DELTA PETROLEUM
CORPORATION
150,000,000 Shares of Common Stock,
par value $0.01
J.P. Morgan
Securities Inc.
BMO Capital Markets Corp.
Deutsche Bank Securities Inc.
As Representatives of the several
Underwriters listed in Schedule 1 hereto
c/o J.P. Morgan Securities Inc.
277 Park Avenue
New York, New York 10172
Delta Petroleum
Corporation, a Delaware corporation (the “Company”),
proposes to issue and sell to the several Underwriters listed in
Schedule 1 hereto (the “Underwriters”), for whom
you are acting as representatives (the
“Representatives”), an aggregate of 150,000,000 shares
of Common Stock, par value $0.01 per share (the “Common
Stock”), of the Company (the “Firm Shares”) and,
at the option of the Underwriters, up to an additional 22,500,000
shares of Common Stock of the Company (the “Option
Shares”). The Firm Shares and the Option Shares are herein
referred to as the “Shares”. The shares of Common Stock
of the Company to be outstanding after giving effect to the sale of
the Shares are herein referred to as the
“Stock”.
The Company hereby
confirms its agreement with the several Underwriters concerning the
purchase and sale of the Shares, as follows:
1.
Registration Statement . The Company has prepared and filed
with the Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the “Securities Act”), a registration
statement on Form S-3 (File No. 333-157644) including a
prospectus, relating to the Shares. Such registration statement, as
amended at the time it became effective, including the information,
if any, deemed pursuant to Rule 430A, 430B or 430C under the
Securities Act to be part of the registration statement at the time
of its effectiveness (“Rule 430 Information”), is
referred to herein as the “Registration Statement”; and
as used herein, the term “Preliminary Prospectus” means
each prospectus included in such registration statement (and any
amendments thereto) before effectiveness, any prospectus filed with
the Commission pursuant to Rule 424(a) under the Securities Act and
the prospectus included in the Registration Statement at the time
of its effectiveness that omits Rule 430 Information, and the
term “Prospectus” means the prospectus in the form
first used (or made available upon request of purchasers pursuant
to Rule 173 under the Securities Act) in connection with
confirmation of sales of the Shares. If the Company has filed an
abbreviated registration statement pursuant to Rule 462(b) under
the Securities Act (the “Rule
2
462
Registration Statement”), then any reference herein to the
term “Registration Statement” shall be deemed to
include such Rule 462 Registration Statement. Any reference in
this Agreement to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act, as of the
effective date of the Registration Statement or the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and
any reference to “amend”, “amendment” or
“supplement” with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date
under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder (collectively,
the “Exchange Act”) that are deemed to be incorporated
by reference therein. Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Registration
Statement and the Prospectus.
At or prior to the
time when sales of the Shares were first made (the “Time of
Sale”), the Company had prepared the following information
(collectively, the “Time of Sale Information”): a
prospectus dated April 22, 2009, as supplemented by a
preliminary prospectus supplement dated May 5, 2009 relating to the
Shares, and each “free-writing prospectus” (as defined
pursuant to Rule 405 under the Securities Act) listed on Annex
B hereto.
2.
Purchase of the Shares by the Underwriters . (a) The
Company agrees to issue and sell the Shares to the several
Underwriters as provided in this Agreement, and each Underwriter,
on the basis of the representations, warranties and agreements set
forth herein and subject to the conditions set forth herein,
agrees, severally and not jointly, to purchase from the Company the
respective number of Firm Shares set forth opposite such
Underwriter’s name in Schedule 1 hereto at a price per
share (the “Purchase Price”) of $1.4363. The public
offering price of the Shares is not in excess of the price
recommended by KeyBanc Capital Markets Inc., acting as a
“qualified independent underwriter” within the meaning
of NASD Rule 2720 of the Financial Industry Regulatory
Authority, Inc. (“FINRA”).
In addition, the
Company agrees to issue and sell the Option Shares to the several
Underwriters as provided in this Agreement, and the Underwriters,
on the basis of the representations, warranties and agreements set
forth herein and subject to the conditions set forth herein, shall
have the option to purchase, severally and not jointly, from the
Company the Option Shares at the Purchase Price.
