AGREEMENT AMONG ▇▇▇ ▇. ▇▇▇▇▇▇, AS CHAPTER 11 TRUSTEE
OF UNDERWRITERS FINANCIAL GROUP, INC., ▇▇▇▇▇▇ OIL
CORPORATION AND DELTA PETROLEUM CORPORATION
This Agreement, dated May 23, 1997, is entered into by and
among ▇▇▇ ▇. ▇▇▇▇▇▇, as Chapter 11 trustee (the "Trustee") of
Underwriters Financial Group, Inc., a Colorado corporation
("UFG") , ▇▇▇▇▇▇ Oil Corporation, a Delaware
corporation ("SOCO"), and Delta Petroleum Corporation, a
Colorado corporation ("Delta").
RECITALS:
A. SOCO asserts a claim (the "SOCO Claim") against UFG
pursuant to a promissory note in the principal amount of
$2,190,464, together with accrued interest thereon aggregating
$3,052,441, as of March 31, 1997.
B. SOCO asserts a perfected security interest in and holds
3,357,003 shares (the "Amber Shares") of common stock of Amber
Resources Company, a majority owned public subsidiary of Delta,
as collateral for the repayment of the SOCO Claim. The Amber
Shares are currently owned by Delta.
C. UFG owns 888,063 shares (the "UFG-Owned Delta
Shares") of common stock of Delta, a publicly-owned company.
Delta asserts a security interest in and holds the UFG-Owned
Delta Shares as collateral for the discharge of certain
obligations owed by UFG to Delta, including the obligation to
repay the SOCO Claim and to obtain the release of the Amber
Shares held as collateral by SOCO.
D. The Trustee disputes the amount of the SOCO Claim,
and believes that certain defenses exist as to the enforceability
of certain of the obligations.
E. UFG filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code on December 11, 1995, and the
Trustee was thereafter duly appointed.
F. The transactions referred to above are the subject
of various agreements (the "Prior Agreements"), more fully
described below, entered into prior to the filing of UFG's
Chapter 11 case including, among others, a Stock Voting Agreement
dated December 21, 1992 (the "Stock Voting Agreement") between
and among Delta, UFG, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
G. The Trustee has raised certain defenses and
disputes with regard to the amount and/or enforceability of the
obligations assertedly owed to SOCO and Delta under the Prior
Agreements.
H. The parties desire to facilitate the sale of the
UFG- Owned Delta Shares to enable the UFG Chapter 11 estate to
realize on their value, to reduce and fix the amount of the SOCO
Claim and provide for its satisfaction in such reduced amount, to
obtain the release of the Amber Shares, to cancel and supersede
the Prior Agreements and otherwise to resolve all existing
disputes among them, all on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual covenants
and conditions set forth in this Agreement, and for other good
and valuable consideration, the parties hereto agree as follows:
SECTION I
BANKRUPTCY COURT APPROVAL
1.1 Except as provided below, this Agreement and all of
the parties, obligations hereunder shall become effective (the
"Effective Date") on the first business day which is at least
eleven days after the entry of a Final Order of the Bankruptcy
Court for the Southern District of New York (the "Bankruptcy
Court") approving this Agreement. For purposes hereof, a Final
Order shall mean an order as to which no appeal has been timely
filed, or if an appeal has been filed, then no stay has been
obtained. Notwithstanding the foregoing, to the extent this
Agreement expressly provides for the effectiveness of an
obligation or the doing of an act upon execution of this
Agreement, such provision shall be effective upon the execution
of this Agreement by all of the parties.
1.2 In the event that no Final Order approving this
Agreement has been entered by the Bankruptcy Court on or before
60 days from the date of this Agreement (or such later date as to
which all the parties hereto have agreed in writing), this
Agreement shall become null and void and of no further force or
effect, and the parties shall retain all of their respective
rights, obligations and defenses as they existed
prior to entry into this Agreement. In that event, neither this
Agreement nor any of the parties' statements
or actions in connection herewith shall be used or proffered as
evidence in any court proceeding, nor shall
anything herein be deemed an admission of or a waiver by any of
the parties hereto.
SECTION 2
RELEASE AND TRANSFER OF COLLATERAL; REDUCTION AND
ALLOWANCE OF SOCO CLAIM
2.1 On the Effective Date of this Agreement, (a) Delta
shall deliver the UFG-Owned Delta Shares, in fully transferable
form (subject only to such limitations on transfer, if any, as
are applicable pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended ("Rule 144")), to the Trustee
and (b) SOCO shall deliver the Amber Shares, in fully
transferable form, to Delta.
2.2 On the Effective Date, the following shall occur:
(a) Delta shall be deemed to have released any and all
claims, ownership interests, security interests and liens in or
on the UFG-Owned Delta Shares, and such shares shall be delivered
to the Trustee, free and clear of such claims, ownership
interests, security interests or liens, for sale as provided in
Section 4 of this Agreement;
(b) SOCO shall be deemed to have released any and all
security interests and liens in or on the Amber Shares, and
(c) The SOCO Claim shall be deemed reduced and allowed
in the total amount of $2,200,000, which sum shall be satisfied
in accordance with the terms hereof, and the SOCO Claim shall be
satisfied solely from the Net Proceeds of such sales and not from
any other assets of the UFG estate.
