B C CAPITAL CORP
000 X. Xxxxxxxx Xxxx.
Xxxxx 0000
Xxxxx, XX 00000
Tel: (000) 000-0000
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, 000
Xxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000 and B C Capital Corp.,
a Florida corporation and an affiliate of Xxxxxx & Xxxxxxx
Incorporated ("B C Capital"), having its principal place of
business at 000 X. Xxxxxxxx Xxxx., Xxxxx 0000, Xxxxx, Xxxxxxx
00000.
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 Xxxxxx & Xxxxxxx 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 Xxxxxx & Xxxxxxx Incorporated ("Xxxxxx & Xxxxxxx") 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 Xxxxxx & Xxxxxxx 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
Xxxxxx & Xxxxxxx 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/Xxxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxx, Xx., Chief Executive Officer
BC CAPITAL CORP., a Florida corporation
By: s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, President
