Document:

exv10w34

Exhibit 10.34

IN THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

	 	 	 	 	 	 	 
	AMBER RESOURCES COMPANY, AERA

	 	 	)	 	 	 
	ENERGY LLC, OGLE PETROLEUM INC.,

	 	 	)	 	 	 
	OLAC RESOURCES LLC, POSEIDON

	 	 	)	 	 	 
	PETROLEUM LLC, TOTAL E&P USA, INC.,

	 	 	)	 	 	 
	PLAINS EXPLORATION & PRODUCTION CO.,

	 	 	)	 	 	 
	NOBLE ENERGY, INC., ANADARKO E&P

	 	 	)	 	 	 
	COMPANY LP, and DEVON ENERGY

	 	 	)	 	 	 
	PRODUCTION COMPANY, L.P., and NYCAL

	 	 	)	 	 	 
	OFFSHORE DEVELOPMENT CORPORATION,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Plaintiffs,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	and

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	DELTA PETROLEUM CORPORATION,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Plaintiff-Cross Appellant,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	v.

	 	 	)	 	 	2009-5072, -5082
	 

	 	 	)	 	 	 
	UNITED STATES,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Defendant-Appellant.

	 	 	)	 	 	 

SETTLEMENT AGREEMENT

     For the purpose of disposing of all claims by plaintiff, Delta Petroleum Corporation
(“Delta”), relating to Lease OCS-P 0452 without any further judicial proceedings and without there
being any trial or adjudication of any issue of law or fact, and without constituting an admission
of liability on the part of the defendant, and for no other purpose, Delta and the United States of
America stipulate and agree as follows:

          1. On or about July 1, 1981, the Department of the Interior (“Interior” or “agency”), issued
Lease OCS-P 0452 (“Lease 452”), located off the California coast, to certain oil and gas
exploration companies. Lease 452 generally permits the lessee(s) to explore for and

 

 

develop oil and gas resources, subject to the requirements of certain statutes and
regulations. In 2001, Delta acquired a 100 percent record ownership interest in Lease 452.

          2. In 1990, Congress amended section 1456(c)(1) of the Coastal Zone Management Act (“CZMA”),
one of the statutes incorporated into Lease 452. In June 2001, the United States District Court
for the Northern District of California ruled that the amended section 1456(c)(1) required
Interior’s Minerals Management Service (“MMS”), prior to granting a lease “suspension,” to provide
a determination that the suspension is consistent to the maximum extent practicable with
California’s coastal management program. California v. Norton, 150 F. Supp. 2d 1046 (N.D.
Cal. 2001), aff’d, 311 F.3d 1162 (9th Cir. 2002). The district court ordered MMS to set
aside existing suspensions of a number of leases, including Lease 452, and to direct suspensions of
the leases to comply with the court’s interpretation of the statute. In July 2001, MMS directed
the suspension of Lease 452.

          3. In January 2002, Delta, along with other similarly situated plaintiffs, filed suit in the
Court of Federal Claims alleging breach of contract.

          4. On November 17, 2005, the Court of Federal Claims held that the United States breached the
lawsuit leases, including Lease 452, giving the lessees a right to rescission and restitution of
the initial lease payments. Thereafter, the United States sought reconsideration of the trial
court’s ruling as to Lease 452, alleging that Delta waived its right to pursue rescission by
electing to continue performance of Lease 452, and that the drainage of oil from Lease 452
prevented Delta from returning it in substantially the same condition as when it was leased.

          5. On February 25, 2009, the Court of Federal Claims granted the motion for reconsideration in
part, and denied it in part. The trial court held that Delta was entitled to

2

 

rescission, and could return Lease 452 in substantially the same condition. The court awarded
the United States an offset of $555,000, and entered judgment for Delta in the amount of
$91,431,300.

          6. On April 24, 2009, the United States appealed to the Court of Appeals for the Federal
Circuit. Delta cross-appealed.

          7. The Federal Circuit selected the appeal for participation in its mediation program and,
with the assistance of a mediator, the parties entered into negotiations designed to resolve this
case amicably. As a result of that mediation, Delta offered to settle this case with respect to
Lease 452 in exchange for payment by the United States in the amount of sixty-five million dollars
($65,000,000.00), inclusive of interest, with each party to bear its own costs, attorney fees, and
expenses.

