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
October 16, 1998
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) In an agreement dated October 12, 1998 ("Acquisition
Agreement"), Delta Petroleum Corporation agreed to acquire two licenses
for exploration of approximately 1.9 million acres in the Pavlodar
region of Eastern Kazakhstan by agreeing to exchange its common stock
and warrants in a private transaction for 100% of Ambir Properties, Inc.
("Ambir"), a private company which holds the licenses as its sole asset.
A copy of the Acquisition Agreement is incorporated herein as Exhibit
99.1. The transaction includes the exchange of 250,000 shares of
restricted Delta common stock and 500,000 warrants to purchase common
stock at prices ranging from $3.50 to $5.00 per share. The stock and
warrants will be held in escrow pending receipt by Delta before March
31, 1999, of a legal opinion verifying certain representations by the
sellers and the status of licenses and contracts with the government of
Kazakhstan. A work plan prepared by Delta has been approved by the
Kazakhstan government which establishes minimum work and spending
commitments until February 1, 2003. The acquisition is a high risk,
frontier exploration project. Delta does not presently have the
expertise nor the resources to meet all commitments that will be
required in the later years of the work plan. Delta may seek other
companies in the oil and gas industry to participate in the
implementation of the work plan.
The Acquisition Agreement includes a Voting Agreement under
which the officers of Delta, Aleron H. Larson, Jr., Chairman and CEO,
and Roger A. Parker, President, vote all shares owned by the selling
shareholders of Ambir until December 31, 2002.
(B) The Company has entered into an agreement dated October 2,
1998 with MDC Group, Inc. ("MDC") entitled "Agreement for Public and
Broker Relations" ("Agreement"), a copy of which, with exhibits, is
incorporated herein as Exhibit 99.2. The Agreement is for the period
of one year and provides for the Company to issue 350,000 shares of its
restricted common stock and options for the purchase of common stock at
prices ranging from $2.50 to $6.00 per share with expiration dates
ranging from 90 days to one year as compensation for services to MDC.
Prior to the end of the first six month period of the Agreement, Delta
may elect to terminate the Agreement for the second six month period in
which event MDC will return 100,000 shares of the common stock to Delta.
MDC will pay for all printing, publication and mailing costs associated
with disseminating information about Delta with certain minimum
requirements (see Agreement; Exhibit 99.2).
The Agreement also includes a Voting Agreement under which the
officers of Delta, Aleron H. Larson, Jr., Chairman and CEO, and Roger A.
Parker, President, vote all shares owned by MDC until December 31, 2002.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
99.1 Acquisition Agreement between Delta Petroleum Corporation and
Ambir Properties, Inc. dated October 12, 1998.
99.2 Agreement for Public and Broker Relations between MDC Group,
Inc. and Delta Petroleum Corporation dated October 2, 1998.
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: October 16, 1998 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.
(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 Acquisition Agreement between Delta Petroleum Corporation and
Ambir Properties, Inc. dated October 12, 1998.
99.2 Agreement for Public and Broker Relations between MDC Group,
Inc. and Delta Petroleum Corporation dated October 2, 1998.
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT is made this 9th day of
October 1998, by and between Delta Petroleum Corporation, a
Colorado corporation ( Delta ), Ambir Properties, Inc., a
Bahamian corporation ( Ambir ), Tony Vanetik, Danny Thomas,
and Fenham Systems Limited, a British Virgin Islands Corporation
( Shareholders ).
WHEREAS, Delta desires to acquire all of the issued and
outstanding shares of common stock of Ambir in exchange for an
aggregate of 250,000 authorized but unissued restricted shares of
Delta's common stock (the "Common Stock") and
warrants to purchase 500,000 shares of Common Stock and Delta
owning 100% of the issued and outstanding shares of Ambir's
common stock (the "Exchange").
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, and in
consideration of the mutual promises, covenants, and
representations contained herein, THE PARTIES HERETO
AGREE AS FOLLOWS:
ARTICLE 1
EXCHANGE OF SECURITIES
1.1 Issuance of Shares and Warrants. Subject to all of the
terms and conditions of this Agreement, Delta agrees to exchange
250,000 shares of Common Stock and 500,000 warrants to purchase a
like number of shares of Delta Common Stock (the "Warrants) in
exchange for all the Ambir common stock issued and
outstanding. All of the Common Stock and shares of Delta Common
Stock issuable upon exercise of the Warrants shall be subject to
a Stock Voting Agreement, the form of which is attached hereto as
Exhibit 1.1. The Warrants will be issued as follows:
Exercise
Number of Warrants Price Term
250,000 Warrants $3.50 per Five years-
share Vests immediately
100,000 Warrants $4.00 per Five years-
share Vests immediately
100,000 Warrants $4.50 per Five years-
share Vests immediately
50,000 Warrants $5.00 per Five years-
share Vests immediately
The Common Stock and Warrants will be issued in the names of
the shareholders of Ambir on the Closing, in the amounts set
forth on Schedule 1 (which is attached hereto and incorporated
herein by reference) and delivered by Delta on the Closing date
to an independent escrow agent (the "Escrow Agent") that
shall be selected by the mutual agreement of the parties hereto
to be held by such Escrow Agent as a stakeholder until the
earlier of March 31, 1999 or the date on which the legal opinion
required by Section 9.1 hereof is delivered to
Delta. In the event that such legal opinion is delivered to
Delta on or before March 31, 1999, the Escrow Agent shall be
irrevocably instructed to deliver all of the Common Stock and
Warrants directly to the shareholders of Ambir. In the
event that such legal opinion is not delivered to Delta on or
before March 31, 1999, the Escrow Agent shall be irrevocably
instructed to return all of the Common Stock and Warrants to
Delta for cancellation in which event Delta shall
return the Ambir stock to Shareholders.
1.2 Exemption from Registration. The parties hereto intend
that the Common Stock to be issued by Delta to Ambir shareholders
shall be exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Act"),
pursuant to Section 4(2) of the Act and the rules and regulations
promulgated thereunder.
1.3 No Sale or Transfer of Shares or Warrants. The
Shareholders agree that they will not attempt to sell, assign or
otherwise transfer ownership of the shares of the Common Stock or
Warrants being issued hereunder until October 9, 1999 and that
any attempt to sell, assign or transfer the Common Stock
or Warrants prior to such date shall be null and void.
1.4 Registration Rights. Delta agrees to use its best
efforts to include the shares underlying the Warrants in any
registration statement filed by Delta with the Securities and
Exchange after October 9, 1999; provided, however, that
none of such shares shall be included in any registration
statement for any public offering of securities involving an
underwriter without the underwriter's prior written consent,
which consent may be withheld or denied for any reason in
the underwriter's sole and absolute discretion. The expense of
such registration shall be borne by Delta.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF AMBIR
Except as disclosed in Schedule 2 which is attached hereto
and incorporated herein by reference, Ambir and the Shareholders
hereby represent and warrant to Delta that:
2.1 Organization. Ambir is a corporation duly organized,
validly existing, and in good standing under the laws of the
Commonwealth of the Bahamas, has all necessary corporate powers
to own its properties and to carry on its business as it is
currently conducted.
2.2 Capital. The authorized capital stock of Ambir
consists of 5,000 shares of Common Stock, of which 5,000 are
currently issued and outstanding. All of the issued and
outstanding shares of Ambir are duly authorized, validly
issued, fully paid, and nonassessable. There are no outstanding
subscriptions, options, rights, warrants, debentures,
instruments, convertible securities, or other agreements or
commitments obligating Ambir to issue or to transfer from
treasury any additional shares of its capital stock of any class.
2.3 Subsidiaries. Ambir does not have any subsidiaries or
own any interest in any other enterprise (whether or not such
enterprise is a corporation).
2.4 Directors and Officers. Schedule 2 contains the names
and titles of all directors and officers of Ambir as of the date
of this Agreement.
2.5 Financial Information. Ambir has no assets other than
those certain licenses and related agreements granted to Ambir by
the Republic of Kazakhstan to extract hydrocarbons and other
minerals, true and complete copies of which are
attached hereto as Exhibit 2.17, which licenses and related
agreements are hereinafter collectively referred to as the
("Kazakhstan Licenses"), and Ambir has no liabilities of any
kind.
