EXHIBIT 99.1
BLUE DOLPHIN ENERGY COMPANY
SHAREHOLDER VOTING AGREEMENT
This SHAREHOLDERS VOTING AGREEMENT, dated September 8, 2004 (this
"Agreement"), is made and entered into by and among the investors listed on the
attached Schedule I (collectively, the "Investors"), and the following
shareholders of Blue Dolphin Energy Company, a Delaware corporation (the
"Company"): Columbus Petroleum Limited, Inc., a Panamanian corporation, Ivar
Siem, Harris A. Kaffie, Michael S. Chadwick, James M. Trimble and Michael J.
Jacobson, (each a "Shareholder," and collectively the "Shareholders"). Unless
otherwise defined in this Agreement, each capitalized term used in this
Agreement shall have the meaning given to such term in the Note and Warrant
Purchase Agreement (the "Purchase Agreement").
W I T N E S S E T H:
WHEREAS, the Company and the Investors propose to enter into the
Purchase Agreement, pursuant to which the Company will issue and sell to the
Investors (i) promissory notes in the aggregate principal amount of seven
hundred fifty thousand dollars ($750,000), (ii) warrants (the "Initial
Warrants") to acquire up to 1,250,000 shares at an exercise price of $0.25 per
share (the "Exercise Price") of its common stock (the "Common Stock"), and (iii)
warrants (the "Additional Warrants" and together with the Initial Warrants, the
"Warrants") to acquire 1,550,000 shares of Common Stock at the same Exercise
Price in consideration for the agreement by each Investor to extend the maturity
date of its Note to a date that is not later than the first anniversary of the
Purchase Agreement;
WHEREAS, shares of Common Stock to be issued upon exercise of the
Additional Warrants represent greater than 20% of the outstanding Common Stock
before issuance;
WHEREAS, the rules of the NASDAQ Stock Market require shareholder
approval of issuances of warrants to purchase shares representing greater than
20% of a company's outstanding voting securities at a price below market;
WHEREAS, the Purchase Agreement provides for the Company to issue
Warrants to purchase 100,000 shares of Common Stock to (1) each of F. Gardner
Parker and Lawrence N. Benz (the "Investor Nominees") and (ii) Michael S.
Chadwick (the "Director Warrants");
WHEREAS, the Purchase Agreement provides for the nomination of the
Investor Nominees for election to the Board of Directors;
WHEREAS, election to the board of directors requires the approval of a
plurality of the shareholders of the Company;
WHEREAS, each Shareholder is the beneficial owner (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of shares of the outstanding Common Stock in the amounts indicated on
Schedule I of this Agreement; and
WHEREAS, as an inducement to the Investors entering into the Purchase
Agreement, the Shareholders have agreed to enter into this Agreement to provide
for certain agreements relating to (i) approval of the issuance of the
Additional Warrants in consideration for the agreement by the Investors to
extend the maturity date of the Notes, (ii) the issuance of the Director
Warrants, (iii) amendment of the Company's certificate of incorporation, and
(iv) the election of the Investor Nominees to the board of directors;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, the parties to this Agreement hereby agree as
follows:
1. Agreement to Vote Shares. Each Shareholder agrees that, at any
special or annual meeting of shareholders of the Company, such Shareholder shall
vote all shares of Common Stock registered in its, his or her name or
beneficially owned by it, him or her as of the date hereof and any and all other
capital stock of the Company legally or beneficially acquired by such
Shareholder after the date hereof (collectively, the "Subject Shares") to
approve (i) the issuance of the Additional Warrants on the terms and conditions
provided in the Purchase Agreement, (ii) the issuance of the Director Warrants,
(iii) the amendment and restatement of the Company's certificate of
incorporation, (iv) the election of the Investor Nominees to the board of
directors as provided in the Purchase Agreement, and (v) any other aspects of
the transactions described in the Purchase Agreement that are required by the
Securities and Exchange Commission or NASDAQ Stock Market to be voted upon by
the shareholders of the Company. Each Shareholder represents to the Investors
that as of the date hereof such Shareholder beneficially owns the number of
outstanding shares of Common Stock set forth opposite such Shareholder's name on
the attached Schedule I.
2. Irrevocable Proxy.
(a) Grant of Proxy. THE SHAREHOLDERS HEREBY APPOINT F. GARDNER
PARKER AND BARRETT L. WEBSTER, AND EACH OF THEM INDIVIDUALLY,
SHAREHOLDERS' PROXY PURSUANT TO THE PROVISIONS OF THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE, WITH FULL POWER OF
SUBSTITUTION AND RESUBSTITUTION, TO VOTE OR ACT BY WRITTEN CONSENT WITH
RESPECT TO THE SUBJECT SHARES ONLY TO ACCOMPLISH THE PURPOSE AND
AGREEMENTS SET FORTH IN SECTION 1 HEREOF. THIS PROXY IS GIVEN TO SECURE
THE PERFORMANCE OF THE DUTIES OF THE SHAREHOLDERS UNDER THIS AGREEMENT.
