Exhibit 10.10
MASTER SECURITY AGREEMENT
To: Laurus Master Fund, Ltd.
c/o M&C Corporate Services Limited
X.X. Xxx 000 XX
Xxxxxx House
South Church Street
Xxxxxx Town
Grand Cayman, Cayman Islands
Date: April 26, 2006
To Whom It May Concern:
1. To secure the payment of all Obligations (as hereafter defined), Gulf
Coast Oil Corporation, a Delaware corporation (the "Company"), each of the other
undersigned parties (other than Laurus Master Fund, Ltd., "Laurus")) and each
other entity that is required to enter into this Master Security Agreement (each
an "Assignor" and, collectively, the "Assignors") hereby assigns and grants to
Laurus a continuing security interest in all of the following property now owned
or at any time hereafter acquired by such Assignor, or in which such Assignor
now has or at any time in the future may acquire any right, title or interest:
(a) all cash, cash equivalents, accounts, accounts receivable, deposit
accounts (including, without limitation, (x) the Restricted Accounts (the
"Restricted Accounts") maintained at North Fork Bank (Account Name: Gulf
Coast Oil Corporation, Account Number: 270-0000000) referred to in the
Restricted Account Agreement) and (y) Lockbox Deposit Accounts), inventory,
equipment, goods, fixtures, documents, instruments (including, without
limitation, promissory notes), contract rights, general intangibles
(including, without limitation, payment intangibles and an absolute right
to license on terms no less favorable than those currently in effect among
such Assignor's affiliates), chattel paper, supporting obligations,
investment property (including, without limitation, all equity interests
owned by any Assignor), letter-of-credit rights, all commercial tort claims
set forth on Schedule A, trademarks, trademark applications, tradestyles,
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patents, patent applications, copyrights, copyright applications and other
intellectual property in which such Assignor now has or hereafter may
acquire any right, title or interest, all proceeds and products thereof
(including, without limitation, proceeds of insurance) and all additions,
accessions and substitutions thereto or therefor.
(b) All of those certain Oil and Gas Leases and Lands (all such Oil
and Gas Leases and Lands being herein called the "Subject Interests," as
hereinafter further defined) which are described in Exhibit A and/or to
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which reference may be made in Exhibit A and/or which are covered by any of
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the leases described on Exhibit A hereto;
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(c) All rights, titles, interests and estates now owned or hereafter
acquired by such Assignor in and to (i) any and all properties now or
hereafter pooled or unitized with any of the Subject Interests, and (ii)
all presently existing or future operating agreements and unitization,
communitization and pooling agreements and the units operated thereby to
the extent the same relate to all or any part of the Subject Interests,
including, without limitation, all units formed under or pursuant to any
applicable laws (the rights, titles, interests and estates described in
this clause (b) also being included within the term "Subject Interests" as
used herein);
(d) All presently existing and future agreements entered into between
such Assignor and any third party that provide for the acquisition by such
Assignor of any interest in any of the properties or interests specifically
described in Exhibit A or which relate to any of the properties and
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interests specifically described in Exhibit A;
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(e) The Hydrocarbons (including inventory) which are in, under, upon,
produced or to be produced from or attributable to the Lands;
(f) The Accounts and Contract Rights;
(g) The Operating Equipment;
(h) The Well Data;
(i) The rights and security interests of such Assignor held by such
Assignor to secure the obligation of the first purchaser to pay the
purchase price of the Hydrocarbons;
(j) All surface leases, rights-of-way, franchises, easements,
servitudes, licenses, privileges, tenements, hereditaments and
appurtenances now existing or in the future obtained in connection with any
of the aforesaid, and all other items of value and incident thereto which
such Assignor may, at any time, have or be entitled; and
(k) All and any different and additional rights of any nature, of
value or convenience in the enjoyment, development, operation or
production, in any way, of any property or interest included in any of the
foregoing clauses, and in all revenues, income, rents, issues, profits and
other benefits arising therefrom or from any contract now in existence or
hereafter entered into pertaining thereto, and in all rights and claims
accrued or to accrue for the removal by anyone of Hydrocarbons from, or
other act causing damage to, any of such properties or interests.
