BDCO Blue Dolphin Energy Company (QX)

Item 1.01 Entry into a Material Definitive Agreement.

On May 9, 2023, Blue Dolphin Pipe Line Company, a Delaware corporation (“BDPL”) and wholly owned subsidiary of Blue Dolphin Energy Company, and Lazarus Energy Holdings, LLC (“Note Holder”) entered into a Payment Agreement, pursuant to which Note Holder agreed to modify the payment terms of a Promissory Note dated August 15, 2016 (as subsequently amended, restated, supplemented, or modified, the “Note”). As of March 31, 2023, principal and accrued interest under the Note totaled $8,307,555 (the “Payoff Amount”). Pursuant to the Payment Agreement, BDPL will make interest-only monthly payments on the Note in the amount of $0.05 million beginning in May 2023, continuing on the fifteenth of each month through and including April 2025. Beginning in May 2025, BDPL agreed to make principal and interest monthly payments approximating $0.4 million through April 2027. Interest shall be incurred throughout the agreement term, including the interest-only payment period. Under the Payment Agreement, BDPL shall make aggregate payments to the Note totaling the Payoff Amount plus any unpaid accrued interest then outstanding. Effective May 9, 2023, interest accrues under the Note at 8.00% per year.

BDPL made a payment of $0.05 million to Note Holder on May 15, 2023. If BDPL continues to make payments as contemplated by the Payment Agreement, Note Holder has agreed to forbear from exercising any of its remedies under the Note related to existing defaults. If BDPL fails to make any payment under the Payment Agreement when due, and such failure continues for thirty (30) calendar days following the due date, Note Holder’s agreement to forbear shall terminate automatically without further act or action by Note Holder and Note Holder shall have the immediate right to exercise its rights and remedies under the Note or applicable law or in equity. In addition, as of the thirteenth calendar day following failure to make any payment, the modified payment and interest terms contemplated by this Payment Agreement shall be of no further force or effect and the terms of the Note as the date immediately prior to the date of the Payment Agreement shall again be applicable to BDPL and Note Holder.

The foregoing description of the Payment Agreement constitutes only a summary thereof and is qualified in its entirety by reference to the text thereof, which is attached hereto as Exhibit 10.1.