Document:

Unsecured Variable Coupon Convertible Notes

 EXHIBIT 10.11 
 VARIABLE COUPON CONVERTIBLE NOTES DUE 2012 
  

			
	 	 	ISIN No. XS0234228830
		 	Common Code 023422883

 NEITHER THESE NOTES NOR THE ORDINARY SHARES ISSUABLE ON CONVERSION OF THESE NOTES (THE
“SHARES”) HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THESE NOTES, AGREES FOR THE BENEFIT OF THE COMPANY THAT
THESE NOTES AND THE SHARES MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OR DISPOSED OF IN THE UNITED STATES OR TO US PERSONS UNLESS THE NOTES OR THE SHARES AS THE CASE MAY BE, HAS BEEN REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES OR BLUE SKY LAWS OR EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS ARE AVAILABLE. 
 IF THE HOLDER OF A
NOTE WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF ANY SUCH TRANSFER, THE FOREGOING CONDITIONS MUST BE COMPLIED WITH REGARDLESS OF WHEN SUCH TRANSFER IS MADE. 
 ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE U.S. INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED
IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED. 
 THIS OBLIGATION IS NOT A DEPOSIT AND
IS NOT INSURED BY ANY AGENCY OF THE UNITED STATES GOVERNMENT. 
 GLOBAL ENERGY DEVELOPMENT PLC 
 VARIABLE COUPON CONVERTIBLE NOTES DUE 2012 
 GLOBAL NOTE 
 Global Energy Development PLC, a company registered in England and Wales (hereinafter, the
“Company,” which term includes any successor to the Company), for value received, hereby promises to pay to The Bank of New York Depository (Nominees) Limited, upon presentation and surrender of this Global Note (the “Global
Note”) the principal sum of TWELVE MILLION FIVE HUNDRED THOUSAND DOLLARS (U.S. $12,500,000) (the “Principal Amount”) on October 30, 2012, and to pay interest thereon from and including 3 November 2005, quarterly (save in the
case of the first interest period) in arrear on January 30, April 30, July 30, and October 30, in each year, commencing January 30, 2006 (each an “Interest Payment Date”), at the rate of 5% per
annum, from (and including) 3 November 2005 to (and including) October 30, 2008, 6% per annum from (and including) October 31, 2008 to (and including) October 30, 2010 and 7% per annum thereafter, each calculated on the
basis of a 360-day year consisting of twelve 30-day months, until the principal hereof is paid or payment thereof is duly provided for; provided, however, that the Principal Amount payable upon presentation and surrender may be reduced
from time to time in connection with conversions, redemptions, purchases, cancellations and similar events described in the Terms and Conditions hereof, and 

 such reductions shall be duly noted on Schedule A hereto (which is incorporated herein by this reference as if set out in
full); and provided further that interest accruing after the date of a reduction in Principal Amount shall be calculated with reference to the new Principal Amount. Payments of interest on each Note shall be paid by the Paying Agent on each
Interest Payment Date, commencing January 30, 2006, to the bearer of such Note, such payment to be made in accordance with the rules and procedures of Euroclear or Clearstream, as the case may be. 
 Upon failure of the Company to make any payment of interest or principal on the date when due and payable, the outstanding principal balance of the Notes
and, to the extent permitted by law, interest thereon will bear interest at the Default Rate beginning on the date such payment was due until the default is cured. 
 Notwithstanding any other provision of the Notes to the contrary, in no event shall the interest contracted for, charged or received in connection with the Notes (including any other costs or considerations that
constitute interest under applicable law which are contracted for, charged or received pursuant to the Notes) exceed the maximum rate of non-usurious interest allowed under applicable law as presently in effect and to the extent an increase is
allowable by such laws, but in no event shall any amount ever be paid or payable greater than the amount contracted for in the Notes, and all amounts paid by the Company which constitute usurious interest under the applicable law shall be applied in
the manner described herein. 
 To the extent permitted by law, interest contracted for, charged or received on the Notes shall be allocated
over the entire term of the Notes, to the end that interest paid on the Notes does not exceed the maximum amount permitted to be paid thereon by law. 
 The principal and interest on the definitive Notes shall be payable at the office or agency of the Company maintained for such purpose in the City of London and the City of New York, New York, or at such other office
or agency of the Company as may be maintained for such purpose. 
 This Global Note has been issued pursuant to resolutions adopted by the
Board of Directors of the Company on October 27, 2005. This Global Note is a permanent security and is exchangeable in whole for definitive Notes in bearer form, with interest coupons attached, upon the event specified in the Terms and
Conditions herein. 
 Until transferred in full for the definitive Notes in certificated form, this Global Note shall in all respects be
ratably entitled to the same benefits under, and subject to the same Terms and Conditions of the definitive Notes authenticated and delivered hereunder. 
 This Global Note, the definitive Notes, and the Terms and Conditions shall be governed by and construed in accordance with the laws of the State of New York. 
 Unless the certificate of authentication hereon has been executed by the Authenticating Agent by manual signature of one of its authorized signatories,
this Global Note shall not be entitled to any benefit under the Terms and Conditions and shall not be valid or obligatory for any purpose. 
  

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 IN WITNESS WHEREOF, the Company has caused this Global Note to be duly executed in its corporate name by
the manual or facsimile signatures of the undersigned duly authorized officers of the Company. 
 Dated as of 31 October
2005, 
  

			
	GLOBAL ENERGY DEVELOPMENT PLC
		
	By:	 	 /s/ David P Quint

		 	David P Quint, Director

  

			
	ATTEST:
		
	By:	 	 /s/ Catherine Miles

		 	Catherine Miles, Secretary

 CERTIFICATE OF AUTHENTICATION 
 This Global Note constitutes the Note referred to in the within mentioned Terms and Conditions. 
  

					
	 	  	THE BANK OF NEW YORK, Authenticating Agent
			
	Date:                      2005	  	By:	 	  

		  	Name:	 	  

		  	Title:	 	  

  

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 TERMS AND CONDITIONS OF THE NOTES 
 The U.S. $12,500,000 of Variable Coupon Convertible Notes Due 2012 (the “Notes”) of Global Energy Development PLC, a company registered in
England and Wales (the “Company”) are constituted by, and authorized to be issued pursuant to these Terms and Conditions and resolutions of the Board of Directors of the Company adopted on October 27, 2005. 
 Copies of a paying and conversion agency agreement dated as of October 31, 2005 (the “Agency Agreement”), made between the Company and The
Bank of New York, as paying and conversion agent (the “Paying Agent” and “Conversion Agent,” respectively, which expressions shall include any successors and assigns) are available for inspection during normal business hours by
the holders of the Notes (“Noteholders”) and the Couponholders at the specified office of the Paying Agent. The Noteholders are entitled to the benefit of, are bound by, and are deemed to have notice of all the provisions of the Agency
Agreement. 
 Certain terms not otherwise defined in the text hereof are defined in Condition 19 herein. 
 1. Form, Denominations, and Title, and Certain Administrative Provisions 
 (A) The Notes if issued in definitive bearer form will be serially numbered, in denominations of U.S. $1,000 or multiples thereof (the “Authorized Denomination”), each with Coupons attached on issue, and
with such numerical and other identification designation as the Company shall deem desirable. 
 (B) Title to the Notes and to the Coupons in
certificated form will pass by delivery. The Company and the Paying Agent and Conversion Agent may (to the fullest extent permitted by applicable laws) deem and treat the Holder of any Note and the Holder of any Coupon as the absolute owner thereof
for all purposes (whether or not the Note or Coupon shall be overdue and notwithstanding any notice to the contrary). 
 Beneficial interests
in the Notes will be represented by a global note (the “Global Note”), without interest coupons, which will be deposited with a common depository (the “Common Depository”) and held on behalf of Morgan Guaranty Trust Company of
New York, as operator of the Euroclear System (“Euroclear”), and Clearstream, société anonyme (“Clearstream”), for credit to the accounts designated by the Noteholders at Euroclear and Clearstream. Except as
provided herein, certificates will not be issued in exchange for beneficial interests in this Global Note. 
 (C) The Notes shall be executed
on behalf of the Company by its Managing Director and attested by its Secretary. The signature of any of these officers on the Notes may be manual or facsimile signatures of the present or any future such authorized officer and may be imprinted or
otherwise reproduced on the Notes. 
 Notes bearing the manual or facsimile signatures of individuals who were at any time the proper
officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes. 
 At any time and from time to time hereafter, the Company may deliver Notes executed by the Company to the Authenticating Agent for authentication,
together with a Company order for the authentication and delivery of such Notes, and the Authenticating Agent in accordance with such Company order shall authenticate and deliver such Notes. Such Company order shall specify the amount of Notes to be
authenticated and the date on which the original issue of Notes is to be authenticated. 
 The Global Note shall be dated as of the date of
authentication. 
 No Note shall be entitled to any benefit hereunder or be valid or obligatory for any purpose until the certificate of
authentication substantially in the form hereto is duly executed by the Authenticating Agent by the manual signature of 
  

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 an authorized signatory of such Authentication Agent, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered hereunder and is entitled to the benefits of these Terms and Conditions. 
 In case the Company, pursuant to Conditions 3(B) and 3(C), shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of its Properties and assets substantially
as an entirety to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or into which the Company shall have been merged, or the Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have entered into an amendment hereto, any of the Notes authenticated or delivered prior to such consolidation, merger, conveyance, transfer, lease or other disposition may, from time to time, at the request of the
successor Person, be exchanged for other notes executed in the name of the successor Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Notes surrendered for such exchange and of
like principal amount; and the Authenticating Agent, upon order of the successor Person, shall authenticate and deliver notes as specified in such request for the purpose of such exchange. 
 (D) If the Common Depository referred to in Condition 1(F) notifies the Company that it is unwilling or unable to continue as Common Depository for this
Global Note, the Company shall use its best efforts to identify and appoint a successor depository within 90 days of such notice. Pending the preparation of definitive Notes, if required herein, the Company may execute, and upon Company order the
Authenticating Agent shall authenticate and deliver, temporary definitive Notes which are printed, lithographed, typewritten, mimeographed or otherwise produced and in the Authorized Denomination, substantially of the tenor of the definitive Notes
in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such temporary definitive Notes may determine, as conclusively evidenced by their execution of such
temporary definitive Notes. 
 If temporary definitive Notes are required to be issued pursuant to these Conditions, the Company will cause
definitive Notes to be prepared thereafter without unreasonable delay. After the preparation of definitive Notes, the temporary Notes shall be exchangeable for definitive Notes upon surrender of the temporary Notes at the office or agency of the
Company designated for such purpose without charge to the Noteholder. Upon surrender for cancellation of any one or more temporary Notes, the Company shall execute and the Authenticating Agent shall authenticate and deliver in exchange therefor a
like principal amount of definitive Notes of the Authorized Denomination or multiples thereof. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under these Terms and Conditions as the definitive Notes.

 (E) Upon surrender for exchange of any Note at the office or agency of the Company designated pursuant to these Conditions, the Company
shall execute, and the Authenticating Agent shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of the Authorized Denomination or denominations of a like aggregate principal amount.

 Furthermore, any Holder of this Global Note, by acceptance of this Global Note, agrees that transfers of a beneficial interest in such
Global Note may be effected only through a book-entry system maintained by the Holder of the Global Note (or its agent) or as otherwise provided in these Conditions, and that ownership of a beneficial interest in this Global Note shall be required
to be reflected by way of book entry. 
 All Notes issued upon any exchange of Notes shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits hereunder, as the Notes surrendered upon such exchange. 
 Every Note presented
or surrendered for exchange shall (if so required by the Company) be duly endorsed, or be accompanied by a written instrument of transfer, in form satisfactory to the Company, duly executed by the Noteholder thereof or such Noteholder’s
attorney duly authorized in writing. 
  

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 Except as otherwise provided herein, no service charge shall be made for any exchange, conversion or
redemption of Notes, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any exchange of Notes. 
 The Company shall not be required (i) to exchange any Note during a period beginning at the opening of business 15 days before the selection of
Notes to be redeemed hereunder and ending at the close of business on the day of such mailing of the relevant notice of redemption, (ii) to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any
Note being redeemed in part, or (iii) to exchange any Note during a period beginning five days before the date of Maturity and ending on such date of Maturity. 
 (F) (1) This Global Note shall be delivered to the Common Depository. Members of, or participants in, Euroclear and Clearstream (“Agent Members”) shall have no direct rights hereunder with respect to
any Global Note held on their behalf by the Common Depository, or under such Global Note. The Common Depository may be treated by the Company, and any agent of the Company, as the absolute owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company or any agent of the Company from giving effect to any written certification, proxy or other authorization furnished by the Common Depository or shall impair, as between the
Common Depository and the Agent Members, the operation of customary practices governing the exercise of the rights of a Noteholder. 
 (2)
Transfers of the Global Note shall be limited to transfers of the Global Note in whole, but not in part, to the Common Depository, its successors or their respective nominees. Interests of beneficial owners in the Global Note may be transferred in
accordance with the rules and procedures of the Common Depository, Euroclear, Clearstream, and the provisions hereof. Definitive Notes in bearer form shall be transferred to all beneficial holders in exchange for their beneficial interests in the
Global Note in accordance with the Common Depository’s procedures only if the Common Depository notifies the Company that it is unwilling or unable to continue as Common Depository for the Global Note and a successor depository is not appointed
by the Company within 90 days of such notice, or an Event of Default has occurred and is continuing and the Company has received a request from any owner of a beneficial interest in the Global Note for such a transfer. 
 (3) In connection with any transfer of beneficial interests in this Global Note to beneficial owners pursuant to subsection (2) of this Condition,
the Common Depository shall reflect on its books and records the date and a decrease in the Principal Amount of this Global Note in an amount equal to the principal amount of the beneficial interests in this Global Note to be transferred, and the
Company shall execute, and the Authenticating Agent shall authenticate and deliver, one or more definitive Notes in bearer form of like tenor and amount. 
 (4) In connection with the transfer of the beneficial interests in the entire Global Note to beneficial owners pursuant to subsection (2) of this Condition, this Global Note shall be deemed to be surrendered to
the Conversion and Paying Agent for cancellation, and the Company shall execute, and the Authenticating Agent shall authenticate and deliver, to each beneficial owner identified by the Common Depository, in exchange for its beneficial interest in
this Global Note, an equal aggregate principal amount of definitive Notes in bearer form. 
 (5) Any definitive Note in bearer form delivered
in exchange for an interest in this Global Note pursuant to subsection (2) or subsection (3) of this Condition shall bear the applicable legend regarding transfer restrictions applicable to the bearer Note as counsel to the Company shall
advise the Company. 
 (6) The Holder of this Global Note may grant proxies and otherwise authorize any person, including Agent Members and
persons that may hold interests through Agent Members, to take any action which a Noteholder is entitled to take under these Terms and Conditions. 
 (7) Any definitive Note in bearer form delivered in exchange for an interest in this Global Note pursuant to subsection (2) or (3) of this Condition will prior to delivery to the Noteholder have all matured Coupons as of such
delivery date, which are attached to such bearer Note, cancelled and voided by the Authenticating Agent. 
  

