EXHIBIT
10.15


 


CONFORMED COPY


 




 





INVESTMENT
NUMBER 24346


 


Loan
Agreement


 


between


 


BPZ EXPLORACIÓN & PRODUCCIÓN S.R.L.


 


BPZ MARINE PERU S.R.L


 


and


 


INTERNATIONAL FINANCE CORPORATION


 


Dated as
of August 15, 2008


 




 




















 


TABLE OF
CONTENTS


 


	
  Article/

  Section

  	
   

  	
  Item

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS AND INTERPRETATION

  	
  1

  
	
  Section 1.01.

  	
  Definitions

  	
  1

  
	
  Section 1.02.

  	
  Interpretation

  	
  5

  
	
  Section 1.03.

  	
  Business Day Adjustment

  	
  5

  
	
  Section 1.04.

  	
  Common Terms Agreement

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  THE IFC FACILITY

  	
  5

  
	
  Section 2.01.

  	
  The IFC Facility

  	
  5

  
	
  Section 2.02.

  	
  Disbursement Procedure

  	
  6

  
	
  Section 2.03.

  	
  Interest

  	
  6

  
	
  Section 2.04.

  	
  Default Rate Interest

  	
  7

  
	
  Section 2.05.

  	
  Repayment

  	
  8

  
	
  Section 2.06.

  	
  Prepayment

  	
  8

  
	
  Section 2.07.

  	
  Fees

  	
  9

  
	
  Section 2.08.

  	
  Currency and Place of Payments

  	
  10

  
	
  Section 2.09.

  	
  Allocation of Partial Payments

  	
  10

  
	
  Section 2.10.

  	
  Increased Costs

  	
  10

  
	
  Section 2.11.

  	
  Unwinding Costs

  	
  10

  
	
  Section 2.12.

  	
  Suspension or Cancellation by IFC

  	
  11

  
	
  Section 2.13.

  	
  Cancellation by the Borrower

  	
  12

  
	
  Section 2.14.

  	
  Taxes

  	
  12

  
	
  Section 2.15.

  	
  Expenses

  	
  12

  
	
  Section 2.16.

  	
  Illegality of Participation

  	
  13

  
	
  Section 2.17

  	
  Mitigation

  	
  14

  



 


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  ARTICLE III

  	
  CONDITIONS OF DISBURSEMENT

  	
  14

  
	
  Section 3.01.

  	
  Conditions of Disbursement

  	
  14

  
	
  Section 3.02.

  	
  Borrower’s Certification

  	
  14

  
	
  Section 3.03.

  	
  Conditions for IFC Benefit

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  MISCELLANEOUS

  	
  15

  
	
  Section 4.01.

  	
  Saving of Rights

  	
  15

  
	
  Section 4.02.

  	
  Notices

  	
  15

  
	
  Section 4.03.

  	
  English Language

  	
  17

  
	
  Section 4.04.

  	
  Term of Agreement

  	
  17

  
	
  Section 4.05.

  	
  Disclosure of Information

  	
  17

  
	
  Section 4.06.

  	
  Successors and Assignees

  	
  17

  
	
  Section 4.07.

  	
  Amendments, Waivers and Consents

  	
  18

  
	
  Section 4.08.

  	
  Governing Law

  	
  18

  
	
  Section 4.09.

  	
  Dispute Resolution

  	
  18

  
	
  Section 4.10.

  	
  Counterparts

  	
  18

  



 


ii

















 


LOAN
AGREEMENT


 


LOAN AGREEMENT (the “Agreement”) dated as of August 15, 2008 between BPZ
EXPLORACIÓN & PRODUCCIÓN S.R.L. (“BPZ Exploración”
and a “Borrower”), incorporated as a limited
liability company registered in Peru, BPZ MARINE PERU S.R.L. (“BPZ Marine” and a “Borrower” and,
together with BPZ Exploración, the “Borrowers”) and
INTERNATIONAL FINANCE CORPORATION, an international organization established by
Articles of Agreement among its member countries, including Peru (“IFC”).


 


RECITALS


 


IFC, the Borrowers and the
Additional Secured Facility Lenders (upon accession thereto) have entered or
will enter into a Common Terms Agreement dated as of the date hereof (the “Common Terms Agreement”) which sets out, inter  alia,
certain terms and conditions under which the Lenders shall provide revolving
credit facilities to the Borrowers; and


 


This Agreement sets out
the additional terms and conditions under which IFC shall provide the IFC
Facility to the Borrowers.


 


ARTICLE I



Definitions and Interpretation


 


Section 1.01.                             Definitions.  Wherever used in this Agreement, terms
defined in the Common Terms Agreement (as defined below) shall have the same
meanings herein unless otherwise defined herein.  In addition, the following terms have the
meanings opposite them:


 


“Available Amount”                                                                                  as
of the date of calculation, the lesser of (i) the Maximum Facility Amount
(as cancelled or reduced from time to time) less the principal amount of
Loans outstanding as of the date of calculation, and (ii) the Maximum
Available Amount as of the date of calculation;


 


“Business Day”                                                                                                          a
day when banks are open for business in New York, New York and Lima, Peru or,
solely for the purpose of determining the Interest Rate other than pursuant to Section 2.03(d)(ii),
London, England;


 


“Disbursement”                                                                                                          any
disbursement of the Loans;


 


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“IFC Fee Letter”                                                                                                         the
letter agreement dated as of the date hereof between IFC and the Borrowers;