          8. Delta’s offer has been accepted on behalf of the Attorney General.

          9. Upon payment by the United States of the settlement amount set forth in paragraph 7, Delta
and the United States agree to stipulate to the dismissal of this case with respect to Lease 452
with prejudice. The parties agree to file a stipulation for the dismissal of their appeal and
cross appeal in the form attached as Exhibit A.

          10. The United States Department of Justice will request expeditious approval, processing, and
payment by the Department of the Treasury of the settlement amount set forth in paragraph 7.

          11. Upon payment by the United States of the settlement amount set forth in paragraph 7, Delta
releases, waives, and abandons all claims against the United States, its political subdivisions,
its officers, agents, and employees, arising out of or related to Lease 452,

3

 

regardless of whether they were included in the complaint, including but not limited to any
claims for costs, expenses, attorney fees, and damages of any sort. Upon payment of the settlement
amount set forth in paragraph 7, Delta further releases, waives, and abandons any interest in Lease
452. Delta agrees that its action under this paragraph constitutes a relinquishment pursuant to 30
C.F.R. § 256.76.

          12. Upon payment of the settlement amount set forth in paragraph 7, and subject to paragraph
14, the United States releases, waives, and abandons all claims against Delta arising out of or
related to Lease 452, except for fraud, regardless of whether they were included in the pleadings,
including but not limited to any claims for costs, expenses, attorney fees, and damages of any
sort.

          13. The Department of the Interior is not aware of any claims pursuant to 31 U.S.C. § 3728
regarding this matter and will not request any delay, reduction, or withholding of payment in full
by the United States of the settlement amount set forth in paragraph 7.

          14. This agreement is in no way related to or concerned with income or other taxes for which
Delta is now liable or may become liable in the future as a result of this agreement.

          15. Delta warrants and represents that no other action or suit arising out of or related to
Lease 452 is pending or will be filed or submitted against the United States by Delta in any other
court, legislative body, or administrative body or agency. Delta further warrants and represents
that although it has assigned certain rights to receive litigation proceeds, it is the sole owner
of Lease 452 and the claims that are the subject of this agreement, and that no assignment or
transfer of Lease 452 or these claims or any part thereof has been made. Should there now or

4

 

in the future be any violation of the warranties and representations set forth in this
paragraph, any amount paid by the United States pursuant to this agreement shall be refunded
promptly by Delta, together with interest thereon at the rates provided in 41 U.S.C. § 611,
computed from the date the United States makes payment.

          16. This agreement is for the purpose of settling this case with respect to Lease 452, and for
no other. Accordingly, except as may be necessary to effect or enforce the terms of this
agreement, this agreement shall not bind the parties, nor shall it be cited or otherwise referred
to, in any proceedings, whether judicial or administrative in nature, in which the parties or
counsel for the parties have or may acquire an interest.

          17. Delta’s counsel represents that he has been and is authorized to enter into this agreement
on behalf of Delta.

          18. This document constitutes a complete integration of the agreement between the parties and
supersedes any and all prior oral or written representations, understandings or agreements among or
between them.

5

 

          Dated this 16th day of December 2009.

	 	 	 
	 

	 	THE UNITED STATES OF AMERICA
	 

	 	By:
	 
	 	 
	 

	 	/s/ JEANNE E. DAVIDSON
	 

	 	 
	 

	 	JEANNE E. DAVIDSON
	 

	 	Director
	 
	 	 
	DELTA PETROLEUM CORPORATION

	 	/s/ PATRICIA M. McARTHY
	 

	 	 
	By:

	 	PATRICIA M. McCARTHY
	 

	 	Assistant Director
	 
	 	 
	/s/ STEVEN J. ROSENBAUM

	 	/S/ GREGG M. SCHWIND
	STEVEN J. ROSENBAUM

	 	GREGG M. SCHWIND
	Covington & Burling LLP

	 	Trial Attorney
	1201 Pennsylvania Avenue, N.W.

