EXHIBIT
10.4


 


NON-RECOURSE
ASSIGNMENT


 


YA
Global Investments, L.P., a Cayman Islands exempt limited partnership (“YA Global”), hereby sells, assigns,
and transfers to Queensbury, Inc. (the “Queensbury”), without
recourse to YA Global, a portion of the secured convertible debentures (the “Original Debentures”)
and a portion of the right of YA Global to receive certain payments of sales from certain wells (the “Royalty Interest”),
each issued by Westport Energy Holdings, Inc. (“Westport”) to YA Global pursuant to the securities purchase
agreement between YA Global and Westport dated February 3, 2014 (the “Westport SPA”) in such amount as set
forth on Exhibit A attached hereto (such portion being assigned hereunder, the “Assigned Debt”)
for a purchase price in the amount of $500,000 (the “Purchase Price”) in accordance with the terms and conditions
of this assignment agreement (the “Assignment”).


 


1. Representations
and Warranties.


 


(a) YA
Global represents and warrants solely the following, all as determined in accordance with YA Global’s books and records:


 


		(i)	Exhibit
                                         A annexed hereto and incorporated herein by reference sets forth the outstanding
                                         principal and accrued and unpaid interest owed in connection with the Original Debentures
                                         as of the date hereof, and the amount of the Original Debentures being assigned to Queensbury;
	 	 	 
		(ii)	Immediately
                                         prior to the assignment contemplated herein, YA Global owned and controlled the Original
                                         Debentures and had the right to service and collect the same; and
	 	 	 
		(iii)	Immediately
                                         prior to assignment contemplated herein, YA Global had good and valid title to the Original
                                         Debentures and the right to collect all amounts owed pursuant thereto.



 


2. Issuance
of Security for Assigned Debt. Contemporaneously with the execution and delivery of this Assignment, YA Global shall deliver
to Westport instructions (a) to record the transfer of the Assigned Debt to Queensbury, and (b) to issue and deliver to Queensbury
a secured convertible debenture payable to Queensbury in an original principal amount equal to the amount of the Assigned Debt
(the “Participation Debenture”). Upon issuance of the Participation Debenture to Queensbury, Queensbury shall
pay the Purchase Price by wire transfer of immediately available funds to YA Global or its designee at the account designated
by YA Global for such purpose.


 


3. Distribution
of Payments. All payments made by or on behalf of Westport to YA Global or Queensbury (which for the avoidance of doubt shall
not include a reduction of the obligations owed by Westport under the Original Debentures or the Participation Debenture as a
result of conversions of such debentures into shares of Westport’s stock) in connection with the Original Debentures, the
Participation Debenture, the Westport SPA, or any other transaction document entered into in connection therewith or providing
collateral in support thereof (collectively, the “Financing Arrangements”), including without limitation, payments
received from Westport, and all amounts received by YA Global or Queensbury from the proceeds of any collateral securing the Financing
Arrangements (collectively, the “Collateral”), shall be distributed as follows:


 




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(a) Within
two business days following the receipt of a payment, the party that received such payment (the “Receiving Party”)
shall notify the other party hereto (the “Non-Receiving Party”) in writing (a “Payment Notice”)
of (i) the amount of such payment, and (ii) the current balance owed by Westport to the Receiving Party in connection with the
Financing Arrangements, which balance shall specify the principal balance, accrued and unpaid interest, and with respect to YA
Global only, any unreimbursed costs and expenses incurred in connection with the Financing Arrangements (“Costs and Expenses”).


 


(b) Within
three business days following the receipt of a Payment Notice, the Non-Receiving Party shall provide the Receiving Party with
a written notice (a “Balance Notice”, and together with the Payment Notice, the “Notices“)
setting forth the current balance owed by Westport to the Non-Receiving Party in connection with the Financing Arrangements, which
balance shall specify the principal balance, accrued and unpaid interest, and, with respect to YA Global only, Costs and Expenses.


 


(c) Within
three business days following the Receiving Party’s receipt of a Balance Notice, the Receiving Party shall distribute or
apply, as applicable, all or a portion of the corresponding payment as follows:


 


(i) First,
to YA Global in reimbursement for YA Global’s Costs and Expenses;


 


(ii) Second,
to the Non-Receiving Party and the Receiving Party their respective pro rata shares of such payment, based upon their respective
shares of the aggregate balance of the Financing Arrangements, and


 


(iii) Third,
to any other amounts owed to YA Global under other financing arrangements between itself and Westport.


 


(d) The
Receiving Party shall apply the portion of any payments retained in accordance with this Paragraph 3 to the outstanding balance
of the obligations owed by Westport to the Receiving Party in connection with the Financing Arrangements.


