Exhibit 10.5
REAFFIRMATION AND RATIFICATION AGREEMENT
December 28, 2006
Laurus Master Fund, Ltd.
c/o Laurus Capital Management LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to (a) the Securities Purchase Agreement dated as of June
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30, 2005 (as amended, restated, modified and/or supplemented from time to time,
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the "June 2005 SPA") by and between New Century Energy Corp., a Colorado
corporation ("New Century"), and Laurus Master Fund, Ltd. ("Laurus"), (b) the
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Amended and Restated Secured Convertible Term Note effective as of June 30, 2005
made by New Century in favor of Laurus in the original principal amount of
Fifteen Million Dollars ($15,000,000) (as amended, restated, modified and/or
supplemented from time to time, the "June 2005 Term Note"), (c) the Subsidiary
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Guaranty dated as of June 30, 2005 (as amended, restated, modified and/or
supplemented from time to time, the "June 2005 Guaranty") made by Century
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Resources, Inc., a Delaware corporation ("Century Resources"), in favor of
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Laurus, (d) the Master Security Agreement dated as of June 30, 2005 (as amended,
restated, modified and/or supplemented from time to time, the "Master Security
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Agreement") among New Century, Century Resources and Laurus, (e) the Stock
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Pledge Agreement dated as of June 30, 2005 (as amended, restated, modified
and/or supplemented from time to time, the "June 2005 Pledge Agreement") by and
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between New Century and Laurus, (f) the Related Agreements (as defined in the
June 2005 SPA) (as amended, restated, modified and/or supplemented from time to
time, the "June 2005 Related Agreements") (the June 2005 SPA, the June 2005 Term
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Note, the June 2005 Guaranty, the Master Security Agreement, the June 2005
Pledge Agreement and the June 2005 Related Agreements, each a "June 2005
Agreement" and collectively, the "June 2005 Agreements"), (g) the Securities
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Purchase Agreement dated as of September 19, 2005 (as amended, restated,
modified and/or supplemented from time to time, the "September 2005 SPA"), (h)
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the Secured Term Note in the original principal amount of Nine Million Five
Hundred Thousand Dollars ($9,500,000) (as amended, restated, modified and/or
supplemented from time to time, the "September 2005 Term Note"), (i) each
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Mortgage, Deed of Trust, Security Agreement, Financing Statement and Assignment
of Production dated as of September 19, 2005 made by New Century and Century
Resources in favor of Laurus (as amended, restated, modified and/or supplemented
from time to time, the "September 2005 Mortgages"), (j) the Related Agreements
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(as defined in the September 2005 SPA) (as amended, restated, modified and/or
supplemented from time to time, the "September 2005 Related Agreements" and
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together with the September 2005 SPA, the September 2005 Term Note and the
September 2005 Mortgages, each a "September 2005 Agreement" and collectively the
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"September 2005 Agreements"), (k) the Guaranty dated as of April 28, 2006 (as
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amended, restated, modified and/or supplemented from time to time, the "April
2006 Guaranty") made by NCEC and Century Resources in favor of Laurus, (l) the
Stock Pledge Agreement dated as of April 28, 2006 (as amended, restated,
modified and/or supplemented from time to time, the "April 2006 Pledge
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Agreement") by and between New Century and Laurus and (m) each Amended and
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Restated Mortgage, Deed of Trust, Security Agreement, Financing Statement and
Assignment of Production dated as of April 26, 2006 made by New Century and
Century Resources in favor of Laurus (as amended, restated, modified and/or
supplemented from time to time, the "April 2006 Mortgages") (the April 2006
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Guaranty, the April 2006 Pledge Agreement and the April 2006 Mortgages, each an
"April 2006 Agreement" and collectively the "April 2006 Agreements"); (m) the
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Amended and Restated Secured Term Note effective as of April 28, 2006 made by
Gulf Coast Oil Corporation, a Delaware corporation ("Gulf Coast") in favor of
Laurus in the aggregate principal amount of Forty Million Dollars ($40,000,000)