	 	Commercial Litigation Branch
	Washington, D.C. 20004

	 	Civil Division
	(202) 662-5568

	 	Department of Justice
	 

	 	1100 L Street, N.W.
	 

	 	Attn: Classification Unit
	 

	 	          8th Floor
	 

	 	Washington, D.C. 20530
	 

	 	Tel. (202) 353-2345
	 
	 	 
	Counsel for Delta Petroleum Corporation

	 	Attorneys for the United States of America
	 
	 	 
	December 16, 2009

	 	December 16, 2009

6

 

Exhibit A

IN THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

	 	 	 	 	 	 	 
	AMBER RESOURCES COMPANY, AERA

	 	 	)	 	 	 
	ENERGY LLC, OGLE PETROLEUM INC.,

	 	 	)	 	 	 
	OLAC RESOURCES LLC, POSEIDON

	 	 	)	 	 	 
	PETROLEUM LLC, TOTAL E&P USA, INC.,

	 	 	)	 	 	 
	PLAINS EXPLORATION & PRODUCTION CO.,

	 	 	)	 	 	 
	NOBLE ENERGY, INC., ANADARKO E&P

	 	 	)	 	 	 
	COMPANY LP, and DEVON ENERGY

	 	 	)	 	 	 
	PRODUCTION COMPANY, L.P., and NYCAL

	 	 	)	 	 	 
	OFFSHORE DEVELOPMENT CORPORATION,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Plaintiffs,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	and

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	DELTA PETROLEUM CORPORATION,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Plaintiff-Cross Appellant,

	 	 	)

)	 	 	 
	v.

	 	 	)	 	 	2009-5072, -5082
	 

	 	 	)	 	 	 
	UNITED STATES,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Defendant-Appellant.

	 	 	)	 	 	 

STIPULATION OF DISMISSAL

     The parties to this appeal, having settled the dispute that is the subject of this appeal and
cross appeal, jointly stipulate pursuant to Fed. R. App. P. 42(b) to the dismissal with prejudice
of their appeal and cross-appeal. No costs, attorney fees, or expenses are to be awarded to either
party.

 

 

	 	 	 	 	 	 	 
	 

	 	 	 	Respectfully submitted,	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

Steven J. Rosenbaum
	 	 
	TONY WEST

	 	 	 	Counsel of Record	 	 
	Assistant Attorney General

	 	 	 	COVINGTON & BURLING LLP	 	 
	 

	 	 	 	1201 Pennsylvania Ave., N.W.	 	 
	JEANNE E. DAVIDSON

	 	 	 	Washington, D.C. 20004-2401	 	 
	Director

	 	 	 	Tel. (202) 662-5568	 	 
	 

	 	 	 	Fax. (202) 778-5568	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	Counsel for Plaintiff-Cross-Appellant	 	 
	PATRICIA M. MCCARTHY

	 	 	 	Delta Petroleum Corporation	 	 
	Assistant Director
	 	 	 	 	 	 
	 

	 	 	 	Dated: ____________________________	 	 
	 
	 	 	 	 	 	 
	 

GREGG M. SCHWIND

	 	 	 	 	 	 
	Trial Attorney
	 	 	 	 	 	 
	Commercial Litigation Branch
	 	 	 	 	 	 
	Civil Division
	 	 	 	 	 	 
	Department of Justice
	 	 	 	 	 	 
	1100 L Street, N.W.
	 	 	 	 	 	 
	Attn: Classification Unit
	 	 	 	 	 	 
	          8th Floor
	 	 	 	 	 	 
	Washington, D.C. 20530
	 	 	 	 	 	 
	Tel. (202) 353-2345
	 	 	 	 	 	 
	Fax (202) 514-7969
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Counsel for Defendant-Appellant
	 	 	 	 	 	 
	United States of America
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Dated: ____________________________
	 	 	 	 	 	 

2exv4w6

Exhibit 4.6

SECOND SUPPLEMENTAL INDENTURE

     SECOND SUPPLEMENTAL INDENTURE dated as of November 24, 2009 (the “Supplemental Indenture”),
between CALLON PETROLEUM COMPANY, a Delaware corporation (the “Company”), having its principal
office at 200 North Canal Street, Natchez, Mississippi 39120, the undersigned Subsidiary Guarantors
(herein so called), and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as trustee (the “Trustee”).

