ex10-1.htm


    
      
        

      

    

    Exhibit 10.1

    EXECUTION COPY


    


    


    


    


    


    


    


    


    


    


    
      


    

    


    PURCHASE
AND SALE AGREEMENT

    


    


    BY
AND AMONG

    


    


    PACIFIC
ASIA PETROLEUM, INC.

    


    CAMAC
ENERGY HOLDINGS LIMITED

    


    CAMAC
INTERNATIONAL (NIGERIA) LIMITED

    


    AND

    


    ALLIED
ENERGY PLC

    


    


    


    


    


    Dated:
November 18, 2009

    
      


    


    
      
        
          


          701784886v7

        

         


      

      
         


        
          

        

      

      
         


      

    

     

     

    
      	
              TABLE
      OF CONTENTS

            	 
	 
      	 
	
              ARTICLE
      I TRANSFER OF CONTRACT RIGHTS; RELATED TRANSACTIONS

            	
              2

            	 
	
              Section
      1.1

            	
              Oyo
      Field

            	
              2

            	 
	
              Section
      1.2

            	
              Transfer
      of Contract Rights

            	
              2

            	 
	
              Section
      1.3

            	
              Complete
      Transfer.

            	
              3

            	 
	
              Section
      1.4

            	
              Release
      and Discharge.

            	
              3

            	 
	
              Section
      1.5

            	
              No
      Assumption of Liabilities.

            	
              3

            	 
	
              ARTICLE
      II CONSIDERATION

            	
              3

            	 
	
              Section
      2.1

            	
              Consideration
      Shares.

            	
              3

            	 
	
              Section
      2.2

            	
              Cash
      Consideration.

            	
              4

            	 
	
              ARTICLE
      III THE CLOSING

            	
              4

            	 
	
              Section
      3.1

            	
              Closing.

            	
              4

            	 
	
              Section
      3.2

            	
              Deliveries
      of the Parties.

            	
              4

            	 
	
              ARTICLE
      IV REPRESENTATIONS AND WARRANTIES OF THE CAMAC PARTIES

            	
              4

            	 
	
              Section
      4.1

            	
              Organization
      and Standing.

            	
              4

            	 
	
              Section
      4.2

            	
              Power
      and Authority.

            	
              5

            	 
	
              Section
      4.3

            	
              No
      Conflicts.

            	
              5

            	 
	
              Section
      4.4

            	
              Representations
      Related to the Oyo Field and Oyo Related Agreements.

            	
              5

            	 
	
              Section
      4.5

            	
              Litigation.

            	
              7

            	 
	
              Section
      4.6

            	
              Consents
      and Approvals.

            	
              7

            	 
	
              Section
      4.7

            	
              Licenses,
      Permits, Etc.

            	
              7

            	 
	
              Section
      4.8

            	
              Material
      Contracts and Commitments.

            	
              7

            	 
	
              Section
      4.9

            	
              Taxes.

            	
              7

            	 
	
              Section
      4.10

            	
              Brokers;
      Schedule of Fees and Expenses.

            	
              8

            	 
	
              Section
      4.11

            	
              Foreign
      Corrupt Practices.

            	
              8

            	 
	
              Section
      4.12

            	
              Money
      Laundering Laws.

            	
              8

            	 
	
              Section
      4.13

            	
              OFAC.

            	
              8

            	 
	
              Section
      4.14

            	
              Environmental
      Matters.

            	
              9

            	 
	
              Section
      4.15

            	
              Bankruptcy.

            	
              9

            	 
	
              ARTICLE
      V REPRESENTATIONS AND WARRANTIES OF PAPI

            	
              10

            	 
	
              Section
      5.1

            	
              Organization
      and Standing.

            	
              10

            	 
	
              Section
      5.2

            	
              Organizational
      Documents.

            	
              10

            	 
	
              Section
      5.3

            	
              Power
      and Authority.

            	
              10

            	 
	
              Section
      5.4

            	
              No
      Conflicts.

            	
              11

            	 
	
              Section
      5.5

            	
              Material
      Contracts.

            	
              11

            	 
	
              Section
      5.6

            	
              Capitalization.

            	
              13

            	 
	
              Section
      5.7

            	
              Shares
      Validly Issued.

            	
              15

            	 
	
              Section
      5.8

            	
              Litigation.

            	
              15

            	 
	
              Section
      5.9

            	
              Consents
      and Approvals.

            	
              16

            	 
	
              Section
      5.10

            	
              Brokers;
      Schedule of Fees and Expenses.

            	
              16

            	 
	
              Section
      5.11

            	
              Financial
      Statements; Undisclosed Liabilities.

            	
              16

            	 
	
              Section
      5.12

            	
              Absence
      of Certain Changes or Events.

            	
              17

            	 
	
              Section
      5.13

            	
              Foreign
      Corrupt Practices.

            	
              19

            	 
	
              Section
      5.14

            	
              Money
      Laundering Laws.

            	
              19

            	 
	
              Section
      5.15

            	
              OFAC.

            	
              19

            	 


       

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

       

      	
              Section
      5.16

            	
              Environmental
      Matters.

            	
              19

            	 
	
              Section
      5.17

            	
              Taxes.

            	
              20

            	 
	
              Section
      5.18

            	
              Title.

            	
              21

            	 
	
              Section
      5.19

            	
              Accounts
      Receivable

            	
              21

            	 
	
              Section
      5.20

            	
              SEC
      Reports.

            	
              21

            	 
	
              ARTICLE
      VI COVENANTS OF THE CAMAC PARTIES

            	
              22

            	 
	
              Section
      6.1

            	
              General
      Conduct of Business.

            	
              22

            	 
	
              Section
      6.2

            	
              Notice
      of CAMAC Material Adverse Effect.

            	
              22

            	 
	
              Section
      6.3

            	
              Consultation;
      Compliance.

            	
              23

            	 
	
              Section
      6.4

            	
              PAPI
      Consent Required.

            	
              23

            	 
	
              Section
      6.5

            	
              Related
      Tax.

            	
              23

            	 
	
              Section
      6.6

            	
              Access
      to Information.

            	
              24

            	 
	
              Section
      6.7

            	
              Exclusivity;
      No Other Negotiations.

            	
              24

            	 
	
              Section
      6.8

            	
              Fulfillment
      of Conditions.

            	
              25

            	 
	
              Section
      6.9

            	
              Regulatory
      and Other Authorizations; Notices and Consents.

            	
              25

            	 
	
              Section
      6.10

            	
              Proxy
      Statement.

            	
              26

            	 
	
              Section
      6.11

            	
              Certain
      PSC and Oyo Field Covenants.

            	
              26

            	 
	
              ARTICLE
      VII COVENANTS OF THE PAPI PARTIES

            	
              26

            	 
	
              Section
      7.1

            	
              Conduct
      of Business.

            	
              26

            	 
	
              Section
      7.2

            	
              Proxy
      Statement Filing and Special Meeting.

            	
              29

            	 
	
              Section
      7.3

            	
              SEC
      Filings.

            	
              30

            	 
	
              Section
      7.4

            	
              Notice
      of PAPI Material Adverse Effect.

            	
              30

            	 
	
              Section
      7.5

            	
              CAMAC
      Consent Required.

            	
              30

            	 
	
              Section
      7.6

            	
              Fulfillment
      of Conditions.

            	
              31

            	 
	
              Section
      7.7

            	
              Regulatory
      and Other Authorizations; Notices and Consents.

            	
              31

            	 
	
              Section
      7.8

            	
              Exclusivity;
      No Other Negotiations.

            	
              31

            	 
	
              Section
      7.9

            	
              Related
      Tax.

            	
              32

            	 
	
              Section
      7.10

            	
              Valid
      Issuance of PAPI Shares.

            	
              32

            	 
	
              Section
      7.11

            	
              Oyo
      Agreements.

            	
              32

            	 
	
              Section
      7.12

            	
              PAPI
      Newco.

            	
              32

            	 
	
              ARTICLE
      VIII ADDITIONAL AGREEMENTS AND COVENANTS

            	
              33

            	 
	
              Section
      8.1

            	
              Disclosure
      Schedules.

            	
              33

            	 
	
              Section
      8.2

            	
              Confidentiality.

            	
              33

            	 
	
              Section
      8.3

            	
              Public
      Announcements.

            	
              33

            	 
	
              Section
      8.4

            	
              Board
      Composition.

            	
              34

            	 
	
              Section
      8.5

            	
              Voting
      Agreement.

            	
              34

            	 
	
              Section
      8.6

            	
              ROFR
      Agreement.

            	
              35

            	 
	
              Section
      8.7

            	
              Fees
      and Expenses.

            	
              35

            	 
	
              Section
      8.8

            	
              Certain
      Disclaimers.

            	
              35

            	 
	
              Section
      8.9

            	
              Further
      Assurances

            	
              36

            	 
	
              ARTICLE
      IX CONDITIONS TO CLOSING

            	
              36

            	 
	
              Section
      9.1

            	
              Joint
      Conditions Precedent

            	
              36

            	 
	
              Section
      9.2

            	
              CAMAC
      Parties Conditions Precedent

            	
              37

            	 
	
              Section
      9.3

            	
              PAPI
      Conditions Precedent.

            	
              39

            	 
	
              ARTICLE
      X INDEMNIFICATION

            	
              40

            	 
	
              Section
      10.1

            	
              Survival.

            	
              40

            	 


       

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

       

      	
              Section
      10.2

            	
              Indemnification
      by the CAMAC Parties.

            	
              40

            	 
	
              Section
      10.3

            	
              Indemnification
      by PAPI.

            	
              41

            	 
	
              Section
      10.4

            	
              Limitations
      on Indemnity.

            	
              42

            	 
	
              Section
      10.5

            	
              Defense
      of Third Party Claims.

            	
              42

            	 
	
              Section
      10.6

            	
              Determining
      Damages.

            	
              43

            	 
	
              Section
      10.7

            	
              Right
      of Setoff.

            	
              44

            	 
	
              Section
      10.8

            	
              Limitation
      on Recourse; No Third Party Beneficiaries.

            	
              44

            	 
	
              ARTICLE
      XI TERMINATION

            	
              44

            	 
	
              Section
      11.1

            	
              Methods
      of Termination.

            	
              44

            	 
	
              Section
      11.2

            	
              Effect
      of Termination.

            	
              45

            	 
	
              Section
      11.3

            	
              Termination
      Recovery and Fee.

            	
              46

            	 
	
              ARTICLE
      XII MISCELLANEOUS

            	
              46

            	 
	
              Section
      12.1

            	
              Notices.

            	
              46

            	 
	
              Section
      12.2

            	
              Amendments;
      Waivers; No Additional Consideration.

            	
              46

            	 
	
              Section
      12.3

            	
              Adjustments
      to Payment of Purchase Price.

            	
              47

            	 
	
              Section
      12.4

            	
              Interpretation.

            	
              47

            	 
	
              Section
      12.5

            	
              Severability.

            	
              47

            	 
	
              Section
      12.6

            	
              Counterparts;
      Facsimile Execution.

            	
              47

            	 
	
              Section
      12.7

            	
              Entire
      Agreement; Third Party Beneficiaries.

            	
              47

            	 
	
              Section
      12.8

            	
              Governing
      Law.

            	
              47

            	 
	
              Section
      12.9

            	
              Dispute
      Resolution.

            	
              47

            	 
	
              Section
      12.10

            	
              Assignment.

            	
              48

            	 
	
              Section
      12.11

            	
              Publicity.

            	
              48

            	 
	
              Section
      12.12

            	
              Governing
      Language.

            	
              48

            	 


    

    


    ANNEX

     

    ANNEX
A                      Definitions

     

    


    
      	 
      	 
      


    

    SCHEDULES

     

    SCHEDULE
A                               Description
of the Oyo Field

    SCHEDULE
B                                CAMAC
Disclosure Schedule

    SCHEDULE
C                                PAPI
Disclosure Schedule

    


    



    
      
        
           

          


           

        

         


      

      
        iii

        
          701784886v7

          

           

        

      

      
         


      

    

    
       

      PURCHASE
AND SALE AGREEMENT

       

      THIS
PURCHASE AND SALE AGREEMENT, dated as of November 18, 2009 (this “Agreement”),
by and among PACIFIC ASIA PETROLEUM, INC., a corporation incorporated in the
State of Delaware, USA (“PAPI” and
together with the new entity to be formed by PAPI pursuant to Section 7.12
hereof (“PAPI
Newco”), the “PAPI
Parties”); CAMAC ENERGY HOLDINGS LIMITED, a Cayman Islands company
(“CEHL”);
CAMAC INTERNATIONAL (NIGERIA) LIMITED, a company incorporated in the Federal
Republic of Nigeria (“CINL”) and
a wholly-owned subsidiary of CEHL; and ALLIED ENERGY PLC (formerly, Allied
Energy Resources Nigeria Limited, a company incorporated in the Federal Republic
of Nigeria and a wholly-owned subsidiary of CEHL (“Allied,”
and together with CEHL, and CINL, the “CAMAC
Parties”).  Each of the Parties to this Agreement is
individually referred to herein as a “Party” and
collectively as the “Parties.”  Capitalized
terms used herein that are not otherwise defined herein shall have the meanings
ascribed to them in Annex A
hereto.

       

       

      BACKGROUND

       

      A.           PAPI
and its subsidiary companies are engaged in the business of oil and gas
development, production and distribution.

       

      B.           On
June 3, 1992, Allied was awarded Oil Prospecting License 210 (“OPL
210”) by the
Federal Republic of Nigeria, 2.5% of the interest in which Allied subsequently
assigned to CINL, on September 30, 1992 pursuant to an assignment agreement by
and between Allied and CINL (the “Allied
Assignment”).

       

      C.           On
August 28, 2002, Allied and CINL were granted Oil Mining Lease 120 and Oil
Mining Lease 121 (the “OMLs”) by the Federal Republic of
Nigeria, with respect to OPL 210, for a term of 20 years commencing on February
27, 2001.  Pursuant to a Deed of Assignment, dated July 22, 2005,
Allied and CINL assigned to the Nigerian AGIP Exploration Limited (the “NAE”), a
40% participating interest in the OMLs, with the remaining 60% participating
interest in the OMLs being retained by Allied and CINL (the “NAE
Assignment”).

       

      D.           On
July 22, 2005, Allied, CINL and the NAE entered into a Production Sharing
Contract (the “PSC”) setting out the terms of
agreement in relation to petroleum operations in the area covered by the
OMLs.

       

      E.           PAPI
desires to acquire from Allied and CINL, through PAPI Newco, all of the CAMAC
Parties’ interest in the PSC with respect to that certain oilfield asset known
as the Oyo Field (as such term is defined herein), that is the subject of Oil
Mining Lease 120 (“OML 120”),
as well as the joint and several obligations of CINL and Allied to the NAE under
the PSC in connection with the Oyo Field (such interest in the PSC with respect
to the Oyo Field, subject to the rights and
obligations set forth in the PSC and the Oyo Field Supplemental Agreement (as
defined herein), is referred to herein as the “Contract
Rights”), for stock consideration consisting of shares of PAPI’s common
stock, par value $0.001 per share (the “Common
Stock”), representing 62.74% of the issued and outstanding Common Stock
of the Company, and cash in the amount of USD $38.84 million.  Allied
and CINL shall retain all right, title and interest in 

       

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

       

      and to
the PSC with respect to the OMLs, other than with respect to the Oyo Field, that
is subject to OML 120.

       

      F.           Concurrently
with the Closing (as described below), the Parties hereto will enter into, or
cause their affiliates to enter into, certain other agreements contemplated by
this Agreement (together, the “Transaction
Documents”), including but not limited to the Novation Agreement by and
among Allied, CINL, PAPI Newco and NAE (the “Novation
Agreement”); the right of first refusal agreement between the CAMAC
Parties and the PAPI Parties (the “ROFR
Agreement”); the technical services agreement between PAPI Newco and
Allied (the “Technical
Services Agreement”); the cost allocation and
management  agreement between PAPI Newco and Allied (the “Oyo Field
Supplemental Agreement”); and the registration rights agreement with
respect to the Consideration Shares between PAPI and the CAMAC Parties (the
“Registration
Rights Agreement”).

       

      G.           As
a condition precedent to the Closing, PAPI will consummate an equity financing
with certain qualified investors, on terms reasonably acceptable to the CAMAC
Parties and the PAPI Parties, resulting in gross proceeds of at least Forty-Five
Million Dollars ($45,000,000) (the “Financing”).

       

      H.           The
boards of directors of each of PAPI, CINL, Allied and PAPI Newco have considered
and have declared advisable this Agreement and the other transactions
contemplated hereby (together, the “Transactions”).

       

       

      AGREEMENT

       

      NOW,
THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, and intending to be
legally bound hereby, the Parties agree as follows:

       

      ARTICLE
I

       

      


       

      Transfer
of Contract Rights; Related Transactions

       

      


      Section
1.1                      Oyo Field.  The
Parties agree and acknowledge that the description set forth in Schedule A
attached hereto is the “Oyo Field”
for purposes of this Agreement, the Transaction Documents, and the transactions
contemplated hereby and thereby and the CAMAC Parties further acknowledge and
agree that the Oyo Field is an oil field subject to the provisions of the Oyo
Related Agreements.

       

      Section
1.2                      Transfer of Contract
Rights.  Subject
to the terms and conditions contained herein, each of the PAPI Parties agrees to
acquire, and the CAMAC Parties agree to transfer, all of the rights, title and
interest of the CAMAC Parties’ in and to the Contract Rights.  The
transfer of the Contract Rights related to the PSC shall be made by novation of
all of Allied’s and CINL’s right, title and interest in and to the PSC with
respect to the Oyo Field, together with all of Allied’s and CINL’s liabilities
and obligations to the NAE under the PSC in relation to the Oyo
Field.  Such novation shall be subject to the terms of a Novation
Agreement in form and

       

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

       

       substance
satisfactory to the Parties, which shall be effective on the effective date set
forth in the Novation Agreement (the “Novation
Date”).

       

      Section
1.3                      Complete Transfer.  Each
of the CAMAC Parties expressly agrees that the transfer of the Contract Rights
pursuant to the Novation Agreement and this Agreement, constitutes a complete
transfer of all of the Contract Rights, free and clear of (a) all Liens on the
Contract Rights or the Oyo Field, and (b) any material adverse contractual
obligations other than the Oyo Related Agreements, and the CAMAC Parties reserve
no rights to market or otherwise transfer any interest in and to the Contract
Rights.  For the avoidance of doubt, upon the consummation of the
Transactions neither PAPI nor PAPI Newco shall have any obligation to any of the
CAMAC Parties to support, maintain, offer, or do any other act relating to the
OMLs or the PSC other than as set forth herein or in the Transaction
Documents.

       

      Section
1.4                      Release and Discharge.  At
the Novation Date, except as otherwise provided for herein, or in the
Transaction Documents, the CAMAC Parties and PAPI Newco hereby release and
discharge from further obligations to each other with respect to the Contract
Rights (other than as shareholders of PAPI) and their respective rights against
each other with respect to the Contract Rights are cancelled; provided that such release
and discharge shall not affect any rights, liabilities or obligations of any of
them with respect to claims, causes of actions,  payments or other
obligations due and payable or due to be performed on or prior to the Novation
Date or related to the facts or events occurring prior to the Novation
Date.

       

      Section
1.5                      No Assumption of
Liabilities.  Except
as otherwise provided for herein, in the Novation Agreement or in any of the
other Transaction Documents, this Agreement does not transfer, the PAPI Parties
do not assume, and the PAPI Parties expressly disclaim any and all liabilities,
costs, debts, claims and obligations of the CAMAC Parties relating to the
Contract Rights or otherwise.  Except as otherwise provided for herein
or the Transaction Documents, neither PAPI nor PAPI Newco shall have any
obligation with respect to the CAMAC Parties arising prior to the Closing
Date.

       

      ARTICLE
II

       

      


       

      Consideration

       

      Section
2.1                      Consideration Shares.  At
the Closing, PAPI shall issue to CEHL or its designee(s), shares of Common Stock
equal to 62.74% of the issued and outstanding Common Stock after giving effect
to the Transactions and the Financing, excluding shares issued in the Excluded
Transaction (as defined below) (the “Consideration
Shares”). The Parties agree and acknowledge that any issuances of Equity
Interests by PAPI prior to the Closing (or  pursuant to any existing
agreement or arrangement, or any agreement or arrangement entered into after the
date of this Agreement but before Closing,  to issue Equity Interests
before or after the Closing) shall not reduce the 62.74% post-Closing Equity
Interest in PAPI to be issued to CEHL or its designee(s) at Closing, except with
respect to: (i) the reservation or issuance of up to one million (1,000,000)
shares of the Common Stock in connection with awards granted under PAPI’s
employee stock incentive plan after the date of this Agreement and prior to
Closing; or (ii) the issuance of shares of Common Stock in connection with the
exercise of existing awards granted under PAPI’s employee stock incentive plan
prior to the date of this Agreement (the “Excluded


       

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

       

      Transactions”). 
Other than the Excluded Transactions, the Parties further agree that no other
existing agreements or arrangements, or any agreement or arrangement entered
into after the date of this Agreement but before Closing, for the issuance of
any Equity Interests in PAPI before or after Closing shall reduce the CAMAC
Parties’ 62.74% Equity Interest in PAPI, and PAPI shall issue such additional
shares Common Stock to the CAMAC Parties at the Closing (or within five (5)
business days of issuance if any such shares of PAPI Common Stock are issues
following the Closing ) as is required to preserve CAMAC’s 62.74% post-Closing
Equity Interest in PAPI.

       

      Section
2.2                      Cash Consideration.  At
the Closing PAPI shall pay to CEHL, cash in the amount of thirty eight million
eight hundred forty thousand dollars ($38,840,000) in immediately available
funds to an account designated by CEHL at least two (2) business days prior to
Closing (the “Cash
Consideration”).

       

      ARTICLE
III

       

      


       

      The
Closing

       

      Section
3.1                      Closing.  The
Closing (the “Closing”)
of the Transactions, shall take place at the offices of Pillsbury Winthrop Shaw
Pittman LLP in Houston, TX, commencing at 9:00 a.m. local time on the third
business day following the satisfaction or waiver of all conditions and
obligations of the Parties to consummate the Transactions contemplated hereby
(other than conditions and obligations with respect to actions that the
respective Parties will take at Closing), or on such other date and at such
other time as the Parties may mutually determine (the “Closing
Date”).

       

      Section
3.2                      Deliveries of the Parties.  At
the Closing, (i) the CAMAC Parties shall deliver or cause to be delivered to the
PAPI Parties, the certificates, opinions, instruments, agreements and documents
required by Article IX hereof and (ii) the PAPI Parties shall deliver or cause
to be delivered to the CAMAC Parties, the Cash Consideration, the Consideration
Shares and the certificates, opinions, instruments, agreements and documents
required by Article IX hereof.

       

      ARTICLE
IV

       

      


       

      Representations
and Warranties of the CAMAC Parties

       

      Subject
to the exceptions set forth in the schedule of exceptions, which shall state the
specific subsection of this Article IV to which each disclosure or exception is
made by the CAMAC Parties and attached hereto as Schedule B, each of
the CAMAC Parties jointly and severally represents and warrants to the PAPI
Parties as of the date hereof and as of the Closing as follows:

       

      Section
4.1                      Organization and Standing.  Each
of the CAMAC Parties is duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation or
organization.  Each of the CAMAC Parties is duly qualified to do
business in each of the jurisdictions in which the property owned, leased or
operated by it or the nature of the business which it conducts requires
qualification, except where the failure to so qualify

       

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

       

       would
not reasonably be expected, individually or in the aggregate, to result in a
CAMAC Material Adverse Effect.  Each of the CAMAC Parties has all
requisite power and authority to own, lease and operate the Oyo Field and to
carry on its business as now being conducted pursuant to the Oyo Related
Agreements.  The CAMAC Parties have made available to PAPI true and
complete copies of the CAMAC Constituent Instruments.