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 (8) Nothing contained herein shall be deemed to authorize any transfers (by book-entry or otherwise) of
this Global Note otherwise than in accordance with the Securities Act and all other applicable legislation. Unless otherwise required by applicable law, neither the Company nor the Common Depository shall recognize or give effect to any attempt to
transfer (by book entry or otherwise) or convert any Note or any interest therein in violation of the Securities Act or all other applicable legislation. 
 (G) The Noteholders by acceptance of the Notes hereby covenant and agree that neither the Notes nor the Conversion Shares will be offered, sold, transferred, pledged, converted or otherwise disposed of
unless (i) the Notes and/ or the Conversion Shares have been registered under the Securities Act or any applicable state securities or blue sky laws or exemptions from the registration requirements of such laws are available, and (ii) such
action is in compliance with all applicable legislation. 
 (H) If (i) any mutilated Note or Coupon is surrendered to the
Authenticating Agent, or (ii) the Company and the Authentication Agent receive evidence to their satisfaction of the destruction, loss or theft of any Note or Coupon, and there is delivered to the Company and the Authenticating Agent such
security and/or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Company or the Authenticating Agent that such Note or Coupon has been acquired by a bona fide purchaser, the Company shall
execute and upon Company order the Authenticating Agent shall authenticate and deliver, in exchange for any such mutilated Note or Coupon or in lieu of any such destroyed, lost or stolen Note or Coupon, a new Note or Coupon of like tenor and
principal amount, bearing a number not contemporaneously Outstanding. 
 In case any such mutilated, destroyed, lost or stolen Note or Coupon
has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Note or Coupon, pay such Note or Coupon, as the case may be. 
 Upon the issuance of any new Note or Coupon under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Authenticating Agent) connected therewith. 
 Every new Note or Coupon issued pursuant
to this Section in lieu of any destroyed, lost or stolen Note or Coupon shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note or Coupon shall be at any time enforceable by
anyone, and shall be entitled to all benefits hereunder equally and proportionately with any and all other Notes or Coupons duly issued hereunder. 
 The provisions of this Condition are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Note or Coupon. 
 Any new Note issued under this Condition 1(H) in lieu of any destroyed, lost or stolen Note shall be issued by the Authenticating Agent with all matured
Coupons as of such date of issuance cancelled or voided. 
 2. Status 
 The Notes and any Coupons are direct, unconditional and unsecured obligations of the Company and will rank pari passu, without any preference among themselves. The Notes and any Coupons will rank senior to all
Subordinated Obligations of the Company, present and future, but, in the event of bankruptcy or insolvency of the Company, only to the extent permitted by the applicable laws relating to creditors’ rights. The Notes will not be secured by any
assets or property of the Company. The Notes and any Coupons will rank pari passu with all other present and future unsecured Indebtedness of the Company other than Subordinated Obligations. 
  

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 3. Covenants 
 (A) The Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights (charter and statutory) of the Company; provided, however, that the Company shall not be
required to preserve any such rights if the Board of Directors shall determine that the preservation thereof is no longer in the best interests of the Company and the conduct of its business, and that the loss thereof is not disadvantageous in any
material respect to the Noteholders; and provided, further, that nothing contained in this Condition 3(A) shall prohibit any transaction permitted by Condition 3(B) or Condition 3(C) herein. 
 (B) The Company will not merge or consolidate with or sell, convey, transfer or lease or otherwise dispose of all, or substantially all of its Properties
and assets substantially as an entirety to any Person, unless either (i) the Company shall be the surviving Person or (ii) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the
Person which acquired by conveyance or transfer, or which leases, the Properties and assets of the Company substantially as an entirety (1) shall be a Person organized and validly existing under the laws of the United Kingdom, or the United
States of America, any state thereof or the District of Columbia and (2) shall expressly assume, by a written instrument, the Company’s obligation for the due and punctual payment of the principal of and interest on all the Notes and the
performance and observance of every Term and Condition contained herein and in the Agency Agreement. 
 (C) Upon any consolidation of the
Company with or merger of the Company with or into any other Person or any conveyance, transfer or lease of the Properties and assets of the Company substantially as an entirety to any person, the successor Person formed by such consolidation or
into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Terms and Conditions contained herein with the same
effect as if such successor Person had been named as the Company herein, and in the event of any such conveyance or transfer, the Company, except in the case of a lease, shall be discharged of all obligations and covenants under the Notes and may be
dissolved and liquidated. 
 (D) The Company will maintain in at least one European city an office or agency where Notes may be presented or
surrendered for payment, where Notes may be surrendered for conversion or exchange and where notices and demands to or upon the Company in respect of the Notes may be served. The corporate trust office of the Paying Agent at One Canada Square,
48th Floor, London, E14 5AL, England shall be such office or agency of the Company, unless the Company shall
designate and maintain some other offices or agencies for one or more of such purposes pursuant to the terms of the Agency Agreement. The Company will give prompt written notice to the Noteholders of any change in the location of any such offices or
agencies. 
 The Company may also from time to time designate one or more other offices or agencies (in or outside of Europe) where the Notes
may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation; provided, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or
agency in Europe for such purposes. The Company will give prompt written notice to the Noteholders of any such designation or rescission and any change in the location of any such other office or agency. 
 (E) The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or upon the income, profits or Property of the Company and (b) all lawful claims for labour, materials and supplies which, if unpaid, might by law become a Lien upon the Property of the
Company; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by
appropriate proceedings. 
 (F) The Company will not amend its Certificate of Incorporation or constitutional documents except as required by
law, except in respect to such amendments that the Board of Directors reasonably determines do not materially adversely affect the rights of the Noteholders, or except to the extent that such amendment would not have a 
  

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 material adverse effect on (a) the ability of the Company to perform its obligations under the Notes or (b) the
rights of the Noteholders, except that neither (i) increases in the number of Shares and issuance thereof with related securities, nor (ii) designations of preferred shares of the Company, modifications of the terms of such designations
and issuance thereof with related securities, nor (iii) modification or expansion of the indemnity provisions provided by the Company to its directors and officers, nor (iv) change of the Company’s registered office shall be deemed an
amendment hereunder. 
 (G) To the extent permitted by law, the Company will provide to the Paying Agent or to any Noteholder such
statements, certificates or other documentation concerning the organization or operations of the Company as may be reasonably necessary to establish any exceptions or exemptions from United Kingdom income tax withholding and reporting requirements.

 (H) While any Conversion Right remains exercisable, the Company will use its best efforts to list and maintain a listing of all Shares
issued upon conversion of the Notes on a Stock Exchange. If the Company is unable to obtain or maintain such listing of Shares, it will forthwith give not less than 30 calendar days notice to the Noteholder of the listing, de-listing or quotation or
lack of quotation of the Shares (as a class) by any such Stock Exchange. 
 (I) If the Company shall at any time act as its own Paying Agent,
it will, on or before each due date of the principal of or interest on any of the Notes, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Paying Agent of its action or failure so to act. 
 Whenever the Company shall have one or more Paying Agents for the Notes, it will, on or before 3:00 p.m. (London time) on the Business Day immediately preceding each due date of the principal of or interest on any
Notes, deposit with a Paying Agent a sum sufficient to pay the principal or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal or interest. 
 Pursuant to the terms of the Agency Agreement, the Paying Agent shall agree with the Company, subject to the provisions of this Condition, that such
Paying Agent will: 
 (1) hold all sums held by it for the payment of the principal of or interest on Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; and 
 (2) notify the
Company by facsimile transmission or by telex if the Paying Agent has not, by the due date for the payment of any principal and/or interest in respect of the Notes or Coupons received unconditionally the full amount of such principal and interest
due or if it receives unconditionally the full amount of such principal and interest due after the due date for the payment. 
 Any money
deposited with the Paying Agent, or then held by the Company, in trust for the payment of the principal of or interest on any Note and remaining unclaimed for two years after such principal or interest has become due and payable shall be paid to the
Company on the Company order, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of
the such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease.. 
 4. Interest

 The Notes bear interest from (and including) 3 November 2005 to (and including) October 30, 2008, at the rate of five percent (5%)
per annum, from (and including) October 31 2008, to (and including) October 30, 2010 at the rate of six percent (6%) per annum, and thereafter at the rate of seven percent (7%) per annum. Interest is payable quarterly in arrear on January
30, April 30, July 30, and October 30, in each year (each an “Interest Payment Date”), the first such 
  

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 payment to be made on January 30, 2006, in respect of the period from (and including) 3 November 2005 to (and
including) January 30, 2006. The interest payable will equal from (and including) 3 November 2005 to (and including) October 30 2008) U.S. $125.00 (save in respect of the first interest period), from (and including) October 31
2008 to (and including) October 30 2010, U.S. $150.00 and thereafter U.S. $175.00, in each case per U.S. $10,000 principal amount of the Notes for each complete quarterly interest period. 
 Each Note will cease to bear interest (i) from its due date for redemption unless the Company shall default in the payment of the Redemption Price,
in which event interest shall continue to accrue as provided herein, or (ii) where the Conversion Right shall have been voluntarily exercised by the Noteholder, from the Conversion Date, or (iii) in the case of a Call For Shares, from the
Conversion Date. 
 Interest is calculated on the basis of a 360 day year consisting of 12 months of 30 days each and, in the case of an
incomplete month, the number of days elapsed. 
 5. Payments 
 For so long as the Notes are represented by a Global Note, beneficial interests in this Global Note will be shown on, and transfers thereof will be effected only through, records maintained by, and in accordance with
the rules and procedures of, Euroclear or Clearstream, as the case may be. 
 Payments of interest on each Note shall be paid by the Paying
Agent on each Interest Payment Date, commencing January 30, 2006, to the Holder of such Note as shown on the Note Register at the close of business on the applicable Record Date, such payment to be made in accordance with the rules and
procedures of such Common Depository and in accordance with the rules and procedures of Euroclear or Clearstream, as the case may be. 
 In
case of definitive Notes, payments of principal in respect of each Note and any net proceeds payable under Condition 6(D) will only be made, against presentation and surrender (or, in the case of part payment only, endorsement) of the relevant Note
at the specified office of the Paying Agent. Payments of interest due on the Notes on an Interest Payment Date will be made against presentation and surrender (or, in the case of part payment only, endorsement) of the relevant Coupons at the
specified office of the Paying Agent. All payments of principal and interest shall be made in U.S. dollars. Each such payment and any payment of the net proceeds of the sale of Shares pursuant to Condition 6(D) will be made at the specified office
of any Paying Agent, or at the option of the Holder, by U.S. dollar cheque mailed to an address, or delivered in accordance with the Holder’s instructions, or by transfer to a U.S. dollar account maintained by the Holder in accordance with the
Holder’s instructions, subject in all cases to any applicable fiscal or other laws and regulations, but without prejudice to the provisions of Condition 8. 
 If, at any time, in the opinion of the Company or of the Paying Agent, payments in U.S. dollars cannot be so made, payments will be made in U.S. dollars in such other manner as may be approved by the Company and the
Paying Agent and notice of the alternative manner of payment will be given to the Noteholders in accordance with Condition 15. 
 Each Note
must be presented for redemption together with all unmatured Coupons relating to such Note, failing which the full amount of any missing unmatured Coupon (or, in the case of payment not being made in full, that proportion of the full amount of the
missing unmatured Coupons which the amount so paid bears to the total amount due) will be deducted from the amount due for payment. Each amount so deducted will be paid in the manner mentioned above against presentation and surrender (or, in the
case of part payment only, endorsement) of such missing Coupon at any time before the expiry of six (6) years after the Relevant Date in respect of the relevant Note (whether or not such Coupon would otherwise have become void pursuant to
Condition 10), or, if later, five (5) years after the date on which such Coupon would have become due, but not thereafter. 
 All monies
paid by the Company to the Paying Agent for the payment of principal or interest on any Note which remain unclaimed at the end of two (2) years after the principal on such Note will have become due and payable will be 
  

 10 

 repaid to the Company and the Holder of such Note or any Coupon appertaining thereto will thereafter have only the rights
of a creditor of the Company as described in these Terms and Conditions or such rights as may be otherwise provided by applicable law. 
 A
Holder shall be entitled to present a Note or Coupon for payment only on a Presentation Date and shall not be entitled to any further interest or other payment if a Presentation Date is after the due date. 
 When making payments to Noteholders or Couponholders, fractions of one cent will be rounded down to the nearest whole cent. 
 The name of the initial Paying Agent and Conversion Agent and its initial specified office is set out at the end of these Terms and Conditions. The
Company reserves the right at any time to vary or terminate the appointment of the Paying Agent or Conversion Agent and to appoint additional or other Paying Agents or Conversion Agents. Notice of any termination or appointment and of any changes in
specified offices will be given to the Noteholders promptly by the Company in accordance with Condition 15. 
 6. Conversion 
 (A) Optional Conversion by the Noteholders; Conversion Period and Price 
 (i) Noteholders have the right, subject as provided herein and to any applicable laws and regulations, to require the Company to convert all or any of
their Notes at their principal amount into Shares at any time during the Conversion Period (“Conversion Right”). The Conversion Period begins on the Issue Date and ends upon the earliest to occur of (A) the second Business Day prior
to the later of October 30, 2012, or the date on which all principal and interest on the Notes is repaid in full, (B) if such Notes shall have been called for redemption pursuant to Condition 7, the close of the second Business Day prior
to the Redemption Date, or (C) if such Notes have been the subject of a Call For Shares, the second Business Day prior to the Call For Shares Conversion Date. Upon conversion, the right of the converting Noteholder to repayment of the principal
amount of the Note to be converted (and, subject as provided in Condition 6(B)(iv), accrued and unpaid interest thereon) shall be extinguished and released, and in consideration and in exchange therefor the Company shall allot and issue Shares
credited as paid up in full as provided in this Condition 6. 
 The number of Shares to be issued on conversion of a Note will be determined
by dividing the principal amount of the Note to be converted, plus accrued and unpaid interest thereon, translated into pounds sterling at a fixed exchange rate of GBP 1/US$1.78, by the Conversion Price, (as defined below) in effect on the
Conversion Date, with the result being rounded down to the nearest whole number. In no circumstances shall the Conversion Price be such as to cause any Shares to be issued at a discount to their par value. 
 (ii) A Conversion Right may only be exercised in respect of the Authorized Denomination or multiples thereof of Notes. If more than one Note is converted
at any one time by the same Holder, the number of Shares to be issued upon such conversion will be calculated on the basis of the aggregate principal amount of the Notes to be converted. Fractions of Shares will not be issued on conversion and no
cash adjustments will be made in respect thereof. 
 (iii) The price at which Shares will be issued upon the exercise of a Conversion Right
initially will be 305.8 pence. The Conversion Price will be subject to adjustment in accordance with the manner provided in Condition 6(C). The Company shall give notice of any adjustment of the Conversion Price in accordance with Condition 15
within ten (10) Business Days of the effective date of such adjustment. 
 (iv) Notwithstanding the provisions of paragraph (i) of
this Condition 6(A), if the Company shall default in making payment in full in respect of any Note which shall have been called for redemption or shall fail to issue Shares in respect of any Conversion, then, from the Relevant Date, interest shall
continue to accrue on such Note and the Conversion Right attaching to such Note will continue to be exercisable (unless already exercised by the Company pursuant to Condition 6(D)) up to, and including the close of business (at the place where the
Note is deposited in connection with the exercise of the Conversion Right) on the date upon which the full amount of the monies payable in respect of such Note has been duly received by the Paying Agent or, the date of the issuance of the Conversion
Shares. 
  