     WHEREAS, there has heretofore been executed and delivered to the Trustee an Indenture dated as
of March 15, 2004 between the Company, the Subsidiary Guarantors and the Trustee (as the same may
have been amended or supplemented from time to time by one or more indentures supplemental thereto
entered into pursuant to the applicable provisions thereof, the “Indenture”), providing for the
issuance of the Company’s 9.75% Senior Notes due 2010, Series B (the “Securities” or the “Notes”);

     WHEREAS, the Company originally issued $200,000,000 in aggregate principal amount of the Notes
pursuant to the Indenture;

     WHEREAS, Section 9.2 of the Indenture provides that the Company, the Subsidiary Guarantors and
the Trustee may amend certain terms and provisions of the Indenture or the Notes with the written
consent of the Holders of at least seventy-five percent (75%) in aggregate principal amount of the
Notes then outstanding;

     WHEREAS, the Company has offered (the “Offer”) to exchange any and all of the outstanding
Notes for certain new notes and capital stock issued by the Company upon the terms and subject to
the conditions set forth in the Offer to Exchange and Consent Solicitation Statement, dated October
20, 2009 (as the same may be amended or supplemented from time to time), from each Holder of the
Notes;

     WHEREAS, the Offer is conditioned upon, among other things, certain amendments to the
Indenture and to the Notes set forth in Article One, Article Two and Article Three of this
Supplemental Indenture (the “Amendments”) having been approved by Holders of at least 75% in
aggregate principal amount of the outstanding Notes (and a supplemental indenture in respect
thereof having been executed and delivered), provided that the Amendments will not become operative
until Notes have been accepted for exchange pursuant to the Offer;

     WHEREAS, the Company has received and delivered to the Trustee the consents from Holders of at
least 75% in aggregate principal amount of the outstanding Notes (“Consenting Holders”) to effect
the Amendments; and

     WHEREAS, all acts, conditions, proceedings and requirements necessary to make this
Supplemental Indenture a valid, binding and legal agreement enforceable in accordance with its
terms for the purposes expressed herein, in accordance with its terms, have been duly done and
performed;

     NOW THEREFORE, this Supplemental Indenture witnesseth that, for and in consideration of the
premises, the Company and the Trustee agree as follows for the equal and ratable benefit of the
Holders of the Securities:

- 1 -

 

ARTICLE I

EFFECTIVENESS

     SECTION 1.1. Effectiveness. This Supplemental Indenture shall become effective as of the date
hereof.

ARTICLE II

AMENDMENTS TO INDENTURE

     SECTION 2.1. Amendments to Indenture.

     (a) The Table of Contents of the Indenture is amended by deleting the titles to Sections 3.1
— 3.13, 3.16 — 3.25 and 4.1 and inserting in lieu thereof in each place the phrase
“[intentionally omitted]”.

     (b) Sections 1.1 and 1.2 of the Indenture are amended by deleting all definitions of terms,
and references to definitions of terms, that are used exclusively in the text of the Indenture
and/or the Notes that are being eliminated by this Supplemental Indenture.

     (c) Sections 3.1 — 3.13 of the Indenture are amended by deleting the text of each such
Section in its entirety and inserting in lieu thereof the phrase “[intentionally omitted]”.

     (d) Section 3.14(a) of the Indenture is amended by deleting the text of such Section in its
entirety and inserting in lieu thereof the phrase “[intentionally omitted]”.

     (e) Sections 3.16 — 3.25 of the Indenture are amended by deleting the text of each such
Section in its entirety and inserting in lieu thereof the phrase “[intentionally omitted]”.

     (f) Section 4.1 of the Indenture is amended by deleting the text of such Section in its
entirety and inserting in lieu thereof the phrase “[intentionally omitted]”.

     (g) Section 6.1(b) of the Indenture is amended by deleting the text of such Section in its
entirety and inserting in lieu thereof the phrase “[intentionally omitted]”.

     (h) Section 6.1(c)(i) of the Indenture is amended by deleting the text of such Section in its
entirety and inserting in lieu thereof the phrase “[intentionally omitted]”.

     (i) Section 6.1(d) of the Indenture is amended by deleting the text of such Section in its
entirety and inserting in lieu thereof the phrase “[intentionally omitted]”.

     (j) Section 6.1(e) of the Indenture is amended by deleting the text of such Section in its
entirety and inserting in lieu thereof the phrase “[intentionally omitted]”.

     (k) Section 6.1(f) of the Indenture is amended by deleting the text of such Section in its
entirety and inserting in lieu thereof the phrase “[intentionally omitted]”.

     (l) Section 6.1(g) of the Indenture is amended by deleting the text of such Section in its
entirety and inserting in lieu thereof the phrase “[intentionally omitted]”.

