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Exhibit 10.9
PLACEMENT AGENCY AGREEMENT
This
Placement Agency Agreement (this "Agreement") is made and entered
into
as of May 27, 2005 (the "Effective Date"), by and between Blue
Dolphin Energy
Company, a Delaware corporation (the "Company"), and Starlight
Investments, LLC,
a Texas corporation ("Starlight").
WHEREAS, the Company desires to retain Starlight as its
non-exclusive
placement agent, and Starlight is willing to act in its specific
capacity, in
each case subject to the terms and conditions of this
Agreement.
WHEREAS, the Company currently has in place investment banking
agreements
with other firms including Amerifund Capital Group, LLC, this
agreement is
exclusive to the $5 (five) million proposed "PIPE" transaction as
contemplated
herein, and PIPE related agency fees as defined in Section 6.(a)
below will only
be paid to Starlight under this agreement.
NOW,
THEREFORE, in consideration of the premises and the mutual
covenants
herein contained, the Company and Starlight (each a "Party" and
collectively,
the "Parties") hereby agree as follows:
1. RETENTION OF
STARLIGHT; SCOPE OF SERVICES
(a)
Subject to the terms
and conditions set forth herein, the Company
hereby retains Starlight to act as the non-exclusive placement
agent
to the Company during the Contract Period (as defined in Section
2
below), and Starlight hereby agrees to be so retained.
(b)
As the non-exclusive
placement agent to the Company, Starlight will
have the non-exclusive right during the Contract Period to
identify
for the Company prospective purchasers (collectively, the
"Purchasers"
and each individually, a "Purchaser") in a placement (the
"Placement")
of equity securities to be issued by the Company, the type and
dollar
amount being as mutually agreed to by the Parties (the
"Securities").
(c)
Terms of the Placement
shall be as set forth in subscription
documents, including any stock purchase or subscription
agreement,
escrow agreement, registration rights agreement, warrant
agreement
and/or other documents to be executed and delivered in connection
with
the Placement (collectively, the "Subscription Documents"). The
Placement is intended to be exempt from the registration
requirements
of the Securities Act of 1933, as amended (the "Securities
Act"),
pursuant to Regulation D ("Regulation D") of the rules and
regulations
of the Securities and Exchange Commission (the "SEC")
promulgated
under the Securities Act.
(d)
Starlight will act on
a best efforts basis and will have no obligation
to purchase any of the Securities offered in the Placement. During
the
Contract Period, Starlight shall have the non-exclusive right
to
arrange for all sales of Securities in the Placement, including
without limitation the non-exclusive right to identify
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For Starlight:
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potential buyers for the Securities. All sales of Securities in
the
Placement shall be subject to the approval of the Company,
which
approval may be withheld in the Company's sole discretion.
2. CONTRACT
PERIOD AND TERMINATION
(a)
Starlight shall act as
the Company's non-exclusive placement agent
under this Agreement for a period commencing on the Effective
Date,
and continuing until the earlier of the Closing of the proposed
"PIPE"
transaction or the Company's decision not to pursue the
transaction,
or until terminated by either Party upon 30 days notice to the
other
Party (the "Contract Period").
(b)
Upon termination,
neither party will have any further obligation under
this Agreement, except as provided in Sections 5, 6, 7, 8, 9 and
10
hereof.
3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The
representations and warranties of the Company made to the
Purchasers as
set
forth in the Subscription Documents are hereby incorporated by
reference as of the date of consummation of the sale of the
Securities (the
"Closing") and all such representations and warranties are hereby
deemed
made
by the Company directly to Starlight as though set forth in
full
herein.
4. COVENANTS OF
THE COMPANY
The
Company covenants and agrees as follows:
(a)
Neither the Company
nor any affiliate of the Company (as defined in
Rule 501(b) of Regulation D) will sell, offer for sale or
solicit
offers to buy or otherwise negotiate in respect of any security
(as
defined in the Securities Act) of the Company which will be
integrated
with the sale of the Securities in a manner which would require
the
registration under the Securities Act of the Securities.
(b)
Any and all filings
and documents required to be filed in connection
with or as a result of the Placement pursuant to federal and
state
securities laws are the responsibility of the Company and will
be
filed by the Company.
