SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
June 27, 1996
DELTA PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 0-16203 84-1060803
(State of Commission (I.R.S. Employer
Incorporation) File No. (Identification No.)
Suite 3310
555 17th Street
Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 293-9133
ITEM 5. OTHER EVENTS
A. On May 2, 1996, the Company amended its August 10, 1995
agreement with Corporate Relations Group ("CRG") which was attached as
Exhibit 99.1 to the Company's Form 8-K dated August 18, 1995. The
Amendment is incorporated herein as Exhibit 99.1. The May 2, 1996
Amendment extended the duration of the August 10, 1995 agreement from
twelve months to sixty months and revised the compensation and extent of
the public relations services provided for in the original agreement.
The Amendment also replaced all unexpired CRG options except for those
exercisable at $6.60 per share which expire August 10, 1996, with
options to purchase 200,000 shares of common stock at $5.75 per share
until May 2, 1997.
B. On May 17, 1996 the Company sold 80 shares of restricted
Series C Convertible Preferred stock to C.A. Opportunidad, S.A. of San
Jose, Costa Rica for $800,000 in a private transaction pursuant to the
rules and regulations of the SEC regarding offshore transactions with
non- U.S. persons. A copy of the agreement relating to this transaction
is attached as Exhibit 99.2. On June 6, 1996, the Company sold 80
shares of restricted Series C Convertible Preferred stock to Fondo de
Adquisciones E Inversiones Internacionales XL S.A. also of San Jose,
Costa Rica for $800,000 in a private transaction pursuant to the rules
and regulations of the SEC regarding offshore transactions to non-U.S.
persons. A copy of the agreement relating to this transaction is
attached as Exhibit 99.3. The Company paid an investment banking fee
equal to 10% on each of the above transactions to the Bruce R. Knox
Corporation. A large portion of the proceeds from these sales is
expected to be used to fund the Company's activities on its Moneta Hills
Prospect in the Wind River Basin in Wyoming (see Form 8-K dated April 5,
1996) and for other general corporate purposes. Each share of Series C
Convertible Preferred stock is convertible into a number of shares of
the Company's common stock ranging from 2,223 shares to 3,334 shares
depending upon the market price of the Company's common stock prior to
conversion. Series C Convertible Preferred stock has no provision for
coupon interest and its holders have no voting rights. A copy of the
"Statement of Designation and Determination of Preferences of Series C
Convertible Preferred stock of Delta Petroleum Corporation" is attached
hereto as Exhibit 4.1. No Series C Convertible Preferred shares have
yet been converted into the Company's common stock.
C. On May 29, 1996, the Company entered into employment
agreements with its Chairman, Aleron H. Larson, Jr. and its President,
Roger A. Parker. Copies of these agreements are attached as Exhibits
99.4 and 99.5, respectively.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
4.1 Statement of Designation and Determination of Preferences
of Series C Convertible Preferred stock of Delta Petroleum
Corporation.
99.1 Amendment to Corporate Relations Group, Inc. and Delta
Petroleum Corporation, Public Relations/Marketing Contract
dated August 10, 1995.
99.2 Investment Representation Agreement Regarding Offshore
Subscriptions for C.A. Opportunidad.
99.3 Investment Representation Agreement Regarding Offshore
Subscriptions for Fondo de Adquisciones E Inversiones
Internacionales XL S.A.
99.4 Employment agreement with Aleron H. Larson, Jr.,
Chairman.
99.5 Employment agreement with Roger A. Parker, President.
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
DELTA PETROLEUM CORPORATION
(Registrant)
Date: June 27, 1996 By: s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr.
Chairman/C.E.O.
INDEX TO EXHIBITS
(1) Underwriting Agreement. Not applicable.
(2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or
Succession. Not applicable.
(3) (i) Articles of Incorporation. Not applicable.
(ii) Bylaws. Not applicable.
(4) Instruments Defining the Rights of Security Holders, including
Indentures. Not applicable.
4.1 Statement of Designation and Determination of Preferences of
Series C Convertible Preferred stock of Delta Petroleum
Corporation.
(5) Opinion: re: Legality. Not applicable.
(6) Opinion: Discount on Capital Shares. Not applicable.
(7) Opinion: re: Liquidation Preference. Not Applicable.
(8) Opinion: re: Tax Matters. Not Applicable.
(9) Voting Trust Agreement. Not Applicable.
(10) Material Contracts. Not Applicable.
(11) Statement re: Computation of Per Share Earnings.
Not Applicable.
(12) Statement re: Computation of Ratios. Not Applicable.
(13) Annual Report to Security Holders, etc. Not Applicable.
(14) Material Foreign Patents. Not Applicable.
(15) Letter re: Unaudited Interim Financial Information.
Not Applicable.
(16) Letter re: Change in Certifying Accountant.
Not applicable.
(17) Letter re: Director Resignation. Not applicable.
(18) Letter re: Change in Accounting Principles. Not Applicable.
(19) Report Furnished to Security Holders. Not Applicable.
(20) Other Documents or Statements to Security Holders.
Not applicable.
(21) Subsidiaries of the Registrant. Not Applicable.
(22) Published Report Regarding Matters Submitted to Vote of Security
Holders. Not Applicable.
(23) Consents of Experts and Counsel. Not applicable.
(24) Power of Attorney. Not applicable.
(25) Statement of Eligibility of Trustee. Not Applicable.
(26) Invitations for Competitive Bids. Not Applicable.
(27) Financial Data Schedule. Not Applicable.
(99) Additional Exhibits.
99.1 Amendment to Corporate Relations Group, Inc. and Delta
Petroleum Corporation, Public Relations/Marketing Contract dated
August 10, 1995.
99.2 Investment Representation Agreement Regarding Offshore
Subscriptions for C.A. Opportunidad.
99.3 Investment Representation Agreement Regarding Offshore
Subscriptions for Fondo de Adquisciones E Inversiones
Internacionales XL S.A.
99.4 Employment agreement with Aleron H. Larson, Jr., Chairman.
99.5 Employment agreement with Roger A. Parker, President.
STATEMENT OF DESIGNATION
AND DETERMINATION OF PREFERENCES
OF
SERIES C CONVERTIBLE
PREFERRED STOCK
OF DELTA PETROLEUM CORPORATION
TO THE SECRETARY OF STATE OF THE STATE OF COLORADO:
Pursuant to the provisions of the Colorado Corporation Code,
the undersigned Aleron H. Larson, Jr. and Roger A. Parker Secretary
and President, respectively, of Delta Petroleum Corporation, (the
"Corporation") a Colorado corporation, submit the following
Statement of Designation and Determination of Preferences of Series
C Convertible Preferred Stock.
FIRST: The name of the Corporation is Delta Petroleum
Corporation, a Colorado corporation.
SECOND: At a meeting of the board of directors of the
corporation held on April 29, 1996, and at which a quorum was duly
present and acting throughout, the following resolution was
unanimously adopted:
WHEREAS the Articles of Incorporation of the corporation
authorize a class of preferred shares of stock consisting of
3,000,000 shares having a par value of $.10 per share, issuable
from time to time in one of more series; and
WHEREAS the board of directors of the corporation is
authorized, subject to limitation prescribed by law and by the
provision of Article FOURTH of the corporation's Articles of
Incorporation, to establish and fix the number of shares to be
included in any series of preferred and the designation, rights,
preferences and limitation of the shares to be included in any
series of preferred stock and the designation, rights, preferences
and limitation of the shares of such series; and
WHEREAS it is the desire of this board of directors to issue,
establish and fix a series of preferred stock and the designation,
rights, preferences and limitation of the shares of such series.
NOW THEREFORE BE IT RESOLVED that pursuant to Article FOURTH
of the corporation's Articles of Incorporation there is hereby
established a series of 1,000 shares of preferred stock of the
corporation, to have the designation, rights, preferences and
limitation set forth in such Article FOURTH as modified in the
paragraphs below:
(1) Designation. The 1,000 shares of such series shall be
designated "Series C Convertible Preferred Stock." Such series
shall hereinafter be referred to as the "Series C Preferred Stock."
(2) Voting Rights. The holders of the shares of Series C
Preferred Stock shall have no voting rights.
(3) Conversion Rights. (a) For a period of six months from
the date of issuance, each of the shares of Series C Preferred
Stock shall be convertible at any time and from time to time at the
option of the respective holders thereof into fully paid and non-
assessable shares of the Corporation's common stock (the "Common
Stock") upon and subject to the terms and conditions set forth in
the following subparagraphs of this paragraph, and of any
investment representation agreement or similar document directly
related to such issuance.
(b) Each share of Series C Preferred Stock shall be
convertible into the number of shares of Common Stock determined by
a fraction the numerator of which is $10,000 and the denominator of
which is the lesser of $4.50 or 65% of the five day average closing
price of the corporation's shares as reported by NASDAQ (or if not
then listed on NASDAQ then by such exchange or market where traded)
for the five trading days prior to conversion; provided that the
conversion price represented in the denominator may never be lower
than $3.00 per share. In the event that 65% of the five day
average closing price is less than $3.00 per share then $3.00 shall
be used as the denominator. The number of shares of Common Stock
issuable at any time upon conversion of one share of Series C
Preferred Stock is hereinafter referred to as the "Conversion
Rate".
(c) (i) In any of the following events, occurring
hereafter, appropriate and equitable adjustment shall be made in
the Conversion Rate, so as to maintain the proportionate interest
of each holder of the Series C Preferred Stock: (A) any
declaration of a dividend on the Common Stock, payable in Common
Stock or securities convertible into Common Stock; (B) any decrease
in the number of outstanding shares of the Common Stock by a
combination, consolidation or reclassification of shares; (C) any
increase in the number of outstanding shares of the Common Stock by
a split-up or reclassification of shares; or (D) any distribution
by the corporation to any of the holders of the Common Stock, qua
shareholders, of any corporate property (excluding cash dividends
payable out of funds legally available therefor).