2.6 Absence of Changes. Since June 30, 1998, except for
changes in the ordinary course of business which have not in the
aggregate been materially adverse, to the best of Ambir's
knowledge, Ambir has conducted its business only
in the ordinary course and has not experienced or suffered any
material adverse change in the condition (financial or
otherwise), results of operations, properties, business or
prospects of Ambir or waived or surrendered any claim or
right of material value.
2.7 Absence of Undisclosed Liabilities. Neither Ambir nor
any of its properties or assets are subject to any liabilities or
obligations of any nature, whether absolute, accrued, contingent
or otherwise and whether due or to become due that, in the
aggregate, would exceed $20,000.
2.8 Taxes. Within the times and in the manner prescribed
by law, Ambir has fully paid filed all taxes, assessments and
penalties due and payable.
2.9 Investigation of Financial Condition. Without in any
manner reducing or otherwise mitigating the representations
contained herein, Delta and/or its attorneys shall have the
opportunity to meet with accountants and attorneys to
discuss the financial condition of Ambir. Ambir shall make
available to Delta and/or its attorneys all books and records of
Ambir.
2.10 Trade Names and Rights. Ambir does not use any
trademark, service mark, trade name, or copyright in its
business, or own any trademarks, trademark
registrations or applications, trade names, service marks,
copyrights, copyright registrations or applications.
2.11 Compliance with Laws. Ambir has complied with, and is
not in violation of, applicable federal, state or local statutes,
laws and regulations (including, without limitation, any
applicable building, zoning or other law, ordinance or
regulation) affecting its properties or the operation of its
business, except for matters which would not have a material
affect on Ambir or its properties.
2.12 Litigation. Ambir is not a party to any suit, action,
arbitration or legal, administrative or other proceeding, or
governmental investigation pending or, to the best knowledge of
Ambir, threatened against or affecting Ambir or its business,
assets or financial condition, except for matters which would
not have a material affect on Ambir or its properties. Ambir is
not in default with respect to any order, writ, injunction or
decree of any federal, state, local or foreign court, department,
agency or instrumentality applicable to it. Ambir is not engaged
in any lawsuit to recover any material amount of monies due
to it.
2.13 Authority. Ambir has full corporate power and
authority to enter into this Agreement. The board of directors
and shareholders of Ambir have taken all action required to
authorize the execution and delivery of this Agreement by
or on behalf of Ambir and the performance of the obligations of
Ambir under this Agreement. No other corporate proceedings on
the part of Ambir are necessary to authorize the execution and
delivery of this Agreement by Ambir in the performance of its
obligations under this Agreement. This Agreement is, when
executed and delivered by Ambir, and will be a valid and binding
agreement of Ambir, enforceable against Ambir in accordance with
its terms, except as such enforceability may be limited by
general principles of equity, bankruptcy, insolvency, moratorium
and similar laws relating to creditors rights generally.
2.14 Ability to Carry Out Obligations. Neither the
execution and delivery of this Agreement, the performance by
Ambir of its obligations under this Agreement, nor the
consummation of the transactions contemplated under this
Agreement will to the best of Ambir's knowledge: (a) materially
violate any provision of Ambir's articles of incorporation or
bylaws; (b) with or without the giving of notice or the passage
of time, or both, violate, or be in conflict
with, or constitute a material default under, or cause or permit
the termination or the acceleration of the maturity of, any debt,
contract, agreement or obligation of Ambir (including, without
limitation, any of the Kazakhstan Licenses), or require the
payment of any prepayment or other penalties; (c)
require notice to, or the consent of, any party to any agreement
or commitment, lease or license, to which Ambir is bound; (d)
result in the creation or imposition of any security interest,
lien, or other encumbrance upon any material
property or assets of Ambir; or (e) violate any statute or law or
any judgment, decree, order, regulation or rule of any court or
governmental authority to which Ambir is bound or subject.
2.15 Full Disclosure. None of the representations and
warranties made by Ambir herein, or in any schedule, exhibit or
certificate furnished or to be furnished in connection with this
Agreement by Ambir, or on its behalf, contains any
untrue statement of material fact, or omits to state any material
fact necessary to make the statements made, in light of the
circumstances under which they are made, not misleading.
2.16 Assets. Ambir has good and marketable title to all of
its tangible and intangible properties (including, without
limitation, the Kazakhstan Licenses), and such tangible and
intangible properties are not subject to any material liens or
encumbrances.
2.17 Material Contracts and Obligations. Attached hereto on
Schedule 2 is a list of all agreements, contracts, indebtedness,
liabilities and other obligations to which Ambir is a party or by
which it is bound that are material to the conduct and operations
of its business and properties which provide for
payments to or by Ambir in excess of $5,000; or which involve
transactions or proposed transactions between Ambir and its
officers and directors. Copies of such agreements and contracts
and documentation evidencing such liabilities and
other obligations have been made available for inspection by
Delta and its counsel. All of such agreements and contracts are
valid, binding and in full force and effect in all material
respects, assuming due execution by the other
parties to such agreements and contracts. Except as set forth on
Schedule 2, Ambir is not a party to or otherwise bound by any
contract, agreement, plan, lease, license, commitment or
undertaking which is materially adverse, materially
onerous, or materially harmful to Ambir's business.
2.18 Consents and Approvals. Ambir has all of the material
licenses, permits, orders, approvals and authorizations that are
necessary for Ambir to immediately commence the commercial
exploitation of hydrocarbons pursuant to the
Kazakhstan Licenses. The Work Plan attached hereto as Exhibit
2.18 (the "Work Plan") has been adopted and approved in its
entirety by the Kazakhstan government and is in full force and
effect. Any and all provisions of the Kazakhstan
Licenses that are currently in apparent default or noncompliance
by Ambir (or which conflict with the Work Plan in any manner) are
either fully cured by such adoption of the Work Plan or have been
waived or otherwise modified in writing
by the Kazakhstan government. To the extent that there is any
conflict between any of the provisions of any of the Kazakhstan
Licenses and any of the provisions of the Work Plan, the
provisions of the Work Plan prevail and any and all such
conflicting provisions of the Kazakhstan Licenses are superseded
and replaced by the provisions of the Work Plan. The provisions
of the Work Plan replace, satisfy and/or supersede any and all of
the provisions of the Kazakhstan Licenses which relate directly
or indirectly to spending and work requirements pursuant
thereto, and the expenditures set forth in the Work Plan are the
only material expenditures that are required by the Kazakhstan
Licenses or any other related document. No consent, approval or
authorization of, or declaration, filing or
registration with, any governmental or regulatory authority is
required to be made or obtained by Ambir in connection with: (a)
the execution and delivery by Ambir of this Agreement; (b) the
performance by Ambir of its obligations under
this Agreement; or (c) the consummation by Ambir of the
transactions contemplated under this Agreement. Neither Ambir
nor any of the Shareholders is aware of any additional license,
permit, order, approval or authorization that will be
required to be obtained by either Delta or Ambir in order for
Ambir to immediately commence the commercial exploitation of
hydrocarbons pursuant to the Kazakhstan Licenses after the
consummation of the transaction contemplated by
this Agreement.
2.19 Compliance With Applicable Laws; Environmental Matters.
To the best of Ambir's knowledge, Ambir and all of the real
properties subject to the Kazakhstan Licenses and related
agreements are in compliance in all material
respects with all applicable laws, ordinances, regulations,
rules, reporting requirements, judgments, orders, decrees and
other legal requirements of any kind (hereinafter collectively
referred to as the "General Laws"), including without
limitation all applicable laws, ordinances, regulations, rules,
reporting requirements, judgments, orders, decrees and other
legal requirements of any kind concerning or relating to the
protection of health and the environment (hereinafter
collectively referred to as the "Environmental Laws"). Neither
Ambir nor any of the Shareholders has received any notification
of (and none of them is otherwise aware of) any violation,
citation, complaint, request for information,
order, directive, compliance schedule, or other similar
enforcement order, or any other notice from any administrative or
governmental agency, indicating that any
of the property subject to the Kazakhstan Licenses was not, is
not or may in the future not be in compliance in all material
respects with the General Laws and the Environmental Laws. To
the best knowledge and belief of Ambir and each of
the Shareholders, all of the real properties subject to the
Kazakhstan Licenses are free of all materials designated as
hazardous substances, wastes, hazardous materials, pollutants or
contaminants under any Environmental Law.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF DELTA
Except as disclosed in Schedule 3 which is attached hereto
and incorporated herein by reference, Delta represents and
warrants to Ambir that:
3.1 Organization. Delta is a corporation duly organized,
validly existing, and in good standing under the laws of
Colorado, has all necessary corporate powers to own its
properties and to carry on its business as it is
currently conducted.
