FIRST AMENDMENT TO THE
NOTE, WARRANT AND OPTION
THIS FIRST AMENDMENT TO THE NOTE, WARRANT AND OPTION (this "Amendment") is
entered into on July 25, 2005 to be effective as of June 30, 2005, by and
between New Century Energy Corp., a Colorado corporation ("NCEC") and Laurus
Master Fund, Ltd. ("Laurus").
BACKGROUND
NCEC and Laurus are parties to a Securities Purchase Agreement dated as of
June 30, 2005 (as amended, restated, supplemented or otherwise modified from
time to time, the "Purchase Agreement") pursuant to which, among other things,
Laurus purchased from NCEC, and NCEC sold to Laurus, a Secured Convertible Term
Note in the original principal amount of Fifteen Million Dollars ($15,000,000)
(as amended, restated, supplemented or otherwise modified from time to time, the
"Note").
NCEC issued to Laurus (a) a Common Stock Purchase Warrant dated June 30,
2005 (as amended, modified or supplemented from time to time, the "Warrant") to
purchase up to 7,258,065 shares of NCEC's Common Stock (subject to adjustment as
set forth therein) in connection with the Laurus' purchase of the Note and (b)
an Option dated June 30, 2005 (as amended, modified or supplemented from time to
time, the "Option" together with the Note and the Warrant, each a "Security" and
collectively, the "Securities") to purchase up to 10,222,784 shares of NCEC's
Common Stock (subject to adjustment as set forth therein) in connection with
Laurus' purchase of the Note;
The parties wish to amend the Securities on the terms and conditions
hereafter set forth.
NOW, THEREFORE, in consideration of the agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined herein shall
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have the meanings given to them in the Purchase Agreement.
2. Amendment to Note. Subject to satisfaction of the conditions precedent
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set forth in Section 5 below, Section 3.2 of the Note is hereby amended and
restated in its entirety to provide as follow:
"3.2 Conversion Limitation. Notwithstanding anything contained
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herein to the contrary, the Holder shall not be entitled to convert
pursuant to the terms of this Note an amount that would be convertible
into that number of Conversion Shares which would exceed the
difference between (i) 9.99% of the outstanding shares of Common Stock
and (ii) the number of shares of Common Stock beneficially owned by
the Holder. For purposes of the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and Regulation 13d-3 thereunder. The
Conversion Shares limitation described in this Section 3.2 shall
automatically become null and void following notice to any Company
upon the occurrence and during the continuance of an Event of Default,
or upon 75 days prior notice to the Parent. Notwithstanding anything
contained herein to the contrary, the provisions of this Section 3.2
are irrevocable and may not be waived by the Holder or any Company."
3. Amendment to the Warrant. Subject to satisfaction of the conditions
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precedent set forth in Section 5 below, Section 10 of the Warrant is hereby
amended and restated in its entirety to provide as follows:
"10. Maximum Exercise. Notwithstanding anything contained herein
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to the contrary, the Holder shall not be entitled to exercise this
Warrant in connection with that number of shares of Common Stock which
would exceed the difference between (i) 9.99% of the issued and
outstanding shares of Common Stock and (ii) the number of shares of
Common Stock beneficially owned by the Holder. For the purposes of the
immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended, and Regulation 13d-3 thereunder. The
limitation described in the first sentence of this Section 10 shall
automatically become null and void following notice to the Company
upon the occurrence and during the continuance of an Event of Default
under and as defined in the Note made by the Company to the Holder
dated the date hereof (as amended, modified or supplemented from time
to time, the "Note"), or upon 75 days prior notice to the Company."
4. Amendment to the Option. Subject to satisfaction of the conditions
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precedent set forth in Section 5 below, the Option is hereby amended as follows:
(a) The first paragraph of the Option is hereby amended and restated
in its entirety to provide as follows:
"NEW CENTURY ENERGY CORP., a corporation organized under the laws
of the State of Colorado (the "Company"), hereby certifies that, for
value received, LAURUS MASTER FUND, LTD., or assigns (the "Holder"),
is entitled, subject to the terms set forth below, to purchase from
the Company (as defined herein) from and after the Issue Date of this
Option and at any time or from time to time, up to 10,222,784 fully
paid and nonassessable shares of Common Stock (as hereinafter
defined), $0.001 par value per share, at the Exercise Price (as
defined below). The number and character of such shares of Common
Stock are subject to adjustment as provided herein."
(b) The definition of Exercise Price in the Option is amended and
restated in its entirety to provide as follows:
"(c) "Exercise Price" means $.001 per share."