All the aforesaid properties, rights and interests, together with any and
all substitutions, replacements, corrections or amendments thereto, or renewals,
extensions or ratifications thereof, or of any instrument relating thereto, and
together with any additions thereto which may be subjected to Laurus' Lien,
being hereinafter called the "Collateral".
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As used herein, the following terms shall have the following meanings:
"Accounts and Contract Rights" shall mean all accounts (including accounts
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in the form of joint interest xxxxxxxx under applicable operating agreements),
contract rights and general intangibles of any Assignor now or hereafter
existing, or hereafter acquired by, or on behalf of, any Assignor, or any
Assignor's successors in interest, relating to or arising from the ownership,
operation and development of the Collateral and to the production, processing,
treating, sale, purchase, exchange or transportation of Hydrocarbons (defined
below) produced or to be produced from or attributable to the Collateral or any
units or pooled interest units in which all or a portion of the Collateral forms
a part, together with all accounts and proceeds accruing to any Assignor
attributable to the sale of Hydrocarbons produced from the Collateral or any
units or pooled interest units in which all or a portion of the Collateral forms
a part.
"Hydrocarbons" shall mean oil, gas, coalbed methane gas, casinghead gas,
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drip gasolines, natural gasoline, condensate, distillate, as-extracted
collateral and all other liquid or gaseous hydrocarbons produced or to be
produced in conjunction therewith, and all products, byproducts and all other
substances derived therefrom or the processing thereof, and all other minerals
and substances, including, but not limited to, sulphur, lignite, coal, uranium,
thorium, iron, geothermal steam, water, carbon dioxide, helium and any and all
other minerals, ores, or substances of value and the products and proceeds
therefrom, including, without limitation, all gas resulting from the in-situ
combustion of coal or lignite.
"Lands" shall mean the lands described in Exhibit A and shall include any
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lands, the description of which is contained in Exhibit A or incorporated in
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Exhibit A by reference to another instrument or document, including, without
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limitation, all lands described in the Oil and Gas Leases listed on Exhibit A
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hereto, and shall also include any lands now or hereafter unitized, pooled,
spaced or otherwise combined, whether by statute, order, agreement, declaration
or otherwise, with lands the description of which is contained in Exhibit A or
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is incorporated in ExhibitA by reference.
"Lien" shall mean any mortgage, deed of trust, collateral assignment, lien,
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pledge, charge, security interest or other encumbrance.
"Oil and Gas Leases" shall mean oil, gas and mineral leases, oil and gas
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leases, oil leases, gas leases, other mineral leases, subleases, top leases, any
rights resulting in an ownership interest in Hydrocarbons and all operating
rights relating to any of the foregoing (whether operated by virtue of such
leases, or assignments or applicable operating agreements), and all other
interests pertaining to any of the foregoing, including, without limitation, all
royalty and overriding royalty interests, production payments and net profit
interests, production payments and net profit interests, mineral fee interests,
and all reversionary, remainder, carried and contingent interests relating to
any of the foregoing and all other rights therein which are described and/or to
which reference may be made on Exhibit A.
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"Operating Equipment" shall mean all Personal Property and fixtures affixed
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or situated upon all or any part of the Collateral, including, without
limitation, all surface or subsurface machinery, equipment, facilities or other
property of whatsoever kind or nature now or hereafter located on any of the
Lands which are useful for the production, treatment, storage or transportation
of oil or gas, including, but not by way of limitation, all oil xxxxx, gas
xxxxx, water xxxxx, injection xxxxx, casing, tubing, rods, pumping units and
engines, Christmas trees, derricks, separators, gun barrels, flow lines, tanks,
gas systems (for gathering, treating and compression), water systems (for
treating, disposal and injection), power plants, poles, lines, transformers,
starters and controllers, machine shops, tools, storage yards and equipment
stored therein, buildings and camps, telegraph, telephone and other
communication systems, roads, loading racks and shipping facilities.
"Personal Property" shall mean that portion of the Collateral that is
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personal property.
