Document:

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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

                                        Initials:

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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:

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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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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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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 respective
     successors or assigns. Neither Starlight nor any director, officer,
     employee or agent of Starlight shall be considered to be an employee of the
     Company by virtue of the services provided hereunder.

                                        Initials:

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15.  MISCELLANEOUS

     Starlight's obligations under this Agreement are subject to the following
     general conditions:

     (a)  All relevant terms, conditions, and circumstances relating to the
          Placement will be reasonably satisfactory to the Company, Starlight
          and their respective counsel.

     (b)  Starlight reserves the right to solicit the assistance of outside
          dealers ("Dealers") to assist in the offer and sale of the Placement;
          provided, however, that any such Dealers agree in writing to be bound
          by the terms of the Placement. It is understood that Starlight, in its
          sole discretion, shall be entitled to pay over to any such Dealers any
          portion of the compensation received by Starlight hereunder. The
          Company shall have no financial liability for any fees or expenses of
          any such Dealers.

16.  CAPTIONS

     The Section titles herein are for reference purposes only and do not
     control or affect the meaning or interpretation of any term or provision
     hereof.

17.  AMENDMENTS

     No alteration, amendment, change or addition hereto shall be binding or
     effective unless the same is set forth in writing and signed by a duly
     authorized representative of each Party.

18.  PARTIAL INVALIDITY

     If it is finally determined that any term or provision hereof is invalid or
     unenforceable, (a) the remaining terms and provisions hereof shall be
     unimpaired, and (b) the invalid or unenforceable term or provision shall be
     replaced by a term or provision that is valid and enforceable and that
     comes as close as possible to expressing the intention of the invalid or
     unenforceable term or provision.

19.  ENTIRE AGREEMENT

     This Agreement embodies the entire agreement and understanding of the
     Parties and supersedes any and all prior agreements, arrangements and
     understandings relating to the matters provided for herein.

                                        Initials:

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20.  COUNTERPARTS

     This Agreement may be executed in one or more counterparts, each of which
     shall be an original, but all of which together shall be considered one and
     the same agreement.

     IN WITNESS WHEREOF, this Agreement has been executed as of the date first
written above by duly authorized representatives of the Company and Starlight.

                                        BLUE DOLPHIN ENERGY COMPANY

                                        By: Ivar Siem
                                        Title: Chairman & CEO

                                        STARLIGHT INVESTMENTS, LLC.

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        Initials:

                                        For Company:
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                                        For Starlight:
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                                    EXHIBIT A

                        FORM OF REPRESENTATIVE'S WARRANT

                                 [See attached]

<PAGE>

                                     SAMPLE

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER
SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR
TRANSFERRED OR OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO
SUCH SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL (WHICH OPINION
IS REASONABLY SATISFACTORY TO THE ISSUER OF THESE SECURITIES), SUCH REGISTRATION
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS IS NOT REQUIRED.

Date: ______________                                         Warrant to Purchase

                                                                ***______***
                                                                   Shares

                           BLUE DOLPHIN ENERGY COMPANY

             (Incorporated under the laws of the State of Delaware)

             REPRESENTATIVE'S WARRANT FOR THE PURCHASE OF SHARES OF

                                  COMMON STOCK

     Warrant Price: $_____ [the same price that the Securities were sold in
       the Placement] per share, subject to adjustment as provided below.

     THIS IS TO CERTIFY that, for value received, Starlight Investments, LLC.
("Starlight") and its assigns (collectively, the "Holder"), is entitled to
purchase, subject to the terms and conditions hereinafter set forth, up to
***______*** shares of the common stock, par value $0.01 per share ("Common
Stock"), of Blue Dolphin Energy Company, a Delaware corporation (the "Company"),
and to receive certificate(s) for the Common Stock so purchased.

     1. EXERCISE PERIOD AND VESTING. The exercise period is the period beginning
on the date of this Warrant (the "Issuance Date") and ending at 5:00 p.m.,
Houston, Texas time, on ______________ [Three years from the Issuance Date] (the
"Exercise Period"). This Warrant is vested in full as of the Issuance Date and
is immediately exercisable by Holder. This Warrant will terminate automatically
and immediately upon the expiration of the Exercise Period. Subject to
adjustment as provided below, the Warrant Price shall be adjusted as follows:
(i) for the period of time beginning on the issuance date and until the later of
the date such warrant shares underlying the warrant are registered or one (1)
year [110% of the Warrant Price], (ii) after the expiration of the later of one
year after the date hereof or until the warrant shares underlying the warrant
are registered until two (2) years [120%of the Warrant Price], and (iii) after
the expiration two (2) years after the date hereof [130% of the Warrant Price].

                                      A-1

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     2. EXERCISE OF WARRANT; CASHLESS EXERCISE. This Warrant may be exercised,
in whole or in part, at any time and from time to time during the Exercise
Period. Such exercise shall be accomplished by tender to the Company of the
purchase price set forth above as the warrant price (the "Warrant Price"),
either (a) in cash, by wire transfer or by certified check or bank cashier's
check, payable to the order of the Company, or (b) by surrendering such number
of shares of Common Stock received upon exercise of this Warrant with a current
market price equal to the Warrant Price (a "Cashless Exercise") together with
presentation and surrender to the Company of this Warrant with an executed
subscription in substantially the form attached hereto as Exhibit A (the
"Subscription"). Upon receipt of the foregoing, the Company will deliver to the
Holder, as promptly as possible, a certificate or certificates representing the
shares of Common Stock so purchased, registered in the name of the Holder or its
transferee (as permitted under Section 3 below). With respect to any exercise of
this Warrant, the Holder will for all purposes be deemed to have become the
holder of record of the number of shares of Common Stock purchased hereunder on
the date this Warrant, a properly executed Subscription and payment of the
Warrant Price is received by the Company (the "Exercise Date"), irrespective of
the date of delivery of the certificate evidencing such shares, except that, if
the date of such receipt is a date on which the stock transfer books of the
Company are closed, such person will be deemed to have become the holder of such
shares at the close of business on the next succeeding date on which the stock
transfer books are open. Fractional shares of Common Stock will not be issued
upon the exercise of this Warrant. In lieu of any fractional shares that would
have been issued but for the immediately preceding sentence, the Holder will be
entitled to receive cash equal to the current market price of such fraction of a
share of Common Stock on the trading day immediately preceding the Exercise
Date. In the event this Warrant is exercised in part, the Company shall issue a
new Warrant to the Holder covering the aggregate number of shares of Common
Stock as to which this Warrant remains exercisable for.

     If the Holder elects to conduct a Cashless Exercise, the Company shall
cause to be delivered to the Holder a certificate or certificates representing
the number of shares of Common Stock computed using the following formula:

     X = (Y x (A-B))/A

     Where:

            X = the number of shares of Common Stock to be issued to Holder;

            Y = the portion of the Warrant (in number of shares of Common Stock)
                being exercised by Holder (at the date of such calculation);

            A = the fair market value of one share of Common Stock on the
                Exercise Date (as calculated below); and

            B = Warrant Price (as adjusted to the date of such calculation).

     For purposes of the foregoing calculation, "fair market value of one share
of Common Stock on the Exercise Date" shall mean: (i) if the principal trading
market for such securities is a national or regional securities exchange, the
closing price on such exchange for day immediately prior to such Exercise Date;
(ii) if sales prices for shares of Common Stock are reported by the NASDAQ
National Market System or NASDAQ Small Cap Market (or a similar system then in
use), the last reported sales price for the day immediately prior to such
Exercise Date; or (iii) if

                                      A-2

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neither (i) nor (ii) above are applicable, and if bid and ask prices for shares
of Common Stock are reported in the over-the-counter market by NASDAQ (or, if
not so reported, by the National Quotation Bureau), the average of the high bid
and low ask prices so reported for the ten (10) trading days immediately prior
to such Exercise Date. Notwithstanding the foregoing, if there is no reported
closing price, last reported sales price, or bid and ask prices, as the case may
be, for the period in question, then the current market price shall be
determined as of the latest ten (10) day period prior to such day for which such
closing price, last reported sales price, or bid and ask prices, as the case may
be, are available, unless such securities have not been traded on an exchange or
in the over-the-counter market for 30 or more days immediately prior to the day
in question, in which case the current market price shall be determined in good
faith by, and reflected in a formal resolution of, the Board of Directors of the
Company. The Company acknowledges and agrees that this Warrant was issued on the
Issuance Date.

     3.   TRANSFERABILITY AND EXCHANGE

          (a) This Warrant, and the Common Stock issuable upon the exercise
hereof, may not be sold, transferred, pledged or hypothecated unless the Company
shall have been provided with an opinion of counsel, or other evidence
reasonably satisfactory to it, that such transfer is not in violation of the
Securities Act, and any applicable state securities laws. Subject to the
satisfaction of the aforesaid condition, this Warrant and the underlying shares
of Common Stock shall be transferable from time to time by the Holder upon
written notice to the Company. If this Warrant is transferred, in whole or in
part, the Company shall, upon surrender of this Warrant to the Company, deliver
to each transferee a Warrant evidencing the rights of such transferee to
purchase the number of shares of Common Stock that such transferee is entitled
to purchase pursuant to such transfer. The Company may place a legend similar to
the legend at the top of this Warrant on any replacement Warrant and on each
certificate representing shares issuable upon exercise of this Warrant or any
replacement Warrants. Only a registered Holder may enforce the provisions of
this Warrant against the Company. A transferee of the original registered Holder
becomes a registered Holder only upon delivery to the Company of the original
Warrant and an original Assignment, substantially in the form set forth in
Exhibit B attached hereto.

