Exhibit 99.1
AGREEMENT OF
SETTLEMENT AND RELEASE
Introduction
1. TheSettling Parties enter into thisAgreement to fully, finally, and completely resolve and forever dispose ofAll Claimsbetween them.
Definitions
2. The following definitions are used for simplicity, govern the terms of thisAgreement only and shall not constitute any admission or stipulation of fact for purposes other than thisAgreement.
3. The term “Agreement” means this Agreement of Settlement and Release.
4. The term “Plan of Reorganization” means the Third Amended Joint Chapter 11 Plan of Reorganization of Delta Petroleum Corporation and its Debtor Affiliates dated as of and confirmed on August 16, 2012, Case No. 11-14006 (KJC), in the U.S. Bankruptcy Court for the District of Delaware. All capitalized terms used herein and not otherwise defined will have the same meaning as in thePlan of Reorganization.
5. The term “Wapiti Assets” means the assets transferred from the Debtors to Wapiti on or about July 30, 2010 for approximately $130.0 million and the assets transferred from the Debtors to Wapiti on or about June 28, 2011 for gross cash proceeds of approximately $43.2 million.
6. The term “Wapiti Trust” means the Wapiti Recovery Trust established pursuant to the Plan of Reorganization and its predecessors (including, without limitation, Delta Petroleum Corporation), successors and assigns.
7. The termWapiti means Wapiti Oil & Gas, L.L.C., a Delaware limited liability company, and its predecessors, successors and assigns.
8. The term “Settling Parties” means the Wapiti Trust and Wapiti.
9. The term “Party” means any of theSettling Parties.
10. The term “Representatives” means with respect to eachParty, suchParty’s present and former subsidiaries, parents, affiliates, insurers, controlled companies, agents, consultants, representatives, trustees, officers, directors, managers, employees, principals, partners, members, predecessors, successors, assigns, transferees, beneficiaries, heirs, executors, administrators, attorneys, and any present or future immediate or mediate transferee with respect to all or any portion of the Wapiti Assets within the meaning of 11 U.S.C. § 550(a)(2).
11. The terms “Third Party” and “Third Parties” means any person or persons and/or entity or entities, other than any of theSettling Parties.
12. The term “Underlying Matters” means:
(i) | The Wapiti Causes of Action; |
(ii) | Wapiti Assets; |
(iii) | Any claims and/or causes of action under 11 U.S.C. § 550 against any present or future immediate or mediate transferee (within the meaning of 11 U.S.C. § 550(a)(2)) of Wapiti with respect to all or any portion of the Wapiti Assets; |
(iv) | any past dealings, agreements, relationships, representations, and/or communications by, between and/or among theSettling Partiesand/or their respectiveRepresentatives(or any of them); |
(v) | any past actual or alleged conduct byWapiti, the Wapiti Trustor their respectiveRepresentatives; and |
(vi) | All Claimsthat have been made or could be made (A) by Delta Petroleum Corporation, Par Petroleum Corp. or theWapiti Trust againstWapitior itsRepresentatives or that relate to theWapiti Assets; or (B) by Wapitiagainst Delta Petroleum Corporation, Par Petroleum Corp. or theWapiti Trust,and each of their respective Representatives. |
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13. The term “All Claims” means: (i) any and all liability, damages, injuries, expenses, costs, equitable relief and/or attorneys’ fees, and whether or not asserted or unasserted, known or unknown, accrued or unaccrued, anticipated or unanticipated, fixed or contingent, liquidated or unliquidated, arising from federal or state law, arising from statutory or common law, arising in contract or in tort, and/or arising at law or in equity — that arise out of, concern, and/or in any way relate to sub-clauses (i) through (v) of the definition ofUnderlying Matters; and/or (ii) any and all claims, counterclaims, complaints, demands, suits, allegations, actions, and/or causes of action accrued or pending as of the date of thisAgreement — whether or not asserted or unasserted, known or unknown (including any claims, counterclaims complaints, demands, suits, allegations, actions and/or causes of action that anyParty does not know of or suspect to exist in its favor at the time of theAgreement which, if known by thatParty, might have affected its settlement with and release of any other Party (an “Unknown Claim”)), anticipated or unanticipated, fixed or contingent, liquidated or unliquidated, arising from federal or state law, arising from statutory or common law, arising in contract or in tort, and/or arising at law or in equity — that arise out of, concern, and/or in any way relate to sub-clauses (i) through (v) of the definition ofUnderlying Matters.