(d) To secure the payment of the SOCO Claim in
accordance with the terms of this Agreement, SOCO shall have a
first perfected security interest in the unsold UFG-Owned Delta
Shares and in the Net Proceeds (as defined below) of sales of the
UFG-Owned Delta Shares upon the issuance of an order of the
Bankruptcy Court approving the Agreement, and SOCO shall not be
required to file any other papers or documents with any
applicable authority to perfect its liens and security interests.
2.3 Promptly after the Effective Date, SOCO shall
deliver to Delta, and Delta shall deliver to the Trustee and the
Trustee shall deliver to SOCO, such executed documents as are
reasonably requested by Delta, the Trustee or SOCO, as the case
may be, to evidence the release or issuance of security interests
and liens as provided in paragraph 2.2 of this Agreement.
SECTION 3
CANCELLATION OF PRIOR AGREEMENTS; RELEASES
3.1 Upon the occurrence of all of the events
described in paragraphs 2.1 through 2.3 of this Agreement,
(a) all Prior Agreements between or among the
parties hereto, or any of them, are hereby cancelled and
superseded by this Agreement and the Amended Stock
Voting Agreement, defined below in paragraph 5.1 hereof. As used
herein, "Prior Agreements" shall include, without
limitation, (i) promissory note, dated June 19, 1992 by Chippewa
Resources Corporation, in favor of SOCO, (ii)
insofar as it pertains to Delta and UFG, the letter agreement
dated October 21, 1992, (iii) Clarification Agreement,
dated March 31, 1993, between Delta and UFG, (iv) memorandum
agreement, dated July 27, 1994, between Delta
and UFG, (v) letter agreement dated
December 7, 1994, between UFG and SOCO, (vi) letter agreement,
dated December 9, 1994, between UFG and
Delta, and (vii) letter agreement, dated February 22, 1995,
between Delta and UFG, and (viii) Stock Voting
Agreement, dated December 21, 1992, between and among Delta, UFG,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.,
together with any and all other existing agreements between two
or more of the parties hereto, but not including the
Amended Stock Voting Agreement and the Stipulation and order
between UFG and Delta dated May 23, 1997 (the
"Stipulation"); and (b) each of the parties hereto hereby
releases each of the other parties, together with such other
party's respective directors, officers, agents, employees and
representatives, from any and all claims and causes of
action arising from or relating to any of the Prior Agreements or
any of the transactions which are the subject of such
Prior Agreements, except such claims and causes of action which
may arise by virtue of any party's failure to meet
its obligations under this Agreement or the Amended Stock Voting
Agreement or the Stipulation.
SECTION 4
SALE OF UFG-OWNED DELTA SHARES
4.1 The Trustee shall use her best efforts to cause the
UFG-Owned Delta Shares to be sold in private or public sales and
in a manner reasonably calculated to achieve the best available
price for such shares, at such prices and upon such terms as the
Trustee, in her sole discretion and consistent with her fiduciary
duties to the UFG estate, deems advisable.
4.2 All Net Proceeds (as defined below) from the sale
of the UFG-Owned Delta Shares shall be distributed upon receipt
by the Trustee as follows:
(a) The first $1,000,000 of Net Proceeds to be paid to
SOCO in partial satisfaction of its claim.
(b) All Net Proceeds in excess of the amount to be paid
to SOCO pursuant to paragraph 4.2 (a) hereof, are to be
distributed in the following proportions:
(i) one third (1/3) of such Net Proceeds shall be
distributed to SOCO, in further partial satisfaction of the SOCO
Claim, provided, however, that the amounts distributed to SOCO
pursuant to this subsection and pursuant to paragraph 4.7, below,
shall not exceed $ 1,200,000; and
(ii) Two thirds (2/3) of such Net Proceeds (or all
of the Net Proceeds after SOCO has received $2,200,000) shall be
distributed to the UFG estate; provided, however, that the Net
Proceeds distributed to the UFG estate pursuant to this paragraph
4.2(b) shall be held in escrow by the Trustee (the "Escrow
Fund") until the earlier of (x) the date on which SOCO has
received a total of $2,000,000 of Net Proceeds, and
Advance Distributions (as provided for in paragraph 4.7, below),
or (y) the last day of the calendar quarter which
ends at least two years after the Effective Date (the "Escrow
Termination Date").
4.3 If the escrow is terminated pursuant to paragraph
4.2(b)(ii)(x) hereof,
(a) the full amount released from escrow, including
interest earned on the Escrow Fund, shall be paid to the UFG
estate, free and clear of any lien, claim, encumbrance
or other interest of SOCO; and
(b) the Net Proceeds of the sales of any of the
UFG-Owned Delta Shares sold after the termination of the escrow
shall be paid out upon receipt in the proportions set forth in
paragraph 4.2(b) hereof until SOCO shall have received a total of
$2,200,000 pursuant to this Agreement.