If any Option
Shares are to be purchased, the number of Option Shares to be
purchased by each Underwriter shall be the number of Option Shares
which bears the same ratio to the aggregate number of Option Shares
being purchased as the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule 1 hereto (or such number
increased as set forth in Section 10 hereof) bears to the
aggregate number of Firm Shares being purchased from the Company by
the several Underwriters, subject, however, to such adjustments to
eliminate any fractional Shares as the Representatives in their
sole discretion shall make.
The Underwriters
may exercise the option to purchase the Option Shares at any time
in whole, or from time to time in part, on or before the thirtieth
day following the date of this Agreement, by written notice from
the Representatives to the Company. Such notice shall set forth the
aggregate number of Option Shares as to which the option is being
exercised and the
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date and time
when the Option Shares are to be delivered and paid for which may
be the same date and time as the Closing Date (as hereinafter
defined) but shall not be earlier than the Closing Date nor later
than the tenth full business day (as hereinafter defined) after the
date of such notice (unless such time and date are postponed in
accordance with the provisions of Section 10 hereof). Any such
notice shall be given at least two business days prior to the date
and time of delivery specified therein.
(b) The
Company understands that the Underwriters intend to make a public
offering of the Shares as soon after the effectiveness of this
Agreement as in the judgment of the Representatives is advisable,
and initially to offer the Shares on the terms set forth in the
Prospectus. The Company acknowledges and agrees that the
Underwriters may offer and sell Shares to or through any affiliate
of an Underwriter and that any such affiliate may offer and sell
Shares purchased by it to or through any Underwriter.
(c) Payment
for the Shares shall be made by wire transfer in immediately
available funds to the order of the Company to the account
specified by the Company to the Representatives in the case of the
Firm Shares, at 10:00 A.M. New York City time on
May 13th, 2009, or at such other time or place on the same or
such other date, not later than the fifth business day thereafter,
as the Representatives and the Company may agree upon in writing or
as provided in Section 10 hereof, or, in the case of the
Option Shares, on the date and at the time and place specified by
the Representatives in the written notice of the
Underwriters’ election to purchase such Option Shares. The
time and date of such payment for the Firm Shares is referred to
herein as the “Closing Date” and the time and date for
such payment for the Option Shares, if other than the Closing Date,
is herein referred to as the “Additional Closing
Date.”
Payment for the
Shares to be purchased on the Closing Date or the Additional
Closing Date, as the case may be, shall be made against delivery of
the Shares to be purchased on such date to the Representatives for
the respective accounts of the several Underwriters in definitive
form registered in such names and in such denominations as the
Representatives shall request in writing not later than two full
business days prior to the Closing Date or the Additional Closing
Date, as the case may be, with any transfer taxes payable in
connection with the sale of the Shares duly paid by the Company.
Delivery of the Shares shall be made through the facilities of The
Depository Trust Company (“DTC”) unless the
Representatives shall otherwise instruct.
(d) The
Company acknowledges and agrees that the Underwriters are acting
solely in the capacity of an arm’s length contractual
counterparty to the Company with respect to the offering of Shares
contemplated hereby (including in connection with determining the
terms of the offering) and not as a financial advisor or a
fiduciary to, or an agent of, the Company or any other person.
Additionally, none of the Representatives or any other Underwriter
is advising the Company or any other person as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction.
The Company shall consult with its own advisors concerning such
matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated
hereby, and the Underwriters shall have no responsibility or
liability to the Company with respect thereto. Any review by the
Underwriters of the Company, the transactions contemplated hereby
or other matters relating to such transactions will be performed
solely for the benefit of the Underwriters and shall not be on
behalf of the Company.
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3.
Representations and Warranties of the Company . The Company
represents and warrants to each Underwriter that:
(a)
Preliminary Prospectus. No order preventing or suspending
the use of any Preliminary Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing
thereof, complied in all material respects with the Securities Act
and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided that the Company makes no representation and
warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in any Preliminary
Prospectus, it being understood and agreed that the only such
information furnished by any Underwriter consists of the
information described as such in Section 7(b) hereof.
(b)
Time of Sale Information . The Time of Sale Information, at
the Time of Sale did not, and at the Closing Date and as of the
Additional Closing Date, as the case may be, will not, contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to any
statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representatives
expressly for use in such Time of Sale Information, it being
understood and agreed that the only such information furnished by
any Underwriter consists of the information described as such in
Section 7(b) hereof.