14. The term “Consideration” means:
(i) | a one-time payment byWapiti in the amount of One Million Five Hundred Thousand Dollars ($1,500,000) (“Cash Consideration”); |
And
(ii) | the promises, agreements, releases, warranties, representations and disclaimers contained in thisAgreement. |
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Background
15. Pursuant to thePlan of Reorganization, the Debtor established theWapiti Trust to investigate and pursue the Wapiti Causes of Action, including any fraudulent conveyance claim relating toWapitior theWapiti Assets, among other allegations, and the Wapiti Causes of Action were transferred to, and are now wholly owned by, the Wapiti Trust. After due consideration of the Wapiti Causes of Action, theWapiti Trust andWapiti negotiated in good faith and at arm’s length to settle the Wapiti Causes of Action and theUnderlying Claims pursuant to the terms hereof.
16. TheSettling Parties agree that, in order to avoid the hardship, trouble, uncertainty and expense associated with vigorously contested litigation, thisAgreement is the proper means by which to fully, finally, and completely resolve and forever dispose ofAll Claims.
Payment of the Consideration
17. Upon execution of this Agreement, and no later than September 19, 2012,Wapiti will pay theCash Consideration to the Wapiti Trust by wire transfer to the following Wapiti Trust bank account:
Amegy Bank, N.A.
Account Officer: Wakefield Thompson
Bank Routing Number: 113011258
Account Number: 54025091.
Receipt and Sufficiency of the Consideration
18. This Agreement shall not be effective unless and until Wapiti pays the Cash Consideration to the Wapiti Trust in accordance with Paragraph 17 above.
19. Each of theSettling Parties acknowledge and confess the sufficiency of theConsideration defined in Paragraph 14 above and specifically agree that theConsideration was bargained for and accepted by allSettling Parties, whether identified as the recipients of sums of money or other consideration described in Paragraph 14 or otherwise.
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Release
20. For (and as part of) theConsideration, each of theWapiti Trust andWapiti releases, acquits, and forever discharges, respectively,Wapiti and the Wapiti Trust and their respective RepresentativesfromAll Claims.
21. For (and as part of) theConsideration, each of theWapiti Trust andWapiti promises and agrees not to make or cause to be made any claim, not to file or cause to be filed any complaint (administrative or otherwise), and not to file or cause to be filed any legal action against, respectively,Wapiti and theWapiti Trust or their respectiveRepresentatives that arises out of, concerns, and/or in any way relates to any of theUnderlying Matters.
22. For (and as part of) theConsideration, theSettling Parties promise and agree: (i) that they bargained for the release, relinquishment and discharge ofAll Claims (includingUnknown Claims); (ii) that they are accepting theConsideration in full, final, and complete bar, satisfaction, and settlement ofAll Claims; and (iii) that they are familiar with and expressly waive the provisions, rights and benefits of California Civil Code § 1542 and any provisions, rights and benefits conferred by any law of any state or territory of the United States or principle of common law which is similar, comparable or equivalent to California Civil Code§ 1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
THE SETTLING PARTIES ACKNOWLEDGE THAT THEY MAY HEREAFTER DISCOVER FACTS IN ADDITION TO OR DIFFERENT FROM THOSE THAT THEY NOW KNOW OR BELIEVE TO BE TRUE WITH RESPECT TO THE SUBJECT MATTER OF THE UNDERLYING MATTERS, BUT THE SETTLING PARTIES SHALL EXPRESSLY HAVE FULLY, FINALLY AND FOREVER SETTLED, RELEASED AND DISCHARGEDALL CLAIMS, KNOWN ORUNKNOWN CLAIMS, SUSPECTED OR UNSUSPECTED, CONTINGENT OR NON-CONTINGENT, WHETHER OR NOT CONCEALED OR HIDDEN, WHICH NOW EXIST, OR HERETOFORE HAVE EXISTED UPON ANY THEORY OF LAW OR EQUITY NOW EXISTING OR COMING INTO EXISTENCE IN THE FUTURE, INCLUDING, BUT NOT LIMITED TO, CONDUCT WHICH IS NEGLIGENT, RECKLESS, INTENTIONAL, WITH OR WITHOUT MALICE, OR A BREACH OF ANY DUTY, LAW OR RULE, WITHOUT REGARD TO THE SUBSEQUENT DISCOVERY OR EXISTENCE OF SUCH DIFFERENT OR ADDITIONAL FACTS.