 


“Increased Costs”                                                                                              the
amount certified in an Increased Costs Certificate to be the net incremental
costs of, or reduction in return to, IFC or any participant who has acquired a
participation in the Loans in connection with the making or maintaining of the
Loans that result from:


 


(i)                                     any
change in any applicable law or regulation or directive (whether or not having
the force of law) or in its interpretation or application by any Authority
charged with its administration; or


 


(ii)                                  compliance
with any request from, or requirement of, any central bank or other monetary or
other Authority;


 


which, in either
case, after the date of this Agreement (or, in the case of a participant that
has acquired a participation in the Loans, the date of its participation
agreement):


 


(A)                              imposes,
modifies or makes applicable any reserve, special deposit or similar
requirements against assets held by, or deposits with or for the account of, or
loans made by, IFC or such participant;


 


(B)                                imposes
a cost on IFC or such participant as a result of IFC or such participant having
made the Loans (or acquired such participation) or reduces the rate of return
on the overall capital of IFC or such participant that it would have achieved,
had IFC or such participant not made the Loans (or acquired such
participation);


 


(C)                                changes
the basis of taxation on payments received by IFC or such participant in
respect of the Loans or 


 


2

















 


such participation
(otherwise than by a change in taxation of the overall net income of IFC or
such participant imposed by the jurisdiction of its incorporation or in which
it books such participation or in any political subdivision of any such
jurisdiction; or


 


(D)                               imposes
on IFC or such participant any other condition regarding the making or
maintaining of the Loans or such participation;


 


but excluding any
incremental costs of making or maintaining a participation in the Loans that
are a direct result of the relevant participant having its principal office in
Peru or having or maintaining a permanent office or establishment in Peru, if
and to the extent that permanent office or establishment acquires that
participation.


 


“Increased Costs


Certificate”                                                                                                                                    a
certificate provided from time to time by IFC (based, if appropriate, on a
certificate to IFC from any participant who has acquired a participation in the
Loans, if Increased Costs affect its participation) certifying:


 


(i)                                     the
circumstances giving rise to the Increased Costs;


 


(ii)                                  that
the costs of IFC or, as the case may be, that participant, have increased or
the rate of return of either of them has been reduced;


 


(iii)                               that either IFC or such
participant has, in IFC’s opinion, exercised reasonable efforts to minimize or
eliminate the relevant increase or reduction, as the case may be; and


 


(iv)                              the
amount of Increased Costs;


 


3

















 


“Interest Determination


Date”                                                                                                                                                                 except
as otherwise provided in Section 2.03 (d) (ii) (Interest), the second Business Day before the beginning of
each Interest Period;


 


“Interest Payment Date”                                                              June 30
and December 31 in each year;


 


“Interest Period”                                                                                                      each
period of six (6) months, except in the case of any Loan that is made on a
date other than an Interest Payment Date, when it means the period beginning on
the date on which that Loan is made and ending on the day immediately before
the next following Interest Payment Date;


 


“Interest Rate”                                                                                                                for
any Interest Period, the rate at which interest is payable on the Loan during
that Interest Period, determined in accordance with Section 2.03 (Interest);


 


“LIBOR”                                                                                                                                                the
British Bankers’ Association (“BBA”) interbank offered rates for deposits in
Dollars which appear on the relevant page of the Reuters Service
(currently page LIBOR01) or, if not available, on the relevant pages of
any other service (such as Bloomberg Financial Markets Service) that displays
such BBA rates; provided that if BBA for any reason ceases (whether permanently
or temporarily) to publish interbank offered rates for deposits in Dollars, “LIBOR”
shall mean the rate determined pursuant to Section 2.03 (d) (Interest);


 


“Loan”                                                                                                                                                         the
principal amount of each borrowing under the IFC Facility or, as the context
requires, the principal amount from time to time outstanding of such borrowing;
provided that, for the avoidance of doubt, and subject to Section 3.3 (Rollover Loans) of the Common Terms Agreement, on each
Interest Payment Date all Loans (including Rollover Loans) outstanding on such
Interest Payment Date shall (to the extent not repaid) be consolidated into a
single Loan on such Interest Payment Date;


 


“Relevant Change”                                                                                         has
the meaning specified in Section 2.16 (Illegality of
Participation);


 


“Relevant Spread”                                                                                             2.75%
per annum;


 


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“Revenue Account”                                                                                   the
bank account entitled “BPZ Exploración—Revenue Account” (or as it is otherwise
entitled in the agreement creating the Flow Trust) established with the
Security Trustee in the name of the trust created under the Flow Trust; and


 


“Taxes”                                                                                                                                                     any
present or future taxes, withholding obligations, duties and other charges of
whatever nature levied by any Authority.


 


Section 1.02.                             Interpretation.  This Agreement shall be interpreted in
accordance with Section 1.3 (Interpretation)
of the Common Terms Agreement.


 


Section 1.03.                             Business Day
Adjustment. 
(a) When an Interest Payment Date is not a Business Day, then such
Interest Payment Date shall be automatically changed to the next Business Day
in that calendar month (if there is one) or the preceding Business Day (if
there is not).


 


(b)                                 When the day on or by which a payment (other
than a payment of principal or interest) is due to be made is not a Business
Day, that payment shall be made on or by the next Business Day in that calendar
month (if there is one) or the preceding Business Day (if there is not).


