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
January 7, 1997
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 January 7, 1997, the Company entered into a two
year agreement ("Agreement") with BC Capital Corp., ("BC
Capital") an affiliate of Barber & Bronson, Incorporated for
financial consulting services. The agreement is attached as
Exhibit 99.1. Under the Agreement the Company will pay a monthly
fee of $3,000 to BC Capital and will issue three year warrants to
purchase an aggregate of 500,000 shares of the Company's
common stock at an exercise price of $6.125 per share.
Warrants to purchase 250,000 of these shares will vest on the
closing date of an equity financing in which the Company, with
Barber & Bronson, Incorporated acting as placement agent,
realizes gross proceeds of not less than $2 million. Upon the
closing of such equity financing the term of the warrants
shall be five years rather than three years. No such equity
financing is currently planned.
B. On December 20, 1996 the Company entered into an
agreement entitled a Purchase and Sale Agreement ("Agreement")
with SOCO Offshore, Inc., ("SOCO") an affiliate of Snyder Oil
Corporation, whereby SOCO assigned an approximate 1.77%
working interest in leases comprising the Sword Unit Offshore
Santa Barbara, California to Delta Petroleum Corporation
("Delta") in exchange for 63,000 shares of the Company's
restricted common stock. A copy of the Agreement is attached
as Exhibit 99.2. Under the agreement the Company had until January 7,
1997 to complete certain due diligence. Delta already held a .8731%
working interest in the Sword Unit through its 92% owned subsidiary, Amber
Resources Company. The 12,240 acre Sword Unit operated by
Conoco, Inc. contains undeveloped reserves. No production in
the Sword Unit is presently anticipated before 2004.
C. On November 14, 1996, the Company entered into an
employment agreement with David Castaneda for the period from
February 1, 1997 through January 31, 1998. A copy of the
employment agreement is attached as Exhibit 99.3.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
99.1 Financial Consulting Agreement with BC Capital Corp.
99.2 Purchase and Sale Agreement between Synder Oil
Corporation and Delta Petroleum Corporation.
99.3 Employment agreement with David Castaneda.
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: January 8, 1997 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.
(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.
INDEX TO EXHIBITS - CONT'D
(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 Financial Consulting Agreement with BC Capital Corp.
99.2 Purchase and Sale Agreement between Synder Oil
Corporation and Delta Petroleum Corporation.
99.3 Employment agreement with David Castaneda.
B C CAPITAL CORP
201 S. Biscayne Blvd.
Suite 2950
Miami, FL 33131
Tel: (305) 536-8500
THIS FINANCIAL CONSULTING AGREEMENT, made as of this 7th
day of January, 1997, is by and between Delta Petroleum
Corporation, a Colorado corporation (the "Company"), with its
principal place of business at 3310 Anaconda Tower, 555
Seventeenth Street, Denver, Colorado 80202 and B C Capital Corp.,
a Florida corporation and an affiliate of Barber & Bronson
Incorporated ("B C Capital"), having its principal place of
business at 201 S. Biscayne Blvd., Suite 2950, Miami, Florida
33131.
RECITALS:
A. The Company is a public company with one class of
equity securities publicly traded, and desires to retain B C
Capital to provide certain financial consulting services.
B. B C Capital desires to provide certain financial
consulting services to the Company in accordance with the terms
and conditions contained hereinafter.
NOW, THEREFORE, in consideration of the mutual promises
set forth herein, the parties hereto hereby agree as follows:
1 . Consulting Services. During the term of this
Agreement, B C Capital is hereby retained by the Company to
provide financial consulting services to the Company, as said
services relate to corporate finance matters. B C Capital shall
provide such financial consulting services as reasonably
requested by the Company during the term of this Agreement,
provided that nothing hereunder shall require B C Capital to
devote a minimum number of hours per calendar month toward the
performance of services hereunder. Unless otherwise agreed to by
B C Capital, all services hereunder shall be performed by B C
Capital, in its sole discretion, at its principal place of
business or other offices. Notwithstanding anything contained
herein to the contrary, the services to be performed by B C
Capital hereunder may be performed by any employee of or
Consultant to B C Capital.
2. Term. The term of this Agreement shall be for two
years commencing as of the date first written above and
terminating one day prior to the 2nd anniversary hereof.
Thereafter, this Agreement shall be renewed for subsequent two
year terms upon mutual agreement of the parties.
3. Compensation.
(a) In consideration for the performance of services
hereunder, the Company hereby agrees to pay B C Capital the
aggregate sum of $3,000 per month during the term of this
Agreement. The initial monthly payment shall be made as of the
date hereof, and each subsequent monthly payment shall be due and
payable on each successive monthly anniversary of such date. The
Company further hereby agrees to pay all reasonable out-of-pocket
expenses incurred by B C Capital in connection with such services
to be rendered hereunder. Any out-of-pocket expense in excess of
$1,000 must be pre-approved by the Company. B C Capital may,
from time to time, deem it to be in the best interests of the
Company to retain an outside Consultant in connection with
certain specific acquisitions or proposed transactions. B C
Capital agrees to obtain the written consent of the Company prior
to retaining such Consultant. In such event, the Company agrees
to pay any and all fees and expenses of such Consultant.
(b) In addition, the Company shall sell to the
Consultant, or its designees, for an aggregate price of $100,
three year warrants to purchase an aggregate of 500,000 shares of
the Company's common stock, $.01 par value per share ("Common
Stock"), at an exercise price of $6.125 per share (the
"Consulting Warrants"). The Consulting Warrants shall vest in
the following manner: (i) warrants to purchase 250,000 shares of
Common Stock shall vest upon the execution of this Agreement, and
(ii) warrants to purchase 250,000 shares of Common Stock shall
vest on the closing date of an equity financing in which the
Company, with Barber & Bronson Incorporated acting as placement
agent, realizes gross proceeds of not less than $2 million. Upon
the closing of such equity financing, the term of the Consulting
Warrants shall be five years, rather than three years. The
Consulting Warrants may be transferable to officers, directors,
consultants and shareholders of B C Capital. The Consulting
Warrants shall contain the usual anti-dilution clauses and shall
be non-redeemable.
At any time during the term of the Consulting Warrants,
other than a time when the Warrant Securities, as hereinafter
defined, are already covered for sale or resale by an effective
and current registration statement that permits the method of
distribution desired by the holders thereof, B C Capital or the
then holders of the then outstanding Consulting Warrants and
securities issued upon the exercise of the Consulting Warrants
(collectively, the "Warrant Securities"), shall have the right to
require the Company (i) upon written request of a majority of the
Warrant Securities, to prepare and file with the Securities and
Exchange Commission one new registration statement under the
Securities Act (the "Demand Registration Rights"), covering all
or any portion of the Warrant Securities and to use its best
efforts to obtain promptly and maintain the effectiveness thereof
until the Shares are sold or until, in the opinion of counsel for
the Company, such Shares may be sold without registration under
the Securities Act, and (ii) to register or qualify the subject
Warrant Securities for sale in any and all states reasonably
requested by B C Capital or such holders. The Company shall bear
all expenses incurred in the preparation and filing of such
registration statement or post-effective amendment (and related
state registrations, to the extent permitted by applicable law)
and the furnishing of copies of the preliminary and final
prospectus thereof to B C Capital or such holders of Warrant
Securities, and other than any underwriting discounts or sales
commissions incurred by the then holders with respect to the sale
of such securities.