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23. The terms, provisions, promises and/or agreements contained within the preceding four paragraphs do not apply to release anyParty from any obligations, liabilities, claims, complaints, demands, allegations, causes of action, injuries, or damages arising from the breach of any promise, agreement, term, provision, warranty, or representation contained in thisAgreement.
Indemnification
24. For (and as part of) theConsideration, theWapiti Trust has promised to and agreed to, and does hereby, indemnify and hold harmlessWapiti and its RepresentativesfromAll Claims made and/or filed in the future by, through, under, on behalf of, or as derived from only itself or its respective interests, as the case may be. Notwithstanding any other provision of this paragraph, the indemnification provided for herein shall not extend to any such future claims, demands, injuries, damages, actions, cross-actions, third-party actions, actions for contribution and/or indemnity and/or other causes of action that arise from a breach byWapiti Trust of any promise, agreement, term, warranty, and/or representation contained in thisAgreement.
25. For (and as part of) theConsideration,Wapiti has promised to and agreed to, and does hereby, indemnify and hold harmless theWapiti Trust and its RepresentativesfromAll Claims made and/or filed in the future by, through, under, on behalf of, or as derived from only itself or its respective interests, as the case may be. Notwithstanding any other provision of this paragraph, the indemnification provided for herein shall not extend to any such future claims, demands, injuries, damages, actions, cross-actions, third-party actions, actions for contribution and/or indemnity and/or other causes of action that arise from a breach byWapitiof any promise, agreement, term, warranty, and/or representation contained in thisAgreement.
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Warranties
26. For (and as part of) theConsideration, eachSettling Party or entity included in the definition of eitherParty (only for himself/herself or itself as the case may be) expressly promises, agrees, warrants, and represents:
(i) | that the person executing thisAgreement on behalf of suchSettling Partyor entity included in the definition of eitherPartyis legally competent and able to execute thisAgreement; |
(ii) | that the person executing thisAgreement on behalf of suchSettling Partyor entity included in the definition of eitherPartyis authorized to execute and deliver thisAgreement in the capacities indicated, and on behalf of those parties as defined, herein and has the power and authority to perform suchSettling Party’s or entity included in the definition of eitherParty’sobligations hereunder; |
(iii) | that suchSettling Partyor entity included in the definition of eitherPartyis the sole and exclusive owner ofAll Claims that could be asserted by thatSettling Party against any otherSettling Partyor itsRepresentatives relating to theUnderlying Matters, and that suchSettling Party has not assigned, pledged, and/or otherwise in any manner whatsoever sold, transferred, or otherwise encumbered, either by instrument in writing or otherwise, all or any portion ofAll Claims of that Settling Party; |
(iv) | that before executing thisAgreement, suchSettling Partyor entity included in the definition of eitherPartyhas fully informed himself or itself, as the case may be, of thisAgreement’s terms, contents, conditions, and effects; |
(v) | that before executing thisAgreement, suchSettling Partyor entity included in the definition of eitherPartyhas had the benefit and advice of counsel of suchSettling Party’s or entity included in the definition of eitherParty’sown choosing; |
(vi) | that suchSettling Partyor entity included in the definition of eitherPartyhas not filed or caused to be filed any suit or action against any otherSettling Party that arises out of, concerns, and/or in any way relates to any of theUnderlying Matters; and |
(vii) | the terms of thisAgreement will be binding upon and fully enforceable by and against suchSettling Party and itsRepresentatives. |
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Disclaimer of Reliance
27. EachSettling Party expressly represents and warrants and does hereby state and represent that no promise or agreement which is not expressed in thisAgreement has been made to them in connection with their execution of thisAgreement and that they are not relying upon any statement, representation or disclosure of any of the parties they are releasing hereby except as expressly set forth in thisAgreement.
