EXHIBIT 10.1
NOTE MODIFICATION AGREEMENT
This Note Modification Agreement (this "Modification") by and between
BLUE DOLPHIN ENERGY COMPANY (the "Borrower") and WESTERN GULF PIPELINE PARTNERS,
LP (the "Lender") is entered into on the 8th day of April 2005.
RECITALS:
A. Borrower executed that certain Promissory Note dated September 8,
2004, payable to the order of Lender, in the face amount of $275,000.00 (the
"Note"), a copy of which is attached hereto as Exhibit A.
B. Pursuant to Section 3(c) of the Note, the Maturity Date under the
Note was extended to the Extended Maturity Date.
C. Borrower and Lender have agreed to amend certain terms of the Note.
D. Borrower and Lender desire to acknowledge and document the
amendments to the Note subject to the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the promises herein
contained, the mutual benefits to be derived herefrom and other good and
valuable consideration received by each party, and each intending to be legally
bound hereby, the parties agree as follows:
1. Specific Amendments to Note.
A. The following definitions are hereby amended in their
entirety to read as follows:
Base Rate means, from day-to-day, an annual rate of interest
equal to the lesser of (a) 12.0% and (b) the Maximum Rate.
Maturity Date means the earlier to occur of (a) June 30, 2006, and (b)
the date upon which the Obligation has been accelerated pursuant to
Section 11 below.
B. The following definition is hereby added to the Note:
Modification means that certain Note Modification Agreement dated April
8, 2005 between Borrower and Lender.
C. The definition of Extended Maturity Date as set forth in
the Note is hereby deleted therefrom for all purposes from and after
the date of this Modification.
D. Section 3(b) is hereby amended in its entirety to read as
follows:
(b) So long as no Default exists on any interest payment date,
from the date of the Modification until the Maturity Date, interest due
under this Note that has accrued during such period shall not be
payable on such interest payment date, but shall continue to accrue on
a daily basis and shall be due and payable on the Maturity Date;
provided that, all accrued but unpaid interest under this Note shall be
due and payable on any interest payment if a Default exists on any such
interest payment date. The outstanding Principal Debt plus all accrued
and unpaid interest on this Note and all other Obligations shall be due
and payable on the Maturity Date.
2. General Amendments to Loan Documents. The Loan Documents shall
continue in force and effect to secure the obligations of Borrower pursuant to
the Note, and any reference to the descriptions of the obligations, indebtedness
or liabilities of Borrower secured by any such Loan Documents shall be deemed to
refer to the obligations of Borrower pursuant to the Note, as hereby amended.
This Modification modifies the Note and the other Loan Documents but in no way
acts as a release or relinquishment of the liens securing payment of the Note,
including without limitation the liens and security interests created by the
Mortgage, and such liens and security interests are hereby renewed, extended,
ratified, confirmed and carried forward by Borrower in all respects.
3. Conditions Precedent in Connection with the Modification. This
Modification shall not become effective unless and until the following
conditions have been satisfied:
A. Receipt of Modification. Lender shall have received
multiple counterparts of this Note Modification Agreement, as requested
by Lender, duly executed by an authorized officer of Borrower.
B. Payment of Legal Fees. Lender shall have paid to Porter &
Hedges, L.L.P. all reasonable legal fees incurred to such firm in
connection with this Modification.
C. Legal Matters Satisfactory to Lender. All legal matters
incident to the consummation of the transactions contemplated by this
Modification shall be satisfactory to the Lender.
4. Reaffirmation of Representations and Warranties.
A. To induce the Lender to enter into this Modification,
Borrower hereby represents and warrants to Lender as follows:
i. The execution and delivery of this
Modification and the performance by the
Borrower of its obligations under this
Modification (i) are within Borrower's
corporate power, (ii) have been duly
authorized by all necessary corporate
action, (iii) have been authorized by all
necessary governmental approval (if any
shall be required), and (iv) do not and will
not contravene or conflict with any
provision of law or of the articles of
incorporation or the bylaws of Borrower or
of any agreement binding upon Borrower.
ii. This Modification represents the legal,
valid and binding obligations of Borrower
enforceable against 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.
iii. Since the original date of the Note, no
change, event or state of affairs has
occurred and is continuing which would
constitute a Default or solely by the
passage of time or the giving of notice
would constitute a Default.
B. To induce the Borrower to enter into this Modification,
Lender hereby represents and warrants to Borrower as follows:
i. Each and every document which evidences or
secures payment of the Note represents the
valid, enforceable and collectible
obligation to Borrower.
ii. There are no existing claims, defenses or
rights of setoff with respect to any of the
documents evidencing or securing payment of
the Note.
iii. Since the original date of the Note, no
change, event or state of affairs has
occurred and is continuing which would
constitute a Default or solely by the
passage of time or the giving of notice
would constitute a Default.
5. Reaffirmation of Note. This Modification shall be deemed to be an
amendment to the Note, and the Note, as amended hereby, is hereby ratified,
adopted and confirmed in each and every respect.
6. Defined Terms. Each capitalized term used herein, but not defined
herein, shall have the meaning given to it in the Note.
7. Governing Law. THIS MODIFICATION 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 Modification has been entered into in Harris
County, Texas, and it shall be performable for all purposes in Harris County,
Texas. Courts within the State of Texas shall have jurisdiction over any and all
disputes between the Borrower and the Lender, whether in law or equity,
including, but not limited to, any and all disputes arising out of or relating
to this Modification or any other Loan Documents; and venue in any such dispute
whether in federal or state court shall be laid in Harris County, Texas.
8. Severability. Whenever possible each provision of this Modification
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Modification 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 Modification.
9. Execution in Counterparts. This Modification 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.
10. Section Captions. Section captions used in this Modification are
for convenience of reference only, and shall not affect the construction of this
Modification.
11. Successors and Assigns. This Modification shall be binding upon the
Borrower, the Lender and its respective successors and assigns, and shall inure
to the benefit of the Borrower, the Lender and the respective successors and
assigns of the Lender.
12. Non-Application of Chapter 346 of Texas Finance Code. The
provisions of Chapter 346 of the Texas Finance Code (which regulates certain
revolving loan accounts and revolving tri-party accounts) are specifically
declared by the parties hereto not to be applicable to this Modification or any
of the other Loan Documents or to the transactions contemplated hereby.
13. NOTICE OF FINAL AGREEMENT. THE WRITTEN NOTE AND LOAN DOCUMENTS, AS
HEREBY AMENDED, REPRESENT THE FINAL AGREEMENT AMONG THE LENDER AND BORROWER AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
BORROWER:
BLUE DOLPHIN ENERGY COMPANY,
a Delaware corporation
By:________________________________
Michael J. Jacobson
President
LENDER:
WESTERN GULF PIPELINE PARTNERS, LP,
a Texas limited partnership
By: PEREGRINE MANAGEMENT, LLC,
its General Partner
By:____________________________
Barrett L. Webster,
its Manager