PARTIAL ASSIGNMENT OF CONTRACT
THIS PARTIAL ASSIGNMENT OF CONTRACT (this "Assignment") is
entered into as of this 10th day of July, 2000, (the "Effective
Date"), by and between Delta Petroleum Corporation, a Colorado
corporation ("Assignor") and Sovereign Holdings, LLC, a Colorado
limited liability company ("Assignee").
(A) Assignor is the buyer under that certain Purchase and
Sale Agreement, dated as of June 1, 2000, between Assignor and
▇▇▇▇▇▇▇ Petroleum Corporation, a Delaware corporation ("Seller"),
(the "Purchase Agreement"), a true complete and correct copy of
which is attached hereto and incorporated herein by this
reference as Exhibit A, for the purchase of certain oil and gas
interests in North Dakota, as more particularly described in
Section 6 of the Purchase Agreement (the "Interests").
(B) Assignor now desires to assign and transfer to Assignee
fifty percent (50%) of Assignor's right, title and interest in,
to and under the Purchase Agreement.
FOR TEN AND NO/100 DOLLARS ($10.00) AND OTHER GOOD AND
VALUABLE CONSIDERATION, the receipt and sufficiency of which are
hereby acknowledged, Assignor and Assignee hereby agree as
follows:
1. Assignment. Assignor hereby transfers, bargains and
conveys unto Assignee a 50% undivided interest in, to and under
the Purchase Agreement. For the term of the Purchase Agreement,
Assignor shall continue to work with Assignee in communicating
with the Seller. Assignee shall have the absolute right to
acquire in its own name 50% of the Interests under the Purchase
Agreement.
2. No Defaults. Assignor warrants and covenants that as
of the date of this Agreement, the Purchase Agreement is in full
force and effect and there exist no defaults thereunder, nor any
acts or events which, with the passage of time or the giving of
notice or both, could become defaults thereunder, on the part of
any party thereto.
3. Assumption. Assignee hereby assumes and agrees to
perform 50% of the obligations of Assignor arising under and in
connection with the Purchase Agreement on and after the date
hereof.
4. Indemnify, Defend and Hold Harmless.
a. Assignor's Covenant. Assignor hereby agrees to
indemnify, defend and hold Assignee harmless from and against any
and all claims, demands, liabilities and/or obligations arising
out of or resulting from any failure by Assignor to perform its
obligations pursuant to the Purchase Agreement, prior to the
date hereof.
b. Assignee's Covenant. Assignee hereby agrees to
reimburse, defend and hold Assignor harmless from and against any
and all claims, demands, liabilities and/or obligations arising
out of or resulting from any failure by Assignor to perform its
obligations pursuant to the Purchase Agreement, on and after the
date hereof.
5. Representation. Assignor represents and covenants to
Assignee that, except for the required consent of the Seller
evidenced below, it has good right to assign and transfer its
rights under the Purchase Agreement in the manner and form
aforesaid. Assignee represents and covenants to Assignor that it
has good right to assume and receive said Purchase Agreement in
the manner and form aforesaid.
6. Attorneys' Fees. In the event of any litigation
between Assignor and Assignee arising out of the obligations of
Assignor or Assignee under this Assignment or concerning the
meaning or interpretation of any provision contained herein, the
losing party shall pay the prevailing party's costs and expenses
of such litigation, including, without limitation, reasonable
attorneys' fees.
7. Successors and Assigns. This Assignment shall survive
the close of escrow and shall be binding on and inure to the
benefit of the parties hereto, their heirs, executors,
administrators, successors in interest and assigns.
8. Counterparts. This Assignment may be executed in
counterparts, each of which so executed shall, irrespective of
the date of its execution and delivery, be deemed an original,
and the counterparts together shall constitute one and the same
instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment as of the day and year first above written.
DELTA PETROLEUM CORPORATION, a
Colorado corporation
S/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
SOVEREIGN HOLDINGS, LLC
a Colorado limited liability company
By: s/▇▇▇▇▇ ▇▇▇▇▇▇
Name: Grandhaven Energy LLC
Its: Member
The undersigned hereby consents to the foregoing
pursuant to Section 10.7 of the Purchase Agreement this 10th day
of July, 2000.
▇▇▇▇▇▇▇ PETROLEUM CORPORATION,
a Delaware corporation
By: s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇.▇▇▇▇▇▇▇
Its: Vice President
EXHIBIT A
Purchase Agreement
(Blank Page)
COLLATERAL ASSIGNMENT OF PURCHASE AND SALE AGREEMENT
THIS COLLATERAL ASSIGNMENT OF PURCHASE AND SALE AGREEMENT
(this "Assignment") is dated as of July 10, 2000, made by DELTA
PETROLEUM CORPORATION, a Colorado corporation ("Assignor"), for
the benefit of HEXAGON INVESTMENTS, LLC, a Colorado limited
liability company ("Lender").
RECITALS:
A. Assignor has contracted to buy certain oil and gas
interests (the "Interests") from ▇▇▇▇▇▇▇ PETROLEUM CORPORATION, a
Delaware corporation ("Seller") pursuant to that certain Purchase
and Sale Agreement dated as of June 1, 2000, attached hereto as
Exhibit A (the "Purchase Agreement").
B. Assignor has applied for a $3,795,000.00 loan (the
"Loan") from Lender, and Lender has agreed to make the Loan. The
Loan is to be secured, in part, by an assignment of the Purchase
Agreement on the terms and conditions as provided for herein.
The promissory note, loan agreement and any other document now or
hereafter evidencing the Loan are referred to herein as the "Loan
Documents."
NOW, THEREFORE, in consideration of Lender's extension of
the Loan to Assignor, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
1 . Warranties of Assignor. Assignor does hereby warrant
and represent, as of the date hereof, to Lender each of the
following:
a. The copy of the Purchase Agreement attached hereto as
Exhibit A is a true, correct and complete copy. The Purchase
Agreement has not been amended, modified, altered, supplemented
or superseded in any manner. Assignor has not consented to any
waivers of the strict performance and observance by Seller of all
of the terms and provisions of the Purchase Agreement.
b. The Purchase Agreement is in full force and effect and
constitutes the binding agreement, enforceable against the
parties thereto in accordance with the terms contained therein.
c. There exist no unresolved title objections or
inspection objections under the Purchase Agreement with respect
to objection periods which have expired under the Purchase
Agreement.
d. Assignor has not received any notice of default from
the Seller, and, to the best of Assignor's knowledge, there
exists no fact or circumstance which, with the passage of time,
would constitute an event of default or breach of the Purchase
Agreement.
e. Assignor has not heretofore assigned any of Assignor's
right, title and interest in the Purchase Agreement to any party.
2. Assignment. Assignor does hereby collaterally assign
to Lender all of its right, title and interest in and to the
Purchase Agreement, together with the right to any proceeds and
the common stock payable thereunder. All payments and proceeds
payable to Assignor under the Purchase and Sale Agreement shall
be paid directly to Lender, regardless of whether there exists an
Event of Default under the Loan Documents; provided that prior to
an Event of Default, Assignor shall be entitled to receive the
proceeds which it is not expressly required to pay over to Lender
under the terms and conditions of the Loan Documents. Upon the
occurrence of an Event of Default (as defined in the Loan
Documents), or upon the occurrence of a breach by Assignor under
the Purchase Agreement, then Lender, acting on its own or acting
through a court-appointed receiver, may, but shall not be
obligated to, perform any of the obligations of Assignor pursuant
to the Purchase Agreement, shall receive all proceeds payable
under the Purchase Agreement, and may exercise any and all
remedies available to Lender under the Loan Documents or as
otherwise provided by law or equity. Lender shall apply all such
proceeds so collected in a manner consistent with the Loan
Documents.
