ex10-7.htm

Exhibit 10.7

    NET
      PROFITS INTEREST AGREEMENT

     

    GULF
      COAST OIL CORPORATION

     

    “WI
      Owner”

     

    and


     

    VALENS
      U.S. SPV I, LLC

     

    and

     

    VALENS
      OFFSHORE SPV II, CORP.

     

    “Assignees”

     

    Dated
      as of

     

    November
      20, 2007

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    NET
      PROFITS INTEREST AGREEMENT

     

    THIS
      NET PROFITS INTEREST AGREEMENT (“Agreement”) is made and entered
      into as of this 20th day of November, 2007, and is between GULF COAST OIL
      CORPORATION, a Delaware corporation (“WI Owner”), and VALENS U.S. SPV I,
      LLC, a Delaware limited liability company, and VALENS OFFSHORE SPV II, CORP.,
      a
      Delaware corporation (collectively, “Assignees”).

     

    W
      I T N E
      S S E T H:

     

    WHEREAS,
      WI Owner is the owner of various interests in the Leases; and

     

    WHEREAS,
      WI Owner desires to drill fourteen (14) Hydrocarbon wells on the Leases
      financed, in part, by loans provided to WI Owner by the Creditor Parties
      pursuant to the Securities Purchase Agreement; and

     

    WHEREAS,
      as a condition to the obligation of the Creditor Parties to make the loans
      provided for in the Securities Purchase Agreement, WI Owner must convey to
      Assignees a Net Profits Interest to be discharged out of Hydrocarbons produced
      from the wells financed, in part, by the Creditor Parties pursuant to the
      Securities Purchase Agreement.

     

    NOW,
      THEREFORE, in consideration of the mutual benefits and obligations of the
      Parties contained herein and the benefits to be received by Assignees pursuant
      to the Securities Purchase Agreement, Assignees and WI Owner agree as
      follows:

     

    ARTICLE
      1.

     

    DEFINITIONS

     

    1.1           Defined
      Terms.  In addition to the terms defined in the introductory
      paragraph and the Recitals of this Agreement, for purposes hereof, the
      capitalized expressions and terms set forth in Schedule 1.1 shall have
      the meanings set forth therein, unless expressly indicated
      otherwise.  Other terms may be defined elsewhere in this Agreement and
      shall, for purposes hereof, have the meanings so specified, unless expressly
      indicated otherwise.

     

    1.2           References.  The
      words “hereby,” “herein,” “hereinabove,” “hereinafter,” “hereinbelow,” “hereof,”
“hereto,” “hereunder,” and words of similar import when used in this Agreement
      shall refer to this Agreement as a whole and not to any particular article,
      section, or provision of this Agreement.  References in this Agreement
      to articles, sections, exhibits, or schedules are to such articles, sections,
      exhibits, or schedules of this Agreement unless otherwise
      specified.

     

    1.3           Articles
      and Sections.  This Agreement, for convenience only, has been
      divided into articles and sections.  The rights and other legal
      relations of the Parties shall be determined from this Agreement as an entirety
      and without regard to the aforesaid division into articles and sections and
      without regard to headings prefixed to such articles and sections.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    1.4           Number
      and Gender.  Whenever the context requires, reference herein
      made to a single number shall be understood to include the plural; and likewise,
      the plural shall be understood to include the singular.  Words
      denoting sex shall be construed to include the masculine, feminine, and neuter,
      when such construction is appropriate; and specific enumeration shall not
      exclude the general but shall be construed as cumulative.  Definitions
      of terms defined in the singular or plural shall be equally applicable to the
      plural or singular, as applicable, unless otherwise indicated.

     

    ARTICLE
      2.

     

    CONVEYANCE
      OF NET PROFITS INTEREST

     

    Subject
      to and in accordance with the terms hereof, and in satisfaction of the terms
      of
      Section 3.2 of the Securities Purchase Agreement, WI Owner agrees to convey
      to
      Assignees, effective as of the Effective Date, the Net Profits
      Interest.  The specific terms and conditions applicable to the Net
      Profits Interest are set forth in the NPI Conveyance.  Concurrently
      with the execution of this Agreement, (a) WI Owner and Assignees have executed,
      acknowledged, and delivered counterparts of the NPI Conveyance in sufficient
      numbers to permit recording and filing in all relevant jurisdictions, and (b)
      WI
      Owner has delivered to Assignees all consents, waivers, and other matters
      pertaining to the Subject Interests required to be obtained by WI Owner to
      cause
      the representation and warranty contained in Section 3.1(g) to be true
      and correct with respect to the Subject Interests as of the date of execution
      hereof.

     

    ARTICLE
      3.

     

    REPRESENTATIONS
      AND WARRANTIES OF WI OWNER

     

    3.1           Representations
      and Warranties of WI Owner.  As a principal cause and
      material inducement to Assignees to execute this Agreement and the NPI
      Conveyance and to consummate the transactions described herein and therein,
      WI
      Owner hereby represents and warrants to Assignees, as follows:

     

    (a)           WI
      Owner is a corporation duly organized, validly existing, and in good standing
      under the Laws of the State of Delaware and is qualified to do business in,
      and
      is in good standing under the Laws of, the State of Texas.  WI Owner
      has all requisite legal right, power, and authority to own and operate its
      properties (including, without limitation, the Assets) and to carry on its
      business as now conducted.

     

    (b)           WI
      Owner has full capacity, legal right, power, and authority to enter into and
      perform this Agreement, the NPI Conveyance, and the transactions contemplated
      herein and therein.  The execution, delivery, and performance by WI
      Owner of this Agreement, the NPI Conveyance, and the transactions contemplated
      herein and therein have been duly and validly authorized and approved by all
      necessary corporate action of WI Owner.  This Agreement and the NPI
      Conveyance have been duly executed and delivered by WI Owner.  This
      Agreement and the NPI Conveyance constitute the legal, valid, and binding
      obligations of WI Owner, enforceable against WI Owner in accordance with their
      respective terms, subject to the effects of bankruptcy, insolvency,
      reorganization, moratorium, and similar Laws, as well as to principles of equity
      (regardless of whether such enforceability is considered in a proceeding in
      equity or at law).

