Exhibit 10.25

THIS PREPAYMENT AGREEMENT (“Agreement”) is made on April 18th 2013

BETWEEN:

(1)

STREAM OIL & GAS LTD, Albania branch, a company organised and existing under the
laws of the Cayman Islands with a branch registered in the Republic of Albania,
and having its registered office at Dega ne Shqiperi e Stream Oil & Gas Ltd,
NIPT K72205016P, Rr. Ismail Qemali Samos Tower, Kati 5, Tirana, Albania
represented by Dr. Sotirios Kapotas ("Seller");  

(2)

STREAM OIL & GAS LTD, a company incorporated in British Columbia, Canada, with
registration number BC0713471 and with registered office at 19th Floor, 885 West
Georgia St, Vancouver BC, V6C 3H4, Canada and its head office at #300, 609 –
14th Street N.W., Calgary, Alberta, T2N 2A1, Canada (“Guarantor”); and

(3)

TRAFIGURA PTE LTD, a company incorporated in Singapore a company duly organised
and existing under the laws of Singapore with its registered office at the
following addresses: 10 Collyer Quay, Ocean Financial Centre #29-00, Singapore
049315, represented by Alan Suchley and Nicolas Marsac  ("Buyer").

RECITALS:

(A)

Seller is engaged in oil and gas exploration, development and production and, in
particular, oil, gas and condensate fields in the Republic of Albania.

(B)

Buyer is an international trading company which trades, markets and invests in
crude oil and petroleum products and related logistics on a global scale.

(C)

Buyer and Seller have concluded a Crude Supply Contract pursuant to which Seller
sells and Buyer purchases and takes delivery of Crude.

(D)

Subject to the terms of the Transaction Documents, Buyer has agreed to pre-pay
part of the purchase price for Crude in an aggregate amount not exceeding the
Limit and Guarantor has agreed to Guarantee performance of Seller’s obligations
under the CrudeSupply Contract and this Agreement.

IT IS AGREED AS FOLLOWS:

1.Definitions and Interpretation

1.1Definitions

In this Agreement:

"Affiliate" means, in relation to a party, a person who is, from time to time, a
subsidiary or a holding company of that party, or is a subsidiary of that
party's holding company;

"Authorisation" means an authorisation, consent, approval, resolution, licence,
exemption, filing or registration however described;

"Availability Period" means the period commencing on satisfaction of the
Conditions Precedent to this Agreement and ending on 31 October 2013;  

"Break Costs" means the amount (if any) by which:

 

1

--------------------------------------------------------------------------------

 

(a)

the interest which Buyer should have received for the period from the date of
receipt of the amount of the Prepayment reimbursed in accordance with Clause 8
to the last day of the current Funding Period, had that amount been paid on the
last day of that Funding Period;

exceeds:

(b)

the amount which Buyer would be able to obtain by placing an amount equal to the
amount of the Prepayment reimbursed in accordance with Clause XX on deposit with
a leading bank in the London interbank market for a period starting on the
Business Day following receipt of that reimbursement and ending on the last day
of the current Funding Period;

"Business Day" means a day (other than a Saturday, Sunday or public holiday) on
which banks are open for general business in Albania, Geneva and New York;

"Contract Payment" means, in relation to a Payment Date, the amount payable by
Buyer to Seller on that Payment Date under the Crude Supply Contract.

“Credit Facility” means the $20,000,000 trade finance term loan facility
agreement between Seller, Guarantor and Raiffeisen Bank ShA dated December 15,
2011  

“Crude” means crude oil as defined in the Crude Supply Contract.

“Crude Supply Contract” means the term contract dated 16 January 2013 contract
no: SKO-012-453470 pursuant to which Seller sells and Buyer purchases and takes
delivery of Crude.

"Default" means a Termination Event or any event or circumstance specified in
Clause 16 (Termination Events) which would (with the expiry of a grace period,
the giving of notice, the making of any determination or any combination of
them) be a Termination Event;

"Default Rate" means in relation to an Unpaid Amount, the rate which is two per
cent (2%) per annum higher than the Interest Rate which would have applied if
the Unpaid Amount had, during the period of non-payment, constituted the whole
or part of the Prepayments;

"Delivery Schedule" means the schedule of deliveries to be made by Seller to
Buyer of Crude in accordance with the terms of the Crude Supply Contract;

“Discharge Amount(s)” means, at any time, the amount of any Prepayment
outstanding at such time plus any Funding Charges which have accrued or are due
and which have not been paid by Seller to Buyer at such time.  

"Discharge Date" means each date when a Repayment is due, in accordance with
Schedule 3 (Discharge Schedule) under the column headed "Date";

"Dollars" and "US$" and "USD" means the lawful currency for the time being of
the United States of America;

"Effective Date" means the date falling one (1) Business Day after the
Conditions Precedent Satisfaction Date and as a result of which Seller can
deliver the Prepayment Request in respect of the Prepayment.

"Environment" means living organisms including the ecological systems of which
they form part and the following media: (i) air (including air within natural or
man-made structures, whether above or below ground); (ii) water (including
territorial, coastal and inland waters, water under or within land

 

2

--------------------------------------------------------------------------------

 

and water in drains and sewers); and (iii) land (including land under water) and
"Environmental" shall be construed accordingly;

"Environmental Law" means all applicable laws and regulations which: (i) have as
a purpose or effect the protection of, and/or prevention of harm or damage to,
the Environment; (ii) provide remedies or compensation for harm or damage to the
Environment; or (iii) relate to Hazardous Substances or health and safety
matters;

"Environmental Licence" means any Authorisation and the filing of any
notification, report or assessment required under any Environmental Law for the
operation of the business of Seller conducted on or from the properties owned or
used by Seller;

“Equipment” means equipment and materials which shall be purchased by Seller for
the expansion of production of the Cakran, Gorisht, Ballsh and Delvina Field
projects.  

"Facility Agreement" means Buyer’s bank facility arrangements;

"Fee Letter" means the letter dated on or about the date of this Agreement
between Seller and Buyer concerning the fees referred to in Clause 9 (Fees);

"Finance Documents" means this Agreement, the Crude Supply Contract, the
Guarantee and any other document designated as such from time to time by Buyer
and Seller;

"Financing Banks" means any lender(s) under the Facility Agreement.  

"Funding Charges" means the costs payable by Buyer under any Transaction
Document to fund the Prepayments made under this Agreement including without
limitation, all fees, interest, default interest, amounts attributable to Taxes,
increased costs, mandatory costs, breakage costs, transaction expenses,
amendment costs, enforcement costs and any other sums payable by Buyer from time
to time and at any time under any Transaction Document and any relevant security
documents and other documents related thereto;  

“Funding Period” means in relation to a Prepayment, each period determined in
accordance with Clause 7 (Funding Periods);

"Funding Rate" means the rate per annum as calculated in accordance with Clause
6 (Funding Rate);

"Guarantee" means a guarantee entered into by Guarantor in favour of Buyer
guaranteeing the performance of Seller's obligations under this Agreement, in a
form appearing at Schedule and on terms acceptable to Buyer in its sole
discretion.

"Hazardous Substance" means any waste, pollutant, contaminant or other substance
(including any liquid, solid, gas, ion, living organism or noise) that may be
harmful to human health or other life or the Environment or a nuisance to any
person or that may make the use or ownership of any affected land or property
more costly.

"Indebtedness" means any obligation (whether incurred as principal or as surety)
for the payment or repayment of money, whether present or future, actual or
contingent.

“Interest Rate” means one month USD LIBOR plus Margin.

"Mandatory Cost" means the percentage rate per annum that is an addition to the
interest rate charged by lenders to Buyer pursuant to the Facility Agreement as
part of the cost of funding to

 

3

--------------------------------------------------------------------------------

 

compensate the lenders for compliance with the requirements of the Bank of
England and/or the Financial Services Authority (or, in either case, any other
authority which replaces all or any of its functions), or the requirements of
the European Central Bank;  

"Margin" means six per cent (6.00%) per annum;

"Material Adverse Effect" means an event or circumstance which (when taken alone
or together with any previous event or circumstance) has, or (in the opinion of
Buyer formed in good faith) could reasonably be expected to have, a materially
adverse effect on any of:

(a)

the assets, business, operations or financial condition of Seller or Guarantor;

(b)

the economic or political situation in the Republic of Albania that could
reasonably be expected to affect the ability of Seller or Guarantor to perform
its obligations under any Transactions Document; or

(c)

the validity or enforceability of the Transaction Documents or the rights of
Buyer under the Transaction Documents;

"Original Financial Statements" means each of the most recent annual audited
financial statements of Seller and the most recent quarterly interim financial
statements of Seller;

"Payment Date" means each date on which a payment is due from Buyer to Seller
under the Crude Supply Contract in respect of the delivery of Products;

“Petroleum Contracts” means the petroleum agreements between Albetrol ShA and
the Seller dated 8 August 2007;

"Policy" means the insurance policy of Seller relating to, inter alia,
environmental liability, third party liability, business interruption and
infrastructure containing assignment of proceeds language in favour of Buyer;  

"Policy Renewal Date" means 12/31/2012;

"Prepayment" means the prepayment(s) made or to be made by Buyer to Seller in
accordance with this Agreement in an amount not exceeding the Prepayment Limit;

"Prepayment Date" means each date on which the Prepayment is made or due to be
made under this Agreement;

"Prepayment Limit" means twenty million US Dollars (USD20,000,000) limited to
seven million US Dollars (USD7,000,000) until the Supplementary Conditions
Precedent have been satisfied;

"Prepayment Request" means a notice in the form set out in Schedule 2
(Prepayment Request), completed with relevant information;

"Purchase Price" means in relation to the Crude Supply Contract, the price at
which Buyer has agreed to purchase Crude from Seller;  

"Repeating Representations" means each of the representations in Clause 11
(Representations) excluding only Clause 11.25 (Repetition);

 

4

--------------------------------------------------------------------------------

 

"Security" means a mortgage, charge, pledge, lien, security assignment or other
security interest securing any obligation of any person or any other agreement
or arrangement having a similar effect or having the effect of providing a
security or preferential treatment to a creditor;

“Supplementary Conditions Precedent” means each of the conditions precedent
appearing in paragraph 4 of Schedule 1;  

"Tax" means any tax, levy, impost, duty, charge, value added tax or other
withholding of a similar nature (including any penalty or interest payable in
connection with any failure to pay or any delay in paying any of the same);

"Tax Deduction" means a deduction or withholding for or on account of Tax from a
payment under a Transaction Document;

"Termination Event" means any event or circumstance specified in Clause 16
(Termination Events) other than Clause 16.20 (Acceleration);  

"Transaction Documents" means each of the Finance Documents, the Facility
Agreement, the Policy, and any other document designated as a Transaction
Document by Buyer and Seller;

"Unpaid Amount" means any amount due and payable to the Buyer but unpaid by
Seller under the Transaction Documents;  

"Valuation" means the value of the Crude as estimated by Buyer in its reasonable
discretion.