(c)
Any press release to
be issued by the Company announcing or referring
to the Placement shall be subject to the prior review of
Starlight,
and each such press release shall, at the request of Starlight,
identify Starlight as the placement agent. Starlight shall be
permitted to publish a tombstone or similar advertisement upon
completion of the Placement identifying itself as the Company's
placement agent with respect thereto. This Agreement shall not
be
filed publicly by the Company without the prior written consent
of
Starlight, unless required by applicable law or regulation.
Initials:
For Company:
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For Starlight:
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5. FURNISHING OF
COMPANY INFORMATION; CONFIDENTIALITY
(a)
In connection with
Starlight's activities hereunder on the Company's
behalf, the Company shall furnish Starlight with all reasonable
information concerning the Company and its operations that
Starlight
deems necessary or appropriate (the "Company Information") and
shall
provide Starlight with reasonable access to the Company's
books,
records, officers, directors, employees, accountants and counsel.
The
Company acknowledges and agrees that, in rendering its services
hereunder, Starlight will be using and relying upon the Company
Information without independent verification thereof or
independent
appraisal of any of the Company's assets and may, in its sole
discretion, use additional information contained in public reports
or
other information furnished by the Company or third parties.
(b)
Starlight agrees that
the Company Information will be used solely for
the purpose of performing its services hereunder. Subject to
the
limitations set forth in subsection (c) below, Starlight will keep
the
Company Information provided hereunder confidential and will
not
disclose such Company Information or any portion thereof, except
(i)
to a third party contacted by Starlight on behalf of, and with
the
prior approval of, the Company pursuant hereto who has agreed to
be
bound by a confidentiality agreement satisfactory in form and
substance to the Company, or (ii) to any other person for which
the
Company's consent to disclose such Company Information has been
obtained.
(c)
Starlight's
confidentiality obligations under this Agreement shall not
apply to any portion of the Company Information which (i) at the
time
of disclosure to Starlight or thereafter is generally available to
and
known by the public (other than as a result of a disclosure
directly
or indirectly by Starlight in violation of this Agreement); (ii)
was
available to Starlight on a non-confidential basis from a source
other
than the Company, provided that such source is not and was not
bound
by a confidentiality agreement with the Company; (iii) has been
independently acquired or developed by Starlight without violating
any
of its obligations under this Agreement; or (iv) the disclosure
of
which is legally compelled (whether by deposition,
interrogatory,
request for documents, subpoena, civil or administrative
investigative
demand or other similar process). In the event that Starlight
becomes
legally compelled to disclose any of the Company Information,
Starlight shall provide the Company with prompt prior written
notice
of such requirement so that the Company may seek a protective order
or
other appropriate
remedy and/or waive compliance with the terms of
this Agreement.
(d)
The obligations of the
Parties under this Section 5 shall survive the
termination of this Agreement for 12 months.
Initials:
For Company:
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For Starlight:
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6. FEES AND
EXPENSES
(a)
As compensation for
services rendered by Starlight in connection with
the Placement, the Company agrees to pay Starlight a fee of
seven
percent (7%) of the gross proceeds from the sale of Securities sold
in
the Placement (the "Agency Fee"). The Agency Fee shall be paid
immediately upon the closing of each sale of Securities by the
Company.
Due diligence, marketing, and other offering related third
party (including Amerifund Capital Group, LLC offering related
expenses) expenses not covered in section 6.(b) below will be
credited
against the Agency Fee.
(b)
The Company shall also
promptly reimburse Starlight for all reasonable
out-of-pocket expenses incurred by Starlight and its directors,
officers and employees in connection with the performance of
Starlight's services under this Agreement. For these purposes,
"out-of-pocket expenses" shall include, but not be limited to,
attorney's fees and costs, long distance telephone, facsimile,
courier, mail, supplies, travel and similar expenses. Except for
bills
for long distance telephone, facsimile, express mail, courier,
mail
and supplies, Starlight will not incur any expenses without the
prior
consent of the Company; and the Parties shall attempt to have
the
Company direct billed as often as possible for such expenses.
(c)
Upon closing of the
Placement, the Company agrees to issue to
Starlight and/or its assigns, a Securities Purchase Warrant
(the
"Representative's Warrant") entitling the holder(s) thereof to
purchase an amount of Securities equal to six percent (6%) of
the
total number of Securities sold in the Placement for a period of
three
(3) years at an exercise price per share equal to the price at
which
the Securities are sold to Purchasers. The Representative's
Warrant
shall otherwise be substantially in the form of EXHIBIT A
attached
hereto.