 11 

 (B) Procedure for Conversion 
 (i) To exercise the Conversion Right attaching to any Note, the Holder thereof must complete, execute and deposit at his own expense during normal
business hours at the specified office of the Conversion Agent, a notice of conversion (a “Conversion Notice”) in the form for the time being currently obtainable from the specified office of such Conversion Agent, together with the
relevant Note and any amount to be paid by the Noteholder pursuant to this Condition 6(B)(i). The current form of Conversion Notice is attached hereto as Exhibit A. 
 The Conversion Date must fall at a time when the Conversion Right attaching to that Note is expressed in these Conditions to be exercisable and will be
deemed to be the date of the surrender of the Note and delivery of such Conversion Notice and, if applicable, any payment to be made or indemnity given under these Conditions in connection with the exercise of such Conversion Right. 
 A Noteholder delivering a Note for conversion must pay any taxes and capital, stamp, issue and registration duties arising on conversion (other than any
taxes or capital, or stamp duties payable in the United Kingdom or required by any Stock Exchange, by the Company in respect of the allotment and issue of Shares and listing of the Shares on conversion). A Conversion Notice delivered shall be
irrevocable. 
 (ii) As soon as practicable, and (subject to compliance with any applicable law and/or regulation and/or with the rules of
any applicable stock exchange) in any event not later than fourteen (14) calendar days after the Conversion Date, the Company will in the case of Notes converted on exercise of the Conversion Right or a Note being converted in accordance with
Condition 6(D) and in respect of which a Conversion Notice has been delivered and the relevant Note, together with all Outstanding Coupons, and amounts payable by the relevant Noteholder deposited as permitted by sub-paragraph (i) above, cause
the person or persons designated for the purpose in the Conversion Notice to be registered as holder(s) of the relevant number of Conversion Shares and will make a certificate or certificates for the relevant Shares available for collection at the
Company’s principal office in London, England or at the Company’s registrar in London, England, or, if so requested in the relevant Conversion Notice, will deliver such certificate or certificates to the person and at the place specified
in the Conversion Notice, at the risk of the Noteholder, together with any other securities, property or cash required to be delivered upon conversion and such assignments and other documents (if any) as may be required by law to effect the transfer
thereof. 
 (iii) The person or persons specified for that purpose will be deemed for all purposes to be the holder of record of the number
of Shares issuable upon conversion with effect from the Conversion Date or Call For Shares Conversion Date, as the case may be. The Shares issued upon conversion of the Notes will in all respects rank pari passu with the issued and
outstanding Shares in issue on the relevant Conversion Date or Call For Shares Conversion Date, as the case may be, except for any right excluded by mandatory provisions of applicable law a holder of Shares issued on conversion of Notes shall not be
entitled to any rights for any record date which precedes the relevant Conversion Date or Call For Shares Conversion Date, as the case may be. 
 (iv) If any notice requiring the conversion of any Notes is given pursuant to Condition 6(B) or Condition 6(D) on or after the fifteenth (15th) calendar day prior to the record date in respect of any dividend payable in respect of the Shares and such notice specifies a date for conversion falling on or prior to the next following
Interest Payment Date, interest shall (subject as hereinafter provided) accrue on Notes which shall have been delivered for conversion on or after such record date from the preceding Interest Payment Date; provided, that the relevant
Noteholder’s entitlement to interest on any Note, in the event that the Shares allotted on conversion thereof shall carry an entitlement to receive such dividend, shall be limited to the amount by which the interest such Noteholder would have
received had no conversion taken place exceeds the amount of the dividend received on such Shares. Any such interest shall be paid by the Company not later than fourteen (14) calendar days after the relevant Conversion Date by U.S. dollar
cheque drawn on, or by transfer to U.S. dollar account maintained by the payee with, a bank outside the United States in accordance with instructions given by the relevant Noteholder. 
  

 12 

 (C) Adjustment of Conversion Price 
 (i) Dividends or Distributions of Shares. In case the Company shall pay or make a dividend or other distribution on its Shares exclusively in
Shares or shall pay or make a dividend or other distribution on any other class of capital stock of the Company which dividend or distribution includes Shares, the Conversion Price in effect at the opening of business on the day next following the
date fixed for the determination of shareholders entitled to receive such dividend or other distribution shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be the number of Shares outstanding at the
close of business on the date fixed for such determination and the denominator shall be the sum of such number of Shares and the total number of Shares constituting such dividend or other distribution, such reduction to become effective immediately
after the opening of business on the day next following the date fixed for such determination. For the purposes of this Condition 6(C)(i), the number Shares at any time outstanding shall not include Shares held in the treasury of the Company. For
the avoidance of doubt, this Condition does not apply to dividends or other distributions in Shares pursuant to the terms of the securities to which such dividend or other distribution may be made. 
 (ii) Dividends or Distributions of Rights, Warrants or Options to Purchase Shares. In case the Company shall pay or make a dividend or other
distribution on its Shares consisting exclusively of, or shall otherwise issue to all holders of its Shares, rights, warrants or options entitling the holders thereof to subscribe for or purchase Shares at a price per share less than the Market
Price per share (determined as further defined in certain circumstances in paragraph (vii) of this Condition 6(C)) on the date fixed for the determination of shareholders entitled to receive such rights, warrants or options, the Conversion
Price in effect at the opening of business on the day following the date fixed for such determination shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be the number of Shares outstanding at the close
of business on the date fixed for such determination plus the number of Shares which the aggregate of the offering price of the total number of Shares so offered for subscription or purchase would purchase at such Market Price and the denominator
shall be the number of Shares outstanding at the close of business on the date fixed for such determination plus the number of Shares so offered for subscription or purchase, outstanding at the close of business on the date fixed for such reduction
to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (ii), the number of Shares at any time outstanding shall not include Shares held in the
treasury of the Company. The Company shall not issue any rights, warrants or options in respect of Shares held in the treasury of the Company. 
 (iii) Dividends or Distributions in Cash. In case the Company shall, by dividend or otherwise, make a distribution to all holders of its Shares exclusively in cash in an aggregate amount that, together with (1) the aggregate
amount of any other distributions to all holders of its Shares made exclusively in cash within the 12 months preceding the date of payment of such distribution and in respect of which no Conversion Price adjustment pursuant to this 6(C)(iii) has
been made and (2) the aggregate of any cash plus the fair market value (as determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Company’s Board of Directors), as
of the expiration of the tender or exchange offer referred to below, of consideration payable in respect of any tender or exchange offer by the Company or a Subsidiary for all or any portion of the Shares concluded within the 12 months preceding the
date of payment of such distribution and in respect of which no Conversion Price adjustment pursuant to paragraph (vi) of this Condition 6(C) has been made, exceeds five percent (5%) of the product of the Market Price per share (determined
as further defined in certain circumstances in paragraph (vii) of this Condition 6(C)) of the Shares on the date fixed for shareholders entitled to receive such distribution times the number of Shares outstanding on such date, the Conversion
Price shall be reduced so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the effectiveness of the Conversion Price reduction contemplated by this paragraph (iii) by a fraction
of which the numerator shall be the Market Price per share (determined as provided in Section Condition 6(C)(vii)) of the Shares on the date of such effectiveness less the amount of cash so distributed applicable to one share and the denominator
shall be such Market Price per share, such reduction to become effective immediately prior to the opening of business on the day following the date fixed for the payment of such distribution. 
  

 13 

 (iv) All Other Distributions or Dividends. Subject to the last sentence of this paragraph (iv), in
case the Company shall, by dividend or otherwise, distribute to all holders of its Shares evidences of its indebtedness, shares of any class of capital stock, securities, cash or Property (excluding any rights, warrants or options referred to in
Condition 6(C)(ii), any dividend or distribution paid exclusively in cash and any dividend or distribution referred to in Condition 6(C)(i), the Conversion Price shall be reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the effectiveness of the Conversion Price reduction contemplated by this paragraph (iv) by a fraction of which the numerator shall be the Market Price per share (determined as further defined in
certain circumstances in paragraph (vii) of this Condition 6(C)) of the Shares on the date of such effectiveness less the fair market value (as determined in good faith by the Board of Directors, whose determination shall be conclusive and
described in a resolution of the Company’s Board of Directors and shall, in the case of securities being distributed for which prior thereto there is an actual or when issued trading market, be no less than the value determined by reference to
the average of the Market Price over the period specified in the succeeding sentence), on the date of such effectiveness, of the portion of the evidences of indebtedness, shares of capital stock, securities, cash and Property so distributed
applicable to one Share and the denominator shall be such Market Price per Share, such reduction to become effective immediately prior to the opening of business on the day next following the date fixed for the payment of such distribution (such
date to being referred to as the “Reference Date”). If the Board of Directors determines the fair market value of any distribution for purposes of this paragraph (iv) by reference to the actual or when issued trading market for any
securities comprising such distribution, it must in doing so consider the prices in such market over the same period used in computing the Market Price per share pursuant to paragraph (vii) of this Condition 6(C). For purposes of this paragraph
(iv), any dividend or distribution that includes Shares or rights, warrants or options to subscribe for or purchase Shares shall be deemed instead to be (1) a dividend or distribution of the evidences of indebtedness, cash, Property, shares of
capital stock or securities other than such Shares or such rights, warrants or options (making any Conversion Price reduction required by this paragraph (iv)) immediately followed by (2) a dividend or distribution of such shares or such rights,
warrants or options (making any further Conversion Price reduction required by Condition 6(C)(i) or (ii)), except (A) the Reference Date of such dividend or distribution as defined in this Condition 6(C)(iv) shall be substituted as “the
date fixed for the determination of shareholders entitled to receive such dividend or other distribution,” “the date fixed for the determination of shareholders entitled to receive such rights, warrants or options,” and “the date
fixed for such determination” within the meaning of Condition 6(C)(i) and Condition 6(C)(ii) and (2) any Shares included in such dividend or distribution shall not be deemed “outstanding at the close of business on the date fixed for
such determination” within the meaning of Condition 6(C)(i)). 
 (v) Subdivision of Shares. In case outstanding Shares shall be
subdivided into a greater number of Shares, the Conversion Price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately reduced, and, conversely, in case outstanding
Shares shall each be combined into a smaller number of Shares, the Conversion Price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. 
 (vi) Tender or Exchange Offer for Shares. In case a tender or exchange offer made by the Company or any Subsidiary for all or any portion of the
Shares shall expire and such tender or exchange offer shall involve an aggregate consideration having a fair market value (as determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution
of the Company’s Board of Directors) at the last time (the “Expiration Time”) tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended) that, together with (A) the aggregate of the cash
plus the fair market value (as determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Company’s Board of Directors), as of the expiration of the other tender or exchange
offer referred to below, of consideration payable in respect of any other tender or exchange offer by the Company or a Subsidiary for all or any portion of the Shares concluded within the preceding 12 months and in respect of which no Conversion
Price adjustment pursuant to this paragraph (vi) has been made and (B) the aggregate amount of any distributions to all holders of the Shares made exclusively in cash within the preceding 12 months and in respect of which no Conversion
Price adjustment pursuant to 
  

 14 

 Condition 6(C)(v) has been made, exceeds five percent (5%) of the product of the Market Price per share (determined
as provided in Condition 6(C)(vii)) of the Shares on the Expiration Time times the number of Shares outstanding (including any tendered Shares) on the Expiration Time, the Conversion Price shall be reduced (but not increased) so that the same shall
equal the price determined by multiplying the Conversion Price in effect immediately prior to the Expiration Time by a fraction of which the numerator shall be (1)the product of the Market Price per share (determined as provided in Condition
6(C)(vii)) of the Shares at the Expiration Time times the number of Shares outstanding (including any tendered or exchanged Shares) at the Expiration Time minus (2) the fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all Shares validly tendered or exchanged and not withdrawn as of the Expiration Time (the Shares deemed so accepted, up to
any such maximum, being referred to as the “Purchased Shares”) and the denominator shall be the product of (1) such Market Price per share at the Expiration Time times (2) such number of outstanding Shares at the Expiration Time
less the number of Purchased Shares, such reduction to become effective immediately prior to the opening of business on the day following the Expiration Time. 
 (vii) Determination of Market Price. For the purpose of any computation of the Market Price under this paragraph (vii) and Conditions 6(C)(ii), (iv) and (v) when certain circumstances described
therein have occurred within ten (10) Business Days of the event giving rise to the adjustment in the Conversion Price, (A) if the “ex” date (as hereinafter defined) for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the Conversion Price pursuant to paragraphs (i), (ii), (iii), (iv), (v) or (vi) above (“Other Event”) occurs on or after the tenth Stock Exchange Business Day prior to
the date in question and prior to the “ex” date for the issuance or distribution requiring such computation (the “Current Event”), the closing price for each Stock Exchange Business Day prior to the “ex” date for such
Other Event shall be adjusted by multiplying such closing price by the same fraction by which the Conversion Price is so required to be adjusted as a result of such Other Event, (B) if the “ex” date for any Other Event occurs after
the “ex” date for the Current Event and on or prior to the date in question, the closing price for each Stock Exchange Business Day on and after the “ex” date for such Other Event shall be adjusted by multiplying such closing
price by the reciprocal of the fraction by which the Conversion Price is so required to be adjusted as a result of such Other Event, (C) if the “ex” date for any Other Event occurs on the “ex” date for the Current Event, one
of those events shall be deemed for purposes of clauses (A) and (B) of this proviso to have an “ex” date occurring prior to the “ex” date for the other event, and (C) if the “ex” date for the Current
Event is on or prior to the date in question, after taking into account any adjustment required pursuant to clause (B) of this proviso, the closing price for each Stock Exchange Business Day on or after such “ex” date shall be
adjusted by adding thereto the amount of any cash and the fair market value on the date in question (as determined in good faith by the Board of Directors in a manner consistent with any determination of such value for purposes of Condition
6(C)(iii) or Condition 6(C)(iv) or (C), whose determination shall be conclusive and described in a resolution of the Company’s Board of Directors) of the portion of the rights, warrants, options, evidences of indebtedness, shares of capital
stock, securities, cash or Property being distributed applicable to one Share. For the purpose of any computation under Condition 6(C)(vi), the Market Price per Share on any date in question shall be deemed to be the Market Price on the date
selected by the Company commencing on or after the latest (the “Commencement Date”) of (A) the date 20 Stock Exchange Business Days before the date in question, (B) the date of commencement of the tender or exchange offer
requiring such computation, and (C) the date of the last amendment, if any, of such tender or exchange offer involving a change in the maximum number of Shares for which tenders are sought or a change in the consideration offered, and ending
not later than the date of the Expiration Time of such tender or exchange offer (or, if such Expiration Time occurs before the close of trading on a Stock Exchange Business Day, not later than the Stock Exchange Business Day immediately preceding
the date of such Expiration Time); provided, however, that if the “ex” date for any Other Event (other than the tender or exchange offer requiring such computation) occurs on or after the Commencement Date and on or prior to the
date of the Expiration Time for the tender or exchange offer requiring such computation, the closing price for each Stock Exchange Business Day prior to the “ex” date for such Other Event shall be adjusted by multiplying such closing price
by the same fraction by which the Conversion Price is so required to be adjusted as a result of such other event. For purposes of this paragraph, the term “ex” date, (A) when used with respect to any issuance or distribution, means
the first date on which the Shares trade in a regular way on the relevant exchange or in the relevant market from which the closing price was obtained without the right to receive such issuance or distribution, (B) when used with respect to any
subdivision or combination of Shares, means the first date on which the Shares trade in a regular way on such exchange, or in such market after the time at 
  