4.4 If the escrow is terminated pursuant to
paragraph 4.2(b)(ii) (y) hereof,
(a) the amount released from escrow shall be paid
promptly as follows:
(i) first an amount to SOCO which, when added to (x) the
Net Proceeds received by SOCO from the sale(s) provided for in
paragraph 4.2(a) above, (y) the Net Proceeds received
by SOCO from the sales provided for in paragraph 4.2 (b) above,
and (z) Advance Distributions, if any, made pursuant to paragraph
4.7, below, will total $2,000,000; and
(ii) the remainder of the amounts held in escrow,
including the interest earned on the Escrow Fund, to UFG, free
and clear of any lien, claim, encumbrance or other interest of
SOCO; and
(b) Upon the release of the escrow amount as set forth
in paragraph 4.4 (a), the UFG Trustee shall continue to sell the
unsold UFG-Owned Delta Shares, and the Net Proceeds of
such sales shall-be paid upon receipt to SOCO until such time as
the total of the Net Proceeds received by SOCO pursuant to
paragraphs 4.2 and 4.3, 4.4 and 4.7 equals $2,000,000.
At such time (i) UFG will have no further obligation to SOCO,
(ii) all further sales will be for the sole account of
UFG, and (iii) and the SOCO Claim shall be deemed satisfied in
full.
4.5 For purposes of this Agreement, Net Proceeds shall
mean the purchase price received by the Trustee upon sales of any
of the UFG-Owned Delta Shares, less any direct or indirect costs
of such sales, including, without limitation, any selling
commissions and brokerage costs or similar expenses, provided,
however, that after SOCO has received $500,000 of Net Proceeds
pursuant to paragraph 4.2 (a) hereof, Net Proceeds shall be
reduced by attorneys fees, as provided in paragraphs 7.1 and 7.2
below before any further distributions of Net Proceeds are made
to SOCO.
4.6 In connection with, and consistent with her
obligations as set forth in paragraph 4.1 hereof,
and subject to such volume restrictions, if any, as may be
applicable pursuant to Rule 144, it is agreed that the
Trustee will not, without the prior written consent of Delta, in
any one month, sell on the public market more than
the greater of (i) 75,000 shares, or (ii) 12 1/2% of the average
monthly reported volume in shares of Delta stock for
the prior two months (in either case, such restriction shall not
apply to block trades of 25,000 shares or more).
4.7 (a) If one year from the Effective Date, SOCO has
received less than $1.5 million of Net Proceeds from Direct
Payments (i.e., payments pursuant to paragraph 4.2), then SOCO
shall receive an Advance Distribution from the Escrow Fund in an
amount equal to the difference between $1.5 million and the
Direct Payments, provided however, that such Advance Distribution
shall not exceed 75% of the Escrow Fund at that date.
(b) If twenty months from the Effective Date, SOCO has
received less than $1.8 million of Net Proceeds from Direct
Payments and Advance Distributions, then SOCO shall receive an
additional Advance Distribution from the Escrow Fund in an amount
equal to the difference between (i) $1.8 million and (ii)
the sum of (x) all Direct Payments and (y) the Advance
Distribution, if any, made pursuant to paragraph 4.7 (a) ,
provided however, that the Advance Distribution pursuant to this
sub-paragraph shall not exceed 75% of the Escrow Fund at that
date.
SECTION 5
AMENDED STOCK VOTING AGREEMENT
5.1 Simultaneously with the execution of this
Agreement, the Trustee and Delta shall execute, and Delta shall
cause its executive officers, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇., to execute, an Amended Stock Voting Agreement in the
form annexed hereto as Exhibit "All (the "Amended Stock Voting
Agreement") . Upon the Effective Date, the Stock Voting
Agreement, which shall be null and void in accordance
with paragraph 3.1(a) hereof, shall be superseded in its entirety
by the Amended Stock Voting Agreement.
SECTION 6
ADDITIONAL COVENANTS OF DELTA
6.1 In order to induce SOCO to release its security
interest in the Amber Shares and, in lieu thereof, accept a first
perfected security interest in the unsold UFG-Owned Delta Shares
and the Net Proceeds of the sale of the UFG-Owned Delta Shares,
and until such time as SOCO has received $2,000,000 in Net
Proceeds from the sale of UFG-Owned Delta Shares by the Trustee,
Delta agrees to the following:
(a) Delta and its directors and officers shall: (i)
operate Delta in good faith and with the care an ordinary prudent
person or company in a like position would exercise under similar
circumstances; (ii) timely make all required periodic filings
with the SEC and other government regulatory agencies; (iii)
operate Delta in a manner reasonably believed to be in the best
interests of Delta and its shareholders; (iv) use commercially
reasonable efforts, subject to their overall fiduciary duty to
the shareholders of Delta and to applicable rules and
regulations of the SEC, to cooperate in the marketing of the
UFG-Owned Delta Shares as promptly as possible and
for prices as high as is practicable;
(b) Delta and its directors and officers shall not,
without (x) concurrent notice in writing to SOCO and the Trustee,
and (y) the consent in writing of SOCO: (i) sell or issue any
shares of Delta's stock or other stock interests in Delta,
including but not limited to any warrants for the purchase
of, or securities convertible or exchangeable into, such stock,
or assets to an "affiliate" or "insider" (as
such terms are defined in sections 101 (2) and (31) of title 11
of the United States Code), provided, however, that this
provision shall not apply to ordinary distributions of stock
under Delta's employee benefit plans and any other arrangements
set forth in Delta's Form 10-K for the year ended June
30, 1996; (ii) sell or issue a number of shares of common stock
or other stock interests in Delta, including
but not limited to any warrants for the purchase of, or
securities convertible or exchangeable into, such
stock, during any rolling twelve month periods (the beginning of
the rolling period shall be January 1, 1997), which stock or
other stock interests in the aggregate represents more than one
third (1/3) of the number of shares of common stock and warrants
of Delta outstanding at the beginning of the rolling
period; and (iii) sell any shares of common stock or warrants of
Delta at a price more than 40% below
the market price at the time; and
(c) Delta will notify the Trustee reasonably in advance
of any filing by Delta of a registration statement(s) for the
public sale of any security of Delta, and, upon request by the
Trustee, Delta will include for sale in such registration
statement any UFG-Owned Delta Shares then held by the
Trustee. Delta shall bear all expenses incurred in the
preparation, filing and distribution of any such
registration statement.
