Exhibit 10.2

 

FOURTH AMENDMENT TO CREDIT AGREEMENT

 

This Fourth Amendment (this “Amendment”) to that certain Credit Agreement, dated
as of July 6, 2011 (as amended, the “Credit Agreement”), by and among BPZ
EXPLORACIÓN & PRODUCCIÓN S.R.L., as borrower (the “Borrower”), BPZ
RESOURCES, INC., BPZ ENERGY LLC, SOLUCIONES ENERGÉTICAS S.R.L., and BPZ NORTE
OIL, S.R.L., as guarantors (the “Guarantors” and, together with the Borrower,
the “Loan Parties”), the Lenders party thereto from time to time (the
“Lenders”), and CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as administrative agent
(the “Administrative Agent”), is entered into as of April 27, 2012.

 

WHEREAS, BPZ Energy International Holdings, L.P., BPZ Energy, BPZ Resources and
the Borrower intend to sell to Pacific Stratus Energy S.A., a subsidiary of
Pacific Rubiales Energy Corp., a 49% participating interest of the Borrower’s
right, title and interest in and to, the Block Z-1 License Contract and of all
assets, rights and contracts of the Borrower used or held for use in connection
with the Block Z-1 License Contract;

 

WHEREAS, on the date hereof, BPZ Norte Oil, S.R.L., executed and delivered to
the Administrative Agent a Guarantor Joinder Agreement pursuant to which it
became a Guarantor under the Credit Agreement;

 

WHEREAS, the Borrower has delivered to the Administrative Agent and the Lenders
an irrevocable notice of prepayment, dated the date hereof (the “Notice of
Prepayment”) pursuant to which it has agreed to make a voluntary prepayment of
the Loans under the Credit Agreement in an aggregate principal amount of
US$40,000,000 together with accrued and unpaid interest thereon to the date of
such prepayment (the “Reference Prepayment”); and

 

WHEREAS, the Borrower has requested the Lenders to amend certain provisions of
the Credit Agreement and the Lenders are agreeable to such request upon the
terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and subject to the satisfaction of
each of the conditions set forth in Section 4.1, the Credit Agreement shall be
and is hereby amended by this Amendment.

 

ARTICLE I

DEFINITIONS AND RULES OF CONSTRUCTION

 

Section 1.1             Definitions. Unless otherwise defined herein, terms
defined in the Credit Agreement (as amended by this Amendment) are used herein
as therein defined, and the rules of interpretation set forth in Section 1.2 of
the Credit Agreement shall apply mutatis mutandis to this Amendment.

 

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ARTICLE II

AMENDMENTS TO CREDIT AGREEMENT

 

Section 2.1         Amendments to Credit Agreement. Effective as of the
Amendment Effective Date, the Credit Agreement is hereby amended as follows:

 

(i) The third recital of the Credit Agreement is hereby amended by it in its
entirety with the following:

 

“WHEREAS, BPZ Resources and BPZ Energy have agreed to jointly and severally,
irrevocably and unconditionally guarantee the obligations of the Borrower
hereunder and under the other Loan Documents.”

 

(ii) Section 1.1 of the Credit Agreement is hereby amended by:

 

(A) replacing the definitions of the terms “Applicable Margin,” “BPZ Peru
Secured Parties,” “Collateral,” “Collateral Documents,” “Consolidated EBITDAX,”
“Consolidated Interest Expense,” “Consolidated Total Debt,” “Debt Service
Amount,” “Debt Service Coverage Ratio,” “EENE Secured Parties,” “Excluded Debt,”
“Farm-Out Available Proceeds,” “Flow Trust,” “Guarantors,” “Interest Payment
Date,” “Interest Period,” “Loan Documents,” “Net Cash Proceeds,” “On-shore
Collateral Agent,” “Principal Repayment Date,” “Proved Developed Non-Producing
Reserves,” “Proved Developed Producing Reserves,” “Proved Undeveloped Reserves”
and “Secured Obligations” in their entirety with the following:

 

““Applicable Margin” means a rate per annum equal to 9%.

 

“BPZ Peru Secured Parties” means the Lenders, the Administrative Agent, the
Arrangers and theirs successors and assigns.

 

“Collateral” means the property of any Person from time to time subject to the
Collateral Documents as security, inter alia, for the Secured Obligations.

 

“Collateral Documents” means the Security and Control Agreement, each Notarial
Notification, the Stock Pledge Agreement, the BPZ Norte Stock Pledge Agreement,
the Oil Pledge Agreement, the Asset Pledge, the Flow Trust, the Power of
Attorney, the Pacific Farm-Out Security Agreement, the Stock Pledge Priority
Assignment Agreement and any other document executed in connection therewith and
all UCC or other financing statements or instruments of perfection required by
the Credit Agreement or any of the foregoing to be filed with respect to the
security interest created pursuant to the terms thereof, and any other document
or instrument utilized to pledge or

 

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grant or purport to pledge or grant a security interest or Lien or any
Collateral to secure the Secured Obligations.

 

“Consolidated EBITDAX” means, with respect to any Person and its Consolidated
Subsidiaries on a Consolidated basis for any Rolling Period, operating revenues
minus operating expenses (including sales and administrative expenses to the
extent included in operating expenses) of such Person and its Consolidated
Subsidiaries for such Rolling Period, plus (i) amortization, depreciation
provisions, other similar non-cash expenses (to the extent included in operating
expenses) for such Rolling Period, (ii) geological, geophysical and engineering
expenses of such Person and its Consolidated Subsidiaries made during such
Rolling Period, and (iii) to the extent not included in clause (ii) above, prior
to the Maximum Carry Amount Date geological, geophysical and engineering
expenses made by PRE or any of its Subsidiaries during such Rolling Period in
connection with the development of Block Z-1, in each case, determined on a
Consolidated basis in accordance with GAAP; provided, that (x) the Consolidated
EBITDAX of the Borrower during such period shall be calculated on a pro forma
basis assuming that the Pacific Farm-Out Completion occurred as of January 1,
2012 (for purposes of this definition, the “reference date”), regardless of
whether or not the Pacific Farm-Out Completion actually occurs, and (y) the
Consolidated EBITDAX attributable to the Borrower for any period other than an
entire Rolling Period commencing on or following the reference date (each such
non-excluded period, a “Stub Period”) shall be determined by reference to the
Consolidated EBITDAX for the period comprising the whole calendar months within
such Stub Period multiplied by a fraction, the numerator of which is 12 and the
denominator of which is the number of whole calendar months within such Stub
Period.

 

“Consolidated Interest Expense” means, with respect to any Person and its
Consolidated Subsidiaries for a Rolling Period, the aggregate interest expense
in respect of Debt (other than Debt incurred pursuant to the Pacific Farm-Out
Documents that is outstanding after the date on which the Pacific Farm-Out
Termination occurs) of such Person and its Consolidated Subsidiaries for such
Rolling Period (including amortization of original issue discount and non-cash
interest payments or accruals in respect of any Debt (other than Debt incurred
under the Loan Documents, the Nueva Esperanza Financing Documents and the
Convertible Notes Indenture)), determined on a Consolidated basis in accordance
with GAAP; provided, that (x) the Consolidated Interest Expense of any Loan
Party during such period shall be calculated on a pro forma basis assuming that
the Pacific Farm-Out Completion occurred as of January 1, 2012, regardless of
whether or not the Pacific Farm-Out Completion actually occurs, and (y) the
Consolidated Interest Expense attributable to any Loan Party for any Stub Period
shall be determined by reference to the Consolidated Interest Expense of the
period comprising the entire calendar months within such Stub Period multiplied
by a fraction, the numerator of which is 12 and the denominator of which is the
number of entire calendar months within such Stub Period.

 

“Consolidated Total Debt” means, with respect to any Person and its Consolidated
Subsidiaries on any date, the aggregate principal amount of all Debt (other than
Debt incurred pursuant to the Pacific Farm-Out Documents and Debt in respect of

 

3

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the Corvina Offshore Field Project Payments) of such Person and its Consolidated
Subsidiaries on such date, determined on a Consolidated basis in accordance with
GAAP, excluding, for the avoidance of doubt, any Permitted Intercompany Debt.

 

“Debt Service Amount” means, as of any date of determination, the sum of all
amounts payable by the Borrower in respect of (i) principal of the Tranche A
Loans and the Tranche B Loans on the last Principal Repayment Date, and
(ii) interest and fees on the Tranche A Loans and the Tranche B Loans on the
Interest Payment Date immediately succeeding such date of determination.

