NET PROFITS INTEREST AGREEMENT NEW CENTURY ENERGY CORP. and CENTURY RESOURCES, INC. and VALENS U.S. SPV I, LLC and VALENS OFFSHORE SPV II, CORP. Dated as of November 30, 2007
Exhibit
10.6
and
CENTURY
RESOURCES, INC.
“WI
Owners”
and
VALENS
U.S. SPV I, LLC
and
VALENS
OFFSHORE SPV II, CORP.
“Assignees”
Dated
as of
November
30, 2007
THIS
NET PROFITS INTEREST AGREEMENT (“Agreement”) is made and entered
into as of this 30th day of November, 2007, and is between NEW CENTURY ENERGY
CORP. (“NCEC”), a Colorado corporation, and CENTURY RESOURCES, INC.
(“CRI”), a Delaware corporation (each a “WI Owner” and,
collectively, “WI Owners”), and VALENS U.S. SPV I, LLC, a Delaware
limited liability company, and VALENS OFFSHORE SPV II, CORP., a Delaware
corporation (collectively, “Assignees”).
W
I T N E
S S E T H:
WHEREAS,
WI Owners are the owners of various interests in the Leases; and
WHEREAS,
NCEC desires to drill up to six (6) new Hydrocarbon xxxxx and rework two (2)
other existing xxxxx on the Leases, and to acquire two (2) additional oil and
gas leases, in each case financed, in part, by loans provided to NCEC by the
Creditor Parties pursuant to the Securities Purchase Agreement; and
WHEREAS,
as a condition to the obligation of the Creditor Parties to make the loans
provided for in the Securities Purchase Agreement, WI Owners must convey to
Assignees a Net Profits Interest to be discharged out of Hydrocarbons produced
from the xxxxx financed, in part, by the Creditor Parties pursuant to the
Securities Purchase Agreement.
NOW,
THEREFORE, in consideration of the mutual benefits and obligations of the
Parties contained herein and the benefits to be received by Assignees pursuant
to the Securities Purchase Agreement, Assignees and WI Owners agree as
follows:
ARTICLE
1.
DEFINITIONS
1.1 Defined
Terms. In addition to the terms defined in the introductory
paragraph and the Recitals of this Agreement, for purposes hereof, the
capitalized expressions and terms set forth in Schedule 1.1 shall have
the meanings set forth therein, unless expressly indicated
otherwise. Other terms may be defined elsewhere in this Agreement and
shall, for purposes hereof, have the meanings so specified, unless expressly
indicated otherwise.
1.2 References. The
words “hereby,” “herein,” “hereinabove,” “hereinafter,” “hereinbelow,” “hereof,”
“hereto,” “hereunder,” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular article,
section, or provision of this Agreement. References in this Agreement
to articles, sections, exhibits, or schedules are to such articles, sections,
exhibits, or schedules of this Agreement unless otherwise
specified.
1.3 Articles
and Sections. This Agreement, for convenience only, has been
divided into articles and sections. The rights and other legal
relations of the Parties shall be
determined from this Agreement as an entirety and without regard to the
aforesaid division into articles and sections and without regard to headings
prefixed to such articles and sections.
-2-
1.4 Number
and Gender. Whenever the context requires, reference herein
made to a single number shall be understood to include the plural; and likewise,
the plural shall be understood to include the singular. Words
denoting sex shall be construed to include the masculine, feminine, and neuter,
when such construction is appropriate; and specific enumeration shall not
exclude the general but shall be construed as cumulative. Definitions
of terms defined in the singular or plural shall be equally applicable to the
plural or singular, as applicable, unless otherwise indicated.
ARTICLE
2.
CONVEYANCE
OF NET PROFITS INTEREST
2.1 Initial
NPI Conveyance. Subject to and in accordance with the terms
hereof, in satisfaction of the terms of Section 3.2 of the Securities Purchase
Agreement, and in connection with the initial advance of funds by the Creditor
Parties to NCEC as contemplated in the Restricted Account Documents, WI Owners
agree to convey to Assignees, effective as of the Effective Date, the Net
Profits Interest in and with respect to the Initial Subject
Interests. The specific terms and conditions applicable to the Net
Profits Interest are set forth in the Initial NPI
Conveyance. Concurrently with the execution of this Agreement, (a) WI
Owners and Assignees have executed, acknowledged, and delivered counterparts
of
the Initial NPI Conveyance in sufficient numbers to permit recording and filing
in all relevant jurisdictions, and (b) WI Owners have delivered to Assignees
all
consents, waivers, and other matters pertaining to the Initial Subject Interests
required to be obtained by WI Owners to cause the representation and warranty
contained in Section 3.1(g) to be true and correct with respect to the
Initial Subject Interests as of the date of execution hereof.
2.2 Supplemental
NPI Conveyance. No later than two (2) Business Days prior to the
date on which the Creditor Parties make the second advance of funds to NCEC
in
accordance with the terms of the Restricted Account Documents, WI Owners shall
execute and deliver to Assignees a supplement and amendment to the Initial
NPI
Conveyance in form and substance satisfactory to Assignees (the “Supplemental
NPI Conveyance”), pursuant to which WI Owners will cause the Supplemental
Subject Interests identified by WI Owners and agreed upon by the Creditor
Parties to become subject to the terms of the Initial NPI Conveyance and the
Net
Profits Interest. From and after the execution and delivery by WI
Owners and Assignees of the Supplemental NPI Conveyance, the Net Profits
Interest shall constitute a single net profits overriding royalty interest
burdening both the Initial Subject Interests and the Supplemental Subject
Interests. When requested to do so by the Creditor Parties in
connection with the making of the second advance of funds to NCEC in accordance
with the Restricted Account Documents, (a) WI Owners and Assignees shall execute
and deliver an amendment to this Agreement that amends (i) Exhibit A to
include the description of the Supplemental Subject Interests and (ii) the
Schedules hereto to the extent necessary to reflect any additional disclosures
relating to the Supplemental Subject Interests agreed upon by WI Owners
and Assignees; (b) WI Owners and Assignees shall execute, acknowledge, and
deliver counterparts of the Supplemental NPI Conveyance in sufficient numbers
to
permit recording and filing in all relevant jurisdictions; and (c) WI Owners
shall deliver to Assignees all consents, waivers, and other matters pertaining
to the Supplemental Subject Interests required to be obtained by WI Owners
to
cause the representation and warranty contained in Section 3.1(g) to be
true and correct with respect to the Supplemental Subject Interests as of the
date of execution hereof.
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ARTICLE
3.