(d) Notwithstanding anything to the contrary contained
in this paragraph 6.1, the officers and directors may sell,
without restriction, shares of stock personally owned by them.
6.2 (a) When the number of UFG-Owned Delta Shares and
other shares of Delta common stock owned by UFG totals less than
ten (10%) percent of the issued and outstanding
shares of common stock of Delta, and the Trustee submits a letter
to Delta in substantially the form attached hereto
as "Exhibit B" Delta agrees, in reliance upon Rule 144 (k) ,
promulgated under the Securities Act of 1933, as
amended ("Rule 144"), to instruct its transfer agent to remove
the restrictive legend and stop-transfer instructions
from all shares of UFG-Owned Delta Shares and from all shares of
common stock of Delta owned by UFG as a
result of the Stipulation and Order dated May 23, 1997. If Delta
refuses to so instruct the transfer agent, then Delta
shall be liable to the Trustee for liquidated damages in the
amount of $100,000.00. unless, within 90 days of the
Trustee's request, Delta shall have obtained a binding
determination of the Bankruptcy Court that a material change
in circumstances from those existing as of the Effective Date of
this Agreement has occurred so as to render UFG
an affiliate of Delta within the meaning of Rule 144(a).
Notwithstanding the foregoing, nothing herein shall be
construed as a limitation on the Trustee's rights to sell the
UFG-owned Delta Shares under any other subsection of
Rule 144.
(b) Each of Delta and the Trustee represent as
follows: Apart from the ownership by UFG of in excess of 10% of
the issued and outstanding shares of common stock of Delta,
they/she have/has no knowledge of any circumstance existing as of
the Effective Date which would render UFG an affiliate of Delta
within the meaning of Rule 144(a).
6.3 If Delta sells or issues shares of its common
stock or warrants or other equity or debt interests which are
convertible or exchangeable into common stock (collectively,
"Interests") for cash or cash equivalents (excluding real estate,
oil and gas assets or other non-cash forms of consideration):
(a) Delta shall offer to purchase from UFG that number
of the UFG-Owned Delta Shares equal to 25% of the Interests sold
or issued by Delta at a price equal to the net price received by
Delta after payment of commissions and other direct costs of such
sale.
(b) Once Delta has entered into an agreement to sell
Interests in Delta and prior to the closing thereof, and provided
that such agreement is with five (5) or fewer purchasers, Delta
shall permit UFG to convey offers through Delta to Delta's
purchasers to sell UFG-Owned Delta Shares, in the percentage
limitation provided in paragraph 6.3 (a), above, directly to such
purchaser at a price greater than the net price to be received
by Delta. Any such sale by UFG to Delta's purchaser shall
discharge Delta's obligation to purchase shares of UFG-
Owned Delta Shares as provided in paragraph 6.3(a) hereof.
(c) Nothing provided herein shall give UFG the right to
negotiate directly with Delta's purchasers.
SECTION 7
ATTORNEYS' FEES
7.1 The UFG Trustee agrees that SOCO shall be entitled
to the payment of professional fees and costs actually and
reasonably incurred in an amount not to exceed $25,000 in
connection with (i) UFG's defaults under its loan
agreement with SOCO; and (ii) the negotiation, documentation and
approval process relating to this agreement.
Upon the Effective Date, SOCO's attorneys shall provide to the
UFG Trustee and her attorneys a detailed summary
of SOCO's legal fees and costs. Within five business days of
receipt thereof, the UFG Trustee shall respond in
writing to SOCO's legal fees and costs and the detailed summary
provided. If the UFG Trustee has no objection
to the fees and costs, SOCO shall be paid such amounts promptly
pursuant to paragraph 4.5 hereof. Should the UFG
Trustee object to the legal costs and fees, she shall identify in
detail and in writing, why and the parties shall
promptly attempt to work out any differences. If an agreement
cannot be reached, the parties shall submit SOCO's
request for legal fees and costs to the Court to determine the
reasonable amount of such fees and costs.
7.2 Any fees for services performed and costs
incurred by professionals retained by the Trustee, which are
allowed by the Bankruptcy Court and (a) to the extent such fees
are for services which relate to the negotiation, documentation
and approval process relating to this agreement, and (b) in an
amount not to exceed $25,000, shall be paid promptly from Net
Proceeds pursuant to paragraph 4.5 hereof.