(c)
Issuer Free Writing Prospectus . Other than the Registration
Statement, the Preliminary Prospectus and the Prospectus, the
Company (including its agents and representatives, other than the
Underwriters in their capacity as such) has not made, used,
prepared, authorized, approved or referred to and will not prepare,
make, use, authorize, approve or refer to any “written
communication” (as defined in Rule 405 under the
Securities Act) that constitutes an offer to sell or solicitation
of an offer to buy the Shares (each such communication by the
Company or its agents and representatives (other than a
communication referred to in clause (i) below) an
“Issuer Free Writing Prospectus”) other than
(i) any document not constituting a prospectus pursuant to
clause (a) of Section 2(a)(10) of the Securities Act or
Rule 134 under the Securities Act or (ii) the documents
listed on Annex B hereto, each electronic road show and any other
written communications approved in writing in advance by the
Representatives. Each such Issuer Free Writing Prospectus complied
in all material respects with the Securities Act, has been filed in
accordance with the Securities Act (to the extent required thereby)
and, when taken together with the Time of Sale Information filed
prior to the first use of such Issuer Free Writing Prospectus, did
not, and at the Closing Date and as of the Additional Closing Date,
as the case may be, will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that
the Company makes no representation and warranty with respect to
any statements or omissions made in each such Issuer Free Writing
Prospectus in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through the
5
Representatives
expressly for use in any Issuer Free Writing Prospectus, it being
understood and agreed that the only such information furnished by
any Underwriter consists of the information described as such in
Section 7(b) hereof.
(d)
Registration Statement and Prospectus. The Registration
Statement has been declared effective by the Commission. No order
suspending the effectiveness of the Registration Statement has been
issued by the Commission and no proceeding for that purpose or
pursuant to Section 8A of the Securities Act against the
Company or related to the offering has been initiated or, to the
Company’s knowledge, threatened by the Commission; as of the
applicable effective date of the Registration Statement and any
amendment thereto, the Registration Statement complied and will
comply in all material respects with the Securities Act, and did
not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading;
and as of the date of the Prospectus and any amendment or
supplement thereto and as of the Closing Date and as of the
Additional Closing Date, as the case may be, the Prospectus will
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided that the Company makes no representation and
warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in the Registration
Statement and the Prospectus and any amendment or supplement
thereto, it being understood and agreed that the only such
information furnished by any Underwriter consists of the
information described as such in Section 7(b) hereof.
(e)
Incorporated Documents. The documents incorporated by
reference in the Registration Statement, the Prospectus or the Time
of Sale Information, when they were filed with the Commission
conformed in all material respects to the requirements of the
Exchange Act and none of such documents contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and any further documents so filed and
incorporated by reference in the Registration Statement, the
Prospectus or the Time of Sale Information, when such documents are
filed with the Commission, will conform in all material respects to
the requirements of the Exchange Act and will not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(f)
Financial Statements. The financial statements and the
related notes thereto of the Company and its consolidated
subsidiaries included or incorporated by reference in the
Registration Statement, the Time of Sale Information and the
Prospectus comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as
applicable, and present fairly in all material respects the
financial position of the Company and its consolidated subsidiaries
as of the dates indicated and the results of their operations and
the changes in their cash flows for the periods specified; such
financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis throughout the periods covered thereby; and the other
financial information included or
6
incorporated by
reference in the Registration Statement, the Time of Sale
Information and the Prospectus has been derived from the accounting
records of the Company and its subsidiaries and presents fairly in
all material respects the information shown thereby.
(g)
No Material Adverse Change. Since the date of the most
recent financial statements of the Company included or incorporated
by reference in the Registration Statement, the Time of Sale
Information and the Prospectus, except in each case as otherwise
disclosed in the Registration Statement, the Time of Sale
Information and the Prospectus, (i) there has not been any
change in the capital stock or long-term debt of the Company or any
of its subsidiaries, or any dividend or distribution of any kind
declared, set aside for payment, paid or made by the Company on any
class of capital stock, or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the business, properties, management, financial position,
stockholders’ equity, results of operations or prospects of
the Company and its subsidiaries taken as a whole;
(ii) neither the Company nor any of its subsidiaries has
entered into any transaction or agreement that is material to the
Company and its subsidiaries taken as a whole or incurred any
liability or obligation, direct or contingent, that is material to
the Company and its subsidiaries taken as a whole; and
(iii) neither the Company nor any of its subsidiaries has
sustained any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor disturbance or dispute or any action,
order or decree of any court or arbitrator or governmental or
regulatory authority.