REPRESENTATIONS
AND WARRANTIES OF WI OWNERS
3.1 Representations
and Warranties of WI Owners. As a principal cause and
material inducement to Assignees to execute this Agreement and the NPI
Conveyances and to consummate the transactions described herein and therein,
WI
Owners have made the representations and warranties set forth
below. The representations and warranties set forth in this
Section 3.1 are made as of the date of execution of this Agreement and
the Initial NPI Conveyance and shall be deemed to be made again as of the date
of execution of the Supplemental NPI Conveyance. Unless expressly
provided to the contrary, representations and warranties made herein with
respect to the Subject Interests (i) as of the date of execution of this
Agreement and the Initial NPI Conveyance, refer to the Initial Subject
Interests, subject to the matters disclosed in the Schedules to this Agreement,
and (ii) as of the date of execution of the Supplemental NPI Conveyance, refer
to the Supplemental Subject Interests, subject to the matters disclosed in
such
Schedules as modified by the Parties with respect thereto. Subject to
the forgoing, WI Owners hereby represent and warrant to Assignees, as
follows:
(a) NCEC
is a corporation duly organized, validly existing, and in good standing under
the Laws of the State of Colorado. CRI is a corporation duly
organized, validly existing, and in good standing under the Laws of the State
of
Delaware. Each WI Owner is qualified to do business in, and is in
good standing under the Laws of, the State of Texas. Each WI Owner
has all requisite legal right, power, and authority to own and operate its
properties and to carry on its business as now conducted.
(b) Each
WI Owner has full capacity, legal right, power, and authority to enter into
and
perform this Agreement, the NPI Conveyances, and the transactions contemplated
herein and therein. The execution, delivery, and performance by each
WI Owner of this Agreement, the NPI Conveyances, and the transactions
contemplated herein and therein have been duly and validly authorized and
approved by all necessary corporate action of each WI Owner. This
Agreement and the Initial NPI Conveyance have been duly executed and delivered
by each WI Owner, and as of its date of execution, the Supplemental NPI
Conveyance will have been duly executed and delivered by each WI
Owner. This Agreement and the Initial NPI Conveyance constitute, and
as of its date of execution, the Supplemental NPI Conveyance will constitute,
the legal, valid, and binding obligations of each WI Owner, enforceable against
each WI Owner in accordance with their respective terms, subject to the effects
of bankruptcy, insolvency, reorganization, moratorium, and similar Laws, as
well
as to principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
-4-
(c) The
execution, delivery, and performance by each WI Owner of this Agreement and
the
NPI Conveyances do not and will not (i) conflict with or result in a breach
of
any of the provisions of the organizational and governing documents of either
WI
Owner; (ii) violate any provision of any Law or any order, writ, judgment,
decree, or determination currently in effect having applicability to either
WI
Owner; (iii) result in a breach of or constitute a default under any indenture,
bank loan, securities purchase agreement, credit agreement, Lease, Property
Agreement, Marketing Agreement, or other agreement or instrument to which either
WI Owner is a party or by which either of WI Owners or the Subject
Interests may be currently bound or affected; or (iv) result in or
require the creation or imposition of any mortgage, lien, pledge, security
interest, charge, or other encumbrance upon any of the Subject Interests under
any such indenture, bank loan, securities purchase agreement, credit agreement,
Lease, Property Agreement, Marketing Agreement, or other agreement or
instrument. Neither WI Owner is in default under any such order,
writ, judgment, decree, determination, indenture, agreement, or instrument
in
any way that now or in the future will materially adversely affect the ability
of either WI Owner to perform its obligations under this Agreement or the NPI
Conveyances.
(d) Upon
the due execution and delivery by WI Owners of the NPI Conveyances, the Net
Profits Interest will constitute an interest in real property under the Laws
of
the State of Texas.
(e) Except
as set forth on Schedule 3.1(e), there is no suit, action, Claim,
investigation, or inquiry by any person or entity or by any administrative
agency or governmental body, and no legal, administrative, or arbitration
proceeding (including, without limitation, bankruptcy or insolvency-related
proceedings) pending or, to either WI Owner’s Knowledge, threatened against
either of WI Owners or the Subject Interests, or to which either WI Owner is
a
party, that reasonably may be expected to (i) result in the material impairment
of either WI Owner’s title to any of the Subject Interests; (ii) hinder or
impede the operation of all or any portion of the Leases; (iii) cause the Leases
to be subject to reduced rates of production or other penalties because of
Hydrocarbon production in excess of applicable allowables or otherwise; or
(iv)
otherwise have a Material Adverse Effect upon (A) the Subject Interests, (B)
the
validity or enforceability of this Agreement or the NPI Conveyances, (C) the
ability of either WI Owner to consummate the transactions contemplated in this
Agreement or perform its obligations under the NPI Conveyances, or (D) generally
the business, properties, assets, or condition, financial or otherwise, of
WI
Owners.
(f) No
authorization, consent, approval, exemption, franchise, permit, or license
of,
or filing with, any Governmental Authority is required to authorize, or is
otherwise required in connection with, the valid execution, delivery, and
performance by WI Owners of this Agreement and the NPI Conveyances.
-5-
(g) Except
as set forth in Schedule 3.1(g), none of the Subject Interests is subject
to a preferential right to purchase, third Person consent to assignment
requirement, right of first refusal, right of first offer or similar right
or
restriction, the operation of which is triggered by the execution and delivery
of this Agreement or the NPI Conveyances. All consents to assignment
and waivers of preferential purchase or other rights necessary to permit the
valid conveyance to Assignees of the Net Profits Interest and the execution
and
delivery of this Agreement and the NPI Conveyances have been obtained or the
time for giving such consents or waivers has expired following a written request
therefor. All advance notifications to third Persons of the
transactions contemplated herein and in the NPI Conveyances necessary to permit
the valid conveyance to Assignees of the Net Profits Interest and the execution
and delivery of this Agreement and the NPI Conveyances have been timely and
properly given.
(h) The
Subject Interests are free and clear of any liens, mortgages, deeds of trust,
pledges, security interests, or other encumbrances, except as set forth on
Schedule 3.1(h).
(i) All
Taxes imposed or assessed with respect to, measured by, charged against, or
attributable to the Subject Interests have been duly paid.
(j) Each
Lease is in full force and effect, at a minimum, with respect to the lands
described in conjunction therewith on Exhibit A as comprising the Subject
Interests and with respect to the all subsurface intervals to be included in
the
Subject Interests. Neither WI Owner is in material breach or material
default, and there has occurred no event, fact, or circumstance that, with
the
lapse of time or the giving of notice, or both, would constitute such a breach
or default by either WI Owner, with respect to any of its obligations under
any
Lease, and, to each WI Owner’s Knowledge, no other Person owning any interest in
any Lease is in material breach or material default with respect to any of
its
obligations thereunder. No lessor under any Lease has given or, to
each WI Owner’s Knowledge, threatened to give notice of any action to terminate,
cancel, rescind, repudiate, or procure a judicial reformation of any Lease
or
any provision thereof.
(k) Each
WI Owner has correctly made, or caused to be correctly made, all payments,
including, without limitation, royalties, rentals, shut-in well payments, and
other lease maintenance payments, due in respect of the Leases
thereunder. All operations proposed to be conducted in connection
with the existing and proposed xxxxx listed on Exhibit A will be
conducted within the subsurface intervals included in the Subject
Interests.
(l) Each
Lease authorizes surface operations on the lands covered thereby for the
drilling, development, operation, and production of Hydrocarbon xxxxx, or for
those Leases as to which surface operations are restricted or impractical for
operational or regulatory reasons, there exist Leases covering contiguous
acreage from which surface operations with respect to such surface-restricted
Leases may be conducted.