3. No Assumption. Lender does not hereby assume any
obligation of Assignor under the Purchase Agreement. Assignor
shall remain liable for all payments, costs and expenses or any
other obligation due and owing to Seller under the Purchase
Agreement, including, without limitation, the refund of any
▇▇▇▇▇▇▇ money (even if received by Lender and applied to the
amounts due under the Loan Documents). Assignor shall indemnify,
defend and hold Lender harmless from and against any and all
claims, actions, demands, loss, cost, liability or expense
(including, but not limited to, reasonable attorney fees)
incurred in connection with any action taken by Lender pursuant
to this Assignment or asserted against Lender by Seller under the
Purchase Agreement, except as the same results from Lender=s
gross negligence and willful misconduct.
4. Covenants. Assignor agrees that it shall not, without
Lender's prior written consent, consent to or permit any
modification, alteration, amendment, change or supplement to the
Purchase Agreement except as permitted in the Loan Documents.
Assignor shall not exercise any right or remedy to terminate or
supersede the Purchase Agreement in any manner, except upon
Seller=s default thereunder. Assignor shall furnish to Lender
immediately upon Assignor's receipt any and all written demands,
correspondence, notices, or other communications from Seller
concerning the Purchase Agreement. Assignor shall timely pay and
perform all of its duties and obligations under the Purchase
Agreement.
5. Payment. Assignor does hereby authorize and direct the
Seller to pay directly to Lender all credits and payments arising
from or related to ownership of the Interests payable to Assignor
under the Purchase Agreement, including the delivery of any
restricted common stock of Assignor held by Seller pursuant to
the Purchase Agreement. Assignor shall perform any act and
execute any documents or instruments reasonably requested by
Lender or Seller in order to cause monies or common stock payable
to Assignor under the Purchase and Sale Agreement to be paid or
delivered directly to Lender. Assignor does hereby agree to
indemnify, defend and hold the Seller and its officers and
directors harmless from any claim, liability, damage, cost or
expense arising from compliance with this instruction.
6. Miscellaneous. This Assignment shall inure to the
benefit of and be binding upon the parties, their respective heirs,
personal representatives, successors and assigns. This Assignment may
only be modified in writing, signed by the parties hereto. A default by
Assignor under any of the provisions hereof shall constitute an Event of
Default under the Loan Documents. This Assignment shall be
interpreted in accordance with the laws of the State of Colorado.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment as of the day and year first above written.
ASSIGNOR:
DELTA PETROLEUM CORPORATION,
a Colorado corporation
By: s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
The undersigned as Seller under the Purchase Agreement
hereby consents to this Assignment pursuant to Section 10.7 of
the Purchase Agreement under the terms and conditions as set
forth herein, to be effective as of the date first above written.
▇▇▇▇▇▇▇ PETROLEUM CORPORATION,
a Delaware corporation
By: s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
Purchase Agreement
[Page Blank)
[Hexagon Investments, LLC letterhead]
July 10, 2000
Delta Petroleum Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Re: Loan in the amount of $3,795,000.00 made to Delta
Petroleum Corporation by Hexagon Investments, LLC
Dear ▇▇▇▇▇:
The purpose of this letter agreement ("Letter Agreement") is
to confirm that, subject to the terms and conditions herein set
forth, Hexagon Investments, LLC, a Colorado limited liability
company ("Lender"), agrees to make the below-referenced loan to
Delta Petroleum Corporation, a Colorado corporation ("Borrower").
SECTION 1. LOAN
1.1 Loan. Borrower desires to receive a loan from Lender in the
amount of THREE MILLION SEVEN HUNDRED NINETY FIVE THOUSAND and
No/100 Dollars ($3,795,000.00)(the "Loan") for the purpose of
purchasing certain interests in oil and gas properties as more
particularly described on Exhibit A attached hereto and by this
reference incorporated herein (the "Interests").
SECTION 2. COMMITMENT
2.1 Note. The Loan shall be evidenced by a Promissory Note (the
"Note") from Borrower, in a form prepared by Lender, executed and
delivered simultaneously with the execution of this Letter
Agreement, in the amount of $3,795,000.00, payable to Lender upon
the terms and conditions contained therein which shall include,
but not be limited to, the following:
(a) Interest Rate. Interest shall accrue on the unpaid
principal balance of the Loan at a rate per annum equal to
fifteen percent (15%). Interest shall accrue and compound
monthly on the outstanding principal balance of the Note.
(b) Accrual of Interest. Unless the due date of the Note
is accelerated upon the occurrence of an Event of Default (as
hereinafter defined), no payment of principal or interest shall
be due hereunder until the Maturity Date (as hereinafter
defined), when the outstanding principal balance of this Note,
together with all accrued interest thereon and any other sums due
under the Note, shall be immediately due and payable.
(c) Maturity Date. The entire unpaid principal balance,
all accrued and unpaid interest and all other amounts payable
under the Note shall be due and payable in full October 9, 2000
(the "Maturity Date").
(d) Distributions to be Applied. Notwithstanding anything
above to the contrary, any and all distributions and from or
related to the Interests which would otherwise be payable or
credited to Borrower shall be paid and credited to Lender as
payment on the Note.
SECTION 3. LOAN FEES
3.1 Origination Fee. The parties acknowledge and agree that an
origination fee (the "Origination Fee") of $50,000,000 has been
included in the face amount of the note, and same shall be
payable, with interest, on the Maturity Date. The Origination
Fee has been earned and shall be non-refundable under any
circumstances.
SECTION 4. SECURITY
4.1 Security. Borrower shall cause the Loan and Borrower
obligation's under this Letter Agreement to be secured by the
following:
(a) A valid and effectual collateral assignment granting
Lender a security interest in that certain Purchase and Sale
Agreement dated as of June 1, 2000 between Borrower and ▇▇▇▇▇▇▇
Petroleum Corporation (the "Purchase Agreement") and all other
documents relating thereto (collectively the "Contract Rights");
and
(b) A security interest, mortgage or other right
satisfactory to Lender that shall be issued if, upon the closing
of the Purchase Agreement, the Loan has not been fully paid and
satisfied.
4.2 Personal Guarantee. Borrower's directors, officers and/or
significant shareholders, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇., shall cause to be executed contemporaneously herewith an
agreement personally guaranteeing the Loan (the "Guaranty
Agreement").
4.3 Security Documents. All of the documents required by Lender
to grant and perfect the liens and security interests required
herein shall be in a form satisfactory to Lender and may be
referred to herein as the "Security Documents."
SECTION 5. CONDITIONS PRECEDENT
5.1 The obligation of Lender to make the Loan is subject to the
following express conditions precedent, all of which, unless
otherwise provided below, shall have been satisfied prior to the
granting of the Loan:
(a) Loan Documents. Borrower shall have executed (or
obtained the execution or issuing of) and delivered to Lender
this Letter Agreement together with the following documents
(collectively the "Loan Documents"), all in form satisfactory to
Lender:
(i) The Note;
(ii) The Security Documents; and
(iii) The Guaranty Agreement.
(b) Consent and Estoppel Documents. Borrower shall obtain
the execution and delivery of that certain Estoppel Certificate
dated July10, 2000, executed by Borrower, ▇▇▇▇▇▇▇ Petroleum
Corporation, for the benefit of Lender, in the form attached
hereto..
(c) Other Conditions. Unless waived by Lender, in writing,
Borrower, at its expense, shall have obtained and delivered to
Lender the following items, all of which shall be in form and
content satisfactory to Lender and shall be subject to approval
in writing by Lender:
(i) As to Borrower: (1) a copy of the organizational
documents for that entity, (2) evidence of the proper formation
and good standing of that entity in the state of its
organization, and (3) evidence of qualification or registration
of that entity in the State of Colorado and all other states
determined by Lender.
(ii) All minutes, resolutions and/or consents
authorizing Borrower to enter into and perform under the Loan.
(iii) A certified copy of the Purchase Agreement
affecting the Interests.
