Exhibit 10.1

 

VETRA ENERGÍA, S.L.

 

as Seller;

 

GRAN TIERRA RESOURCES LIMITED

 

as Purchaser;

 

-and-

 

INVERSIONES FRIEIRA, S.L.

 

VETRA ENERGY GROUP LLC

 

as

 

Parent Companies;

 

 

 

SALE AND PURCHASE AGREEMENT*
for all of the issued share capital of Vetra Southeast S.L.U.

 

 

 

 

 

 

TABLE OF CONTENTS

  

Article 1 Definitions and interpretation 2       1.1 Defined terms 2 1.2
Contents page and headings 11 1.3 Meaning of references 11       Article 2
Agreement to sell and purchase 12       2.1 Sale and Purchase 12       Article 3
Purchase Price 13       3.1 Purchase Price 13 3.2 Payment of Purchase Price 13
3.3 Preliminary Closing Statement 13 3.4 Preparation of Final Closing Statement
13 3.5 Price Adjustment 16 3.6 Form of Payment of Purchase Price 16 3.7 Receipt
of Payment on Closing Date 16       Article 4 Closing 17       4.1 Closing 17
4.2 Seller’s Closing Deliveries 17 4.3 Purchaser’s Obligations vis a vis the
Company and the Conveyed Entities and Vetra P&G 18 4.4 Purchaser’s Closing
Obligations 21 4.5 Parties’ Closing Obligations 22       Article 5 conditions to
closing 22       5.1 Conditions to the Obligations of Purchaser 22 5.2
Conditions to the Obligations of Seller 22 5.3 Endeavors 23       Article 6
SELLER’S WARRANTIES 23       6.1 Company’s shares in SIC and Vetra P&G 23 6.2
Company, SIC and Branch Returns and Records 23 6.3 Shares and Share Capital 24
6.4 Subsidiaries, Partnerships Etc. 24 6.5 Branches 25 6.6 Financial Statements
25 6.7 Assets of the Conveyed Entities 25 6.8 Borrowings 26 6.9 Insolvency 26
6.10 Records Etc. 26

 

( i )

 

 

6.11 Litigation and Claims 27 6.12 E&P Interests 27 6.13 Impairment of Conveyed
Entities’ Interests 28 6.14 Processing, Marketing and Transportation Commitments
29 6.15 Environmental Matters 29 6.16 Contracts and Commitments (Other Than E&P
Contracts) 30 6.17 The Properties 30 6.18 Conduct of Business 30 6.19
Intellectual Property 31 6.20 Insurance 31 6.21 Debts to and Contracts with
Connected Persons 32 6.22 Employees and Pensions 32 6.23 Taxation Matters 33
6.24 Business Ethics and Foreign Investments 34 6.25 Authorities 36 6.26
Required Authorizations 36       Article 7 LIABILITIES AND CLAIMS 37       7.1
Liability Acknowledgement Agreement 37       Article 8 Settlement of Claims 37  
    8.1 Security on Closing 37 8.2 Settlement of Claims 37       Article 9
ACKNOWLEDGEMENTS BY THE PURCHASER 37       9.1 Acknowledgements by the Purchaser
37       Article 10 Purchaser’s warranties 38       10.1 Purchaser’s Warranties
38       Article 11 ACTIONS TOWARDS CLOSING 39       11.1 Due Diligence 39 11.2
Conduct up to Closing Date 39       Article 12 Seller’s assignees 41    
Article 13 Costs 42       Article 14 Entire agreement 42       14.1 Entire
agreement 42       Article 15 Continuing effect 43       15.1 Continuing Effect
43 15.2 Invalidity 43

 

( ii )

 

 

Article 16 Amendments and waivers 43       16.1 Amendments 43 16.2 Waivers 43  
    Article 17 Further assurance and assistance 43       17.1 Further assurance
43       Article 18 Counterparts 44       18.1 Any number of counterparts 44
18.2 Each counterpart an original 44       Article 19 Assignment and third party
rights 44       19.1 Agreement binding on successors and permitted assignees 44
19.2 Agreement not assignable 44       Article 20 NOTICES 44       20.1 Form of
notices 44 20.2 When notices take effect 46       Article 21 ARBITRATION 46    
  21.1 Settling Disputes 46 21.2 Exceptions 46 21.3 Arbitration 46      
Article 22 Governing law and jurisdiction 47       22.1 Governing law 47      
Article 23 INDEPENDENT LEGAL ADVICE 47

 

( iii )

 

 

ADDENDA

 

SCHEDULE A  DETAILS OF THE COMPANY A-1     SCHEDULE B  DETAILS OF SIC AND VETRA
P&G B-1     SCHEDULE C BRANCH DETAILS C-1     SCHEDULE D  E&P CONTRACTS D-1    
SCHEDULE E  PARENT CORPORATE GUARANTEE E-1     SCHEDULE F  FINANCIAL STATEMENTS
AND EXPENDITURES F-1     SCHEDULE G  PROMISSORY NOTE G-1     SCHEDULE H  NOT
USED H-1     SCHEDULE I  ESTIMATED WORKING CAPITAL I-1     SCHEDULE J  BANK
ACCOUNTS J-1     SCHEDULE K  CREDIT AGREEMENT PARTICULARS K-1     SCHEDULE
L  LITIGATION L-1     SCHEDULE M  INSURANCE CLAIMS M-1     SCHEDULE N  FORMS OF
RESIGNATION N-1

 

( iv )

 

 

THIS AGREEMENT is dated February 20, 2019 and made between:

 

Vetra Energía, S.L., a company incorporated and existing under the laws of the
Kingdom of Spain whose registered office is at Fernández de la Hoz, 9, 28010,
Madrid, Spain;

 

(the “Seller”)

 

and

 

Gran Tierra Resources Limited, a company incorporated under the laws of the
Province of Alberta, Canada, whose registered office is at 900, 520 – 3rd Avenue
SW, Calgary, Alberta T2P 0R3.

 

(the “Purchaser”)

 

Inversiones Frieira, S.L., a company incorporated and existing under the laws of
the Kingdom of Spain whose registered office is at Avenida de Linares Rivas 1,
bajo entreplanta, 15005 La Coruña, Spain;

 

and

 

Vetra Energy Group LLC, a company incorporated under the laws of Delaware, whose
registered office is at 1209 Orange Street Wilmington, Delaware, United States;

 

(jointly, the “Parent Companies”);

 

Parent Companies enter into this Agreement for the purposes of assuming the
obligations set forth under Article 12 of this Agreement in respect of Seller.

 

BACKGROUND:

 

(A)Seller is the exclusive owner of the issued and outstanding share capital of
Vetra Southeast, S.L.U., a company incorporated and existing under the laws of
the Kingdom of Spain (the “Company”) and of which details are set out in
Schedule A.

 

(B)SIC and Vetra P&G, of which details are set out in Schedule B, are the only
subsidiaries of the Company.

 

(C)The Branch, of which details are set out in Schedule C, is the only branch of
SIC.

 

(D)SIC and the Branch hold the E&P Interests in the E&P Contracts listed in
Schedule D.

 

 

 

 

WHEREAS following all the above mentioned, the Purchaser is willing to purchase
and acquire, and Seller is willing to sell and transfer, the Shares according to
the terms and conditions established in this Agreement.

 

NOW, THEREFORE, in consideration of premises and the mutual covenants and
obligations set out below and to be performed, the Parties agree as follows:

 

Article 1
Definitions and interpretation

 

1.1Defined terms

 

In this Agreement, terms and expressions shall have the meanings given to them
in this Section, as follows:

 

“Affiliate” means, with respect to any person, any other person controlling,
controlled by or under common control with such first person. For purposes of
this definition and this Agreement, the term “control” (and correlative terms)
means (a) the ownership of fifty percent (50%) or more of the equity interest in
a person, and/or (b) the power, whether by contract, equity ownership or
otherwise, to direct or cause the direction of the policies or management of a
person;

 

“Agreement” means this Sale and Purchase Agreement together with its Exhibits
and Schedules and any extension, renewal or amendment hereof agreed to in
writing by the Parties;

 

“ANH” means “Agencia Nacional de Hidrocarburos”, the national hydrocarbons
agency of Colombia;

 

“Applicable Laws” means laws, regulations, statutes, codes, rules, orders,
permits, policies, licenses, certifications, decrees, standards or
interpretations imposed by any Government Authority that apply to this
Agreement, the Seller, the Purchaser, the Company, SIC, the Branch or to their
assets, activities or contracts. For the avoidance of doubt, “Applicable Laws”
also include any applicable anti-corruption laws including the FCPA and the
CFPOA;

 

“Asset Sale Agreement PUT-8” (PUT-8) means the Sale and Purchase Agreement dated
as of the Execution Date between Vetra E&P as seller and GTEC as purchaser;

 

“Asset Sale Agreement LLA-5” (LLA-5) means the Sale and Purchase Agreement dated
as of the Execution Date between Vetra E&P as seller and GTEC as purchaser;

 

“Asset Sale Agreement (Suroriente Block)” means the Sale and Purchase Agreement
dated as of the Execution Date between Vetra E&P as seller and SIC as purchaser;

 

 2 

 

 

“Asset Sale Agreements” means collectively the Asset Sale Agreement (Suroriente
Block), Asset Sale Agreement PUT-8 (PUT-8), Asset Sale Agreement LLA-5 (LLA-5);

 

“Assignment of Obligations” has the meaning ascribed to it in Article 12.

 

“Assignment of Right” has the meaning ascribed to it in Article 12.

 

“Authorization” means, with respect to any person, any order, permit, approval,
consent, waiver, licence or other authorization of any Governmental Authority
having jurisdiction over the person;

 

“Balance” has the meaning ascribed to it in Section 3.2(a) of this Agreement;

 

“Balance Payment Date” means the date 12 months following the Closing Date;

 

“Branch” means Southeast Investment Corporation (Suc Colombia), details of which
are given in Schedule C;

 

“Business” means the business of the Conveyed Entities at the date hereof being
the exploration and production of hydrocarbons onshore in Colombia;

 

“Business Day” means a day (not being a Saturday or Sunday) when banks generally
are open in the City of Madrid, the City of Calgary and the City of Bogotá for
the transaction of general banking business;

 

“Claim” means any bona fide claim made by the Purchaser to Seller in respect of
a breach of any representation, warranty or covenant of Seller set forth in this
Agreement, causing any Losses;

 

“Closing” means completion of the sale and purchase of the Shares in accordance
with the terms of this Agreement;

 

“Closing Date” means the date that is the third (3rd) Business Day following the
date upon which all Regulatory Approvals are obtained provided this date is on
or before the date that is two (2) months following the Execution Date-, or such
other date as may be mutually agreed upon by the Parties ;

 

“Company” has the meaning ascribed to it in the Preamble;

 

“Company Intellectual Property” means all Intellectual Property which at the
Execution Date is owned or used by the Conveyed Entities;

 

“Conveyed Entities” means collectively the Company and SIC and the Branch;

 

“Credit Agreement” means the amended and restated credit agreement signed
between Vetra E&P, the Company, and Citibank, N.A. (as administrative Agent) and
Citigroup Global Markets Inc. and Banca de Inversión Bancolombia S.A.
Corporación Financiera (as Co-lead arrangers) dated as of August 1, 2016;

 

 3 

 

 

“Data Room” has the meaning ascribed to it in the Liability Acknowledgement
Agreement;

 

“Directors” means the directors of the Company and of SIC named in Schedule A
and Schedule B, but excluding the Gran Tierra Directors;

 

“Disclosed Materials” means all documentation and information included in the
Data Room, together with this Agreement and its Schedules, and “set out in” or
“disclosed” in the Disclosed Materials shall be subject to the limitations as
set out in s. 2.3 of the Liability Acknowledgement Agreement.

 

“Draft Closing Statement” has the meaning specified in Section 3.4(a);

 

“Ecopetrol” means Empresa Colombiana de Petroleos, the Colombian national oil
company, which is now operated as Ecopetrol, S.A, an independent for-profit
organisation;

 

“Ecopetrol Claim” has the meaning ascribed to it in the Liability Acknowledgment
Agreement.