-6-
(m) There
are no agreements, instruments, or documents affecting the Subject Interests
other than the Property Agreements and the Marketing Agreements described on
Schedule 3.1(m). WI Owners have furnished or made available to
Assignees true and complete copies of all of the Property Agreements and
Marketing Agreements. With respect to the Property Agreements and
Marketing Agreements: (i) all of the Property Agreements and
Marketing Agreements are in full force and effect; (ii) neither WI Owner is
in
material breach or material default, and there has occurred no event, fact,
or
circumstance that, with the lapse of time or the giving of notice, or both,
would constitute such a breach or default by either WI Owner, with respect
to
any of its obligations under any Property Agreement or Marketing Agreement;
(iii) to each WI Owner’s Knowledge, no other Person who is a party thereto is in
material breach or material default with respect to any of its obligations
under
any Property Agreement or Marketing Agreement; and (iv) neither of WI Owners
nor, to either WI Owner’s Knowledge, any other party to any Property Agreement
or Marketing Agreement has given or threatened to give notice of any action
to
terminate, cancel, rescind, or procure a judicial reformation of such Property
Agreement or Marketing Agreement or any provision thereof.
(n) Except
as set forth on Schedule 3.1(n), the Subject Interests are not subject to
any area of mutual interest provision, interest reversion or conversion, or
other contract or provision thereof under which WI Owners or Assignees may
be
obligated to make assignments to third parties of interests in any Subject
Interest prior to the Effective Date.
(o) All
costs and expenses incurred in connection with the operation of the Subject
Interests for which WI Owners are responsible and have received invoices from
the operator(s) thereof have been paid, and there are no outstanding calls
or
payments due from either WI Owner under the terms of the Property Agreements
or
the Marketing Agreements. Neither the Leases nor the Property
Agreements contain any expressed contractual obligations to drill additional
xxxxx or to engage in other development operations, except for obligations
arising under offset well provisions and obligations arising under Property
Agreements that allow the parties thereto to elect whether to
participate. There are no material operations on any Lease under any
of the Property Agreements with respect to which either of WI Owners or any
other Person has become a non-consenting party.
(p) The
Subject Interests are not subject to any regulatory refund obligation, and,
to
each WI Owner’s Knowledge, there has occurred no event, fact, or circumstance
that, with the lapse of time or the giving of notice, or both, would give rise
to such a regulatory refund obligation.
(q) No
third party has any call, right of first refusal, or preferential right to
purchase any Hydrocarbons produced from or allocable to the Subject
Interests.
(r) Except
as set forth in Schedule 3.1(r), neither WI Owner is a party to or bound
by, and the Subject Interests and the Hydrocarbons attributable thereto are
not
encumbered or affected by, any gas balancing, deferred production, gas banking,
or similar
agreement or arrangement. Except as shown on Schedule 3.1(r),
neither WI Owner is in an “overlift,” “overproduced,” “underproduced”, or
similar status under any such agreement or arrangement.
-7-
(s) Neither
the Subject Interests nor the Hydrocarbons attributable thereto are subject
to
any contract, agreement, or arrangement (including, without limitation, advance
payment agreements, prepayments, take-or-pay makeup obligations, or otherwise)
whereby the owner of the Hydrocarbons or any part thereof is not entitled to
convey the Hydrocarbons or to market the Hydrocarbons and to obtain the full
market price or value of the same at the time of delivery.
(t) To
each WI Owner’s Knowledge, no Casualty Event or Environmental Liability
adversely affecting any material portion of the Subject Interests or the
operation thereof, or adversely affecting the ability of either WI Owner to
perform its obligations under this Agreement or the NPI Conveyances, has
occurred or accrued.
(u) Each
WI Owner and, to each WI Owner’s Knowledge, the operators of the Leases, have
complied in all material respects with all Laws (including, without limitation,
Environmental Laws), licenses, and permits relating to the Assets, other than
violations that could not (either individually or collectively) reasonably
be
expected to have a Material Adverse Effect on WI Owners. Each WI
Owner and, to each WI Owner’s Knowledge, the operator(s) of the Leases, as
applicable, have all approvals, authorizations, consents, licenses, and permits
from Governmental Authorities required under applicable Laws (including, without
limitation, Environmental Laws) in connection with the ownership and operation
of the Leases, and have properly made all filings necessary or appropriate
to
obtain such approvals, authorizations, consents, licenses, and
permits. All of such licenses, permits, filings, approvals,
authorizations, and consents are in full force and effect. Neither of
WI Owners nor, to each WI Owner’s Knowledge, any other Person has received
notice from any Governmental Authority having jurisdiction over the Leases
that
any such applicable Law, permit, license, or filing has been violated or not
complied with by either WI Owner or any other Person.
(v) Without
limiting the representations and warranties contained in Section 3.1(u),
neither WI Owner has (i) received notice or otherwise learned of any
Environmental Liability in, on, affecting, or otherwise relating in any way
to
any Lease that could, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on either WI Owner arising in connection
with
(A) any non-compliance with or violation of any Environmental Law or (B) the
Release (or threatened Release) of a Hazardous Substance, or (ii) received
notice or otherwise learned of any federal or state investigation evaluating
whether any remedial action is needed to respond to a Release (or threatened
Release) of a Hazardous Substance in, on, affecting, or otherwise relating
in
any way to any Lease for which either WI Owner may be liable. No
Release of Hazardous Substances by either WI Owner in, on, from, affecting,
or
relating in any way to any Lease or any property of either WI Owner adjacent
thereto has occurred, and neither WI Owner has received any Environmental
Complaint.
-8-
(w) There
are no bankruptcy, insolvency, reorganization, or arrangement proceedings
pending, being contemplated by, or to each WI Owner’s Knowledge, threatened
against either WI Owner or any Affiliate that controls either WI
Owner.
ARTICLE
4.
MISCELLANEOUS
4.1 Further
Assurances. WI Owners and Assignees agree to take all such
further actions and to execute, acknowledge, and deliver all such further
documents as are necessary or useful to effectuate the conveyance of the Net
Profits Interest and to carry out the purposes of this Agreement and the NPI
Conveyances.
4.2 Survival. The
representations, warranties, covenants, agreements, and indemnities in this
Agreement shall survive the execution and delivery of the NPI Conveyances and
the consummation of the transactions described herein and therein.
4.3 Expenses;
Taxes. WI Owners shall bear and pay all fees, costs, and
expenses incurred by both WI Owners and Assignees in negotiating this Agreement
and the NPI Conveyances and consummating the transactions contemplated herein
and therein. All required documentary, filing, and recording fees and
expenses incurred in connection with the filing and recording of the NPI
Conveyances, as well as all state sales and use taxes and real estate transfer
taxes (including any applicable interest or penalties) incurred or imposed
with
respect to the transactions described in this Agreement and the NPI Conveyances,
shall be borne and paid by WI Owners. Each Party shall assume
responsibility for, and shall bear and pay, all federal and state income,
franchise, and other similar taxes (including any applicable interest or
penalties) incurred by or imposed upon such Party with respect to the
transactions described in this Agreement. Prior to the Effective
Date, all Taxes based upon or measured by the ownership of the Subject
Interests, Hydrocarbon production therefrom, or the receipt of proceeds thereof,
shall be borne and paid by WI Owners, and after the Effective Date, shall be
allocated as set forth in the NPI Conveyance.
