EXHIBIT 10.1

Execution Version

 

 

LOAN AGREEMENT

 

 

dated as of

 

 

September 11, 2014

 

 

between

 

 

HARVEST NATURAL RESOURCES, INC.,

as Holdings,

 

 

HNR ENERGIA B.V.,

as the Borrower,

 

 

and

 

 

PETROANDINA RESOURCES CORPORATION N.V.,

as Lender

 

 

 

 

   

 

 

 

 

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TABLE OF CONTENTS 

(continued)

 

 

 

 

 

 

 

Page

ARTICLE I Definitions

1 

SECTION 1.01

Defined Terms

1 

SECTION 1.02

Terms Generally

14 

SECTION 1.03

Accounting Terms; GAAP

15 

ARTICLE II The Credits

15 

SECTION 2.01

The Commitment

15 

SECTION 2.02

Loans and Borrowings

15 

SECTION 2.03

Requests for Borrowings

15 

SECTION 2.04

Funding of Borrowings

15 

SECTION 2.05

Termination and Reduction of the Commitment

16 

SECTION 2.06

Repayment of Loans; Evidence of Debt

16 

SECTION 2.07

Prepayment of Loans

17 

SECTION 2.08

Interest

18 

SECTION 2.09

Taxes

19 

SECTION 2.10

Payments Generally

20 

ARTICLE III Representations and Warranties

20 

SECTION 3.01

Authorization and Enforceability

20 

SECTION 3.02

No Violation or Conflict; No Default

20 

SECTION 3.03

Use of Proceeds

21 

SECTION 3.04

No Material Adverse Change

21 

SECTION 3.05

Third Party Consents

21 

SECTION 3.06

Solvency

21 

SECTION 3.07

Litigation

22 

SECTION 3.08

Environmental Compliance

22 

SECTION 3.09

ERISA Compliance

22 

SECTION 3.10

Compliance with Laws

23 

SECTION 3.11

Foreign Assets Control Regulation

23 

ARTICLE IV Conditions

24 

SECTION 4.01

Effective Date

24 

SECTION 4.02

Each Credit Event

25 

 

 

 

 

 

 

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

 

 

 

Page

ARTICLE V Covenants

25 

SECTION 5.01

Payment of the Loans

26 

SECTION 5.02

Limitations on Liens

26 

SECTION 5.03

Limitations on Restricted Payments

27 

SECTION 5.04

Limitations on Investments

27 

SECTION 5.05

Limitations on Indebtedness

29 

SECTION 5.06

Limitations on Sales of Assets

31 

SECTION 5.07

Transactions with Affiliates

31 

SECTION 5.08

Merger or Consolidation

32 

SECTION 5.09

Change in Nature of Business

32 

SECTION 5.10

Amendments of Organization Documents

32 

SECTION 5.11

Future Guarantors

32 

SECTION 5.12

Accounting Changes

32 

SECTION 5.13

Terrorism Sanctions Regulations

32 

SECTION 5.14

Compliance with Laws

33 

SECTION 5.15

Compliance with Environmental Laws

33 

SECTION 5.16

Reports and Other Information

33 

ARTICLE VI Events of Default

34 

SECTION 6.01

Events of Default

34 

SECTION 6.02

Remedies

36 

ARTICLE VII Guaranty

37 

SECTION 7.01

Guaranty

37 

SECTION 7.02

Guaranty of Payment

37 

SECTION 7.03

No Limitations, Etc

37 

SECTION 7.04

Bankruptcy, Etc

40 

SECTION 7.05

Reinstatement

40 

SECTION 7.06

General Limitation on Guaranty Obligations

40 

ARTICLE VIII Miscellaneous

41 

SECTION 8.01

Notices

41 

SECTION 8.02

Waivers; Amendments

41 

 

 

 

 

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

 

 

 

Page

SECTION 8.03

Successors and Assigns

42 

SECTION 8.04

Survival

42 

SECTION 8.05

Counterparts; Integration; Effectiveness

42 

SECTION 8.06

Severability

43 

SECTION 8.07

Governing Law; Jurisdiction; Consent to Service of Process

43 

SECTION 8.08

WAIVER OF JURY TRIAL

44 

SECTION 8.09

Indemnification by the Loan Parties

44 

SECTION 8.10

Headings

45 

SECTION 8.11

Interest Rate Limitation

45 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit A 

Borrowing Request

Exhibit B

Form of Joinder Agreement 

Exhibit C

Form of Promissory Note

 

 

Schedule 2.01

Availability Schedule

Schedule 2.03

Lender Representatives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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This LOAN AGREEMENT is dated as of September 11, 2014 (this “Agreement”) by and
among HARVEST NATURAL RESOURCES, INC., a Delaware corporation (“Holdings”), HNR
Energia B.V., a private company with limited liability (besloten vennootschap
met beperkte aansprakelijkheld) organized and existing under the laws of Curacao
(the “Borrower”), and Petroandina Resources Corporation N.V., a company with
limited liability (naamloloze vennootschap) organized and existing under the
laws of the Netherlands (together with its Affiliates or permitted successors
and assigns, the “Lender”).

WHEREAS, Holdings, the Borrower and the Lender have entered into that certain
Share Purchase Agreement, dated as of December 16, 2013 (as amended, restated,
replaced, supplemented or otherwise modified from time to time in accordance
with its terms, the “Share Purchase Agreement”);

WHEREAS, pursuant to Section 8.1(b)(i) of the Share Purchase Agreement, the
Lender may extend the Termination Date (such term and each other capitalized
term used and not otherwise defined herein having the meaning assigned to it in
Article I of this Agreement) in its sole discretion in one-month periods if in
connection therewith, if so required by the Borrower, the Lender agrees to lend
to the Borrower $2,000,000 for each month of extension on the terms and
conditions to be set forth in a loan agreement consistent with such Section; 

WHEREAS, the Lender has notified Holdings and the Borrower that it has extended
the Termination Date to October 7, 2014, and the Borrower has notified the
Lender that the Borrower requires the Lender to lend the Borrower $2,000,000 on
the terms set forth in Section 8.1(b)(i) of the Share Purchase Agreement;

WHEREAS, the Lender desires to extend the Termination Date for such additional
periods as it shall determine in its sole discretion in accordance with Section
8.1(b)(i) of the Share Purchase Agreement;

WHEREAS, the Borrower and the Lender wish to establish a loan agreement under
which the Borrower may obtain Loans in Dollars for the Borrowing Periods for
which the Lender has extended the Termination Date and in the amounts as set
forth on Schedule 2.01 (the “Availability Schedule”);

NOW, THEREFORE, the Lender is willing to establish this Agreement on the terms
and subject to the conditions set forth herein, and accordingly, the parties
hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01 Defined Terms.  As used in this Agreement, the following terms have
the meanings specified below:

“Affiliate” means, with respect to a specified Person, another Person that
directly or indirectly Controls, is Controlled by or is under common Control
with the Person specified.

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“Asset Sale” means (a) the sale, lease, conveyance or other disposition of
assets (including by way of a sale and leaseback) of Holdings or any of its
Subsidiaries in excess of (i) $500,000 or with a fair market value in excess of
$500,000 or (ii) $1,000,000 when aggregated with the Net Cash Proceeds or fair
market value of all other assets subject to any Asset Sales during the same
fiscal year, in the case of clause (i) or clause (ii), other than Permitted
Dispositions or (b) the issuance or sale of Equity Interests of any of the
Subsidiaries of Holdings to any Person other than Holdings, in the case of
either clause (a) or (b) above, whether in a single transaction or a series of
related transactions. 

“Attributable Indebtedness” means, on any date, (a) in respect of any
Capitalized Lease Obligation of any Person, the capitalized amount thereof that
would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the
capitalized amount of the remaining lease or similar payments under the relevant
lease or other applicable agreement or instrument that would appear on a balance
sheet of such Person prepared as of such date in accordance with GAAP if such
lease or other agreement or instrument were accounted for as a Capitalized Lease
Obligation and (c) all Synthetic Debt of such Person. 

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of (i) December 31, 2014 and (ii) the Final Closing
Date or, if the Share Purchase Agreement is terminated, the date the Share
Purchase Agreement is terminated.

“Availability Schedule” has the meaning assigned to such term in the preamble to
this Agreement.

“Blocked Person” means a Person who is (a) an OFAC Listed Person or (b) a
department, agency or instrumentality of, or is otherwise controlled by or
acting on behalf of, directly or indirectly, (i) any OFAC Listed Person or (ii)
the government of a country subject to comprehensive U.S. economic sanctions
administered by the Office of Foreign Assets Control, U.S. Department of
Treasury (“OFAC”). 

“Board of Directors” means, with respect to any Person, the board of directors
of such Person or any committee thereof duly authorized to act on behalf of such
board.

“Borrower” has the meaning assigned to such term in the preamble to this
Agreement.

“Borrowing” means a borrowing hereunder consisting of Loans made to the Borrower
pursuant to Article II.

“Borrowing Date” means a Business Day within the Availability Period, designated
by the Borrower in a Borrowing Request, as a day on which the Borrower shall
make a Borrowing.  The Borrowing Dates applicable hereunder for the Borrowing
Periods are set forth in the Availability Schedule under the caption “Borrowing
Date,” 

“Borrowing Period” means the applicable period within the Availability Period
during which the Borrower can make a Borrowing, as set forth in the Availability
Schedule under the caption “Borrowing Period”; provided that only one Borrowing
may be made during

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each Borrowing Period and only on the corresponding Borrowing Date designated in
the Availability Schedule.

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03, which request shall be substantially in the form
of Exhibit A hereto.

“Business Day” means any day that is not a Saturday, a Sunday, or any day on
which commercial banks in New York City or Amsterdam, The Netherlands are
authorized or required by law or executive order to remain closed.

“Capitalized Lease Obligations” means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation will be the capitalized amount of such obligation at the time
any determination thereof is to be made as determined in accordance with GAAP,
and the Stated Maturity thereof will be the date of the last payment of rent or
any other amount due under such lease prior to the first date such lease may be
terminated without penalty. 

“Cash Equivalents” means (a) securities issued or directly and fully guaranteed
or insured by the United States Government or any agency or instrumentality of
the United States (provided that the full faith and credit of the United States
is pledged in support thereof), having maturities of not more than one year from
the date of acquisition; (b) marketable general obligations issued by any state
of the United States of America or any political subdivision of any such state
or any public instrumentality thereof maturing within one year from the date of
acquisition and, at the time of acquisition, having a credit rating of “A” or
better from either Standard & Poor’s Ratings Services or Moody’s Investors
Service, Inc.; (c) certificates of deposit, time deposits, eurodollar time
deposits, overnight bank deposits or bankers’ acceptances having maturities of
not more than one year from the date of acquisition thereof issued by any
commercial bank the long-term debt of which is rated at the time of acquisition
thereof at least “A” or the equivalent thereof by Standard & Poor’s Ratings
Services, or “A” or the equivalent thereof by Moody’s Investors Service, Inc.,
and having combined capital and surplus in excess of $500.0 million; (d)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (a), (b) and (c) entered into with
any bank meeting the qualifications specified in clause (c) above; (e)
commercial paper rated at the time of acquisition thereof at least “A-2” or the
equivalent thereof by Standard & Poor’s Ratings Services or “P-2” or the
equivalent thereof by Moody’s Investors Service, Inc., or carrying an equivalent
rating by a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of investments, and in any case maturing
within one year after the date of acquisition thereof; and (f) interests in any
investment company or money market fund substantially all of the assets of which
constitute instruments of the type specified in clauses (a) through (e) above. 

“Change of Control” means:

(a)any “person” or “group” of related persons (as such terms are used in Section
13(d) of the Exchange Act) is or becomes a beneficial owner, directly or
indirectly, of

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more than 35% of the total voting power of the Voting Stock of the Borrower (or
its successor by merger, consolidation or purchase of all or substantially all
of its properties or assets) (for the purposes of this clause, such person or
group shall be deemed to beneficially own any Voting Stock of the Borrower held
by an entity, if such person or group beneficially owns, directly or indirectly,
more than 35% of the voting power of the Voting Stock of such entity);

(b)the first day on which a majority of the members of the Board of Directors of
the Borrower or Holdings are not Continuing Directors;

(c)the direct or indirect sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Borrower and its Subsidiaries taken as a whole to any “person” (as such term is
used in Section 13(d) of the Exchange Act); or

(d)the adoption or approval by the stockholders of the Borrower of a plan for
the liquidation or dissolution of the Borrower.

“Charges” has the meaning assigned to such term in Section 8.11.

“Charter Documents” of any Person, means its certificate of incorporation,
articles of incorporation, bylaws, limited liability company certificate,
limited partnership certificate, limited liability company agreement, operating
agreement, limited partnership agreement, partnership agreement or other organic
document of similar purpose. 

“Commitment” means the commitment of the Lender to make Loans pursuant to
Section 2.01, as such commitment may be reduced from time to time as provided in
Section 2.05 or pursuant to assignments by the Lender as provided in Section
8.03.  The initial amount of the Lender’s Commitment for the applicable
Borrowing Period is set forth in the Availability Schedule under the caption
“Commitment.”

“Continuing Directors” means, as of any date of determination, any member of the
Board of Directors of the Borrower or Holdings who (a) was a member of the Board
of Directors of the Borrower or Holdings, respectively, on December 16, 2013; or
(b) was nominated for election or elected to the Board of Directors of the
Borrower or Holdings, respectively, with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies, or the dismissal or
appointment of the management, of a Person, whether through the ability to
exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

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“Default” means any event or condition that constitutes, or upon notice, lapse
of time or both would, unless cured or waived, constitute, an Event of Default.

“Default Rate” means the Interest Rate plus 2.0 % per annum.  

“Dollars” or “$” means the lawful money of the United States of America.

“Domestic Subsidiary” means any Subsidiary of Holdings that was formed under the
laws of the United States or any state of the United States or the District of
Columbia or that Guarantees or otherwise provides direct credit support for any
Indebtedness of Holdings or any Subsidiary of Holdings (other than a foreign
subsidiary).

“Effective Date” means the date on which the conditions specified in Section
4.01 are satisfied (or waived in accordance with Section 8.02).