 

“E&P Contracts” means the contract (and extensions, amendments, variations and
renewals of, or substitutions in respect of, the whole or any part thereof)
listed in Schedule  D;

 

“E&P Documents” means the E&P Contracts and any other documents pertaining to
the E&P Interests, including any joint operating agreements, farm-outs, any
joint venture or similar operational agreements;

 

“E&P Interests” means the interests of the Conveyed Entities in the E&P
Contracts as described in Schedule D;

 

“Encumbrance” includes any mortgage, pledge, charge, lien, assignment, hypothec,
security interest, right of pre-emption or any third party rights, and any
agreement to create any of the foregoing;

 

“Environment” means the components of the earth and includes ambient air, land,
surface and sub-surface strata, groundwater, lake, river or other surface water,
all layers of the atmosphere, all organic and inorganic matter and living
organisms, and the interacting natural systems that include such components;

 

“Environmental Laws” means all Laws relating to pollution or the protection of
natural resources or the Environment or health and human safety, including those
Laws relating to the Release or threatened Release of, or exposure to, Hazardous
Substances, and those Laws regulating the generation, manufacture, distribution,
use, processing, treatment, storage, transportation, disposal, arrangement for
transport or disposal, or other management of Hazardous Substances;

 

“Estimated Closing Amount” has the meaning specified in Section 3.5(a);

 

 4 

 

 

“Estimated Closing Statement” has the meaning specified in Section 3.3(a);

 

“Estimated Working Capital” has the meaning specified in Section 3.3(a);

 

“Excluded Share Claims” means any Claims arising from the breach of Seller’s
Warranties in Sections 6.1, 6.2, 6.3, 6.4, 6.9, 6.12(a), 6.12(b), 6.12(c),
6.23(c), 6.23(o), 6.25, the Ross Energy Claim, and for the indemnity set out in
Section 4.3(c)(iv);

 

“Execution Date” means the date upon which this Agreement is executed by the
Parties as set out on the first page of this Agreement;

 

“Final Closing Amount” has the meaning specified in Section 3.4(a);

 

“Financial Statements” means the unaudited individual balance sheet and
unaudited and individual profit and loss account of the Company, the Branch and
SIC for the fiscal year ended December 31, 2018 as set out in Schedule F;

 

“Governmental Authority” means: (i) any national, super-national, international,
multinational, federal, provincial, state, regional, municipal, local or other
government, governmental or public department, ministry, central bank, court,
tribunal, arbitral body, commission, commissioner, board, bureau or agency,
domestic or foreign; (ii) any subdivision, agency, agent or authority of any of
the foregoing; (iii) any tribunal, commission, regulatory agency or
self-regulatory organization, exercising any regulatory, expropriation or taxing
authority under or for the account of any of the foregoing; (iv) any public
enterprise or state-owned or controlled corporation; (v) any stock exchange; or
(vi) any other government owned or controlled person;

 

“Gran Tierra Directors” means William Peter A. Douglas who is a director of
Vetra Petroamerica P&G Corp., Manuel Buitrago and Phillip David Abraham who are
directors of SIC, and Manuel Buitrago and Mauricio Calderón Hernández who are
legal representatives of the Branch;

 

“GTEC” means Gran Tierra Energy Colombia, LLC through its Colombian branch, Gran
Tierra Energy Colombia Ltd., a limited liability company existing under the laws
of the Cayman Islands;

 

“Hazardous Substance” means any substance that, by its nature or its use, is
regulated or as to which liability might arise under any Environmental Laws
including any natural or artificial substance or thing (whether in solid,
liquid, gas, vapour or other form and whether alone or in combination with any
other substance or thing) capable of causing harm to any living organism
supported by the Environment, or damage to the Environment, including
Hydrocarbons and petroleum products, pollutants, asbestos containing materials,
polychlorinated biphenyls, radioactive materials, urea formaldehyde foam
insulation, naturally occurring radioactive materials or radon gas,
contaminants, naturally occurring radioactive material, radiation, electricity,
heat and any waste;

 

 5 

 

 

“Hydrocarbons” means oil, gas, casinghead gas, condensate, natural gasoline,
ethane, propane, butane, natural gas liquids, and other liquid or gaseous
hydrocarbons, or any of them or any combination thereof, together with all other
products and substances extracted, separated, processed and produced therewith
or therefrom, whether hydrocarbon or not, including sulfur, coalbed gas and
carbon dioxide;

 

“IBA Rules of Evidence” has the meaning ascribed to it in Section 21.3(2);

 

“ICC Rules” has the meaning ascribed to it in Section 21.3(2);

 

“IFRS” means International Financial Reporting Standards as issued by the
International Accounting Standards Board;

 

“Indebtedness” means

 

(i)any liability, for borrowed money (including bank loans, lines of credit and
loans from related parties), or evidenced by an instrument for the payment of
money, or incurred in connection with the acquisition of any property, services
or assets (including securities), or relating to a capitalized lease obligation,
or any other obligation that meets the definition of a liability in accordance
with IFRS, other than, in each case (x) accounts payable representing unsecured
claims of trade creditors created or assumed in the ordinary course in
connection with the obtaining of materials or services that are included in
Working Capital, and (y) any other liability that is included in Working
Capital, *

 

(ii)any obligations under exchange rate contracts, interest rate protection
agreements or other hedging or derivatives arrangements,

 

(iii)any obligations to reimburse the issuer of any letter of credit (where the
issuer has made payment on such letter of credit), surety bond, performance bond
or other guarantee of contractual performance, in each case to the extent drawn,
and

 

(iv)any payments, fines, fees, penalties or other amounts applicable to or
otherwise incurred in connection with, or as a result of any prepayment or early
satisfaction of, any obligation described in clauses (i) through (iii) above;

 

“Indirect Transfer Tax” means any Tax owing by Seller or any of the Conveyed
Entities as a consequence of the Transactions, including any tax owing in
Colombia as a result of the transfer of the Shares or an indirect transfer of
the assets of any of the Conveyed Entities which are located in Colombia,
together with all costs of filing, payment, audit and review, as such amount may
be adjusted within 3 years from closing as a result of any review, audit or
information request from the applicable tax authorities;

 

 6 

 

 

“Indirect Transfer Tax Holdback” means the amount of US$1,575,674 (ONE MILLION
FIVE HUNDRED SEVENTY FIVE THOUSAND SIX HUNDRED AND SEVENTY FOUR UNITED STATES
DOLLARS); 

 

“Insurance Policies” means each current insurance and indemnity policy in
respect of which the Company or SIC has an interest (including any active
historic policies which provide cover on a losses occurring basis);

 

“Intercompany Cleanup Activities” means the following activities:

 

(i)Seller shall pay to the Company US$ 1,268,489.

 

(ii)Vetra E&P shall pay to SIC US$ 377,455.

 

“Interest Rate” means the rate per annum for U.S. dollar borrowings appearing on
page BBAM of the Bloomberg Service (or on any successor or substitute page of
such Service, or any successor to or substitute for such Service providing rate
quotations comparable to those currently provided on such page of such Service,
as determined by Purchaser from time to time for purposes of providing
quotations of interest rates applicable to U.S. dollar deposits in the London
interbank market) at approximately 11:00 a.m., London time, as the rate for U.S.
dollar deposits with one month maturity, calculated daily;

 

“Intellectual Property” means all intellectual and industrial property, patents,
utility models, trade and service marks, trade names, domain names, right in
designs, copyrights, topography rights, rights in databases, trade secrets and
know-how, in all cases registered and including registrations and applications
for registration of any of these and rights to apply for the same and forms of
protection of a similar nature or having equivalent or similar effect to any of
these;

 

“IVA” means value added tax or Impuesto sobre el Valor Añadido or Impuesto al
Valor Agregado, as applicable;

 

“Knowledge’ means, with respect to Seller, the actual knowledge (after
reasonable inquiry, but otherwise excluding constructive or imputed knowledge)
of the directors, officers, and senior managers of Vetra Energía, S.L. and Vetra
Southeast, S.L.U., and for either the Vetra P&G Director, or the Vetra SIC
Directors, means only such individuals’ actual knowledge (after reasonable
inquiry, but otherwise excluding constructive or imputed knowledge),

 

“Last Balance Sheet Date” means December 31, 2018;

 

“Last Financial Year” means the accounting year of the Conveyed Entities ended
on the Last Balance Sheet Date;

 

“Lenders” means the lenders under the Credit Agreement;

 

 7 

 

  

“Liability Acknowledgement Agreement” means the Liability Acknowledgement
Agreement dated as of the Execution Date among Purchaser, Seller, Vetra E&P,
GTEC and SIC;

 

“Losses” has the meaning ascribed to it in the Liability Acknowledgement
Agreement.

 

“Material Contracts” has the meaning ascribed to it in Section 6.16(a);

 

“Money Laundering Laws” means financial recordkeeping and reporting requirements
and requirements as to identification of persons of the money laundering
statutes, the rules and regulations thereunder and any related or similar rules,
regulations or guidelines issued by Governmental Authorities;

 

“OFAC” has the meaning ascribed to it in Section 6.24(e);

 

“Parent” has the meaning ascribed to it in Section 4.3(c);

 

“Parent Companies” means Inversiones Frieira, S.L. and Vetra Energy Group LLC.

 

“Parent Corporate Guarantee” means the corporate guarantee to be provided on
Closing by Inversiones Frieira, S.L. to Purchaser and to the purchasers under
the Asset Sale Agreements in the amount of $4,500,000 in the form set out in
Schedule E;

 

“Parties” means Seller and the Purchaser and “Party” means either one of them;

 

“Payment” means the payment to be made by Purchaser (or on behalf of Purchaser)
at Closing, as described in Section 3.2;

 

“Promissory Note” means the promissory note, freely transferable to any of the
shareholders of the Seller, to be delivered to Seller by Purchaser at Closing
for payment of the Balance, in the form set out on Schedule G;

 

“Properties” means the properties which are subject to the E&P Contracts;

 

“Public Notary” means the Spanish public notary designated by Seller and
approved by the Purchaser, before whom the documents related to transfer of the
Shares and the change of Directors and officers of the Company, will be
executed;

 

“Purchase Price” means the purchase price specified in Section 3.1;

 

“Purchaser” has the meaning ascribed to it in the preamble;

 

“Purchaser’s Group” means any of the following from time to time: the Purchaser
and its Affiliates and “member of the Purchaser’s Group” shall be construed
accordingly;

 

 8 

 

 

“Regulatory Approval” means the earlier of: (A) confirmation of receipt by the
Superintendence of Industry and Commerce of the Republic of Colombia in respect
of the SIC Notice; (B) the date that is 10 business days following the
submission of the SIC Notice if the Superintendence of Industry and Commerce of
the Republic of Colombia has not sought further information with respect to the
SIC Notice, and (C) if the Superintendence of Industry and Commerce of the
Republic of Colombia has sought further information with respect to the SIC
Notice, the date on which receipt of the complete submission of additional
information is received by the Superintendence of Industry and Commerce;

 

“Release” means any depositing, spilling, leaking, pumping, pouring, placing,
emitting, discarding, abandoning, emptying, discharging, migrating, injecting,
escaping, leaching, seeping, dumping, or disposing;

 

“Ross Energy Claim” means both the judicial proceedings filed by Ross Energy
S.A. against Ecopetrol, the Colombian Ministry of Energy and Mines, Vetra E&P
and Southeast Investment Corporation before the Administrative Court of Nariño,
Sala Unitaria de Decisión del Sistema Oral, under the procedure number
52001233300020130020600, involving the review and reinterpretation of the
Incremental Production Agreement before the Administrative Tribunal of Nariño
and claiming an amount of USD $50,962,080.885 and the constitutional action for
the protection of fundamental rights filed by Ross Energy against the Nineteenth
Civil Circuit Judge of Bogota for the alleged violation of due process within
the collection action filed by Vetra E&P and Southeast Investment Corporation
for the execution of the documents required for the assignment of Ross Energy’s
participation in the Colombia Energy Joint Venture, which is subject to possible
review by the Constitutional Court of Colombia under the procedure number
T7157880;

 

“Sales Agreement” means the Sales Contract signed between SIC and Vetra
Exploración y Producción Colombia S.A.S. on April 29, 2016, as amended by
Amendment No. 1 dated June 21, 2017, which relates to Cohembí, Quinde, and
Quillacinga crude oil and shall be terminated effective on the Closing Date or
such other date as the Parties may agree;

 

“Sales Agreement Termination” means an agreement to terminate the Sales
Agreement in the form as the Parties shall agree on the Closing Date or such
other date as the Parties may agree;

 

“SEC” has the meaning ascribed to it in Section 4.3(c);

 

“Seismic” means (i) all permanent records of basic field data including, but not
limited to, any and all microfilm or paper copies of seismic driller’s reports,
monitor records, observer’s reports and survey notes and any and all copies of
magnetic field tapes or conversions thereof; (ii) all permanent records of the
processed field data including, but not limited to, any and all microfilm or
paper copies of shot point maps, pre- and post- stacked record sections
including amplitude, phase and structural displays, post-stack data
manipulations including filters, migrations and wavelet enhancements, and any
and all copies of final stacked tapes and any manipulations and conversions
thereof; and (iii) in the case of 3D seismic, in addition to the foregoing, all
permanent records or bin locations, bin fold, static corrections, surface
elevations and any other relevant information;