       

      Section
4.2                      Power and Authority.  Each
of the CAMAC Parties has all requisite corporate power and authority to execute
and deliver this Agreement and the Transaction Documents to which it is a party
and to consummate the Transactions contemplated hereby and
thereby.  The execution and delivery by the CAMAC Parties of this
Agreement and the Transaction Documents and the consummation by them of the
Transactions have been duly authorized and approved by the boards of directors
or other governing body of each of the CAMAC Parties (if an entity), such
authorization and approval remains in effect and has not been rescinded or
qualified in any respect, and no other  proceedings on the part of any
such entities are necessary to authorize this Agreement, the Transaction
Documents or the consummation of the Transactions contemplated hereby and
thereby.  Each of this Agreement and the Transaction Documents to
which any CAMAC Party is a party has been duly executed and delivered by such
party and constitutes the valid and binding obligation of each of the CAMAC
Parties, enforceable against the CAMAC Parties in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws of general
application now or hereafter in effect affecting the rights and remedies of
creditors and by general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity).

       

      Section
4.3                      No Conflicts.  The
execution and delivery of this Agreement or any of the Transaction Documents
contemplated hereby by each of the CAMAC Parties and the consummation of the
Transactions and compliance with the terms hereof and thereof will not, (a)
conflict with, or result in any violation of or Default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a material benefit
under, or result in the creation of any Lien upon any of the Contract Rights
under any provision of: (i) any CAMAC Constituent Instrument; (ii) any
material contract  to which any of the CAMAC Parties is a party or to
or by which it (or any of its assets and properties) is subject or bound; (iii)
any applicable Law or Legal requirement of and Governmental Authority; or (iv)
any Material Permit of any of the CAMAC Parties; (b) result in any material
Judgment applicable to any of the Contract Rights or (c) terminate or modify, or
give any third party the right to terminate or modify, the provisions or terms
of any of the Oyo Related Agreements.

       

      Section
4.4                      Representations Related to the Oyo Field and
Oyo Related Agreements..

       

      (a)           Oyo
Related Agreements.  Each
of the OMLs, the Allied Assignment, the NAE Assignment and the PSC (the “Oyo Related
Agreements”) are valid, binding and in full force and effect in all
material respects and enforceable by and against the CAMAC Parties, as
applicable, in accordance with its terms.  None of the CAMAC Parties
is in violation of, or in Default under (nor does there exist any condition
which upon the passage of time or the giving of notice would cause such a
violation of, or Default under), any of the Oyo Related Agreements to which any
CAMAC Party is a party, except for violations or Defaults that would
not,

       

       

      
        
          
          

        

        
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       individually
or in the aggregate, reasonably be expected to result in a CAMAC Material
Adverse Effect; and, except as set forth on Schedule 4.4, to the CAMAC Parties’
Knowledge, no other Person has violated or breached, or committed any Default
under, any Oyo Related Agreement, except for violations, breaches and Defaults
that, individually or in the aggregate, have not had and would not reasonably be
expected to have a CAMAC Material Adverse Effect. No party to an Oyo Related
Agreement has terminated or, the CAMAC Parties’ Knowledge, threatened
termination of any such agreement with any of the CAMAC Parties. To the CAMAC
Parties’ Knowledge, no other party to any of the Oyo Related Agreements is in
material Default thereunder and none of the CAMAC Parties has received any
written notice regarding any actual or possible violation or breach of, or
Default under, any Oyo Related Agreement, except in each such case for Defaults,
acceleration rights, termination rights and other rights that have not had and
would not reasonably be expected to have a CAMAC Material Adverse
Effect.  No event or claim of force majeure has occurred under any of
the Oyo Related Agreements.  There have been no written claims by any
Governmental Authority to terminate the Oyo Related Agreements. To the CAMAC
Parties’ Knowledge, the Oyo Related Agreements do not infringe upon the rights
of any third party.

       

      (b)           Completeness
of Oyo Related Agreements.  The
OMLs contain the entirety of the obligation of the CAMAC Parties to the
Government of Nigeria with respect to the Oyo Field and the interests thereon
that are subject to the PSC.  No CAMAC Party is a party to any
Contract relating to or affecting the Oyo Field or Contract Rights other than
the Oyo Related Agreements.

       

      (c)           No
Claims.  There
are no claims, actions, suits, audits, demands, arbitrations, mediations, formal
investigations or proceedings pending, or, to the CAMAC Parties’ Knowledge,
threatened, before any Governmental Authority, mediator or arbitrator with
respect to the Oyo Field or the Oyo Related Agreements.

       

      (d)           Funding
and Other Obligations.  No
work program or operations or funding commitment exists or has been proposed by
the CAMAC Parties or any other party to any of the Oyo Related Agreements under
such agreements, except as has been disclosed to the PAPI Parties in writing or
as set forth in the PSC.  Upon the consummation of the Transactions,
neither PAPI nor PAPI Newco will be subject to any obligation to pay any other
party any net profits interests, production payments, royalties or other fixed
or contingent amounts based upon the sale, license, distribution or other use or
exploitation of the Oyo Field, except as set forth in the PSC or applicable
Law.  There are no bonds, letters of credit, guarantees, deposits or
other security furnished by the CAMAC Parties or any Affiliate of CAMAC Parties
relating to the Oyo Field or the Oyo Related Agreements that will require
expenditures in excess of $100,000, other than the Oyo Debt.  The
interests of the CAMAC Parties in the PSC and the OMLs are not subject to any
preferential rights to purchase, rights of first opportunity or similar rights,
or any required third party consents to assignment that may be applicable to the
Transactions other than as may be specified in the Oyo Related
Agreements.

       

      (e)           No
Limitations on Transfer.  PAPI
Newco shall not be subject to any limitations, obligations or restrictions with
regard to the sale, license, distribution or other transfer or exploitation of
the Contract Rights, except as set forth in the Oyo Related Agreements,
applicable stock exchange rules or applicable Law.

       

       

      
        
          
          

        

        
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      (f)           The
transfer of the Contract Rights pursuant to the Novation Agreement constitutes a
complete transfer of all of the CAMAC Parties’ rights, title and interest in and
to the Oyo Field, and the CAMAC Parties reserve no rights to market or otherwise
transfer any interest in the Oyo Field.  For the avoidance of doubt,
neither PAPI nor PAPI Newco shall have any obligation to any of the CAMAC
Parties to support, maintain, offer, or do any other act relating to the OMLs or
the PSC other than as set forth in the Transaction Documents, and the PAPI
Parties may dispose of the Contract Rights, at their sole discretion, subject
only to any approval rights maintained by NAE, the Nigerian government,
applicable stock exchange rules, and applicable shareholder and board approval
requirements.

       

      Section
4.5                      Litigation.  As
of the date of this Agreement, there is no private or governmental action, suit,
inquiry, notice of violation, claim, arbitration, audit, proceeding or
investigation (“Action”)
pending or threatened in writing against any of the CAMAC Parties or, to the
CAMAC Parties’ Knowledge, any of the other parties to the Oyo Related
Agreements, before or by any Governmental Authority which (a) adversely affects
or challenges the legality, validity or enforceability of this Agreement or the
Oyo Related Agreements (b) could, if there were an unfavorable decision,
individually or in the aggregate, have or would reasonably be expected to result
in a CAMAC Material Adverse Effect.  As of the date of this Agreement,
there is no judgment imposed upon any of the CAMAC Parties or, to the CAMAC
Parties’ Knowledge, any of the parties to the Oyo Related Agreements, that would
prevent, enjoin, alter or materially delay any of the Transactions contemplated
by this Agreement, or that would reasonably be expected to have a CAMAC Material
Adverse Effect.

       

      Section
4.6                      Consents and Approvals.  Except
as disclosed on Schedule 4.6, no consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with any Governmental
Authority (“Consent”)
to which any of the Oyo Related Agreements or the Oyo Field are subject is
required to be obtained or made by any of the CAMAC Parties, in connection with
the execution, delivery and performance of this Agreement or the consummation of
the Transactions, except for (a) such Consents as may be required under
applicable state securities laws and the securities laws of any foreign country;
and (b) such other Consents which, if not obtained or made, would not have a
CAMAC Material Adverse Effect.

       

      Section
4.7                      Licenses, Permits, Etc.  The
CAMAC Parties possesses or will possess prior to the Closing all licenses,
franchises, permits and other governmental authorizations held by them that are
material in connection with business related to the Oyo Related Agreements and
the Oyo Field (the “Material
Permits”).  As of the date of this Agreement, all such Material
Permits are in full force and effect.

       

      Section
4.8                      Material Contracts and
Commitments.  Other
than the Oyo Related Agreements and the Transaction Documents, there are no
material contracts, agreements or other instruments to which any CAMAC Party or
any affiliate of a CAMAC Party is a party that will be binding on PAPI and PAPI
Newco after the consummation of the Transactions.

       

      Section
4.9                      Taxes.  Each
of the CAMAC Parties have timely, or have caused to be timely filed on their
behalf, all Tax Returns required by any law or regulation to be filed by or with
respect to it in connection with the Contract Rights, the Oyo Related Agreements
or the Oyo Field, either separately or as a member of group of corporations,
pursuant to applicable 

       

       

      
        
          
          

        

        
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      Legal
Requirements. All such Tax Returns filed by (or that include on a consolidated
basis) any of the CAMAC Parties were (and, as to a Tax Return not filed as of
the date hereof, will be) in all respects true, complete and accurate, except to
the extent any failure to file or any inaccuracies in any filed Tax returns,
individually or in the aggregate, have not and would not reasonably be expected
to have a CAMAC Material Adverse Effect.  There are no unpaid Taxes in
respect to the Contract Rights, the Oyo Related Agreements or the Oyo Field
claimed to be due by any Governmental Authority in charge of taxation of any
jurisdiction, nor any claim for additional Taxes in respect to the Contract
Rights, the Oyo Related Agreements or the Oyo Field for any period for which Tax
Returns have been filed, except to the extent any failure to file or any
inaccuracies in any filed Tax returns, individually or in the aggregate, have
not and would not reasonably be expected to have a CAMAC Material Adverse
Effect.  Any deficiencies proposed as a result of any governmental
audits or such Tax Returns have been paid or settled, and there are no present
disputes as to Taxes in respect to the Contract Rights, the Oyo Related
Agreements or the Oyo Field payable by any of the CAMAC
Parties.  There are no tax liens against any of the Contract Rights
and, to the CAMAC Parties’ Knowledge, there is no basis for any such
lien.

       

      Section
4.10                      Brokers; Schedule of Fees and
Expenses.  No
broker, investment banker, financial advisor or other Person is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with this Agreement or the Transactions based upon arrangements made
by or on behalf of the CAMAC Parties.

       

      Section
4.11                      Foreign Corrupt Practices.  Neither
the CAMAC Parties, nor to the CAMAC Parties’ Knowledge, any of their respective
Representatives, has, in the course of its actions for, or on behalf of, the
CAMAC Parties, directly or indirectly, (a) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; (b) made any direct or indirect unlawful payment to any
Governmental Authority or any foreign or domestic government official or
employee from corporate funds; (c) violated or is in violation of any provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (the “FCPA”); or
(d) made any unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful payment in connection with the operations of CAMAC Parties to any
foreign or domestic government official or employee, except, in the case of
clauses (a) and (b) above, any such items that, individually or in the
aggregate, have not had and would not reasonably be expected to have a CAMAC
Material Adverse Effect.

       

      Section
4.12                      Money Laundering Laws.  To
the CAMAC Parties’ Knowledge, none of the CAMAC Parties has violated any money
laundering statute or any rules and regulations relating to money laundering
statutes (collectively, the “Money Laundering
Laws”) and no proceeding involving any CAMAC Parties with respect to the
Money Laundering Laws is pending or, to the Knowledge of the officers of the
CAMAC Parties, is threatened.

       

      Section
4.13                      OFAC.  None
of the CAMAC Parties, any director or officer of the CAMAC Parties, or, to the
CAMAC Parties’ Knowledge, any agent, employee, affiliate or Person acting on
behalf of the CAMAC Parties is currently identified on the specially designated
nationals or other blocked person list or otherwise currently subject to any
U.S. sanctions administered by the Office of Foreign Asset Control of the U.S.
Treasury Department

       

       

      
        
          
          

        

        
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       (“OFAC”);
and the CAMAC Parties have not, directly or indirectly, used any funds, or
loaned, contributed or otherwise made available such funds to any Subsidiary,
joint venture partner or other Person, in connection with any sales or
operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned
by OFAC or for the purpose of financing the activities of any Person currently
subject to, or otherwise in violation of, any U.S. sanctions administered by
OFAC.

       

      Section
4.14                      Environmental Matters.  Except
as set forth on Schedule 4.14, with
respect to the Oyo Field:

       

      (a)           The
CAMAC Parties and all associated operations are and, during the relevant time
periods specified in all applicable statutes of limitations, have been in
compliance with Environmental Laws in all material respects;

       

      (b)           The
CAMAC Parties have all Environmental Authorizations required for their
operations as presently conducted, all such Environmental Authorizations are in
the name of the proper entity and in full force and effect, and the CAMAC
Parties are in compliance in all material respects with such Environmental
Authorizations;

       

      (c)           The
CAMAC Parties are not subject to any pending or, to the CAMAC Parties’
Knowledge, threatened Action pursuant to Environmental Laws, nor has any CAMAC
Party received any written notice of violation, noncompliance, or enforcement or
any written notice of investigation or remediation from any Governmental
Authority pursuant to Environmental Laws;

       

      (d)           There
has been no Release of Hazardous Materials at, on, under or from the assets or
in connection with the operations of the Acquired Entities in violation of any
Environmental Laws or in a manner that could give rise to any Environmental
Liabilities or any other remedial or corrective action obligations pursuant to
Environmental Laws;

       

      (e)           To
the CAMAC Parties’ Knowledge, there has been no exposure of any Person or
property to any Hazardous Materials that could reasonably be expected to form
the basis for any Environmental Liabilities or any Action for other Damages or
compensation; and

       

      (f)           The
CAMAC Parties have made available for inspection by the PAPI Parties complete
and correct copies of all environmental assessment and audit reports and studies
and all correspondence addressing environmental obligations that are in the
possession or control of the CAMAC Parties.

       

      (g)           Notwithstanding
any other provision of this Agreement, the representations and warranties made
in this Section 4.14 are the sole and exclusive representations and warranties
made in this Agreement by the CAMAC Parties with respect to environmental
matters.

       

      Section
4.15                      Bankruptcy.  The
CAMAC Parties do not contemplate filing for relief under the provision of any
applicable bankruptcy code.  The Contract Rights are not the proceeds
of, nor are they intended for, or being transferred in, the furtherance of any
concealment of assets or any effort by conspiracy or otherwise to defeat,
defraud or otherwise evade, any party or the

       

       

      
        
          
          

        

        
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       court
in any bankruptcy proceeding, a receiver, a custodian, a trustee, a marshall, or
any other officer of the court or government or regulatory official of any
kind.

       

      ARTICLE
V

       

      


       

      Representations
and Warranties of PAPI

       

      Subject
to the exceptions set forth in the schedule of exceptions, which shall state the
specific subsection of this Article V to which each disclosure or exception is
made by the PAPI Parties with respect to themselves and their respective
Subsidiaries, and attached hereto as Schedule C (the
“PAPI
Disclosure Schedule”), each of the PAPI Parties jointly and severally
represents and warrants to the CAMAC Parties as of the date hereof and as of the
Closing Date as follows:

       

      Section
5.1                      Organization and Standing.  Each
of the PAPI Parties and their respective Subsidiaries is duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation.  Each of the PAPI Parties and their respective
Subsidiaries is duly qualified to do business in each of the jurisdictions in
which the property owned, leased or operated by it or the nature of the business
which it conducts requires qualification, except where the failure to so qualify
would not reasonably be expected, individually or in the aggregate, to result in
a PAPI Material Adverse Effect.  Each of the PAPI Parties and their
respective Subsidiaries has all requisite power and authority to own, lease and
operate its tangible assets and properties and to carry on its business as now
being conducted.  The PAPI Parties have delivered to the CAMAC Parties
true and complete copies of the PAPI Constituent Instruments.

       

      Section
5.2                      Organizational Documents.  The
PAPI Parties have made available to the CAMAC Parties true, complete and correct
copies of the PAPI Constituent Instruments, in each case as amended or restated
to date and presently in effect.  Except as set forth on Schedule 5.2, neither
PAPI nor any of its Subsidiaries is in violation of any of the provisions of its
PAPI Constituent Instruments.  The minute books and stock records of
PAPI heretofore made available to the CAMAC Parties correctly and completely
reflect in all material respects all actions taken at all meetings of, or by
written consents of, directors, managers and holders of equity interests of PAPI
(including any analogous governing bodies thereof or committees of governing
bodies thereof).

       

      Section
5.3                      Power and Authority.  Each
of the PAPI Parties and their respective Subsidiaries (and their respective
nominees) has all requisite corporate power and authority to execute and deliver
this Agreement and the Transaction Documents to which it is a party and to
consummate the Transactions contemplated hereby and thereby.  The
execution and delivery by the PAPI Parties of this Agreement and the
consummation by them of the Transactions have been duly authorized and approved
by the boards of directors or other governing body of each of the PAPI Parties
and their respective Subsidiaries (if an entity), such authorization and
approval remains in effect and has not been rescinded or qualified in any way,
and no other proceedings on the part of any such entities are necessary to
authorize this Agreement and the Transactions.  Each of this Agreement
and the Transaction Documents to which any PAPI Party is a party has been duly
executed and delivered by such party and constitutes the valid, binding,
and

       

       

      
        
          
          

        

        
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       enforceable
obligation of each of them, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws of general
application now or hereafter in effect affecting the rights and remedies of
creditors and by general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity).

       

      Section
5.4                      No Conflicts.  Neither
the execution nor delivery by the PAPI Parties of this Agreement nor compliance
by any of them with the terms and provisions hereof will conflict with, or
result in a breach of (a) the terms, conditions or provisions of, or constitute
a Default under, or result in any violation of, any PAPI Constituent Instrument
or any Material Contract to which any PAPI Party or their respective
Subsidiaries is a party, which would prevent any of the transactions
contemplated under this Agreement or any of the Transaction Documents
contemplated hereby and thereby, or (b) any regulation, law, judgment, order or
the like to which any such PAPI Party or their respective Subsidiaries is
subject, the Default or violation of which would prevent any of the transactions
contemplated under this Agreement or any of the Transaction Documents
contemplated hereby and thereby.

       

      Section
5.5                      Material Contracts.  Except
as set forth in the SEC Reports and on Schedule 5.5, none of the PAPI Parties or
their respective Subsidiaries is a party to any of the following (each such
Contract, a “Material
Contract”):

       

      (a)           any
Contract involving payments by or to a PAPI Party or any of their respective
Subsidiaries in excess of $100,000;

       

      (b)           any
Contract that constitutes a purchase order or other Contract relating to the
sale, purchase, lease or provision by a PAPI Party or any of their respective
Subsidiaries of goods or services in excess of $100,000 in any 12 month
period;

       

      (c)           any
Contract pursuant to which any party is required to purchase or sell a stated
portion of its requirements or output from or to another party;

       

      (d)           any
Contract under which a PAPI Party or any of their respective Subsidiaries has
agreed to indemnify any third Person in any manner, other than such Contracts
that were made in the ordinary course of business consistent with past practice,
or to share the Tax liability of any third Person;

       

      (e)           any
Contract pursuant to which a PAPI Party or any of their respective Subsidiaries
is required to make on or after the date of the Latest Balance Sheet a capital
expenditure, capital addition or betterment in excess of $100,000 in the
aggregate;

       

      (f)           any
power of attorney (other than powers of attorney given in the ordinary course of
business with respect to routine export, Tax or securities
matters);

       

      (g)           any
Contract in respect of Intellectual Property involving a license granted, title
conveyed or royalty payment to or by a PAPI Party or any of their respective
Subsidiaries;

       

       

      
        
          
          

        

        
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      (h)           any
bond, indenture, note, loan or credit agreement or other Contract relating to
indebtedness for borrowed money, any Contract creating a capital lease
obligation, any Contract for the sale of accounts receivable, any Contract
relating to the direct or indirect guarantee or assumption of the obligations of
any other Person or any Contract requiring a PAPI Party or any of their
respective Subsidiaries to maintain the financial position of any other
Person;

       

      (i)           any
outstanding loan or advance by a PAPI Party or any of their respective
Subsidiaries to, or investment by such Person in, any Person, or any Contract or
commitment relating to the making of any such loan, advance or investment
(excluding trade receivables and advances to employees for normally incurred
business expenses each arising in the ordinary course of business consistent
with past practice);

       

      (j)           any
Contract involving interest rate swaps, cap or collar agreements, commodity or
financial future or option contracts or similar derivative or hedging
Contracts;

       

      (k)           any
Contract providing for the deferred payment of any purchase price (other than
trade payables incurred in the ordinary course of business consistent with past
practice) including any “earn out” or other contingent fee
arrangement;

       

      (l)           any
Contract creating a Lien, other than any Permitted Lien, on any of the PAPI
Parties or any of their respective Subsidiaries that will not be discharged at
or prior to the Closing;

       

      (m)           any
Contract purporting to limit or restrict the freedom of a PAPI Party or any of
their respective Subsidiaries or, to the PAPI Parties’ Knowledge, any of their
respective officers, directors or key employees (A) to engage in any line of
business, (B) to own, operate, sell, transfer, pledge or otherwise dispose of or
encumber any asset, (C) to compete with any Person or (D) to engage in any
business or activity in any geographic region;

       

      (n)           any
(A) distributorship agreement or (B) Contract that grants any Person the
exclusive right to sell products or provide services within any geographical
region other than a Contract that (1) is terminable by any party thereto giving
notice of termination to the other party thereto not more than 30 days in
advance of the proposed termination date and (2) even if so terminable, contains
no post-termination obligations (other than payment obligations for
pre-termination sales or services), termination penalties, buy-back obligations
or similar obligations;

       

      (o)           any
Contract under which a PAPI Party or any of their respective Subsidiaries is the
lessor of, or makes available for use by any third Person, any tangible personal
property owned by a PAPI Party or any of their respective Subsidiaries, in each
case for an annual rent in excess of $100,000;

       

      (p)           any
Contract constituting a partnership, joint venture or other similar
Contract;

       

      (q)           any
Contract that contains restrictions with respect to the payment of any dividends
in respect of a PAPI Party or any of their respective Subsidiaries or the
purchase, redemption or other acquisition of any such Equity
Interests;

       

       

      
        
          
          

        

        
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      (r)           any
Contract relating to the acquisition or divestiture by a PAPI Party or any of
their respective Subsidiaries of Equity Interests, assets or business of any
Person, which provides for consideration or payments in excess of $100,000 and
is not made in the ordinary course of business;

       

      (s)           any
Contract between a PAPI Party or any of their respective Subsidiaries, on the
one hand, and the present or former officers, directors, stockholders, other
equity holders of a PAPI or other Affiliates of a PAPI Party or any of their
respective Subsidiaries on the other hand;

       

      (t)           any
Contract containing provisions applicable upon a change of control of a PAPI
Party or any of their respective Subsidiaries;

       

      (u)           any
Contract granting to any Person a right of first refusal, first offer or other
right to purchase any of the assets of a PAPI Party or any of their respective
Subsidiaries;

       

      (v)           any
Contract requiring a PAPI Party or any of their respective Subsidiaries to make
a payment as a result of the consummation of the Transactions contemplated
hereby; and

       

      (w)           any
other agreement which is material to the PAPI Parties or any of their respective
Subsidiaries taken as a whole.