(ii) If there shall be effected any consolidation or
merger of the corporation with another corporation (other than a
consolidation of merger in which the corporation is the continuing
corporation) or the sale of all or substantially all of the
corporation's assets to another corporation, then, as a condition
of such consolidation, merger or sale, lawful and fair provision
shall be made whereby the holder of any share or shares of Series
C Preferred Stock shall thereafter have the right to purchase and
receive upon the basis and upon the terms and conditions specified
in this paragraph (3) and in lieu of the shares of Common Stock of
the corporation immediately theretofore purchasable and receivable
upon the conversion of such share or shares of Series C Preferred
Stock, such shares of stock, securities or assets as may be issued
or payable with respect to or in exchange for a number of
outstanding shares of Common Stock equal to the number of shares of
Common Stock immediately theretofore purchasable and receivable
upon such conversion had such consolidation, merger or sale not
taken place; and in any such case appropriate provision shall be
made with respect to the rights and interests of the holders of
shares of Series C Preferred Stock to the end that the provisions
hereof (including without limitation, provisions for adjustments of
the Conversion Rate) shall thereafter be applicable, as nearly as
may be, in relation to any share of stock, securities or assets
thereafter deliverable upon the conversion of such share or shares
of Series C Preferred Stock. The corporation shall not effect any
such consolidation, merger or sale unless prior to the consummation
thereof the successor corporation (if other than the corporation)
resulting from such consolidation or merger, or the corporation
purchasing such assets, shall assume by written instrument executed
and delivered to the corporation the obligation to deliver the
holders of shares of Series C Preferred Stock such shares of stock,
securities or assets as, in accordance with the foregoing
provision, such holder may be then entitled to purchase.
(iii) No adjustment in the Conversion Rate shall be
made if, at the same time as the corporation issues shares of
Common Stock as a dividend which, as provided in (i) above, would
otherwise call for an adjustment in the conversion Rate, the
corporation shall issue shares of Common Stock as a dividend or
distribution on the outstanding shares of Series C Preferred stock
equal to the dividend or distribution of the shares of Common Stock
into which the Series C Preferred Stock is then convertible.
(iv) Except as otherwise specifically provided in
(i) above, no adjustment in the Conversion Rate shall be made by
reason of the issuance of shares of Common Stock or any security
convertible into shares of Common Stock in exchange for cash,
property of services.
(v) Notwithstanding any other provision of this
subparagraph (c) of paragraph (3), the corporation shall not be
required, except as hereinafter provided, to make any adjustment of
the Conversion Rate in any case in which the amount by which such
Conversion Rate would be increased would be less than five one
hundredths (5/100) of a share of Common Stock, but in such case any
adjustment that would otherwise be required then to be made shall
be carried forward and made at the time and together with the next
subsequent adjustment which, together with any and all such
adjustments so carried forward, shall amount to one one-twentieth
of a share of Common Stock; in the event of any subdivision or
combination of shares of common stick such amount of one-twentieth
(as theretofore decreased or increased) shall be proportionately
decreased or increased.
(vi) No fraction of a share of Common Stock shall be
issued upon conversion, but in lieu thereof the corporation shall,
notwithstanding any other provision of this paragraph (3), pay for
such fraction an appropriate amount in cash.
(vii) Whenever the Conversion Rate is adjusted, the
corporation shall deliver prompt written notices to each holder of
the Series C Preferred Stock, containing a statement signed by two
officers of the corporation, stating the adjusted Conversion Rate
and sufficient facts to show the reason for and the manner of
computing the adjustments.
(viii) Neither the purchase or other acquisition by
the corporation of any shares of Common stock nor the sale or other
disposition of any shares of Common Stock at any time theretofore
purchased or otherwise acquired by it shall result in any
adjustment of the Conversion Rate or be taken into account in
computing any subsequent adjustment of the Conversion Rate.
(d) Each share of Series C Preferred Stock shall be
automatically converted into shares of corporations Common Stock as
provided above upon the earlier of:
(i) The effectiveness of a registration statement
(or similar document as require by the applicable jurisdiction)
related to the shares of Common Stock underlying the conversion
right; or
(ii) Six months from the date issued; or
(iii) June 1, 1997.
(e) The corporation shall at all times reserve and keep
available out of its authorized by unissued shares of Common Stock,
for the purpose of effecting the conversion of shares of Series C
Preferred Stock, the full number of whole shares of Common Stock
then deliverable upon the conversion of all shares of Series C
Preferred Stock at the time outstanding.
(f) The Series C Preferred Stock shall be convertible at
the office of the Corporation upon surrender of the certificate or
certificates therefore, duly endorsed for transfer. Such
conversion shall be deemed to have been made as of the date of such
surrender of certificates representing shares of Series C Preferred
Stock for conversion and the person entitled to receive the common
Stock issuable on such conversion shall be treated for all purposes
as having become the record holder of such Common Stock on such
date. The corporation shall make no payment or adjustment on
account of any dividends accrued on the shares of Series C
Preferred Stock surrendered for conversion, except that all
dividends accrued and unpaid on such shares up to the dividend
payment date immediately preceding such surrender for conversion
shall constitute a debt of the corporation payable without interest
to the converting stockholder, and no dividend shall be declared or
paid in respect to shares of Common Stock until such debt shall be
fully paid or sufficient funds set apart for the payment thereof.
(4) No dividends shall be declared or paid on the
corporation's Common Stock prior to the conversion of all shares of
Series C Preferred Stock.
(5) In the event of a liquidation or dissolution (or similar
event) of the corporation prior to conversion of the Series C
Preferred Stock, the Series C Preferred Stock shall be treated as
if it has been converted to Common Stock for all purposes related
to such liquidation, dissolution or similar event.
(6) The Series C Preferred Stock Shall have no other
preferences over Common Stock except those specifically set forth
above.
IN WITNESS WHEREOF the undersigned corporation has caused this
Statement to be prepared, executed and verified by its duly
authorized president and secretary.
Dated: April 29, 1996
Delta Petroleum Corporation
By: s/Roger A. Parker
President
By: s/Aleron H. Larson, Jr.
Secretary
State of Colorado )
) ss.
City and County of Denver )
I, Sheryl K. Shelton, a notary public, do
hereby certify that on this 8th day of May, 1996,
personally appeared before me, Roger A. Parker, who, being by me
first duly sworn, declared that he is President of Delta Petroleum
Corporation, that he signed the foregoing documents as President of
the corporation and that the statements contained therein are true.
In witness whereof I have hereunto set by hand and seal this
8th day of May, 1996.
My commission expires: 5/18/97
s/Sheryl K. Shelton
State of Colorado )
) ss.
City and County of Denver )
I, Sheryl K. Shelton, a notary public, do
hereby certify that on this 8th day of May, 1996,
personally appeared before me, Aleron H. Larson, Jr., who, being by
me first duly sworn, declared that he is Secretary of Delta
Petroleum Corporation, that he signed the foregoing documents as
Secretary of the corporation and that the statements contained
therein are true.
In witness whereof I have hereunto set by hand and seal this
8th day of May, 1996.
My commission expires: 5/18/97
s/Sheryl K. Shelton
AMENDMENT TO CORPORATE RELATIONS GROUPS, INC. and
DELTA PETROLEUM CORPORATION, PUBLIC
RELATIONS/MARKETING CONTRACT dated August 10, 1995.
As per paragraph 8, of the Lead Generation/Corporation
Relations Agreement dated August 10, 1995, this letter will serve
as an Amendment to this Contract after it has been properly
executed as required in paragraph 8.
1. Parties hereby Agree to modify Exhibit "A", line 1, from
twelve (12) months to sixty (60) months.
2. Exhibit "A", item I, sub-section A, is hereby modified
from twelve (12) months to sixty (60) months.
3. Exhibit "A", item I, subparagraph A, is hereby amended to
read: 550,000 of a 18 page, four column magazine will be created of
which a minimum of four (4) page in each issue will be dedicated
for advertorial to the client, with an additional 450,000 to be
mailed.
4. Exhibit "A", paragraph 1 subparagraph B, will be amended
to read twenty thousand (20,000) instead of five thousand (5,000).
5. Exhibit "B" paragraph A, will be amended to read SEVEN
HUNDRED AND FIVE THOUSAND AND 00/100 ($705,000.00) DOLLARS.
$300,000.000 has been paid by issurance of 54,546 shares of Delta
Petroleum Corporation common stock and balance of which is to be
paid in 2 equal installments of $202,500.00.
6. Exhibit "B" will be amended as follows by the addition to
the following language:
G. CRG will be guaranteed an additional 200,000 options at $5.75
for 12 months from the date of the signing of this amendment which
will replace all options granted except for the options issued at
$6.60.
This letter of Agreement modifying the Agreement dated August
10, 1995 are the only changes and modifications agreed to by all
parties.
IN WITNESS WHEREOF, this Agreement is executed as of May 2,
1996.
CORPORATE RELATIONS GROUP, INC. DELTA PETROLEUM CORPORATION
BY: s/Robert E. Veitia s/Aleron H. Larson, Jr.
Roberto E. Veitia Aleron H. Larson, Jr.
President CEO/Chairman
INVESTMENT REPRESENTATION AGREEMENT
REGARDING OFFSHORE SUBSCRIPTIONS
Delta Petroleum Corporation
555 17th Street, Suite 3310
Denver, Colorado 80202
Gentlemen:
1. Subscription. The undersigned C.A. Oportunidad S.A. of
Aparado 1474; San Jose 1000, San Jose, Costa Rica, hereby agrees to
acquire from Delta Petroleum Corporation ("Seller", "Delta" or
"Company") 80 shares of restricted and legended Series C
Convertible Preferred stock of Delta Petroleum Corporation
(collectively the "Securities"), for $800,000 in a private
negotiated transaction pursuant to the U.S. Securities and Exchange
Commission Regulation S and/or other applicable statute, rule
and\or regulation. The delivery of the certificate representing
the Securities and the payment therefore in certified funds shall
take place on or before May 17, 1996 ("Closing Date"). Each share
of Series C Convertible Preferred Stock shall be convertible into
common stock as provided in the copy of the "Statement of
Designation and Determination of Preferences of Series C
Convertible Preferred Stock of Delta Petroleum Corporation"
attached hereto as Exhibit A.
2. Representations and Warranties. The undersigned warrants
and represents to Seller and to the Company that:
a. Offshore Transaction.
(i) Undersigned is not a U.S. person as that term
is defined under Regulation S as promulgated by the Securities and
Exchange Commission ("SEC") under authority of the Securities Act
of 1993, as amended ("Act").
(ii) At the time the buy order was originated,
undersigned was outside the United States.
(iii) Undersigned is purchasing for its own account
and not on behalf of any U.S. Person, and the sale has not been
pre-arranged with a buyer in the United States.