1.2

Construction

(a)

Any reference in this Agreement to:

(i)

"asset" includes every kind of property, asset, interest or right (whether
present, future or contingent);  

(ii)

"claims" and "losses" include:  

(1)

any claim or demand, including any in the nature of or asserted as a total or
partial defence, abatement, set-off or counterclaim;  

(2)

any legal or administrative action; and  

(3)

any loss, liability or expense,  

including any item which relates to tax and any item the amount or final amount
of which remains open or unknown;  

(iii)

"company" includes any partnership, joint venture and unincorporated
association;  

(iv)

"control" means in relation to any person, the power of that person to direct or
cause the direction of the management or policies of another person;

(v)

"document" includes a deed; also a letter, fax or telex;  

(vi)

"expense" means any kind of cost, charge or expense (including all legal costs,
charges and expenses) and any applicable value added or other tax;  

 

5

--------------------------------------------------------------------------------

 

(vii)

“include” and “including” are to be construed to include the phrase "but not
limited to."

(viii)

"law" includes, any order or decree, any form of delegated legislation, any
treaty or international convention and any regulation, directive or decision of
the Council of the European Union or the European Commission; and a provision of
law is a reference to that provision as amended or re-enacted;  

(ix)

"liability" includes every kind of debt or liability (present or future, certain
or contingent), whether incurred as principal or surety or otherwise, and where
any person is under an obligation to guarantee a liability, or to indemnify or
hold another person harmless in respect of it, such obligations shall exist
notwithstanding that the relevant liability has not been paid or discharged by
the person entitled to or claiming the benefit of the guarantee, indemnity or
hold harmless obligation as the case may be;  

(x)

"Transaction Document" or "Finance Document" or any other agreement or
instrument is a reference to that Transaction Document, Finance Document or
other agreement or instrument as amended, novated, re-stated or replaced;

(xi)

unless otherwise stated, a "Clause" or "Schedule" is a reference to a Clause or
Schedule of this Agreement;

(xii)

a "person" includes any person, firm, company, corporation, government, state or
agency of a state or any association, trust or partnership (whether or not
having separate legal personality) or two or more of the foregoing;

(xiii)

"successor" includes any person who is entitled (by assignment, novation, merger
or otherwise) to any other person's rights under the Transaction Documents (or
any interest in those rights) or who, as administrator, liquidator or otherwise,
is entitled to exercise those rights; and in particular references to a
successor include a person to whom those rights (or any interest in those
rights) are transferred or pass as a result of a merger, division,
reconstruction or other reorganisation of it or any other person;  

(xiv)

any party includes its successors in title and permitted transferees;

(xv)

"tax" includes any present or future tax, duty, impost, levy or charge of any
kind which is imposed by any state, any political sub-division of a state or any
local or municipal authority (including any such imposed in connection with
exchange controls), and any connected penalty, interest or fine.  

(xvi)

a time of day is a reference to Geneva time unless indicated otherwise;

(b)

A term used in any other Transaction Document or in any notice given under or in
connection with any Transaction Document and not expressly defined therein has
the same meaning in that Transaction Document or notice as in this Agreement;
and

(c)

A Default is "continuing" if it has not been remedied or waived.

1.3

Period of this Agreement

This Agreement shall be effective on the Effective Date and shall remain in
effect until such time as all of the obligations of the parties under this
Agreement have been irrevocably paid and discharged in full.

 

6

--------------------------------------------------------------------------------

 

2.

Prepayment Facility

2.1

Subject to the terms of this Agreement, Buyer agrees to pre-pay part of the
Purchase Price for Crude to be supplied by Seller under the Crude Supply
Contract by way of Prepayment(s), each in an aggregate amount not less than one
million US Dollars (USD1,000,000) and not exceeding in aggregate the Prepayment
Limit.  Subject to Clause 4.2 (Completion of the Prepayment Request), the
Prepayments shall be used by Seller to expand production of the Cakran, Gorisht,
Ballsh and Delvina Field projects and for no other purpose save with the prior
written consent of Buyer.  

2.2

Buyer shall be under no obligation to monitor or verify how Seller uses the
Prepayments.  

3.

Conditions of Prepayment

3.1

Initial conditions precedent

Seller may not deliver any Prepayment Request in respect of the Prepayment and
Buyer shall not be obliged to make any Prepayment unless and until Buyer gives
written confirmation to Seller that the conditions precedent listed in paragraph
1 of Schedule 1 (Conditions Precedent) have been satisfied and that it has
received (or waived the requirement to receive, in whole or in part) all of the
documents and other evidence listed in paragraph 2 of Schedule 1 (Conditions
Precedent) in each case in form and substance satisfactory to Buyer.

3.2

Further conditions precedent  

Buyer shall only be obliged to comply with Clause 4 (Prepayment) if on the date
of the Prepayment Request and on the proposed Prepayment Date:

(a)

no Default or Material Adverse Effect is continuing or would result from the
proposed Prepayment;

(b)

the Repeating Representations are true in all material respects;

(c)

Seller has provided copies of all invoices for Equipment that Seller shall
purchase with the proposed Prepayment; and

(d)

Buyer is satisfied that sufficient finance pursuant to the Facility Agreement is
available to it to enable it to fund the Prepayment.

3.3

Supplementary Conditions Precedent

Seller may not deliver any Prepayment Request where the aggregate of the
Prepayment Requests will be in excess of seven million US Dollars (USD7,000,000)
and Buyer shall not be obliged to make any Prepayment where the aggregate
Prepayment will be in excess of seven million US Dollars (USD7,000,000) unless
and until Buyer gives written confirmation that the conditions precedent listed
in paragraph 4 of Schedule 1 (Supplementary Conditions Precedent) have been
satisfied and that it has received (or waived the requirement to receive, in
whole or in part) all of the documents and other evidence listed in paragraph 4
of Schedule 1 (Supplementary Conditions Precedent) in each case in form and
substance satisfactory to Buyer.  

3.4

Condition subsequent

It is a condition subsequent to Buyer making a Prepayment that Seller shall
execute, deliver to Buyer and register a charge over all of Seller’s rights,
title and interest in and to the Equipment that Seller has or shall purchase
with the proposed Prepayment within 14 days of: (i) Seller acquiring rights in
and to such Equipment; or for already acquired Equipment (ii) execution of this
Agreement.

 

7

--------------------------------------------------------------------------------

 

4.

Prepayment

4.1

Delivery of the Prepayment Request

Seller may request a Prepayment by delivering to Buyer a completed Prepayment
Request not later than 12 noon (Geneva time) on the fifth Business Day before
the proposed Prepayment Date.

4.2

Completion of the Prepayment Request

(a)

A Prepayment Request is irrevocable and will not be valid unless:

(i)

the proposed Prepayment Date is a Business Day within the Availability Period;
and

(ii)

the amount of the proposed Prepayment does not exceed the Prepayment Limit.

(b)

Only one Prepayment may be requested in a Prepayment Request.

(c)

For the avoidance of doubt, Seller can issue more than one Prepayment Request.

(d)

Seller shall not deliver more than ten1 Prepayment Requests.  

(e)

All Prepayments shall be denominated in and requested in US Dollars and the
aggregate amount of Prepayments made or to be made shall not exceed the Limit.  

4.3

If the conditions precedent and other requirements set out in this Agreement
have been met, the Buyer shall make the requested Prepayment to the Seller on
the Prepayment Date.

4.4

The amounts of any Prepayments shall first be applied in payment to Buyer of the
fees to which Buyer is entitled pursuant to Clause 9 (Fees).

5.

Payment and Discharge  

5.1

Subject to the other terms of this Agreement, Seller shall discharge the
Prepayments and the Discharge Amounts by Seller delivering Crude to Buyer in
accordance with the Crude Supply Contract and at the times and in the quantities
of Crude as set out in the Delivery Schedule, and Buyer deducting such Discharge
Amounts (as well as other sums due) from Contract Payments in accordance with
this Clause 5.  

5.2

For the avoidance of doubt, Seller shall not reborrow any part of the Prepayment
which has been discharged in accordance with Clause 5.1 or any other term of
this Agreement.  

5.3

Subject to clause 5.9, on each Payment Date, provided no Default is continuing,
Buyer shall pay to Seller the Contract Payment due on that Payment Date to the
Credit Facility account of Seller at Raiffeisen Bank Sha specified in its
invoice after deducting, in the following order:

(a)

any fees, costs and expenses payable by Seller which have accrued under this
Agreement (including without limitation pursuant to Clause 6) and which have not
been paid;  

(b)

all Unpaid Amounts;

(c)

an amount accrued at the Funding Rate up to the relevant Payment Date, plus all
other Funding Charges payable by Seller under Clause 6 (Funding Charge);  

 

8

--------------------------------------------------------------------------------

 

(d)

any outstanding element of the Prepayment due by the Discharge Date following
the relevant Payment Date to the extent that such amounts have not previously
been paid, deducted or discharged in accordance with this Clause 5; and

(e)

any other amount payable by Seller to Buyer under the Transaction Documents on
or before that Payment Date,

provided that the amount which results from the above deductions is a positive
number.  