 

“Debt Service Coverage Ratio” means as of the last day of each calendar month,
the ratio of (i) the Dollar Equivalent of all amounts in respect of Receivables
(disregarding, for purposes of this definition, any Receivables that would not
had been so assigned if the Pacific Farm-Out Completion had occurred as of
January 1, 2012) assigned to the On-Shore Collateral Agent pursuant to the Flow
Trust actually paid by Off-takers in cash directly to the Collection Account
during the three (3)- month period ended on such day, to (ii) the Debt Service
Amount as of such day.

 

“EENE Secured Parties” shall have the meaning ascribed to the term “Secured
Parties” in the Nueva Esperanza Credit Agreement.

 

“Excluded Debt” means (a) Debt owed by any Loan Party or Subsidiary thereof to
any other Loan Party or Subsidiary thereof the repayment of which is made in
compliance with Section 7.18, (b) any Debt of Nueva Esperanza to the extent such
Debt is being repaid with the proceeds of any Gas to Power Non-Recourse Debt
secured by the assets of Nueva Esperanza, or (c) any Debt of any Loan Party or
any of its Subsidiaries (other than Debt incurred pursuant to the Pacific
Farm-Out Documents that is outstanding after the date on which the Pacific
Farm-Out Termination occurs) (i) the prepayment of which is funded with the
proceeds of Equity Offerings and/or Farm-Out Available Proceeds or (ii) up to a
maximum amount of US$6,000,000 in any Financial Year the prepayment of which is
funded with sources other than Equity Offerings or Farm-Out Available Proceeds.

 

“Farm-Out Available Proceeds” means an amount equal to the cash proceeds derived
from the Pacific Loans to be made in respect of the Pacific Reference Debt, in
an aggregate amount not exceeding US$150,000,000, minus the sum of (i) the
aggregate of all amounts actually paid by any Loan Party to Pacific Stratus and
PRE pursuant to or in connection with the Pacific Farm-Out Documents, (ii) any
taxes, levies and other charges required to be paid by any Loan Party to any
Governmental Authority in connection with the receipt of such cash proceeds,
(iii) fees and expenses payable by any Loan Party or any of its Subsidiaries
under any Pacific Farm-Out Document (iv) the aggregate principal amount of the
Loans prepaid pursuant to the Reference Prepayment, together with accrued and
unpaid interest thereon and any other amounts paid in connection therewith and
(v) amounts required to be paid or scheduled to be paid by any Loan Party or any
Subsidiary thereof (other than amounts paid or payable by PRE or any of its
Subsidiaries pursuant to the Pacific Farm-Out Documents) in order to
(x) complete the Corvina Offshore Field Project and (y) drill and initiate
production of four new wells in

 

4

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the Block Z-1 (other than existing wells as of the Closing Date and excluding
any workovers or well reopenings).

 

“Flow Trust” means the Peruvian law trust (fideicomiso en administración y
garantía), dated as of July 7, 2011, covering all right, title and interests of
the Borrower in the Receivables and all cash balances in the Collection Account
to be established with the Onshore Collateral Agent for the benefit of the
Offshore Collateral Agent (on behalf of the EENE Secured Parties and the BPZ
Peru Secured Parties) to be amended and restated on or prior to the Fourth
Amendment Effective Date by the parties thereto, substantially in the form of
Exhibit D, and as further amended, supplemented or modified from time to time.

 

“Guarantors” means, collectively, BPZ Energy, BPZ Resources, BPZ Norte and
Soluciones Energéticas.

 

“Interest Payment Date” means January 15, April 15, July 15 and October 15 of
each calendar year and the Maturity Date; provided that if any of such dates
(other than the Maturity Date) would otherwise fall on a day which is not a
Business Day, such Interest Payment Date shall be the immediately succeeding
Business Day, unless such Business Day falls in the next calendar month, in
which case such Interest Payment Date shall be the immediately preceding
Business Day.

 

“Interest Period” means with respect to any Loan, (a) initially, the period
commencing on the date such Loan is made and ending on the numerically
corresponding day three months thereafter, and (b) thereafter, each period
commencing on the last day of the immediately preceding Interest Period and
ending on the numerically corresponding day three months thereafter; provided,
however, that (i) the Interest Period ending in July 2012, shall end on July 15,
2012, and (ii) each Interest Period thereafter, shall commence on the last day
of the immediately preceding Interest Period and shall end on the immediately
succeeding Interest Payment Date.

 

“Loan Documents” means, collectively, this Agreement, each Peruvian Promissory
Note, the Collateral Documents, the Intercreditor Agreement, the Pacific
Farm-Out Intercreditor Agreement, the Fee Letter and all other agreements,
documents or instruments executed concurrently with or in connection with any of
the foregoing.

 

“Net Cash Proceeds” means in connection with any incurrence of Debt (other than
Debt permitted under Sections 7.9 (a), 7.9(b), 7.9(d), 7.9(e), 7.9(h) and
7.9(i)) or the issuance and sale or other disposition of Capital Stock
(including, without limitation, through an Equity Offering), the cash proceeds
received from such incurrence, sale or disposition, net of reasonable attorneys’
fees, investment banking fees, accountants’ fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.

 

“On-shore Collateral Agent” means La Fiduciaria S.A., or any other financial or
fiduciary institution organized and existing under the laws of Perú, reasonably
acceptable to the Administrative Agent, who will act as trustee under

 

5

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the Flow Trust and as “common representative” under the Stock Pledge Agreement,
the Asset Pledge, the BPZ Norte Stock Pledge Agreement and the Oil Pledge
Agreement.

 

“Principal Repayment Date” has the meaning set forth in Section 3.1(a).

 

“Proved Developed Non-Producing Reserves” means, as of any date of
determination, Proved Reserves, that as of such date are expected to be
recovered from non-producing wells and installed facilities by the Borrower, as
stated in the most recently delivered Reserve Certification; provided, that
Proved Developed Non-Producing Reserves shall be calculated on a pro forma basis
assuming that the Pacific Farm-Out Completion occurred as of January 1, 2012.

 

“Proved Developed Producing Reserves” means, as of any date of determination,
Proved Reserves, that are expected to be recovered from producing wells and
installed facilities by the Borrower, as stated in the most recently delivered
Reserve Certification; provided, that Proved Developed Non-Producing Reserves
shall be calculated on a pro forma basis assuming that the Pacific Farm-Out
Completion occurred as of January 1, 2012.

 

“Proved Undeveloped Reserves” means, as of any date of determination, Proved
Reserves, that are expected to be recovered from new undrilled wells through
investments by the Borrower, as stated in the most recently delivered Reserve
Certification; provided, that Proved Developed Non-Producing Reserves shall be
calculated on a pro forma basis assuming that the Pacific Farm-Out Completion
occurred as of January 1, 2012.

 

“Secured Obligations” means the full and prompt payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of all obligations,
liabilities and indebtedness (including, without limitation, principal, premium,
interest (including, without limitation, all interest that accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency, quiebra, reorganization or similar proceeding of any Loan Party at
the rate provided for in the respective documentation, whether or not a claim
for post-petition interest is allowed in any such proceeding)), fees, costs and
indemnities owed by any Loan Party to any BPZ Peru Secured Party, whether now
existing or hereafter incurred under, arising out of, or in connection with, any
Loan Document and the due performance and compliance by the Loan Parties to the
BPZ Peru Secured Parties with all of the terms, conditions and agreements
contained in each such Loan Document.

 

(B) adding the following definitions of the following terms in Section 1.1
thereof, in the corresponding alphabetical order:

 

6

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“BPZ Holdings” means BPZ Holdings Limited Partnership, a limited partnership
duly organized and validly existing under the laws of the British Virgin
Islands.

 

“BPZ Norte” means BPZ Norte Oil S.R.L., a sociedad comercial de responsabilidad
limitada duly organized and validly existing under the laws of Peru.

 

“BPZ Norte Stock Pledge Agreement” means, the Peruvian law stock pledge
agreement (contrato de garantía mobiliaria de participaciones), among BPZ
Holdings, BPZ Energy and the Offshore Collateral Agent (on behalf of the EENE
Secured Parties and the BPZ Peru Secured Parties), substantially in the form of
Exhibit C.

 

“Carry Agreement” means the Carry Agreement, executed on April 27, 2012, between
the Borrower and BPZ Norte.

 

“Fourth Amendment Effective Date” means the date on which the Fourth Amendment
to Credit Agreement becomes effective in accordance with its terms.