"Well Data" shall mean all logs, drilling reports, division orders,
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transfer orders, operating agreements, contracts and other agreements,
abstracts, title opinions, files, records, seismic data, memoranda and other
information in the possession or control of any Assignor or to which any
Assignor has access relating to the Lands and/or any xxxxx located thereon.
2. Except as otherwise defined herein, all capitalized terms used herein
shall have the meanings provided such terms in the Securities Purchase Agreement
referred to below. All items of Collateral which are defined in the UCC shall
have the meanings set forth in the UCC. For purposes hereof, the term "UCC"
means the Uniform Commercial Code as the same may, from time to time, be in
effect in the State of New York; provided, that in the event that, by reason of
mandatory provisions of law, any or all of the attachment, perfection or
priority of, or remedies with respect to, Laurus' security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions of this Master Agreement relating to such attachment, perfection,
priority or remedies and for purposes of definitions related to such provisions;
provided further, that to the extent that the UCC is used to define any term
herein and such term is defined differently in different Articles or Divisions
of the UCC, the definition of such term contained in Article or Division 9 shall
govern.
3. The term "Obligations" as used herein shall mean and include all debts,
liabilities and obligations owing by each Assignor to Laurus arising under, out
of, or in connection with: (i) that certain Securities Purchase Agreement dated
as of the date hereof by and between the Company and Laurus (the "Securities
Purchase Agreement"), (ii) the Related Agreements referred to in the Securities
Purchase Agreement, (iii) each guaranty agreement made from time to time by each
Assignor in favor of Laurus, (iv) the Securities Purchase Agreement dated as of
June 30, 2005 by and between New Century Energy Corp. and Laurus (the "June 2005
Securities Purchase Agreement"), (v) each Related Agreement referred to in the
June 2005 Securities Purchase Agreement, (vi) the Securities Purchase Agreement
dated as of September 19, 2005 by and between the New Century Energy Corp. and
Laurus (the "September 2005 Securities Purchase Agreement") and (vii) each
Related Agreement referred to in the September 2005 Securities Purchase
Agreement (each, a "September 2005 Related Agreement") (each of the foregoing
documents, instruments and agreements, as each may be amended, modified,
restated or supplemented from time to time, collectively, the "Documents"), and
in connection with any documents, instruments or agreements relating to or
executed in connection with the Documents or any documents, instruments or
agreements referred to therein or otherwise, and in connection with any other
indebtedness, obligations or liabilities of each such Assignor to Laurus,
whether now existing or hereafter arising, direct or indirect, liquidated or
unliquidated, absolute or contingent, due or not due and whether under, pursuant
to or evidenced by a note, agreement, guaranty, instrument or otherwise,
including, without limitation, obligations and indebtedness of each Assignor for
post-petition interest, fees, costs and charges that accrue after the
commencement of any case by or against such Assignor under any bankruptcy,
insolvency, reorganization or like proceeding (collectively, the "Debtor Relief
Laws") in each case, irrespective of the genuineness, validity, regularity or
enforceability of such Obligations, or of any instrument evidencing any of the
Obligations or of any collateral therefor or of the existence or extent of such
collateral, and irrespective of the allowability, allowance or disallowance of
any or all of the Obligations in any case commenced by or against any Assignor
under any Debtor Relief Law.