          (b) This Warrant is exchangeable upon its surrender by the Holder to
the Company for new Warrants of like tenor and date representing in the
aggregate the right to purchase the number of shares purchasable hereunder, each
of such new Warrants to represent the right to purchase such number of shares as
may be designated by the Holder at the time of such surrender.

     4. ADJUSTMENTS TO WARRANT PRICE AND NUMBER OF SHARES SUBJECT TO WARRANT.
The Warrant Price and the number of shares of Common Stock purchasable upon the
exercise of this Warrant are subject to adjustment from time to time upon the
occurrence of any of the events specified in this Section 4. For the purpose of
this Section 4, "Common Stock" means shares now or hereafter authorized of any
class of common stock of the Company and any other stock of the Company, however
designated, that has the right to participate in any distribution of the assets
or earnings of the Company without limit as to per share amount (excluding, and
subject to any prior rights of, any class or series of preferred stock).

          (a) In case the Company shall (i) pay a dividend or make a
distribution in shares of Common Stock or other securities, (ii) subdivide its
outstanding shares of Common

                                      A-3

<PAGE>

Stock into a greater number of shares, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares, or (iv) issue by reclassification
of its shares of Common Stock other securities of the Company, then the Warrant
Price in effect at the time of the record date for such dividend or on the
effective date of such subdivision, combination or reclassification, and/or the
number and kind of securities issuable on such date, shall be proportionately
adjusted so that the Holder of any Warrant thereafter exercised shall be
entitled to receive the aggregate number and kind of shares of Common Stock (or
such other securities other than Common Stock) of the Company, at the same
aggregate Warrant Price, that, if such Warrant had been exercised immediately
prior to such date, the Holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, distribution, subdivision,
combination or reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur.

          (b) In case the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
surviving corporation) of cash, evidences of indebtedness or assets, or
subscription rights or warrants, the Warrant Price to be in effect after such
record date shall be determined by multiplying the Warrant Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the current market price per share of Common Stock on such record date,
less the amount of cash so to be distributed (or the fair market value (as
determined in good faith by, and reflected in a formal resolution of, the Board
of Directors of the Company) of the portion of the assets or evidences of
indebtedness so to be distributed, or of such subscription rights or warrants,
applicable to one share of Common Stock, and the denominator of which shall be
such current market price per share of Common Stock. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Warrant Price shall again be adjusted to
be the Warrant Price which would then be in effect if such record date had not
been fixed.

          (c) For the purpose of any computation under any subsection of this
Section 4, the "current market price" per share of Common Stock on any date
shall be the per share price of the Common Stock on the trading day immediately
prior to the event requiring an adjustment hereunder and shall be: (i) if the
principal trading market for such securities is a national or regional
securities exchange, the closing price on such exchange on such day; or (ii) if
sales prices for shares of Common Stock are reported by the NASDAQ National
Market System or Small Cap Market System (or a similar system then in use), the
last reported sales price so reported on such day; or (iii) if neither (i) nor
(ii) above are applicable, and if bid and ask prices for shares of Common Stock
are reported in the over-the-counter market by NASDAQ (or, if not so reported,
by the National Quotation Bureau), the average of the high bid and low ask
prices so reported on such day. Notwithstanding the foregoing, if there is no
reported closing price, last reported sales price, or bid and ask prices, as the
case may be, for the day in question, then the current market price shall be
determined as of the latest date prior to such day for which such closing price,
last reported sales price, or bid and ask prices, as the case may be, are
available, unless such securities have not been traded on an exchange or in the
over-the-counter market for 30 or more days immediately prior to the day in
question, in which case the current market price shall be determined in good
faith by, and reflected in a formal resolution of, the Board of Directors of the
Company.

                                      A-4

<PAGE>

          (d) Notwithstanding any provision herein to the contrary, no
adjustment in the Warrant Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Warrant Price; provided,
however, that any adjustments which by reason of this subsection (b) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 4 shall be made to
the nearest cent or the nearest one-hundredth of a share, as the case may be.

          (e) In the event that at any time, as a result of an adjustment made
pursuant to subsection (a) above, the Holder of any Warrant thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than shares of Common Stock, thereafter the number of such other shares so
receivable upon exercise of any Warrant shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Common Stock contained in this Section
4, and the other provisions of this Warrant shall apply on like terms to any
such other shares.

          (f) If the Company merges or consolidates into or with another
corporation or entity, or if another corporation or entity merges into or with
the Company (excluding such a merger in which the Company is the surviving or
continuing corporation and which does not result in any reclassification,
conversion, exchange, or cancellation of the outstanding shares of Common
Stock), or if all or substantially all of the assets or business of the Company
are sold or transferred to another corporation, entity, or person, then, as a
condition to such consolidation, merger, or sale (a "Transaction"), lawful and
adequate provision shall be made whereby the Holder shall have the right from
and after the Transaction to receive, upon exercise of this Warrant and upon the
terms and conditions specified herein and in lieu of the shares of the Common
Stock that would have been issuable if this Warrant had been exercised
immediately before the Transaction, such shares of stock, securities, or assets
as the Holder would have owned immediately after the Transaction if the Holder
had exercised this Warrant immediately before the effective date of the
Transaction.

     5. REGISTRATION RIGHTS. The Company hereby grants to Holder, with respect
to the shares of Common Stock underlying this Warrant, registration rights
identical to those that are granted to Purchasers in the Placement (as such
terms are defined in that certain Placement Agency Agreement, dated as of
__________, by and between the Company and Starlight); it being specifically
agreed and understood that the shares of Common Stock underlying this Warrant
will be included in any registration statement filed by the Company which
includes shares of Common Stock, or shares of Common Stock underlying any
securities, issued to Purchasers in the Placement.

     6. RESERVATION OF SHARES. The Company agrees at all times to reserve and
hold available out of its authorized but unissued shares of Common Stock the
number of shares of Common Stock issuable upon the full exercise of this
Warrant. The Company further covenants and agrees that all shares of Common
Stock that may be delivered upon the exercise of this Warrant will, upon
delivery, be fully paid and nonassessable and free from all taxes, liens and
charges with respect to the purchase thereof hereunder.

     7. NOTICES TO HOLDER. Upon any adjustment of the Warrant Price (or number
of shares of Common Stock purchasable upon the exercise of this Warrant)
pursuant to Section 4, the Company shall promptly thereafter cause to be given
to the Holder written notice of such

                                      A-5

<PAGE>

adjustment. Such notice shall include the Warrant Price (and/or the number of
shares of Common Stock purchasable upon the exercise of this Warrant) after such
adjustment, and shall set forth in reasonable detail the Company's method of
calculation and the facts upon which such calculations were based. Where
appropriate, such notice shall be given in advance and included as a part of any
notice required to be given under the other provisions of this Section 7.

     In the event of (a) any fixing by the Company of a record date with respect
to the holders of any class of securities of the Company for the purpose of
determining which of such holders are entitled to dividends or other
distributions, or any rights to subscribe for, purchase or otherwise acquire any
shares of capital stock of any class or any other securities or property, or to
receive any other right, (b) any capital reorganization of the Company, or
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets or business of the Company
to, or consolidation or merger of the Company with or into, any other entity or
person, or (c) any voluntary or involuntary dissolution or winding up of the
Company, then and in each such event the Company will give the Holder a written
notice specifying, as the case may be (i) the record date for the purpose of
such dividend, distribution, or right, and stating the amount and character of
such dividend, distribution, or right; or (ii) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, conveyance, dissolution, liquidation, or winding up is to take place and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such capital stock or securities receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock securities) for securities or other property deliverable upon such
event. Any such notice shall be given at least 10 days prior to the earliest
date therein specified.

     8. NO RIGHTS AS A STOCKHOLDER. This Warrant does not entitle the Holder to
any voting rights or other rights as a stockholder of the Company, nor to any
other rights whatsoever except the rights herein set forth.

     9. ADDITIONAL COVENANTS OF THE COMPANY. The Company shall not, by amendment
of its Articles of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant. Without limiting the generality of the
foregoing, the Company (a) will at all times reserve and keep available, solely
for issuance and delivery upon exercise of this Warrant, shares of Common Stock
issuable from time to time upon exercise of this Warrant, (b) will not increase
the par value of any shares of capital stock receivable upon exercise of this
Warrant above the amount payable therefor upon such exercise, and (c) will take
all such actions as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable stock.

     10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the Company, the Holder and their respective successors and
permitted assigns.

     11. NOTICES. All notices, requests, demands, and other communications
required or permitted to be given or made hereunder by any party hereto shall be
in writing and shall be deemed to have been duly given or made if (i) delivered
personally, (ii) sent by prepaid overnight courier service, or (iii) sent by
telecopy or facsimile transmission, answer back requested, to the parties at the
following addresses (or at such other address as shall be specified by the
parties by like notice):

                                      A-6

<PAGE>

     if to the Holder:

           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)

     and, if to the Company:

           Blue Dolphin Energy Company
           801 Travis, Suite 2100
           Houston, TX 77002
           Facsimile: 713-227-7626
           Attention: President

Such notices, requests, demands, and other communications shall be effective (i)
if delivered personally or sent by courier service, upon actual receipt by the
intended recipient, or (ii) if sent by telecopy or facsimile transmission, when
the answer back is received.