(c) Section 1.1 of the Option is hereby amended and restated in its
entirety to provide as follows:
"1.1 Number of Shares Issuable upon Exercise. From and after the
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date hereof, the Holder shall be entitled to receive, upon exercise of
this Option in whole or in part, by delivery of an original or fax
copy of an exercise notice in the form attached hereto as Exhibit A
(the "Exercise Notice"), shares of Common Stock of the Company,
subject to adjustment pursuant to Section 4. The Holder may not sell
any shares of the Common Stock delivered to the Holder upon exercise
of this Option until (a) the payment in full of all of the obligations
and liabilities of the Company to the Holder under the Purchase
Agreement and the Note (as defined in the Purchase Agreement) have
been paid in full and (b) the exercise of the Warrant (as defined in
the Purchase Agreement) by the Holder; provided; however, the Holder
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may sell all or any portion of the Common Stock delivered to the
Holder upon exercise of this Option following the occurrence and
during the continuance of an Event of Default."
(d) Section 10 of the Option is hereby amended and restated in its
entirety to provide as follows:
"10. Maximum Exercise. Notwithstanding anything contained herein
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to the contrary, the Holder shall not be entitled to exercise this
Option in connection with that number of shares of Common Stock which
would exceed the difference between (i) 9.99% of the issued and
outstanding shares of Common Stock and (ii) the number of shares of
Common Stock beneficially owned by the Holder. For the purposes of the
immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended, and Regulation 13d-3 thereunder. The
limitation described in the first sentence of this Section 10 shall
automatically become null and void following notice to the Company
upon the occurrence and during the continuance of an Event of Default
under and as defined in the Note made by the Company to the Holder
dated the date hereof (as amended, modified or supplemented from time
to time, the "Note"), or upon 75 days prior notice to the Company."
(e) Exhibit A to the Option is replaced in its entirety with Exhibit A
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attached hereto.
5. Conditions of Effectiveness. This Amendment shall become effective upon
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receipt by Laurus of a copy of this Amendment duly executed by NCEC and
consented and agreed to by the guarantor, Century Resources, Inc. ("CRI"
together with NCEC, each a "Company" and collectively, "Companies").
6. Representations and Warranties. Each Company hereby represents and
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warrants as follows:
(a) This Amendment and the Securities, as amended hereby, constitute
legal, valid and binding obligations of NCEC and are enforceable against
NCEC in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, NCEC hereby reaffirms
all covenants, representations and warranties made in the Purchase
Agreement and the Securities, as applicable, to the extent the same are not
amended hereby and agree that all such covenants, representations and
warranties shall be deemed to have been remade as of the effective date of
this Amendment.
(c) No Event of Default has occurred and is continuing or would exist
after giving effect to this Amendment.
(d) No Company has any defense, counterclaim or offset with respect to
the Purchase Agreement, the Securities or any other Related Agreement to
which it is a party.
7. Effect on the Securities.
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(a) Upon the effectiveness of Sections 2, 3 and 4 hereof, each
reference in the Securities, the Purchase Agreement and any other Related
Agreement to "Note," "Warrant," "Option," "hereunder," "hereof," "herein"
or words of like import shall mean and be a reference to such Security, as
amended hereby.
(b) Except as specifically amended herein, each Security, the Purchase
Agreement and the other Related Agreements shall remain in full force and
effect and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of Laurus, nor
constitute a waiver of any provision of the Securities, the Purchase
Agreement or any other Related Agreement or any other documents,
instruments or agreements executed and/or delivered under or in connection
therewith.
8. Governing Law. This Amendment shall be binding upon and inure to the
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benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
9. Headings. Section headings in this Amendment are included herein for
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convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
10. Counterparts; Facsimile. This Amendment may be executed by the parties
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hereto in one or more counterparts, each of which shall be deemed an original
and all of which when taken together shall constitute one and the same
agreement. Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto.
[Signature Pages to Follow]
IN WITNESS WHEREOF, this First Amendment to the Note, Warrant and Option
has been duly executed as of the day and year first written above.
NEW CENTURY ENERGY CORP.
By: /s/ Xxxxxx X. XxXxxxxxx
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Name: Xxxxxx X. XxXxxxxxx
Title: President
LAURUS MASTER FUND, LTD.
By: /s/ Xxxxxx Grin
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Name:
Title:
CONSENTED AND AGREED TO:
CENTURY RESOURCES, INC.
By: /s/ Xxxxxx X. XxXxxxxxx
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Name: Xxxxxx X. XxXxxxxxx
Title: President
EXHIBIT A
FORM OF SUBSCRIPTION
(To Be Signed Only On Exercise Of Option)
TO: New Century Energy Corp.
0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
The undersigned, pursuant to the provisions set forth in the attached
Option (No. L-1), hereby irrevocably elects to purchase shares
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of the Common Stock covered by such Option.
The undersigned herewith makes payment of the Exercise Price provided for
in such Option, which is $ in lawful money of the United States.
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The undersigned requests that the certificates for such shares be issued in
the name of, and delivered to whose address is
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The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Option shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act") or pursuant to an exemption from
registration under the Securities Act.
Dated:
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(Signature must conform to name of
holder as specified on the face of the
Option)
Address:
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