4. Finder's Fee.
In the event the Company effectuates a corporate
restructuring, merger, joint venture, or acquisition to
subsequent to the date hereof and on or prior to one year
from the date of termination of this Agreement,
irrespective of any reason for such termination
(the "Term"), and such corporate restructuring, merger, joint
venture, or acquisition is effectuated as a result or consequence
of any introduction made directly or indirectly by B C Capital,
including without limitation, any introduction made by a third
party to whom the Company was initially introduced, directly or
indirectly, by B C Capital, or which corporate restructuring,
merger, joint venture, or acquisition was initiated, directly or
indirectly, by B C Capital, then the Company hereby agrees to pay
B C Capital the following cash consideration, which payment shall
be due and payable in cash on the date of any such closing with
respect thereto:
5.0% of the consideration from $1 and up to $5,000,000,
plus 4.0% of the consideration in excess of $5,000,000 and up
to $10,000,000, plus 3.0% of the consideration in excess
of $10,000,000 and up to $15,000,000, plus 2.0% of the
consideration in excess of $15,000,000 and up to
$20,000,000, plus 1.0% of the consideration paid in
excess of $20,000,000.
In addition, in the event the Company plans to
effectuate a corporate restructuring, merger, or acquisition
(excluding: private oil & gas corporate, partnership, joint
venture or leasehold/property acquisitions) during the Term,
which transaction was not arranged, directly or indirectly, by B
C Capital, the Company shall use B C Capital as its consultant in
connection with such transaction and shall pay B C Capital a
consulting fee, equal to the following percentages based upon the
value of the transaction:
2.5 % of the consideration from $1 and up to
$5,000,000, plus 2.0% of the consideration in excess of
$5,000,000 and up to $10,000,000, plus 1.5 % of the consideration
in excess of $10,000,000 and up to $15,000,000, plus 1.0% of
the consideration in excess of $15,000,000 and up to
$20,000,000, plus 0.5 % of the consideration paid in
excess of $20,000,000.
For purposes of this Agreement, "consideration" shall
mean the value of the transaction described herein and shall
include all cash, the principal of any notes executed as part of
the purchase price for such acquisition, the value, as determined
by the mutual agreement of the Board of Directors of the Company
and B C Capital, of any securities paid or exchanged in
connection with the transaction, and the amounts of any loans or
other obligations owed by the acquired entity and which are paid
or assumed by the acquiring entity as part of the purchase price
for the acquisition.
In the event B C Capital agrees to assist the Company in
raising capital to finance an acquisition, the parties hereto
hereby agree that the compensation to be paid to B C Capital for
said assistance shall be the subject of an agreement, the terms
of which are to be mutually agreed to by and between the parties
hereto.
5. Right of First Refusal. For a period of three
years from the date of this Agreement, the Company hereby agrees
to afford Barber & Bronson Incorporated ("Barber & Bronson") the
right to act as the Company's lead managing underwriter or
placement agent, as the case may be, in any public offering(s)
and/or and private placement(s) to be effectuated by or on behalf
of the Company or any subsidiary or affiliate, on terms no less
favorable than any other underwriter, broker-dealer, or placement
agent, and with such compensation to be determined on a
deal-by-deal basis. In the event Barber & Bronson determines not
to participate in any such financing and the terms thereof are
then subsequently changed in any material respect, the Company
shall afford the opportunity to act as the lead managing
underwriter or placement agent, as the case may be, in any such
financing as modified. Notwithstanding anything contained in
this Section 5 to the contrary, nothing hereunder shall obligate
Barber & Bronson to participate in any such financing.
6. Representations of the Company. The Company hereby
represents and warrants that any and all information supplied
hereunder to B C Capital in connection with any and all services
to be performed hereunder by B C Capital for and on behalf of the
Company shall be true, complete and correct as of the date of
such dissemination and shall not fail to state a material fact
necessary to make any of such information not misleading. The
Company hereby acknowledges that the ability of B C Capital to
adequately provide financial consulting services hereunder is
dependent upon the prompt dissemination of accurate, correct and
complete information to B C Capital. The Company further
represents and warrants that this Agreement and the transactions
contemplated hereunder, including the issuance of the warrants
hereunder, have been duly and validly authorized by all requisite
corporate action; that the Company has the full right, power and
capacity to execute, deliver and perform its obligations
hereunder; and that this Agreement, upon execution and delivery
of the same by the Company, will represent the valid and binding
obligation of the Company enforceable in accordance with its
terms. The representations and warranties set forth herein shall
survive the termination of this Agreement.
7. Indemnification.
(a) The Company hereby agrees to indemnify, defend and
hold harmless B C Capital, its officers, directors, principals,
employees, affiliates, and shareholders, and their successors and
assigns from and against any and all claims, damages, losses,
liability, deficiencies, actions, suits, proceedings, costs or
legal expenses (collectively the "Losses") arising out of or
resulting from: (i) any breach of a representation, or warranty
by the Company contained in this Agreement; or (ii) any
activities or services performed hereunder by B C Capital, unless
such Losses were the result of the intentional misconduct or
gross negligence of B C Capital or were the result of any
information supplied by B C Capital; or (iii) any and all costs
and expenses (including reasonable attorneys' and paralegals'
fees) related to the foregoing, and as more fully described
below.
(b) If B C Capital receives written notice of the
commencement of any legal action, suit or proceeding with respect
to which the Company is or may be obligated to provide
indemnification pursuant to this Section 7, B C Capital shall,
within thirty (30) days of the receipt of such written notice,
give the Company written notice thereof (a "Claim Notice").
Failure to give such Claim Notice within such thirty (30) day
period shall not constitute a waiver by B C Capital of its right
to indemnity hereunder with respect to such action, suit or
proceeding, unless the defense thereof is prejudiced thereby.
Upon receipt by the Company of a Claim Notice from B C Capital
with respect to any claim for indemnification which is based upon
a claim made by a third party ("Third Party Claim"), the Company
may assume the defense of the Third Party Claim with counsel of
its own choosing, as described below. B C Capital shall
cooperate in the defense of the Third Party Claim and shall
furnish such records, information and testimony and attend all
such conferences, discovery proceedings, hearings, trial and
appeals as may be reasonably required in connection therewith. B
C Capital shall have the right to employ its own counsel in any
such action, but the fees and expenses of such counsel shall be
at the expense of B C Capital unless the Company shall not have
with reasonable promptness employed counsel to assume the defense
of the Third Party Claim, in which event such fees and expenses
shall be borne solely by the Company. The Company shall not
satisfy or settle any Third Party Claim for which indemnification
has been sought and is available hereunder, without the prior
written consent of B C Capital, which consent shall not be
unreasonably withheld or delayed and which shall not be required
if B C Capital is granted a release in connection therewith. If
the Company shall fail with reasonable promptness to defend such
Third Party Claim, B C Capital may defend, satisfy or settle the
Third Party Claim at the expense of the Company (but subject to
its consent which shall not be unreasonably withheld). The
Company shall pay to B C Capital the amount of any indemnifiable
Loss hereunder within ten (10) days after written demand
therefor. The indemnification provisions hereunder shall survive
the termination of this Agreement.
(c) B C Capital hereby agrees to indemnify, defend and
hold harmless the Company, its officers, directors, principals
employees, affiliates, and shareholders, and their successors and
assigns from and against Losses arising out of or resulting from
intentional or gross misconduct of B C Capital. The procedure
set forth in (b) above shall also serve as the protocol to permit
the Company to seek indemnification from B C Capital.
8. Confidentiality. B C Capital agrees that all
information and materials pertaining to the prior current or
contemplated business of the Company are valuable and
confidential assets of the Company. Such information shall
include, without limitation, information relating to customer
lists, bidding procedures, intellectual property, patents,
trademarks, trade secrets, financing techniques and sources and
such financial statements of the Company as are not available to
the public. B C Capital, its officers, directors, employees,
agents and shareholders shall hold all such information in trust
and confidence for the Company and shall not use or disclose any
such information for other than the Company's business and shall
be liable for damages incurred by the Company as a result of the
use or disclosure of such information by B C Capital, its
officers, directors, employees, agents or shareholders for any
purpose other than the Company's business, either during the term
of this Agreement or after the termination or expiration thereof.