 


Section 1.04.                             Common Terms
Agreement. 
This Agreement constitutes the IFC Loan Agreement referred to in the
Common Terms Agreement and the provisions of the Common Terms Agreement are
hereby incorporated herein by this reference. 
In the event of any conflict between the provisions of this Agreement
and the Common Terms Agreement, the provisions of this Agreement shall prevail.


 


ARTICLE II


 


The IFC Facility


 


Section 2.01.                             The IFC Facility.  (a) Subject to the provisions of this
Agreement and the Common Terms Agreement, IFC agrees to make available to the
Borrowers a revolving loan facility of up to fifteen million Dollars
($15,000,000) (the “IFC Facility”).


 


(b)                                 Each
Loan under the IFC Facility may be utilized only for the purposes set forth in Section 2.1
(The Project) of the Common Terms Agreement.


 


(c)                                  The
Borrowers’ obligations under this Agreement and the other Finance Documents are
joint and several.


 


5
















 


Section 2.02.                             Disbursement
Procedure.


 


(a)                                  The
Borrowers may request Disbursements during the Availability Period by
delivering to IFC, at least ten (10) Business Days prior to the proposed
date of disbursement, a Disbursement Application substantially in the form of
Schedule 1.


 


(b)                                 Each
Disbursement shall be made by IFC at a bank in New York, New York for further
credit to the Revenue Account or such other bank account in Peru acceptable to
IFC, all as specified by the Borrowers in the relevant Disbursement request.


 


(c)                                  Each
Disbursement shall be made in an amount of (i) not less than five million
Dollars ($5,000,000) or (ii) if less, the Available Amount.


 


(d)                                 The
Borrowers shall deliver to IFC a receipt, substantially in the form of Schedule
2, within five (5) Business Days following each Disbursement.


 


(e)                                  On
each Interest Payment Date on which there are any Loans outstanding, the
Borrowers shall be conclusively deemed to have delivered to IFC a Rollover
Request in accordance with Section 3.3 (Rollover
Loans) of the Common Terms Agreement.


 


Section 2.03.                             Interest.  Subject to the provisions of Section 2.04
(Default Rate Interest), the Borrower
shall pay interest on each Loan in accordance with this Section 2.03:


 


(a)                                  During
each Interest Period, each Loan shall bear interest at the applicable Interest
Rate for that Interest Period.


 


(b)                                 Interest
on each Loan shall accrue from day to day, be prorated on the basis of a
360-day year for the actual number of days in the relevant Interest Period and
be payable in arrears on the Interest Payment Date immediately following the
end of that Interest Period.


 


(c)                                  The
Interest Rate for any Interest Period shall be the rate which is the sum of:


 


(i)                                     the
Relevant Spread; and


 


(ii)                                  LIBOR
on the Interest Determination Date for that Interest Period for six (6) months
(or, in the case of any Loan that is made on a date other than an Interest
Payment Date, for one (1) month, two (2) months, three (3) months
or six (6) months, whichever period is closest to the duration of the
relevant Interest Period (or, if two periods are equally close, 


 


6

















 


the longer one)) rounded
upward to the nearest three decimal places.


 


(d)                                 If,
for any Interest Period, IFC cannot determine LIBOR by reference to the Reuters
Service or any other service that displays BBA rates, IFC shall notify the
relevant Borrower and shall instead determine LIBOR:


 


(i)                                     on
the second Business Day before the beginning of the relevant Interest Period by
calculating the arithmetic mean (rounded upward to the nearest three decimal
places) of the offered rates advised to IFC on or around 11:00 a.m.,
London time, for deposits in Dollars and otherwise in accordance with Section 2.03
(c) (ii), by any four (4) major banks active in Dollars in the London
interbank market, selected by IFC; provided that if less than four quotations
are received, IFC may rely on the quotations so received if not less than two
(2); or


 


(ii)                                  if
less than two (2) quotations are received from the banks in London in
accordance with subsection (i) above, on the first day of the relevant
Interest Period, by calculating the arithmetic mean (rounded upward to the
nearest three decimal places) of the offered rates advised to IFC on or around
11:00 a.m., New York time, for loans in Dollars and otherwise in
accordance with Section 2.03 (c) (ii), by a major bank or banks in
New York, New York selected by IFC.


 


(e)                                  On
each Interest Determination Date for any Interest Period, IFC shall determine
the Interest Rate applicable to that Interest Period and promptly notify the
Borrowers of those rates.


 


(f)                                    The
determination by IFC, from time to time, of the applicable Interest Rate shall
be final and conclusive and bind the Borrowers (unless the Borrowers show to
IFC’s satisfaction that the determination involves manifest error).


 


Section 2.04.                             Default Rate
Interest.  (a) Without
limiting the remedies available to IFC under this Agreement or otherwise (and
to the maximum extent permitted by applicable law), if any Borrower fails to
make any payment of principal or interest (including interest payable pursuant
to this Section) or any other payment provided for in Section 2.07 (Fees) when due as specified in this Agreement (whether at
stated maturity or upon acceleration), the Borrowers shall pay interest on the
amount of that payment due and unpaid at the rate which shall be the sum of two
per cent (2%) per annum and the Interest Rate in effect from time to time.


 


7

















 


(b)                                 Interest
at the rate referred to in Section 2.04 (a) shall accrue from the
date on which payment of the relevant overdue amount became due until the date
of actual payment of that amount (as well after as before judgment), and shall
be payable on demand or, if not demanded, on each Interest Payment Date falling
after any such overdue amount became due.