 

“Fourth Amendment to Credit Agreement” means the Fourth Amendment to Credit
Agreement, dated as of April 27, 2012, among the Borrower, the Guarantors, the
Lenders and the Administrative Agent.

 

“Joint Operating Agreement” means the Joint Operating Agreement, executed on
April 27, 2012, between the Borrower and BPZ Norte.

 

“Maturity Date” means July 15, 2015.

 

“Maximum Carry Amount” shall have the meaning ascribed to such term in the Carry
Agreement (as in effect on the Fourth Amendment Effective Date).

 

“Maximum Carry Amount Date” means the date on which PRE, directly or through any
of its Subsidiaries, shall have funded Capital and Exploratory Expenditures in
an amount equal to or exceeding the Maximum Carry Amount, in accordance with the
Carry Agreement.

 

“Non Block Z-1 Farm-Out Transaction” means, with respect to any block other than
the Block Z-1, any agreement between a Loan Party or any of its Subsidiaries and
any Person (other than a Loan Party or any of its Subsidiaries) primarily
engaged in exploration and production of hydrocarbons in Peru (a “Farmee”)
pursuant to which (i) such Loan Party or any of its Subsidiaries assigns or
transfers to such Farmee all or any portion of such Loan Party’s or such
Subsidiary’s rights and obligations to explore and develop an area in accordance
with the license contract applicable to such area, while retaining an economic
interest in such area, and (ii) such Farmee agrees to cover all or any portion
of the development costs required to be incurred in connection with such
obligations at its own risk and expense; provided that such Non Block Z-1
Farm-Out

 

7

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Transaction does not impose any obligation to any Loan Party or any of its
Subsidiaries to make or commit to make Capital and Exploratory Expenditures in
excess of the amounts permitted under Section 7.21.

 

“Notice of Prepayment” shall have the meaning ascribed to such term in the
recitals of the Fourth Amendment to Credit Agreement.

 

“Operating Services Agreement” means the Operating Services Agreement, executed
on April 27, 2012, between the Borrower and BPZ Norte.

 

“Pacific Asset Pledge Agreement” means the Peruvian law second-priority asset
pledge (contrato de garantía mobiliaria de activos), between the Borrower and
Pacific Lender, pursuant to definitive documentation in substantially the form
of Exhibit L, as amended, supplemented or modified from time to time.

 

“Pacific Farm-Out” means (i) the acquisition of the Capital Stock of, and equity
rights in, BPZ Norte by Pacific Stratus, and (ii) the joint operation of Block
Z-1 by the Borrower and BPZ Norte, in each case, in accordance with the Pacific
Farm-Out Documents.

 

“Pacific Farm-Out Completion” means the satisfaction of the conditions to
completion under Section 5 of the Stock Purchase Agreement (as in effect on the
Fourth Amendment Effective Date) and the occurrence of the Completion as defined
in the Stock Purchase Agreement (as in effect on the Fourth Amendment Effective
Date).

 

“Pacific Farm-Out Completion Date” means the date on which (i) the Pacific
Farm-Out Completion occurs, (ii) all Liens created for the benefit of the
Pacific Secured Parties (as defined in the Pacific Farm-Out Intercreditor
Agreement) are released and discharged in full pursuant to definitive
documentation in substance and form reasonably satisfactory to the
Administrative Agent, and a first priority security interest inures for the
benefit of the BPZ Secured Parties and the EENE Secured Parties in respect of
all Capital Stock of, and equity rights in, the Borrower, (iii) a first priority
fully perfected Lien (subject to no other Liens) is duly created by the Borrower
for the benefit of the BPZ Secured Parties and the EENE Secured Parties, over a
deposit account established by the Borrower in the City of New York with a
financial institution reasonably acceptable to the Administrative Agent pursuant
to definitive documentation reasonably satisfactory to the Administrative Agent
(the “Reference Deposit Account”), and (iv) the balance on deposit in the
Reference Deposit Account as of such date is equal to or exceeds the aggregate
principal amount of the Loans outstanding as of such date; it being understood,
that during the period commencing on the Pacific Farm-Out Completion Date and
ending on the Pacific Farm-Out Settlement Date, the balance on deposit shall at
all times be equal to or exceeding the aggregate principal amount of the Loans
outstanding at such time.

 

“Pacific Farm-Out Documents” means, collectively, the (i) the Stock Purchase
Agreement, (ii) the Carry Agreement, (iii) the Pacific Security Documents,
(iv) the Guaranty, dated as of April 27, 2012, made by PRE in favor of the
Borrower, BPZ

 

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Holdings and BPZ Energy, (v) the Guaranty, dated as of April 27, 2012, made by
BPZ Resources in favor of the Pacific Lender, (vi) the Operating Services
Agreement, (vii) the Initial Note, Final Note and any other notes issued in
favor of the Pacific Lender by any Loan Party or any of its Affiliates pursuant
to the Stock Purchase Agreement, and (viii) the Joint Operating Agreement.

 

“Pacific Farm-Out Intercreditor Agreement” means the Intercreditor Agreement to
be entered into by and among the Loan Parties, Nueva Esperanza, BPZ Holdings,
the Administrative Agent, the administrative agent under the Nueva Esperanza
Credit Agreement, Pacific Stratus and Pacific Lender, substantially in the form
of Exhibit M, as amended, supplemented or modified from time to time.

 

“Pacific Farm-Out Settlement Date” means the date falling after the Pacific
Farm-Out Completion Date on which (i) the purchase price under the Stock
Purchase Agreement is paid in full by Pacific Stratus to BPZ Energy and BPZ
Holdings, and (ii) all indebtedness of the Loan Parties incurred pursuant to the
Stock Purchase Agreement is extinguished, cancelled or repaid in full.

 

“Pacific Farm-Out Security Agreement” means the collateral assignment and
security agreement to be entered into among BPZ Resources, BPZ Holdings, BPZ
Energy, the Borrower and the Offshore Collateral Agent (on behalf and for the
benefit of the BPZ Secured Parties and the EENE Secured Parties), pursuant to
definitive documentation in substantially the form of Exhibit N, as amended,
supplemented or modified from time to time.

 

“Pacific Farm-Out Termination” means the termination of the Stock Purchase
Agreement pursuant to Section 10.2 thereof (as in effect on the Fourth Amendment
Effective Date).

 

“Pacific Lender” means Pacific Stratus International Energy Corp., a corporation
duly organized and validly existing under the laws of the Province of British
Columbia, Canada.

 

“Pacific Lender Final Note” shall have the meaning ascribed to the term “Final
Note” in the Stock Purchase Agreement (as in effect on the Fourth Amendment
Effective Date).

 

“Pacific Lender Initial Note” shall have the meaning ascribed to the term
“Initial Note” in the Stock Purchase Agreement (as in effect on the Fourth
Amendment Effective Date).

 

“Pacific Loans” means any loans actually made by Pacific Lender to any Loan
Party or any of its Affiliates under the Stock Purchase Agreement, in each case
prior to the occurrence of the Pacific Farm-Out Completion Date.

 

“Pacific Oil Pledge Agreement” means the Peruvian law second-priority wellhead
oil pledge agreement (contrato de garantía mobiliaria de crudo) between the
Borrower

 

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and Pacific Lender, substantially in the form of Exhibit O, as amended,
supplemented or modified from time to time.

 

“Pacific Reference Debt” means Debt incurred by any Loan Party under the Pacific
Lender Initial Note and the Pacific Lender Final Note.

 

“Pacific Security Documents” means, collectively, the Pacific Asset Pledge
Agreement, the Pacific Oil Pledge Agreement, the Pacific Stock Pledge Agreement,
the Stock Pledge Priority Assignment Agreement and the Flow Trust, each as
amended, supplemented or modified from time to time.

 

“Pacific Stock Pledge Agreement” means the Peruvian law stock pledge agreement
(contrato de garantía mobiliaria de participaciones) among BPZ Holdings, BPZ
Energy, the Borrower and Pacific Lender, substantially in the form of Exhibit P,
as amended, supplemented or modified from time to time.

 

“Pacific Stratus” means Pacific Stratus Energy S.A. a sociedad anónima duly
organized and validly existing under the laws of the Republic of Panama.

 

“Permitted Block Z-1 Transfer” means the transfer by the Borrower to BPZ Norte
of a portion representing 49% of the Borrower’s right, title, and interest in
and to the Block Z-1 License Contract and the assets, rights and contracts used
or held for use in connection with the Block Z-1 License Contract; provided,
that upon the occurrence of the Pacific Farm-Out Completion Date, BPZ Norte
shall automatically and without further action on the part of the BPZ Peru
Secured Parties cease in all respects to be a guarantor hereunder and shall have
no further obligations of any kind to the BPZ Secured Parties under any Loan
Document.