3.2 Capitalization. The authorized capital stock of Delta
consists of 3,000,000 authorized shares of $0.10 par value
Preferred Stock, of which no shares are currently issued or
outstanding, and 300,000,000 shares of $0.01 par
value Common Stock, of which 5,513,858 shares are currently
issued and outstanding. All of the issued and outstanding shares
of Common Stock are duly authorized, validly issued, fully paid
and nonassessable. Except as set forth in Schedule 3 attached
hereto, there are no outstanding subscriptions, options,
rights, warrants, convertible securities, or other agreements or
commitments obligating Delta to issue or to transfer from
treasury any additional shares of its capital stock of any class.
3.3 Directors and Officers. Schedule 3 contains the names
and titles of all directors and officers of Delta as of the date
of this Agreement.
3.4 Financial Statements. Delta has delivered to Ambir its
audited balance sheet and statements of operations and cash flows
as of and for the period ended June 30, 1998, (the Financial
Statements) as filed with the United States Securities and
Exchange Commission (the "SEC"). The Financial Statements
are complete and correct in all material respects and have been
prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods
indicated. The Financial Statements accurately set
out and describe the financial condition and operating results of
Delta as of the dates, and for the periods, indicated therein.
3.5 Absence of Changes. Since June 30, 1998, except for
changes in the ordinary course of business which have not in the
aggregate been materially adverse, to the best of Delta's
knowledge, Delta has not experienced or suffered
any material adverse change in its condition (financial or
otherwise), results of operations, properties, business or
prospects or waived or surrendered any claim or right of material
value.
3.6 Tax Returns. Within the times and in the manner
prescribed by law, Delta has filed all federal, state and local
tax returns required by law and has paid all taxes, assessments
and penalties due and payable.
3.7 Investigation of Financial Condition. Without in any
manner reducing or otherwise mitigating the representations
contained herein, Ambir shall have the opportunity to meet with
Delta's accountants and attorneys to discuss the
financial condition of Delta. Delta shall make available to
Ambir all books and records of Delta.
3.8 Compliance with Laws. Delta has complied with, and is
not in violation of, applicable federal, state or local statutes,
laws and regulations affecting its properties or the operation of
its business, except for the noncompliance or violation of those
statutes, laws or regulations, the violation
of which could not reasonably be expected to have a material
adverse impact on Delta's current business or operations.
3.9 Litigation. Delta is not a party to any suit, action,
arbitration, or legal, administrative, or other proceeding, or
governmental investigation pending or, to the best knowledge of
Delta, threatened against or affecting Delta
or its business, assets, or financial condition. Delta is not in
default with respect to any order, writ, injunction, or decree of
any federal, state, local, or foreign court, department agency,
or instrumentality.
3.10 No Prior or Pending Investigation. Delta is not aware
of any legal proceedings by the SEC, any state securities
regulatory agency, or any other governmental agency regarding
Delta or any officers or directors of Delta or any
shareholders or controlling persons of such shareholders.
3.11 Authority. Delta has full corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The Board of
Directors of Delta has taken all action required to
authorize the execution and delivery of this Agreement by or on
behalf of Delta, the performance of the obligations of Delta
under this Agreement and the consummation by Delta of the
transactions contemplated under this Agreement. No
other corporate proceedings on the part of Delta are necessary to
authorize the execution and delivery of this Agreement by Delta
in the performance of its obligations under this Agreement. This
Agreement is, and when executed and
delivered by Delta, will be a valid and binding agreement of
Delta, enforceable against Delta in accordance with its terms,
except as such enforceability may be limited by general
principles of equity, bankruptcy, insolvency, moratorium and
similar laws relating to creditors rights generally.
3.12 Ability to Carry Out Obligations. Neither the
execution and delivery of this Agreement, the performance by
Delta of its obligations under this Agreement, nor the
consummation of the transactions contemplated under this
Agreement will, to the best of Delta's knowledge: (a) violate
any provision of Delta's articles of incorporation or bylaws; (b)
with or without the giving of notice or the passage of time, or
both, violate, or be in conflict with, or
constitute a default under, or cause or permit the termination or
the acceleration of the maturity of, any debt, contract,
agreement or obligation of Delta, or require the payment of any
prepayment or other penalties; (c) require notice to, or the
consent of, any party to any agreement or commitment, lease or
license, to which Delta is bound; (d) result in the creation or
imposition of any security interest, lien or other encumbrance
upon any property or assets of Delta; or (e) violate any statute
or law or any judgment, decree, order, regulation or rule of any
court or governmental authority to which Delta is bound
or subject.
3.13 Validity of Delta Shares. The shares of Delta Common
Stock to be delivered pursuant to this Agreement, when issued in
accordance with the provisions of this Agreement, will be duly
authorized, validly issued, fully paid and nonassessable.
3.14 Full Disclosure. None of the representations and
warranties made by Delta herein, or in any exhibit, certificate
or memorandum furnished or to be furnished by Delta, or on its
behalf (including without limitation Delta's annual
report on Form 10-KSB for the fiscal year ended June 30, 1998),
contains any untrue statement of material fact, or omits to state
any material fact necessary to make the statements made, in light
of the circumstances under which they are made, not misleading.
3.15 Consents and Approvals. No consent, approval or
authorization of, or declaration, filing or registration with,
any governmental or regulatory authority is required to be made
or obtained by Delta in connection with: (a) the
execution and delivery by Delta of its obligations under this
Agreement; (b) the performance by Delta of its obligations under
this Agreement; or (c) the consummation by Delta of the
transactions contemplated by this Agreement.
3.16 Compliance with Laws. Delta has complied with, and is
not in violation of, applicable federal, state or local statutes,
laws and regulations (including, without limitation, any
applicable building, zoning or other law, ordinance or
regulation) affecting its properties or the operation of its
business, except for matters which would not have a material
affect on Delta or its properties.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
4.1 Share Ownership. Shareholders hold 100% of the issued
and outstanding shares of Ambir common stock. Such shares are
owned of record and beneficially by Shareholders, and such shares
are not subject to any lien, encumbrance or pledge, but they are
restricted securities as defined in Rule 144
of the Securities Act of 1933. Shareholders have the full and
requisite authority to exchange such shares pursuant to this
Agreement.
4.2 Investment Intent. Shareholders understand and
acknowledge that the shares of Delta Common Stock (the "Delta
Shares") are being offered for exchange in reliance upon the
exemption provided in Section 4(2) of the Securities Act of
1933 (the "Securities Act") for non-public offerings; and
Shareholders make the following representations and warranties
with the intent that the same may be relied upon in determining
the suitability of Shareholders as purchasers of
securities:
(a) The Delta Shares are being acquired solely for the
account of Shareholders, for investment purposes only, and not
with a view to, or for sale in connection with, any distribution
thereof and with no intention of distributing or reselling any
part of the Delta Shares.
(b) Shareholders agree not to dispose of their Delta
Shares or any portion thereof unless and until counsel for Delta
shall have reasonably determined that the intended disposition is
permissible and does not violate the Securities Act or any
applicable state securities laws, or the rules and regulations
thereunder.
(c) Shareholders acknowledge that Delta has made all
documentation pertaining to all aspects of the Exchange available
to them, and has offered such persons an opportunity to discuss
the Exchange with the officers of Delta.
(d) Shareholders have relied solely upon independent
investigations made by Shareholders.
(e) Shareholders are knowledgeable and experienced in
making and evaluating investments of this nature and desires to
accept the Exchange on the terms and conditions set forth.