 


Section 2.05.                             Repayment.  (a) Subject
to Section 1.03 (Business Day Adjustment)
and Section 2.02(e) (Disbusement Procedure),
the Borrowers shall repay each Loan in full on the Interest Payment Date
immediately following the date of Disbursement of such Loan.


 


(b)                                 Subject
to the terms of this Agreement and the Common Terms Agreement, the principal
amount of any Loan repaid under this Agreement may be re-borrowed.


 


Section 2.06.                             Prepayment.  Without prejudice to
Section 2.16 (Illegality of
Participation):


 


(a)                                  subject
to the requirements of Section 3.8 (General Prepayment Terms)
of the Common Terms Agreement, the Borrower may prepay on any Interest Payment
Date all or any part of any Loan, on not less than fifteen (15) days prior
notice to IFC, but only if:


 


(i)                                     the
Borrower simultaneously pays all accrued interest and Increased Costs (if any)
on the amount of the Loans to be prepaid, together with all other amounts then
due and payable under this Agreement, including the amount payable under Section 2.11
(Unwinding Costs), if the prepayment is
not made on an Interest Payment Date;


 


(ii)                                  for
a partial prepayment, that prepayment is an amount not less than three hundred
seventy-five thousand Dollars ($375,000); and


 


(iii)                               if
requested by IFC, the Borrowers deliver to IFC, prior to the date of
prepayment, evidence reasonably satisfactory to IFC that all necessary
Authorizations with respect to the prepayment have been obtained.


 


(b)                                 The
Borrowers shall make the prepayment in accordance with the terms of any notice
delivered in accordance with Section 2.06(a).


 


(c)                                  The
Borrowers shall also make the prepayments required under Section 3 (Loans) of the Common Terms Agreement.


 


8

















 


Section 2.07.                             Fees.  (a) The
Borrowers shall pay to IFC a commitment fee:


 


(i)                                     at
the rate of one per cent (1%) per annum on an amount equal to that part of the
Maximum Available Amount of the IFC Facility that from time to time has not
been disbursed or canceled, beginning to accrue on the date of this Agreement;


 


(ii)                                  at
the rate of ten percent (10%) of the Relevant Spread per annum on an amount
equal to (x) the Maximum Facility Amount less (y) the Maximum
Available Amount from time to time of the IFC Facility, beginning to accrue on
the date of this Agreement;


 


(iii)                               pro
rated on the basis of a 360-day year for the actual number of days
elapsed; and


 


(iv)                              payable
semi-annually, in arrears, on each Interest Payment Date, the first such
payment to be due on December 31, 2008.


 


(b)                                 The
Borrowers shall also pay to IFC:


 


(i)                                     a
front-end fee of one and one-half percent (11⁄2%) of the amount of the IFC
Facility, to be paid on the earlier of (x) the date which is thirty (30)
days after the date of this Agreement and (y) the date immediately
preceding the date of the first Disbursement;


 


(ii)                                  the
fees set forth in the IFC Fee Letter; and


 


(iii)                               if
the Borrowers and IFC agree to restructure all or part of the Loans, the
Borrowers and IFC shall negotiate in good faith an appropriate amount to
compensate IFC for the additional work of IFC staff required in connection with
such restructuring.


 


9

















 


Section 2.08.                             Currency and Place
of Payments. 
(a) The Borrowers shall make all payments of principal, interest,
fees, and any other amount due to IFC under this Agreement in Dollars, in same
day funds, to the account of IFC at Citibank N.A., 111 Wall Street, New York,
New York, U.S.A., ABA #021000089, for credit to
IFC’s account number 36085579, or at such other bank or account as IFC from
time to time designates, quoting Investment No. 24346.  Payments must be received in IFC’s designated
account no later than 1:00 p.m. New York time.


 


(b)                                 The
tender or payment of any amount payable under this Agreement (whether or not by
recovery under a judgment) in any currency other than Dollars shall not novate,
discharge or satisfy the obligation of the Borrowers to pay in Dollars all
amounts payable under this Agreement except to the extent that (and as of the
date when) IFC actually receives funds in Dollars in the account specified in,
or pursuant to, Section 2.08 (a).


 


(c)                                  The
Borrowers shall indemnify IFC against any losses resulting from a payment being
received or an order or judgment being given under this Agreement in any
currency other than Dollars or any place other than the account specified in,
or pursuant to, Section 2.08 (a). The Borrowers shall, as a separate
obligation, pay such additional amount as is necessary to enable IFC to
receive, after conversion to Dollars at a market rate and transfer to that
account, the full amount due to IFC under this Agreement in Dollars and in the
account specified in, or pursuant to, Section 2.08 (a).


 


(d)                                 Notwithstanding
the provisions of Section 2.08 (a) and Section 2.08 (b), IFC may
require the Borrowers to pay (or reimburse IFC) for any Taxes, fees, costs,
expenses and other amounts payable under Section 2.14 (a) (Taxes) and Section 2.15 (Expenses)
in the currency in which they are payable, if other than Dollars.


 


Section 2.09.                             Allocation of
Partial Payments.  If at any time IFC receives less than the
full amount then due and payable to it under this Agreement, IFC may allocate
and apply the amount received in any way or manner and for such purpose or
purposes under this Agreement as IFC in its sole discretion determines,
notwithstanding any instruction that the Borrowers may give to the contrary.