(iv) Each distributor participating in the offering
of the Securities, if any, has agreed in writing that all offers
and sales of the Securities prior to the expiration of a period
commencing on the Closing Date of the transaction and ending the
later of 40 days thereafter or as set forth in the legend at
Paragraph 3 herein shall be made in compliance with the Issuer Safe
Harbor, pursuant to registration of Securities under the Act or
pursuant to an exemption from such registration requirements.
(v) The undersigned represents and warrants and
hereby agrees that all offers and sales of the Securities of the
Company acquired hereby prior to the expiration of a period
commencing on the Closing Date of the transaction and ending the
later of 40 days thereafter or as set forth in the legend at
Paragraph 3 herein shall be made in compliance with the Issuer Safe
Harbor, pursuant to registration of Securities under the Act or
pursuant to an exemption from registration.
(iv) All offering documents received by the
undersigned include statements to the effect that the Securities
have not been registered under the Act and may not be offered or
sold in the United States or to U.S. persons during a period
commencing on the Closing Date of the transaction and ending the
later of 40 days thereafter or as set forth in the legend at
Paragraph 3 herein unless the Securities are registered under the
Act or an exemption from the registration requirements is
available.
b. The undersigned will not take, or cause to be taken,
any action that would cause it to be deemed an underwriter of the
Securities, as defined in Section 2(11) of the Act. The Purchaser
is acquiring the Shares for its own account, for investment
purposes only and without the intent toward the further resale or
distribution thereof.
c. The undersigned has been afforded and has utilized
an opportunity to examine such documents and obtain such
information concerning the Company as it may have requested,
including without limitation all publicly available information,
and has had the opportunity to request such other information (and
all information so requested has been provided) for the purpose of
verifying the information furnished to it and for the purpose of
answering any questions it may have had concerning the business
affairs of the Company and it has reviewed to the extent desired by
it, the Articles, Bylaws and Minutes of the Company, documentation
concerning the Company's financial condition, assets, liabilities,
share ownership and capital structure, operations, sales,
management, relationship with Amber Resources Company and Delta
Petroleum Corporation; all documents, comment letters and responses
thereto relating to the Company's pending S-3 Registration
Statement; the existing but thinly traded public market; public
filings; litigation; leases and lease-related obligations (and the
geology and related properties of such leases), and other material
contracts and matters and all documents filed with the SEC to date.
d. The undersigned (and its officers, directors and/or
agents, as applicable) have had an opportunity to personally ask
questions of, and receive answers from, one or more of the officers
and directors of the Company and/or the attorneys for the Company
to ascertain and verify the accuracy and completeness of all
material information regarding the Company, its business and its
officers, directors, and promoters. The undersigned has had an
opportunity to ask questions of and receive answers from duly
designated representatives of the Company concerning the terms and
conditions pursuant to which the Securities are being acquired by
it.
e. The undersigned understands that its acquisition of
the Securities from the Company is a negotiated private
transaction.
f. By reason of its knowledge and experience (and that
of its officers and directors and/or advisors and investment
bankers) in financial and business matters in general, and
investments in particular, the undersigned is capable of evaluating
the merits and risks of an investment in the Securities.
g. The undersigned is capable of bearing the economic
risks of an investment in the Securities. The undersigned's
present financial condition is such that it is under no present or
contemplated future need to dispose of any portion of the
Securities to satisfy any existing or contemplated undertaking,
need or indebtedness. The undersigned is an accredited investor
within the meaning of Rule 501 promulgated under the Act.
h. If required to do so, the undersigned has retained
to advise it, as to the merits and risks of a prospective
investment in the Securities, a purchaser representative, legal
counsel, financial and accounting advisors, investment bankers,
etc.
i. The undersigned understands that no federal or state
agency of either the U.S. or Costa Rica or any other jurisdiction
has passed on or made any recommendation or endorsement of the
Securities.
j. The undersigned hereby represents and warrants to
Seller and to the Company that all of the representations,
warranties and acknowledgements contained in this agreement, and
the agreements to which this document is attached as an exhibit are
true, accurate and complete as of the date herein and acknowledges
that the Company, its officers, directors, agents, and affiliates
have relied on its representations and warranties herein in
consenting to the restricted issuance and/or transfer of the
Securities and the undersigned hereby agrees to indemnify and hold
the Seller and the Company (together with its officers, directors,
agents and affiliates) harmless with respect to any and all
expenses, claims or litigation (including without limitation
reasonable attorney's fees related thereto) arising from or related
to breach of any warranty or representation herein.
3. Restrictions. The undersigned acknowledges and
understands that the Securities are unregistered and must be held
indefinitely unless they are subsequently registered under the Act
or an exemption from such registration is available.
There is a limited trading market in Securities of the Company
as of this date on the small cap NASDAQ Stock Market and there is
no assurance such trading market will develop further or, if
developed, will continue or be substantial or liquid if it
continues.
Any and all certificates representing the Securities and any
and all Securities issued in replacement or conversion thereof or
in exchange thereof shall bear either the transfer agent's usual
restrictive legend for restricted shares or the following legend,
or one substantially similar thereto, which the undersigned has
read and understands:
The shares represented by this certificate
("Shares") have been issued pursuant to
Regulation S promulgated under the Securities
Act of 1933, as amended ("Act") and certain
contractual agreements. These shares may be
sold without restriction and freely
transferred to foreign nationals or companies
by the registrar of the Company's shares.
However, no United States national or company
can buy or transfer any of the shares prior to
(a date will be inserted here which is 41 days
subsequent to the payment for and delivery of
the shares) in the absence of an effective
registration statement pursuant to the Act and
other applicable Securities laws of the United
States, or exemption therefrom.
The undersigned further agrees that the Company shall have the
right to issue transfer instructions to its transfer agent, if any,
or to note a transfer instruction in its stockholder records, as
per the legend above, and it acknowledges that the Company has
informed it of its intention to issue such instructions when and if
necessary.
4. Company's Representations.
a. Reporting Company Status. The Company is a
reporting company as defined by Rule 902 of Regulation S. The
Company is in full compliance with all reporting obligations under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as
amended.
b. Offshore Transaction.
(i) The Company has not offered these Securities to
any person in the United States or to any U.S. person as that term
is defined in Regulation S.
(ii) At the time the buy order was originated, the
Company and/or its agent reasonably believed undersigned was
outside of the United States and was not a U.S. person.
(iii) The Company and/or its agent reasonably believe
that the transaction has not been pre-arranged with a buyer in the
United States.
5. Exemption: Reliance on Representations.
Undersigned understands that the Securities are not being
registered under the Act. The Company is relying on the rules
governing offers and sales made outside the United States pursuant
to Regulation S. Rules 901 through 904 of Regulation S apply to
this transaction.
6. Conditions to the Seller's Obligation to Sell the Shares.
The obligations of the Seller under this Agreement are subject, in
the discretion of the Company, to the satisfaction at or prior to
the Closing Date of the following conditions.
(a) The Company's receipt of the Purchase Price for the
Shares, as described in paragraph 1 of this agreement.
(b) The representations and warranties made by the
Purchaser in this agreement were true when made and shall be true
as at the Closing Date with the same force and effect as if such
representations and warranties were made at and as of the Closing
Date.
(c) All of the terms, covenants and conditions of this
Agreement to be complied with and performed by Purchaser on or
prior to the Closing Date shall have been fully complied with and
performed.
(d) Purchaser shall have provided the Company with a
certified copy of resolutions of the Board of Directors of the
Purchaser authorizing the purchase of the Shares and the
transactions contemplated herein.
7. Conditions to the Purchaser's Obligation to Buy the
Shares. The obligations of the Purchaser under this Agreement are
subject in the discretion of the Purchaser, to the satisfaction at
or prior to the Closing Date of the following conditions:
(a) Delivery of the Shares to the Purchaser together
with a certified copy of resolutions of the Board of Directors of
the Seller, authorizing the sale of the Shares and the transactions
contemplated herein.
(b) The representations and warranties made by the
Company in this Agreement were true when made and shall be true as
at the Closing Date with the same force and effect as if such
representations and warranties were made at and as of the Closing
Date.
(c) All of the terms, covenants and conditions of this
Agreement to be complied with and performed by the Company on or
prior to the Closing Date shall have been fully complied with and
performed.
(d) The Company's legal counsel shall have supplied the
Company's transfer agent with instructions, based upon an opinion
of purchaser's legal counsel, that the legend set forth on the
certificates evidencing the Shares can be removed upon the
effectuation of the sale of the Shares contemplated herein to
Purchaser in accordance with Regulation S and all stop transfer
order notations with respect to the Shares have been removed from
the transfer agent's books and records with respect thereto.
8. Conversion. The Series C Convertible Preferred Stock
purchased hereunder may be converted in accordance with the terms
contained in the Statement of Designation and Determination of
Preferences of Series C Convertible Preferred Stock of Delta
Petroleum Corporation attached hereto as Exhibit A provided that,
without the Company's consent; no more than 27 shares may be
converted until after forty five (45) days of Closing Date; no more
than 27 shares may be converted until after sixty (60) days of
Closing Date; and balance may not be converted until after seventy
five (75) days of Closing Date.
9. Notices. Any notices or other communications required or
permitted hereby shall be sufficiently given if sent by registered
or certified mail, postage prepaid, return receipt requested, and,
if to the Company, at the address to which this agreement is
addressed, and if to the undersigned, at the address set forth
below its signature hereto, or to such other addresses as either
you or the undersigned shall designate to the other by notice in
writing.
10. Investment Banking Fee. The undersigned acknowledges
that seller will pay an investment banking fee equal to 10% or the
proceeds from the sale of the Securities to the Bruce R. Knox
Corporation.
11. Successors and Assigns. This agreement shall be binding
upon and shall inure to the benefit of the parties hereto and to
the successors and assigns of the Seller and to the personal and
legal representatives, heirs, guardians, successors and permitted
assignees of the undersigned.
12. Applicable Law. This agreement shall be governed by and
construed in accordance with the laws of the State of Colorado and,
to the extent it involves any United States statute, in accordance
with the laws of the United States, and jurisdiction and venue for
any dispute related hereto shall be in the District Court for the
City and County of Denver, Colorado.
13. Counterparts. This agreement may be executed in any
number of counterparts, including facsimile signatures which shall
be deemed as original signatures. All executed counterparts shall
constitute one Agreement, notwithstanding that all signatories are
not signatories to the original or the same counterparts.