4. Each Assignor hereby jointly and severally represents, warrants and
covenants to Laurus that:
(a) it is a corporation, partnership or limited liability company, as
the case may be, validly existing, in good standing and formed under the
respective laws of its jurisdiction of formation set forth on Schedule B,
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and each Assignor will provide Laurus thirty (30) days' prior written
notice of any change in any of its respective jurisdiction of formation;
(b) its legal name is as set forth in its Certificate of Incorporation
or other organizational document (as applicable) as amended through the
date hereof and as set forth on Schedule B, and it will provide Laurus
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thirty (30) days' prior written notice of any change in its legal name;
(c) its organizational identification number (if applicable) is as set
forth on Schedule B hereto, and it will provide Laurus thirty (30) days'
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prior written notice of any change in its organizational identification
number;
(d) it is the lawful owner of its Collateral and it has the sole right
to grant a security interest therein and will defend the Collateral against
all claims and demands of all persons and entities;
(e) it will keep its Collateral free and clear of all attachments,
levies, taxes, liens, security interests and encumbrances of every kind and
nature ("Encumbrances"), except (i) Encumbrances securing the Obligations
and (ii) Encumbrances securing indebtedness of each such Assignor not to
exceed $50,000 in the aggregate for all such Assignors so long as all such
Encumbrances are removed or otherwise released to Laurus' satisfaction
within ten (10) days of the creation thereof;
(f) it will, at its and the other Assignors' joint and several cost
and expense keep the Collateral in good state of repair (ordinary wear and
tear excepted) and will not waste or destroy the same or any part thereof
other than ordinary course discarding of items no longer used or useful in
its or such other Assignors' business;
(g) it will not, without Laurus' prior written consent, sell,
exchange, lease or otherwise dispose of any Collateral, whether by sale,
lease or otherwise, except for the sale of inventory in the ordinary course
of business and for the disposition or transfer in the ordinary course of
business during any fiscal year of obsolete and worn-out equipment or
equipment no longer necessary for its ongoing needs, having an aggregate
fair market value of not more than $25,000 and only to the extent that:
(i) the proceeds of each such disposition are used to acquire
replacement Collateral which is subject to Laurus' first priority
perfected security interest, or are used to repay the Obligations or
to pay general corporate expenses; or
(ii) following the occurrence of an Event of Default which
continues to exist the proceeds of which are remitted to Laurus to be
held as cash collateral for the Obligations;
(h) it will insure or cause the Collateral to be insured in Laurus'
name (as additional insured and loss payee) against loss or damage by fire,
theft, burglary, pilferage, loss in transit and such other hazards as
Laurus shall specify in amounts and under policies by insurers acceptable
to Laurus and all premiums thereon shall be paid by such Assignor and the
policies delivered to Laurus. If any such Assignor fails to do so, Laurus
may procure such insurance and the cost thereof shall be promptly
reimbursed by the Assignors, jointly and severally, and shall constitute
Obligations;
(i) it will at all reasonable times allow Laurus or Laurus'
representatives free access to and the right of inspection of the
Collateral;
(j) such Assignor (jointly and severally with each other Assignor)
hereby indemnifies and saves Laurus harmless from all loss, costs, damage,
liability and/or expense, including reasonable attorneys' fees, that Laurus
may sustain or incur to enforce payment, performance or fulfillment of any
of the Obligations and/or in the enforcement of this Master Security
Agreement or in the prosecution or defense of any action or proceeding
either against Laurus or any Assignor concerning any matter growing out of
or in connection with this Master Security Agreement, and/or any of the
Obligations and/or any of the Collateral except to the extent caused by
Laurus' own gross negligence or willful misconduct (as determined by a
court of competent jurisdiction in a final and nonappealable decision) In
addition, each Assignor hereby indemnifies and saves Laurus harmless from
any claim, cost, expense, liability, obligation, loss or damage (including
reasonable legal fees) of any nature, incurred by or imposed upon Laurus
which results, arises out of or is based upon: (i) any misrepresentation by
any Assignor or breach of any warranty by any Assignor in this Agreement or
any Document or any agreement between any Assignor and Laurus relating
hereto or thereto; or (ii) any breach or default in performance by the
Assignors of any covenant or undertaking to be performed by the Assignors
hereunder or under any Document, or any other agreement entered into by any
Assignor and Laurus relating hereto or thereto or (iii) (a) the violation
of any local, state or federal law, rule or regulation pertaining to
environmental regulation, contamination or clean-up (collectively,
"Environmental Laws"), including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C.