9. Independent Contractor. It is expressly understood
and agreed that B C Capital shall, at all times, act as an
independent contractor with respect to the Company and not as an
employee or agent of the Company, and nothing contained in this
Agreement shall be construed to create a joint venture,
partnership, association or other affiliation, or like
relationship, between the parties. It is specifically agreed
that the relationship is and shall remain that of independent
parties to a contractual relationship and that B C Capital shall
have no right to bind the Company in any manner. In no event
shall either party be liable for the debts or obligations of the
other except as otherwise specifically provided in this
Agreement. B C Capital shall not have any claim under this
Agreement, or otherwise against the Company for vacation pay,
paid sick leave, retirement benefits, social security, worker's
compensation, health, disability, unemployment insurance
benefits, or other employee benefits of any kind. B C Capital
understands and agrees that: (i) B C Capital will not be
treated as an employee of the Company for Federal tax purposes;
(ii) the Company will not withhold on B C Capital's behalf
any sums for income tax, unemployment insurance, social security
or any other withholding pursuant to any law or requirement of
any governmental body, or make available any of the benefits
afforded to employees of the Company; (iii) all of such payments,
withholdings or benefits, if any, are B C Capital's sole
responsibility; and (iv) B C Capital will indemnify and hold
harmless the Company from any and all loss or liability arising
from its failure to make such payments, withholdings and
benefits, if any. In the event the Internal Revenue Service or
any other governmental agency should question or challenge B C
Capital's independent contractor status, the parties hereby agree
that both B C Capital and the Company shall have the right to
participate in any discussion or negotiation occurring with such
agency or agencies, regardless of with whom or by whom such
discussions or negotiations are initiated.
10 Amendment. No modification, waiver, amendment,
discharge or change of this Agreement shall be valid unless the
same is evidenced by a written instrument, executed by the party
against which such modification, waiver, amendment, discharge, or
change is sought.
11. Notices. All notices, demands or other
communications given hereunder shall be in writing and shall be
deemed to have been duly given when delivered in person or
transmitted by facsimile transmission or on the third calendar
day after being mailed by United States registered or certified
mail, return receipt requested, postage prepaid, to the addresses
herein above first mentioned or to such other address as any
party hereto shall designate to the other for such purpose in the
manner hereinafter set forth.
12. Entire Agreement. This Agreement contains all of
the understandings and agreements of the parties with respect to
the subject matter discussed herein. All prior agreements,
whether written or oral, are merged herein and shall be of no
force or effect.
13. Severability. The invalidity, illegality or
unenforceability of any provision or provisions of this Agreement
will not affect any other provision of this Agreement, which will
remain in full force and effect, nor will the invalidity,
illegality or unenforceability of a portion of any provision of
this Agreement affect the balance of such provision. In the
event that any one or more of the provisions contained in this
Agreement or any portion thereof shall for any reason be held to
be invalid, illegal or unenforceable in any respect, this
Agreement shall be reformed, construed and enforced as if such
invalid, illegal or unenforceable provision had never been
contained herein.
14. Construction and Enforcement. This Agreement shall
be construed in accordance with the laws of the State of Florida,
without application of the principles of conflicts of laws. If
it becomes necessary for any party to institute legal action to
enforce the terms and conditions of this Agreement, the
successful party will be awarded reasonable attorneys' fees at
all trial and appellate levels, expenses and costs.
15. Binding Nature. The terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the
parties, and their respective successors and assigns.
16. 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
counterpart.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
DELTA PETROLEUM CORPORATION, a Colorado corporation
By: s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr., Chief Executive Officer
BC CAPITAL CORP., a Florida corporation
By: s/James S. Cassel
James S. Cassel, President
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, dated December 18, 1996, is made by
DELTA PETROLEUM CORPORATION, a Colorado corporation ("Buyer"),
and SOCO OFFSHORE, INC. (formerly DelMar Operating, Inc.)
("Seller").
ARTICLE I
BASIS OF AGREEMENT
Seller is the owner of the undivided interests specified
in Exhibits A-1 through A-3 inclusive attached hereto in the
following: (a) the oil, gas and mineral leases described in
Exhibits A-1 through A-3 (the "Leases"); (b) all personal and
mixed property located on the lands covered by the Leases and
used in the operation of the Leases; and (c) all permits,
licenses, easements and similar rights associated with the
operation of the Leases. Those interests are referred to herein
as the "Assets." Seller desires to sell the Assets to Buyer and
Buyer desires to purchase the Assets from Seller, all in
accordance with and for the consideration recited in the
provisions hereof.
ARTICLE II
PURCHASE AND SALE
2.01 Purchase Price. The "Purchase Price" shall be
comprised of (a) 63,000 shares of the Common Stock, par value
$.01 per share, of Buyer (the "Buyer Stock") and (b) the
assumption of the obligations undertaken by Buyer in this
Agreement, including without limitation those set forth
in Section 2.02 below. In consideration of receipt of the
Purchase Price, Seller shall sell the Assets to Buyer and Buyer
shall purchase the Assets from Seller.
2.02 Buyer's Plugging and Abandonment Obligations. To
the extent of the interests assigned in accordance herewith,
Buyer agrees to accept fell responsibility for and all costs
associated with plugging and abandoning all existing and
subsequently drilled wells on the Leases, removal of all existing
and subsequently erected platforms from the Leases, removal of
all existing and subsequently installed pipelines from the Leases
and restoration of the sea floor of the Leases and any related
environmental costs. Buyer shall complete the plugging and
abandonment of wells, the removal of platforms and pipelines and
sea floor restoration in compliance with the rules and
regulations of any governmental agency having jurisdiction over
the Leases and with applicable provisions of the Leases.
2.03 The Closing. The sale shall be completed at a
closing (the "Closing") to be held in the office of Seller, 1221
Lamar Street, Suite 1200, Houston, Texas, on December 20, 1996,
or an earlier or later date agreed upon by the parties that shall
be as soon as the appropriate documentation has been agreed to by
the parties and all required consents, rulings and waivers have
been obtained. At the Closing (a) Seller shall deliver to Buyer
fully executed Assignments in the form attached hereto as
Exhibits A-1 through A-3 inclusive; and (b) Buyer shall deliver
to Seller a certificate, registered in the name of Seller,
representing the Buyer Stock.
2.04 The Effective Date. The Effective Date hereof shall
be December 1, 1996, at 7:00 A.M., CST.
ARTICLE III
REGISTRATION RIGHTS
3.01 Registration. Unless a registration statement is
effective with respect thereto, the shares of Buyer Stock
delivered to Seller pursuant to Article II will not have been
registered under the Securities Act of 1933, as amended.
3.02 Investment Representation Agreement. Any
registration of the Buyer Stock shall be accomplished in
accordance with the provisions of the Investment Representation
Agreement attached hereto as Exhibit B.
ARTICLE IV
APPORTIONMENT OF LIABILITIES
4.01 Obligations of the Parties. Buyer agrees to
assume, pay, perform, fulfill, discharge and be liable for all
Assumed Liabilities and Seller agrees to retain, pay, perform,
fulfill, discharge and remain liable for all Retained
Liabilities.
4.02 Definitions. The term "Assumed Liabilities" shall
mean (a) all costs, expenses, liabilities and obligations assumed
or required to be borne by Buyer pursuant to this Agreement
and (b) all costs, expenses, liabilities and obligations
resulting directly or indirectly from the ownership or operation
of the Assets from and after the Effective Date, including
plugging, abandonment and sea floor restoration liabilities and
any related environmental costs for existing wells, platforms,
facilities and pipelines, but excluding Retained Liabilities.
The term "Retained Liabilities" shall mean (x) all costs,
expenses, liabilities and obligations retained or required to be
borne by Seller pursuant to this Agreement and (y) all costs,
expenses, liabilities and obligations (except those assumed by
Buyer pursuant to Sections 2.02 and 5.04) attributable to the
Assets and resulting directly or indirectly from operation
of the Assets prior to the Effective Date.
