Exhibit 10.1
EIGHTH AMENDMENT AGREEMENT
THIS EIGHTH AMENDMENT AGREEMENT (this "Amendment"), entered into on
December 5, 2006, by and between Promethean Industries, Inc., a Delaware
corporation ("Promethean"), New Century Energy Corp., a Colorado corporation
("NCEC"), and Laurus Master Fund, Ltd. ("Laurus"), and acknowledged by Century
Resources, Inc. ("CRI") and Gulf Coast Oil Corporation ("Gulf Coast").
BACKGROUND
NCEC and Laurus are parties to (a) a Securities Purchase Agreement dated as
of June 30, 2005 (as amended, restated, supplemented or otherwise modified from
time to time, the "June 2005 SPA"); (b) a Securities Purchase Agreement dated as
of September 19, 2005 (as amended, restated, supplemented or otherwise modified
from time to time, the "September 2005 SPA" together with the June 2005 SPA,
each a "Purchase Agreement" and collectively, the "Purchase Agreements")
pursuant to which Laurus provided NCEC with certain financial accommodations;
and (c) NCEC and Laurus are parties to a Registration Rights Agreement dated as
of June 30, 2005 (as amended, restated, supplemented or otherwise modified from
time to time, the "Registration Rights Agreement") pursuant to which NCEC, among
other things, has agreed to file a registration statement covering the
Registrable Securities (as therein defined).
In connection with the (a) June 2005 SPA, NCEC executed a Secured
Convertible Term Note dated as of June 30, 2005 in favor of Laurus in the
original principal amount of $15,000,000 (as amended, restated, supplemented or
otherwise modified from time to time), which Secured Convertible Term Note was
amended by NCEC's entry into the Amended and Restated Secured Convertible Term
Note on December 30, 2005, which was effective as of June 30, 2004 (the
"Convertible Note"), a Common Stock Purchase Warrant to purchase up to 7,258,065
shares of NCEC common stock, which has since been assigned to Promethean (the
"Warrant") and an Option to purchase up to 10,222,784 shares of NCEC common
stock, which a portion has been exercised and 6,547,784 shares remain to be
exercised, which remaining portion has been assigned to Promethean (the "June
Option") and (b) the September 2005 SPA, NCEC executed a Secured Term Note dated
as of September 19, 2005 in favor of Laurus in the original principal amount of
$9,500,000 (as amended, restated, supplemented or otherwise modified from time
to time).
In December 2005, in connection with the parties entry into a Third
Amendment Agreement, NCEC issued Laurus an Option to purchase up to 5,061,392
shares of NCEC common stock, which has since been assigned to Promethean (the
"December Option").
In April 2006, NCEC's wholly owned subsidiary, Gulf Coast, a Delaware
corporation, entered into a Securities Purchase Agreement with Laurus (the "Gulf
Coast Securities Purchase Agreement"), whereby Gulf Coast sold a $40,000,000
Secured Term Note to Laurus (the "Gulf Coast Note") and a Common Stock Purchase
Warrant (the "Gulf Coast Warrant"), and entered into various other Related
Agreements, as defined in the Gulf Coast Securities Purchase Agreement (the
"Gulf Coast Related Agreements"). NCEC guaranteed all of Gulf Coasts obligations
and liabilities to Laurus pursuant to a Guaranty (as amended, restated,
supplemented or otherwise modified from time to time, the "NCEC Guaranty").
NCEC and Laurus have agreed to amend the Registration Rights Agreement,
Warrant, June Option and December Option (collectively the "Options") 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. Amendment to Warrant. Subject to satisfaction of the conditions
----------------------
precedent set forth in Section 4 below, Section 2.2 of the Warrant is hereby
deleted in its entirety and the following new Section 2.2. inserted in lieu
thereof:
"2.2 (a) Exercise. Payment may be made either (i) in cash in
immediately available funds or by certified or official bank check payable
to the order of the Company equal to the applicable aggregate Exercise
Price, (ii) by delivery of this Warrant, or shares of Common Stock and/or
Common Stock receivable upon exercise of this Warrant in accordance with
the formula set forth in subsection (b) below, or (iii) by a combination of
any of the foregoing methods, for the number of Common Shares specified in
such Exercise Notice (as such exercise number shall be adjusted to reflect
any adjustment in the total number of shares of Common Stock issuable to
the Holder per the terms of this Warrant) and the Holder shall thereupon be
entitled to receive the number of duly authorized, validly issued,
fully-paid and non-assessable shares of Common Stock (or Other Securities)
determined as provided herein.