     12. SEVERABILITY. Every provision of this Warrant is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the remainder of this
Warrant.

     13. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to the
principles of choice of laws thereof.

     14. ATTORNEYS' FEES. In any action or proceeding brought to enforce any
provision of this Warrant, the prevailing party shall be entitled to recover
reasonable attorneys' fees in addition to its costs and expenses and any other
available remedy.

     15. ENTIRE AGREEMENT. This Warrant (including the Exhibits attached hereto)
constitutes the entire understanding between the Company and the Holder with
respect to the subject matter hereof, and supersedes all prior negotiations,
discussions, agreements and understandings relating to such subject matter.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officer as of the date first set forth above.

                                        BLUE DOLPHIN ENERGY COMPANY

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                      A-7

<PAGE>

                                    Exhibit A

                                SUBSCRIPTION FORM

(To be Executed by the Holder to Exercise the Rights To Purchase Common Stock
Evidenced by the Within Warrant)

     The undersigned hereby irrevocably subscribes for _______ shares (the
"Stock") of the Common Stock of _________________ (the "Company") pursuant to
and in accordance with the terms and conditions of the attached Warrant (the
"Warrant"), and hereby makes payment of $_______ therefor by [tendering cash,
wire transferring or delivering a certified check or bank cashier's check,
payable to the order of the Company] [surrendering _______ shares of Common
Stock received upon exercise of the Warrant, which shares have a current market
price equal to such payment as required in Section 2 of the Warrant]. The
undersigned requests that a certificate for the Stock be issued in the name of
the undersigned and be delivered to the undersigned at the address stated below.
If the Stock is not all of the shares purchasable pursuant to the Warrant, the
undersigned requests that a new Warrant of like tenor for the balance of the
remaining shares purchasable thereunder be delivered to the undersigned at the
address stated below.

     In connection with the issuance of the Stock, I hereby represent to the
Company that I am acquiring the Stock for my own account for investment and not
with a view to, or for resale in connection with, a distribution of the shares
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").

     I understand that because the Stock has not been registered under the
Securities Act, I must hold such Stock indefinitely unless the Stock is
subsequently registered and qualified under the Securities Act or is exempt from
such registration and qualification. I shall make no transfer or disposition of
the Stock unless (a) such transfer or disposition can be made without
registration under the Securities Act by reason of a specific exemption from
such registration and such qualification, or (b) a registration statement has
been filed pursuant to the Securities Act and has been declared effective with
respect to such disposition. I agree that each certificate representing the
Stock delivered to me shall bear substantially the same legend as set forth on
the front page of the Warrant.

     I further agree that the Company may place stop orders on the certificates
evidencing the Stock with the transfer agent, if any, to the same effect as the
above legend. The legend and stop transfer notice referred to above shall be
removed only upon my furnishing to the Company of an opinion of counsel
(reasonably satisfactory to the Company) to the effect that such legend may be
removed.

     Date:                              Signed:
           --------------------------           --------------------------------
                                        Address:
                                                 -------------------------------

                                        ----------------------------------------

                                      A-8

<PAGE>

                                    Exhibit B

                                   ASSIGNMENT

    (To be Executed by the Holder to Effect Transfer of the Attached Warrant)

     For Value Received __________________________ hereby sells, assigns and
transfers to _________________________ the Warrant attached hereto and the
rights represented thereby to purchase _________ shares of Common Stock in
accordance with the terms and conditions hereof, and does hereby irrevocably
constitute and appoint _________________________ as attorney to transfer such
Warrant on the books of the Company with full power of substitution.

     Dated:                             Signed:
            -------------------------           --------------------------------

Please print or typewrite               Please insert Social Security
name and address of                     or other Tax Identification
assign:                                 Number of Assign:

-------------------------------------   ----------------------------------------

-------------------------------------

-------------------------------------

                                       B-1

<PAGE>

                                    EXHIBIT C

                   ADDENDUM B To That Certain Agreement dated

                                 August 5, 2004

                           (Incorporated by reference)<PAGE>

                                                                   Exhibit 10.10

                            STOCK PURCHASE AGREEMENT

     STOCK PURCHASE AGREEMENT (the "AGREEMENT"), dated as of March 8, 2006 by
and between Blue Dolphin Energy Company, a Delaware corporation (the "COMPANY"),
and the investors listed on the signature pages hereto (each, an "INVESTOR" and
collectively the "INVESTORS").

     WHEREAS, the Investors wish to purchase, and the Company wishes to sell,
upon the terms and conditions stated in this Agreement, __________ shares of the
common stock, par value $.01 per share, of the Company (the "COMMON STOCK"). The
shares of Common Stock to be purchased by the Investors pursuant to this
Agreement are referred to herein as the "SECURITIES"; and

     WHEREAS, the Company and the Investors are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the "SECURITIES
ACT"), and Rule 506 of Regulation D ("REGULATION D") as promulgated by the
United States Securities and Exchange Commission (the "COMMISSION") under the
Securities Act.

     NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors agree
as follows:

                                    ARTICLE I
                                   DEFINITIONS

     1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, the following terms have the meanings indicated:

     "2005 10-K" has the meaning set forth in Section 4.4.

     "ADVICE" has the meaning set forth in Section 6.5.

     "AFFILIATE" means, with respect to any Person, any other Person that,
directly or indirectly through one or more intermediaries, "controls" or is
"controlled" by or is under common control with, such Person, as such terms are
used in and construed under Rule 144 under the Securities Act.

     "AGREEMENT" has the meaning set forth in the Preamble.

     "BUSINESS DAY" means any day other than Saturday, Sunday or other day on
which commercial banks in the City of Houston are authorized or required by law
to remain closed.

     "CLOSING" means the closing of the purchase and sale of the Securities
pursuant to Section 2.1.

<PAGE>

     "CLOSING DATE" means the date and time of the Closing and shall be 9:00
a.m., Houston time, on March 8, 2006, or such other date and time as is mutually
agreed to by the Company and the Investors.

     "COMMISSION" has the meaning set forth in the Recitals.

     "COMMON STOCK" has the meaning set forth in the Recitals.

     "COMPANY" has the meaning set forth in the Preamble.

     "DISCLOSURE MATERIALS" has the meaning set forth in Section 3.1(g).

     "EFFECTIVE DATE" means the date that the Registration Statement is first
declared effective by the Commission.

     "EFFECTIVENESS PERIOD" has the meaning set forth in Section 6.1(b).

     "ELIGIBLE MARKET" means any of the New York Stock Exchange, the American
Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap Market.

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

     "INDEMNIFIED PARTY" has the meaning set forth in Section 6.4(c).

     "INDEMNIFYING PARTY" has the meaning set forth in Section 6.4(c).

     "INVESTOR" has the meaning set forth in the Preamble.

     "LIEN" means any lien, charge, claim, security interest, encumbrance, right
of first refusal or other restriction.

     "LOSSES" means any and all losses, claims, damages, liabilities, settlement
costs and expenses, including, without limitation, costs of preparation and
reasonable attorneys' fees.

     "MATERIAL ADVERSE EFFECT" has the meaning set forth in Section 3.1(b).

     "PERSON" means any individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, or joint stock company.

     "PROCEEDING" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened in writing.

     "PROSPECTUS" means the prospectus included in the Registration Statement at
the time of effectiveness (including, without limitation, a prospectus that
includes any information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A promulgated under
the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and

                                       2

<PAGE>

supplements to such prospectus including post effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such prospectus.

     "PURCHASE PRICE" means [80% of the volume weighted average price for twenty
(20) Trading Days preceding the Closing Date].

     "REGULATION D" has the meaning set forth in the Recitals.

     "REGISTRABLE SECURITIES" means any Securities issued pursuant to this
Agreement, together with any securities issued or issuable upon any stock split,
dividend or other distribution, recapitalization or similar event with respect
to the foregoing.

     "REGISTRATION STATEMENT" means each registration statement required to be
filed under Article VI, as amended at the time and on the date it became
effective, including the information (if any) contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) or deemed to be
part thereof at the time of effectiveness pursuant to Rule 430A, and all
material incorporated by reference or deemed to be incorporated by reference in
such registration statement.

     "RULE 144," "RULE 415," "RULE 424" and "RULE 430A" means Rule 144, Rule
415, Rule 424 and Rule 430A, respectively, promulgated by the Commission
pursuant to the Securities Act, as such Rules may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

     "SEC REPORTS" has the meaning set forth in Section 3.1(g).

     "SECURITIES" has the meaning set forth in the Recitals.

     "SECURITIES ACT" has the meaning set forth in the Recitals.

     "SUBSIDIARY" means any Person in which the Company, directly or indirectly,
owns voting securities having the power to elect a majority of the directors (or
similar members of such corporation's or other entity's governing body), or
otherwise direct the management and polices of such corporation or other entity.

     "TRADING DAY" means (a) any day on which the Common Stock is listed or
quoted and traded on its primary Trading Market, (b) if the Common Stock is not
then listed or quoted and traded on any Eligible Market, then a day on which
trading occurs on the Nasdaq SmallCap Market (or any successor thereto), or (c)
if trading ceases to occur on the Nasdaq SmallCap Market (or any successor
thereto), any Business Day.