5.4

If:  

(a)

any amount referred to in Clauses 5.3 (a) – (e) fall due for payment, Buyer
shall deduct such amount from Contract Payments (and such amount shall be deemed
paid upon and by virtue of such deduction); and  

(b)

any amount falls due for payment under or in connection with the Facility
Agreement, Buyer is authorised to deduct such amount from any Contract Payment
and pay it in accordance with the Facility Agreement.

5.5

If the amount of the Contract Payments are not, or in Buyer’s reasonable
determination may not be, sufficient to discharge the Discharge Amount and/or
any other sums payable by the Seller under the Transaction Documents, Seller
shall in Buyer’s option:

(a)

deliver additional Product to Buyer in each case, on the terms set out in the
Crude Supply Contract and in a volume sufficient to enable the deduction from
Contract Payments in respect of such additional Product of all sums due;
and/or  

(b)

pay to Buyer in respect of a failure or anticipated failure to discharge the
Discharge Amount and/or any other sum due by the Discharge Date, an amount equal
to the Discharge Amount and/or other sum due less the total of the Contract
Payments made prior to the Discharge Date;  

Nothing in this Clause 5.5 shall qualify or otherwise affect the Parties’
respective rights and obligations under Clause 5.6.  

5.6

Notwithstanding any other term of this Agreement, Seller shall pay and discharge
the Prepayment in full together with all Funding Charges and other amounts
payable under this Agreement by the Final Discharge Date.

5.7

Buyer shall supply a list of the deductions made under Clause 5.3 in respect of
each Contract Payment as soon as reasonably practicable after each Payment Date.

5.8

It is agreed that Buyer shall be entitled to deduct from any payment to be made
by it to Seller:

(a)

Any sum that is required to ensure Seller’s compliance with Clause 13.8
(Financial Covenants); or

(b)

at the request of Seller, any amount which is to be applied in voluntary
reimbursement of part of the Prepayments in accordance with Clause 8 (Voluntary
Reimbursement).

5.9

Notwithstanding the other provisions of this clause 5 but subject to clauses 13
and 16, until 31 October 2013, Seller shall not be obliged to repay and Buyer
shall not be entitled to deduct the amount of any Prepayment outstanding. This
clause 5.9 shall not impact upon Seller’s obligation to pay and Buyer’s
entitlement to deduct Funding Charges or other amounts due and payable up to 31
October 2013 and thereafter.  

 

9

--------------------------------------------------------------------------------

 

6.

Funding Charge

6.1

Funding Rate

The funding rate on the Prepayment for each Funding Period is the percentage
rate per annum equal to the aggregate of (i) the Interest Rate; and (ii) any
Mandatory Cost.

6.2

Payment of funding charges

Subject to Clause 10.2 (Additional Funding Costs), Seller shall pay accrued
Funding Charges on the Prepayment on each Payment Date as part of the Discharge
Amount.  

6.3

Default Interest

(a)

If Seller fails to pay any amount payable by it under a Transaction Document on
its due date, interest shall accrue on the Unpaid Amount from the due date up to
the date of actual payment (both before and after judgment) at the Default
Rate.  Any interest accruing under this Clause 6.3 shall be immediately due and
payable.

(b)

Default interest (if unpaid) arising on an Unpaid Amount shall be compounded
with the Unpaid Amount at the end of each Funding Period applicable to that
Unpaid Amount but will remain immediately due and payable.

6.4

Notification of rates

Buyer shall promptly notify Seller of the determination of any Funding Rate or
other rate of interest under this Agreement.

6.5

Notification of Funding Charges

(a)

On or after the commencement of each Funding Period for a Prepayment, Buyer
shall (to the extent that it is then able to do so) promptly notify Seller of
the amount of Funding Charges applicable to that Prepayment for the relevant
Funding Period.

(b)

If a Prepayment becomes subject to additional Funding Charges during a Funding
Period, Buyer shall promptly notify Seller giving details of the amount of such
additional Funding Charges.

7.

Funding Periods

7.1

Funding Periods

(a)

The first funding period shall start from the Prepayment Date and end on the
last day of the calendar month in which the Payment Date falls, and thereafter,
each funding period shall be of one calendar month or any other period as
determined by Buyer (provided that such other period selected by the Buyer shall
not result in increased costs to the Seller), except the last Funding Period
which shall end on the Final Discharge Date and provided always that if a
Discharge Date falls within a Funding Period, such Funding Period shall end on
such Discharge Date (and the next Funding Period shall begin on the following
day and end on the last day of the then current calendar month or such other
date as is determined by Buyer).  

(b)

A Funding Period in relation to a Prepayment shall not extend beyond the Final
Discharge Date.  

 

10

--------------------------------------------------------------------------------

 

7.2

Changes to Funding Periods

Buyer shall promptly notify Seller if Buyer makes any change to a Funding
Period.

7.3

Non-Business Days

If a Funding Period would otherwise end on a day which is not a Business Day,
that Funding Period will instead end on the next Business Day in that calendar
month (if there is one) or the preceding Business Day (if there is not).

8.

Voluntary reimbursement

8.1

From six months after the First Prepayment Date and provide the Availability
Period has passed, Seller may reimburse the whole or any part of the Prepayment
in cash (but, if in part, being an amount that reduces the amount of the
Prepayment by a minimum amount of one million US Dollars (USD1,000,000) or an
integral multiple of USD1,000,000) on giving at least ten (10) Business Days'
prior written notice to Buyer and paying any Break Costs duly justified by Buyer
to Seller.

8.2

All or any part of the Prepayment may only be reimbursed by Seller to Buyer on
the last Business Day of a calendar month.

8.3

A voluntary reimbursement by Seller shall not prejudice or limit or undermine or
reduce in any way any of the rights of Buyer under the Crude Supply Contract to
buy Crude or the obligations of Seller under the Crude Supply Contract to
deliver Crude, in accordance with the Crude Supply Contract.  

8.4

Any notice of reimbursement shall be irrevocable and shall specify the date or
dates upon which the relevant reimbursement is to be made and the amount of that
reimbursement.

8.5

Seller shall not reimburse all or any part of the Prepayment except at the times
and in the manner provided for in this Agreement.

9.

Fees

9.1

Seller shall pay to Buyer an arrangement fee of an amount equal to 1% of the
Prepayment Limit plus the Funding Charge within thirty (30) days from execution
of this agreement. Such fee shall be payable regardless of whether or not any
Prepayment occurs and shall not be refundable under any circumstances.

9.2

A commitment fee shall be payable by Seller to Buyer at the rate of 50% of the
Interest Rate payable monthly in arrears on the undrawn balance of the
Prepayment Limit from the date of this Agreement until the end of the
Availability Period.  

9.3

Transaction expenses

Seller shall reimburse Buyer on demand for all reasonable costs and expenses
(including legal fees and all value added and similar taxes) incurred by Buyer
in connection with the negotiation, preparation, printing, execution,
completion, amendment or variation of and the enforcement or preservation of
rights under, the Transaction Documents and any related documents.  

 

11

--------------------------------------------------------------------------------

 

10.

Other amounts

10.1

Tax Gross Up and Indemnity

(a)

Seller shall make all payments to be made by it under the Transaction Documents
without any Tax Deduction, unless a Tax Deduction is required by law. Seller
shall promptly upon becoming aware that it must make a Tax Deduction (or that
there is any change in the rate or the basis of a Tax Deduction) notify Buyer
accordingly.  If a Tax Deduction is required by law to be made by Seller, the
amount of the payment due from Seller shall be increased to an amount which
(after making any Tax Deduction) leaves an amount equal to the payment which
would have been due if no Tax Deduction had been required.  

(b)

Without prejudice to paragraph (a) above, if Buyer is required to make any
payment of or on account of Tax on or in relation to any sum received or
receivable under any Transaction Document (including any sum deemed for purposes
of Tax to be received or receivable by Buyer whether or not actually received or
receivable) or if any liability in respect of any such payment is asserted,
imposed, levied or assessed against Buyer, Seller shall, within three (3)
Business Days of demand of Buyer, promptly indemnify Buyer against such payment
or liability, together with any interest, penalties, costs and expenses payable
or incurred in connection therewith.

10.2

Additional Funding Costs

Seller shall, within ten (10) Business Days of a demand by Buyer, pay for the
account of Buyer the amount of any additional Funding Charges (save to the
extent that Buyer is compensated for such costs by the other provisions of this
Agreement).  

10.3

Currency indemnity

(a)

If any sum due from Seller under the Transaction Documents (a "Sum"), or any
order, judgment or award given or made in relation to a Sum, has to be converted
from the currency (the "First Currency") in which that Sum is payable into
another currency (the "Second Currency") for the purpose of:

(i)

making or filing a claim or proof against Seller; or

(ii)

obtaining or enforcing an order, judgment or award in relation to any litigation
or arbitration proceedings, Seller shall as an independent obligation, within
three Business Days of demand, indemnify Buyer against any cost, loss or
liability arising out of or as a result of the conversion including any
discrepancy between (A) the rate of exchange used to convert that Sum from the
First Currency into the Second Currency and (B) the rate or rates of exchange
available to that person at the time of its receipt of that Sum.

(b)

Seller waives any right it may have in any jurisdiction to pay any amount under
the Transaction Documents in a currency or currency unit other than US Dollars.

10.4

Other indemnities

(a)

Seller shall, within ten (10) Business Days of demand, indemnify Buyer on demand
against any cost or expense incurred by Buyer or any of its officers, directors,
employees, agents or representatives (as the case may be) as a result of:

(i)

the occurrence of any Termination Event;  

 

12

--------------------------------------------------------------------------------

 

(ii)

any enquiry, investigation, subpoena (or similar order) or litigation with
respect to Seller or with respect to the transactions contemplated or financed
under this Agreement;

(iii)

a failure by Seller to pay any amount due under a Transaction Document within
five (5) Business Days of demand;

(iv)

funding, or making arrangements to fund, the Prepayment requested by Seller in
the Prepayment Request but not made by reason of the operation of any one or
more of the provisions of this Agreement; or

(v)

the Prepayment (or part of the Prepayment) not being reimbursed in accordance
with a notice of reimbursement given by Seller pursuant to section 8.