(d) Representations True. All representations and
warranties by Borrower set forth in the Loan Documents shall
remain true and correct and all agreements that Borrower is to
have performed or complied with by the date hereof shall have
been performed or complied with.
(e) No Event of Default. No Event of Default exists, and
no event has occurred and no condition exists that, after notice
or lapse of time, or both, would constitute an Event of Default.
SECTION 6. REPRESENTATIONS AND WARRANTIES
6.1 Borrower represents and warrants to Lender as follows:
(a) Recitals and Statements. The recitals and statements
of intent appearing in this Letter Agreement are true and
correct.
(b) Organization and Good Standing. Borrower is a
corporation duly organized, validly existing and in good standing
under the laws of the state of its organization and is, to the
extent required by law, qualified to do business and is in good
standing in the State of Colorado and in each state in which it
is doing business.
(c) Power. Borrower has full power and authority to own
its properties and assets and to carry on its business as now
being conducted. The execution, delivery and performance of the
Loan Documents have been duly authorized by all requisite action
on the part of Borrower.
(d) Authority. Borrower is fully authorized and permitted
to enter into the Loan Documents, to execute any and all
documentation required therein, to borrow the amounts
contemplated herein upon the terms set forth herein and to
perform the terms of the Loan Documents, none of which conflicts
with any provision of any law, rule or regulation applicable to
Borrower. The Loan Documents are the valid and binding legal
obligations of Borrower, and each is enforceable in accordance
with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to the
rights of creditors generally and general principles of equity.
(e) Enforceable Liens. The liens, security interests and
assignments created by the Security Documents will, when granted
and recorded or filed, be valid, effective, properly perfected
and enforceable first liens, security interests and assignments.
(f) No Other Liens. The Contract Rights secured by the
Security Documents are free and clear of any other interests,
liens or encumbrances.
(g) No Breach. The execution, delivery and performance by
Borrower of the Loan Documents will not result in any breach of
the terms, conditions or provisions of, or constitute a default
under, any agreement or instrument under which Borrower is a
party or is obligated. Borrower is not in default in the
performance or observance of any covenants, conditions or
provisions of any such agreement or instrument.
(h) No Actions. No actions, suits or proceedings are
pending or threatened against Borrower that might materially and
adversely affect the repayment of the Loan, the performance by
Borrower under the Loan Documents or the financial condition,
business or operations of Borrower.
(i) Affirmation of Representations and Warranties. All
representations and warranties made herein shall survive the
execution of this Letter Agreement, and the execution and
delivery of all other documents and instruments in connection
with the Loan, until the Loan and all indebtedness hereunder have
been paid in full and all of Borrower's obligations hereunder
have been fully discharged.
SECTION 7. AFFIRMATIVE COVENANTS
7.1 Until the Loan and all other indebtedness hereunder have
been paid in full and all of Borrower's obligations hereunder
have been fully discharged:
(a) Compliance with Loan Documents. Borrower shall make
all payments of interest and principal on the Loan and shall keep
and comply with all terms, conditions and provisions of the Loan
Documents.
(b) Subsequent Actions. Borrower shall immediately inform
Lender of any actions, suits or proceedings involving Borrower
that could materially and adversely affect the repayment of the
Loan, the performance by Borrower under the Loan Documents, or
the financial condition, business or operations of Borrower.
(c) Further Assurances. Borrower shall execute and deliver
such additional documents and do such other acts as Lender may
reasonably require in connection with the Loan.
(d) Borrower Notices. Borrower shall promptly give notice
in writing to Lender of (i) the occurrence of any Event of
Default, (ii) any change in the name of Borrower, and in the case
of a reorganization, any change in name, identity or corporate
structure, or (iii) any uninsured or partially insured loss
through fire, theft, liability or property damage.
SECTION 8. NEGATIVE COVENANTS
8.1 Until the Loan and all other indebtedness hereunder have
been paid in full and all of Borrower's obligations hereunder
have been fully discharged, Borrower shall not, without receiving
the prior written consent of Lender:
(a) Dissolution or Liquidation. Dissolve or liquidate, or
merge or consolidate with or into any other entity, or turn over
the management or operation of its property, assets or business
to any other person, firm or corporation.
(b) Due on Sale or Encumbrance. Assign, transfer or convey
any of its right, title and interest in any property whether real
or personal encumbered by the Security Documents; create or
suffer to be created any mortgage, pledge, security interest,
encumbrance or other lien on any property encumbered by the
Security Documents; or create or suffer to be created any
mortgage, pledge, security interest, encumbrance or other lien on
any other property or assets which it now owns or hereafter
acquires except in consideration of the contemporaneous receipt
by it of benefits equal or greater in value to the lien created.
SECTION 9. WAIVER
9.1 Waiver. Borrower waives presentment, demand, protest and
notices of protest, nonpayment, partial payment and all other
notices and formalities except as expressly called for in this
Letter Agreement. Borrower consents to and waives notice of:
(i) the granting of indulgences or extensions of time of payment,
(ii) the taking or releasing of security, and (iii) the addition
or release of persons who may be or become primarily or
secondarily liable for the Loan or any other indebtedness arising
in connection with the Loan, or any part thereof, and all in such
manner and at such time as Lender may deem advisable.
9.2 Delay or Omission. No delay or omission by Lender in
exercising any right, power or remedy hereunder, and no
indulgence given to Borrower, with respect to any term, condition
or provision set forth herein, shall impair any right, power or
remedy of Lender under this Letter Agreement, or be construed as
a waiver by Lender of, or acquiescence in, any Event of Default.
Likewise, no such delay, omission or indulgence by Lender shall
be construed as a variation or waiver of any of the terms,
conditions or provisions of this Letter Agreement. Any actual
waiver by Lender of any Event of Default shall not be a waiver of
any other prior or subsequent Event of Default or of the same
Event of Default after notice to Borrower demanding strict
performance.
SECTION 10. DEFAULT
10.1 Event of Default. The occurrence of any of the following
events or conditions shall constitute an "Event of Default" under
this Letter Agreement:
(a) Any failure to pay any principal or interest under the
Note when the same shall become due and payable and such failure
continues for five (5) days thereafter, or the failure to pay any
other sum due under the Note, this Letter Agreement or any
Security Document when the same shall become due and payable and
such failure continues for ten (10) days after notice thereof to
Borrower. No notice, however, shall be required after maturity
of the Note.
(b) Any failure or neglect to perform or observe any of the
covenants, conditions or provisions of this Letter Agreement, the
Note, any Security Document or any other document or instrument
executed or delivered in connection with the Loan (other than a
failure or neglect described in one or more of the other
provisions of this Paragraph 10.1) and such failure or neglect
either cannot be remedied or, if it can be remedied, it continues
unremedied for a period of thirty (30) days after notice thereof
to Borrower. Notwithstanding the foregoing, in the case of an
Event of Default under this subparagraph 10.1(b), if such Event
of Default cannot be remedied within 30 days, Borrower shall have
an additional thirty (30) days to remedy such Event of Default
provided that Borrower commences its cure within the first thirty
(30) day period and diligently prosecutes such cure. In no event
shall Borrower have more than the sixty (60) days allowed under
this subparagraph 10.1(b) to effectuate a cure of an Event of
Default hereunder unless Lender agrees to extend such period of
time, which extension may be granted or denied in Lender's sole
discretion.
(c) Any warranty, representation or statement contained in
this Letter Agreement, in the Note or in any Security Document or
any other document or instrument executed or delivered in
connection with the Loan, or made or furnished to Lender by or on
behalf of Borrower, that shall be or shall prove to have been
false when made or furnished.
(d) The filing by Borrower (or against Borrower to which
Borrower acquiesces or that is not dismissed within sixty (60)
days after the filing thereof) of any proceeding under the
federal bankruptcy laws now or hereafter existing or any other
similar statute now or hereafter in effect; the entry of an order
for relief under such laws with respect to Borrower or such
guarantor; or the appointment of a receiver, trustee, custodian
or conservator of all or any part of the assets of Borrower or
such guarantor.