THE SHAREHOLDERS AFFIRM THAT THIS PROXY IS COUPLED WITH AN INTEREST AND
SHALL BE IRREVOCABLE. THE SHAREHOLDERS SHALL TAKE SUCH FURTHER ACTION
AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE
THE INTENT OF THIS PROXY.
(b) Other Proxies Revoked. The Shareholders represent that any
proxies heretofore given in respect of the Subject Shares are not
irrevocable, and that all such proxies are hereby revoked.
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3. Restriction on Transfer of Subject Shares, Proxies and
Noninterference. During the period before the Closing of the transactions
contemplated by, or the termination of, the Purchase Agreement, the Shareholders
shall not, directly or indirectly, in their capacity as stockholders of the
Company, except pursuant to the terms and conditions of this Agreement: (a)
offer for sale, sell, transfer, tender, loan, pledge, encumber, assign, or
otherwise dispose of, or enter into any contract, option, or other arrangement
or understanding with respect to or consent to the offer for sale, sale,
transfer, tender, pledge, encumbrance, assignment, or other disposition of,
grant any rights with respect to, or enter into any transaction which is
designed to, or might be reasonably be expected to, resort in the disposition
(whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) of any right, title and interest in any or all of the
Subject Shares; (b) grant any proxies or powers of attorney, deposit any of the
Subject Shares into a voting trust or enter into a voting agreement with respect
to any of the Subject Shares; or (c) take any action that would make any
representation or warranty contained herein untrue, inaccurate or incorrect or
have the effect of impairing the ability of any Shareholder to perform such
Shareholder's obligations under this Agreement or preventing or delaying the
consummation of any of the transactions contemplated hereby or by the Purchase
Agreement.
4. Cooperation. The Shareholders shall reasonably cooperate with the
Investors and the Company in connection with their respective efforts to fulfill
the conditions to the Purchase Agreement.
5. Further Assurances. The Shareholders shall execute and deliver such
other documents and instruments and take such further actions as may be
necessary or appropriate and reasonably requested by the Investors in order to
ensure that the Investors receive the full benefit of this Agreement.
6. Successors, Assigns and Transferees. The terms and provisions of
this Agreement shall bind, inure to the benefit of and be enforceable by or
against the successors, assigns or transferees of each of the parties hereto. No
party hereto may assign its rights under this Agreement, except that each
Investor may assign its rights to an affiliate.
7. Entire Agreement; Amendments. This Agreement, and such additional
instruments as may be concurrently executed and delivered pursuant to this
Agreement, constitutes the entire understanding of the parties with respect to
its subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings other than those
expressly set forth herein or in the documents delivered concurrently herewith.
This Agreement may be amended only by a written instrument duly executed by all
the parties hereto.
8. Headings. The section headings contained in this Agreement are for
reference purposes only and shall not effect in any way the meaning or
interpretation of this Agreement.
9. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given if so given) by hand delivery, facsimile or by
mail (registered or certified, postage prepaid, return receipt requested) to the
respective parties as follows:
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(a) If to an Investor:
To the address listed on the attached Schedule I or to such
other address the person to whom notice is given may have
previously furnished to the others in writing in the manner
set forth above.
with a copy to counsel for Western Gulf:
Gardere Wynne Sewell LLP
1000 Louisiana, Suite 3400
Houston, Texas 77002
Attention: N.L. Stevens III
Telefax: 713-276-5807
(b) If to a Shareholder:
To his address listed on the attached Schedule I or to such
other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner
set forth above.
with a copy to counsel for the Company:
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002
Attention: Nick D. Nicholas
Telefax: 713-226-0237
10. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware, without
reference to the conflict of laws principles thereof.
11. Waiver. Any waiver by any party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
12. Challenges to Agreement. In the event that any part of this
Agreement or any transaction contemplated hereby is temporarily, preliminarily
or permanently enjoined or restrained by a court of competent jurisdiction, the
parties hereto shall use their reasonable best efforts to cause any such
injunction or restraining order to be vacated or dissolved or otherwise declared
or determined to be of no further force or effect.