“Environmental Laws” means all federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
Release of any Hazardous Materials into the environment, including those related
to air emissions and discharges to waste or public systems.

“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law. 

“Equity Interests” means any or all shares of capital stock, partnership
interests (whether general or limited), limited liability company membership
interests, beneficial interests in a trust or any other ownership interests or
participation, whether voting or nonvoting, that confers on a Person the right
to receive a share of profits or losses, or distributions of assets, of an
issuing Person, and any warrants, options or other rights entitling the holder
thereof to purchase or acquire any of the foregoing, and including any debt
securities convertible into such Equity Interests.

“Equity Limitation Date” means the date, if any, that Holdings shall have
received in excess of $30,000,000 for the issuance of its common stock or other
common Equity Interests of Holdings (including without limitation warrants,
options and other rights to acquire common stock) for cash or Cash Equivalents
after the date hereof.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute or Law thereto. 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with a Loan Party within the meaning of Section 414(b) or
(c) of the Internal Revenue Code (and Sections 414(m) and (o) of the Internal
Revenue Code for purposes of provisions relating to Section 412 of the Internal
Revenue Code). 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan (other
than a Multiemployer Plan); (b) the withdrawal of a Loan Party or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan
year in which such entity

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was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a
cessation of operations that is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by a Loan Party or any
ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer
Plan is in reorganization; (d) the filing of a notice of intent to terminate the
treatment of a Pension Plan amendment as a termination under Section 4041 or
4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a
Pension Plan; (f) any event or condition which constitutes grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (g) the determination that any Pension Plan is
considered an at-risk plan or any Multiemployer Plan is a plan in endangered or
critical status within the meaning of Sections 430, 431 and 432 of the Internal
Revenue Code or Sections 303, 304 and 305 of ERISA; or (h) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon Holdings or any ERISA Affiliate. 

“Event of Default” has the meaning assigned to such term in ARTICLE VI.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Taxes” means, with respect to the Lender, income or franchise taxes
imposed on (or measured by) its net income by the Netherlands or by the
jurisdiction under the laws of which the Lender is organized or in which the
Lender’s principal or applicable lending office is located.

“Exposure” means the aggregate principal amount of the Loans outstanding at the
time of determination.

“Final Closing Date” has the meaning assigned to such term in the Share Purchase
Agreement.

“GAAP” means generally accepted accounting principles in the United States of
America, applied in accordance with the consistency requirements thereof.

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national body exercising such powers or functions, such as the
European Union or the European Central Bank).

“Guaranty” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly.

“Guarantor” means each of (i) Holdings and (ii) any Additional Guarantor joined
pursuant to Section 5.11, and the permitted successors and assigns of each such
Person.

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“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“Holdings” has the meaning assigned to such term in the preamble to this
Agreement.

“Incur” means issue, create, assume, provide a Guaranty of, incur or otherwise
become liable for; and the terms “Incurred” and “Incurrence” have meanings
correlative to the foregoing. 

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP: 

(a)all obligations of such Person for borrowed money and all obligations of such
Person evidenced by bonds, debentures, notes, loan agreements or other similar
instruments; 

(b)the maximum amount of all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments; 

(c)net obligations of such Person under any Swap Contract; 

(d)all obligations of such Person to pay advances or the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business, which if in excess of $100,000 are not payable more than 60
days after the date on which such trade account was created), unless otherwise
approved by the prior written consent of the Lender in its sole discretion;

(e)indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse; 

(f)all Attributable Indebtedness in respect of Capitalized Lease Obligations and
Synthetic Lease Obligations of such Person and all Synthetic Debt of such
Person; 

(g)all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person or any warrant, right or option to acquire such Equity
Interest, valued, in the case of a redeemable preferred interest, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; 

(h)all Guaranties of such Person in respect of any of the foregoing; and

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(i)obligations of such Person with respect to preferred stock (other than with
respect to Holdings’s authorized Series B Preferred Stock that may become
issuable under the Third Amended and Restated Rights Agreement dated August 23,
2007, between Holdings and Wells Fargo Bank, N.A., as amended).

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person.  The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. 

“Indemnified Taxes” means Taxes other than Excluded Taxes and Other Taxes.

“Indemnified Liabilities” has the meaning assigned to such term in Section 8.09.

“Indemnitees” has the meaning assigned to such term in Section 8.09.

“Interest Payment Date” means January 1 (other than January 1, 2015), April 1,
July 1 and October 1 of each year, except the first Interest Payment Date
hereunder shall be December 31, 2014.

“Interest Rate” means a rate equal to 11.0% per annum.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute or Law thereto.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests of another Person, (b) a loan, advance or
capital contribution to, Guaranty or assumption of debt of, or purchase or other
acquisition of any other debt or interest in, another Person, or (c) the
purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit or all or a
substantial part of the business of, such Person.  For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment. 

“IRS” means the United States Internal Revenue Service. 

“Joinder Agreement” has the meaning assigned to such term in Section 5.11. 

“Laws” means, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directives, requests, licenses, authorizations
and permits of, and agreements with, any Governmental Authority, in each case
whether or not having the force of Law.

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“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing). 

“Lender” has the meaning set forth in the preamble hereto.

“Loan Documents” means this Agreement, any Joinder Agreement, each Borrowing
Request and the Promissory Note delivered pursuant to Section 2.06(d).

“Loan Obligations” means, with respect to the Borrower or a Guarantor, as
applicable, without duplication:

(i)all principal of and interest (including, without limitation, any interest
which accrues after the commencement of any proceeding under any Debtor Relief
Law with respect to the Borrower, whether or not allowed or allowable as a claim
in any such proceeding) on any Loan under this Agreement;

(ii)all fees, expenses, indemnification obligations and other amounts of
whatever nature now or hereafter payable by the Borrower (including, without
limitation, any amounts which accrue after the commencement of any proceeding
under any Debtor Relief Law with respect to the Borrower, whether or not allowed
or allowable as a claim in any such proceeding) pursuant to this Agreement or
any other Loan Document;

(iii)all expenses of the Lender as to which it has a right to reimbursement
pursuant to any Loan Documents;

(iv)all amounts paid by the Lender as to which the Lender has the right to
reimbursement and/or indemnification hereunder; and

(v)all amounts now or hereafter payable by the Borrower and all other
obligations or liabilities now existing or hereafter arising or incurred
(including any amounts which accrue after the commencement of any proceeding
under any Debtor Relief Law with respect to the Borrower, whether or not allowed
or allowable as a claim in any such proceeding) on the part of the Borrower
pursuant to this Agreement or any other Loan Document; together in each case
with all renewals, modifications, consolidations or extensions thereof.

“Loan Party” means each of Holdings, the Borrower and the Guarantors.

“Loans” means the loans made by the Lender to the Borrower pursuant to this
Agreement. 

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“Material Adverse Effect” means an event or condition that could reasonably be
expected to result in a material adverse effect on (i) the financial condition,
results of operations, capitalization, liquidity, assets or liabilities or
prospects of Holdings and its Subsidiaries, (ii) the ability of any Loan Party
to perform any of its obligations under any Loan Document or (iii) the rights of
or benefits available to the Lender under any Loan Document.

“Maturity Date” means the earlier of (i) the Final Closing Date or (ii) if the
Share Purchase Agreement is terminated, the date that is one year after the date
on which the Share Purchase Agreement is terminated.

“Maximum Rate” has the meaning assigned to such term in Section 8.11.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which Holdings or any ERISA Affiliate makes or
is obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions. 

“Multiple Employer Plan” means a plan which has two or more contributing
sponsors (including Holdings or any ERISA Affiliate) at least two of whom are
not under common control, as such a plan is described in Section 4064 of
ERISA.  

“Net Cash Proceeds” means in connection with each Asset Sale, the proceeds
thereof in the form of cash, cash equivalents and marketable securities,
including any cash received in respect of any non-cash proceeds (including any
cash payments received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment receivable or
otherwise, but excluding any interest payments), but only as and when received,
net of (i) reasonable and documented attorneys’ fees, accountants’ fees and
other professional charges (if any) and (ii) Taxes paid by the Borrower,
Holdings or any of their Subsidiaries, as applicable.  For clarification
purposes only, any proceeds from a disposition of assets or incurrence of
Indebtedness not in the form of cash, cash equivalents or marketable securities
shall not constitute Net Cash Proceeds.     

“OFAC Listed Person” means a Person whose name appears on the list of Specially
Designated Nationals and Blocked Persons published by OFAC. 

“Other Taxes” means any and all present or future stamp or documentary taxes or
any excise or property taxes, charges or similar levies arising from the
execution, delivery or enforcement of, from any payment made under, or otherwise
with respect to, any Loan Document.

“PBGC” means the Pension Benefit Guaranty Corporation. 

“Pension Funding Rules” means the rules of the Internal Revenue Code and ERISA
regarding minimum required contributions (including any installment payment
thereof) to Pension Plans and set forth in, with respect to plan years ending
before the effective date of the Pension Act, Section 412 of the Internal
Revenue Code and Section 302 of ERISA, each as in effect before the Pension Act
and, thereafter, Section 412, 430, 431, 432 and 436 of the Internal Revenue Code
and Sections 302, 303, 304 and 305 of ERISA.

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“Pension Plan” means any employee pension benefit plan within the meaning of
Section 3(3) or ERISA (including a Multiple Employer Plan or a Multiemployer
Plan) that is maintained or is contributed to by Holdings and any ERISA
Affiliate and is either covered by Title IV of ERISA or is subject to the
minimum funding standards under Section 412 of the Internal Revenue Code. 

“Permitted Disposition” means any of the following: (a) dispositions of obsolete
or worn-out property in the ordinary course of business; (b) dispositions of
hydrocarbons in the ordinary course of business; (c) dispositions of equipment
or real property to the extent that it is exchanged for credit against the
purchase price of similar replacement property or the proceeds of the
disposition are promptly applied to the purchase price of the replacement
property; (d) dispositions to Holdings or a wholly owned Subsidiary of Holdings;
(e) dispositions of drilling equipment and related assets in the ordinary course
of business; (f) farmouts of a percentage of a Subsidiary’s working interest in
any properties owned by Holdings or any of its Subsidiaries as of the Effective
Date, which farmouts are entered into in the ordinary course of business,
provided that the aggregate fair market value of such farmouts at any time is
less than $100 million; (g) farmouts of a percentage of a Subsidiary’s working
interest, in any properties acquired by Holdings or any of its Subsidiaries
after the Effective Date; (h) dispositions pursuant to sale-leaseback
transactions of not more than $5 million in book value in a fiscal year; (i)
dispositions of oil and gas property or interests (in each case other than from
farmouts) in exchange for assets other than cash or Cash Equivalents in
transactions entered into on an arm’s length basis and not exceeding $500
million in the aggregate (other than any direct or indirect disposition of
properties or interests owned by Petrodelta); and (j) the sale of the Subject
Shares pursuant to the Share Purchase Agreement.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Petrodelta” has the meaning assigned to such term in the Share Purchase
Agreement.

“Plan” means any employee benefit plan within the meaning of Section 3(3) of
ERISA (including a Pension Plan) other than a Multiemployer Plan, maintained for
employees of a Loan Party or any ERISA Affiliate or any such Plan to which a
Loan Party or any ERISA Affiliate is required to contribute on behalf of any of
its employees. 

“Project Financing Indebtedness” means indebtedness incurred to finance oil and
gas related projects by a special purpose Subsidiary of Holdings to finance the
acquisition, construction or development of a specific tangible property or
asset (the “Specified Property”) and with respect to which the obligation to
repay such obligation is recourse (a) only to the Specified Property, and not to
the general credit of, or any other asset of, such Subsidiary or Holdings or any
Subsidiary of Holdings or (b) only to contract revenues under a contract for the
sale of products or services  manufactured at or derived from the Specified
Property by such Subsidiary and entered into in the ordinary course of business,
and not to the general credit of, or any other asset of, such Subsidiary or
Holdings or any of its other Subsidiaries. 

“Promissory Note” has the meaning assigned to such term in Section 2.06(d).

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“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing into the
environment of any Hazardous Materials (including the abandonment or discarding
of barrels, containers and other closed receptacles containing any Hazardous
Materials). 

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30-day notice period has been waived. 

“Responsible Officer” means the Chief Executive Officer or the Chief Financial
Officer of Holdings or the Borrower.  

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of any Person or any of its Subsidiaries, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to any Person’s
stockholders, partners or members (or the equivalent of any thereof), or any
option, warrant or other right to acquire any such dividend or other
distribution or payment.  The amount of all Restricted Payments (other than
cash) shall be the fair market value on the date of such Restricted Payment of
the asset(s) or securities proposed to be paid, transferred or issued by the
Borrower or such Subsidiary of the Borrower, as the case may be, pursuant to
such Restricted Payment.  The fair market value of any cash Restricted Payment
shall be its face amount and any non-cash Restricted Payment shall be determined
conclusively by the Board of Directors of the Borrower acting in good faith
whose resolution with respect thereto shall be delivered to the Lender. 

“SEC” means the United States Securities and Exchange Commission.

“Second Tranche Purchase Price” has the meaning assigned to such term in the
Share Purchase Agreement.

“Share Purchase Agreement” has the meaning assigned to such term in the preamble
to this Agreement.

“Significant Subsidiary” means any Subsidiary of Holdings that would be a
“Significant Subsidiary” of Holdings within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.

“Solvent” means, with respect to any Person on a particular date, that on such
date, (a) the fair saleable value of the assets of such Person exceeds its
probable liability on its debts as they become absolute and mature, (b) all of
such Person’s assets, at a fair valuation, exceed the sum of such Person’s
debts, (c) such Person is able to pay its debts or liabilities as such debts and
liabilities mature and (d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which
such Person’s assets would constitute an unreasonably small capital.

“Stated Maturity” means, with respect to any security, the date specified in
such security as the fixed date on which the payment of outstanding principal of
such security is due

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and payable, including pursuant to any mandatory redemption provision, but shall
not include any contingent obligations to repay, redeem or repurchase any such
principal prior to the date originally scheduled for the payment thereof. 