 15 

 which such subdivision or combination becomes effective, and (C) when used with respect to any tender or exchange
offer means the first date on which the Shares trade in a regular way on such exchange or in such market after the Expiration Time of such tender or exchange offer. 
 (viii) Further Reductions for Income Tax. The Company may make such reductions in the Conversion Price, in addition to those required by Conditions 6(C) (i), (ii), (iii), (iv), (v), and (vi), as it considers to
be advisable in order that any event treated for income tax purposes as a dividend of shares or share rights shall not be taxable to the recipients. 
 (ix) Adjustments to be Carried Forward. No adjustment in the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least five percent (5%) in the Conversion
Price; provided, however, that any adjustments which by reason of this paragraph (ix) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. 
 (x) Notice of Adjustments of Conversion Price 
 Whenever the Conversion Price is adjusted as herein provided the Company shall compute the adjusted Conversion Price in accordance with Condition 6(C) and shall prepare a certificate signed by the chief financial officer of the Company
setting forth the adjusted Conversion Price and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be delivered to the Paying Agent and the Conversion Agent, and the Company shall cause
notice thereof to be published in accordance with Condition 15 at least ten (10) Business Days in advance of the effective date of such adjustment. 
 (D) Call For Shares 
 (i) Each Noteholder acknowledges and agrees that provided the Shares into which
the Notes would be converted are listed on a Stock Exchange, the Company may, at its own cost (save those expenses or taxes referred to in Condition 6(D)(iii)), at any time, elect to exercise the Conversion Right on behalf of each and every
Noteholder in respect of all of the Notes Outstanding at the Conversion Price applicable as of the date fixed by the Company for such conversion (the “Call For Shares Conversion Date”), provided that the average of the Market Price of the
Shares over any 20 consecutive Stock Exchange Business Day period, is equal to or greater than one hundred and twenty-five percent (125%) of the Conversion Price. The Company will give notice in the manner set out in Condition 15 that the
criteria for Call For Shares under this Condition 6(D) has been met within 30 days of such criteria having been met. The form of Company Conversion Notice is attached hereto as Exhibit B. 
 (ii) At least 45 calendar days prior to the Call For Shares Conversion Date, the Company shall cause written notice of the Call For Shares Conversion
Date to be given to the Paying and Conversion Agent. Not less than 30 and not more than 60 calendar days prior to the Call For Shares Conversion Date, the Company shall cause written notice of the Call For Shares Conversion Date to be given to the
Paying Agent, the Conversion Agent and the Noteholders (in accordance with Condition 15). Following such notice, each of the Noteholders will be required on or before the Call For Shares Conversion Date to deliver or procure delivery of its Notes
with all unmatured Coupons relating to such Notes together with a duly completed Conversion Notice to the specified office of the Conversion Agent, during its usual business hours for such purposes and perform together with the Company, the
obligations applicable to it on conversion specified in this Condition 6. Failure to deliver the Conversion Notice shall not affect the conversion of such Notes pursuant to the terms of this Condition 6(D). 
 (iii) If any Noteholder with respect to whose Notes Conversion (pursuant to this Condition 6) is to take place shall fail to perform its obligations
specified in this Condition 6 or shall have a registered address in any territory where, in the absence of any registration statement or other special formalities or legal requirements, the issue, allotment, transfer or delivery of the Shares
arising on Conversion in the reasonable opinion of the Company, is or could be unlawful or impracticable, subject to applicable law, the Company shall make arrangements for the sale of such Shares to a third party at the best consideration
reasonably obtainable by the Company and arrange for the Paying Agent to pay 
  

 16 

 to such Noteholder the consideration received by it in respect of such Shares (after any deduction required to reimburse
any reasonable and proper expenses incurred in arranging any such sale or any taxes payable in connection therewith arising solely as a result of the Noteholder’s failure to perform its obligations under this Condition 6(D)). 
 (iv) Any Notes converted in accordance with this Condition 6(D) where the Call For Shares Conversion Date falls on or before October 30 2006 will
entitle the relevant Noteholder to the following additional interest payable on the Call For Shares Conversion Date equal to: 
  

	 	a.	Where the Call For Shares Conversion Date falls on or before January 30 2006, U.S. $500 per U.S. $10,000 principal amount of the Notes; 

  

	 	b.	Where the Call For Shares Conversion Date falls after January 30, 2006 but on or before April 30 2006, U.S. $375 per U.S. $10,000 principal amount of the Notes;

  

	 	c.	Where the Call For Shares Conversion Date falls after April 30 2006 but on or before July 30 2006, U.S. $250 per U.S. $10,000 principal amount of the Notes;

  

	 	d.	Where the Call For Shares Conversion Date falls after July 30 2006 but on or before October 30 2006, U.S. $125 per U.S. $10,000 principal amount of the Notes.

 (iv) From and after the Call For Shares Conversion Date and upon compliance by the Company of its obligations hereunder with
respect to such conversion, the Notes shall cease to constitute Indebtedness of the Company and shall thereafter be only deemed to represent the right to receive Shares. 
 (E) Notice of Certain Corporate Action 
 In case of the occurrence of one or more of the events that
are listed herein, the Company shall cause a notice to be mailed to the Paying Agent and the Conversion Agent and to be published in the manner provided under Condition 15 hereof within ten (10) Business Days after the date on which notice is
sent to the holders of the Company’s Shares. Such events are: (i) the Company shall declare a dividend (or any other distribution) on its Shares payable (1) otherwise than exclusively in cash, or (2) exclusively in cash in an
amount that would require a Conversion Price adjustment pursuant to Condition 6(C)(iii); or (ii) the Company shall authorize the granting to the holders of its Shares of rights, warrants or options to subscribe for or purchase any shares of
capital stock of any class or of any other rights (excluding employee stock options); or (iii) of any reclassification of the Shares of the Company (other than a subdivision or combination of its outstanding Shares), or of any consolidation or
merger to which the Company is a party and for which approval of any shareholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or (iv) of the voluntary or involuntary
dissolution, liquidation or winding up of the Company; or (v) the Company or any Subsidiary of the Company shall commence a tender or exchange offer for all or a portion of the Company’s outstanding Shares (or shall amend any such tender
or exchange offer). The notice shall state (i) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights, warrants or options, or, if a record is not to be taken, the date as of which the
holders of Shares of record to be entitled to such dividend, distribution, rights, warrants or options are to be determined, or (ii) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or
winding up is expected to become effective, and the date as of which it is expected that holders of Shares of record shall be entitled to exchange their Shares for securities, cash or other Property deliverable upon such re-classification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up, or (iii) the date on which such tender offer commenced, the date on which such tender offer is scheduled to expire unless extended, the consideration offered and the
other material terms thereof (or the material terms of any amendment thereto). 
 (F) Consolidation, Amalgamation or Merger

 In the event that the Company shall be a party to any transaction, including without limitation any (i) recapitalization or
reclassification of the Shares (other than a change in par value, or from par value to no par value or from no par value to par value, or as a result of a subdivision or combination of the Shares), (ii) any consolidation of the 
  

 17 

 Company with, or merger of the Company into, any other person, any merger of another person into the Company (other than
a merger which does not result in a reclassification, conversion, exchange or cancellation of all of the outstanding Shares of the Company), (iii) any sale or transfer of all or substantially all of the assets of the Company, or (iv) any
compulsory share exchange pursuant to which the Shares are converted into the right to receive other securities, cash or other Property, the Company will forthwith notify the Noteholders of such event in accordance with Condition 15 and, then lawful
provision shall be made as part of the terms of such transaction whereby the Holder of each Note then Outstanding shall have the right (during the period in which such Note is convertible) to convert such Note into the class and amount of Shares and
other securities and property receivable upon such transaction by a holder of such number of Shares which would have been liable to be issued upon conversion of such Note immediately prior to the transaction. So far as legally possible, the Company
shall cause the Person formed by such consolidation or resulting from such merger or which acquired such assets or which acquired the Company’s Shares, as the case may be, to execute and deliver to the Paying Agent on behalf of each of the
Noteholders an amendment to these Terms and Conditions as provided for under Condition 17. Such amendment shall provide for adjustments which, for events subsequent to the effective date of such amendment, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Condition. The above provisions of this Condition 6(F) shall similarly apply to successive transactions of the foregoing type. 
 (G) Conversion Prohibited Under Certain Circumstances 
 The Note shall not be convertible into Conversion Shares as provided in this Condition 6 if the Stock Exchange on which the Shares are listed requires the approval by the shareholders of the Company of the issuance of
the Shares which may be issued upon the exercise of the conversion rights contained in this Condition 6 and the shareholders fail to approve such issuances of the Shares at an annual meeting or general meeting held to approve such issuances.

 7. Redemption and Purchase 
 (A) Unless
previously redeemed, converted or purchased and canceled as provided herein, the Company will redeem the Notes in cash at their principal amount on October 30, 2012. 
 (B) (i) If as a result of any change in, or amendment to, the laws or regulations of the United Kingdom or any political sub-division of, or any authority in, or of, the United Kingdom having power to tax, or any
change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective after October 30, 2005, the Company has or will become obliged to pay additional amounts as provided or referred to in
Condition 8 (and such amendment or change has been evidenced by the delivery by the Company to the Paying Agent (who shall, in the absence of manifest error, accept such certificate and opinion as sufficient evidence thereof) of (x) a
certificate signed by two officers of the Company on behalf of the Company stating that such amendment or change has occurred (irrespective of whether such amendment or change is then effective), describing the facts leading thereto and stating that
such obligation cannot be avoided by the Company taking reasonable measures available to it and (y) an opinion of independent legal advisers of recognized standing to the effect that such amendment or change has occurred (irrespective of
whether such amendment or change is then effective), the Company may at its option, having given not less than 30 nor more than 60 calendar days’ notice to the Noteholders in accordance with Condition 15 (which notice shall be irrevocable),
redeem all the Notes but not some only, at their principal amount together with interest (if any) accrued to (but excluding) the Redemption Date, provided that no notice of redemption shall be given earlier than 90 calendar days before the earliest
date on which the Company would be required to pay such additional amounts were a payment in respect of the Notes then due. 
 (ii) On or
before October 30, 2008, the Company may, at its option and after having given not less than 30 nor more than 60 calendar days’ notice to the Noteholders in accordance with Condition 15 (which notice shall be irrevocable), redeem the Notes
for cash, in whole or in part, at 108% of their principal amount together with interest (if any) accrued to (but excluding) the Redemption Date. If the Company elects to redeem less than all the Notes, the Company will select which Notes to redeem
by lot, random, or such other method as it shall deem fair and appropriate. Upon expiry of any such notice period as is referred to in this Condition 7(B) (and subject as provided above), the Company shall be bound to redeem the Notes at 108% of
their principal amount, together with interest accrued to but excluding the Redemption Date. 
  

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 (iii) After October 30, 2008, the Company may, at its option and after having given not less than 30
nor more than 60 calendar days’ notice to the Noteholders in accordance with Condition 15 (which notice shall be irrevocable), redeem the Notes for cash, in whole or in part, at their principal amount together with interest (if any) accrued to
(but excluding) the Redemption Date. If the Company elects to redeem less than all the Notes, the Company will select which Notes to redeem by lot, random, or such other method as it shall deem fair and appropriate. Upon expiry of any such notice
period as is referred to in this Condition 7(B) (and subject as provided above), the Company shall be bound to redeem the Notes at their principal amount, together with interest accrued to but excluding the Redemption Date. 
 (C) Subject to applicable law, the Company or any of its Subsidiaries may at any time purchase Notes together with unmatured Coupons in any manner and at
any price in the open market or by private treaty. If purchases are made by tender, tenders must be available to all Noteholders alike. Notes purchased by the Company or any of its Subsidiaries will forthwith be surrendered for cancellation and
shall no longer be deemed Outstanding. 
 (D) All Notes which are redeemed by the Company will forthwith be canceled (together with all
related unmatured Coupons attached to or surrendered with the Notes) and may not be reissued or resold. 
 8. Taxation 
 All payments in respect of the Notes by the Company shall be made without withholding or deduction for, or on account of, any present or future taxes,
duties, assessments or governmental charges of whatever nature (“Taxes”) imposed or levied by or on behalf of the United Kingdom or any political sub-division of, or any authority in, or of, the United Kingdom having power to tax, unless
the withholding or deduction of the Taxes is required by law. In that event, the Company will pay such additional amounts as may be necessary in order that the net amounts received by the Noteholders and Couponholders after the withholding or
deduction shall equal the respective amounts which would have been receivable in respect of the Notes or, as the case may be, Coupons in the absence of the withholding or deduction except that no additional amounts shall be payable in relation to
any payment in respect of any Notes or Coupon presented for payment more than 30 calendar days after the Relevant Date except to the extent that a Holder would have been entitled to additional amounts on presenting the same for payment on the last
day of such period of 30 calendar days. 
 Any reference in these Terms and Conditions to any amounts in respect of the Notes shall be deemed
also to refer to any additional amounts which may be payable under this Condition. 
 9. Additional Covenants 
 While any Conversion Right remains exercisable, the Company will, save with the approval of an Extraordinary Resolution: 
 (1) at all times keep available for issuance free from any preemptive rights out of its authorized but unissued capital such number of Shares as would
enable the Conversion Rights and all other rights of subscription and exchange for and conversion pursuant to Condition 6 into Shares to be satisfied in full; 
 (2) maintain a listing for all the issued Shares and all Shares to be issued on the exercise of the Conversion Rights on a Stock Exchange, it being understood that if the Company is unable to obtain or maintain such
listing of Shares it will forthwith give notice to the Noteholders in accordance with Condition 15 of the listing, de-listing or quotation or lack of quotation of the Shares (as a class) by any such Stock Exchange; and 
  

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 (3) not in any way modify the rights attaching to the Shares with respect to voting, dividends or
liquidation. 
 10. Prescription 
 Notes
and Coupons will become void unless presented for payment within periods of ten (10) years (in the case of principal) and five (5) years (in the case of interest) from the Relevant Date in respect of the Notes or the Coupons, as the case may
be, subject to the provisions of Condition 5. 
 11. Events of Default and Enforcement 
 (A) Event of Default 
 “Event of
Default,” wherever used in these Terms and Conditions, means any one of the following events (whatever the reason for such Event of Default, whether voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or
order of any court or any order, rule or regulation of any administrative or governmental body) which shall have occurred and is continuing: 
 (1) if default is made for a period of five (5) Business Days or more in the payment of interest or principal due in respect of the Notes or any of them; or 
 (2) if the Company fails to perform or observe any of its other obligations, covenants, conditions or provisions under the Notes or these Terms and Conditions and such failure continues for the period of 30 calendar
days (or such longer period as the Majority Holders may in their absolute discretion permit) next following the service by the one or more of the Holders on the Company of notice requiring the same to be remedied; or 
 (3) if (i) any other Indebtedness of the Company becomes due and payable prior to its Stated Maturity by reason of an event of default (howsoever
defined) or (ii) any such Indebtedness of the Company is not paid when due or, as the case may be, within any applicable grace period or (iii) the Company fails to pay when due (or, as the case may be, within any applicable grace period)
any amount payable by it under any present or future guarantee for, or indemnity in respect of, any indebtedness of any Person or (iv) any security given by the Company or any subsidiary for any Indebtedness of any Person or any guarantee or
indemnity of Indebtedness of any Person by the Company becomes enforceable by reason of default in relation thereto and steps are taken to enforce such security save in any such case where there is a bona fide dispute as to whether the relevant
Indebtedness or any such guarantee or indemnity as aforesaid shall be due and payable (following any applicable grace period); provided, however, that in each such case the Indebtedness exceeds in the aggregate U.S. $10,000,000 and in each
such case such event continues unremedied for a period of 30 calendar days (or such longer period as the Majority Holders may in their sole discretion consent to in writing upon receipt of written notice from the Company); or 
 (4) if the Company shall generally fail to pay its debts as such debts come due (except debts which the Company may contest in good faith generally) or
shall be declared or adjudicated by a competent court to be insolvent or bankrupt, shall consent to the entry of an order of relief against it in an involuntary bankruptcy case, shall enter into any assignment or other similar arrangement for the
benefit of its creditors or shall consent to the appointment of a custodian (including, without limitation, a receiver, liquidator or Company); or 
 (5) if a receiver, administrative receiver, administrator or other similar official shall be appointed in relation to the Company or in relation to the whole or a substantial part its undertaking or assets or a distress, execution or other
process shall be levied or enforced upon or sued out against, or an encumbrancer shall take possession of, the whole or a substantial part of the assets of any of them and in any of the foregoing cases is not paid out or discharged within 90
calendar days (or such longer period as the Majority Holders may in their absolute discretion consent to in writing upon receipt of written notice from the Company); or 
  

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 (6) if the Company institutes proceedings to be adjudicated insolvent, or shall consent to the filing of
a insolvency proceeding against it, under United Kingdom insolvency laws, or shall consent to the filing of any such proceeding, or shall consent to the appointment of a receiver or liquidator or trustee or assignee (or other similar official) in
bankruptcy or insolvency of it or its Property, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they come due; or 
 (7) if a decree or order by a court having jurisdiction in the premises shall have been entered adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking the insolvent winding up of the Company under applicable United Kingdom insolvency laws, and such decree or order shall have continued undischarged or unstayed for a period of 90 calendar days; or a
decree or order of a court having jurisdiction in the premises for the appointment of a receiver or liquidator or trustee or assignee (or other similar official) in bankruptcy or insolvency of the Company or of all or substantially all of its
Property, or for the winding up or liquidation of its affairs, shall have been entered, and such decree or order shall have continued undischarged and unstayed for a period of 90 calendar days; or 
 (8) if a warranty, representation, or other statement made by or on behalf of the Company contained herein or any certificate or other agreement
furnished in compliance herewith is false in any material respect when made and such falsity continues for a period of 30 calendar days (or such longer period as the Majority Holders may in their absolute discretion permit) next following the
service by one or more of the Holders on the Company of notice requiring the same to be remedied; or 
 (9) if there is any final judgment or
judgments for the payment of money exceeding in the aggregate U.S. $10,000,000 outstanding against the Company which has been outstanding for more than 60 calendar days from the date of its entry and shall not have otherwise been discharged in full
or stayed by appeal, bond or otherwise. 
 (B) Acceleration of Maturity; Rescission and Annulment 
 If an Event of Default (other than an Event of Default specified in Condition 11(A)(6) or 11(A)(7)) occurs and is continuing, then and in every such case
the Majority Holders may declare the principal amount of all the Notes and accrued and unpaid interest thereon to be due and payable immediately, by a notice in writing to the Company, and upon any such declaration such principal amount and accrued
and unpaid interest shall become immediately due and payable. 
 If an Event of Default specified in Condition 11(A)(6) or Condition 11(A)(7)
occurs and is continuing, then the principal amount of all the Notes and all accrued and unpaid interest thereon shall ipso facto become and be immediately due and payable without any declaration or other act on the part of any Noteholder.