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    (c)           The
      execution, delivery, and performance by WI Owner of this Agreement and the
      NPI
      Conveyance do not and will not (i) conflict with or result in a breach of any
      of
      the provisions of the organizational and governing documents of WI Owner; (ii)
      violate any provision of any Law or any order, writ, judgment, decree, or
      determination currently in effect having applicability to WI Owner; (iii) result
      in a breach of or constitute a default under any indenture, bank loan,
      securities purchase agreement, credit agreement, Lease, Property Agreement,
      Marketing Agreement, or other agreement or instrument to which WI Owner is
      a
      party or by which WI Owner or the Assets may be currently bound or affected;
      or
      (iv) result in or require the creation or imposition of any mortgage, lien,
      pledge, security interest, charge, or other encumbrance upon any of the Assets
      under any such indenture, bank loan, securities purchase agreement, credit
      agreement, Lease, Property Agreement, Marketing Agreement, or other agreement
      or
      instrument.  WI Owner is not in default under any such order, writ,
      judgment, decree, determination, indenture, agreement, or instrument in any
      way
      that now or in the future will materially adversely affect the ability of WI
      Owner to perform its obligations under this Agreement or the NPI
      Conveyance.

     

    (d)          Upon
      the due execution and delivery by WI Owner of the NPI Conveyance, the Net
      Profits Interest will constitute an interest in real property under the Laws
      of
      the State of Texas.

     

    (e)           Except
      as set forth on Schedule 3.1(e), there is no suit, action, Claim,
      investigation, or inquiry by any person or entity or by any administrative
      agency or governmental body, and no legal, administrative, or arbitration
      proceeding (including, without limitation, bankruptcy or insolvency-related
      proceedings) pending or, to WI Owner’s Knowledge, threatened against WI Owner or
      the Assets, or to which WI Owner is a party, that reasonably may be expected
      to
      (i) result in the material impairment of WI Owner’s title to any of the Subject
      Interests; (ii) hinder or impede the operation of all or any portion of the
      Leases; (iii) cause the Leases to be subject to reduced rates of production
      or
      other penalties because of Hydrocarbon production in excess of applicable
      allowables or otherwise; or (iv) otherwise have a material adverse effect upon
      (A) the Subject Interests, (B) the validity or enforceability of this Agreement
      or the NPI Conveyance, (C) the ability of WI Owner to consummate the
      transactions contemplated in this Agreement or perform its obligations under
      the
      NPI Conveyance, or (D) generally the business, properties, assets, or condition,
      financial or otherwise, of WI Owner.

     

    (f)           No
      authorization, consent, approval, exemption, franchise, permit, or license
      of,
      or filing with, any Governmental Authority is required to authorize, or is
      otherwise required in connection with, the valid execution, delivery, and
      performance by WI Owner of this Agreement and the NPI Conveyance.

     

    (g)           Except
      as set forth in Schedule 3.1(g), none of the Subject Interests is subject
      to a preferential right to purchase, third Person consent to assignment
      requirement, right of first refusal, right of first offer or similar right
      or
      restriction, the operation
      of which is triggered by the execution and delivery of this Agreement or the
      NPI
      Conveyance.  All consents to assignment and waivers of preferential
      purchase or other rights necessary to permit the valid conveyance to Assignees
      of the Net Profits Interest and the execution and delivery of this Agreement
      and
      the NPI Conveyance have been obtained or the time for giving such consents
      or
      waivers has expired following a written request therefor.  All advance
      notifications to third Persons of the transactions contemplated herein and
      in
      the NPI Conveyance necessary to permit the valid conveyance to Assignees of
      the
      Net Profits Interest and the execution and delivery of this Agreement and the
      NPI Conveyance have been timely and properly given.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    (h)           The
      Subject Interests are free and clear of any liens, mortgages, deeds of trust,
      pledges, security interests, or other encumbrances, except as set forth on
      Schedule 3.1(h).

     

    (i)           All
      Taxes imposed or assessed with respect to, measured by, charged against, or
      attributable to the Subject Interests have been duly paid.

     

    (j)           Each
      Lease is in full force and effect, at a minimum, with respect to the lands
      described in conjunction therewith on Exhibit A as comprising the Subject
      Interests.  WI Owner is not in material breach or material default,
      and there has occurred no event, fact, or circumstance that, with the lapse
      of
      time or the giving of notice, or both, would constitute such a breach or default
      by WI Owner, with respect to any of its obligations under any Lease, and, to
      WI
      Owner’s Knowledge, no other Person owning any interest in any Lease is in
      material breach or material default with respect to any of its obligations
      thereunder.  No lessor under any Lease has given or, to WI Owner’s
      Knowledge, threatened to give notice of any action to terminate, cancel,
      rescind, repudiate, or procure a judicial reformation of any Lease or any
      provision thereof.  None of the Leases is subject to a limitation as
      to depths covered.

     

    (k)           WI
      Owner has correctly made, or caused to be correctly made, all payments,
      including, without limitation, royalties, rentals, shut-in well payments, and
      other lease maintenance payments, due in respect of the Leases
      thereunder.

     

    (l)           
      Each Lease authorizes surface operations on the lands covered thereby for the
      drilling, development, operation, and production of Hydrocarbon wells, or for
      those Leases as to which surface operations are restricted or impractical for
      operational or regulatory reasons, there exist Leases covering contiguous
      acreage from which surface operations with respect to such surface-restricted
      Leases may be conducted.

     

    (m)           There
      are no agreements, instruments, or documents affecting the Subject Interests
      other than the Property Agreements and the Marketing Agreements described on
      Schedule 3.1(m).  WI Owner has furnished or made available to
      Assignees true and complete copies of all of the Property Agreements and
      Marketing Agreements.  With respect to the Property Agreements and
      Marketing Agreements:  (i) all of the Property Agreements and
      Marketing Agreements are in full force and effect; (ii) WI Owner
      is
      not in material breach or material default, and there has occurred no event,
      fact, or circumstance that, with the lapse of time or the giving of notice,
      or
      both, would constitute such a breach or default by WI Owner, with respect to
      any
      of its obligations under any Property Agreement or Marketing Agreement; (iii)
      to
      WI Owner’s Knowledge, no other Person who is a party thereto is in material
      breach or material default with respect to any of its obligations under any
      Property Agreement or Marketing Agreement; and (iv) neither WI Owner nor, to
      WI
      Owner’s Knowledge, any other party to any Property Agreement or Marketing
      Agreement has given or threatened to give notice of any action to terminate,
      cancel, rescind, or procure a judicial reformation of such Property Agreement
      or
      Marketing Agreement or any provision thereof.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    (n)           Except
      as set forth on Schedule 3.1(n), the Subject Interests are not subject to
      any area of mutual interest provision, interest reversion or conversion, or
      other contract or provision thereof under which WI Owner or Assignees may be
      obligated to make assignments to third parties of interests in any Subject
      Interest prior to the Effective Date.

