CAMAC Energy Inc. - Exhibit 10.1 - Filed by newsfilecorp.com






Exhibit 10.1

LIMITED WAIVER AGREEMENT RELATING

TO

  PURCHASE AND CONTINUATION AGREEMENT 

          THIS
LIMITED WAIVER AGREEMENT RELATING TO PURCHASE AND CONTINUATION AGREEMENT (this
“Agreement”) is made and entered into effective as of February 15,
2011, by and among CAMAC ENERGY INC. (formerly, Pacific Asia Petroleum, Inc.), a
Delaware corporation (“CEI”), CAMAC PETROLEUM LIMITED, a company
incorporated in the Federal Republic of Nigeria and a wholly-owned subsidiary of
CEI (“CPL,” and together with CEI, the “CEI
Parties”), CAMAC ENERGY HOLDINGS LIMITED, a Cayman Islands company
(“CEHL”), 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 CAMAC
INTERNATIONAL (NIGERIA) LIMITED, a company incorporated in the Federal Republic
of Nigeria and a wholly-owned subsidiary of CEHL (“CINL,” and
together with CEHL and Allied, the “CAMAC Parties”). Each of the
Parties to this Agreement is individually referred to herein as a
“Party” and collectively as the “Parties.”

R E C
I T A
L S: 

          WHEREAS,
the CEI Parties and the CAMAC Parties entered into that certain Purchase and
Continuation Agreement dated as of December 10, 2010 (as amended, modified,
restated, or supplemented from time to time, the “Purchase
Agreement”); 

          WHEREAS,
the CAMAC Parties have determined that on the Closing Date the CAMAC Parties may
be in violation of the representation and warranty contained in Section
4.4(f)(i)(A) of the Purchase Agreement (the “Section 4.4(f)(i)(A)
Breach”) as a result of a subsisting security interest created by Allied
and CINL over all their respective rights, title and benefits under and in
respect of the Assigned Agreements (as defined in the Security Deed) (including
any assets or benefits accruable thereunder) under a Security Deed, dated
January 28, 2008 (the “Security Deed”), among Allied, CINL, and
Union Bank UK plc (as “Security Agent” for the lenders under a
related facility agreement) (the “Lien”); 

          WHEREAS,
the CAMAC Parties have determined that on the Closing Date the CAMAC Parties are
not able to satisfy certain conditions to CEI’s obligation to enter into and
complete the Closing contained in Section 9.3(i) of the Purchase
Agreement, which conditions consist of the delivery on or prior to the Closing
Date of the Data (as defined in the Purchase Agreement) and the delivery, in
part, of the G & G Workstations (as defined in the Purchase Agreement),
specifically with respect to two (2) SMT geophysical workstations located in
Lagos, Nigeria, including corresponding Micro Seismic Technology Geophysical
software (SMT) and Petrel software and licenses, to the extent such software
licenses are assignable or transferrable by the CAMAC Parties to the CEI
Parties, and all in “as-is” condition (the “Lagos Workstations”)
(such breach, together with the Section 4.4(f)(i)(A) Breach, is hereinafter
referred to as the “Breach”); 

          WHEREAS,
the CAMAC Parties have requested that the CEI Parties waive the condition to
CEI’s obligation to enter into and complete the Closing contained in
Section 9.3(a) and Section 9.3(i) of the Purchase Agreement (the
“Waiver”), but solely with respect to the Breach that may result
from the Lien or the non-delivery of the Data or Lagos Workstations, upon the
terms and conditions set forth in this Agreement; and 

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          WHEREAS,
the CAMAC Parties and the CEI Parties desire to set forth certain remedies of
CEI in the event the CAMAC Parties fail to discharge the Lien and deliver the
Data in accordance with this Agreement.

          NOW
THEREFORE, in consideration of the premises herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows: 

          1.     
Definitions. Except as otherwise provided below, unless the
context hereof indicates otherwise, all capitalized terms used herein shall have
the same meaning as such capitalized terms are defined in the Purchase
Agreement. 

          2.     
Waiver. From the date hereof until the date that is ten business
days after the date CEI delivers the Closing Cash Consideration to the CAMAC
Parties, CEI hereby waives the application of Section 9.3(a) and
Section 9.3(i) of the Purchase Agreement, but solely with respect
to the Breach that may result from the Lien and the non-delivery of the Data.
Additionally, CEI hereby waives the application of Section 9.3(i)
of the Purchase Agreement indefinitely but solely with respect to the Breach
that may result from the non-delivery of the Lagos Workstations. However, except
for the Waiver, nothing herein shall be deemed to modify or waive any other
provision of the Purchase Agreement or any other Transaction Document or to
constitute waiver of any default by any of the CAMAC Parties under the Purchase
Agreement or any other Transaction Document, whether now existing or hereafter
arising. Without limitation to the foregoing, the Waiver shall constitute a
waiver made pursuant to the terms of Section 12.2 of the Purchase
Agreement and shall be governed in all respects by the terms and conditions
thereof. Except for the Waiver, all of the representations, warranties, terms,
covenants, conditions and other provisions of the Purchase Agreement or any of
the other Transaction Documents shall remain in full force and effect in
accordance with their respective terms and are in all respects hereby ratified
and confirmed. 

