Exhibit 10.1
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THIS NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO NEW CENTURY ENERGY CORP. THAT SUCH
REGISTRATION IS NOT REQUIRED.
AMENDED AND RESTATED SECURED TERM NOTE
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FOR VALUE RECEIVED, NEW CENTURY ENERGY CORP., a Colorado corporation (the
"COMPANY"), hereby promises to pay to LAURUS MASTER FUND, LTD., c/o M&C
Corporate Services Limited, P.O. Box 309 GT, Xxxxxx House, South Church Street,
Xxxxxx Town, Grand Cayman, Cayman Islands, Fax: 000-000-0000 (the "HOLDER") or
its registered assigns or successors in interest, the sum of Nine Million Five
Hundred Thousand Dollars ($9,500,000), together with any accrued and unpaid
interest hereon, on January 2, 2007 (the "MATURITY DATE") if not sooner paid.
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in that certain Securities Purchase Agreement dated as of
the date hereof by and between the Company and the Holder (as amended, modified
and/or supplemented from time to time, the "PURCHASE AGREEMENT").
The following terms shall apply to this Secured Term Note (this "NOTE"):
ARTICLE I
CONTRACT RATE AND REDEMPTION
1.1 Contract Rate. Subject to Sections 2.2 and 3.9, interest payable on the
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outstanding principal amount of this Note (the "PRINCIPAL AMOUNT") shall accrue
at a rate per annum equal to twenty percent (20%) (the "CONTRACT RATE").
Interest shall be (i) calculated on the basis of a 360 day year, and (ii)
payable monthly, in arrears, commencing on November 1, 2005, on the first
business day of each consecutive calendar month thereafter through and including
the Maturity Date, and on the Maturity Date, whether by acceleration or
otherwise
1.2 Repayments. Amortizing payments of the aggregate Principal Amount
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outstanding under this Note at any time together with accrued and unpaid
interest shall be made by the Company on each Repayment Date (as hereafter
defined) in an amount equal to the Payment Amount (as hereafter defined). Each
such Payment Amount shall be applied (a) first to any fees due and payable to
the Holder pursuant to this Note, the Purchase Agreement or any other Related
Agreement, (b) then to accrued and unpaid interest due on this Note and (c) then
to the outstanding Principal Amount under this Note, in each case, in such order
as the Holder shall determine in its sole discretion. Any outstanding Principal
Amount together with any accrued and unpaid interest and any and all other
unpaid amounts which are then owing by the Company to the Holder under this
Note, the Purchase Agreement and/or any other Related Agreement shall be due and
payable on the Maturity Date. For purposes of this Section, (a) the term
"PAYMENT AMOUNT" shall mean eighty percent (80%) of the gross proceeds paid to
the Company in respect of oil, gas and/or other hydrocarbon production arising
from the Company's 7.15% working interest in the Wishbone Field in the
Xxxxxxxx-Xxxxxx Gas Unit located in XxXxxxxx County, Texas (the "Wishbone
Field"), purchased by the Company pursuant to the Purchase and Sale Agreement
dated September 2, 2005 between the Company and the seller of such working
interest (the "Production Payments") and (b) the term "REPAYMENT DATE" means a
date not later than five (5) days following the day on which the Company
receives each Production Payment, commencing with all Production Payments
received by the Company after March 1, 2006 with respect to the production month
of January 2006 and each month thereafter. Notwithstanding anything contained in
this Section to the contrary, if during the 2006 calendar year the Company
drills one or more xxxxx in the Wishbone Field, then so long as no Event of
Default shall have occurred and be continuing the Company shall be permitted to
deduct from each Payment Amount in respect of the Principal Amount then required
to be made an amount sufficient to cover not more than the Company's then owing
7.25% pro-rata share of the drilling and completion costs associated with such
drilling, provided that in no event shall any such drilling and completion costs
be deducted from the interest payments then due and owing by the Company to the
Holder hereunder.
1.3 Mandatory Redemption. The total outstanding Principal Amount together
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with any accrued and unpaid interest and any and all other unpaid amounts which
are then owing by the Companies to the Holder under this Note, the Purchase
Agreement and/or any other Related Agreement shall be due and payable on the
Maturity Date.