C.A. OPORTUNIDAD S.A.
By: s/Adriana Gomez Tristan
Typed or Printed Name Signature
Adriana Gomez Tristan, Presidente
Apartado 1474
Address
San Jose 1000
San Jose, Costa Rica
City, State and Zip Code
SELLER:
DELTA PETROLEUM CORPORATION
By: s/Aleron H. Larson, Jr.
Authorized Officer
Dated: 5/17/96 , 1996
STATEMENT OF DESIGNATION
AND DETERMINATION OF PREFERENCES
OF
SERIES C CONVERTIBLE
PREFERRED STOCK
OF DELTA PETROLEUM CORPORATION
TO THE SECRETARY OF STATE OF THE STATE OF COLORADO:
Pursuant to the provisions of the Colorado Corporation Code,
the undersigned Aleron H. Larson, Jr. and Roger A. Parker Secretary
and President, respectively, of Delta Petroleum Corporation, (the
"Corporation") a Colorado corporation, submit the following
Statement of Designation and Determination of Preferences of Series
C Convertible Preferred Stock.
FIRST: The name of the Corporation is Delta Petroleum
Corporation, a Colorado corporation.
SECOND: At a meeting of the board of directors of the
corporation held on April 29, 1996, and at which a quorum was duly
present and acting throughout, the following resolution was
unanimously adopted:
WHEREAS the Articles of Incorporation of the corporation
authorize a class of preferred shares of stock consisting of
3,000,000 shares having a par value of $.10 per share, issuable
from time to time in one of more series; and
WHEREAS the board of directors of the corporation is
authorized, subject to limitation prescribed by law and by the
provision of Article FOURTH of the corporation's Articles of
Incorporation, to establish and fix the number of shares to be
included in any series of preferred and the designation, rights,
preferences and limitation of the shares to be included in any
series of preferred stock and the designation, rights, preferences
and limitation of the shares of such series; and
WHEREAS it is the desire of this board of directors to issue,
establish and fix a series of preferred stock and the designation,
rights, preferences and limitation of the shares of such series.
NOW THEREFORE BE IT RESOLVED that pursuant to Article FOURTH
of the corporation's Articles of Incorporation there is hereby
established a series of 1,000 shares of preferred stock of the
corporation, to have the designation, rights, preferences and
limitation set forth in such Article FOURTH as modified in the
paragraphs below:
(1) Designation. The 1,000 shares of such series shall be
designated "Series C Convertible Preferred Stock." Such series
shall hereinafter be referred to as the "Series C Preferred Stock."
(2) Voting Rights. The holders of the shares of Series C
Preferred Stock shall have no voting rights.
(3) Conversion Rights. (a) For a period of six months from
the date of issuance, each of the shares of Series C Preferred
Stock shall be convertible at any time and from time to time at the
option of the respective holders thereof into fully paid and non-
assessable shares of the Corporation's common stock (the "Common
Stock") upon and subject to the terms and conditions set forth in
the following subparagraphs of this paragraph, and of any
investment representation agreement or similar document directly
related to such issuance.
(b) Each share of Series C Preferred Stock shall be
convertible into the number of shares of Common Stock determined by
a fraction the numerator of which is $10,000 and the denominator of
which is the lesser of $4.50 or 65% of the five day average closing
price of the corporation's shares as reported by NASDAQ (or if not
then listed on NASDAQ then by such exchange or market where traded)
for the five trading days prior to conversion; provided that the
conversion price represented in the denominator may never be lower
than $3.00 per share. In the event that 65% of the five day
average closing price is less than $3.00 per share then $3.00 shall
be used as the denominator. The number of shares of Common Stock
issuable at any time upon conversion of one share of Series C
Preferred Stock is hereinafter referred to as the "Conversion
Rate".
(c) (i) In any of the following events, occurring
hereafter, appropriate and equitable adjustment shall be made in
the Conversion Rate, so as to maintain the proportionate interest
of each holder of the Series C Preferred Stock: (A) any
declaration of a dividend on the Common Stock, payable in Common
Stock or securities convertible into Common Stock; (B) any decrease
in the number of outstanding shares of the Common Stock by a
combination, consolidation or reclassification of shares; (C) any
increase in the number of outstanding shares of the Common Stock by
a split-up or reclassification of shares; or (D) any distribution
by the corporation to any of the holders of the Common Stock, qua
shareholders, of any corporate property (excluding cash dividends
payable out of funds legally available therefor).
(ii) If there shall be effected any consolidation or
merger of the corporation with another corporation (other than a
consolidation of merger in which the corporation is the continuing
corporation) or the sale of all or substantially all of the
corporation's assets to another corporation, then, as a condition
of such consolidation, merger or sale, lawful and fair provision
shall be made whereby the holder of any share or shares of Series
C Preferred Stock shall thereafter have the right to purchase and
receive upon the basis and upon the terms and conditions specified
in this paragraph (3) and in lieu of the shares of Common Stock of
the corporation immediately theretofore purchasable and receivable
upon the conversion of such share or shares of Series C Preferred
Stock, such shares of stock, securities or assets as may be issued
or payable with respect to or in exchange for a number of
outstanding shares of Common Stock equal to the number of shares of
Common Stock immediately theretofore purchasable and receivable
upon such conversion had such consolidation, merger or sale not
taken place; and in any such case appropriate provision shall be
made with respect to the rights and interests of the holders of
shares of Series C Preferred Stock to the end that the provisions
hereof (including without limitation, provisions for adjustments of
the Conversion Rate) shall thereafter be applicable, as nearly as
may be, in relation to any share of stock, securities or assets
thereafter deliverable upon the conversion of such share or shares
of Series C Preferred Stock. The corporation shall not effect any
such consolidation, merger or sale unless prior to the consummation
thereof the successor corporation (if other than the corporation)
resulting from such consolidation or merger, or the corporation
purchasing such assets, shall assume by written instrument executed
and delivered to the corporation the obligation to deliver the
holders of shares of Series C Preferred Stock such shares of stock,
securities or assets as, in accordance with the foregoing
provision, such holder may be then entitled to purchase.
(iii) No adjustment in the Conversion Rate shall be
made if, at the same time as the corporation issues shares of
Common Stock as a dividend which, as provided in (i) above, would
otherwise call for an adjustment in the conversion Rate, the
corporation shall issue shares of Common Stock as a dividend or
distribution on the outstanding shares of Series C Preferred stock
equal to the dividend or distribution of the shares of Common Stock
into which the Series C Preferred Stock is then convertible.
(iv) Except as otherwise specifically provided in
(i) above, no adjustment in the Conversion Rate shall be made by
reason of the issuance of shares of Common Stock or any security
convertible into shares of Common Stock in exchange for cash,
property of services.
(v) Notwithstanding any other provision of this
subparagraph (c) of paragraph (3), the corporation shall not be
required, except as hereinafter provided, to make any adjustment of
the Conversion Rate in any case in which the amount by which such
Conversion Rate would be increased would be less than five one
hundredths (5/100) of a share of Common Stock, but in such case any
adjustment that would otherwise be required then to be made shall
be carried forward and made at the time and together with the next
subsequent adjustment which, together with any and all such
adjustments so carried forward, shall amount to one one-twentieth
of a share of Common Stock; in the event of any subdivision or
combination of shares of common stick such amount of one-twentieth
(as theretofore decreased or increased) shall be proportionately
decreased or increased. (vi) No fraction of a share of Common Stock
shall be issued upon conversion, but in lieu thereof the corporation shall,
notwithstanding any other provision of this paragraph (3), pay for
such fraction an appropriate amount in cash.
(vii) Whenever the Conversion Rate is adjusted, the
corporation shall deliver prompt written notices to each holder of
the Series C Preferred Stock, containing a statement signed by two
officers of the corporation, stating the adjusted Conversion Rate
and sufficient facts to show the reason for and the manner of
computing the adjustments.
(viii) Neither the purchase or other acquisition by
the corporation of any shares of Common stock nor the sale or other
disposition of any shares of Common Stock at any time theretofore
purchased or otherwise acquired by it shall result in any
adjustment of the Conversion Rate or be taken into account in
computing any subsequent adjustment of the Conversion Rate.
(d) Each share of Series C Preferred Stock shall be
automatically converted into shares of corporations Common Stock as
provided above upon the earlier of:
(i) The effectiveness of a registration statement
(or similar document as require by the applicable jurisdiction)
related to the shares of Common Stock underlying the conversion
right; or
(ii) Six months from the date issued; or
(iii) June 1, 1997.
(e) The corporation shall at all times reserve and keep
available out of its authorized by unissued shares of Common Stock,
for the purpose of effecting the conversion of shares of Series C
Preferred Stock, the full number of whole shares of Common Stock
then deliverable upon the conversion of all shares of Series C
Preferred Stock at the time outstanding.
(f) The Series C Preferred Stock shall be convertible at
the office of the Corporation upon surrender of the certificate or
certificates therefore, duly endorsed for transfer. Such
conversion shall be deemed to have been made as of the date of such
surrender of certificates representing shares of Series C Preferred
Stock for conversion and the person entitled to receive the common
Stock issuable on such conversion shall be treated for all purposes
as having become the record holder of such Common Stock on such
date. The corporation shall make no payment or adjustment on
account of any dividends accrued on the shares of Series C
Preferred Stock surrendered for conversion, except that all
dividends accrued and unpaid on such shares up to the dividend
payment date immediately preceding such surrender for conversion
shall constitute a debt of the corporation payable without interest
to the converting stockholder, and no dividend shall be declared or
paid in respect to shares of Common Stock until such debt shall be
fully paid or sufficient funds set apart for the payment thereof.
(4) No dividends shall be declared or paid on the
corporation's Common Stock prior to the conversion of all shares of
Series C Preferred Stock.
(5) In the event of a liquidation or dissolution (or similar
event) of the corporation prior to conversion of the Series C
Preferred Stock, the Series C Preferred Stock shall be treated as
if it has been converted to Common Stock for all purposes related
to such liquidation, dissolution or similar event.
(6) The Series C Preferred Stock Shall have no other
preferences over Common Stock except those specifically set forth
above.
IN WITNESS WHEREOF the undersigned corporation has caused this
Statement to be prepared, executed and verified by its duly
authorized president and secretary.
Dated: April 29, 1996
Delta Petroleum Corporation
By: s/Roger A. Parker
President
By: s/Aleron H. Larson, Jr.