 

 9 

 

 

“Shares” means all the issued shares in the capital of the Company details of
which are given in Schedule A;

 

“Seller” has the meaning ascribed thereto in the preamble;

 

“Seller’s Warranties” means the representations and warranties set out in
Article 6 given and made by Seller in favour of the Purchaser;

 

“SIC” means Southeast Investment Corporation, a company incorporated under the
laws of Panama, whose registered office is at c/o Patton, Moreno & Asvat, 8th
Floor, Capital Plaza Building Roberta Motta Ave., Costa Del Este, Panama City,
Republic of Panama; details of which are given in Schedule B;

 

“SIC Notice” means the submission of such notice or notices to the
Superintendent of Industry and Commerce of the Republic of Colombia under Law
1340 of 2009 required in connection with the Transactions;

 

“SDNs” has the meaning given in Section 6.24(e);

 

“Tax” or “Taxation” means all forms of taxation and impositions, duties,
contributions and levies in the nature of taxation and all penalties and
interest relating to any of them;

 

“Tax Authority” means any Tax or other authority, body or person competent to
impose any liability to Tax;

 

“Third Party Claim” has the meaning ascribed to it in the Liability
Acknowledgement Agreement;

 

“Transactions” means the purchase and sale of the Shares as contemplated by this
Agreement;

 

“Vetra E&P” means Vetra Exploración y Producción Colombia S.A.S., a corporation
existing under the laws of Colombia;

 

“Vetra P&G” means Vetra Petroamerica P&G Corp., a corporation existing under the
laws of Barbados;

 

“Vetra P&G Director” means Javier Casais Mira who is a director of Vetra P&G;

 

“Vetra SIC Director” means Javier Casais Mira who is a director of SIC, and a
legal representative of the Branch;

 

 10 

 

 

“Working Capital” means the amount by which the aggregate current assets of the
Conveyed Entities and Vetra P&G exceeds or is less than the aggregate current
liabilities of the Conveyed Entities and Vetra P&G determined in accordance with
IFRS as of the Execution Date  including the proportionate interest of Vetra
Southeast, S.L.U. in the current assets and current liabilities of Consorcio
Colombia Energy, and shall be deemed to include any impacts of the Intercompany
Cleanup Activities as if they occurred prior to the Execution Date. It is agreed
that it will only include the valuation of the difference of the Vetra overlift
amount from September 30th, 2018 until Execution Date (number of barrels * 41,53
usd/bbl).

 

1.2Contents page and headings

 

In this Agreement, the contents page and headings are included for convenience
only and shall not affect the interpretation or construction of this Agreement.

 

1.3Meaning of references

 

In this Agreement, unless the context requires otherwise, any reference to:

 

(a)this Agreement includes the Schedules, which form part of this Agreement for
all purposes;

 

(b)the Background is to the statements about the background to this Agreement
made above; a Clause, Sub Clause or to a Schedule is, as the case may be, to a
clause or a schedule to this Agreement; and in a Schedule to a Part or Paragraph
is to a part or paragraph of that Schedule;

 

(c)a company is to any company, corporation or other body corporate wherever and
however incorporated or established;

 

(d)a document is to that document as supplemented, otherwise amended or replaced
from time to time;

 

(e)any reference to provisions of Spanish laws or Spanish regulation or to a
concept of Spanish law is to be taken, in relation to any of the Conveyed
Entities or Vetra P&G incorporated or doing business in another jurisdiction, to
refer to the equivalent provision or concept having substantially the same
effect in that other jurisdiction;

 

(f)any Spanish statutory provision or Spanish legal term for any action, remedy,
method of judicial proceeding, document, legal status, court, official or other
legal concept or thing shall in respect of any jurisdiction other than Spain be
deemed to include what most nearly approximates in that jurisdiction to the
Spanish statutory provision or Spanish legal term;

 

(g)the masculine, feminine or neuter gender respectively includes the other
genders and any reference to the singular includes the plural (and vice versa);

 

 11 

 

 

(h)including means “including without limitation” (with related words being
construed accordingly), in particular means “in particular but without
limitation” and other general words shall not be given a restrictive
interpretation by reason of their being preceded or followed by words indicating
a particular class of acts, matters or things;

 

(i)a person includes any individual, firm, company, corporation, government,
state or agency of state or any association, trust or partnership (whether or
not having a separate legal personality);

 

(j)a person includes a reference to that person’s legal personal representatives
and successors;

 

(k)dollars or US$ is to the lawful currency from time to time of the United
States of America;

 

(l)a statute or statutory provision includes any consolidation or re-enactment,
modification or replacement of the same, any statute or statutory provision of
which it is a consolidation, re-enactment, modification or replacement and any
subordinate legislation in force under any of the same from time to time except
to the extent that any consolidation, re-enactment, modification or replacement
enacted after the date of this Agreement would extend or increase the liability
of any Party to another under this Agreement;

 

(m)a time of the day is to Madrid time, Calgary time or Bogotá time (as the
context requires) and references to a day are to a period of 24 hours running
from midnight to midnight;

 

(n)in case of any conflicting provisions among the terms of any Schedule and
this Agreement, the provisions of this Agreement shall prevail; and

 

(o)writing shall include any modes of reproducing words in a legible and
non-transitory form.

 

Article 2
Agreement to sell and purchase

 

2.1Sale and Purchase

 

Seller sells and agrees to transfer at Closing, and the Purchaser purchases and
agrees to acquire at Closing, the entire legal and beneficial ownership in
Shares, together with all rights attached or accruing to them subject to the
terms and conditions set out in this Agreement.

 

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Article 3
Purchase Price

 

3.1Purchase Price

 

The total price payable by the Purchaser for the Shares shall be US$ 38,537,941
(THIRTY-EIGHT MILLION FIVE HUNDRED THIRTY SEVEN THOUSAND NINE HUNDRED AND
FORTY-ONE UNITED STATES DOLLARS)  plus the Estimated Working Capital adjustment
as provided for in Sections 3.3 of US$ 1,659,334 (ONE MILLION SIX HUNDRED FIFTY
NINE THOUSAND THREE HUNDRED AND THIRTY FOUR UNITED STATES DOLLARS) for a total
of US$ 40,197,275 (FORTY MILLION ONE HUNDRED NINETY SEVEN THOUSAND TWO HUNDRED
AND SEVENTY FIVE UNITED STATES DOLLARS) and is subject to further adjustment as
set forth in Section  3.5, (the “Purchase Price”).

 

3.2Payment of Purchase Price

 

The Purchase Price shall be satisfied as follows:

 

(a)the Indirect Transfer Tax Holdback, to be paid  through a bank check by the
Purchaser (or by a person appointed by the Purchaser) to the Colombian tax
authorities on behalf of the Seller; 

 

(b)US$ 1,500,000 (the “Balance”) to be paid by way of delivery of the Promissory
Notes to Seller on the Closing Date;

 

(c)as to the balance thereof, that is US$37,121,601 (THIRTY SEVEN MILLION ONE
HUNDRED TWENTY ONE THOUSAND SIX HUNDRED AND ONE UNITED STATES DOLLARS), to be
paid to Seller on the Closing Date.

 

3.3Preliminary Closing Statement

 

(a)Attached hereto as Schedule I is the good faith estimate of the Working
Capital as of the December 31, 2018 and including as estimate of the impacts of
the Intercompany Cleanup Activities as if they occurred prior to such date (the
“Estimated Working Capital”), including reasonable detail on the computation
thereof (the “Estimated Closing Statement”).

 

3.4Preparation of Final Closing Statement

 

(a)Within 90 days following the Closing Date (or such other date as is mutually
agreed to by Seller and the Purchaser in writing), the Purchaser shall prepare
and deliver to Seller a draft statement of the Working Capital prepared as of
the close of business on the Closing Date (the “Draft Closing Statement”). The
Draft Closing Statement will be prepared in accordance with IFRS and shall
include reasonable detail on the computation thereof. If the Purchaser fails to
deliver to Seller the Draft Closing Statement in accordance with this
Section 3.4(a) within 90 days following the Closing Date, the Seller shall be
entitled to, upon notice to Purchaser that Purchaser is in default of this
section that is not cured within 5 Business Days, provide such Draft Closing
Statement within 30 Business Days following the reception of all the information
that the Seller in accordance with this Section may have required for the
purpose of preparing the Draft Closing Statement. The Seller has the right to
request to be provided with the information of the Purchaser and the Purchaser
shall have the obligation to provide the Seller with the information necessary
to prepare the Draft Closing Statement

 

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(b)The Party providing the Draft Closing Statement shall in this Section 3.4 be
the “Submitter” and the Party receiving the Draft Closing Statement shall be the
“Receiver”. Each Party shall be required to provide information to each other as
is reasonable required by the other in the preparation of such Draft Closing
Statement.

 

(c)Receiver shall have 20 Business Days to review the Draft Closing Statement
following receipt of it and Receiver must notify the Submitter in writing if
they have any objections to the Draft Closing Statement within such 20 Business
Day period. The notice of objection must contain a statement of the basis of
each of the objections and each amount in dispute. Each Party shall provide
access, upon every reasonable request, to the other Party and their auditors, to
all work papers, accounting books and records and the appropriate personnel to
verify the accuracy, presentation and other matters relating to the preparation
of the Draft Closing Statement, subject to execution and delivery by the other
Party and their auditors of any agreement or other document, including any
release, waiver or indemnity that the Party’s auditors reasonably require prior
to providing such access.

 

(d)If Receiver sends a notice of objection of the Draft Closing Statement in
accordance with Section 3.4(c), Receiver and the Submitter shall promptly meet
to try to resolve such objections within 20 Business Days following receipt of
the notice. Failing resolution of any objection to the Draft Closing Statement
raised by Receiver, only the amount(s) in dispute will be submitted for
determination to an independent firm of chartered accountants mutually agreed to
by Seller and the Purchaser (and, failing such agreement between Seller and the
Purchaser within a further period of 5 Business Days, such independent firm of
chartered accountants will be Deloitte Colombia or if such firm is unable to
act, PwC Colombia. The independent firm of chartered accountants shall identify
a member at its Bogota, Colombia, office to act in such mandate and shall
determine the procedures applicable to the resolution of the amounts in dispute
with the primary purposes of minimizing expenses of Seller and the Purchaser and
expediting the accurate resolution of the dispute. The determination of such
firm of chartered accountants of the amount(s) in dispute and any corresponding
changes flowing from the resolution of such amounts in dispute will be final and
binding upon the Parties and will not be subject to appeal, absent manifest
error. Such firm of chartered accountants are deemed to be acting as experts and
not as arbitrators. Notwithstanding the foregoing, the determination of such
firm of chartered accountants of the amount(s) in dispute shall in no event be
more favorable to Receiver than shown in the proposed changes to the Draft
Closing Statement delivered by Receiver under its notice of objection pursuant
to Section 3.4(c). During the review by the firm of chartered accountants, the
Purchaser and Seller shall each make available to such firm of chartered
accountants, such individuals and such information, facilities, books, records
and work papers as may be reasonably required by the firm of chartered
accountants to fulfill their obligations hereunder during normal business hours
(such access not to unreasonably disrupt the operations of the Purchaser or
Seller).

 

 14 

 

 

(e)If Receiver does not notify the Submitter of any objection within the 20
Business Day period, Receiver is deemed to have accepted and approved the Draft
Closing Statement and such Draft Closing Statement will be final, conclusive and
binding upon the Parties, absent manifest error and will become the “Final
Closing Statement” on the next Business Day following the end of such 20
Business Day period.

 

(f)If Receiver sends a notice of objection in accordance with Section 3.4(d)
Seller and the Purchaser shall revise the Draft Closing Statement to reflect the
final resolution or final determination of such objections under Section 3.4(d)
within five (5) Business Days following such final resolution or determination.
Such revised Draft Closing Statement will be final, conclusive and binding upon
the Parties, absent manifest error. The Draft Closing Statement will become the
“Final Closing Statement” on the next Business Day following revision of the
Draft Closing Statement under this Section 3.4(f).