4.4 Notices. All
notices, requests, demands, instructions and other communications required
or
permitted to be given hereunder shall be in writing and shall be (a) delivered
personally, (b) mailed by certified U.S. mail, postage prepaid and return
receipt requested, (c) sent by bonded courier, or (d) sent by facsimile, as
follows:
|
If
to WI Owners:
Century
Resources, Inc.
0000
Xxx Xxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Attention: Chief
Financial Officer
Facsimile
No.: (000) 000-0000
|
If
to Assignees:
Valens
U.S. SPV I, LLC
Valens
Offshore SPV II, Corp.
c/o
Valens Capital Management, LLC
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention: Portfolio
Services
Facsimile
No.: (000) 000-0000
|
|
-9-
|
with
a copy to:
Xxxxx
X. Xxxx, Esquire
The
Loev Law Firm, PC
0000
Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxx,
Xxxxx 00000
Facsimile
No.: (000) 000-0000
|
with
a copy to:
Loeb
& Loeb, LLP
000
Xxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention: Xxxxx
X. Xxxxxxxx, Esq.
Facsimile
No.: (000) 000-0000
|
|
|
and
to:
Xxxxxxx
Xxxxxx L.L.P.
0000
XxXxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Attention: Xxxxxxx
X. Xxxxxxx, Esquire
Facsimile
No.: (000) 000-0000
|
||
or
to
such other place within the United States of America as either Party may
designate as to itself by written notice to the other. All notices
given by personal delivery, courier, or mail shall be effective on the date
of
actual receipt at the appropriate address. Notice given by telecopier
shall be effective upon actual receipt if received during recipient’s normal
business hours or at the beginning of the next Business Day after receipt if
received after the recipient’s normal business hours.
4.5 Indemnification.
(a) Notwithstanding
the execution of the NPI Conveyances, regardless of any investigation made
at
any time by or on behalf of Assignees or any information Assignees may have,
and
regardless of the presence or absence of insurance, WI Owners shall indemnify
and hold harmless Assignees and Assignees’ respective successors, assigns,
Affiliates, shareholders, partners, members, directors, officers, managers,
employees, agents, and representatives (collectively, the “Indemnified
Parties”) from and against any and all Claims caused by, arising out of,
resulting from, or relating in any way to, and shall pay the Indemnified Parties
any sum that the Indemnified Parties pay or become obligated to pay on account
of: (i) any breach or default in the performance by either WI Owner of any
covenant or agreement of WI Owners contained in this Agreement or the NPI
Conveyances; (ii) any breach of a warranty or an inaccurate or erroneous
representation made by either WI Owner in this Agreement or the NPI Conveyances;
and (iii) all liability or obligation to third Persons (including,
without limitation, liabilities resulting from injury to or death of any Person,
Persons, or other living things, or loss or destruction of or damage to
property, as well as Environmental Liabilities), whether arising in
contract, in tort, or by operation of Law, arising out of, resulting from,
or
relating in any way to the ownership, use, possession, and operation of the
Subject Interests and the production, handling, and marketing of Hydrocarbons
therefrom by WI Owners; provided, however, that in no event shall the terms
of
this Section 4.5(a) be deemed to create personal liability on the part of
WI Owners with respect to the satisfaction or discharge of the Net Profits
Interest. IT IS THE
INTENT OF THE PARTIES THAT THE FOREGOING INDEMNITY BE WITHOUT REGARD TO THE
CAUSE OR CAUSES OF THE CLAIM TO BE INDEMNIFIED, INCLUDING, WITHOUT LIMITATION,
THE NEGLIGENCE OF ASSIGNEES, OR EITHER OF THEM, WHETHER SUCH NEGLIGENCE BE
SOLE,
JOINT, OR CONCURRENT, OR ACTIVE OR PASSIVE, OR THE STRICT LIABILITY OF
ASSIGNEES, OR EITHER OF THEM.
-10-
(b) Assignees
shall give to WI Owners prompt written notice and particulars of any Claim
for
which indemnification is sought. At their option, WI Owners
may: (i) permit Assignees to respond to the Claim in the manner set
forth in its notice; or (ii) assume responsibility for and conduct the
negotiation, defense, or settlement of the Claim; provided, however, that
Assignees shall at all times have the right to participate in the defense
thereof and to be represented, at their sole expense, by counsel selected by
them. No such Claim shall be compromised or settled by either WI
Owners or Assignees, as applicable, in any manner that might adversely affect
the interest of the other Party without the prior written consent of such other
Party.
4.6 Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD
TO
ANY CONFLICTS OF LAW PRINCIPLES.
4.7 Limitation
on Damages. For the breach or non-performance by any Party
of any representation, warranty, covenant, or agreement contained in this
Agreement, the liability of the obligor shall be limited to direct actual
damages only, except to the extent that the obligee is entitled to specific
performance or injunctive relief. NEITHER WI OWNERS NOR
ASSIGNEES SHALL BE LIABLE TO THE OTHER FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE,
EXEMPLARY, OR INDIRECT DAMAGES, LOST PROFITS, OR OTHER BUSINESS INTERRUPTION
DAMAGES, IN TORT, IN CONTRACT, UNDER ANY INDEMNITY PROVISION, ARISING BY
OPERATION OF LAW, OR OTHERWISE AS TO ANY MATTER RELATING TO THIS AGREEMENT,
THE
NPI CONVEYANCES, OR THE TRANSACTIONS CONTEMPLATED HEREIN OR
THEREIN. Without limiting the foregoing, if the NPI
Conveyances or any Lease is rejected as an unexpired lease or executory contract
pursuant to any of the terms of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy
Code, the damages recoverable as a result of such rejection shall equal the
value as of the date of rejection of the future obligations remaining under
the
NPI Conveyances at the time of the rejection, determined in a commercially
reasonably manner.
4.8 Successors
and Assigns.
(a) This
Agreement shall be binding upon and, subject to the following restriction,
shall
inure to the benefit of the Parties and their respective permitted successors
and assigns. Nothing contained herein shall in any way limit or
restrict the right of Assignees, or Assignees’ successors and assigns, to sell,
convey, assign, transfer, mortgage, pledge, or create a lien or security
interest in their respective rights
or
obligations hereunder in whole or in part; provided, however, that (i) any
such transfer shall expressly be made subject to the terms of this Agreement
and
the NPI Conveyances and (ii) the prospective transferee from Assignees
shall expressly agree to assume and perform all of Assignees’ covenants and
obligations under the terms of this Agreement and the NPI
Conveyances. WI Owners shall not Transfer their rights or obligations
hereunder separately from the Subject Interests without the prior written
consent of Assignees.