Sec.9601 et seq. and 40 CFR Sec.302.1 et seq.), the Resource Conservation
and Recovery Act of 1976 (42 U.S.C. Sec.6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. Sec.1251 et seq., and 40 CFR Sec.116.1 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Sec.1801 et
seq.) and the regulations promulgated pursuant to said laws, all as amended
and relating to or affecting any Assignor and/or any Assignor's properties,
whether or not caused by or within the control of Laurus and/or (b) the
presence, release or threat of release of any hazardous, toxic or harmful
substances, wastes, materials, pollutants or contaminants (including,
without limitation, asbestos, polychlorinated biphenyls, petroleum
products, flammable explosives, radioactive materials, infectious
substances or raw materials which include hazardous constituents) or any
other substances or raw materials which are included under or regulated by
Environmental Laws on, in, under or affecting all or any portion of any
property of any Assignor or any surrounding areas, regardless of whether or
not caused by or within the control of Laurus;
(k) it will promptly, and in any event within five (5) business days
after the same is acquired by it, notify Laurus of any commercial tort
claim acquired by it and unless otherwise consented to in writing by
Laurus, it shall enter into a supplement to this Master Security Agreement
granting to Laurus a security interest in such commercial tort claim; and
(l) On or prior to the Closing Date, each Assignor will (x)
irrevocably direct all of its present and future Account Debtors (as
defined below) and other persons or entities obligated to make payments
constituting Collateral to make such payments directly to the lockboxes
maintained by such Assignor (the "Lockboxes") with North Fork Bank or such
other financial institution accepted by Laurus in writing as may be
selected by the Company (the "Lockbox Bank") (each such direction pursuant
to this clause (x), a "Direction Notice") and (y) provide Laurus with
copies of each Direction Notice, each of which shall be agreed to and
acknowledged by the respective Account Debtor. Upon receipt of such
payments, the Lockbox Bank shall agree to deposit the proceeds of such
payments in that certain deposit account maintained at the Lockbox Bank and
evidenced by the account name of Gulf Coast Oil Corporation and the account
number of 270-4057658, or such other deposit account accepted by Laurus in
writing (the "Lockbox Deposit Account"). On or prior to the Closing Date,
the Company shall and shall cause the Lockbox Bank to enter into all such
documentation acceptable to Laurus pursuant to which, among other things,
the Lockbox Bank agrees to, following notification by Laurus (which
notification Laurus shall only give following the occurrence and during the
continuance of an Event of Default), comply only with the instructions or
other directions of Laurus concerning the Lockbox and the Lockbox Deposit
Account. All of each Assignor's invoices, account statements and other
written or oral communications directing, instructing, demanding or
requesting payment of any Account (as hereinafter defined) of any such
Assignor or any other amount constituting Collateral shall conspicuously
direct that all payments be made to the Lockbox or such other address as
Laurus may direct in writing. If, notwithstanding the instructions to
Account Debtors, any Assignor receives any payments, such Assignor shall
immediately remit such payments to the Lockbox Deposit Account in their
original form with all necessary endorsements. Until so remitted, the
Assignors shall hold all such payments in trust for and as the property of
Laurus and shall not commingle such payments with any of its other funds or
property. For the purpose of this Master Security Agreement, (x) "Accounts"
shall mean all "accounts", as such term is defined in the UCC as in effect
in the State of New York on the date hereof, now owned or hereafter
acquired by any Assignor and (y) "Account Debtor" shall mean any person or
entity who is or may be obligated with respect to, or on account of, an
Account.
5. The occurrence of any of the following events or conditions shall
constitute an "Event of Default" under this Master Security Agreement:
(a) any covenant or any other term or condition of this Master
Security Agreement is breached in any material respect and such breach, if
subject to cure, shall continue for a period of fifteen (15) days after the
occurrence thereof;
(b) any representation or warranty, or statement made or furnished to
Laurus under this Master Security Agreement by any Assignor or on any
Assignor's behalf should prove to any time be false or misleading in any
material respect on the date as of which made or deemed made;
(c) the loss, theft, substantial damage, destruction, sale or
encumbrance to or of any of the Collateral or the making of any levy,
seizure or attachment thereof or thereon except to the extent:
(i) such loss is covered by insurance proceeds which are used to
replace the item or repay Laurus; or
(ii) said levy, seizure or attachment does not secure
indebtedness in excess of $100,000 in the aggregate for all Assignors
and such levy, seizure or attachment has been removed or otherwise
released within ten (10) days of the creation or the assertion
thereof;
(d) any Assignor shall become insolvent, cease operations, dissolve,
terminate its business existence, make an assignment for the benefit of
creditors, suffer the appointment of a receiver, trustee, liquidator or
custodian of all or any part of any Assignor's property;
(e) any proceedings under any bankruptcy or insolvency law shall be
commenced by or against any Assignor and if commenced against any Assignor
shall not be dismissed within thirty (30) days;
(f) any Assignor shall repudiate, purport to revoke or fail to perform
any of its obligations under any Note (after passage of applicable cure
period, if any) or any document, instrument or agreement executed in
connection therewith; or
(g) an Event of Default (or similar term) shall have occurred under
and as defined in any Document or any document, instrument or agreement
entered into in connection therewith.