(f) Shareholders are able to bear the economic risk of
an investment, as a result of the Exchange, in the Delta Shares.
4.3 Indemnification. Shareholders recognize that the offer
of the Delta shares to them are based upon their representations
and warranties set forth and contained herein and hereby agree to
indemnify and hold harmless Delta against all liability, costs or
expenses (including reasonable attorney's fees) arising
as a result of any misrepresentations made herein by
Shareholders.
4.4 Legend. Shareholders agree and acknowledge that the
certificates evidencing the Delta Shares acquired pursuant to
this Agreement will have a legend placed thereon stating that the
securities have not been registered under the Act or any state
securities laws and setting forth or referred to the
restrictions on transferability and sales of the Shares.
ARTICLE 5
COVENANTS
5.1 Investigative Rights. From the date of this Agreement
until the Closing Date, each party shall provide to the other
party, and such other party's counsels, accountants, auditors,
and other authorized representatives, full access during normal
business hours and upon reasonable advance written notice
to all of each party's properties, books, contracts, commitments,
and records for the purpose of examining the same. Each party
shall furnish the other party with all information concerning
each party's affairs as the other party may reasonably
request. If the transaction contemplated hereby is not
completed, all documents received by each party and/or its
attorneys and accountants, auditors or other
authorized representatives shall be returned to the other party
who provided same upon request. The parties hereto, their
directors, employees, agents and representatives shall not
disclose any of the information described above unless
such information is already disclosed to the public, without the
prior written consent of the party to which the confidential
information pertains. Each party shall take such steps as are
necessary to prevent disclosure of such information
to unauthorized third parties.
ARTICLE 6
CONDITIONS PRECEDENT TO DELTA S PERFORMANCE
6.1 Conditions. The obligations of Delta hereunder shall
be subject to the satisfaction, at or before the Closing, of all
the conditions set forth in this Article 6. Delta may waive any
or all of these conditions in whole or in part without prior
notice; provided, however, that no such waiver of a condition
shall constitute a waiver by Delta of any other condition of or
any of Delta's other rights or remedies, at law or in equity, if
Ambir shall be in default of any of their representations,
warranties, or covenants under this Agreement.
6.2 Accuracy of Representations. Except as otherwise
permitted by this Agreement, all representations and warranties
by Ambir in this Agreement or in any written statement that shall
be delivered to Delta by Ambir under this Agreement shall be true
and accurate on and as of the Closing Date as though made
at that time.
6.3 Performance. Ambir shall have performed, satisfied,
and complied with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with by
it, on or before the Closing Date.
6.4 Absence of Litigation. No action, suit, or proceeding
before any court or any governmental body or authority,
pertaining to the transaction contemplated by this Agreement or
to its consummation, shall have been instituted
or threatened against Ambir on or before the Closing Date.
ARTICLE 7
CONDITIONS PRECEDENT TO AMBIR'S PERFORMANCE
7.1 Conditions. Ambir's obligations hereunder shall be
subject to the satisfaction, at or before the Closing, of all the
conditions set forth in this Article 7. Ambir may waive any or
all of these conditions in whole or in part
without prior notice; provided, however, that no such waiver of a
condition shall constitute a waiver by Ambir of any other
condition of or any of Ambir's rights or remedies, at law or in equity,
if Delta shall be in default of any of its representations,
warranties, or covenants under this Agreement.
7.2 Accuracy of Representations. Except as otherwise
permitted by this Agreement, all representations and warranties
by Delta in this Agreement or in any written statement that shall
be delivered to Ambir by Delta under this Agreement shall be true
and accurate on and as of the Closing Date as though made
at that time.
7.3 Performance. Delta shall have performed, satisfied,
and complied with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with by
them, on or before the Closing Date.
7.4 Absence of Litigation. No action, suit or proceeding
before any court or any governmental body or authority,
pertaining to the transaction contemplated by this Agreement or
to its consummation, shall have been instituted
or threatened against Delta on or before the Closing Date.
ARTICLE 8
CLOSING
8.1 Closing. The Closing of this transaction shall be held
at the offices of Krys Boyle Freedman & Sawyer, P.C., 600
Seventeenth Street, Suite 2700 South Tower, Denver, Colorado
80202, or at such other place or in such other
manner as shall be mutually agreed upon, at 10:00 a.m. on October
12, 1998, or such other date as shall be mutually agreed upon in
writing by the parties. At the Closing:
(a) Shareholders shall deliver duly endorsed
certificates representing their shares of Ambir being exchanged
for shares of Delta.
(b) Shareholders shall receive a certificate or
certificates representing the number of shares of Delta Common
Stock for which the shares of Ambir common stock shall have been
exchanged.
(c) Delta shall deliver a signed Consent and/or
Minutes of the Directors of Delta approving this Agreement and
each matter to be approved by the Directors of Delta under this
Agreement.
(d) Ambir shall deliver a signed Consent or Minutes of
the Directors of Ambir approving this agreement and each matter
to be approved by the Directors of Ambir under this Agreement.
In the event that the Closing is not conducted in an actual
face-to-face meeting, it is agreed that the parties may
electronically exchange copies of the documents to be delivered
at Closing via facsimile with a written representation
that the actual manually signed documents will be delivered to
the appropriate parties via overnight courier.
ARTICLE 9
POST CLOSING CONDITION TO DELTA'S PERFORMANCE
9.1 Legal Opinion. On or before March 31, 1999, Ambir
shall, at Delta's sole expense, cause Delta to receive a legal
opinion from a nationally recognized law firm that is reasonably
acceptable to Delta, which legal opinion shall be substantially
in the form attached hereto as Exhibit 9.1; provided,
however, that Ambir shall not be permitted to incur any expense
on behalf of Delta without Delta's prior written consent. In the
event that Delta does not authorize such expenditure, Ambir may,
at its option, procure the subject legal opinion at Ambir's
expense and thereby satisfy the requirements of this Section
9.1.
ARTICLE 10
MISCELLANEOUS
10.1 Captions and Headings. The Article and paragraph
headings throughout this Agreement are for convenience and
reference only, and shall in no way be deemed to define, limit,
or add to the meaning of any provision of this Agreement.
10.2 No Oral Change. This Agreement and any provision
hereof, may not be waived, changed, modified, or discharged
orally, but it can be changed by an agreement in writing signed
by the party against whom enforcement of any waiver,
change, modification, or discharge is sought.
10.3 Non-Waiver. Except as otherwise expressly provided
herein, no waiver of any covenant, condition, or provision of
this Agreement shall be deemed to have been made unless expressly
in writing and signed by the party against whom
such waiver is charged; and (i) the failure of any party to
insist in any one or more cases upon the performance of any of
the provisions, covenants, or conditions of this Agreement or to
exercise any option herein contained shall not
be construed as a waiver or relinquishment for the future of any
such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be
performed with knowledge of the breach or failure of a
covenant, condition, or provision hereof shall not be deemed a
waiver of such breach or failure, and (iii) no waiver by any
party of one breach by another party shall be construed as a
waiver with respect to any other or subsequent
breach.
10.4 Time of Essence. Time is of the essence of this
Agreement and of each and every provision hereof.
10.5 Entire Agreement. This Agreement contains the entire
Agreement and understanding between the parties hereto, and
supersedes all prior agreements and understandings.
10.6 Choice of Law. This Agreement and its application
shall be governed by the laws of the State of Colorado, except to
the extent its conflict of laws provisions would apply the laws
of another jurisdiction.
10.7 Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall
be deemed to have been duly given on the date of service if
served personally on the party to whom notice is
to be given, or on the third day after mailing if mailed to the
party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid, and properly addressed
as follows:
Delta:
Delta Petroleum Corporation
555 Seventeenth Street, Suite 3310
Denver, Colorado 80202
with a copy to:
Stanley F. Freedman, Esq.
Krys Boyle Freedman & Sawyer, P.C.
600 Seventeenth Street, Suite 2700 South Tower
Denver, Colorado 80202
Shareholders:
C/O Richard D. Aprahamian, Esq.
