ex10-1.htm


    
      

    

    Exhibit
10.1


     

    AMENDMENT
NO. 1 TO

     

     

    PURCHASE
AND SALE AGREEMENT

     

    THIS
AMENDMENT NO. 1 TO PURCHASE AND SALE AGREEMENT, dated as of March 4, 2010 (this
“Amendment”),
by and among PACIFIC ASIA PETROLEUM, INC., a corporation incorporated in the
State of Delaware, USA (“PAPI”);
CAMAC PETROLEUM LIMITED, a company incorporated in the Federal Republic of
Nigeria, and a wholly owned subsidiary of PAPI (“Newco,”
and together with  PAPI, 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”), amends that certain Purchase and Sale Agreement, dated
November 18, 2009, entered into by and among the Parties (the “Purchase
Agreement”).  Capitalized terms used herein that are not
otherwise defined herein shall have the meanings ascribed to them in the
Purchase Agreement.

     

     

    WITNESSETH

     

    A.           On
November 18, 2009, the Parties entered into the Purchase Agreement, which
agreement set forth the terms and conditions pursuant to which PAPI will acquire
from Allied and CINL, through Newco, all of the CAMAC Parties’ interest in the
PSC with respect to that certain oilfield asset known as the Oyo Field for stock
consideration consisting of shares of PAPI’s Common Stock representing 62.74% of
the issued and outstanding Common Stock of PAPI, and cash in the amount of USD
$38.84 million (the “Cash
Consideration”), subject to certain conditions to closing set forth in
the Purchase Agreement.

     

    B.           On
December 28, 2009, Newco was formed in the Federal Republic of Nigeria as a
wholly-owned subsidiary of PAPI, and pursuant to Sections 7.12 and 9.3(n) of the
Purchase Agreement, Newco is required to execute and deliver to the CAMAC
Parties an agreement whereby it will agree to the terms of the Purchase
Agreement as if it were an original signatory thereto and shall be deemed a
“PAPI Party” as such term is defined therein, and Newco, PAPI and the CAMAC
Parties desire to enter into this Amendment in satisfaction of such requirement
under Sections 7.12 and 9.3(n) of the Purchase Agreement.

     

    C.           The
PAPI Parties and the CAMAC Parties also desire to enter into this Amendment to
confirm the Parties’ mutual agreement that the condition to Closing set forth
under the Purchase Agreement requiring PAPI to consummate the Financing prior to
or concurrently with the Closing is removed.

     

    D.           The
PAPI Parties and the CAMAC Parties also desire to enter into this Amendment to
confirm the Parties’ mutual agreement that the amount of Cash Consideration due
and payable by PAPI to CEHL at Closing shall be $32,000,000, with the balance
$6,840,000 (“Post-Closing Cash
Consideration”) to be due and payable to CEHL (without interest) from
initial cash received by Newco as payment for its allocation of Cost Oil and
Profit Oil (each as defined in the PSC) post-Closing with respect to any
Petroleum Operations (as defined in the PSC) conducted on the Oyo Field (“Initial
Post-Closing Newco Receipts”), 100% of which Initial Post-Closing Newco
Receipts shall be paid to CEHL until the full Post-Closing Cash Consideration is
paid to CEHL, provided that if Post-Closing Consideration paid by PAPI to CEHL
from Initial Post-Closing Newco Receipts, if any, does not equal the full
Post-Closing Cash Consideration due and payable to CEHL by the date that is six
months following the Closing Date, PAPI shall pay the balance due of the
Post-Closing Cash Consideration to CEHL on such date.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     F.           The
PAPI Parties and the CAMAC Parties also desire to enter into this Amendment to
confirm that any and all cash received by any of the CAMAC Parties as payment
for its allocation of Cost Oil and Profit Oil prior to the Closing of the
Purchase Agreement with respect to any Petroleum Operations conducted on the Oyo
Field (“Pre-Closing CAMAC
Receipts”) shall cause an equal reduction of the Post-Closing Cash
Consideration due and payable by Newco to CEHL post-Closing from Initial
Post-Closing Newco Receipts.

     

    G.           The
PAPI Parties and the CAMAC Parties also desire to enter into this Amendment to
confirm the Parties’ mutual understanding and agreement that the Closing shall
occur on or before April 7, 2010, subject to satisfaction of the conditions to
Closing under the Purchase Agreement, and that Sections 6.7(c), 7.8(c), and
11.1(b) of the Purchase Agreement shall be revised accordingly.

     

    H.           The
PAPI Parties and the CAMAC Parties also desire to enter into this Amendment to
confirm the Parties’ mutual understanding and agreement that Royalty Oil and Tax
Oil (each as defined in the PSC) shall, at all times be allocated to Allied in
accordance with the terms and conditions of Sections 8.1(a), 8.1(c) and 8.3 of
the PSC, which shall remain unaffected by the Purchase Agreement, including this
Amendment, and Allied Energy shall retain its rights and obligations under such
Articles.

     

    I.           The
PAPI Parties and the CAMAC Parties also desire to enter into this Amendment to
confirm the Parties’ mutual understanding and agreement that Cost Oil that is
allocated to Allied as payment for outstanding invoices to NAE, acting as the
Operating Contractor under the PSC, for services performed (including
reimbursable expenses relating thereto), training expenses, and other support
provided by Allied, including work subcontracted to Oceanic Consultants Nigeria
Limited and Oceanic Consultants Inc. (all such invoices to be hereinafter
referred to as the “Allied
Invoices”) shall, at all times be allocated to Allied.