       

      True and
complete copies (including all amendments) of each Material Contract have been
made available to the CAMAC Parties.  Each Material Contract is the
legal, valid obligation of each PAPI Party or any of their respective
Subsidiaries, as the case may be, and to the PAPI Parties’ Knowledge, any other
Person party thereto, binding and enforceable against each such PAPI Party or
any of their respective Subsidiaries, as the case may be and, to the PAPI
Parties’ Knowledge, any other Person party thereto, in accordance with its terms
subject to, except as enforcement may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar
Laws relating to or affecting the enforcement of creditors’ rights generally and
subject, as to enforceability, to legal principles of general applicability
governing the availability of equitable remedies (whether enforcement is sought
in a proceeding in equity or at law); (ii) no Material Contract has been
terminated, and neither a PAPI Party or any of their respective Subsidiaries,
nor, to the PAPI Parties’ Knowledge, any other Person is in material breach or
Default thereunder, and to the PAPI Parties’ Knowledge no event has occurred
that with notice or lapse of time, or both, would constitute a material breach
or Default, or permit termination, modification in any manner materially adverse
to a PAPI Party or any of their respective Subsidiaries, as the case may be, or
acceleration thereunder; (iii) no party has asserted or has any right to offset,
discount or otherwise abate any amount owing under any Material Contract; and
(iv) there are no material waivers regarding any Material Contract that have not
been disclosed in writing to the CAMAC Parties.

       

      Section
5.6                      Capitalization.  Schedule
5.6 sets forth a correct and complete description of the following: (i) all of
the authorized Equity Interests of the PAPI Parties and each of its Subsidiaries
and (ii) the amount of outstanding Equity Interests of the PAPI Parties and each
of

       

       

      
        
          
          

        

        
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       its
Subsidiaries.  Except as described in Schedule 5.6 no Equity Interests
of any PAPI Party or any of its Subsidiaries are issued or outstanding or
reserved for any purpose.

       

      All of
the outstanding Equity Interests of the PAPI Parties and their respective
Subsidiaries are duly authorized, validly issued and fully paid and
nonassessable, and have not been issued in violation of (nor are any of the
authorized Equity Interests of a PAPI Party or any of their respective
Subsidiaries is subject to) any preemptive or similar rights created by the PAPI
Constituent Instruments or any Contract to which a PAPI Party or their
respective Subsidiary is a party or bound.

       

      There are
no outstanding securities, options, warrants or other rights (including
registration rights), agreements, arrangements or other Contracts to which a
PAPI Party or any of their respective Subsidiaries is a party or is bound
relating to the issued or unissued Equity Interests of a PAPI Party or any of
their respective Subsidiaries or obligating a PAPI Party or any of their
respective Subsidiaries to grant, issue, deliver or sell, or cause to be
granted, issued, delivered or sold, any Equity Interests of a PAPI Party or any
of their respective Subsidiaries, by sale, lease, license or
otherwise.  Except as set forth on Schedule 5.6, there are no
obligations, contingent or otherwise, of a PAPI Party or any of their respective
Subsidiaries to (i) repurchase, redeem or otherwise acquire any Equity Interests
of a PAPI Party or any of their respective Subsidiaries, (ii) dispose of any
Equity Interests of a PAPI Party or any of their respective Subsidiaries or
(iii) provide funds to, or make any investment in (in the form of a loan,
capital contribution or purchase of Equity Interests or otherwise), or provide
any guarantee with respect to the obligations of, any other
Person.  No PAPI Party or any of their respective Subsidiaries
directly or indirectly owns, has agreed to purchase or otherwise acquire or
holds any interest convertible into or exchangeable or exercisable for, Equity
Interests of any Person.  There are no agreements, arrangements or
other Contracts (contingent or otherwise) to which a PAPI Party or any of their
respective Subsidiaries is a party or otherwise bound pursuant to which any
Person is or may be entitled to receive any payment based on the revenues or
earnings, or calculated in accordance therewith, of a PAPI Party or any of their
respective Subsidiaries.  Except as set forth on Schedule 5.6, are no
voting trusts, proxies or other agreements or understandings with respect to the
voting of any Equity Interests of a PAPI Party or any of their respective
Subsidiaries.  There are no bonds, debentures, notes or other
indebtedness of a PAPI Party or any of their respective Subsidiaries having the
right to vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which holders of Equity Interests of a PAPI
Party or any of their respective Subsidiaries may vote.

       

      (a)           Rights; Liens;
Encumbrances.  Except as disclosed in
Schedule 5.6 of the PAPI Disclosure Schedule, (i) none of the capital stock
of the PAPI Parties or their Subsidiaries is subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by any
of them; (ii) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any
capital stock of any of the PAPI Parties or their Subsidiaries, or contracts,
commitments, understandings or arrangements by which any of the PAPI Parties or
their Subsidiaries is or may become bound to issue additional capital stock of
any of the PAPI Parties or their Subsidiaries or options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any capital stock of any of the PAPI Parties or their


       

       

      
        
          
          

        

        
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      Subsidiaries;
(iii) there are no outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing indebtedness
of any of the PAPI Parties or their Subsidiaries or by which any of them is or
may become bound which are required to be disclosed in any SEC Report (as
defined below) but not so disclosed in the SEC Reports, (iv) there are no
agreements or arrangements under which any of the PAPI Parties or their
Subsidiaries is obligated to register the sale of any of their securities under
the Securities Act; (v) there are no outstanding securities or instruments of
any of the PAPI Parties or their Subsidiaries which contain any redemption or
similar provisions, and there are no contracts, commitments, understandings or
arrangements by which any of them is or may become bound to redeem a security of
any of the PAPI Parties or their Subsidiaries; (vi) there are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance or reservation of the Consideration Shares; (vii) PAPI
does not have any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement; (viii) none of the PAPI Parties or
their Subsidiaries have any liabilities or obligations required to be disclosed
in the SEC Reports but not so disclosed in the SEC Reports, other than those
incurred in the ordinary course of the their respective businesses and which,
individually or in the aggregate, do not or would not have a PAPI Material
Adverse Effect; and (ix) there are no financing statements securing obligations
in any material amounts, either singly or in the aggregate, filed in connection
with any of the PAPI Parties or their Subsidiaries.  PAPI has filed in
its SEC Reports with the SEC true, correct and complete copies of its
Certificate of Incorporation and its Bylaws, both as amended and as in effect on
the date hereof, and the form of all securities convertible into, or exercisable
or exchangeable for, shares of Common Stock.

       

      (b)           Effect of Consideration
Shares.  The Consideration Shares
shall equal 62.74% of PAPI’s issued and outstanding Common Stock after giving
effect to the consummation of the Transactions and the Financing, excluding
shares issued in the Excluded Transaction.

       

      Section
5.7                      Shares Validly Issued.  When
issued in compliance with the provisions of this Agreement, the Consideration
Shares will be validly issued, fully paid and nonassessable, and will be free of
any liens or encumbrances; provided, however, that the
Consideration Shares may be subject to restrictions on transfer under state
and/or federal securities laws as set forth herein or as otherwise required by
such laws.

       

      Section
5.8                      Litigation.  As
of the date of this Agreement, there is no private or governmental Action
pending or threatened in writing against any of the PAPI Parties or their
respective Subsidiaries, or, to the PAPI Parties’ Knowledge, any of their
respective executive officers or directors (in their capacities as such) or any
of their respective properties before or by any Governmental
Authority.  As of the date of this Agreement, there is no Judgment
imposed upon any of the PAPI Parties or their respective Subsidiaries or any of
their respective properties, that would prevent, enjoin, alter or materially
delay any of the Transactions contemplated by this Agreement.  Neither
the PAPI Parties, nor any director or executive officer of any of them (in his
or her capacity as such), is or has been the subject of any Action involving a
material claim or material violation of or material liability under the
securities laws of any Governmental Authority or a material claim of breach of
fiduciary duty.

       

       

      
        
          
          

        

        
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      Section
5.9                      Consents and Approvals. Except
as disclosed on Schedule 5.9 of the
PAPI Disclosure Schedule, no Consent to which any of the PAPI Parties or any of
their respective Subsidiaries are subject is required to be obtained or made by
or with respect to any of the PAPI Parties or any of their respective
Subsidiaries, in connection with the execution, delivery and performance of this
Agreement or the consummation of the Transactions, except for (a) such Consents
as may be required under applicable state securities laws and the securities
laws of any foreign country; and (b) such other Consents which, if not obtained
or made, would not have a PAPI Material Adverse Effect and would not prevent or
materially alter or delay any of the Transactions.

       

      Section
5.10                      Brokers; Schedule of Fees and
Expenses. There are
no broker, investment banker, financial advisor or other Person is entitled to
any broker’s, finder’s, financial advisor’s or other similar fee or commission
in connection with this Agreement or the Transactions based upon arrangements
made by or on behalf of PAPI Parties.

       

      Section
5.11                      Financial Statements; Undisclosed
Liabilities.


       

      (a)           The
SEC Reports contain true and complete copies of the combined financial
statements of PAPI consisting of (i) audited combined balance sheets of PAPI as
of December 31, 2007 and 2008, and the related audited combined statements of
income and stockholder’s equity and cash flows for the years then ended
(including the notes or other supplementary information thereto) (collectively,
the “Year-End
Financial Statements”) and (ii) an unaudited balance sheet of PAPI as of
September 30, 2009 (the “Latest Balance
Sheet”), and the related unaudited combined statements of income and
stockholders’ equity and cash flows for the nine-month period then ended (the
“Interim
Financial Statements,” and, collectively with the Year-End Financial
Statements, the “Financial
Statements”).

       

      (b)           Each
of the Financial Statements (including the notes or other supplementary
information thereto) (i) has been prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved and (ii) present fairly, in all
material respects, the financial position of PAPI as of the respective dates
thereof and the results of each such entity’s operations and cash flows for the
periods indicated, subject, however, in the case of the Interim Financial
Statements, to normal year-end audit adjustments and to the absence of notes and
other textual disclosure required by GAAP.  The books and records of
PAPI have been and are being maintained in all material respects in accordance
with applicable legal and accounting requirements to permit preparation of the
financial statements in accordance with GAAP and to maintain asset
accountability.

       

      (c)           No
PAPI Party has any liability (and, to the PAPI Parties’
Knowledge,  there is no reasonable basis for any action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against a
PAPI Party or any of their respective Subsidiaries giving rise to any
liability), other than (i) liabilities reserved or disclosed on the face of the
Latest Balance Sheet, (ii) liabilities which have arisen after the date of
Latest Balance Sheet in the ordinary course of business of the PAPI (none of
which results from, arises out of, relates to, is in the nature of or was caused
by any breach of contract, breach of warranty, tort, infringement or violation
of Laws), (iii) liabilities which have been discharged or paid in full after the
date of the Latest Balance Sheet in the ordinary course of business of PAPI
(none of which results from,

       

       

      
        
          
          

        

        
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      arises
out of, relates to, is in the nature of or was caused by any breach of contract,
breach of warranty, tort, infringement or violation of Laws) or (iv) liabilities
that are obligations to perform pursuant to the terms of any Contract binding on
the PAPI Parties or any of their respective Subsidiaries.

       

      Section
5.12                      Absence of Certain Changes or
Events.  Except
as set forth in the SEC Reports or on Schedule 5.12,
since December 31, 2008, PAPI has conducted its businesses only in the ordinary
course and in a manner consistent with past practice and there has not
been:

       

      (a)           any
PAPI Material Adverse Effect;

       

      (b)           any
damage, destruction or loss (whether or not covered by insurance) with respect
to a PAPI Party or any of their respective Subsidiaries, having a replacement
cost of more than $50,000 for any single loss or $200,000 for all such
losses;

       

      (c)           except
as required by changes in GAAP or any Law regarding Taxes, any material change
by a PAPI Party or any of their respective Subsidiaries in their accounting or
Tax reporting methods, principles or practices;

       

      (d)           any
declaration, setting aside or payment of any dividends on or dividends in
respect of any Equity Interests of a PAPI Party;

       

      (e)           any
(A) issuance of any Equity Interests in a PAPI Party or any of their respective
Subsidiaries, (B) redemption, purchase or other acquisition by a PAPI Party or
any of their respective Subsidiaries of any Equity Interests of a PAPI Party or
any of their respective Subsidiaries or (C) any split, combination or
reclassification of any Equity Interests of a PAPI Party or any of their
respective Subsidiaries;

       

      (f)           any
entry into, or amendment of, any employment, consulting, severance, change in
control or indemnification agreement or any agreement with respect to any
retention bonus with any employee of a PAPI Party or any of their respective
Subsidiaries or any other Person, or any incurrence of, entry into or amendment
of any collective bargaining agreement or obligation to any labor
organization;

       

      (g)           any
increase or acceleration of the benefits under, or the establishment or
amendment of, any bonus, insurance, severance, deferred compensation, pension,
retirement, profit sharing, option (including the granting of equity options,
equity appreciation rights, performance awards or restricted equity awards),
equity purchase or other employee benefit plan, or any increase in the
compensation payable or to become payable to partners, members, directors,
officers, employees or contractors of a PAPI Party or any of their respective
Subsidiaries, except for (A) increases in salaries or wages payable or to become
payable in the ordinary course of business and consistent with past
practice;

       

      (h)           any
making by a PAPI Party or any of their respective Subsidiaries of any material
election relating to Taxes, the rescission by a PAPI Party or any of their
respective Subsidiaries of any material election relating to Taxes or the
settlement or compromise of any material claim relating to Taxes;

       

       

      
        
          
          

        

        
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      (i)           any
entry by a PAPI Party or any of their respective Subsidiaries into any
commitment, arrangement or transaction with any director, officer, member,
partner or holder of any Equity Interest in a PAPI Party or any of their
respective Subsidiaries;

       

      (j)           any
revaluation by a PAPI Party or any of their respective Subsidiaries of any of
its assets or properties, including the writing down of the value of inventory
or the writing down or off of notes or accounts receivable, other than in the
ordinary course of business and consistent with past practices;

       

      (k)           any
material acquisition of any assets, business or Person (other than the purchase
of assets from suppliers or vendors in the ordinary course of business
consistent with past practice);

       

      (l)           any
sale, transfer, lease, exchange or other disposition of any material assets or
properties owned or leased by a PAPI Party or any of their respective
Subsidiaries (other than in the ordinary course of business consistent with past
practice);

       

      (m)           any
pending order for, any capital expenditures, or capital additions or betterments
made by or on behalf of a PAPI Party or any of their respective Subsidiaries in
excess of $100,000 in the aggregate;

       

      (n)           any
waiver, release, discharge, transfer or cancellation by a PAPI Party or any of
their respective Subsidiaries of any debt or claim or the amendment,
cancellation, termination, relinquishment, waiver or release of any Contract or
right, other than such actions in the ordinary course of business consistent
with past practice and, in the aggregate, not material to a PAPI Party and their
respective Subsidiaries;

       

      (o)           any
commencement or settlement of any material legal actions, suits or other legal
proceedings;

       

      (p)           the
creation of any Lien, other than Permitted Liens, on any assets or properties
owned or leased by a PAPI Party or any of their respective
Subsidiaries;

       

      (q)           any
discharge or satisfaction of any Lien, or payment of any obligation or liability
(fixed or contingent), except as is in the ordinary course of business
consistent with past practice and not material to a PAPI Party or any of their
respective Subsidiaries;

       

      (r)           any
entry by a PAPI Party or any of their respective Subsidiaries into any
commitment, arrangement or transaction material to the PAPI Parties and their
respective Subsidiaries, taken as a whole;

       

      (s)           any
material increase (including by way of guaranteeing or assuming the obligations
of third Persons to repay indebtedness for borrowed money) in the PAPI Parties
indebtedness for borrowed money;

       

      (t)           any
failure by the PAPI Parties or any of their respective Subsidiaries to pay trade
accounts payable or any other liability of a PAPI Party or any of their
respective Subsidiaries when due (other than trade accounts payable that are
subject to dispute in the

       

       

      
        
          
          

        

        
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      ordinary
course of business and are, individually and in the aggregate, not material to
the PAPI Parties and their respective Subsidiaries);

       

      (u)           any
loan to or from any PAPI Party to or from any partner, member, director,
officer, employee or contractor of such PAPI Party; or

       

      (v)           any
Contract to do any of the foregoing, except as expressly permitted by this
Agreement.

       

      Section
5.13                      Foreign Corrupt Practices.  Neither
the PAPI Parties and their respective Subsidiaries, nor to the PAPI Parties’
Knowledge, any of their respective Representatives, has, in the course of its
actions for, or on behalf of, the PAPI Parties or their respective Subsidiaries,
directly or indirectly, (a) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (b) made any direct or indirect unlawful payment to any
Governmental Authority or any foreign or domestic government official or
employee from corporate funds; (c) violated or is in violation of any provision
of the FCPA; or (d) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment in connection with the operations of PAPI
Parties or any of their respective Subsidiaries to any foreign or domestic
government official or employee, except, in the case of clauses (a) and (b)
above, any such items that, individually or in the aggregate, have not had and
would not reasonably be expected to have a PAPI Material Adverse
Effect.

       

      Section
5.14                      Money Laundering Laws.  To
the PAPI Parties’ Knowledge, none of the PAPI Parties or their respective
Subsidiaries has violated any Money Laundering Laws, and no proceeding involving
any PAPI Parties or any of their respective Subsidiaries with respect to the
Money Laundering Laws is pending or, to the Knowledge of the officers of the
PAPI Parties, is threatened.

       

      Section
5.15                      OFAC.  None
of the PAPI Parties or their respective Subsidiaries, any director or officer of
the PAPI Parties, or, to the PAPI Parties’ Knowledge, any agent, employee,
affiliate or Person acting on behalf of the PAPI Parties is currently identified
on the specially designated nationals or other blocked person list or otherwise
currently subject to any U.S. sanctions administered by OFAC; and none of the
PAPI Parties nor any of their respective Subsidiaries have, directly or
indirectly, used any funds, or loaned, contributed or otherwise made available
such funds to any Subsidiary, joint venture partner or other Person, in
connection with any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or
any other country sanctioned by OFAC or for the purpose of financing the
activities of any Person currently subject to, or otherwise in violation of, any
U.S. sanctions administered by OFAC.

       

      Section
5.16                      Environmental
Matters.  Except as
set forth on Schedule
5.16:

       

      (a)           The
PAPI Parties and their respective Subsidiaries and all associated operations are
and, during the relevant time periods specified in all applicable statutes of
limitations, have been in compliance with Environmental Laws in all material
respects;

       

      (b)           The
PAPI Parties and their respective Subsidiaries all Environmental Authorizations
required for their operations as presently conducted, all such
Environmental

       

       

      
        
          
          

        

        
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      Authorizations
are in the name of the proper entity and in full force and effect, and the PAPI
Parties are in compliance in all material respects with such Environmental
Authorizations;

       

      (c)           The
PAPI Parties and their respective Subsidiaries are not subject to any pending
or, to the PAPI Parties’ Knowledge, threatened Action pursuant to Environmental
Laws, nor has any PAPI Party received any written notice of violation,
noncompliance, or enforcement or any written notice of investigation or
remediation from any Governmental Authority pursuant to Environmental
Laws;

       

      (d)           There
has been no Release of Hazardous Materials at, on, under or from the assets or
in connection with the operations of the PAPI Parties in violation of any
Environmental Laws or in a manner that could give rise to any Environmental
Liabilities or any other remedial or corrective action obligations pursuant to
Environmental Laws;

       

      (e)           To
the PAPI Parties’ Knowledge and their respective Subsidiaries, there has been no
exposure of any Person or property to any Hazardous Materials in connection with
the Acquired Assets or the operations of the PAPI Parties that could reasonably
be expected to form the basis for any Environmental Liabilities or any Action
for other Damages or compensation; and

       

      (f)           The
PAPI Parties and their respective Subsidiaries have made available for
inspection complete and correct copies of all environmental assessment and audit
reports and studies and all correspondence addressing environmental obligations
relating to the PAPI Parties  that are in the possession or control of
the PAPI Parties.

       

      (g)           Notwithstanding
any other provision of this Agreement, the representations and warranties made
in this Section 5.16 are the sole and exclusive representations and warranties
made in this Agreement by the PAPI Parties with respect to environmental
matters.

       

      Section
5.17                      Taxes. Each of
the PAPI Parties and their Subsidiaries have timely, or have caused to be timely
filed on their behalf, all Tax Returns required by any law or regulation to be
filed by or with respect to it, either separately or as a member of group of
corporations, pursuant to applicable Legal Requirements. All Tax Returns filed
by (or that include on a consolidated basis) any of the PAPI Parties and their
Subsidiaries were (and, as to a Tax Return not filed as of the date hereof, will
be) in all respects true, complete and accurate, except to the extent any
failure to file or any inaccuracies in any filed Tax returns, individually or in
the aggregate, have not and would not reasonably be expected to have a PAPI
Material Adverse Effect. There are no unpaid Taxes claimed to be due by any
Governmental Authority in charge of taxation of any jurisdiction, nor any claim
for additional Taxes for any period for which Tax Returns have been filed,
except to the extent any failure to file or any inaccuracies in any filed Tax
returns, individually or in the aggregate, have not and would not reasonably be
expected to have a PAPI Material Adverse Effect.  Each of the PAPI
Parties and their Subsidiaries has set aside on its books provision reasonably
adequate for the payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply.  Any deficiencies
proposed as a result of any governmental audits or such Tax Returns have been
paid or settled, and there are no present disputes as to such Taxes payable by
any of the PAPI Parties or their 

       

       

      
        
          
          

        

        
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      Subsidiaries.
There are no tax liens against any property for assets of the PAPI Parties or
their Subsidiaries and, to the PAPI Parties’ Knowledge, there is no basis for
any such lien.

       

      Section
5.18                      Title.  Each
of PAPI and its Subsidiaries has good and marketable title to all real property
and good and marketable title to all personal property owned by them which is
material to their respective businesses, in each case free and clear of all
liens, encumbrances and defects except (i) such as are described in Schedule 5.18 of the
PAPI Disclosure Schedule, or (ii) such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be made of
such property by any of them.  Any real property (including mineral,
mining or similar rights) and facilities held under lease by PAPI or any of its
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by any of
them.

       

      Section
5.19                      Accounts Receivable.  Except
as set forth on Schedule 5.19, all
accounts receivable reflected on the Latest Balance Sheet or accrued after the
date thereof and existing as of the Closing are due and valid claims against
account debtors for goods or services delivered or rendered, collectible and
subject to no defenses, offsets or counterclaims, except to the extent reserved
against on the Latest Balance Sheet, as would be adjusted for operations and
transactions during the period after the date of the Latest Balance Sheet
through the Closing Date in accordance with the past custom and practice of the
PAPI.  PAPI good and valid title to such accounts receivable free and
clear of all Liens except Permitted Liens. No PAPI Party has any obligation
pursuant to any rule or regulation of any Governmental Authority (whether in
bankruptcy or insolvency proceedings or otherwise) to repay, return, refund or
forfeit any accounts receivable previously collected.  All accounts
receivable of PAPI reflected on the Latest Balance Sheet or accrued after the
date thereof arose in the ordinary course of business.  None of the
obligors of such receivables have refused or given written notice that it
refuses to pay the full amount thereof and none of the obligors of such accounts
receivable is an affiliate of any PAPI Party or, to the PAPI Parties’ Knowledge,
is involved in a bankruptcy or insolvency proceeding.  Except as set
forth in Schedule
5.19, no accounts receivable are subject to prior assignment or Lien.
Except as reflected on the Latest Balance Sheet as would be adjusted for
operations and transactions during the period after the date of the Latest
Balance Sheet through the Closing Date in accordance with the past custom and
practice of PAPI, no PAPI Party has incurred any liabilities to customers for
discounts, returns, promotional allowances or otherwise.