 

“PRE” means Pacific Rubiales Energy Corp., a corporation duly organized and
validly existing under the laws of the Province of British Columbia, Canada.

 

“Reference Prepayment” shall have the meaning ascribed to such term in the
recitals of the Fourth Amendment to Credit Agreement.

 

“Stock Pledge Priority Assignment Agreement” means, the Peruvian law priority
assignment agreement (contrato de cesión de rango) between the Offshore
Collateral Agent and Pacific Lender, substantially in the form of Exhibit Q, as
amended, supplemented or modified from time to time.”

 

“Stock Purchase Agreement” means the Stock Purchase Agreement, dated as of
April 27, 2012, among BPZ Holdings and BPZ Energy, as sellers, BPZ Resources, as
borrower, Pacific Stratus, as buyer, and Pacific Lender, as lender.”

 

(C)   deleting in their entirety the definitions of the terms “Asset Trust,”
“Best Efforts,” “Farm-Out

 

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Transaction,” “Guarantor Joinder Agreement,” “Permitted Block Z-1 License
Transfer,” “Pro Forma Basis,” “Subsidiary Guarantor,” “Tranche A Maturity Date,”
“Tranche A Principal Repayment Date,” “Tranche B Maturity Date” and “Tranche B
Principal Repayment Date.”

 

(iii)  Section 2.5 of the Credit Agreement is hereby amended by deleting clause
(b) thereof in its entirety.

 

(iv)  Section 3.1 of the Credit Agreement is hereby amended by replacing it in
its entirety with the following:

 

“SECTION 3.1 Repayment of the Loans. (a) The Borrower hereby unconditionally
promises to repay to the Administrative Agent, for the account of each Tranche A
Lender, the outstanding principal amount of each Tranche A Loan as follows:
(A) a portion of the principal amount of the Tranche A Loans outstanding in the
amount of US$23,333,333.33 shall be prepaid by the Borrower on or prior to
May 3, 2012, in accordance with the Notice of Prepayment, and (B) the remainder
of the principal outstanding amount of the Tranche A Loans shall be repaid by
the Borrower in 11 consecutive quarterly installments on each Interest Payment
Date commencing with the Interest Payment Date falling in January, 2013 and on
the Maturity Date (each such Interest Payment Date and the Maturity Date, a
“Principal Repayment Date”), each such installment in an amount equal to the
lesser of (i) the principal amount set forth below opposite to the calendar
month in which such Principal Repayment Date falls; and (ii) the principal
amount of the Tranche A Loans outstanding on such Principal Repayment Date, as
applicable; provided, however, that all unpaid principal of the Tranche A Loans
on the Maturity Date shall be repaid by the Borrower on the Maturity Date

 

Calendar Month

 

Amount

 

January, 2013

 

$

1,166,667

 

April, 2013

 

$

1,458,333

 

July, 2013

 

$

1,458,333

 

October, 2013

 

$

1,458,333

 

January, 2014

 

$

1,458,333

 

April, 2014

 

$

1,750,000

 

July, 2014

 

$

1,750,000

 

October, 2014

 

$

2,041,667

 

January, 2015

 

$

2,625,000

 

April, 2015

 

$

2,625,000

 

Maturity Date

 

$

2,625,000

 

 

(b) The Borrower hereby unconditionally promises to repay to the Administrative
Agent, for the account of each Tranche B Lender, the outstanding principal
amount of each Tranche B Loan as follows: (A) a portion of the principal amount
of the Tranche B Loans outstanding in the amount of US$16,666,666.67 shall be
prepaid by the Borrower on or prior to May 3, 2012, in accordance with the
Notice of Prepayment, and (B) the remainder of the principal outstanding amount
of the Tranche B Loans shall be repaid by the Borrower in 11 consecutive
quarterly installments on each Principal Repayment Date, each such installment
in an amount equal to the

 

11

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

 

lesser of (i) the principal amount set forth below opposite to the calendar
month in which such Principal Repayment Date falls; and (ii) the principal
amount of the Tranche B Loans outstanding on such Principal Repayment Date, as
applicable; provided, however, that all unpaid principal of the Tranche B Loans
on the Maturity Date shall be repaid by the Borrower on the Maturity Date

 

Calendar Month

 

Amount

 

January, 2013

 

$

833,333

 

April, 2013

 

$

1,041,667

 

July, 2013

 

$

1,041,667

 

October, 2013

 

$

1,041,667

 

January, 2014

 

$

1,041,667

 

April, 2014

 

$

1,250,000

 

July, 2014

 

$

1,250,000

 

October, 2014

 

$

1,458,333

 

January, 2015

 

$

1,875,000

 

April, 2015

 

$

1,875,000

 

Maturity Date

 

$

1,875,000

 

 

(v)  Section 3.3 of the Credit Agreement is hereby amended by replacing it in
its entirety with the following:

 

“(a)        The Borrower shall have the right at any time to prepay the Loans in
whole but not in part (other than the Reference Prepayment in accordance with
the Notice of Prepayment), subject in all cases to Section 4.3. Concurrently
with (and on the same day of) such prepayment, the Borrower shall pay the
Prepayment Premium and all accrued and unpaid interest on the principal amount
so prepaid to the date of the prepayment.

 

(b)          Amounts prepaid under this Section 3.3 may not be reborrowed.”

 

(vi)  Section 3.4 of the Credit Agreement is hereby amended by replacing it in
its entirety with the following:

 

SECTION 3.4 Mandatory Prepayments. (a) If any Debt (other than the Excluded
Debt) of any Loan Party or any of its Subsidiaries is repaid prior to the
scheduled maturity thereof, then, if requested by the Administrative Agent
(acting on behalf of the Lenders), the Borrower shall prepay, on the date that
is ten (10) Business Days after the date of such request, 100% of the
outstanding principal amount of the Loans of such Lenders electing to have their
Loans prepaid.

 

(b) In case of receipt by any Loan Party or any of its Subsidiaries of any Net
Cash Proceeds in connection with the incurrence of any Debt, the Borrower shall,
if so requested by the Administrative Agent (acting on behalf of the Lenders),
prepay the Loans of such Lenders electing to have their Loans prepaid,
concurrently with (and on the same day of) the receipt of such Net Cash Proceeds
by such Loan Party or such Subsidiary, in an amount equal to the lesser of
(x) the aggregate principal of, and interest on, the Loans then outstanding, and
(y) the aggregate amount of such Net Cash Proceeds (or the Dollar equivalent
thereof).

 

12

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

 

(c) Concurrently with (and on the same day of) each mandatory prepayment under
this Section 3.4, the Borrower shall pay the Prepayment Premium and all accrued
and unpaid interest on the principal amount so prepaid to the date of the
prepayment.”

 

(vii)  Sections 3.5 and 3.6 of the Credit Agreement are hereby amended by
deleting “(including, for the avoidance of doubt, in Section 3.3(a))” therein.

 

(viii)  Section 7.5(b) of the Credit Agreement is hereby amended by replacing it
in its entirety with the following:

 

“(b)        each time financial statements are required to be delivered under
clause (a) (other than financial statements for and as of the end of the fiscal
quarter of the Borrower ended March 31, 2012), a certificate of the chief
financial officer (or more senior officer) of the each Loan Party: (i) providing
a calculation (in reasonable detail) of each covenant under Section 7.22 as of
the end of the most recent fiscal quarter, and (ii) certifying that his/her
review has not disclosed the existence of a Default or, if any Default then
exists, specifying the nature and period of existence thereof and what action
has been taken or is proposed to be taken with respect thereto,”

 

(ix)  Section 7.5(d) of the Credit Agreement is hereby amended by adding the
following new clause (iii) at the end thereof:

 

“or (iii) relating to any Pacific Farm-Out Document.”