     

    J.           The
PAPI Parties and the CAMAC Parties also desire to enter into this Amendment to
confirm the Parties’ mutual understanding and agreement that the TSA Accruals
(as defined in that certain Technical Services Agreement, to be entered into by
and between Newco and Allied on or about Closing (the “TSA”))
shall be paid by Newco to Allied from Initial Post-Closing Newco Receipts following
payment in full of the Post-Closing Cash Consideration due and payable
therefrom, provided that if TSA Accruals paid by Newco to Allied from Initial
Post-Closing Newco Receipts, if any, do not equal the full TSA Accruals due and
payable to Allied by the date that is six months following the Closing Date,
Newco shall pay the balance due of the TSA Accruals to Allied on such
date.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    NOW,
THEREFORE, in consideration of the premises, and the mutual covenants and
agreements set forth herein, the Parties agree as follows:

     

    Section
1. Newco Signatory to Purchase
Agreement.  Newco agrees to the terms of the Purchase
Agreement, as amended hereby and from time to time, as if it were an original
signatory thereto and agrees to be deemed a “PAPI Party” as such term is defined
therein, and PAPI and the CAMAC Parties agree to the addition of Newco as a
party to the Purchase Agreement as an original signatory thereto as a “PAPI
Party” thereunder, in satisfaction of the requirements set forth under Sections
7.12 and 9.3(n) of the Purchase Agreement.

     

    Section
2. Removal of Financing Closing
Condition.  The PAPI Parties and the CAMAC Parties agree and
acknowledge that the condition to Closing set forth under the Purchase Agreement
requiring PAPI to consummate the Financing prior to or concurrently with the
Closing is hereby removed.

     

    Section
3. Cash
Consideration.

     

    (a) The
Parties hereby acknowledge and agree that the amount of Cash Consideration due
and payable by PAPI to CEHL at Closing shall be $32,000,000, with the
Post-Closing Cash Consideration balance of $6,840,000 to be due and payable to
CEHL (without interest) from Initial Post-Closing Newco Receipts, 100% of which
Initial Post-Closing Newco Receipts shall be paid to CEHL until the full
Post-Closing Cash Consideration is paid, provided that if Post-Closing
Consideration paid by PAPI to CEHL from Initial Post-Closing Newco Receipts, if
any, does not equal the full Post-Closing Cash Consideration due and payable to
CEHL by the date that is six months following the Closing Date, PAPI shall pay
the balance due of the Post-Closing Cash Consideration to CEHL on such
date.

     

    (b) The
Parties hereby acknowledge and agree that any and all Pre-Closing CAMAC Receipts
received by any of the CAMAC Parties shall cause an equal reduction of the
Post-Closing Cash Consideration due and payable by Newco to CEHL post-Closing
from Initial Post-Closing Newco Receipts.

     

    Section
4. Royalty Oil and Tax
Oil.  The Parties hereby acknowledge and agree that Royalty Oil
and Tax Oil (each as defined in the PSC) shall, at all times be allocated to
Allied in accordance with the terms and conditions of Sections 8.1(a), 8.1(c)
and 8.3 of the PSC, which shall remain unaffected by the Purchase Agreement,
including this Amendment, and Allied Energy shall retain its rights and
obligations under such Sections.

     

    Section
5. Cost Oil for Allied
Services.  The Parties hereby acknowledge and agree that Cost
Oil that is allocated to Allied as payment for the Allied Invoices shall, at all
times, be allocated and distributed to Allied, and the PAPI Parties shall have
no right with respect to, or interest in (pecuniary or otherwise), such Cost
Oil.

     

    Section
6. Closing
Date.  The Parties hereby acknowledge and agree that the
Closing shall occur on or before April 7, 2010, subject to satisfaction of the
conditions to Closing under the Purchase Agreement, and that the references to
“March 31, 2010” in each of Section 6.7(c), Section 7.8(c), and Section 11.1(b)
of the Purchase Agreement shall be replaced with “April 7, 2010.”

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section
7. TSA
Accruals.                                
The Parties hereby acknowledge and agree that the TSA Accruals shall be paid by
Newco to Allied from Initial Post-Closing Newco Receipts following
payment in full of the Post-Closing Cash Consideration due and payable
therefrom, provided that if TSA Accruals paid by Newco to Allied from Initial
Post-Closing Newco Receipts, if any, do not equal the full TSA Accruals due and
payable to Allied by the date that is six months following the Closing Date,
Newco shall pay the balance due of the TSA Accruals to Allied on such
date.

     

    Section
8. Entire Agreement; Continued
Validity.  Except as expressly set forth in this Amendment, all
other provisions of the Purchase Agreement shall remain in full force and
effect.

     

    [Signature
Pages Follow]

     

     

     

     

     

     

     

     

     

     

     

     

     

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


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

     

    PACIFIC
ASIA PETROLEUM, INC.

     

    By: /c/ Frank C.
Ingriselli                                                                      

    Frank C.
Ingriselli

    President
and Chief Executive Officer

     

    CAMAC
PETROLEUM LIMITED

    


    By: /c/ Frank C.
Ingriselli                                                                      

    Frank C.
Ingriselli

    Authorized
Signatory

     

    CAMAC
ENERGY HOLDINGS LIMITED

     

    By: /c/ Kamoru
Lawal                                                                      

    Name:  Kamoru
Lawal

    Title:  Director

     

    CAMAC
INTERNATIONAL (NIGERIA) LIMITED

     

    By: /c/ Mickey
Lawal                                                                      

    Name:
Mickey Lawal

    Title:  Director

     

    ALLIED
ENERGY PLC

     

    By: /c/ Mickey
Lawal                                                                      

    Name:  Mickey
Lawal

    Title:  Director