Secretary
State of Colorado )
) ss.
City and County of Denver )
I, Sheryl K. Shelton, a notary public, do
hereby certify that on this 8th day of May, 1996,
personally appeared before me, Roger A. Parker, who, being by me
first duly sworn, declared that he is President of Delta Petroleum
Corporation, that he signed the foregoing documents as President of
the corporation and that the statements contained therein are true.
In witness whereof I have hereunto set by hand and seal this
8th day of May, 1996.
My commission expires: 5/18/97
s/Sheryl K. Shelton
State of Colorado )
) ss.
City and County of Denver )
I, Sheryl K. Shelton, a notary public, do
hereby certify that on this 8th day of May, 1996, personally
appeared before me, Aleron H. Larson, Jr., who, being by me first
duly sworn, declared that he is Secretary of Delta Petroleum
Corporation, that he signed the foregoing documents as Secretary of
the corporation and that the statements contained therein are true.
In witness whereof I have hereunto set by hand and seal this
8th day of May, 1996.
My commission expires: 5/18/97
s/Sheryl K. Shelton
INVESTMENT REPRESENTATION AGREEMENT
REGARDING OFFSHORE SUBSCRIPTIONS
Delta Petroleum Corporation
555 17th Street, Suite 3310
Denver, Colorado 80202
Gentlemen:
1. Subscription. The undersigned Fondo de Adquisciones E
Inversiones Internacionales XL S. A. 1474-1000; San Jose, San Jose,
Costa Rica, hereby agrees to acquire from Delta Petroleum
Corporation ("Seller", "Delta" or "Company") 80 shares of
restricted and legended Series C Convertible Preferred stock of
Delta Petroleum Corporation (collectively the "Securities"), for
$800,000 in a private negotiated transaction pursuant to the U.S.
Securities and Exchange Commission Regulation S and/or other
applicable statute, rule and\or regulation. The delivery of the
certificate representing the Securities and the payment therefore
in certified funds shall take place on or before May 17, 1996
("Closing Date"). Each share of Series C Convertible Preferred
Stock shall be convertible into common stock as provided in the
copy of the "Statement of Designation and Determination of
Preferences of Series C Convertible Preferred Stock of Delta
Petroleum Corporation" attached hereto as Exhibit A.
2. Representations and Warranties. The undersigned warrants
and represents to Seller and to the Company that:
a. Offshore Transaction.
(i) Undersigned is not a U.S. person as that term
is defined under Regulation S as promulgated by the Securities and
Exchange Commission ("SEC") under authority of the Securities Act
of 1993, as amended ("Act").
(ii) At the time the buy order was originated,
undersigned was outside the United States.
(iii) Undersigned is purchasing for its own account
and not on behalf of any U.S. Person, and the sale has not been
pre-arranged with a buyer in the United States.
(iv) Each distributor participating in the offering
of the Securities, if any, has agreed in writing that all offers
and sales of the Securities prior to the expiration of a period
commencing on the Closing Date of the transaction and ending the
later of 40 days thereafter or as set forth in the legend at
Paragraph 3 herein shall be made in compliance with the Issuer Safe
Harbor, pursuant to registration of Securities under the Act or
pursuant to an exemption from such registration requirements.
(v) The undersigned represents and warrants and
hereby agrees that all offers and sales of the Securities of the
Company acquired hereby prior to the expiration of a period
commencing on the Closing Date of the transaction and ending the
later of 40 days thereafter or as set forth in the legend at
Paragraph 3 herein shall be made in compliance with the Issuer Safe
Harbor, pursuant to registration of Securities under the Act or
pursuant to an exemption from registration.
(iv) All offering documents received by the
undersigned include statements to the effect that the Securities
have not been registered under the Act and may not be offered or
sold in the United States or to U.S. persons during a period
commencing on the Closing Date of the transaction and ending the
later of 40 days thereafter or as set forth in the legend at
Paragraph 3 herein unless the Securities are registered under the
Act or an exemption from the registration requirements is
available.
b. The undersigned will not take, or cause to be taken,
any action that would cause it to be deemed an underwriter of the
Securities, as defined in Section 2(11) of the Act. The Purchaser
is acquiring the Shares for its own account, for investment
purposes only and without the intent toward the further resale or
distribution thereof.
c. The undersigned has been afforded and has utilized
an opportunity to examine such documents and obtain such
information concerning the Company as it may have requested,
including without limitation all publicly available information,
and has had the opportunity to request such other information (and
all information so requested has been provided) for the purpose of
verifying the information furnished to it and for the purpose of
answering any questions it may have had concerning the business
affairs of the Company and it has reviewed to the extent desired by
it, the Articles, Bylaws and Minutes of the Company, documentation
concerning the Company's financial condition, assets, liabilities,
share ownership and capital structure, operations, sales,
management, relationship with Amber Resources Company and Delta
Petroleum Corporation; all documents, comment letters and responses
thereto relating to the Company's pending S-3 Registration
Statement; the existing but thinly traded public market; public
filings; litigation; leases and lease-related obligations (and the
geology and related properties of such leases), and other material
contracts and matters and all documents filed with the SEC to date.
d. The undersigned (and its officers, directors and/or
agents, as applicable) have had an opportunity to personally ask
questions of, and receive answers from, one or more of the officers
and directors of the Company and/or the attorneys for the Company
to ascertain and verify the accuracy and completeness of all
material information regarding the Company, its business and its
officers, directors, and promoters. The undersigned has had an
opportunity to ask questions of and receive answers from duly
designated representatives of the Company concerning the terms and
conditions pursuant to which the Securities are being acquired by
it.
e. The undersigned understands that its acquisition of
the Securities from the Company is a negotiated private
transaction.
f. By reason of its knowledge and experience (and that
of its officers and directors and/or advisors and investment
bankers) in financial and business matters in general, and
investments in particular, the undersigned is capable of evaluating
the merits and risks of an investment in the Securities.
g. The undersigned is capable of bearing the economic
risks of an investment in the Securities. The undersigned's
present financial condition is such that it is under no present or
contemplated future need to dispose of any portion of the
Securities to satisfy any existing or contemplated undertaking,
need or indebtedness. The undersigned is an accredited investor
within the meaning of Rule 501 promulgated under the Act.
h. If required to do so, the undersigned has retained
to advise it, as to the merits and risks of a prospective
investment in the Securities, a purchaser representative, legal
counsel, financial and accounting advisors, investment bankers,
etc.
i. The undersigned understands that no federal or state
agency of either the U.S. or Costa Rica or any other jurisdiction
has passed on or made any recommendation or endorsement of the
Securities.
j. The undersigned hereby represents and warrants to
Seller and to the Company that all of the representations,
warranties and acknowledgements contained in this agreement, and
the agreements to which this document is attached as an exhibit are
true, accurate and complete as of the date herein and acknowledges
that the Company, its officers, directors, agents, and affiliates
have relied on its representations and warranties herein in
consenting to the restricted issuance and/or transfer of the
Securities and the undersigned hereby agrees to indemnify and hold
the Seller and the Company (together with its officers, directors,
agents and affiliates) harmless with respect to any and all
expenses, claims or litigation (including without limitation
reasonable attorney's fees related thereto) arising from or related
to breach of any warranty or representation herein.
3. Restrictions. The undersigned acknowledges and
understands that the Securities are unregistered and must be held
indefinitely unless they are subsequently registered under the Act
or an exemption from such registration is available.
There is a limited trading market in Securities of the Company
as of this date on the small cap NASDAQ Stock Market and there is
no assurance such trading market will develop further or, if
developed, will continue or be substantial or liquid if it
continues.
Any and all certificates representing the Securities and any
and all Securities issued in replacement or conversion thereof or
in exchange thereof shall bear either the transfer agent's usual
restrictive legend for restricted shares or the following legend,
or one substantially similar thereto, which the undersigned has
read and understands:
The shares represented by this certificate
("Shares") have been issued pursuant to
Regulation S promulgated under the Securities
Act of 1933, as amended ("Act") and certain
contractual agreements. These shares may be
sold without restriction and freely
transferred to foreign nationals or companies
by the registrar of the Company's shares.
However, no United States national or company
can buy or transfer any of the shares prior to
(a date will be inserted here which is 41 days
subsequent to the payment for and delivery of
the shares) in the absence of an effective
registration statement pursuant to the Act and
other applicable Securities laws of the United
States, or exemption therefrom.
The undersigned further agrees that the Company shall have the
right to issue transfer instructions to its transfer agent, if any,
or to note a transfer instruction in its stockholder records, as
per the legend above, and it acknowledges that the Company has
informed it of its intention to issue such instructions when and if
necessary.
4. Company's Representations.
a. Reporting Company Status. The Company is a
reporting company as defined by Rule 902 of Regulation S. The
Company is in full compliance with all reporting obligations under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as
amended.
b. Offshore Transaction.
(i) The Company has not offered these Securities to
any person in the United States or to any U.S. person as that term
is defined in Regulation S.
(ii) At the time the buy order was originated, the
Company and/or its agent reasonably believed undersigned was
outside of the United States and was not a U.S. person.
(iii) The Company and/or its agent reasonably believe
that the transaction has not been pre-arranged with a buyer in the
United States.
5. Exemption: Reliance on Representations.
Undersigned understands that the Securities are not being
registered under the Act. The Company is relying on the rules
governing offers and sales made outside the United States pursuant
to Regulation S. Rules 901 through 904 of Regulation S apply to
this transaction.
6. Conditions to the Seller's Obligation to Sell the Shares.
The obligations of the Seller under this Agreement are subject, in
the discretion of the Company, to the satisfaction at or prior to
the Closing Date of the following conditions.
(a) The Company's receipt of the Purchase Price for the
Shares, as described in paragraph 1 of this agreement.
(b) The representations and warranties made by the
Purchaser in this agreement were true when made and shall be true
as at the Closing Date with the same force and effect as if such
representations and warranties were made at and as of the Closing
Date.
(c) All of the terms, covenants and conditions of this
Agreement to be complied with and performed by Purchaser on or
prior to the Closing Date shall have been fully complied with and
performed.
(d) Purchaser shall have provided the Company with a
certified copy of resolutions of the Board of Directors of the
Purchaser authorizing the purchase of the Shares and the
transactions contemplated herein.
