EX-10.16







Exhibit 10.16






 









 





DATED 9 JULY 2009




MI ENERGY CORPORATION

as Borrower



and



MIE HOLDINGS CORPORATION

as Lender



 





INTERCOMPANY LOAN AGREEMENT



 





 









 





CONTENTS




	 	 	 	 	 
	Clause	 	Page	 
	1. Definitions
	 	 	1	 
	 
	2. Advances
	 	 	1	 
	 
	3. Interest
	 	 	2	 
	 
	4. Repayment
	 	 	2	 
	 
	5. Payments
	 	 	2	 
	 
	6. Governing Law
	 	 	2	 






 









 





THIS AGREEMENT is made on 9 July 2009




BETWEEN:





	(1)	 	MI ENERGY CORPORATION, a corporation organised and existing under the laws of the Cayman
Islands and having an office at: c/o M&C Corporate Services Limited, P.O. Box 309 GT, Ugland
House, South Church Street, George Town, Grand Cayman, Cayman Islands
(the “Borrower”); and
	 
	(2)	 	MIE HOLDINGS CORPORATION, an exempted company incorporated with limited liability in the
Cayman Islands (the “Lender”).





IT IS AGREED as follows:





	1.	 	DEFINITIONS
	 
	 	 	“Advance” means an advance (as from time to time reduced by repayment or prepayment) made or
to be made by the Lender hereunder.
	 
	 	 	“Availability Period” means the period from and including the date of this Agreement to and
including the day falling 30 days after the date of this Agreement.
	 
	 	 	“Borrowing Base Facility Agreement” means the facility agreement dated 29 October 2007
between, amongst others, the Lender as borrower and Standard Bank Asia Limited as arranger,
agent and security trustee (as amended by a waiver and amendment letter dated 23 November
2007, as amended and restated by a new first amendment and restatement agreement dated 12
January 2009, and as may be further amended, varied, novated or supplemented from time to
time).
	 
	2.	 	ADVANCES
	 
	2.1	 	On the Borrower’s request but subject to Clause 2.2 below, the Lender agrees that it shall
make Advances to the Borrower at the time and in the amount specified in such request.
Provided that:






	 	2.1.1	 	the proposed date for the making of the Advance falls within the Availability
Period;
	 
	 	2.1.2	 	the total aggregate amount of Advances made by the Lender hereunder shall not
exceed $50,000,000; and
	 
	 	2.1.3	 	all Advances shall be applied by the Borrower solely towards capital
expenditure in connection with the Borrower’s drilling operations and related working
capital payables.






	2.2	 	The Lender shall not be obliged to comply with a request made pursuant to Clause 2.1 if,
following the receipt thereof, the board of directors of the Lender determines either:






	 	2.2.1	 	that the Lender is insolvent; or
	 
	 	2.2.2	 	that compliance with such request would prejudice the Lender’s ability to pay its
debts as they fall due.





- 1 -









 






	3.	 	INTEREST
	 
	3.1	 	Interest (if any) shall be payable on the amount of an Advance outstanding at the rate per
annum which agreed upon between the Borrower and the Lender from time to time and shall be
calculated on the basis of a 360 day year and the number of days elapsed.
	 
	3.2	 	Interest (if any) on an Advance shall be payable at such times as may be agreed between the
Borrower and the Lender.
	 
	4.	 	REPAYMENT
	 
	 	 	Each Advance (together with any interest accrued thereon and other amounts due or owing to
the Lender in connection with such Advance) shall be repayable by the Borrower on the date
falling six years after the date of this Agreement, or, following the occurrence of an Event
of Default (as such term is defined in the Borrowing Base Facility Agreement) under the
Borrowing Base Facility Agreement, on demand of the Lender provided that the Borrower may
prepay any Advance in whole or in part at any time without premium or penalty.
	 
	5.	 	PAYMENTS
	 
	 	 	Unless required by law and unless the Borrower and the Lender agree otherwise, all
payments made by the Borrower hereunder shall be made free and clear of and without any
deduction for or on account of any tax, set-off or counterclaim.
	 
	6.	 	AMENDMENTS
	 
	 	 	This Agreement may be amended by the Borrower and the Lender but, until the Secured
Obligations (as defined in the Borrowing Base Facility Agreement) have been satisfied in full,
only with the prior written consent of the Agent acting on the instructions of the Majority
Lenders (as each such term is defined under the Borrowing Base Facility Agreement). The Agent
shall be entitled to enforce and enjoy the benefit of this Clause.
	 
	7.	 	GOVERNING LAW
	 
	 	 	This Agreement shall be governed by English Law.




AS WITNESS the hands of the duly authorised representatives of the parties hereto the day and year
first before written.




- 2 -









 





SIGNATURE PAGE TO

INTERCOMPANY LOAN AGREEMENT BETWEEN

MI ENERGY CORPORATION AND

MIE HOLDINGS CORPORATION




The Borrower




MI ENERGY CORPORATION




	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Zhao Jiangwei
 	 
	 	Name:  	 	 
	 	Title 	 
	 



The Lender




MIE HOLDINGS CORPORATION




	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Zhang Ruilin
 	 
	 	Name:  	 	 
	 	Title