7.3 The escrow provisions of paragraph 4.2 (b) (ii)
hereof .notwithstanding, SOCO agrees that administrative expenses
of the UFG bankruptcy, once approved by the Court, shall be
payable from the escrow established, pursuant to paragraph 4.2
hereof, provided, however, that this paragraph 7.3 shall be
applicable only to the extent of $60,000 (exclusive of any
amounts paid pursuant to paragraph 7.2) of administrative
expenses approved by the Court.
SECTION 8
RESOLUTION OF APEX CLAIMS
8.1 Delta and SOCO acknowledge that they are aware of
certain claims (the "Apex Claims") with respect to the UFG-Owned
Delta Shares under an alleged pre-petition agreement for the sale
of such shares by UFG. In the event that the Apex Claims shall
not have been resolved to the reasonable satisfaction of the
Trustee prior to the entry of a Final Order approving this
Agreement, then this Agreement may be terminated by the Trustee
upon written notice to the other parties hereto.
SECTION 9
REPRESENTATIONS AND WARRANTIES
9.1 The Trustee represents and warrants that, subject
to the approval of the Bankruptcy Court, she has full right,
power and authority to enter into this Agreement and she is aware
of nothing that would prevent her from performing her obligations
hereunder.
9.2 Delta represents and warrants as follows:
(a) Delta has full right, power and authority to enter
into this Agreement and there is nothing that would prevent it
from performing its obligations hereunder.
(b) This Agreement has been duly authorized
by all necessary corporate and stockholder actions on the part
of Delta and constitutes a valid and binding obligation of Delta
enforceable in accordance with its terms.
(c) Delta is a corporation duly organized and validly
existing and in good standing under the laws of the State of
Colorado, and is duly qualified and authorized to do business
wherever the nature of its activities or properties requires such
qualification or authorization.
(d) There is no provision in the articles of
incorporation or by-laws of Delta and no provision in any
existing mortgage, indenture, contract or agreement binding on it
that would be contravened by the execution, delivery or
performance by it of this Agreement.
(e) No representation, warranty or statement by Delta
contained herein or in any certificate or other document
furnished or to be furnished by Delta pursuant hereto contains or
at the time of delivery will contain any untrue statement of
material fact, or omits, or will omit at the time of
delivery, to state a material fact necessary to make it not
misleading.
(f) Delta owns the Amber shares free and clear of any
lien or interest of any party other than SOCO, and the value of
the Amber shares is in excess of the amount of the SOCO Claim
as of the time of execution hereof.
(g) Delta has in its possession the UFG-Owned Delta
Shares and has not assigned, hypothecated, or otherwise
transferred any interest in such shares or in the obligation or
claim Delta asserts is secured by the UFG-Owned Delta Shares.
9.3 SOCO represents and warrants as follows:
(a) SOCO has full right power and authority to enter
into this Agreement and there is nothing that would prevent it
from performing its obligations hereunder.
(b) To the extent necessary, this
Agreement has been duly authorized by all corporate and
stockholder actions on the part of SOCO and constitutes a valid
and binding obligation on SOCO enforceable in accordance with its
terms.
(c) SOCO is a corporation duly organized and validly
existing and in good standing under the laws of the State of
Delaware, and is duly qualified and authorized to do business
wherever the nature of its activities or properties requires such
qualification or authorization.
(d) There is no provision in the articles of
incorporation or by-laws of SOCO and no provision in any existing
mortgage, indenture, contract or agreement binding on it that
would be contravened by the execution, delivery or performance by
it of this Agreement.
(e) No representation, warranty or statement by SOCO
contained herein or in any certificate or other document
furnished or to be furnished by SOCO pursuant hereto contains or
at the time of delivery will contain any untrue statement of
material fact, or omits, or will omit at the time of delivery, to
state a material fact necessary to make it not misleading.
(f) SOCO is the sole owner of the promissory note and
the lien on the Amber stock which is the basis for the SOCO
Claim, and it has not assigned, hypothecated, or otherwise
transferred any interest in such promissory note or in its lien
on the Amber stock.
(g) SOCO has in its possession or control the Amber
shares and has not assigned, hypothecated, or otherwise
transferred any interest in such shares.
9.4 SOCO shall consult with the Trustee with
respect to their consent to waive provisions of paragraph 6. 1
(b), and the Trustee shall consult with SOCO with respect to the
selling of the UFG-Owned Delta Shares. Nothing contained herein
shall be construed as giving the Trustee or
SOCO, as the case may be, veto powers over the rights of the
other party.
SECTION 10
MISCELLANEOUS
10.1 Headings
The descriptive headings of this Agreement are for
reference only, and shall not affect the interpretation of this
Agreement.
10.2 Jurisdiction
The United States Bankruptcy Court for the Southern
District of New York shall have continuing jurisdiction over the
parties hereto with respect to this Agreement until the
obligations of all parties hereto have been fully performed.
10.3 Survival of Representations and Warranties
The representations and warranties contained in Section 9
of this Agreement shall survive until all the UFG-Owned Delta
Shares have been sold by the Trustee.
