, a copy of the Regular Statements prepared as
described in Section 5.01 of each of the Operating Agreements;
and deliver to the Bank, within five (5) Business Days' of
preparation thereof by the operator, a copy of any Special
Statements prepared as described in Section 5.02 of each of
the Operating Agreements.
SECTION 7.03 is amended by changing $300,000.00 to $400,000.00 in
subsection (b) thereof, and by adding "for 1995" following
$400,000.00.
SECTION 7.14 is amended to read:
"CERTAIN CAPITAL EXPENDITURES". Make any capital expenditures
for items other than for acquisitions and abandonment costs
exceeding $1,310,000.00 in 1994; $700,000.00 in 1995
(exclusive of the $400,000.00 loan or capital contribution
from the Parent Company to BDAC described in Section 7.03(b));
and $200,000.00 per annum thereafter, on a consolidated basis.
SECTION 8.01(l), which reads as follows, is hereby added to the
Loan Agreement:
(l) COPPC is in violation of, or is not in compliance with,
any material terms, provisions, or covenants of any of
the COPPC Agreements.
II. WAIVERS TO COVENANT VIOLATIONS BY BANK. The Bank has agreed to
waive compliance by the Borrowers with the following covenants, subject
to the limitations specifically stated:
A. The general and administrative expenses covenant in Section
6.20 of the Loan Agreement for the quarter ending September
30, 1995.
B. The capital expenditures covenant in Section 7.14 of the Loan
Agreement for the quarter ending September 30, 1995.
C. Any of the provisions of the Loan Agreement, including but not
limited to, Section 7.07 thereof, with respect to any prior
violation thereof arising solely from the execution or
performance of the COPPC Agreements.
III. EXTENT OF AMENDMENTS. This Second Amendment shall not be deemed
to be a waiver by Bank of any covenant, condition or obligation on the
part of the Borrowers under the Loan Agreement, as amended hereby,
except as expressly set forth herein. In addition, this Second
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 Borrowers 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.
IV. CONDITION TO CLOSING THE SECOND AMENDMENT. This Second Amendment
shall not become effective until the Bank has received a an original or
a certified copy of an instrument from the Office of the Secretary of
State of the State of Delaware evidencing the change of name of Ivory to
Blue Dolphin Exploration Company, and evidence satisfactory to the Bank
that such instrument has been filed with the Minerals Management Service
and in the Official Public Records of Real Property in Brazoria and
Galveston Counties, Texas.
V. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. To induce the
Bank to enter into this Second Amendment, each Borrower hereby
reaffirms, as of the date hereof, its representations and warranties
contained in Article V of the Loan Agreement and in all other documents
executed pursuant thereto, and additionally represents and warrants as
follows:
A. The execution and delivery of this Second Amendment and the
performance by each of the Borrowers of its obligations under this
Second Amendment are within each 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 any of the Borrowers or of any
agreement binding upon any Borrower.
B. This Second Amendment represents the legal, valid and binding
obligations of each Borrower enforceable against each 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.
VI. DEFINED TERMS. Terms used herein that are defined in the Loan
Agreement shall have the same meanings herein, unless the context
otherwise requires.
VII. REAFFIRMATION OF LOAN AGREEMENT. This Second 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.
VIII. GOVERNING LAW. THIS SECOND 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 Second 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 Borrowers and the Bank, whether in law or equity, including, but not
limited to, any and all disputes arising out of or relating to this
Second 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.
IX. SEVERABILITY. Whenever possible each provision of this Second
Amendment shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Second
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 Second Amendment.
X. EXECUTION IN COUNTERPARTS. This Second 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.
XI. SECTION CAPTIONS. Section captions used in this Second Amendment
are for convenience of reference only, and shall not affect the
construction of this Second Amendment.
XII. SUCCESSORS AND ASSIGNS. This Second Amendment shall be binding
upon each of the Borrowers, the Bank and its respective successors and
assigns, and shall inure to the benefit of the Borrowers, the Bank and
the respective successors and assigns of the Bank.
XIII. 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 Second Amendment or any of the other
Loan Documents or to the transactions contemplated hereby.
XIV. NOTICE. THE LOAN AGREEMENT, AS HEREBY AMENDED, EMBODIES THE
ENTIRE AGREEMENT BETWEEN THE BORROWERS AND THE BANK AND SUPERSEDES ALL
PRIOR PROPOSALS, AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT
MATTER HEREOF. EACH OF THE BORROWERS 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 Second
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
BLUE DOLPHIN EXPLORATION COMPANY,
PREVIOUSLY KNOWN AS 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