6. Upon the occurrence of any Event of Default and at any time thereafter,
Laurus may declare all Obligations immediately due and payable and Laurus shall
have the remedies of a secured party provided in the UCC as in effect in the
State of New York, this Agreement and other applicable law. Upon the occurrence
of any Event of Default and at any time thereafter, Laurus will have the right
to receive one-hundred percent of all accounts receivable of each Company,
whether attributable to oil, gas, other hydrocarbon production or otherwise,
take possession of the Collateral and to maintain such possession on any
Assignor's premises or to remove the Collateral or any part thereof to such
other premises as Laurus may desire. Upon Laurus' request, each Assignor shall
assemble or cause the Collateral to be assembled and make it available to Laurus
at a place designated by Laurus. If any notification of intended disposition of
any Collateral is required by law, such notification, if mailed, shall be deemed
properly and reasonably given if mailed at least ten (10) days before such
disposition, postage prepaid, addressed to the applicable Assignor either at
such Assignor's address shown herein or at any address appearing on Laurus'
records for such Assignor. Any proceeds of any disposition of any of the
Collateral shall be applied by Laurus to the payment of all expenses in
connection with the sale of the Collateral, including reasonable attorneys' fees
and other legal expenses and disbursements and the reasonable expenses of
retaking, holding, preparing for sale, selling, and the like, and any balance of
such proceeds may be applied by Laurus toward the payment of the Obligations in
such order of application as Laurus may elect, and each Assignor shall be liable
for any deficiency. For the avoidance of doubt, following the occurrence and
during the continuance of an Event of Default, Laurus shall have the immediate
right to withdraw any and all monies contained in the Restricted Account or any
other deposit accounts in the name of any Assignor and controlled by Laurus and
apply same to the repayment of the Obligations (in such order of application as
Laurus may elect). The parties hereto each hereby agree that the exercise by any
party hereto of any right granted to it or the exercise by any party hereto of
any remedy available to it (including, without limitation, the issuance of a
notice of redemption, a borrowing request and/or a notice of default, in each
case, hereunder, under the Documents which has been publicly filed with the SEC
shall not constitute confidential information and no party shall have any duty
to the other party to maintain such information as confidential.
7. If any Assignor defaults in the performance or fulfillment of any of the
terms, conditions, promises, covenants, provisions or warranties on such
Assignor's part to be performed or fulfilled under or pursuant to this Master
Security Agreement, Laurus may, at its option without waiving its right to
enforce this Master Security Agreement according to its terms, immediately or at
any time thereafter and without notice to any Assignor, perform or fulfill the
same or cause the performance or fulfillment of the same for each Assignor's
joint and several account and at each Assignor's joint and several cost and
expense, and the cost and expense thereof (including reasonable attorneys' fees)
shall be added to the Obligations and shall be payable on demand with interest
thereon at the highest rate permitted by law, or, at Laurus' option, debited by
Laurus from the Restricted Account or any other deposit accounts in the name of
any Assignor and controlled by Laurus.