 

(x)  Section 7.5(g) of the Credit Agreement is hereby amended by adding the
following new clause (iv) at the end thereof:

 

“and (iv) setting forth (x) the aggregate amount of Pacific Loans made during
the immediately preceding calendar month, and (y) the aggregate amount of all
Pacific Loans made on or prior to the last day of the immediately preceding
calendar month;”

 

(xi)  Section 7.5 of the Credit Agreement is hereby amended by adding the
following new clauses (j), (k) and (l) at the end thereof:

 

“(j)          within five (5) Business Days after the date of receipt thereof by
PRE, Pacific Stratus, BPZ Norte or any of its Affiliates a true, correct and
complete copy of any billing statement prepared in connection with the operation
of the Block Z-1, including those statements setting forth the aggregate amount
of (i) Exploratory Expenditures made by BPZ Resources and its Consolidated
Subsidiaries and by BPZ Norte pursuant to the Pacific Farm-Out Documents, and
(ii) operating revenues and expenses of the Loan Parties and BPZ Norte derived
from the operation of the Block Z-1, in each case, during the immediately
preceding calendar month;

 

(k)          (i) prompt notice of any material notices received or delivered by
any Loan Party under any Pacific Farm-Out Document or in connection with the
Pacific Farm-Out; (ii) prompt notice of any material filing with any
Governmental Authority made by any Loan Party in connection with the Pacific
Farm-Out; (iii) not later that ten (10) Business Days

 

13

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

 

prior to the proposed date of execution and delivery thereof, a true, correct
and complete copy of the final execution version of any proposed (x) amendment,
supplement or modification to any Pacific Farm-Out Document, and (y) financing
agreement with respect to Debt to be incurred by any Loan Party pursuant to
Section 7.9(c); and concurrently with the execution and delivery thereof, a
true, correct and complete copy of such amendment, supplement or modification to
any Pacific Farm-Out Document or such financing agreement, as applicable and in
each case, together with all the exhibits and schedules thereto and certificates
delivered thereunder; and (iv) promptly (and, in any event within five
(5) Business Days) after any Loan Party obtains knowledge thereof, notice of the
occurrence of any breach or violation of any provision of any Pacific Farm-Out
Document by any party thereto; and

 

(l)           on the date on which the Loan Parties intend the Pacific Farm-Out
Completion to occur, the Borrower shall deliver to the Administrative Agent a
certificate dated as of such date, signed by the Chief Financial Officer (or
more senior officer) of the Borrower, certifying the satisfaction as of such
date of each of the conditions specified in the definition of the term “Pacific
Farm-Out Completion Date”.”

 

(xii)  Section 7.7 of the Credit Agreement is hereby amended by replacing it in
its entirety with the following:

 

“SECTION 7.7 Debt Service Reserve Account. The Borrower shall cause

 

(a)          the Debt Service Reserve Account to be established and maintained
in accordance with the provisions of the Security and Control Agreement; and

 

(b)          the amounts on deposit in the Debt Service Reserve Account to be at
all times at least equal to (i) during the period commencing on the Fourth
Amendment Effective Date and ending on the date on which the Reference
Prepayment is actually made (such date, the “Reference Prepayment Date”), the
sum of (x) Debt Service Reserve Account Required Balance, and (y) US$40,000,000;
and (ii) following the Reference Prepayment Date, the Debt Service Reserve
Account Required Balance.”

 

(xiii)  Sections 7.9(c), 7.9(d), 7.9(f) and 7.9(g) of the Credit Agreement are
hereby amended by replacing them in their entirety with the following:

 

“(c)         following the Pacific Farm-Out Settlement Date and for so long as
no Default or Event of Default shall have occurred and is continuing or would
occur after giving pro-forma basis to such incurrence, Debt of the Borrower
incurred in compliance with Section 7.22(g), but subject always to
Section 3.4(b);

 

(d)          following the Pacific Farm-Out Settlement Date and for so long as
no Default or Event of Default shall have occurred and is continuing or would
occur after giving pro-forma basis to such incurrence, Gas to Power Non-Recourse
Debt;

 

(f)            following the Pacific Farm-Out Settlement Date and for so long as
no Default or Event of Default shall have occurred and is continuing or would
occur after giving effect

 

14

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

 

on a pro-forma basis to the incurrence thereof, unsecured Debt of BPZ Resources,
but subject always to Section 3.4(b);

 

(g)          following the Pacific Farm-Out Settlement Date and for so long as
no Default or Event of Default shall have occurred and is continuing or would
occur after giving effect on a pro-forma basis to the incurrence thereof,
Non-Recourse Debt of any Block Subsidiary, but subject always to
Section 3.4(b);”

 

(xiv)  Section 7.9 of the Credit Agreement is hereby amended by adding the
following new clause (i) at the end thereof:

 

“(i) Debt incurred pursuant to the Pacific Farm-Out Documents.”

 

(xv)  Section 7.10 of the Credit Agreement is hereby amended by adding the
following new clause (e) at the end thereof:

 

“(e)         Prior to the Pacific Farm-Out Completion Date, Liens created
pursuant to the Pacific Security Documents.”

 

(xvi)  Section 7.14 of the Credit Agreement is hereby amended by replacing it in
its entirety with the following:

 

“SECTION 7.14 Further Assurances.

 

(a) Each Loan Party shall

 

(i) within forty-five (45) days from the Fourth Amendment Effective Date,
deliver to the Administrative Agent documentation in substance and form
satisfactory to the Administrative Agent evidencing confirmation of registration
and recordings with the relevant Peruvian Governmental Authority of the Stock
Pledge Priority Assignment Agreement and the Flow Trust (as amended on the
Fourth Amendment Effective Date); and

 

(ii) from time to time, do and perform any and all acts (and execute any and all
documents) as may be necessary or required by Applicable Law or reasonably
requested by a Collateral Agent to maintain each Lien created by the applicable
Collateral Documents in full force and effect and enforceable in accordance with
its terms, including: (1) making filings and recordings, (2) making payments of
fees and other charges, (3) issuing and, if necessary, filing or recording
supplemental documentation, including continuation statements, (4) discharging
all claims or other Liens adversely affecting the rights of the Collateral
Agents or any other BPZ Peru Secured Party in any Collateral, (5) publishing or
otherwise delivering notice to third parties, (6) depositing title documents and
(7) taking all other actions either necessary or required by Applicable Law or
otherwise reasonably requested by the Collateral Agents. None of the Loan
Parties shall transfer all or any portion of the Collateral to any Person except
as expressly provided in the Loan Documents.

 

15

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

 

(b) Without limiting the generality of the foregoing, it is acknowledged and
agreed that it is the intent of the parties that upon the occurrence of the
Pacific Farm-Out Completion Date, the obligations of the Loan Parties under the
Loan Documents shall be secured by the Collateral, which shall include, without
limitation, (i) an indirect interest in 51% of the rights, title and interest in
and to, the Block Z-1 License Contract and of all assets, rights and contracts
used or held for use in connection with the Block Z-1 License Contract, and
(ii) 100% of the Capital Stock of, and equity rights in, the Borrower.

 

(c) During the period commencing on the Pacific Farm-Out Completion Date and
ending on the Pacific Farm-Out Settlement Date, cause the balance on deposit in
the Reference Deposit Account to be at all times equal to or exceeding the
aggregate principal amount of the Loans outstanding at such time.”

 

(xvii)  Section 7.15(b) of the Credit Agreement is hereby amended by replacing
it in its entirety with the following:

 

“(b)        None of the Loan Parties shall (or shall permit any of its
Subsidiaries) to make any Asset Sale, other than (i) a Non Block Z-1 Farm-Out
Transaction, and (ii) on the Pacific Farm-Out Completion Date, the Permitted
Block Z-1 Transfer and the Pacific Farm-Out.”

 

(xviii)  Section 7.18(a) of the Credit Agreement is hereby amended by replacing
it in its entirety with the following:

 

“(a)        following the Pacific Farm-Out Settlement Date, by BPZ Resources to
the holders of its Capital Stock, so long as immediately before any such
Restricted Payment is made and immediately after giving effect thereto on a pro
forma basis (i) no Default or Event of Default shall have occurred and is
continuing and (ii) the Consolidated Leverage Ratio for the Rolling Period most
recently ended prior to the date on which such Restricted Payment is proposed to
be made, is less than 0.75:1.00;”

 

(xix)  Section 7.21 of the Credit Agreement is hereby amended by replacing it in
its entirety with the following:

 

“SECTION 7.21 Limitation on Capital and Exploratory Expenditures. None of the
Loan Parties shall (or shall permit any of its Subsidiaries to) make Capital and
Exploratory Expenditures, other than:

 

(a)          so long as immediately before any such Capital and Exploratory
Expenditures is made and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and is continuing, (i) Capital and
Exploratory Expenditures made by any Loan Party or any of its Subsidiaries
financed solely with proceeds from Equity Offerings, and (ii) following the
Pacific Farm-Out Settlement Date, Capital and Exploratory Expenditures made by
any Loan Party or any of its Subsidiaries with any Farm-Out Available Proceeds
(minus the amount of any Farm-Out Available Proceeds used to make Investments or
Restricted Payments in accordance with this Agreement prior to the date of such
Capital and Exploratory Expenditures);