4.03 Indemnification. Provided that the Closing occurs,
Buyer shall protect, defend, indemnify and hold Seller harmless
from any and all damages (including but not limited to property
damage, personal injury and death), claims, losses demands,
fines, penalties, judgments (including interest), costs,
expenses, environmental liabilities and other liabilities,
direct, contingent or otherwise, including consulting and
attorneys' fees and costs of court ("Damages") arising out of or
accruing with respect to Assumed Liabilities and Seller shall
protect, defend, indemnify and hold Buyer harmless from any
Damages arising out of or accruing with respect to Retained
Liabilities.
ARTICLE V
CONDITION OF THE ASSETS
5.01 Review and Inspection of the Assets. Buyer shall
complete its due diligence review and inspection of the Assets
not later than January 7, 1997. Seller shall make available to
Buyer the following information and data relating to the Assets,
to the extent possessed by Seller: (a) financial and accounting
records; (b) production, engineering, geological and geophysical
data and reports for the Leases; (c) copies of engineering,
geological and geophysical studies, subject to any license and
non-disclosure requirements; (d) copies of seismic data across
any of the Leases (subject to any license restriction and
non-disclosure requirements); (e) title records, including, but
not limited to, copies of the Leases, division orders, and
contracts for the sale of production; (f) material,
relevant information concerning pending litigation or threatened
litigation (excluding information subject to attorney-client or
attorney work product privilege); (g) regulatory compliance; (h)
contracts between Seller and third parties with regard to the
Assets; and (i) all permits and licenses pertaining to the
Assets. Nothing contained in this paragraph shall obligate
Seller to take action or expend any money to acquire anything for
Buyer which Seller does not already have in its possession.
Seller does not warrant the accuracy of any
material listed above.
5.02 Warranty Disclaimer. BUYER UNDERSTANDS AND AGREES
THAT, EXCEPT AS SPECIFICALLY PROVIDED HEREIN, THE ASSETS ARE
BEING SOLD "AS IS" AND "WHERE IS." WITH ALL FAULTS AND DEFECTS,
WITHOUT RECOURSE BY BUYER, ITS SUCCESSORS AND/OR ASSIGNS, AGAINST
SELLER AND WITHOUT COVENANT, REPRESENTATION OR WARRANTY,
EXPRESS,
IMPLIED OR STATUTORY WHATSOEVER, AND NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY, SELLER EXPRESSLY DISCLAIMS AND
NEGATES (a) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE AND/OR TITLE TO THE ASSETS AND (b) ANY @LIED
OR EXPRESS WARRANTY OF MERCHANTABILITY. BUYER HEREBY RELEASES
SELLER FROM ANY AND ALL LIABILITY WITH RESPECT TO THE CONDITION
OF THE PERSONAL PROPERTY INCLUDED IN THE ASSETS, WHETHER OR NOT
CAUSED BY SELLER'S SOLE OR PARTIAL NEGLIGENCE, AND WAIVES ITS
RIGHT TO RECOVER FROM SELLER ANY DAMAGES, CLAIMS, FINES,
PENALTIES OR EXPENSES, THAT MAY IN ANY WAY BE CONNECTED WITH THE
PHYSICAL CONDITION OF THE PERSONAL PROPERTY INCLUDED IN THE
ASSETS, WHETHER KNOWN OR UNKNOWN.
5.03 Contracts, Files and Records. At the Closing or as
soon thereafter as practicable, Seller shall furnish to Buyer, at
Buyer's election and Buyer's expense, copies of all lease,
contract and well files relating to the Assets and maintained by
Seller, except those merely incidental thereto, interpretive
data, economic analyses of the value of the Assets and any
information subject to non-disclosure obligations. Seller does
not warrant the accuracy or completeness of any information
furnished and reliance thereon is at Buyer's sole risk. Buyer
shall take title to the Assets subject to the terms and
conditions of and shall assume the obligations of Seller, as of
the Effective Date, in all contracts affecting the Leases,
including but not limited to the contracts described in Exhibits
A-I through A-3.
5.04 NORM. Naturally occurring radioactive material
("NORM") may be associated with oil and gas producing
operations, and as a result the facilities and production
equipment transferred herein may be contaminated by NORM.
Accordingly, Buyer shall comply with the applicable federal and
state laws and regulations governing (a) NORM and (b) facilities
and equipment contaminated by or containing NORM. Buyer
expressly assumes the obligation of disposal of equipment and/or
of deposits and scale contained therein pursuant to the
regulations of any governmental agencies having jurisdiction,
regardless of whether the NORM, if any, was deposited before or
after the Effective Date, AND INDEMNIFIES SELLER AGAINST ANY
LIABILITY ATTRIBUTABLE THERETO.
5.05 Texas Deceptive Trade Practices Act Waiver. Seller
and Buyer certify that they are not "Consumers" within the
meaning of the Texas Deceptive Trade Practices - Consumer
Protection Act, Subchapter E of Chapter 17, Sections 17.41, et
seq., of the Texas Business and Commerce Code, as amended (the
"DTPA"). The parties covenant, for themselves and for and on
behalf of any successors and assignees, that if the DTPA
is applicable, (a) the parties are "business consumers"
hereunder, (b) each party hereby waives and releases all of its
rights and remedies thereunder (other than Section 17.555,
Texas Business and Commercial Code) as applicable to the other
party and its successors, and (c) each party shall defend and
indemnify the other from and against any and all claims, demands,
or causes of action of or by that party or any successor or any
of its affiliates based in whole or in part on the DTPA, arising
out of or in connection with the transaction set forth in this
Agreement.
5.06 Net Revenue Interests. To Seller's knowledge and
belief, the net revenue interest conveyed in the Assignments
attached hereto as Exhibits A-1 and A-2 is 83.33% and the net
revenue interest conveyed in the Assignment attached hereto as
Exhibit A-3 is 78.33%. If Buyer's due diligence review of the
Assets indicates a materially (at least 5%) lesser net revenue
interest in any of the Leases, Buyer may rescind this Agreement
not later than January 7, 1997 and Seller shall return the Buyer
Stock to Buyer.
ARTICLE VI
AUTHORITY
Each party hereto represents and warrants to the other (a)
that it has full power and authority to enter into this Agreement
and (b) that no legal or administrative proceeding is pending or
threatened that would inhibit it from entering into or
consummating this Agreement.
ARTICLE VII
MISCELLANEOUS
7.01 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
EXCLUDING, HOWEVER, (a) ANY PROVISION OF TEXAS LAW THAT WOULD
REQUIRE THE APPLICATION OF THE LAW OF A DIFFERENT JURISDICTION
AND THE PROVISIONS OF EXHIBIT B.
7.02 Exhibits. The exhibits to this Agreement are
incorporated herein by reference.
7.03 Successors and Assigns. The terms, covenants and
conditions hereof bind and inure to the benefit of Buyer and
Seller and their successors and assigns.
7.04 Conflicts. This Agreement supersedes all prior
agreements regarding the subject matter hereof, whether written
or oral.
7.05 Survival. The covenants, obligations, indemnities,
representations and warranties included in this Agreement shall
survive the Closing and remain actionable thereafter.
7.06 Product of Negotiation: Prior Agreements. The
parties acknowledge that this Agreement is a product of
negotiation between them and that they have had an adequate
opportunity to review each provision contained herein and to
submit the Agreement to legal counsel for review and comment.
Based upon the foregoing, the parties agree that the rule of
construction that a contract be construed against the drafter, if
any, shall not apply to the interpretation or construction of
this Agreement.
EXECUTED on the date first written above.
SELLER:
SOCO OFFSHORE, INC.
