Exhibit 10.4

 
AMENDED AND RESTATED OPERATING AGREEMENT
 
THIS AMENDED AND RESTATED MANAGEMENT AGREEMENT (this “Amended and Restated
Agreement”) is effective as of April 1, 2017 (the “Effective Date”), by and
between Lazarus Energy Holdings, LLC, a Delaware limited liability company
(“LEH”), Lazarus Energy, LLC, a Delaware limited liability company (“LE”), and
Blue Dolphin Energy Company, a Delaware corporation (“Blue Dolphin”). (LEH, LE,
and Blue Dolphin are collectively referred to herein as the “Parties”).
 
W I T N E S S E T H:
 
WHEREAS, LE owns a refinery located in Nixon, Texas (the “Refinery”);
 
WHEREAS, the ownership of all of the membership interests of LE was acquired by
Blue Dolphin effective as of February 15, 2012;
 
WHEREAS, LE and Blue Dolphin engaged LEH to manage and operate Blue Dolphin and
the Refinery, and LEH has provided management services in the areas of
operations and management of the business of the companies thereto (collectively
the “Services”);
 
WHEREAS, following the termination of a Crude Oil Supply and Throughput Services
Agreement (as amended and supplemented) and a Joint Marketing Agreement (as
amended and supplemented), each dated August 12, 2011, by and among LE and
Genesis Energy, LP and GEL Tex Marketing, LLC, the agreement between the Parties
requires modification.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Parties hereto agree as follows:
 
1.           Throughout the Term of this Amended and Restated Agreement LEH
agrees to perform the Services in the interest of LE and Blue Dolphin, subject
to the terms and conditions stated herein. The Services shall be performed on a
continuing basis without any further specific requests or instructions.
 
2.           LE and Blue Dolphin may also request LEH to render additional
special services and LEH undertakes to comply with such requests to the extent
that it has the time, resources, manpower and expertise to do so.
 
3.           For the purposes of certainty, it is understood and agreed that the
term “Services” does not include any activities that can be exercised by LEH as
a shareholder and the Services shall be provided in a way that is independent of
any such shareholding.
 
4.           
Quality. The Services provided by LEH hereunder shall be provided in a good and
workmanlike manner in accordance with prevailing industry standards.
 
 
 
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5.           
Compensation. In consideration for its services hereunder, LE shall assign to
LEH:
 
(a)           
Blue Dolphin shall reimburse LEH at cost plus five percent (5%) for all
reasonable Blue Dolphin expenses incurred while performing the Services. Amounts
payable to LEH by Blue Dolphin for expenses incurred in a calendar month shall
be paid as incurred.
 
(b)           
Management services as defined under Services shall exclude the payment of
property taxes, property insurance, principal and interest on loans, turnaround
expenses, capital expenditures, environmental and regulatory compliance matters
(including purchase of related equipment and supplies), product dyes, chemicals,
propane, fuel and other items as determined from time to time by Blue Dolphin’s
board of directors (the “Board”), at their sole discretion.
 
6.           
Term. The “Term” of this Amended and Restated Agreement shall begin on the date
hereof and shall expire:
 
(a)           
Upon the third anniversary of the Effective Date, which termination date shall
be April 1, 2020.
 
(b)           
Upon written notice of either party upon the material breach of this Amended and
Restated Agreement by the other party.
 
(b)           
Upon 90 days’ notice by the Board if the Board determines that this Amended and
Restated Agreement is not in the best interest of Blue Dolphin.
 
The termination of this Amended and Restated Agreement shall not affect the
survival of Section 7 of this Amended and Restated Agreement.
 
7.           
Indemnification.
 
(a)           
LEH will indemnify, defend and hold harmless LE, Blue Dolphin, and their
affiliates, and their respective officers, directors and employees, from and
against any claim or liability arising from the negligence or willful misconduct
of LEH, or from any injury suffered or alleged to be suffered by any employee of
LEH.
 
(b)           
LE will indemnify, defend and hold harmless LEH, its affiliates, and their
respective officers, directors and employees, from and against any claim or
liability arising from the negligence or willful misconduct of LE or Blue
Dolphin.
 
8.           Remedies. If any legal action or other proceeding is brought for
the enforcement of this Amended and Restated Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any of the
provisions of this Amended and Restated Agreement, the successful or prevailing
party or parties shall be entitled to recover reasonable attorneys' fees and
other costs incurred in that action or proceeding in addition to any other
relief to which it or he may be entitled at law or equity.
 
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9.           Successors. This Amended and Restated Agreement shall be binding
upon each of the Parties upon their execution, and inure to the benefit of the
Parties hereto and their successors and assigns. Any assignee whatsoever will be
bound by the obligations of the assigning party under this Amended and Restated
Agreement, and any assignment shall not diminish the liability or obligation of
the assignor under the terms of this Amended and Restated Agreement unless
otherwise agreed.
 
10.           Severability. In the event that any one or more of the provisions
contained in this Amended and Restated Agreement or in any other instrument
referred to herein, shall, for any reason, be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision of this Amended and Restated Agreement or
any such other instrument.
 
11.           Paragraph Headings. The paragraph headings used herein are
descriptive only and shall have no legal force or effect whatsoever.
 
12.           Gender. Whenever the context so requires, the masculine shall
include the feminine and neuter, and the singular shall include the plural and
conversely.
 
13.           Governing Law. This Amended and Restated Agreement shall be
governed by and construed in accordance with the laws of the state of Texas
applicable to agreements and contracts executed and to be wholly performed
there, without giving effect to the conflicts of law principles thereof. Venue
for any action brought in connection herewith shall lie in Harris County, Texas.
 
14.           Remedies. In the event of any action, dispute or litigation from
the Parties hereto relating to the interpretation or enforcement of this Amended
and Restated Agreement or otherwise relating to the subject matter hereof, the
prevailing party shall be entitled to recover reasonable attorneys’ fees and
court costs.
 
15.           Multiple Counterparts. This Amended and Restated Agreement may be
executed in multiple counterparts, each of which shall be deemed an original.
 
16.           Waiver. Any waiver by either party to be enforceable must be in
writing and no waiver by either party shall constitute a continuing waiver.
 
17.           Cross References. References in this Amended and Restated
Agreement to Articles, Sections, Exhibits, or Schedules shall be deemed to be
references to Articles, Sections, Exhibits, and Schedules of this Amended and
Restated Agreement unless the context specifically and expressly requires
otherwise.
 
18.           Entire Agreement. This Amended and Restated Agreement and the
other agreements referred to herein set forth the entire understanding of the
Parties hereto relating to the subject matter hereof and thereof and supersede
all prior agreements and understandings among or between any of the Parties
relating to the subject matter hereof and thereof.
 
[Remainder of page intentionally left blank; signature page to follow.]
 
 
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IN WITNESS WHEREOF, the Parties have executed this Amended and Restated
Agreement as of the date and year first set forth above.
 
LAZARUS ENERGY HOLDINGS, LLC
 
 
 
By:_________________________________
Name: Jonathan P. Carroll
Title: Director
 
 
 
LAZARUS ENERGY, LLC
 
 
 
By:_________________________________
Name: Jonathan P. Carroll
Title: Director
 
 
 
 
 
BLUE DOLPHIN ENERGY COMPANY
 
 
By:_________________________________
Name: Tommy L. Byrd
Title: Chief Financial Officer, Treasurer and
Assistant Secretary
 
 
 
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