“Subject Shares” has the meaning assigned to such term in the Share Purchase
Agreement.

“Subsidiary” means, with respect to any Person (the “parent”) at any date, (a)
any Person the accounts of which would be consolidated with those of the parent
in the parent’s consolidated financial statements if such financial statements
were prepared in accordance with GAAP as of such date and (b) any other Person
(i) of which Equity Interests representing more than 50% of the equity value or
more than 50% of the ordinary voting power or, in the case of a partnership,
more than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (ii) that is, as of such date, otherwise Controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.  For clarification purposes only, Petrodelta
shall not be deemed to be a Subsidiary of any Loan Party.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement. 

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the markto-market
value(s) for such Swap Contracts, as determined based upon one or more
mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts. 

“Synthetic Debt” means, with respect to any Person as of any date of
determination thereof, all obligations of such Person in respect of transactions
entered into by such Person that are intended to function primarily as a
borrowing of funds (including any minority interest transactions that function
primarily as a borrowing) but are not otherwise included in the definition of
“Indebtedness” or as a liability on the consolidated balance sheet of such
Person and its Subsidiaries in accordance with GAAP. 

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“Synthetic Lease Obligation” means the monetary obligation of a Person under (a)
a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property (including sale and leaseback
transactions), in each case, creating obligations that do not appear on the
balance sheet of such Person but which, upon the application of any Debtor
Relief Laws to such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment). 

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

“Termination Date” has the meaning assigned to such term in the Share Purchase
Agreement.

“Transactions” means the execution, delivery and performance by the Borrower of
the Loan Documents to which it is to be a party, the borrowing of Loans
hereunder and the use of the proceeds thereof.

“Uniform Commercial Code” means the New York Uniform Commercial Code as in
effect from time to time.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing:

(1)the sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at final maturity, in respect of the
Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment; by

(2)the then outstanding principal amount of such Indebtedness.

SECTION 1.02 Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation.”  The word
“will” shall be construed to have the same meaning and effect as the word
“shall.”  The words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all real and personal, tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.  The word “law” shall be construed as referring to all
statutes, rules, regulations, codes and other laws (including official rulings
and interpretations thereunder having the force of law or with which affected
Persons customarily comply), and all judgments, orders, writs and decrees, of
all Governmental Authorities.  Unless the context requires otherwise, (a) any
definition of or reference to any agreement, instrument or other document
(including this Agreement and the other Loan Documents) shall be construed as
referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any definition
of or reference to any statute, rule or regulation shall be construed as
referring thereto as from time to

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time amended, supplemented or otherwise modified (including by succession of
comparable successor laws), (c) any reference herein to any Person shall be
construed to include such Person’s successors and assigns (subject to any
restrictions on assignment set forth herein) and, in the case of any
Governmental Authority, any other Governmental Authority that shall have
succeeded to any or all functions thereof, (d) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof and (e) all
references herein to Articles and Sections shall be construed to refer to
Articles and Sections of this Agreement.

SECTION 1.03 Accounting Terms; GAAP.  Except as otherwise expressly provided
herein, all terms of an accounting or financial nature used herein shall be
construed in accordance with GAAP as in effect from time to time; provided that
if the Borrower, by notice to the Lender, shall request an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
(or if the Lender, by notice to the Borrower, shall request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith. 

ARTICLE II

The Credits

SECTION 2.01 The Commitment.  Subject to the terms and conditions set forth
herein, the Lender agrees to make Loans to the Borrower from time to time for
the applicable Borrowing Period during the Availability Period in Dollars up to
the amount of the Lender’s Commitment as set forth in the Availability
Schedule.  Amounts borrowed under this Section 2.01 and repaid or prepaid may
not be reborrowed.

SECTION 2.02 Loans and Borrowings. 

(a)Each Loan shall be made as part of a Borrowing.

(b)The Lender at its option may make any Loan by causing any of its Affiliates
to make such Loan; provided that any exercise of such option shall not affect
the obligation of the Borrower to repay such Loan in accordance with the terms
of this Agreement.

SECTION 2.03 Requests for Borrowings.  (a) To request a Borrowing for a
Borrowing Period, the Borrower shall notify the Lender of such request by
telephone not later than 10:00 a.m., New York City time on the date that is
three Business Days prior to the Borrowing Date (other than with respect to the
Borrowing to be made for the extension of the Termination Date to October 7,
2014, in which case the Borrower has already notified the Lender of such
request).  Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly (no later than one Business Day prior to the Borrowing
Date) by hand delivery or by email to the representatives of the Lender referred
to in Schedule 2.03 of an

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executed written Borrowing Request signed by a Responsible Officer of the
Borrower (other than with respect to the Borrowing to be made for the extension
of the Termination Date to October 7, 2014, in which case the Borrower shall
provide its Borrowing Request concurrently with the execution of this
Agreement).  The Borrower may not give more than one Borrowing Request in
respect of a Borrowing Period without the consent of the Lender.  Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:

(i)the aggregate principal amount of such Borrowing for such Borrowing Period;
provided that the aggregate principal amount of such Borrowing for the Borrowing
Period shall not exceed the Commitment for such Borrowing Period as set forth in
the Availability Schedule; 

(ii)the Borrowing Date; and

(iii)the location and number of the account of the Borrower to which funds are
to be disbursed, which shall be an account of the Borrower with a commercial
bank in the United States of America.

SECTION 2.04 Funding of Borrowings.  Upon the satisfaction of the applicable
conditions set forth in Section 4.01, Section 4.02 and the Borrowing Request,
the Lender shall make each Loan to be made by it hereunder by wire transfer of
immediately available funds by 3:00 p.m., New York City time, on the Borrowing
Date to the account specified by the Borrower in accordance with Section 2.03. 

SECTION 2.05 Termination and Reduction of the Commitment.  (a) Unless previously
terminated, the Commitment shall terminate on the last Business Day of the
Availability Period.  For the avoidance of doubt, the Lender may terminate the
Commitment for each Borrowing Period for which the Termination Date has not been
extended pursuant to Section 8.1(b)(i) of the Share Purchase Agreement or upon
any other termination of the Share Purchase Agreement in accordance with its
terms.

(b)The Borrower may at any time terminate, or from time to time permanently
reduce, the Commitment; provided that each reduction of the Commitment shall be
in an amount that is an integral multiple of $1,000,000 and not less than
$1,000,000.

(c)The Borrower shall notify the Lender and confirm by hand delivery or by email
of any election to terminate or reduce the Commitment under paragraph (b) of
this Section at least three (3) Business Days prior to the effective date of
such termination or reduction, specifying the effective date thereof.  Each
notice delivered by the Borrower pursuant to this Section shall be
irrevocable.  

(d)Upon the occurrence of the Equity Limitation Date, the Commitment shall
terminate and there shall be no further obligation of the Lender to make any
Loans hereunder.  Each of the Loan Parties and the Lender agree that upon the
occurrence of the Equity Limitation Date, the Lender will be deemed to satisfy
the obligation to make Loans for all subsequent Borrowing Periods under Section
8.1(b)(i) of the Share Purchase Agreement notwithstanding the termination of the
Commitment and Section 8.1(b)(i) of the Share Purchase Agreement shall be

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deemed amended to not require further Loans to be made as a condition to the
extension of the Termination Date (as defined therein).

SECTION 2.06 Repayment of Loans; Evidence of Debt.  (a) The Borrower hereby
unconditionally promises to pay to the Lender the then unpaid principal amount
of each Loan on the Maturity Date, and all accrued but unpaid interest and all
other amounts owed under this Agreement and the other Loan Documents.  For the
avoidance of doubt, if the Final Closing Date occurs pursuant to the terms of
the Share Purchase Agreement, the Second Tranche Purchase Price shall be reduced
by any outstanding amounts due and payable under this Section 2.06(a), and such
reduction shall constitute full payment of such amounts.

(b)The Lender shall maintain an account or accounts evidencing the obligations
of the Borrower to the Lender resulting from the Loans made by the Lender.

(c)The entries made in the accounts maintained pursuant to paragraph (b) of this
Section shall be binding and conclusive absent manifest error of the existence
and amounts of the obligations of the Borrower in respect of the Loans, interest
due or accrued hereunder; provided that the failure of the Lender to maintain
such records or any error therein shall not in any manner affect the obligation
of the Borrower to pay any amounts due hereunder in accordance with the terms of
this Agreement.

(d)The Borrower shall prepare, execute and deliver to the Lender a promissory
note in favor of the Lender (a “Promissory Note”) evidencing the full amount of
the Loans that may be made by the Lender (or, if requested by the Lender, the
Lender and its registered assigns) and substantially in the form of which is
attached as Exhibit C hereto.

SECTION 2.07 Prepayment of Loans.  (a) Optional.  (i)  The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, together with accrued and unpaid interest to the date of prepayment on
the aggregate principal amount prepaid, subject to the requirements of this
Section.  Amounts repaid under this Section 2.07(a) may not be reborrowed. 

(ii)The Borrower shall notify the Lender by telephone (confirmed by hand
delivery or by email to the representatives of the Lender referred to in
Schedule 2.03) of any prepayment hereunder not later than 10:00 a.m., New York
City time, four (4) Business Days before the date of such prepayment.  Each such
notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid.  Each
partial prepayment of any Borrowing shall be in an aggregate amount that is at
least equal to $100,000 and an integral multiple of $10,000 in excess thereof
or, if less, the entire principal amount thereof then outstanding.  

(b)Mandatory.  (i)  If Holdings or any of its Subsidiaries disposes of any
property or assets pursuant to an Asset Sale, which results in the realization
or receipt by Holdings or such Subsidiary of Net Cash Proceeds, the Borrower
shall prepay on or prior to the date which is ten (10) Business Days after the
date of the realization or receipt of such Net Cash Proceeds, an aggregate
principal amount of Loans equal to the lesser of (A) 100% of all

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Net Cash Proceeds realized or received and (B) the then unpaid principal amount
of each Loan, all accrued and unpaid interest and any other amounts payable
under the Loan Documents.

(ii)If Holdings or the Borrower receives any dividends, distributions or any
other cash payments or proceeds from Petrodelta, the Borrower shall prepay on or
prior to the date which is ten (10) Business Days after the date of the receipt
of such proceeds, an aggregate principal amount of Loans equal to the lesser of
(A) 50% of all proceeds received and (B) the then unpaid principal amount of
each Loan, all accrued and unpaid interest and any other amounts payable under
the Loan Documents.

(iii)If the Equity Limitation Date occurs, the Borrower shall prepay on or prior
to the date which is ten (10) Business Days after the Equity Limitation Date all
of the then unpaid principal amount of each Loan, all accrued and unpaid
interest and any other amounts payable under the Loan Documents. 

(iv)Amounts repaid under this Section 2.07(b) may not be reborrowed.

(c)Any payments shall be applied to the Loans as elected by the Lender.

(d)Amounts repaid under this Section 2.07 shall be made in Dollars to the
Lender’s account as designated by the Lender in writing from time to time to the
Borrower.

SECTION 2.08 Interest.  (a)  The Loans comprising each Borrowing shall bear
interest at a rate per annum equal to the Interest Rate on the unpaid principal
amount thereof.  Interest on any Loan shall accrue from and include the date
such Loan is made through and until repayment of the principal amount of such
Loan and payment of all interest thereon in full.

(b)Accrued (and theretofore unpaid) interest on each Loan shall be payable (x)
in arrears on each Interest Payment Date, (y) on the date of any repayment or
prepayment (on the principal amount repaid or prepaid), and (z) in arrears on
the Maturity Date (whether at stated maturity, by acceleration or otherwise).

(c)Notwithstanding the foregoing, (i) if any principal of or interest on any
Loan or other amount payable by the Borrower hereunder is not paid when due,
whether at stated maturity, upon acceleration or otherwise or (ii) any Event of
Default exists and is continuing, the Loans shall bear interest, after as well
as before judgment, at a rate per annum equal to the Default Rate (“Default
Interest”) payable on demand; provided that when any Event of Default ceases to
exist and is no longer continuing, such Default Interest shall no longer
accrue. 

(d)The Lender shall be entitled at any time to surrender to the Borrower the
Promissory Note in exchange for a new Promissory Note reflecting any increased
principal amount, and the Borrower shall prepare, execute and deliver such new
Promissory Note to the Lender promptly thereafter.

(e)All interest hereunder shall be computed on the basis of a year of 360 days
and actual days elapsed.  The applicable Interest Rate shall be determined by
the Lender, and such determination shall be conclusive and binding absent
manifest error.

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(f)All interest hereunder shall be made in Dollars to the Lender’s account as
designated by the Lender in writing from time to time to the Borrower.

SECTION 2.09 Taxes.  (a)  Each payment on account of any obligation of any Loan
Party hereunder or under any other Loan Document shall be made free and clear of
and without deduction for any Indemnified Taxes or Other Taxes; provided that if
any Loan Party shall be required to deduct any Indemnified Taxes or Other Taxes
from any such payment, then (i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Lender receives an amount equal
to the sum it would have received had no such deductions been made, (ii) such
Loan Party shall make such deductions and (iii) such Loan Party shall pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.

(b)In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authorities in accordance with applicable law.

(c)The Borrower shall indemnify, or shall cause the applicable Loan Party to
indemnify, the Lender, within ten (10) days after written demand therefor, for
the full amount of any Indemnified Taxes paid by the Lender on or with respect
to any payment by or on account of any obligation of any Loan Party hereunder or
under any other Loan Document (including Indemnified Taxes imposed or asserted
on or attributable to amounts payable under this Section) and any penalties,
interest and expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority.  A certificate as to the amount of such payment
or liability delivered to the Borrower by the Lender shall be conclusive absent
manifest error. 

(d)As soon as practicable after any payment of Indemnified Taxes by the Borrower
or any other Loan Party to a Governmental Authority, the Borrower shall deliver,
or shall cause such Loan Party to deliver, to the Lender the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Lender.

(e)The Lender shall deliver to the Borrower any documentation reasonably
requested by the Borrower that will permit payments hereunder to be made without
imposition of Taxes.