By: /Peter C. Forbes
Peter C. Forbes
President JER
BUYER:
DELTA PETROLEUM CORPORATION
By:/Aleron H. Larson, Jr.
Aleron H. Larson, Jr.
Chairman/CEO
EXHIBIT A-1
CHANNEL ISLANDS BLOCK 54N-84W
OCS-P0320
UNITED STATES OF AMERICA
OUTER CONTINENTAL SHELF
OFFSHORE CALIFORNIA
ASSIGNMENT OF INTEREST
This ASSIGNMENT, from SOCO OFFSHORE, INC., a Delaware
Corporation, whose address is 1221 Lamar, Suite 1200, Houston,
Texas 77010 (hereinafter called "Assignor") to DELTA PETROLEUM
CORPORATION, a Colorado Corporation, whose address is 555
Seventeenth Street, Suite 3310, Denver, Colorado 80202
(hereinafter called "Assignee");
WITNESSETH:
That Assignor, for and in consideration of the sum of
Ten and No/100 Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, does hereby SELL, TRANSFER, ASSIGN, SET OVER and
CONVEY unto Assignee, subject to the terms and provisions set
forth herein, an undivided 2.41934% interest (hereinafter called
the "Assigned Interest") in and to all rights in the Oil and Gas
Lease more particularly described on Exhibit "A", attached hereto
and made a part hereof for all purposes (hereinafter called the
"Lease"), together with a like interest in and to all wells,
fixtures, equipment, or personal property in, on, or used in
connection with the Lease.
This ASSIGNMENT is made by Assignor and accepted by
Assignee subject to the following:
1. the terms, provisions and conditions of the Lease and
any limitation or contained in the Lease;
2. all obligations and burdens affecting the Lease;
3. the Amended and Restated Exploration Agreement dated as
of February 22, 1982, (hereinafter called the "Exploration
Agreement")' and
4. all existing obligations and burdens related to the
Assigned Interest including, but not limited to, all obligations
and burdens described in Exhibit "A".
Assignee may, subject to the restrictions upon
assignments provided in the Exploration Agreement and in any
other agreements to which this Assignment is made subject,
transfer, in whole or in part, its rights under this Assignment.
TO HAVE AND TO HOLD the Assigned Interest hereby
assigned unto Assignee, its successors and assigns forever; and
Assignor hereby binds itself and its successors to
WARRANT and FOREVER DEFEND the title to the Assigned Interest
against every person whomsoever lawfully claiming or to claim the
same, or any part thereof, by, through or under Assignor, but not
otherwise.
The terms and conditions of this Assignment shall extend
to and be binding upon the successors and assigns of the parties.
This assignment is made effective December 1, 1996,
subject to the approval thereof by the Minerals Management
Service, United States Department of the Interior.
IN WITNESS WHEREOF, the parties have executed this
instrument on the dates acknowledged below.
ASSIGNOR:
Witnesses: SOCO OFFSHORE, INC.
Maria A. Gomez By:s/Brian H. Macmillan
Holly Vogler Brian H. Macmillan
Attorney-in-Fact
ASSIGNEE:
Witnesses: DELTA PETROLEUM CORPORATION
Roger A. Parker
By:s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr.
Chairman/CEO
STATE OF TEXAS
COUNTY OF HARRIS
On this 20th day of December 1996, before me appeared
Brian H. Macmillan, to me personally known, who, being by me duly
sworn, did say that he is Attorney-in-Fact for SOCO OFFSHORE,
INC., and that the foregoing instrument was signed on behalf of
the corporation by authority of its Board of Directors, and that
Brian H. Macmillan acknowledged the instrument to be the free act
and deed of the corporation.
s/Chrystal Lemons
Notary Public, State of Texas
[SEAL]
Commission Expires: 7-26-97
STATE OF COLORADO
COUNTY OF DENVER
On this 9th day of December 1996, before me appeared
Aleron H. Larson, Jr. to me personally known, who being by me
duly sworn, did say that he is Chairman/CEO of DELTA
PETROLEUM CORPORATION, a Colorado corporation, and that the
foregoing instrument was signed on behalf of the corporation by
authority of its Board of Directors, and that Aleron H.
Larson, Jr. acknowledged the instrument to be the free act and
deed the corporation.
/Sheryl K. Shelton
Notary Public, State of Colorado
Commission Expires: 5-18-97
[SEAL]
EXHIBIT A
Attached to and made a part of that certain
Assignment of Interest from
SOCO OFFSHORE, INC., Assignor
to DELTA PETROLEUM CORPORATION, Assignee
effective December 1, 1996
SWORD I PROSPECT
Outer Continental Shelf
Channel Islands Area
Offshore California
OCS-P 0320: Oil and Gas Lease dated September 1, 1979
from the United States of America, Lessor to Conoco Inc., et al,
Lessee, bearing Serial No. OCS-P 0320, covering all of Block 54N
84W, OCS Leasing Map, Channel Islands Area, CAL-Map No. 6A.
This Assignment is made by Assignor and accepted by Assignee
subject to all of the terms and provisions of the following:
1 . Farmout Agreement dated November 1, 1982, between Conoco
Inc. and Huffco Petroleum Corporation, to which is attached as
Exhibit "E" to Offshore Operating Agreement effective September
1, 1979, executed November 14, 1979, between Conoco Inc. and
American Petrofina Company of Texas, et al.
2. Amendment to Operating Agreement, undated, between
Conoco Inc. and McMoRanF-reeport Oil Company, et al., executed by
Huffco Petroleum Corporation April 24, 1984.
3. Assignment dated August 12, 1983, from Conoco Inc. to
Huffco Petroleum Corporation, approved by Minerals Management
Services effective August 12, 1983.
4. Letter Agreement dated January 24, 1985, between Huffco
Petroleum Corporation and Adobe Oil & Gas Corporation.
5. Letter Agreement dated March 19, 1985, between Huffco
Petroleum Corporation and Adobe Oil & Gas Corporation;
Conditional Letter of Acceptance dated March 29, 1985, between
said parties.
6. Assignment dated April 5, 1985, from McMoRan-Freeport
Oil Company to Huffco Petroleum Corporation, approved by Minerals
Management Service effective as of January 18, 1985.
7. Assignment dated April 17, 1985, from Weeks Exploration
Company to Huffco Petroleum Corporation, approved by Minerals
Management Service effective as of January 18, 1985.
8. Assignment dated November 27, 1985, from Huffco
Petroleum Corporation to Adobe Oil & Gas Corporation, approved by
Minerals Management Service effective March 22, 1985.
9. Unit Operating Agreement executed by Conoco Inc. on June
29, 1984, ratified by Huffco Petroleum Corporation by
Subscription, Ratification and Joinder instrument dated July 27,
1984.
10. Unit Agreement for the Exploration, Development and
Operation of the Sword Unit Area, Channel Islands Area, Outer
Continental Shelf, Offshore California, dated effective July 13,
1984, executed by Conoco Inc. and approved by Minerals Management
Service effective July 13, 1984.
1 1. Subscription, Ratification and Joinder, Sword Unit
Area, Channel Islands Area, Outer Continental Shelf, Offshore
California, executed May 24, 1984, by Huffco Petroleum
Corporation.
12. Seismic Data Agreement dated January 30, 1984, between
Conoco Inc. and Huffco Petroleum Corporation.