7. Conditions to the Purchaser's Obligation to Buy the
Shares. The obligations of the Purchaser under this Agreement are
subject in the discretion of the Purchaser, to the satisfaction at
or prior to the Closing Date of the following conditions:
(a) Delivery of the Shares to the Purchaser together
with a certified copy of resolutions of the Board of Directors of
the Seller, authorizing the sale of the Shares and the transactions
contemplated herein.
(b) The representations and warranties made by the
Company in this Agreement were true when made and shall be true as
at the Closing Date with the same force and effect as if such
representations and warranties were made at and as of the Closing
Date.
(c) All of the terms, covenants and conditions of this
Agreement to be complied with and performed by the Company on or
prior to the Closing Date shall have been fully complied with and
performed.
(d) The Company's legal counsel shall have supplied the
Company's transfer agent with instructions, based upon an opinion
of purchaser's legal counsel, that the legend set forth on the
certificates evidencing the Shares can be removed upon the
effectuation of the sale of the Shares contemplated herein to
Purchaser in accordance with Regulation S and all stop transfer
order notations with respect to the Shares have been removed from
the transfer agent's books and records with respect thereto.
8. Conversion. The Series C Convertible Preferred Stock
purchased hereunder may be converted in accordance with the terms
contained in the Statement of Designation and Determination of
Preferences of Series C Convertible Preferred Stock of Delta
Petroleum Corporation attached hereto as Exhibit A provided that,
without the Company's consent; no more than 27 shares may be
converted until after forty five (45) days of Closing Date; no more
than 27 shares may be converted until after sixty (60) days of
Closing Date; and balance may not be converted until after seventy
five (75) days of Closing Date.
9. Notices. Any notices or other communications required or
permitted hereby shall be sufficiently given if sent by registered
or certified mail, postage prepaid, return receipt requested, and,
if to the Company, at the address to which this agreement is
addressed, and if to the undersigned, at the address set forth
below its signature hereto, or to such other addresses as either
you or the undersigned shall designate to the other by notice in
writing.
10. Investment Banking Fee. The undersigned acknowledges
that seller will pay an investment banking fee equal to 10% or the
proceeds from the sale of the Securities to the Bruce R. Knox
Corporation.
11. Successors and Assigns. This agreement shall be binding
upon and shall inure to the benefit of the parties hereto and to
the successors and assigns of the Seller and to the personal and
legal representatives, heirs, guardians, successors and permitted
assignees of the undersigned.
12. Applicable Law. This agreement shall be governed by and
construed in accordance with the laws of the State of Colorado and,
to the extent it involves any United States statute, in accordance
with the laws of the United States, and jurisdiction and venue for
any dispute related hereto shall be in the District Court for the
City and County of Denver, Colorado.
13. Counterparts. This agreement may be executed in any
number of counterparts, including facsimile signatures which shall
be deemed as original signatures. All executed counterparts shall
constitute one Agreement, notwithstanding that all signatories are
not signatories to the original or the same counterparts.
FONDO DE ADQUISCIONES
E INVERSIONES
INTERNACIONALES XL S. A.
By: s/Jose Antonio Gomez
Typed or Printed Name Signature
Jose Antonio Gomez, Presidente
Apartado 1474-1000
Address
San Jose
San Jose, Costa Rica
City, State and Zip Code
SELLER:
DELTA PETROLEUM CORPORATION
By: s/Aleron H. Larson, Jr.
Authorized Officer
Dated: 5/30 , 1996
STATEMENT OF DESIGNATION
AND DETERMINATION OF PREFERENCES
OF
SERIES C CONVERTIBLE
PREFERRED STOCK
OF DELTA PETROLEUM CORPORATION
TO THE SECRETARY OF STATE OF THE STATE OF COLORADO:
Pursuant to the provisions of the Colorado Corporation Code,
the undersigned Aleron H. Larson, Jr. and Roger A. Parker Secretary
and President, respectively, of Delta Petroleum Corporation, (the
"Corporation") a Colorado corporation, submit the following
Statement of Designation and Determination of Preferences of Series
C Convertible Preferred Stock.
FIRST: The name of the Corporation is Delta Petroleum
Corporation, a Colorado corporation.
SECOND: At a meeting of the board of directors of the
corporation held on April 29, 1996, and at which a quorum was duly
present and acting throughout, the following resolution was
unanimously adopted:
WHEREAS the Articles of Incorporation of the corporation
authorize a class of preferred shares of stock consisting of
3,000,000 shares having a par value of $.10 per share, issuable
from time to time in one of more series; and
WHEREAS the board of directors of the corporation is
authorized, subject to limitation prescribed by law and by the
provision of Article FOURTH of the corporation's Articles of
Incorporation, to establish and fix the number of shares to be
included in any series of preferred and the designation, rights,
preferences and limitation of the shares to be included in any
series of preferred stock and the designation, rights, preferences
and limitation of the shares of such series; and
WHEREAS it is the desire of this board of directors to issue,
establish and fix a series of preferred stock and the designation,
rights, preferences and limitation of the shares of such series.
NOW THEREFORE BE IT RESOLVED that pursuant to Article FOURTH
of the corporation's Articles of Incorporation there is hereby
established a series of 1,000 shares of preferred stock of the
corporation, to have the designation, rights, preferences and
limitation set forth in such Article FOURTH as modified in the
paragraphs below:
(1) Designation. The 1,000 shares of such series shall be
designated "Series C Convertible Preferred Stock." Such series
shall hereinafter be referred to as the "Series C Preferred Stock."
(2) Voting Rights. The holders of the shares of Series C
Preferred Stock shall have no voting rights.
(3) Conversion Rights. (a) For a period of six months from
the date of issuance, each of the shares of Series C Preferred
Stock shall be convertible at any time and from time to time at the
option of the respective holders thereof into fully paid and non-
assessable shares of the Corporation's common stock (the "Common
Stock") upon and subject to the terms and conditions set forth in
the following subparagraphs of this paragraph, and of any
investment representation agreement or similar document directly
related to such issuance.
(b) Each share of Series C Preferred Stock shall be
convertible into the number of shares of Common Stock determined by
a fraction the numerator of which is $10,000 and the denominator of
which is the lesser of $4.50 or 65% of the five day average closing
price of the corporation's shares as reported by NASDAQ (or if not
then listed on NASDAQ then by such exchange or market where traded)
for the five trading days prior to conversion; provided that the
conversion price represented in the denominator may never be lower
than $3.00 per share. In the event that 65% of the five day
average closing price is less than $3.00 per share then $3.00 shall
be used as the denominator. The number of shares of Common Stock
issuable at any time upon conversion of one share of Series C
Preferred Stock is hereinafter referred to as the "Conversion
Rate".
(c) (i) In any of the following events, occurring
hereafter, appropriate and equitable adjustment shall be made in
the Conversion Rate, so as to maintain the proportionate interest
of each holder of the Series C Preferred Stock: (A) any
declaration of a dividend on the Common Stock, payable in Common
Stock or securities convertible into Common Stock; (B) any decrease
in the number of outstanding shares of the Common Stock by a
combination, consolidation or reclassification of shares; (C) any
increase in the number of outstanding shares of the Common Stock by
a split-up or reclassification of shares; or (D) any distribution
by the corporation to any of the holders of the Common Stock, qua
shareholders, of any corporate property (excluding cash dividends
payable out of funds legally available therefor).
(ii) If there shall be effected any consolidation or
merger of the corporation with another corporation (other than a
consolidation of merger in which the corporation is the continuing
corporation) or the sale of all or substantially all of the
corporation's assets to another corporation, then, as a condition
of such consolidation, merger or sale, lawful and fair provision
shall be made whereby the holder of any share or shares of Series
C Preferred Stock shall thereafter have the right to purchase and
receive upon the basis and upon the terms and conditions specified
in this paragraph (3) and in lieu of the shares of Common Stock of
the corporation immediately theretofore purchasable and receivable
upon the conversion of such share or shares of Series C Preferred
Stock, such shares of stock, securities or assets as may be issued
or payable with respect to or in exchange for a number of
outstanding shares of Common Stock equal to the number of shares of
Common Stock immediately theretofore purchasable and receivable
upon such conversion had such consolidation, merger or sale not
taken place; and in any such case appropriate provision shall be
made with respect to the rights and interests of the holders of
shares of Series C Preferred Stock to the end that the provisions
hereof (including without limitation, provisions for adjustments of
the Conversion Rate) shall thereafter be applicable, as nearly as
may be, in relation to any share of stock, securities or assets
thereafter deliverable upon the conversion of such share or shares
of Series C Preferred Stock. The corporation shall not effect any
such consolidation, merger or sale unless prior to the consummation
thereof the successor corporation (if other than the corporation)
resulting from such consolidation or merger, or the corporation
purchasing such assets, shall assume by written instrument executed
and delivered to the corporation the obligation to deliver the
holders of shares of Series C Preferred Stock such shares of stock,
securities or assets as, in accordance with the foregoing
provision, such holder may be then entitled to purchase.
(iii) No adjustment in the Conversion Rate shall be
made if, at the same time as the corporation issues shares of
Common Stock as a dividend which, as provided in (i) above, would
otherwise call for an adjustment in the conversion Rate, the
corporation shall issue shares of Common Stock as a dividend or
distribution on the outstanding shares of Series C Preferred stock
equal to the dividend or distribution of the shares of Common Stock
into which the Series C Preferred Stock is then convertible.
(iv) Except as otherwise specifically provided in
(i) above, no adjustment in the Conversion Rate shall be made by
reason of the issuance of shares of Common Stock or any security
convertible into shares of Common Stock in exchange for cash,
property of services.
(v) Notwithstanding any other provision of this
subparagraph (c) of paragraph (3), the corporation shall not be
required, except as hereinafter provided, to make any adjustment of
the Conversion Rate in any case in which the amount by which such
Conversion Rate would be increased would be less than five one
hundredths (5/100) of a share of Common Stock, but in such case any
adjustment that would otherwise be required then to be made shall
be carried forward and made at the time and together with the next
subsequent adjustment which, together with any and all such
adjustments so carried forward, shall amount to one one-twentieth
of a share of Common Stock; in the event of any subdivision or
combination of shares of common stick such amount of one-twentieth
(as theretofore decreased or increased) shall be proportionately
decreased or increased.
(vi) No fraction of a share of Common Stock shall be
issued upon conversion, but in lieu thereof the corporation shall,
notwithstanding any other provision of this paragraph (3), pay for
such fraction an appropriate amount in cash.