       

      Section
5.20                      SEC Reports.  The
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof (the foregoing materials
including all exhibits and schedules thereto, being collectively referred to
herein as the “SEC
Reports” and, together with the Schedules to this Agreement, and any
other materials prepared by the Company and delivered to the CAMAC Parties in
writing, the “Disclosure
Materials”).  The Company has delivered to the CAMAC Parties or
their representatives, true, correct and complete copies of the SEC Reports not
available on the EDGAR system.  As of their respective dates, the SEC
Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, none of the SEC Reports or the other
Disclosure Materials, when filed or prepared, as applicable, contained any
untrue statement of a material fact or omitted to state a material
fact

       

       

      
        
          
          

        

        
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      required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.

       

      Section
5.21                      Investment
Company.  None of the PAPI Parties, nor any of their
subsidiaries, is, and after giving effect to this Agreement, the
Transaction Documents, and the transactions contemplated hereby and thereby,
none of them will be, (i) an “investment company” within the meaning of such
term under the Investment Company Act of 1940, as amended (the “Investment
Company Act”), and the rules and regulations of the SEC thereunder or
(ii) a “business development company” (as defined in Section 2(a)(48) of the
Investment Company Act).

       

      ARTICLE
VI

       

      


       

      Covenants
of the CAMAC Parties

       

      Section
6.1                      General Conduct of
Business.  During
the period from the date of this Agreement and continuing until the earlier of
the termination of this Agreement or the Closing Date, each of the CAMAC Parties
agree, unless consented to in writing by the PAPI Parties, it will (x) operate
its business with respect to the Contract Rights and the Oyo Related Agreements
in the usual and ordinary course consistent with past practices and (y) with
respect to the Contract Rights and the Oyo Related Agreements, preserve
substantially intact its business organization, maintain its rights and
franchises and maintain its relationships and goodwill with its suppliers,
customers, distributors, licensors, licensees and other Persons doing business
with it.  Without limiting the generality of the foregoing, except as
otherwise consented to in writing by the PAPI Parties, from the date of this
Agreement until the earlier of the Closing or the termination of this Agreement,
the CAMAC Parties will not, and will prevent their respective Subsidiaries from
doing any of the following:

       

      (a)           sell,
transfer, lease, exchange or otherwise dispose of, whether by merging,
consolidating or in any other manner, or grant any Lien with respect to the
Contract Rights or the Oyo Field;

       

      (b)           incur,
create, assume, guarantee or otherwise become liable for any obligation for
borrowed money, purchase money indebtedness or any obligation of any other
Person, that is secured by the Contract Rights or the Oyo Field;

       

      (c)           take
or cause to be taken any action (including inaction) that could reasonably be
expected to delay or adversely affect the consummation of the transactions
contemplated hereby or that could reasonably be expected to result in any of the
representations and warranties contained in Article IV becoming
untrue or inaccurate in any material respect; or

       

      (d)           agree
in writing or otherwise to do any of the foregoing.

       

      Section
6.2                      Notice of CAMAC Material Adverse
Effect.  Each
of the CAMAC Parties agree to promptly notify the PAPI Parties of any material
event or occurrence not in the ordinary course of its business that would have
or reasonably be expected to have a CAMAC Material Adverse Effect, including but
not limited to: (i) any written notice of Default or termination received or
given by any of the CAMAC Parties with respect to any of the Oyo
Related

       

       

      
        
          
          

        

        
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      Agreements,
Oyo Debt Documents or the Oyo Field; (ii) any written notice of any pending or
threatened claim, demand, action, suit, inquiry or proceeding relating to any of
the Oyo Related Agreements, Oyo Debt Documents or the Oyo Field; (iii) any
material damage, destruction or loss to all or any part of the Oyo Field or any
assets used in connection with the Oyo Field or any of the Oyo Related
Agreements or (iv) any event or condition occurring or arising on or after the
date hereof that (A) would render unenforceable, the PAPI Parties’ rights under
this Agreement, or, after giving effect to this Agreement, under any of the Oyo
Related Agreements or (B) would require any amendment or supplement to the Proxy
Statement (as defined below).

       

      Section
6.3                      Consultation; Compliance.  The
CAMAC Parties agree to (i) consult with the PAPI Parties before voting on
material decisions under any of the Oyo Related Agreements; (ii) continue to pay
all amounts due and owing under each of the Oyo Related Agreements; and (iii)
comply in all material respects with all covenants, agreements and other
provisions of each of the Oyo Related Agreements required to be complied with by
the CAMAC Parties.

       

      Section
6.4                      PAPI Consent Required.  Without
limiting the generality of the forgoing, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Closing Date, except as listed on Schedule 6.4 of the
CAMAC Disclosure Schedule or as otherwise expressly permitted by or provided for
in this Agreement, none of the CAMAC Parties shall do, allow, cause or permit
any of the following actions to occur with respect to any of the Contract Rights
without the prior written consent of the PAPI Parties, which shall not be
unreasonably delayed or withheld:

       

      (a)           Material
Contracts.  Except as set forth in Schedule 6.4(a),
enter into any new material contract relating to the PSC or the Oyo Field, or
violate, amend or otherwise materially modify or waive any of the terms of any
existing Oyo Related Agreement or waive or fail to enforce any material right
thereunder, other than (x) in the ordinary course of business consistent with
past practice or (y) upon prior consultation with, and prior written consent of
the PAPI Parties;

       

      (b)           Dispositions.  Sell,
lease, license or otherwise dispose of or encumber all or part of the Contract
Rights, except in the ordinary course of business consistent with past
practice;

       

      (c)           Litigation.  Compromise
or settle any material litigation or arbitration proceedings related to the PSC
or the Oyo Field; or

       

      (d)           Capital
Commitments.  Enter into any capital commitment in excess of
$100,000 relating to the Oyo Field.

       

      Section
6.5                      Related Tax.  From
the date of this Agreement and continuing until the earlier of the termination
of this Agreement or the Closing Date, each of the CAMAC Parties, consistent
with past practice, shall (i) duly and timely file all Tax Returns and other
documents, with respect to the Oyo Related Agreements or the Oyo Field, required
to be filed by it with applicable Governmental Authorities, the failure to file
of which could have a CAMAC Material Adverse Effect, subject to extensions
permitted by law and properly granted by the appropriate authority; and (ii) pay
all Taxes shown as due  on such Tax Returns (subject to good
faith

       

       

      
        
          
          

        

        
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      disputes
over such Taxes). The CAMAC Parties shall be jointly and severally responsible
for any and all sales or other transaction taxes, duties and other similar
charges payable in connection with the sale and transfer of the interest in the
Contract Rights.

       

      Section 6.6 Access to Information.  Except
as required pursuant to any confidentiality agreement or similar agreement or
arrangement to which any CAMAC Party is subject, between the date of this
Agreement and the Closing Date, subject to the PAPI Parties’ undertaking to use
commercially reasonable efforts to keep confidential and protect the
Intellectual Property of CAMAC Parties against any disclosure, the CAMAC Parties
will permit the PAPI Parties and its Representatives reasonable access at
dates and times agreed upon by the applicable CAMAC Party and the PAPI Parties,
to all of their books and records and other data with respect to the Oyo Related
Agreements and the Oyo Field, including, but not limited to, exploration
operations, oil screening assessments and drilling and reconnaissance programs,
which the PAPI Parties determine are necessary for the preparation and amendment
of the Proxy Statement and such other filings or submissions required by SEC
rules and regulations as are necessary to consummate the Transactions and as are
necessary to respond to requests of the SEC’s staff, the PAPI Parties’
accountants and relevant Governmental Authorities.

       

      Notwithstanding
anything to the contrary contained herein, the failure to use commercially
reasonable efforts to protect against any disclosure of any Intellectual
Property of the CAMAC Parties by any PAPI Party or its Representatives in
violation of this Section, shall constitute a breach of a covenant in a material
respect pursuant to Section 11.1(c) hereof; provided, however, that the
PAPI Parties may make a disclosure otherwise prohibited by this Section if
required by applicable Law or regulation or regulatory, administrative or legal
process (including, without limitation, by oral questions, interrogatories,
requests for information, subpoena of documents, civil investigative demand or
similar process) or the rules and regulations of the SEC or any stock exchange
having jurisdiction over the PAPI Parties.  In the event that any PAPI
Party or any of its Representatives is requested or required to disclose any
Intellectual Property of the CAMAC Parties as provided in the proviso in the
immediately preceding sentence, such PAPI Party shall provide the CAMAC Parties
with prompt written notice of any such request or requirement so that the CAMAC
Parties may seek a protective order or other appropriate remedy.  If
any or all seismic data or other information obtained by any of the CAMAC
Parties in connection with the Oyo Field or the Oyo Related Agreements from a
third party is subject to restrictions on disclosure, the CAMAC Parties shall
use commercially reasonable efforts to enter into an agreement with such third
party allowing disclosure of such data to the PAPI Parties.

       

      Section
6.7                      Exclusivity; No Other
Negotiations.

       

      (a)           None
of the CAMAC Parties shall take (or authorize or permit any investment banker,
financial advisor, attorney, accountant or other Person retained by or acting
for or on behalf of any of the CAMAC Parties to take) directly or indirectly,
any action to initiate, assist, solicit, negotiate, or encourage any offer,
inquiry or proposal from any Person other than the PAPI Parties:
(i) relating to the acquisition of the Oyo Field, or any interest thereon,
or any interest in and to the Contract Rights (including any acquisition
structured as a merger, consolidation, share exchange or other business
combination) (an “Acquisition Proposal”); (ii) to reach any agreement or
understanding (whether or not such agreement or

       

       

      
        
          
          

        

        
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      understanding
is absolute, revocable, contingent or conditional) for, or otherwise attempt to
consummate, any Acquisition Proposal with any of the CAMAC Parties;
(iii) to participate in discussions or negotiations with or to furnish or
cause to be furnished any information with respect to the CAMAC
Parties  or afford access to such assets and properties or books and
records of any of the CAMAC Parties to any Person who any of the CAMAC Parties
(or any such Person acting for or on their behalf) knows or has reason to
believe is in the process of considering any Acquisition Proposal relating to
any of the CAMAC Parties; (iv) to participate in any discussions or negotiations
regarding, furnish any material non-public information with respect to, assist
or participate in, or facilitate in any other manner any effort or attempt by
any Person to do or seek any of the foregoing, or (v) to take any other action
that is inconsistent with the Transactions and that has the effect of avoiding
the Closing contemplated hereby.

       

      (b)           The
CAMAC Parties will immediately cease any and all existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the actions set forth in Section 6.7(a) above, if applicable. The
CAMAC Parties will promptly (i) notify the PAPI Parties if any of the CAMAC Parties receives any proposal or inquiry or
request for information in connection with an Acquisition Proposal, and
(ii) notify the PAPI Parties of the significant terms and conditions of any
such Acquisition Proposal including the identity of the Party making an
Acquisition Proposal.

       

      (c)           Notwithstanding
the other provisions of this Section 6.7, from and after, March 31,
2010,  the CAMAC Parties may engage in the activities described in
Section 6.7(a) with respect to an Acquisition Proposal; provided, that any
definitive agreement entered into by a CAMAC Party relating to an Acquisition
Proposal must provide that the closing of any Acquisition Proposal be
conditioned on the prior termination of this Agreement in accordance with its
terms and include a provision which provides that such agreement will
automatically terminate upon the Closing of the Transactions.  The
CAMAC Parties will promptly notify the PAPI Parties of the entry into any such
definitive agreement.

       

      Section
6.8                      Fulfillment of Conditions.  The
CAMAC Parties shall use their commercially reasonable efforts to fulfill the
conditions specified in Article IX hereof, to the extent that the fulfillment of
such conditions is within their control. The foregoing obligation includes
(a) good faith negotiation, the execution and delivery of documents
necessary or desirable to consummate the Transactions contemplated hereby, (b)
participate in meetings at mutually agreed to times and places, in connection
with the Financing, and (c) taking or refraining from such actions as may
be necessary to fulfill such conditions (including using their commercially
reasonable efforts to conduct their business in such manner that on the Closing
Date the representations and warranties of the each of the CAMAC Parties
contained herein shall be accurate as though then made, except as contemplated
by the terms hereof).

       

      Section
6.9                      Regulatory and Other Authorizations; Notices
and Consents.  The
CAMAC Parties shall use their commercially reasonable efforts to obtain all
material Consents that may be or become necessary for their execution and
delivery of, and the performance of their obligations pursuant to, this
Agreement and the Transaction Documents and will cooperate with the PAPI Parties
in promptly seeking to obtain all such Consents.  Each of the CAMAC
Parties shall give promptly such notices to third parties and use its or their
commercially reasonable efforts to obtain such Consents as are required to
consummate the Transactions (and

       

       

      
        
          
          

        

        
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      in such
regard use commercially reasonable efforts to cause the relevant Government
Authorities to permit the PAPI Parties and/or its counsel to participate in the
conversation and correspondence with such Government Authorities together with
the PAPI Parties’ counsel); provided, however, that the
PAPI Parties shall have no obligation to give any guarantee or other
consideration of any nature in connection with any such notice, consent or
estoppel certificate or to consent to any change in the terms of any agreement
or arrangement which could reasonably be expected to result in a PAPI Material
Adverse Effect.

       

      Section
6.10                      Proxy Statement.  Each
of the CAMAC Parties shall direct that its counsel and auditors cooperate with
the PAPI Parties’ counsel in the preparation of the Proxy
Statement.  None of the information supplied or to be supplied by or
on behalf of the CAMAC Parties for inclusion or incorporation by reference in
the Proxy Statement will, at the time the Proxy Statement is filed with the SEC
contain any untrue statement of a material fact, or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading. The CAMAC Parties shall promptly notify the PAPI Parties if any
information is discovered or any event occurs with respect to any of the CAMAC
Parties, or any change occurs with respect to information provided by the CAMAC
Parties and included in the Proxy Statement, which information is required to be
described in an amendment of, or a supplement to, the Proxy Statement to avoid a
misstatement of a material fact or render the filed disclosures to be
misleading.

       

      Section
6.11                      Certain PSC and Oyo Field
Covenants.  Each
of the CAMAC Parties hereby agrees that: (a) it shall not engage in any conduct
or activity that could result in the revocation, suspension or termination of
any of the Oyo Related Agreements; and (b) it shall take all such actions as are
reasonably necessary and appropriate to (1) comply with applicable obligations
under the Oyo Related Agreements and (2) maintain the effectiveness and validity
of the Oyo Related Agreements during the terms thereof.  In the event
that the PSC is terminated by any party after the Closing Date, Allied shall be
obligated to fulfill the obligations of NAE under the PSC and shall obtain such
instruments, assignments, certificates, notices, statements, consents,
agreements, deeds, papers and documents, as necessary to give PAPI Newco the
same rights and obligations with respect to the Oyo Field as previously afforded
under the Contract Rights.

       

      ARTICLE
VII

       

      


       

      Covenants
of the PAPI Parties

       

      Section
7.1                      Conduct of Business.  PAPI
hereby covenant and agree that, until the earlier of the Closing or the
termination of this Agreement, unless consented to in writing by the CAMAC
Parties, it will (x) operate its business in the usual and ordinary course
consistent with past practices and (y) preserve substantially intact its
business organization, maintain its rights and franchises, retain the services
of its respective officers and key employees and consultants and maintain its
relationships and goodwill with its suppliers, customers, distributors,
licensors, licensees and other Persons doing business with
it.  Without limiting the generality of the foregoing, except as
otherwise consented to in writing by the CAMAC Parties, from the date
of

       

       

      
        
          
          

        

        
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      this
Agreement until the earlier of the Closing or the termination of this Agreement,
the PAPI Parties will not, and will prevent their respective Subsidiaries from
doing any of the following:

       

      (a)           (i)
increase the compensation payable to or to become payable to or grant any
bonuses (except with respect to such annual compensation increases and bonuses
that are consistent with past practices) to any present or former director,
officer, employee or consultant of a PAPI Party of any of their respective
Subsidiaries; (ii) grant any severance or termination pay (unless required
pursuant to any existing agreement); (iii) enter into or amend any employment,
consulting, severance or termination agreement or other similar Contract with
any present or former partner, member, director, officer, employee or consultant
of a PAPI Party of any of their respective Subsidiaries; (iv) establish, adopt,
enter into or amend any employee benefit plan or arrangement in any material
respect; (v) amend, or take any other actions to increase the amount of, or
accelerate the payment or vesting of, any benefit or amount under any benefit
plan or any of the Contracts described in Section 7.1; or (vi) make any loan to
any present or former partner, member, director, officer, employee or consultant
of a PAPI Party of any of their respective Subsidiaries; except in each case (A)
as required by any Contract, Plan or other legal obligation of a PAPI Party of
any of their respective Subsidiaries existing on the date of this Agreement or
(B) as required by applicable Law;

       

      (b)           declare,
set aside or pay any dividend on, or make any other distributions in respect of,
any outstanding Equity Interests of a PAPI Party of any of their respective
Subsidiaries;

       

      (c)           (i)
directly or indirectly redeem, purchase or otherwise acquire, or offer to
redeem, purchase or otherwise acquire, any outstanding Equity Interests of a
PAPI Party of any of their respective Subsidiaries; (ii) effect any
reorganization or recapitalization; or (iii) split, combine or reclassify any of
the Equity Interests of a PAPI Party of any of their respective Subsidiaries or
issue or authorize or propose the issuance of any other securities in respect
of, in lieu of or in substitution for, such Equity Interests, except, in each
case, as may be required by applicable Laws;

       

      (d)           other
than in connection with the Financing and the Excluded Transactions, offer,
issue, deliver, grant or sell, or authorize or propose the offering, issuance,
delivery, grant or sale (including the grant of any Liens or limitations in
voting rights) of, (i) any Equity Interests of a PAPI Party of any of their
respective Subsidiaries or (ii) any securities convertible into or exchangeable
for, or any rights, warrants or options to acquire any such Equity Interests,
except, in each case, as may be required by applicable Laws;

       

      (e)           (i)
merge, consolidate, combine or amalgamate with any Person or completely or
partially dissolve or liquidate; (ii) acquire or agree to acquire, by merging or
consolidating with, purchasing Equity Interests of, or purchasing all or a
portion of the assets of, or in any other manner, any business or any Person or
otherwise acquire or agree to acquire any assets of any other Person (other than
the purchase of assets from suppliers or vendors in the ordinary course of
business consistent with past practice); or (iii) make any loans, advances or
capital contributions to, or investments in, any Person except for loans,
advances and capital contributions (A) to any wholly owned Subsidiary of a PAPI
Party or (B) pursuant to and in

       

       

      
        
          
          

        

        
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      accordance
with the terms of any legal obligation existing as of the date of this
Agreement, except, in each case, as may be required by applicable
Laws;

       

      (f)           sell,
transfer, lease, exchange or otherwise dispose of, whether by merging,
consolidating or in any other manner, or grant any Lien with respect to any
properties or assets of a PAPI Party of any of their respective Subsidiaries,
except for sales of (i) inventories and assets in the ordinary course of
business consistent with past practice and (ii) worn out or obsolete property in
the ordinary course of business consistent with past practice, except, in each
case, as may be required by applicable Laws;

       

      (g)           (i)
transfer, assign, pledge, convey or grant any ownership interest or any
exclusive license or rights to any Intellectual Property; (ii) grant any
material nonexclusive licenses to any Intellectual Property except those in the
ordinary course of business consistent with past practice; (iii) take any Action
that would, or fail to take any Action the failure of which would, directly or
indirectly, cause any of the Intellectual Property to enter the public domain or
otherwise adversely affect the Intellectual Property, or its validity or
enforceability; (iv) license to any Person, or otherwise extend, amend or modify
any Person’s rights to, any of the Intellectual Property, other than in the
ordinary course of business consistent with past practice, except, in each case,
as may be required by applicable Laws;

       

      (h)           adopt
or propose any amendments to any PAPI Constituent Instrument;

       

      (i)           (i)
change any PAPI Party’s methods of accounting in effect at December 31, 2008,
except to the extent required to comply with GAAP; (ii) make or rescind any
election relating to Taxes; (iii) settle or compromise any claim, Action, suit,
litigation, proceeding, arbitration, investigation, audit or controversy
relating to Taxes; or (iv) change any of the PAPI Party’s methods of reporting
income or deductions for income tax purposes from those employed in the
preparation of the income tax returns for the taxable year ending December 31,
2008, except, in each case, as may be required by applicable Laws;

       

      (j)           incur,
create, assume, guarantee or otherwise become liable for any obligation for
borrowed money, purchase money indebtedness or any obligation of any other
Person, whether or not evidenced by a note, bond, debenture, guarantee,
indemnity or similar Contract, except for (i) trade payables incurred in the
ordinary course of business consistent with past practice; and (ii) indebtedness
with any wholly owned Subsidiary of any PAPI Party;

       

      (k)           make
or commit to make any capital expenditures, or capital additions or betterments
in excess of $100,000 in the aggregate, except for capital expenditures that
have been approved by the management of the PAPI Parties prior to the date
hereof and are set forth on Schedule
7.1(k);

       

      (l)           pay,
discharge, settle or satisfy any claims prior to the same being due in excess of
$100,000 in the aggregate, other than pursuant to mandatory terms of any
Contract as in effect on the date hereof;

       

      (m)           (i)
enter into, renew, modify, amend or terminate any Material Contract, or waive,
delay the exercise of, release or assign any material rights or claims
thereunder except in the ordinary course of business consistent with past
practice or (ii) enter into or amend in any

       

       

      
        
          
          

        

        
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      material
manner any Contract with any former or present director, officer, employee or
consultant of a PAPI Party of any of their respective Subsidiaries or with any
affiliate of any of the foregoing Persons;

       

      (n)           take
or cause to be taken any action (including inaction) that could reasonably be
expected to delay or adversely affect the consummation of the transactions
contemplated hereby or that could reasonably be expected to result in any of the
representations and warranties contained in Article V becoming
untrue or inaccurate in any material respect;

       

      (o)           enter
into any new line of business; or

       

      (p)           agree
in writing or otherwise to do any of the foregoing.

       

      Section
7.2                      Proxy Statement Filing and Special
Meeting.  PAPI
shall cause a meeting of its stockholders (the “Stockholders’
Meeting”) to be duly called and held as soon as reasonably practicable
for the purpose of voting on the adoption and approval of, among others, this
Agreement and the Transactions contemplated hereby and thereby.  The
board of directors of PAPI shall recommend to its stockholders that they vote in
favor of the adoption of such matters thereto.  In connection with the
Stockholders’ Meeting, this Agreement and the consummation of the Transactions
contemplated hereby, and in favor of the PAPI Parties (a) will use
commercially reasonable efforts to file with the SEC as promptly as practicable
the preliminary and definitive proxy statements pursuant to Section 14(a),
Regulation 14A, and Schedule 14A under the Exchange Act (the definitive proxy
statement is referred to herein as the “Proxy
Statement”) and all other proxy materials for such meeting, (b) upon
receipt of approval from the SEC, PAPI will mail to its stockholders the Proxy
Statement and other proxy materials, (c) will use commercially reasonable
efforts to obtain the necessary approvals by its stockholders of this Agreement
and the Transactions contemplated hereby, and (d) will otherwise comply
with all Legal Requirements applicable to the Stockholders’
Meeting.  At the time the Proxy Statement is mailed to Shareholders,
the Proxy Statement will not contain any untrue statement of a material fact, or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading (other than with respect to information
provided by the CAMAC Parties to PAPI specifically for inclusion in the Proxy
Statement). The PAPI Parties shall promptly notify the CAMAC Parties if any
information is discovered or any event occurs with respect to any of the PAPI
Parties, or any change occurs with respect to information included in the Proxy
Statement, other than information provided by the CAMAC Parties to PAPI
specifically for inclusion in the Proxy Statement, which information is required
to be described in an amendment of, or a supplement to, the Proxy Statement to
avoid a misstatement of a material fact or render the filed disclosures to be
misleading.  THE CAMAC PARTIES SHALL HAVE NO LIABILITY TO ANY PAPI
PARTY OR ANY SHAREHOLDER OF PAPI UNDER THIS AGREEMENT, THE SECURITIES ACT OF
1933, THE SECURITIES EXCHANGE ACT OF 1934, OR ANY OTHER STATUTE OR LAW FOR ANY
MISSTATEMENTS OR OMISSIONS IN THE PROXY STATEMENT, EXCEPT WITH RESPECT TO
INFORMATION REGARDING THE CAMAC PARTIES’ BOARD REPRESENTATIVES (INCLUDING
BIOGRAPHICAL INFORMATION) PROVIDED BY THE CAMAC PARTIES TO PAPI FOR INCLUSION
THEREIN.