(f)If the Lender determines, in its sole discretion, that it has received a
refund of any Taxes as to which it has been indemnified by any Loan Party or
with respect to which any Loan Party has paid additional amounts pursuant to
this Section, it shall pay over such refund to such Loan Party (but only to the
extent of indemnity payments made, or additional amounts paid, by such Loan
Party under this Section with respect to the Indemnified Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the Lender and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that such Loan Party, upon the
request of the Lender, agrees to repay to the Lender the amount paid over to
such Loan Party (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) in the event the Lender is required to repay
such refund to such Governmental Authority.  This Section shall not be construed
to require any

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recipient of any Tax refund to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to any Loan Party
or any other Person.

(g)All of the Borrower’s obligations under this Section 2.09 shall survive
repayment of all Loans hereunder. 

SECTION 2.10 Payments Generally.  The Borrower shall make each payment required
to be made by it hereunder or under any other Loan Document prior to the time
expressly required hereunder or under such other Loan Document for such payment
(or, if no such time is expressly required, prior to 12:00 noon, New York City
time), on the date when due, in immediately available funds, without any
defense, setoff, recoupment or counterclaim.  Any amounts received after such
time on any date may, in the discretion of the Lender, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments shall be made to such account as may be
specified by the Lender or the Persons entitled to any such payment.  If any
payment under any Loan Document shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding Business Day
and, in the case of any payment accruing interest, interest thereon shall be
payable for the period of such extension.  All payments under each Loan Document
shall be made in Dollars.

ARTICLE III

Representations and Warranties

Each of the Loan Parties represents and warrants to the Lender, as of the date
hereof, as of the Effective Date and (to the extent required by Section 4.02) as
of the date of each Borrowing, that:

SECTION 3.01 Authorization and Enforceability.  It has taken all actions
necessary to authorize it (i) to execute, deliver and perform all of its
obligations under each of the Loan Documents to which it is a party, and (ii) to
consummate the transactions contemplated thereby.  Upon and after execution and
delivery thereof by the parties thereto, each of the Loan Documents will be its
legally valid and binding obligation, enforceable against it in accordance with
its respective terms, except for (a) the effect thereon of bankruptcy,
insolvency, reorganization, moratorium and other similar Laws relating to or
affecting the rights of creditors generally and (b) limitations imposed by
equitable principles upon the specific enforceability of any of the remedies,
covenants or other provisions thereof and upon the availability of injunctive
relief or other equitable remedies.  

SECTION 3.02 No Violation or Conflict; No Default.    (a) Neither the execution,
delivery or performance of this Agreement or any of the other Loan Documents by
it, nor the compliance with its obligations thereunder, nor the consummation of
the transactions contemplated thereby, nor the issuance, sale or delivery of the
Promissory Note will: 

(i)violate any provision of its Charter Documents; 

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(ii)violate any statute, Law, rule or regulation or any judgment, decree, order,
regulation or rule of any Governmental Authority to which it, any of its
Subsidiaries or any of the properties of it or any of its Subsidiaries may be
subject;

(iii)permit or cause the acceleration of the maturity of any debt or obligation
of it or any or its Subsidiaries; or (iv) violate, or be in conflict with, or
constitute a default under, or permit the termination of, or require the consent
of any Person under, or result in the creation or imposition of any Lien (other
than Liens permitted under Section 5.02(a) through (k) of this Agreement) upon
any property of it or any or its Subsidiaries under, any mortgage, indenture,
loan agreement, note, debenture, agreement for borrowed money or any other
agreement to which it or any of its Subsidiaries is a party or by which it or
any of its Subsidiaries (or their properties) may be bound, other than such
violations, conflicts, defaults, terminations and Liens, or such failures to
obtain consents, which could not reasonably be expected to result in a Material
Adverse Effect. 

(b)Neither it nor any of its Subsidiaries is in default (without giving effect
to any grace or cure period or notice requirement) under any agreement for
borrowed money or under any agreement pursuant to which any of its securities
were sold.

SECTION 3.03 Use of Proceeds.    All of the proceeds of the Loans will be used
for general corporate purposes, including without limitation Gabon drilling and
development programs of Holdings or its Subsidiaries.

SECTION 3.04No Material Adverse Change.  Since December 16, 2013, Holdings and
its Subsidiaries, have not suffered any change in their properties, business,
operations, assets, condition (financial or otherwise) or prospects that could
reasonably be expected to result in a Material Adverse Effect.

SECTION 3.05Third Party Consents.  Neither the nature of its business and the
business of its Subsidiaries nor of any of their businesses or properties, nor
any relationship between it or any Subsidiary and any other Person, nor any
circumstance in connection with the issuance of the Promissory Note nor the
performance by it of its other obligations under the Loan Documents, or the
consummation of the transactions contemplated under the Loan Documents, as the
case may be, is such as to require a consent, approval or authorization of, or
notice to, or filing, registration or qualification with, any Governmental
Authority or other Person on the part of it as a condition to the execution and
delivery of this Agreement or any of the other Loan Documents or the issuance of
the Promissory Note other than such consents, approvals, authorizations,
notices, filings, registrations or qualifications which shall have been made or
obtained on or prior to the Effective Date and such filings under Federal and
state securities Laws which are permitted to be made after the Effective Date
and which Holdings hereby agrees to file within the time period prescribed by
applicable Law.

SECTION 3.06Solvency.  Immediately prior to and after giving effect to the
issuance of the Promissory Note and the execution, delivery and performance of
this Agreement, the other Loan Documents and any instrument governing
Indebtedness of it or any of its Subsidiaries incurred as of the Effective Date,
it and each of its Subsidiaries are Solvent.

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SECTION 3.07Litigation.  There are no actions, suits, proceedings, claims or
disputes pending or, to its knowledge, threatened or contemplated, at Law, in
equity, in arbitration or before any Governmental Authority, by or against it or
any of its Subsidiaries or against any of their properties or revenues that (a)
purport to affect or pertain to this Agreement or any other Loan Document, or
(b) except as specifically disclosed in filings made by Holdings with the SEC on
or before the Effective Date, either individually or in the aggregate, if
determined adversely, could reasonably be expected to have a Material Adverse
Effect.

SECTION 3.08 Environmental Compliance.  (a) It and its Subsidiaries conduct in
the ordinary course of business a review of the effect of existing Environmental
Laws on their business, operations and properties and claims asserted against
them alleging potential liability or responsibility for violation of any
Environmental Law, and as a result thereof it has reasonably concluded that such
Environmental Laws and such claims could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. 

(b)None of the properties currently or formerly owned or operated by it or any
of its Subsidiaries is listed or proposed for listing on the National Priorities
List of the Environmental Protection Agency or on the Comprehensive
Environmental Response Compensation, Liability Information System maintained by
the Environmental Protection Agency or any analogous foreign, state or local
list or, to its knowledge, is adjacent to any such property; there are no and
never have been any underground or above-ground storage tanks other than in
material compliance with applicable Environmental Laws or any surface
impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials
are being or have been treated, stored or disposed on any property currently
owned or operated by it or any of its Subsidiaries or, to its knowledge, on any
property formerly owned or operated by it or any of its Subsidiaries; other than
in material compliance with applicable Environmental Laws, there is no asbestos
or asbestos-containing material on any property currently owned or operated by
it or any of its Subsidiaries; and Hazardous Materials have not been Released,
discharged or disposed of by it or any of its Subsidiaries or, to its knowledge,
any other Person on any property currently or formerly owned or operated by it
or any of its Subsidiaries.

(c)Except as could not reasonably be expected to have a Material Adverse Effect,
neither it nor any of its Subsidiaries is undertaking, either individually or
together with other potentially responsible parties, any investigation or
assessment or remedial or response action relating to any actual or threatened
release, discharge or disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any Governmental
Authority or the requirements of any Environmental Law; and to its knowledge,
all Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned or operated by
it or any of its Subsidiaries have been disposed of in a manner not reasonably
expected to result in material liability to it or any of its Subsidiaries.

SECTION 3.09 ERISA Compliance.  (a) Each Plan is in compliance with the
applicable provisions of ERISA, the Internal Revenue Code and other federal or
state laws, except in instances in which any such non-compliance could not be
reasonably expected to have a Material Adverse Effect.  Each Pension Plan that
is intended to be a qualified plan under Section 401(a) of the Internal Revenue
Code has received a favorable determination letter from the IRS to the effect
that the form of such Plan is qualified under Section 401(a) of the Internal

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Revenue Code and the trust related thereto has been determined by the IRS to be
exempt from federal income tax under Section 501(a) of the Internal Revenue
Code, or has an applicable remedial amendment period that will not have ended
before the Effective Date. To the knowledge of Holdings, nothing has occurred
that would prevent or cause the loss of such taxqualified status. 

(b)There are no pending or, to its knowledge, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with respect to any Plan that
could reasonably be expected to have a Material Adverse Effect.  There has been
no prohibited transaction or violation of the fiduciary responsibility rules
with respect to any Plan that has resulted or could reasonably be expected to
result in a Material Adverse Effect. 

(c)(i) No ERISA Event has occurred, and neither it nor any ERISA Affiliate is
aware of any fact, event or circumstance that could reasonably be expected to
constitute or result in an ERISA Event with respect to any Pension Plan; (ii) it
and each ERISA Affiliate has met all applicable requirements under the Pension
Funding Rules in respect of each Pension Plan, and no waiver of the minimum
funding standards under the Pension Funding Rules has been applied for or
obtained; (iii) as of the most recent valuation date for any Pension Plan which
is not a Multiemployer Plan, the funding target attainment percentage (as
defined in Section 430(d)(2) of the Internal Revenue Code) is 60% or higher and
it knows of no facts or circumstances that could reasonably be expected to cause
the funding target attainment percentage for any such plan to drop below 60% as
of the most recent valuation date; (iv) neither it nor any ERISA Affiliate has
incurred any liability to the PBGC other than for the payment of premiums, and
there are no premium payments which have become due that are unpaid; (v) neither
it nor any ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or Section 4212(c) of ERISA; and (vi) no Pension Plan has been
terminated by the plan administrator thereof nor by the PBGC, and no event or
circumstance has occurred or exists that could reasonably be expected to cause
the PBGC to institute proceedings under Title IV of ERISA to terminate any
Pension Plan. 

(d)Neither it nor any ERISA Affiliate maintains or contributes to, or has any
unsatisfied obligation to contribute to, or liability under, any active or
terminated Pension Plan.

SECTION 3.10Compliance with Laws.  It and its Subsidiaries are in compliance
with the requirements of all applicable Laws and all orders, writs, injunctions
and decrees applicable to them or to their properties, except in such instances
in which (a) such requirement of Law or order, writ, injunction or decree is
being contested in good faith by appropriate proceedings diligently conducted or
(b) the failure to comply therewith, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

SECTION 3.11Foreign Assets Control Regulation.  (a) Neither it nor any Affiliate
is (i) a Person whose name appears on the list of Specially Designated Nationals
and Blocked Persons published by the Office of Foreign Assets Control, U.S.
Department of Treasury (“OFAC”) (an “OFAC Listed Person”) or (ii) a department,
agency or instrumentality of, or is otherwise controlled by or acting on behalf
of, directly or indirectly, (x) any OFAC Listed Person or (y) the government of
a country subject to comprehensive U.S. economic

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sanctions administered by OFAC (each OFAC Listed Person and each other entity
described in clause (ii), a “Blocked Person”). 

(b)No part of the proceeds from the Loans constitutes or will constitute funds
obtained on behalf of any Blocked Person or will otherwise be used, directly by
it or indirectly through any Affiliate, in connection with any investment in, or
any transactions or dealings with, any Blocked Person. 

(c)To its knowledge, neither it nor any Affiliate (i) is under investigation by
any Governmental Authority for, or has been charged with, or convicted of, money
laundering, drug trafficking, terrorist-related activities or other money
laundering predicate crimes under any applicable Law (collectively, “Anti-Money
Laundering Laws”), (ii) has been assessed civil penalties under any Anti-Money
Laundering Laws or (iii) has had any of its funds seized or forfeited in an
action under any Anti-Money Laundering Laws (except as disclosed in Holdings’s
Annual Reporting Form 10-K for the year ended December 31, 2013, filed with the
SEC. It has taken reasonable measures appropriate to the circumstances (in any
event as required by applicable Law), to ensure that it and each Affiliate is
and will continue to be in compliance with all applicable current and future
Anti-Money Laundering Laws. 

(d)No part of the proceeds from the Loans made hereunder will be used, directly
or indirectly, for any improper payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, official of any public international organization or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage.  Holdings has taken reasonable
measures appropriate to the circumstances (in any event as required by
applicable Law), to ensure that Holdings and each of its Subsidiaries is and
will continue to be in compliance with all applicable current and future
anti-corruption Laws and regulations.

ARTICLE IV

Conditions

SECTION 4.01 Effective Date.  The obligations of the Lender to make Loans
hereunder shall not become effective until the date on which each of the
following conditions shall be satisfied (or waived in accordance with Section
8.02):

(a)The Lender shall have received from each party hereto a counterpart of this
Agreement signed on behalf of such party.

(b)The Lender shall have received a customary legal opinion of Fulbright &
Jaworski LLP and special Netherlands Antilles counsel, counsel to the Loan
Parties, in a form reasonably satisfactory to the Lender. 

(c)The Lender shall have received a copy of (i) each organizational document of
each Loan Party certified, to the extent applicable, as of a recent date by the
applicable Governmental Authority, (ii) signature and incumbency certificates of
the officers of each Loan Party executing the Loan Documents to which it is a
party, (iii) resolutions of the Board of Directors (or equivalent body or sole
member, as applicable) of each Loan Party approving and

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authorizing the execution, delivery and performance of Loan Documents to which
it is a party, certified as of the Effective Date by its secretary or an
assistant secretary as being in full force and effect, and (iv) (A) in the case
of Holdings, a good standing certificate from the Delaware Secretary of State
and (B) in the case of the Borrower, an excerpt of registration from the
applicable Governmental Authority of its jurisdiction of formation.

(d)The Lender shall have received a certificate in form, scope and substance
reasonably satisfactory to the Lender, from the Chief Financial Officer of the
Borrower or Holdings, dated as of the Effective Date, to the effect that at the
Effective Date, (and after giving effect to the Transactions), Holdings and its
Subsidiaries on a consolidated basis are Solvent.