(e) The insolvency of Borrower; or the execution by
Borrower of an assignment for the benefit of creditors; or the
convening by Borrower of a meeting of its creditors, or any class
thereof, for purposes of effecting a moratorium upon or extension
or composition of its debts; or the failure of Borrower to pay
its debts as they mature; or if Borrower is generally not paying
its debts as they mature.
(f) The admission in writing by Borrower that it is unable
to pay its debts as they mature or that it is generally not
paying its debts as they mature.
(g) The liquidation, termination or dissolution of
Borrower.
(h) Any levy or execution upon, or judicial seizure of, any
portion of any collateral or security for the Loan.
(i) Any attachment or garnishment of, or the existence or
filing of any lien or encumbrance against any portion of any
collateral or security for the Loan, that is not removed or
released within thirty (30) days after its creation or is not
released within sixty (60) days of its creation if Borrower is
diligently contesting such lien or encumbrance in good faith and
has provided Lender with security therefor acceptable to Lender
in its sole discretion.
(j) The institution of any legal action or proceedings to
enforce any lien or encumbrance upon any portion of any
collateral or security for the Loan, that is not dismissed within
thirty (30) days after its institution, or is not released within
sixty (60) days of its institution if Borrower is diligently
contesting such action in good faith and has provided Lender with
security therefor acceptable to Lender in its sole discretion;
provided, however, that if such legal action or proceedings could
not result in an award, judgment or decision requiring an action
by the Borrower other than the payment of funds, no Event of
Default shall be deemed to occur or be continuing upon Borrower
establishing an escrow account in an amount equal to or greater
than any such threatened award, judgment or decision.
(k) The occurrence of any event of default under the Loan
Documents and the expiration of any applicable notice and cure
period.
(l) The occurrence of any adverse change in the financial
condition of Borrower that Lender, in its reasonable discretion,
deems material, or if Lender in good faith shall believe that the
prospect of payment or performance of the Loan is impaired.
10.2 Remedies. Upon the occurrence of any Event of Default and
at any time while such Event of Default is continuing, Lender may
do one or more of the following:
(a) Declare the Loan and all other indebtedness of Borrower
hereunder immediately due and payable, without notice or demand;
(b) Proceed to protect and enforce its rights and remedies
under this Letter Agreement, the Note, and all Security
Documents;
(c) Avail itself of any other relief to which Lender may be
legally or equitably entitled.
10.3 Enforcement Costs. Borrower shall pay all costs and
expenses, including without limitation costs of title searches
and title policy commitments, Uniform Commercial Code searches,
court costs and reasonable in-house and outside attorneys' fees,
incurred by Lender in enforcing payment and performance of the
Loan and the other indebtedness and obligations of Borrower
hereunder or in exercising the rights and remedies of Lender
hereunder. All such costs and expenses shall be secured by all
Security Documents. In the event of any court proceedings, court
costs and attorneys' fees shall be set by the court and not by
jury and shall be included in any judgment obtained by Lender.
SECTION 11. ACTION UPON AGREEMENT
11.1 No Third Party Beneficiaries. This Letter Agreement is made
for the sole protection and benefit of the parties hereto and no
other person or organization shall have any right of action
hereon.
11.2 Integration. This Letter Agreement embodies the entire
Letter Agreement of the parties with regard to the subject matter
hereof. There are no representations, promises, warranties,
understandings or agreements expressed or implied, oral or
otherwise, in relation thereto, except those expressly referred
to or set forth herein. Borrower acknowledges that the execution
and delivery of this Letter Agreement is its free and voluntary
act and deed, and that said execution and delivery have not been
induced by, nor done in reliance upon, any representations,
promises, warranties, understandings or agreements made by
Lender, its agents, officers, employees or representatives.
11.3 Modifications. No promise, representation, warranty or
agreement made subsequent to the execution and delivery of this
Letter Agreement by either party hereto, and no revocation,
partial or otherwise, or change, amendment or addition to, or
alteration or modification of, this Letter Agreement shall be
valid unless the same shall be in writing signed by all parties
hereto.
11.4 No Joint Venture. Lender and Borrower each have separate
and independent rights and obligations under this Letter
Agreement. Nothing contained herein shall be construed as
creating, forming or constituting any partnership, joint venture,
merger or consolidation of Borrower and Lender for any purpose or
in any respect.
SECTION 12. GENERAL
12.1 Survival. This Letter Agreement shall survive the making of
the Loan and shall continue so long as any part of the Loan, or
any extension or renewal thereof, remains outstanding.
12.2 Discretionary Rights. All rights, powers and remedies
granted Lender herein, or otherwise available to Lender, are for
the sole benefit and protection of Lender, and Lender may
exercise any such right, power or remedy at its option and in its
sole and absolute discretion without any obligation to do so. In
addition, if, under the terms hereof, Lender is given two or more
alternative courses of action, Lender may elect any alternative
or combination of alternatives, at its option and in its sole and
absolute discretion. All monies advanced by Lender under the
terms hereof and all amounts paid, suffered or incurred by Lender
in exercising any authority granted herein, including reasonable
attorneys' fees, shall be secured by the Security Documents,
shall bear interest at the highest rate payable on the Loan until
paid, and shall be due and payable by Borrower to Lender
immediately without demand.
12.3 Indemnity. Borrower shall indemnify and hold Lender
harmless from and against all claims, costs, expenses, actions,
suits, proceedings, losses, damages and liabilities of any kind
whatsoever, including but not limited to attorneys' fees and
expenses, arising out of any matter relating, directly or
indirectly, to the Loan, to the ownership, development,
construction, or sale of the Interests, whether resulting from
internal disputes of Borrower, disputes between Borrower and any
guarantor, or whether involving other third persons or entities,
or out of any other matter whatsoever related to this Letter
Agreement, the Security Documents, or any property encumbered
thereby, but excluding any claim or liability which arises as the
direct result of the gross negligence or willful misconduct of
Lender. This indemnity provision shall continue in full force
and effect and shall survive not only the making of the Loan and
the Advances but shall also survive the repayment of the Loan and
the performance of all of Borrower's other obligations hereunder.
12.4 Joint and Several. If Borrower consists of more than one
person or entity their liability shall be joint and several. The
provisions hereof shall apply to the parties according to the
context thereof and without regard to the number or gender of
words or expressions used.
12.5 Time of Essence. Time is expressly made of the essence of
this Letter Agreement.
12.6 Notices. All notices required or permitted to be given
hereunder shall be in writing and may be given in person or by
United States mail, by delivery service or by electronic
transmission. Any notice directed to a party to this Letter
Agreement shall become effective upon the earliest of the
following: (i) actual receipt by that party; (ii) delivery to the
designated address of that party, addressed to that party; or
(iii) if given by certified or registered United States mail,
seventy-two (72) hours after deposit with the United States
Postal Service, postage prepaid, addressed to that party at its
designated address. The designated address of a party shall be
the address of that party shown at the beginning of this Letter
Agreement or such other address as that party, from time to time,
may specify by notice to the other parties. Any notice to Lender
shall be sent Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Any notice to Borrower under
this Letter Agreement shall be sent simultaneously to
__________________________________________,
_________________________________.
12.7 Payment of Costs. Borrower shall pay all costs and expenses
arising from the preparation of the Loan Documents, the closing
of the Loan and the monitoring and administration of the Loan,
including but not limited to title insurance premiums, other
title company charges, recording and filing fees, costs of
Uniform Commercial Code searches, Lender's attorneys' fees,
Lender's processing and closing fees, Lender's inspection fees,
appraisal and appraisal review fees, any intangible or recording
taxes and any other charges that may be imposed on Lender as a
direct result of this transaction.
12.8 Severability. The illegality or unenforceability of any
provision of this Letter Agreement or any instrument or agreement
required hereunder shall not in any way affect or impair the
legality or enforceability of the remaining provisions of this
Letter Agreement or any instrument or agreement required
hereunder.