8. Each Assignor appoints Laurus, any of Laurus' officers, employees or any
other person or entity whom Laurus may designate as such Assignor's attorney,
with power to execute such documents in each such Assignor's behalf and to
supply any omitted information and correct patent errors in any documents
executed by any Assignor or on any Assignor's behalf; to file financing
statements against such Assignor covering the Collateral (and, in connection
with the filing of any such financing statements, describe the Collateral as
"all assets and all personal property, whether now owned and/or hereafter
acquired" (or any substantially similar variation thereof)); to sign such
Assignor's name on public records; and to do all other things Laurus deem
necessary to carry out this Master Security Agreement. Each Assignor hereby
ratifies and approves all acts of the attorney and neither Laurus nor the
attorney will be liable for any acts of commission or omission, nor for any
error of judgment or mistake of fact or law other than gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision). This power being coupled with an interest,
is irrevocable so long as any of the Obligations remain unpaid.
9. No delay or failure on Laurus' part in exercising any right, privilege
or option hereunder shall operate as a waiver of such or of any other right,
privilege, remedy or option, and no waiver whatever shall be valid unless in
writing, signed by Laurus and then only to the extent therein set forth, and no
waiver by Laurus of any default shall operate as a waiver of any other default
or of the same default on a future occasion. Laurus' books and records
containing entries with respect to the Obligations shall be admissible in
evidence in any action or proceeding, shall be binding upon each Assignor for
the purpose of establishing the items therein set forth and shall constitute
prima facie proof thereof. Laurus shall have the right to enforce any one or
more of the remedies available to Laurus, successively, alternately or
concurrently. Each Assignor agrees to join with Laurus in executing such
documents or other instruments to the extent required by the UCC in form
satisfactory to Laurus and in executing such other documents or instruments as
may be required or deemed necessary by Laurus for purposes of affecting or
continuing Laurus' security interest in the Collateral.
10. The Assignors shall jointly and severally pay all of Laurus'
out-of-pocket costs and expenses, including reasonable fees and disbursements of
in-house or outside counsel and appraisers, in connection with the preparation,
execution and delivery of the Documents, and in connection with the prosecution
or defense of any action, contest, dispute, suit or proceeding concerning any
matter in any way arising out of, related to or connected with any Document. The
Assignors shall also jointly and severally pay all of Laurus' reasonable fees,
charges, out-of-pocket costs and expenses, including fees and disbursements of
counsel and appraisers, in connection with (a) the preparation, execution and
delivery of any waiver, any amendment thereto or consent proposed or executed in
connection with the transactions contemplated by the Documents, (b) Laurus'
obtaining performance of the Obligations under the Documents, including, but not
limited to the enforcement or defense of Laurus' security interests, assignments
of rights and liens hereunder as valid perfected security interests, (c) any
attempt to inspect, verify, protect, collect, sell, liquidate or otherwise
dispose of any Collateral, (d) any appraisals or re appraisals of any property
(real or personal) pledged to Laurus by any Assignor as Collateral for, or any
other Person as security for, the Obligations hereunder and (e) any
consultations in connection with any of the foregoing. The Assignors shall also
jointly and severally pay Laurus' customary bank charges for all bank services
(including wire transfers) performed or caused to be performed by Laurus for any
Assignor at any Assignor's request or in connection with any Assignor's loan
account (if any) with Laurus. All such costs and expenses together with all
filing, recording and search fees, taxes and interest payable by the Assignors
to Laurus shall be payable on demand and shall be secured by the Collateral. If
any tax by any nation or government, any state or other political subdivision
thereof, and any agency, department or other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government (each, a "Governmental Authority") is or may be imposed on or as a
result of any transaction between any Assignor, on the one hand, and Laurus on
the other hand, which Laurus is or may be required to withhold or pay, the
Assignors hereby jointly and severally indemnify and hold Laurus harmless in
respect of such taxes, and the Assignors will repay to Laurus the amount of any
such taxes which shall be charged to the Assignors' account; and until the
Assignors shall furnish Laurus with indemnity therefor (or supply Laurus with
evidence satisfactory to it that due provision for the payment thereof has been
made), Laurus may hold without interest any balance standing to each Assignor's
credit (if any) and Laurus shall retain its liens in any and all Collateral.