     

    (o)           All
      costs and expenses incurred in connection with the operation of the Subject
      Interests for which WI Owner is responsible and has received invoices from
      the
      operator(s) thereof have been paid, and there are no outstanding calls or
      payments due from WI Owner under the terms of the Property Agreements or the
      Marketing Agreements.  Neither the Leases nor the Property Agreements
      contain any expressed contractual obligations to drill additional wells or
      to
      engage in other development operations, except for obligations arising under
      offset well provisions and obligations arising under Property Agreements that
      allow the parties thereto to elect whether to participate.  There are
      no material operations on any Lease under any of the Property Agreements with
      respect to which either WI Owner or any other Person has become a non-consenting
      party.

     

    (p)           The
      Subject Interests are not subject to any regulatory refund obligation, and,
      to
      WI Owner’s Knowledge, there has occurred no event, fact, or circumstance that,
      with the lapse of time or the giving of notice, or both, would give rise to
      such
      a regulatory refund obligation.

     

    (q)           No
      third party has any call, right of first refusal, or preferential right to
      purchase any Hydrocarbons produced from or allocable to the Subject
      Interests.

     

    (r)           
      Except as set forth in Schedule 3.1(r), WI Owner is not a party to or
      bound by, and the Subject Interests and the Hydrocarbons attributable thereto
      are not encumbered or affected by, any gas balancing, deferred production,
      gas
      banking, or similar agreement or arrangement.  Except as shown on
Schedule 3.1(r), WI Owner is not in an “overlift,” “overproduced,”
“underproduced”, or similar status under any such agreement or
      arrangement.

     

    (s)           Neither
      the Subject Interests nor the Hydrocarbons attributable thereto are subject
      to
      any contract, agreement, or arrangement (including, without limitation, advance
      payment agreements, prepayments, take-or-pay makeup obligations, or
      otherwise) whereby the owner of the Hydrocarbons or any part thereof is not
      entitled to convey the Hydrocarbons or to market the Hydrocarbons and to obtain
      the full market price or value of the same at the time of
      delivery.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    (t)           To
      WI Owner’s Knowledge, no Casualty Event or Environmental Liability adversely
      affecting any material portion of the Subject Interests or the operation
      thereof, or adversely affecting the ability of WI Owner to perform its
      obligations under this Agreement or the NPI Conveyance, has occurred or
      accrued.

     

    (u)           WI
      Owner and, to WI Owner’s Knowledge, the operators of the Leases, have complied
      in all material respects with all Laws (including, without limitation,
      Environmental Laws), licenses, and permits relating to the Assets, other than
      violations that could not (either individually or collectively) reasonably
      be
      expected to have a Material Adverse Effect on WI Owner.  WI Owner and,
      to WI Owner’s Knowledge, the operator(s) of the Leases, as applicable, have all
      approvals, authorizations, consents, licenses, and permits from Governmental
      Authorities required under applicable Laws (including, without limitation,
      Environmental Laws) in connection with the ownership and operation of the
      Leases, and have properly made all filings necessary or appropriate to obtain
      such approvals, authorizations, consents, licenses, and permits.  All
      of such licenses, permits, filings, approvals, authorizations, and consents
      are
      in full force and effect.  Neither WI Owner nor, to WI Owner’s
      Knowledge, any other Person has received notice from any Governmental Authority
      having jurisdiction over the Leases that any such applicable Law, permit,
      license, or filing has been violated or not complied with by WI Owner or any
      other Person.

     

    (v)           Without
      limiting the representations and warranties contained in Section 3.1(u),
      WI Owner has not (i) received notice or otherwise learned of any Environmental
      Liability in, on, affecting, or otherwise relating in any way to any Lease
      that
      could, individually or in the aggregate, reasonably be expected to have a
      Material Adverse Effect on WI Owner arising in connection with (A) any
      non-compliance with or violation of any Environmental Law or (B) the Release
      (or
      threatened Release) of a Hazardous Substance, or (ii) received notice or
      otherwise learned of any federal or state investigation evaluating whether
      any
      remedial action is needed to respond to a Release (or threatened Release) of
      a
      Hazardous Substance in, on, affecting, or otherwise relating in any way to
      any
      Lease for which WI Owner may be liable.  No Release of Hazardous
      Substances by WI Owner in, on, from, affecting, or relating in any way to any
      Lease or any property of WI Owner adjacent thereto has occurred, and WI Owner
      has not received any Environmental Complaint.

     

    (w)           There
      are no bankruptcy, insolvency, reorganization, or arrangement proceedings
      pending, being contemplated by, or to WI Owner’s Knowledge, threatened against
      WI Owner or any Affiliate that controls WI Owner.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ARTICLE
      4.

     

    MISCELLANEOUS

     

    4.1           Further
      Assurances.  WI Owner and Assignees agree to take all such
      further actions and to execute, acknowledge, and deliver all such further
      documents as are necessary or useful to effectuate the conveyance of the Net
      Profits Interest and to carry out the purposes of this Agreement and the NPI
      Conveyance.

     

    4.2           Survival.  The
      representations, warranties, covenants, agreements, and indemnities in this
      Agreement shall survive the execution and delivery of the NPI Conveyance and
      the
      consummation of the transactions described herein and therein.

     

    4.3           Expenses;
      Taxes.  WI Owner shall bear and pay all fees, costs, and
      expenses incurred by both WI Owner and Assignees in negotiating this Agreement
      and the NPI Conveyance and consummating the transactions contemplated herein
      and
      therein.  All required documentary, filing, and recording fees and
      expenses incurred in connection with the filing and recording of the NPI
      Conveyance, as well as all state sales and use taxes and real estate transfer
      taxes (including any applicable interest or penalties) incurred or imposed
      with
      respect to the transactions described in this Agreement and the NPI Conveyance,
      shall be borne and paid by WI Owner.  Each Party shall assume
      responsibility for, and shall bear and pay, all federal and state income,
      franchise, and other similar taxes (including any applicable interest or
      penalties) incurred by or imposed upon such Party with respect to the
      transactions described in this Agreement.  Prior to the Effective
      Date, all Taxes based upon or measured by the ownership of the Subject
      Interests, Hydrocarbon production therefrom, or the receipt of proceeds thereof,
      shall be borne and paid by WI Owner, and after the Effective Date, shall be
      allocated as set forth in the NPI Conveyance.