     (m) Section 6.1(h) of the Indenture is amended by deleting the text of such Section in its
entirety and inserting in lieu thereof the phrase “[intentionally omitted]”.

     (n) Sections 10.1 — 10.4 of the Indenture are amended by deleting the text of each such
Section in its entirety and inserting in lieu thereof the phrase “[intentionally omitted]”, and

- 2 -

 

as of the date hereof and after giving effect to this Supplemental Indenture, the parties signing
below as Subsidiary Guarantors shall be released and discharged from any obligations and
indebtedness under the Indenture, including any guarantee of the Obligations (as defined in the
Indenture) and shall no longer be or be deemed to be parties to the Indenture.

ARTICLE III

MISCELLANEOUS

     SECTION 3.1 Elimination of Certain Provisions in the Notes.

     The Notes are deemed to be amended as follows:

     (a) Section 4 of the Notes is amended by deleting the text of the last paragraph of such
Section; and

     (b) Subsections (b), (c)(i), and (d) — (h) of Section 12 of the Notes are amended by deleting
the text of each such subsection in its entirety and inserting in lieu thereof the phrase
“[intentionally omitted]”.

ARTICLE IV

MISCELLANEOUS

     SECTION 4.1 Instruments To Be Read Together. This Supplemental Indenture is an indenture
supplemental to and in implementation of the Indenture, and said Indenture and this Supplemental
Indenture shall henceforth be read together.

     SECTION 4.2 Confirmation. The Indenture as amended and supplemented by this Supplemental
Indenture is in all respects confirmed and preserved.

     SECTION 4.3 Terms Defined. Capitalized terms used in this Supplemental Indenture and not
otherwise defined herein shall have the respective meanings set forth in the Indenture.

     SECTION 4.4 Headings. The headings of the Articles and Sections of this Supplemental
Indenture have been inserted for convenience of reference only, and are not to be considered a part
hereof and shall in no way modify or restrict any of the terms and provisions hereof.

     SECTION 4.5 Governing Laws. This Supplemental Indenture shall be governed by, and construed
in accordance with, the laws of the State of New York.

     SECTION 4.6 Multiple Originals. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them together represent
the same agreement. One signed copy is enough to prove this Supplemental Indenture.

     SECTION 4.7 Compliance with the Trust Indenture Act. This Supplemental Indenture shall be
interpreted to comply in every respect with the Trust Indenture Act of 1939, as amended (the
“TIA”). If any provision of this Supplemental Indenture limits, qualifies or conflicts with the
duties imposed by the TIA, the imposed duties shall control.

     SECTION 4.8 Responsibility of Trustee. The recitals contained herein shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture,
except that the Trustee is duly authorized to execute and deliver this Supplemental Indenture.

[Signature Page Follows]

- 3 -

 

     IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be
duly executed, all as of the date first written above.

	 	 	 	 	 
	 	CALLON PETROLEUM COMPANY

 	 
	 	By:  	/s/ B. F. Weatherly
 	 
	 	Name:  	B. F. Weatherly 	 
	 	Title:  	Executive Vice President and Chief Financial Officer 	 
	 
	 	Subsidiary Guarantors:

CALLON PETROLEUM OPERATING COMPANY

 	 
	 	By:  	/s/ B. F. Weatherly
 	 
	 	Name:  	B. F. Weatherly 	 
	 	Title:  	Executive Vice President and Chief Financial Officer 	 
	 
	 	CALLON OFFSHORE PRODUCTION, INC.

 	 
	 	By:  	/s/ B. F. Weatherly
 	 
	 	Name:  	B. F. Weatherly 	 
	 	Title:  	Executive Vice President and Chief Financial Officer 	 
	 
	 	MISSISSIPPI MARKETING, INC.

 	 
	 	By:  	/s/ B. F. Weatherly
 	 
	 	Name:  	B. F. Weatherly 	 
	 	Title:  	Executive Vice President and Chief Financial Officer 	 
	 
	 	AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as Trustee

 	 
	 	By:  	/s/ HERBERT J. LEMMER
 	 
	 	Name:  	HERBERT J. LEMMER 	 
	 	Title:  	VICE PRESIDENT 	 
	 

[Signature Page — Second Supplemental Indenture]

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