(e)The Lender shall have received the Promissory Note executed by the Borrower.

SECTION 4.02 Each Credit Event.  The obligation of the Lender to make a Loan on
the occasion of any Borrowing is subject to receipt of the request therefor in
accordance herewith and to the satisfaction of the following conditions:

(a)The Termination Date shall have been extended for the Borrowing Period
applicable to such Borrowing by the Lender in its sole discretion pursuant to
the terms of Section 8.1(b)(i) of the Share Purchase Agreement.  A Loan made for
such Borrowing by the Lender (or, if the Borrower shall not have satisfied the
conditions under Section 4.01 or Section 4.02 other than as a result of a breach
by the Lender, the Commitment by the Lender to make such Loan) will satisfy the
terms of the Share Purchase Agreement to extend the Termination Date for the
length of such Borrowing Period. 

(b)The representations and warranties of each Loan Party set forth in the Loan
Documents and the Borrowing Request shall be true and correct on and as of the
date of such Borrowing except in the case of any such representation and
warranty that expressly relates to a prior date, in which case such
representation and warranty shall be so true and correct on and as of such prior
date.

(c)At the time of and immediately after giving effect to such Borrowing, no
Default shall have occurred and be continuing or would result from the proposed
Borrowing.

(d)The Final Closing Date shall not have occurred and the Share Purchase
Agreement shall not have been terminated in accordance with its terms.

(e)The Equity Limitation Date shall not have occurred.

ARTICLE V

Covenants

Until the Commitments shall have expired or been terminated and the principal of
and interest on each Loan shall have been paid in full, Holdings, Borrower and
the other Guarantors covenant and agree with the Lender that:

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SECTION 5.01 Payment of the Loans.  The Borrower shall promptly pay the
principal of and interest on the Loans on the dates and in the manner provided
in this Agreement.  Principal and interest shall be considered paid on the date
due if on such date the Lender (or an Affiliate thereof) holds in accordance
with this Agreement money sufficient to pay all principal and interest then
due. 

SECTION 5.02 Limitations on Liens.  None of Holdings or any of its Subsidiaries
will, directly or indirectly, create, incur, assume or permit to exist any Lien
on any of its property, assets or revenues now owned or hereafter acquired by
it, or sign and file or suffer to exist under the Uniform Commercial Code of any
jurisdiction a financing statement that names Holdings or any of its
Subsidiaries as debtor, or assign any accounts or other right to receive income,
except:

(a)Liens existing on the Effective Date and any renewals or extensions thereof;
provided that (i) the property covered thereby is not changed, (ii) the amount
secured or benefited thereby is not increased, and (iii) the direct or any
contingent obligor with respect thereto is not changed; 

(b)Liens pursuant to this Agreement or any Guaranty by the Guarantors pursuant
to this Agreement;

(c)Liens for taxes not yet delinquent or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

(d)carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business that are not overdue for a
period of more than 30 days or that are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;

(e)pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;

(f)deposits to secure the performance of bids, trade contracts and leases (other
than Indebtedness), statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary course of
business;

(g)easements, rights-of-way, restrictions and other similar encumbrances
affecting real property that, in the aggregate, are not substantial in amount,
and that do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;

(h)Liens securing judgments for the payment of money not constituting an Event
of Default under Section 6.01(k);

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(i)Liens securing Indebtedness permitted under Section 5.05(f); provided that
(i) such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and (ii) the Indebtedness secured thereby does not
exceed the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition;

(j)Liens on the assets of Harvest Dussafu BV or any Subsidiary of Harvest
Dussafu BV securing the Indebtedness described in Section 5.05(i); and

(k)Liens on Specified Property of a special purpose Subsidiary incurring the
applicable Project Financing Indebtedness and Liens on the contract revenues
under a contract for the sale of products or services manufactured at or derived
from the Specified Property by such special purpose Subsidiary entered into in
the ordinary course of business to secure Project Financing Indebtedness of such
special purpose Subsidiary.

SECTION 5.03 Limitations on Restricted Payments.  Holdings shall not, and shall
not permit any of its Subsidiaries, directly or indirectly, to declare or make
any Restricted Payment, or incur any obligation (contingent or otherwise) to do
so, or issue or sell any Equity Interests or accept any capital contributions,
except that, so long as no Default shall have occurred and be continuing at the
time of any action described below or would result therefrom:

(a)Each Subsidiary of Holdings may make Restricted Payments to (A) Holdings, (B)
any Guarantor and (C) any other Person that owns a direct Equity Interest in a
Guarantor (to the extent such Subsidiary is making a contemporaneous Restricted
Payment to Holdings or a Guarantor that also holds and Equity Interest in such
Subsidiary), in each case ratably according to their respective holdings of the
type of Equity Interest in respect of which such Restricted Payment is being
made;

(b)Holdings and each Subsidiary of Holdings may declare and make dividend
payments or other distributions payable solely in the common stock or other
common Equity Interests of such Person; 

(c)Holdings and its Subsidiaries may make capital contributions permitted by
Section 5.04(c); and

(d)Holdings may issue common stock or other common Equity Interests (including
without limitation warrants, options and other rights to acquire common stock).

SECTION 5.04Limitations on Investments.  Holdings shall not, and shall not
permit any of its Subsidiaries, directly or indirectly, to make or hold any
Investments, except: 

(a)Investments held by Holdings and its Subsidiaries in the form of Cash
Equivalents in an aggregate principal amount for all such Investments not to
exceed $800 million at any time outstanding;

(b)advances to officers, directors and employees of Holdings and its
Subsidiaries in an aggregate amount not to exceed $750,000 at any time
outstanding, for travel, entertainment, relocation and analogous amounts for
ordinary business purposes;

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(c)(A) Investments by Holdings and its Subsidiaries in their respective
Subsidiaries outstanding on the Effective Date; (B) additional investments by
Holdings and its Subsidiaries in Holdings or a Guarantor; (C) additional
Investments by Subsidiaries of Holdings that are not Guarantors in other
subsidiaries of Holdings that are not Guarantors; and (D) so long as no Default
has occurred and is continuing or would result from such Investment, additional
Investments by Holdings or any Subsidiary of Holdings in direct or indirect
wholly owned Subsidiaries of Holdings that are not Guarantors; provided that the
aggregate amount of Investments made pursuant to this clause (D) shall not
exceed $500 million; 

(d)Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss; 

(e)Guaranties permitted by Section 5.05;

(f)Investments existing on the date hereof;

(g)the purchase or other acquisition of all of the Equity Interests in, or all
or substantially all of the property of, any Person that, upon the consummation
thereof, will be wholly owned directly by Holdings or one or more of its wholly
owned Subsidiaries (including as a result of a merger or consolidation);
provided that, with respect to each purchase or other acquisition made pursuant
to this Section 5.04(g):

(i)any such newly created or acquired Subsidiary, if it is a Domestic
Subsidiary, shall comply with any applicable requirements of Section 5.11;

(ii)the lines of business of the Person to be (or the property of which is to
be) so purchased or otherwise acquired shall be substantially the same lines of
business as one or more of the principal businesses of Holdings and its
Subsidiaries in the ordinary course;

(iii)such purchase or other acquisition shall not include or result in any
contingent liabilities that could reasonably be expected to be material to the
business, financial condition, operations or prospects of Holdings and its
Subsidiaries, taken as a whole (as determined in good faith by the Board of
Directors (or the persons performing similar functions) of Holdings or such
Subsidiary if the Board of Directors is otherwise approving such transaction
and, in each other case, by a Responsible Officer); and

(iv)the total cash and non-cash consideration (including the fair market value
of all Equity Interests issued or transferred to the sellers thereof, all
indemnities, earnouts and other contingent payment obligations to, and the
aggregate amounts paid or to be paid under non-compete, consulting and other
affiliated agreements with, the sellers thereof, all write-downs of property and
reserves for liabilities with respect thereto and all assumptions of debt,
liabilities and other obligations in connection therewith) paid by or on behalf
of Holdings and its Subsidiaries for any such purchase or other acquisition,
when aggregated with the total cash and non-cash consideration paid by or on
behalf of Holdings and its Subsidiaries for all other purchases and other
acquisitions made by

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Holdings and its Subsidiaries pursuant to this Section 5.04(g)(iv) shall not
exceed $200 million in the aggregate;

(h)Investments by Holdings and its Subsidiaries not otherwise permitted under
this Section 5.04; provided that the aggregate amount of Investments made
pursuant to this Section 5.04(g) shall not exceed $800 million in the aggregate;
provided further that, with respect to each Investment made pursuant to this
Section 5.04(h):

(i)such Investment shall not include or result in any contingent liabilities
that could reasonably be expected to be material to the business, financial
condition, operations or prospects of Holdings and its Subsidiaries, taken as a
whole (as determined in good faith by the Board of Directors (or persons
performing similar functions) of Holdings or such Subsidiary if the Board of
Directors is otherwise approving such transaction and, in each other case, by a
Responsible Officer);

(ii)such Investment shall be in property that is part of, or in lines of
business that are, substantially the same lines of business as one or more of
the principal businesses of Holdings and its Subsidiaries in the ordinary
course; and

(iii)any determination of the amount of such Investment shall include all cash
and non-cash consideration (including the fair market value of all Equity
Interests issued or transferred to the sellers thereof, all indemnities,
earnouts and other contingent payment obligations to, and the aggregate amounts
paid or to be paid under non-compete, consulting and other affiliated agreements
with, the sellers thereof, all write-downs of property and reserves for
liabilities with respect thereto and all assumptions of debt, liabilities and
other obligations in connection therewith) paid by or on behalf of Holdings and
its Subsidiaries in connection with such Investment; and

(h)other Investments not exceeding $10 million in the aggregate.

SECTION 5.05 Limitations on Indebtedness.  Holdings shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or suffer to exist any Indebtedness, except:

(a)Indebtedness under the Loans; 

(b)obligations of Holdings or any Subsidiary (contingent or otherwise) existing
or arising under any Swap Contract, provided that (i) such obligations are (or
were) entered into by such Person in the ordinary course of business (and not
for speculative purposes) to hedge or mitigate risks to which Holdings or any
Subsidiary of Holdings is exposed in the conduct of its business or the
management of its liabilities and (ii) such Swap Contract does not contain any
provision exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party; provided that the
aggregate Swap Termination Value thereof shall not exceed $30 million at any
time outstanding;

(c)Indebtedness of a Subsidiary of Holdings owing to a wholly owned Subsidiary
of Holdings if such Indebtedness shall be permitted under the provisions of
Section 5.04;

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(d)existing Indebtedness on the Effective Date and any refinancings, refundings,
renewals or extensions thereof; provided that the amount of such Indebtedness is
not increased at the time of such refinancing, refunding, renewal or extension
except by an amount equal to a reasonable premium or other reasonable amount
paid, and fees and expenses reasonably incurred, in connection with such
refinancing and by an amount equal to any existing commitments unutilized
thereunder and the direct or any contingent obligor with respect thereto is not
changed, as a result of or in connection with such refinancing, refunding,
renewal or extension; provided further, that the terms relating to principal
amount, amortization, maturity, collateral (if any) and subordination (if any),
and other material terms taken as a whole, of any such refinancing, refunding,
renewing or extending Indebtedness, and of any agreement entered into and of any
instrument issued in connection therewith, are no less favorable in any material
respect to Holdings and its Subsidiaries than the terms of any agreement or
instrument governing the Indebtedness being refinanced, refunded, renewed or
extended and the interest rate applicable to any such refinancing, refunding,
renewing or extending Indebtedness does not exceed the then applicable market
interest rate; provided, further, that such refinancing, refunding, renewing or
extending Indebtedness has a final maturity date or redemption date, as
applicable, no earlier than the final maturity date or redemption date, as
applicable, of, and has a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of, the Indebtedness being
refinanced, refunded, renewed or extended;

(e)Guaranties of Holdings or any Subsidiary in respect of Indebtedness of
Holdings or any Subsidiary otherwise permitted under clauses (a), (b), (c) or
(f) of this Section 5.05;

(f)Indebtedness in respect of Capitalized Lease Obligations, Synthetic Lease
Obligations and purchase money obligations for fixed or capital assets within
the limitations set forth in Section 5.02(j); provided, however, that the
aggregate amount of all such Indebtedness at any one time outstanding shall not
exceed $10.0 million;

(g)unsecured Indebtedness of Holdings or any Subsidiary of Holdings that is
subordinated to the Loan Obligations in an aggregate principal amount
outstanding not to exceed $40 million at any time; provided that the terms of
subordination of any such Indebtedness shall be reasonably satisfactory to the
Lender; 

(h)obligations of Holdings or any Subsidiary existing or arising under any bank
guaranties or letters of credit provided to service companies in the ordinary
course of business of Holdings and its Subsidiaries with respect to drilling
operations, in an aggregate principal amount at any time outstanding not
exceeding $10 million; 

(i)Indebtedness of Harvest Dussafu BV or any wholly owned Subsidiary of Harvest
Dussafu BV to which Harvest Dussafu BV transfers any of its assets held in
connection with the operations of Harvest Dussafu BV in the Gabonese Republic (a
“Gabon Subsidiary”), in an aggregate principal amount at any time outstanding
not exceeding $300 million, incurred for the purpose of funding the operations
of Harvest Dussafu BV or any Gabon Subsidiary in the Gabonese Republic; and

(j)Project Financing Indebtedness of any Subsidiary of Holdings.

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For purposes of determining compliance with any U.S. dollar-denominated
restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent
principal amount of Indebtedness denominated in a foreign currency shall be
calculated based on the relevant currency exchange rate in effect on the date
such Indebtedness was Incurred, in the case of term Indebtedness, or first
committed, in the case of revolving credit Indebtedness; provided that if such
Indebtedness is Incurred to refinance other Indebtedness denominated in a
foreign currency, and such refinancing would cause the applicable U.S.
dollar-dominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such U.S.
dollar-dominated restriction shall be deemed not to have been exceeded so long
as the principal amount of such refinancing Indebtedness does not exceed the
principal amount of such Indebtedness being refinanced.  Notwithstanding any
other provision of this Section 5.05, the maximum amount of Indebtedness that
Holdings may Incur pursuant to this Section 5.05 shall not be deemed to be
exceeded solely as a result of fluctuations in the exchange rate of
currencies.  The principal amount of any Indebtedness Incurred to refinance
other Indebtedness, if Incurred in a different currency from the Indebtedness
being refinanced, shall be calculated based on the currency exchange rate
applicable to the currencies in which such refinancing Indebtedness is
denominated that is in effect on the date of such refinancing.