     "TRADING MARKET" means the Nasdaq SmallCap Market or any other Eligible
Market, or any national securities exchange, market or trading or quotation
facility on which the Common Stock is then listed or quoted.

     "TRANSFER AGENT" means Securities Transfer Corporation or any successor
transfer agent for the Company.

                                       3

<PAGE>

                                   ARTICLE II
                                PURCHASE AND SALE

     2.1 Closing. Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to the Investors, and
the Investors shall purchase from the Company, the Securities. The date and time
of the Closing and shall be 9:00 a.m., Houston, Texas time, on the Closing Date.
The Closing shall take place at a location mutually agreeable to the parties or
by electronic mail and/or facsimile.

     2.2 Closing Deliveries.

          (a) At the Closing, each Investor shall deliver or cause to be
     delivered to the Company the aggregate Purchase Price for the Securities
     listed next to such Investor's name on Schedule 2.2. The Purchase Price
     shall be paid in United States dollars and in immediately available funds,
     by wire transfer to an account designated in writing to the Investor by the
     Company for such purpose.

          (b) As soon as practicable after the Closing, the Company shall
     deliver or cause to be delivered to each Investor one or more stock
     certificates, containing only the legend expressly provided in Section 4.1
     hereof, evidencing the Securities purchased by such Investor.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

     3.1 Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investors as follows (which representations and
warranties shall be deemed to apply, where appropriate, to each Subsidiary):

          (a) Organization and Qualification. Each of the Company and the
     Subsidiaries is an entity duly organized, validly existing and in good
     standing under the laws of the jurisdiction of its incorporation or
     organization (as applicable), with the requisite power and authority to own
     and use its properties and assets and to carry on its business as currently
     conducted. Neither the Company nor any Subsidiary is in violation of any of
     the provisions of its respective certificate or articles of incorporation,
     bylaws or other organizational or charter documents. Each of the Company
     and the Subsidiaries is duly qualified to do business and is in good
     standing as a foreign corporation or other entity in each jurisdiction in
     which the nature of the business conducted or property owned by it makes
     such qualification necessary, except where the failure to be so qualified
     or in good standing, as the case may be, could not reasonably be expected,
     individually or in the aggregate, to have a material adverse effect on (i)
     the results of operations, assets, business or financial condition of the
     Company and the Subsidiaries, taken as a whole on a consolidated basis, or
     (ii) the Company's ability to consummate the transactions contemplated by
     this Agreement on a timely basis (either of (i) or (ii), a "MATERIAL
     ADVERSE EFFECT").

          (b) Authorization; Enforcement. The Company has the requisite
     corporate authority to enter into and to consummate the transactions
     contemplated by this

                                       4

<PAGE>

     Agreement and otherwise to carry out its obligations hereunder. The
     execution and delivery of this Agreement and the consummation by it of the
     transactions contemplated hereby have been duly authorized by all necessary
     action on the part of the Company and no further consent or action is
     required by the Company, its board of directors or its stockholders. This
     Agreement has been (or upon delivery will be) duly executed by the Company
     and is, or when delivered in accordance with the terms hereof, will
     constitute, the valid and legally binding obligation of the Company
     enforceable against the Company in accordance with its terms, except as may
     be limited by applicable bankruptcy, insolvency, reorganization or other
     laws of general application relating to or affecting the enforcement of
     creditors rights generally, or by general principles of equity.

          (c) No Conflicts. The execution, delivery and performance of this
     Agreement by the Company and the consummation by the Company of the
     transactions contemplated hereby and thereby do not, and will not, (i)
     conflict with or violate any provision of the Company's Amended and
     Restated Certificate of Incorporation or its bylaws, (ii) conflict with, or
     constitute a default (or an event that with notice or lapse of time or both
     would become a default) under, or give to others any rights of termination,
     amendment, acceleration or cancellation (with or without notice, lapse of
     time or both) of, any agreement, credit facility, debt or other instrument
     to which the Company or any Subsidiary is a party or by which any property
     or asset of the Company or any Subsidiary is bound, or affected, except to
     the extent that such conflict, default, termination, amendment,
     acceleration or cancellation right could not reasonably be expected to have
     a Material Adverse Effect, or (iii) result in a violation of any law, rule,
     regulation, order, judgment, injunction, decree or other restriction of any
     court or governmental authority to which the Company or a Subsidiary is
     subject (including federal and state securities laws and regulations and
     the rules and regulations of any self-regulatory organization to which the
     Company or its securities are subject), or by which any property or asset
     of the Company or a Subsidiary is bound or affected, except to the extent
     that such violation could not reasonably be expected to have a Material
     Adverse Effect.

          (d) Subsidiaries. The Company has no Subsidiaries or any other equity
     interests in any other Person other than those listed on Schedule 3.1(d)
     hereto. Except as disclosed on Schedule 3.1(d) hereto, the Company owns,
     directly or indirectly, all of the capital stock or comparable equity
     interests of each Subsidiary free and clear of any Lien and all the issued
     and outstanding shares of capital stock or comparable equity interests of
     each Subsidiary are validly issued and are fully paid, non-assessable and
     free of preemptive and similar rights.

          (e) Issuance of the Securities. The Securities have been duly
     authorized and, when issued and paid for in accordance with this Agreement,
     will be duly and validly issued, fully paid and nonassessable, free and
     clear of all Liens and shall not be subject to preemptive or similar rights
     of stockholders.

          (f) Capitalization. The aggregate number of shares and type of all
     authorized, issued and outstanding classes of capital stock, options and
     other securities of the Company (whether or not presently convertible into
     or exercisable or exchangeable for shares of capital stock of the Company)
     as of the date of this Agreement is set forth on

                                       5

<PAGE>

     Schedule 3.1(f) hereto. All outstanding shares of capital stock are duly
     authorized, validly issued, fully paid and nonassessable and have been
     issued in compliance with all applicable securities laws. Except as
     disclosed on Schedule 3.1(f) hereto, the Company has not issued any other
     options, warrants, script rights to subscribe to, calls or commitments of
     any character whatsoever relating to, or securities, rights or obligations
     convertible into or exercisable or exchangeable for, or entered into any
     agreement giving any Person any right to subscribe for or acquire, any
     shares of Common Stock, or securities or rights convertible or exchangeable
     into shares of Common Stock. Except as set forth on Schedule 3.1(f) hereto,
     and except for customary adjustments as a result of stock dividends, stock
     splits, combinations of shares, reorganizations, recapitalizations,
     reclassifications or other similar events, there are no anti-dilution or
     price adjustment provisions contained in any security issued by the Company
     (or in any agreement providing rights to security holders) and the issuance
     and sale of the Securities will not obligate the Company to issue shares of
     Common Stock or other securities to any Person (other than the Investor)
     and will not result in a right of any holder of securities to adjust the
     exercise, conversion, exchange or reset price under such securities.

          (g) SEC Reports; Financial Statements. The Company has filed all
     reports required to be filed by it under the Exchange Act, including
     pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding
     the date hereof (the foregoing materials, together with any materials filed
     by the Company under the Exchange Act, whether or not required, being
     collectively referred to herein as the "SEC REPORTS" and, together with
     this Agreement and the Schedules to this Agreement, the "DISCLOSURE
     MATERIALS") on a timely basis. As of the respective dates on which they
     were filed and/or amended, the SEC Reports complied in all material
     respects with the requirements of the Securities Act and the Exchange Act
     and the rules and regulations of the Commission promulgated thereunder, and
     none of the SEC Reports, when filed, contained any untrue statement of a
     material fact or omitted to state a material fact required to be stated
     therein or necessary in order to make the statements therein, in the light
     of the circumstances under which they were made, not misleading. The
     audited consolidated balance sheets and audited consolidated statements of
     income and cash flows of the Company as of December 31, 2004 and 2003 and
     for the three years ended December 31, 2004 and the unaudited consolidated
     balance sheets and unaudited consolidated statements of income and cash
     flows of the Company as at and for the periods ended March 31, 2005, June
     30, 2005 and September 30, 2005 (as restated and including in each case any
     related notes and schedules thereto) included in the SEC Reports comply in
     all material respects with applicable accounting requirements and the rules
     and regulations of the Commission with respect thereto as in effect at the
     time of filing. Such financial statements have been prepared in accordance
     with United States generally accepted accounting principles ("GAAP")
     applied on a consistent basis during the periods involved, except as may be
     otherwise specified in such financial statements or the notes thereto, and
     fairly present in all material respects the consolidated financial position
     of the Company and its consolidated subsidiaries as of and for the dates
     thereof and the results of operations and cash flows for the periods then
     ended, subject, in the case of unaudited statements, to normal, year-end
     audit adjustments.

                                       6

<PAGE>

          (h) Material Changes. Since the date of the latest audited financial
     statements included within the SEC Reports, and except as specifically
     disclosed in the SEC Reports or on Schedule 3.1(h) hereto, (i) there has
     been no event, occurrence or development that, individually or in the
     aggregate, has had or that could result in a Material Adverse Effect and
     (ii) the Company has not incurred any material liabilities other than (A)
     trade payables and accrued expenses incurred in the ordinary course of
     business consistent with past practice and (B) liabilities not required to
     be reflected in the Company's financial statements pursuant to GAAP or
     required to be disclosed in filings made with the Commission.