     

    4.4           Notices.  All
      notices, requests, demands, instructions and other communications required
      or
      permitted to be given hereunder shall be in writing and shall be (a) delivered
      personally, (b) mailed by certified U.S. mail, postage prepaid and return
      receipt requested, (c) sent by bonded courier, or (d) sent by facsimile, as
      follows:

     

    
      	
              If
                to WI Owner:

               

              Gulf
                Coast Oil Corporation

              5851
                San Felipe, Suite 775

              Houston,
                Texas  77057

              Attention:  Chief
                Financial Officer

              Facsimile
                No.:  (713) 266-4358

            	
              If
                to Assignees:

               

              Valens
                U.S. SPV I, LLC

              Valens
                Offshore SPV II, Corp.

              c/o
                Valens Capital Management, LLC

              335
                Madison Avenue, 10th
                Floor

              New
                York, New York  10017

              Attention:  Portfolio
                Services

              Facsimile
                No.:  (212) 581-5037

            
	 	 
	
              with
                a copy to:

               

              David
                M. Loev, Esquire

              The
                Loev Law Firm, PC

              6300
                West Loop South, Suite 280

              Bellaire,
                Texas  77401

              Facsimile
                No.:  (713) 524-4122

            	
              with
                a copy to:

               

              Loeb
                & Loeb, LLP

              345
                Park Avenue

              New
                York, New York  10154

              Attention:  Scott
                J. Giordano, Esq.

              Facsimile
                No.:  (212) 407-4990

            
	 	 
	 	
              and
                to:

               

              Jackson
                Walker L.L.P.

              1401
                McKinney, Suite 1900

              Houston,
                Texas  77010

              Attention:  Michael
                P. Pearson, Esquire

              Facsimile
                No.:  (713) 752-4221

            
	 	 


    

    or
      to
      such other place within the United States of America as either Party may
      designate as to itself by written notice to the other.  All notices
      given by personal delivery, courier, or mail shall be effective on the date
      of
      actual receipt at the appropriate address.  Notice given by telecopier
      shall be effective upon actual receipt if received during recipient’s normal
      business hours or at the beginning of the next Business Day after receipt if
      received after the recipient’s normal business hours.

     

    4.5           Indemnification.

     

    (a)           Notwithstanding
      the execution of the NPI Conveyance, regardless of any investigation made at
      any
      time by or on behalf of Assignees or any information Assignees may have, and
      regardless of the presence or absence of insurance, WI Owner shall indemnify
      and
      hold harmless Assignees and Assignees’ respective successors, assigns,
      Affiliates, shareholders, partners, members, directors, officers, managers,
      employees, agents, and representatives (collectively, the “Indemnified
      Parties”) from and against any and all Claims caused by, arising out of,
      resulting from, or relating in any way to, and shall pay the Indemnified Parties
      any sum that the Indemnified Parties pay or become obligated to pay on account
      of: (i) any breach or default in the performance by WI Owner of any covenant
      or
      agreement of WI Owner contained in this Agreement or the NPI Conveyance; (ii)
      any breach of a warranty or an inaccurate or erroneous representation made
      by WI
      Owner in this Agreement or the NPI Conveyance; and (iii) all liability or
      obligation to third Persons (including, without limitation, liabilities
      resulting from injury to or death of any Person, Persons, or other living
      things, or loss or destruction of or damage to property, as well as
      Environmental Liabilities), whether arising in contract, in tort, or by
      operation of Law, arising out of, resulting from, or relating in any way to
      the
      ownership, use, possession, and operation of the Assets and the production,
      handling, and marketing of Hydrocarbons therefrom by WI Owner; provided,
      however, that in no event shall the terms of this Section 4.5(a) be
      deemed to create personal liability on the part of WI Owner with respect to
      the
      satisfaction or discharge of the Net Profits Interest.  IT IS
      THE INTENT OF THE PARTIES THAT THE FOREGOING INDEMNITY BE WITHOUT REGARD TO
      THE
      CAUSE OR CAUSES
      OF THE CLAIM TO BE INDEMNIFIED, INCLUDING, WITHOUT LIMITATION, THE NEGLIGENCE
      OF
      ASSIGNEES, OR EITHER OF THEM, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT, OR
      CONCURRENT, OR ACTIVE OR PASSIVE, OR THE STRICT LIABILITY OF ASSIGNEES, OR
      EITHER OF THEM.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    (b)           Assignees
      shall give to WI Owner prompt written notice and particulars of any Claim for
      which indemnification is sought.  At its option, WI Owner
      may:  (i) permit Assignees to respond to the Claim in the manner set
      forth in its notice; or (ii) assume responsibility for and conduct the
      negotiation, defense, or settlement of the Claim; provided, however, that
      Assignees shall at all times have the right to participate in the defense
      thereof and to be represented, at their sole expense, by counsel selected by
      them.  No such Claim shall be compromised or settled by either WI
      Owner or Assignees, as applicable, in any manner that might adversely affect
      the
      interest of the other Party without the prior written consent of such other
      Party.

     

    4.6           Governing
      Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND
      CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD
      TO
      ANY CONFLICTS OF LAW PRINCIPLES.

     

    4.7           Limitation
      on Damages.  For the breach or non-performance by any Party
      of any representation, warranty, covenant, or agreement contained in this
      Agreement, the liability of the obligor shall be limited to direct actual
      damages only, except to the extent that the obligee is entitled to specific
      performance or injunctive relief.  NEITHER WI OWNER NOR
      ASSIGNEES SHALL BE LIABLE TO THE OTHER FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE,
      EXEMPLARY, OR INDIRECT DAMAGES, LOST PROFITS, OR OTHER BUSINESS INTERRUPTION
      DAMAGES, IN TORT, IN CONTRACT, UNDER ANY INDEMNITY PROVISION, ARISING BY
      OPERATION OF LAW, OR OTHERWISE AS TO ANY MATTER RELATING TO THIS AGREEMENT,
      THE
      NPI CONVEYANCE, OR THE TRANSACTIONS CONTEMPLATED HEREIN OR
      THEREIN.  Without limiting the foregoing, if the NPI
      Conveyance or any Lease is rejected as an unexpired lease or executory contract
      pursuant to any of the terms of Section 365 of the United States Bankruptcy
      Code, the damages recoverable as a result of such rejection shall equal the
      value as of the date of rejection of the future obligations remaining under
      the
      NPI Conveyance at the time of the rejection, determined in a commercially
      reasonably manner.