(b)

Seller shall promptly indemnify Buyer for any cost or expense incurred by Buyer
or any of its officers, directors, employees, agents or representatives (as the
case may be) as a result of:

(i)

investigating any event which it reasonably believes is a Termination Event; or

(ii)

acting or relying on any notice, request or instruction which it reasonably
believes to be genuine, correct and appropriately authorised.  

11.

Representations

11.1

General

Each of Seller and Guarantor makes the representations and warranties set out in
this Clause 12 to Buyer on the date of this Agreement and as set out in Clause
11.25 (Repetition).  

11.2

Status  

(a)

It is a corporation, duly incorporated and validly existing under the law of its
jurisdiction of incorporation.

(b)

It has the power to own its assets and carry on its business as it is being
conducted.

11.3

Binding obligations  

The obligations expressed to be assumed by it in each Transaction Document are
legal, valid, binding and enforceable obligations.

11.4

No conflict  

The execution of the Transaction Documents and performance of, the transactions
contemplated by, the Transaction Documents do not and will not conflict with:

(a)

any law or regulation applicable to it, including any currency control
regulations in place in the Republic of Albania or Canada;

(b)

its constitutional documents; or

(c)

any agreement or instrument binding upon it or any of its assets.

 

13

--------------------------------------------------------------------------------

 

11.5

Power  

It has the power to enter into, perform and deliver, and has taken all necessary
action to authorise its entry into, performance and delivery of, the Transaction
Documents and the transactions contemplated by those Transaction Documents.

11.6

Validity  

All Authorisations required or desirable:

(a)

to enable it lawfully to enter into, exercise its rights and comply with its
obligations in the Transaction Documents; and

(b)

to make the Transaction Documents to which it is a party admissible in evidence
in its jurisdiction of incorporation,

have been obtained or effected and are in full force and effect.

11.7

Governing law

The choice of governing law of the Transaction Documents (as applicable in each
case) will be recognised and enforced in its jurisdiction of incorporation and
any judgment obtained in England or in the Republic of Albania or in Canada in
relation to a Transaction Document will be recognised and enforced in its
jurisdiction of incorporation.

11.8

Tax  

(a)

It is not required under the law of its jurisdiction of incorporation to make
any deduction for or on account of Tax from any payment (whether in cash or in
kind) it may make under any Transaction Document.

(b)

It has duly and punctually paid and discharged all Taxes imposed upon it or its
assets within the time period allowed without incurring penalties (save to the
extent that (i) payment is being contested in good faith, (ii) it has maintained
adequate reserves for those Taxes and (iii) payment can be lawfully withheld).

(c)

It is not materially overdue in the filing of any Tax returns.

(d)

No claims are being or are reasonably likely to be asserted against it with
respect to Taxes.

11.9

No filing or stamp taxes  

Under the law of its jurisdiction of incorporation it is not necessary that the
Transaction Documents be filed, recorded or enrolled with any court or other
authority in that jurisdiction or that any stamp, registration or similar tax be
paid on or in relation to the Transaction Documents or the transactions
contemplated by the Transaction Documents save for:

(a)

the registration in the Republic of Albania of this Agreement; and

(b)

the payment in the Republic of Albania of stamp duty on this Agreement.  

 

14

--------------------------------------------------------------------------------

 

11.10

Residency

Each of Buyer and Guarantor is not and will not be deemed to be resident,
domiciled or carrying on business in the Republic of Albania, or subject to any
Tax in that jurisdiction, by reason only of its entry into and performance of
its obligations under the Transaction Documents.

11.11

Trade Obligations  

Its obligations under the Transaction Documents constitute short term trade
obligations and its performance of these obligations is not subject to any
rescheduling, readjustment, arrangement or moratorium of debts.

11.12

Foreign Currency  

It is legally and beneficially entitled to all foreign currency owed to or held
by it and to make payments in foreign currency under the terms of this
Agreement.

11.13

Immunity

Neither it nor any of its assets enjoy under the laws of any jurisdiction, any
right of immunity from suit, judgment, set-off, execution on a judgment,
attachment or other legal process in respect of any of its obligations under the
Transaction Documents.

11.14

No default  

No Termination Event is continuing or might reasonably be expected to result
from the making of the Prepayment and no other event or circumstance is
outstanding which constitutes a default under any other agreement or instrument
which is binding on it or any of its Affiliates or to which its or any of its
Affiliate's assets are subject which might have a Material Adverse Effect.

11.15

Information  

All information provided by Seller or Guarantor to Buyer under or in connection
with the Transaction Documents was true and accurate in all material respects as
at the date it was provided or as at the date (if any) at which it is stated,
and nothing has occurred since the date the information was provided which makes
that information untrue or misleading in any material respect.

11.16

Financial statements  

Its Original Financial Statements were prepared in accordance with
internationally accepted auditing standards consistently applied and fairly
represent its financial condition and operations during the relevant financial
period and there has been no material adverse change in its business or
financial condition since the date of the Original Financial Statements.

11.17

Pari passu

Its obligations under the Transaction Documents rank at least pari passu with
the claims of all its other unsecured and unsubordinated creditors, except for
obligations mandatorily preferred by law applying to companies generally.

 

15

--------------------------------------------------------------------------------

 

11.18

Litigation  

No litigation, arbitration or administrative proceedings (including any arising
from or relating to Environmental Law) before any court, arbitral body or agency
have (to the best of its knowledge and belief) been started or threatened
against it which, if adversely determined, might reasonably be expected to have
a Material Adverse Effect or would result in a judicial or arbitral indebtedness
in aggregate in excess of USD1,000,000.

11.19

No winding-up

It has not taken any corporate action, nor have any other steps been taken or
legal proceedings been started or threatened against it for its winding-up,
dissolution, administration or reorganisation or for the appointment by it (or
on its behalf) of a receiver, administrator, administrative receiver, trustee or
similar officer in relation to itself or all or any of its assets or revenues.

11.20

Environmental laws and licences

It has:

(a)

complied with all Environmental Laws to which it may be subject;

(b)

obtained all Environmental Licences required or desirable in connection with its
business; and

(c)

complied with the terms of those Environmental Licences,

in each case where failure to do so might constitute or result in a Material
Adverse Effect.

11.21

Environmental releases

No:

(a)

property currently or previously owned, leased, occupied or controlled by it
(including any offsite waste management or disposal location utilised by it) is
contaminated with any Hazardous Substance; and

(b)

discharge, release, leaching, migration or escape of any Hazardous Substance
into the Environment has occurred or is occurring on, under or from that
property,

in each case in circumstances where this might constitute or result in a
Material Adverse Effect.

11.22

Environmental Claims

So far as it is aware, having made all reasonable enquiries, there are no
Environmental claims pending or threatened and there are no past or present
acts, omissions, events or circumstances that might form the basis of any
Environmental claim against it.

11.23

Legal and beneficial ownership

It is the sole legal and beneficial owner of any asset over which it purports to
grant Security to Buyer pursuant to a Transaction Document.

 

16

--------------------------------------------------------------------------------

 

11.24

Insurance

(a)

It maintains with reputable insurers such insurance in respect of its assets and
business as would normally be maintained by a prudent company carrying on
business similar to its business.  

(b)

It maintains the Policy which includes, without limitation, the rights to assign
the proceeds of such insurances as covers the full replacement value of the
equipment (“the Insurance Payment Assignment” and non-vitiation in favour of
Buyer.

11.25

Repetition

The Repeating Representations are deemed to be made by Seller by reference to
the facts and circumstances then existing on the date of any Prepayment Request
and the first day of each Funding Period.

12.

Undertakings

12.1

For so long as any amount is outstanding under the Transaction Documents or any
part of the Limit is available:

(a)

Financial statements

Each of Seller and Guarantor shall supply to Buyer, in English:

(i)

as soon as they become available, but in any event within one hundred and twenty
(120) days after the end of each of its financial years, its audited financial
statements for that financial year;

(ii)

as soon as they become available, but in any event within sixty (60) days after
the end of each quarter of its financial year, its cash-flow report (including
figures in respect operating expenses production, sales and exports,
inventories, income statements, updates on payments made under financing
agreements) for the preceding quarter;

(iii)

as soon as the same becomes available but in any event within twenty Business
Days after the beginning of each calendar month, its monthly report on actual
production volumes of Crude in Albania;  

(iv)

any other information which Buyer may reasonably request from time to time in
relation to Seller's and Guarantor’s business (including without limitation, any
information relating to the operations, general economics or capital expenditure
program of Seller) or any policy of the Government of the Republic of Albania
vis-à-vis regulation of crude export or prices.  

(b)

Requirements as to financial statements

(i)

Each set of financial statements delivered by Seller pursuant to Clause 12.1 (a)
(Financial statements) shall be certified by the General Manager and the Chief
Financial Officer as fairly representing its financial condition as at the date
those financial statements were drawn up.

(ii)

Seller shall procure that each set of financial statements delivered pursuant to
Clause 12.1 (a) (Financial statements) is prepared using internationally
accepted and consistently applied accounting principles.

 

17

--------------------------------------------------------------------------------

 

Any reference in this Agreement to those financial statements shall be construed
as a reference to those financial statements as adjusted to reflect the basis
upon which the Original Financial Statements were prepared.

(c)

Information: miscellaneous

Each of Seller and Guarantor (as applicable) shall supply to Buyer:

(i)

promptly upon becoming aware of them, the details of any litigation, arbitration
or administrative proceedings which are current, threatened or pending against
it and which might, if adversely determined, have a Material Adverse Effect; and

(ii)

promptly, such further information regarding its financial condition, business
and operations or the delivery of Product under the Crude Supply Contract as
Buyer may reasonably request; and

(iii)

full details of any amendment or addendum to or extension of the terms of: (1)
the Credit Facility; and (2) the Petroleum Agreements.