          (i) Absence of Litigation. Except as disclosed in the SEC Reports,
     there is no action, suit, claim, or proceeding, or, to the Company's
     knowledge, inquiry or investigation, before or by any court, public board,
     government agency, self-regulatory organization or body pending or, to the
     knowledge of the Company, threatened against or affecting the Company or
     any of its Subsidiaries that would be reasonably expected to, individually
     or in the aggregate, have a Material Adverse Effect.

          (j) Compliance. Neither the Company nor any Subsidiary, except in each
     case as could not, individually or in the aggregate, reasonably be expected
     to have or result in a Material Adverse Effect, (i) is in default under or
     in violation of (and no event has occurred that has not been waived that,
     with notice or lapse of time or both, would result in a default by the
     Company or any Subsidiary under), nor has the Company or any Subsidiary
     received written notice of a claim that it is in default under or that it
     is in violation of, any indenture, loan or credit agreement or any other
     agreement or instrument to which it is a party or by which it or any of its
     properties is bound (whether or not such default or violation has been
     waived), (ii) is in violation of any order of any court, arbitrator or
     governmental body, or (iii) is or has been in violation of any statute,
     rule or regulation of any governmental authority.

          (k) Private Placement. Neither the Company, nor any of its Affiliates,
     nor any Person acting on the Company's behalf, has, directly or indirectly,
     at any time within the past six months, made any offer or sale of any
     security or solicitation of any offer to buy any security under
     circumstances that would (i) eliminate the availability of the exemption
     from registration under Regulation D under the Securities Act in connection
     with the offer and sale by the Company of the Securities as contemplated
     hereby or (ii) cause the offering of the Securities pursuant to this
     Agreement to be integrated with prior offerings by the Company for purposes
     of any applicable law, regulation or stockholder approval provisions,
     including, without limitation, under the rules and regulations of any
     Trading Market.

          (l) Disclosure. The Company confirms that neither it nor any officers,
     directors or Affiliates, has provided the Investors or their agents or
     counsel with any information that constitutes or might constitute material,
     nonpublic information with respect to the Company (other than the existence
     and terms of the issuance of Securities, as contemplated by this
     Agreement).

                                       7

<PAGE>

     3.2 Representations and Warranties of the Investors. Each Investor hereby
represents and warrants to the Company as follows:

          (a) Organization; Authority. If the Investor is an entity, the
     Investor is duly organized, validly existing and in good standing under the
     laws of the jurisdiction of its organization with the requisite power and
     authority to enter into and to consummate the transactions contemplated by
     this Agreement and otherwise to carry out its obligations hereunder. The
     purchase by such Investor of the Securities hereunder has been duly
     authorized by all necessary action on the part of the Investor. In
     addition, this Agreement has been duly executed and delivered by each
     Investor and constitutes the valid and legally binding obligation of the
     Investor, enforceable against it in accordance with its terms, except as
     may be limited by applicable bankruptcy, insolvency, reorganization or
     other laws of general application relating to or affecting the enforcement
     of creditors rights generally, or by general principles of equity.

          (b) No Public Sale or Distribution; Investment Intent. The Investor is
     acquiring the Securities for investment, for its own account, and not with
     a view towards, or for resale in connection with, the public sale or
     distribution thereof, except pursuant to sales registered under the
     Securities Act or under an exemption from such registration and in
     compliance with applicable federal and state securities laws, and the
     Investor does not have a present intention or arrangement to effect any
     sale or distribution of the Securities to or through any Person except
     pursuant to sales registered under the Securities Act or under an exemption
     from such registration and in compliance with applicable federal and state
     securities laws; provided, however, that by making the representations
     herein, the Investor does not agree to hold any of the Securities for any
     minimum or other specific term and reserves the right to dispose of the
     Securities at any time in accordance with applicable federal and state
     securities laws.

          (c) Investor Status. At the time the Investor was offered the
     Securities, it was, and at the date hereof it is, an "accredited investor"
     as defined in Rule 501(a) under the Securities Act.

          (d) Experience of the Investor. The Investor has such knowledge,
     sophistication and experience in business and financial matters so as to be
     capable of evaluating the merits and risks of the prospective investment in
     the Securities, and has so evaluated the merits and risks of such
     investment. The Investor is able to bear the economic risk of an investment
     in the Securities and, at the present time, is able to afford a complete
     loss of such investment.

          (e) Access to Information. The Investor acknowledges that it has
     reviewed the Disclosure Materials and has been afforded: (i) the
     opportunity to ask such questions as it has deemed necessary of, and to
     receive answers from, representatives of the Company concerning the terms
     and conditions of the offering of the Securities and the merits and risks
     of investing in the Securities; (ii) access to information (other than
     material non-public information) about the Company and the Subsidiaries and
     their respective financial condition, results of operations, business,
     properties, management and prospects sufficient to enable it to evaluate
     its investment; and (iii) the opportunity to obtain such

                                       8

<PAGE>

     additional information that the Company possesses or can acquire without
     unreasonable effort or expense that is necessary to make an informed
     investment decision with respect to the Securities. Neither such inquiries
     nor any other investigation conducted by or on behalf of the Investor or
     its representatives or counsel shall modify, amend or affect the Investor's
     right to rely on the truth, accuracy and completeness of the Disclosure
     Materials and the Company's representations and warranties contained in
     this Agreement.

          (f) No Governmental Review. The Investor understands that no United
     States federal or state agency or any other government or governmental
     agency has passed on or made any recommendation or endorsement of the
     Securities or the fairness or suitability of the investment in the
     Securities nor have such authorities passed upon or endorsed the merits of
     the offering of the Securities.

          (g) No Conflicts. The execution, delivery and performance by the
     Investor of this Agreement and the consummation by the Investor of the
     transactions contemplated hereby will not (i) conflict with or violate the
     organizational documents of the Investor (if the Investor is an entity),
     (ii) conflict with, or constitute a default (or an event which with notice
     or lapse of time or both would become a default) under, or give to others
     any rights of termination, amendment, acceleration or cancellation (with or
     without notice, lapse of time, or both) of, any agreement, credit facility,
     debt, indenture or other instrument to which the Investor is a party or by
     which any of its property is bound, or (iii) result in a violation of any
     law, rule, regulation, order, judgment, decree or other restriction of any
     court or governmental authority to which the Investor is subject (including
     federal and state securities laws) or by which any of its property or
     assets is bound or affected, except in the case of clauses (ii) and (iii)
     above, for such conflicts, defaults or violations that are not material and
     do not otherwise affect the ability of the Investor to consummate the
     transactions contemplated hereby.

          (h) No Legal, Tax or Investment Advice. The Investor understands that
     nothing in this Agreement or any other materials presented by or on behalf
     of the Company to the Investor in connection with the purchase of the
     Securities constitutes legal, tax or investment advice. The Investor has
     consulted such legal, tax and investment advisors as it, in its sole
     discretion, has deemed necessary or appropriate in connection with its
     purchase of the Securities.

          (i) Disclosure. The Investor confirms that, to the Investor's
     knowledge, none of the Company and its officers, directors and Affiliates
     has provided the Investor or its agents or counsel with any information
     that constitutes or might constitute material, nonpublic information with
     respect to the Company, other than the existence and terms of the issuance
     of Securities, as contemplated by this Agreement.

                                   ARTICLE IV
                         OTHER AGREEMENTS OF THE PARTIES

     4.1 Legend Requirements. Each Investor agrees to the imprinting, so long as
is required by this Section 4.1, of the following legend on any certificate
evidencing Securities:

                                       9

<PAGE>

          "THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
     EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
     UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
     AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
     SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
     SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
     TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
     ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY
     LAWS."

     Certificates evidencing Securities shall not be required to contain such
     legend (i) after a Transfer pursuant to a Registration Statement that is
     effective under the Securities Act covering the resale of such Securities,
     (ii) following any sale of such Securities pursuant to Rule 144, (iii) if
     such Securities are eligible for sale under Rule 144(k) or (iv) if such
     legend is not required under applicable requirements of the Securities Act
     (including controlling judicial interpretations and pronouncements issued
     by the Staff of the Commission). Following the Effective Date or at such
     earlier time as a legend is no longer required for the Securities, the
     Company will no later than five Business Days following the delivery by an
     Investor to the Company or the Transfer Agent of a legended certificate
     representing such Securities and an opinion of counsel to the extent
     required, deliver or cause to be delivered to such Investor a certificate
     representing such Securities that is free from such legend.

     4.2 Furnishing of Information. As long as any Investor owns Securities, the
Company covenants to use its commercially reasonable efforts to timely file (or
obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. The Company further covenants that it will use its
commercially reasonable efforts to take such further action as any holder of
Securities may reasonably request to satisfy the provisions of this Section 4.2.