Binding
28. This Agreement is binding, valid and enforceable upon the execution by Wapiti, the Wapiti Trust and any two of the three board members of the Wapiti Trust.
Non-Disparagement
29. TheSettling Parties agree that they will refrain from making any representation, statement, comment or any other form of communication (hereinafter collectively referred to as “representation”), whether written or oral, to any person or entity, which representation has the effect or tendency to disparage, denigrate, or otherwise reflect negatively on any other Settling Party, other Settling Party and/or their respectiveRepresentatives.
No Admission of Liability
30. For (and as part of) theConsideration, it is the clear understanding and agreement of theSettling Parties: (i) that neither the giving nor acceptance of theConsideration shall in any manner be construed or used as an admission of liability or wrongdoing on the part of any of theSettling Parties; and (ii) that the giving and acceptance of theConsideration is for the sole and exclusive purpose of buying peace, compromising and settlingAll Claims, and avoiding and eliminating the expense and hardship of litigation.
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Complete Agreement
31. For (and as part of) theConsideration, theSettling Parties agree: (i) that thisAgreement contains the complete agreement between them regarding any and all facets ofAll Claims; (ii) that thisAgreement supersedes all prior written and/or oral agreements, relationships, and/or understandings between any of them regardingAll Claims; and (iii) that there are no contemporaneous written and/or oral agreements or representations between any of them regardingAll Claims except as are expressly stated within thisAgreement.
Severability/Additional Documents and/or Action
32. For (and as part of) theConsideration, theSettling Parties promise and agree: (i) that, except with respect to Paragraphs 17 and 18 above, if one or more of the agreements, undertakings, and/or terms embodied in thisAgreement should later be found to be void, voidable, or ineffective, then that finding shall have no effect on the remainder of the agreements, undertakings, and/or terms embodied herein, which remaining agreements, undertakings, and/or terms shall remain in full force and effect; (ii) that, if any agreements, undertakings, and/or terms contained in thisAgreement are later found to be void, voidable, and/or ineffective, then (as to those agreements, undertakings, and/or terms) theSettling Parties will negotiate in good faith with each other to modify thisAgreement so as to give effect to their original intent as closely as possible; and (iii) that theSettling Parties will cooperate fully and execute any and all supplementary and/or additional documents (and take any and all additional action) which may be reasonably necessary to give full force and effect to thisAgreement.
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Drafting
33. TheSettling Partiesacknowledge that they have jointly participated in the drafting of thisAgreement. ThisAgreement shall not be construed against anyPartybecause of anyParty’s involvement in drafting thisAgreement.
Applicable Law
34. For (and as part of) theConsideration, theSettling Parties agree that thisAgreement is made and performable in Harris County, Texas, and that thisAgreement is made under and shall be interpreted, construed, and enforced in accordance with the laws of the State of Delaware without regard to any choice of law provision.
Choice of Forum
35. Any action arising out of thisAgreement, or relating to the performance or any breach of theSettling Parties hereunder or the interpretation hereof, shall be brought only in the United States Bankruptcy Court for the District of Delaware, and each of theSettling Parties (a) consents to jurisdiction in such court, (b) agrees that it will not bring any action relating to thisAgreement, including, but not limited to, the performance or breach or interpretation of thisAgreement, in any court other than the United States Bankruptcy Court for the District of Delaware, and (c) agrees that any such action should, to the extent possible, be referred to Judge Kevin Carey.
Counterparts, Photocopies, Etc.
36. For (and as part of) theConsideration, theSettling Parties agree that thisAgreement may be executed in multiple counterparts and/or sets of counterparts, and all counterparts and/or sets of counterparts so executed shall constitute oneAgreement binding upon all of them, notwithstanding the fact that all of them may not be signatory to the same counterpart or set of counterparts. A photocopy of a signed signature page is as good as the original signed signature page. When each signatory has signed his, her, or its respective signature page, any of theSettling Parties’ lawyers are authorized to compile oneAgreement with each of the signed signature pages (or copies of each of the signed signature pages) attached thereto, and that compiledAgreement shall be as good as an originalAgreement signed by all of the signatories.