1.4 Optional Redemption. The Company may prepay this Note ("OPTIONAL
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REDEMPTION") by paying to the Holder a sum of money equal to the Applicable
Principal Amount (as defined below) together with accrued but unpaid interest
thereon and any and all other sums due, accrued or payable to the Holder arising
under this Note, the Purchase Agreement and/or any other Related Agreement (the
"REDEMPTION AMOUNT") outstanding on the Redemption Payment Date (as defined
below). The Company shall deliver to the Holder a written notice of redemption
(the "NOTICE OF REDEMPTION") specifying the date for such Optional Redemption
(the "REDEMPTION PAYMENT DATE"), which date shall be seven (7) business days
after the date of the Notice of Redemption. On the Redemption Payment Date, the
Redemption Amount must be paid in good funds to the Holder. In the event the
Company fails to pay the Redemption Amount on the Redemption Payment Date as set
forth herein, then such Notice of Redemption will be null and void. For purposes
of this Section 1.4, the "APPLICABLE PRINCIPAL AMOUNT" shall mean 100% of the
Principal Amount outstanding at the time of such prepayment.
ARTICLE II
EVENTS OF DEFAULT
2.1 Events of Default. The occurrence of any of the following events set
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forth in this Section 2.1 shall constitute an event of default ("EVENT OF
DEFAULT") hereunder:
(a) Failure to Pay. The Company fails to pay when due any installment
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of principal, interest or other fees hereon in accordance herewith, or the
Company fails to pay any of the other Obligations (under and as defined in
the Master Security Agreement) when due, and, in any such case, such
failure shall continue for a period of three (3) days following the date
upon which any such payment was due.
(b) Breach of Covenant. The Company or any of its Subsidiaries
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breaches any covenant or any other term or condition of this Note in any
material respect and such breach, if subject to cure, continues for a
period of fifteen (15) days after the occurrence thereof.
(c) Breach of Representations and Warranties. Any representation,
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warranty or statement made or furnished by the Company or any of its
Subsidiaries in this Note, the Purchase Agreement or any other Related
Agreement shall at any time be false or misleading in any material respect
on the date as of which made or deemed made.
(d) Default Under Other Agreements. The occurrence of any default (or
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similar term) in the observance or performance of any other agreement or
condition relating to any indebtedness or contingent obligation of the
Company or any of its Subsidiaries beyond the period of grace (if any), the
effect of which default is to cause, or permit the holder or holders of
such indebtedness or beneficiary or beneficiaries of such contingent
obligation to cause, such indebtedness to become due prior to its stated
maturity or such contingent obligation to become payable;
(e) Material Adverse Effect. Any change or the occurrence of any event
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which could reasonably be expected to have a Material Adverse Effect;
(f) Bankruptcy. The Company or any of its Subsidiaries shall (i) apply
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for, consent to or suffer to exist the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of
all or a substantial part of its property, (ii) make a general assignment
for the benefit of creditors, (iii) commence a voluntary case under the
federal bankruptcy laws (as now or hereafter in effect), (iv) be
adjudicated a bankrupt or insolvent, (v) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (vi)
acquiesce to, without challenge within ten (10) days of the filing thereof,
or failure to have dismissed, within thirty (30) days, any petition filed
against it in any involuntary case under such bankruptcy laws, or (vii)
take any action for the purpose of effecting any of the foregoing;
(g) Judgments. Attachments or levies in excess of $100,000 in the
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aggregate are made upon the Company or any of its Subsidiary's assets or a
judgment is rendered against the Company's property involving a liability
of more than $100,000 which shall not have been vacated, discharged, stayed
or bonded within thirty (30) days from the entry thereof;
(h) Insolvency. The Company or any of its Subsidiaries shall admit in
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writing its inability, or be generally unable, to pay its debts as they
become due or cease operations of its present business;
(i) Change in Control. A Change in Control shall occur. A "Change in
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Control" shall arise when any "Person" or "group" (as such terms are
defined in Sections 13(d) and 14(d) of the Exchange Act, as in effect on