(as amended, restated, modified and/or supplemented from time to time, the
"April 2006 Term Note"), the Subsidiary Guaranty dated as of April 28, 2006 (as
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amended, restated, modified and/or supplemented from time to time, the
"Guaranty") made by Gulf Coast in favor of Laurus, the Master Security Agreement
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dated as of April 28, 2006 (as amended, restated, modified and/or supplemented
from time to time, the "Master Security Agreement") by and between Gulf Coast
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and Laurus and the Related Agreements (as defined in the April 2006 Securities
Purchase Agreement (the "April 2006 SPA") (as amended, restated, modified and/or
supplemented from time to time, the "April 2006 Related Agreements"); the
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Guaranty dated as of April 28, 2006 (as amended, restated, modified and/or
supplemented from time to time, the "April 2006 Guaranty") made by New Century
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and Century Resources in favor of Laurus, the Stock Pledge Agreement dated as of
April 28, 2006 (as amended, restated, modified and/or supplemented from time to
time, the "April 2006 Pledge Agreement") by and between New Century and Laurus
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and (m) each Amended and Restated Mortgage, Deed of Trust, Security Agreement,
Financing Statement and Assignment of Production dated as of April 26, 2006 made
by New Century and Century Resources in favor of Laurus (as amended, restated,
modified and/or supplemented from time to time, the "April 2006 Mortgages") (the
April 2006 SPA, the April 2006 Term Note, the Guaranty, the Master Security
Agreement and the April 2006 Related Agreements, the April 2006 Guaranty, the
April 2006 Pledge Agreement and the April 2006 Mortgages, each an "April 2006
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Agreement" and collectively the "April 2006 Agreements"); (n) the Secured Term
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Note effective as of June 30, 2006 made by Gulf Coast in favor of Laurus in the
aggregate principal amount of Five Million Dollars ($5,000,000) (as amended,
restated, modified and/or supplemented from time to time, the "June 2006 Term
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Note"), the Subsidiary Guaranty dated as of June 30, 2006 (as amended, restated,
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modified and/or supplemented from time to time, the "Guaranty") made by Gulf
Coast in favor of Laurus, and the Related Agreements (as defined in the June
2006 Securities Purchase Agreement (the "June 2006 SPA") (as amended, restated,
modified and/or supplemented from time to time, the "April 2006 Related
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Agreements") (the June 2006 SPA, the June 2006 Term Note, the Guaranty and the
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June 2006 Related Agreements, each a "June 2006 Agreement" and collectively the
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"June 2006 Agreements"); the Guaranty dated as of June 30, 2006 (as amended,
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restated, modified and/or supplemented from time to time, the "June 2006
Guaranty") made by New Century and Century Resources in favor of Laurus, the
Guaranty dated as of June 30, 2006 (as amended, restated, modified and/or
supplemented from time to time, the "June 2006 Gulf Coast Guaranty") made by
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Gulf Coast in favor of Laurus, each Amended and Restated Mortgage, Deed of
Trust, Security Agreement, Financing Statement and Assignment of Production
dated as of June 30, 2006 made by New Century, Century Resources and Gulf Coast
in favor of Laurus (as amended, restated, modified and/or supplemented from time
to time, the "June 2006 Mortgages") (the June 2006 Guaranty, the June 2006 Gulf
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Coast Guaranty, and the June 2006 Mortgages, each a "June 2006 Agreement" and
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collectively the "June 2006 Agreements");
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To induce Laurus to enter into the Securities Purchase Agreement dated as of
the date hereof by and between New Century and Laurus (as amended, restated,
modified and/or supplemented from time to time, the "December 2006 SPA") and
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purchase from New Century a Secured Term Note in the aggregate principal amount
of Sixteen Million, Two Hundred and Ten Thousand Dollars ($16,210,000) (as
amended, restated, modified and/or supplemented from time to time, the "December
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2006 Term Note"), each of the undersigned, as applicable, hereby:
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(1) represents and warrants to Laurus that it has reviewed and approved the
terms and provisions of the December 2006 SPA and the Related Agreements (as