(h)
Organization and Good Standing . The Company and each of its
subsidiaries have been duly organized and are validly existing and
in good standing under the laws of their respective jurisdictions
of organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification, and have all power and authority
necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure
to be so qualified or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on
the business, properties, management, financial position,
stockholders’ equity, results of operations or prospects of
the Company and its subsidiaries taken as a whole or on the
performance by the Company of its obligations under this Agreement
(a “Material Adverse Effect”). The Company does not own
or control, directly or indirectly, any corporation, association or
other entity other than the entities listed in Annex A hereto (the
“subsidiaries”).
(i)
Capitalization . The Company has an authorized
capitalization as set forth in the Registration Statement, the Time
of Sale Information and the Prospectus under the heading
“Capitalization”; all the outstanding shares of capital
stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and are not subject to
any pre-emptive or similar rights; except as described in or
expressly contemplated by the Time of Sale Information and the
Prospectus, there are no outstanding rights (including, without
limitation, pre-emptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding
or arrangement of any kind relating to the issuance of any capital
stock of the Company or any such subsidiary, any such convertible
or exchangeable securities or any such rights, warrants or options;
the capital stock
7
of the Company
conforms in all material respects to the description thereof
contained in the Registration Statement, the Time of Sale
Information and the Prospectus; and all the outstanding shares of
capital stock or other equity interests of each subsidiary of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of any lien, charge, encumbrance, security
interest, restriction on voting or transfer or any other claim of
any third party, except for (i) liens existing under the
Second Amended and Restated Credit Agreement, dated
November 3, 2008, by and among the Company, JPMorgan Chase
Bank, N.A., as Administrative Agent, Bank of Montreal as
Syndication Agent, U.S. Bank National Association and the lenders
thereto, as amended by the First Amendment to Second Amended and
Restated Credit Agreement, dated effective March 2, 2009, by
and among the Company, JPMorgan Chase Bank, N.A., as Administrative
Agent, and each of the lenders thereto as further amended by the
letter agreements dated March 30, 2009 and April 14, 2009
among the Company and the lenders thereto (together, the
“Credit Agreement”) on the date hereof as set forth in
the Registration Statement, the Time of Sale Information and the
Prospectus, (ii) liens existing under the Amended and Restated
Credit Agreement, dated as of August 15, 2008 among DHS
Holding Company, DHS Drilling Company, the several banks and other
financial institutions or entities party to such Agreement, Lehman
Brothers, Inc., as sole arranger and sole bookrunner and Lehman
Commercial Paper, Inc., as syndication agent as amended by
Amendment Number One to Amended and Restated Credit Agreement dated
effective September 19, 2008, among DHS Holding Company, DHS
Drilling Company, the several banks and other financial
institutions or entities from time to time parties to such
Agreement, Lehman Brothers, Inc., as sole arranger and sole
bookrunner and Lehman Commercial Paper, Inc., as syndication agent
(together, the “DHS Credit Agreement”) on the date
hereof as set forth in the Registration Statement, the Time of Sale
Information and the Prospectus and (iii) as set forth in Annex
A and disclosed in the Registration Statement, the Time of Sale
Information and the Prospectus.
(j)
Due Authorization . The Company has the requisite corporate
right, power and authority to execute and deliver this Agreement
and to perform its obligations hereunder; and all corporate action
required to be taken for the due and proper authorization,
execution and delivery by it of this Agreement and the consummation
by it of the transactions contemplated hereby or by the Time of
Sale Information and the Prospectus has been duly and validly
taken.
(k)
Underwriting Agreement . This Agreement has been duly
authorized, executed and delivered by the Company.
(l)
The Shares . The Shares have been duly authorized by the
Company and, when issued and delivered and paid for as provided
herein, will be duly and validly issued and will be fully paid and
nonassessable and will conform to the descriptions thereof in the
Time of Sale Information and the Prospectus; and the issuance of
the Shares is not subject to any preemptive or similar rights,
except for the rights of Tracinda Corporation set forth in
Section 3.1 of the Company Stock Purchase Agreement dated
December 29, 2007, as amended, filed as Exhibit 10.1 to
the Company’s Form 8-K filed January 25,
2000.