the date hereof) is or becomes the "beneficial owner" (as defined in Rules
13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 35%
or more on a fully diluted basis of the then outstanding voting equity
interest of the Company (other than a "Person" or "group" that beneficially
owns 35% or more of such outstanding voting equity interests of the Company
on the date hereof) or (ii) the Board of Directors of the Company shall
cease to consist of a majority of the Company's board of directors on the
date hereof (or directors appointed by a majority of the board of directors
in effect immediately prior to such appointment);
(j) Indictment; Proceedings. The indictment or threatened indictment
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of the Company or any of its Subsidiaries or any executive officer of the
Company or any of its Subsidiaries under any criminal statute, or
commencement or threatened commencement of criminal or civil proceeding
against the Company or any of its Subsidiaries or any executive officer of
the Company or any of its Subsidiaries pursuant to which statute or
proceeding penalties or remedies sought or available include forfeiture of
any of the property of the Company or any of its Subsidiaries;
(k) The Purchase Agreement, Related Agreements, the June 2005 Purchase
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Agreement and the June 2005 Related Agreements. (i) An Event of Default
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shall occur under and as defined in the Purchase Agreement, any other
Related Agreement, the Securities Purchase Agreement dated as of June 30,
2005 by and between the Holder and the Company (as amended, modified and
supplemented from time to time, the "June 2005 Purchase Agreement") and/or
any other document, instrument or agreement entered into in connection with
the transactions contemplated by the June 2005 Purchase Agreement (as
amended, modified and supplemented from time to time, the "June 2005
Related Agreements") and/or hereby (ii) the Company or any of its
Subsidiaries shall breach any term or provision of the Purchase Agreement
or any other Related Agreement in any material respect and such breach, if
capable of cure, continues unremedied for a period of fifteen (15) days
after the occurrence thereof, (iii) the Company or any of its Subsidiaries
attempts to terminate, challenges the validity of, or its liability under,
the Purchase Agreement or any Related Agreement, (iv) any proceeding shall
be brought to challenge the validity, binding effect of the Purchase
Agreement or any Related Agreement or (v) the Purchase Agreement or any
Related Agreement ceases to be a valid, binding and enforceable obligation
of the Company or any of its Subsidiaries (to the extent such persons or
entities are a party thereto); or
2.2 Default Interest. Following the occurrence and during the continuance
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of an Event of Default, the Company shall pay additional interest on this Note
in an amount equal to two percent (2%) per month, and all outstanding
obligations under this Note, the Purchase Agreement and each other Related
Agreement, including unpaid interest, shall continue to accrue interest at such
additional interest rate from the date of such Event of Default until the date
such Event of Default is cured or waived.
2.3 Default Payment. Following the occurrence and during the continuance of
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an Event of Default, the Holder, at its option, may demand repayment in full of
all obligations and liabilities owing by Company to the Holder under this Note,
the Purchase Agreement and/or any other Related Agreement and/or may elect, in
addition to all rights and remedies of the Holder under the Purchase Agreement
and the other Related Agreements and all obligations and liabilities of the
Company under the Purchase Agreement and the other Related Agreements, to
require the Company to make a Default Payment ("DEFAULT PAYMENT"). The Default
Payment shall be 130% of the outstanding principal amount of the Note, plus
accrued but unpaid interest, all other fees then remaining unpaid, and all other
amounts payable hereunder. The Default Payment shall be applied first to any
fees due and payable to the Holder pursuant to this Note, the Purchase
Agreement, and/or the other Related Agreements, then to accrued and unpaid
interest due on this Note and then to the outstanding principal balance of this
Note. The Default Payment shall be due and payable immediately on the date that
the Holder has exercised its rights pursuant to this Section 2.3.
ARTICLE III
MISCELLANEOUS
3.1 Cumulative Remedies. The remedies under this Note shall be cumulative.
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3.2 Failure or Indulgence Not Waiver. No failure or delay on the part of
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the Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
3.3 Notices. Any notice herein required or permitted to be given shall be
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in writing and provided in accordance with the terms of the Purchase Agreement.