 


Section 2.10.                             Increased Costs.  On each Interest Payment Date, the Borrowers
shall pay, in addition to principal and interest, the amount which IFC from
time to time notifies to the Borrowers in an Increased Costs Certificate as
being the aggregate Increased Costs accrued and unpaid prior to that Interest
Payment Date.


 


Section 2.11.                             Unwinding Costs.  (a) If IFC incurs any cost, expense or
loss (other than loss of the Relevant Spread) as a result of the Borrowers:


 


10

















 


(i)                                     failing
to borrow in accordance with a request for Disbursement made pursuant to Section 2.02
(Disbursement Procedure);


 


(ii)                                  failing
to prepay in accordance with a notice of prepayment;


 


(iii)                               prepaying
all or any portion of the Loans; or


 


(iv)                              after
acceleration of the Loans, paying all or a portion of the Loans on a date other
than an Interest Payment Date;


 


then the Borrowers shall
promptly pay to IFC the amount that IFC from time to time notifies to the
Borrowers as being the amount of those costs, expenses and losses incurred.


 


(b)                                 For
the purposes of this Section, “costs, expenses or losses” include any premium,
penalty or expense incurred to liquidate or obtain third party deposits,
borrowings, hedges or swaps in order to make, maintain, fund or hedge all or
any part of any Loan or prepayment of any Loan, or any payment of all or part
of the Loans upon acceleration.


 


Section 2.12.                             Suspension or
Cancellation by IFC.  (a) IFC may, by notice to the Borrowers,
suspend or cancel the right of the Borrowers to the undisbursed portion of the IFC
Facility in whole or in part:


 


(i)                                     if
the first Disbursement of a Loan has not been made by October 31, 2008, or
such other date as the parties agree;


 


(ii)                                  if
any Event of Default has occurred and is continuing or if the Event of Default
specified in Section 8.1(d) of the Common Terms Agreement is, in the
reasonable opinion of IFC, imminent; or


 


(iii)                               any
event or condition has occurred which has or can be reasonably expected to have
a Material Adverse Effect.


 


(b)                                 Upon
the giving of any such notice, the right of the Borrowers to any further
Disbursement of the undisbursed portion of the IFC Facility shall be suspended
or canceled, as the case may be.  The
exercise by IFC of its right of suspension shall not preclude IFC from
exercising its right of cancellation, either for the same or any other reason
specified in Section 2.12(a) and shall not limit any other provision
of this Agreement.  Upon any cancellation
the Borrowers shall, subject to paragraph (c) of this Section 2.12,
pay to IFC all fees and other amounts accrued (whether or not then due and
payable) under this Agreement up to the date of that cancellation.


 


11

















 


(c)                                  In
the case of partial cancellation of the undisbursed portion of the IFC Facility
pursuant to paragraph (a) of this Section 2.12, or Section 2.13(a),
interest on the amount then outstanding of the Loans remains payable as
provided in Section 2.03 (Interest).


 


Section 2.13.                             Cancellation by
the Borrowers. 
(a) Subject to the requirements of Section 3.9 (Cancellation by the Borrowers) of the Common Terms
Agreement, the Borrowers may, by notice to IFC, irrevocably request IFC to
cancel, in whole or in part, the undisbursed portion of the IFC Facility on the
date specified in that notice (which shall be a date not earlier than fifteen
(15) days after the date of that notice); provided that the Borrowers may
request any such cancellation only once in any Financial Year.


 


(b)                                 IFC
shall, by notice to the Borrowers, cancel such undisbursed portion of the IFC
Facility effective as of that specified date if, subject to Section 2.12(c),
IFC has received all fees and other amounts accrued (whether or not then due
and payable) under this Agreement up to such specified date.


 


(c)                                  Any
portion of the Facility that is cancelled under this Section 2.13 may not
be reinstated or disbursed.


 


Section 2.14.                             Taxes.  (a) The Borrowers shall pay or cause to
be paid all Taxes (other than taxes, if any, payable on the overall income of
IFC)  on
or in connection with the payment of any and all amounts due under this
Agreement that are now or in the future levied or imposed by any Authority of
the Republic of Peru or by any organization of which the Republic of Peru is a
member or any jurisdiction through or out of which a payment is made.


 


(b)                                 All
payments of principal, interest, fees and other amounts due under this
Agreement shall be made without deduction for or on account of any Taxes.


 


(c)                                  If
the Borrowers are prevented by operation of law or otherwise from making or causing
to be made those payments without deduction, the principal or (as the case may
be) interest, fees or other amounts due under this Agreement shall be increased
to such amount as may be necessary so that IFC receives the full amount it
would have received (taking into account any Taxes payable on amounts payable
by the Borrowers under this subsection) had those payments been made without
that deduction.


 


(d)                                 If
Section 2.14 (c) applies and IFC so requests, the Borrowers shall
deliver to IFC official tax receipts evidencing payment (or certified copies of
them) within thirty (30) days of the date of that request.


 


Section 2.15.                             Expenses.  (a) The Borrowers shall pay or, as the
case may be, reimburse IFC or its assignees any amount paid by them on account
of, all 


 


12

















 


taxes (including stamp taxes), duties, fees or other charges payable on
or in connection with the execution, issue, delivery, registration or
notarization of the Transaction Documents and any other documents related to
this Agreement or any other Transaction Document.