 

(g)Seller and the Purchaser shall each bear their own fees and expenses,
including the fees and expenses of their respective auditors, in preparing or
reviewing, as the case may be, the Draft Closing Statement. In the case of a
dispute and the retention of a firm of chartered accountants to determine such
amount(s) in dispute, the costs and expenses of such firm of chartered
accountants will be borne by Seller and the Purchasers in such proportions as
the positions taken by each of Seller and the Purchaser are successful when
compared to the Final Closing Statement. However, Seller and the Purchaser shall
each bear their own costs in presenting their respective cases to such firm of
chartered accountants.

 

(h)The Parties agree that the procedure set forth in this Section 3.4 for
resolving disputes with respect to the Draft Closing Statement is the sole and
exclusive method of resolving such disputes, absent manifest error. This
Section 3.4(h) will not prohibit any Party from instigating Arbitration, in
accordance with Section 21.3to compel specific performance of this Section 3.4
or to enforce the determination of the independent firm of chartered
accountants.

 

 15 

 

 

3.5Price Adjustment

 

(a)The Purchase Price will be increased or decreased, as the case may be,
dollar-for-dollar, to the extent that the sum of Working Capital (expressed as a
negative amount), as determined from the Final Closing Statement (the “Final
Closing Amount”), is more or less than the sum of Estimated Working Capital
(expressed as a negative amount) (the “Estimated Closing Amount”).

 

(b)If the Final Closing Amount is more than the Estimated Closing Amount, the
Purchaser shall pay to Seller the amount of such difference as an increase to
the Purchase Price, in cash.

 

(c)If the Final Closing Amount is less than the Estimated Closing Amount, Seller
shall pay to the Purchaser the amount of such difference as a decrease to the
Purchase Price, in cash.

 

3.6Form of Payment of Purchase Price

 

(a)Payment of the Purchase Price provided for in Section 3.2(c) will be made by
way of electronic irrevocable wire transfer via Swift for same day value, at
Seller’s bank account for the credit of Seller’ bank account on the Closing
Date;

 

(b)Payment of the Purchase Price provided for in Section 3.2(c) will be subject
to any applicable withholdings under Applicable Laws, which for clarity will be
calculated on the entire Purchase Price; and

 

(c)Obligations of Purchaser to pay will not be considered to be fulfilled until
Payment of the Purchase Price provided for in Section 3.2(c) are credited into
Seller’s bank accounts.

 

3.7Receipt of Payment on Closing Date

 

(a)At the Closing Date, once all documents and actions required for Closing
under Sections 4.2 and 4.4 have been tabled for signature and once the Public
Notary is present at the location of Closing, the Parties will execute, as the
case may be, simultaneously and as a single transaction (“unidad de acto”), all
such documents and the Purchaser shall cause the Payment to be wired.

 

(b)The Public Notary shall only notarize the transfer of the Shares when Payment
of the Purchase Price provided for in Section 3.2(c) has been either delivered
by certified bank check with immediate available funds, or effectively received
in the Seller’s account, and when the Promissory Note is delivered to the Seller
(a copy of which will be attached to the Transfer Deed).

 

 16 

 

 

Article 4
Closing

 

4.1Closing

 

Closing shall take place on the Closing Date, at the offices of Seller located
at Avda. Linares Rivas, 4 Bajo 15005 A Coruña, Spain or at the offices of the
Public Notary, as Seller may decide. In the event Seller opt to have the closing
at Avda. Linares Rivas, 4 Bajo 15005 A Coruña, Spain, then they shall arrange
for the Public Notary to be present at such offices for the Closing.

 

At Closing, the Parties, through their duly empowered signatories, shall execute
a share transfer deed (the “Transfer Deed”) pursuant to which,

 

(a)the Parties will formalize (“elevación a público”) this Agreement;

 

(b)the Buyer and Seller will acknowledge the satisfaction or waiver, as the case
may be, of the Conditions Precedent set out in Article 5;

 

(c)Seller will transfer ownership of the Shares to the Buyer and the Buyer, in
turn, will acquire the Shares; and

 

(d)Seller will acknowledge receipt of the Purchase Price.

 

The expenses of the Public Notary shall be borne on a 50/50 basis by Seller and
the Purchaser, in accordance with a quote to be obtained by Seller and agreed to
by Buyer prior to the Closing Date .

 

4.2Seller’s Closing Deliveries

 

At Closing, Seller shall deliver to the Purchaser or the Public Notary, as
applicable:

 

(a)powers of attorney, or the relevant documentation, evidencing the legal
capacity of their respective representatives for granting the Transfer Deed, as
well as to perform the rest of Closing actions contemplated by this Agreement;

 

(b)certifications of resolutions of the General Shareholders Meeting of the
Seller authorising the Transaction pursuant to article 160f) of the Spanish
Companies Ac (“Ley de Sociedades de Capital” or “LSC”)”;

 

(c)authorized copies of the deeds (“copies auténticas”) delivered to the Public
Notary evidencing the ownership of the Shares, for the purpose of the notary
inserting therein a reference to the sale of the Shares to the Purchaser
(“rebaje”);

 

(d)a statement (public deed) delivered to the Public Notary relating to Seller’
ultimate “beneficial owner” in order to comply with Spanish money laundering
prevention law;

 

 17 

 

 

(e)written resignations and releases, from the Directors, officers (except for
those offices held by the Gran Tierra Directors), managers, secretaries of the
board and legal representatives of the Company, SIC, Vetra P&G and the Branch
listed in Schedules A, B and C (except those legal representatives held by Gran
Tierra Directors), resigning their office and releasing the Company, SIC and the
Branch from all claims and rights of action whatsoever, whether in respect of
breach of contract, compensation for loss of office, unfair dismissal,
redundancy or in respect of any loan or other indebtedness, or on any other
account whatsoever;

 

(f)the shareholders’ registry book, the minutes’ book and the corporate books of
the Company, SIC (unless such books are already in the position of Purchaser’s
Group) and the Branch, if in the possession of the Seller, properly written up
to the day prior to the Closing Date;

 

(g)a certificate signed by Seller addressed to the Purchaser and dated as of the
Closing Date confirming that Seller’s Warranties are true and accurate as of the
Effective Date;

 

(h)evidence to Purchaser that the Intercompany Cleanup Activities have been
completed;

 

(i)certificates confirming that the Company does not have any pending debts with
the Social Security and an updated certificate issued by the Spanish Tax
Authority Agency confirming that the Company is up to date with its tax payment
obligations, both issued the day before the Closing Date;

 

(j)evidence of the cancellation (i.e. policies of cancellation or deed of
cancellation) of the Encumbrances with regard to the Shares;

 

(k)original share certificates representing the Company’s shares in SIC and
Vetra P&G;

 

(l)the Parent Corporate Guarantee; and

 

(m)the Sales Agreement Termination.

 

4.3Purchaser’s Obligations vis a vis the Company and the Conveyed Entities and
Vetra P&G

 

(a)The Company

 

At Closing (and simultaneously with the transfer of the Shares), the Purchaser
shall cause to be duly held a meeting of the Directors or of the shareholders
(as the case may be) of the Company to effect or execute or validly to resolve
to effect or execute:

 

 18 

 

 

(i)the acceptance of the resignation of Directors and managers, the approval of
their performance of their duties and their release from all claims and rights
of action whatsoever, whether in respect of breach of contract, or in respect of
any other account whatsoever and therefore discharging them from any liability
in connection to the performance of their duties as Directors or managers and
shall provide a document executed by a person with sufficient power of attorney
acting on behalf of the Company, releasing all the Directors of the Company from
any liability whatsoever and waiving any actions against them, in the form set
out in Schedule N;

 

(ii)the appointment as directors and secretary of such persons as the Purchaser
may nominate, subject to those persons consenting to such appointment and not
being disqualified in law or under the articles of association of the relevant
companies from holding those offices;

 

(iii)including for the bank accounts identified in Schedule J, the revocation of
all existing bank mandates and the issue of new mandates in relation to the
relevant companies to such bank or banks and in such form as the Purchaser may
direct; and

 

(iv)the revocation of all existing powers of attorney of each of the Conveyed
Entities and Vetra P&G, except any which Gran Tierra elects to remain;

 

(v)record the transfer of the Shares to the Purchaser in the Shareholders’
Registry Book of the Company; and

 

(vi)the Sales Agreement Termination.

 

(b)Conveyed Entities and Vetra P&G

 

At Closing (and immediately upon the transfer of the Shares), the Purchaser
shall cause to be duly held a meeting of board of directors or shareholders (as
the case may be) of the Conveyed Entities and Vetra P&G validly to effect or
execute or validly to resolve to effect or execute:

 

(i)the acceptance of the resignation of Directors and managers of SIC, Vetra P&G
and the Branch, the approval of their performance of their duties and their
release from all claims and rights of action whatsoever, whether in respect of
breach of contract, or in respect of any other account whatsoever and therefore
discharging them from any from any liability in connection to the performance of
their duties as Directors or managers and shall provide a document executed by a
person with sufficient power of attorney acting on behalf of SIC, Vetra P&G and
the Branch, releasing all the directors of SIC, Vetra P&G and the Branch from
any liability whatsoever and waiving any actions against them;

 

 19 

 

 

(ii)the appointment as Directors and secretary of SIC, Vetra P&G and the Branch
(as applicable) of such persons as the Purchaser may nominate, subject to those
persons consenting to such appointment and not being disqualified in law or
under the articles of association of SIC, Vetra P&G and the Branch (as
applicable) from holding those offices;

 

(iii)the acceptance of the resignation and releases by the existing secretary,
Directors and legal representatives of SIC, Vetra P&G and the Branch (other than
the Gran Tierra Directors) and shall provide an executed document as provided in
Schedule 4.3(b)(iii) by a person with sufficient power of attorney acting on
behalf of SIC, Vetra P&G and the Branch releasing all the Directors of SIC,
Vetra P&G and the Branch (other than the Gran Tierra Directors) from any
liability whatsoever and waiving any actions against them; and

 

(iv)any other business which may be necessary or desirable to give full and
valid effect to the sale and purchase provided for in this Agreement or as the
Purchaser may reasonably require,

 

and the Purchaser and Seller, as applicable, shall supply duly signed minutes of
all those meetings to the other Party on Closing.

 

(c)Following the Closing:

 

(i)at Closing or as soon as possible thereafter, but in any event within 10
Business Days, all information in any form (including electronic form) relating
to the business of any Conveyed Entity and Vetra P&G, including, without
limitation, accounting books and information, financial, tax, business,
marketing, personnel, research information and records, files, correspondence,
if any;

 

(ii)Seller shall provide to the Purchaser and the Company, as reasonably
requested by the Purchaser or the Company, all reports, documentation or other
information that may been necessary for the publicly-traded parent entity of the
Purchaser (the “Parent”) to consolidate the financial statements of the Conveyed
Entities and Vetra P&G with those of the Parent in the time frame necessary to
permit the Parent to timely file its periodic and other reports with the U.S.
Securities and Exchange Commission (the “SEC”) and all financial statements,
audit reports, auditor consents and other information that may be necessary for
the Parent to comply with any requirement under the U.S. securities laws,
including any financial statements required by Rule 3-05 of Regulation S-X.

 

 20 

 

 

(iii)Seller will appoint a representative for filing and paying the Indirect
Transfer Tax on behalf of the Seller. Seller, or its designated representative,
shall file the application for payment of the Indirect Transfer Tax, and shall
immediately inform Purchaser of the response from the Governmental Authority
providing for the payment instructions for the Indirect Transfer Tax. Purchaser,
through its designated Affiliate, shall, together with Seller or Seller’s
designated representative, and as agreed between the Parties, make the payment
of the Indirect Transfer Tax in accordance to the instructions provided by the
Governmental Authority. Seller will provide a certified copy of the tax return
filed and paid to Purchaser on the earlier of: (i) seven (7) days after Closing
or (ii) the day after the tax return is filed and paid. The Indirect Transfer
Tax will be paid through a bank check issued by the Purchaser (or by a person
appointed by the Purchaser) to the Colombian tax authorities.

 

(iv)Seller shall be responsible for, and shall conduct, all reviews, audits or
other challenges under any Applicable Law with respect to the filing and payment
of, and accuracy and continued accuracy of, the Indirect Transfer Tax, and shall
indemnify Purchaser and each of the Conveyed Entities for any Loss any of them
may suffer as a result of failure to do so.