 


(e) In
the event that a court of competent jurisdiction shall adjudge that any amount received and distributed by a Receiving Party is
to be repaid or disgorged, then the Non-Receiving Party shall repay to the Receiving Party the amount thereof previously received
by the Non-Receiving Party and so adjudged to be repaid or disgorged.


 


4. Administration
of the Financing Arrangements.


 


(a) Queensbury
hereby irrevocably designates and appoints YA Global as collateral agent for the sole purpose of perfecting Queensbury’s
security interest in any collateral granted to secure the Participation Debenture and for administering and enforcing the Financing
Arrangements, including without limitation, the Participation Debenture, as set forth herein, and irrevocably authorizes YA Global
to take such action on its behalf under the provisions of this Assignment and the Financing Arrangements and to exercise such
powers and perform such duties in connection with the Financing Arrangements and the Collateral as YA Global deems appropriate
in its sole and exclusive discretion.


 




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(b) YA
Global shall administer the Financing Arrangements in its sole and exclusive discretion, as it deems appropriate and may take
such steps, and engage in such acts as YA Global determines in its sole and exclusive discretion to be appropriate. YA Global
shall not have any requirement to consult with Queensbury in connection with the administration of the Financing Arrangements
and Queensbury shall not have right to vote on or otherwise direct, influence, or have input into any action, inaction, or other
determination to be made by YA Global. YA Global may, in its sole and exclusive discretion, amend and modify the Financing Arrangements,
waive defaults, events of default and/or termination events, release Collateral or accept substitutions thereof, enforce the Financing
Arrangements, enter into forbearance agreements, and/or otherwise administer the Financing Arrangements as if Queensbury did not
participate in the Financing Arrangements, provided, however, that YA Global shall not amend or modify the terms and conditions
of the Participation Debenture without the prior consent of Queensbury.


 


(c) YA
Global’s sole and exclusive responsibility to Queensbury under this Assignment is and shall be in accordance with the express
provisions hereof. No other duty, whether express or implied, or fiduciary relationship shall be imposed upon YA Global. Queensbury
shall not have any claim against YA Global or any employee, officer, representative, affiliate, or agent of YA Global, except
for actions of YA Global which constitute (i) gross negligence, or (ii) acts taken in bad faith.


 


(d) Except
as permitted in Paragraph 5 below, Queensbury has no independent right to enforce the Participation Debenture against Westport
nor the right to enforce any of the documents, instruments, and/or agreements evidencing the Financing Arrangements and/or the
Collateral, or to demand, accelerate, or collect any amounts owed under the Participation Debenture or the Financing Arrangements,
nor may Queensbury maintain any independent action against Westport to recover all or any portion of those funds, its sole rights
and interest being a participant in the Financing Arrangements established, administered, and enforced by YA Global.


 


(e) Queensbury
agrees not to interfere with YA Global’s administration and enforcement of the Financing Arrangements. Queensbury further
agrees to cooperate with YA Global’s administration and enforcement of the Financing Arrangements, and to render all such
reasonable assistance as YA Global may request in connection therewith. Such assistance and cooperation shall include, without
limitation, providing YA Global with all such authorizations, documentation, and consents as may be necessary, useful, or desirable
to YA Global and, at the request of YA Global, joining as a party to any enforcement action or proceeding.


 


5. Conversion
of Participation Debenture. Notwithstanding anything contained herein to the contrary, Queensbury shall at all times have
the right to convert the outstanding balance of the Participation Debenture into common shares of Westport in accordance with
the terms and conditions of the Participation Debenture and applicable law and Queensbury shall have the right to enforce and
collect any payments owed to it under the Royalty Interest assigned to it hereunder.


 


6. Liquidation
of the Financing Arrangements.


 


(a) The
exercise by YA Global of its rights as a creditor looking towards the collection of the obligations owed pursuant to the Financing
Arrangements, whether through the appointment of a receiver, or otherwise (a “Liquidation”) shall be conducted
by YA Global with the advice and assistance of YA Global’s counsel, in a manner determined by YA Global in its sole and
exclusive discretion.


 


(b) All
proceeds of any Collateral and all other amounts received by YA Global on account of any Liquidation shall be distributed in the
manner set forth in Paragraph 3 above.