12.9 Choice of Law. This Letter Agreement shall be governed by
and construed according to the laws of the State of Colorado,
without giving effect to conflict of laws principles.
12.10 Successors. Except as otherwise provided herein, this
Letter Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their successors and assigns.
12.11 Headings. The headings or captions of sections and
paragraphs in this Letter Agreement are for reference only, do
not define or limit the provisions of such sections or
paragraphs, and shall not affect the interpretation of this
Letter Agreement.
12.12 Counterparts. This Letter Agreement may be executed in
counterparts, all of which executed counterparts shall together
constitute a single document. Signature pages may be detached
from the counterparts and attached to a single copy of this
Letter Agreement to physically form one document.
12.13 JURY WAIVER. BORROWER AND LENDER HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED
UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG BORROWER AND
LENDER ARISING OUT OF OR IN ANY WAY RELATED TO THE NOTE, THIS
DOCUMENT OR ANY OTHER RELATED DOCUMENT OR ANY RELATIONSHIP
BETWEEN LENDER AND BORROWER. THIS PROVISION IS A MATERIAL
INDUCEMENT TO LENDER TO PROVIDE THE FINANCING DESCRIBED HEREIN OR
IN THE OTHER RELATED DOCUMENTS.
Please indicate your agreement with the terms and provisions
of this Letter Agreement by signing where indicated below and
returning an executed original to the undersigned at the address
set forth above.
Sincerely,
Hexagon Investments, LLC
a Colorado limited liability company
By: s/▇▇▇▇▇ ▇▇▇▇▇▇
Name:
Its:
AGREED TO AND ACCEPTED THIS
10 day of July, 2000
DELTA PETROLEUM CORPORATION
a Colorado corporation
By: s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
ESTOPPEL CERTIFICATE AND AGREEMENT
THIS ESTOPPEL CERTIFICATE AND AGREEMENT ("Certificate") is
made and entered into as of this 10th day of July, 2000, by
▇▇▇▇▇▇▇ Petroleum Corporation, a Delaware corporation, having an
address of ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("▇▇▇▇▇▇▇"). ▇▇▇▇▇▇▇ is the seller under that certain Purchase
and Sale Agreement dated as of June 1, 2000, a copy of which is
attached as Exhibit A hereto (the "Purchase Agreement"), and
Delta Petroleum Corporation, a Colorado corporation ("Delta"), is
the buyer of certain oil and gas interests (the "Interests")
under the Purchase Agreement. ▇▇▇▇▇▇▇ understands and
acknowledges that this Certificate will be relied upon by
Sovereign Holdings, LLC, a Colorado limited liability company
("Sovereign") and Hexagon Investments, LLC, a Colorado limited
liability company ("Hexagon") in connection with the Assignment
and Collateral Assignment described below.
The undersigned does hereby certify to Sovereign and Hexagon
that to the best of its knowledge, information and belief, as of
the date hereof:
1. The Purchase Agreement attached hereto is a full, true and
accurate copy thereof, the Purchase Agreement is in full
force and effect, and has not been modified other than as is
indicated in Exhibit A, and it constitutes the complete
agreement between ▇▇▇▇▇▇▇ and Delta with respect to the
purchase of the Interests.
2. As of the date of this Certificate, neither ▇▇▇▇▇▇▇ nor
Delta is in default under any terms of the Purchase
Agreement, nor has any event occurred which with the passage
of time, the giving of notice, or both, would become an
event of default under the Purchase Agreement.
3. ▇▇▇▇▇▇▇ hereby acknowledges and consents to that certain
Partial Assignment of Contract dated July 10, 2000, between
Delta and Sovereign, and the transactions described therein,
including, without limitation, the assignment from Delta to
Sovereign of fifty percent (50%) of Delta's rights under the
Purchase Agreement. ▇▇▇▇▇▇▇ acknowledges receipt of a copy
of such Partial Assignment of Contract.
4. ▇▇▇▇▇▇▇ hereby acknowledges and consents to that certain
Collateral Assignment of Purchase and Sale Agreement dated July 10,
2000, between Delta and Hexagon and the transactions
described therein, including, without limitation, Delta's
grant to Hexagon of a security interest in Delta's rights
under the Purchase Agreement. ▇▇▇▇▇▇▇ acknowledges receipt
of a copy of such Collateral Assignment of Purchase and Sale
Agreement.
5. ▇▇▇▇▇▇▇ acknowledges that it is holding the Interests
subject to the terms and conditions of the Purchase
Agreement and that, subject to such terms and conditions,
any credits or other payments arising from or related to the
ownership of the Interests since February 1, 2000, have been
accruing for the benefit of Delta. ▇▇▇▇▇▇▇ hereby agrees to
distribute to Hexagon all credits and payments that have
accrued or will accrue in connection with the Interests from
the date hereof and that are otherwise payable to Delta
pursuant to the Purchase Agreement unless and until
otherwise advised in writing by Hexagon.
IN WITNESS WHEREOF, the undersigned has caused this
Certificate to be duly executed as of the day and year first
written above.
▇▇▇▇▇▇▇ PETROLEUM CORPORATION
a Delaware Corporation
By: s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Vice President
PROMISSORY NOTE
$3,795,000.00 July 10, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
FOR VALUE RECEIVED, the undersigned DELTA PETROLEUM
CORPORATION, a Colorado corporation ("Maker"), whose address is
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, promises to
pay to the order of HEXAGON INVESTMENTS, LLC, a Colorado limited
liability company ("Holder"), whose address is ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other
address as Holder may from time to time designate, the principal
sum of Three Million Seven Hundred Ninety Five Thousand and
No/100 Dollars ($3,795,000.00), or so much thereof as may be
advanced by Holder hereunder and remain unpaid from time to time,
together with interest on said principal sum or such part thereof
disbursed by Holder, from the date of each disbursement made by
Holder until repaid in full, at the rate and at the times set
forth below. The loan evidenced by this Promissory Note (the
"Note") is not a revolving loan and, therefore, Maker may not
borrow, repay and reborrow the principal indebtedness evidenced
hereby.
1. Definitions. As used herein, the following terms shall
have the indicated meanings (definitions appear in alphabetical
order and defined terms used within definitions are defined
either above or in the appropriate alphabetical place within this
Paragraph 1):
(a) Default Interest Rate. A fluctuating rate per annum at
all times equal to the lesser of (i) eighteen percent (18%) per
annum, or (ii) the Maximum Rate.
(b) Guaranty Agreement. That certain Guaranty Agreement
dated of even date herewith executed jointly and severally by
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. for the benefit of
Holder.
(c) Loan Documents. Collectively, all documents and
instruments now or hereafter evidencing, securing, guaranteeing
and/or relating to the indebtedness evidenced by this Note, as
the same may be amended or replaced from time to time hereafter,
including, without limitation, this Note, that certain Letter
Agreement dated contemporaneously herewith, and the Guaranty
Agreement.
(d) Maturity Date. October 9, 2000.
(e) Maximum Rate. The maximum non-usurious rate of
interest per annum permitted by whichever of applicable United
States federal law or Colorado law permits the higher interest
rate, including, to the extent permitted by such applicable law,
any amendments thereof or any new law hereafter coming into
effect to the extent a higher maximum non-usurious rate of
interest is permitted thereby. The Maximum Rate shall be applied
by taking into account all amounts characterized by applicable
law as interest on the debt evidenced by this Note, so that the
aggregate of all interest does not exceed the maximum
non_usurious amount permitted by applicable law.
(f) Note. This Promissory Note.
2. Interest Rate. The outstanding principal balance of
this Note shall bear interest, from the date of each disbursement
of the loan proceeds made by Holder until repaid in full, at a
rate per annum at all times equal to fifteen percent (15%).
Interest shall accrue and compound monthly on the outstanding
principal balance of this Note. Interest on the principal
balance of this Note shall be due and payable on the Maturity
Date.