 

4.4Purchaser’s Closing Obligations

 

At Closing the Purchaser shall carry out the following actions or deliver to
Seller, or the Public Notary, as applicable:

 

(a)make the Payments as provided for in Section 3.2;

 

(b)a document as provided in Schedule 4.4 executed by a person with sufficient
power of attorney acting on behalf of the Purchaser releasing all the directors
of the Company, SIC, Vetra P&G and the Branch (except the Gran Tierra Directors)
from all claims and rights of action whatsoever, whether in respect of breach of
contract, or in respect of any other account whatsoever and therefore
discharging them from any liability in connection to the performance of their
duties as Directors or managers and shall provide a document executed by a
person with sufficient power of attorney acting on behalf of SIC, Vetra P&G and
the Branch, releasing all the directors of SIC, Vetra P&G and the Branch (except
the Gran Tierra Directors) from any liability whatsoever and waiving any actions
against them;

 

(c)deliver the powers of attorney, duly apostilled or legalized, evidencing the
legal capacity of the representatives of the Purchaser for granting the Transfer
Deed, as well as to perform the rest of the actions contemplated by this
Agreement to be carried out at Closing;

 

(d)the D-1A form to the Notary Public duly filed;

 

 21 

 

 

(e)certifications of resolutions of a meeting of the directors of the Purchaser
authorising the execution and delivery by the Purchaser of this Agreement (those
copy minutes being certified as correct by an officer of the Purchaser); and

 

(f)a statement (public deed) delivered to the Public Notary relating to the
Purchaser’s ultimate “beneficial owner” in order to comply with Spanish money
laundering prevention law.

 

4.5Parties’ Closing Obligations

 

(a)At Closing the Parties shall grant the sale and purchase public deed to
complete the transfer of the Shares.

 

(b)All the actions provided in this Article 4 will be performed as a single act
(“unidad de acto”) on the Closing Date. The Parties expressly acknowledge and
agree that the performance of all the actions provided in this Article on the
Closing Date is an essential obligation under this Agreement and that none of
them will be held to have been performed until each and every action has been
completed.

 

Article 5
conditions to closing

 

5.1Conditions to the Obligations of Purchaser

 

The obligation of Purchaser to complete the Transactions is subject to the
satisfaction (or waiver by Purchaser), at or prior to the Closing, of each of
the following conditions:

 

(a)Regulatory Approval. The Regulatory Approval shall have been obtained or
shall have been waived in writing by the applicable Governmental Authority, and
all conditions in respect thereof imposed by the applicable Governmental
Authority that are required to be satisfied prior to Closing shall have been
satisfied.

 

(b)No Prohibition. No Applicable Laws make illegal the consummation of the
Transactions.

 

(c)Relevant Agreements: The execution and closing of the Relevant Agreements,
except for the closing of the Asset Sale Agreement (Suriroente Block) which will
close immediately following the Closing hereunder, and except for the closing
for of the Asset Sale Agreement PUT-8.

 

5.2Conditions to the Obligations of Seller

 

The obligation of Seller to complete the Transactions is subject to the
satisfaction (or waiver by Seller), at or prior to the Closing, of each of the
following conditions:

 

 22 

 

 

(a)Regulatory Approval. The Regulatory Approval shall have been obtained or
shall have been waived in writing by the applicable Governmental Authority, and
all conditions in respect thereof imposed by the applicable Governmental
Authority that are required to be satisfied prior to Closing shall have been
satisfied.

 

(b)No Prohibition. No Applicable Laws make illegal the consummation of the
Transactions.

 

(c)Relevant Agreements: The execution and closing of the Relevant Agreements,
except for the closing of the Asset Sale Agreement (Suriroente Block) which will
close immediately following the Closing hereunder, and except for the closing
for of the Asset Sale Agreement PUT-8.

 

5.3Endeavors

 

Each of the Parties shall use commercially reasonable efforts to procure that
the Conditions Precedent are satisfied as soon as it is reasonably practicable
following the date hereof and in any event no later than the Closing Date.

 

Article 6
SELLER’S WARRANTIES

 

As at the date of this Agreement Seller represents and warrants to Purchaser and
acknowledges and agrees that Purchaser is relying upon these representations and
warranties that:

 

6.1Company’s shares in SIC and Vetra P&G

 

(a)The Company is the owner of 20,177,489 shares of SIC and 2,750 common shares
of Vetra P&G, as the legal and beneficial owner with good title, free and clear
of any Encumbrances of any nature whatsoever. No person has the right to acquire
any interest in any of the such shares.

 

6.2Company, SIC and Branch Returns and Records

 

(a)The particulars of the Company and the Shares contained in Schedule A are
true, accurate and not misleading.

 

(b)The articles of association (estatutos) of the Company, SIC and the Branch
are complete and contain all alterations or amendments made to any prior to the
date of this Agreement. Seller has delivered to Purchaser correct copies of
articles of association, by-laws (or where applicable comparable organizational
documents) of the Companies and SIC and the Branch, except where such documents
are already in the possession of the Buyer;

 

(c)The register of shareholders and other statutory books and records of the
Company and SIC have been properly kept and are in the possession or under the
control of the Company.

 

 23 

 

 

(d)Each of the Company, SIC and the Branch is duly organised and validly exists
under the laws of the country in which it is currently incorporated and has all
requisite corporate powers and authority to own its properties and to carry on
its business as presently conducted.

 

6.3Shares and Share Capital

 

(a)The Shares comprise the whole of the allotted and issued share capital of the
Company and all of them have been validly issued and are fully subscribed and
paid up by Seller. The Shares are owned by Seller, as the legal and beneficial
owners with good title, free and clear of any Encumbrances of any nature
whatsoever. No person has the right to acquire any interest in any of the Shares
except the Purchaser pursuant to this Agreement.

 

(b)No person has the right to call for the issue of any share or loan capital of
any Conveyed Entity under any option or other agreement or under any conversion
rights.

 

(c)None of the Company, SIC or the Branch has, since the Last Balance Sheet
Date, repaid or redeemed or agreed to repay or to redeem any shares of any class
of its share capital or otherwise reduced or agreed to reduce its issued share
capital or any class thereof or capitalised or agreed to capitalise in the form
of shares or debentures or other securities or in paying up any amounts unpaid
on any shares debentures or other securities any profits or reserves of any
class or description or passed or agreed to pass any resolution to do so.

 

6.4Subsidiaries, Partnerships Etc.

 

(a)The Company has no subsidiaries other than SIC, the Branch and Vetra P&G, and
is not the legal or beneficial owner of any shares or other securities or
capital of any other company or corporation other than SIC, and Vetra P&G
whether limited or unlimited and whether incorporated in Spain, Colombia,
Panama, Barbados or elsewhere.

 

(b)None of the Company, SIC and Vetra E&P or the Branch is a member of any
partnership or other unincorporated association, except SIC through its
Colombian branch is a member of Consorcio Colombia Energy.

 

(c)The particulars of SIC set out in the Schedule B are true and complete and
the whole of the issued share capital is legally and beneficially owned by the
Company as therein set forth free and clear of any Encumbrances of any nature
whatsoever, except as provided in the Credit Agreement.

 

(d)No person has the right to call for the issue of any share or loan capital of
SIC and the Branch under any option or other agreement or under any conversion
rights.

 

 24 

 

 

6.5Branches

 

(a)The Company has no branches other than the Branch.

 

(b)The particulars of the Branch set out in Schedule C are true and complete.

 

6.6Financial Statements

 

(a)The Financial Statements have been prepared in accordance with IFRS and give
a true and fair view of the financial position of the Conveyed Entities as of
the Last Balance Sheet Date and of its financial performance and its cash flows
for the year then ended.

 

(b)Since the Last Balance Sheet Date:

 

(i)each of the Conveyed Entities has carried on its Business in the ordinary and
usual course with a view to maintaining the same as a going concern and without
entering into any material transaction, or assuming any material liability which
is not in the ordinary course of its Business;

 

(ii)no distribution of capital or income has been declared made or paid in
respect of any share capital of the Company except as provided in the Financial
Statements;

 

(iii)no Conveyed Entity has made any capital expenditure or incurred any capital
commitments which are now outstanding in excess of US$1,000,000 in respect of
any one item or US$2,000,000 in aggregate;

 

(iv)none of the Conveyed Entities has made a non-arm’s length payment; and

 

(v)there has occurred no material adverse change that has been, or would be
reasonably likely to be, individually or in the aggregate, materially adverse to
the assets, business, condition (financial or otherwise), prospects or results
of operations of the Conveyed Entities, taken as a whole or to the value thereof
to the Purchaser.

 

6.7Assets of the Conveyed Entities

 

(a)All the assets included in the Financial Statements and all assets which have
been acquired by the Company or SIC, including the Branch, since the Last
Balance Sheet Date are:

 

(i)legally and beneficially owned by the Company or SIC, including the Branch,
as the case may be, free from and clear of all Encumbrances (but excluding
encumbrances such as liens or licences arising in the ordinary course of the
business);

 

 25 

 

 

(ii)not the subject of any hire purchase, leasing, lease purchase or credit-sale
agreements, agreements for conditional sale or sale by instalments; and

 

(iii)in the possession of or under the control of any of the Conveyed Entities.

 

(b)All accounts receivable of the Conveyed Entities included within Working
Capital are bona fide and collectable in the ordinary course or an allowance has
been made within the Financial Statements.

 

6.8Borrowings

 

(a)As of the Closing Date, none of the Conveyed Entities will have any
Indebtedness.

 

(b)None of the Conveyed Entities have any outstanding borrowings or indebtedness
in the nature of borrowing, including any bank overdrafts or liabilities under
acceptances (other than normal trade bills) or acceptance credits, other than as
set out in the Credit Agreement.

 

(c)No event is occurring which constitutes an event of default under any
agreement relating to borrowing or indebtedness in the nature of borrowing or
which would lead to any security constituted or created being enforceable,
except for those arising from the Credit Agreement.

 

(d)The particulars of the Credit Agreement are as set out in Schedule K.

 

6.9Insolvency

 

(a)No order has been made or resolution passed for the winding up of the Company
or SIC or the Branch.

 

(b)No order has been made for the administration of the Company or SIC or the
Branch and no notice of appointment of an administrator has been filed with the
court.

 

(c)No provisional liquidator, administrative receiver, administrator, trustee or
other similar officer has taken possession of or been appointed over, and no
encumbrancer has taken possession of, the whole or substantially the whole of
the property of the Company or SIC or the Branch.

 

6.10Records Etc.

 

(a)To the best of Seller’s Knowledge, the books and records of the Company, SIC
and the Branch have been maintained at all material times as may be required by
Applicable Laws and are in the possession of the Company or SIC.

  

 26 

 

 

6.11Litigation and Claims

 

(a)As of the Execution Date, there is no civil, criminal or administrative
action, suit or proceeding pending or, to the best of Seller’s Knowledge and
Vetra SIC Director’s Knowledge, threatened in writing against any of the
Conveyed Entities before any Governmental Authority, except as set out in
Schedule L or the Disclosed Materials.

 

(b)As of the date hereof, there is no material action, suit or proceeding
commenced by any of the Conveyed Entities pending before any Governmental
Authority or threatened in writing by any of the Conveyed Entities against any
other person, except as set out in Schedule L or the Disclosed Materials.

 

(c)To the best of Seller’s Knowledge and Vetra SIC Director’s Knowledge, there
is no valid basis for any civil, criminal or administrative action, suit or
proceeding involving any Conveyed Entity, except as set out in Schedule L. No
Conveyed Entity is subject to any judgment, order or decree entered in any
lawsuit or proceeding nor has any Conveyed Entity settled any claim prior to
being prosecuted in respect of it.

 

6.12E&P Interests

 

(a)SIC and the Branch, as applicable:

 

(i)are the legal and beneficial owners of the E&P Interests and of all property,
rights and interests attributable to the E&P Contracts in proportion to the
percentage interests that SIC hold in the E&P Contracts as shown in Schedule D;

 

(ii)have not entered into any agreement with a third party whereby that third
party is entitled to acquire any interest in the E&P Contracts or E&P Interests,
whether by way of sale, farmout or otherwise;

 

(iii)no preferential rights to purchase or options any of the E&P Interests are
triggered by as a result of the Transactions; and

 

(iv)have not, subject to the provisions of the E&P Documents and except as in
connection with the Credit Agreement or E&P Documents, created, granted or
entered into any Encumbrances over the E&P Interests or any part thereof nor,
subject as aforesaid, is any Conveyed Entity a party to any agreement which
might give rise to any such Encumbrance.

 

(b)As at the date of this Agreement the E&P Contracts are the only material
interest in petroleum rights owned by the Conveyed Entities.

 

 27 

 

 

(c)Each of the E&P Contracts is in full force and effect and no notice has been
given to any Conveyed Entity by ANH or Ecopetrol of any intention to revoke or
vary any of the E&P Contracts.

