Exhibit 10.4 
 
 
APRIL 30, 2019
 
LAZARUS ENERGY LLC ("Lazarus")
801Travis Street, Suite 2100
Houston, TX 77002
 
BLUE DOLPHIN ENERGY COMPANY ("Blue Dolphin")
801 Travis Street, Suite 2100
Houston, TX 77002
 
LAZARUS REFINING & MARKETING, LLC ("LRM")
801 Travis Street, Suite 2100
Houston, TX 77002
 
LAZARUS ENERGY HOLDINGS LLC ("Holdings")
801 Travis Street, Suite 2100
Houston, TX 77002
 
LAZARUS MARINE TERMINAL I, LLC ("Marine")
801 Travis Street, Suite 2100
Houston, TX 77002
 
JONATHAN PITTS CARROLL, SR. ("Carroll")
2201 Sunset Blvd.
Houston, TX 77005
 
RE:            That certain (a) LOAN AGREEMENT (as amended, modified or restated
from time to time, the "June 2015 Loan Agreement') dated as of JUNE 22, 2015,
among VERITEX COMMUNITY LENDER, a Texas state Lender, as successor in interest
to SOVEREIGN LENDER by merger (together with its successors and assigns,
"Lender'), Lazarus, Carroll, Blue Dolphin, LRM, and Holdings (collectively,
"Obligor"); (b) LOAN AGREEMENT (as amended, modified or restated from time to
time, the "December 2015 Loan Agreement') dated as of DECEMBER 4, 2015, among
Lender, LRM, Carroll, Blue Dolphin, Lazarus, and Holdings; (c) LOAN AND SECURITY
AGREEMENT (as amended, modified or restated from time to time, the "May 2016
Loan Agreement" and together with the June 2015 Loan Agreement, and the December
2015 Loan Agreement, individually and collectively, the "Loan Agreements" and
individually, a "Loan Agreement') dated as of MAY 31, 2016 , among Lender and
Marine, with the joinder of Carroll and Holdings. Capitalized terms not
otherwise defined herein shall have the same meanings as in the Loan Agreements.
 
Waiver. As of the quarter ending MARCH 31, 2019, Obligor is in breach of the
following covenants specified in the Loan Agreements, as specified below
(collectively, the "Financial Covenant Default"):
 
1.            
June 2015 Loan Agreement:
 
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a. Section 4.2 (a) combined Debt to Tangible Net Worth Ratio of not greater than
2.50 to 1.0;
 
b. Section 4.2 (c) combined Current Ratio of not less than 1.0 to 1.0;
 
c. Section 4.2 (e) combined Debt Service Coverage Ratio of not less than 1.50 to
1.0;
 
2.           
December 4, 2015 Loan Agreement:
 
a. Section 4.2 (a) combined Debt to Tangible Net Worth Ratio of not greater than
2.50 to 1.0;
 
b. Section 4.2 (c) combined Current Ratio of not less than 1.0 to 1.0;
 
c. Section 4.2 (e) combined Debt Service Coverage Ratio of not less than 1.50 to
1.0;
 
Subject to the agreement and concurrence of the United States Department of
Agriculture ("USDA") that Lender's waiver of the Financial Covenant Default
shall not impair or void any of the USDA agreements and guarantees relating to
the Loans, Lender hereby waives (the "Waiver") the Financial Covenant Default as
to the quarter ending MARCH 31, 2019.
 
Forbearance. Reference is made to that certain correspondence dated as of AUGUST
25, 2017 relating to the certain potential breaches of financial covenants,
potential defaults and events of default under the Loan Agreements (the
"Specified Defaults."). Subject to (a) the agreement and concurrence of the USDA
that Lender's forbearance of remedies on account of the Specified Defaults shall
not impair or void any of the USDA agreements and guarantees relating to the
Loans, and (b) the replenishment of the Reserve Account on or before AUGUST 31,
2019, Lender hereby agrees to forbear (the "Forbearance") from exercising or
enforcing any remedies available to it under the Loan Agreements solely to the
extent resulting from the Specified Defaults, including, but not limited to, the
commencement of a lawsuit and/or enforcement proceedings or other action against
Lazarus or any of its assets or property solely to the extent relating to the
Specified Defaults until AUGUST 31, 2019. Upon the occurrence of any Event of
Default under the Loan Agreements (other than a Financial Covenant Default)
after the date hereof, the Forbearance shall become void ab initio and have no
force or effect for any purpose whatsoever.
 
Except for the foregoing, Lender hereby expressly reserves and preserves all of
Lender's rights, remedies and recourses under the Loan Agreements and all of the
other documents evidencing, governing, guaranteeing and/or securing the loans
(all such documents, collectively, with the Loan Agreements, the "Loan
Documents"), including, without limitation, Lender's rights with respect to any
other breaches or defaults under the Loan Documents which may be now existing,
or which hereafter occur.
 
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This Waiver and the Forbearance is made as a courtesy to Lazarus, and shall not
constitute a course of dealing or entitle Lazarus to any further waivers or
forbearances. Lender hereby demands strict performance with all terms and
conditions of the Loan Documents.
 
VERITEX COMMUNITY BANK
 
By: /s/WILLIAM ALT
Name: William Alt
 
Title: Executive Vice President
 
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