EXHIBIT A-2
CHANNEL ISLANDS BLOCK 53N-85W
OCS-P0322
UNITED STATES OF AMERICA
OUTER CONTINENTAL SHELF
OFFSHORE CALIFORNIA
ASSIGNMENT OF INTEREST
This ASSIGNMENT, from SOCO OFFSHORE, INC., a Delaware
Corporation, whose address is 1221 Lamar, Suite 1200, Houston,
Texas 77010 (hereinafter called "Assignor") to DELTA PETROLEUM
CORPORATION, a Colorado Corporation, whose address is 555
Seventeenth Street, Suite 33 10, Denver, Colorado 80202
(hereinafter called "Assignee");
WITNESSETH:
That Assignor, for and in consideration of the sum of
Ten and No/100 Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, does hereby SELL, TRANSFER, ASSIGN, SET OVER and
CONVEY unto Assignee, subject to the terms and provisions set
forth herein, an undivided 2.02463% interest (hereinafter called
the "Assigned Interest") in and to all rights in the Oil and Gas
Lease more particularly described on Exhibit "A", attached hereto
and made a part hereof for all purposes (hereinafter called the
"Lease"), together with a like interest in and to all wells,
fixtures, equipment, or personal property in, on, or used in
connection with the Lease.
This ASSIGNMENT is made by Assignor and accepted by
Assignee subject to the following:
1. the terms, provisions and conditions of the Lease and
any limitation or contained in the Lease;
2. all obligations and burdens affecting the Lease;
3. the Amended and Restated Exploration Agreement dated as
of February 22, 1982, (hereinafter called the "exploration
Agreement")' and
4. all existing obligations and burdens related to the
Assigned Interest including, but not limited to, all obligations
and burdens described in Exhibit "A".
Assignee may, subject to the restrictions upon
assignments provided in the Exploration Agreement and in any
other agreements to which this Assignment is made subject,
transfer, in whole or in part, its rights under this Assignment.
TO HAVE AND TO HOLD the Assigned Interest hereby
assigned unto Assignee, its successors and assigns forever; and
Assignor hereby binds itself and its successors to
WARRANT and FOREVER DEFEND the title to the Assigned Interest
against every person whomsoever lawfully claiming or to claim the
same, or any part thereof, by, through or under Assignor, but not
otherwise.
The terms and conditions of this Assignment shall extend
to and be binding upon the successors and assigns of the parties.
This assignment is made effective December 1, 1996,
subject to the approval thereof by the Minerals Management
Service, United States Department of the Interior.
IN WITNESS WHEREOF, the parties have executed this
instrument on the dates acknowledged below.
ASSIGNOR:
Witnesses: SOCO OFFSHORE, INC.
Maria A. Gomez By:s/Brian H. Macmillan
Holly Vogler Brian H. Macmillan
Attorney-in-Fact
ASSIGNEE:
Witnesses: DELTA PETROLEUM CORPORATION
Roger A. Parker
By: /Aleron H. Larson, Jr.
Aleron H. Larson, Jr.
Chairman/CEO
STATE OF TEXAS
COUNTY OF HARRIS
On this 20th day of December 1996, before me appeared
Brian H. Macmillan, to me personally known,
who, being by me duly sworn, did say that he is Attorney-in-
Fact for SOCO OFFSHORE, INC., and that the foregoing instrument
was signed on behalf of the corporation by authority of its Board
of Directors, and that Brian H. Macmillan acknowledged the
instrument to be the free act and deed of the corporation.
s/Chrystal Lemons
Notary Public, State of Texas
[SEAL]
Commission Expires: 7-26-97
STATE OF COLORADO
COUNTY OF DENVER
On this 9th day of December, 1996, before me appeared
Aleron H. Larson, Jr., to me personally known, who being by me
duly sworn, did say that he is of DELTA PETROLEUM CORPORATION, a
Colorado corporation, and that the foregoing instrument
was signed on behalf of the corporation by authority of its Board
of Directors, and that Aleron H. Larson, Jr. acknowledged the
instrument to be the free act and deed the corporation.
/Sheryl K. Shelton
Notary Public, State of Colorado
Commission Expires: 5-18-97
[SEAL]
EXHIBIT A
Attached to and made a part of that certain
Assignment of Interest from
SOCO OFFSHORE, INC., Assignor
to DELTA PETROLEUM CORPORATION, Assignee
effective December 1, 1996
SWORD I PROSPECT
Outer Continental Shelf
Channel Islands Area
Offshore California
OCS-P 0322: Oil and Gas Lease dated September 1, 1979,
from the United States of America, Lessor to Conoco Inc., et al.,
Lessee, bearing Serial No. OCS-P 0322, covering all of Block 53N
85W, OCS Leasing Map, Channel Islands Area, CAL-Map No. 6A.
This Assignment is made by Assignor and accepted by Assignee
subject to all of the terms and provisions of the following:
1 . Farmout Agreement dated November 1, 1982, between Conoco
Inc. and Huffco Petroleum Corporation, to which is attached as
Exhibit "D" to Offshore Operating Agreement effective September
1, 1979, executed November 14, 1979, between Conoco Inc. and
American Petrofina Company of Texas, et al.
2. Amendment to Operating Agreement, undated, between
Conoco Inc. and McMoRanFreeport Oil Company, et al., executed
April 24, 1984, by Huffco Petroleum Corporation.
3. Letter Agreement dated January 12, 1983, between Mobil
Oil Corporation and Conoco Inc.
4. Letter Agreement dated January 21, 1983, between Mobil
Oil Corporation, et al. and Conoco Inc., et al.
5. Letter Agreement dated December 6, 1984, between Conoco
Inc. and American Petrofina Company of Texas, et al. (including
Huffco Petroleum Corporation).
6. Letter Agreement dated September 6, 1984, between Mobil
Oil Corporation, et al. and Conoco Inc.; Conditional Letter of
Acceptance dated January 17, 1985, between Conoco Inc. and Mobil
Oil Corporation, et al.
7. Assignment dated May 25, 1983, from Conoco Inc. to
Huffco Petroleum Corporation, approved by Minerals Management
Service effective July 14, 1983.
8. Assignment dated April 17, 1985, effective January 18,
1985, from Weeks Exploration Company to Huffco Petroleum
Corporation, approved by Minerals Management Service effective
January 18, 1985.
9. Assignment dated April 5, 1985, from McMoRan-Freeport
Oil Company to Huffco Petroleum Corporation, approved by Minerals
Management Service effective January 18, 1985.
10. Assignment of Oil and Gas Lease, dated effective May 5,
1983, from Mobil Oil Corporation, et al. to Conoco Inc., et al.
11. Assignment of Oil and Gas Lease, dated effective July 1,
1984, from Mobil Oil Corporation, et al. to Conoco Inc., et al.,
approved by Minerals Management Service December 23, 1985.
12. Letter Agreement dated January 24, 1985, between Huffco
Petroleum Corporation and Adobe Oil & Gas Corporation.
13. Letter Agreement dated March 19, 1985, between Huffco
Petroleum Corporation and Adobe Oil & Gas Corporation;
Conditional Letter of Acceptance dated March 29, 1985, between
said parties.
14. Assignment dated November 27, 1985, approved by Minerals
Management Service effective March 22, 1985, from Huffco
Petroleum Corporation to Adobe Oil & Gas Corporation.
15. Unit Operating Agreement executed by Conoco Inc. on June
29, 1984, ratified by Huffco Petroleum Corporation by
Subscription, Ratification and Joinder instrument dated July 27,
1984.
16. Unit Agreement for the Exploration, Development and
Operation of the Sword Unit Area, Channel Islands Area, Outer
Continental Shelf, Offshore California, dated effective July 13,
1984, executed by Conoco Inc. and approved by Minerals Management
Service effective July 13, 1984.
17. Subscription, Ratification and Joinder, Sword Unit Area,
Channel Islands Area, Outer Continental Shelf, Offshore
California, executed May 24, 1984, by Huffco Petroleum
Corporation.
18. Seismic Data Agreement dated January 30, 1984, between
Conoco Inc. and Huffco Petroleum Corporation.