 

(d)All material accrued obligations and liabilities imposed by each of the E&P
Documents and/or contracts with joint venture partners required to have been
performed as at the date of this Agreement have been duly fulfilled.

 

(e)The E&P Contract is not in the course of being surrendered in whole, or in
part.

 

(f)The E&P Documents are the only material agreements to which the Conveyed
Entities are a party in relation to the E&P Interests.

 

(g)Except as provided in the E&P Documents and the Credit Agreement and subject
to any statutory or regulatory restrictions, SIC and the Branch is able freely
to dispose of its interests in the E&P Contracts and all petroleum attributable
or which may become attributable to those interests in proportion to the
percentage interests that the Conveyed Entities hold in the E&P Contracts,
except for the Ecopetrol Disagreement.

 

(h)No sole risk or non-consent operations are being undertaken by a Conveyed
Entity or have been formally proposed by a Conveyed Entity or by a third party.

 

(i)No Conveyed Entity is party to any outstanding bidding or area of mutual
interest arrangements.

 

(j)No Conveyed Entity has any obligation to make payments in excess of its
percentage interest under the relevant E&P Documents save as expressly provided
under such E&P Documents.

 

(k)The sale of the Shares to the Purchaser is not prohibited under any of the
E&P Documents.

 

6.13Impairment of Conveyed Entities’ Interests

 

All ad valorem, property, production, severance and similar taxes and
assessments based on, or measured by, the ownership of the Properties or the
production of crude oil, natural gas and natural gas liquids from the
Properties, or the receipt of proceeds from them, and all royalties and rentals
accruing prior to the December 31, 2018, that were payable by any Conveyed
Entity with respect to the Properties at that date have been properly paid.

 

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6.14Processing, Marketing and Transportation Commitments

 

Other than the Sales Agreement, no Conveyed Entity has entered into any third
party processing or transportation agreements or any obligations to deliver
sales volumes to any other person and has not entered into any marketing
arrangements or agreements having any fixed price, term or delivery obligations.

 

6.15Environmental Matters

 

(a)Except as otherwise disclosed by Seller to Buyer in the Disclosed Materials,
to the best of Seller’s Knowledge and Vetra SIC Director’s Knowledge:

 

(i)there has not been and there is not now existing any material non-compliance
with Environmental Laws in respect of the construction, ownership or operation
of the assets of the Conveyed Entities or the conduct of any operations thereby.
For the purposes of this representation and warranty a “material non compliance”
shall be such a non compliance which may result in a material adverse change in
or affecting the condition (financial, operational or legal) of the Company with
an economical impact equal to or greater than 200,000US$.

 

(ii)the Conveyed Entities have obtained all material and necessary environmental
permits and licences;

 

(iii)no investigation or complaint by any Governmental Authority with respect to
any environmental issues or matters or work place health and safety matters
pertaining to or affecting any of the Company or SIC, including the Branch, or
their respective assets or operations, is currently outstanding;

 

(iv)no information request or any other requirement by any Governmental
Authority with respect to any environmental issues or matters or work place
health and safety matters pertaining to or directly affecting any of the Company
or SIC, including the Branch, or their respective assets or operations, is
currently outstanding

 

(v)all known spills or similar incidents pertaining to or affecting the areas of
the E&P Contracts have been reported to the appropriate Governmental Authorities
to the extent required by Environmental Laws;

 

(vi)all waste disposal pertaining to or affecting any of the Company or SIC
including the Branch, or their respective assets or operations, has been and is
being conducted in accordance with Environmental Laws ;

 

(vii)there has been no Release of Hazardous Substances at or from the areas of
the E&P Contracts in connection with operations of the Company or SIC, including
the Branch, that could reasonably be expected to give rise to a material
remedial or corrective action obligation under any Environmental Laws; and

 

 29 

 

 

(viii)Seller have made available to the Purchaser all material environmental
studies, reports, audits, sampling data, site assessments, compliance reviews,
correspondence and other similar documents in its possession or control with
respect to the E&P Interests.

 

6.16Contracts and Commitments (Other Than E&P Contracts)

 

(a)There are no material contracts (other than the E&P Documents and the Sales
Agreement) (the “Material Contracts”) currently subsisting to which any Conveyed
Entity is a party and which are material to the Business of the Conveyed
Entities as a whole (that is to say which represents more than $200,000 of the
annual turnover or cost of the Conveyed Entities taken as a whole, or which
involves the lease or ownership of real estate regardless of value except those
referred to in Section 6.17(c)).

 

(b)Except for indemnity agreements with its Directors and officers or, as
applicable, management executives as contemplated by the by-laws, as applicable,
of any Conveyed Entity and Applicable Laws, and other than standard indemnity
agreements in the ordinary course provided to service providers, no Conveyed
Entity is a party to or bound by any agreement, guarantee, indemnification or
endorsement or like commitment of the obligations, liabilities (contingent or
otherwise) or indebtedness of any person.

 

6.17The Properties

 

(a)The Company (directly or through SIC or the Branch) has title to the
Properties free from all leases, tenancies or Encumbrances, other than as
disclosed in the Disclosed Materials. The Properties comprise all the estate or
interest of the Conveyed Entities in any land or premises.

 

(b)The Company has in its possession or under its control all duly registered
deeds and documents which are necessary to prove title to the Properties.

 

(c)To the Seller’s knowledge, each of the Conveyed Entities has access to the
areas of the E&P Contracts where it currently conducts it activities. Where such
access does not derive from land property titles, the Conveyed Entity has in
place adequate agreements with the respective land owners or any other valid
instruments allowing such access, except force majeure or fortuitous or
catastrophic or unpredictable event.

 

6.18Conduct of Business

 

(a)There are not in force any powers of attorney given by the Company, SIC or
the Branch, other than powers of attorney given in the normal course of business
that can be revoked by notice at any time.

 

 30 

 

 

(b)Other than the Intercompany Cleanup Activities, no person has given any
guarantee of or any security for any overdraft loan or loan facility granted to
or other obligations of the Company, SIC or the Branch, nor are any of them
party to nor is any of their assets affected by any material contract for
guarantee, indemnity or suretyship of another person.

 

(c)Other than as shown in Schedule L or set out in the Disclosed Materials and
save for the collection of small debts in the ordinary course and for matters
involving a liability (excluding costs) of less than US$300,000, no Conveyed
Entity is engaged in any suits, actions, legal or arbitration proceedings or
governmental investigations and To the best of Seller’s Knowledge and Vetra SIC
Director’s Knowledge, no such suit, action, legal or arbitration proceedings or
governmental investigations are pending or threatened against the Company, SIC
or the Branch.

 

(d)To the best of the Seller’s Knowledge and Vetra SIC Director’s Knowledge, no
Conveyed Entity has received written notice from any Governmental Authority of
any violation of or investigation relating to any federal, provincial, state,
municipal or local law, regulation or ordinance with respect to any Conveyed
Entity, any of their assets or the Business.

 

(e)No Conveyed Entity or its board of directors has agreed or consented to the
release of any director or officer of any Conveyed Entity from any fiduciary
duty owed by such person to any Conveyed Entity, including as would allow any
such person to pursue any corporate opportunities that would otherwise be the
property of any Conveyed Entity.

 

6.19Intellectual Property

 

(a)There are no registrations of nor applications for registration or grant of
any Company Intellectual Property, and the Conveyed Entities own or have the
right to use all the Company Intellectual Property and such Company Intellectual
Property constitutes all of the Intellectual Property reasonably required to
conduct the business of the Conveyed Entities.

 

(b)To the best of Seller’s Knowledge, the Company has not received any notice
alleging that its conduct of its business infringes the Intellectual Property of
any third party. To the best of Seller’s Knowledge, no person is infringing the
Company Intellectual Property.

 

(c)The Conveyed Entities are the legal and beneficial owners of an interest in
the Seismic free and clear of any Encumbrances of any nature whatsoever, all of
which Seismic is in the possession of the Conveyed Entities.

 

6.20Insurance

 

(a)The Disclosed Materials contains particulars of all insurances maintained by
or on behalf of the Conveyed Entities, and all policies in respect of those
insurances are currently in force. Each of the Conveyed Entities has maintained
valid and adequate insurance cover of a type and affording the same degree of
cover as that normally held by companies engaged in businesses of the same or
similar type to the Business for the past three years.

 

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(b)Except as set forth in Schedule M, there are no outstanding claims under any
policies of insurance maintained by or on behalf of the Company, SIC or the
Branch.

 

6.21Debts to and Contracts with Connected Persons

 

(a)A Closing there will be:

 

(i)no loans owing by the Company or SIC, including the Branch, to Seller or any
Affiliate of the Seller or to any director or officer (including any of their
affiliates or related persons) of the Company or SIC, including the Branch; and

 

(ii)no debts owing to the Company or SIC, including the Branch, by Seller or any
Affiliate of the Seller or any director or officer (including any of their
affiliates or related persons) of the Company or SIC, including the Branch.

 

(b)There are no existing contracts, arrangements or understandings to which the
Company or SIC, including the Branch, is a party in which any Seller is
interested.

 

6.22Employees and Pensions

 

(a)None of the Conveyed Entities have, or have ever had, any employees

 

(b)None of the Conveyed Entities are, or have ever been, party or subject to any
collective bargaining agreement.

 

(c)There are no subsisting contracts for the provision by any person of any
consultancy services to any of the Conveyed Entities.

 

(d)No Conveyed Entity has a profit-sharing, share option or share incentive
schemes or other employee benefit plans in relation to any person and no
collective bargaining agreements or agreements or arrangements with trade unions
relating to any person (including those of SIC and the Branch).

 

(e)No liability has been incurred by the Company (including SIC and the Branch)
for termination payments.

 

(f)There is not in operation any pension or life assurance scheme in respect of
which the Company, SIC or the Branch have any legally binding liability to
contribute.

 

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6.23Taxation Matters

 

(a)The Company, SIC and the Branch have duly paid all Taxation which it is or
has been liable to pay or account for prior to the date of this Agreement.

 

(b)Since the Last Balance Sheet Date, the Company, SIC and the Branch have not
been involved in any transaction which has given or may give rise to a liability
to Taxation on the Company, any of SIC or the Branch (or would have given or
might give rise to such a liability but for the availability of any relief)
other than Taxation arising from transactions in the ordinary course of
business.

 

(c)The Company, SIC and the Branch are resident in its country of incorporation
for taxation purposes, and the Company is and has been at the time when
submission was made validly enrolled in the ETVE regime and is and has been
compliant with all applicable terms of such regime.

 

(d)All material returns, notifications, computations, registrations and payments
required to be made for the purposes of Taxation have been filed by the Company
(including SIC and the Branch).

 

(e)No material returns, notifications, computations, registrations and payments
are the subject of any disputes generally or appeal nor are yet to be determined
by or are subject to agreement with any Tax Authority.

 

(f)The Company, SIC and the Branch, have not postponed, deferred or suspended
tax debts with the Tax Authorities.

 

(g)The Company, SIC and the Branch have in their possession all material records
and documentation which it is obliged to hold, preserve and retain under any
Applicable Laws with respect to Taxation.

 

(h)The Company, SIC and the Branch have duly fulfilled all the material and
formal transfer pricing obligations established in the relevant applicable
legislation relative to transactions carried out with related parties.

 

(i)Carried forward losses of the Company, SIC and the Branch, and any other
deferred tax asset, have been properly assessed and the Company, SIC and the
Branch keep all the adequate information and documentation evidencing the origin
and correctness of the relevant amounts.

 

(j)There are no current tax sanctions procedures against the Company, SIC or the
Branch.

 

(k)All obligations to make deductions in respect of payments of salary or other
emoluments or benefits (whether in money or money’s worth) to employees of the
Company, SIC and the Branch of or on account of Taxation or any social levy or
insurance have been complied with and all amounts due to any Tax Authority in
respect of the same have been duly paid.

 

 33 

 

 

(l)Copies of all applications for clearance made and all consents or clearances
obtained since the Last Balance Sheet Date (together with all relevant
particulars) have been disclosed to the Purchaser.

 

(m)The Company, SIC and the Branch are duly registered for the purposes of IVA
and has been at all times when it ought to have been so registered in order to
comply with relevant legislation in the jurisdiction where it conducts any
business. The Company, SIC and the Branch have complied with and observed in all
material respects the terms of any applicable IVA legislation.

 

(n)Each Conveyed Entity has paid all transfer taxes and stamp taxes payable on
any instruments or documents which are in the possession of a Conveyed Entity
and which are necessary to establish the title of such Conveyed Entity to any
asset, or to enforce any rights.

 

(o)The amount of the Indirect Transfer Tax is and shall be complete and correct
within 3 years from filing.