(vii) Whenever the Conversion Rate is adjusted, the
corporation shall deliver prompt written notices to each holder of
the Series C Preferred Stock, containing a statement signed by two
officers of the corporation, stating the adjusted Conversion Rate
and sufficient facts to show the reason for and the manner of
computing the adjustments.
(viii) Neither the purchase or other acquisition by
the corporation of any shares of Common stock nor the sale or other
disposition of any shares of Common Stock at any time theretofore
purchased or otherwise acquired by it shall result in any
adjustment of the Conversion Rate or be taken into account in
computing any subsequent adjustment of the Conversion Rate.
(d) Each share of Series C Preferred Stock shall be
automatically converted into shares of corporations Common Stock as
provided above upon the earlier of:
(i) The effectiveness of a registration statement
(or similar document as require by the applicable jurisdiction)
related to the shares of Common Stock underlying the conversion
right; or
(ii) Six months from the date issued; or
(iii) June 1, 1997.
(e) The corporation shall at all times reserve and keep
available out of its authorized by unissued shares of Common Stock,
for the purpose of effecting the conversion of shares of Series C
Preferred Stock, the full number of whole shares of Common Stock
then deliverable upon the conversion of all shares of Series C
Preferred Stock at the time outstanding.
(f) The Series C Preferred Stock shall be convertible at
the office of the Corporation upon surrender of the certificate or
certificates therefore, duly endorsed for transfer. Such
conversion shall be deemed to have been made as of the date of such
surrender of certificates representing shares of Series C Preferred
Stock for conversion and the person entitled to receive the common
Stock issuable on such conversion shall be treated for all purposes
as having become the record holder of such Common Stock on such
date. The corporation shall make no payment or adjustment on
account of any dividends accrued on the shares of Series C
Preferred Stock surrendered for conversion, except that all
dividends accrued and unpaid on such shares up to the dividend
payment date immediately preceding such surrender for conversion
shall constitute a debt of the corporation payable without interest
to the converting stockholder, and no dividend shall be declared or
paid in respect to shares of Common Stock until such debt shall be
fully paid or sufficient funds set apart for the payment thereof.
(4) No dividends shall be declared or paid on the
corporation's Common Stock prior to the conversion of all shares of
Series C Preferred Stock.
(5) In the event of a liquidation or dissolution (or similar
event) of the corporation prior to conversion of the Series C
Preferred Stock, the Series C Preferred Stock shall be treated as
if it has been converted to Common Stock for all purposes related
to such liquidation, dissolution or similar event.
(6) The Series C Preferred Stock Shall have no other
preferences over Common Stock except those specifically set forth
above.
IN WITNESS WHEREOF the undersigned corporation has caused this
Statement to be prepared, executed and verified by its duly
authorized president and secretary.
Dated: April 29, 1996
Delta Petroleum Corporation
By: s/Roger A. Parker
President
By: s/Aleron H. Larson, Jr.
Secretary
State of Colorado )
) ss.
City and County of Denver )
I, Sheryl K. Shelton, a notary public, do
hereby certify that on this 8th day of May, 1996,
personally appeared before me, Roger A. Parker, who, being by me
first duly sworn, declared that he is President of Delta Petroleum
Corporation, that he signed the foregoing documents as President of
the corporation and that the statements contained therein are true.
In witness whereof I have hereunto set by hand and seal this
8th day of May, 1996.
My commission expires: 5/18/97
s/Sheryl K. Shelton
State of Colorado )
) ss.
City and County of Denver )
I, Sheryl K. Shelton, a notary public, do hereby
certify that on this 8th day of May, 1996, personally
appeared before me, Aleron H. Larson, Jr., who, being by me first
duly sworn, declared that he is Secretary of Delta Petroleum
Corporation, that he signed the foregoing documents as Secretary of
the corporation and that the statements contained therein are true.
In witness whereof I have hereunto set by hand and seal this
8th day of May, 1996.
My commission expires: 5/18/97
s/Sheryl K. Shelton
EMPLOYMENT AGREEMENT
This agreement is entered into as of May 29, 1996, by and
between Delta Petroleum Corporation ("Delta" or the "Company") and
Aleron H. Larson, Jr. ("Employee").
Employee has in the past and does at present act as an officer
and director by the Company.
The Company desires to retain the services of Employee as an
employee upon the conditions contained in this Agreement and
Employee desires to provide services to the Company under such
conditions.
NOW THEREFORE, in consideration of the mutual covenants and
conditions hereafter set forth, the Company and Employee agree as
follows:
1. Employment. The Company hereby agrees to engage
Employee, and Employee does hereby agree to be engaged by the
Company, upon the terms and conditions set forth in the following
paragraphs. This agreement replaces and supersedes all prior
employment agreements.
2. Employment Period. The Company hereby engages Employee
for the period commencing May 29, 1996 and ending on the fifth
anniversary of such date ("Employment Period") to continue to serve
in all present positions with the Company and to render such other
services in an executive capacity as the Company shall reasonably
require. Except as provided in Paragraph 10 (Termination Upon
Change in Control hereof), Employee hereby agrees to remain in the
employ of the Company for the Employment Period, provided that
Employee may, by 90 days written notice to the Company, terminate
his employment with the Company; in which case this Agreement shall
terminate, except as to provisions which survive termination of
employment as provided herein, without liability to the Company
upon the date specified by Employee.
3. Duties. Employee agrees that at all times during the
Employment Period, he will faithfully and diligently endeavor to
promote the business and business interests of the Company, and
that he will devote such time and attention to the affairs of the
Company as is necessary and appropriate to its proper management;
provided, however, that this Agreement shall not restrict Employee
from engaging, directly or indirectly, in any business, investment
or activity which is not inconsistent with the performance by the
Employee of his duties under this Agreement.
4. Salary and Benefits. Subject to the provisions of
Paragraph 8 below, during the Employment Period, Employee shall be
compensated as follows:
a) Employee shall earn a salary of $198,000 per annum,
payable in monthly installments, subject to the customary payroll
deductions for Federal, State and local taxes, and which salary
shall escalate each year by 10% beginning January 1, 1997;
b) the Board of Directors and/or the Compensation Committee
of the Board of Directors of the Company may review Employee's
salary from time to time with a view to making such increases in
Employee's salary or declaring such bonuses or other benefits to
Employee as merited and warranted in light of factors considered
pertinent;
c) Employee shall have the use of a Company automobile,
receive free of cost parking for his automobile and health,
hospitalization and life insurance with coverage exceeding or equal
to that now in force, plus such other benefits as the Board shall
vote; and
d) Employee shall be entitled to four weeks vacation per
year to be taken at such times as do not interfere with the
performance of his duties hereunder; and
5. Expenses. All reasonable and necessary expenses incurred
by Employee in the performance of his duties under this Agreement,
including but not limited to expenses for entertainment, travel and
similar items, will be paid or reimbursed monthly by the Company.
The Company will furnish Employee with an office in its principal
executive offices in Denver and necessary secretarial, geological,
engineering, legal, accounting and other services necessary to
properly support Employee's performance of his duties at the
Company's expenses.
6. Disability of Employee. In the event of the disability
(as defined herein) of Employee prior to the expiration of the
Employment Period, Employee shall nevertheless continue to be
compensated for a period of one year following the date of
disability at the annual rate and with such benefits provided for
in Paragraph 4 hereof. For purposes of this Agreement, Employee
shall be deemed to be disabled if, because of illness or other
physical or mental condition, he is unable to perform for two
successive months, or for short periods aggregating over two months
in any twelve successive calendar months, his duties under this
Agreement. Such benefit period shall run from the time disability
commenced until Employee's condition improves sufficiently to
permit him to work after which date he must be available at the
Company's option.
7. Termination Upon Death and Disability. The Employment
Period shall automatically terminate upon the death of Employee;
provided, however, that in the event of the Employee's death, all
compensation Employee is entitled to receive under this Agreement
at the time of his death shall be paid to his legal representative
in accordance with the provisions of Paragraph (4)(a) hereof for
the shorter of a period of one year following the date of
Employee's death or the remainder of the Employment Period. The
Employment Period shall automatically terminate upon the payment
for twelve consecutive months of disability benefits to Employee
(as defined in Paragraph 6 above).
8. Termination for Cause. Upon the occurrence of any of the
events listed below, the Company may terminate the Employee without
further obligation under this Agreement except as to provisions
which survive termination of employment or termination of this
agreement as provided herein:
a) Employee's conviction of any criminal act directly related
to Employee's duties hereunder including without limitation
misappropriation of funds or property of the Company or a felony
criminal act directly related to Employee's duties hereunder.
b) Employee's misfeasance or malfeasance in office, which
the parties agree shall mean fraud, dishonesty, wilful misconduct
or gross neglect of duties.
c) Breach by Employee of any material provision of this
Agreement.
9. Termination without Cause. In the event Employee is
terminated by the Company for any reason except as set forth at
Paragraph 8 above, he shall continue to be compensated for the
duration of the Employment Period in the full amounts provided for
in Paragraphs 4, 5, 6 and 7 hereof.
10. Termination Upon Change in Control.
In the event that a Change in Control (as defined in Delta's
1993 Incentive Plan or as now or later defined by rules and
regulations of the S.E.C.) of the Company or a sale of all or a
majority of the Company's assets shall occur at any time during the
Employment Period, as a result of which the Board of Directors
appoints a person other than Employee to serve in the capacity for
which Employee is employed hereunder, or as a result of which
Employee shall elect to resign his executive position hereunder,
Employee nevertheless shall be entitled to the benefits of and
subject to all of the terms and conditions set forth herein,
including, without limitation, the right to receive full
compensation as provided in Paragraphs 4, 5, 6 and 7 hereof
regardless of whether Employee continues to perform any services
for the Company. In addition, in the event of any such Change in
Control or sale, irrespective of any resulting termination or
resignation, the Company shall immediately cause all of Employee's
then outstanding unexercised options or warrants, granted under the
1993 Incentive Plan or otherwise, to be exercised by the Company on
behalf of Employee with the Company paying, waiving or otherwise
being responsible for the exercise prices therefore and, in
addition, the Company shall thereupon pay to Employee an amount
equal to the Employee's estimated federal, state and local taxes
applicable to the exercise of said warrants or options. All shares
underlying said options or warrants shall be issued to Employee
immediately thereafter and all shares shall be covered by and
included in an effective S-8 or similar registration statement
filed with the S.E.C. These provisions under this Paragraph 10
shall survive any termination of this agreement under any other
section hereunder.