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Descriptive Headings
37. For (and as part of) theConsideration, theSettling Parties promise and agree that the descriptive headings of the several paragraphs of thisAgreement were inserted for convenience only and shall not be deemed to affect the meaning, interpretation, or construction of any of the terms or provisions of thisAgreement.
Contractual Terms/Survival
38. For (and as part of) theConsideration, theSettling Parties promise and agree that: (1) each term, representation, and warranty contained in thisAgreement is negotiated, bargained for, and contractual—and is not a mere recital; and (2) each term, representation, and warranty contained in thisAgreement survives the execution of thisAgreement.
Amendment
39. ThisAgreement may not be modified or amended, nor may any of its provisions be waived, except by a writing signed by allSettling Parties or their successors-in-interest.
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Waiver of Jury Trial
40.THESETTLING PARTIES EXPRESSLY AND IRREVOCABLY WAIVE ANY RIGHT TO TRIAL BY JURY FOR ANY CLAIM, COUNTERCLAIM, ACTION OR OTHER PROCEEDINGS ARISING UNDER OR RELATING TO THISAGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER, THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR THE RELATIONSHIP BETWEEN THE PARTIES, IN EACH CASE WHETHER SUCH CLAIM, COUNTERCLAIM, ACTION OR OTHER PROCEEDING IS NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
[Signatures continued on the next page]
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THE WAPITI RECOVERY TRUST | ||||
By: | /s/ John T. Young | |||
John T. Young, Jr., Trustee and Board Member of the Wapiti Recovery Trust | ||||
By: | /s/ Watersone Capital Management LP | |||
as investment manager, Board Member of the Wapiti Recovery Trust | ||||
By: | /s/ Jeffrey C. Erb | |||
General Counsel |
STATE OF | TEXAS | § | ||
§ | ||||
COUNTY OF | HARRIS | § |
Before me, the undersigned authority, on this day personally appeared John T. Young, Jr., and authorized signatories for The Wapiti Recovery Trust, known to me to be the persons whose names are ascribed to the foregoing Agreement of Settlement and Release, and acknowledged to me that they is duly authorized to execute thisAgreement in the above capacities, and that they executed the same in the above capacities for the purposes and consideration therein expressed.
Subscribed and sworn to before me this 19th day of September, 2012.
/s/ Kay-La Hughes |
Notary Public |
My commission expires: 6/25/2013 |
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STATE OF: | Minnesota | § | ||
§ | ||||
COUNTY OF: | Hennepin | § |
Before me, the undersigned authority, on this day personally appeared Jeffrey C. Erb, authorized signatory for Waterstone Capital Mangement, LP, acting as investment manager, as a Board Member of The Wapiti Recovery Trust, known to me to be the person whose name is ascribed to the foregoing Agreement of Settlement and Release, and acknowledged to me that he is duly authorized to execute thisAgreement in the above capacities, and that they executed the same in the above capacities for the purposes and consideration therein expressed.
Jeffrey C. Erb | /s/ Jeffrey C. Erb | |
Subscribed and sworn to before me this 19th day of September, 2012. | ||
/s/ Christina Marie Newcombe | ||
Notary Public | ||
My commission expires 01/31/2013 |
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WAPITI OIL & GAS, L.L.C. | ||||||
By: | /s/ Bart Agee | |||||
Bart Agee, President & CEO | ||||||
STATE OF TEXAS | § | |
§ | ||
COUNTY OF HARRIS | § |
Before me, the undersigned authority, on this day personally appeared Bart Agee, known to me to be the person whose name is ascribed to the foregoing Agreement of Settlement and Release, and acknowledged to me that she is duly authorized to execute thisAgreement in the above capacities, and that she executed the same in the above capacities for the purposes and consideration therein expressed.
Subscribed and sworn to before me this 19th day of September, 2012.
/s/ Robert W. Kirkland |
Notary Public |
My commission expires: 7/8/2015 |
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