EXHIBIT 10.2
WAIVER AGREEMENT
THIS WAIVER AGREEMENT is entered into by Blue Dolphin Energy
Company, a
Delaware corporation (the "Company"),
and Western Gulf
Pipeline Partners, LP, a
Texas limited partnership ("Western Gulf"). Certain capitalized terms not
defined herein have the meanings assigned
to them in the Purchase Agreement (as
defined below).
RECITALS:
In Section 5.10 of Article 5 of the Note and Warrant Purchase
Agreement dated
September 8, 2004 (the "Purchase Agreement") between
the Company
and certain
investors named in Schedule I thereto
(the
"Investors"), each
Investor, including Western Gulf, agreed that,
during the nine (9) month period following the Additional Closing
Date,
it will not sell, transfer or assign any of the Warrants or the
Warrant
Shares without the prior written consent of the Company.
Western Gulf has requested that the Company waive
compliance
with the Section 5.10 of the Purchase Agreement.
Western Gulf has
advised the Company
that Western Gulf plans
to distribute and assign (the "Assignment") the Warrants
represented by
Warrant Certificates
1 and 1A (an aggregate of 916,667 Warrants)
pursuant to,
and in compliance with, Section 5.5(a)(iii) of the
Purchase Agreement
to the partners of Western Gulf identified on
Schedule I hereto (each a "Partner" and collectively, the "Partners")
on a pro rata basis.
Western Gulf has requested the Company to acknowledge (i) the
anticipated Assignment
of Warrants by Western
Gulf and (ii) that upon
the Assignment
of the Warrants to the partners of Western Gulf the
Partners will
succeed to the rights
and obligations
of Western Gulf
under the Purchase Agreement, including, but not limited to, the
rights
of Investors pursuant to Section 5.12 of the Purchase
Agreement.
Concurrently
herewith the
Company and Western Gulf are
entering into the Note Modification Agreement (as defined
below).
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
Company and Western Gulf hereby agree as
follows:
The Company waives any further compliance by Western Gulf with
Section
5.10 of the Purchase Agreement.
Western Gulf represents and warrants that each Partner is an
affiliate,
as such term is defined in Section
5.5(a)(iii)(A) of the Purchase Agreement, of
Western Gulf and agrees to cause each Partner to enter into an assignment
agreement substantially in the form of
Exhibit A (the
"Assignment
Agreement")
attached hereto as soon as reasonably
practicable.
<PAGE>
The Company agrees
that upon execution
and delivery of an
Assignment
Agreement the Assignment of the Warrants by
Western Gulf to the Partners will be
in compliance with Section 5.5(a)(iii) of the Purchase Agreement will not
violate the transfer restrictions contained in Section 5.5 of the Purchase
Agreement.
The Company agrees
that upon the
Assignment
of the Warrants to the
Partners, the Partners will succeed to the rights and
obligations
of Western
Gulf under the Purchase Agreement;,
including, but not limited to, the rights of
Investors pursuant to Section 5.12 of the
Purchase Agreement.
The Company
agrees that, pursuant to Section 10.3 of the Purchase
Agreement, the Assignment of the Warrants
to the Partners is a proper assignment
of the rights, interests and obligations of Western Gulf in accordance with
Section 10.3 of the Purchase Agreement.
The Company agrees to use its commercially reasonable best efforts to
(i) file a registration statement on Form S-3 or such other form that the
Company is then eligible to use (the
"Registration
Statement") by May 15,
2005
registering the resale of the Warrant
Shares beneficially
owned by Western Gulf
and (ii) cause such Registration Statement to be declared
effective under
the
Securities Act as soon as reasonably
practicable thereafter.
Concurrently with the execution of this Waiver Agreement,
Western Gulf
agrees to enter into that certain Note
Modification
Agreement dated April
___,
2005 between the Company and Western Gulf
(the "Note Modification Agreement").
Except as modified by this Agreement all other obligations of Western
Gulf and the Company pursuant to the
Purchase Agreement remain in full force and
effect.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement which
may be
executed in multiple counterparts, to be executed by their duly authorized
representatives, all as of the ____ day of
April, 2005.
THE COMPANY:
BLUE DOLPHIN ENERGY COMPANY
By:___________________________________
Name: Michael J. Jacobson
Title: President
WESTERN GULF PIPELINE PARTNERS, LP
By: PEREGRINE MANAGEMENT, LLC,
Its General Partner
By:_______________________________
Barrett L. Webster, its Manager
<PAGE>
SCHEDULE I
DISTRIBUTION OF BLUE DOLPHIN WARRANTS
TO WESTERN GULF PARTNERS
Number of
Number of
Warrants
Warrants
Partner
Certificate No. 1
Certificate No. 2 Total
-------
-----------------
----------------- -----
Peregrine Management, LLC
4,584
4,583
9,167
Steven A. Webster
206,250
206,250
412,500
Kestrel Capital, LP
122,500
122,500
245,000
William A. Lang
41,667
41,667
83,334
William R. Ziegler
83,333
83,333
166,666
-------
Total
916,667
=======
<PAGE>
EXHIBIT A
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT
AGREEMENT (this "Agreement") is entered into and
effective as of the _____ day of April,
2005 (the "Effective Time"), by and
among Western Gulf Pipeline Partners, LP, a Texas limited partnership
("Assignor"), ___________________, a
____________ ("Assignee"), and is joined in
by Blue Dolphin Energy Company, a Delaware
corporation ("Blue Dolphin"), for the
purposes of Article III.
RECITALS:
A. Assignor
owns warrants, issued by Blue Dolphin, to acquire an
aggregate of 916,667 shares of Common Stock
(the "Warrants").
B. Assignor desires to
distribute and assign,
and Assignee desires to
acquire, all of Assignor's right, title and interest in and to Warrants to
acquire ____ shares of Common Stock
currently held by Assignor (the "Transferred
Warrants").
NOW, THEREFORE, the
parties hereto,
intending to be le