(m)
Descriptions of this Agreement . The description of this
Agreement contained in the Registration Statement, the Time of Sale
Information and the Prospectus are accurate in all material
respects.
8
(n)
No Violation or Default . Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or
similar organizational documents; (ii) except as disclosed in
the Registration Statement, the Time of Sale Information and the
Prospectus, in default, and no event has occurred that, with notice
or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject; or (iii) in
violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clauses (ii) and (iii)
above, for any such default or violation that would not,
individually or in the aggregate, have a Material Adverse
Effect.
(o)
No Conflicts . The execution, delivery and performance by
the Company of this Agreement, the issuance and sale of the Shares
and the consummation of the transactions contemplated by this
Agreement or the Time of Sale Information and the Prospectus will
not (i) conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, (ii) result in any violation of the provisions of the
charter or by-laws or similar organizational documents of the
Company or any of its subsidiaries or (iii) result in the
violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory
authority.
(p)
No Consents Required . No consent, approval, authorization,
order, registration or qualification of or with any court or
arbitrator or governmental or regulatory authority is required for
the execution, delivery and performance by the Company of this
Agreement, the issuance and sale of the Shares and the consummation
of the transactions contemplated by this Agreement or the Time of
Sale Information and the Prospectus, except for the registration of
the Shares under the Securities Act and such consents, approvals,
authorizations, orders and registrations or qualifications as may
be required (i) under applicable state securities laws in
connection with the purchase and distribution of the Shares by the
Underwriters or (ii) by the National Association of Securities
Dealers Automated Quotations Global Select Market Companies (the
“NASDAQ Global Market”).
(q)
Legal Proceedings . Except as described in the Registration
Statement, the Time of Sale Information and the Prospectus, there
are no legal, governmental or regulatory investigations, actions,
suits or proceedings pending to which the Company or any of its
subsidiaries is or may be a party or to which any property of the
Company or any of its subsidiaries is or may be the subject that,
individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect; to the knowledge of the Company, no
such investigations, actions, suits or proceedings are threatened
or contemplated by any governmental or regulatory authority or
threatened by others; and (i) there are no current or pending
legal, governmental or regulatory actions, suits or proceedings
that are required under the Securities
9
Act to be
described in the Registration Statement that are not so described
in the Registration Statement, the Time of Sale Information and the
Prospectus and (ii) there are no statutes, regulations or
contracts or other documents that are required under the Securities
Act to be described in the Registration Statement or the Prospectus
or filed as exhibits to the Registration Statement that are not so
filed as exhibits to the Registration Statement or described in the
Registration Statement, the Time of Sale Information and the
Prospectus.
(r)
Independent Accountants . KPMG LLP, which has certified
certain financial statements of the Company and its subsidiaries,
is an independent registered public accounting firm with respect to
the Company and its subsidiaries within the applicable rules and
regulations adopted by the Commission and the Public Company
Accounting Oversight Board (United States) and as required by the
Securities Act.
(s)
Title to Real and Personal Property . The Company and its
subsidiaries have good and valid title to, or have valid rights to
lease or otherwise use, in each case in accordance with industry
custom and standard, all items of real and personal property that
are material to the respective businesses of the Company and its
subsidiaries, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title except
those that (i) exist under the Credit Agreement or the DHS
Credit Agreement on the date hereof as set forth in the
Registration Statement, the Time of Sale Information and the
Prospectus, (ii) do not materially interfere with the use made
and proposed to be made of such property by the Company and its
subsidiaries or (iii) would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect.
(t)
Title to Intellectual Property . The Company and its
subsidiaries own or possess adequate rights to use all material
patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations,
copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of
their respective businesses; and the conduct of their respective
businesses will not conflict in any material respect with any such
rights of others, and the Company and its subsidiaries have not
received any notice of any claim of infringement or conflict with
any such rights of others.
(u)
No Undisclosed Relationships . No relationship, direct or
indirect, exists between or among the Company or any of its
subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its
subsidiaries, on the other, that is required by the Securities Act
to be described in the Registration Statement and the Prospectus
and that is not so described in such documents and in the Time of
Sale Information.
(v)
Investment Company Act . The Company is not and, after
giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the
Registration Statement, the Time of Sale Information and the
Prospectus, will not be required to register as an
“investment company” or an entity
“controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder
(collectively, “Investment Company Act”).