     4.3 Securities Laws Disclosure; Publicity. Following the Closing, the
Company shall issue a press release disclosing all material terms of the
transactions contemplated hereby and shall, thereafter, timely file a Current
Report on Form 8-K with the Commission describing the terms of the transactions
contemplated by this Agreement in the form required by the Exchange Act and
shall file this Agreement as an exhibit to its annual report on Form 10-K for
the fiscal year ended December 31, 2005 (the "2005 10-K"). The Company and the
Investors shall consult with each other in issuing any press releases or
otherwise making public statements or filings and other communications with the
Commission or any regulatory agency or Trading Market with respect to the
transactions contemplated hereby, and neither party shall issue any such press
release or otherwise make any such public statement, filing or other
communication without the prior consent of the other, except if such disclosure
is required by law, in which case the disclosing party shall promptly provide
the other party with prior notice of such public statement, filing or other
communication. Notwithstanding the foregoing, the Company shall not publicly

                                       10

<PAGE>

disclose the name of any Investor, or include the name of any Investor in any
press release without the prior written consent of such Investor.

     4.4 Use of Proceeds. The Company intends to use the net proceeds from the
sale of the Securities for working capital needs and general corporate purposes.

                                    ARTICLE V
                                   CONDITIONS

     5.1 Conditions Precedent to the Obligations of the Investors. The
obligation of the Investors to acquire Securities at the Closing is subject to
the satisfaction or waiver by the Investors, at or before the Closing, of each
of the following conditions:

          (a) Representations and Warranties. The representations and warranties
     of the Company contained herein shall be true and correct in all material
     respects as of the date when made and as of the Closing as though made on
     and as of such date; and

          (b) Performance. The Company shall have performed, satisfied and
     complied in all material respects with all covenants, agreements and
     conditions required by this Agreement to be performed, satisfied or
     complied with by it at or prior to the Closing.

     5.2 Conditions Precedent to the Obligations of the Company. The obligation
of the Company to sell the Securities at the Closing is subject to the
satisfaction or waiver by the Company, at or before the Closing, of each of the
following conditions:

          (a) Representations and Warranties. The representations and warranties
     of the Investors contained herein shall be true and correct in all material
     respects as of the date when made and as of the Closing Date as though made
     on and as of such date; and

          (b) Performance. The Investors shall have performed, satisfied and
     complied in all material respects with all covenants, agreements and
     conditions required by this Agreement to be performed, satisfied or
     complied with by the Investors at or prior to the Closing.

                                   ARTICLE VI
                               REGISTRATION RIGHTS

     6.1 Shelf Registration.

          (a) The Company shall prepare and file with the Commission a "Shelf"
     Registration Statement covering the resale of all Registrable Securities
     for an offering to be made on a continuous basis pursuant to Rule 415, as
     promptly as reasonably practicable after the filing of the 2005 10-K, but
     in no event later than May 15, 2006. The Registration Statement shall be on
     Form S-3, except if the Company is not then eligible to register for resale
     the Registrable Securities on Form S-3, in which case such registration
     shall be on another appropriate form in accordance with the Securities Act
     and the Exchange Act and as consented to by the Investors.

                                       11

<PAGE>

          (b) The Company shall use its reasonable best efforts to cause the
     Registration Statement to be declared effective by the Commission as
     promptly as possible after the filing thereof and shall use its reasonable
     best efforts to keep the Registration Statement continuously effective (the
     period for which the Company is required to use its reasonable best efforts
     to keep such Registration Statement effective, the "EFFECTIVENESS PERIOD")
     under the Securities Act until the earlier of (i) the date that all
     Registrable Securities covered by such Registration Statement have been
     sold or (ii) the date that all Registrable Securities may be sold publicly
     under Rule 144(k).

          (c) The Company shall notify the Investors in writing promptly (and in
     any event within three Business Days) after receiving notification from the
     Commission that the Registration Statement has been declared effective.

          (d) Notwithstanding anything in this Agreement to the contrary, at any
     time when the Registration Statement is effective, the Company may, by
     written notice to the Investors, suspend sales thereunder and/or require
     that the Investors immediately cease the sale of shares of Common Stock
     pursuant thereto if (x) the Company is engaged in a merger, acquisition or
     sale and the board of directors of the Company determines in good faith, by
     appropriate resolutions, that, as a result of such activity, (A) it would
     be detrimental to the Company (other than as relating solely to the price
     of the Common Stock) to maintain a Registration Statement at such time and
     (B) it is in the best interests of the Company to suspend such Registration
     Statement or (y) another event has occurred or is reasonably likely to
     occur that would require additional disclosure by the Company and that the
     Company has a bona fide business purpose for keeping confidential, and the
     nondisclosure of which would reasonably be expected to cause the
     Registration Statement to fail to comply with applicable disclosure
     requirements at such time. Upon receipt of such notice, the Investors shall
     immediately discontinue any sales of Registrable Securities pursuant to
     such registration until the Investors have received copies of a
     supplemented or amended Prospectus or until the Investors are advised in
     writing by the Company that the then-current Prospectus may be used and has
     received copies of any additional or supplemental filings that are
     incorporated or deemed incorporated by reference in such Prospectus. In no
     event, however, shall this right be exercised to suspend sales beyond the
     period during which (in the good faith determination of the Company's board
     of directors) the failure to require such suspension would be detrimental
     to the Company. The Company's rights under this Section 6.1(d) may be
     exercised for a period of no more than 30 days at a time and not more than
     three times in any twelve-month period. Immediately after the end of any
     suspension period under this Section 6.1(d), the Company shall take all
     necessary actions (including filing any required supplemental prospectus)
     to restore the effectiveness of the applicable Registration Statement and
     the ability of the Investors to publicly resell their Registrable
     Securities pursuant to such effective Registration Statement.

     6.2 Information from Investors. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Article VI with
respect to the Registrable Securities that each of the Investors shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of such securities, including
but not limited to, the Investor's name, the amount of Registrable Securities

                                       12

<PAGE>

held by such Investor and the amount of other debt and equity securities of the
Company held by such Investor. Each Investor agrees to provide such other
information as the Company may reasonably request in writing.

     6.3 Registration Procedures. In connection with the Company's registration
obligations hereunder, the Company shall:

          (a) Not less than three Business Days prior to the filing of a
     Registration Statement or any related Prospectus or any amendment or
     supplement thereto (including any document that would be incorporated or
     deemed to be incorporated therein by reference), furnish to the Investors
     copies of all such documents proposed to be filed, which documents (other
     than those incorporated or deemed to be incorporated by reference) will be
     subject to the review of the Investors.

          (b) (i) Subject to Section 6.1(d), prepare and file with the
     Commission such amendments, including post-effective amendments, to each
     Registration Statement and the Prospectus used in connection therewith as
     may be necessary to keep the Registration Statement continuously effective,
     as to the applicable Registrable Securities for the Effectiveness Period
     and prepare and file with the Commission during the Effectiveness Period
     any additional Registration Statements, only to the extent necessary to
     register for resale under the Securities Act all of the Registrable
     Securities; (ii) cause the related Prospectus to be amended or supplemented
     by any required Prospectus supplement, and as so supplemented or amended to
     be filed pursuant to Rule 424; (iii) respond as promptly as reasonably
     possible to any comments received from the Commission with respect to the
     Registration Statement or any amendment thereto and as promptly as
     reasonably possible provide the Investors with true and complete copies of
     all correspondence from and to the Commission relating to the Registration
     Statement; and (iv) comply in all material respects with the provisions of
     the Securities Act and the Exchange Act with respect to the disposition of
     all Registrable Securities covered by the Registration Statement during the
     applicable period in accordance with the intended methods of disposition by
     the Investor thereof set forth in the Registration Statement as so amended
     or in such Prospectus as so supplemented.

          (c) Notify the Investors as promptly as reasonably practicable, and no
     later than three Business Days thereafter, of any of the following events:
     (i) the Commission notifies the Company whether there will be a "review" of
     any Registration Statement; (ii) the Commission comments in writing on any
     Registration Statement (in which case the Company shall deliver to the
     Investors a copy of such comments and of all written responses thereto);
     (iii) the Registration Statement or any post-effective amendment is
     declared effective; (iv) the Commission or any other federal or state
     governmental authority requests any amendment or supplement to any
     Registration Statement or Prospectus or requests additional information
     related thereto; (v) the Commission issues any stop order suspending the
     effectiveness of any Registration Statement or initiates any Proceedings
     for that purpose; (vi) the Company receives notice of any suspension of the
     qualification or exemption from qualification of any Registrable Securities
     for sale in any jurisdiction, or the initiation or threat of any Proceeding
     for such purpose; or (vii) the financial statements included in any
     Registration Statement become ineligible for

                                       13

<PAGE>

     inclusion therein or any statement made in any Registration Statement or
     Prospectus or any document incorporated or deemed to be incorporated
     therein by reference is untrue in any material respect or any revision to a
     Registration Statement, Prospectus or other document is required so that it
     will not contain any untrue statement of a material fact or omit to state
     any material fact required to be stated therein or necessary to make the
     statements therein, in the light of the circumstances under which they were
     made, not misleading.

          (d) Use its reasonable best efforts to avoid the issuance of or, if
     issued, obtain the withdrawal of (i) any order suspending the effectiveness
     of any Registration Statement or (ii) any suspension of the qualification
     (or exemption from qualification) of any of the Registrable Securities for
     sale in any jurisdiction, as soon as possible.

          (e) Upon request, provide the Investors, without charge, at least one
     conformed copy of each Registration Statement and each amendment thereto,
     including financial statements and schedules, and all exhibits to the
     extent requested by such Person (including those previously furnished or
     incorporated by reference) promptly after the filing of such documents with
     the Commission.