SECTION 5.06 Limitations on Sales of Assets.  Holdings shall not, and shall not
permit any of its Subsidiaries to, make any Asset Sale unless no Default or
Event of Default exists and is continuing or is created by such disposition,
such Asset Sale is not in conflict with the obligations of Holdings and the
Borrower under the Share Purchase Agreement and: 

(a)Holdings or such Subsidiary receives consideration (whether in Cash
Equivalents or otherwise) at the time of such Asset Sale at least equal to the
fair market value of such assets (as determined in good faith by the Board of
Directors of Holdings or such Subsidiary and evidenced by a resolution,
including as to the value of all noncash consideration); 

(b)all of the consideration therefor received by Holdings or such Subsidiary, as
the case may be, shall be in the form of cash; provided,  however, that for the
purposes of this clause (b), the following are deemed to be cash: (x) any
liabilities (as shown on Holdings’ or such Subsidiary’s most recent balance
sheet or in the notes thereto) of Holdings or such Subsidiary that are assumed
by the transferee in connection with the Asset Sale (other than liabilities that
are incurred in connection with or in anticipation of such Asset Sale); and (y)
securities received by Holdings or such Subsidiary from such transferee that are
immediately converted into cash at the face amount or fair market value thereof
by Holdings or such Subsidiary; and 

(c)any Net Cash Proceeds realized or received from an Asset Sale shall be
applied to prepay the Loan pursuant to Section 2.07(b). 

SECTION 5.07 Transactions with Affiliates.  Holdings shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, enter into any
transaction of any kind with any Affiliate of Holdings, whether or not in the
ordinary course of business, other than with the Loan Parties and on fair and
reasonable terms substantially as favorable to Holdings or such Subsidiary as
would be obtainable by Holdings or such Subsidiary at the time in a comparable

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arm’s length transaction with a Person other than an Affiliate, unless otherwise
consented to by the Lender; provided, however, that nothing herein shall
prohibit intercompany loans to fund expenditures of a Subsidiary of Holdings in
the ordinary course of business and permitted under Section 5.04(a) or Section
5.05. 

SECTION 5.08 Merger or Consolidation.  Holdings shall not, and shall not permit
any of its Subsidiaries to, consolidate with or merge with or into, or convey,
transfer or lease all or substantially all its assets to, any Person; provided,
however, that any Subsidiary of Holdings may consolidate with, merge into or
transfer all or part of its properties and assets to Holdings or any Subsidiary
of Holdings, as long as (i) such transaction shall not conflict with the
obligations of Holdings and the Borrower under the Share Purchase Agreement and
(ii) no capital stock of Holdings is distributed to any Person. 

SECTION 5.09 Change in Nature of Business.  Holdings shall not, nor shall it
permit any of its Subsidiaries to, directly or indirectly, engage in any
material line of business substantially different from those lines of business
conducted by Holdings and its Subsidiaries on the date hereof or any business
substantially related or incidental thereto.

SECTION 5.10 Amendments of Organization Documents.  Holdings shall not, and
shall not permit any of its Subsidiaries to, amend any of its Charter Documents
in any way that would have an adverse effect on the ability of any Loan Party to
perform any of its obligations under any Loan Document.

SECTION 5.11 Future Guarantors.  (a) If, after the Effective Date, any Domestic
Subsidiary of Holdings that is not already a Guarantor incurs any Indebtedness,
or issues any preferred stock, then such Subsidiary shall become a Guarantor by
executing and delivering a joinder to this Agreement (a “Joinder Agreement”),
the form of which is attached as Exhibit B hereto, providing for a Guaranty by
such Subsidiary within 30 days of the date on which it incurred such
Indebtedness or issued such preferred stock.

(b)The Guaranty of a Guarantor shall be released upon request of the Guarantor
at such time as such Guarantor is not liable for any Indebtedness and has no
preferred stock outstanding, as long as at the time of such release (1) no
Default or Event of Default has occurred and is continuing, (2) the Guarantor
has not been liable under any Indebtedness whatsoever during the immediately
preceding 181 consecutive days and (3) if the Guarantor paid any fees or similar
compensation (specifically excluding principal and interest) to a creditor in
connection with the termination or satisfaction of Indebtedness incurred after
the Effective Date, such Guarantor shall pay the same fee or similar
compensation to the Lender at the time of such payment.

SECTION 5.12 Accounting Changes.  Holdings shall not, nor shall it permit any
Subsidiary to, directly or indirectly, make any change in (a) accounting
policies or reporting practices, except as required by GAAP or (b) its fiscal
year.

SECTION 5.13 Terrorism Sanctions Regulations.  Holdings will not, and will not
permit any Subsidiary or any Affiliate to knowingly (a) become an OFAC Listed
Person,

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(b) have its assets located in Blocked Persons or (c) have any investments in,
or engage in any dealings or transactions with, any Blocked Person.  

SECTION 5.14 Compliance with Laws.  Holdings shall, and shall cause each of its
Subsidiaries to, comply with the requirements of all applicable Laws and all
orders, writs, injunctions and decrees applicable to it or to its business or
property, except in such instances in which (a) compliance with such requirement
of Law or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted; or (b) the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect. 

SECTION 5.15 Compliance with Environmental Laws.  Holdings shall, and shall
cause each of its Subsidiaries to (a) comply, and, except with respect to oil
and gas properties that are not operated by Holdings or any of its Subsidiaries,
cause all lessees and other Persons operating or occupying its properties to
comply, with all applicable Environmental Laws and Environmental Permits, except
in any of the foregoing instances in which the failure to comply therewith could
not reasonably be expected to have a Material Adverse Effect; (b) obtain and
renew all Environmental Permits necessary for its operations and properties; and
(c) conduct any investigation, study, sampling and testing, and undertake any
cleanup, removal, remedial or other action required to remove and clean up all
Hazardous Materials from any of its properties, as required under, and in
accordance with the requirements of all Environmental Laws; provided, however,
that neither Holdings nor any of its Subsidiaries shall be required to undertake
any such cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by proper proceedings
and appropriate reserves are being maintained with respect to such circumstances
in accordance with GAAP.

SECTION 5.16 Reports and Other Information.  Holdings shall deliver to the
Lender:

(a)Regardless of whether required by the rules and regulations of the SEC,
within the time periods specified in the SEC’s rules and regulations:

(i)all quarterly and annual reports that would be required to be filed with the
SEC on Forms 10-Q and 10-K, respectively, if Holdings were required to file such
reports; and

(ii)all current reports that would be required to be filed with the SEC on Form
8-K if Holdings were required to file such reports.

All such reports shall be prepared in all material respects in accordance with
all of the rules and regulations applicable to such reports.  Each annual report
on Form 10-K shall include a report on Holdings’ consolidated financial
statements by Holdings’ certified independent accountants.  In addition,
Holdings shall file a copy of each of the reports referred to in clauses (i) and
(ii) above with the SEC for public availability within the time periods
specified in the rules and regulations applicable to such reports (unless the
SEC will not accept such a filing) and shall post the reports on its web site
within those time periods. 

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(b)Holdings will be deemed to have furnished the reports required by paragraph
(a) of this Section 5.16 to the Lender if it has filed such reports or
information, respectively, with the SEC using the EDGAR filing system (or any
successor filing system of the SEC) or, if Holdings has posted such reports or
information, respectively, on its web site, and such reports, certifications or
information, respectively, are available to the Lender through internet access.

(c)Within 120 days after the close of each fiscal year, a certificate of a
Responsible Officer stating that a review of the activities of the Loan Parties
has been made under the supervision of the signing Officer with a view to
determining whether the Loan Parties have kept, observed, performed and
fulfilled their obligations under this Agreement and further stating, as to each
such Officer signing such certificate, that to the best of such Officer’s
knowledge, the Loan Parties during such preceding fiscal year have kept,
observed, performed and fulfilled each and every such covenant and no Default
occurred during such year and at the date of such certificate there is no
Default that has occurred and is continuing or, if such signer does know of such
Default, the certificate shall specify such Default and what action, if any, the
respective Loan Party is taking or proposes to take with respect thereto.

(d)Promptly after a Responsible Officer of the Borrower obtains actual knowledge
thereof, notify the Lender of the occurrence of (i) any Default, (ii) any
dispute, litigation, investigation or proceeding between any Loan Party and any
Governmental Authority, (iii) the commencement of, or any material development
in, any litigation or proceeding affecting any Loan Party or any of its
Subsidiaries, or (iv) any other event, occurrence or claim that, in any case
described in clauses (ii), (iii) or (iv) above, (x) could obligate any Loan
Party to make a payment to a third party in an amount that could reasonably be
expected to exceed $3.0 million or (y) has resulted or could reasonably be
expected to result in a Material Adverse Effect.  Each written notice shall
include the details of the occurrence referred to therein and what action the
relevant Loan Party is taking or proposes to take with respect thereto.

ARTICLE VI

Events of Default

SECTION 6.01 Events of Default.  Each of the following is an Event of Default
(“Events of Default”) under this Agreement:

(a)the Borrower shall fail to pay any principal on the Loans when due, upon
prepayment, upon declaration of acceleration or otherwise;

(b)the Borrower shall fail to pay any interest on any Loan or any other amount
(other than an amount referred to in clause (a) of this Section 6.01) payable
under this Agreement or any other Loan Document when and as the same shall
become due and payable;

(c)any Loan Party shall fail to comply with any covenants contained in Section
2.07(b) (regarding mandatory prepayment in certain events), Section 5.01
(regarding payment of Loans) or Section 5.08 (regarding merger or
consolidation);

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(d)any Loan Party shall fail to comply with any covenants contained in Section
5.02, Section 5.03, Section 5.04, Section 5.05, Section 5.06, Section 5.07,
Section 5.09, Section 5.10, Section 5.11, Section 5.12 or Section 5.13 for 30
days after the earlier of (i) written notice from the Lender and (ii) the time
at which a Responsible Officer of the Borrower first has knowledge of the
failure; 

(e)any Loan Party shall fail to comply with any covenants contained in this
Agreement (other than the covenants described in clauses (c) and (d) of this
Section 6.01) for 60 days after the earlier of (i) written notice from the
Lender and (ii) the time at which a Responsible Officer of the Borrower first
has knowledge of the failure; 

(f)any representation, warranty or statement made by or on behalf of any Loan
Party or any Subsidiary (i) in any Loan Document or (ii) in any report,
certificate, financial statement or other information furnished pursuant to any
Loan Document or any amendment or modification thereof or waiver thereunder,
shall prove to have been inaccurate in any material respect when made;

(g)a Change of Control shall occur (other than the sale of the Subject Shares
pursuant to the Share Purchase Agreement);

(h)default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by Holdings or any of its Subsidiaries (or the payment of which is
guaranteed by Holdings or any of its Subsidiaries), other than Indebtedness owed
to Holdings or a Subsidiary of Holdings, whether such Indebtedness or Guaranty
now exists, or is created after the incurrence of the Loans, which default has
not been cured prior to the expiration of any applicable grace period provided
in such Indebtedness and the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there has
been such a default, aggregates to more than $3.0 million at any one time;

(i)any Loan Party or a Significant Subsidiary or group of Subsidiaries that,
taken together (as of the latest audited consolidated financial statements for
such Loan Party and its Subsidiaries), would constitute a Significant Subsidiary
pursuant to or within the meaning of any Debtor Relief Law: 

(i)commences a voluntary proceeding or files any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect; 

(ii)consents to the entry of an order for relief, or fails to contest in a
timely and appropriate manner, against it in any involuntary proceeding or
petition described in clause (i) of this Section 6.01; 

(iii)(A) applies for or consent to the appointment of a custodian, receiver,
trustee, sequestrator, conservator or similar official for it or for any
substantial part of its property; or (B) files an answer admitting the material
allegations of a petition filed against it in any such proceeding; 

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(iv)makes a general assignment for the benefit of its creditors; or

(v)takes any comparable action under any foreign laws relating to insolvency; 

(j)a court of competent jurisdiction enters an order or decree under any Debtor
Relief Law that: 

(i)is for relief against any Loan Party, any Significant Subsidiary or group of
Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for such Loan Party and its Subsidiaries), would constitute
a Significant Subsidiary in an involuntary case; 

(ii)appoints a custodian of any Loan Party, any Significant Subsidiary or group
of Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for such Loan Party and its Subsidiaries), would constitute
a Significant Subsidiary, or for any substantial part of its or their property;
or 

(iii)orders the winding up or liquidation of any Loan Party, any Significant
Subsidiary or group of Subsidiaries that, taken together (as of the latest
audited consolidated financial statements for such Loan Party and its
Subsidiaries), would constitute a Significant Subsidiary; or

(iv)any similar relief is granted under any foreign laws and the order or decree
remains unstayed and in effect for 60 days.

(k)failure by any Loan Party or any Significant Subsidiary or group of
Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for such Loan Party and its Subsidiaries), would constitute
a Significant Subsidiary, to pay final judgments aggregating in excess of $3.0
million (net of any amounts that a reputable and creditworthy insurance company
has acknowledged liability for in writing), which judgments are not paid,
bonded, discharged or stayed for a period of 60 consecutive days following the
entry of such judgment or decree; 

(l)any Loan Party shall admit in writing its inability or fail generally to pay
its debts as they become due; and

(m)any Guaranty of a Loan Party purposed to be created under any Loan Document
shall cease to be, or shall be asserted by any Loan Party not to be, in full
force and effect, except upon the consummation of any transaction permitted
under this Agreement or as otherwise expressly permitted by any Loan Document.