 At any time after a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been
obtained by the Majority Holders as hereinafter in this Condition provided, the Majority Holders, with written notice to the Company, may rescind and annul such declaration and its consequences if 
 (1) the Company has paid or deposited in a manner satisfactory to such Holders a sum sufficient to pay 
 (i) all overdue interest on all Outstanding Notes, 
 (ii) all unpaid principal of any Outstanding Notes which has become due otherwise than by such declaration of acceleration, and interest on such unpaid principal at the rate prescribed therefor in the Notes,

 (iii) to the extent that payment of such interest is legally enforceable, interest on overdue interest at the rate prescribed therefor in
the Notes, and 
 (iv) all reasonable sums paid or advanced by the such Holders hereunder; and 
  

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 (2) all Events of Default, other than the non-payment of amounts of principal of or interest on Notes
which have become due solely by such declaration of acceleration, have been cured or waived as provided in Condition 11(K) 
 No such
rescission shall affect any subsequent default or impair any right consequent thereon. 
 (C) Collection of Indebtedness and Suits for
Enforcement by the Majority Holders  
 The Company covenants that if 
 (1) default is made in the payment of any installment of interest on any Note when such interest becomes due and payable and such default continues for a
period of five (5) Business Days, or 
 (2) default is made in the payment of the principal of any Note at the Maturity thereof and such
default continues for a period of five (5) Business Days, 
 the Company will, upon demand of the Majority Holders, pay to the Holders of the Notes, the
whole amount then due and payable on the Notes for principal and interest, and interest on any overdue principal and, to the extent that payment of such interest shall be legally enforceable, upon any overdue installment of interest, at the rate
prescribed therefor in the Notes, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable expenses, disbursements and advances of the Holders, their agents and
counsel, and the reasonable compensation of such agents and counsel. 
 If the Company fails to pay such amounts forthwith upon such demand,
the Majority Holders in their name, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor
upon the Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the Property of the Company or any other obligor upon the Notes, wherever situated. 
 If an Event of Default occurs and is continuing, the Majority Holders may in their discretion proceed to protect and enforce their rights and the rights
of the other Noteholders by such appropriate judicial proceedings as such Holders shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in these terms and conditions or to
enforce any other proper remedy. 
 (D) Majority Holders May File Proofs of Claim 
 In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Notes or the Property of the Company or of such other obligor or their creditors, the Majority Holders (irrespective of whether the principal of the Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether the Majority Holders shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise, 
 (1) to file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the
Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Holders (including any claim for the reasonable expenses, disbursements and advances of such Holders, their agents and counsel) and
of the other Noteholders allowed in such judicial proceeding, and the reasonable compensation of such agents and counsel, and 
 (2) to
collect and receive any moneys or other Property payable or deliverable on any such claims and to distribute the same; 
  

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 and any custodian, receiver, assignee, trustee, liquidator, sequestrator or similar official in any such judicial
proceeding is hereby authorized by each Noteholder to make such payments to the Majority Holders due them for the reasonable expenses, disbursements and advances of such Holders, their agents and counsel and the reasonable compensation of such
agents and counsel, and to pay to the Paying Agent (where one is appointed) all such other sums due under the Notes. In the absence of such appointment, any such sums shall be paid for the rateable benefit of all the Noteholders. 
 Nothing herein contained shall be deemed to authorize the Majority Holders, except as permitted by law and these Terms and Conditions, to authorize or
consent to or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Noteholder thereof, or to authorize the such Holder to vote in respect of the claim
of any Noteholder in any such proceeding, except to the extent permitted by law. 
 (E) Majority Holders May Enforce Claims Without
Possession of Notes 
 All rights of action and claims under these Terms and Conditions may be prosecuted and enforced by the Majority
Holders without the possession of any of the Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Majority Holders shall be brought in their own name and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Majority Holders, their agents and counsel, be paid to the Paying Agent (where one is appointed) for the rateable benefit of all the Noteholders in
respect of which such judgment has been recovered. 
 (F) Application of Money Collected 
 Any money collected by the Majority Holder pursuant to this Condition shall be applied in the following order in case of the distribution of such money on
account of principal or interest, upon presentation of the Notes and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: 
 FIRST: To the payment of the amounts then due and unpaid for principal of and interest on the Notes in respect of which or for the benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such Notes for principal and interest, respectively; and 
 SECOND: The
balance, if any, to the Person or Persons entitled thereto. 
 (G) Unconditional Right of Holders to Receive Principal and Interest

 Notwithstanding any other provision in these Terms and Conditions, the Holder of any Note or of any Coupon, as the case may be, shall have
the right, which is absolute and unconditional, to receive payment, as provided herein and in such Note of the principal of and interest on, such Note on the respective Stated Maturity or expressed in such Note (or, in the case of redemption, on the
Redemption Date) or Coupon and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder; provided, that all monies paid by the Company to the Paying Agent for the
payment of principal or interest on any Note which remain unclaimed at the end of two (2) years after the Stated Maturity or Redemption Date of such Note will be repaid to the Company and the Holder of any Note or Coupon shall thereafter have
only the rights of a creditor of the Company or such rights as may be otherwise provided by applicable law. 
 (H) Restoration of Rights
and Remedies 
 If the Majority Holders or any Noteholder has instituted any proceeding to enforce any right or remedy under these Terms
and Conditions and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Majority Holders or to such Noteholder, then and in every such case, subject to any determination in such proceeding, the
Company, the Majority Holders and the Noteholders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Majority Holders and the Noteholders shall continue as though no such
proceeding had been instituted. 
  

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 (I) Rights and Remedies Cumulative 
 Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes as provided herein, no right or
remedy herein conferred upon or reserved to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or
remedy. 
 (J) Delay or Omission Not Waiver 
 No delay or omission of the Majority Holders or Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Noteholders. 
 (K) Waiver of Past Defaults 
 Subject
to Condition 11(B), the Majority Holders may on behalf of the Holders of all the Notes waive any past default hereunder and its consequences, except a default 
 (1) in respect of the payment of the principal of or interest on any Note, or 
 (2) in respect of a covenant
or provision hereof which under Condition 17 cannot be modified or amended without the consent of the Holder of each Outstanding Note affected. 
 Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of these Terms and Conditions; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon. 
 (L) Waiver of Stay or Extension Laws 
 The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of these Terms and Conditions; and the Company (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law. 
 (M) Requirements Regarding Agents 
 (1) At any time after an Event of Default has occurred and is continuing the Majority Holders shall notify in writing the Company and the Paying Agent,
and may by notice in writing to the Company and the Paying Agent: 
 (i) require the Paying Agent, until notified to the contrary by Majority
Holders, to hold all Notes and Coupons and all moneys, documents and records held by it in respect of Notes and Coupons to the order of the Holders; or 
 (ii) require the Paying Agent to deliver to the Holders on a pro rata basis all funds held by it for the benefit of the Holders, and to deliver the documents and records held by it in respect of Notes and Coupons to
the Holders, provided that such notice shall be deemed not to apply to any documents or records which the relevant Paying Agent is obliged to release by any law or regulation; and 
  

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 (iii) require the Company to make all subsequent payments in respect of the Notes and Coupons to or to
the order of the Holders and not to the Paying Agent. 
 (2) The Majority Holders shall notify the Paying Agent immediately upon the cure or
waiver of an Event of Default. Upon receipt of such notice, the provisions of this Condition 11(M) shall no longer apply. 
 (3) Prior to
taking any action under this Agreement at the direction of any Person with respect to the Notes, the Paying Agent shall be entitled to receive (and shall receive) indemnity or security satisfactory to it. 
 12. Liability Solely Corporate 
 No recourse shall be
had for the payment of the principal of or interest on any Notes or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement in these
Terms and Conditions, against any incorporator, or against any shareholder, officer or director, as such, past, present or future, of the Company, or of any predecessor or successor Person, either directly or through the Company or any such
predecessor or successor Person, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, it being expressly agreed and understood that the Notes and these Terms and Conditions
which are a part thereof are solely corporate obligations, and that no personal liability whatsoever shall attach to, or be insured by, any such incorporator, shareholder, officer or director, as such, past, present or future, of the Company or of
any predecessor or successor Person, either directly or through the Company or any such predecessor or successor Person, because of the indebtedness hereby authorized or under or by reason of any of the obligations, covenants, promises or agreements
contained in the Notes or the these Terms and Conditions which constitute a part thereof or to be implied herefrom; and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for
the Offering pursuant to which the Notes were issued; provided, however, that nothing herein contained shall be taken to prevent recourse to and the enforcement of the liability, if any, of any shareholder or subscriber to capital stock of
the Company upon or in respect of shares of capital stock not fully paid up. 
 13. Defeasance and Covenant Defeasance 
 (A) Company’s Option to Effect Defeasance or Covenant Defeasance 
 The Company may, at its option by Board Resolution, at any time, with respect to the Notes, elect to have either Condition 13(B) or Section 13(C) applied to all Outstanding Notes upon compliance with the
conditions set forth below in this Condition. The Company shall promptly give notice of such election to the Holders. 
 (B) Legal
Defeasance and Discharge 
 Upon the Company’s exercise under Condition 13(A) of the option applicable to this Condition 13(B), the
Company shall be deemed to have been discharged from its obligations with respect to all Outstanding Notes on the date the conditions set forth in Condition 13(D) are satisfied (hereinafter, “legal defeasance”). For this purpose, such
legal defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Notes, which shall thereafter be deemed to be “Outstanding” only for the purposes of Condition 13(E)
and the other Conditions of these Terms and Conditions referred to in (1) and (2) below, and to have satisfied all its obligations under such Notes, including the obligation to pay interest on the Notes, and these Terms and Conditions
insofar as such Notes are concerned (and the Holders, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder:
(1) the rights of Holders of Outstanding Notes to receive, solely from the trust fund described in Condition 13(D) and as more fully set forth in such Condition, payments in respect of the principal of and interest on such Notes 
  

 25 

 when such payments are due, and (B) the Company’s obligations with respect to the Notes under Conditions 1(D),
1(E), 1(H), 3(D) or 3(L). Subject to compliance with this Condition, the Company may exercise its option under this Condition 13(B) notwithstanding the prior exercise of its option under Condition 13(C) with respect to the Notes. 
 (C) Covenant Defeasance 
 Upon the
Company’s exercise under Condition 13(A) of the option applicable to this Condition 13(C), the Company shall be released from its obligations under any covenant contained in Condition 3 (except Condition 3(D) with respect to the Outstanding
Notes on and after the date the conditions set forth in Condition 13(D)) are satisfied (hereinafter, “covenant defeasance”), and the Notes shall thereafter be deemed not to be “Outstanding” for the purposes of any request,
demand, authorization, direction, declaration, notice, consent, waiver or Act of Noteholders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “Outstanding” for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect to the Outstanding Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Condition 11(A)(4), but, except as specified above, the remainder of these and the Notes shall be unaffected thereby. 
 (D) Conditions to Legal Defeasance or Covenant Defeasance 
 The following shall be the conditions to
application of either Condition 13(B) or Section 13 (C) to the Outstanding Notes: 
 (1) The Company shall irrevocably have
deposited or caused to be deposited with the Paying Agent as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Notes,
(A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any
payment, money in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Paying Agent, to pay and
discharge, and which shall be applied by the Paying Agent to pay and discharge, the principal of and interest on the Outstanding Notes on the Stated Maturity (or Redemption Date, if applicable) of such principal or installment of interest;
provided that the Paying Agent shall have been irrevocably instructed to apply such money or the proceeds of such U.S. Government Obligations to said payments with respect to the Notes; and provided further that, upon the effectiveness
of this Condition 13(D), the money or U.S. Government Obligations deposited shall not be subject to the rights of the Noteholders pursuant to the provisions of this Condition. Before or after such a deposit, the Company may give to the Paying Agent
a notice of its election to redeem all of the Outstanding Notes at a future date in accordance with Condition 7, which notice shall be irrevocable. Such irrevocable redemption notice, if given, shall be given effect in applying the foregoing.

 (2) No Default or Event of Default with respect to the Notes shall have occurred and be continuing on the date of such deposit or, insofar
as paragraphs (6) and (7) of Condition 11(A) hereof are concerned, at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the
expiration of such period). 
 (3) No event or condition shall exist that pursuant to the provisions of Condition 13(B) or 13(C) would
prevent the Company from making payments of the principal of or interest on the Notes on the date of such deposit or at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall
not be deemed satisfied until the expiration of such period). 
  

 26 

 (4) Such legal defeasance or covenant defeasance shall not result in a breach or violation of, or
constitute a default under any material agreement or material instrument to which the Company is a party or by which it is bound. 
 (5) In
the case of an election under Condition 13(B), the Company shall have delivered to the Paying Agent an Opinion of Counsel stating that the Holders of the Outstanding Notes will not recognize income, gain or loss for U.S. federal income tax purposes
as a result of such defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred. 
 (f) The Company shall have delivered to the Paying Agent an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the legal defeasance under Condition 13(B) or the covenant defeasance under Condition 13(C) (as the case may be) have been complied with. 
 (E) Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions 
 Subject to the provisions of the disposition of unclaimed moneys contained herein, all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Paying Agent pursuant to Condition 13(D) in respect of the Outstanding Notes shall be held in trust and applied by the Paying Agent, in accordance with the provisions of these terms and conditions, to the payment, either
directly or through the Paying Agent (including the Company acting as its own Paying Agent) to the Holders of the Notes of all sums due and to become due thereon in respect of principal and interest, but such money and U.S. Government Obligations
need not be segregated from other funds except to the extent required by law. 
 (F) Reinstatement 
 If the Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Condition 13(E) by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under these Terms and Condition shall be revived and reinstated as though no deposit had occurred pursuant to
Condition 13(B) or 13(C), as the case may be, until such time as the Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with Condition 13(E); provided, however, that no action taken in good faith by
the Company after a deposit of money or U.S. Government Obligations or both pursuant to Condition 13(E) and prior to the revival and reinstatement of obligations under these Terms and Conditions pursuant to this Condition 13(F) shall constitute the
basis for the assertion of an Event of Default pursuant to Condition 11; and provided, further, that if the Company makes any payment of principal of or interest on any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Paying Agent. 
 14. Replacement of Notes and Coupons 
 As provided in Conditions 1(H), should any Note or Coupon be lost, stolen, mutilated,
defaced or destroyed, it may be replaced at the specified office of the Paying Agent upon payment by the claimant of the expenses incurred in connection with the replacement and on such terms as to evidence indemnity and security as the Company may
reasonably require. Mutilated or defaced Notes or Coupons must be surrendered before replacements will be issued. 
 15. Notices 
 (A) Notices to all the Noteholders will be valid if published in one Authorized Newspaper (unless another form of notice is permitted by these Terms and
Conditions) with a copy provided to RP&C International Limited. Any notice shall be deemed to have been given on the date of publication or, if so published more than once, on the date of the first publication. If publication as provided above
is not practicable, notice will be given in such other manner, and shall be deemed to have been given on such date, as the Company may approve. 
  