3. Accrual of Interest. Unless the due date of this Note
is accelerated upon the occurrence of an Event of Default (as
hereinafter defined), no payment of principal or interest shall
be due hereunder until the Maturity Date, when the outstanding
principal balance of this Note, together with all accrued
interest thereon and any other sums due under this Note, shall be
immediately due and payable.
4. Payment of Interest. All amounts due hereunder shall
be payable in lawful money of the United States of America.
Accrued interest shall bear interest at the same rate as the
principal of this Note.
5. Prepayment. Maker may prepay this Note upon ten (10)
days' prior written notice to Holder without premium. Maker
shall not be entitled to reborrow any amounts prepaid hereunder.
6. Time. Time is of the essence hereof.
7. Events of Default. At the option of Holder, the
payment of all principal, any interest accrued thereon and any
other sums then due and payable under the provisions of this Note
will be accelerated and such principal, interest and such other
sums shall be immediately due and payable without notice or
demand upon the earlier to occur of any of the following events
(an "Event of Default"):
(a) the failure of Maker to pay any amounts hereunder or
under any other Loan Document when due, subject to any applicable
grace or cure period set forth herein or in such other Loan
Document;
(b) any other default hereunder or under any other Loan
Document, not cured within any applicable grace period;
(c) the filing by Maker, any guarantor of the obligations
represented by this Note, or any Affiliate of Maker or any such
guarantor of a voluntary petition in bankruptcy; the commencement
of a bankruptcy or insolvency proceeding against any such party
(unless stayed or dismissed within 30 days); the filing by any
such party of an assignment for the benefit of creditors; or the
attachment, execution or judicial seizure, whether by enforcement
of money judgment, writ or warrant of attachment or any other
process, of all or substantially all of the assets of Maker or
such party which is not released within sixty (60) days after
such action; and
8. Default Interest Rate. After the Maturity Date or
after an Event of Default, the principal amount outstanding, and
all accrued interest thereon, shall thereafter bear interest at
the Default Interest Rate.
9. Release. Each Maker, endorser, cosigner and guarantor
of this Note hereby expressly grants to Holder the right to
release or to agree not to ▇▇▇ any other person, or to suspend
the right to enforce this Note against such other person or to
otherwise discharge such person; and each such Maker, endorser,
cosigner and guarantor hereby agrees that the exercise of such
rights by Holder shall have no effect on the liability of any
other person, primarily or secondarily liable hereunder.
10. Waivers. Maker, for itself and its legal
representatives, successors and assigns, expressly waives
presentment, protest, demand, notice of dishonor, notice of
nonpayment, notice of maturity, notice of protest, presentment
for the purposes of accelerating the maturity, and diligence in
collection, and consents that Holder may extend the time for
payment or otherwise modify the terms of payment of any part or
the whole of the debt evidenced hereby.
11. Attorneys' Fees. If Holder employs counsel to collect
this Note or otherwise to exercise its remedies, including
without limitation filing a claim in connection with any
bankruptcy or insolvency proceedings, Maker shall pay the
reasonable fees, costs and expenses of Holder, including without
limitation attorneys' fees, whether or not suit is brought.
12. Limitations on Interest. This Note is subject to the
express condition that at no time shall Maker be obligated or
required to pay interest on the principal balance at a rate which
could subject Holder to either civil or criminal liability as a
result of being in excess of the Maximum ate which Maker is
permitted by law to contract or agree to pay. If by the terms of
this Note Maker is at any time required or obligated to pay
interest on the principal balance at a rate in excess of such
Maximum Rate, the rate of interest under this Note shall be
deemed to be immediately reduced to such Maximum Rate and
interest payable hereunder shall be computed at such Maximum
Rate.
13. Notice. Whenever any party hereto shall desire to, or
be required to, give or serve any notice, demand, request or
other communication with respect to this Note, each such notice,
demand, request or communication shall be in writing and shall be
effective only if the same is delivered by personal service
(including, without limitation, courier or express service) or
mailed certified or registered mail, postage prepaid, return
receipt requested, or sent by telegram or facsimile transmission
with confirmation of receipt, to the parties at the addresses
shown throughout this Note or such other addresses which the
parties may provide to one another in accordance herewith. If
notice is sent to Holder, a copy of such notice shall also be
given to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. If notice
is sent to Maker, a copy of such notice shall also be given to
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, c/o Delta Petroleum Corporation, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Notice delivered
personally will be effective upon delivery to an authorized
representative of the party at the designated address; notices
sent by mail in accordance with the above paragraph will be
effective upon execution by the addressee of the Return Receipt.
Notices delivered via facsimile will be effective upon
confirmation of receipt.
14. Recourse Obligation. This Note is specifically a full
recourse obligation, and nothing herein contained shall be
construed to prevent Holder from proceeding personally against
Maker under this Note.
15. Business Purpose. Maker certifies that this loan is
obtained for business or commercial purposes and that the
proceeds thereof will not be used primarily for personal, family,
household or agricultural purposes.
16. Representations and Warranties. Maker makes the
following representations and warranties, which shall be deemed
to be continuing representations and warranties in favor of
Holder, and covenants and agrees to perform all acts necessary to
maintain the truth and correctness, in all material respects, of
the following:
(a) Maker's Employer Identification Number is: ▇▇-▇▇▇▇▇▇▇
and its principal place of business is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(b) Maker agrees that it shall not, without prior written
notification to Holder, move or otherwise change its principal
place of business.
17. CHOICE OF LAW. THIS NOTE WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE PARTIES
FURTHER AGREE THAT IN THE EVENT OF DEFAULT, THIS NOTE MAY BE
ENFORCED IN ANY COURT OF COMPETENT JURISDICTION IN THE STATE OF
COLORADO AND THEY DO HEREBY SUBMIT TO THE JURISDICTION OF ANY AND
ALL SUCH COURTS REGARDLESS OF THEIR RESIDENCE OF WHERE THIS NOTE
OR ANY ENDORSEMENT HEREOF MAY BE EXECUTED.
18. WAIVER OF TRIAL BY JURY. TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW, AND ACKNOWLEDGING THAT THE
CONSEQUENCES OF SAID WAIVER ARE FULLY UNDERSTOOD, MAKER HEREBY
EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY, THE RIGHT TO
INTERPOSE ANY DEFENSE BASED UPON ANY STATUTE OF LIMITATIONS, ANY
CLAIM OF LACHES AND ANY SET-OFF OR COUNTERCLAIM OF ANY NATURE OR
DESCRIPTION IN ANY ACTION OR PROCEEDING INSTITUTED AGAINST MAKER
OR ANY OTHER PERSON LIABLE ON THIS NOTE. MAKER ACKNOWLEDGES AND
AGREES THAT HOLDER SHALL HAVE ALL RIGHTS OF A THIRD PARTY
CREDITOR WITH RESPECT TO THIS NOTE, AND MAKER WAIVES AND RELEASES
FOR ITSELF ALL CLAIMS TO THE CONTRARY.
SIGNATURE PAGE TO THAT CERTAIN PROMISSORY NOTE GIVEN BY DELTA
PETROLEUM CORPORATION, A COLORADO CORPORATION, TO HEXAGON
INVESTMENTS, LLC, A COLORADO LIMITED LIABILITY COMPANY
EXECUTED as of the date set forth above.
DELTA PETROLEUM CORPORATION,
a Colorado corporation
By: s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this
11th day of July, 2000, by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as President of Delta
Petroleum Corporation.
Witness my hand and notarial seal.