-11-
(b) Transfers
by WI Owners, or either of them, of the Subject Interests shall be subject
to
the terms of Section 7.2 of the Initial NPI Conveyance. In the event
of a Transfer by WI Owners, or either of them, that includes only the Subject
Interests, or any portion thereof, and the Net Profits Interest attributable
thereto, WI Owners shall pay to Assignees, as consideration for Assignees’
reconveyance to WI Owners of the Net Profits Interest in advance of such
Transfer as required under Section 7.2(b) of the Initial NPI Conveyance, an
amount equal to forty-nine percent (49%) of the total purchase price (net of
all
applicable adjustments) to be paid by the prospective transferee to WI Owners
(or the WI Owner Transferring its interest) with respect to the Subject
Interests (including the Net Profits Interest) being Transferred as part of
the
same transaction or series of transactions.
(c) In
the event of a Transfer by WI Owners, or either of them, that includes the
Subject Interests, or any portion thereof, and the Net Profits Interest
attributable thereto, as part of a larger transaction, WI Owners shall pay
to
Assignees, as consideration for Assignees’ reconveyance to WI Owners of the Net
Profits Interest in advance of such Transfer as required under Section 7.2(b)
of
the Initial NPI Conveyance, an amount equal to forty-nine percent (49%) of
the
portion of the total purchase price (net of all applicable adjustments) to
be
paid by the prospective transferee to WI Owners (or the WI Owner Transferring
its interest) with respect to all properties, assets, and interests of every
kind and character being Transferred by WI Owners (or the WI Owner Transferring
its interest) to such prospective transferee as part of the same transaction
or
series of related transactions that is allocable, under the terms of the
relevant acquisition document(s), to the Subject Interests, or the portion
thereof being Transferred, and the Net Profits Interest attributable
thereto. Notwithstanding the preceding sentence of this Section
4.8(c) to the contrary, in the absence of such an allocation of values to
the individual properties, assets, and interests being Transferred in the
relevant acquisition documents, or if Assignees determine, in the good faith
exercise of their business judgment, that the values allocated to the relevant
Subject Interests (including the Net Profits Interest) set forth in the
acquisition documents are not at least equivalent to the values established
for
such Subject Interests (including the Net Profits Interest) in the most recent
reserve report provided by WI Owners to the Creditor Parties pursuant to Section
6.18 of the Securities Purchase Agreement (adjusted to reflect production from
or allocable to such Subject Interests during the period from the effective
date
of such reserve report through the effective date of the Transfer), the
consideration payable to Assignees for the reconveyance to WI Owners (or the
WI
Owner Transferring its interest) of the Net Profits Interest, or relevant
portion thereof, in advance of such Transfer shall be an amount equal to
forty-nine percent (49%) of the values established for the Subject Interests
being transferred (including the Net Profits Interest) in such reserve
report.
-12-
4.9 Unenforceable
or Inapplicable Provisions. If any provision hereof is
invalid or unenforceable in any jurisdiction, the other provisions hereof shall
remain in full force and effect in such jurisdiction, and the remaining
provisions hereof shall be liberally construed in favor of Assignees, and their
successors and assigns, in order to effectuate the terms hereof, and the
invalidity of any provision hereof in any jurisdiction shall not affect the
validity or enforceability of any such provision in any other
jurisdiction.
4.10 Execution
in Counterparts. This Agreement has been executed in several
counterparts, each of which shall be deemed to be an original and all of which
are identical. All of such counterparts together shall constitute but
one and the same agreement. All of said documents are integral parts
of one consolidated transaction and are to be construed as a single
transaction.
4.11 Entire
Agreement. This Agreement, together with the NPI
Conveyances, shall constitute the entire agreement between the Parties covering
the subject matter hereof, and there are no agreements, modifications,
conditions, or understandings, written or oral, expressed or implied, pertaining
to the subject matter hereof which are not contained herein or
therein.
4.12 Amendment;
Waiver. This Agreement shall not be modified or changed
except in writing signed by all Parties. No provision of this
Agreement shall be waived except in writing signed by the Party granting the
waiver. A waiver of any breach or a failure to enforce any of the
terms or conditions of this Agreement shall not in any way affect, limit, or
waive a Party’s rights under this Agreement at any time to enforce strict
compliance thereafter with every term or condition of this
Agreement.
EXECUTED
on the date first set forth above.
WI
OWNERS:
By:
/s/
Xxxxxx X.
XxXxxxxxx
Xxxxxx
X.
XxXxxxxxx
President
and Chief
Executive Officer
CENTURY
RESOURCES,
INC.
By:
/s/
Xxxxxx X.
XxXxxxxxx
Xxxxxx
X.
XxXxxxxxx
President
and Chief
Executive Officer
-13-
ASSIGNEES:
VALENS
U.S. SPV I,
LLC
By: Valens
Capital Management,
LLC, its
Investment Manager
By:
/s/
Xxxxxxx
Xxxxx
Name:
Xxxxxxx
Xxxxx
Authorized
Signatory
VALENS
OFFSHORE SPV II,
CORP.
By: Valens
Capital Management,
LLC, its
Investment Manager
By: /s/
Xxxxxxx
Xxxxx
Name:
Xxxxxxx
Xxxxx
Authorized
Signatory
SCHEDULES
|
Schedule
1.1
|
-
|
Definitions
|
|
Schedule
3.1(e)
|
-
|
WI
Owners’ Litigation
|
|
Schedule
3.1(g)
|
-
|
Preferential
Purchase Rights; Required Third Person Consents to
Assignment
|
|
Schedule
3.1(h)
|
-
|
Liens
and Encumbrances
|
|
Schedule
3.1(m)
|
-
|
Property
Agreements; Marketing Agreements
|
|
Schedule
3.1(n)
|
-
|
Future
Assignment Obligations
|
|
Schedule
3.1(r)
|
-
|
Production
Imbalances and Related Items
|
EXHIBITS
|
Exhibit
A
|
-
|
Subject
Interests
|
|
Exhibit
B
|
-
|
Form
of Conveyance of Net Profits Overriding Royalty
Interest
|
-14-
SCHEDULE
1.1
Definitions
“Affiliate”
means, with respect to any person, any other person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with such person. The term “control” (including, with
correlative meaning, the terms “controlled by” and “under common control with”)
as used with respect to any person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and
policies of such person, whether through the ownership of voting securities,
by
contract, or otherwise.
“Business
Day” means any day which is not a day on which national banking institutions
in New York, New York, are closed as authorized or required by Law.
“Casualty
Event” means, with respect to all or any material portion of an Asset, any
destruction by fire, blowout, leak, explosion, or other casualty (above or
below
ground) or any taking, or pending or threatened taking, in condemnation or
under
the right of eminent domain, of any Lease or portion thereof.
“Central
Time” means Central Standard Time or Central Daylight Savings Time, as in
effect in Houston, Texas, on the day in question.