     

    4.8           Successors
      and Assigns.

     

    (a)           This
      Agreement shall be binding upon and, subject to the following restriction,
      shall
      inure to the benefit of the Parties and their respective permitted successors
      and assigns.  Nothing contained herein shall in any way limit or
      restrict the right of Assignees, or Assignees’ successors and assigns, to sell,
      convey, assign, transfer, mortgage, pledge, or create a lien or security
      interest in their respective rights or obligations hereunder in whole or in
      part; provided, however, that (i) any such transfer shall expressly be made
      subject to the terms of this Agreement and the NPI Conveyance
      and (ii) the prospective transferee from Assignees shall expressly agree to
      assume and perform all of Assignees’ covenants and obligations under the terms
      of this Agreement and the NPI Conveyance.  WI Owner shall not Transfer
      its rights or obligations hereunder separately from the Subject Interests
      without the prior written consent of Assignees.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    (b)           Transfers
      by WI Owner of the Subject Interests shall be subject to the terms of Section
      7.2 of the NPI Conveyance.  In the event of a Transfer by WI Owner
      that includes only the Subject Interests, or any portion thereof, and Net
      Profits Interest attributable thereto, WI Owner shall pay to Assignees, as
      consideration for Assignees’ reconveyance to WI Owner of the Net Profits
      Interest in advance of such Transfer as required under Section 7.2(b) of the
      NPI
      Conveyance, an amount equal to forty-nine percent (49%) of the total purchase
      price (net of all applicable adjustments) to be paid by the prospective
      transferee to WI Owner with respect to the Subject Interests (including the
      Net
      Profits Interest) being Transferred as part of the same transaction or series
      of
      transactions.

     

    (c)           In
      the event of a Transfer by WI Owner that includes the Subject Interests, or
      any
      portion thereof, and the Net Profits Interest attributable thereto, as part
      of a
      larger transaction, WI Owner shall pay to Assignees, as consideration for
      Assignees’ reconveyance to WI Owner of the Net Profits Interest in advance of
      such Transfer as required under Section 7.2(b) of the NPI Conveyance, an amount
      equal to forty-nine percent (49%) of the portion of the total purchase price
      (net of all applicable adjustments) to be paid by the prospective transferee
      to
      WI Owner with respect to all properties, assets, and interests of every kind
      and
      character being Transferred by WI Owner to such prospective transferee as part
      of the same transaction or series of related transactions that is allocable,
      under the terms of the relevant acquisition document(s), to the Subject
      Interests, or the portion thereof being Transferred, and the Net Profits
      Interest attributable thereto.  Notwithstanding the preceding sentence
      of this Section 4.8(c) to the contrary, in the absence of such an
      allocation of values to the individual properties, assets, and interests being
      Transferred in the relevant acquisition documents, or if Assignees determine,
      in
      the good faith exercise of their business judgment, that the values allocated
      to
      the relevant Subject Interests (including the Net Profits Interest) set forth
      in
      the acquisition documents are not at least equivalent to the values established
      for such Subject Interests (including the Net Profits Interest) in the most
      recent reserve report provided by WI Owner to the Creditor Parties pursuant
      to
      Section 6.18 of the Securities Purchase Agreement (adjusted to reflect
      production from or allocable to such Subject Interests during the period from
      the effective date of such reserve report through the effective date of the
      Transfer), the consideration payable to Assignees for the reconveyance to WI
      Owner of the Net Profits Interest, or relevant portion thereof, in advance
      of
      such Transfer shall be an amount equal to forty-nine percent (49%) of the values
      established for the Subject Interests being transferred (including the Net
      Profits Interest) in such reserve report.

     

    4.9           Unenforceable
      or Inapplicable Provisions.  If any provision hereof is
      invalid or unenforceable in any jurisdiction, the other provisions hereof shall
      remain in full force and effect in such jurisdiction, and the remaining
      provisions hereof shall be liberally
      construed in favor of Assignees, and their successors and assigns, in order
      to
      effectuate the terms hereof, and the invalidity of any provision hereof in
      any
      jurisdiction shall not affect the validity or enforceability of any such
      provision in any other jurisdiction.

     

    4.10           Execution
      in Counterparts. This Agreement has been executed in several
      counterparts, each of which shall be deemed to be an original and all of which
      are identical.  All of such counterparts together shall constitute but
      one and the same agreement.  All of said documents are integral parts
      of one consolidated transaction and are to be construed as a single
      transaction.

     

    4.11           Entire
      Agreement.  This Agreement, together with the NPI Conveyance,
      shall constitute the entire agreement between the Parties covering the subject
      matter hereof, and there are no agreements, modifications, conditions, or
      understandings, written or oral, expressed or implied, pertaining to the subject
      matter hereof which are not contained herein or therein.

     

    4.12           Amendment;
      Waiver.  This Agreement shall not be modified or changed
      except in writing signed by all Parties.  No provision of this
      Agreement shall be waived except in writing signed by the Party granting the
      waiver.  A waiver of any breach or a failure to enforce any of the
      terms or conditions of this Agreement shall not in any way affect, limit, or
      waive a Party’s rights under this Agreement at any time to enforce strict
      compliance thereafter with every term or condition of this
      Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXECUTED
      on the date first set forth above.

     

    


     

    WI
      OWNER:

     

    


     

    GULF
      COAST OIL CORPORATION

     

    


     

    


     

    By:  /s/
      Edward R.
      DeStefano                                                     

     

      Edward
      R.
      DeStefano

     

      President
      and Chief
      Executive Officer

     

    


     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


     

    ASSIGNEES:

     

    


     

    VALENS
      U.S. SPV I, LLC

     

    


     

    By:           Valens
      Capital Management, LLC,

    its
      Investment Manager

     

    By:   /s/
      Patrick
      Regan                                                  

    Name:  Patrick
      Regan                                                             

     

              Authorized
      Signatory

     

    VALENS
      OFFSHORE SPV II, CORP.