 


(b)                                 The
Borrowers shall pay to IFC or as IFC may direct:


 


(i)                                     the
fees and expenses set forth in Section 6.14 (Costs and
Expenses) of the Common Terms Agreement; and


 


(ii)                                  the
documented fees and expenses of IFC’s counsel, being White & Case LLP,
and Estudio Aurelio García Sayán Abogados, Peruvian counsel, incurred in
connection with:


 


(A)                              Project-related
due diligence conducted and the preparation of the investment by IFC provided
for under this Agreement and any other Transaction Document; and


 


(B)                                the
administration by IFC of the investment provided for in this Agreement.


 


Section 2.16.                             Illegality of
Participation. 
If IFC has sold a participation in the Loans and after the date of this
Agreement, any change made in any applicable law or regulation or official
directive (or its interpretation or application by any Authority charged with
its administration) (herein the “Relevant Change”) makes it unlawful for the
participant acquiring that participation to continue to maintain or to fund its
participation:


 


(a)                                  the
Borrowers shall, upon request by IFC (but subject to any applicable
Authorization having been obtained), on the earlier of (x) the next
Interest Payment Date and (y) the date that IFC advises the Borrowers is
the latest day permitted by the Relevant Change, prepay in full that part of
the Loans that IFC advises corresponds to that participation;


 


(b)                                 concurrently
with the prepayment of the part of the Loans corresponding to the participation
affected by the Relevant Change, the Borrowers shall pay all accrued interest,
Increased Costs (if any) on that part of the Loans (and, if that prepayment is
not made on an Interest Payment Date, any amount payable in respect of the prepayment
under Section 2.11 (Unwinding Costs));
and


 


(c)                                  the
Borrowers agree to take all reasonable steps to obtain, as quickly as possible
after receipt of IFC’s request for prepayment, the Authorization referred to in
Section 2.16 (a) if any such Authorization is then required.


 


13

















 


Section 2.17.                             Mitigation.  If the Borrowers
become obligated to make payments or prepay Loans under Section 2.10 (Increased Costs) or 2.16 (Illegality
of Participation), IFC shall request the relevant participant to
take such steps (to the extent it can lawfully do so and without prejudice to
its own position) as are reasonably available to it with a view to mitigating
the circumstances giving rise to such payment obligations.


 


ARTICLE III


 


Conditions of Disbursement


 


Section 3.01.                             Conditions of
Disbursement.  (a)  The obligation of IFC to make any
Disbursement is subject to the fulfillment prior to or concurrently with the
making of such Disbursement of the conditions set forth in Section 4.1 (First Disbursement under each Facility), Section 4.2 (Special Conditions for First Disbursement under IFC Facility)
and Section 4.4 (All Disbursements under
the Facilities) of the Common Terms Agreement; and


 


(b)           the
obligation of IFC to make any Disbursement is further subject to the
fulfillment prior to or concurrently with the making of such Disbursement of
the condition that, upon the request of IFC, IFC shall have received a legal
opinion or opinions in form and substance satisfactory to IFC of Lenders’
counsel in Peru or in any other relevant jurisdiction with respect to matters
relating to any changes in applicable Law.


 


Section 3.02.                             Borrower’s
Certification. 
(a)  The Borrowers shall deliver to IFC with respect to each
request for Disbursement:


 


(i)                                     certifications,
in the form included in Schedule 1, relating to the conditions referred to in Section 3.01
(Conditions of Disbursement) expressed to be effective as of the date of that
Disbursement, and in the case of Section 4.2 (j)(i) of the Common
Terms Agreement, also certified by the Auditors if IFC so requires; and


 


(ii)                                  such
evidence as IFC may reasonably request of the proposed utilization of the
proceeds of that Disbursement or the utilization of the proceeds of any prior
Disbursement.


 


(b)                                 With
respect to Rollover Loans, the Borrowers shall be deemed to have provided the
certifications set forth in Schedule 1 as of the Interest Payment Date upon
which such Rollover Loan is made.


 


14
















 


Section 3.03.                             Conditions for
IFC Benefit. 
The conditions in Section 4 (Conditions Precedent)
of the Common Terms Agreement and in this Article III are for the benefit
of IFC and may be waived only by IFC in its sole discretion.


 


ARTICLE IV



Miscellaneous


 


Section 4.01.                             Saving of Rights.  (a) The
rights and remedies of IFC in relation to any misrepresentation or breach of
warranty on the part of the Borrowers shall not be prejudiced by any
investigation by or on behalf of IFC into the affairs of the Borrowers, by the
execution or the performance of this Agreement, or by any other act or thing
which may be done by or on behalf of IFC in connection with this Agreement and
which might, apart from this Section, prejudice such rights or remedies.


 


(b)                                 No
course of dealing or waiver by IFC in connection with any condition of
Disbursement of any Loan under this Agreement shall impair any right, power or
remedy of IFC with respect to any other condition of Disbursement, or be
construed to be a waiver thereof; nor shall the action of IFC with respect to
any Disbursement affect or impair any right, power or remedy of IFC with
respect to any other Disbursement.


 


(c)                                  Unless otherwise
notified to the Borrowers by IFC and without prejudice to the generality of Section 4.01(b),
the right of IFC to require compliance with any condition under this Agreement
that may be waived by IFC with respect to any Disbursement is expressly
preserved for the purposes of any subsequent Disbursement.