(d)

Notification of default

Each of Seller and Guarantor shall:

(i)

notify Buyer of any Default (and the steps, if any, being taken to remedy it)
promptly upon becoming aware of its occurrence; and

(ii)

promptly upon a request by Buyer, supply to Buyer a certificate signed by two of
its directors or senior officers on its behalf certifying that no Default is
continuing (or if a Default is continuing, specifying the Default and the steps,
if any, being taken to remedy it).

12.2

Seller undertakes not to amend, renegotiate or otherwise vary the tenor or any
terms or conditions of the Petroleum Agreements without the consent of the
Buyer, such consent not to be unreasonably withheld or delayed save that where
an amendment is imposed or required pursuant to statute, court order or
governmental or state decree, directive, law, rule or regulation, the Petroleum
Agreements may be amended upon written notice to Buyer but without Buyer’s
consent.  

13.

General undertakings

The undertakings in this Clause 13 shall remain in force from the date of this
Agreement and for so long as any amount is outstanding under the Transaction
Documents or any part of the Limit is available:

13.1

Authorisations  

Each of Seller and Guarantor shall promptly:

(a)

obtain, comply with and do all that is necessary to maintain in full force and
effect; and

(b)

supply certified copies to Buyer of,

any Authorisation required under any law or regulation of its jurisdiction of
incorporation to enable it to perform its obligations under the Transaction
Documents and to ensure the legality, validity, enforceability or admissibility
in evidence in its jurisdiction of incorporation of any Transaction Document.

 

18

--------------------------------------------------------------------------------

 

13.2

Compliance with laws  

Each of Seller and Guarantor shall comply in all respects with all laws to which
it may be subject.

13.3

Compliance  

Each of Seller and Guarantor shall comply in all respects with any agreement or
instrument binding upon it or any of its assets, including any currency control
regulations existing in the Republic of Albania of Canada.

13.4

Negative Pledge  

Seller shall not create, amend, extend, agree to create, amend or extend, or
permit to subsist, any Security over:

(a)

the Transaction Documents, or any Product to be delivered pursuant to the Crude
Supply Contract; or

(b)

if that Security may have a Material Adverse Effect, any of its other assets or
undertaking,

other than:  

(1)

the Credit Facility; and

(2)

Security created by or in favour of Buyer.  

13.5

Merger  

Each of Seller and Guarantor shall not enter into any amalgamation, demerger,
merger or corporate reconstruction.

13.6

Change of business  

Each of Seller and Guarantor shall not make any substantial change to the
general nature of its business from that carried on at the date of this
Agreement.

13.7

Crude Supply Contract

Seller shall give all necessary instructions and take all such other actions as
may be required in order to ensure that it delivers Product in accordance with
the Crude Supply Contract and this Agreement.

13.8

Financial Covenants

Seller shall ensure that at all times:

(a)

the Coverage Ratio is not less than 150%. If at any time, Buyer considers the
Coverage Ratio to be less than or equal to 150%, Buyer shall notify Seller of
this and Seller shall take immediate action to:

(i)

Enter into a binding commitment to Buyer to extend the period of the Crude
Supply Contract so as to deliver additional Crude sufficient to meet the
Coverage Ratio; and/or

(ii)

reimburse to Buyer part of the Prepayment Amount as is necessary to restore the
Coverage Ratio; and/or

 

19

--------------------------------------------------------------------------------

 

(iii)

do such other things as agreed by and as satisfactory in all respects to Buyer
acting reasonably,

in each case to an extent sufficient to ensure that prior to the next Discharge
Date or the end of the next Funding Period (as the case may be) and in any case
within 7 Business Days of being so notified, the Coverage Ratios are greater
than or equal to 150%. Failure to remedy a Shortfall within such time period
shall constitute a Termination Event.

(b)

Each of Seller and Guarantor shall ensure at all times (to be assessed no less
frequently than at the end of each Funding Period) that:

(i)

Its EBITDA is not less than ten million US Dollars (USD10,000,000);

(ii)

Its Indebtedness is never more than twice its EBITDA; and

(iii)

Its EBITDA is at least ten times greater than the interest charges payable on
its Indebtedness.

In this Clause 13.8:

"Coverage Ratio" means the ratio (at any time), expressed as a percentage, of:

(a)

the estimated aggregate Valuation of the volume of Crude to be delivered under
the Crude Supply Contract; to

(b)

the then outstanding amount of the Prepayment plus any Funding Costs (as
determined by Buyer by reference to the most recent Funding Rate or rates) and
fees due to be paid on or before the Discharge Date;

"Shortfall" means at any time the percentage by which the Coverage Ratio is less
than 150%.

13.9

Payment of shortfall

If at any time Buyer determines that there is a shortfall in the repayment by
Seller of any Funding Charges or other liabilities under any Transaction
Document, Seller shall forthwith at the request of Buyer transfer by telegraphic
transfer to an account designated by Buyer an amount equal to that shortfall.  

13.10

Restricted Payments

Seller shall not:

(a)

pay, repay or prepay any principal, interest or other amount on or in respect
of, or redeem, purchase or cancel any Indebtedness owed actually or
contingently, to any shareholder of Seller or to any Affiliate of any
shareholder of Seller; or

(b)

reduce, return, purchase, repay, cancel or redeem any of its share capital.

13.11

Environmental undertakings

Seller shall comply with all Environmental Laws to which it may be subject and
obtain and comply at all times with all Environmental Licences required or
desirable in connection with its business.

 

20

--------------------------------------------------------------------------------

 

13.12

Environmental claims

Seller shall promptly notify Buyer of any claim, proceeding, investigation,
notice or other communication received by it or any Affiliate in respect of any
actual or alleged breach of or liability under Environmental Law which, if
substantiated, might constitute or result in a Material Adverse Effect.

13.13

Insurance

(a)

Seller shall maintain with reputable insurers such insurance in respect of its
assets and business as are mandatorily required by all applicable laws and as
would otherwise normally be maintained by a prudent company carrying on business
similar to its business.

(b)

Seller shall at all times maintain the Policy and the rights of Buyer thereunder
being the Insurance Payment Assignment and non-vitiation.

(c)

Within ten Business Days falling after the date of each anniversary of the
Policy Renewal Date Seller shall provide to Buyer a certificate confirming that
the Policy has been renewed (including the Insurance Payment Assignment made in
favour of Buyer), is in full force and effect and that all insurance premiums
have been paid and are up to date.  

13.14

Further assurance

Each of Seller and Guarantor shall immediately at its own cost take all such
action (including without limitation, making all filings and registrations
(including the registration of this Agreement) and paying any stamp duty
(including the payment of any stamp duty on this Agreement)) as may be necessary
to ensure the legality, validity, enforceability or admissibility in evidence in
its jurisdiction of incorporation of any Transaction Document.

14.

Inconsistency with Supply Contract

If there is any inconsistency between the terms of this Agreement and the terms
of the Supply Contract, the terms of this Agreement shall prevail to the extent
of the inconsistency.

15.

Illegality

If it becomes unlawful in any jurisdiction for Buyer to perform any of its
obligations as contemplated by this Agreement, the Crude Supply Contract, or
under the Finance Documents:

(a)

Buyer shall promptly notify Seller upon becoming aware of that event;

(b)

upon Buyer notifying Seller, the Prepayment (or such part as Buyer may specify)
will be immediately cancelled; and

(c)

Seller shall reimburse any outstanding Prepaid Amount (or such part as Buyer may
specify) in cash upon demand by Buyer on the last day of the then current
Funding Period occurring after Buyer has notified Seller or, if earlier, the
date specified by Buyer in the notice delivered to Seller.

16.

Termination events

16.1

Each of the events or circumstances set out in Clause 16 is a Termination Event
(save for Clause 16.20 (Acceleration)).

 

21

--------------------------------------------------------------------------------

 

16.2

Non-payment  

Seller or the Guarantor does not pay on the due date any amount payable pursuant
to a Transaction Document at the place at and in the currency in which it is
expressed to be payable.

16.3

Financial covenants and other obligations

Any requirement of Clause 13.8 (Financial Covenants) is not satisfied or Seller
or Guarantor does not comply with the provisions of Clause 12.1 (c) (Information
Undertakings).  

16.4

Other obligations  

Seller or Guarantor does not comply with any provision of the Transaction
Documents (other than those referred to in Clause 16.2 (Non-payment), Clause
13.8 (Financial Covenants)) Clause 12.1 (c) (Information Undertakings) and such
failure (if capable of remedy in the opinion of Buyer) is not remedied within
five (5) Business Days.

16.5

Misrepresentation  

Any representation or statement made or deemed to be made by Seller or Guarantor
in the Transaction Documents or any other document delivered by or on behalf of
Seller or Guarantor under or in connection with any Transaction Document is or
proves to have been incorrect or misleading in any material respect when made or
deemed to be made.

16.6

Change of Control  

Any person or group of persons (other than those who own and control Seller or
Guarantor as at the date of this Agreement) acting in concert gains ownership or
control of Seller (other than with the prior written consent of Buyer).

16.7

Expropriation

At any time after the date of this Agreement, by or under the authority of any
governmental agency or authority:

(a)

the management board, board of directors or the general director of Seller or
Guarantor is wholly or partially displaced or the authority of Seller in the
conduct of a material portion of its business is curtailed;

(b)

any of the revenues or assets of Seller or Guarantor are seized, nationalised,
expropriated or compulsorily acquired; or

(c)

Seller or Guarantor is otherwise deprived or prevented from exercising ownership
or control of its business, assets or rights.

16.8

Foreign exchange restrictions

Any foreign exchange law is enacted or threatened to be enacted by or in the
Republic of Albania or Canada (as applicable) that in the opinion of Buyer has,
or may reasonably be expected to have, the effect of prohibiting, restricting or
delaying any payment that Seller or Guarantor is required to make under the
Transaction Documents.  