10
(w)
Taxes . The Company and its subsidiaries have paid all
material federal, state, local and foreign taxes and filed all
material tax returns required to be paid or filed through the date
hereof; and except as otherwise disclosed in the Registration
Statement, the Time of Sale Information and the Prospectus, there
is no material tax deficiency that has been, or would reasonably be
expected to be, asserted against the Company or any of its
subsidiaries or any of their respective properties or
assets.
(x)
Licenses and Permits . The Company and its subsidiaries
possess all licenses, certificates, permits and other
authorizations issued by, and have made all declarations and
filings with, the appropriate federal, state, local or foreign
governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of
their respective businesses as described in the Registration
Statement, the Time of Sale Information and the Prospectus, except
where the failure to possess or make the same would not,
individually or in the aggregate, have a Material Adverse Effect;
and except as described in the Registration Statement, the Time of
Sale Information and the Prospectus, neither the Company nor any of
its subsidiaries has received notice of any revocation or
modification of any such license, certificate, permit or
authorization or has any reason to believe that any such license,
certificate, permit or authorization will not be renewed in the
ordinary course.
(y)
No Labor Disputes . No labor disturbance by or dispute with
employees of the Company or any of its subsidiaries exists or, to
the knowledge of the Company, is contemplated or threatened and the
Company is not aware of any existing or imminent labor disturbance
by, or dispute with, the employees of any of its or its
subsidiaries’ principal suppliers, contractors or customers,
except as would not have a Material Adverse Effect.
(z)
Compliance with Environmental Laws . (i) The Company
and its subsidiaries (x) are, and at all prior relevant times
were, in compliance with any and all applicable federal, state,
local and foreign laws, rules, regulations, requirements, decisions
and orders relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (collectively, “Environmental
Laws”); (y) have received and are in compliance with all
permits, licenses, certificates or other authorizations or
approvals required of them under applicable Environmental Laws to
conduct their respective businesses; and (z) have not received
notice of any actual or potential liability for the investigation
or remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, and
(ii) there are no costs or liabilities associated with
Environmental Laws of or relating to the Company or its
subsidiaries, except for any such failure to comply, or failure to
receive required permits, licenses or approvals, or cost or
liability, as would not, individually or in the aggregate, have a
Material Adverse Effect.
(aa)
Hazardous Substances . There has been no storage,
generation, transportation, handling, treatment, disposal,
discharge, emission, or other release of any kind of toxic wastes
or hazardous substances, including, but not limited to, any
naturally occurring radioactive materials, brine, drilling mud,
crude oil, natural gas liquids and other petroleum materials, by,
due to or caused by the Company or any of its subsidiaries (or, to
the best of the Company’s knowledge, any other entity
(including any predecessor) for whose acts or omissions the Company
or any of its subsidiaries is or would reasonably be expected to be
liable) upon any of the property now or previously owned or leased
by the Company or any of its subsidiaries, or
11
upon any other
property, in violation of any Environmental Laws or in a manner or
to a location that would reasonably be expected to give rise to any
liability under any Environmental Laws, except for any violation or
liability which would not, individually or in the aggregate, have a
Material Adverse Effect.
(bb)
Certain Environmental Proceedings and Capital Expenditures .
Except as described in the Registration Statement, the Time of Sale
Information and the Prospectus, (i) without limitation to
Section 3(q) hereof, there are no proceedings that are pending, or
that are known to be contemplated, against the Company or any of
its subsidiaries under any Environmental Laws in which a
governmental entity is also a party, other than such proceedings
regarding which it is reasonably believed no monetary sanctions of
$100,000 or more will be imposed, and (ii) none of the Company
and its subsidiaries anticipates material capital expenditures
relating to any Environmental Laws.