SECTION 6.02Remedies.  (a)  In the event of an Event of Default (other than an
Event of Default specified in Section 6.01(i) or (j)), and at any time
thereafter during the continuance of such event, the Lender may by notice to the
Borrower, take any or all of the following actions, at the same or different
times:  (i) terminate the Commitment, and thereupon the Commitment shall
terminate immediately and (ii) declare the Loans then outstanding to be due and
payable in whole (or in part), in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the

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Loans so declared to be due and payable, together with accrued interest thereon
and other obligations of any Loan Party hereunder, shall become due and payable
immediately, in each case without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Loan Parties.

(b)In case of any Event of Default with respect to any Loan Party arising under
Section 6.01(i) or (j), the Commitment shall terminate immediately and the
principal of the Loans then outstanding, together with accrued interest thereon
and other obligations of any Loan Party accrued hereunder, shall automatically
become due and payable, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Loan Parties.

ARTICLE VII

Guaranty

SECTION 7.01 Guaranty.  Each Guarantor unconditionally guarantees, as a primary
obligor and not merely as a surety, the due and punctual payment and performance
of the Loan Obligations owing by the Borrower.  The Guarantors further agree
that the Loan Obligations may be extended or renewed, in whole or in part,
without notice to or further assent from it, and that it will remain bound upon
its Guaranty notwithstanding any extension or renewal of any Loan
Obligation.  The Guarantors waive presentment to, demand of payment from and
protest to the Guarantors or the Borrower of any Loan Obligation, and also waive
notice of acceptance of its Guaranty and notice of protest for nonpayment.

SECTION 7.02 Guaranty of Payment.  Each Guarantor further agrees that its
Guaranty hereunder constitutes a Guaranty of payment when due and not of
collection, and waives any right to require that any resort be had by the Lender
to any security held for the payment of the Loan Obligations.

SECTION 7.03 No Limitations, Etc.

(a)The obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Loan Obligations or otherwise.  Without limiting the generality of the
foregoing, the obligations of the Guarantors hereunder shall be valid and
enforceable and shall not be discharged, terminated, reduced or impaired or
otherwise affected by, whether or not each of the Guarantors shall have had
notice or knowledge of any of them, (i) the failure of the Lender to assert any
claim or demand or to enforce any right or remedy under the provisions of any
Loan Document or otherwise, (ii) any rescission, waiver, amendment or
modification of, or any release from any of the terms or provisions of, any Loan
Document or any other agreement, (iii) any default, failure or delay, willful or
otherwise, in the performance of the Loan Obligations, (iv) the existence of any
dispute among the Borrower, the Lender, the Guarantors or any other Person with
respect to the existence of any Default or Event of Default or (vi) any other
act or omission that may or might in any manner or to any extent vary the risk
of any of the Guarantors or

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otherwise operate as a discharge of the Guarantors as a matter of law or equity
(other than the indefeasible payment in full in cash of all the Loan
Obligations).

(b)To the fullest extent permitted by applicable law, each of the Guarantors
waives (i) any defense based on or arising out of any defense of the Borrower,
such Guarantor or any other Person or the unenforceability of the Loan
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the  Borrower, the Guarantors or any other Person, other
than the indefeasible payment in full in cash of all the Loan Obligations; (ii)
any right to require the Lender, as a condition of payment or performance by the
Guarantors, to (A) proceed against the Borrower or any other Person of any Loan
Obligations, (B) proceed against or have resort to any balance of any deposit
account or credit on the books of the Lender or any other Person, or (C) pursue
any other remedy in the power of the Lender whatsoever; (iii) any defense based
upon any statute or rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than that
of the principal; (iv) any defense based upon the Lender’s errors or omissions
in the administration of the Loan Obligations; (v) (A) any principles or
provisions of law, statutory or otherwise, which are or might be in conflict
with the terms hereof and any legal or equitable discharge of each Guarantor’s
obligations hereunder, (B) the benefit of any statute of limitations affecting
any Guarantor’s liability hereunder or the enforcement hereof and (C) any rights
to set-offs, recoupments and counterclaims; (vi) notices, demands, presentments,
protests, notices of protest, notices of dishonor and notices of any action or
inaction, including acceptance hereof, notices of default hereunder, notices of
any renewal, extension or modification of the Loan Obligations or any agreement
related thereto, notices of any extension of credit to the Borrower and notices
of any of the matters referred to in this Section 7.03(b) and any right to
consent to any thereof; and (vii) any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms hereof.  The Lender may, at its
election, foreclose on any security held by it by one or more judicial or
nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Loan Obligations, make any
other accommodation with the Borrower, the Guarantors or any other Person or
exercise any other right or remedy available to it against the Borrower, the
Guarantors or any other Person, without affecting or impairing in any way the
liability of the Guarantors hereunder except to the extent the Loan Obligations
have been fully and indefeasibly paid in full in cash.  To the fullest extent
permitted by applicable law, the Guarantors waive any defense arising out of any
such election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of any Guarantor against the Borrower or any other Person, as the case
may be, or any security.

(c)The Guarantors agree that their obligations hereunder are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or
surety other than the indefeasible payment in full in cash of the Loan
Obligations.  In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees as follows:

(i)the obligations of each Guarantor hereunder are independent of the
obligations of the Borrower and the obligations of any other guarantor of the
obligations of the Borrower, and a separate action or actions may be brought and
prosecuted against

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the Guarantors whether or not any action is brought against the Borrower or any
of such other guarantors and whether or not the Borrower is joined in any such
action or actions;

(ii)payment by the Guarantors or any other Person of a portion, but not all, of
the Loan Obligations shall in no way limit, affect, modify or abridge the
Guarantors’ liability for any portion of the Loan Obligations which has not been
paid; and without limiting the generality of the foregoing, if the Lender is
awarded a judgment in any suit brought to enforce each Guarantor’s covenant to
pay a portion of the Loan Obligations, such judgment shall not be deemed to
release any Guarantor from its covenant to pay the portion of the Loan
Obligations that is not the subject of such suit, and such judgment shall not,
except to the extent satisfied by the Guarantors, limit, affect, modify or
abridge the Guarantors’ liability hereunder in respect of the Loan Obligations;
and

(iii)the Lender, upon such terms as it deems appropriate, without notice or
demand and without affecting the validity or enforceability hereof or giving
rise to any reduction, limitation, impairment, discharge or termination of each
Guarantor’s liability hereunder, from time to time may (A) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Loan Obligations; (B) settle,
compromise, release or discharge, or accept or refuse any offer of performance
with respect to, or substitutions for, the Loan Obligations or any agreement
relating thereto and/or subordinate the payment of the same to the payment of
any other obligations; (C) request and accept other guaranties of the Loan
Obligations and take and hold security for the payment hereof or the Loan
Obligations; (D) release, surrender, exchange, substitute, compromise, settle,
rescind, waive, alter, subordinate or modify, with or without consideration, any
security for payment of the Loan Obligations, any other guaranties of the Loan
Obligations, or any other obligation of any Person (including any other
guarantor) with respect to the Loan Obligations; and (E) enforce and apply any
security now or hereafter held by or for the benefit of the Lender in respect
hereof or the Loan Obligations and direct the order or manner of sale thereof,
or exercise any other right or remedy that the Lender may have against any such
security, in each case as the Lender in its discretion may determine consistent
herewith and any applicable security agreement, including foreclosure on any
such security pursuant to one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable, and even though
such action operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of the Guarantor against the Borrower or
any security for the Loan Obligations; and

(iv)the Lender may exercise any other rights or remedies available to it under
the Loan Documents.

(d)Each Guarantor agrees to pay any and all costs and expenses (including
reasonable attorneys’ fees and expenses) incurred by the Lender in enforcing any
rights under this Section.

(e)Each Guarantor hereby waives any right to which it may be entitled to have
its obligations hereunder divided among the Guarantors, such that such
Guarantor’s obligations would be less than the full amount claimed.  Each
Guarantor hereby waives any right

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to which it may be entitled to have the assets of Holdings first be used and
depleted as payment of Holding’s or such Guarantor’s obligations hereunder prior
to any amounts being claimed from or paid by such Guarantor hereunder.  Each
Guarantor hereby waives any right to which it may be entitled to require that
Holdings be sued prior to an action being initiated against such Guarantor.

SECTION 7.04 Bankruptcy, Etc.  

(a)The obligations of the Guarantors hereunder shall not be reduced, limited,
impaired, discharged, deferred, suspended or terminated by any Debtor Relief Law
involving the Borrower or any other guarantor of the obligations of the Borrower
or by any defense which the Borrower, any other guarantor of the Borrower may
have by reason of the order, decree or decision of any court or administrative
body resulting from any such proceeding unless also stayed in connection with
the insolvency, bankruptcy or reorganization of the Guarantors.

(b)Each Guarantor acknowledges and agrees that any interest on any portion of
the Loan Obligations which accrues after the commencement of any case brought
under any Debtor Relief Law involving the Borrower or any other guarantor of the
obligations of the Borrower (or, if interest on any portion of the Loan
Obligations ceases to accrue by operation of law by reason of the commencement
of such case or proceeding, such interest as would have accrued on such portion
of the Loan Obligations if such case or proceeding had not been commenced) shall
be included in the Loan Obligations because it is the intention of each of the
Guarantor, the Borrower and the Lender that the Loan Obligations which are
guaranteed by the Guarantor pursuant hereto should be determined without regard
to any rule of law or order which may relieve the Borrower of any portion of
such Loan Obligations.  The Guarantors will permit any trustee in bankruptcy,
receiver, debtor in possession, assignee for the benefit of creditors or similar
Person to pay the Lender, or allow the claim of the Lender in respect of, any
such interest accruing after the date on which such case or proceeding is
commenced.

SECTION 7.05 Reinstatement.  Each Guarantor agrees that its Guaranty hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any Loan Obligation is rescinded or must
otherwise be restored by the Lender upon the bankruptcy or reorganization of the
Borrower, any Guarantor or otherwise.

SECTION 7.06 General Limitation on Guaranty Obligations.  In any action or
proceeding involving any state corporate, limited partnership or limited
liability company law, or any applicable Debtor Relief Law, if the obligations
of the Guarantors hereunder would otherwise be held or determined to be void,
voidable, invalid or unenforceable, or subordinated to the claims of any other
creditors, on account of the amount of its liability hereunder, then,
notwithstanding any other provision to the contrary, the amount of such
liability shall, without any further action by the Guarantors, the Borrower or
any other Person, be automatically limited and reduced to the highest amount
that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.

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ARTICLE VIII

Miscellaneous

SECTION 8.01Notices.  (a) Except in the case of notices and other communications
expressly permitted by this Agreement to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by fax, as follows:

(i)if to a Loan Party to it at Harvest Natural Resources, Inc., 1177 Enclave
Parkway, Suite 300, Houston, Texas, Attention of Keith Head, Vice President and
General Counsel, Fax No. (281) 899-5702, Email address at khead@harvestnr.com,
with a copy (which shall not constitute notice) to: Fulbright & Jaworski LLP,
2200 Ross Avenue, Suite 2800, Dallas, Texas 75201, Attention of Harva R.
Dockery, Fax No. (214) 855-8200, Email address at
harva.dockery@nortonrosefulbright.com; and

(ii)if to the Lender, to it at Petroandina Resources Corporation N.V.,
Muiderstraat 7/A, 1011PZ Amsterdam, The Netherlands, Attention of María Ximena
Storni, Phone No. +31 20 662 2199, Fax No. +31 20 364 0323, Email address at
mstorni@pluspetrol.net, with a copy (which shall not constitute notice) to
Cleary Gottlieb Steen & Hamilton LLP, One Liberty Plaza, New York, New York
10006, Attention of Jeffrey S. Lewis and Neil Q. Whoriskey, Fax No. (212)
225-3999; 

(iii)Notices sent by hand or overnight courier service, or mailed by certified
or registered mail, shall be deemed to have been given when received; notices
sent by fax shall be deemed to have been given when sent (but if not given
during normal business hours for the Lender, shall be deemed to have been given
at the opening of business on the next business day for the Lender); and notices
delivered through electronic communications to the extent provided in paragraph
(b) below shall be effective as provided in such paragraph.

(b)Any notices or other communications to the Lender or the Borrower may be
delivered or furnished by electronic communications pursuant to procedures
approved by the recipient thereof prior thereto or as provided by this
Agreement; provided that approval of such procedures may be limited or rescinded
by any such Person by notice to each other such Person. 

(c)Any party hereto may change its address or fax number for notices and other
communications hereunder by notice to the other parties hereto.

SECTION 8.02Waivers; Amendments.  (a)  No failure or delay by the Lender in
exercising any right or power hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power.  The rights and remedies of the Lender
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have.  No waiver
of any provision

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of any Loan Document or consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be permitted by paragraph
(b) of this Section, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given.  Without limiting the
generality of the foregoing, the execution and delivery of this Agreement and
the making of Loans shall not be construed as a waiver of any Default,
regardless of whether the Lender may have had notice or knowledge of such
Default at the time.

(b)None of this Agreement, any other Loan Document or any provision hereof or
thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower and the Lender and, in the case of any other Loan Document, pursuant to
an agreement or agreements in writing entered into by the party or parties
thereto and the Borrower, in each case with the consent of the Lender.

SECTION 8.03Successors and Assigns.  (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void).  For the
avoidance of doubt, the Lender may assign or otherwise transfer its rights and
obligations hereunder without the consent of the Borrower.  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby) any legal or equitable right, remedy or claim under or by
reason of this Agreement.  Any assignment pursuant to this Section 8.03 shall be
recorded on a register to be maintained by the Borrower.

SECTION 8.04Survival.  All covenants, agreements, representations and warranties
made by the Loan Parties in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the Lender may
have had notice or knowledge of any Default or incorrect representation or
warranty at the time any Loan Document is executed and delivered or any credit
is extended hereunder, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any other amount payable
under this Agreement is outstanding and unpaid and so long as the Commitment has
not expired or terminated.  The provisions of Section 2.09 shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Commitment or the termination of this Agreement or any
provision hereof. 

SECTION 8.05Counterparts; Integration; Effectiveness.  This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.  Except
as

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provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Lender and the Lender shall have received counterparts
hereof that, when taken together, bear the signatures of each of the other
parties hereto, and thereafter shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.  Delivery of an
executed counterpart of a signature page of this Agreement by facsimile or other
electronic imaging shall be effective as delivery of a manually executed
counterpart of this Agreement.