          (f) Consent to the use of any Prospectus and each amendment or
     supplement thereto by the Investors in connection with the offering and
     sale of the Registrable Securities covered by such Prospectus and any
     amendment or supplement thereto to the extent permitted by federal and
     state securities laws and regulations.

          (g) Prior to any public offering of Registrable Securities, use its
     reasonable best efforts to register or qualify or cooperate with the
     Investor in connection with the registration or qualification (or exemption
     from such registration or qualification) of such Registrable Securities for
     offer and sale under the securities or Blue Sky laws of such jurisdictions
     within the United States as the Investor requests in writing, to keep each
     such registration or qualification (or exemption therefrom) effective for
     so long as required, but not to exceed the duration of the Effectiveness
     Period, and to do any and all other acts or things reasonably necessary or
     advisable to enable the disposition in such jurisdictions of the
     Registrable Securities covered by a Registration Statement; provided,
     however, that the Company shall not be obligated to file any general
     consent to service of process or to qualify as a foreign corporation or as
     a dealer in securities in any jurisdiction in which it is not so qualified
     or to subject itself to taxation in respect of doing business in any
     jurisdiction in which it is not otherwise so subject.

          (h) If requested by the Investors, as promptly as reasonably
     practicable incorporate in the Registration Statement such appropriate
     information as the Investors may reasonably request to have included
     therein by filing a Form 8-K, or filing a supplement to the Prospectus, to
     reflect any change in the information regarding the holder of the
     Registrable Securities or the Investor's plan of distribution, provided,
     that all filings made in connection with such requests shall be made at the
     requesting Investor's expense.

                                       14

<PAGE>

          (i) Cooperate with the Investors to facilitate the timely preparation
     and delivery of certificates representing Registrable Securities to be
     delivered to a transferee pursuant to the Registration Statement, which
     certificates shall be free, to the extent permitted by this Agreement and
     under law, of all restrictive legends, and to enable such Registrable
     Securities to be in such denominations and registered in such names as the
     Investors may reasonably request.

          (j) Upon the occurrence of any event described in Section 6.2(c)(vii),
     as promptly as reasonably possible, prepare a supplement or amendment,
     including a post-effective amendment, to the Registration Statement or a
     supplement to the related Prospectus or any document incorporated or deemed
     to be incorporated therein by reference, and file any other required
     document so that, as thereafter delivered, neither the Registration
     Statement nor such Prospectus will contain an untrue statement of a
     material fact or omit to state a material fact required to be stated
     therein or necessary to make the statements therein, in the light of the
     circumstances under which they were made, not misleading.

          (k) Cooperate with any reasonable due diligence investigation
     undertaken by the Investors in connection with the sale of Registrable
     Securities, including, without limitation, by making available documents
     and information.

          (l) Comply with all rules and regulations of the Commission applicable
     to the registration of the Securities.

     6.4 Registration Expenses. The Company shall pay all fees and expenses
incident to the performance of or compliance with Article VI of this Agreement
by the Company, including without limitation (a) all registration and filing
fees and expenses, including without limitation those related to filings with
the Commission, any Trading Market and in connection with applicable state
securities or Blue Sky laws, other than those fees and expenses which are
specific to an individual Investor, (b) printing expenses (including without
limitation expenses of printing certificates for Registrable Securities), (c)
messenger, telephone and delivery expenses, (d) fees and disbursements of
counsel for the Company, (e) fees and expenses of all other Persons retained by
the Company in connection with the consummation of the transactions contemplated
by this Agreement and (f) all listing fees to be paid by the Company to the
Trading Market.

     6.5 Indemnification.

          (a) Indemnification by the Company. The Company shall, notwithstanding
     any termination of this Agreement, indemnify and hold harmless each
     Investor, their officers, directors, partners, members, agents and
     employees, each Person who controls an Investor (within the meaning of
     Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
     officers, directors, partners, members, agents and employees of each such
     controlling Person, to the fullest extent permitted by applicable law, from
     and against any and all Losses arising out of or based on (i) any breach of
     any representation or warranty made by the Company in this Agreement or any
     other certificate, instrument or document delivered in connection with this
     Agreement, (ii) any breach of any

                                       15

<PAGE>

     covenant, agreement or obligation of the Company contained in this
     Agreement or any other certificate, instrument or document delivered in
     connection with this Agreement or (iii) any untrue or alleged untrue
     statement of a material fact contained in the Registration Statement, any
     Prospectus or related preliminary prospectus or in any amendment or
     supplement thereto or any omission or alleged omission of a material fact
     required to be stated therein or necessary to make the statements therein
     not misleading, except (x) to the extent, but only to the extent, that any
     such untrue statement, alleged untrue statement, omission or alleged
     omission was contained in or based upon information furnished in writing to
     the Company by or on behalf of the Investor for use therein, or to the
     extent that such information relates to the Investor or the Investor's
     proposed method of distribution of Registrable Securities, or (y) in the
     case of an occurrence of an event of the type specified in Section
     6.2(c)(v)-(vii), such Loss results from the use by the Investor of an
     outdated or defective Prospectus after the Company has notified the
     Investor in writing that the Prospectus is outdated or defective and prior
     to the receipt by the Investor of the Advice contemplated in Section 6.5.
     The indemnification obligations of the Company pursuant to Sections
     6.4(a)(i) and 6.4(a)(ii) shall terminate upon the first anniversary of the
     Closing Date. In addition, the Company shall not be liable to reimburse the
     Investor pursuant to Sections 6.4(a)(i) or 6.4(a)(ii) unless the aggregate
     amount of Losses incurred by the Investor with respect to all such breaches
     of representations, warranties, covenants, agreements or obligations by the
     Company exceeds $25,000 and, provided that, the Company's maximum aggregate
     indemnification obligations pursuant to Sections 6.4(a)(i) or 6.4(a)(ii)
     will be limited to the amount of the purchase price paid by the Investor
     for the Securities pursuant to Section 2.2(b).

          (b) Indemnification by Investors. Each Investor shall indemnify and
     hold harmless the Company, its directors, officers, agents and employees,
     each Person who controls the Company (within the meaning of Section 15 of
     the Securities Act and Section 20 of the Exchange Act), and the directors,
     officers, agents or employees of such controlling Persons, to the fullest
     extent permitted by applicable law, from and against all Losses arising out
     of or based on (i) any breach of any representation or warranty made by
     such Investor in this Agreement or any other certificate, instrument or
     document delivered in connection with this Agreement, (ii) any breach of
     any covenant, agreement or obligation of the Investor contained in this
     Agreement or any other certificate, instrument or document delivered in
     connection with this Agreement or (iii) any untrue or alleged untrue
     statement of a material fact contained in the Registration Statement, any
     Prospectus or related preliminary prospectus or in any amendment or
     supplement thereto or any omission or alleged omission of a material fact
     required to be stated therein or necessary to make the statements therein
     not misleading. In no event shall the liability of the Investor hereunder
     be greater in amount than the dollar amount of the proceeds received by the
     Investor upon the sale of the Registrable Securities giving rise to such
     indemnification obligation. The indemnification obligations of the
     Investors pursuant to Sections 6.4(b)(i) and 6.4(b)(ii) shall terminate
     upon the first anniversary of the Closing Date. In addition, the Investors
     shall not be liable to reimburse the Company pursuant to Sections 6.4(b)(i)
     or 6.4(b)(ii) unless the aggregate amount of Losses incurred by the Company
     with respect to all such breaches of representations, warranties,
     covenants, agreements or obligations by the Investor exceeds $25,000 and,
     provided that, the Investor's maximum aggregate indemnification obligations
     pursuant to Sections 6.4(b)(i)

                                       16

<PAGE>

     or 6.4(b)(ii) will be limited to the amount of the purchase price paid by
     the Investor for the Securities pursuant to Section 2.2(b).

          (c) Conduct of Indemnification Proceedings. If any Proceeding shall be
     brought or asserted against any Person entitled to indemnity hereunder (an
     "INDEMNIFIED PARTY"), such Indemnified Party shall promptly notify the
     Person from whom indemnity is sought (the "INDEMNIFYING PARTY") in writing,
     and the Indemnifying Party shall assume the defense thereof, including the
     employment of counsel reasonably satisfactory to the Indemnified Party and
     the payment of all fees and expenses incurred in connection with defense
     thereof; provided, that the failure of any Indemnified Party to give such
     notice shall not relieve the Indemnifying Party of its obligations or
     liabilities pursuant to this Agreement, except (and only) to the extent
     that it shall be finally determined by a court of competent jurisdiction
     (which determination is not subject to appeal or further review) that such
     failure shall have proximately and materially adversely prejudiced the
     Indemnifying Party.