 

(p)Within this Section 6.23, references to “the Company, SIC and the Branch”
shall include all predecessors, including persons wound up or dissolved by or
into any of the company (including SIC and the Branch) or such predecessors.

 

6.24Business Ethics and Foreign Investments

 

(a)Seller and the Company (including SIC and the Branch) and Vetra P&G (in the
case of the latter to the Knowledge of the Vetra P&G Director) are in compliance
with (i) the applicable Spanish legislation on foreign investments and foreign
exchange, in particular with the provisions of the Royal Decree 664/1999 on
foreign investments, and (ii) Colombian Banco de la República (Central Bank)
requirements of any and all required foreign exchange declarations and any
updates to the same. Seller has no knowledge of any pending investigations or
fines with respect to such foreign investments and foreign exchange.

 

(b)The operations of each Conveyed Entity and Vetra P&G ((in the case of the
latter to the Knowledge of the Vetra P&G Director) are and have been conducted
at all times in compliance with applicable Spanish and Colombian Money
Laundering Laws and no action, suit or proceeding by or before any court,
Governmental Authority or arbitrator with respect to Spanish and Colombian Money
Laundering Laws to which any Conveyed Entity or its business are subject is
pending, or, to the best of Seller’s Knowledge, threatened.

 

 34 

 

 

(c)No Conveyed Entity or Vetra P&G, nor any of its representatives nor, to the
best of Seller’s Knowledge and with respect to Vetra P&G, to the best of
Knowledge of the Vetra P&G Director , any person acting in relation to the
assets or business of any of the Conveyed Entities or Vetra P&G: (i) has made,
given or promised, either directly or indirectly, any illegal contributions,
gifts, entertainment or other unlawful expenses relating to political activity;
(ii) has made, given or promised, either directly or indirectly, any unlawful
payments, gifts or benefits of any kind to any foreign or domestic governmental
officials or employees; (iii) has violated or is violating any provision of any
Spanish, EU or Colombian anti-bribery or anti-corruption laws applicable to any
Conveyed Entities, Vetra P&G or its representatives; (iv) has established or
maintained, or is maintaining, any unlawful fund of corporate monies or other
properties; or (v) has made, given or promised, either directly or indirectly
any bribe, unlawful rebate, payoff, influence payment, kickback or other
unlawful payment of any gift or benefit of any nature to any foreign or domestic
governmental officials or employees for any of the following purposes:
influencing any act or decision of such public official in his or her official
capacity; inducing such public official to do or omit to do any act in violation
of the lawful duty of the public official; inducing such public official to use
his or her influence with any governmental agency or authority or political
party to affect or influence any act or decision of such entity; or securing any
improper advantage to either assist a person to obtain business or to further
the interests of its business

 

(d)Each Conveyed Entity and Vetra P&G (in the case of the latter to the
Knowledge of the Vetra P&G Director) maintains appropriate internal controls
over financial reporting given Spanish and Colombian Applicable Laws to which it
is subject.

 

(e)No Conveyed Entity or Vetra P&G nor any of its representatives nor, to the
best of Seller’s Knowledge and with respect to Vetra P&G, to the best of
Knowledge of the Vetra P&G Director, any person acting in relation to the assets
or business of any of the Conveyed Entities, is aware of or has taken any
action, directly or indirectly, including, but not limited to sales,
transactions, contracts, loans or investments in, or with, in any currency, any
individuals or entities sanctioned as Specially Designated Nationals (“SDNs”)
under sanctions administered by the US Office of Foreign Asset Control (“OFAC”).

 

(f)Each Conveyed Entity and Vetra P&G (in the case of the latter to the
Knowledge of the Vetra P&G Director) maintains appropriate internal controls
over financial reporting given Spanish and Colombian Applicable Laws to which it
is subject.

 

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6.25Authorities

 

(a)Seller has full power to enter into and perform this Agreement and this
Agreement constitutes valid and binding obligations thereof in accordance with
its terms;

 

(b)Seller is entering into this Agreement on its own behalf and not on behalf of
any other person;

 

(c)Except for the Regulatory Approvals, the execution and delivery of this
Agreement by Seller and the performance and consummation of any Transactions:

 

(i)do not constitute or result in a violation or breach of, or conflict with, or
allow any person to exercise any rights under, or result in a penalty,
forfeiture or a right of termination or acceleration under, or result in the
creation of any Encumbrance, claim, trust, royalty or carried, participation,
net profits or other third party interest, option, right of first refusal, right
or privilege, preferential right, and any agreement or arrangement (whether by
Applicable Laws, contract or otherwise) capable of becoming any of the
foregoing, upon any of the properties or assets of any Conveyed Entity under,
any of the terms or provisions of any (A) Seller or Conveyed Entity’s constating
documents or by-laws, as applicable, or (B) any contracts or instruments to
which it or any Conveyed Entity is a party or pursuant to which any Conveyed
Entity’s assets or property may be affected;

 

(ii)do not and will not result in a breach of, or cause the termination or
revocation of, any Authorization held by any Conveyed Entity; and

 

(iii)do not and will not result in the violation of any Applicable Laws or
result in a breach of any order, judgment or decree of Governmental Authority to
which a Seller or a Conveyed Entity is a party or by which a Seller or a
Conveyed Entity is bound.

 

(d)All consents, permissions, approvals and agreements of shareholders of the
Seller or any other third parties which are necessary or desirable for the
Seller to obtain in order to enter into and perform this Agreement in accordance
with its respective terms have been unconditionally obtained in writing and have
been disclosed in writing to the Purchaser.

 

6.26Required Authorizations

 

There is no requirement to make any filing with, give any notice to, or obtain
any Authorization of, any Governmental Authority as a condition to the lawful
completion of the transactions contemplated by this Agreement, except for the
SIC Notice or that relate solely to the identity of the Purchaser or the nature
of the business carried on by the Purchaser prior to Closing.

 

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Article 7
LIABILITIES AND CLAIMS

 

7.1Liability Acknowledgement Agreement

 

Provisions related to liability and Claims shall be governed by Article 2 of the
Liability Acknowledgement Agreement

 

Article 8
Settlement of Claims

 

8.1Security on Closing

 

At Closing, the Purchaser shall provide to Seller the Promissory Note in the
amount (on aggregate) of the Balance as security for payment of the Balance, to
be payable in accordance with the provisions of this Article 8. In addition, at
Closing, Seller with deliver the Parent Corporate Guarantee, as further security
for the payment of any Claims.

 

8.2Settlement of Claims

 

The mechanism for the settlement of Claims as between the Parties shall be
governed by the provisions of Article 2 of the Liability Acknowledgement
Agreement.

 

Article 9
ACKNOWLEDGEMENTS BY THE PURCHASER

 

9.1Acknowledgements by the Purchaser

 

The Purchaser acknowledges and agrees that:

 

(a)It has the know-how and expertise in the industrial sector in which the
Company develops its Business and it is fully aware of the functioning of the
market in this sector;

 

(b)It has carried out a due diligence over the Conveyed Entities, their assets
and the E&P Contracts (the “Purchaser’s Due Diligence”);

 

(c)the Purchaser is relying on its own opinion and analysis and/or professional
advice and the analysis carried out by its advisors in relation with the
Conveyed Entities and all assets used and/or owned by them, the Business and the
Shares;

 

(d)Seller’ Warranties (as defined in Article 6) are the only representations,
warranties or other assurances of any kind given by or on behalf of Seller and
on which the Purchaser may rely in entering into this Agreement;

 

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(e)no other statement, promise or forecast made by or on behalf of Seller may
form the basis of, or be pleaded in connection with, any claim by the Purchaser;

 

(f)other than Seller´ Warranties, all representations, warranties and
conditions, express or implied, statutory or otherwise, in respect of the Group,
the Business, the Shares, the items owned or used by the Group, or of which
possession is agreed to be passed under this Agreement, are expressly excluded,
unless otherwise specified in this Agreement;

 

Article 10
Purchaser’s warranties

 

10.1Purchaser’s Warranties

 

The Purchaser warrants to Seller that:

 

(a)it has full power to enter into and perform this Agreement and this Agreement
constitutes valid and binding obligations on the Purchaser in accordance with
its respective terms;

 

(b)it is entering into this Agreement on its own behalf and not on behalf of any
other person;

 

(c)the execution and delivery of, and the performance by the Purchaser of its
obligations under, this Agreement will not:

 

(i)result in a breach of any provision of its memorandum or articles of
association; or

 

(ii)result in a breach of any order, judgment or decree of any court or
governmental agency to which the Purchaser is a party or by which that party is
bound;

 

(d)except for Regulatory Approvals, all consents, permissions, approvals and
agreements of shareholders of the Purchaser or any other third parties which are
necessary or desirable for the Purchaser to obtain in order to enter into and
perform this Agreement in accordance with its respective terms have been
unconditionally obtained in writing and have been disclosed in writing to
Seller;

 

(e)it has the financial and economic capacity to pay in full the Purchase Price
with no need to obtain any external financing of any nature;

 

(f)Except for the Regulatory Approvals, the execution and delivery of this
Agreement by Purchaser and the performance and consummation of any Transactions:

 

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(i)do not and will not result in the violation of any Applicable Laws or result
in a breach of any order, judgment or decree of Governmental Authority to which
the Purchaser is a party or by which the Purchaser is bound.

 

(g)All consents, permissions, approvals and agreements of shareholders of the
Purchaser or any other third parties which are necessary or desirable for the
Purchaser to obtain in order to enter into and perform this Agreement in
accordance with its respective terms have been unconditionally obtained in
writing and have been disclosed in writing to the Seller; and

 

(h)Neither the Purchaser nor any member of the Purchaser’s Group nor its or
their respective employees, agents or advisers has actual knowledge of any facts
or matter which would or may constitute a breach of any of the Warranties or
otherwise give rise to any liability on the part of the Sellers under any other
provision of this Agreement.

 

(i)The Purchaser will not rescind this Agreement in the event of any breach by
the Sellers of any of the Seller’s Warranties (except with respect to a
fundamental and material breach of Seller’s Warranties regarding title ownership
and capacity of the Seller) and any such breaches, if any, of the Seller’s
Warranties will be considered as grounds of a Claim.

 

Article 11
ACTIONS TOWARDS CLOSING

 

11.1Due Diligence

 

The Purchaser has confirmed to Seller that it has conducted the Purchaser’s Due
Diligence and therefore due diligence shall not be a condition to Closing.

 

11.2Conduct up to Closing Date

 

Seller represent, warrant and covenant to the Purchaser that between the
Execution Date and Closing, they will and shall procure, save with the prior
written consent of the Purchaser, that:

 

(a)the Conveyed Entities and Vetra P&G shall carry on business in the normal and
ordinary course consistent with past practice and in such a manner that on the
Closing Date such representations and warranties will be true, correct and
complete as if they were made on and as of such date;

 

(b)the Conveyed Entities and Vetra P&G shall keep the Purchaser fully informed
as to the Business; respond as soon as practicable to the Purchaser in respect
of any reasonable written request by the Purchaser for further information; and
upon Purchaser request coordinate meetings with key employees of the Company
provided they are during business hours and not exceeding one meeting in any 5
day period;

 

 39 

 

 

(c)none of the Conveyed Entities nor Vetra P&G shall:

 

(i)resolve to change its name or to alter its memorandum or articles of
association;

 

(ii)allot or issue any shares or any securities or grant rights (including
options) which confer on the holder any right to subscribe for or acquire any
shares;

 

(iii)declare, pay or make any dividend or other distribution;

 

(iv)increase or reduce, or make any other alteration to (including by
redemption, repurchase, subdivision, consolidation or redesignation) its share
capital;

 

(v)resolve to be or convene any general meeting at which a resolution is to be
proposed that the Company or SIC or Branch shall be voluntarily wound-up;

 

(vi)incorporate any subsidiary or branch or effect any hive-up or hive-down of
assets or any reorganisation;

 

(vii)otherwise than in the normal and ordinary course of business consistent
with past practice (including the fulfilment of the obligations under the
existing contractual arrangements on the Execution Date) incur any capital
expenditure which exceeds $200,000;

 

(viii)acquire or dispose of any asset or provide or receive any service
otherwise than on an arm’s length basis;

 

(ix)vary the terms of any E&P Contract;

 

(x)vary the terms on which it holds any of the Properties;

 

(xi)vary any employment or consultancy arrangements of any person which is (1)
material or (2) outside the ordinary and usual course of business consistent
with past practice;

 

(xii)make any material change to the accounting procedures, principles or
standards by reference to which its accounts are drawn up or appoint new
auditors;

 

(xiii)enter into any borrowing, factoring or other financing or any lending
commitments, being in each case commitments which are outside the normal and
ordinary course of its business;

 

(xiv)establish any pension, superannuation, life assurance, death benefit,
sickness or accident benefit scheme or make any material change to the terms of
(or wind up) any existing scheme of this kind for the benefit of present or
former directors, officers or employees or any of their dependants;

 

 40 

 

 

(xv)satisfy or settle any material claim prior to the same being due, relinquish
any material contractual rights in relation thereto, commence any material claim
out of the normal and ordinary course of business or amend or otherwise vary any
existing material claim out of the normal and ordinary course of business,
consistent with past practice, individually or in the aggregate;

 

(xvi)enter into any new contract, arrangement, or commitment with any Seller or
related party;

 

(xvii)create any Encumbrances upon any of its assets except in the normal and
ordinary course of business consistent with past practice;

 

(xviii)sell, lease, transfer, gift or otherwise dispose of any of its material
properties or assets, except in the normal and ordinary course of business,
consistent with past practice;

 

(xix)take any material decisions which have to be made due to regulatory
deadlines up to the Closing Date without informing to the Purchaser, who will
not be entitled to objector interfere; or

 

(xx)agree to do any of the things referred to in this Section.