 


(d)                                 No course of
dealing and no failure or delay by IFC in exercising, in whole or in part, any
power, remedy, discretion, authority or other right under this Agreement or any
other agreement shall waive or impair, or be construed to be a waiver of, such
or any other power, remedy, discretion, authority or right under this
Agreement, or in any manner preclude its additional or future exercise; nor
shall the action of IFC with respect to any default, or any acquiescence by it
therein, affect or impair any right, power or remedy of IFC with respect to any
other default.


 


Section 4.02.                             Notices.  Any notice, request or other communication to
be given or made under this Agreement shall be in writing.  Subject to Sections 6.17(j) and (k) (Furnishing of Information by the Borrower) of the Common
Terms Agreement and Section 9.7 (Jurisdiction and
Enforcement) of the Common Terms Agreement, any such communication
may be delivered by hand, airmail, facsimile or established courier service to
the party’s address specified below or at such other address as such party
notifies to the other party from time to time, and will be effective upon
receipt.


 


15

















 


For the Borrowers:


 


BPZ
Exploración & Producción S.R.L.


BPZ Marine
Peru S.R.L.


Attention:  General Manager


Manual
de Falla #297


San
Borja, Lima


Peru


 


Facsimile:  (011-511) 225-3289


 


and


 


BPZ
Resources Inc.


Attention:  Chief Financial Officer or General Counsel


Two
Westlake


580
Westlake Park Blvd., Suite 525


Houston,
Texas 77079


 


Facsimile:
(281) 556-6377


 


For IFC:


 


International Finance
Corporation


2121 Pennsylvania Avenue,
N.W.


United States of America


 


Attention:                                         Director, Oil, Gas, Mining and Chemicals Department


 


Facsimile:                                            (202) 974-4768


 


With a
copy (in the case of communications relating to payments) sent to the attention
of the Director, Department of Financial Operations, at:


 


Facsimile:                                            (202) 522-7419.


 


16

















 


Section 4.03.                             English Language.  (a) All documents to be provided or
communications to be given or made under this Agreement shall be in the English
language.


 


(b)                                 To
the extent that the original version of any document to be provided, or
communication to be given or made, to IFC under this Agreement or any other
Transaction Document is in a language other than English, that document or
communication shall be accompanied by an English translation certified by an
Authorized Representative to be a true and correct translation of the
original.  IFC may, if it so requires,
obtain an English translation of any document or communication received in a
language other than English at the cost and expense of the Borrowers.  IFC may deem any such English translation to
be the governing version between the Borrowers and IFC.


 


Section 4.04.                             Term of
Agreement. 
This Agreement shall continue in force until all monies payable under it
have been fully paid in accordance with its provisions.


 


Section 4.05.                             Disclosure of
Information. 
(a) IFC may disclose any documents or records of, or information
about, this Agreement or any other Transaction Document, or the assets,
business or affairs of the Borrowers to:


 


(i)                                     its
outside counsel, auditors and rating agencies,


 


(ii)                                  any
Person who intends to purchase a participation in a portion of any Loan or any
participant in a Loan, and


 


(iii)                               any
other Person as IFC may deem appropriate in connection with any proposed sale,
transfer, assignment or other disposition of IFC’s rights under this Agreement
or any Transaction Document or otherwise for the purpose of exercising any
power, remedy, right, authority, or discretion relevant to this Agreement or
any other Transaction Document.


 


(b)                                 The
Borrowers acknowledge and agree that, notwithstanding the terms of any other
agreement between the Borrowers and IFC, a disclosure of information by IFC in
the circumstances contemplated by Section 4.05(a) does not violate
any duty owed to the Borrowers under this Agreement or under any such other
agreement.


 


Section 4.06.                             Successors and
Assignees. 
This Agreement binds and benefits the respective successors and
assignees of the parties.  However, the
Borrowers may not assign or delegate any of their rights or obligations under
this Agreement without the prior consent of IFC.  IFC may assign or delegate any of 


 


17

















 


its rights and obligations under the other Finance Documents in
connection with any assignment or delegation of rights and obligations under
this Agreement.


 


Section 4.07.                             Amendments,
Waivers and Consents.  Any amendment or waiver of, or any consent
given under, any provision of this Agreement shall be in writing and, in the
case of an amendment, signed by the parties.


 


Section 4.08.                             Governing Law.  This Agreement is governed by, and shall be
construed in accordance with, the laws of the State of New York, United States
of America.


 


Section 4.09.                             Dispute
Resolution. 
The provisions of Sections 9.7 (Jurisdiction and Enforcement) and 9.8 (Privileges and Immunities) of the Common
Terms Agreement shall be applicable to this Agreement as if set forth in full
herein.


 


Section 4.10.                             Counterparts.  This Agreement may be executed in several
counterparts, each of which is an original, but all of which together
constitute one and the same agreement.


 


18

















 


IN WITNESS WHEREOF, the
parties have caused this Agreement to be signed in their respective names as of
the date first above written.