“Claims”
means any and all claims, demands, liens, notices of non-compliance or
violation, notices of liability or potential liability, investigations, actions
(whether judicial, administrative, or arbitrational), causes of action, suits,
controversies, losses, judgments, damages, liabilities, costs, expenses,
interest, penalties, taxes, fines, obligations, and deficiencies, including,
without limitation, reasonable attorneys’ fees and other costs and expenses of
the Party defending a claim incident to the investigation and defense thereof
that results in litigation or arbitration, or the settlement of any claim,
or,
in the case of a claim subject to indemnification hereunder, the enforcement
by
the Party receiving indemnification of the provisions of Section 4.5, as
applicable.
“Creditor
Parties”, as defined in the Securities Purchase Agreement, means,
collectively, Assignees, as “Purchasers” under the terms of the Securities
Purchase Agreement, and LV Administrative Services, Inc., as administrative
and
collateral agent for each Purchaser.
“Effective
Date” means 7:00 A.M., Central Time, on the first Day of the Month following
the first to occur of (a) the payment in full by NCEC to Assignees of all
amounts (including principal and accrued interest) owed by NCEC under the terms
of the Notes, or (b) the “Maturity Date” of the Notes (as such term is defined
therein).
“Environmental
Complaint” means any written or oral complaint, order, directive, claim,
citation, notice of environmental report or investigation, or other notice
by
any governmental authority or any other Person with respect to (a) air
emissions, (b) spills, releases, or discharges to soils, any improvements
located thereon, surface water, groundwater,
or the sewer, septic, waste treatment, storage, or disposal systems servicing
any Lease, (c) solid or liquid waste disposal, (d) the use, generation, storage,
transportation, or disposal of any Hazardous Substance, or (e) other
environmental, health, or safety matters affecting any Lease or the business
conducted thereon.
Schedule
1.1-i
“Environmental
Laws” means (a) the following federal laws as they may be cited, referenced,
and amended from time to time: the Clean Air Act, the Clean Water
Act, the Safe Drinking Water Act, the Comprehensive Environmental Response,
Compensation and Liability Act, the Endangered Species Act, the Resource
Conservation and Recovery Act, the Hazardous Materials Transportation Act,
the
Superfund Amendments and Reauthorization Act, and the Toxic Substances Control
Act; (b) any and all equivalent environmental statutes of any state in which
any
Lease is situated, as they may be cited, referenced and amended from time to
time; (c) any rules or regulations promulgated under or adopted pursuant to
the
above federal and state laws; and (d) any other equivalent federal, state,
or
local statute or any requirement, rule, regulation, code, ordinance, or order
adopted pursuant thereto, including those relating to the generation,
transportation, treatment, storage, recycling, disposal, handling, or Release
of
Hazardous Substances.
“Environmental
Liability” means any claim, demand, obligation, cause of action,
accusation, allegation, order, violation, damage, injury, judgment, penalty
or
fine, cost of enforcement, cost of remedial action, or any other cost or expense
whatsoever, including reasonable attorneys’ fees and disbursements, resulting
from the violation or alleged violation of any Environmental Law or the
imposition of any Environmental Lien.
“Environmental
Lien” means a lien in favor of a Governmental Authority or other Person for
(a) any liability under an Environmental Law or (b) damages arising from or
costs incurred by such Governmental Authority or other Person in response to
a
Release (or threatened Release) of Hazardous Substances into the
environment.
“Governmental
Authority” means any governmental or quasi-governmental federal, state,
provincial, county, city, or other political subdivision of the United States,
any foreign country, or any department, bureau, agency, commission, court,
or
other statutory or regulatory body or instrumentality thereof.
“Hazardous
Substances” shall mean flammables, explosives, radioactive materials,
hazardous wastes, asbestos, or any material containing asbestos, polychlorinated
biphenyls (PCBs), toxic substances or related materials, petroleum, petroleum
products, associated oil or natural gas exploration, production, and development
wastes, or any substances defined as “hazardous substances,” “hazardous
materials,” “hazardous wastes,” or “toxic substances” under the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, the
Superfund Amendments and Reauthorization Act, as amended, the Hazardous
Materials Transportation Act, as amended, the Resource Conservation and Recovery
Act, as amended, the Toxic Substances Control Act, as amended, or any other
Environmental Laws.
Schedule
1.1-ii
“Hydrocarbons”
shall have the meaning given that term in the Initial NPI
Conveyance.
The
term
“Indemnified Parties” is defined in Section 4.5(a).
“Initial
NPI Conveyance” means the Conveyance of Net Profits Overriding
Royalty Interest to be executed by WI Owners in favor of Assignee concurrently
with the execution of this Agreement, creating the Net Profits Interest in
and
with respect to the Initial Subject Interests, substantially in the form
attached hereto as Exhibit B.
“Initial
Subject Interests” means: (a) the undivided leasehold interests
and the associated net revenue interests of WI Owners described more
particularly on Exhibit A in and to the Leases and the other rights and
interests described more particularly in Exhibit A, INSOFAR ONLY AS the
Leases cover and include the lands identified in Exhibit A, which
comprise the drill site locations for the proposed xxxxx listed on Exhibit
A, all as provided in Exhibit A; (b) all rights, titles, and
interests of WI Owners in and to all Hydrocarbons produced, saved, and marketed
from or allocable to the proposed Hydrocarbon xxxxx listed on
Exhibit A once such xxxxx are drilled and completed, and any
Hydrocarbon xxxxx drilled thereafter on the Leases, INSOFAR ONLY AS the Leases
cover and include the lands identified in Exhibit A, and any unit into
which any such Lease, INSOFAR ONLY AS such Lease covers and includes the lands
identified in Exhibit A, is pooled or unitized; and (c) any and all other
rights, titles, and interests of WI Owners in or with respect to all voluntary
or compulsory pooling or unitization agreements or orders, farmout agreements,
farmin agreements, operating agreements, Hydrocarbon purchase and sale
agreements, licenses, permits, and all other contracts of any kind whatsoever
covering or affecting the production or marketing of Hydrocarbons from the
Leases, INSOFAR ONLY AS the Leases cover and include the lands identified in
Exhibit A, and any unit into which any such Lease, INSOFAR ONLY AS such
Lease covers and includes the lands identified in Exhibit A, is pooled or
unitized, and attributable to the interests of WI Owners therein.
“Knowledge”
means, for purposes of Article 3, (a) knowledge of those matters of which
a Person is charged with constructive notice under applicable Law, and (b)
actual knowledge.
“Laws”
means all constitutions, laws, statutes, ordinances, rules, and
regulations of the United States, any foreign country, or any domestic or
foreign state, and any local, state, or federal political subdivision or agency
thereof, as well as all decisions of courts having the effect of law in each
such jurisdiction.
“Leases”
means the oil and gas leases, fee mineral interests, and other interests
described, referred to, or identified in Exhibit A (as Exhibit A
may be supplemented and amended pursuant to Section 2.2) as to all lands
covered thereby (or the applicable part or portion thereof if specifically
limited in depth and/or areal extent), together with, in the case of an oil
and
gas lease, any renewal or extension of such lease (as to all or any part or
portion thereof), and any replacement lease taken upon or in anticipation of
the
expiration or termination of such lease (if executed and delivered during the
term of or within
one (1) year after expiration of the predecessor lease), as to all lands and
depths described in the predecessor lease (unless the predecessor lease is
specifically limited in depth or geographic extent, in which event only such
portion of such lease shall be considered a renewal or extension or a
replacement lease subject to this Agreement).