       

       

      
        
          
          

        

        
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      Section
7.3                      SEC Filings.  The
PAPI Parties will timely provide to the CAMAC Parties all correspondence
received from and to be sent to the SEC and will not file any amendment to the
filings with the SEC without providing the CAMAC Parties the opportunity to
review and comment on any responses to the SEC.  In addition, the PAPI
Parties will use commercially reasonable efforts to cause the SEC to permit the
CAMAC Parties and/or their counsel to participate in the SEC conversations on
issues related to the PAPI Parties’ SEC filings together with the PAPI Parties
counsel.

       

      Section
7.4                      Notice of PAPI Material Adverse
Effect.  From
the date hereof through the Closing Date, the PAPI Parties shall give the CAMAC
Parties prompt written notice of any event or development that occurs that (a)
is of a nature that, individually or in the aggregate, would have or reasonably
be expected to have a PAPI Material Adverse Effect, or (b) would require
any amendment or supplement to the Proxy Statement.

       

      Section
7.5                      CAMAC Consent Required. Without
limiting the generality of the forgoing, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Closing Date, except as listed on Schedule 7.5 of the
PAPI Disclosure Schedule or as otherwise expressly permitted by or provided for
in this Agreement, none of the PAPI Parties shall do, allow, cause or permit any
of the following actions to occur without the prior written consent of the CAMAC
Parties, which consent shall not be unreasonably delayed or
withheld:

       

      (a)           Charter
Documents.  Except as set forth on Schedule 7.5(a) of
the PAPI Disclosure Schedule, none of the PAPI Parties nor any of its
Subsidiaries shall adopt or propose any change in any of their respective
Constituent Instruments except for such amendments required by any Legal
Requirement or the rules and regulations of the SEC or NYSE Amex LLC or as are
contemplated by this Agreement.

       

      (b)           SEC
Reports.  The PAPI Parties shall not fail to timely file or
furnish to or with the SEC all SEC Reports, except those filings by affiliates
of the PAPI Parties required under Section 13(d) or 16(a) of the Exchange Act
which do not have a PAPI Material Adverse Effect.

       

      (c)           Dividends; Changes in
Capital Stock.  The PAPI Parties shall not declare or pay any
dividends on or make any other distributions (whether in cash, stock or
property) in respect of any of its capital stock, or split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or repurchase or otherwise acquire, directly or indirectly, any
shares of its capital stock nor shall any of the PAPI Parties enter into any
agreement or arrangement to do any of the foregoing.

       

      (d)           Taxes.  None
of the PAPI Parties nor any of its Subsidiaries shall make or change any
material election in respect of Taxes, adopt or change any accounting method in
respect of Taxes, file any Tax Return or any amendment to a Tax Return, enter
into any closing agreement, settle any claim or assessment in respect of Taxes,
or consent to any extension or waiver of the limitation period applicable to any
claim or assessment in respect of Taxes.

       

       

      
        
          
          

        

        
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      (e)           Litigation.
Compromise or settle any material litigation or arbitration
proceedings.

       

      (f)           Material
Contracts.  Enter into any new material contract imposing a
payment obligation of the PAPI Parties or any of their respective Subsidiaries
in excess of $100,000, other than (x) in the ordinary course of business
consistent with past practice or (y) upon prior consultation with, and prior
written consent  of the CAMAC Parties.

       

      Section
7.6                      Fulfillment of Conditions.  From
the date hereof to the Closing Date, the PAPI Parties shall use its commercially
reasonable efforts to fulfill the conditions specified in Article IX, to the
extent that the fulfillment of such conditions is within its control. The
foregoing obligation includes (a) the execution and delivery of documents
necessary or desirable to consummate the Transactions, (b) engaging in a road
show, at mutually agreed to times and places, in connection with the Financing
and to seek the approval of the Transactions, and (c) taking or refraining from
such actions as may be necessary to fulfill such conditions (including using its
commercially reasonable efforts to conduct the business of the PAPI Parties and
their respective Subsidiaries in such manner that on the Closing Date the
representations and warranties of the PAPI Parties contained herein shall be
accurate as though then made).

       

      Section
7.7                      Regulatory and Other Authorizations; Notices
and Consents. The
PAPI Parties shall use its commercially reasonable efforts to obtain all
authorizations, consents, orders and approvals of all Governmental Authorities
and officials that may be or become necessary for their execution and delivery
of, and the performance of their obligations pursuant to, this Agreement and the
Transaction Documents to which they are a party.  The PAPI Parties
shall cooperate and use commercially reasonable efforts to assist the CAMAC
Parties in giving such notices and obtaining such Consents set forth in Section
6.9 of this Agreement (and in such regard use commercially reasonable efforts to
cause the relevant Government Authorities to permit the CAMAC Parties and/or its
counsel to participate in the conversation and correspondence with such
Government Authorities together with the PAPI Parties’ counsel); provided, however, that the
PAPI Parties shall have no obligation to give any guarantee or other
consideration of any nature in connection with any such notice, consent or
estoppel certificate or to consent to any change in the terms of any agreement
or arrangement which could reasonably be expected to result in a PAPI Material
Adverse Effect.

       

      Section
7.8                      Exclusivity; No Other
Negotiations.

       

      (a)           The
PAPI Parties shall not take (or authorize or permit any investment banker,
financial advisor, attorney, accountant or other Person retained by or acting
for or on behalf of the PAPI Parties to take) directly or indirectly, any action
to initiate, assist, solicit, negotiate, or encourage any offer, inquiry or
proposal from any Person: (i) relating to the acquisition by the PAPI
Parties of that Person (regardless of the structure of any such acquisitions) or
any affiliate of that Person, or (ii) take any other action that is inconsistent
with the Transactions and that has the effect of avoiding the Closing
contemplated hereby.

       

      (b)           The
PAPI Parties will immediately cease any and all existing activities, discussions
or negotiations with any parties conducted heretofore with respect to any of the
actions set forth in Section 7.8(a) above, if applicable.  The
PAPI Parties will promptly (i) notify

       

       

      
        
          
          

        

        
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      the CAMAC
Parties if any of them receives any such proposal or inquiry or request for
information in connection with such proposal and (ii) notify the CAMAC
Parties of the significant terms and conditions of any such proposal including
the identity of the party making the proposal.

       

      (c)           Notwithstanding
the other provisions of this Section 7.8, from and after March 31, 2010, the
PAPI Parties may engage in the activities described in Section 7.8(a); provided,
that any definitive agreement entered into by a the PAPI Parties Party relating
to such activities must provide that the closing of any transaction of the type
described in Section 7.8(a) be conditioned on the prior termination of this
Agreement in accordance with its terms.  The PAPI Parties will
promptly notify the CAMAC Parties of the entry into any such definitive
agreement and will promptly provide to the CAMAC Parties a true copy of such
agreement.

       

      Section
7.9                      Related Tax. From
the date hereof through the Closing Date, the PAPI Parties, consistent with past
practice, shall (i) duly and timely file all Tax Returns and other documents
required to be filed by it with applicable Governmental Authorities, the failure
to file of which could have a PAPI Material Adverse Effect, subject to
extensions permitted by law and properly granted by the appropriate authority;
provided, that the PAPI
Parties notify the CAMAC Parties that the PAPI Parties are availing themselves
of such extensions, and (ii) pay all Taxes shown as due on such Tax Returns
(subject to good faith disputes over such Taxes).

       

      Section
7.10                      Valid Issuance of PAPI
Shares.  At
the Closing, the Consideration Shares to be issued to CEHL or its designees)
hereunder will be duly authorized, validly issued, fully paid and nonassessable
and, when issued and delivered in accordance with the terms hereof for the
consideration provided for herein, will be validly issued and will constitute a
valid, binding and enforceable obligation of PAPI in accordance with their terms
and will have been issued in compliance with all applicable federal and state
securities laws.

       

      Section
7.11                      Oyo Agreements.  The
PAPI Parties shall not engage in any conduct or activity that could result in
the revocation, suspension or termination of any of the Oyo Related
Agreements.

       

      Section
7.12                      PAPI Newco.  PAPI
shall form a wholly-owned subsidiary under the laws of the Federal Republic of
Nigeria prior to the Closing.  Such subsidiary, which shall be
entitled “CAMAC Energy Nigeria Limited” or a similar name, shall be the PAPI
entity to which the Contract Rights shall be novated pursuant to this Agreement
and is referred to herein as “PAPI
Newco”.  Upon formation, PAPI Newco shall execute and deliver
to the CAMAC Parties a letter agreement, in form and content reasonably
satisfactory to the CAMAC Parties, whereby it will agree to the terms of this
Agreement as if it were an original signatory hereof and shall be deemed to be a
“PAPI Party,” as such term is defined herein.  If this Agreement is
terminated pursuant to Article XI hereof, then unless otherwise agreed to by the
Parties, the PAPI Parties shall within thirty (30) days (i) dissolve, or cause
to be dissolved, PAPI Newco or (ii) change, or cause to be changed, the name of
PAPI Newco to remove any and all references to any of the CAMAC Parties from the
name of PAPI Newco.  This Section 7.12 shall survive any termination
of this Agreement pursuant to Article XI hereof.

       

       

      
        
          
          

        

        
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      ARTICLE
VIII

       

      Additional
Agreements and Covenants

       

      Section
8.1                      Disclosure Schedules.  Each
of Parties shall, as of the Closing Date, have the obligation to supplement or
amend their respective Disclosure Schedules being delivered concurrently with
the execution of this Agreement and annexes and exhibits hereto with respect to
any matter hereafter arising or discovered which resulted in, or could
reasonably be expected to result in a PAPI Material Adverse Effect or CAMAC
Material Adverse Effect, as the case may be.  The obligations of the
Parties to amend or supplement their respective Disclosure Schedules being
delivered herewith shall terminate on the Closing Date. Notwithstanding any such
amendment or supplementation, the representations and warranties of the Parties
shall be made with reference to the Disclosure Schedules as they exist at the
time of execution of this Agreement.

       

      Section
8.2                      Confidentiality.  Between
the date hereof and the Closing Date, each of the CAMAC Parties and the PAPI
Parties shall hold and shall cause their respective Representatives to hold in
strict confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law or by the rules and regulations of, or
pursuant to any agreement of a stock exchange or trading system, all documents
and information concerning the other Party furnished to it
by such other Party or its Representatives in connection with the Transactions,
except to the extent that such information can be shown to have been (a)
publicly available without the receiving Party’s breach of any obligation owed
to the disclosing Party, (b) known to the receiving Party prior to the
disclosing Party’s disclosure of such information; (c) known to the receiving
Party from a source other than the disclosing Party other than by the breach of
an obligation of confidentiality owed to disclosing Party; or (d) is
independently developed by the receiving Party without reliance on the
disclosing Party’s information. Each Party shall be deemed to have satisfied its
obligations to hold confidential information concerning or supplied by the other
Party in connection with the Transactions, if it exercises the same care as it
takes to preserve confidentiality for its own similar
information.  For the avoidance of doubt, any disclosure of
information required to be included by PAPI in its filings with the SEC as
required by the applicable laws will not be violation of this Section
8.2.  Notwithstanding the foregoing, PAPI’s disclosure to financial
institutions and accredited investors in connection with the Financing, subject
to nondisclosure agreements among PAPI and such parties, shall not constitute a
violation of this Section 8.2.

       

      Section
8.3                      Public Announcements.  From
the date of this Agreement until the Closing or termination of this Agreement,
the Parties shall cooperate in good faith to jointly prepare all press releases
and public announcements pertaining to this Agreement and the Transactions
governed by it, and none of the foregoing shall issue or otherwise make any
public announcement or communication pertaining to this Agreement or the
transaction without the prior consent of the PAPI Parties (in the case of the
CAMAC Parties) or the CAMAC Parties (in the case of the PAPI Parties), except as
required by Law or by the rules and regulations of, or pursuant to any agreement
of, a stock exchange or trading system. Each Party will not unreasonably
withhold approval from the others with respect to any press release or public
announcement. If any Party determines with the advice of counsel that it is
required to make this Agreement and the terms of the transaction public or
otherwise issue a press release or make public disclosure with respect thereto,
it shall at a reasonable time before making any public

       

       

      
        
          
          

        

        
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      disclosure,
consult with the other Parties regarding such disclosure, seek such confidential
treatment for such terms or portions of this Agreement or the transaction as may
be reasonably requested by the other Parties and disclose only such information
as is legally compelled to be disclosed. This provision will not apply to
communications by any Party to its counsel, accountants and other professional
advisors.

       

      Section
8.4                      Board Composition.  For
a period commencing on the Closing Date and ending not sooner than the date that
is one (1) year following the Closing Date, the Board of PAPI will consist of
seven (7) persons.  For a period commencing from the Closing Date
until the next annual  or special meeting of the PAPI stockholders, or
until each director’s successor is elected and takes office, the Combined Board
shall consist of: (i) four (4) persons nominated by CEHL (at least two (2) of
which shall be an “Independent
Director” as such term is defined in §804 of the NYSE Amex Company Guide
(the “CAMAC
Directors”); and (ii) three (3) current PAPI directors (at least two (2)
of which shall be independent directors (the “PAPI
Directors”).

       

      Section
8.5                      Voting Agreement.  CEHL
agrees that for a period commencing on the Closing Date and ending not sooner
than the date that is one (1) year following the Closing Date (the “Voting
Period”), it shall vote all the Consideration Shares then owned by it as
follows:

       

      (a)           At
any annual or special meeting called, or in connection with any other action
(including the execution of written consents) taken for the purpose of electing
directors to the board of directors of PAPI, CEHL agrees to vote all of the
Consideration Shares controlled by it (the “Voting Shares”) in favor of the
persons nominated by the PAPI Representative. Notwithstanding the foregoing,
any persons nominated by the PAPI Representatives to serve as the PAPI
Directors, other than persons identified in Section 8.4 hereof, must be
reasonably acceptable to a majority of the board of directors or a majority of
the members of the nominating and corporate governance committee, if such
committee exists.

       

      (b)           The
PAPI Representatives shall have the right to request the resignation or removal
of any PAPI Director.  In such event, CEHL agrees to vote all of its
Voting Shares in a manner that would cause the removal of such PAPI Director,
whether at any annual or special meeting called, or, in connection with any
other action (including the execution of written consents) taken for the purpose
of removing such director.  In the event of the resignation, death,
removal or disqualification of a PAPI Director, the PAPI Representatives shall
promptly nominate a new director and, after written notice of the nomination has
been given by PAPI Representatives, CEHL hereby agrees to vote all its Voting
Shares to elect such nominee to the board of directors.

       

      (c)           CEHL
shall appear in person (through a representative) or by proxy at any annual or
special meeting of PAPI’s shareholders for the purpose of obtaining a quorum and
shall vote all Voting Shares owned by CEHL, either in person or by proxy, at any
annual or special meeting of shareholders of PAPI called for the purpose of
voting on the election of directors or by written consent of shareholders with
respect to the election of directors, in favor of the election of the PAPI
Directors.  In addition, CEHL shall appear in person or proxy at any
annual or special meeting of shareholders of PAPI for the purpose of obtaining a
quorum and shall vote, or shall execute and deliver a written consent with
respect to, all Voting Shares owned by CEHL entitled to vote upon any other
matter submitted to a vote of shareholders of PAPI in a

       

       

      
        
          
          

        

        
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      manner so
as to be consistent and not in conflict with, and to implement, the terms of
this Agreement.

       

      (d)           CEHL
hereby agrees that all transfers of PAPI capital stock made by it shall be made
subject to the provisions of this Section 8.5, except as set forth below, and
any transferee will agree in writing to be bound by the terms and provisions of
this Section as a condition precedent to any such transfer.  Each
certificate representing the Consideration Shares shall be endorsed with a
legend in substantially the following form:

       

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VOTING
REQUIREMENTS AND OTHER RESTRICTIONS SET FORTH IN AN AGREEMENT BETWEEN THE HOLDER
OF THIS CERTIFICATE AND CERTAIN OTHER PARTIES.  TRANSFER OF THE
SECURITIES IS SUBJECT TO THE RESTRICTIONS CONTAINED IN SUCH
AGREEMENT.

       

      Notwithstanding
the foregoing, the provisions of this Section 8.5 shall not apply to any
transfers made in connection with an underwritten secondary offering of shares
owned by CEHL or a sale of shares made in the open market pursuant to Rule
144.

       

      Section
8.6                      ROFR Agreement.  Each
of the CAMAC Parties agrees that, effective as of the Closing, until the fifth
(5th)
anniversary thereof,  PAPI shall have a right of first refusal with
respect to any and all upstream oil and gas assets, licenses or rights currently
held or arising and inuring to any of the CAMAC Parties, which it offers for
sale, transfer, license or other disposition, other than such sales that occur
in the ordinary course of business (the “ROFR”),
pursuant to the terms and conditions set forth in the ROFR Agreement in form and
substance reasonably satisfactory to the Parties.

       

      Section
8.7                      Fees and Expenses.  Except
as expressly provided in Article XI, in the event there is no Closing of the
Transactions contemplated by this Agreement, all fees and expenses incurred in
connection with this Agreement shall be paid by the Party incurring such fees or
expenses.

       

      Section
8.8                      Certain Disclaimers.  EXCEPT
TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT, THE CAMAC PARTIES AND THE
PAPI PARTIES MAKE NO REPRESENTATIONS OR WARRANTIES WHATSOEVER AND DISCLAIM ALL
LIABILITY AND RESPONSIBILITY FOR ANY OTHER REPRESENTATION, WARRANTY, STATEMENT
OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO THE OTHER PARTIES
..  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER THE CAMAC PARTIES NOR THE PAPI
PARTIEES MAKE ANY REPRESENTATIONS OR WARRANTIES AS TO (I) THE AMOUNTS OF OR
VALUES WITH RESPECT TO ANY HYDROCARBON RESERVES ATTRIBUTABLE TO THE ASSETS OR
(II) THE ACCURACY OR CONTENT OF THE RECORDS AND DATA.

       

       

      
        
          
          

        

        
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       EXCEPT
AS CONTAINED IN ARTICLE IV OR ARTICLE V, THE CAMAC PARTIES AND PAPI PARTIES,
RESPECTIVELY, EXPRESSLY DISCLAIM ANY REPRESENTATION OR WARRANTY, EXPRESS,
STATUTORY OR IMPLIED, AS TO (I) THE ASSETS (II) THE CONTENTS, CHARACTER OR
NATURE OF ANY DESCRIPTIVE MEMORANDUM, OR ANY REPORT OF ANY PETROLEUM ENGINEERING
CONSULTANT, OR ANY GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO THE
COMPANIES, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS IN OR
FROM THE ASSETS, (IV) ANY ESTIMATES OF THE VALUE OF THE ASSETS, RESERVES, OR
FUTURE REVENUES GENERATED BY THE ASSETS, (V) THE PRODUCTION OF HYDROCARBONS (VI)
THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR
MARKETABILITY OF THE ASSETS, (VII) THE CONTENT, CHARACTER OR NATURE OF ANY
DESCRIPTIVE MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY
THIRD PARTIES, AND (VIII) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN
MADE AVAILABLE OR COMMUNICATED TO THE PAPI PARTIES OR ITS AFFILIATES, OR ITS OR
THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR
PRESENTATION RELATING THERETO, AND FURTHER DISCLAIM ANY REPRESENTATION OR
WARRANTY, EXPRESS, STATUTORY OR IMPLIED, OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, OR OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, IT BEING
EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES THAT THE PAPI PARTIES SHALL BE
DEEMED TO BE OBTAINING THE ASSETS IN THEIR PRESENT STATUS, CONDITION AND STATE
OF REPAIR, “AS IS” AND “WHERE IS” WITH ALL FAULTS AND THAT THE PAPI PARTIES HAS
MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AND EVALUATIONS, AS THE PAPI PARTIES
DEEMS APPROPRIATE.

       

      Section
8.9                      Further Assurances. Subject
to the terms and conditions of this Agreement, at any time or from time to time
after the Closing, each of the Parties shall execute and deliver such other
documents and instruments, provide such materials and information and take such
other actions as may be commercially reasonable, to the extent permitted by law,
to fulfill its obligations under this Agreement and to effectuate and consummate
the Transactions.

       

      


       

      


       

      ARTICLE
IX

       

      


       

      Conditions
to Closing

       

      Section
9.1                      Joint Conditions Precedent  The
obligations of the Parties to enter into and complete the Closing are subject to
the fulfillment on or prior to the Closing Date of the following conditions by
the Parties, any one or more of which may be waived by the Parties in
writing:

       

      (a)           Novation
Agreement.  Execution and delivery of the Novation Agreement
(which shall include a waiver pursuant to which NAE waives the enforcement of
Section 8.11(e) of the Production Sharing Contract and agrees that,
notwithstanding anything to the contrary

       

       

      
        
          
          

        

        
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      contained
in the Production Sharing Contract, the profit sharing allocation set forth in
therein shall remain the same after the Closing Date);

       

      (b)           Financing.  PAPI
shall consummate the Financing prior to or concurrently with the Closing. The
proceeds of from the Financing shall be used to pay the Cash Consideration and
provide working capital for PAPI.

       

      (c)           Deliveries.  The
deliveries required to be made by the PAPI Parties and the CAMAC Parties in
Article III shall have been made by them.

       

      (d)           Approval by the PAPI
Stockholders. The Transactions shall have been approved by the PAPI
majority holders (including any approvals required to change the name from
Pacific Asia Petroleum Inc. to CAMAC Energy Inc.), voting as a group, in
accordance with Section 253 of the Delaware General Corporation Law (the “DGCL”)
and other applicable laws, and this Agreement and the Transactions shall have
been approved by holders of a majority of the PAPI Newco shareholders in
accordance with the PAPI Newco constituent documents.

       

      Section
9.2                      CAMAC Parties Conditions
Precedent  The
obligations of the CAMAC Parties to enter into and complete the Closing are
subject, at the option of the CAMAC Parties, to the fulfillment on or prior to
the Closing Date of the following conditions by the PAPI Parties, any one or
more of which may be waived by the CAMAC Parties in writing.

       

      (a)           Payment of
Consideration.  PAPI shall have paid the Cash Consideration and
issued the Consideration Shares.

       

      (b)           Governmental and Third Party
Approvals.  Each of PAPI Parties shall have timely obtained
from each Governmental Authority all approvals, waivers and consents, if any,
necessary for consummation of or in connection with this Agreement and the
Transactions contemplated hereby, including such approvals, waivers and consents
as may be required from the Federal Republic of Nigeria (and any other Nigerian
governmental agency), NAE, the SEC, and any other foreign or domestic Persons
and governmental entities.

       

      (c)           Representations and
Covenants.  The representations and warranties of the PAPI
Parties contained in this Agreement shall be true on and as of the Closing Date
except where the failure of such representations or warranties to be so true and
correct, individually or in the aggregate, has not had or would not reasonably
be expected to have a PAPI Material Adverse Effect and each of the PAPI Parties
shall have performed and complied in all material respects with all covenants
and agreements required by this Agreement to be performed or complied with by
each of them on or prior to the Closing Date, and the PAPI Parties shall have
delivered to the CAMAC Parties a certificate, dated the Closing Date, to the
foregoing effect.