          An Indemnified Party shall have the right to employ separate counsel
     in any such Proceeding and to participate in the defense thereof, but the
     fees and expenses of such counsel shall be at the expense of such
     Indemnified Party or Parties unless: (i) the Indemnifying Party has agreed
     in writing to pay such fees and expenses; or (ii) the Indemnifying Party
     shall have failed promptly to assume the defense of such Proceeding and to
     employ counsel reasonably satisfactory to such Indemnified Party in any
     such Proceeding; or (iii) the named parties to any such Proceeding
     (including any impleaded parties) include both such Indemnified Party and
     the Indemnifying Party, and such Indemnified Party shall have been advised
     by counsel that a conflict of interest is likely to exist if the same
     counsel were to represent such Indemnified Party and the Indemnifying Party
     (in which case, if such Indemnified Party notifies the Indemnifying Party
     in writing that it elects to employ separate counsel at the expense of the
     Indemnifying Party, the Indemnifying Party shall not have the right to
     assume the defense thereof and such counsel shall be at the expense of the
     Indemnifying Party). It is understood, however, that the Indemnifying Party
     shall not, in connection with any one such Proceeding be liable for the
     fees and expenses of more than one separate firm of attorneys at any time
     for all Indemnified Parties, which firm shall be appointed by a majority of
     the Indemnified Parties; provided, however, that in the case a single firm
     of attorneys would be inappropriate due to actual or potential differing
     interests or conflicts between such Indemnified Parties and any other party
     represented by such counsel in such Proceeding or otherwise, then the
     Indemnifying Party shall be liable for the fees and expenses of one
     additional firm of attorneys with respect to such Indemnified Parties. The
     Indemnifying Party shall not be liable for any settlement of any such
     Proceeding effected without its written consent, which consent shall not be
     unreasonably withheld. No Indemnifying Party shall, without the prior
     written consent of the Indemnified Party, effect any settlement of any
     pending Proceeding in respect of which any Indemnified Party is a party,
     unless such settlement includes an unconditional release of such
     Indemnified Party from all liability for claims that are the subject matter
     of such Proceeding.

                                       17

<PAGE>

          (d) Contribution. If a claim for indemnification under Section 6.4(a)
     or 6.4(b) is unavailable to an Indemnified Party or is otherwise
     insufficient to hold harmless an Indemnified Party (by reason of public
     policy or otherwise), then each Indemnifying Party, in lieu of indemnifying
     the Indemnified Party, shall contribute to the amount paid or payable by
     such Indemnified Party as a result of such Losses, in such proportion as is
     appropriate to reflect the relative fault of the Indemnifying Party and
     Indemnified Party in connection with the actions, statements or omissions
     that resulted in such Losses as well as any other relevant equitable
     considerations. The relative fault of such Indemnifying Party and
     Indemnified Party shall be determined by reference to, among other things,
     whether any action in question, including any untrue or alleged untrue
     statement of a material fact or omission or alleged omission of a material
     fact, has been taken or made by, or relates to information supplied by,
     such Indemnifying Party or Indemnified Party, and the parties' relative
     intent, knowledge, access to information and opportunity to correct or
     prevent such action, statement or omission. The amount paid or payable by a
     party as a result of any Losses shall be deemed to include, subject to the
     limitations set forth in Section 6.4(c), any reasonable attorneys' or other
     reasonable fees or expenses incurred by such party in connection with any
     Proceeding to the extent such party would have been indemnified for such
     fees or expenses if the indemnification provided for in this Section was
     available to such party in accordance with its terms.

          The parties hereto agree that it would not be just and equitable if
     contribution pursuant to this Section 6.4(d) were determined by pro rata
     allocation or by any other method of allocation that does not take into
     account the equitable considerations referred to in the immediately
     preceding paragraph. Notwithstanding the provisions of this Section 6.4(d),
     the Investor shall not be required to contribute, in the aggregate, any
     amount in excess of the amount by which the proceeds actually received by
     the Investor from the sale of the Registrable Securities subject to the
     Proceeding exceeds the amount of any damages that the Investor has
     otherwise been required to pay by reason of such untrue or alleged untrue
     statement or omission or alleged omission. No Person guilty of fraudulent
     misrepresentation (within the meaning of Section 11(f) of the Securities
     Act) shall be entitled to contribution from any Person who was not guilty
     of such fraudulent misrepresentation.

          The indemnity and contribution agreements contained in this Section
     are in addition to any liability that an Indemnifying Party may have to an
     Indemnified Party.

     6.6 Dispositions. Each Investor agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration
Statement. Each Investor further agrees that, upon receipt of a notice from the
Company of the occurrence of any event of the kind described in Sections
6.2(c)(v)-(vii), the Investor will discontinue disposition of such Registrable
Securities under the Registration Statement until the Investor's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 6.2(k), or until it is advised in writing (the "ADVICE")
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration

                                       18

<PAGE>

Statement. The Company may provide appropriate stop orders to enforce the
provisions of this paragraph.

                                   ARTICLE VII
                                  MISCELLANEOUS

     7.1 Termination. This Agreement may be terminated by the Company or the
Investor, by written notice to the other party, if the Closing has not been
consummated by April 1, 2006; provided that no such termination will affect the
right of any party to sue for any breach by the other party.

     7.2 Fees and Expenses. Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.

     7.3 Entire Agreement. This Agreement, together with the Schedules hereto,
contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral or
written, with respect to such matters, which the parties acknowledge have been
merged into such documents, exhibits and schedules. At or after the Closing, and
without further consideration, the Company will execute and deliver to the
Investors such further documents as may be reasonably requested in order to give
practical effect to the intention of the parties under this Agreement.

     7.4 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified on the Investor's signature page prior to 6:30 p.m. (Houston time) on
a Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified on the Investor's signature page on a day that is not a Trading Day or
later than 6:30 p.m. (Houston time) on any Trading Day, (c) the Trading Day
following the date of deposit with a nationally recognized overnight courier
service and (d) the date of actual receipt by the party to whom such notice is
required to be given. The addresses and facsimile numbers for such notices and
communications are those set forth on the signature pages hereof, or such other
address or facsimile number as may be designated in writing hereafter, in the
same manner, by any such Person.

     7.5 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and the Investors or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right. Notwithstanding the foregoing,
a waiver or consent to depart from the provisions hereof with respect to a
matter that relates exclusively to rights

                                       19

<PAGE>

under Article VI may be given by holders of least a majority of the Registrable
Securities to which such waiver or consent relates.

     7.6 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

     7.7 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investors. Each Investor may assign its
rights under this Agreement to any Person to whom the Investor assigns or
transfers any Securities, provided such transferee agrees in writing to be
bound, with respect to the transferred Securities, by the provisions hereof that
apply to the "Investors."

     7.8 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except that each Indemnified Party is an intended third
party beneficiary of Section 6.4 and (in each case) may enforce the provisions
of such Sections directly against the parties with obligations thereunder.

     7.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

     7.10 Survival. The representations, warranties, agreements and covenants
contained herein shall survive the Closing, provided that the representations
and warranties contained herein shall terminate on the first anniversary of the
Closing Date.

     7.11 Execution. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that the parties need not sign
the same counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original thereof.

     7.12 Severability. If any provision of this Agreement is held to be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

     7.13 Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) this
Agreement, whenever an Investor exercises a right, election, demand or option
owed to the Investor by the Company under this Agreement and the Company does
not timely perform its related obligations within the

                                       20

<PAGE>

periods therein provided, then, prior to the performance by the Company of the
Company's related obligation, the Investor may rescind or withdraw, in its sole
discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future
actions and rights.

     7.14 Replacement of Securities. If any certificate or instrument evidencing
any Securities is mutilated, lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and the execution by the holder
thereof of a customary lost certificate affidavit of that fact and an agreement
to indemnify and hold harmless the Company for any losses in connection
therewith. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with
the issuance of such replacement Securities.

     7.15 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Investors and the Company will be entitled to seek specific performance under
this Agreement. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
described in the foregoing sentence and hereby agree to waive in any action for
specific performance of any such obligation (other than in connection with any
action for temporary restraining order) the defense that a remedy at law would
be adequate.

     7.16 Adjustments in Share Numbers and Prices. In the event of any stock
split, subdivision, dividend or distribution payable in shares of Common Stock
(or other securities or rights convertible into, or entitling the holder thereof
to receive directly or indirectly shares of Common Stock), combination or other
similar recapitalization or event occurring after the date hereof, each
reference in this Agreement or any other certificate, instrument or document
delivered in connection with this Agreement to a number of shares or a price per
share shall be amended to appropriately account for such event.

                            [SIGNATURE PAGES FOLLOW]

                                       21

<PAGE>

                                 SIGNATURE PAGE

                       Attached to and made a part of the
                            STOCK PURCHASE AGREEMENT
                            dated as of March 8, 2006

     IN WITNESS WHEREOF, the parties have caused this Stock Purchase Agreement
to be duly executed as of the date written above.

                                        THE COMPANY:

                                        BLUE DOLPHIN ENERGY COMPANY

                                        By:
                                            ------------------------------------
                                        Name: Michael J. Jacobson
                                        Title: President

Address for Notice:

   801 Travis, Suite 2100
   Houston, Texas 77002
   Facsimile: (713) 227-7626
   Telephone: (713) 227-7660

                                       22

<PAGE>

                                 SIGNATURE PAGE

                       Attached to and made a part of the
                            STOCK PURCHASE AGREEMENT
                            dated as of March 8, 2006

     IN WITNESS WHEREOF, the parties have caused this Stock Purchase Agreement
to be duly executed as of the date written above.

                                        INVESTOR:

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        Number of Shares Purchased:
                                                                    ------------

Address for Notice:

   ----------------------------------

   ----------------------------------
   Facsimile:
              -----------------------
   Telephone:
              -----------------------
   E-Mail:
           --------------------------

                                       23

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