 

22

--------------------------------------------------------------------------------

 

16.9

Restraining Orders  

Any order or declaration is made or judgment is given by any court or authority,
the effect of which is to restrain the performance or observance by Seller or
Guarantor of any of the terms of any of the Transaction Documents.

16.10

Cross default

(a)

Any material Indebtedness of Seller or Guarantor is not paid when due nor within
any originally applicable grace period.

(b)

Any material Indebtedness of Seller or Guarantor is declared to be or otherwise
becomes due and payable prior to its specified maturity as a result of an event
of default (however described).

(c)

Any commitment for any material Indebtedness of Seller or Guarantor is cancelled
or suspended by a creditor of Seller or Guarantor as a result of an event of
default (however described).

(d)

Any creditor of Seller or Guarantor becomes entitled to declare any Indebtedness
of Seller or Guarantor due and payable prior to its specified maturity as a
result of an event of default (however described).

16.11

Insolvency

(a)

Seller or Guarantor is unable or admits inability to pay its debts as they fall
due or is deemed to or declared to be unable to pay its debts under applicable
law, suspends making payments on any of its debts or, by reason of actual or
anticipated financial difficulties, commences negotiations with one or more of
its creditors with a view to rescheduling any of its Indebtedness.

(b)

The value of the assets of Seller or Guarantor is less than its liabilities
(taking into account contingent and prospective liabilities).

(c)

A moratorium is declared in respect of any Indebtedness of Seller or Guarantor.

16.12

Insolvency proceedings  

Any corporate action, legal proceedings or other procedure or step is taken in
relation to:

(a)

the suspension of payments, a moratorium of any Indebtedness, winding-up,
dissolution, administration or reorganisation (by way of voluntary arrangement,
scheme of arrangement or otherwise) of Seller or Guarantor;

(b)

a composition, assignment or arrangement with any creditor of Seller or
Guarantor which is for more than 90 days;  

(c)

the appointment of a liquidator, receiver, administrator, administrative
receiver, compulsory manager or other similar officer in respect of Seller or
Guarantor or any of each of their assets; or

(d)

enforcement of any Security over any assets of Seller or Guarantor,

or any analogous procedure or step is taken in any jurisdiction and, in the case
of legal proceedings instituted against seller or Guarantor, same shall continue
undismissed, or unstayed and in effect for a period of 20 Business Days.

 

23

--------------------------------------------------------------------------------

 

16.13

Creditors' process  

Any expropriation, attachment, sequestration, distress or execution affects any
material asset or assets of Seller or Guarantor is not discharged within seven
days.

16.14

Unlawfulness and invalidity  

(a)

It is or becomes unlawful for Seller or Guarantor to perform any of its
obligations under a Transaction Document.

(b)

Any obligation of Seller or Guarantor under any Transaction Document is not or
ceases to be legal, valid and binding or enforceable and the cessation
individually or cumulatively materially and adversely affects the interests of
Buyer under any Transaction Document.  

16.15

Repudiation  

Seller or Guarantor repudiates or purports to repudiate or rescind a Transaction
Document or evidences an intention to repudiate or rescind a Transaction
Document.

16.16

Material adverse change

Any event or series of events occurs, which, in the opinion of Buyer, may have a
Material Adverse Effect and Seller or Guarantor fails to provide evidence
satisfactory to Buyer within five (5) Business Days of the date of Buyer
notifying Seller or Guarantor of such event or series of events that the same
will not in fact have a Material Adverse Effect.

16.17

Transaction Documents

Any Transaction Document is terminated, suspended or otherwise ceases to be
valid and in full force and effect.

16.18

Environmental Laws and licences

Seller or Guarantor does not:

(a)

comply with any Environmental Laws to which it is subject; or

(b)

maintain, and comply with the terms of, all Environmental Licences required or
desirable in connection with its business.

16.19

Litigation  

Any court of law or arbitral tribunal awards as final judgement damages and/or
fines against Seller or Guarantor an aggregate amount which is in excess of
USD1,000,000.  

 

24

--------------------------------------------------------------------------------

 

16.20

Acceleration

At any time after a Termination Event occurs, Buyer may, by notice to Seller do
all or any of the following:

(a)

cancel the Prepayment;

(b)

declare all or part of the Prepaid Amount, together with accrued Funding
Charges, and all other amounts accrued under the Finance Documents (and if
relevant, the Supply Contract) be immediately due and payable; and

(c)

declare all or part of the Prepaid Amount to be payable on demand.

16.21

Material

For the purposes of clauses 16.10 and 16.13, Indebtedness or an asset
respectively shall be considered “material” where the value of the Indebtedness
or asset is USD500,000 or greater or, in the case of an amount denominated in an
alternative currency, the equivalent based on the spot exchange rate on the date
of such cross-default or expropriation, attachment, sequestration, distress or
execution (as applicable).

17.

Payment mechanics

17.1

Accounts

(a)

Seller shall make each payment due from it to Buyer under each Transaction
Document, for value on the due date at the time and in same day funds in the
relevant currency in the place of payment.

(b)

All payments by a party shall be made to the account designated in writing by
the other party for this purpose.

17.2

Business Days

Any payment which is due to be made on a day that is not a Business Day shall be
made on the next Business Day in the same calendar month (if there is one) or
the preceding Business Day (if there is not).

17.3

Currency of account

The US Dollar is the currency of account and payment for any sum due from Seller
under any Transaction Document provided that:

(a)

each payment in respect of costs, expenses or Taxes shall be made in the
currency in which the costs, expenses or Taxes are incurred; and

(b)

any amount expressed to be payable in a currency other than Dollars shall be
paid in that other currency; and

(c)

Buyer may elect at any time to change the currency of account for payment for
any sum due from Seller under any Transaction Document to another currency. In
such event, Buyer may determine the rate of exchange which shall be applicable
to such new currency.

 

25

--------------------------------------------------------------------------------

 

18.

Stamp Duty and Registration Fees

Seller shall pay all stamp duty, registration fees and similar taxes or charges
which may be payable in any jurisdiction in connection with the execution,
delivery, performance or enforcement of the Transaction Documents or any
judgment given in connection with any of them and shall indemnify Buyer against
all liabilities, including penalties, with respect to or resulting from its
delay or omission to pay any such stamp, registration or similar tax or charge.

19.

Transfer

19.1

Seller may not assign any of its rights and/or transfer any of its obligations
under this Agreement.

19.2

Buyer may assign any of its rights and/or transfer any of its obligations under
the Transaction Documents to any bank or other institution providing Buyer with
finance in connection with this Agreement.  

20.

Communications

20.1

All communications to be made under this Agreement shall be in writing and in
English language and be served at the address, fax number or telex number set
out on the execution page of this Agreement (or such other address, fax or telex
number as either party may notify the other in writing).

20.2

Communications to Seller shall be deemed to have been given:

(a)

if posted, on the second Business Day following the day on which it has been
sent by prepaid post;

(b)

if sent by fax, on the Business Day on which it is transmitted unless
transmitted after 5.00 pm (local time), in which case on the following Business
Day; and

(c)

if delivered personally or by courier, at the time of actual delivery.

20.3

Communications to Buyer shall be effective only upon actual delivery.

21.

Amendments, consents and approvals

21.1

This Agreement may not be amended except in writing executed by each of the
parties.

21.2

Any other consent, notice or approval from Buyer to Seller under this Agreement
must be obtained in writing and shall be of no effect if it is not in writing.  

22.

Set-off

Seller shall have no rights of set-off against Buyer.  

23.

Severability

Any provision of this Agreement which is unenforceable in any jurisdiction
shall, in that jurisdiction, be ineffective to the extent of the
unenforceability without affecting the validity or enforceability of that
provision in any other jurisdiction or affecting any other provision of this
Agreement.

24.

Counterparts

This Agreement may be executed in one or more counterparts, each of which shall
be an original and all of which taken together shall constitute one and the same
instrument.

 

26

--------------------------------------------------------------------------------

 

25.

Continuing obligations

Each obligation in this Agreement is a continuing obligation, separate and
independent from each other obligation.

26.

Entire Agreement

This Agreement constitutes the entire agreement between the parties about its
subject matter and any previous arrangements, understandings and negotiations on
that subject cease to have any effect.

27.

Further assurance

Seller shall take any further action and execute any further documents at its
own expense as Buyer may reasonably request to give effect to this Agreement and
the transactions contemplated by it.

28.

No Rights of Third Parties

No person other than a party to this Agreement may enforce this Agreement by
virtue of the Contracts (Rights of Third Parties) Act 1999.

29.

Remedy and Waiver

No failure to exercise, nor any delay in exercising, on the part of Buyer, any
right or remedy under this Agreement shall operate as a waiver, nor shall any
single or partial exercise of any right or remedy prevent any further or other
exercise or the exercise of any other right or remedy.  The rights and remedies
provided in this Agreement are cumulative and not exclusive of any rights or
remedies provided by law.

30.

Governing law and jurisdiction

30.1

This Agreement and all non-contractual obligations arising in any way whatsoever
out of or in connection with this Agreement shall be governed by, construed and
take effect in accordance with English law.

30.2

Subject to the below court option, all claims, disputes or differences
whatsoever between the parties arising out of or in connection with this
Agreement (including without limitation to any question regarding its existence,
validity or termination) (a “Dispute”) shall be referred to arbitration in
London in accordance with the Arbitration Act 1996 (or any subsequent amendment
or re-enactment thereof) (the “Act”).

30.3

The claiming party shall appoint one arbitrator and give written notice to the
other party of the appointment (“Arbitration Notice”). The defending party shall
appoint and give notice to the claiming party of the second arbitrator within
fourteen (14) days of the Arbitration Notice. The third arbitrator shall be
appointed by the two arbitrators so appointed within fourteen (14) days of the
defending party’s notice. Failing appointment of an arbitrator by the defending
party in accordance with this clause, the claiming party’s arbitrator may act as
sole arbitrator, at the claiming party’s option. The arbitrator(s) shall have
experience of commodities trading matters.