10.4 Assignment of Agreement
Neither this Agreement, nor any of its rights or
benefits or its duties and obligations, shall be
assigned by any party to any other person or entity without the
prior written consent of the others, which consent
shall not unreasonably be withheld. The Agreement shall be
binding upon, and inure to the benefit of, any successor
in interest to the Trustee, and any successor to the whole
business of any other party.
10.5 Notices
All notices required or permitted by the Agreement shall
be in writing, and service shall be deemed completed if made by
(i) personal delivery, or (ii) certified mail, 5 days after the
date of posting a properly addressed and prepaid envelope or
package containing the notice. The respective addresses of the
parties for service of notices shall be as indicated below. The
address of a party may be changed from time to time, provided
that such party provides written notice of such change to the
other party in the manner provided herein.
To the Trustee at: ▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
To DELTA at: Delta Petroleum Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
To SOCO at: ▇▇▇▇▇▇ Oil Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
10.6 Choice of Law
This Agreement shall be construed, executed and enforced
in accordance with the United States Bankruptcy Code and, to the
extent such law is not applicable, then in accordance with the
laws, excluding conflict of law rules, of the State of New York.
10.7 Entire Agreement
This Agreement contains the entire understanding among
the Trustee, Delta and SOCO, and, except as expressly provided
herein, supersedes and terminates all prior agreements and
understandings, verbal or otherwise, at any time existing among
the parties hereto. No modification of, addition to or deletion
from this Agreement shall be binding on any party hereto unless
it is in writing and is signed by authorized representatives of
each of the parties to this Agreement, and is approved by the
Bankruptcy Court.
10.8 Severability
The validity and applicability of the entire Agreement
shall not be altered by any finding of any court that any
particular provision is invalid or inapplicable.
In the event that any provision or provisions are found to be
invalid or inapplicable, the remaining provisions shall continue
in full force and effect as if such invalidated
provision(s) had not been included in the Agreement and the
parties shall cooperate on replacing such invalidated
provision(s) with a valid one as close as possible to
the legal and economic essence and purpose of such invalid
provision(s).
10.9 Signed in Counterparts
This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed as
of the date first written above.
▇▇▇ ▇. ▇▇▇▇▇▇, as Chapter 11 Trustee of UNDERWRITERS FINANCIAL
GROUP, INC.
s/▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
▇▇▇▇▇▇ OIL CORPORATION
By: s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Vice President
DELTA PETROLEUM CORPORATION
s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Chairman of the Board
EXHIBIT A
AMENDED STOCK VOTING AGREEMENT
This Amended Stock Voting Agreement, dated as of May 23,
1997, is entered into by and among ▇▇▇ ▇. ▇▇▇▇▇▇, as Chapter 1 1
Trustee of Underwriters Financial Group, Inc., a
Colorado corporation ("UFG"), Delta Petroleum Corporation, a
Colorado corporation ("Delta"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇') and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. ("▇▇▇▇▇▇").
WHEREAS, UFG, Delta, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ are parties to a
Stock Voting Agreement dated December 21, 1992 (the "Prior Stock
Voting Agreement");
WHEREAS, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ are, respectively, the
President and the Chairman of the Board of Delta;
WHEREAS, UFG commenced a voluntary case under Chapter 11
of the United States Bankruptcy Code on December 11, 1995 before
the United States Bankruptcy Court for
the Southern District of New York (the "Bankruptcy Court"), and
the Trustee was thereafter duly appointed;
WHEREAS, UFG, Delta and ▇▇▇▇▇▇ Oil Corporation have
entered into an Agreement (the "3-Party Agreement") dated May 23,
1997, subject to the approval of the Bankruptcy Court, which
provides, among other things, for the sale of 888,063 shares of
common stock of Delta owned by UFG (the "UFG-Owned Delta
Shares");
WHEREAS, pursuant to the 3-Party Agreement, the Prior
Stock Voting Agreement shall become null and void and shall be
superseded in its entirety by this Amended Stock Voting
Agreement;
NOW, THEREFORE, in consideration of the mutual
agreements of the parties hereto, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1 . This Amended Stock Voting Agreement shall be subject
to the approval by the Bankruptcy Court of the 3-Party Agreement
and shall become effective on the Effective Date (as
such term is defined in the 3-Party Agreement). On the Effective
Date, the Prior Stock Voting Agreement shall be null and void and
shall be superseded in its entirety by this Amended Stock
Voting Agreement.
2. UFG hereby constitutes and appoints ▇▇▇▇▇▇ and
▇▇▇▇▇▇, and each of them, with full power of substitution, for
the period commencing on the Effective Date and
ending on the earlier of December 31, 2002 or the date on which
the SOCO Claim (as EXHIBIT A defined in the 3-Party Agreement) is
satisfied in full (the "Termination Date"), to vote the UFG-
Owned Delta Shares as the proxy of UFG, at any and all
shareholder meetings, regular or special, of the shareholders of
Delta, or at any adjournments thereof, which may be held during
such period, hereby granting to ▇▇▇▇▇▇ and ▇▇▇▇▇▇ (the
"Proxies"), and each of them, as UFG's attorney and proxy, all
powers UFG 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 the
Termination Date, except to the extent
provided for below. The proxy granted hereby revokes any other
proxy relative to the UFG- Owned Delta Shares heretofore granted
by UFG or any predecessor in interest to UFG.