 

16

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

 

(b)          following the Pacific Farm-Out Settlement Date and for so long as
immediately before any such Capital and Exploratory Expenditures is made and
immediately after giving effect thereto, no Default or Event of Default shall
have occurred and is continuing, Capital and Exploratory Expenditures made by
Nueva Esperanza solely in connection with the Gas to Power Project, but only to
the extent that such Capital and Exploratory Expenditures are financed solely
using the proceeds from Gas to Power Non-Recourse Debt;

 

(c)           with respect to Capital and Exploratory Expenditures made by any
Loan Party or any of its Subsidiaries in connection with the development of
Block Z-1, so long as immediately before any such Capital and Exploratory
Expenditure is made and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and is continuing,

 

(i) during the period commencing on the Fourth Amendment Effective Date and
ending on the later of (x) the first anniversary of the Fourth Amendment
Effective Date and (y) the Pacific Farm-Out Settlement Date, Capital and
Exploratory Expenditures made by any Loan Party or any of its Subsidiaries
financed solely with proceeds from Pacific Loans (other than Pacific Loans made
in respect of the Pacific Reference Debt);

 

(ii) during the period commencing on the later of (x) the first anniversary of
the Fourth Amendment Effective Date and (y) the Pacific Farm-Out Settlement
Date, and ending on the Maximum Carry Amount Date, Capital and Exploratory
Expenditures made by any Loan Party or any of its Subsidiaries, not exceeding,
individually or in the aggregate, US$15,000,000;

 

(iii) following the later of the Pacific Farm-Out Settlement Date and the
Maximum Carry Amount Date, Capital and Exploratory Expenditures by any Loan
Party or any of its Subsidiaries, not exceeding, individually or in the
aggregate, US$100,000,000 in any Financial Year, minus the aggregate amount of
Capital and Exploratory Expenditures made during such Financial Year pursuant to
Section 7.21(c)(ii), of which no more than US$50,000,000 shall be used for
Exploratory Expenditures during any such Financial Year; provided, however, that
any unused portion of the amount of all such Capital and Exploratory
Expenditures in any Financial Year up to a maximum amount of US$15,000,000 (such
amount, the “Carry Over Amount”) may be carried forward one single Financial
Year and allocated to the next succeeding Financial Year, and for purposes of
measuring compliance herewith, the Carry Over Amount shall be deemed to be the
first amount spent on Capital and Exploratory Expenditures in the succeeding
Financial Year; and

 

(iv) following the Pacific Farm-Out Termination Date, if the Consolidated cash
on hand of BPZ Resources as of the close of business on the last day of the
fiscal quarter of BPZ Resources most recently ended prior to the date on which
the relevant Capital and Exploratory Expenditures are made, in respect of which
Consolidated financial statements of BPZ Resources have been actually delivered
to the Administrative Agent pursuant to Section 7.5(a), is (after giving effect
on a pro forma basis to the making of such Capital and Exploratory Expenditure)
equal to or greater than US$40,000,000 (or its equivalent in

 

17

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

 

other currencies), Capital and Exploratory Expenditures by any Loan Party or any
of its Subsidiaries, not exceeding, individually or in the aggregate, during any
Financial Year US$65,000,000, minus the aggregate amount of Capital and
Exploratory Expenditures made during such Financial Year pursuant to
Section 7.21(c)(ii), of which no more than US$15,000,000 shall be used for
Exploratory Expenditures during any such Financial Year; and

 

(d)          with respect to Capital and Exploratory Expenditures made by any
Loan Party or any of its Subsidiaries for the development of any oil and gas
exploration field in any exploration block other than the Block Z-1, so long as
immediately before any such Capital and Exploratory Expenditure is made and
immediately after giving effect thereto, no Default or Event of Default shall
have occurred and is continuing,

 

(i) prior to the earlier of (x) the Pacific Farm-Out Settlement Date, and
(y) the Pacific Farm-Out Termination, Capital and Exploratory Expenditures by
any Loan Party or any of its Subsidiaries, not exceeding, individually or in the
aggregate, the positive difference, if any, between US$15,000,000 and the amount
of any Investments made pursuant to Section 7.19(b) in such Financial Year;

 

(ii) following the Pacific Farm-Out Settlement Date, Capital and Exploratory
Expenditures by any Loan Party or any of its Subsidiaries (1) with proceeds from
Non-Recourse Debt of any Block Subsidiary incurred in compliance with
Section 7.9(g) and (2) not exceeding, individually or in the aggregate, during
any Financial Year, the positive difference, if any, between (A) (x) with
respect to the Financial Year ending on December 31, 2012, US$7,500,000 minus
the aggregate amount of Capital and Exploratory Expenditures made during such
Financial Year pursuant to Section 7.21(d)(i), and (y)with respect to any
Financial Year ending on or after December 31, 2013, US$20,000,000 minus the
aggregate amount of Capital and Exploratory Expenditures made during such
Financial Year pursuant to Section 7.21(d)(i), and (B) the sum of (x) the amount
of any Investments made pursuant to Section 7.19(b) in such Financial Year, and
(y) the amount Capital and Exploratory Expenditures made pursuant to
Section 7.21(c)(ii); and

 

(iii) following the Pacific Farm-Out Termination, Capital and Exploratory
Expenditures by any Loan Party or any of its Subsidiaries, not exceeding in any
Financial Year, individually or in the aggregate, US$2,500,000 minus the
aggregate amount of Capital and Exploratory Expenditures made during such
Financial Year pursuant to Section 7.21(d)(i).

 

(xx) Section 7.22(d) of the Credit Agreement is hereby amended by replacing it
in its entirety with the following:

 

“(d)        Minimum Barrel Production per Quarter. None of the Loan Parties
shall permit the Borrower’s aggregate crude oil barrel production for each of
the fiscal quarters set forth in Annex III-D to be less than the number of
barrels set forth therein opposite such quarter; provided that the aggregate
crude oil barrel production of the Borrower for such periods shall be calculated
on a pro forma basis assuming that the Pacific Farm-Out

 

18

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

 

Completion occurred as of January 1, 2012, regardless of whether or not the
Pacific Farm-Out Completion actually occurs.”

 

(xxi) Section 7.22(g) of the Credit Agreement is hereby amended by replacing it
in its entirety with the following:

 

“(g)        Maximum Indebtedness. None of the Loan Parties shall permit the
Consolidated Total Debt of the Borrower to exceed at any time US$90,000,000 (or
its equivalent in other currencies).”

 

(xxii) Section 7.24(a) of the Credit Agreement are hereby amended by deleting
“(i) in accordance with Section 7.30 or (ii)” therein.

 

(xxiii) Section 7.26(a) of the Credit Agreement is hereby amended by replacing
the reference to “August 31, 2012” with “January 31, 2013”.

 

(xxiv) Section 7.26(b) of the Credit Agreement is hereby amended by replacing
the reference to “October 31, 2012” with “March 31, 2013”.

 

(xxv) Section 7.27 of the Credit Agreement is hereby amended by replacing the
reference to “April 16, 2012” with “July 31, 2012”.

 

(xxvi) Section 7.29 of the Credit Agreement is hereby amended by deleting it in
its entirety.

 

(xxvii) Section 7.30 of the Credit Agreement is hereby amended by deleting it in
its entirety.

 

(xxviii) Article VII of the Credit Agreement is hereby amended by adding the
following Section 7.31 at the end thereof:

 

“7.31      Limitation on Amendments to Documents. None of the Loan Parties
shall, or shall permit any of their respective Subsidiaries to, without the
prior written consent of the Required Lenders, enter into or consent to any
modification, supplement or waiver to any provision of (i) any Pacific Security
Documents, or (ii) any Pacific Farm-Out Document (other than the Pacific
Security Documents), except in the case of clause (ii) above, to the extent such
modification, supplement or waiver does not adversely affects the interests of
the Lenders hereunder in any respect.”

 

(xxix) Clause (i) of Article VIII of the Credit Agreement is hereby amended by
adding “or the Pacific Farm-Out Documents to which it is a party” at the end of
clause (ii) thereof.

 

(xxx) Clause (k)(iv) of Article VIII of the Credit Agreement is hereby amended
by adding the following at the end thereof:

 

19

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

 

“(or, with respect to the Liens created pursuant to the Pacific Stock Pledge
Agreement, a fully perfected second priority security interest, as contemplated
in the Stock Pledge Priority Assignment Agreement).”