Schedule
1.1-iii
“Marketing
Agreements” means the Hydrocarbon processing, sale, purchase, exchange,
gathering, transportation, and other marketing-related contracts, agreements,
and rights owned by WI Owners or to which either WI Owner is a party and that
are appurtenant to or affect the Subject Interests, described more particularly
on Schedule 3.1(m) (as such schedule may be amended in connection with
the addition of the Supplemental Subject Interests).
“Material
Adverse Effect” shall have the meaning given to that term in the Securities
Purchase Agreement.
“Net
Profits Interest” means the net profits overriding royalty interest to be
conveyed by WI Owners to Assignee out of the Subject Interests as provided
in
this Agreement, subject to and in accordance with the terms of the NPI
Conveyances.
“Notes”
mean, collectively, (a) the Secured Term Note dated of even date herewith,
from
NCEC to Valens U.S. SPV I, LLC, in the original principal amount of
$2,300,000.00, and (b) the Secured Term Note dated of even date herewith, from
NCEC to Valens Offshore SPV II, Corp., in the original principal amount of
$3,000,000.00.
“Parties”
shall mean, collectively, WI Owners and Assignees.
“Permitted
Encumbrances” shall have the meaning given that term in the Initial NPI
Conveyance.
“Person”
means any individual, natural person, corporation, joint venture, partnership,
limited partnership, limited liability company, limited liability partnership,
trust, estate, business trust, association, governmental entity or other
entity.
“Property
Agreements” means all of the operating agreements, unit operating
agreements, processing plant operating agreements, pooling and unitization
agreements, and other contracts, agreements, and rights owned by WI Owners,
in
whole or in part, to the extent that they are appurtenant to or affect the
Subject Interests, described more particularly on Schedule 3.1(m) (as
such schedule may be amended in connection with the addition to this Agreement
of the Supplemental Subject Interests).
“Release
of Hazardous Substances” means any emission, spill, release, disposal, or
discharge, except in accordance with a valid permit, license, certificate,
or
approval of the relevant governmental authority, of any Hazardous Substance
into
or upon (a) the air, (b) soils or any improvements located thereon, (c) surface
water or groundwater, or (d) the sewer or septic system, or the waste treatment,
storage, or disposal system servicing any Lease, with respect to which either
WI
Owner is legally obligated to respond under applicable
Environmental Laws by notifying the relevant Governmental Authority,
investigating, or undertaking corrective action.
Schedule
1.1-iv
“Restricted
Account Documents” means, collectively, (a) the Restricted Account Agreement
dated of even date herewith, among North Fork Bank, NCEC, and LV Administrative
Services, Inc., as administrative and collateral agent for the “Purchasers”
under the terms of the Securities Purchase Agreement, and (b) the letter
agreement regarding Restricted Account mechanics dated of even date herewith,
executed by NCEC and LV Administrative Services, Inc., as Agent.
“Securities
Purchase Agreement” means the Securities Purchase Agreement dated of even
date herewith, between NCEC, the “Purchasers” from time to time a party thereto,
and LV Administrative Services, Inc., as administrative and collateral agent
for
each Purchaser.
“Subject
Interests” means, collectively, the Initial Subject Interests and the
Supplemental Subject Interests.
“Supplemental
NPI Conveyance” has the meaning given to that term in Section
2.2.
“Supplemental
Subject Interests” means (a) the undivided leasehold interests, the
associated net revenue interests, and the other rights and interests of WI
Owners in and to the Leases to be described in Exhibit A to the
Supplemental NPI Conveyance, INSOFAR ONLY AS such Leases cover and include
the
lands identified in Exhibit A to the Supplemental NPI Conveyance, which
comprise the drill site locations for the proposed xxxxx agreed upon by WI
Owners and the Creditor Parties and listed on Exhibit A to the
Supplemental NPI Conveyance; (b) all rights, titles, and interests of WI Owners
in and to all Hydrocarbons produced, saved, and marketed from or allocable
to
the proposed Hydrocarbon xxxxx listed on Exhibit A to the
Supplemental NPI Conveyance once such xxxxx are drilled and completed, and
any
Hydrocarbon xxxxx drilled thereafter on such Leases, INSOFAR ONLY AS such Leases
cover and include the lands identified in Exhibit A to the Supplemental
NPI Conveyance, and any unit into which any such Lease, INSOFAR ONLY AS such
Lease covers and includes the lands identified in Exhibit A to the
Supplemental NPI Conveyance, is pooled or unitized; and (c) any and all other
rights, titles, and interests of WI Owners in or with respect to all voluntary
or compulsory pooling or unitization agreements or orders, farmout agreements,
farmin agreements, operating agreements, Hydrocarbon purchase and sale
agreements, licenses, permits, and all other contracts of any kind whatsoever
covering or affecting the production or marketing of Hydrocarbons from the
Leases described in Exhibit A to the Supplemental NPI Conveyance, INSOFAR
ONLY AS such Leases cover and include the lands identified in Exhibit A
to the Supplemental NPI Conveyance, and any unit into which any such Lease,
INSOFAR ONLY AS such Lease covers and includes the lands identified in
Exhibit A to the Supplemental NPI Conveyance, is pooled or unitized, and
attributable to the interests of WI Owners therein.
Schedule
1.1-v
“Taxes”
means all ad valorem, property, occupation, gathering, pipeline regulating,
windfall profit, severance, gross production, gross receipts, Btu, energy,
excise, and other taxes and governmental charges and assessments imposed on
the
Subject Interests, the Net Profits Interest, the Hydrocarbons attributable
thereto, or the proceeds therefrom, other than income, franchise, or similar
taxes.
“Transfer”
means, for purposes of Section 4.8, as applicable, (a) a sale,
exchange, assignment, conveyance, gift, bequest, devise, disposition, or other
direct transfer of title to an asset, (b) a transfer of the equity
interests of the Person owning the relevant asset or, in the case of an entity
other than an individual, the direct parent of such entity, or (c) a
merger, consolidation, reorganization, or other business combination of such
Person or, in the case of an entity other than an individual, the direct parent
of such entity.
Schedule
1.1-vi
SCHEDULE
3.1(e)
WI
OWNERS’ LITIGATION
None.
SCHEDULE
3.1(g)
PREFERENTIAL
PURCHASE RIGHTS; REQUIRED THIRD
PERSON
CONSENTS TO ASSIGNMENT
None.