11. THIS MASTER SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS. All of the rights, remedies, options, privileges and
elections given to Laurus hereunder shall inure to the benefit of Laurus'
successors and assigns. The term "Laurus" as herein used shall include Laurus,
any parent of Laurus', any of Laurus' subsidiaries and any co-subsidiaries of
Laurus' parent, whether now existing or hereafter created or acquired, and all
of the terms, conditions, promises, covenants, provisions and warranties of this
Agreement shall inure to the benefit of each of the foregoing, and shall bind
the representatives, successors and assigns of each Assignor.
12. Each Assignor hereby consents and agrees that the state of 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 Assignor, on
the one hand, and Laurus, on the other hand, pertaining to this Master Security
Agreement or to any matter arising out of or related to this Master Security
Agreement, provided, that Laurus and each Assignor 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
Master Security Agreement shall be deemed or operate to preclude Laurus 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 Laurus.
Each Assignor expressly submits and consents in advance to such jurisdiction in
any action or suit commenced in any such court, and each Assignor hereby waives
any objection which it may have based upon lack of personal jurisdiction,
improper venue or forum non conveniens. Each Assignor hereby waives personal
----- --- ----------
service of the summons, complaint and other process issues 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 such assignor at the address
set forth on the signature lines hereto and that service so made shall be deemed
completed upon the earlier of such Assignor's actual receipt thereof or three
(3) days after deposit in the U.S. mails, proper postage prepaid.
The parties desire that their 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 parties hereto waive all rights to
trial by jury in any action, suite, or proceeding brought to resolve any
dispute, whether arising in contract, tort, or otherwise between Laurus, and/or
any Assignor arising out of, connected with, related or incidental to the
relationship established between them in connection with this Master Security
Agreement or the transactions related hereto.
13. It is understood and agreed that any person or entity that desires to
become an Assignor hereunder, or is required to execute a counterpart of this
Master Security Agreement after the date hereof pursuant to the requirements of
any Document, shall become an Assignor hereunder by (x) executing a Joinder
Agreement in form and substance satisfactory to Laurus, (y) delivering
supplements to such exhibits and annexes to such Documents as Laurus shall
reasonably request and (z) taking all actions as specified in this Master
Security Agreement as would have been taken by such Assignor had it been an
original party to this Master Security Agreement, in each case with all
documents required above to be delivered to Laurus and with all documents and
actions required above to be taken to the reasonable satisfaction of Laurus.
14. All notices from Laurus to any Assignor shall be sufficiently given if
mailed or delivered to such Assignor's address set forth below.
15. This Master Security Agreement may be executed by facsimile signatures
and in any number of counterparts, each of which shall be an original, but all
of which together shall constitute one agreement.
Very truly yours,
GULF COAST OIL CORPORATION
By: /s/ Xxxxxx X. XxXxxxxxx
-------------------------------------
Name: Xxxxxx X. XxXxxxxxx
-----------------------------------
Title: President
----------------------------------
Address: 0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
NEW CENTURY ENERGY CORP.
By: /s/ Xxxxxx X. XxXxxxxxx
-------------------------------------
Name: Xxxxxx X. XxXxxxxxx
-----------------------------------
Title: President
----------------------------------
Address: 0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
CENTURY RESOURCES, INC.
By: /s/ Xxxxxx X. XxXxxxxxx
-------------------------------------
Name: Xxxxxx X. XxXxxxxxx
-----------------------------------
Title: President
----------------------------------
Address: 0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
ACKNOWLEDGED:
LAURUS MASTER FUND, LTD.
By: /s/ Xxxxxx Grin
-------------------------------------
Name: Xxxxxx Grin
-----------------------------------
Title: Director
----------------------------------
Address: c/o Laurus Capital Management LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
SCHEDULEA
---------
COMMERCIAL TORT CLAIMS
----------------------
None
SCHEDULE B
----------
Jurisdiction of Organization Identification
Entity Formation Number
-------------------------- ---------------- --------------------------
Gulf Coast Oil Corporation Delaware 4143411
New Century Energy Corp. Colorado 20031402340
Century Resources, Inc. Delaware 2029277