       

      (d)           Litigation.  There
is no effective injunction, writ or preliminary restraining order or any order
of any nature issued by a Governmental Authority prohibiting or making illegal
the consummation of the Transaction, and no action, suit or proceeding shall
have been threatened or instituted before any court or governmental or
regulatory body or instituted by any Governmental Authorities to restrain,
modify or prevent the carrying out of the Transactions, or to seek damages or a
discovery order in connection with such Transactions, which has or may have, in
the reasonable opinion of the CAMAC Parties, a PAPI Material Adverse
Effect.

       

       

      
        
          
          

        

        
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      (e)           No PAPI Material Adverse
Change.  There shall not have been any occurrence, event,
incident, action, failure to act, or transaction since September 30, 2009, which
has had or is reasonably likely to cause a PAPI Material Adverse
Effect.

       

      (f)           Resignations.  Effective
as of the Closing, the directors of PAPI who are not continuing directors and
the officers of PAPI shall have resigned and the copies of such resignation
letters of such directors shall have been delivered to the CAMAC Parties, and
such resigning directors shall have no claim for employment compensation in any
form from PAPI except for any reimbursement of outstanding expenses existing as
of the date of such resignation.

       

      (g)           SEC
Reports.  The PAPI Parties shall have filed all reports and
other documents required to be filed by the PAPI Parties under the U.S. federal
securities laws through the Closing Date.

       

      (h)           NYSE Amex
Listing.  The PAPI Parties shall have maintained its status as
a Company whose Common Stock is quoted on the NYSE Amex and no reason shall
exist as to why such status shall not continue immediately following the
Closing.

       

      (i)           Secretary’s
Certificate.  The CAMAC Parties shall have received a
certificate from the PAPI Parties, signed by its Secretary certifying that the
attached copies of the PAPI Constituent Instruments and resolutions of the PAPI
board of directors approving the Agreement and the Transactions are all true,
complete and correct and remain in full force and effect.

       

      (j)           Opinions.  The
CAMAC Parties shall have received the opinions of PAPI’s legal counsel in
Delaware and PAPI Newco’s legal counsel in Nigeria, which such opinions shall be
in the form reasonably acceptable to the CAMAC Parties.

       

      (k)           Certificate of Good
Standing.  The CAMAC Parties shall have received a certificate
of good standing under the applicable Law of each of the PAPI
Parties.

       

      (l)           Injunctions or Restraints on
Conduct of Business.  No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint provision limiting
or restricting any the PAPI Party’s conduct or operation of the business of the
PAPI Parties following the Closing Date shall be in effect, nor shall any
proceeding brought by an administrative agency or commission or other
Governmental Authority, domestic or foreign, seeking the foregoing be
pending.

       

      (m)           SEC
Actions.  No formal or informal SEC investigation or proceeding
shall have been initiated by the SEC against any of the PAPI Parties or any of
their officers or directors.

       

      (n)           Registration Rights
Agreement.  Execution and delivery of the Registration Rights
Agreement, substantially in form and substance reasonably satisfactory to the
Parties.

       

       

      
        
          
          

        

        
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      Section
9.3                      PAPI Conditions Precedent.  The
obligations of PAPI to enter into and complete the Closing are subject, at the
option of PAPI, to the fulfillment on or prior to the Closing Date of the
following conditions by each of the CAMAC Parties, any one or more of which may
be waived by PAPI in writing:

       

      (a)           Representations and
Covenants.  The representations and warranties of the CAMAC
Parties contained in this Agreement shall be true on and as of the Closing Date
except where the failure of such representations or warranties to be so true and
correct, individually or in the aggregate, has not had or would not reasonably
be expected to have a CAMAC Material Adverse Effect, and each of the CAMAC
Parties shall have performed and complied in all material respects with all
covenants and agreements required by this Agreement to be performed or complied
with by each of them on or prior to the Closing Date, and the CAMAC Parties
shall have delivered to PAPI a certificate, dated the Closing Date, to the
foregoing effect.

       

      (b)           Litigation.  There
is no effective injunction, writ or preliminary restraining order or any order
of any nature issued by a Governmental Authority prohibiting or making illegal
the consummation of the Transactions, and no action, suit or proceeding shall
have been threatened or instituted before any court or governmental or
regulatory body or instituted by any Governmental Authorities to restrain,
modify or prevent the carrying out of the Transactions, or to seek damages or a
discovery order in connection with such Transactions, which has or may have, in
the reasonable opinion of the PAPI Parties, a CAMAC Material Adverse
Effect.

       

      (c)           No CAMAC Material Adverse
Change.  There shall not have been any occurrence, event,
incident, action, failure to act, or transaction since September 30, 2009, which
has had or is reasonably likely to cause a CAMAC Material Adverse
Effect.

       

      (d)           Opinions.  PAPI
shall have received the opinion of the CAMAC Parties’ legal counsel in Nigeria
and the Cayman Islands, and each such opinion shall be in the form reasonably
acceptable to the PAPI Parties.

       

      (e)           Officer’s
Certificate.  PAPI shall have received a certificate from each
of CAMAC Parties signed by an authorized officer or representative of such
Party, respectively, certifying that the attached copies of each such Party’s
constituent instruments and resolutions or other authorizing documents approving
the Agreement and the Transactions are all true, complete and correct and remain
in full force and effect

       

      (f)           Certificate of Good
Standing.  PAPI shall have received a certificate of good
standing or equivalent under the applicable Law of each of the CAMAC
Parties.

       

      (g)           Injunctions or Restraints on
Conduct of Business.  No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint provision limiting
or restricting any CAMAC Parties’ conduct or operation of the business of any of
the CAMAC Parties with respect to the Oyo Related Agreements and the Oyo Field
following the Closing Date shall be in effect, nor shall any proceeding brought
by an administrative agency or commission or other Governmental Authority,
domestic or foreign, seeking the foregoing be pending.

       

       

      
        
          
          

        

        
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      (h)           Transaction
Documents.  The Parties shall have executed and delivered all
of the Transaction Documents and all other agreements and instruments reasonably
necessary to consummate the Transactions.

       

      (i)           OYO
Debt.  The CAMAC Parties shall delivered one or more debt/lien
release instruments with respect to all debt secured by the Contract Rights and
the Oyo Field in form and substance reasonably satisfactory to the
Parties.

       

      (j)           
Actions.  No formal or informal Government Authority
investigation or proceeding, including by the SEC, shall have been initiated or
sent by any Government Authority against any of the CAMAC Parties or any of
their officers or directors with respect to the Oyo Related Agreements and the
Oyo Field.

       

      (k)           Technical Services
Agreement.  Execution and delivery of the Technical Services
Agreement, substantially in form and substance reasonably satisfactory to the
Parties.

       

      (l)           ROFR
Agreement.  Execution and delivery of the ROFR Agreement in
form and substance reasonably satisfactory to the Parties.

       

      (m)           Oyo Field Supplemental
Agreement.  Execution and delivery of the Oyo Field
Supplemental Agreement in form and substance reasonably satisfactory to the
Parties.

       

      (n)           Formation of PAPI
Newco.  PAPI shall have formed PAPI Newco and PAPI Newco shall
have executed and delivered to the CAMAC Parties the letter agreement pursuant
to Section 7.12 hereof.

       

       

      ARTICLE
X

       

      


       

      Indemnification

       

      Section
10.1                      Survival.  All
of the representations and warranties of the Parties contained in this Agreement
shall survive the Closing for a period of twelve (12) months and shall
thereafter be of no further force and effect; provided, however, that all
of the covenants and obligations of the Parties contained in this Agreement,
including the covenants and obligations with respect to the Oyo Related
Agreements and the Oyo Field, shall survive the Closing unless they expire
sooner in accordance with their terms.  The term during which any
representation, warranty, or covenant survives hereunder is referred to as the
“Survival
Period.” Except as expressly provided in this paragraph, no claim for
indemnification hereunder may be made after the expiration of the Survival
Period.

       

      Section
10.2                      Indemnification by the CAMAC
Parties.

       

      (a)           The
CAMAC Parties shall, subject to the terms hereof, jointly and severally
indemnify, defend and hold harmless the PAPI Parties (which term, for the
purposes of this Article X shall include any of the PAPI Parties’ successors)
and permitted assigns (the “PAPI Indemnified Parties”) from and against any
liabilities, loss, claims, damages, fines, penalties, expenses (including costs
of investigation and defense and reasonable attorneys’ fees and court costs)
(collectively, “Damages”) arising from: (i) any debts, claims, liabilities,
or

       

       

      
        
          
          

        

        
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      obligations
of the CAMAC Parties not expressly assumed by PAPI Parties pursuant to this
Agreement (including the liabilities retained by the CAMAC Parties pursuant to
Section 1.4); (ii) any breach of any representation or warranty made by the
CAMAC Parties in Article IV hereof or in any certificate delivered by the CAMAC
Parties pursuant to this Agreement; (iii) any breach by any CAMAC Party of its
covenants or obligations in this Agreement to be performed or complied with by
such CAMAC Party at or prior to the Closing; or (iv) any breach by any CAMAC
Party of its representations or warranties, covenants or obligations in this
Agreement or in any certificate delivered by the CAMAC Parties pursuant to this
Agreement.

       

      (b)           Pursuant
to the provisions of this Article X, if any claim for indemnification is to be
brought against the CAMAC Parties on behalf of or by right of any PAPI Party,
such claim shall be determined and approved by a committee of directors
comprised of (i) all Independent Directors, and (ii) the directors nominated by
the PAPI Representatives, each as elected pursuant to Section 8.5(a) (the
“Independent Committee”).  Any settlement of any claim described in
the immediately preceding sentence shall be determined and approved by the
Independent Committee.  Any determination or approval of the
Independent Committee made pursuant to the provisions of this Article X shall be
by majority vote.

       

      (c)           The
amount of any and all indemnifiable Damages suffered by the PAPI Indemnified
Parties and agreed to be paid by the CAMAC Parties shall be paid in cash, or, at
the option of the PAPI Parties, may be paid in the return of a specified number
of Consideration Shares.  If the PAPI Parties opt to receive shares in
lieu of receiving cash for any indemnifiable Damages, then the PAPI Parties
shall notify the CAMAC Parties in writing of their intent to exercise such
option.  The number of shares to be returned to the PAPI Indemnified
Parties shall have a fair market value equal to the aggregate amount of the
indemnifiable Damages agreed to be paid by the CAMAC Parties.  The
fair market value of such shares shall be determined by calculating the average
closing price of PAPI’s Common Stock over a period of 30 days, counting back
from the first business day immediately prior to the official determination of
Damages hereunder.

       

      Section
10.3                      Indemnification by PAPI.

       

      (a)           Each
of the PAPI Parties shall, subject to the terms hereof, jointly and severally
indemnify, defend and hold harmless the CAMAC Parties and their respective
successors and permitted assigns (the “CAMAC Indemnified Parties”) from and
against any Damages arising from: (i) any breach of any representation or
warranty made by the PAPI Parties in Article V hereof or in any certificate
delivered by the PAPI Parties pursuant to this Agreement; or (ii) any breach by
any PAPI Party, of its covenants or obligations in this Agreement to be
performed or complied with by such PAPI Party at or prior to the
Closing.

       

      (b)           The
amount of any and all Damages suffered by the CAMAC Indemnified Parties shall be
paid in cash, or, at the option of the CAMAC Parties, may be paid in newly
issued shares of PAPI’s Common Stock.  If the CAMAC Parties opt to
receive newly issued shares in lieu of receiving cash for any indemnifiable
Damages, the number of shares to be issued to the CAMAC Indemnified Parties
shall have a fair market value equal to the aggregate amount of the
indemnifiable Damages agreed to be paid by the PAPI Parties.  The fair
market value of such shares shall be determined by calculating the average
closing price of PAPI’s

       

       

      
        
          
          

        

        
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      Common
Stock over a period of 30 days, counting back from the first business day
immediately prior to the official determination of Damages
hereunder.

       

      Section
10.4                      Limitations on Indemnity.

       

      (a)           Notwithstanding
any other provision in this Agreement to the contrary, the PAPI Indemnified
Parties shall not be entitled to indemnification pursuant to Section 10.2,
unless and until the aggregate amount of Damages to the PAPI Indemnified Parties
with respect to such matters under Section 10.2 exceeds $5,000,000 (the
“Deductible”), and then only to the extent such Damages exceed the Deductible;
provided that the aggregate amount of Damages payable by the CAMAC Parties to
the PAPI Indemnified Parties hereunder shall not exceed $25,000,000 (the “Cap”)
unless the Damages arise from or otherwise relate to the breach of Sections 4.4
and 4.6 made by the CAMAC Parties.

       

      (b)           Notwithstanding
any other provision in this Agreement to the contrary, the CAMAC Parties shall
not be liable to, or indemnify the PAPI Indemnified Parties for any Damages or
indemnify the PAPI Indemnified Parties for any Damages “that are punitive
(except to the extent constituting third party punitive claims), special,
consequential, incidental, exemplary, lost profits or other wise not actual
damages.”  The PAPI Indemnified Parties shall not use “multiple of
profits” or “multiple of cash flow” or any similar valuation methodology in
calculating the amount of any Damages.  This Article X constitutes the
PAPI Parties’ sole and exclusive remedy for any and all Damages or other claims
relating to or arising from this Agreement and the transactions contemplated
hereby.

       

      (c)           Notwithstanding
any other provision in this Agreement to the contrary, no CAMAC Party shall be
entitled to indemnification pursuant to Section 10.3, unless and until the
aggregate amount of Damages with respect to such matters under Section 10.3
exceeds the Deductible, and then only to the extent such Damages exceed the
Deductible; provided that the aggregate amount of Damages payable by any PAPI
Party to the CAMAC Parties hereunder shall not exceed the Cap unless the Damages
arise from or otherwise relate to the breach of any of the Basic Representations
made by the PAPI Parties.

       

      (d)           Notwithstanding
any other provision in this Agreement to the contrary, PAPI shall not be liable
to, or indemnify any CAMAC Party for any Damages (i) resulting from any
non-fulfillment or breach of any such representations, warranties, covenants,
and obligations of which the CAMAC Parties had knowledge on or prior to the
Closing Date; (ii) that are punitive (except to the extent constituting third
party punitive claims), special, consequential, incidental, exemplary or
otherwise not actual damages or (iii) that are in the nature of lost profits or
any diminution in value of property or equity.  The CAMAC Parties
shall not use “multiple of profits” or “multiple of cash flow” or any similar
valuation methodology in calculating the amount of any Damages.  This
Article X constitutes the CAMAC Parties’ sole and exclusive remedy for any and
all Damages or other claims relating to or arising from this Agreement and the
transactions contemplated hereby.

       

      Section
10.5                      Defense of Third Party
Claims. If
the Independent Committee determines to make a claim for indemnification on
behalf of the PAPI Parties under Section 10.2 or any CAMAC Party makes a claim
for indemnification under Section 10.3 (each as applicable an

       

       

      
        
          
          

        

        
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       “Indemnitee”),
the Independent Committee or such CAMAC Party as applicable shall notify the
indemnifying party (an “Indemnitor”)
of the claim in writing promptly after receiving notice of any action, lawsuit,
proceeding, investigation, demand or other claim against the Indemnitee (if by a
third party), describing the claim, the amount thereof (if known and
quantifiable) and the basis thereof in reasonable detail (such written notice,
an “Indemnification
Notice”); provided that the failure to
so notify an Indemnitor shall not relieve the Indemnitor of its obligations
hereunder except to the extent that (and only to the extent that) such failure
shall have caused the damages for which the Indemnitor is obligated to be
greater than such damages would have been had the Indemnitee given the
Indemnitor prompt notice hereunder. Any Indemnitor shall be entitled to
participate in the defense of such action, lawsuit, proceeding, investigation or
other claim giving rise to an Indemnitee’s claim for indemnification at such
Indemnitor’s expense, and at its option shall be entitled to assume the defense
thereof by appointing a reputable counsel reasonably acceptable to the
Indemnitee to be the lead counsel in connection with such defense; provided, that the Indemnitee
shall be entitled to participate in the defense of such claim and to employ
counsel of its choice for such purpose; provided, however, that the
fees and expenses of such separate counsel shall be borne by the Indemnitee and
shall not be recoverable from such Indemnitor under this Article
X.  If the Indemnitor shall control the defense of any such claim, the
Indemnitor shall be entitled to settle such claims; provided, that the Indemnitor
shall obtain the prior written consent of the Indemnitee (which consent shall
not be unreasonably withheld, conditioned or delayed) before entering into any
settlement of a claim or ceasing to defend such claim if, pursuant to or as a
result of such settlement or cessation, injunctive or other equitable relief
will be imposed against the Indemnitee or if such settlement does not expressly
and unconditionally release the Indemnitee from all liabilities and obligations
with respect to such claim.  If the Indemnitor assumes such defense,
the Indemnitor shall not be liable for any amount required to be paid by the
Indemnitee that exceeds, where the Indemnitee has unreasonably withheld or
delayed consent in connection with the proposed compromise or settlement of a
third party claim, the amount for which that third party claim could have been
settled pursuant to that proposed compromise or settlement.  In all
cases, the Indemnitee shall provide its reasonable cooperation with the
Indemnitor in defense of claims or litigation, including by making employees,
information and documentation reasonably available.  If the Indemnitor
shall not assume the defense of any such action, lawsuit, proceeding,
investigation or other claim, the Indemnitee may defend against such matter as
it deems appropriate; provided that the Indemnitee
may not settle any such matter without the written consent of the Indemnitor
(which consent shall not be unreasonably withheld, conditioned or delayed) if
the Indemnitee is seeking or will seek indemnification hereunder with respect to
such matter.

       

      Section
10.6                      Determining Damages. The
amount of Damages subject to indemnification under Section 10.2 or Section 10.3
shall be calculated net of (i) any Tax Benefit inuring to the Indemnitee on
account of such Damages, and (ii) any insurance proceeds or other amounts under
indemnification agreements received or receivable by the Indemnitee on account
of such Damages.  If the Indemnitee receives a Tax Benefit on account
of such Damages after an indemnification payment is made to it, the Indemnitee
shall promptly pay to the Person or Persons that made such indemnification
payment the amount of such Tax Benefit at such time or times as and to the
extent that such Tax Benefit is realized by the Indemnitee.  For
purposes hereof, “Tax
Benefit” shall mean any refund of Taxes to be paid or reduction in the
amount of Taxes which otherwise would be paid by the Indemnitee, in each case
computed at the highest marginal tax rates applicable to the recipient of such
benefit.  To the extent Damages are

       

       

      
        
          
          

        

        
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      recoverable
by insurance, the Indemnitees shall take all commercially reasonable efforts to
obtain maximum recovery from such insurance.  In the event that an
insurance or other recovery is made by any Indemnitee with respect to Damages
for which any such Person has been indemnified hereunder, then a refund equal to
the aggregate amount of the recovery shall be made promptly to the Person or
Persons that provided such indemnity payments to such Indemnitee.  The
Indemnitors shall be subrogated to all rights of the Indemnitees in respect of
Damages indemnified by the Indemnitors. The Indemnitees shall take all
commercially reasonable efforts to mitigate all Damages upon and after becoming
aware of any event which could reasonably be expected to give rise to
Damages.  For Tax purposes, the Parties agree to treat all payments
made under this Article X as adjustments to the consideration received for the
CAMAC Shares.

       

      Section
10.7                      Right of Setoff. To
the extent that any Party is obligated to indemnify any other Party after
Closing under the provisions of this Article X for Damages reduced to a monetary
amount, such Party after Closing shall have the right to decrease any amount due
and owing or to be due and owing under any agreement with the other Party,
whether under this Agreement or any other agreement between such Parties on the
one hand, and any of the other Party or any of their respective Affiliates,
Subsidiaries or controlled persons or entities on the other.

       

      Section
10.8                      Limitation on Recourse; No Third Party
Beneficiaries.

       

      (a)           No
claim shall be brought or maintained by any Party or its respective successors
or permitted assigns against any officer, director, partner, member, agent,
representative, Affiliate, equity holder, successor or permitted assign of any
Party which is not otherwise expressly identified as a Party, and no recourse
shall be brought or granted against any of them, by virtue of or based upon any
alleged misrepresentation or inaccuracy in or breach of any of the
representations, warranties, covenants or obligations of any Party set forth or
contained in this Agreement or any exhibit or schedule hereto or any certificate
delivered hereunder.

       

      (b)           Except
as set forth in Section 10.2(a) and 10.3(a), the provisions of this Article X
are for the sole benefit of the Parties and nothing in this Article X, express
or implied, is intended to or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Article X.

       

      ARTICLE
XI


       

      Termination

       

      Section
11.1                      Methods of Termination.  Unless
waived by the Parties hereto in writing, the Transactions may be terminated
and/or abandoned at any time but not later than the Closing:

       

      (a)           by
mutual written consent of the Parties;

       

      (b)           by
any Party, if the Closing has not occurred by the later of (i) March 31, 2010 or
(ii) such other date that has been agreed by the Parties;

       

       

      
        
          
          

        

        
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      (c)           by
any CAMAC Party, if there has been a breach by the PAPI Parties of any
representation, warranty, covenant or agreement contained in this Agreement
which has prevented the satisfaction of the conditions to the obligations of the
CAMAC Parties at the Closing under Article IX and such violation or breach has
not been waived by the CAMAC Parties or cured by the PAPI Parties within ten
(10) business days after written notice thereof from the CAMAC
Parties;

       

      (d)           by
the PAPI Parties, if there has been a breach by the CAMAC Parties of any
representation, warranty, covenant or agreement contained in this Agreement
which has prevented the satisfaction of the conditions to the obligations of the
PAPI Parties at the Closing under Article IX and such violation or breach has
not been waived by the PAPI Parties or cured by the CAMAC Parties within ten
(10) business days after written notice thereof from the PAPI
Parties;

       

      (e)           by
any CAMAC Party, if the PAPI board of directors (or any committee thereof) shall
have failed to recommend or shall have withdrawn or modified in a manner adverse
to the CAMAC Parties its approval or recommendation of this Agreement and the
Transactions; or

       

      (f)           by
any PAPI Party, if (i) the CEHL board of directors (or any committee thereof)
shall have failed to approve or shall have withdrawn its approval of this
Agreement and the Transactions or (ii) the CEHL shareholders shall have failed
to approve of this Agreement and the Transactions; or

       

      (g)           by
either PAPI or the CAMAC Parties, if, at the Stockholders’ Meeting (including
any adjournments thereof), this Agreement and the Transactions shall fail to be
approved and adopted by holders of a majority of the PAPI voting securities in
accordance with Section 253 of the DGCL, and by the affirmative vote of holders
of a majority of the PAPI Newco outstanding shares in accordance with PAPI Newco
Constituent Instruments.

       

      Section
11.2                      Effect of Termination.

       

      (a)           In
the event of termination and abandonment by either PAPI or the CAMAC Parties, or
both of them, pursuant to Section 11.1 hereof, written notice thereof shall
forthwith be given to the other Party (as applicable), and except as set forth
in this Section 11, all further obligations of the Parties shall terminate, no
Party shall have any right against the other Party hereto, and each Party shall
bear its own costs and expenses.

       

      (b)           If
the Transactions contemplated by this Agreement are terminated and/or abandoned
as provided herein:

       

      (i)           each
Party hereto will destroy all documents, work papers and other material (and all
copies thereof) of the other Party relating to the Transactions contemplated
hereby, whether so obtained before or after the execution hereof, to the Party
furnishing the same;

       

      (ii)           all
confidential information received by either Party hereto with respect to the
business of the other Party hereto shall be treated in accordance with Section
9.2

       

       

      
        
          
          

        

        
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      hereof,
which shall survive such termination or abandonment.  The provisions
of Article X and Article XI shall survive termination of this Agreement;
and

       

      (iii)           The
PAPI Parties agree to comply with Section 7.12 of this Agreement following any
termination of this Agreement. The provisions of Section 7.12 shall survive
termination of this Agreement.