 

(xxxi)  Article VIII of the Credit Agreement is hereby amended by adding the
following new clauses (n), (o) and (p) at the end thereof:

 

“(n)        (i) any “default” by any Loan Party or any of its Affiliates under
any Pacific Farm-Out Document shall have occurred, but only to the extent the
occurrence thereof (A) entitles PRE or any of its Affiliates to terminate any
Farm-Out Document or require the making of any payment (other than any payment
pursuant to Section 10.2 or 10.3 of the Stock Purchase Agreement (as in effect
on the Fourth Amendment Effective Date)) by any Loan Party or any of its
Affiliates, individually or in the aggregate, in excess of US$5,000,000 (or the
Dollar equivalent thereof); or (B) results in the loss of any material right of
any Loan Party or any of its Affiliates under any Farm-Out Document (in each
case, irrespective of whether any right or remedy of PRE or any of its
Affiliates as a result thereof is actually asserted, exercised or waived);
provided, that for purposes of this clause (n), a “default” by any Loan Party or
any of its Affiliates under any Pacific Farm-Out Document shall not include a
breach of any “Seller Warranty” (as defined in the Stock Purchase Agreement (as
in effect on the Fourth Amendment Effective Date)), but subject always to clause
(A) above if any payment is required to be made by any Loan Party or Affiliate
thereof (including pursuant to Section 9 of the Stock Purchase Agreement (as in
effect on the Fourth Amendment Effective Date)) as a result of the breach of
such “Seller Warranty”; or

 

(o)          if the Pacific Farm-Out Settlement Date shall not occur on or prior
to the date falling 30 days after the Pacific Farm-Out Completion Date; or

 

(p)          (i) any principal in respect of Debt incurred by any Loan Party
pursuant to the Pacific Farm-Out Documents, individually or in the aggregate, in
excess of US$4,000,000 shall be paid or repaid by, or on behalf of, any Loan
Party during any three-month period commencing on October 15, 2013; or (ii) any
interest in respect of Debt incurred pursuant to the Pacific Farm-Out Documents
(other than interest accrued on Pacific Loans made prior to the Pacific Farm-Out
Termination) shall be paid by, or on behalf of, any Loan Party, at any time.

 

(xxxii)            Article X of the Credit Agreement is hereby amended by adding
the following Section 10.8 at the end thereof:

 

“10.8      Execution of Loan Documents. Each Lender hereby acknowledges the
terms of each of the Loan Documents and authorizes and instructs the
Administrative Agent to execute and deliver, for the benefit of the Lenders,
each of the Loan Documents to which it is an intended party.”

 

(xxxiii)             (i) Exhibit III-A to the Credit Agreement is hereby
replaced in its entirety with Exhibit I hereto, (ii) Exhibit III-B to the Credit
Agreement is hereby replaced in its entirety with Exhibit II hereto,
(iii) Exhibit III-C to the Credit

 

20

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

 

Agreement is hereby replaced in its entirety with Exhibit III hereto,
(iv) Exhibit III-D to the Credit Agreement is hereby replaced in its entirety
with Exhibit IV hereto, (v) Exhibit C to the Credit Agreement is hereby replaced
in its entirety with Exhibit V hereto, (vi) Exhibit D to the Credit Agreement is
hereby replaced in its entirety with Exhibit VI hereto, (vii) Exhibit VII hereto
is hereby added as new Exhibit L to the Credit Agreement; (viii) Exhibit VIII
hereto is hereby added as new Exhibit M to the Credit Agreement; (ix) Exhibit IX
hereto is hereby added as new Exhibit N to the Credit Agreement; (x) Exhibit X
hereto is hereby added as new Exhibit O to the Credit Agreement; (xi) Exhibit XI
hereto is hereby added as new Exhibit P to the Credit Agreement; and
(xii) Exhibit XII hereto is hereby added as new Exhibit Q to the Credit
Agreement.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Section 3.1         Pacific Farm-Out Documents. The Borrower has delivered to
the Administrative Agent a true, correct and complete duly executed copy of the
Pacific Farm-Out Documents, including any amendments, supplements or
modifications with respect thereto. Each of the Pacific Farm-Out Documents has
been validly authorized, executed and delivered by each party thereto and
constitutes the valid and binding obligation of each party thereto in accordance
with the terms thereof. No provision of any Pacific Farm-Out Document has been
amended, supplemented or modified in any respect. No “default,” “event of
default” or similar event has occurred and is continuing under any of the
Pacific Farm-Out Documents. No event or circumstance, the occurrence of which
would result in any Loan Party having the ability to terminate its obligations
under the Pacific Farm-Out Documents or to decline to consummate the Pacific
Farm-Out, has occurred or is reasonably expected to occur on or prior to the
Amendment Effective Date. The Joint Operating Agreement, the Operating Services
Agreement and the Carry Agreement will not become effective at any time prior to
the Pacific Farm-Out Completion Date.

 

Section 3.2         Loans Balance. The outstanding principal amount as of the
Amendment Effective Date of the Tranche A Loans is US$43,750,000.00 and of the
Tranche B Loans is US$31,250,000.00, all of which is payable by the Borrower
without offset, defense, recoupment, claim or counterclaim of any kind, in
accordance with the terms set forth in the Credit Agreement.

 

ARTICLE IV

CONDITIONS TO EFFECTIVENESS

 

Section 4.1         Effectiveness. This Amendment shall become effective on and
as of the date hereof (the “Amendment Effective Date”), subject to the
satisfaction of each of the following conditions on or prior to such date in a
manner satisfactory to the Administrative Agent and the Lenders:

 

(a)         Officer’s Certificate. The Administrative Agent shall have received
a certificate, dated as of the Amendment Effective Date and signed by an
authorized officer or director of the Borrower and each Guarantor, substantially
in the form of Exhibit XIII.

 

21

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(b)        Loan Documents. The Administrative Agent shall have received a true,
correct and complete copy of (i) the Flow Trust, as amended on the date hereof,
and (ii) the Stock Pledge Priority Assignment Agreement, the Pacific Farm-Out
Security Agreement and the Pacific Farm-Out Intercreditor Agreement, in each
case, duly executed and delivered by a duly authorized officer of each party
thereto, and each such Loan Document shall be in full force and effect.

 

(c)         Pacific Farm-Out Documents. The Administrative Agent shall have
received a true, correct and complete copy of each Pacific Farm-Out Document
specified in Section 3.1, in each case, duly executed and delivered by a duly
authorized officer of each party thereto, and each such Pacific Farm-Out
Document shall be in full force and effect.

 

(d)        Opinion of Counsel. The Administrative Agent shall have received an
opinion of Rodrigo, Elías & Medrano, special Peruvian counsel to the Borrower,
in the form of Exhibit XIV, with qualifications and exceptions acceptable to the
Administrative Agent and its counsel (and the Borrower has instructed such
counsel to deliver such opinion to the Administrative Agent and the Lenders).

 

(e)         Debt Service Reserve Account Required Balance. The balance on
deposit in the Debt Service Reserve Account on the Amendment Effective Date is
equal to or exceeds US$42,500,000.

 

(f)         Collateral. All actions specified in the Collateral Documents (other
than such actions required to be taken following the Amendment Effective Date
pursuant to Section 7.14(a)) for the Liens purported to be created, and the
assignments purported to be made, pursuant to the terms of the Collateral
Documents on or prior to the Amendment Effective Date, shall have been taken so
that such Liens and such assignments shall be perfected in accordance with
Applicable Law.

 

(g)        Payment of Fees. The Administrative Agent shall have received all
reasonable and documented fees and other amounts due and payable on or prior to
the Amendment Effective Date, including reimbursement or payment of all
reasonable and documented out-of-pocket expenses (including reasonable and
documented fees, charges and disbursements of Rubio, Leguía & Normand and
Skadden, Arps, Slate, Meagher & Flom LLP) required to be reimbursed or paid by
the Borrower hereunder or under any other Loan Document.

 

(h)        Representations and Warranties. Each of the representations and
warranties of each Loan Party set out in each of the Loan Documents (after
giving effect to this Amendment) shall (i) if such representation and warranty
is qualified as to materiality or by reference to the existence of a Material
Adverse Effect, true and correct to the extent of such qualification on and as
of the Amendment Effective Date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date), or (ii) if such representation and warranty is not so qualified, true and
correct in all material respects on and as of the Amendment Effective Date (or,
if any such

 

22

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representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date) be true and correct on and as of the
Amendment Effective Date.