(d)
Addendum B to that
certain Agreement dated August 5, 2004 between
Amerifund Capital Group, LLC and the Company, attached herein
by
reference as EXHIBIT C, provides for the provision of consultancy
and
other services by Amerifund Capital Group, LLC or its
subsidiaries,
collectively ("AMCAP"), to the Company in connection with the
Placement, in return for fees payable to AMCAP. Starlight
hereby
agrees that any such fees paid or payable to AMCAP by the
Company
shall be credited against the fees due Starlight hereunder.
(e)
The obligations of the
Parties under this Section 6 shall survive the
termination of this Agreement for any reason for 12 (twelve)
months.
7.
INDEMNIFICATION
(a)
The Company agrees to
indemnify and hold Starlight harmless from and
against any and all losses, claims, damages or liabilities (or
actions, including securityholder actions, in respect thereof)
related
to or arising out of Starlight's engagement hereunder or its role
in
connection herewith, and will reimburse Starlight for all
reasonable
expenses (including reasonable costs, expenses, awards and
counsel
fees and/or judgments) as they are incurred by Starlight in
Initials:
For Company:
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For Starlight:
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connection with investigating, preparing for or defending any
such
action or claim, whether or not in connection with pending or
threatened litigation
in which Starlight is a party. The Company will
not, however, be responsible for any claims, liabilities,
losses,
damages or expenses which are finally judicially determined to
have
resulted primarily from the bad faith, gross negligence or
willful
misconduct of Starlight. The Company also agrees that Starlight
shall
not have any liability to the Company for or in connection with
such
engagement, except for any such liability for losses, claims,
damages,
liabilities or expenses incurred by the Company that result
primarily
from the bad faith, gross negligence or willful misconduct of
Starlight. In the event that the foregoing indemnity is
unavailable
(except by reason of the bad faith, gross negligence, or
willful
misconduct of Starlight), then the Company shall contribute to
amounts
paid or payable by Starlight in respect of its losses, claims,
damages
and liabilities in such proportion as appropriately reflects
the
relative benefits received by, and fault of, the Company and
Starlight
in connection with the matters as to which such losses, claims,
damages or liabilities relate, and other equitable considerations.
The
foregoing shall be in addition to any rights that Starlight may
have
at common law or otherwise and shall extend upon the same terms to
and
inure to the benefit of any director, officer, employee, agent
or
controlling person of Starlight. The Company hereby consents to
personal jurisdiction, service and venue in any court in which
any
claim which is subject to this agreement is brought against
Starlight
or any
other person entitled to indemnification or contribution under
this subsection (a).
(b)
Starlight agrees to
indemnify and hold the Company harmless from and
against any and all losses, claims, damages or liabilities (or
actions, including securityholder actions, in respect thereof)
which
are finally judicially determined to have resulted primarily from
the
bad faith, gross negligence or willful misconduct of Starlight,
and
will reimburse the Company for all reasonable expenses
(including
reasonable costs, expenses, awards and counsel fees and/or
judgments)
as they are incurred by the Company in connection with
investigating,
preparing for or defending any such action or claim, whether or not
in
connection with pending or threatened litigation in which the
Company
is a party. In the event that the foregoing indemnity is
unavailable,
then Starlight shall contribute to amounts paid or payable by
the
Company in respect of its losses, claims, damages and liabilities
in
such proportion as appropriately reflects the relative benefits
received by, and fault of, the Company and Starlight in
connection
with the matters as to which such losses, claims, damages or
liabilities relate, and other equitable considerations. The
foregoing
shall be in addition to any rights that the Company may have at
common
law or otherwise and shall extend upon the same terms to and inure
to
the benefit of any director, officer, employee, agent or
controlling
person of the Company. Starlight hereby consents to personal
jurisdiction, service and venue in any court in which any claim,
which
is subject to this agreement, is brought against the Company or
any
other person entitled to indemnification or contribution under
this
subsection (b).
(c)
The obligations of the
Parties under this Section 7 shall survive the
termination of this Agreement for a period of 12 (twelve)
months.
Initials:
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For Starlight:
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8.