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13. Specific Performance. Each of the Shareholders acknowledges and
agrees that irreparable harm would occur if any provision of this Agreement were
not performed in accordance with the terms thereof, or were otherwise breached,
and that such harm could not be remedied by an award of damages. Accordingly,
each of the Shareholders agrees that any non-breaching party shall be entitled
to injunctive relief to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof.
14. Counterparts. This Agreement may be executed in counterparts, each
of which shall be an original, but each of which together shall constitute one
and the same Agreement.
15. Termination. This Agreement shall terminate upon the earlier of (a)
eighteen (18) months after the date hereof or (b) the conclusion of the
Company's annual meeting of Shareholders for its fiscal year ending December 31,
2004 (which meeting is contemplated to occur after December 31, 2004 and on or
before December 31, 2005) at which directors of the Company are elected by its
shareholders. Notwithstanding any provision of this Agreement to the contrary,
in the event the employment of Michael J. Jacobson is involuntarily terminated
by the Company during the term of this Agreement (a "Terminated Employee") this
Agreement shall terminate as to such Terminated Employee.
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IN WITNESS WHEREOF, and intending to be legally bound hereby, each of
the undersigned parties has executed or caused this Agreement to be executed on
the date first above written.
INVESTORS:
WESTERN GULF PIPELINE PARTNERS, LP
By: PEREGRINE MANAGEMENT,
LLC, Its General Partner
By: /s/ Barrett L. Webster
--------------------------------
Barrett L. Webster, its Manager
/s/ F. Gardner Parker
---------------------------------------
F. Gardner Parker
/s/ Ramsay H. Gilman
---------------------------------------
Ramsay H. Gilman
/s/ Laurence N. Binz
---------------------------------------
Laurence N. Binz
/s/ David R. Bolton
---------------------------------------
David R. Bolton
/s/ Lee Moore
---------------------------------------
Lee Moore
/s/ Macille G. Moore
---------------------------------------
Macille G. Moore
/s/ W. Tyler Moore, Jr.
---------------------------------------
W. Tyler Moore, Jr.
Schmid Family Trust U/D/T 09-05-97
By: /s/ Lewis B. Schmid
---------------------------------------
, Trustee
-------------------
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/s/ Michael S. Chadwick
---------------------------------------
Michael S. Chadwick
/s/ Ben T. Morris
---------------------------------------
Ben T. Morris
/s/ Don A. Sanders
---------------------------------------
Don A. Sanders
/s/ Katherine U. Sanders
---------------------------------------
Katherine U. Sanders
Sanders 1998 Children's Trust
By: /s/ Don Weir
------------------------------------
Sanders Opportunity Fund, LP
By: /s/ Don A. Sanders
------------------------------------
-------------------------------
Sanders Opportunity Fund
(Institutional), LP
By: /s/ Don A. Sanders
------------------------------------
-------------------------------
DON WEIR AND JULIE ELLEN WEIR,
tenants in common
/s/ Don Weir
---------------------------------------
Don Weir
/s/ Julie Ellen Weir
---------------------------------------
Julie Ellen Weir
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SHAREHOLDERS:
COLUMBUS PETROLEUM LIMITED, INC.
By: /s/ Michael Delouche
------------------------------------
Name: Michael Delouche
----------------------------------
Title: Authorized Signatory
---------------------------------
/s/ Ivar Siem
---------------------------------------
Ivar Siem
/s/ Harris A. Kaffie
---------------------------------------
Harris A. Kaffie
/s/ Michael S. Chadwick
---------------------------------------
Michael S. Chadwick
/s/ James M. Trimble
---------------------------------------
James M. Trimble
/s/ Michael J. Jacobson
---------------------------------------
Michael J. Jacobson
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Schedule I
<Table>
<Caption>
NUMBER OF OUTSTANDING
SHAREHOLDER SHARES OF COMMON STOCK OWNED
----------- ----------------------------
Columbus Petroleum Limited, Inc. 911,712
Aeulestrasse 74, FL-9490
Vaduz, Liechtenstein
Ivar Siem 918,264
c/o Blue Dolphin Energy Company
801 Travis, Suite 2100
Houston, Texas 77002
Harris A. Kaffie 723,436
c/o Blue Dolphin Energy Company
801 Travis, Suite 2100
Houston, Texas 77002
Michael S. Chadwick 14,080
c/o Sanders Morris Harris
3100 Chase Tower
600 Travis, Suite 3100
Houston, Texas 77002
James M. Trimble 14,580
c/o Blue Dolphin Energy Company
801 Travis, Suite 2100
Houston, Texas 77002
Michael J. Jacobson 161,962
c/o Blue Dolphin Energy Company
801 Travis, Suite 2100
Houston, Texas 77002
</Table>
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