30.4

Notwithstanding the above arbitration clause above, the Buyer shall have the
option of referring any dispute to the High Court of Justice in London, England
or any other court having jurisdiction over the dispute (the “Court”). If the
Buyer is the defending party, such option must be declared within fourteen (14)
days of an Arbitration Notice and, upon such declaration, the parties shall
procure that the arbitration be discontinued (without an award being given).

30.5

If the Buyer exercises its option, the parties waive any objection now or later
to any proceedings relating to the agreement being brought in the Court and the
parties hereby irrevocably submit to the exclusive

 

27

--------------------------------------------------------------------------------

 

jurisdiction of the Court. Nothing in this clause 30 shall limit the right of
Buyer to commence and pursue proceedings for interim or conservatory relief
against Seller in any other court of competent jurisdiction nor shall the taking
of proceedings in one or more jurisdictions preclude the taking of proceedings
in any other jurisdiction, whether concurrently or otherwise.

30.6

Seller irrevocably waives any objections on the ground of venue or inconvenient
forum or any similar grounds and irrevocably agrees that any judgment in any
proceedings brought in any court referred to in this clause shall be conclusive
and binding and may be enforced in any other jurisdiction.

30.7

If the Buyer so requests, the Seller must, within three Business Days, appoint
(for itself) an agent (with an office in London, United Kingdom) for service of
all claim forms, application notices, judgments, orders or other notices of
English legal process relating to this

Agreement and notify the agent’s address to the Buyer.  If the Seller does not
do this, the Buyer may appoint a service agent on the Seller’s behalf and at its
expense.  If the Buyer does this, it must notify the Seller it has done so and
provide details of the service agent as soon as reasonably practicable.  The
Seller agrees to reimburse the Buyer on its demand all expenses relating to the
appointment of the service agent.

30.8

If the Process Agent ceases to be able to act as such or no longer has an
address in London, Seller shall appoint a substitute Process Agent acceptable to
Buyer and deliver to Buyer a copy of the acceptance of the appointment by the
new process agent within 30 days.  If Seller fails to appoint such a substitute
Process Agent then Buyer shall be entitled to appoint a Process Agent on
Seller's behalf and expense and Buyer shall notify Seller of any such
appointment.  This clause shall not affect the right of Buyer to serve process
in any other manner permitted by law.

31.

Waiver of immunity

Seller irrevocably waives, to the fullest extent permitted by any applicable
law, with respect to itself and its revenues and assets (irrespective of their
use or intended use) all immunity on the grounds of sovereignty or other similar
grounds from legal action, the jurisdiction of any court, relief by way of
injunction, orders for specific performance or for recovery of property,
attachment of its assets (whether before or after judgment) and execution or
enforcement of any judgment to which it or its revenues or assets might
otherwise be entitled in any proceedings in the courts of any jurisdiction and
irrevocably agrees to the extent permitted by applicable law, that it will not
claim any such immunity in any proceedings.

Executed by Seller and Buyer on the date written at the start of this Agreement.

Schedule 1

Conditions Precedent

1.

Approvals

(a) Documents evidencing authority including certified copies of constitutional
documents, board resolutions, powers of attorney, specimen signatures  

(b) A specimen of the signature of each person authorised by the authorisation
document referred to in paragraph (a) above.  

 

28

--------------------------------------------------------------------------------

 

(c) A certificate of an authorised signatory of the Seller certifying that each
copy document relating to it specified in this Schedule 1 is correct, complete
and in full force and effect as at a date no earlier than the date of this
Agreement.

(d) Certified copies of all authorisations, approvals, consents, exemptions,
licences, permits or similar required including those required from any
governmental, financial, regulatory or other authority to enable Seller and
Guarantor to perform their obligations under the Transaction Documents,
Petroleum Contracts or such other agreements or arrangements as may be required
for Seller to engage in oil and gas exploration, development and production,
including in the oil, gas and condensate fields in the Republic of Albania.

2.

Security Documents

Receipt by Buyer of executed:

2.1

On demand Guarantee.

2.2

Charge over Equipment for already acquired Equipment.

2.3

Agreement with Raiffeisen Bank ShA in which the bank, inter alia, consents to
the arrangements under this Prepayment Agreement (including the Guarantee
appearing at Schedule 4) and waives certain set-off rights under the Credit
Facility.  

3.

Other documents and evidence

(a)

A certificate signed by the General Manager of Seller in form and substance
acceptable to Buyer.

(b)

Evidence that the Process Agent has accepted its appointment in accordance with
Clause 30.7 (Process Agent).

(c)

A copy of any Authorisation or other document, opinion or assurance which Buyer
considers to be necessary or desirable in connection with the entry into and
performance of the transactions contemplated by any Transaction Document or for
the validity and enforceability of any Transaction Document.

(d)

The Original Financial Statements of Seller and Guarantor.

(e)

Evidence that the fees, costs and expenses then due from Seller pursuant to
Clause 9 (Fees) have been paid or will be paid by the Prepayment Date.  

(f)

Confirmation by Buyer of the satisfactory completion of technical, financial and
legal due diligence in respect of Seller (including legal opinion from legal
advisers to Buyer in a form and terms acceptable by Buyer).

(g)

Evidence that all necessary or desirable stamp, registration or similar taxes
levied in the Republic of Albania in relation to this Agreement and any other
Transaction Document or other document have been paid.  

(h)

Evidence that all necessary or desirable notarisations, filings or registrations
in the Republic of Albania in relation to this Agreement and any other
Transaction Document or other document, or in relation to the subject matter of
any of the foregoing, have been fully and satisfactorily completed.

 

29

--------------------------------------------------------------------------------

 

(i)

Certified copies of insurance policies and such Original Financial Statements as
Buyer may require and to Buyer’s satisfaction

(j)

Completion, to the reasonable satisfaction of the Buyer, of due diligence
covering the financial status of Seller and Guarantor, the oil and gas
production fields of the Seller and third parties engaged to operate those
fields, including in respect of insurances held by those third parties
(including legal opinion from legal advisers to Buyer in a form and terms
acceptable by Buyer).

(k)

Copies of Seller’s existing loan agreements including the Credit Facility.

(l)

Execution of Transaction Documents

(m)

Perfection of security.

(n)

No Default by Seller or Guarantor.

4.

Supplementary Conditions Precedent

4.1

Receipt by Buyer of :

(a)

Executed agreement (in a form acceptable to Buyer) with Raiffeisen Bank ShA in
which the bank, inter alia, further waives certain set-off rights under the
Credit Facility;

(b)

Confirmation by Buyer of the satisfactory completion of further technical,
financial and legal due diligence in respect of Seller (including legal opinion
from legal advisers to Buyer in a form and terms acceptable by Buyer);

(c)

Completion, to the reasonable satisfaction of the Buyer, of due diligence
covering the financial status of Seller and Guarantor, the oil and gas
production fields of the Seller and third parties engaged to operate those
fields, including in respect of insurances held by those third parties
(including legal opinion from legal advisers to Buyer in a form and terms
acceptable by Buyer);

(d)

Charge over Equipment for already acquired Equipment.

4.2

No Default by Seller or Guarantor;

4.3

A copy of any Authorisation or other document, opinion or assurance which Buyer
considers to be necessary or desirable in connection with the entry into and
performance of the transactions contemplated by any Transaction Document or for
the validity and enforceability of any Transaction Document;

4.4

Evidence that the fees, costs and expenses then due from Seller pursuant to
Clause 9 (Fees) have been paid on time;

4.5

Certified copies of insurance policies and such Original Financial Statements as
Buyer may require and to Buyer’s satisfaction;

4.6

Updated copies of Seller’s existing loan agreements including the Credit
Facility.

 

30

--------------------------------------------------------------------------------

 

Schedule 2

Prepayment Request

From: Stream Oil & Gas (CI) Ltd

To: Trafigura Pte Ltd Dated: Dear Sirs

Prepayment Agreement dated    2013 between Stream Oil & Gas (CI) Ltd ("Seller")
and Trafigura Pte Ltd ("Buyer") ("Agreement")

Capitalised terms used in the Agreement shall have the same meaning when used
herein. This is a Prepayment Request pursuant to the terms of the Agreement.  

1. We wish to obtain the Prepayment on the following terms:

Proposed Prepayment Date: [.] (or, if that is not a Business Day, the next
Business Day)

Amount:   [min USD1,000,000 – max USD20,000,000]

Proposed Funding Period:  

2. We confirm that each condition specified in Clause XX (Further conditions
precedent) is satisfied on the date of this Prepayment Request.

3. The proceeds of the Prepayment should be applied as follows:

(a)

in payment to Buyer of the fees to which Buyer is entitled pursuant to Clause 10
(Fees) and Clause 11 (Costs and Expenses);

(b)

in payment of any other prepayment financing as referred to in Clause 4.2
(Completion of the Prepayment Request) and accordingly please pay USD [.]
directly to [Bank details either of Stream’s account with Raiffeisen Albania
Bank or Raiffeisen Bank, Vienna, at the sole discretion of Stream].