(b) Notwithstanding any provisions herein to the contrary, if the Fair
Market Value of one share of Common Stock is greater than the Exercise
Price (at the date of calculation as set forth below), in lieu of
exercising this Warrant for cash, the Holder may elect to receive shares
equal to the value (as determined below) of this Warrant (or the portion
thereof being exercised) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed Exercise Notice
in which event the Company shall issue to the Holder a number of shares of
Common Stock computed using the following formula:
X= Y(A-B)
-------
A
Where X = the number of shares o Common Stock to be
issued to the Holder
Y = the number of shares of Common Stock
purchasable under this Warrant or, if only a
portion of this Warrant is being exercised,
the portion of this Warrant being exercised
(at the date of such calculation)
A = the Fair Market Value of one share of
the Company's Common Stock (at the date of
such calculation)
B = the Exercise Price per share (as
adjusted to the date of such calculation)
Notwithstanding anything to the contrary set forth in Section 2.2(a)
above, (i) to the extent that a registration statement registering all of
the shares of Common Stock of the Company issuable upon exercise of this
Warrant has been declared effective by the Securities and Exchange
Commission and remains effective as of the date of the proposed exercise
set forth in an Exercise Notice, the Holder shall upon such proposed
exercise, make payment to the Company of each respective Exercise Price set
forth in such Exercise Notice in cash by wire transfer of immediately
available funds or by certified or official bank check only, and (ii) the
cashless exercise option set forth in Section 2.2(a)(ii) above shall only
be available to the Holder (subject to Section 2.2(b)(i)), after December
4, 2007."
2. Amendment to Options. Subject to satisfaction of the conditions
----------------------
precedent set forth in Section 4 below, Section 2.2 of the Options is hereby
deleted in its entirety and the following new Section 2.2. is inserted in lieu
thereof:
"2.2 (a) Exercise. Payment may be made either (i) in cash in
immediately available funds or by certified or official bank check payable
to the order of the Company equal to the applicable aggregate Exercise
Price, (ii) by delivery of this Option, or shares of Common Stock and/or
Common Stock receivable upon exercise of this Option in accordance with the
formula set forth in subsection (b) below, or (iii) by a combination of any
of the foregoing methods, for the number of Common Shares specified in such
Exercise Notice (as such exercise number shall be adjusted to reflect any
adjustment in the total number of shares of Common Stock issuable to the
Holder per the terms of this Warrant) and the Holder shall thereupon be
entitled to receive the number of duly authorized, validly issued,
fully-paid and non-assessable shares of Common Stock (or Other Securities)
determined as provided herein.
(b) Notwithstanding any provisions herein to the contrary, if the Fair
Market Value of one share of Common Stock is greater than the Exercise
Price (at the date of calculation as set forth below), in lieu of
exercising this Option for cash, the Holder may elect to receive shares
equal to the value (as determined below) of this Option (or the portion
thereof being exercised) by surrender of this Option at the principal
office of the Company together with the properly endorsed Exercise Notice
in which event the Company shall issue to the Holder a number of shares of
Common Stock computed using the following formula:
X= Y(A-B)
-------
A
Where X = the number of shares of Common Stock to
be issued to the Holder
Y = the number of shares of Common Stock
purchasable under this Option or, if only a
portion of this Option is being exercised,
the portion of this Option being exercised
(at the date of such calculation)
A = the Fair Market Value of one share of
the Company's Common Stock (at the date of
such calculation)
B = the Exercise Price per share (as
adjusted to the date of such calculation)
Notwithstanding anything to the contrary set forth in Section 2.2(a)
above, the cashless exercise option set forth in Section 2.2(a)(ii) above
shall only be available to the Holder, upon the earlier of (i) the date a
registration statement registering all of the shares of Common Stock
issuable in connection with the exercise of the Warrant issued as of June
30, 2005 by the Company to the Holder is declared effective with the
Securities and Exchange Commission, and (ii) December 4, 2007.