     

    


     

    By:           Valens
      Capital Management, LLC,

    its
      Investment Manager

     

     

    By:   /s/
      Patrick
      Regan                                                 

    Name:  Patrick
      Regan                                                            

     

              Authorized
      Signatory

     

    SCHEDULES

     

    
      	
              Schedule
                1.1

            	
              -

            	
              Definitions

            
	
              Schedule
                3.1(e)

            	
              -

            	
              WI
                Owner’s Litigation

            
	
              Schedule
                3.1(g)

            	
              -

            	
              Preferential
                Purchase Rights; Required Third Person Consents to
                Assignment

            
	
              Schedule
                3.1(h)

            	
              -

            	
              Liens
                and Encumbrances

            
	
              Schedule
                3.1(m)

            	
              -

            	
              Property
                Agreements; Marketing Agreements

            
	
              Schedule
                3.1(n)

            	
              -

            	
              Future
                Assignment Obligations

            
	
              Schedule
                3.1(r)

            	
              -

            	
              Production
                Imbalances and Related Items

            
	 	 	 


    

    EXHIBITS

     

    
      	
              Exhibit
                A

            	
              -

            	
              Subject
                Interests

            
	
              Exhibit
                B

            	
              -

            	
              Form
                of Conveyance of Net Profits Overriding Royalty
                Interest

            
	 	 	 


    

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      1.1

     

     

    Definitions

     

    “Affiliate”
      means, with respect to any person, any other person that directly, or indirectly
      through one or more intermediaries, controls, is controlled by, or is under
      common control with such person.  The term “control” (including, with
      correlative meaning, the terms “controlled by” and “under common control with”)
      as used with respect to any person, means the possession, directly or
      indirectly, of the power to direct or cause the direction of the management
      and
      policies of such person, whether through the ownership of voting securities,
      by
      contract, or otherwise.

     

     “Business
      Day” means any day which is not a day on which national banking institutions
      in New York, New York, are closed as authorized or required by Law.

     

    “Casualty
      Event” means, with respect to all or any material portion of an Asset, any
      destruction by fire, blowout, leak, explosion, or other casualty (above or
      below
      ground) or any taking, or pending or threatened taking, in condemnation or
      under
      the right of eminent domain, of any Asset or portion thereof.

     

    “Central
      Time” means Central Standard Time or Central Daylight Savings Time, as in
      effect in Dallas, Texas, on the day in question.

     

    “Claims”
      means any and all claims, demands, liens, notices of non-compliance or
      violation, notices of liability or potential liability, investigations, actions
      (whether judicial, administrative, or arbitrational), causes of action, suits,
      controversies, losses, judgments, damages, liabilities, costs, expenses,
      interest, penalties, taxes, fines, obligations, and deficiencies, including,
      without limitation, reasonable attorneys’ fees and other costs and expenses of
      the Party defending a claim incident to the investigation and defense thereof
      that results in litigation or arbitration, or the settlement of any claim,
      or,
      in the case of a claim subject to indemnification hereunder, the enforcement
      by
      the Party receiving indemnification of the provisions of Section 4.5, as
      applicable.

     

    “Creditor
      Parties”, as defined in the Securities Purchase Agreement, means,
      collectively, Assignees, as “Purchasers” under the terms of the Securities
      Purchase Agreement, and LV Administrative Services, Inc., as administrative
      and
      collateral agent for each Purchaser.

     

    “Effective
      Date” means 7:00 A.M., Central Time, on the first Day of the Month following
      the first to occur of (a) the payment in full by WI Owner to Assignees of all
      amounts (including principal and accrued interest) owed by WI Owner under the
      terms of the Notes, or (b) the “Maturity Date” of the Notes (as such term is
      defined therein).

     

    “Environmental
      Complaint” means any written or oral complaint, order, directive, claim,
      citation, notice of environmental report or investigation, or other notice
      by
      any governmental authority or any other Person with respect to (a) air
      emissions, (b) spills, releases, or discharges to soils, any improvements
      located thereon, surface water, groundwater,
      or the sewer, septic, waste treatment, storage, or disposal systems servicing
      any Lease, (c) solid or liquid waste disposal, (d) the use, generation, storage,
      transportation, or disposal of any Hazardous Substance, or (e) other
      environmental, health, or safety matters affecting any Lease or the business
      conducted thereon.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    “Environmental
      Laws” means (a) the following federal laws as they may be cited, referenced,
      and amended from time to time:  the Clean Air Act, the Clean Water
      Act, the Safe Drinking Water Act, the Comprehensive Environmental Response,
      Compensation and Liability Act, the Endangered Species Act, the Resource
      Conservation and Recovery Act, the Hazardous Materials Transportation Act,
      the
      Superfund Amendments and Reauthorization Act, and the Toxic Substances Control
      Act; (b) any and all equivalent environmental statutes of any state in which
      any
      Asset is situated, as they may be cited, referenced and amended from time to
      time; (c) any rules or regulations promulgated under or adopted pursuant to
      the
      above federal and state laws; and (d) any other equivalent federal, state,
      or
      local statute or any requirement, rule, regulation, code, ordinance, or order
      adopted pursuant thereto, including those relating to the generation,
      transportation, treatment, storage, recycling, disposal, handling, or Release
      of
      Hazardous Substances.

     

    “Environmental
      Liability”  means any claim, demand, obligation, cause of action,
      accusation, allegation, order, violation, damage, injury, judgment, penalty
      or
      fine, cost of enforcement, cost of remedial action, or any other cost or expense
      whatsoever, including reasonable attorneys’ fees and disbursements, resulting
      from the violation or alleged violation of any Environmental Law or the
      imposition of any Environmental Lien.

     

    “Environmental
      Lien” means a lien in favor of a Governmental Authority or other Person for
      (a) any liability under an Environmental Law or (b) damages arising from or
      costs incurred by such Governmental Authority or other Person in response to
      a
      Release (or threatened Release) of Hazardous Substances into the
      environment.

     

    “Governmental
      Authority” means any governmental or quasi-governmental federal, state,
      provincial, county, city, or other political subdivision of the United States,
      any foreign country, or any department, bureau, agency, commission, court,
      or
      other statutory or regulatory body or instrumentality thereof.

     

    “Hazardous
      Substances” shall mean flammables, explosives, radioactive materials,
      hazardous wastes, asbestos, or any material containing asbestos, polychlorinated
      biphenyls (PCBs), toxic substances or related materials, petroleum, petroleum
      products, associated oil or natural gas exploration, production, and development
      wastes, or any substances defined as “hazardous substances,” “hazardous
      materials,” “hazardous wastes,” or “toxic substances” under the Comprehensive
      Environmental Response, Compensation and Liability Act, as amended, the
      Superfund Amendments and Reauthorization Act, as amended, the Hazardous
      Materials Transportation Act, as amended, the Resource Conservation and Recovery
      Act, as amended, the Toxic Substances Control Act, as amended, or any other
      Environmental Laws.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    “Hydrocarbons”
      shall have the meaning given that term in the NPI Conveyance.