 




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7. Insolvency
Proceedings. In the event that any voluntary or involuntary case or proceeding
under 11 U.S.C. §§ 101, et seq. (the “Bankruptcy Code”) shall be commenced by or against Westport
(an “Insolvency Proceeding”), Queensbury hereby agrees that:


 


(a) It
shall not seek any relief from, or modification of, the automatic stay as provided in § 362 of the Bankruptcy Code or seek
or accept any form of “adequate protection” under any or all of §§ 362, 363 and 364 of the Bankruptcy Code,
except super-priority administrative expense claims for diminution of value (the “Priority Claims”), which
Priority Claims shall be subordinated to any similar Priority Claims granted to YA Global in accordance with, and subject to,
the terms of this Assignment;


 


(b) It
shall not seek to appoint a trustee or examiner under § 1104 of the Bankruptcy Code or to convert (or support any other person
in converting) such case or proceeding under § 1112 of the Bankruptcy Code;


 


(c) It
shall not oppose or object (or support any other person in opposing or objecting) to any “adequate protection” sought
by or granted to YA Global;


 


(d) It
shall not oppose or object (or support any other person in opposing or objecting) to any post-petition financing provided by YA
Global, provided, that such post-petition financing is in such amounts and on such terms and conditions as are consistent with
the documents, agreements, and instruments evidencing the Financing Arrangements and this Assignment (provided, further, that
YA Global may charge such fees as are customary and commercially reasonable under such circumstances);


 


(e) It
shall not object (or support any other person in objecting) to (i) the amount of the Financing Arrangements allowed or permitted
to be asserted under any Bankruptcy Law or (ii) the extent to which the Financing Arrangements are deemed secured claims, including
under § 506(a) of the Bankruptcy Code;


 


(f) It
shall not oppose or object (or support any other person in opposing or objecting) to any protection provided to YA Global, including
any form of adequate protection under § 362, § 363 or § 364 of the Bankruptcy Code and the payment of amounts equal
to interest and expenses allowed under § 506(b) and (c) of the Bankruptcy Code to YA Global;


 


(g) It
hereby waives any claim that it may now or hereafter have arising out of the election of YA Global, in an Insolvency Proceeding,
of the application of § 1111(b) of the Bankruptcy Code in respect of the obligations represented by the Participation Debenture;
and


 


(h) If
YA Global seeks any or all of the relief described in Sections 7(a)-(f), Queensbury hereby irrevocably consents thereto
and hereby agrees to join in any such motion or application seeking such relief if requested by YA Global.


 


 8. Exculpation.


 




(a) Neither
YA Global, nor any officer, employee, affiliate, representative, or agent of YA Global, shall be liable for any act or omission
to act pursuant to this Assignment except for such act or omission to act as to which a final determination is made in a judicial
proceeding (in which YA Global has had an opportunity to be heard), which determination includes a specific finding that such
act or omission to act had been both (i) grossly negligent, and (ii) in actual bad faith.


 




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(b) Queensbury
may now or hereafter hold direct or indirect rights and interests in Westport. Accordingly, Queensbury acknowledges and agrees
that YA Global may, in its sole and exclusive discretion, take or withhold the taking of action, which may be adverse to such
interests of Queensbury. Without limiting the provisions hereof, Queensbury represents and warrants to YA Global that Queensbury
has assessed fully and voluntarily assumed all risks directly or indirectly associated with the possible adverse effects on such
interests of Queensbury as a result of YA Global’s taking of action or withholding of the taking of action.


 


9. Reliance
by YA Global. YA Global may rely upon any notice, certificate, instrument, document, letter, email, telegram, telex, or other
paper and upon any telephone call believed by YA Global in good faith to be genuine and to have been signed or made by or on behalf
of the person purporting so to do and, in respect of legal matters, upon the advice provided YA Global by its counsel, and shall
not be liable hereunder on account of any such good faith reliance.


 


10. Non-Reliance
by Queensbury.


 


(a) Except
with respect to the representations and warranties contained in Paragraph 1 above, Queensbury may not rely on any statements,
information, representations, or warranties made by or on behalf of YA Global.


 


(b) Queensbury
acknowledges and agrees that YA Global, any employee, officer, representative, affiliate, nor agent of YA Global has made any
representation or warranty, whether expressed, implied, or imposed by law, to induce Queensbury to accept this Assignment. Without
limiting the generality of the foregoing exclusion of representations and warranties, YA Global shall have any responsibility
with respect to:


 


(i) the
genuineness, legality, validity, binding effect, enforceability, sufficiency, accuracy, or completeness of any aspect of the Assigned
Debt and/or the Financing Arrangements;


 


(ii) the
filing, recording, or taking of any other action to perfect any security interest, mortgage, or other lien or security granted
by Westport or any of the other Westports, or with respect to any aspect of the Financing Arrangements;


 


(iii) the
collectability of the Assigned Debt or the Financing Arrangements, and/or the value of any Collateral;


 


(iv) the
truthfulness, accuracy, or completeness of any representation or warranty made by Westport;


 


(v) the
financial or other condition of Westport or any endorser, guarantor, or surety of Westport;


 


(vi) the
state of title to any Collateral subject to any security interest, mortgage, or other lien or security granted to YA Global by
Westport or any endorser, guarantor, or surety of Westport, or the priority thereof; or


 


(vii) any
other matter relating in any way to the Financing Arrangements, Westport, or any endorser, guarantor, or surety of Westport, or
this Assignment, or any other person, entity, or matter not specifically referred to herein except (with respect to this Subsection
(vii)) any matter which constitutes an act or omission to act which a final determination is made in a judicial proceeding (in
which YA Global has had an opportunity to be heard), which determination includes a specific finding that such act or omission
to act had been both (x) grossly negligent, and (y) in actual bad faith.