defined in the December 2006 SPA, the "December 2006 Related Agreements") (the
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December 2006 SPA, the December 2006 Term Note and the December 2006 Related
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Agreements, each a "December 2006 Agreement" and collectively, the "December
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2006 Agreements");
(2) acknowledges, ratifies and confirms that all of the terms, conditions,
representations and covenants contained in the June 2005 Agreements, the
September 2005 Agreements, the April 2006 Agreements, and the June 2006
Agreements to which it is a party are in full force and effect and shall remain
in full force and effect after giving effect to the execution and effectiveness
of the December 2006 Agreements;
(3) acknowledges, ratifies and confirms that the defined term "Obligations"
under the June 2005 Guaranty, the Master Security Agreement, the September 2005
Mortgages, the April 2006 Guaranty and the April 2006 Mortgages and the defined
term "Indebtedness" under the June 2005 Pledge Agreement and the April 2006
Pledge Agreement include, without limitation, all obligations and liabilities of
Gulf Coast or New Century to Laurus under the June 2006 Agreements and/or the
December 2006 Agreements and all other obligations and liabilities of each of
the undersigned to Laurus (including interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, whether or not a claim for post-filing or post-petition
interest is allowed or allowable in such proceeding), whether now existing or
hereafter arising, direct or indirect, liquidated or unliquidated, absolute or
contingent (collectively, the "Obligations");
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(4) acknowledges and confirms that the occurrence of an Event of Default
under any of the September 2005 Agreements, the June 2005 Agreements, the April
2006 Agreements and/or the June 2006 Agreements shall constitute an Event of
Default under the December 2006 Agreements and (ii) the occurrence of an Event
of Default under any of the December 2006 Agreements shall constitute an Event
of Default under the September 2005 Agreements, the June 2005 Agreements, the
April 2006 Agreements or the June 2006 Agreements;
(5) represents and warrants that no offsets, counterclaims or defenses
exist as of the date hereof with respect to any of the undersigned's obligations
under any of the September 2005 Agreements, the June 2005 Agreements, the April
2006 Agreements, or the June 2006 Agreements;
(6) acknowledges, ratifies and confirms (i) the grant by each undersigned
to Laurus of a security interest and lien in the assets of each undersigned as
more specifically set forth in the June 2005 Agreements, the September 2005
Agreements, the April 2006 Agreements, the June 2006 Agreements, and the
December 2006 Agreements as applicable (the "Security Interest Grants") and (ii)
that the Security Interest Grants secure all Obligations; and
(7) releases, remises, acquits and forever discharges Laurus and Laurus'
employees, agents, representatives, consultants, attorneys, fiduciaries,
officers, directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations, and related corporate divisions (all of the
foregoing hereinafter called the "Released Parties"), from any and all actions
and causes of action, judgments, executions, suits, debts, claims, demands,
liabilities, obligations, damages and expenses of any and every character, known
or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or
nature, for or because of any matter or things done, omitted or suffered to be
done by any of the Released Parties prior to and including the date of execution
hereof, and in any way directly or indirectly arising out of or in any way
connected to this Reaffirmation and Ratification Agreement, the June 2005
Agreements, the September 2005 Agreements, the April 2006 Agreements, the June
2006 Agreements, the December 2006 Agreements and any other document, instrument
or agreement made by any of the undersigned in favor of Laurus.
[Remainder of Page Intentionally Left Blank]
This agreement shall be governed by and construed in accordance with the
laws of the State of New York.
Very truly yours,
NEW CENTURY ENERGY CORP.
/s/ Xxxxxx X. XxXxxxxxx
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Xxxxxx XxXxxxxxx
President
Address: 0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
CENTURY RESOURCES, INC.
/s/ Xxxxxx X. XxXxxxxxx
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Xxxxxx XxXxxxxxx
President
Address: 0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
GULF COAST OIL CORPORATION
/s/ Xxxxxx X. XxXxxxxxx
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Xxxxxx XxXxxxxxx
President
Address: 0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
ACCEPTED AND AGREED TO:
LAURUS MASTER FUND, LTD.
By: /s/ Xxxxxx Grin
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Name: Xxxxxx Grin
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Title: Director
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