 27 

 (B) Couponholders will be deemed for all purposes to have notice of the contents of any notice given to
the Noteholders in accordance with this Condition. 
 (C) Any request, demand, authorization, direction, declaration, notice, consent,
waiver, Extraordinary Resolution or Act of Noteholders or other document provided or pertained by these Terms and Conditions (herein collectively called “Notice”) to be made upon, given or furnished to, or filed with the Company by any
Noteholder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing to or with the Company addressed to it at the address of its principal office which shall initially
be: Global Energy Development PLC, 26 Dover Street, London, W1S 9LY, Attention: Stephen Voss, Managing Director Tel. 281 504 6401, Fax, 281 504 6451; with a copy to Catherine Miles, Secretary: Tel. +44 (0)207 763 7177, Fax. +44 (0) 207 763
7137. 
 16. Acts of Noteholders, Meetings of Noteholders 
 (A) Any Extraordinary Resolution, request, demand, authorization, direction, declaration, notice, consent, waiver or other action provided by these Terms and Conditions to be given or taken by Noteholders may be
embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective
when such instrument or instruments are delivered to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such
instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of these Terms and Conditions and conclusive in favor of the Company, if made in the manner provided
in this Condition 
 (B) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of
a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to such witness, notary public or
other such officer the execution thereof. Where such execution is by a signer acting in a capacity other than such signer’s individual capacity, such certificate or affidavit shall also constitute sufficient proof of authority. The fact and
date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Company deems sufficient. 
 (C) Any Extraordinary Resolution, request, demand, authorization, direction, notice, consent, waiver or other Act of the Holders of any Note shall bind
every future Holder of the same Note and the Holder of every Note issued upon conversion or redemption thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Company or any Paying or
Conversion Agent in reliance thereon, whether or not notation of such action is made upon such Note. 
 (D) The Noteholders may convene a
meeting at any time and from time to time to consider any matter affecting the Holders of the Notes, including the modification of the Terms and Conditions and to make, give or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this these Terms and Conditions to be made, given or taken by Holders of the Notes. 
 (E) Notice of every
meeting of the Holders of the Notes, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given in the manner provided in Condition 15, not less than 21 nor more than 180
days prior to the date fixed for the meeting. 
 (F) To be entitled to vote at any meeting of Holders of the Notes, a Person shall be
(i) a Holder of one or more Outstanding Notes, or (ii) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or 
  

 28 

 more Outstanding Notes by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any
meeting of Noteholders shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Company, and their respective counsel. 
 (G) The quorum at any meeting for passing any Extraordinary Resolution will be one or more Persons present holding or representing 50% or more in principal amount of the Outstanding Notes as of the date of the
meeting, or at any adjourned such meeting one or more Persons present whatever the principal amount of the Notes held or represented by such Person and the vote required for passing an Extraordinary Resolution at such meeting will be not less than a
majority of the principal amount of the Outstanding Notes and represented at such meeting or adjournment thereof; provided, that at any meeting, the business of which includes the modification of the provisions of the Terms and Conditions and the
provisions of these Terms and Conditions, the necessary quorum and vote required for passing an Extraordinary Resolution will be one or more Persons present holding or representing not less than a majority, or at any adjourned such meeting not less
than one-third, of the principal amount of the Outstanding Notes. An Extraordinary Resolution passed at any meeting of the Holders of the Notes will be binding on all Holders of the Notes, whether or not such Noteholders are present at the meeting,
and on the Holders of all Coupons. 
 17. Amendments to Terms and Conditions 
 (A) Amendments 
 The Company, when
authorized by a Board Resolution, may amend these Terms and Conditions to correct what is, in the reasonable view of the Board of Directors, a manifest error without the need to obtain the consent of any of the Holders of the Notes. 
 With the consent of the Holders of a majority in principal amount of the Notes Outstanding, the Company, when authorized by a Board Resolution, may
otherwise amend these Terms and Conditions for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions hereof or of modifying in any manner the rights of the Noteholders hereunder; provided, however,
that no such amendment shall, without the consent of the Holder of each Outstanding Note affected thereby: 
 (1) change the Stated Maturity
of the principal of, or any installment of principal of or interest on, any Note, or reduce the principal amount thereof or the rate of interest thereon, or change the coin or currency in which any Note or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or 
 (2) reduce the percentage in principal amount of the Outstanding Notes, the consent of whose Holders is required for any amendment of these terms and conditions, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of these Terms and Conditions or certain defaults hereunder and their consequences provided for herein, or 
 (3) modify any of the provisions of Condition 11(K), except to increase any such percentage or to provide that certain other provisions of these Terms and Conditions be modified or waived without the consent of the
Holder of each Outstanding Note affected thereby, 
 (4) modify any of the provisions of these Terms and Conditions relating to the
subordination of the Notes in a manner adverse to the Holders thereof, or 
 (5) modify any of the provisions of these Terms and Conditions
relating to Conversion Rights or redemption rights. 
  

 29 

 It shall not be necessary for any Act of Noteholders under this Section to approve the particular form of
any proposed amendment to the Terms and Conditions, but it shall be sufficient if such Act shall approve the substance thereof. 
 (B)
Effect of Amendments 
 Upon the entering into of an amendment of these Terms and Conditions pursuant to the terms hereof, these Terms
and Conditions shall be modified in accordance therewith, and amendment shall form a part of these Terms and Conditions for all purposes; and every Holder of Notes theretofore or thereafter delivered hereunder shall be bound thereby. 
 18. Governing Law 
 The Notes, including these Terms
and Conditions, the Coupons, and the Agency Agreement are governed by, and will be construed in accordance with, the laws of the State of New York. 
 19.
Definitions of Certain Terms 
 “Act,” when used with respect to any Noteholder, has the meaning specified in Condition 16.

 “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person and the terms “controlling” and “controlled” have meanings correlative to the foregoing. 
 “Authenticating Agent” means The Bank of New York 
 “Authorized Denomination” means U.S.
$1,000. 
 “Authorized Newspaper” means The Financial Times (European Edition) of London, England. If such newspaper shall cease to
be published, the Company shall substitute for it another newspaper in Europe, customarily published at least once a day for at least five (5) days in each calendar week, of general circulation. If, because of temporary suspension of
publication or general circulation of such newspaper or for any other reason, it is impossible or, in the opinion of the Company, impracticable to make any publication of any notice required by these Conditions in the manner herein provided, such
publication or other notice in lieu thereof which is made by the Company in the exercise of its reasonable discretion shall constitute a sufficient publication of such notice. 
 “Board of Directors” means either the board of directors of the Company or any duly authorized committee of that board. 
 “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is a day on which banking institutions in the City of New York,
New York, and London, England are not authorized or obliged by law, regulation or executive order to close. 
 “Call For Shares”
means conversion of the Notes at the option of the Company pursuant to Condition 6D. 
 “Capitalized Lease Obligation” means the
amount of the liability under any capital lease that, in accordance with GAAP, is required to be capitalized and reflected as a liability on the balance sheet of the relevant Person. 
 “Clearstream” means Clearstream, société anonyme. 
 “Commission” means the Securities and Exchange Commission, as from time to time constituted or, if at any time after the Issue Date such Commission is not existing, then the body performing similar duties at
such time. 
  

 30 

 “Common Depository” means the common depository appointed by Morgan Guaranty Trust Company of
New York, Brussels office, as operator of the Euroclear System, and Clearstream, société anonyme, which shall initially be The Bank of New York, including the nominees and successors of any Common Depository. 
 “Company” means Global Energy Development PLC, until a successor Person shall have become such pursuant to the applicable provisions of these
Terms and Conditions, and thereafter “Company” shall mean such successor Person. 
 “Conversion Agent” means any Person
(including the Company acting as Conversion Agent) authorized by the Company to effect conversions of the Notes on behalf of the Company. Pursuant to the terms hereof, the Company has initially appointed The Bank of New York to act as the Conversion
Agent. 
 “Conversion Date” means the Business Day during the Conversion Period on which the Conversion Right is exercised by
delivery to the Conversion Agent of the Note surrendered for conversion and the completed notice of a Noteholder’s intention to exercise its Conversion Right (as set forth in Exhibit A hereto) with respect to any Note. 
 “Conversion Period” means, with respect to any Note, the period which begins on the Issue Date, and ends upon the earliest to occur of
(A) the second Business Day prior to the later of October 30, 2012, or the date on which all principal and interest on the Note is repaid in full, (B) if such Notes shall have been called for redemption pursuant to Condition 7 of
these Terms and Conditions, the close of the second Business Day prior to the Redemption Date, or (C) if such Notes have been the subject of a Call For Shares the second Business Day prior to the Call For Shares Conversion Date. 
 “Conversion Price” means, in respect of a Conversion Right, initially 305.8 pence. 
 “Conversion Right” means the right of a Holder of any Note to convert such Note into Conversion Shares. 
 “Conversion Shares” means the Shares into which the Notes are convertible or converted. 
 “Corporation” includes corporations, limited liability companies, limited and general partnerships, associations, joint-stock companies and
business trusts. 
 “Coupon” means bearer interest Coupons relating to the definitive Notes in bearer form and any replacement
Coupons issued therefore 
 “Couponholder” means a Person who is the bearer of any Coupon. 
 “Default Rate” means, with respect to the Notes, ten percent (10%) per annum. 
 “Euroclear” means the Euroclear System. 
 “Exchange Rate” means the noon (New York time) buying rate in the City of New York for cable transfers in pounds sterling as certified for customs purposes by the Federal Reserve Bank of New York. 
 “Extraordinary Resolution” means a resolution passed at a meeting of the Noteholders duly convened and held in these Terms and Conditions.

 “Generally Accepted Accounting Principles” or “GAAP” means generally accepted accounting principles in the United
Kingdom, as applied from time to time by the Company and its Subsidiaries in the preparation of its financial statements. 
  

 31 

 “Guaranty” means all obligations of any Person (other than endorsements in the ordinary course
of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation, of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, including without limitation all obligations incurred through an agreement, contingent or otherwise, by such Person: (i) to purchase such Indebtedness or obligation or any Property or assets constituting security
therefor, or (ii) to advance or supply funds (1) for the purchase or payment of such Indebtedness or obligation, or (2) to enable the recipient of such funds to maintain certain financial conditions (e.g. agreed amount of working
capital) under loan or similar documents, or (iii) to lease Property or to purchase securities or other Property or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of the primary
obligor to make payment of the Indebtedness or obligation, or (iv) otherwise to assure the owner of the Indebtedness or obligation of the primary obligor against loss in respect thereof. For the purposes of all computations made under these
Terms and Conditions, a Guaranty in respect of any Indebtedness shall be deemed to be Indebtedness equal to the principal amount and accrued interest of such Indebtedness which has been guaranteed, and a Guaranty in respect of any other obligation
or liability or any dividend shall be deemed to be Indebtedness equal to the maximum aggregate amount of such obligation, liability or dividend. 
 “GBP”, “£”, “pounds sterling” and “pence” means the lawful currency of the United Kingdom. 
 “Holder or Noteholder” means a Person in whose name a Note is registered on the Paying Agent’s books, or if a Note is not in registered form, a Person who is a bearer of a Note or Coupon, as the case may be. 
 “Indebtedness” of any Person means and includes all present and future obligations of such Person, which shall include all obligations
(i) which in accordance with generally accepted accounting principles in the United States shall be classified upon a balance sheet of such Person as liabilities of such Person, (ii) for borrowed money, (iii) which have been incurred
in connection with the acquisition of Property (including, without limitation, all obligations of such Person evidenced by any debenture, bond, note, commercial paper or other similar security, but excluding, in any case, obligations arising from
the endorsement in the ordinary course of business of negotiable instruments for deposit or collection), (iv) secured by any Lien existing on Property owned by such Person, even though such Person has not assumed or become liable for the
payment of such obligations, (v) created or arising under any conditional sale or other title retention agreement with respect to Property acquired by such Person, notwithstanding the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited to repossession or sale of such Property, (vi) which are Capitalized Lease Obligations, (vii) for all Guaranties, whether or not reflected in the balance sheet of such Person
and (viii) which are all reimbursement and other payment obligations (whether contingent, matured or otherwise) of such Person in respect of any acceptance or documentary credit. Notwithstanding the foregoing, Indebtedness shall not include (i)
Indebtedness incidental to the operation of the business of the Person in the ordinary course and in the aggregate not material to the business and operations of the Person, (ii) Indebtedness for which the Company or any of its Subsidiaries are
the sole obligors and obligees, and (iii) Indebtedness represented by purchase, rental or lease obligations not to exceed S1,000,000 in any period of 12 months for any Person and its Subsidiaries. 
 “Interest Payment Date” means the Stated Maturity of an installment of interest on the Notes. 
 “Issue Date” means October 31, 2005. 
 “Lien” means any mortgage, charge, pledge, lien, security interest or encumbrance of any kind whatsoever, including any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute or contract, and including but not limited to the security interest lien arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes. The term “Lien” shall include reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting Property.
For the purposes of these Terms and Conditions, the Company or its Subsidiary shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement, financing lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some other Person for security purposes. 
  

 32 

 “Majority Holders” means the Holders of a majority of the principal amount of Notes
Outstanding. 
 “Market Price” means the daily closing sale price of the Shares for a Stock Exchange Business Day on a Stock
Exchange. 
 “Maturity,” when used with respect to any Note, means the date on which the principal of such Note becomes due and
payable as therein or herein provided, whether at the Stated Maturity or the Redemption Date and whether by declaration of acceleration, call for redemption or otherwise. 
 “Outstanding,” when used with respect to Notes, means, as of the date of determination, all Notes theretofore issued, except: (1) Notes heretofore cancelled by the Paying and Conversion Agent or
delivered to the Paying and Conversion Agent for cancellation; (2) Notes, or portions thereof, for whose payment or redemption money in the necessary amount has been theretofore deposited any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Notes; provided that, if such Notes are to be redeemed, notice of such redemption has been duly given or provision therefor
satisfactory to the a Paying Agent has been made; (3) Notes, except to the extent provided in Conditions 13 (B) and 13(C), with respect to which the Company has effected defeasance and/or covenant defeasance as provided in Condition 13;
and (4) Notes which have been paid pursuant to or in exchange for or in lieu of which other Notes have been issued, however, that in determining whether the Holders of the requisite principal amount of Outstanding Notes have taken any Act or
given or made any Extraordinary Resolution, Notes owned by the Company or any other obligor upon the Notes or any Affiliate of the Company (other than Persons whose Affiliate relationship arises solely from ownership of Conversion Shares) or such
other obligor shall be disregarded and deemed not to be Outstanding. 
 “Paying Agent” means any Person (including the Company
acting as Paying Agent) authorized by the Company to pay the principal of or interest on any Notes on behalf of the Company. Pursuant to the terms and conditions hereof, the Company has initially appointed The Bank of New York as the Paying Agent

 “Person” means any individual, corporation, limited liability company, limited or general partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. 
 “Preferred Shares” means, with respect to any Person, any and all shares, interests, participation or other equivalents (however designated) of such Person’s preferred or preference shares whether now outstanding or issued on
or after the Issue Date, and includes, without limitation, all classes and series of preferred or preference shares. 
 “Presentation
Date” means the date on which a Note is presented by a Noteholder for payment of principal or a Coupon is presented by the Couponholder for payment of interest, as the case may be, or if such date is not a Business Day in London and New York,
the next date which is a Business Day in each of the foregoing cities. 
 “Property” or “Properties” means any kind of
property or asset, whether real, personal or mixed, or tangible or intangible, and any interest therein. 
 “Record Date” means the
15th day preceding each Interest Payment Date whether or not a Business Day. 
 “Redemption Date,” when used with respect to any
Note to be redeemed, in whole or in part, means the date fixed for such redemption by or pursuant to these Terms and Conditions. 
  