611 Anton Blvd., Suite 1110
Costa Mesa, California 92626
with a copy to:
Tony Vanetik
1085 Castlerock Lane
Santa Ana, California 92705
10.8 Binding Effect. This Agreement shall inure to and be
binding upon the heirs, executors, personal representatives,
successors and assigns of each of the parties to this Agreement.
10.9 Mutual Cooperation. The parties hereto shall cooperate
with each other to achieve the purpose of this Agreement, and
shall execute such other and further documents and take such
other and further actions as may be necessary or
convenient to effect the transaction described herein.
10.10 Brokers. The parties hereto represent and agree that
no broker has brought about the aforementioned transaction and no
finder's fee has been paid or is payable by any party. Each of
the parties hereto shall indemnify and hold
the other harmless against any and all claims, losses,
liabilities or expenses which may be asserted against it as a
result of its dealings, arrangements or agreements with any
broker or person, except as described in this paragraph.
10.11 Announcements. Delta and Ambir will consult and
cooperate with each other as to the timing and content of any
announcements of the transactions contemplated hereby to the
general public or to employees, customers or suppliers.
10.12 Expenses. Except as provided in Section 9.1 hereof,
Delta and Ambir will pay their own legal, accounting and any
other out-of-pocket expenses reasonably incurred in connection
with this transaction, whether or not the transaction
contemplated hereby is consummated.
10.13 Exhibits. As of the execution hereof, the parties
hereto have provided each other with the Exhibits provided for
hereinabove, including any items referenced therein or required
to be attached thereto. Any material changes to the Exhibits
shall be immediately disclosed to the other party.
AGREED TO AND ACCEPTED as of the date first above written.
DELTA PETROLEUM CORPORATION
By: s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr., Chairman/CEO
AMBIR PROPERTIES, INC.
By: s/Brendan Morrissey
Authorized Officer
SHAREHOLDERS:
s/Tony Vanetik
Tony Vanetik
s/Danny Thomas
Danny Thomas
s/Danny Thomas
Fenham Systems Limited,
A British Virgin Islands Corporation
SCHEDULE 1
Stock Ownership of Ambir and
Shares of Delta to be Exchanged Therefor
Name Number of Number of Warrants
Delta
Shares $3.50 $4.00 $4.50 $5.00
Yuri Vanetik 50,000 40,000 20,000 20,000 10,000
Dean Miller 50,000 50,000 20,000 20,000 10,000
Daniel A.A.
Thomas 50,000 40,000 20,000 20,000 10,000
Fenham Systems 10,000 10,000 5,000 5,000 2,500
Limited
Yedil Kassymov 10,000 -- -- -- --
Starrleaf
Business 80,000 35,000 10,000 10,000 5,000
Limited
Brendan Joseph -- 40,000 15,000 15,000 7,500
Morrisey
Tony Vanetik -- 35,000 10,000 10,000 5,000
Total 250,000 250,000 100,000 100,000 50,000
SCHEDULE 2
AMBIR PROPERTIES, INC.
( Ambir )
Directors and Officers of Ambir:
- Brendan Morrissey - President, Director,
Secretary, Treasurer
- Dean Miller - Director
- Daniel A. A. Thomas - Director
Material Contracts of Ambir:
2.17 Licenses and related agreements granted to Ambir by the
Republic of Kazakhstan to extract hydrocarbons and other
minerals.
2.18 Estimated Work Plan approved by the Republic of
Kazakhstan in connection with the licenses and related
agreements.
SCHEDULE 3
DELTA PETROLEUM CORPORATION
("Delta")
DIRECTORS AND OFFICERS
Aleron H. Larson, Jr. - Chairman, Chief Executive
Officer, Secretary, Treasurer
and Director
Roger A. Parker - President and Director
Terry D. Enright - Director
Jerrie F. Eckelberger - Director
OUTSTANDING OPTIONS/WARRANTS
A. Options outstanding under the Company's 1993 Incentive
Plan to purchase up to 1,400,477 shares of common stock at prices
ranging from $1.125 to $9.75 per share.
B. Options and Warrants to purchase 889,500 shares of
common stock at prices ranging from $1.25 to $8.50 per share.
AGREEMENT(S) OBLIGATING DELTA TO ISSUE
ADDITIONAL SHARES/OPTIONS
Agreement dated October 2, 1998 between MDC Group, Inc.
and Delta entitled "Agreement for Public and Broker Relations"
obligating Delta to issue up to 350,000 shares of common stock
and Options to purchase up to 500,000 shares of common stock
at exercise prices ranging from $2.50 to $6.00 per share with
expiration dates ranging from 90 days to one year.
CERTIFICATE
I, Aleron H. Larson, Jr., Chairman/CEO of Delta Petroleum
Corporation ( Delta ), on behalf of Delta hereby certify as
follows:
All of the representations and warranties, covenants and
conditions made by or on behalf of Delta which are set forth in
the Share Exchange Agreement dated October 9, 1998 with
Ambir Properties, Inc. (the Agreement ) are true and correct as
of this date and that each of the conditions set forth in
Sections 7.2 through 7.6 of the Agreement have been fulfilled as
of this date.
Dated: October 9, 1998
s/Aleron H. Larson, Jr.
Aleron H. Larson, Chairman/CEO
Delta Petroleum Corporation
CERTIFICATE
I, s/B. Morrissey, President of Ambir Properties, Inc. (Ambir ),
on behalf of Ambir hereby certify as follows:
All of the representations and warranties, covenants and
conditions made by or on behalf of Ambir which are set forth in
the Share Exchange Agreement dated October 9, 1998 with
Delta Petroleum Corporation (the Agreement ) are true and
correct as of this date and that each of the conditions set forth
in Sections 6.2 through 6.4 of the Agreement have been fulfilled
as of this date.
Dated: October 9, 1998
s/Brendan Morrissey
President
Ambir Properties, Inc.
EXHIBIT 1.1
STOCK VOTING AGREEMENT
THIS VOTING AGREEMENT, executed and effective this
day of October 1998, is by, between and among DELTA PETROLEUM
CORPORATION, a Colorado corporation ("Delta"),
("Shareholder"),
Roger A. Parker ("RAP") and Aleron H. Larson, Jr. ("AHL").
WHEREAS, Shareholder owns an aggregate of
shares of the issued and outstanding common stock of Delta and
may in the future acquire and own additional shares (collectively
the "Shares").
NOW, THEREFORE, in consideration of the mutual agreements of
the parties hereto and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. Shareholder contemporaneously herewith owning the
Shares, hereby constitutes and appoints AHL and RAP, and each of
them, with full power of substitution, for the period commencing
on the date hereof and ending on December 31, 2002, to vote the
Shares as the proxy of Shareholder, at any and all
meetings, regular or special, of the shareholders of Delta, or at
any adjournments thereof, which may be held during such period,
hereby granting to said AHL and RAP, and each of them (the
"Proxies"), as Shareholder's attorney and proxy, all powers
Shareholder would possess if personally present at any such
meetings. The proxy granted hereby is expressly acknowledged to
be coupled with an interest and shall be irrevocable to the full
extent permitted by law until December 31, 2002, except to the
extent specifically provided in Paragraph 3 below. The proxy
granted hereby revokes any other proxy relative to the Shares
heretofore granted by Shareholder. Shareholder agrees that this
proxy shall also apply to any shares acquired in the future prior
to December 31, 2002 or, in the alternative, that shareholder,
upon acquisition, will execute additional agreements identical to
this one for any such shares.
2. During the entire term of this Agreement, the Proxies,
and each of them, shall have full and absolute discretion as to
the manner in which Shares are to be voted as to any matter
whatsoever, all without any liability or obligation of any kind
to Shareholder.
3. Nothing contained herein shall be construed in such a
manner so as to prohibit or preclude the sale or exchange of all
or any part of the Shares by Shareholder in accordance with the
provisions of this Paragraph 3. In the event that all or any
portion of the Shares are sold, assigned or exchanged by
Shareholder (and/or its assigns) in any transaction other than a
public resale prior to December 31, 2002, then transferred shares
shall remain subject to the voting restrictions set forth herein
subsequent to the transfer unless otherwise agreed to in
writing.