SCHEDULE
3.1(h)
LIENS
AND ENCUMBRANCES
|
1.
|
Mortgage,
Deed of Trust, Security Agreement, Financing Statement and Assignment
of
Production, from New Century Energy Corp. and Century Resources,
Inc., as
Mortgagors, to Xxxxxx Grin, as Trustee, for the benefit of Laurus
Master
Fund, Ltd., as Mortgagee, dated June 30, 2005, filed and recorded
as
follows:
|
|
|
JURISDICTION
|
FILING
DATA
|
|
|
Matagorda
County
|
Filed
on July 5, 2005, under Instrument No. 055103, Official
Records
|
|
|
Xxxxxxx
County
|
Filed
on July 5, 2005, under Instrument No. 255765, Volume 614 Page 333,
Official Records
|
|
|
2.
|
UCC-1
Financing Statement reflecting New Century Energy Corp. and Century
Resources, Inc., as Debtors, and Laurus Master Fund, Ltd., as Secured
Party, relating to the Mortgage dated as of June 30, 2005, and covering
fixtures and as-extracted collateral, filed and recorded as
follows:
|
|
|
JURISDICTION
|
FILING
DATA
|
|
|
Matagorda
County
|
Filed
on July 5, 2005, under Instrument No. 055104, Official
Records
|
|
|
Xxxxxxx
County
|
Filed
on July 5, 2005, under Instrument No. 255766, Volume 614 Page 358,
Official Records
|
|
Schedule
3.1(h)-i
|
3.
|
Mortgage,
Deed of Trust, Security Agreement, Financing Statement and Assignment
of
Production from New Century Energy Corp. and Century Resources, Inc.,
as
Mortgagors, to Xxxxxx Grin, as Trustee, for the benefit of Laurus
Master
Fund, Ltd., as Mortgagee, dated as of September 19, 2005, filed and
recorded as follows:
|
|
|
JURISDICTION
|
FILING
DATA
|
|
|
Matagorda
County
|
Filed
on September 20, 2005, under Instrument No. 057328, Official
Records
|
|
|
XxXxxxxx
County
|
Filed
on September 20, 2005, Volume 163 Page 276
|
|
|
Xxxxxxx
County
|
Filed
on September 21, 2005, under Instrument No. 257742, Volume 624
Page 304, Official Records
|
|
|
4.
|
UCC-1
Financing Statement reflecting New Century Energy Corp. and Century
Resources, Inc., as Debtors, and Laurus Master Fund, Ltd., as Secured
Party, relating to the Mortgage dated as of September 19, 2005, and
covering fixtures and as-extracted collateral, filed and recorded
as
follows:
|
|
|
JURISDICTION
|
FILING
DATA
|
|
|
Matagorda
County
|
Filed
on September 20, 2005, under Instrument No. 057329, Official
Records
|
|
|
XxXxxxxx
County
|
Filed
on September 20, 2005, Volume 163 Page 308
|
|
|
Xxxxxxx
County
|
Filed
on September 21, 2005, under Instrument No. 257743, Volume 624
Page 330, Official Records
|
|
Schedule
3.1(h)-ii
|
5.
|
Amended
and Restated Mortgage, Deed of Trust, Security Agreement, Financing
Statement and Assignment of Production from New Century Energy Corp.
and
Century Resources, Inc., as Mortgagors, to Xxxxxx Grin, as Trustee,
for
the benefit of Laurus Master Fund, Ltd., as Mortgagee, dated April
26,
2006, filed and recorded as follows:
|
|
|
JURISDICTION
|
FILING
DATA
|
|
|
Matagorda
County
|
Filed
on April 27, 2006, under Instrument No. 063043, Official
Records
|
|
|
XxXxxxxx
County
|
Filed
on April 27, 2006, Volume 168 Page 336
|
|
|
Xxxxxxx
County
|
Filed
on April 27, 2006, under Instrument No. 263022, Volume 650 Page 320,
Official Records
|
|
|
6.
|
UCC-1
Financing Statement reflecting New Century Energy Corp. and Century
Resources, Inc., as Debtors, and Laurus Master Fund, Ltd., as Secured
Party, relating to the Mortgage dated April 26, 2006, and covering
fixtures and as-extracted collateral, filed and recorded as
follows:
|
|
|
JURISDICTION
|
FILING
DATA
|
|
|
Matagorda
County
|
Filed
on April 28, 2006, under Instrument Xx. 000000
|
|
|
XxXxxxxx
Xxxxxx
|
Filed
on April 28, 2006, Volume 168 Page 413
|
|
|
Xxxxxxx
County
|
Filed
on April 28, 2006, under Instrument No. 263056, Volume 650 Page 481,
Official Records
|
|
|
7.
|
UCC-1
Financing Statement reflecting New Century Energy Corp. and Century
Resources, Inc., as Debtors, and Laurus Master Fund, Ltd., as Secured
Party, covering fixtures and as-extracted collateral, filed and recorded
as follows:
|
|
|
JURISDICTION
|
FILING
DATA
|
|
|
TEXAS
|
||
|
Matagorda
County
|
Filed
on January 5, 2007, under Instrument No. 070109, Official
Records
|
|
|
XxXxxxxx
County
|
Filed
on January 9, 2007, Volume 173 Page 13
|
|
|
Xxxxxxx
County
|
Filed
on January 5, 2007, under Instrument No. 269469, Volume 683 Page
99,
Official Records
|
|
Schedule
3.1(h)-iii
SCHEDULE
3.1(m)
PROPERTY
AGREEMENTS; MARKETING AGREEMENTS
|
A.
|
Property
Agreements
|
|
|
Operating
Agreement dated March 1, 2004, among Century Resources, Inc., as
Operator,
and Acquatic Cellulose International Corp., as Non-Operator, covering
certain leases, xxxxx, and facilities in Xxxxxxx County,
Texas.
|
|
B.
|
Marketing
Agreements
|
|
|
1.
|
Base
Contract for Sale and Purchase of Natural Gas dated as of July 17,
2002,
among Century Resources, Inc., as Seller, and Harvest Pipeline Company,
as
Buyer, relating to the Subject Interests in Matagorda County,
Texas.
|
|
|
2.
|
Crude
Oil Purchase Agreement, Flint Hills Resources, LP Contact No. 4762,
dated
August 7, 2007, among New Century Energy Corp., as Seller and Flint
Hills
Resources, LP, as Buyer, relating to the Subject Interests in Xxxxxxx
County, Texas.
|
SCHEDULE
3.1(n)
FUTURE
ASSIGNMENT OBLIGATIONS
None.
SCHEDULE
3.1(r)
PRODUCTION
IMBALANCES AND RELATED ITEMS
None.
EXHIBIT
A
Attached
to and made a part of Net Profits Interest Agreement
dated
as of November 30, 2007, between
New
Century Energy Corp. and CenturyResources, Inc., as WI Owners,
and
Valens
U.S. SPV I, LLC, and Valens Offshore SPV II, Corp., as
Assignees
SUBJECT
INTERESTS
[CONFIDENTIAL
INFORMATION REMOVED]
EXHIBIT
B
Attached
to and made a part of Net Profits Interest Agreement
dated
as of November 30, 2007, between New Century Energy Corp.
and
Century
Resources, Inc., as WI Owners, and
Valens
U.S. SPV I, LLC, and Valens Offshore SPV II, Corp., as
Assignees
Form
of Conveyance of Net Profits Overriding Royalty
Interest