 

Article 12
Seller’s assignees

 

12.1With effect from the Closing Date, Inversiones Frieira, S.L. and Vetra
Energy Group LLC (jointly referred as the “Parent Companies”) shall fully
undertake any whatsoever payment obligation of either the Seller or Vetra E&P
hereunder and under the Liability Acknowledgement Agreement and the Asset Sales
Agreement. Therefore from Closing Date, the Parent Companies will be liable
individually and severally (“mancomunadamente”) between both –(74.5% in the case
of Inversiones Frieira, S.L. and 25.5% in the case of Vetra Energy Group LLC) of
the potential payment obligations, including all the Seller’s obligations to
indemnify any Losses suffered by the Purchaser as a result of any breach of the
Sellers’ Warranties set forth in Article 6 (the “Assignment of Obligations”).

 

12.2Likewise, the Seller, by mean of this Agreement assigns to Parent Companies,
individually and severally (“mancomunadamente”) in the proportion of their stake
in the share capital of Seller all the rights hereunder (the “Assignment of
Rights”).

 

12.3As a result of the Assignment of Obligations, the Purchaser expressly agree
to release the Seller from any such payment obligations under this Agreement and
under the Liability Acknowledgement Agreement and the Asset Sales Agreement. As
previously set forth, each of the Parent Companies shall be liable vis-à-vis the
Purchaser individually and severally (“mancomunadamente”), in the proportion
74.5%/25.5% of any and all payment obligations arising from the Seller’s
obligations under this Agreement under the Liability Acknowledgement Agreement
and the Asset Sales Agreement.

 

 41 

 

 

12.4The Purchaser expressly accepts the terms and conditions of the Assignment
of Obligations and the Assignment of Rights and, therefore, acknowledges that on
the Closing Date, once the Assignment of Obligations and the Assignment of
Rights are effective, Seller will be automatically released against the
Purchaser from any and all Losses. The Purchaser irrevocably waives any and all
judicial or extra-judicial claims to be brought after the Closing Date against
the Seller related to this Agreement and under the Liability Acknowledgement
Agreement and the Asset Sales Agreement.

 

Article 13
Costs

 

Except to the extent this Agreement provides otherwise, each Party shall be
responsible for all the costs, charges and expenses incurred by it in connection
with and incidental to the negotiation, preparation and completion of this
Agreement, the other documents referred to in this Agreement and the sale and
purchase under this Agreement. For the avoidance of doubt, the Purchaser shall
be solely responsible for any and all stamp duty, stamp duty reserve tax and/or
other transfer taxes (and any associated interest and penalties) payable by it
in respect of the transfer of the Shares in accordance with all Applicable Laws.
All taxes, withholdings and any other charges due as a result of the sale of the
Shares will be borne by each Party according to Applicable Laws. Seller shall be
solely responsible for any charges due to its legal counsel and other advisers
in connection with the disposal of the Shares. For the avoidance of doubt, any
fee, commission or costs associated with the termination of the Credit Agreement
shall be borne by solely by Seller.

 

Article 14
Entire agreement

 

14.1Entire agreement

 

This Agreement (including its exhibits and Schedules) represent the whole and
only agreement between the Parties in relation to the sale and purchase of the
Shares and supersede any previous agreement whether written or oral between the
Parties in relation to that subject matter. Accordingly, all other terms,
conditions, representations, warranties and other statements which would
otherwise be implied (by law or otherwise) shall not form part of this
Agreement.

 

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Article 15
Continuing effect

 

15.1Continuing Effect

 

Each provision of this Agreement shall continue in full force and effect after
Closing, except to the extent that any provision has been fully performed on or
before Closing.

 

15.2Invalidity

 

If any provision of this Agreement is determined to be illegal, invalid or
unenforceable by an arbitrator or any court of competent jurisdiction, that
provision will be severed from this Agreement and the remaining provisions will
remain in full force and effect.

 

Article 16
Amendments and waivers

 

16.1Amendments

 

No amendment or variation of the terms of this Agreement or any document entered
into pursuant to this Agreement (including the Schedules) shall be effective
unless it is made or confirmed in a written document signed by each Party to the
relevant document.

 

16.2Waivers

 

No delay in exercising or non-exercise by a Party of any right, power or remedy
under this Agreement or any other document referred to in it shall impair, or
otherwise operate as a waiver or release of, that right, power or remedy.

 

Article 17
Further assurance and assistance

 

17.1Further assurance

 

Each Party shall from time to time at the cost of the requesting Party, do,
perform, sign, execute and deliver such reasonable and necessary acts, deeds,
documents (or procure the doing, performance, signing, execution or delivery of
them) as any other Party shall from time to time reasonably require, in a form
and in terms reasonably satisfactory to that other Party to give full effect to
this Agreement and to secure to that other the full benefit of the rights,
powers and remedies conferred upon it in this Agreement.

 

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Article 18
Counterparts

 

18.1Any number of counterparts

 

This Agreement may be executed in any number of counterparts and each such
counterpart shall be deemed an original Agreement for all purposes; provided
that no Party shall be bound to this Agreement unless and until all Parties have
executed a counterpart.

 

The Parties agree that the exchange by e-mail of scanned copies (in PDF format)
of the executed Agreement or its addendum will be enough to comply with this
Section.

 

For purposes of assembling all counterparts into one document, the Parties are
authorized to detach the signature page from one or more counterparts and, after
signature thereof by the respective Party, attach each signed signature page to
a counterpart.

 

Notwithstanding the above, on Closing, the Parties shall provide to the Notary a
single document including all the original signatures of both Parties.

 

18.2Each counterpart an original

 

Each counterpart shall constitute an original of this Agreement, but all the
counterparts shall together constitute one and the same instrument.

 

Article 19
Assignment and third party rights

 

19.1Agreement binding on successors and permitted assignees

 

This Agreement shall be binding on and enure for the benefit of the successors
and permitted assignees of the Parties.

 

19.2Agreement not assignable

 

Without prejudice to Article 12, this Agreement may not be assigned,
transferred, charged or dealt in (whether by way of security, trust or
otherwise) either in whole or in part to any person except with the prior and
written consent of the Parties.

 

Article 20
NOTICES

 

20.1Form of notices

 

All communications relating to this Agreement shall be in writing and delivered
by both:

 

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(a)hand or sent by overnight courier to the Party concerned at the relevant
address shown at the start of this Agreement and in case to the Purchaser to the
following address for the Purchaser:

 

Address: 900, 520 – 3rd Avenue S.W., Calgary, Alberta, Canada T2P 0R3    
Attention: President and Director, Corporate Legal     Fax: +1 403 265 3242

 

(or such other address as may be notified from time to time in accordance with
this clause by the relevant Party to the other Parties);

 

AND in case to the Seller to the following addresses:

 

Address: Linares Rivas, bajo 1, entreplanta, 15005, A Coruña, Spain,    
Attention: President and Director, Business Director, Corporate Legal     Fax:
34 981 25 18 86

 

(b)e-mail to the Party concerned at the relevant email address shown below:

 

Purchaser:   Phillip Abraham   Manuel Buitrago   Adam Smith   Andrew Carroll  
Seller:   Luis Garcia   Javier Casais   Antonio de la Morena   Domingo Torres  
with a copy to   Ana Soriano   Dee Replogle   Javier Carvajal

 

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20.2When notices take effect

 

Each of the communications referred to in Section 20.1 shall take effect upon
confirmed receipt.

 

Article 21
ARBITRATION

 

21.1Settling Disputes

 

If any dispute, claim, question or difference arises out of or in connection
with this Agreement, or in respect of any legal relationship associated with or
derived from this Agreement, other than a matter referred to in Section 21.2 (a
“Dispute”), the Parties shall attempt to settle the Dispute by negotiation. If
the Dispute has not been resolved, for any reason, within 15 Business Days
following delivery of a notice of Dispute, the Dispute will be resolved by
arbitration as provided in Section 21.3.

 

21.2Exceptions

 

Section 21.1 does not apply to (i) disputes under Section 3.4 which will be
resolved in accordance with that Section, or (ii) Third Party Claims themselves
which will be resolved in the manner set forth in Section 3.4. Additionally,
although the arbitrator(s) also have the power to grant injunctive or other
equitable relief, nothing in this Section 21.2 prevents a Party from seeking or
obtaining an injunction, specific performance or any other equitable remedy from
a court of competent jurisdiction.

 

21.3Arbitration

 

(1)A Party may commence arbitration in respect of a Dispute by delivering to the
other Party a written notice of arbitration.

 

(2)Any and all disputes or controversies arising out of or in connection with
this Agreement, including the execution, performance or termination of thereof,
shall be finally settled under the Rules of Arbitration of the International
Chamber of Commerce (the “ICC Rules”), supplemented by the International Bar
Association Rules on the Taking of Evidence in International Arbitration (the
“IBA Rules of Evidence”), as amended from time to time, by a three-member
arbitral tribunal. Each side shall nominate a co-arbitrator. The co-arbitrators
will nominate jointly the President of the Tribunal within 30-days of the
confirmation or designation of the second co-arbitrator by the International
Chamber of Commerce. The place of arbitration shall be the city of London,
England, or such other locations as the Parties may agree. The arbitration shall
be conducted in English, or such other language as the Parties may agree.
Judgment will be executable in any court having jurisdiction thereof.

 

 46 

 

 

(3)The arbitration will be kept confidential and the existence of the proceeding
and any element of it (including any pleadings, briefs or other documents
submitted or exchanged, any testimony or other oral submissions and any awards)
will not be disclosed beyond the arbitrator, the Parties, their counsel and any
person necessary to the conduct of the proceeding, except as may lawfully be
required in judicial proceedings relating to the arbitration or otherwise or as
may be required by Applicable Law.

 

Article 22
Governing law and jurisdiction

 

22.1Governing law

 

This Agreement shall be shall be governed by and interpreted in accordance with
the laws of the Kingdom of Spain, without regard for any conflict of laws or
choice of laws principles that would permit or require the application of the
laws of any other jurisdiction.

 

Article 23
INDEPENDENT LEGAL ADVICE

 

Each Party hereby represents and warrants to the others that it had the
opportunity to seek and was not prevented or discouraged by any of the other
Parties from seeking independent legal advice prior to the execution and
delivery of this Agreement and that, in the event that he or it did not
available himself of that opportunity prior to signing this Agreement he or it
did so voluntarily without any undue pressure and agrees that its failure to
obtain independent legal advice shall not be used by it as a defence to the
enforcement of its obligations under this Agreement or as a basis for the
exertion of any rights under this Agreement.

 

[The remainder of this page is intentionally left blank. The counterpart
execution pages of the Parties follow.]

 

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IN WITNESS of their agreement each Party has caused its duly authorized
representative to sign this instrument on the date set out in the first sentence
of this Agreement

 

VETRA ENERGÍA, S.L.   GRAN TIERRA RESOURCES LIMITED         /s/ Antonio De La
Morena       By: /s/ Javier Casais   By: /s/ Gary Guidry   Name:  Antonio De La
Morena     Name:   Title:    Javier Casais     Title:           INVERSIONES
FRIEIRA, S.L.   VETRA ENERGY GROUP LLC           By: /s/ Manuel Jove   By: /s/
Domingo Torres   Name: Manuel Jove     Name: Domingo Torres   Title:     Title:

 

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