4. A counterpart of this Agreement shall forthwith be
deposited with Delta at its principal place of business.
5. This Agreement shall be construed in accordance with
the laws of the State of Colorado and shall be binding upon the
successors and assigns of each party hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date set forth above.
DELTA PETROLEUM CORPORATION
By:
Authorized Officer
Aleron H. Larson, Jr.
Roger A. Parker
SHAREHOLDER:
EXHIBIT 2.18
Estimated
Work Plan
AMBIR PROPERTY
CONTRACT AREA
Northeast Kazakhstan
Part A, to be completed by February 1, 2000
Goal: Purchase and process USGS magnetic data over the
contract area. (Part B would include processing
additional magnetic and gravity processing of
additional data over the contract area. The
Kazakhstan and Russian Governments have
additional detailed magnetic and gravity data
over this area which can be purchased and
processed as part of Part B, the next phase,
Part C might include acquiring additional
proprietary data to compliment any areas without
good control.) $4,000.00
Acquire and process additional Torsion data over
the contract areas using existing Russian
surface photos. $200,000.00
Interpret and integrate magnetic, seismic and
torsion information over the contract area. Use
this information to, produce and translate into
Kazak the yearly work plan. The work plan
should include any proposed seismic data
acquisition and/or drilling for the next year.
Typically, these plans are filed with the
Ministry of Geology by the middle of February
each calendar year. $60,000.00
Perform due diligence on contract/license;
verify title on concession.
Result: Develop the work plans for 1999-2000, evaluate
the contract areas, Retrieve all of the
information on the Contract area, commencement
of reprocessing the existing 2-D seismic,
torsion, and magnetic data to define wildcat
structure/trap for estimated 10,000 foot well
location.
Cost: Total Cost For Part A: $264,000.000
Part B, to be completed by February 1, 2001
Goal: File exploration work plan with government by
February 1999.
$20,000.00
Retrieve all geophysical and geological data.
maps, geochemical data, make tape copies, gather
survey and observer notes, translate, catalog,
inventory and prioritize the information.
Complete reprocessing of all available 2-D
seismic data in the combined Ertismunai and
Ambir Contract Areas (one half net to Ambir.)
$75,000.00
Contact local geophysical acquisition crews,
plan acquisition of 150 km of 2-D seismic data
to define additional regional detail, to define
the wildcat drilling sites (plus potentially
development locations following a success of
wildcat #1.)
$20,000.00
Contact drilling equipment contractors and
suppliers in Kazakhstan for drilling operations.
Trip to Pavlodar region. $60,000.00
Result: Develop the work plans for 2001, evaluate
the contract areas and define a 10,000'
wildcat location. Retrieve all of the
information on the Contract area, reprocess
the existing 2-D seismic, torsion, and
magnetic data should define wildcat
structure/trap for proposed well location.
Cost: Total Cost for Part B $175,000.00
Part C, to be completed by February 1, 2002
Goal: Finalize drilling plans for wildcat in first
half of year. Contract drilling equipment,
supplies and crews in Kazakhstan. Trip to
Pavlodar region and contract area.
$60,000.00
Drill, supervise and evaluate first wildcat to
estimated depth of 10,000'.
$3,500,000.00
Plan second wildcat and/or first development
well to be drilled in early 2002.
Plan 400 km regional, prospect and development
2-D seismic program in mid-2000.
$60.000.00
Result: Complete plans for drilling first wildcat in
first half 2000. Plan detailed 2-D seismic
program and define second wildcat and/or
development well by 1st half 2002. Build
location(s), roads; move in equipment and
personnel, drill or locate water source, install
or build tanks and storage pits, spud and begin
drilling wildcat to approximate depth of 10,000
feet.
Cost: Total Expense For Part C $3,560,000.00
Includes drilling costs, installation of
equipment, costs for well site supervision,
travel expenses and land payment to Kazakhstan
government.
Part D, to be completed by February 1, 2003
Goal: Acquire, process and interpret additional 400 km
of 2-D seismic data in first half of 2003.
$3,500,000.00
Trip to Pavlodar and Contract area.
$60,000.00
Develop full exploration and development plan
for contract area.
$60,000.00
Spud second wildcat and/or first development
well on Contract area in first half of 2001.
$3,500,000.00
Consider design of 3-D survey follow results of
first 2 successful wildcat wells.
Result: Spud second wildcat and/or development well by
4th quarter 2003. Build location(s), roads,
move in equipment and personnel, drill or locate
water source, install or build tanks and storage
pits, spud and begin drilling wildcat to
approximate depth of 10,000 feet.
Cost: Total Cost For Part D $7,120,000.00
Includes equipment, personnel for seismic
acquisition, processing, and interpretation,
travel expenses.
EXHIBIT 9.1
Form of Opinion
(Date)
Delta Petroleum Corporation
555 Seventeenth Street, Suite 3310
Denver Colorado 80202
Gentlemen:
We have acted as Kazakhstan counsel to Ambir Properties,
Inc., a Bahamian corporation ("Ambir"), in connection with the
consummation of the Share Exchange Agreement dated as of
September 28, 1998 (the "Agreement"), among Ambir, Ambir's
shareholders and Delta Petroleum Corporation ("Delta"). This
letter is being furnished to you pursuant to Section 9.1 of the
Agreement.
Unless otherwise indicated, all capitalized terms used
herein have the meanings given to those terms in the Agreement.
In order to render this opinion, we have examined the
following:
In our examination of documents for purposes of this
opinion, we have assumed, and express no opinion as to, the
genuineness of all signatures on original documents, the
authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted
to us as copies, the lack of any undisclosed terminations,
modifications, waivers or amendments to any agreements reviewed
by us and the due execution and delivery
of all documents where due execution and delivery are
prerequisites to the effectiveness thereof.
As to matters of fact relevant to this opinion, we have
relied solely upon our examination of the documents we have
considered to be relevant and our actual knowledge, and have
assumed the current accuracy and completeness of (i) the
information obtained from public officials and records included
in the documents referred to above, and (ii) the representations
and warranties made by representatives of Ambir to us, including,
without limitation, those made to us in the performance of our
due diligence review with respect to the exchange of
shares (the "Exchange") contemplated by the Agreement. We have
made no independent investigations or other attempts to verify
the accuracy of any of such information, representations,
warranties or other facts as represented by
Ambir or to verify the existence or non-existence of any other
factual matters; however, we are not aware of any facts that
would lead us to believe that any of the opinions expressed
herein are not accurate.
For purposes of this opinion, we have also assumed that: (a)
Delta has all requisite power and authority, and has taken any
and all corporate or other action necessary, for the due
authorization by Delta of the execution, delivery
and performance of the Agreement and other relevant documents to
which Delta is a party and that the Agreement constitutes a
binding obligation of Delta enforceable against it in accordance
with its terms; (b) Delta has fully performed all of the other
obligations which it is to perform at or before the
Closing; and (c) all of the representations and warranties made
by Delta in the Agreement are true and correct in all respects.
Based upon the foregoing, and subject to the assumptions and
qualifications referred to herein, it is our opinion that:
1. Ambir is a corporation duly organized, validly
existing and in good standing under the laws of the
Commonwealth of the Bahamas, and has the requisite corporate
power to perform its obligations pursuant to the Agreement.
2. The execution and delivery of the Agreement by
Ambir and the consummation of the Exchange have been duly and
validly authorized by the Board of Directors of Ambir and by each
of its shareholders. No other corporate acts or proceedings on
the part of Ambir are necessary to authorize the execution,
delivery or performance of the Agreement by Ambir or its
shareholders.
3. To the best of our knowledge after due inquiry,
neither the execution and delivery of the Agreement, the
performance by Ambir and its shareholders of their respective and
collective obligations under the Agreement, nor the consummation
of the transactions contemplated under the Agreement will:
(a) materially violate any provision of Ambir's
articles of incorporation or bylaws;
(b) with or without the giving of notice or the passage
of time, or both, violate, or be in conflict with, or constitute
a material default under, or cause or permit the termination or
the acceleration of the maturity of, any debt, contract,
agreement or obligation of Ambir (including, without limitation,
any of the Kazakhstan Licenses), or require the payment of any
prepayment or other penalties;
(c) require notice to, or the consent of, any party to
any agreement or commitment, lease or license, to which Ambir is
bound;
(d) result in the creation or imposition of any
security interest, lien, or other encumbrance upon any material
property or assets of Ambir; or
(e) violate any statute or law or any judgment, decree,
order, regulation or rule of any court or governmental authority
to which Ambir is bound or subject.