 33 

 “Redemption Price,” when used with respect to any Note and Coupons to be redeemed, means the
price at which they are to be redeemed pursuant to the terms hereof, plus accrued and unpaid interest to, but excluding, the Redemption Date. 
 “Relevant Date” means the date on which the payment first becomes due; provided, that if the full amount of the money payable has not been received by the Paying Agent on or before the due date, it shall mean the date on which,
the full amount of the money having been so received, notice to that effect shall have been duly given to the Noteholders by the Company in accordance with Condition 15. 
 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated from time to time by the Commission pursuant thereto. 
 “Shares” means the ordinary shares, par value £0.01, of the Company (and all other (if any) shares or stock resulting from any
sub-division, consolidation or reclassification of such shares). 
 “Special Record Date” means the date established by the Paying
Agent as provided herein as a record date for the payment of defaulted principal of or interest on the Notes. 
 “Stated Maturity,”
when used with respect to any Indebtedness or any installment of principal thereof or interest thereon, means the date specified in such Indebtedness as the fixed date on which the principal of such Indebtedness or such installment of principal or
interest is due and payable. 
 “Stock Exchange” means the AIM Market of the London Stock Exchange, or if the Shares are no longer
traded on this market, any other internationally recognized or established securities exchange on which the Shares trade. 
 “Stock
Exchange Business Day” means any day (other than a Saturday or Sunday) on which the Stock Exchange on which the Shares are listed is open for business. 
 “Subordinated Obligation” means any Indebtedness of the Company outstanding on such date which is contractually subordinate or junior in right of payment to the Notes. 
 “Subsidiary” of any Person means any Corporation of which at least a majority of the shares having by the terms thereof ordinary voting power
to elect a majority of the Board of Directors of such Corporation (irrespective of whether or not at the time stock of any other class or classes of such Corporation shall have or might have voting power by reason of the happening of any
contingency) is directly or indirectly owned or controlled by the Person. 
 “U.S. Government Obligations” means securities that
are (x) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the
United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt. 
 The Paying Agent and Conversion Agent is: 
 The Bank of New York 
  

 34 

 through its London branch at: 
 One Canada Square 
 London E14 5AL 

United Kingdom 
 and 
 The Bank of New York 
 Attention: Global
Finance Unit 
 101 Barclay Street, Floor 21 West 
 New York, New York 10286 
 USA 
  

 35 

 SCHEDULE A 
 Principal Amount of this Global Note 
 The aggregate principal amount of this Global Note is as shown by the
latest entry made by or on behalf of the Paying Agent in the fourth column below. Reductions in the outstanding principal amount of this Global Note following redemption, conversion into Shares, or the purchase and cancellation of Notes are entered
in the second and third columns below. 
  

									
	 Date
	  	 Reasons for change
in
 the outstanding
principal amount of
Global
 Note
	  	Amount of
such change	  	 Outstanding
principal
amount of this
Global
 Note following
such
 change
	  	 Notation made by or on
behalf of the Paying Agent
(other than
 in respect of
the initial
principal amount)

	 October 31, 2005
	  	Not applicable	  	Not applicable	  		  	Not applicable

  

 36 

 SCHEDULE B 
 Interest Payments in respect of this Global Note 
 The following payments of interest in respect of this Global Note have
been made: 
  

							
	 Date made
	  	Amounts of interest
Due and payable	  	Amount of interest paid	  	Notation made by and on behalf of the
Paying Agent

  

 37 

 EXHIBIT A 
 HOLDER’S CONVERSION NOTICE 
 To: [Conversion Agent] 
 The undersigned Holder of the Variable Coupon Convertible Notes Due 2012 (the “Notes”) in the aggregate principal amount of U.S. $•
tendered herewith hereby irrevocably exercises the option to convert such Note(s) into Shares in accordance with the Terms and Conditions of the Notes relating to the issuance by Global Energy Development PLC of an aggregate of U.S. $12,500,000, of
the Notes and directs that the Conversion Shares issuable and deliverable upon such conversion be issued and delivered to the undersigned in the name and at the address set forth below. 
 If the Conversion Shares are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith a certificate in proper form certifying that the applicable restrictions on transfer have been complied with. 
 All terms used and not otherwise defined herein have the respective meanings set forth in the Terms and Conditions. 
 DATE:                       
  

					
		 		 	  

		 		 	Name of Holder
			
		 		 	  

		 		 	Signature(s) of Holder
			
	 Address for Delivery
 of Share
Certificates
	 		 	  

			
		 		 	  
  
  

			
	 Name for Registration
 of Share Certificates

(if Different than Holder):
	 		 	  

		 		 	

  

 A-1 

 EXHIBIT B 
 COMPANY’S CALL FOR SHARES CONVERSION NOTICE 
 To: Conversion Agent 
 Global Energy Development PLC (the “Company”) hereby irrevocably exercises the option to convert $• Variable Coupon Convertible Notes Due
2012 (the “Notes”) of the Company that have not been previously converted and are Outstanding at the date of this notice into Shares, in accordance with the Terms and Conditions, pursuant to which the Company has issued an aggregate of
U.S. $12,500,000, of the Notes, and confirms that the Conversion Shares issuable and deliverable upon conversion shall be issued and delivered to the Noteholders in accordance with the instructions for registration and delivery of the Conversion
Shares to each Holder, to be provided by each Holder to the Conversion Agent. 
 The Company is entitled to exercise its option to convert
because the average of the Market Price of the Shares over the 20 Stock Exchange Business Day period beginning on                      and
ending on                      equaled or exceeded 125% of the Conversion Price. 
 All terms used and not otherwise defined herein shall have the respective meanings set forth in the Terms and Conditions. 
  

									
	DATE:                      	 		 	GLOBAL ENERGY DEVELOPMENT PLC
					
		 		 		 	By:	 	  

					
		 		 		 	 Name:
	 	  

					
		 		 		 	 Title:
	 	  

  

 B-1 

 EXHIBIT C 
 COMPANY’S NOTICE OF REDEMPTION 
 To: [Paying and Conversion Agent] 
 Global Energy Development PLC (the “Company”) hereby irrevocably exercises the option to redeem
             United States dollars (U.S. $                     ) principal
amount of the Variable Coupon Convertible Notes Due 2012 (the “Notes”) of the Company that have not been previously converted and are Outstanding at the date of this notice. 
 Each Note so redeemed will be redeemed for a cash amount equal to     % of the face value of the Note plus interest accrued
and unpaid thereon. 
 All terms used and not otherwise defined herein shall have the respective meanings set forth in the Terms and
Conditions. 
  

					
	DATE:                     	 	GLOBAL ENERGY DEVELOPMENT PLC
			
	 	 	By:	 	  

			
		 	Name:	 	  

			
		 	Title:	 	  

  

 C-1Exploration and Production Contract

 Exhibit 10.12 
 HYDROARBON EXPLORATION AND PRODUCTION CONTRACT CARACOLI - Page 1 of 55 
 

 
 NATIONAL HYDROCARBONS AGENCYHYDROCARBON EXPLORATION AND PRODUCTION CONTRACT 
  

					
	SECTOR	  	CARACOLI	  	

	CONTRACTOR:	  	HARKEN DE COLOMBIA LIMITED	  
	EFFECTIVE DATE:	  	DECEMBER 27, 2005	  

 The contracting parties: On the one hand, the National Hydrocarbons Agency, ANH special administrative unit
attached to the Ministry of Mines and Energy, created by the decree-law 1760 on June 26, 2003, with main legal address in Bogotá, D.C., represented by JOSE ARMANDO ZAMORA REYES, identified with Colombian ID No. 19.303.017 issued at
Bogota, resident in Bogota, D.C., who declares: 1. That with his status as Director General of ANH, and representing this Agency, and 2. That he has been authorized to enter into this contract by the Executive Council of the ANH, as registered on
Minutes No. 48, on December the second, 2005, and on the other part HARKEN DE COLOMBIA LIMITED, a company organized under the laws of the Cayman Islands, with its main legal address in the Cayman Islands, with a branch office established in
Colombia and main legal address in Bogotá, D.C., pursuant to public articles of incorporation No. 406, on February 19th, 1993, executed at the Notary Eleven (11) of Bogotá Jurisdiction, represented by GUILLERMO SANCHEZ,
of age, citizen of the United States of America, identified with passport 132457597, who declares: 1. That with his status of Lawful Representative he performs representing HARKEN DE COLOMBIA LIMITED company. 2. That, in order to enter the contract
herein he is fully authorized, as recorded in the existence and lawful representation certificate issued by Bogotá D.C. Chamber of Commerce. 3. That he declares under oath that neither himself nor the company he represents are involved in any
cause of incompatibility or inability to enter into the contract herein, and 4. That HARKEN DE COLOMBIA LIMITED has credited having and commits itself to maintain financial capacity, technical competence, and professional capabilities required to
carry out the activities that the contract herein relates to. The aforementioned company shall be referred to as THE CONTRACTOR to all effects. 
 The ANH
and THE CONTRACTOR hereby state that they have entered the contract herein pursuant to the following Covenants: 

 HYDROCARBON EXPLORATION AND PRODUCTION CONTRACT CARACOLI - Page 2 of 55 
  

 CLAUSE 1 – DEFINITIONS 
 To the effects hereto, the expressions below shall have the meaning assigned herein: 
 1. Appendixes A, B, and C are part of
the Contract herein as a whole, and consequently, every time the expressions of this clause refers to are used in such appendixes, they shall have the same meanings as herein. 
 1.1. Abandonment: Is the sealing and abandonment of wells, dismantling of buildings, and environmental restoration of the areas where Exploration, Assessment, or Exploitation might have been carried out
pursuant to Colombian legislation. 
 1.2. Year: The 12 consecutive month period, as per Gregorian calendar, counted from a specific date. 
 1.3. Calendar Year The twelve month period, from January 1st thru December 31, both included, each year. 
 1.4. Contracted Area: The surface and its projection on the sub-soil, as identified on Clause 3, an delimited on Appendix A, in which THE CONTRACTOR is authorized, by
virtue of the contract herein, to carry out Hydrocarbon Exploration, Evaluation, and Exploitation Operations, which are the subject mater hereto. 
 1.5.
Evaluation Area: The portion of the Contracted Area in which THE CONTRACTOR has performed a Discovery, and in which he has decided to carry out an Evaluation Program in order to establish or not its commercial feasibility, pursuant to Clause 7. This
area shall be framed within a regular polygon on the surface, which shall preferably be four sided, which shall comprise the surrounding line of the vertical projection on the surface of the structure or geological trap which contains the Discovery.

 1.6. Exploitation Area: The portion of contracted Area in which one or more of the Commercial Fields, as established on Clause 9 (Number 9 hereto)
is located. Each Commercial Field’s area shall involve the surrounding line of the vertical projection on the surface of the deposit or deposits that it is made of, and as defined by the Ministry of Mines, pursuant to Decree 3229, on
November 11, 2003, or to the regulations that might modify it or substitute it. 
 1.7. Barrel: The Liquid Hydrocarbon measuring unit, which
contains forty two (42) United States of America gallons, corrected to standard conditions (sixty degrees Fahrenheit (60° F) temperature, and one (1) standard atmosphere absolute pressure). 

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 1.8. Good Practices in the Petroleum Industry The good, safe, and efficient operations and procedures which are
commonly used by cautious and diligent operators in the international petroleum industry, under conditions and circumstances which are similar to those encountered during the execution of the activities of the contract herein, mainly in such aspects
related to usage of methods and processes that are adequate to obtaining maximum economic benefit regarding the final recovery of reservoirs, loss reduction, operational safety, and protection of the environment, among others, as long as such
operations and procedures are not in violation of Colombian law. 
 1.9. Commercial Field: The portion of the Contracted Area having one or more
discovered reservoirs within its grounds, which THE CONTRACTOR has decided to exploit commercially. 
 1.10. Declaration of Commercial Feasibility:
The written notice from THE CONTRACTOR to the ANH, my means of which he declares that the Discovery he has made within the Contracted Area is a Commercial Field. 
 1.11. Discovery: A discovered Hydrocarbon oilfield is deemed as existing, when by means of drilling with a drill or similar equipment, and subsequent fluid tests, finding of the rock in which the Hydrocarbons
are accumulated is attained, and it behaves as an independent unit regarding production mechanisms, petro-physical characteristics, and fluid properties. 
 1.12. Discovery of Non-Associated Natural Gas: It is a Discovery which has its official production test, being it understood that such test be representative of the discovered oilfield or oilfields, that it shows a Gas Oil Ratio
(GOR) above 7000 standard cubic feet per each barrel of Liquid Hydrocarbons, and a heptane molar composition (C7+) below 4.0%. GOR is understood as the ratio between the Natural Gas volume in cubic feet per day, and the Liquid Hydrocarbon volume in
barrels per day produced by a well, and the heptane (C7+) molar composition as the molar percentage of heptanes and other greater molecular weight hydrocarbons. 
 The Oil Gas Ratio (OGR) of a Discovery having several oilfields shall be determined based upon the weighted average of the production of each oilfield and the heptane (C7+) molar composition as the simple arithmetic average. 
 1.13. Day: Twenty four hour (24) period beginning at zero hours (00:00), and ending at twenty four hours (24:00). 
 1.14. Development or Development Operations: The activities and Works carried out by THE CONTRACTOR, including but not limited to drilling, completion, equipping,
of wells under development, the design, construction, installation, maintenance of equipment, piping, transfer lines, storage tanks, artificial production methods, primary and improved recovery methods, liquid transportation methods, treatment, and
storage, among other, within an Exploitation Area within the Contracted Area and outside such Area whenever it might be necessary 

 1.15. Exploration or Exploration Operations: These are any such pieces of equipment, Works, and jobs the
CONTRACTOR executes in order to determine the existence and location of Hydrocarbons in the sub-soil, which include but are not limited to geophysical, geochemical, geological, cartographic methods, and in general, superficial prospecting
activities, Exploratory well drilling, and other operations which are directly related to the search or Hydrocarbons in the subsoil. 
 1.16. Evaluation
or Evaluation Operations: These are all operations and activities performed by THE CONTRACTOR at an Evaluation Area pursuant to Clause 7 herein, with the purpose of evaluating a Discovery, delimiting the geometry of the oilfield or oilfields
within the Evaluation Area, and determining, among other things, the feasibility of extracting such Hydrocarbons en economically exploitable quantity and quality, and the impact its commercial exploitation might cause on the social and environmental
sides. Such operations include drilling Exploration Wells, acquisition of seismic detail programs, carrying out of production tests, and generally speaking, other operations aimed at determining whether the Discovery is a Commercial Field, and at
delimiting such field. 
 1.17. Exploitation: Comprises Development and Production. 
 1.18. EFFECTIVE DATE: This is the day the contract herein is signed, and as of which all times related thereto begin to elapse. 
 1.19. Natural Gas: This is the mixture of Hydrocarbons which remains in a gaseous state at standard conditions (sixty degrees Fahrenheit (60° F) temperature, and one (1) standard atmosphere absolute
pressure), which is composed of the most volatile members of the paraffinic series of Hydrocarbons. 
 1.20. Hydrocarbons: These are all organic
compounds made out mainly of the natural mixture of carbon and hydrogen, as well as those substances accompanying them or deriving from them. 
 1.21.
Liquid Hydrocarbons: These are all hydrocarbons produced in the Contracted Area, which at standard conditions (sixty degrees Fahrenheit (60° F) temperature, and one (1) standard atmosphere absolute pressure), are in liquid state at the
head of the well or at the separator, as well as the distillates and condensates extracted from the gas. 
 1.22. Heavy Liquid Hydrocarbons: These are
Liquid Hydrocarbons with an API gravity equal to or lower than fifteen degrees (15° API). 
 1.23. Default Interest: Whenever it has to do with
pesos, this shall be the highest default interest rate allowed, certified by competent authority. Whenever it has to do with United States of America dollars, this shall be the principal LIBOR (London Interbank Borrowing Offered Rate) rate for three
month deposits in dollars, plus four percentage points (LIBOR plus 4%). 
 1.24. Month: Time period beginning any Day of a calendar month and ending
the previous Day to the same Day on the next calendar month, or if it is Day one, the last day of the current month. 
 1.25. Parties: Upon signature
of the Contract, ANH and THE CONTRACTOR. 
 Subsequently, at any time, ANH on one part, and THE CONTRACTOR and/or its duly accepted by ANH assigns, on the
other. Whenever the CONTRACTING party is made out by a plural number of companies, they shall designate a single one among them to act as their representative before ANH. 
 1.26. Period of Exploration: This is the period of six (6) years, counted as of the Effective Date, as well as any extension granted, during which THE CONTRACTOR shall carry out the Minimum Exploratory
program. 