3. Until the Termination Date or such earlier time, if
any, as to which this Stock Voting Agreement shall terminate in
accordance with its terms, the Proxies shall have full
and absolute discretion as to the manner in which the UFG-Owned
Delta Shares are to be voted as to any matter whatsoever, all
without any liability or obligation of any kind to UFG, subject,
however, to their obligations as officers and/or directors of
Delta pursuant to Section 6 of the 3-Party Agreement.
4. Nothing contained herein shall be construed to
prohibit or preclude the sale, assignment or exchange of all or
any part of the UFG-Owned Delta Shares by UFG as
contemplated in the 3-Party Agreement. Except as provided in
paragraphs 5 and 6 hereof, any UFG-Owned Delta Shares sold,
assigned or exchanged by UFG during the term of this Amended
Stock Voting Agreement shall remain subject to the voting
provisions hereof until the earlier of the Termination Date or 60
months from the date of transfer.
5. This Amended Stock Voting Agreement shall
immediately terminate with respect to any and all UFG-Owned
Shares sold, assigned or exchanged by UFG (or its
assigns) prior to the Termination Date:
a. in any public resale(s) to persons or entities
who are not affiliates of UFG; or
b. in any private sale(s) of blocks of 300,000 shares
or less; provided, however, multiple block sales to the same
person or entity or group of persons or entities shall be
aggregated for purposes hereof; and provided, further, that the
purchaser shall not, as a result of such purchases, become the
holder of more than 1 0% of the outstanding common stock of
Delta.
6. Notwithstanding anything else in this Amended Stock
Voting Agreement, upon the request of UFG, Delta shall not
unreasonably withhold its agreement to terminate this
Amended Stock Voting Agreement with respect to any UFG-Owned
Delta Shares sold in private transactions of blocks in excess of
300.000 shares.
7. Delta shall have the power and authority, on
behalf of itself and the Proxies, to waive any rights granted to
the Proxies under this Amended Voting Agreement.
8. A counterpart of this Amended Stock Voting
Agreement shall forthwith be deposited with Delta at its
principal place of business.
9. The Bankruptcy Court shall have continuing
jurisdiction to enforce this Amended Stock Voting Agreement and
to determine any disputes arising hereunder or related
hereto, and the parties hereby submit to the jurisdiction of the
Bankruptcy Court for those purposes. All matters relating to the
interpretation and enforcement of this Amended Stock
Voting Agreement and any controversy arising with respect thereto
shall be determined by the Bankruptcy Court in accordance with
the bankruptcy laws of the United States, and, to the extent
not covered thereby, in accordance with the laws of the State of
New York.
10. Except as expressly provided herein, neither this
Amended Stock Voting Agreement, nor any of its rights or benefits
or its duties and obligations, shall be assigned by any
party to any other person or entity without the prior written
consent of the other, which consent shall not unreasonably be
withheld. The Agreement shall be binding upon, and inure to the
benefit of, any successor in interest to the Trustee.
11. This Amended Stock Voting Agreement may be signed
in counterparts, each of which shall be deemed an original and
all of which together shall constitute one and
the same document.
IN WITNESS WHEREOF, this Amended Stock Purchase
Agreement has been executed as of the date first written above.
▇▇▇ ▇. ▇▇▇▇▇▇, as Chapter 11
Trustee of UNDERWRITERS
FINANCIAL GROUP, INC.
s/▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee
DELTA PETROLEUM CORPORATION
By:s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: CEO/Chairman
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
EXHIBIT B
Delta Petroleum Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Re: Sale of UFG-Owned Delta Shares
Dear ▇▇. ▇▇▇▇▇▇:
Underwriters Financial Group, Inc. ("UFG") now owns, and for
the past ninety (90) days has owned, or fewer
shares of Delta Petroleum Corporation ("Delta") common stock,
representing less than 10% of the issued outstanding shares of
common stock of Delta.
Pursuant to Paragraph 6.2(a) of the Agreement among the
Trustee of UFG, ▇▇▇▇▇▇ Oil Corporation and Delta, dated May 23,
1997 (the "Agreement"), the Trustee hereby requests that Delta,
in reliance upon Rule 144(k) promulgated under the Securities Act
of 1933, as amended, instruct its transfer agent to remove the
restrictive legend and stop-transfer instructions from all shares
of the UFG-Owned Delta Shares and from all shares of common stock
of Delta owned by UFG pursuant to a stipulation and order dated
May 23, 1997.
The Trustee hereby represents to you that she is not aware
of any material change in circumstances having occurred from
those existing as of the Effective Data of the Agreement so as to
render UFG an affiliate within the meaning of Rule 144(a).
Very truly yours,
▇▇▇ ▇. ▇▇▇▇▇▇
EHP/mmi
▇▇▇▇▇ ▇. ▇▇▇▇▇ (KK 7927)
Attorney for ▇▇▇ ▇. ▇▇▇▇▇▇,
Chapter 11 Trustee
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re
UFG INTERNATIONAL, INC., et al., Chapter 11
Debtors. Case No. 95 B 43641(JHG)
In re
UNDERWRITERS FINANCIAL GROUP,
INC. f/k/a Chippewa Resources Chapter 11
Corporation, BRI Holding Corp., Case ▇▇. ▇▇ ▇ ▇▇▇▇▇ (JHG)
Debtor. Jointly Administered
STIPULATION AND ORDER
WHEREAS, on December 11, 1995 (the "Petition Date"),
Underwriters Financial Group, Inc. ("UFG") filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code; and
WHEREAS, by order dated February 2, 1996, the United
States Bankruptcy Court for the Southern District of New York
(the "Bankruptcy Court") approved the appointment of ▇▇▇ ▇.