 


 


	
   

  	
  BPZ EXPLORACIÓN & PRODUCCIÓN
  S.R.L.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  Manuel Pablo Zúñiga-Pflücker

  
	
   

  	
   

  	
  Name:

  	
  Manuel Pablo Zúñiga-Pflücker

  
	
   

  	
   

  	
  Title:

  	
  President and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BPZ MARINE PERU S.R.L.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  Manuel Pablo Zúñiga-Pflücker

  
	
   

  	
   

  	
  Name:

  	
  Manuel Pablo Zúñiga-Pflücker

  
	
   

  	
   

  	
  Title:

  	
  President and CEO

  



 

















 


	
   

  	
  INTERNATIONAL FINANCE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  William Bullmer

  
	
   

  	
   

  	
  Name:

  	
  William Bullmer

  
	
   

  	
   

  	
  Title:

  	
  Associate Director

  



 

















 


SCHEDULE 1


 


FORM OF REQUEST FOR
DISBURSEMENT


 


(See Section 2.02
and Section 3.03 of the Loan Agreement)


 


[BPZ
Exploración/BPZ Marine’s Letterhead]


 


[Date]


 


International Finance
Corporation


2121 Pennsylvania Avenue,
N.W.


Washington, D.C. 20433


United States of America


Attention:                                         Director,
Oil, Gas, Mining and Chemicals Department


 


Ladies and Gentlemen:


 


Investment No. 24346

Request for Loan Disbursement No. [·]*


 


1.                                       Please
refer to the Loan Agreement (the “Loan Agreement”)
dated as of August 15, 2008, between BPZ Exploración & Producción
S.R.L. (“BPZ Exploración”), BPZ Marine Peru
S.R.L. (“BPZ Marine”) and International Finance
Corporation (“IFC”) and the Common Terms
Agreement referred to therein. Terms defined in the Loan Agreement have their
defined meanings whenever used in this request.


 


2.                                       [BPZ
Exploración/ BPZ Marine] irrevocably requests the disbursement on                         ,
         (or as soon as
practicable thereafter) of the amount of                         
(                        )
under the IFC Facility (the “Disbursement”)
in accordance with the provisions of Section 2.02 of the Loan Agreement.
You are requested to pay such amount to the account in [New York] of [BPZ
Exploración & Producción S.R.L./BPZ Marine Peru S.R.L.] [Name of
correspondent Bank], Account No.                         
at [Name and Address of Bank] [for further credit to Account No.                         
at [Name and address of Security Trustee] in Lima, Peru.


 


3.                                       For
the purpose of Article III of the Loan Agreement, the Borrower certifies
as follows:


 


(a)                                  no
Event of Default and no Potential Event of Default has occurred and is
continuing;


 






*                                         Each
to be numbered in series.


 


1

















 


SCHEDULE 1


 


(b)                                 the
proceeds of the Disbursement are at the date of this request needed by the
Borrowers for the purpose of (i) the Project, or will be needed for such
purpose within three (3) months of such date, (ii) the Permitted
Nueva Esperanza Credit Support or (iii) establishing cash collateral in
full for BPZ Exploración’s obligations secured under the Import Duty Contract
pursuant to Section 6.1(b) (Use of Proceeds)
of the Common Terms Agreement;


 


(c)                                  since
the date of the Loan Agreement nothing has occurred which has or could
reasonably be expected to have a Material Adverse Effect;


 


(d)                                 the
representations and warranties made in Section 5 of the Common Terms
Agreement (other than in Sections 5.1(f) and 5.1(h)) are true on the date
of this request and will be true on the date of Disbursement with the same
effect as if such representations and warranties had been made on and as of
each such date, except that in the event any such representation or warranty
has been expressly made only as of an earlier date, such representation and
warranty is true and correct in all material respects as of such earlier date;


 


(e)                                  the
proceeds of the Disbursement are not in reimbursement of, or to be used for,
expenditures in the territories of any country that is not a member of the
World Bank or for goods produced in or services supplied from any such country;
and


 


(f)                                    no
Lender has suspended or cancelled its commitment to make Loans in accordance
with the terms of its Facility Agreement to the extent permitted to do so
pursuant to the express terms thereof.


 


The above certifications
are effective as of the date of this Request for Disbursement and shall
continue to be effective as of the date of the Disbursement.  If any of these certifications is no longer
valid as of or prior to the date of the requested Disbursement, the Borrower
undertakes to immediately notify IFC.


 


	
   

  	
  Yours truly,

  
	
   

  	
   

  
	
   

  	
  BPZ EXPLORACIÓN & PRODUCCIÓN 

  S.R.L./BPZ MARINE PERU S.R.L.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Representative

  



 


	
  Copy to:

  	
  Director, Department of Financial Operations International Finance
  Corporation

  



 


2

















 


SCHEDULE 2


 


FORM OF DISBURSEMENT
RECEIPT


 


(See Section 2.02
of the Loan Agreement)


 


[Borrower’s
Letterhead]


 


International Finance
Corporation


2121 Pennsylvania Avenue,
N.W.


Washington, D.C. 20433


United States of America


Attention:                                         Director,
Department of Financial Operations


 


Ladies and Gentlemen:


 


Investment No. 24346


 


Disbursement
Receipt No. [·]*


 


We, [BPZ Exploración &
Producción S.R.L./BPZ Marine Peru S.R.L.]  hereby acknowledge receipt on the
date hereof, of the sum of                       
(      ) disbursed to us by International
Finance Corporation (“IFC”) under the
IFC Facility of fifteen million Dollars (US$15,000,000) provided for in the
Loan Agreement dated as of August 15, 2008 between our company and IFC.


 


	
   

  	
  Yours truly,

  
	
   

  	
   

  
	
   

  	
  BPZ EXPLORACIÓN & PRODUCCIÓN 

  S.R.L./BPZ MARINE PERU S.R.L.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Representative**

  



 






*                                         To
correspond with number of the Disbursement request.  See Schedule 1.


**                                  As
named in the Borrower’s Certificate of Incumbency and Authority.


 


1