 

(i)          No Material Adverse Effect. Since December 31, 2011, no event,
development or circumstance shall have occurred that has had or could reasonably
be expected to have a Material Adverse Effect.

 

(j)          No Default. After giving effect to this Amendment, no event, act or
condition shall have occurred and be continuing which constitutes a Default or
Event of Default.

 

(k)         No Order. There shall not (i) be in effect any statute, regulation,
order, decree or judgment of any Governmental Authority that makes illegal or
enjoins or prevents the consummation of the transactions contemplated by this
Amendment, any other Loan Document or any of the Pacific Farm-Out Documents or
(ii) have been commenced any action or proceeding that seeks to prevent or
enjoin any transactions contemplated by this Amendment or any other Loan
Document or any Pacific Farm-Out Document.

 

(l)          Taxes. All applicable taxes and stamp duties due and payable on or
prior to the Amendment Effective Date, if any, arising in connection with the
execution, delivery and performance of this Amendment and the other Loan
Documents shall have been paid in full.

 

(m)        Satisfaction of Conditions under Amendment to Nueva Esperanza Credit
Agreement. All conditions precedent for the occurrence of the “Amendment
Effective Date” under (and as defined in) the amendment to the Nueva Esperanza
Credit Agreement, dated as of the date hereof (the “EENE Amendment”) among Nueva
Esperanza, as borrower, BPZ Resources and the Borrower, as guarantors, the
lenders referred to therein, and Credit Suisse AG, Cayman Islands Branch, as
administrative agent, shall have been satisfied in full and the “Amendment
Effective Date” (as defined in the EENE Amendment) shall fall on the same
Business Day on which the Amendment Effective Date falls.

 

ARTICLE V

MISCELLANEOUS

 

Section 5.1          Notices. All notices, requests and other communications to
any party hereto shall be given or served in the manner contemplated in
Section 11.2 of the Credit Agreement.

 

Section 5.2          No Waiver; Status of Credit Documents. This Amendment shall
not constitute an amendment, supplement or waiver of any provision of the Credit
Agreement not expressly referred to herein and shall not be construed as an
amendment, supplement, waiver or consent to any action on the part of any party
hereto that would require an amendment, supplement, waiver or consent of the
Lenders except as expressly stated herein. Except as expressly amended and
supplemented hereby, the provisions of the Credit Agreement are and shall remain
in full force and effect. No failure or delay on the part of the Lenders in the

 

23

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exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Amendment and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies available at equity
or law. Nothing in this Amendment shall constitute a novation of any of the
Borrower’s obligations under the Credit Agreement or any other Loan Document.

 

Section 5.3             Amendment. This Amendment may be amended, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.

 

Section 5.4             Amendment Binding. This Amendment shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and the
respective successors and permitted assigns of the parties hereto.

 

Section 5.5             Headings. Section headings used herein are for
convenience of reference only, are not part of this Amendment and shall not
affect the construction of, or be taken into consideration in interpreting, this
Amendment.

 

Section 5.6             Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to its conflicts of laws principles.

 

Section 5.7             Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties thereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
instrument.

 

[Remainder of this page intentionally left blank]

 

24

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

 

BPZ EXPLORAClÓN & PRODUCCIÓN S.R.L.,

as Borrower

 

 

By:

/s/ Luis Rafael Zoeger Nuñez

 

 

Name: Luis Rafael Zoeger Nuñez

 

 

Title: General Manager

 

 

[Signature Page to Fourth Amendment to BPZ E&P Credit Agreement]

 

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BPZ NORTE OIL S.R.L.,

as Guarantor

 

 

By:

/s/ Luis Rafael Zoeger Nuñez

 

 

Name: Luis Rafael Zoeger Nuñez

 

 

Title: General Manager

 

 

[Signature Page to Fourth Amendment to BPZ E&P Credit Agreement]

 

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

 

BPZ RESOURCES, INC.,

as Guarantor

 

 

By:

/s/ Richard S Menniti

 

 

Name: Richard S Menniti

 

 

Title: Chief Financial Officer

 

 

[Signature Page to Fourth Amendment to BPZ E&P Credit Agreement]

 

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BPZ ENERGY LLC,

as Guarantor

 

 

By:

/s/ J.D. Ledgard

 

 

Name: J.D. Ledgard

 

 

Title: CLO

 

 

[Signature Page to Fourth Amendment to BPZ E&P Credit Agreement]

 

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

 

SOLUCIONES ENERGÉTlCAS S.R.L.,

as Guarantor

 

 

By:

/s/ Francisco Galvez

 

 

Name: Francisco Galvez

 

 

Title: General Manager

 

 

[Signature Page to Fourth Amendment to BPZ E&P Credit Agreement]

 

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

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

as Administrative Agent

 

 

By:

/s/ Andreas Schenk Caviezel

 

 

Name: Andreas Schenk Caviezel

 

 

Title: Managing Director

 

 

By:

/s/ Martin Cameo

 

 

Name: Martin Cameo

 

 

Title: Director

 

 

[Signature Page to Fourth Amendment to BPZ E&P Credit Agreement]

 

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

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

as Lender

 

 

By:

/s/ Andreas Schenk Caviezel

 

 

Name: Andreas Schenk Caviezel

 

 

Title: Managing Director

 

 

By:

/s/ Martin Cameo

 

 

Name: Martin Cameo

 

 

Title: Director

 

 

[Signature Page to Fourth Amendment to BPZ E&P Credit Agreement]

 

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

 

STANDARD BANK PLC,

as Lender

 

 

By:

/s/ Robert Anastasio

 

 

Name: Robert Anastasio

 

 

Title: Attorney in Fact

 

 

By:

/s/ Albert Maartens

 

 

Name: Albert Maartens

 

 

Title: Attorney in Fact

 

 

[Signature Page to Fourth Amendment to BPZ E&P Credit Agreement]

 

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

 

Exhibit I

 

ANNEX III-A

to Credit Agreement

 

Rolling Period ended

 

Maximum Ratio

 

June 30, 2012

 

3.50x

 

September 30, 2012

 

3.50x

 

December 31, 2012

 

3.50x

 

March 31, 2013

 

3.50x

 

June 30, 2013

 

3.25x

 

September 30, 2013

 

2.75x

 

December 31, 2013

 

2.25x

 

March 31, 2014

 

1.75x

 

June 30, 2014

 

1.50x

 

September 30, 2014

 

1.50x

 

December 31, 2014

 

1.50x

 

March 31, 2015

 

1.50x

 

June 30, 2015

 

1.50x

 

 

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

 

Exhibit II

 

ANNEX III-B

to Credit Agreement

 

Rolling Period ended

 

Minimum Ratio

 

June 30, 2012

 

1.00x

 

September 30, 2012

 

1.00x

 

December 31, 2012

 

1.00x

 

March 31, 2013

 

1.00x

 

June 30, 2013

 

1.00x

 

September 30, 2013

 

1.25x

 

December 31, 2013

 

2.00x

 

March 31, 2014

 

2.50x

 

June 30, 2014

 

2.50x

 

September 30, 2014

 

3.00x

 

December 31, 2014

 

3.00x

 

March 31, 2015

 

3.00x

 

June 30, 2015

 

3.00x

 

 

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

 

Exhibit III

 

ANNEX III-C

to Credit Agreement

 

Quarter Ended

 

Maximum Ratio

 

June 30, 2012

 

70.0

%

September 30, 2012

 

70.0

%

December 31, 2012

 

70.0

%

March 31, 2013

 

70.0

%

June 30, 2013

 

70.0

%

September 30, 2013

 

70.0

%

December 31, 2013

 

70.0

%

March 31, 2014

 

70.0

%

June 30, 2014

 

70.0

%

September 30, 2014

 

70.0

%

December 31, 2014

 

70.0

%

March 31, 2015

 

65.0

%

June 30, 2015

 

65.0

%

 

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

 

Exhibit IV

 

ANNEX III-D

to Credit Agreement

 

Quarter Ended

 

Minimum Barrel
Production (barrels) per
Quarter

 

June 30, 2012

 

140,000

 

September 30, 2012

 

140,000

 

December 31, 2012

 

140,000

 

March 31, 2013

 

165,000

 

June 30, 2013

 

200,000

 

September 30, 2013

 

270,000

 

December 31, 2013

 

320,000

 

March 31, 2014

 

325,000

 

June 30, 2014

 

325,000

 

September 30, 2014

 

325,000

 

December 31, 2014

 

350,000

 

March 31, 2015

 

350,000

 

June 30, 2015

 

350,000

 

 

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