My commission expires: 3-2-2003
S/▇▇▇▇ ▇. May
Notary Public
[SEAL]
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (this "Guaranty Agreement"), is
made as of July 10, 2000, by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇") and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. ("▇▇▇▇▇▇") jointly and severally (▇▇▇▇▇▇
and ▇▇▇▇▇▇ are individually and collectively referred to herein
as the "Guarantors"), each of whose address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, for the benefit of HEXAGON
INVESTMENTS, LLC, a Colorado limited liability company
("Hexagon"), whose address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, Hexagon has made a loan (the "Loan") to Delta
Petroleum Corporation, a Colorado corporation ("Maker"), as
evidenced by that certain Promissory Note in the amount of
$3,795,000.00 of even date herewith from Maker payable to the
order of Hexagon (the "Note"), that certain Letter Agreement of
even date herewith, this Guaranty Agreement and any other
instrument or documents now or hereafter evidencing,
guaranteeing, securing or relating to the indebtedness evidenced
by the Note (hereinafter collectively referred to as the "Loan
Documents"); and
WHEREAS, each Guarantor is a, director, officer and/or
significant shareholder of Maker and believes he shall
substantially benefit, directly or indirectly, from the making of
the Loan; and
WHEREAS, as a condition of making the Loan, Hexagon has
required the Guarantors to jointly and severally guarantee to
Hexagon the obligations of Maker under the Loan Documents, and
certain other items as herein set forth.
NOW, THEREFORE, in order to induce Hexagon to make the Loan,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Guarantor
hereby jointly and severally covenants and agrees as follows:
1. Each Guarantor irrevocably, unconditionally, jointly
and severally fully guarantees the due, prompt and complete
performance of each and every one of the following obligations:
(a) the payment and performance by Maker of each and every
obligation of Maker under the Note and the other Loan Documents
to which it is a party; and (b) the due, prompt and complete
payment of all costs and expenses (including, without limitation,
reasonable attorneys' fees) incurred by Hexagon in collection or
enforcement of this Guaranty Agreement against the Guarantors
(the obligations described in this Paragraph 1 are hereinafter
collectively referred to as the "Indebtedness").
2. Each Guarantor hereby grants to Hexagon, in the
absolute discretion of Hexagon, and without notice to any
Guarantor, the power and authority to deal in any lawful manner
with the Indebtedness and the other obligations guaranteed
hereby, and without limiting the generality of the foregoing, the
further power and authority, from time to time:
(a) to renew, compromise, extend, accelerate or
otherwise change the time or place of payment of or to otherwise
change the terms of the Indebtedness;
(b) to modify or to waive any of the terms of the
obligations guaranteed hereby;
(c) to take and hold security for the payment of the
Indebtedness and/or performance of the other obligations
guaranteed hereby and to impair, exhaust, exchange, enforce,
waive or release any such security;
(d) to direct the order or manner of sale of any such
security as Hexagon, in its discretion, may determine;
(e) to grant any indulgence, forbearance or waiver
with respect to the Indebtedness or any of the other obligations
guaranteed hereby; and
(f) to release or waive rights against any one or more
Guarantors without releasing or waiving any rights against any
other Guarantor.
The liability of each Guarantor hereunder shall not be affected,
impaired or reduced in any way by any action taken by Hexagon
under the foregoing provisions or any other provision hereof, or
by any delay, failure or refusal of Hexagon to exercise any right
or remedy it may have against Maker or any other person, firm or
corporation, including other guarantors, if any, liable for all
or any part of the Indebtedness or any of the other obligations
guaranteed hereby.
3. The Guarantors agree that if any of the Indebtedness is
not fully and timely paid or performed according to the tenor
thereof, whether by acceleration or otherwise, the Guarantors
shall immediately upon receipt of written demand therefor from
Hexagon pay all of the Indebtedness hereby guaranteed in like
manner as if the Indebtedness constituted the direct and primary
obligation of the Guarantors. The Guarantors shall not have any
right of subrogation as a result of any payment hereunder or any
other payment made by the Guarantors or a Guarantor on account of
the Indebtedness, and each Guarantor hereby waives, releases and
relinquishes any claim based on any right of subrogation, any
claim for unjust enrichment or any other theory that would
entitle a Guarantor to a claim against Maker based on any payment
made hereunder or otherwise on account of the Indebtedness until
Hexagon is paid in full.
4. This Guaranty Agreement and the obligations of the
Guarantors hereunder shall be continuing and irrevocable until
the Indebtedness has been satisfied in full. Notwithstanding the
foregoing or anything else set forth herein, and in addition
thereto, if at any time all or any part of any payment received
by Hexagon from Maker or a Guarantor under or with respect to
this Guaranty Agreement is or must be rescinded or returned for
any reason whatsoever (including, but not limited to,
determination that said payment was a voidable preference or
fraudulent transfer under insolvency, bankruptcy or
reorganization laws), then Guarantors' obligations hereunder
shall, to the extent of the payment rescinded or returned, be
deemed to have continued in existence, notwithstanding such
previous receipt of payment by Hexagon, and Guarantors'
obligations hereunder shall continue to be effective or be
reinstated as to such payment, all as though such previous
payment to Hexagon had never been made. The provisions of the
foregoing sentence shall survive termination of this Guaranty
Agreement, and shall remain a valid and binding obligation of
each Guarantor until satisfied.
5. Each Guarantor hereby waives notice of acceptance of
this Guaranty Agreement by Hexagon and this Guaranty Agreement
shall immediately be binding upon each Guarantor. Any Guarantor
who executes this Guaranty Agreement shall be fully bound hereby
regardless of whether or not any other Guarantor subsequently
executes this Guaranty Agreement.
6. Each Guarantor hereby waives and agrees not to assert
or take advantage of:
(a) any right to require Maker to proceed against any
other person or to proceed against or exhaust any security held
by Maker at any time or to pursue any other remedy in Maker's
power before proceeding against any one or more Guarantors
hereunder;
(b) any right to require Hexagon to proceed against
Maker or any other person or to proceed against or exhaust any
security held by Hexagon at any time or to pursue any other
remedy in Hexagon's power before proceeding against any one or
more Guarantors hereunder;
(c) any defense that may arise by reason of the
incapacity, lack of authority, death or disability of any other
person or persons or the failure of Hexagon to file or enforce a
claim against the estate (in administration, bankruptcy or any
other proceeding) of any other person or persons;
(d) demand, presentment for payment, notice of
non_payment, protest, notice of protest and all other notices of
any kind, including, without limitation, notice of the existence,
creation or incurring of any new or additional indebtedness or
obligation or of any action or non_action on the part of Hexagon
or any endorser or creditor of Hexagon or any Guarantor or on the
part of any other person whomsoever under this or any other
instrument in connection with any obligation or evidence of
indebtedness held by Hexagon or in connection with the
Indebtedness;
(e) any election by Hexagon to exercise any right or
remedy it may have against Maker or any security held by Hexagon,
including, without limitation, the right to foreclose upon any
such security by judicial or non-judicial sale, without affecting
or impairing in any way the liability of Guarantors hereunder,
except to the extent the indebtedness has been paid, and the
Guarantors waive any default arising out of the absence,
impairment or loss of any right of reimbursement, contribution or
subrogation or any other right or remedy of the Guarantors
against Maker or any such security whether resulting from such
election by Hexagon or otherwise. The Guarantors understand that
if all or any part of the liability of Maker to Hexagon for the
Indebtedness is secured by real property the Guarantors shall be
liable for the full amount of their liability hereunder,
notwithstanding foreclosure on such real property by trustee sale
or any other reason impairing the Guarantors' right to proceed
against Maker; and
(f) all duty or obligation on the part of Hexagon to
perfect, protect, not impair, retain or enforce any security for
the payment of the Indebtedness or performance of any of the
other obligations guaranteed hereby.