       

      Section
11.3                      Termination Recovery and
Fee.

       

      (a)           If
the Agreement is properly terminated pursuant to Sections 11.1(c) or 11.1(e),
then CAMAC will be entitled to damages in the amount of Five Hundred Thousand
Dollars ($500,000) immediately upon termination of this Agreement as liquidated
damages and not as a penalty amount, and in lieu of any other right or remedy
that the PAPI Parties may have against the CAMAC Parties for such termination or
breach.

       

      (b)           If
this Agreement is properly terminated pursuant to Sections 11.1(d) or 11.1(f),
then PAPI will be entitled to damages in the amount of Five Hundred Thousand
Dollars ($500,000) immediately upon termination of this Agreement as liquidated
damages and not as a penalty amount, and in lieu of any other right or remedy
that the PAPI Parties may have against the CAMAC Parties for such termination or
breach

       

      (c)           Except
for the rights specified in Section 11.2 and the right to liquidated damages
provided for in Section 11.3, no Person shall have any rights to any other
remedy or damages, whether at law or equity, in contract, in tort or otherwise
upon the termination of this Agreement.  Each of PAPI and the CAMAC
Parties acknowledge that the covenants and agreements contained in this Article
XI are an integral part of this Agreement.  If PAPI or the CAMAC
Parties fail to pay the liquidated damages amounts provided for in Section 11.3
when due, PAPI or the CAMAC Parties, as the case may be, will reimburse the
other party for all Expenses incurred by the other Party (including Expenses of
counsel) in connection with the collection under and enforcement of this Article
XI.

       

      ARTICLE
XII


       

      Miscellaneous

       

      Section
12.1                      Notices.  All
notices, requests, claims, demands and other communications under this Agreement
shall be in writing and shall be deemed given upon receipt by the Parties at the
addresses set forth on the signature pages hereto (or at such other address for
a Party as shall be specified in writing to all other Parties).

       

      Section
12.2                      Amendments; Waivers; No Additional
Consideration.  Except
as otherwise provided in this Agreement, no provision of this Agreement may be
waived or amended except in a written instrument signed by all of the Parties
hereto.  No waiver of any Default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent Default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any Party to exercise any right hereunder in any manner impair the
exercise of any such right.

       

       

      
        
          
          

        

        
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      Section
12.3                      Adjustments to Payment of Purchase
Price.  The
Consideration Shares shall be adjusted to reflect appropriately the effect of
any stock split, reverse stock split, stock dividend, extraordinary cash
dividends, reorganization, recapitalization, reclassification, combination,
exchange of shares or other like change with respect to PAPI’s securities,
occurring on or after the date hereof and prior to the Closing
Date.

       

      Section
12.4                      Interpretation.  When
a reference is made in this Agreement to a Section, such reference shall be to a
Section of this Agreement unless otherwise indicated.  Whenever the
words “include,” “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation.”

       

      Section
12.5                      Severability.  If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule or Law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the Transactions is not affected
in any manner materially adverse to any Party (it being understood that if any
provision of Section 11.3 hereof is invalid, illegal or incapable of being
enforced by any Law or public policy, it will be deemed to be a change to the
economic and legal substance of the Transactions that is materially adverse to
the Parties and will entitle either the PAPI Parties or the CAMAC Parties to
terminate the Agreement without penalty and none of the Parties and their
respective shareholders and Affiliates will have recourse against any other
Parties).  Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the Parties shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that
Transactions are fulfilled to the extent possible.

       

      Section
12.6                      Counterparts; Facsimile
Execution.  This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the Parties and delivered to the
other Parties.  Facsimile execution and delivery of this Agreement is
legal, valid and binding for all purposes.

       

      Section
12.7                      Entire Agreement; Third Party
Beneficiaries.  This
Agreement, taken together with all Exhibits, Annexes and Schedules hereto (a)
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the Parties with respect to the
Transactions and (b) are not intended to confer upon any Person other than the
Parties any rights or remedies.

       

      Section
12.8                      Governing Law.  This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.

       

      Section
12.9                      Dispute Resolution.

       

      (a)           All
disputes among the Parties arising out of or relating to this Agreement will be
resolved by mandatory, binding arbitration in accordance with this Section
12.10.

       

       

      
        
          
          

        

        
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      (b)           Before
any arbitration is commenced pursuant to this Section 12.10, the Parties must
endeavor to reach an amicable settlement of the dispute through friendly
negotiations.

       

      (c)           If
no mutually acceptable settlement of the dispute is made within the sixty (60)
days from the commencement of the settlement negotiation or if any Party refuses
to engage in any settlement negotiation, any Party may submit the dispute for
arbitration.

       

      (d)           Any
arbitration commenced pursuant to this Section 12.10 will be conducted in New
York under the Arbitration Rules of the United Nations Commission on
International Trade Law by arbitrators appointed in accordance with such rules.
The arbitration and appointing authority will be the American Arbitration
Association (“AAA”). The arbitration will be conducted by a panel of three
arbitrators, one chosen by the PAPI Representatives, one chosen by the CAMAC
Parties and the third chosen by agreement of the two selected arbitrators;
failing agreement within thirty (30) days prior to commencement of the
arbitration proceeding, the AAA will appoint the third arbitrator. The
proceedings will be confidential and conducted in English. The arbitral tribunal
will have the authority to grant any equitable and legal remedies that would be
available in any judicial proceeding instituted to resolve a disputed matter,
and its award will be final and binding on the Parties. The arbitral tribunal
will determine how the Parties will bear the costs of the arbitration.
Notwithstanding the foregoing, each Party will have the right at any time to
immediately seek injunctive relief, an award of specific performance or any
other equitable relief against the other Party in any court or other tribunal of
competent jurisdiction. During the pendency of any arbitration or other
proceeding relating to a dispute between the Parties, the Parties will continue
to exercise their remaining respective rights and fulfill their remaining
respective obligations under this Agreement, except with regard to the matters
under dispute.

       

      Section
12.10                                Assignment.  Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or
otherwise by any of the Parties without the prior written consent of the other
Parties.  Any purported assignment without such consent shall be
void.  Subject to the preceding sentences, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the Parties and
their respective successors and assigns.

       

      Section
12.11                                Publicity.  The
terms of this Agreement shall be considered confidential information of the
Parties.  The Parties agree that the specific provisions hereof shall
not be revealed or disclosed by it without the prior written consent of all the
Parties hereto, except to the Representatives or to the extent such disclosure
is required by applicable law or regulation.

       

      Section
12.12                                Governing Language.  This
Agreement shall be governed and interpreted in accordance with the English
language.

       

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      IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.

       

      


       

      PACIFIC
ASIA PETROLEUM, INC.

       

      


       

      


       

      By: /s/
Frank C. Ingriselli

      Frank C.
Ingriselli

      President
and Chief Executive Officer

       

      Address for
Notice

      250 East
Hartsdale Ave., Suite 47

      Hartsdale,
New York 10530

      


       

      


       

      


       

      


       

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

       

      SIGNATURE
PAGES FOR CAMAC PARTIES FOLLOW]

       


      
        
          
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      IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.

       

      


       

      CAMAC
ENERGY HOLDINGS LIMITED

       

      By: /s/
Kamoru Lawal

      Name:
Kamoru Lawal

      Title:
Director

      


       

      Address
for Notice

       

      c/o CAMAC
International Corporation

      1330 Post
Oak Blvd.

      Suite
2200

      Houston,
Texas 77056

      


      


      CAMAC
INTERNATIONAL (NIGERIA) LIMITED

       

      


       

      By: /s/
Kase Lawal

      Name:
Kase Lawal

      Title:
Director

      


       

      Address
for Notice

       

      c/o CAMAC
International Corporation

      1330 Post
Oak Blvd.

      Suite
2200

      Houston,
Texas 77056

      


      


      [SIGNATURES
FOR CAMAC PARTIES CONTINUE]


      
        
          
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            701784886v7

          

           


        

        
           


          
            

          

        

        
           


        

      


      ALLIED
ENERGY PLC

      


      


      By: /s/
Kase Lawal

      Name:
Kase Lawal

      Title:
Director

       

      


       

      Address
for Notice

       

      c/o CAMAC
International Corporation

      1330 Post
Oak Blvd.

      Suite
2200

      Houston,
Texas 77056

      


      


      


       

      


       


      
        
          
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      ANNEX A

       

      Definitions

       

      “Acquisition Proposal”
has the meaning set forth in Section 6.7(a) of the Agreement.

       

      “Action” has the
meaning set forth in Section 4.5 of the Agreement.

       

      “Affiliates” shall
mean any Person that directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the Person
specified. For purposes of this definition, control of a Person means the power,
direct or indirect, to direct or cause the direction of the management and
policies of such Person whether by Contract or otherwise and, in any event and
without limitation of the previous sentence, any Person owning fifty percent
(50%) or more of the voting securities of a second Person shall be deemed
to control that second Person. For the purposes of this definition, a Person
shall be deemed to control any of his or her immediate family
members.

       

      “Allied” has the
meaning set forth in the preamble to the Agreement.

       

      “Allied Assignment”
has the meaning set forth in the background to the Agreement.

       

      “Agreement” has the
meaning set forth in the preamble to the Agreement.

       

      “CAA” means the
federal Clean Air Act, as amended.

       

      “CAMAC Constituent
Instruments” means the memorandum and articles of association of each of
the CAMAC Parties together with any of their statutory registers and such
constituent instruments of any of them as may exist, each as amended to the date
of the Agreement.

       

      “CAMAC Directors” has
the meaning set forth in Section 8.4 of the Agreement.

       

      “CAMAC Indemnified
Parties” has
the meaning set forth in Section 10.3(a) of the Agreement.

       

      “CAMAC Material Adverse
Effect” means any event, change or effect that is materially adverse to
the condition (financial or otherwise) of the Contract Rights, the Oyo Related
Agreements or the Oyo Field or would prevent or materially alter or delay any of
the Transactions.  Notwithstanding the foregoing, the definition of
CAMAC Material Adverse Effect shall not include events caused by (A) changes in
Nigerian economic conditions, except to the extent that the same
disproportionately impact any of the Contract Rights, the Oyo Related Agreements
or the Oyo Field, as compared to similar assets of other similarly situated
companies; (B) changes to the economic conditions (including changes in
commodity prices) affecting the industries in which any of the Contract Rights
are exercised, the Oyo Related Agreements are performed or in which the Oyo
Field operates, except to the extent that the same disproportionately impact any
of the Contract Rights, the Oyo Related Agreements or the Oyo Field; (C) changes
related to or arising from the execution, announcement or performance of, or
compliance with, this Agreement or the consummation of the Transactions,
including the impact thereof on relationships, contractual or otherwise,
governmental authorities, customers, suppliers,

       

       

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

       

      distributors
or employees; (D) changes in accounting requirements or principles or any change
in applicable laws or the interpretation thereof; (E) the failure to meet any
projections or budgets; or (F) matters listed in the Disclosure
Schedules.

       

      “CAMAC Party” or
“CAMAC Parties”
has the meaning set forth in the preamble to the Agreement.

       

      “Cap” has the meaning
set forth in Section 10.4(a) of the Agreement.

       

      “Cash Consideration”
has the meaning set forth in Section 2.2 of the Agreement.

       

      “CEHL” has the meaning
set forth in the preamble to the Agreement.

       

      “CERCLA” shall mean
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
as amended.

       

      “CINL” has the meaning
set forth in the preamble to the Agreement.

       

      “Closing” has the
meaning set forth in Section 3.1 of the Agreement.

       

      “Closing Date” has the
meaning set forth in Section 3.1 of the Agreement.

       

      “Code” means the
United States Internal Revenue Code of 1986, as amended.

       

      “Combined Board” means
the board of directors of PAPI following the Closing.

       

      “Common Stock” has the
meaning set forth in the background of the Agreement.

       

      “Consent” has the
meaning set forth in Section 4.6 of the Agreement.

       

      “Consideration Shares”
has the meaning set forth in Section 2.1 of the Agreement.

       

      “Contract” means any
contract, agreement, option, right to acquire, preferential purchase right,
preemptive right, warrant, indenture, debenture, note, bond, loan, loan
agreement, collective bargaining agreement, lease, mortgage, franchise, license,
purchase order, commitment, letter of credit, guaranty, surety or any other
legally binding arrangement, whether oral or written.

       

      “Contract Rights” has
the meaning set forth in the background to the Agreement.

       

      “Damages” has the
meaning set forth in Section 10.2(a) of the Agreement.

       

      “Deductible” has the
meaning set forth in Section 10.4(a) of the Agreement.

       

      “DGCL” has the meaning
set forth Section 9.1(d).

       

      “Disclosure Materials”
shall have the meaning set forth in Section 5.20 of the Agreement.

       

       

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

       

      “Disclosure Schedules”
means the CAMAC Disclosure Schedule and the PAPI Disclosure
Schedule.

       

      “Environment” means
soil, land surface or subsurface strata, surface waters (including navigable
waters, ocean waters, streams, ponds, drainage basins, and wetlands),
groundwaters, drinking water supply, stream sediments, ambient air (including
indoor air), plant and animal life, and any other environmental medium or
natural resource.

       

      “Environmental
Authorization” means any license, permit, certificate, order, approval,
consent, notice, registration, exemption, variance, filing or other form of
permission required under any Environmental Law.

       

      “Environmental Laws”
means all Laws of any Governmental Authority currently in effect relating to
pollution or protection of human health, safety, natural resources or the
environment (including ambient air, surface water, ground water, land surface or
subsurface strata), including Laws relating to Releases or threatened Releases
of Hazardous Materials or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, transport or handling of Hazardous
Materials. Environmental Laws include CERCLA, RCRA, SARA, CAA, OSHA, FWPCA,
FIFRA, OPA and TSCA.

       

      “Environmental
Liabilities” means any and all obligations to pay the amount of any
judgment or settlement, the cost of complying with any settlement, judgment or
order for injunctive or other equitable relief, the cost of compliance or
corrective action in response to any notice, demand, directive or request from a
Governmental Authority, the cost of performing any investigatory or remedial
action required under Environmental Laws in response to a Release of Hazardous
Materials (including any work performed under any voluntary cleanup program),
the amount of any administrative or civil penalty or criminal fine or
supplemental environmental project, and any court costs and reasonable amounts
for attorneys’ fees, fees for witnesses and experts, and costs of investigation
and preparation for defense of any Action or proceeding, regardless of whether
such Action or proceeding is threatened, pending or completed, that may be or
have been asserted against or imposed upon any owner or operator of the assets
or the business of the Party, to the extent any of the foregoing arise out
of:

       

      (a)           failure
of a Party or any of its respective Affiliates, any predecessor or the business
conducted by the Party to comply at any time before the Closing Date with all
Environmental Laws;

       

      (b)           presence
of any Hazardous Materials on, in, under, at or in any way affecting any
property used in the business conducted by the Party at any time before the
Closing Date;

       

      (c)           a
Release or threatened Release at any time before the Closing Date of any
Hazardous Materials on, in, at, under or in any way affecting the business
conducted by the Party or any property used therein or at, on, in, under or in
any way affecting any adjacent site or facility;

       

      (d)           a
Release or threatened Release of any Hazardous Materials on, in, at, under or
from any real property other than those described in (c), immediately above, and
to which any Party or any of its respective Affiliates or any Predecessor
transported or disposed, or arranged

       

       

      
        
          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

       

      for the
transportation or disposal of, Hazardous Materials generated at or arising from
operation of the business conducted by the Party at any time before the Closing
Date;

       

      (e)           identification
of any Party or any of its respective Affiliates or any Predecessor as a
potentially responsible party under CERCLA or under any Environmental Law
similar to CERCLA;

       

      (f)           presence
at any time before the Closing Date of any above-ground and/or underground
storage tanks, or any asbestos-containing material on, in, at or under any
property used in connection with the business conducted by the Party;
or

       

      (g)           any
and all Actions for injury or damage to persons or property arising out of
exposure to Hazardous Materials originating in connection with the business
conducted by the Party or any adjoining property, resulting from operation
thereof, or located at the location where such business is conducted, where such
exposure allegedly occurred prior to the Closing Date.

       

      “Equity Interests”
means any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all ownership
interests in a limited liability company, partnership, association or other
business entity (other than a corporation), and any and all warrants, options or
other rights to purchase or acquire any of the foregoing.

       

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

       

      “Excluded
Transactions” has the meaning set forth in Section 2.1 of the
Agreement.

       

      “Expenses” shall mean
all reasonable out-of-pocket expenses (including all reasonable fees and
expenses of counsel, accountants, investment bankers, experts and consultants to
a party hereto and its Affiliates) incurred by a party on its behalf in
connection with or related to the authorization, preparation, diligence,
negotiation, execution, performance and enforcement of this Agreement and the
Transaction Documents.

       

      “FCPA” has the meaning
set forth in Section 4.11 of the Agreement.

       

      “FIFRA” means the
Federal Insecticide, Fungicide & Rodenticide Act, as amended.

       

      “Financial Statements”
has the meaning set forth in Section 5.11(a) of the Agreement.

       

      “Financing” has the
meaning set forth in the background to the Agreement.

       

      “FWPCA” means the
Federal Water Pollution Control Act, as amended.

       

      “Governmental
Authority” means any national, federal, state, provincial, local or
foreign government, governmental, regulatory or administrative authority, agency
or commission or any court, tribunal or judicial or arbitral body of competent
jurisdiction, or other governmental authority or instrumentality, domestic or
foreign.

       

       

      
        
          
          

        

        
          A-4

          
            

          

        

        
          
          

        

      

       

      “Hazardous Materials”
means any chemical, product, material, waste or substance that, whether by its
nature or its use, is regulated or as to which liability might arise under any
Environmental Law, including:

       

      (a)           solid
or hazardous wastes, as defined in RCRA or in any other Environmental
Law;

       

      (b)           hazardous
substances, as defined in CERCLA or in any other Environmental Law;

       

      (c)           toxic
substances, as defined in TSCA or in any other Environmental Law;

       

      (d)           pollutants
or contaminants, as defined in the CAA or the FWPCA, or in any other
Environmental Law;

       

      (e)           insecticides,
fungicides or rodenticides, as defined in FIFRA or in any other Environmental
Law;

       

      (f)           petroleum
hydrocarbons including, without limitation, natural gas, crude oil or any
components, fractions or derivatives thereof; and

       

      (g)           gasoline
or any other petroleum product or byproduct, polychlorinated biphenyls,
asbestos, urea formaldehyde, naturally occurring radioactive materials, other
radioactive materials or radon.

       

      “Indemnitee” has the
meaning set forth in Section 10.5 of the Agreement.

       

      “Indemnitor” has the
meaning set forth in Section 10.5 of the Agreement.

       

      “Indemnification
Notice” has the meaning set forth in Section 10.5 of the
Agreement.

       

      “Independent
Committee” has the meaning set forth in Section 10.2(b) of the
Agreement.

       

      “Independent
Director(s)” has the meaning set forth in Section 8.4 of the
Agreement.

       

      “Intellectual
Property” means all United States and foreign (a) patents, patent
applications, utility models or statutory invention registrations (whether or
not filed), and invention disclosures; (b) trademarks, service marks, logos,
designs, trade names, trade dress, domain names and corporate names and
registrations and applications for registration thereof (whether or not filed)
and the goodwill associated therewith; (c) copyrights, whether registered or
unregistered, and registrations and applications for registration thereof
(whether or not filed) and other works of authorship, whether or not published;
and (d) trade secrets, proprietary information, confidential information,
know-how, inventions, customer lists and information, supplier lists,
manufacturer lists, manufacturing and production processes and techniques,
blueprints, drawings, schematics, manuals, software, firmware and
databases.

       

      “Interim Financial
Statements” is defined in Section 5.11(a).

       

      “Judgment” means any
judgment, order or decree.

       

       

      
        
          
          

        

        
          A-5

          
            

          

        

        
          
          

        

      

       

      “Knowledge”, (i) with
respect to the CAMAC Parties shall mean the actual knowledge of Abiola Lawal,
Gary Hirstein, Carolyn Anandu, and Segun Omidele, and (ii) with respect to the
PAPI Parties shall mean the actual knowledge of Frank Ingriselli, Stephen F.
Groth, Richard Grigg and the members of its Board of Directors.

       

      “Latest Balance Sheet”
is defined in Section 5.11(a).

       

      “Law” means any law,
statute, code, ordinance, order, rule, rule of common law, regulation, judgment,
decree, injunction, franchise, permit, certificate, license, authorization or
other directional requirement of any Governmental Authority.

       

      “Legal Requirement”
means any federal, state, local, municipal, provincial, foreign or other law,
statute, constitution, principle of common law, resolution, ordinance, code,
edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted,
promulgated, implemented or otherwise put into effect by or under the authority
of any Governmental Authorities (or under the authority of any national
securities exchange upon which PAPI Securities then listed or
traded)

       

      “Liens” means any
liens, security interests, pledges, equities and claims of any kind, voting
trusts, shareholder agreements and other encumbrances.

       

      “Material Contract”
has the meaning set forth in Section 5.5 of the Agreement.

       

      “Material Permits” has
the meaning set forth in Section 4.7 of the Agreement.

       

      “Money Laundering
Laws” has the meaning set forth in Section 4.12 of the
Agreement.

       

      “NAE” has the meaning
set forth in the background to the Agreement.

       

      “NAE Assignment” has
the meaning set forth in the background to the Agreement.

       

      “Novation Agreement”
has the meaning set forth in background of the Agreement.

       

      “Novation Date” has
the meaning set forth in Section 1.1 of the Agreement.

       

      “OFAC” has the meaning
set forth in Section 4.13 of the Agreement.

       

      “OMLs” has the meaning
set forth in the background to the Agreement.

       

      “OML 120” has the
meaning set forth in the background to the Agreement.

       

      “OPA” means the Oil
Pollution Act of 1990, as amended.

       

      “OPL 210” has the
meaning set forth in the background to the Agreement.

       

       

      ”Oyo Field” has the
meaning set forth in Section 1.1 of the Agreement.

       

      “Oyo Field Supplemental
Agreement” has the meaning set forth in the background to the
Agreement.

       

       

      
        
          
          

        

        
          A-6

          
            

          

        

        
          
          

        

      

       

      “Oyo Related
Agreements” has the meaning set forth in Section 4.4(b) of the
Agreement.

       

      “PAPI” has the meaning
set forth in the preamble to the Agreement.

       

      “PAPI Constituent
Instruments” means the articles of incorporation and bylaws of PAPI,
together with any memorandum and articles of association, statutory registers
and such constituent instruments of any of its Subsidiaries as may exist, each
as amended as of the date of the Agreement.

       

      “PAPI Directors” has
the meaning set forth in Section 8.4 of the Agreement.

       

      “PAPI Disclosure
Schedule” has the meaning set forth in Article V of the
Agreement.

       

      “PAPI Indemnified
Parties” has the meaning set forth in Section 10.2(a) of the
Agreement.

       

      “PAPI Material Adverse
Effect” means any event, change or effect that is materially adverse to
the condition (financial or otherwise), properties, assets, liabilities,
business, operations or results of operations of PAPI and its subsidiaries,
taken as a whole. Notwithstanding the foregoing, the definition of PAPI Material
Adverse Effect shall not include events caused by (A) changes in the PRC
economic conditions (including changes in commodity prices), except to the
extent that the same disproportionately impact the PAPI Parties as compared to
other similarly situated companies; (B) changes to the economic conditions
affecting the industries in which the PAPI Parties operate, except to the extent
that the same disproportionately impact the PAPI Parties as compared to other
companies in the industries in which the PAPI Parties operate; (C) changes
related to or arising from the execution, announcement or performance of, or
compliance with, this Agreement or the consummation of the Transactions,
including the impact thereof on relationships, contractual or otherwise,
governmental authorities, customers, suppliers, distributors or employees; (D)
changes in accounting requirements or principles or any change in applicable
laws or the interpretation thereof; (E) the failure to meet any projections or
budgets; or (F) matters listed in the Disclosure Schedules.