3. Amendment to Registration Rights Agreement. NCEC hereby agrees to, and
-------------------------------------------
Promethean and Laurus hereby acknowledge that NCEC will only register the shares
of Common Stock issuable to Laurus in connection with the exercise of the
Warrant on the Registration Statement (as defined in the SPA and as revised to
the extent necessary to reflect Promethean as an additional selling
shareholder), and each party hereto agrees that all provisions of the
Registration Rights Agreement and Related Agreements describing Registrable
Securities (as defined in the Registration Rights Agreement), shall refer only
to the shares of common stock issuable in connection with the exercise of the
Warrant, and NCEC shall not be responsible for registering any of the other
shares convertible in connection with the Note, or issuable in connection with
the exercise of the Options, including but not limited to the 3,675,000 shares
of common stock previously issued to Laurus in connection with a partial
exercise of the June Option.
4. Conditions of Effectiveness. This Amendment shall become effective upon
----------------------------
due execution by each of the parties hereto and upon receipt by Laurus of a copy
of this Amendment duly executed by NCEC and consented and agreed to by CRI and
Gulf Coast (together with CRI and NCEC, each a "Company" and collectively,
"Companies").
5. Representations and Warranties. The Companies hereby represent and
--------------------------------
warrant as follows:
(a) This Amendment, the Purchase Agreements and the Registration
Rights Agreement, as amended hereby, constitute legal, valid and binding
obligations of the Companies party thereto and are enforceable against such
Companies in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, each Company hereby
reaffirms all covenants, representations and warranties made in each
Purchase Agreement, the Related Agreements (as therein defined), the Gulf
Coast Related Agreements and the Registration Rights Agreement, 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
under any document, instrument or agreement by and between any Company,
Promethean, and/or Laurus after giving effect to this Amendment.
(d) No Company has any defense, counterclaim or offset with respect to
any Purchase Agreement, the Registration Rights Agreement or any other
Related Agreement (as defined in each Purchase Agreement).
6. Effect on the Securities.
---------------------------
(a) Upon the effectiveness of Sections 1 and 2 hereof, each reference
in the Securities, the Purchase Agreement, the Registration Agreement and
any other Related Agreement to "Warrant," "Option," "hereunder," "hereof,"
"herein" or words of like import shall mean and be a reference to such
Security, as amended hereby.
(b) Upon the effectiveness of Section 3 hereof, each reference in the
Registration Rights Agreement, Securities, Purchase Agreement or Related
Agreements to "this Agreement," "hereunder," "hereof," "herein" or words of
like import shall mean and be a reference to the Registration Rights
Agreement, as applicable, as amended hereby and the Gulf Coast Related
Agreements and all other documents, instruments and agreements executed
and/or delivered in connection therewith, shall remain in full force and
effect, and are hereby ratified and confirmed.
(c) 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.
(d) 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.
7. Headings. Section headings in this Amendment are included herein for
--------
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
8. Disclosure. NCEC understands that it has an affirmative obligation to
----------
make prompt public disclosure of material agreements and material amendments to
such agreements. It is NCEC's determination that this Amendment and the terms
and provisions of this Amendment, (collectively, the "Information") are
material. NCEC hereby agrees to file a Form 8-K disclosing the Amendment and the
terms and provisions of this Amendment within four (4) business days of the
execution of this Amendment.
9. This Amendment shall be binding upon the parties hereto and their
respective successors and permitted assigns and shall inure to the benefit of
and be enforceable by each of the parties hereto and their respective successors
and permitted assigns. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
10. Counterparts; Facsimile. This Amendment may be executed by the parties
------------------------
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 Eighth Amendment Agreement has been duly executed as of
the day and year first written above.
NEW CENTURY ENERGY CORP.
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: President
LAURUS MASTER FUND, LTD.
By: /s/ Xxxxxx Grin
-----------------------------
Name: Xxxxxx Grin
Title: Director
PROMETHEAN INDUSTRIES, INC.
By: /s/ Xxxxxx Grin
-----------------------------
Name: Xxxxxx Grin
Title: President
CONSENTED AND AGREED TO:
CENTURY RESOURCES, INC.
By: /s/ Xxxxxx X. XxXxxxxxx
-----------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: President
GULF COAST OIL CORPORATION
By: /s/ Xxxxxx X. XxXxxxxxx
-----------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: President
