Blueprint





 





 



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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