     

    The
      term
“Indemnified Parties” is defined in Section 4.5(a).

     

    “Knowledge”
      means, for purposes of Article 3, (a) knowledge of those matters of which
      a Person is charged with constructive notice under applicable Law, and (b)
      actual knowledge.

     

    “Laws”
      means all constitutions, laws, statutes, ordinances, rules,  and
      regulations of the United States, any foreign country, or any domestic or
      foreign state, and any local, state, or federal political subdivision or agency
      thereof, as well as all decisions of courts having the effect of law in each
      such jurisdiction.

     

    “Leases”
      means the oil and gas leases, fee mineral interests, and other interests
      described, referred to, or identified in Exhibit A as to all lands
      covered thereby (or the applicable part or portion thereof if specifically
      limited in depth and/or areal extent), together with, in the case of an oil
      and
      gas lease, any renewal or extension of such lease (as to all or any part or
      portion thereof), and any replacement lease taken upon or in anticipation of
      the
      expiration or termination of such lease (if executed and delivered during the
      term of or within one (1) year after expiration of the predecessor lease),
      as to
      all lands and depths described in the predecessor lease (unless the predecessor
      lease is specifically limited in depth or areal extent, in which event only
      such
      portion of such lease shall be considered a renewal or extension or a
      replacement lease subject to this Agreement).

     

    “Marketing
      Agreements” means the Hydrocarbon processing, sale, purchase, exchange,
      gathering, transportation, and other marketing-related contracts, agreements,
      and rights owned by WI Owner or to which WI Owner is a party and that are
      appurtenant to or affect the Subject Interests, described more particularly
      on
Schedule 3.1(m).

     

    “Material
      Adverse Effect” shall have the meaning given to that term in the Securities
      Purchase Agreement.

     

    “NPI
      Conveyance” means the Conveyance of Net Profits Overriding Royalty Interest
      to be executed by WI Owner in favor of Assignee with respect to the Net Profits
      Interest, substantially in the form attached hereto as Exhibit
      B.

     

    “Net
      Profits Interest” means the net profits overriding royalty interest to be
      conveyed by WI Owner to Assignee out of the Subject Interests as provided in
      this Agreement, subject to and in accordance with the terms of the NPI
      Conveyance.

     

    “Notes”
      mean, collectively, (a) the Secured Term Note dated of even date herewith,
      from
      WI Owner to Valens U.S. SPV I, LLC, in the original principal amount of
      $3,100,000.00, and (b) the Secured Term Note dated of even date herewith, from
      WI Owner to Valens Offshore SPV II, Corp., in the original principal amount
      of
      $4,000,000.00.

     

    “Parties”
      shall mean, collectively, WI Owner and Assignees.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    “Permitted
      Encumbrances” shall have the meaning given that term in the NPI
      Conveyance.

     

    “Person”
      means any individual, natural person, corporation, joint venture, partnership,
      limited partnership, limited liability company, limited liability partnership,
      trust, estate, business trust, association, governmental entity or other
      entity.

     

    “Property
      Agreements” means all of the operating agreements, unit operating
      agreements, processing plant operating agreements, pooling and unitization
      agreements, and other contracts, agreements, and rights owned by WI Owner,
      in
      whole or in part, to the extent that they are appurtenant to or affect the
      Subject Interests, described more particularly on Schedule
      3.1(m).

     

    “Release
      of Hazardous Substances” means any emission, spill, release, disposal, or
      discharge, except in accordance with a valid permit, license, certificate,
      or
      approval of the relevant governmental authority, of any Hazardous Substance
      into
      or upon (a) the air, (b) soils or any improvements located thereon, (c) surface
      water or groundwater, or (d) the sewer or septic system, or the waste treatment,
      storage, or disposal system servicing any Lease, with respect to which WI Owner
      is legally obligated to respond under applicable Environmental Laws by notifying
      the relevant governmental authority, investigating, or undertaking corrective
      action.

     

    “Securities
      Purchase Agreement” means the Securities Purchase Agreement dated of even
      date herewith, between Gulf Coast Oil Corporation, the purchasers from time
      to
      time a party thereto, and LV Administrative Services, Inc., as administrative
      and collateral agent for each purchaser.

     

    “Subject
      Interests” means:  (a) the undivided leasehold interests and the
      associated net revenue interests of WI Owner described more particularly on
      Exhibit A in and to the Leases and the other rights and interests
      described more particularly in Exhibit A, INSOFAR ONLY AS the Leases
      cover and include the lands identified in Exhibit A, which comprise the
      drill site locations for the proposed wells listed on Exhibit A, all as
      provided in Exhibit A; (b) all rights, titles, and interests of WI Owner
      in and to all Hydrocarbons produced, saved, and marketed from or allocable
      to
      the proposed Hydrocarbon wells listed on Exhibit A once such wells
      are drilled and completed, and any Hydrocarbon wells drilled thereafter on
      the
      Leases, INSOFAR ONLY AS the Leases cover and include the lands identified in
      Exhibit A, and any unit into which any such Lease, INSOFAR ONLY AS such
      Lease covers and includes the lands identified in Exhibit A, is pooled or
      unitized; and (c) any and all other rights, titles, and interests of WI Owner
      in
      or with respect to all voluntary or compulsory pooling or unitization agreements
      or orders, farmout agreements, farmin agreements, operating agreements,
      Hydrocarbon purchase and sale agreements, licenses, permits, and all other
      contracts of any kind whatsoever covering or affecting the production or
      marketing of Hydrocarbons from the Leases, INSOFAR ONLY AS the Leases cover
      and
      include the lands identified in Exhibit A, and any unit into which any
      such Lease, INSOFAR ONLY AS such Lease covers and includes the lands identified
      in Exhibit A, is pooled or unitized, and attributable to the interests of
      WI Owner therein.

     

    “Taxes”
      means all ad valorem, property, occupation, gathering, pipeline regulating,
      windfall profit, severance, gross production, gross receipts, Btu, energy,
      excise, and other taxes and governmental charges and assessments imposed on
      the
      Subject Interests, the Net Profits Interest, the Hydrocarbons attributable
      thereto, or the proceeds therefrom, other than income, franchise, or similar
      taxes.