NON-CIRCUMVENTION
The
Company and Starlight acknowledge that Amerifund Capital
Securities, a
subsidiary of Amerifund Capital Group, LLC (hereinafter referred
to
collectively as AMCAP) and an affiliate of Starlight has
previously
disclosed and will further identify and disclose investors to that
certain
Agreement between the Company and AMCAP dated August 5, 2004.
Such
investors have been registered in writing with, and the Company has
agreed
to,
such list of approved and subsequently to be approved investors
for
solicitation by AMCAP. Starlight hereby agrees that, for a period
of one
year
from the end of the Contract Period or other termination of
this
Agreement, Starlight will not enter into any agreement, transaction
or
arrangement with any of the institutions (including their
agents,
principals and affiliates and the accounts and funds which they
manage or
advise) which AMCAP has introduced, directly or as a result of a
referral
from
such institution, to the Company as prospective purchasers of
the
Securities in the Placement (collectively, the "AMCAP
Contacts"),
regardless of whether a transaction is consummated with such
prospective
purchasers, unless Starlight notifies AMCAP and the Company in
writing of
the
agreement, transaction or arrangement, and pays AMCAP either a
fee
equal to the Agency Fee or a mutually agreeable fee for securities
of the
Company sold to AMCAP Contacts.
9. GOVERNING
LAW
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE
LAWS
OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY CONFLICT OF
LAWS
PROVISIONS THEREOF.
10. ARBITRATION
Starlight and the Company will attempt to settle any claim or
controversy
arising out of this Agreement through consultation and negotiation
in good
faith and a spirit of mutual cooperation. Any dispute which the
parties
cannot resolve may then be submitted by either party to binding
arbitration
in
Houston, Texas under the rules of the American Arbitration
Association
for
resolution. Nothing in this paragraph will prevent either party
from
resorting to judicial proceedings if (a) good faith efforts to
resolve the
dispute under these procedures have been unsuccessful or (b)
interim relief
from
a court is necessary to prevent serious and irreparable injury.
11. NO WAIVER
The
failure or neglect of any party hereto to insist, in any one or
more
instances, upon the strict performance of any of the terms or
conditions of
this
Agreement, or waiver by any party of strict performance of any of
the
terms or conditions of this Agreement, shall not be construed as a
waiver
or
relinquishment in the future of such term or condition, but the
same
shall continue in full force and effect.
Initials:
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For Starlight:
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12. SUCCESSORS AND
ASSIGNS
The
benefits of this Agreement shall inure to the benefit of the
Parties,
their respective successors, assigns and representatives, and
the
obligations and liabilities assumed in this Agreement by the
Parties shall
be
binding upon their respective successors and assigns. This
Agreement may
not
be assigned by either Party without the express written consent of
the
other Party, which consent shall not be unreasonably withheld.
13. NOTICES
All
notices and other communications required or permitted to be
given
under this Agreement shall be in writing and shall be delivered
personally
or
sent by certified mail, return receipt requested, recognized
overnight
delivery service, or facsimile as follows:
If to the Company:
Blue Dolphin Energy Company
801 Travis, Suite 2100
Houston, TX 77002
Facsimile: 713-227-7626
Attention: Michael Jacobson (President)
If to Starlight:
Starlight Investments, LLC.
c/o Amerifund Capital Group, LLC
14800 St Mary's Lane, Suite 130
Houston, TX 77079
Facsimile: 713-482-2004
Attention: Andrew J. Martin (Branch Manager)
Either Party may change its address or facsimile number set forth
above by
giving the other Party notice of such change in accordance with
the
provisions of this Section 13. A notice shall be deemed given (a)
if by
personal delivery, on the date of such delivery, (b) if by
certified mail,
on
the date shown on the applicable return receipt, (c) if by
overnight
delivery service, on the day after the date delivered to the
service, or
(d)
if by facsimile, on the date of transmission.
14. NATURE OF
RELATIONSHIP
The
Parties intend that Starlight's relationship to the Company and
the
relationship of each director, officer, employee or agent of
Starlight to
the
Company shall be that of an independent contractor and not as
an
employee of the Company or an affiliate thereof. Nothing contained
in this
Agreement shall constitute or be construed to be or create a
partnership or
joint venture between Starlight and the Company or their respe