(cc)
Compliance with ERISA . (i) Each employee benefit plan,
within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), for
which the Company or any member of its “Controlled
Group” (defined as any organization which is a member of a
controlled group of corporations within the meaning of
Section 414 of the Internal Revenue Code of 1986, as amended
(the “Code”)) would have any liability (each, a
“Plan”) has been maintained in compliance with its
terms and the requirements of any applicable statutes, orders,
rules and regulations, including but not limited to ERISA and the
Code; (ii) no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any Plan excluding transactions effected
pursuant to a statutory or administrative exemption; (iii) for
each Plan that is subject to the funding rules of Section 412
of the Code or Section 302 of ERISA, no “accumulated
funding deficiency” as defined in Section 412 of the
Code, whether or not waived, has occurred or is reasonably expected
to occur; (iv) the fair market value of the assets of each
Plan exceeds the present value of all benefits accrued under such
Plan (determined based on those assumptions used to fund such
Plan); (v) no “reportable event” (within the
meaning of Section 4043(c) of ERISA) has occurred or is reasonably
expected to occur; and (vi) neither the Company nor any member
of the Controlled Group has incurred, nor reasonably expects to
incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the PBGC, in the ordinary
course and without default) in respect of a Plan (including a
“multiemployer plan”, within the meaning of
Section 4001(a)(3) of ERISA); except where those events or
conditions described in clauses (i) through (vi) above
would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(dd)
Disclosure Controls . The Company and its subsidiaries
maintain an effective system of “disclosure controls and
procedures” (as defined in Rule 13a-15(e) of the
Exchange Act) that complies with the requirements of the Exchange
Act and that has been designed to ensure that information required
to be disclosed by the Company in reports that it files or submits
under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the
Commission’s rules and forms, including controls and
procedures designed to ensure that such information is accumulated
and communicated to the Company’s management as appropriate
to allow timely decisions regarding required disclosure. The
Company and its subsidiaries have carried out evaluations of the
effectiveness of their disclosure controls and procedures as
required by Rule 13a-15 of the Exchange Act.
12
(ee)
Accounting Controls . The Company and its subsidiaries
maintain systems of “internal control over financial
reporting” (as defined in Rule 13a-15(f) of the Exchange
Act) that comply with the requirements of the Exchange Act and have
been designed by, or under the supervision of, their respective
principal executive and principal financial officers, or persons
performing similar functions, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles,
including, but not limited to internal accounting controls
sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except
as disclosed in the Registration Statement, the Time of Sale
Information and the Prospectus, there are no material weaknesses in
the Company’s internal controls. The Company’s auditors
and the Audit Committee of the Board of Directors of the Company
have been advised of: (i) all significant deficiencies and
material weaknesses in the design or operation of internal controls
over financial reporting which are reasonably likely to adversely
affect the Company’s ability to record, process, summarize,
and report financial information; and (ii) any fraud, whether
or not material, that involves management or other employees who
have a significant role in the Company’s internal controls
over financial reporting.
(ff)
Insurance . The Company and its subsidiaries have insurance
covering their respective properties, operations, personnel and
businesses, including business interruption insurance, which
insurance is in amounts and insures against such losses and risks
as are customary in the oil and gas business and adequate, in all
material respects, to protect the Company and its subsidiaries and
their respective businesses; and neither the Company nor any of its
subsidiaries has (i) received notice from any insurer or agent of
such insurer that capital improvements or other expenditures are
required or necessary to be made in order to continue such
insurance or (ii) any reason to believe that it will not be
able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage at reasonable cost
from similar insurers as may be necessary to continue its
business.
(gg)
No Unlawful Payments . Neither the Company nor any of its
subsidiaries nor, to the knowledge of the Company, any director,
officer, agent, employee or other person acting on behalf of the
Company or any of its subsidiaries has (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (ii) made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment.
(hh)
Compliance with Money Laundering Laws . The operations of
the Company and its subsidiaries are and have been conducted at all
times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of
all
13
jurisdictions,
the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced
by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or
before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries with
respect to the Money Laundering Laws is pending or, to the
knowledge of the Company, threatened.
(ii)
Compliance with OFAC . None of the Company, any of its
subsidiaries or, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury (“OFAC”); and the Company
will not directly or indirectly use the proceeds of the offering of
the Shares hereunder, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered
by OFAC.
(jj)
No Restrictions on Subsidiaries . No subsidiary of the
Company is currently prohibited, directly or indirectly, under any
agreement or other instrument to which it is a party or is subject,
from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from
repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such
subsidiary’s properties or assets to the Company or any other
subsidiary of the Company, except pursuant to the Credit Agreement,
the DHS Credit Agreement and the Indenture dated as of
March 15, 2005, among Delta Petroleum Corporation, the
guarantors named therein and U.S. Bank National Association, as
trustee, relating to the Company’s 7% Senior Notes due 2015
(the “Senior Note Indenture”).