4. No consent, approval or authorization of, or
declaration, filing or registration with, any governmental or
regulatory authority is required to be made or obtained by Ambir
in connection with: (a) the execution and delivery by Ambir and
its shareholders of the Agreement; (b) the performance by Ambir
and its shareholders of their respective and collective
obligations under the Agreement; or (c) the consummation by
Ambir and its shareholders of the transactions contemplated under
the Agreement. We are not aware of any additional license,
permit, order, approval or authorization that will be required to
be obtained by either Delta or Ambir in order for Ambir to
immediately commence the commercial exploitation of hydrocarbons
pursuant to the Kazakhstan Licenses after the consummation of the
transactions contemplated by the Agreement.
5. Ambir has all of the material licenses, permits,
orders, approvals and authorizations that are necessary for Ambir
to immediately commence the commercial exploitation of
hydrocarbons pursuant to the Kazakhstan Licenses. The Work Plan
attached to the Agreement as Exhibit 2.18 (the "Work Plan") has
been adopted and approved in its entirety by the Kazakhstan
government and is in full force and effect. Any and all
provisions of the Kazakhstan Licenses that are currently in
apparent default or noncompliance by Ambir (or which conflict
with the Work Plan in any manner) are either fully cured by such
adoption of the Work Plan or have been waived or otherwise
modified in writing by the Kazakhstan government. To the extent
that there is any conflict between any of the provisions of any
of the Kazakhstan Licenses and any of the provisions of the Work
Plan, the provisions of the Work Plan prevail and any and all
such conflicting provisions of the Kazakhstan Licenses are
superseded and replaced by the provisions of the Work Plan. The
provisions of the Work Plan replace, satisfy and/or supersede any
and all of the provisions of the Kazakhstan Licenses which relate
directly or indirectly to spending and work requirements pursuant
thereto, and the expenditures set forth in the Work Plan are the
only material expenditures that are required by the Kazakhstan
Licenses or any other related document.
We are admitted to practice law in the Republic of
Kazakhstan, and we express no opinion herein with respect to the
application or effect of the laws of any jurisdiction other than
the existing internal laws of the Republic of Kazakhstan.
This opinion is intended solely for Delta's use for the
purpose of the consummation of the transactions contemplated by
the Agreement, and is not to be made available to, or relied upon
for any other purpose by, any other persons or entities without
our prior written consent. Except as otherwise indicated, all
opinions herein are rendered as of the date hereof. We assume no
obligation to advise you of facts, circumstances, events or
changes in the law that may hereafter be brought to our attention
whether or not they would affect or modify the opinions expressed
herein.
Very truly yours,
AGREEMENT FOR PUBLIC AND BROKER RELATIONS
This Agreement ("Agreement") is made this 2nd day of October,
1998 by and between MDC Group, Inc., a Colorado corporation
("MDC"), and Delta Petroleum Corporation, a Colorado corporation
("Delta").
WHEREAS, MDC provides consulting services designed to heighten
awareness of the business conducted and performance results
achieved by specific companies among licensed broker/dealers in the
United States of America, which services consist primarily of 1)
organizing and assembling information provided to MDC by the
Company in a format which profiles the Company and which is
conducive to dissemination in appropriate information channels and
networks, and 2) disseminating such information; and
WHEREAS Delta wishes to engage MDC to provide such services,
the manner and substance of which are more specifically described
herein.
NOW THEREFORE, in consideration of the mutual premises and
covenants contained herein, and for such other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1) Information to be Furnished by Delta to MDC.
Delta shall furnish to MDC all current public information
about Delta including all reports, with exhibits, filed by Delta
with the United States Securities and Exchange Commission ("the
Commission"). Delta shall not provide to MDC any confidential or
non-public information about Delta. Delta shall be responsible to
assure that the information provided to MDC accurately and fairly
represents the financial conditions and results of operations of
Delta and shall update the information as necessary from time to
time to assure that it continues to accurately and fairly represent
the financial condition and results of operations of Delta.
In the absence of its own negligence or affirmative
misconduct, MDC shall have no liability for any misstatement or
omission in Delta information, and Delta shall be obligated to
indemnify and defend MDC against any claim, action or proceeding
brought by any party against MDC asserting such third party has
been injured or suffered a loss as a result of any such
misstatement or omission in the information provided by Delta.
Delta shall be fully responsible to assure that Delta's common
stock is legally qualified for secondary trading in all
jurisdictions where the information is disseminated. MDC shall be
obligated to indemnify and defend Delta against any claims, action
or proceedings brought by any party against Delta asserting such
third party has been injured or suffered a loss as a result of any
information disseminated by MDC that was not previously approved by
Delta, or was inaccurately disseminated as a consequence of MDC's
negligence or affirmative misconduct.
MDC shall have no liability or responsibility for any failures
of information to comply with any applicable laws, rules or
regulations or for failure with any applicable laws, rules or
regulations or for failure of Delta's common stock to be duly
qualified for secondary trading under the laws of applicable
jurisdiction.
2) Services to be Provided by MDC.
MDC shall exercise its best efforts to identify and establish
appropriate informational channels and networks capable of
maximizing dissemination of Delta's information to licensed brokers
and dealers in the United States of America with the resources and
inclination to establish and maintain a secondary trading market in
Delta's common stock in jurisdictions where it has been legally
qualified for secondary trading. MDC shall also exercise its best
efforts to assemble and organize Delta's information in a format
and medium which best facilitates dissemination through such
channels and networks, and shall further exercise its best efforts
to instigate and facilitate such dissemination.
Without limiting the generality of the foregoing, the
following procedures will be followed for preparation and
dissemination of any literature incorporating Delta's information:
(a) MDC will prepare proofs of brochures, advertising
materials and other literature incorporating the information as
selected and directed by Delta, and MDC shall present such proofs
to Delta for its review prior to publication;
(b) MDC shall make all corrections and changes in the proofs
requested by Delta. Such corrections and changes shall be
accomplished by Delta's written consent to the publication thereof,
subject to incorporation of such corrections and/or changes. MDC
shall not distribute any information with respect to Delta without
Delta's written consent.
In addition to the foregoing, for each six month period of the
Agreement, MDC shall provide for the publication, printing and
dissemination of the Delta information, at MDC's sole cost, in
publications or through direct mailings, with the printed material
and lists of recipients acceptable to Delta, in a program as set
forth below:
(a) MDC will provide for the printing, publication and
mailing of at least 700,000 pieces of direct mail and/or the
inclusion in national financial publications acceptable to Delta in
the form of one to four page advertorials.
(b) MDC will provide for the printing and dissemination of
10,000 corporate profiles which may be disseminated pursuant to
inquiries and otherwise;
(c) MDC will produce a nucleus of 10 to 12 retail brokers,
market makers and/or money managers who will take positions in the
publicly traded stock of Delta.
(d) MDC represents that it has a significant broker network
and that it will distribute Delta information and disseminate Delta
leads to the brokers in this network.
3. Term
This Agreement shall be for the period of one year from the
date hereof unless earlier terminated as provided herein.
4. Compensation for Services.
(a) Delta will issue 350,000 shares of restricted Delta
common stock to MDC upon execution of this Agreement. Of those
shares 250,000 shares shall be compensation for the first six month
period of the Agreement and 100,000 shares shall be compensation
for the second six month period of the Agreement. Prior to the end
of the first six month period, Delta may elect to terminate the
Agreement for the second six month period in which event MDC will
return 100,000 shares of the common stock to Delta.
(b) In addition to the restricted common stock referenced
above in 4.(a), Delta will issue the following options to MDC:
NUMBER
PRICE OF OPTIONS DURATION
$2.50/share 25,000 90 days
2.75/share 25,000 90 days
3.00/share 50,000 90 days
3.25/share 50,000 90 days
3.50/share 50,000 90 days
3.75/share 50,000 90 days
4.00/share 50,000 6 mos.