11. Notice of Termination. Prior to termination, for any
reason (with or without cause), Employee will be given notice
thereof sufficient to allow Employee to exercise any and all
options granted to Employee under Delta's 1993 Incentive Plan but
which notice in any event shall be given not less than thirty (30)
days prior to such termination.
12. Parties in Interest. This Agreement shall be binding
upon, and shall inure to the benefit of the Company and its
successors and assigns and any person acquiring, whether by merger,
consolidation, liquidation, purchase of assets or otherwise, all or
substantially all of the Company's equity or assets, and business.
13. Choice of Law. It is the intention of the parties hereto
that this Agreement and the performance hereunder and all suits and
special proceedings hereunder be construed in accordance with and
under the laws of the State of Colorado and that in any action,
special proceeding or other proceeding that may be brought arising
out of, in connection with, or by reason of this Agreement, the
laws of the State of Colorado shall be applicable and shall govern
to the exclusion of the law of any other forum, without regard to
the jurisdiction in which any action or special proceeding may be
instituted.
14. Severance of Invalid Provisions. In case any one or more
of the provisions, or portions thereof, of this Agreement should be
determined to be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.
15. Integrated Agreement. This Agreement shall constitute
the entire agreement between the parties hereto relating to the
Engagement of Employee.
IN WITNESS WHEREOF, Employee has executed this Agreement and
the Company has caused this Agreement to be duly executed on its
behalf by its duly authorized officer, all as of the date first
above written.
DELTA PETROLEUM CORPORATION
By: s/Roger A. Parker
Authorized Officer
EMPLOYEE:
s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr.
RATIFIED AND APPROVED BY DELTA
PETROLEUM CORPORATION COMPENSATION
COMMITTEE:
By: s/Terry D. Enright
Terry D. Enright
s/Don E. Mettler
Don E. Mettler
EMPLOYMENT AGREEMENT
This agreement is entered into as of May 29, 1996, by and
between Delta Petroleum Corporation ("Delta" or the "Company") and
Roger A. Parker ("Employee").
Employee has in the past and does at present act as an officer
and director by the Company.
The Company desires to retain the services of Employee as an
employee upon the conditions contained in this Agreement and
Employee desires to provide services to the Company under such
conditions.
NOW THEREFORE, in consideration of the mutual covenants and
conditions hereafter set forth, the Company and Employee agree as
follows:
1. Employment. The Company hereby agrees to engage
Employee, and Employee does hereby agree to be engaged by the
Company, upon the terms and conditions set forth in the following
paragraphs. This agreement replaces and supersedes all prior
employment agreements.
2. Employment Period. The Company hereby engages Employee
for the period commencing May 29, 1996 and ending on the fifth
anniversary of such date ("Employment Period") to continue to serve
in all present positions with the Company and to render such other
services in an executive capacity as the Company shall reasonably
require. Except as provided in Paragraph 10 (Termination Upon
Change in Control hereof), Employee hereby agrees to remain in the
employ of the Company for the Employment Period, provided that
Employee may, by 90 days written notice to the Company, terminate
his employment with the Company; in which case this Agreement shall
terminate, except as to provisions which survive termination of
employment as provided herein, without liability to the Company
upon the date specified by Employee.
3. Duties. Employee agrees that at all times during the
Employment Period, he will faithfully and diligently endeavor to
promote the business and business interests of the Company, and
that he will devote such time and attention to the affairs of the
Company as is necessary and appropriate to its proper management;
provided, however, that this Agreement shall not restrict Employee
from engaging, directly or indirectly, in any business, investment
or activity which is not inconsistent with the performance by the
Employee of his duties under this Agreement.
4. Salary and Benefits. Subject to the provisions of
Paragraph 8 below, during the Employment Period, Employee shall be
compensated as follows:
a) Employee shall earn a salary of $198,000 per annum,
payable in monthly installments, subject to the customary payroll
deductions for Federal, State and local taxes, and which salary
shall escalate each year by 10% beginning January 1, 1997;
b) the Board of Directors and/or the Compensation Committee
of the Board of Directors of the Company may review Employee's
salary from time to time with a view to making such increases in
Employee's salary or declaring such bonuses or other benefits to
Employee as merited and warranted in light of factors considered
pertinent;
c) Employee shall have the use of a Company automobile,
receive free of cost parking for his automobile and health,
hospitalization and life insurance with coverage exceeding or equal
to that now in force, plus such other benefits as the Board shall
vote; and
d) Employee shall be entitled to four weeks vacation per
year to be taken at such times as do not interfere with the
performance of his duties hereunder; and
5. Expenses. All reasonable and necessary expenses incurred
by Employee in the performance of his duties under this Agreement,
including but not limited to expenses for entertainment, travel and
similar items, will be paid or reimbursed monthly by the Company.
The Company will furnish Employee with an office in its principal
executive offices in Denver and necessary secretarial, geological,
engineering, legal, accounting and other services necessary to
properly support Employee's performance of his duties at the
Company's expenses.
6. Disability of Employee. In the event of the disability
(as defined herein) of Employee prior to the expiration of the
Employment Period, Employee shall nevertheless continue to be
compensated for a period of one year following the date of
disability at the annual rate and with such benefits provided for
in Paragraph 4 hereof. For purposes of this Agreement, Employee
shall be deemed to be disabled if, because of illness or other
physical or mental condition, he is unable to perform for two
successive months, or for short periods aggregating over two months
in any twelve successive calendar months, his duties under this
Agreement. Such benefit period shall run from the time disability
commenced until Employee's condition improves sufficiently to
permit him to work after which date he must be available at the
Company's option.
7. Termination Upon Death and Disability. The Employment
Period shall automatically terminate upon the death of Employee;
provided, however, that in the event of the Employee's death, all
compensation Employee is entitled to receive under this Agreement
at the time of his death shall be paid to his legal representative
in accordance with the provisions of Paragraph (4)(a) hereof for
the shorter of a period of one year following the date of
Employee's death or the remainder of the Employment Period. The
Employment Period shall automatically terminate upon the payment
for twelve consecutive months of disability benefits to Employee
(as defined in Paragraph 6 above).
8. Termination for Cause. Upon the occurrence of any of the
events listed below, the Company may terminate the Employee without
further obligation under this Agreement except as to provisions
which survive termination of employment or termination of this
agreement as provided herein:
a) Employee's conviction of any criminal act directly related
to Employee's duties hereunder including without limitation
misappropriation of funds or property of the Company or a felony
criminal act directly related to Employee's duties hereunder.
b) Employee's misfeasance or malfeasance in office, which
the parties agree shall mean fraud, dishonesty, wilful misconduct
or gross neglect of duties.
c) Breach by Employee of any material provision of this
Agreement.
9. Termination without Cause. In the event Employee is
terminated by the Company for any reason except as set forth at
Paragraph 8 above, he shall continue to be compensated for the
duration of the Employment Period in the full amounts provided for
in Paragraphs 4, 5, 6 and 7 hereof.
10. Termination Upon Change in Control.
In the event that a Change in Control (as defined in Delta's
1993 Incentive Plan or as now or later defined by rules and
regulations of the S.E.C.) of the Company or a sale of all or a
majority of the Company's assets shall occur at any time during the
Employment Period, as a result of which the Board of Directors
appoints a person other than Employee to serve in the capacity for
which Employee is employed hereunder, or as a result of which
Employee shall elect to resign his executive position hereunder,
Employee nevertheless shall be entitled to the benefits of and
subject to all of the terms and conditions set forth herein,
including, without limitation, the right to receive full
compensation as provided in Paragraphs 4, 5, 6 and 7 hereof
regardless of whether Employee continues to perform any services
for the Company. In addition, in the event of any such Change in
Control or sale, irrespective of any resulting termination or
resignation, the Company shall immediately cause all of Employee's
then outstanding unexercised options or warrants, granted under the
1993 Incentive Plan or otherwise, to be exercised by the Company on
behalf of Employee with the Company paying, waiving or otherwise
being responsible for the exercise prices therefore and, in
addition, the Company shall thereupon pay to Employee an amount
equal to the Employee's estimated federal, state and local taxes
applicable to the exercise of said warrants or options. All shares
underlying said options or warrants shall be issued to Employee
immediately thereafter and all shares shall be covered by and
included in an effective S-8 or similar registration statement
filed with the S.E.C. These provisions under this Paragraph 10
shall survive any termination of this agreement under any other
section hereunder.
11. Notice of Termination. Prior to termination, for any
reason (with or without cause), Employee will be given notice
thereof sufficient to allow Employee to exercise any and all
options granted to Employee under Delta's 1993 Incentive Plan but
which notice in any event shall be given not less than thirty (30)
days prior to such termination.
12. Parties in Interest. This Agreement shall be binding
upon, and shall inure to the benefit of the Company and its
successors and assigns and any person acquiring, whether by merger,
consolidation, liquidation, purchase of assets or otherwise, all or
substantially all of the Company's equity or assets, and business.
13. Choice of Law. It is the intention of the parties hereto
that this Agreement and the performance hereunder and all suits and
special proceedings hereunder be construed in accordance with and
under the laws of the State of Colorado and that in any action,
special proceeding or other proceeding that may be brought arising
out of, in connection with, or by reason of this Agreement, the
laws of the State of Colorado shall be applicable and shall govern
to the exclusion of the law of any other forum, without regard to
the jurisdiction in which any action or special proceeding may be
instituted.
14. Severance of Invalid Provisions. In case any one or more
of the provisions, or portions thereof, of this Agreement should be
determined to be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.
15. Integrated Agreement. This Agreement shall constitute
the entire agreement between the parties hereto relating to the
Engagement of Employee.
IN WITNESS WHEREOF, Employee has executed this Agreement and
the Company has caused this Agreement to be duly executed on its
behalf by its duly authorized officer, all as of the date first
above written.
DELTA PETROLEUM CORPORATION
By: s/Aleron H. Larson, Jr.
Authorized Officer
EMPLOYEE:
s/Roger A. Parker
Roger A. Parker
RATIFIED AND APPROVED BY DELTA
PETROLEUM CORPORATION COMPENSATION
COMMITTEE:
By: s/Terry D. Enright
Terry D. Enright
s/Don E. Mettler
Don E. Mettler