     

    “Transfer”
      means, for purposes of Section 4.8, as applicable, (a) a sale,
      exchange, assignment, conveyance, gift, bequest, devise, disposition, or other
      direct transfer of title to an asset, (b) a transfer of the equity
      interests of the Person owning the relevant asset or, in the case of an entity
      other than an individual, the direct parent of such entity, or (c) a
      merger, consolidation, reorganization, or other business combination of such
      Person or, in the case of an entity other than an individual, the direct parent
      of such entity.

     

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      3.1(e)

     

    


     

    WI
      OWNER’S LITIGATION

     

    None.

     

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      3.1(g)

     

    


     

    PREFERENTIAL
      PURCHASE RIGHTS; REQUIRED THIRD

     

    PERSON
      CONSENTS TO ASSIGNMENT

     

    None.

     

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      3.1(h)

     

    


     

    LIENS
      AND ENCUMBRANCES

     

    


    


    
      	
              1.

            	
              Mortgage,
                Deed of Trust, Security Agreement, Financing Statement and Assignment
                of
                Production, from Gulf Coast Oil Corporation, as Mortgagor, to Eugene
                Grin,
                as Trustee, for the benefit of Laurus Master Fund, Ltd., as Mortgagee,
                dated as of April 26, 2006, filed and recorded as
                follows:

            
	 	 
	 	
              JURISDICTION

            	
              FILING
                DATA

            
	 	 	 
	 	
              TEXAS

            	 
	 	 	 
	 	
              Atascosa
                County

            	
              Filed
                on April 27, 2006, under Instrument No. 81631, Official
                Records

            
	 	 	 
	 	
              McMullen
                County

            	
              Filed
                on April 27, 2006, under Instrument No. 61695 Volume 168 Page
                371

            


    

    


    


    
      	
              2.

            	
              UCC-1
                Financing Statement reflecting Gulf Coast Oil Corporation, as Debtor,
                and
                Laurus Master Fund, Ltd., as Secured Party, relating to the Mortgage
                dated
                as of April 26, 2006, filed and recorded as follows:

            
	 	 	 
	 	
              JURISDICTION

            	
              FILING
                DATA

            
	 	 	 
	 	
              TEXAS

            	 
	 	 	 
	 	
              McMullen
                County

            	
              Filed
                on April 28, 2006, Volume 168 Page
                426

            


    

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    
      	
              3.

            	
              Amended
                and Restated Mortgage, Deed of Trust, Security Agreement, Financing
                Statement and Assignment of Production from Gulf Coast Oil Corporation,
                as
                Mortgagor, to Eugene Grin, as Trustee, for the benefit of Laurus
                Master
                Fund, Ltd., as Mortgagee, dated as of June 30, 2006, filed and recorded
                as
                follows:

            
	 	 
	 	
              JURISDICTION

            	
              FILING
                DATA

            
	 	 	 
	 	
              TEXAS

            	 
	 	 	 
	 	
              Atascosa
                County

            	
              Filed
                on July 3, 2006, under Instrument No. 83177, Official
                Records

            
	 	 	 
	 	
              McMullen
                County

            	
              Filed
                on July 3, 2006, under Instrument No. 61899 Volume 170 Page
                01

            


    

    


    


    
      	
              4.

            	
              UCC-1
                Financing Statement reflecting Gulf Coast Oil Corporation, as Debtor,
                and
                Laurus Master Fund, Ltd., as Secured Party, relating to the Mortgage
                dated
                as of June 30, 2006, filed and recorded as follows:

            
	 	 
	 	
              JURISDICTION

            	
              FILING
                DATA

            
	 	 	 
	 	
              TEXAS

            	 
	 	 	 
	 	
              Atascosa
                County

            	
              Filed
                on July 10, 2006, under Instrument No. 83277, Official
                Records

            
	 	 	 
	 	
              McMullen
                County

            	
              Filed
                on July 3, 2006, Volume 170
                Page 92

            


    

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    
      	
              5.

            	
              First
                Amendment to Amended and Restated Mortgage, Deed of Trust, Security
                Agreement, Financing Statement and Assignment of Production from
                Gulf
                Coast Oil Corporation, as Mortgagor, to Eugene Grin, as Trustee,
                for the
                benefit of Laurus Master Fund, Ltd., as Mortgagee, dated January
                30, 2007,
                filed and recorded as follows:

            
	 	 
	 	
              JURISDICTION

            	
              FILING
                DATA

            
	 	 	 
	 	
              TEXAS

            	 
	 	 	 
	 	
              Atascosa
                County

            	
              Filed
                on February 5, 2007, under Instrument No. 88090, Official
                Records

            
	 	 	 
	 	
              McMullen
                County

            	
              Filed
                on February 5, 2007, under Instrument No. 62467 Volume 173
                Page 89

            


    

    


    


    
      	
              6.

            	
              UCC-1
                Financing Statement reflecting Gulf Coast Oil Corporation, as Debtor,
                and
                Laurus Master Fund, Ltd., as Secured Party, relating to the First
                Amendment dated January 30, 2007, filed and recorded as
                follows:

            
	 	 
	 	
              JURISDICTION

            	
              FILING
                DATA

            
	 	 	 
	 	
              TEXAS

            	 
	 	 	 
	 	
              Atascosa
                County

            	
              Filed
                on January 10, 2007, under Instrument No. 87556, Official
                Records

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      3.1(m)

     

    


     

    PROPERTY
      AGREEMENTS; MARKETING AGREEMENTS

     

    
      	
              A.

            	
              Property
                Agreements

            


    

     

    
      	
               

            	
              None.

            


    

     

    
 

     

    
      	
              B.

            	
              Marketing
                Agreements

            


    

     

    
      	
               

            	
              Crude
                Oil Purchase Agreement, GulfMark Contract No. 52010, dated May 19,
                2006,
                between Gulf Coast Oil Corporation, as Seller, and GulfMark Energy,
                Inc.,
                as Buyer, as amended.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      3.1(n)

     

    


     

    FUTURE
      ASSIGNMENT OBLIGATIONS

     

    None.

     

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      3.1(r)

     

    


     

    PRODUCTION
      IMBALANCES AND RELATED ITEMS

     

    None.

     

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A

     

    


     

    [Confidential
      Information
      Removed]

     

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      



    EXHIBIT
      B

     

    


     

    


     

    Attached
      to and made a part of Net Profits Interest Agreement

     

    dated
      as of November 20, 2007, between

     

    Gulf
      Coast Oil Corporation, as WI Owner, and

     

    Valens
      U.S. SPV I, LLC, and Valens Offshore SPV II, Corp., as
      Assignees

     

    Form
      of Conveyance of Net Profits Overriding Royalty
      Interest