7. All existing and future indebtedness of Maker to the
Guarantors or to any person controlled or owned in whole or in
part by any of the Guarantors and, the right of the Guarantors to
withdraw or to cause or permit any person controlled or owned in
whole or in part by any of the Guarantors to withdraw any capital
invested by any Guarantor in Maker, is hereby subordinated to the
Indebtedness at any time after a default exists under the
Indebtedness. Furthermore, without the prior written consent of
Hexagon, such subordinated indebtedness shall not be paid and
such capital shall not be withdrawn in whole or in part nor shall
any Guarantor accept or cause or permit any person controlled or
owned in whole or in part by a Guarantor to accept any payment of
or on account of any such subordinated indebtedness or as a
withdrawal of capital at any time after a default exists under
the Indebtedness. Any payment received by the Guarantors in
violation of this Guaranty Agreement shall be received by the
person to whom paid in trust for Hexagon, and Guarantors shall
cause the same to be paid to Hexagon immediately on account of
the Indebtedness. No such payment shall reduce or affect in any
manner the liability of the Guarantors under this Guaranty
Agreement.
8. The amount of each Guarantor's liability and all
rights, powers and remedies of Hexagon hereunder shall be
cumulative and not alternative and such rights, powers and
remedies shall be in addition to all rights, powers and remedies
given to Hexagon under any document or agreement relating in any
way to the terms and provisions hereof or otherwise by law. With
respect to each Guarantor, this Guaranty Agreement is in addition
to and exclusive of the guaranty of any other Guarantor executing
this Guaranty Agreement or any other person or entity which
guarantees the Indebtedness and/or the other obligations
guaranteed hereby.
9. The liability of each Guarantor under this Guaranty
Agreement shall be an absolute, direct, immediate and
unconditional guarantee of payment and not of collectability. The
obligations of each Guarantor hereunder are independent of the
obligations of Maker or any other party which may be initially or
otherwise responsible for performance or payment of the
obligations hereunder guaranteed and each other Guarantor, and,
in the event of any default hereunder, a separate action or
actions may be brought and prosecuted against any one or more
Guarantors, whether or not Maker is joined therein or a separate
action or actions are brought against Maker. Hexagon may
maintain successive actions for other defaults. Hexagon's rights
hereunder shall not be exhausted by its exercise of any of its
rights or remedies or by any such action or by any number of
successive actions until and unless the Indebtedness has been
paid in full.
10. The Guarantors hereby agree to pay to Hexagon, upon
demand, reasonable attorneys' fees and all costs and other
expenses which Hexagon expends or incurs in collecting or
compromising the Indebtedness or in enforcing this Guaranty
Agreement against each Guarantor whether or not suit is filed,
including, without limitation, all costs, attorneys' fees and
expenses incurred by Hexagon in connection with any insolvency,
bankruptcy, reorganization, arrangement or other similar
proceedings involving a Guarantor which in any way affect the
exercise by Hexagon of its rights and remedies hereunder. Any
and all such costs, attorneys' fees and expenses not so paid
shall bear interest at an annual interest rate equal to the
lesser of (i) 18%, or (ii) the highest rate permitted by
applicable law, from the date incurred by Hexagon until paid by
the Guarantors.
11. Should any one or more provisions of this Guaranty
Agreement be determined to be illegal or unenforceable, all other
provisions nevertheless shall be effective.
12. No provision of this Guaranty Agreement or right of
Hexagon hereunder can be waived nor can any Guarantor be released
from such Guarantor's obligations hereunder except by a writing
duly executed by Hexagon. This Guaranty Agreement may not be
modified, amended, revised, revoked, terminated, changed or
varied in any way whatsoever except by the express terms of a
writing duly executed by Hexagon.
13. When the context and construction so require, all words
used in the singular herein shall be deemed to have been used in
the plural, and the masculine shall include the feminine and
neuter and vice versa. The word "person" as used herein shall
include any individual, company, firm, association, partnership,
corporation, trust or other legal entity of any kind whatsoever.
14. If any or all of the Indebtedness is assigned by
Hexagon, this Guaranty Agreement shall automatically be assigned
therewith in whole or in part, as applicable, without the need of
any express assignment and when so assigned, each Guarantor shall
be bound as set forth herein to the assignee(s) without in any
manner affecting such Guarantor's liability hereunder for any
part of the Indebtedness retained by such Hexagon.
15. ▇▇▇▇▇▇'▇ Social Security Number is .
▇▇▇▇▇▇'▇ Social Security Number is .
16. This Guaranty Agreement shall inure to the benefit of
and bind the heirs, legal representatives, administrators,
executors, successors and assigns of Hexagon and Guarantors.
17. This Guaranty Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado
without regard to principles of conflicts of law. In any action
brought under or arising out of this Guaranty Agreement, each
Guarantor hereby consents to the jurisdiction of any competent
court within the City & County of Denver, Colorado and consents
to service of process by any means authorized by the laws of such
State. Except as provided in any other written agreement now or
at any time hereafter in force between Hexagon and any Guarantor,
this Guaranty Agreement shall constitute the entire agreement of
Guarantors with Hexagon with respect to the subject matter
hereof, and no representation, understanding, promise or
condition concerning the subject matter hereof shall be binding
upon Hexagon or any Guarantor unless expressed herein or in a
writing signed by Guarantors and Hexagon.
18. All notices, demands, requests or other communications
to be sent by one party to the other hereunder or required by law
shall be in writing and shall be deemed to have been validly
given or served by delivery of same in person to the addressee or
by depositing same with Federal Express for next business day
delivery or by depositing same in the United States mail, postage
prepaid, registered or certified mail, return receipt requested,
addressed as follows:
Hexagon: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Guarantor: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Guarantor: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to: __________________________
__________________________
__________________________
All notices, demands and requests shall be effective upon
such personal delivery or upon being deposited with Federal
Express or in the United States mail as required above. However,
with respect to notices, demands or requests so deposited with
Federal Express or in the United States mail, the time period in
which a response to any such notice, demand or request must be
given shall commence to run from the next business day following
any such deposit with Federal Express or, in the case of a
deposit in the United States mail as provided above, the date on
the return receipt of the notice, demand or request reflecting
the date of delivery or rejection of the same by the addressee
thereof. Rejection or other refusal to accept or the inability to
deliver because of changed address of which no notice was given
shall be deemed to be receipt of the notice, demand or request
sent. By giving to the other party hereto at least 30 days'
written notice thereof in accordance with the provisions hereof,
the parties hereto shall have the right from time to time to
change their respective addresses and each shall have the right
to specify as its address any other address within the United
States of America.
19. Each Guarantor hereby agrees that this Guaranty
Agreement, the Indebtedness and all other obligations guaranteed
hereby, shall remain in full force and effect at all times
hereafter until paid and/or performed in full notwithstanding any
action or undertakings by, or against, Hexagon, any Guarantor,
and/or any member in Hexagon in any proceeding in the United
States Bankruptcy Court, including, without limitation, any
proceeding relating to valuation of collateral, election or
imposition of secured or unsecured claim status upon claims by
Hexagon pursuant to any Chapter of the Bankruptcy Code or the
Rules of Bankruptcy Procedure as same may be applicable from time
to time.
20. This Guaranty Agreement may be executed in any number
of counterparts, each of which shall be effective only upon
delivery and thereafter shall be deemed an original, and all of
which shall be taken to be one and the same instrument, with the
same effect as if all parties hereto had signed the same
signature page. Any signature page of this Guaranty Agreement
may be detached from any counterpart of this Guaranty Agreement
without impairing the legal effect of any signatures thereon and
may be attached to another counterpart of this Guaranty Agreement
identical in form hereto but having attached to it one or more
additional signature pages. Execution by any Guarantor shall
bind such Guarantor regardless of whether any one or more other
Guarantors execute this Guaranty Agreement.
IN WITNESS WHEREOF, the undersigned Guarantors have executed
this Guaranty Agreement as of the day and year first above
written.
GUARANTORS:
s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this
11th day of July, 2000, by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
Witness my hand and notarial seal.
My commission expires: 3-2-2003
s/▇▇▇▇ ▇. May
Notary Public
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this
11th day of July, 2000, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Witness my hand and notarial seal.
My commission expires: 3-2-2003
s/▇▇▇▇ ▇. May
Notary Public