          3.     
Discharge of Lien; Delivery of Data. In consideration of the
granting of the Waiver by CEI, the CAMAC Parties agree to, within ten business
days after receipt of the Closing Cash Consideration, (a) either (i) pay all
amounts or (ii) provide sufficient substitute collateral necessary to discharge
the Lien and obtain and deliver to CEI a release in form and substance
satisfactory to CEI from the Security Agent releasing the Lien and authorizing
the filing of any termination statements with any Governmental Authority in
connection therewith, and (b) deliver the Data to the CEI Parties. 

          4.     
  Remedies for Failure to Cure Breach.

          (a)     
If the CAMAC Parties fail to discharge the Lien, deliver the Data and perform
their obligations under Section 3 of this Agreement by the date ten business
days after receipt of the Closing Cash Consideration, CEI shall have the right,
at its sole option, by notice to CEHL, to either (i) rescind and terminate the
Purchase Agreement, subject to NAE’s agreement to terminate or rescind the novation of the Contract Rights to the CEI Parties
  under the Novation Agreement (the “NAE Approval”), in
  which case Section 4(b) below shall apply, or (ii) pursue any and all rights
  and remedies it may have against the CAMAC Parties with respect to the Breach,
  including a claim for indemnification under Section 10.2 of the Purchase Agreement;
  provided, that Section 10.4(a) of the Purchase Agreement shall not apply to
  any claim for indemnification that CEI has with respect to the Breach. In addition,
  each of the CAMAC Parties hereby waives any defense that any of the CAMAC Parties
  may have with respect to its obligation to indemnify CEI for the Breach based
  on the fact that the CEI Parties have knowledge of the Breach on or prior to
  the Closing Date. 

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          (b)      If
  CEI elects to rescind and terminate the Purchase Agreement pursuant to Section
  4(a)(i) above, within two business days following CEHL’s receipt of CEI’s
  notice of such rescission and termination, the CAMAC Parties shall refund the
  Closing Cash Consideration in full to CEI, plus interest on the Closing Cash
  Consideration at the Interest Rate from the date of CEI’s payment of the
  Closing Cash Consideration to the date of such refund, by wire transfer of immediately
  available funds to an account to be designated by CEI, and the CAMAC
  Parties agree to use their reasonable best efforts to promptly attain the NAE
  Approval. Upon receipt of the NAE Approval and effectiveness of the termination
  or rescission of the novation of the Contract Rights, the Contract Rights shall
  revert back to CAMAC. In the event the NAE Approval is not obtained within thirty
  calendar days, CEI shall have the right, at its sole option, to retain the refunded
  Closing Cash Consideration in full, plus interest received, and pursue it rights
  under Section 4(a)(ii) above, with any cash recovery being reduced by the value
  of the Closing Cash Consideration previously refunded by the CAMAC Parties to
  CEI. “Interest Rate” shall mean two percent per annum
  above the “prime rate” or other comparable index or reference rate
  reported in the Money Rates column or section of The Wall Street Journal
  as of the date of CEI’s payment of the Closing Cash Consideration. 

          5.     
Representations and Warranties of the Parties. Each of the Parties
represents and warrants as follows: 

          (a)      It
is duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of formation. It has all requisite power and authority
to execute, deliver and perform its obligations under this Agreement. 

          (b)      The
execution, delivery and performance by it of this Agreement have been duly
authorized and approved by its board of directors or other governing body, and
such authorizations and approvals remain in effect and have 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. This Agreement will be duly
executed and delivered by it and constitutes the valid and binding obligation of
such Party, enforceable against such Party 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). 

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          6.      Reference
to and Effect on the Transaction Documents.

          (a)      Upon
the effectiveness of this Agreement, each reference in the Purchase Agreement to
“this Agreement”, “hereunder”, “hereof”, “herein” or words of like import, and
each reference in the Transaction Documents shall mean and be a reference to the
Purchase Agreement as supplemented hereby. 

          (b)      Except
as specifically supplemented or modified above, the Purchase Agreement and all
other Transaction Documents shall remain in full force and effect and are hereby
ratified and confirmed. 

          (c)      The
execution, delivery and effectiveness of this Agreement shall not, except as
expressly provided herein, operate as a waiver of any right of any CEI Party
under any of the Transaction Documents. 

          7.     
Execution in Counterparts. 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. 

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

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FOLLOWS] 

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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 INC. 
By:
/s/ Byron A.
Dunn                                                
Bryon
A. Dunn 
President and Chief Executive Officer 

Address for Notice 
1330
Post Oak Blvd.
Suite 2575 
Houston, Texas 77056 

CAMAC PETROLEUM LIMITED 
By:
/s/ Byron A. Dunn
                                               
Byron
A. Dunn 
Director 


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SIGNATURE PAGES
FOR CAMAC PARTIES FOLLOW] 





          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/ Kamoru
Lawal                                                        
Name:
Kamoru 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]








ALLIED ENERGY PLC 



  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