SECTION 8.06Severability.  Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 8.07Governing Law; Jurisdiction; Consent to Service of Process.   This
Agreement shall be construed in accordance with and governed by the law of the
State of New York.

(a)Each Loan Party hereby irrevocably and unconditionally submits, for itself
and its property, to the exclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court.  Each of the parties hereto agrees that a final judgment in
any such action or proceeding in either such court shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.  Nothing in this Agreement or any other Loan Document
shall affect any right that the Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
Loan Party or any of its properties in the courts of any jurisdiction. 

(b)Each Loan Party hereby irrevocably and unconditionally waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court referred to in paragraph
(b) of this Section.  Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

(c)Each Loan Party hereby irrevocably appoints CT Corporation, having its office
on the date hereof at 111 Eighth Avenue, New York, New York 10011, as its
authorized agent on which any and all legal process may be served in any such
action, suit or proceeding brought in any federal or state court located in New
York.  Each Loan Party agrees that service of process in respect of it upon such
agent, together with written notice of such service given to it as provided in
Section 8.01, shall be deemed to be effective service of process upon it in any
such action, suit or proceeding.  Each Loan Party agrees that the failure of
such agent to give

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notice to it of any such service shall not impair or affect the validity of such
service or any judgment rendered in any action, suit or proceeding based
thereon.  If for any reason such agent shall cease to be available to act as
such, each Loan Party agrees to designate a new agent in New York, on the terms
and for the purposes of this Section 8.07(c).  Nothing herein shall be deemed to
limit the ability of any other party hereto to serve any such legal process in
any other manner permitted by applicable Law or to obtain jurisdiction over any
such party or bring actions, suits or proceedings against it in such other
jurisdictions, and in such manner, as may be permitted or required by applicable
Law.  Each party hereto irrevocably consents to the service of process in the
manner provided for notices in Section 8.01.

SECTION 8.08WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

SECTION 8.09Indemnification by the Loan Parties.  Each Loan Party shall
indemnify and hold harmless the Lender, its Affiliates and their respective
officers, directors, employees, agents, controlling persons, advisors and other
representatives and their successors and permitted assigns of each of the
foregoing (collectively, the “Indemnitees”) from and against any and all losses,
claims, damages, liabilities or expenses (including attorney costs and
Environmental Liability) to which any such Indemnitee may become subject arising
out of, resulting from or in connection with any actual or threatened claim,
litigation, investigation or proceeding relating to the Transactions or to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents, the Loans or the use, or proposed use of
the proceeds therefrom, whether based on contract, tort or any other theory
(including any investigation of, preparation for, or defense of any pending or
threatened claim, litigation, investigation or proceeding), and regardless of
whether any Indemnitee is a party thereto (all the foregoing, collectively, the
“Indemnified Liabilities”); provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or expenses resulted from the gross negligence, bad faith or willful
misconduct of such Indemnitee or any of its Affiliates as determined by a final,
non-appealable judgment of a court of competent jurisdiction.  To the extent
that the undertakings to indemnify and hold harmless set forth in this Section
8.09 may be unenforceable in whole or in part because they are violative of any
applicable law or public policy, the Loan Parties shall contribute the maximum
portion that they are permitted to pay and satisfy under applicable law to the
payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.  No Indemnitee shall have any liability for any
special, punitive, indirect or consequential damages relating to this Agreement
or any other Loan Document or arising out of its activities in

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connection herewith or therewith (whether before or after the date hereof).  All
amounts due under this Section 8.09 shall be paid within twenty (20) Business
Days after written demand therefor.  The agreements in this Section 8.09 shall
survive the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Loan Obligations.  

SECTION 8.10Headings.  Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 8.11Interest Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the Interest Rate applicable to any Loan, together with
all fees, charges and other amounts that are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken,
received or reserved by the Lender in accordance with applicable Law, the rate
of interest payable in respect of such Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan but were not payable as a result of the operation of this Section
shall be cumulated and the interest and Charges payable to the Lender in respect
of other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
lesser of (i) the Interest Rate and (ii) the Maximum Rate, to the date of
repayment, shall have been received by the Lender.  

[Signature Page Follows.]

 

 

 

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Picture 1 [hnr-20150331ex101a18141g001.jpg]

 

 

 

 

 

 

 

[Signature Page to Loan Agreement]

 

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Picture 2 [hnr-20150331ex101a18141g002.jpg]

 

[Loan Agreement Signature Page]

 

 

 

 

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EXHIBIT A

FORM OF BORROWING REQUEST

[Date]

 

 

 

To:

Petroandina Resources Corporation N.V.

 

as the Lender

 

Attn:

 

Muiderstraat 7/A

 

1011PZ Amsterdam, The Netherlands

 

 

 

via e-mail:

 

Reference is made to the Loan Agreement, dated as of September 11, 2014 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Agreement”) among Harvest Natural Resources, Inc., HNR Energia B.V., as the
borrower (the “Borrower”), and Petroandina Resources Corporation N.V., as the
lender (the “Lender”).  Each capitalized term used but not defined herein has
the meaning ascribed to such term in the Agreement.

Pursuant to Section 2.03 of the Agreement, the undersigned, in its capacity as a
Responsible Officer of the Borrower and not individually, hereby:

1.Gives you irrevocable notice on behalf of the Borrower that the Borrower
hereby requests a Loan to be made to the Borrower, and sets forth below the
information relating to such Loan (the “Requested Borrowing”) as required by the
Agreement: 

(a)The Borrowing Date is [DATE]; 

(b)The aggregate principal amount of the Requested Borrowing is US$[_______]; 

2.Provides the following wire instructions: Name of Bank:____________________

 

A/C No.:_____________________________

A/C Name:___________________________

ABA No.:____________________________

Swift Code :__________________________

Reference :___________________________

 

3.Pursuant to Section 4.02 of the Agreement, certifies on behalf of the Borrower
that both immediately before and after giving effect to the Requested Borrowing:

56082427.4    

Exhibit A-1

[NEWYORK 2931135_16]

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(a)       the representations and warranties of each Loan Party set forth in the
Loan Documents and this Borrowing Request shall be true and correct on and as of
the date of such Requested Borrowing, except in the case of any such
representation and warranty that expressly relates to a prior date, in which
case such representation and warranty shall be so true and correct on and as of
such prior date;

(b)       no Default exists, or would result from the Requested Borrowing; 

(c)       after giving effect to the Requested Borrowing, the aggregate
Exposures do not exceed the Commitment; 

(d)       the Termination Date has been extended for the Borrowing Period
applicable to such Requested Borrowing by the Lender in its sole discretion
pursuant to the terms of Section 8.1(b)(i) of the Share Purchase Agreement prior
to the Requested Borrowing.  A Loan made for such Requested Borrowing by the
Lender (or, if the Borrower shall not have satisfied the conditions under
Section 4.01 or Section 4.02 other than as a result of a breach by the Lender,
the Commitment by the Lender to make such Loan) will satisfy the terms of the
Share Purchase Agreement to extend the Termination Date for the length of such
Borrowing Period; and

(e)       the Final Closing Date shall not have occurred and the Share Purchase
Agreement shall not have been terminated in accordance with its terms.

(f)       The Equity Limitation Date shall not have occurred.

 

 

 

HNR ENERGIA B.V.,

as Borrower

 

 

By: ____________________________________

Name:

Title:

 

 

56082427.4    

Exhibit A-2

[NEWYORK 2931135_16]

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EXHIBIT B

[FORM OF JOINDER

TO BE DELIVERED BY ADDITIONAL GUARANTORS]

This Guarantee Joinder (this “Joinder”), dated as of ______________, and is
incorporated into and shall be deemed to amend and supplement that certain Loan
Agreement (the “Agreement”) dated as of [_], 2014, among HARVEST NATURAL
RESOURCES, INC., a Delaware corporation, HNR ENERGIA B.V., a a private company
with limited liability (besloten vennootschap met beperkte aansprakelijkheld)
organized and existing under the laws of Curacao (the “Borrower”) and
PETROANDINA RESOURCES CORPORATION N.V., as Lender (together with its Affiliates
or permitted successors and assigns in such capacity, the
“Lender”).  Capitalized terms used but not defined herein have the meaning
assigned to such term in the Agreement.

1.Joinder.    By their execution below, ________, a ____________ (the
“Additional Guarantor”) is added as a party to the Agreement, with each having
the rights and obligations of a Guarantor as set forth therein.   

2.Representations and Warranties.  The Additional Guarantor hereby represents
and warrants to that as of the date hereof: 

It has the authority to enter into this Joinder and bind itself in favor of the
Lender as a Guarantor under the Agreement, and each reference to a “Guarantor”
in such agreement shall be deemed to include the Additional Guarantor.

3.Continuing Effectiveness.  Except as expressly supplemented hereby, the
Agreement shall remain in full force and effect. 

4.Headings.  The section headings used herein are for convenience only and shall
not affect the construction hereof. 

5.Counterparts.  This Joinder may be signed in one or more counterparts each of
which shall constitute an original when so executed and all of which together
shall constitute one and the same agreement.  Delivery of an executed
counterpart of a signature page to this Joinder by the telecopier, facsimile or
other electronic transmission (i.e., a “pdf” or “tif”) shall be effective as
delivery of a manually executed counterpart thereof.

6.Amendments.  No amendment or waiver of any provision of this Joinder, nor any
consent or approval to any departure therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Lender or any Affiliate
thereof. 

7.Governing Law.  THIS JOINDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

8.Notices.  All communications and notices hereunder shall be in writing and
given as provided in the Agreement. 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

 

56082427.4    

Exhibit B-1

[NEWYORK 2931135_16]

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IN WITNESS WHEREOF, the parties hereto have caused this Joinder to be duly
executed, all as of the date first above written.

 

 

 

 

 

 

[GUARANTEEING SUBSIDIARY], as

 

 

Additional Guarantor

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

PETROANDINA RESOURCES

 

 

CORPORATION N.V., as the Lender

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

56082427.4    

Exhibit B-2

[NEWYORK 2931135_16]

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EXHIBIT C

FORM OF PROMISSORY NOTE

 

 

 

$7,600,000.00

 

Dated:  September 11, 2014

 

FOR VALUE RECEIVED, the undersigned, HNR Energia B.V., a private company with
limited liability (besloten vennootschap met beperkte aansprakelijkheld)
organized and existing under the laws of Curacao (the Borrower), HEREBY PROMISES
TO PAY Petroandina Resources Corporation N.V., a company with limited liability
(naamloloze vennootschap) organized and existing under the laws of the
Netherlands (the Lender) or its registered assigns in accordance with the terms
of the Agreement (defined below), for its account on the Maturity Date the
aggregate principal amount of the Loans owing to the Lender by the Borrower
pursuant to the Loan Agreement, dated as of September 11, 2014 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
Agreement; the terms defined therein, unless otherwise defined herein, being
used herein as therein defined) among Harvest Natural Resources, Inc., the
Borrower, and the Lender.

The Borrower promises to pay interest on the unpaid principal amount of each
Loan from the date of such Loan, as the case may be, until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Agreement.

Both principal and interest are payable in lawful money of the United States of
America to the Lender, in the manner specified in the Agreement.  Each Loan
owing to the Lender by the

Borrower, and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto, which is part of this promissory note (this Promissory Note);
provided, however, that the failure of the Lender to make any such recordation
or endorsement shall not affect the Loan Obligations of the Borrower under this
Promissory Note and the other Loan Documents.  

This Promissory Note is one of the Promissory Notes referred to in, and is
entitled to the benefits of, the Agreement.  The Agreement, among other things,
(i) provides for the making of Loans by the Lender to or for the benefit of the
Borrower from time to time and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.  

The Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Promissory Note.  This Promissory Note is issued under and
subject to the terms of the Agreement.

This Promissory Note may not be transferred or assigned by the Lender to any
Person except in compliance with the terms of the Agreement.  The rights
evidenced by this Promissory Note to receive principal and interest may only be
transferred if the transfer is registered on a record of ownership and the
transferee is identified as the owner of an interest in the obligation pursuant
to Section 8.03 of the Agreement.  This Promissory Note may not at any time be
endorsed to, or to the order of, bearer.

56082427.4    

Exhibit C-1

[NEWYORK 2931135_16]

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This Promissory Note shall be governed by, and construed in accordance with, the
laws of the State of New York.

 

 

HNR ENERGIA B.V.

By: ________________________

       Name:

      Title:

 

 

 

56082427.4    

Exhibit C-2

[NEWYORK 2931135_16]

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LOANS AND PAYMENTS OF PRINCIPAL

 

 

 

 

 

 

 

 

 

 

Date 

Amount of Loan 

Amount of

Principal or

Interest Paid or Prepaid 

Unpaid

Principal

Balance 

Notation Made By 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

56082427.4    

[NEWYORK 2931135_16]

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Availability Schedule 

 

 

 

 

 

 

Borrowing Period (if extended)

Borrowing Date

Commitment (up to)

1.

September 7, 2014 to October 6, 2014

* 

$2,000,000

2.

October 7, 2014 to November 6, 2014

October 7, 2014

$2,000,000

3.

November 7, 2014 to December 6, 2014

November 7, 2014

$2,000,000

4.

December 7, 2014 to December 31, 2014

December 8, 2014

$1,600,000

TOTAL

 

 

$7,600,000

 

 

 

 

 ________________________

*   Lender will initiate the wire transfer of funds on September 12, 2014, and
funds must be received by Borrower by September 15, 2014.

56082427.4    

[NEWYORK 2931135_16]

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Lender Representatives

 

1.Attention: María Ximena Storni 

Phone: +31 20 662 2199

Fax: +31 20 364 0323

E-mail: mstorni@pluspetrol.net 

 

 

2.Attention: Lindor Martin

E-mail: lemartin@pluspetrol.net 

 

 

3.Attention: María Victoria Sánchez Vaqueiro

E-mail: msanchezvaqueiro@pluspetrol.net 

 

56082427.4    

[NEWYORK 2931135_16]

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