EXHIBIT A-3
CHANNEL ISLANDS BLOCK 53N-84W
OCS-P 0323-A
UNITED STATES OF AMERICA
OUTER CONTINENTAL SHELF
OFFSHORE CALIFORNIA
ASSIGNMENT OF INTEREST
This ASSIGNMENT, from SOCO OFFSHORE, INC., a Delaware
Corporation, whose address is 1221 Lamar, Suite 1200, Houston,
Texas 77010 (hereinafter called "Assignor") to DELTA PETROLEUM
CORPORATION, a Colorado Corporation, whose address is 555
Seventeenth Street, Suite 3310, Denver, Colorado 80202
(hereinafter called "Assignee");
WITNESSETH:
That Assignor, for and in consideration of the sum of
Ten and No/100 Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, does hereby SELL, TRANSFER, ASSIGN, SET OVER and
CONVEY unto Assignee, subject to the terms and provisions set
forth herein, an undivided 2.02463% interest (hereinafter called
the "Assigned Interest") in and to all rights in the Oil and Gas
Lease more particularly described on Exhibit "A", attached hereto
and made a part hereof for all purposes (hereinafter called the
"Lease"), together with a like interest in and to all wells,
fixtures, equipment, or personal property in, on, or used in
connection with the Lease.
This ASSIGNMENT is made by Assignor and accepted by
Assignee subject to the following:
1. the terms, provisions and conditions of the Lease and
any limitation or contained in the Lease;
2. all obligations and burdens affecting the Lease;
3. the Amended and Restated Exploration Agreement dated as
of February 22, 1982, (hereinafter called the "Exploration
Agreement")' and
4. all existing obligations and burdens related to the
Assigned Interest including, but not limited to, all obligations
and burdens described in Exhibit "A".
Assignee may, subject to the restrictions upon
assignments provided in the Exploration Agreement and in any
other agreements to which this Assignment is made subject,
transfer, in whole or in part, its rights under this Assignment.
TO HAVE AND TO HOLD the Assigned Interest hereby
assigned unto Assignee, its successors and assigns forever; and
Assignor hereby binds itself and its successors to
WARRANT and FOREVER DEFEND the title to the Assigned Interest
against every person whomsoever lawfully claiming or to claim the
same, or any part thereof, by, through or under Assignor, but not
otherwise.
The terms and conditions of this Assignment shall extend
to and be binding upon the successors and assigns of the parties.
This assignment is made effective December 1, 1996,
subject to the approval thereof by the Minerals Management
Service, United States Department of the Interior.
IN WITNESS WHEREOF, the parties have executed this
instrument on the dates acknowledged below.
ASSIGNOR:
Witnesses: SOCO OFFSHORE, INC.
Maria A. Gomez
Holly Vogler By:s/Brian H. Macmillan
Brian H. Macmillan
Attorney-in-Fact
ASSIGNEE:
Witnesses: DELTA PETROLEUM CORPORATION
Roger A. Parker
By: s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr.
Chairman/CEO
STATE OF TEXAS
COUNTY OF HARRIS
On this 20th day of December 1996, before me appeared
Brian H. Macmillan, to me personally known, who, being by me duly
sworn, did say that he is Attorney-in-Fact for SOCO OFFSHORE,
INC., and that the foregoing instrument was signed on behalf of
the corporation by authority of its Board of Directors, and that
Brian H. Macmillan acknowledged the instrument to be the free act
and deed of the corporation.
s/Chrystal Lemons
Notary Public, State of Texas
Commission Expires: 7-26-97
[SEAL]
STATE OF COLORADO
COUNTY OF DENVER
On this 9th day of December, 1996, before me appeared
Aleron H. Larson, Jr., to me personally known, who being by me
duly sworn, did say that he is of Chairman/CEO of DELTA PETROLEUM
CORPORATION, a Colorado corporation, and that the foregoing
instrument was signed on behalf of the corporation by authority
of its Board of Directors, and that Aleron H. Larson, Jr.
acknowledged the instrument to be the free act and deed the
corporation.
s/Sheryl K. Shelton
Notary Public, State of Colorado
Commission Expires: 5-18-97
[SEAL]
EXHIBIT A
Attached to and made a part of that certain
Assignment of Interest from
SOCO OFFSHORE, INC., Assignor
to DELTA PETROLEUM CORPORATION, Assignee
effective December 1, 1996
SWORD I PROSPECT
Outer Continental Shelf
Channel Islands Area
Offshore California
OCS-P 0323: Oil and Gas Lease dated September 1, 1979,
from the United States of America, Lessor to Mobil Oil
Corporation and Hamilton Brothers Oil Company, Lessee,
bearing Serial No. OCS-P 0323, covering all of Block 53N 84W, OCS
Leasing Map, Channel Islands Area, CAL-Map No. 6A, INSOFAR AND
ONLY INSOFAR as said Lease covers the NW/4 and the NW/4 of the
SW/4 of Block 53N 84W.
This Assignment is made by Assignor and accepted by Assignee
subject to all of the terms and provisions of the following:
1 . Farmout Agreement dated November 1, 1982, between Conoco
Inc. and Huffco Petroleum Corporation, to which is attached as
Exhibit "D" to Offshore Operating Agreement effective
September 1, 1979, executed November 14, 1979, between Conoco
Inc. and American Petrofina Company of Texas, et al.
2. Amendment to Operating Agreement, undated, between
Conoco Inc. and McMoRanFreeport Oil Company, et al., executed
April 24, 1984, by Huffco Petroleum Corporation.
3. Letter Agreement dated January 12, 1983, between Mobil
Oil Corporation and Conoco Inc.
4. Letter Agreement dated January 21, 1983, between Mobil
Oil Corporation, et al. and Conoco Inc., et al.
5. Letter Agreement dated December 6, 1984, between Conoco
Inc. and American Petrofina Company of Texas, et al. (including
Huffco Petroleum Corporation).
6. Letter Agreement dated September 6, 1984, between Mobil
Oil Corporation, et al. and Conoco Inc.; Conditional Letter of
Acceptance dated January 17, 1985, between Conoco Inc. and Mobil
Oil Corporation, et al.
7. Assignment dated May 25, 1983, from Conoco Inc. to
Huffco Petroleum Corporation, approved by Minerals Management
Service effective July 14, 1983.
8. Assignment dated April 17, 1985, effective January 18,
1985, from Weeks Exploration Company to Huffco Petroleum
Corporation, approved by Minerals Management Service
effective January 18, 1985.
9. Assignment dated April 5, 1985, from McMoRan-Freeport
Oil Company to Huffco Petroleum Corporation, approved by Minerals
Management Service effective January 18, 1985.
10. Assignment of Oil and Gas Lease, dated effective May 5,
1983, from Mobil Oil Corporation, et al. to Conoco Inc., et al.
11. Assignment of Oil and Gas Lease, dated effective July 1,
1984, from Mobil Oil Corporation, et al. to Conoco Inc., et al.,
approved by Minerals Management Service December 23, 1985.
12. Letter Agreement dated January 24, 1985, between Huffco
Petroleum Corporation and Adobe Oil & Gas Corporation.
13. Letter Agreement dated March 19, 1985, between Huffco
Petroleum Corporation and Adobe Oil & Gas Corporation;
Conditional Letter of Acceptance dated March 29, 1985, between
said parties.
14. Assignment dated November 27, 1985, approved by Minerals
Management Service effective March 22, 1985, from Huffco
Petroleum Corporation to Adobe Oil & Gas Corporation.
15. Unit Operating Agreement executed by Conoco Inc. on June
29, 1984, ratified by Huffco Petroleum Corporation by
Subscription, Ratification and Joinder instrument dated July 27,
1984.
16. Unit Agreement for the Exploration, Development and
Operation of the Sword Unit Area, Channel Islands Area, Outer
Continental Shelf, Offshore California, dated effective July 13,
1984, executed by Conoco Inc. and approved by Minerals Management
Service effective July 13, 1984.