(kk)
No Broker’s Fees . Neither the Company nor any of its
subsidiaries is a party to any contract, agreement or understanding
with any person (other than this Agreement) that would give rise to
a valid claim against the Company or any of its subsidiaries or any
Underwriter for a brokerage commission, finder’s fee or like
payment in connection with the offering and sale of the
Shares.
(ll)
No Registration Rights . No person has the right to require
the Company or any of its subsidiaries to register any securities
for sale under the Securities Act by reason of the filing of the
Registration Statement with the Commission or the issuance and sale
of the Shares.
(mm)
No Stabilization . The Company has not taken, directly or
indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of
the price of the Shares.
(nn)
Margin Rules . Neither the issuance, sale and delivery of
the Shares nor the application of the proceeds thereof by the
Company as described in the Registration Statement, the Time of
Sale Information and the Prospectus will violate Regulation T,
U or X of the Board of Governors of the Federal Reserve System or
any other regulation of such Board of Governors.
14
(oo)
Forward-Looking Statements . No forward-looking statement
(within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in the Registration
Statement, the Time of Sale Information and the Prospectus has been
made or reaffirmed without a reasonable basis or has been disclosed
other than in good faith.
(pp)
Statistical and Market Data . Nothing has come to the
attention of the Company that has caused the Company to believe
that the statistical and market-related data included in the
Registration Statement, the Time of Sale Information and the
Prospectus is not based on or derived from sources that are
reliable and accurate in all material respects.
(qq)
Reserve Report Data. The oil and gas reserve estimates of
the Company and its subsidiaries for the years ended
December 31, 2006, 2007 and 2008 contained in the Registration
Statement, the Time of Sale Information and the Prospectus are
derived from reports that have been prepared by independent
petroleum consulting firms as set forth in the Registration
Statement, the Time of Sale Information and the Prospectus, to the
Company’s knowledge, such reserve estimates fairly reflect
the oil and gas reserves of the Company and its subsidiaries at the
dates indicated in such report and were prepared in accordance with
the Commission guidelines applied on a consistent basis throughout
the periods involved.
(rr)
Independent Reserve Engineering Firms. Ralph E. Davis
Associates, Inc. is an independent reserve engineer with respect to
the Company and its subsidiaries and for the periods set forth in
the Registration Statement, the Time of Sale Information and the
Prospectus.
(ss)
Sarbanes-Oxley Act . There is and has been no failure on the
part of the Company or any of the Company’s directors or
officers, in their capacities as such, to comply in all material
respects with any provision of the Sarbanes-Oxley Act of 2002 and
the rules and regulations promulgated in connection therewith (the
“Sarbanes-Oxley Act”), including Section 402
related to loans and Sections 302 and 906 related to
certifications.
(tt)
Status under the Securities Act . The Company is not an
“ineligible issuer,” as defined under the Securities
Act, at the times specified in the Securities Act in connection
with the offering of the Shares. The Company has paid the
registration fee for this offering pursuant to Rule 456(b)(1)
under the Securities Act or will pay such fees within the time
period required by such rule (without giving effect to the proviso
therein) and in any event prior to the Closing Date.
(uu)
Beneficial Owners . To the Company’s knowledge, the
Company has no beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act) of more than 5% of its Common Stock
other than as set forth in the Company’s Proxy Statement on
Schedule 14A filed with the Commission on April 21,
2009.
4.
Further Agreements of the Company . The Company covenants
and agrees with each Underwriter that:
(a)
Required Filings. The Company will file the final Prospectus
with the Commission within the time periods specified by Rule
424(b) and Rule 430A, 430B or 430C under the Securities Act,
will file any Issuer Free Writing Prospectus to the extent required
by Rule 433 under the Securities Act; and will file promptly
all reports and any definitive proxy or
15
information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the
offering or sale of the Shares; and the Company will furnish copies
of the Prospectus and each Issuer Free Writing Prospectus (to the
extent not previously delivered) to the Underwriters in New York
City prior to 10:00 A.M., New York City time, on the business
day next succeeding the date of this Agreement in such quantities
as the Representatives may reasonably request. The Company will pay
the registration fees for this offering within the time period
required by Rule 456(b)(i) under the Securities Act prior to
the Closing Date.
(b)
Delivery of Copies. The Company will deliver, without
charge, (i) to the Representatives, a copy of the Registration
Statement as originally filed and each amendment thereto, in each
case including all exhibits and consents f
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