3.4 Amendment Provision. The term "Note" and all references thereto, as
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used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented, and any successor instrument as such successor instrument may be
amended or supplemented.
3.5 Assignability. This Note shall be binding upon the Company and its
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successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements of the Purchase Agreement. The Company may not assign any of its
obligations under this Note without the prior written consent of the Holder, any
such purported assignment without such consent being null and void.
3.6 Cost of Collection. In case of any Event of Default under this Note,
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the Company shall pay the Holder reasonable costs of collection, including
reasonable attorneys' fees.
3.7 Governing Law, Jurisdiction and Waiver of Jury Trial.
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(a) THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
(b) THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
THE COMPANY, ON THE ONE HAND, AND THE HOLDER, ON THE OTHER HAND, PERTAINING
TO THIS NOTE OR ANY OF THE OTHER RELATED AGREEMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATED TO THIS NOTE OR ANY OF THE RELATED AGREEMENTS;
PROVIDED, THAT THE COMPANY ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK,
STATE OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN THIS NOTE SHALL BE
DEEMED OR OPERATE TO PRECLUDE THE HOLDER FROM BRINGING SUIT OR TAKING OTHER
LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE HOLDER. THE COMPANY
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND THE COMPANY HEREBY WAIVES
ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS. THE COMPANY HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER
PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE
COMPANY AT THE ADDRESS SET FORTH IN THE PURCHASE AGREEMENT AND THAT SERVICE
SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY'S ACTUAL
RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE PREPAID.
(c) THE COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE
APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE COMPANY
HERETO WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT,
TORT, OR OTHERWISE BETWEEN THE HOLDER AND THE COMPANY ARISING OUT OF,
CONNECTED WITH, RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS NOTE, ANY OTHER RELATED AGREEMENT OR
THE TRANSACTIONS RELATED HERETO OR THERETO.
3.8 Severability. In the event that any provision of this Note is invalid
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or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision of this
Note.
3.9 Maximum Payments. Nothing contained herein shall be deemed to establish
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or require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest
required to be paid or other charges hereunder exceed the maximum rate permitted
by such law, any payments in excess of such maximum rate shall be credited
against amounts owed by the Company to the Holder and thus refunded to the
Company.
3.10 Security Interest and Guarantee. The Holder has been granted a
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security interest (i) in certain assets of the Company and its Subsidiaries as
more fully described in the Master Security Agreement and in the Mortgage, Deed
of Trust, Security Agreement, Financing Statement and Assignment of Production
and (ii) in the equity interests of the Companies' Subsidiaries pursuant to the
Stock Pledge Agreement which such security interests, in each case, have been
reaffirmed and ratified pursuant to the Reaffirmation Agreement. The obligations
of the Company under this Note are guaranteed by certain Subsidiaries of the
Company pursuant to the Subsidiary Guaranty which guaranty has been reaffirmed
pursuant to the Reaffirmation Agreement.
3.11 Construction. Each party acknowledges that its legal counsel
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participated in the preparation of this Note and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other
3.12 Amendment and Restatement. This Note amends and restates in its
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entirety (and is given in substitution for but not in satisfaction of) that
certain Secured Term Note dated as of September 19, 2005 executed by the Company
in favor of the Holder in the original principal amount of $9,500,000 (the
"PRIOR NOTE"). This Note does not effect a refinancing of all or any portion of
the obligations heretofore evidenced by the Prior Note, it being the intention
of the Company and the Holder to avoid effectuating a novation of such
obligations.
[Balance of page intentionally left blank; signature page follows]
IN WITNESS WHEREOF, the Company has caused this Amended and Restated
Secured Term Note to be signed in its name effective as of the 19th day of
September, 2005.
NEW CENTURY ENERGY CORP.
By: /s/ Xxxxxx X. XxXxxxxxx
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Name: Xxxxxx X. XxXxxxxxx
Title: President
WITNESS:
/s/ Xxxxx X. Xxxxxxx
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