17. Subscription, Ratification and Joinder, Sword Unit Area,
Channel Islands Area, Outer Continental Shelf, Offshore
California, executed May 24, 1984, by Huffco Petroleum
Corporation.
18. Seismic Data Agreement dated January 30, 1984, between
Conoco Inc. and Huffco Petroleum Corporation.
EXHIBIT B
INVESTMENT REPRESENTATION AGREEMENT
Delta Petroleum Corporation
555 17th Street, Suite 3310
Denver, Colorado 80202
Gentlemen:
1. Subscription. The undersigned SOCO Offshore, Inc.,
(and designees) hereby agrees to acquire, from Delta Petroleum
Corporation ("DPC" or the "Company") 63,000 shares of the
restricted and legended common stock of DPC (collectively the
"Securities"), in exchange for certain interests in @e federal
leases included in the Sword Unit offshore Santa Barbara,
California, as referenced in that certain agreement of even date
herewith, a copy of which is attached, in a private negotiated
transaction pursuant to Section 3(b) and/or 4(2) of the
Securities Act of 1933 (the "Act") (and the regulations
promulgated thereunder) and/or other applicable statute, rule
and\or regulation.
2. Representations and Warranties. The undersigned
warrants and represents to the Company that.
a. The Securities are being acquired by the
undersigned for investment for its own account, and not with a
view to the offer or sale in connection therewith, or the
distribution thereof, and that the undersigned is not now, and
will not in the future, participate, directly or
indirectly, in an underwriting of any such undertaking except in
compliance with applicable registration provisions of the Act.
b. The undersigned will not @, or cause to be taken,
any action that would cause it to be deemed an underwriter of the
Securities, as deemed in Section 2(l 1) of the Securities Act
of 1933, as amended (the 'Act").
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 the knowledge and experience of the
undersigned (and that of its officers and directors and their
respective advisors and investment bankers) in financial and
business matters in general, and investments in particular, it is
capable of evaluating the merits and risks of an investment in
the Securities.
9. The undersigned is capable of bearing the economic
risks of an investment in the Securities.
h. 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.
i. If required to do so, it 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.
j. The undersigned hereby represents and warrants to
the Company that all of the representations, warranties and
acknowledgements contained in this agreement, and the agreements,
if any, 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 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 this
agreement including without limitation breach of any warranty or
representation herein.
3. Restrictions. The undersigned acknowledges and
understands that the Securities are unregistered and must be held
indefinitely by the undersigned and/or its assignees unless they
are subsequently registered under the Act or
an exemption from such registration is available. The
undersigned @er acknowledges that it is fully aware of the
applicable limitations on the resale of the Securities. For
instance, Rule 144 (the "Rule") permits sales of "Restricted
Securities" held for not less than two years and upon compliance
with the requirements of such Rule. Further, the Securities must
be sold in an active market and appropriate information relating
to the Company must be generally available in order to effectuate
a transaction pursuant to the Rule by an affiliate
of the Company. Any and all certificates representing the
Securities and any and all securities issued in replacement in
replacement or conversion thereof or in exchange thereof shall
bear the following legend, or one substantially similar thereto,
which the undersigned has read and understands:
The Securities represented by this Certificate have not
been registered under the Securities Act of 1933 (the "Act") and
are "restricted securities" as that term is deemed in Rule 144
under the Act. The Securities may not be offered for sale, sold
or otherwise transferred except pursuant to an effective
registration statement under the Act or pursuant to an exemption
from registration under the Act, the availability of which is to
be established to the satisfaction of the Company.
The undersigned further agrees that the Company shall have the
right to issue a stop transfer instruction to its transfer agent,
if any, or to note a stop transfer instruction in its stockholder
records, which will prevent any resale of the securities
prior to two years from purchase which is not in compliance with
the Rule or subject to an effective registration statement,
without written consent from the Company, and it acknowledges
that the Company has informed it of its intention
to issue such instructions when and if necessary.
4. Registration Rights. Subject to the approval of an
underwriter, if any, involved in a registration relating to a
public offering of the Company's securities, in the event that
the Company shall file a registration statement (or similar
document) with the U.S. Securities & Exchange Commission on a
form which would legally allow inclusion of the shares issued
pursuant hereto, the Company shall include such shares in such
registration statement, at the Company's sale
cost. At the time of such registration, the undersigned and the
Company shall enter into an indemnification and contribution
agreement containing customary terms pursuant to which the
Company will indemnify the undersigned from liability
arising out of information contained in or required to be
contained in such registration statement and the related
prospectus (other than information provided
in writing by the undersigned).
5. 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 Company and to the
personal and legal representatives, heirs, guardians,
successors and permitted assignees of the undersigned.
6. 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.
SOCO Offshore, Inc.
By:s/Peter C. Forbes
Authorized Officer
74-2209188 1221 Lamar Suite 1200
Social Security or Tax Address
Identification Number
Houston, Texas 77010
City, State and Zip Code
ACCEPTED:
Delta Petroleum Corporation
By: s/Aleron H. Larson, Jr.
December 19, 1996
EMPLOYMENT AGREEMENT
This agreement is entered into as of November 14, 1996, by and
between Delta Petroleum Corporation ("Delta" or the "Company") and
David Castaneda ("Employee").
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.
2. Employment Period. The Company hereby engages Employee
for the period commencing February 1, 1997 and ending January 31,
1998 ("Employment Period") to serve as manager of shareholder
relations, broker relations and marketing and to render such other
services in that capacity as the Company shall reasonably require.
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 one to the other 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; 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 7 below, during the Employment Period, Employee shall be
compensated as follows:
a) Employee shall earn a salary payable through issuance of
an aggregate of 30,000 shares of the company's common stock at the
rate of 2,500 shares per month for the twelve month employment
period subject to the customary payroll deductions for Federal,
State and local taxes which Employee shall direct to the Company
from the proceeds of any sale of the common stock. The Company,
for convenience, may issue the shares representing Employee's
salary for the twelve month employment period, provided, however,
that Employee, without company permission, may not sell shares
prior to the month in which such shares are earned.
b) Employee shall also receive options, which shall be
issued under the company's 1993 Incentive Plan, to purchase 75,000
shares of common stock at a purchase price of $6.00 per share, one-
third of which shall vest March 31, June 30, and September 30,
1997, and all of which shall expire November 14, 2006.
Notwithstanding other provisions herein, options which have not
vested shall expire in the event the employee's employment is
terminated under this agreement prior to the expiration of the
employment period except as provided in paragraph 6 below. Options
which have vested shall not expire upon termination with or without
cause.
c) The Board of Directors and/or the Compensation Committee
of the Board of Directors of the Company may review Employee's
compensation from time to time with a view to making such increases
in Employee's compensation or granting options or declaring such
bonuses or other benefits to Employee as maybe merited and
warranted in light of factors considered pertinent;
5. Expenses. All pre-approved 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 in cash or
in common stock as in paragraph 4.a) above at the election of the
Company. Expenses which are not approved by the Company will not
be reimbursed to Employee. Employee shall receive an option to
purchase 25,000 shares at $5.50 until December 31, 1997 which is
acknowledged by the parties hereto to be given partially in lieu of
such unreimbursed expenses. 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 expense.
6. 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 remainder of the Employment Period.
7. 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.
8. Termination without Cause. In the event Employee is
terminated by the Company for any reason except as set forth at
Paragraph 7 above, he shall continue to be compensated for the
duration of the Employment Period in the full amounts provided for
in Paragraphs 4, 5, and 6 hereof.
9. 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.
10. 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.
11. 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.
12. 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/David Castaneda
David Castaneda
RATIFIED AND APPROVED BY DELTA
PETROLEUM CORPORATION COMPENSATION
COMMITTEE AND INCENTIVE PLAN
COMMITTEE:
s/Terry D. Enright
Terry D. Enright
s/Jerrie F. Eckelberger
Jerrie F. Eckelberger