 




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11. Contribution.
In the event that at any time YA Global issued or shall have a demand, threat, or claim made upon it, or suit, cause of action,
or the like brought against it by or on behalf of Westport or any guarantor, or any creditor of Westport or of any guarantor,
any trustee, receiver, administrator, Queensbury, or other fiduciary appointed with respect to Westport or any guarantor, or any
person whose rights derive from Westport or any guarantor, which demand, threat, claim, suit, cause of action, or the like, is
based upon or directly or indirectly relates to the Financing Arrangements or YA Global’s acting in accordance with this
Assignment, then, unless (a) YA Global has been found liable to Westport or such other party due to YA Global’s gross negligence
and actual bad faith, or (b) YA Global has been reimbursed therefore by Westport, YA Global may charge any monies paid or to be
paid in satisfaction or compromise of such demand, threat, claim, suit, cause of action, or the like, and all costs and expenses
and attorneys’ fees and expenses incurred by YA Global in connection with the defense of such demand, threat, claim, suit,
cause of action, or the like as costs of collection reimbursable as provided in Paragraph 3 above.


 


12. Securities
Law Provisions. Queensbury has agreed to enter into this Assignment and to receive the Participation Debenture for its own
account, for investment purposes only, and not for the account of any other person, and not with a view to distribution, assignment,
or resale to others, as to fractionalization in whole or in part.


 


13. Assignments.
Upon five days prior written notice to YA Global, Queensbury may assign the Participation Debenture, provided, however,
that (a) the person or entity to which the Participation Debenture is assigned must acknowledge in writing that it received the
Participation Debenture subject to the terms and conditions of this Assignment; and (b) the Participation Debenture may not be
assigned to Westport, or one of its employees, subsidiaries, directors, affiliates, agents, or any person or entity affiliated
with Westport.


 


14. Notices.
All notices hereunder to any party hereto shall be in writing and (i) hand delivered, (ii) sent by a nationally recognized overnight
courier, or (iii) posted in the United States mail by registered or certified mail, return receipt requested, addressed to such
party at its address set forth above, or at any other address specified by such party in writing upon seven days written notice
to the other parties. Any such notice shall be treated as having been given upon the earlier of (i) actual receipt (by any method
of delivery) by the person to whom the notice is addressed, or (ii) upon delivery to such address (or refusal to accept delivery).


 


15. Choice
of Law. This Assignment shall be construed in accordance with the law of the State of New Jersey and is intended to take effect
as a sealed instrument.


 


[SIGNATURE
PAGE TO IMMEDIATELY FOLLOW]


 




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Executed
as of the February 5, 2014.


 


	 	YA GLOBAL INVESTMENTS, L.P.
	 	 
	 	By:	Yorkville
    Advisors, LLC
	 	Its:	Investment
    Manager
	 	 	 
	 	By:	 
	 	Name:	David
    Gonzalez
	 	Its:	Managing
    Member & General Counsel


 


ACCEPTED
AND AGREED:


 


Queensbury,
Inc.


 


	By:	 	 
	Name:	Raffaele
    Attar	 
	Title:
    	President	 



 



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EXHIBIT
“A”


 


Assigned
Debt


 


Original
Debentures: 


 


Secured
Convertible Debenture (Debenture Number: CICS-28) in the Principal Amount of $1,080,000 originally issued on February 3, 2014.


 


	 	Outstanding Principal	 	 	 	Accrued and Unpaid Interest	 
	$	1,080,000	 	 	$	0	 



 


Portion
of the Original Debentures Assigned (Assigned Debt): 


 


	 	Principal Amount Assigned	 	 	 	Accrued and Unpaid Interest Assigned	 
	$	540,000	 	 	$	0	 



 


Royalty
Interest:


 


The right
to receive 25% of net gas sales resulting from the Allocated Wells of Westport.


 


Original
Principal Amount of Participation Debenture: $540,000


 


Royalty
Interest: One half of YA Global’s Royalty Interest (12.5% of net gas sales resulting from the Allocated Wells). 


 


Purchase
Price: $500,000