▇▇▇▇▇▇ as the Chapter 11 trustee (the "Trustee") of UFG's
estate; and
WHEREAS, within one year prior to the Petition Date,
pursuant to that certain letter agreement dated February 22, 1995
between UFG and Delta Petroleum Corporation ("Delta"), UFG
transferred to Delta 92,117 shares of common stock of Delta owned
by UFG, together with 491,300 shares of newly-issued common stock
of UFG. UFG made the foregoing transfers (the "Transfers") in
satisfaction of indebtedness in the aggregate amount of
$1,473,864 allegedly owed by UFG to Delta; and WHEREAS, the
Transfers may be avoidable under, inter alia, Sections 547 and/or
548 of the Bankruptcy Code, subject to certain defenses which
could be asserted by Delta in the event an avoidance action were
initiated; and
WHEREAS, the Trustee, Delta and ▇▇▇▇▇▇ Oil Corporation
("SOCO") are currently negotiating the terms of an agreement (the
"Three-Party Agreement") which, if approved by the Bankruptcy
Court, would resolve all claims among those parties and enable
the UFG estate to liquidate its interest in an additional 888,063
UFG owned shares of Delta stock, in which stock Delta asserts a
security interest for the repayment of certain additional
obligations allegedly owed by UFG to Delta and to SOCO; and
WHEREAS, in order to avoid the delay, expense and
uncertainty inherent in litigation with regard to the Transfers,
and to facilitate the effectuation of the Three Party Agreement,
the parties desire to resolve any disputes relating to the
Transfers on the terms hereinafter set forth.
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, by
and between the undersigned, as follows:
1 . Concurrently with the execution of this Stipulation
and Order by the parties hereto, Delta shall deliver to the
Trustee 92,117 shares of common stock of Delta and 491,300 shares
of common stock of UFG. Delta shall deliver all such stock in
fully transferrable form (subject only to such limitations on
transfer, if any, as are applicable pursuant to Rule 144
promulgated under the Securities Act of 1933), and the Trustee
shall hold such stock in escrow pending its release pursuant to
paragraph 2 or paragraph 3 hereof, as the case may be.
2. Upon the entry of one or more orders of the
Bankruptcy Court approving both this Stipulation and Order and
the Three-Party Agreement:
(a) the Delta stock and the UFG stock delivered
to the Trustee pursuant to paragraph 1 hereof shall be released
from escrow to the Trustee, on behalf of the UFG estate, in full
discharge and satisfaction of all claims of the estate against
Delta arising from or relating to the Transfers; and
(b) Delta shall be deemed to have an allowed
general unsecured claim in the UFG estate in the amount of
$1,473,864.
3. In the event that the Bankruptcy Court shall not
have approved both this Stipulation and Order and the Three-Party
Agreement on or before 60 days from the date hereof (or such
later date as to which the parties shall agree in writing), then
the Delta stock and the UFG stock held in escrow by the Trustee
pursuant hereto shall be released and returned to Delta, and the
parties shall retain all of their respects rights, claims and
defenses with respect to the Transfers.
4. Delta hereby represents and warrants that it is
the sole owner of the shares of stock delivered to the Trustee
pursuant to paragraph 1 hereof, that it holds such shares free
and clear of any liens, claims or interest s of any other person
or entity, and that it has not previously sold, transferred,
conveyed or encumbered such shares or any interest therein.
These representations and warranties shall survive the delivery
of the shares and their release from escrow to the Trustee
pursuant hereto.
5. This Stipulation and Order constitutes the entire
understanding .between the parties with respect to the subject
matter hereof, and may not be modified or amended except in a
writing signed by the party or parties to be charged and approved
by the Bankruptcy Court.
6. This Stipulation and Order shall be binding upon
and inure to the benefit of the parties' respective principals,
officers, directors, shareholders, employees and agents, and
their respective successors and assigns, to the same extent as
the parties themselves.
7. The Bankruptcy Court shall have continuing
jurisdiction to enforce this Stipulation and Order and to
determine any disputes arising hereunder or related hereto, and
the parties hereby consent to the jurisdiction of the Bankruptcy
Court for those purposes. All matters relating to the
interpretation or enforcement of this Stipulation and Order and
any controversy arising with respect hereto shall be determined
by the Bankruptcy Court in accordance with the bankruptcy laws of
the United States, and, to the extent not covered thereby, then
in accordance with the laws of the State of New York.
Dated: New York, New York
May 23, 1997
▇▇▇ ▇. ▇▇▇▇▇▇, as Chapter 11 Trustee
of Underwriters Financial Group, Inc.
s/▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee
DELTA PETROLEUM CORPORATION
By: s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Chairman/CEO
SO ORDERED this day of ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Judge