4.50/share 50,000 6 mos.
5.00/share 50,000 9 mos.
5.50/share 50,000 1 yr.
6.00/share 50,000 1 yr.
Total 500,000
All Options granted shall vest immediately. The periods
indicated under the column headed "Duration" shall commence upon
the effectiveness of a registration statement filed with the SEC
covering the shares underlying the Options. Notwithstanding the
duration of the periods indicated, all unexercised Options shall
expire on December 31, 1999 regardless of whether or not the
underlying shares have been or are then covered by an effective
registration statement.
(c) Within 30 days of the effective date of this Agreement,
Delta will include 250,000 of the above referenced shares in and
all of the options in a registration statement filed with the
Commission and will use commercially reasonable efforts to cause
the registration to become
effective. Provided that the Agreement has not been terminated,
within 30 days of beginning of the second six month period of this
Agreement Delta will include the remaining 100,000 of the above
mentioned shares in a registration statement filed with the
Commission and will use commercially reasonable efforts to cause
the registration to become
effective.
(d) Notwithstanding any provision set forth above, MDC shall
not at any time be deemed to have the right to acquire any Delta
shares under circumstances which would cause MDC and/or its
affiliates to become the beneficial owner of an amount of Delta
shares that would be in excess of 9.9% of Delta's then issued and
outstanding shares. Without limiting the generality of the
foregoing, no option to purchase Delta's common stock shall be
delivered to MDC and/or be exercisable by MDC if the option, when
combined with shares of Delta's common stock owned by MDC or its
affiliates, on such date will cause MDC to own, or be able to own
by exercise of the options, 9.9% or more of Delta's outstanding
common stock; if vesting and/or delivery of any option would have
such effect, the number of shares issuable upon exercise of such
option shall automatically be reduced prior to delivery so that
upon exercise MDC's ownership of Delta's outstanding common stock
will at no time exceed 9.9%; any reduced portion of the option
shall not vest in MDC until the first date when its vesting will
not increase MDC's ownership of Delta shares to 9.9% or greater;
MDC shall inform Delta of its ownership of Delta's securities prior
to each Vesting Date so that the calculations required hereby can
be timely made.
5. Representations and Warranties.
MDC represents and warrants that services to be provided and
materials to be produced or developed by MDC under this Agreement
will be performed, produced or developed by competent, trained
personnel in a workmanlike manner. MDC and its personnel shall
comply with all applicable statutes, rules and regulations
governing all aspects of the services to be performed under this
Agreement; provided that, as described in paragraph 1 of this
Agreement, Delta shall be fully responsible to assure all the
information is accurate and complete and complies with the
applicable laws, rules and regulations of each jurisdiction where
it is to be disseminated by MDC, and that Delta's common stock is
legally qualified for secondary trading under the laws, rules and
regulations of each such jurisdiction. Delta understands and
acknowledges that, subject to the obligations of MDC as specified
in paragraph 2 above, MDC cannot guarantee objective results or
fulfill any specified goals. OTHER THAN THE FOREGOING EXPRESS
WARRANTIES, MDC MAKES NO WARRANTIES WITH RESPECT TO THE QUALITY OF
THE GOODS AND SERVICES TO BE PROVIDED HEREUNDER OR ANY RESULTS TO
BE ACHIEVED, AND HEREBY EXPRESSLY DISCLAIMS THE EXISTENCE OF ANY
SUCH REPRESENTATIONS AND WARRANTIES, INCLUDING WITHOUT LIMITATION,
ANY IMPLIED WARRANTIES OR MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
6. Personal Services of David Castaneda.
The parties hereto agree that the personal services of David
Castaneda of MDC are material to performance by MDC under this
Agreement and that in the event he is not available to perform
and/or provide the services of MDC under this Agreement that Delta
may terminate this Agreement and that the parties will agree upon
an equitable return to Delta of all or a portion of the
compensation provided to MDC considering performance and provision
of services by MDC up to the date of termination. It is provided,
however, that MDC may subcontract other parties to perform services
if the parties are supervised by David Castaneda and approved by
Delta.
7. Stock Voting Agreement.
MDC will execute the Stock Voting Agreement attached hereto as
Exhibit A.
8. Miscellaneous.
This Agreement shall be interpreted and construed in accordance
with the laws of the State of Colorado. The parties agree that
jurisdiction and venue of any dispute arising hereunder shall be in
a the court of general jurisdiction located in the Denver, Colorado
metropolitan area. Neither party may assign its rights or duties
under this Agreement without the express prior written consent of
the other party.
This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof. The terms of this
Agreement may be altered only by written agreement between the
parties. The failure of either party to object to or take
affirmative action with respect ot any conduct of the other which
is in violation of the terms of this Agreement shall not be
construed as a waiver of the violation of breach, or of any future
similar violation or breach.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer as of the
date first written above.
DELTA PETROLEUM CORPORATION
a Colorado corporation
By: s/Aleron H. Larson, Jr.
Authorized Officer
MDC GROUP, INC.
a Colorado corporation
By: s/David Castaneda
Authorized Officer
EXHIBIT A
STOCK VOTING AGREEMENT
THIS VOTING AGREEMENT, executed and effective this 1st day of
October 1998, is by, between DELTA PETROLEUM CORPORATION, a
Colorado corporation ("Delta"), MDC GROUP, INC. ("Shareholder"),
Roger A. Parker ("RAP") and Aleron H. Larson, Jr. ("AHL").
WHEREAS, Shareholder has acquired at this date an aggregate of
350,000 shares of the issued and outstanding common stock of Delta
and may now or in the future acquire and/or own additional shares
(collectively the "Shares").
NOW, THEREFORE, in consideration of the mutual agreements of
the parties hereto and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. Shareholder contemporaneously herewith owning the Shares,
hereby constitutes and appoints AHL and RAP, and each of them, with
full power of substitution, for the period commencing on the date
hereof and ending on December 31, 2002, to vote the Shares as the
proxy of Shareholder, at any and all meetings, regular or special,
of the shareholders of Delta, or at any adjournments thereof, which
may be held during such period, hereby granting to said AHL and
RAP, and each of them (the "Proxies"), as Shareholder's attorney
and proxy, all powers Shareholder would possess if personally
present at any such meetings. The proxy granted hereby is
expressly acknowledged to be coupled with an interest and shall be
irrevocable to the full extent permitted by law until December 31,
2002, except to the extent specifically provided in Paragraph 3
below. The proxy granted hereby revokes any other proxy relative
to the Shares heretofore granted by Shareholder. Shareholder
agrees that this proxy shall also apply to any shares acquired in
the future prior to December 31, 2002 or, in the alternative, that
shareholder, upon acquisition, will execute additional agreements
identical to this one for any such shares.
2. During the entire term of this Agreement, the Proxies,
and each of them, shall have full and absolute discretion as to the
manner in which Shares are to be voted as to any matter whatsoever,
all without any liability or obligation of any kind to Shareholder.
3. Nothing contained herein shall be construed in such a
manner so as to prohibit or preclude the sale or exchange of all or
any part of the Shares by Shareholder in accordance with the
provisions of this Paragraph 3. In the event that all or any
portion of the Shares are sold, assigned or exchanged by
Shareholder (and/or its assigns) in any transaction other than a
public resale to non-affiliated persons or entities prior to
December 31, 2002, then transferred shares shall remain subject to
the voting restrictions set forth herein subsequent to the transfer
unless otherwise agreed to in writing.
4. A counterpart of this Agreement shall forthwith be
deposited with Delta at its principal place of business.
5. This Agreement shall be construed in accordance with the
laws of the State of Colorado and shall be binding upon the
successors and assigns of each party hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date set forth above.
DELTA PETROLEUM CORPORATION
By: s/Aleron H. Larson, Jr
Authorized Officer
s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr.
s/Roger A. Parker
Roger A. Parker
SHAREHOLDER:
MDC GROUP, INC.
s/David Castaneda
Authorized Officer, President