4. This Prepayment Request is irrevocable.

Yours faithfully

…………………………………………………….……

 

 

31

--------------------------------------------------------------------------------

 

Schedule 3

Repayment Schedule – assuming USD 7 million

Date

Principal Repayment Amount (in USD)

Interest

28 February 2013

-

Monthly interest

31 March 2013

-

Monthly interest

30 April 2013

-

Monthly interest

31 May 2013

-

Monthly interest

30 June 2013

-

Monthly interest

31 July 2013

-

Monthly interest

31 August 2013

-

Monthly interest

30 September 2013

-

Monthly interest

31 October 2013

304,348

Monthly interest

30 November 2013

304,348

Monthly interest

31 December 2013

304,348

Monthly interest

31 January 2014

304,348

Monthly interest

28 February 2014

304,348

Monthly interest

31 March 2014

304,348

Monthly interest

30 April 2014

304,348

Monthly interest

31 May 2014

304,348

Monthly interest

30 June 2014

304,348

Monthly interest

31 July 2014

304,348

Monthly interest

31 August 2014

304,348

Monthly interest

30 September 2014

304,348

Monthly interest

31 October 2014

304,348

Monthly interest

30 November 2014

304,348

Monthly interest

31 December 2014

304,348

Monthly interest

31 January 2015

304,348

Monthly interest

28 February 2015

304,348

Monthly interest

31 March 2015

304,348

Monthly interest

30 April 2015

304,348

Monthly interest

31 May 2015

304,348

Monthly interest

30 June 2015

304,348

Monthly interest

31 July 2015

304,348

Monthly interest

31 August 2015

304,348

Monthly interest

 

32

--------------------------------------------------------------------------------

 

Schedule 4

Form of Guarantee

This Guarantee is made the 16th day of April 2013 by STREAM OIL & GAS LTD, a
company incorporated in British Columbia, Canada, with registration number
BC0713471 and with registered office at 19th Floor, 885 West Georgia St,
Vancouver BC, V6C 3H4, Canada and its head office at #300, 609 – 14th Street
N.W., Calgary, Alberta, T2N 2A1, Canada (the “Guarantor”) in favour of Trafigura
Pte Ltd, a company incorporated in Singapore, whose registered office is at 1
Marina Boulevard, #28-00, One Marina Boulevard, Singapore 018989  and with a
branch office at 5 Rue de Jargonnant, 1207 Geneva, Switzerland (the
“Beneficiary”).  

1.

In consideration of the Beneficiary entering into or continuing to enter into
certain prepayment arrangements in respect of crude oil transactions (the
“Transactions”) to STREAM OIL & GAS LTD, Albania branch, a company organised and
existing under the laws of the Cayman Islands with a branch registered in the
Republic of Albania, and having its registered office at Dega ne Shqiperi e
Stream Oil & Gas Ltd, NIPT K72205016P, Rr. Ismail Qemali Samos Tower, Kati 5,
Tirana, Albania (the “Counterparty”), the Guarantor hereby irrevocably and
unconditionally guarantees that the Guarantor will, within five (5) business
days of a demand in writing by the Beneficiary to the Guarantor, pay all moneys
and discharge all liabilities which shall at any time or times be due or owing
to the Beneficiary by the Counterparty pursuant to the Transactions (the
“Guaranteed Amounts”).

2.

The obligations of the Guarantor hereunder shall be as primary obligor and not
merely as surety and such obligations shall be in addition to and independent of
any other security which the Beneficiary may at any time hold.  Neither the
obligations of the Guarantor herein contained nor the rights, powers and
remedies conferred in respect of the Guarantor upon the Beneficiary by this
Guarantee or by law shall be discharged impaired or otherwise affected by: (a)
any insolvency, winding-up, liquidation, dissolution, administration,
receivership or reorganisation (“Insolvency Event”) of the Counterparty or any
material change in the status, function, control or ownership of the
Counterparty; (b) any concession, release, waiver, time or other indulgence
being granted or agreed to be granted to the Counterparty by the Beneficiary;
(c) any amendment or extension to or renewal, variation, waiver or release of
any obligation of the Counterparty to the Beneficiary; (d) any other act, event,
circumstance or omission (whether or not known to the Beneficiary) which but for
this clause 2 might operate to discharge, impair or otherwise affect any of the
obligations of the Guarantor herein contained or any of the rights, powers or
remedies conferred upon the Beneficiary under this Guarantee or by law; (e) any
invalidity, illegality, unenforceability, irregularity or frustration of any
actual or purported obligation of the Counterparty under any Transaction; or (f)
any change of control or sale of the Counterparty.

3.

As a separate and independent obligation and liability from its obligations and
liabilities under clause 2, the Guarantor agrees to indemnify and keep
indemnified the Beneficiary in full and on demand from and against all and any
losses, costs, claims, liabilities, damages, demands and expenses suffered or
incurred by the Beneficiary arising out of or in connection with any failure of
the Counterparty to perform or discharge any of its obligations or liabilities
arising under the Transactions and/or in respect of the Guaranteed Amounts.

4.

The Guarantor must not assert as against the Counterparty any right of
subrogation in respect of any money paid to the Beneficiary until the
Beneficiary has received satisfaction of the whole of the Guaranteed Amounts.  

5.

If an Insolvency Event occurs with respect to the Counterparty, the Guarantor
shall not prove in the bankruptcy or liquidation in competition with the
Beneficiary in respect of any money paid by the Guarantor under this Guarantee
or in respect of any other amount applied by the Beneficiary in reduction of the
Guarantor’s liability under this Guarantee or otherwise until the Beneficiary
has received satisfaction of the whole of the Guaranteed Amounts.  

 

33

--------------------------------------------------------------------------------

 

6.

The Beneficiary shall not be obliged before exercising any of the rights powers
or remedies conferred upon it in respect of the Guarantor by this Guarantee or
by law: (a) to make a demand on the Counterparty; (b) to take any action or
obtain judgment in any court against the Counterparty; (c) to make or file any
claim or proof in a winding-up or dissolution of the Counterparty; or (d) to
enforce or seek to enforce any security taken in respect of any of the
obligations of the Counterparty.

7.

The Guarantor hereby warrants, represents and undertakes to the Beneficiary
that: (a) it is duly incorporated and has full power to enter into and perform
its obligations under this Guarantee and all necessary corporate shareholder and
other action to enable it to execute deliver and perform the same has been taken
and no limitation on its powers to borrow or give guarantees have been exceeded
as a result of this Guarantee; (b) this Guarantee has been validly created and
constitutes a valid and legally binding obligation on the Guarantor enforceable
in accordance with its terms; and (c) the creation of this Guarantee and the
performance and observance of the obligations hereunder does not: (i) contravene
any existing applicable law or regulation to which it is subject; (ii) conflict
with or result in any breach of any of the terms of or constitute a default
under any agreement to which it is a party or is subject or by which it or any
of its property is bound; or (iii) contravene or conflict with any provision of
its memorandum and articles of association or its other constitutional
documents.

8.

This Guarantee shall not be considered as satisfied by any intermediate payment
or satisfaction of any part of any sum or sums of money owing as aforesaid but
shall be a continuing security and shall extend to cover any sum or sums of
money which shall for the time being constitute the Guaranteed Amounts. If the
Guarantor cannot pay in the currency specified in the Transactions due to a
legal or other impediment beyond its control, it may pay in an alternative
appropriate currency.  

9.

Any notice, demand or other communication given under this Guarantee shall be in
writing and sent by pre-paid first class letter post or delivered by hand
addressed to the address of the party set out above or by email
to Dr. Sotirios Kapotas (skapotas@streamoilandgas.com) and James Hodgson (jhodgson@streamoilandgas.com)
or to such other address as such party may notify in writing to the other in
accordance with this clause.  Any such notice shall be deemed to have been
received by the party to whom it is addressed five (5) business days after
posting in the case of notice given by pre-paid first class letter post or if
sent by hand upon delivery or if sent by email on the date of transmission of
such email provided such date is a business day at the place of receipt and,
where not a business day at the place of receipt, on the immediately following
business day at the place of receipt.  

10.

This Guarantee and any dispute arising out of or in connection with it
(including in relation to its subject matter, formation or termination) shall be
governed by and construed in accordance with the laws of England and the parties
hereby submit to the exclusive jurisdiction of the English High Court in London.
Nothing in this clause shall limit the right of the Beneficiary to take
proceedings against the Guarantor in any other court of competent jurisdiction,
nor shall the taking of proceedings in any one or more jurisdictions preclude
the taking of proceedings in any other jurisdictions, whether concurrently or
not, to the extent permitted by the law of such other jurisdiction.

11.

If the Beneficiary so requests, the Guarantor must, within three Business Days,
appoint (for itself) an agent (with an office in London, United Kingdom) for
service of all claim forms, application notices, judgments, orders or other
notices of English legal process relating to this Agreement and notify the
agent's address to the Beneficiary. If the Guarantor does not do this, the
Beneficiary may appoint a service agent on the Guarantor's behalf and at its
expense. If the Beneficiary does this, it must notify the Guarantor it has done
so and provide details of the service agent as soon as reasonably practicable.
The Guarantor agrees to reimburse the Beneficiary on its demand all expenses
relating to the appointment of the service agent.

12.

This Guarantee and the rights and obligations hereunder are not assignable or
otherwise transferable, provided that the Beneficiary may with the Guarantor's
and Counterparty's prior written consent (which is not

 

34

--------------------------------------------------------------------------------

 

to be unreasonably withheld) assign any of its rights under this Guarantee to
any bank or other entity providing the Beneficiary with finance in connection
with the any of the Transactions.

13.

Subject to clause 12, nothing in this Guarantee shall confer on any third party
any benefit or the right to enforce any term ofthis Guarantee.

IN WITNESS of which this Guarantee was executed and is deliver d as a deed and
takes effect from

the day and year first above written.

 

EXECUTED as a deed by

)

……………………………………………………………………………….

 

STREAM OIL & GAS LTD acting by

)

Director

 

Sotirios Kapotas, a director

)

 

 

In the presence of:

 

 

 

[signature,

)

……………………………………………………………………………….

 

name and address of witness]

)

 

 

 

 

 

 

 

EXECUTION PAGE

EXECUTED by

STREAM OIL & GAS LTD acting by:

Name:

Sotirios Kapotas

 

(Sign)

/s/ Sotirios Kapotas

Title :

President & CEO

 

(Authorised Signatory)

…………………...……………………..……

EXECUTED by

TRAFIGURA PTE LTD acting by:

Name:

…………………………………………………………………….

(Sign) ……………………………………….……………………………………

Title:

…………………………………………………………………….

(Authorised Signatory) ………………………………………….……..

Name:

…………………………………………………………………….

(Sign) ……………………………………………………………….……………

Title :

…………………………………………………………………….

(Authorised Signatory) ……………………………………….………..

 

 

35