BDCO Blue Dolphin Energy Company (QX)

As previously reported, on May 3, 2019, Pilot Travel Centers LLC, a Delaware limited liability company (“Lender”), entered into a Line of Credit, Guarantee and Security Agreement (as amended to date, the “Credit Agreement”) with Nixon Product Storage, LLC, a Delaware limited liability company (“Borrower”), Lazarus Refining & Marketing, LLC, a Delaware limited liability company (“LRM” and, together with the Borrower, the “Grantors”), Lazarus Energy LLC, a Delaware limited liability company (“LE”), Blue Dolphin Energy Company, a Delaware corporation (“Blue Dolphin” or “Pledgor”, and Grantors and LE being wholly-owned subsidiaries of Blue Dolphin), and Lazarus Energy Holdings LLC, a Delaware limited liability company (“LEH,” together with LE, Pledgor and Grantors, the “Guarantors”), whereby Lender agreed to extend a line of credit to Borrower in an aggregate principal amount of $13.0 million. The Credit Agreement had a maturity date of May 3, 2020 (the “Maturity Date”). The Credit Agreement provides for an interest rate of twelve percent (12%) per annum, payable monthly. Upon the occurrence of an Event of Default, as defined in the Credit Agreement, the interest rate payable shall increase to fourteen percent (14%) per annum (the “Default Rate”).

On May 4, 2020, Borrower and Guarantors received a notice of default and election to accelerate (the “Notice”) from Lender informing Guarantors that the Credit Agreement was in default because the Borrower had not paid Lender all interest accrued and unpaid thereon and all other amounts owing and payable under the Credit Agreement by May 4, 2020, which constitutes an Event of Default under Section 9 of the Credit Agreement. Accordingly, the Lender has elected to accelerate the amount due under the Credit Agreement, pursuant to Section 10 of the Credit Amendment. The Lender has demanded the immediate payment of $11,054,017, which includes accrued and unpaid interest.

The Borrower and Guarantors are attempting to reach a negotiated settlement with Pilot., and Pilot hopes to continue to work with the Borrower to settle its obligations under the Credit Agreement. Further, the Borrower and Guarantors are working with a lender on the possible refinance of amounts owing and payable under the Credit Agreement.

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