       

      “PAPI Newco” has the
meaning set forth in the preamble to the Agreement.

       

      “PAPI Parties” has the
meaning set forth in the preamble to the Agreement.

       

      “PAPI Representatives”
means each of Frank Ingriselli, and Stephen F. Groth.

       

      “Party” or “Parties” has the
meaning set forth in the preamble to the Agreement.

       

      “Permits” mean all
governmental franchises, licenses, permits, authorizations and approvals
necessary to enable a Person to own, lease or otherwise hold its properties and
assets and to conduct its businesses as presently conducted.

       

      “Permitted Lien” shall
mean (a) any restriction on transfer arising under applicable securities law;
(b) any Liens for Taxes not yet due or delinquent or being contested in good
faith by appropriate proceedings for which adequate reserves have been
established in accordance

       

       

      
        
          
          

        

        
          A-7

          
            

          

        

        
          
          

        

      

       

      with U.S.
GAAP; (c) any statutory Liens arising in the ordinary course of business by
operation of Law with respect to a liability that is not yet due and delinquent
and which are not, individually or in the aggregate, significant; (d) zoning,
entitlement, building and other land use regulations imposed by governmental
agencies having jurisdiction over the Oyo Field or Contract Rights which are not
violated by the current use and operation of the Contract Rights; (e) covenants,
conditions, restrictions, easements and other similar matters of record
affecting title to the Oyo Field or Contract Rights which do not materially
impair the occupancy or use of the Oyo Field or Contract Rights for the purposes
for which it is currently used or proposed to be used in connection with the
such relevant Person’s business; (f) Liens identified on title policies, title
opinions or preliminary title reports or other documents or writings included in
the public records; (g) Liens arising under worker’s compensation, unemployment
insurance, social security, retirement and similar legislation; (h) Liens of
lessors and licensors arising under lease agreements or license arrangements;
and (i) those Liens set forth in the CAMAC Disclosure Schedule.

       

      “Person” shall mean an
individual, partnership, corporation, joint venture, unincorporated
organization, cooperative or a governmental entity or agency
thereof.

       

      “Proxy Statement” has
the meaning set forth in Section 7.2 of the Agreement.

       

      “PSC” has the meaning
set forth in the background to the Agreement.

       

      “RCRA” shall mean the
Resource Conservation and Recovery Act, as amended.

       

      “Registration Rights
Agreement” has the meaning set forth in the background to the
Agreement.

       

      “Release” shall mean
any depositing, spilling, leaking, pumping, pouring, placing, emitting,
discarding, abandoning, emptying, discharging, migrating, injecting, escaping,
leaching, dumping or disposing into the indoor or outdoor
environment.

       

      “Representatives” of
either Party shall mean such Party’s employees, accountants, auditors,
actuaries, counsel, financial advisors, bankers, investment bankers and
consultants and any other person acting on behalf of such Party.

       

      “ROFR” has the meaning
set forth in Section 8.6 of the Agreement.

       

      “ROFR Agreement” has
the meaning set forth in the background to the Agreement.

       

      “SARA” shall mean the
Superfund Amendments and Reauthorization Act of 1986, as amended.

       

      “SEC” means the U.S.
Securities and Exchange Commission.

       

      “SEC Reports” shall
have the meaning set forth in Section 5.20 of the Agreement.

       

      “Securities Act” means
the Securities Act of 1933, as amended.

       

       

      
        
          
          

        

        
          A-8

          
            

          

        

        
          
          

        

      

       

      “Stockholders’
Meeting” has the meaning set forth in Section 7.2 of the
Agreement.

       

      “Subsidiary” an entity
shall be deemed to be a “Subsidiary” of another Person if such Person directly
or indirectly owns, beneficially or of record, (a) an amount of voting
securities of other interests in such entity that is sufficient to enable such
Person to elect at least a majority of the members of such entity’s board of
directors or other governing body, or (b) at least 50% of the outstanding equity
or financial interests of such entity.

       

      “Survival Period”
means the applicable period of time that a representation, warranty, covenant or
obligation survives the Closing pursuant to Section 10.1 of this
Agreement.

       

      “Tax” or “Taxes” includes all
forms of taxation, whenever created or imposed, and whether of the United States
or elsewhere, and whether imposed by a local, municipal, governmental, state,
foreign, federal or other Governmental Authority, or in connection with any
agreement with respect to Taxes, including all interest, penalties and additions
imposed with respect to such amounts.

       

      “Tax Benefit” has the
meaning set forth in Section 10.6 of the Agreement.

       

      “Tax Return” means all
federal, state, local, provincial and foreign Tax returns, declarations,
statements, reports, schedules, forms and information returns and any amended
Tax return relating to Taxes.

       

      “Technical Services
Agreement” has the meaning set forth in the background to the
Agreement.

       

      “Transactions” has the
meaning set forth in the background to the Agreement.

       

      “Transaction
Documents” shall have the meaning set forth in the background to the
Agreement.

       

      “TSCA” means the Toxic
Substances Control Act, as amended.

       

      “U.S. GAAP” means
generally accepted accounting principles of the United States.

       

      “Voting Period” has
the meaning set forth in Section 8.5 of the Agreement.

       

      “Voting Shares” has
the meaning set forth in Section 8.5(a) of the Agreement.

       

      “Year-End Financial
Statements” is defined in Section 5.11(a).

       


      
        
          
            A-9

            701784886v7

          

           


        

        
           


          
            

          

        

        
           


        

      


      


       

      SCHEDULE
A

       

      


       

      

       

      
 

      
        
          
            
               

              701784886v7

            

             


          

          
             


            
              

            

          

          
             


          

        

      

      


      SCHEDULE
B

       

      CAMAC
DISCLOSURE SCHEDULE

       

      Dated
as of November 18, 2009

       

      This is
the CAMAC Disclosure Schedule referred to in Article IV of that certain Purchase
and Sale Agreement, dated as of November 18, 2009 (the “Purchase
Agreement”), by and among Pacific Asia Petroleum, Inc., a corporation
incorporated in the State of Delaware, USA (“PAPI” and
together with the new entity to be formed by PAPI pursuant to Section 7.12
hereof (“PAPI
Newco”, the “PAPI
Parties”); CAMAC Energy Holdings Limited, a Cayman Islands company
(“CEHL”);
CAMAC International (Nigeria) Limited, a company incorporated in the Federal
Republic of Nigeria (“CINL”) and
a wholly-owned subsidiary of CEHL; and Allied Energy Plc (formerly, Allied
Energy Resources Nigeria Limited), a company incorporated in the Federal
Republic of Nigeria and a wholly-owned subsidiary of CEHL (“Allied,”
and together with CEHL, and CINL, the “CAMAC
Parties”).

       

      This
CAMAC Disclosure Schedule is qualified by reference to the specific provisions
of the Purchase Agreement and is not intended to constitute, and shall not be
deemed to constitute, representations or warranties of the CAMAC Parties, except
as and to the extent set forth in the Purchase Agreement.  The
disclosure of any matter herein is not intended to indicate and does not
constitute an indication that such matter is required to be disclosed pursuant
to the Purchase Agreement, and such disclosure does not constitute an admission
that such information is material to the CAMAC Parties or any other party to the
Purchase Agreement except to the extent required pursuant to the Purchase
Agreement.

       

      The
numbering and headings of this CAMAC Disclosure Schedule refer to the section or
subsection of the Purchase Agreement and are for convenience of reference
only.   Copies of all agreements listed below have been made
available to the PAPI Parties and their counsel.

       

      


      Section
4.3:

      


      Under the
PSC, NAE waives its rights to its entitlement of Profit Oil as the First Party
in favour of Allied (the “NAE Waiver”).  Absent the waiver referred to
in Section 9.1(a) of the Purchase Agreement, if Allied sells, assigns or
otherwise transfers all or part of its legal or beneficial interests and or
obligations under the PSC to any third party (other than its Affiliates, subject
to Article 17.1of the PSC) or if the owner of Allied disposes of control of
Allied to any third party or parties, the NAE Waiver shall not inure or be
extended to such third party or parties and NAE shall be entitled prospectively
to its forty percent (40%) share of the Profit Oil as First Party, unless such
transfer of legal and beneficial interests is made in favor of
NNPC.

      


      


      Section
4.4(a):

      


      NAE has,
from time to time, failed to deliver to the CAMAC Parties documents and
information when required under the PSC.  NAE has not provided
adequate documentation to support costs

       

       

      
        
          Schedule B

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      that NAE
claims they have incurred in relation to, or pursuant to, the PSC and activities
thereunder.  CAMAC believes that such matters constitute a breach of
the PSC.

      


      Section
4.4(b):

      


      In
addition to the Oyo Related Agreements, one or  more of the CAMAC
Parties is a party to the following Contracts relating to or affecting the Oyo
Field or Contract Rights:

      1.           Cooperation
Agreement by and between NAE and Allied, dated January 15, 2006

      
        	
                 
      

              	
                2.

              	
                Escrow
      Agreement by and among NAE, Allied and BNP Paribas S.A., dated August 4,
      2005

              


      

      3.           Secondment
Agreement by and between NAE and Allied, dated January 15, 2006

      
        	
                 
      

              	
                4.

              	
                Service
      Agreement for the Provision of Project Management Services by and between
      NAE and Allied, dated January 26, 2009 (effective September 1,
      2008)

              


      

      In
addition, Oceanic Consultants Nigeria Limited (“OCNL”), a Nigerian company, and
Oceanic Consultants Inc. (“OCI”), a Texas corporation, both of which are
companies affiliated with the CAMAC Parties, provide engineering consulting
services as a contractor to Allied, as well as to third parties, in connection
with the planning, procurement and operation functions that NAE has assigned to
Allied with respect to seismic and other studies, drilling,
geological/geophysical, operational and general services.  In relation
to these functions, the following agreements have been entered into for the
provision of services for compensation to be mutually agreed on a particular
work order on a fixed sum or rate basis:

      1.           Between
OCNL and OCI, dated January 16, 2008

      2.           Between
OCNL and Allied, dated January 16, 2008

      3.           Between
OCI and Allied, dated January 16, 2008

      4.           Additionally,
OCNL and OCI are parties to the following agreements:

      
        	
                 
      

              	
                5.

              	
                Agreement
      for Engineering Services (Package 1) between OCI and William Jacob
      Management:  this is an evergreen contract but currently there
      is no work being performed pursuant
thereto.

              


      

      
        	
                 
      

              	
                6.

              	
                Agreement
      for Engineering Services (Packages 2 and 3) between OCI and Intec
      Engineering Partnership:  this is an evergreen contract but
      currently there is no work being performed pursuant
    thereto.

              


      

      
        	
                 
      

              	
                7.

              	
                Agreement
      for Engineering and Drafting Services between OCI and Fairwinds
      International Inc.:  this is an evergreen contract but currently
      there is no work being performed pursuant
  thereto.

              


      

      
        	
                 
      

              	
                8.

              	
                Agreement
      for Inspection Services (Packages 2 and 3) between OCI and Global
      SCS:  this is an evergreen contract but currently there is no
      work being performed pursuant
thereto.

              


      

      
        	
                 
      

              	
                9.

              	
                Agreement
      for Inspection Services (Packages 2 and 3) between OCI and
      MAC:  this is an evergreen contract but currently there is no
      work being performed pursuant
thereto.

              


      

      
        	
                 
      

              	
                10.

              	
                Agreements
      for the services of the following  individuals working as
      contractors to OCI:

              


      

      A.          Swift
Technical (for the services of Natalia Milovankina

      B.           Peter
Cutt

      C.           Nigel
Buchan

      D.           Loy
Liang Zai

       

       

      
        
          
            Schedule
B

          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	
                 
      

              	
                11.

              	
                Allied
      has entered into General Service Agreements with both OCNL and
      OCI.  In addition to these General Service Agreements, OCNL and
      OCI are parties to the following agreements that relate
  to

              


      

      


      Section
4.14:

      The
Environmental Impact Assessment (“EIA”) of the Oyo development may not have been
filed in a timely manner, but the Department of Petroleum Resources has granted
provisional approval for this EIA.

      


      Section
6.4(a):

      The CAMAC
Parties have been and continue to be in discussions with various third parties
concerning the possible sale to such third parties of the crude oil to which the
CAMAC Parties are entitled to lift under the PSC.  The CAMAC Parties
expect to finalize such crude sale agreement prior to the Closing.

      


       


      
        
          
            Schedule
B

            701784886v7

          

           


        

        
           


          
            

          

        

        
           


        

      


      SCHEDULE
C

       

      PAPI
DISCLOSURE SCHEDULE

       

      Dated
as of November 18, 2009

       

      This is
the PAPI Disclosure Schedule referred to in Article V of that certain Purchase
and Sale Agreement, dated as of November 18, 2009 (the “Purchase
Agreement”), by and among Pacific Asia Petroleum, Inc., a corporation
incorporated in the State of Delaware, USA (“PAPI” and
together with the new entity to be formed by PAPI pursuant to Section 7.12 of
the Purchase Agreement (“PAPI
Newco”), the “PAPI
Parties”); CAMAC Energy Holdings Limited (“CEHL”);
CAMAC International (Nigeria) Limited, a company incorporated in the Federal
Republic of Nigeria (“CINL”) and
a wholly-owned subsidiary of CEHL; and Allied Energy Plc (formerly, Allied
Energy Resources Nigeria Limited), a company incorporated in the Federal
Republic of Nigeria and a wholly-owned subsidiary of CEHL (“Allied,”
and together with CEHL, and CINL, the “CAMAC
Parties”).

       

      This PAPI
Disclosure Schedule is qualified by reference to the specific provisions of the
Purchase Agreement and is not intended to constitute, and shall not be deemed to
constitute, representations or warranties of the PAPI Parties, except as and to
the extent set forth in the Purchase Agreement.  The disclosure of any
matter herein is not intended to indicate and does not constitute an indication
that such matter is required to be disclosed pursuant to the Purchase Agreement,
and such disclosure does not constitute an admission that such information is
material to the PAPI Parties or any other party to the Purchase Agreement except
to the extent required pursuant to the Purchase Agreement.

       

      The
numbering and headings of this PAPI Disclosure Schedule refer to the section or
subsection of the Purchase Agreement and are for convenience of reference
only.  Copies of all agreements listed below have been made available
to the CAMAC Parties and their counsel.

       

      Section
5.5                      Material
Contracts.

      
        	
                (1)

              	
                Work
      Program entered pursuant to Production Sharing Contract for Exploitation
      of Coalbed Methane Resources in Zinjinshan Area, Shanix Province, The
      People’s Republic of China, dated October 26, 2007, by and between PAPL
      and China United Coalbed Methane Corp
Ltd.

              


      

       

      
        	
                (2)

              	
                Advisor
      Agreement, dated August 4, 2008, as amended effective July 30, 2009, by
      and between PAPI and Somerley
Limited.

              


      

       

      
        	
                (3)

              	
                Engagement
      Letter, dated August 30, 2009, by and between Worldwide Capital Group and
      PAPI (the “WCG
      Engagement Letter”).

              


      

       

      
        	
                (4)

              	
                Letter
      of Understanding, dated May 13, 2009, by and among Mr. Li Xiangdong
      (“LXD”),
      PAPI, Pacific Asia Petroleum Energy Limited (“PAPE”),
      and Mr. Ho Chi Kong (“HCK”),
      as amended June 25, 2009 (the “EORP
      LOU”).

              


      

       

      
        	
                (5)

              	
                Consulting
      Engagement Agreement, dated June 7, 2009, by and among LXD, PAPL and Inner
      Mongolia Production Company (HK) Limited (“IMPCO
      HK”).

              


      

       

       

      
        
          
            Schedule
C

          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                (6)

              	
                Assignment
      Agreement of Application Right For Patent, by and between LXD and PAPL,
      dated June 7, 2009.

              


      

       

      
        	
                (7)

              	
                Interest
      Assignment Agreement, dated June 7, 2009, by and between IMPCO HK, PAPL
      and LXD.

              


      

       

      
        	
                (8)

              	
                Offer
      Letter, dated November 13, 2009, by and between Clark Moore and
      PAPI.

              


      

       

      


       

      


      Section
5.6                      Capitalization.

      
        	
                 
      

              	
                (1)

              	
                Pacific Asia
      Petroleum, Inc. (“PAPI”):

              


      

       

       

      


       

       

      
        	
                 
      

              	
                a.

              	
                Common
    Stock

              


      

       

       

      PAPI is
authorized to issue up to 300,000,000 shares of Common Stock, par value $0.001
per share. As of November 18, 2009, 43,866,267 shares of Common Stock are
currently issued and outstanding. PAPI has authorized and reserved 4,000,000
shares of Common Stock for issuance under the PAPI 2007 Stock Plan, and
6,000,000 shares of Common Stock for issuance under the PAPI 2009 Equity
Incentive Plan.  As of November 18, 2009, an aggregate of 1,347,000
shares of Common Stock were issuable upon exercise of outstanding stock options
under the 2007 Stock Plan, an aggregate of 30,000 shares of Common Stock were
issuable upon exercise of outstanding stock options under the 2009 Equity
Incentive Plan, and an aggregate of 755,200 shares of Common Stock were issuable
upon exercise of outstanding stock options issued outside of a PAPI incentive
stock plan.

       

      


       

      
        	
                 
      

              	
                b.

              	
                Preferred
      Stock

              


      

       

       

                  PAPI
is authorized to issue up to 50,000,000 shares of Preferred Stock in one or more
classes or series within a class as may be determined by the PAPI board of
directors, of which 30,000,000 shares have been designated “Series A Convertible
Preferred Stock.” No shares of Preferred Stock are currently
outstanding.

       

      


       

      
        	
                 
      

              	
                c.

              	
                Warrants

              


      

       

      As of
November 18, 2009, PAPI had warrants outstanding to purchase (i) an aggregate of
1,060,888 shares of Common Stock at a price per share of $1.25; (ii) an
aggregate of 200,000 shares of Common Stock at a price per share of $1.375; and
(iii) an aggregate of 200,000 shares of Common Stock at a price per share of
$1.50.

      Pursuant
to the WCG Engagement Letter, WCG shall be entitled to receive warrants
exercisable for Common Stock of PAPI upon consummation of certain debt and
equity fundraisings of PAPI.  See WCG Engagement Letter.

      


       

      
        	
                 
      

              	
                d.

              	
                EORP-Related
      Obligations

              


      

       

       

      Pursuant
to the EORP LOU, upon acknowledgement from the Chinese Government that the CJVC
(as defined in the EORP LOU) is the registered owner of the LXD patents, PAPI
shall issue to HCK up to 100,000 shares of Common Stock of PAPI and options to
purchase up to 400,000 additional shares of Common Stock of PAPI at an exercise
price coinciding with PAPI’s

       

       

      
        
          
            Schedule
C

          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      share
price on the day of the issue of the options. PAPI has agreed to issue 300,000
more shares to HCK upon the signing of certain contracts by the CJVC with
respect to the Fulaerjiqu Oilfield (as set forth in the EORP
LOU).   The options will not vest immediately, and vesting will
be contingent upon the achievement of certain milestones related to the entry by
the CJVC into certain EORP-related development contracts pertaining to oilfield
projects in the Fulaerjiqu Oilfield.

      PAPI has
agreed to loan up to $5 million to PAPE, which may then invest up to RMB
30,000,000 (approximately $ 4.4 million) with portion of this being a
requirement to invest RMB 22,650,000 as PAPE’s share of the registered capital
of the CJVC when and to the extent required under applicable law, to be used by
the CJVC to carry out work projects, fund operations, and to make aggregate
payments of up to $1.5 million in cash to LXD and HCK.   See EORP
LOU.

      


       

      
        	
                 
      

              	
                (2)

              	
                Inner Mongolia
      Production Company (HK) Ltd. (“IMPCO
      HK”):

              


      

       

      IMPCO HK
is a wholly-owned subsidiary of PAPI.

       

      
        	
                 
      

              	
                (3)

              	
                Inner Mongolia Sunrise
      Petroleum JV Company (“IMPCO Sunrise”):

              


      

       

      In March
2006, PAPI formed IMPCO Sunrise, a Chinese joint venture company which is owned
97% by IMPCO HK and 3% by Beijing Jinrun Hongda Technology Co., Ltd. (“BJHTC”),
an unaffiliated Chinese corporation.  PAPI formed IMPCO Sunrise as an
indirect subsidiary to engage in Chinese energy ventures.  Under
Chinese law, a foreign-controlled Chinese joint venture company must have a
Chinese partner. BJHTC is IMPCO HK’s Chinese partner in IMPCO Sunrise. IMPCO
Sunrise is governed and managed by a Board of Directors comprised of three
members, two of whom are appointed by IMPCO HK and one by BJHTC.

       

      IMPCO HK
has advanced a total of $407,507 to BJHTC, which then invested that amount in
IMPCO Sunrise and issued notes to IMPCO HK for that amount.  BJHTC is
obligated to apply any remittances received from IMPCO Sunrise directly to IMPCO
HK. IMPCO Sunrise is authorized to pay these remittances directly to IMPCO HK on
BJHTC’s behalf, until the debt is satisfied.

      


      
        	
                 
      

              	
                (4)

              	
                Pacific Asia Petroleum
      Ltd. (“PAPL”):

              


      

       

      PAPL is a
wholly-owned subsidiary of PAPI.

      
        	
                 
      

              	
                (5)

              	
                Pacific Asia Petroleum
      (HK) Ltd. (“PAPL
      HK”):

              


      

       

      PAPL HK
is a wholly-owned subsidiary of PAPL.

      
        	
                 
      

              	
                (6)

              	
                Pacific Asia Petroleum
      Energy Ltd. (“PAPE”):

              


      

       

      PAPE is
70% owned by PAPI and 30% beneficially owned by HCK.

       

      PAPI has
agreed to loan up to $5 million to PAPE, which may then invest up to RMB
30,000,000 (approximately $ 4.4 million) with portion of this being a
requirement to invest RMB 22,650,000 as PAPE’s share of the registered capital
of the CJVC when and to the extent required under applicable law, to be used by
the CJVC to carry out work projects, fund operations, and to make aggregate
payments of up to $1.5 million in cash to LXD and
HCK.     See EORP LOU.

       

       

      
        
          
            Schedule
C

          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      


      
        	
                 
      

              	
                (7)

              	
                Beijing Dong Fang Ya
      Zhou Petroleum Technology Services Company Limited (“CJCV”):

              


      

       

      CJVC is a
Chinese joint venture company formed on September 24, 2009, 75.5% owned by PAPE
and 24.5% owned by LXD.

       

      Pursuant
to the EORP LOU, LXD has a “Share Sale Right” for a period of 24 months from the
date of incorporation of the CJVC to require PAPE to purchase 50% of the shares
owned by LXD in the CJVC.  See EORP LOU.

      


      Section
5.9                      Consents and
Approvals.

       

      The
Transactions must be approved by (i) the PAPI Board of Directors, and (ii) the
PAPI majority holders, voting as a group, in accordance with Section 253 of the
Delaware General Corporation Law (the “DGCL”) and other applicable
laws.

       

      The
Agreement and the Transactions must be approved by (i) the PAPI Newco Board of
Directors, and (ii) the holders of a majority of the PAPI Newco shareholders in
accordance with the PAPI Newco constituent documents.

      


      Section
5.12                      Absence of Certain Changes
or Events.

       

      See
agreements disclosed under Section 5.5 above that were entered into since
December 31, 2008.

      


       

      



      
        
          
            Schedule
C

            701784886v7