 1.27. Period of Exploitation: This is the period of up to twenty four Years and their extensions if any, regarding
each area of Exploitation, as of the date of the date of the Declaration of Commercial Feasibility of the corresponding Commercial Field, during which THE CONTRACTOR must carry out Development and Production Operations. 
 1.28. Exploitation Plan: This is the guiding document prepared by THE CONTRACTOR pursuant to Clauses 9 and 10 hereto, in order to carry out the technical,
efficient, and economic exploitation of each Exploitation area, and it shall contain, among other aspects, the calculation of the Hydrocarbon reserves, the Hydrocarbon Production forecasts for short and mid term, an Abandonment program, and the
Exploitation Works Programs for the remainder of the current Calendar Year or for the Next Calendar Year. 
 1.29. Exploratory well: This is a well
that shall be drilled by THE CONTRACTOR within the Contracted Area, in search of Hydrocarbon oilfields in an area that has not been proven to be Hydrocarbon producer, or in order to find oilfields additional to a Discovery, or in order to extend the
limits of the known oilfields within one Discovery. 
 1.30. Production or Production Operations: Such are all operations and activities which are
carried out by THE CONTRACTOR in an Exploitation Area, with relation to the extraction, collection, treatment, and movement processes of the Hydrocarbons up to the Point of Delivery, the Abandonment, and all other operations regarding obtaining
Hydrocarbons. 
 1.31. Minimum Exploratory Program: This is the Exploration Operations program which has been agreed upon in Clause 5 hereto (Number
5.1), which THE CONTRACTOR commits to perform, at least, during each phase of the Exploration Period in which he might enter. 
 1.32. Subsequent
Exploratory Program: This is the Exploration Operations program which THE CONTRACTOR commits to perform, subsequently to the ending of the Exploration Period, pursuant to Clause 6 hereto (Number 6.1). 
 1.33. Evaluation Program: This is the Evaluation Operations plan presented by THE CONTRACTOR to the ANH, as per Clause 7 hereto, with the purpose of evaluating a
Discovery and determining whether it is a Commercial Field. The performance of the Evaluation Program and submittal of the report on the results to ANH are requisites to declare whether a Discovery is a Commercial Field. 
 1.34. Work Program: Is the description of the Exploration, Evaluation, and/or Exploitation activities and Operations on the contracted Area pursuant to the terms
hereto. The Work Program shall include the timetable pursuant to which the CONTRACTOR shall initiate and conclude the due activities and budget. 
 1.35.
Point of Delivery: Is the site agreed upon by the parties where the Hydrocarbon production for each field is measured in the minimum inlet specifications to any transportation system the CONTRACTOR might use, in order to determine the volume of
Hydrocarbons which corresponds to royalties, and the CONTRACTOR’s Hydrocarbon volume. 
 CLAUSE 2 – SUBJECT MATTER

 2.1. Subject Matter: By virtue of the contract hereto, the CONTRACTOR is granted exclusively the right to explore the Contracted Area, and to
exploit the Hydrocarbons property of the Nation that might be discovered within such area. The CONTRACTOR shall have the right to the part of the production of Hydrocarbons coming from the Contracted Area that might correspond to him,
pursuant to Clause 14 hereto. 
 2.2. Scope: THE CONTRACTOR, exerting such right, shall carry on the activities and operations pursuant the covenants
herein, and he shall, at his own exclusive expense and risk, supplying all the resources required to project, to prepare, and perform the Exploration, Evaluation, Development, and Production activities and Operations, within the Contracted Area.

 2.3. Exclusion of rights on other natural resources: The rights granted herein are exclusively related to
Hydrocarbons property of the Nation which might be discovered within the Contracted Area, and consequently, they shall not be extended to any other natural resource that might exist within such area. 
 CLAUSE 3 - CONTRACTED AREA: 
 3.1. Extension:
The Contracted Area comprises a total extension of approximately thirty six thousand, one hundred and ninety three (36,193) hectares, and seven thousand five hundred and forty six (7546) square meters. This area is as described in
Appendix A, which is part of the contract hereto, and it is located within the municipal jurisdictions of Cúcuta, El Zulia, Santiago, and San Cayetano, in Norte de Santander Department. The Contracted Area shall be gradually reduced pursuant
to this clause. 
 3.2. Restrictions: In case a portion of the Contracted Area should extend to areas within the National Natural Park System or other
reserved, excluded, or restricted areas, which are delimited by the corresponding authority, or whenever zones with the aforementioned characteristics should extend over the Contracted Area, the CONTRACTOR commits to comply with the conditions
imposed by the competent authorities regarding such areas. ANH shall not assume any liability to this regard. 
 Whenever ANH shall be made aware of the claim
of private property on the Hydrocarbons in the subsoil within the Contracted Area, it will proceed with the due formalities pursuant to legal stipulations. 
 3.3. Return of the Exploration, Evaluation, and Exploitation areas: THE CONTRACTOR shall return the areas under Exploration, Evaluation, and Exploitation in all cases pursuant hereto as causes of return, whether because of
relinquishment, expiration of the terms, due to the cases foreseen in Clause 8 hereto (Number 8.2), or due to failure to perform the activities of the corresponding Work Programs, or, in general, due to any such other contractual cause that might
impose on the CONTRACTOR the obligation to return the area. 
 3.4. Voluntary Returns: At any time, THE CONTRACTOR can make partial returns of the
Contracted Area, as long as the fulfillment of the obligations pursuant hereto shall not be affected. If such voluntary returns are made within the term of the Exploration Period, they shall be accounted to the effect of the mandatory return
of areas. 
 3.5. Restoring of returned areas: The CONTRACTOR shall perform all Abandonment activities required, and he shall restore all returned
areas pursuant to stipulations in Colombian Legislation and herein. 
 3.6. Drafting of returned areas: Areas returned by THE CONTRACTOR shall
comprise the minimum possible number of contiguous rectangular blocks delimited by lines in north-south and east-west directions, following a grid akin to the one that is formed by the Instituto Geográfico Agustín Codazzi cartographic
sheets. 
 3.7. Formalization of return of areas: Every return of areas carried out pursuant hereto, shall be formalized by means of Minutes signed by
the Parties. 
 CLAUSE 4 – DURATION AND PERIODS 
 4.1. Duration: The duration of this contract shall be determined pursuant to the following clauses. 
 4.2. Period
of Exploration: The Exploration Period shall have a six (6) year duration as of the Effective Date, and it is divided among the Phases described below. First phase of the Exploitation Period begins on the Effective Date, and the following
phases begin on the calendar Day immediately after the termination of the preceding phase: 

 Phase 1 with a twelve month (12) duration. 
 Phase 2 with a twelve month (12) duration. 
 Phase 3 with a twelve month (12) duration. 
 Phase 4 with a twelve month (12) duration 
 Phase 5 with a twelve month (12) duration 
 Phase 6 with a twelve month (12) duration 
 4.2.1. Right to relinquishment during the Exploration Period: During whichever phase of the Exploration Period, the CONTRACTOR shall have the right to relinquish hereto, as long as he has satisfactorily accomplished Minimum
Exploratory Program of the current phase, and the remaining obligations he is accountable for. To such purpose, the CONTRACTOR shall provide notice in writing to ANH, previously to the termination of the phase in progress. 
 4.2.2. Extension of a Phase of the Exploration Period: At a request from the CONTRACTOR, ANH shall extend the phase in progress within the Exploration Period
until termination of the drilling of the exploratory wells and/or the acquisition of the seismic program and two (2) further months, as long as the following conditions are met: 
  

	a)	That the aforementioned Exploration Operations are part of the Minimum Exploratory Program, and that they had been initiated at least one (1) month prior to the termination
date of the corresponding phase of the Exploration Period. 

  

	b)	The CONTRACTOR having performed uninterruptedly such Exploration Operations, and 

  

	c)	That notwithstanding the diligence applied toward the performance of such Exploration Operations, THE CONTRACTOR reasonably deems the remaining time to be insufficient to finish
them prior to the expiration of the phase in progress. 

 With the extension request, THE CONTRACTOR shall deliver the documents
upon which he bases his request to the ANH, with the corresponding guarantee, pursuant to the requisites stipulated in Clause 22 hereto. 
 4.2.3.
Termination of the Contract due to expiration of the Exploration Period: Upon expiration of the Exploration Period, the contract shall be terminated if there does not exist an Evaluation Area, an Exploitation Area, or a Discovery which has been
carried out by THE CONTRACTOR in the last phase of the Exploration Period in the Contracted Area. In such case, the CONTRACTOR shall return the Contracted Area in total to the ANH, without exemption from the fulfillment of the remaining obligations,
and he remains obliged to show that he has complied with the Abandonment obligations, crediting that the drilled wells have been properly sealed and abandoned, that the surface facilities have been totally dismantled, and that he has performed the
cleanup and environmental restoration works pursuant to the applicable law. 
 4.3. Period of Exploitation: 
 The exploitation Period is stated separately with regard to each Exploitation Area, and consequently, every mention on duration, extension, or termination of the
Exploitation period refers to each particular Area of Exploitation. 
 4.3.1. Duration: The Exploitation Period shall have a twenty four
(24) year duration as of the date in which the ANH receives from THE CONTRACTOR the Declaration of Commercial Feasibility as per Clause 8 hereto. 
 4.3.2. Extension of the Exploitation Period: ANH shall extend the Period of Exploitation to the economic limit of the Commercial Field, at THE CONTRACTOR’S election, provided the following conditions are met: 
  

	 	a)	That THE CONTRACTOR requests the extension in writing to the ANH on no more than four (4) years’ notice, but no less than one year’s regarding the date of termination
of the Exploitation Period of the corresponding Area of Exploitation. 

  

	 	b)	That the Area of Exploitation be producing Hydrocarbons regularly on the date of the request. 

	 	c)	That THE CONTRACTOR shows that, during the four (4) Calendar Years prior to the date of the request, he has performed a drilling program that includes at least a well per
calendar year, and / or that he has had one pressure maintenance or a secondary or tertiary or improved recovery project. 

 Notice: If the CONTRACTOR fails to satisfy totally or in its full scope the condition stipulated in number c) above, ANH, once having analyzed the justifications submitted by THE CONTRACTOR, can grant the extension. It is understood
that the denial of such by the ANH shall not bring about disagreement, and shall not be submitted to the procedure established in Clause 27 hereto. In all cases, the extension of the Exploitation period shall be formalized by signing an addendum
hereto. 
 4.3.3. Voluntary termination of the Exploitation Period: At any time during the Exploitation Period, the CONTRACTOR can terminate the
contract regarding any Area of Exploitation, to which purpose he shall notify in writing to ANH with minimum 3 months’ notice, which shall not waive his obligation to fulfill the remaining obligations. 
 4.3.4. Effects of the termination of the Exploitation Period: Whenever the operational rights and obligations are terminated by any cause regarding any
Exploitation Area, the CONTRACTOR shall leave the wells which are currently productive, and buildings, and other construction property in good condition, all of which shall pass free of cost to ANH with the rights of access, and goods acquired for
the benefit of the exploitation to the Point of Delivery, even if such goods are outside the Exploitation Area. Regarding the movable goods destined exclusively to the service of such Exploitation Area, if such termination takes place before the
first eighteen (18) years of the Exploitation Period have elapsed, the CONTRACTOR shall have the obligation to offer them for sale for their book value to the ANH. If, within three (3) months from the date of the offering, the ANH has not
responded affirmatively, the CONTRACTOR can proceed with such goods at will. If the termination takes place after the first eighteen (18) years of the Exploitation Period have elapsed, such goods shall pass free of cost to the ANH. The ANH will
establish which of the wells currently in production at that time should be abandoned, and which of them will continue in production. Any disagreement regarding the nature and the destination of the goods shall be submitted to the procedure set
forth in Clause 27. Likewise, the CONTRACTOR shall be committed to assign to the ANH or to whomever it might indicate, the Environmental License and the economic resources required to cope with the obligations of Abandonment. The application of this
Clause shall not imply Labor Substitution between THE CONTRACTOR and the ANH. 
 CLAUSE 5 - MINIMUM EXPLORATORY PROGRAM 
 5.1. Minimum Exploratory Program for each phase: During the Exploration Period, the CONTRACTOR shall conduct the Minimum Exploratory Program of each phase, as
described in Appendix B, which is part hereof. In order to fulfill the obligations of the Minimum Exploratory Program, the Exploratory Wells proposed by THE CONTRACTOR must be Exploratory Wells for a new field (A-3 type) or Exploratory wells forming
part of an Evaluation Program, pursuant to Clause 7 hereto (number 7.3b). In remaining cases, the Exploratory Well proponed by THE CONTRACTOR shall be previously accepted by the ANH. 
 5.2. Exploration Works Programs The CONTRACTOR commits itself to submit to ANH the Exploration Works Program for the phase it initiates, where the way its
obligations will be fulfilled must be described, at least eight (8) calendar days prior to the beginning of each phase of the Exploration Period. For the first phase, THE CONTRACTOR must deliver the Exploration Work Program within thirty
(30) calendar days from the Effective Date. 

 5.3. Modifications to the Minimum Exploratory Program 
 5.3.1. During the current phase: Within the first half of the term for ant phase of the Exploration Period different from the first phase, THE CONTRACTOR can
substitute the acquisition and processing of a seismic program contained in the Minimum Exploratory Program submitted initially for the phase in progress, with the drilling of one or more Exploratory Wells, or with the acquisition and processing of
a seismic program with more modern technology, as long as the financial effort of the new Minimum Exploratory Program is equivalent or better than the one submitted initially for the corresponding phase. In such case, the CONTRACTOR shall previously
report in writing to the ANH on the substitution of Exploration Operations he wishes to accomplish. 
 5.3.2. For the following phase If, after
drilling an Exploratory well which results dry, the CONTRACTOR judges that the outlook of the Contracted Area does not justify drilling an Exploratory Well contained within the Minimum Exploratory Program of the following phase of the Exploration
Period, the CONTRACTOR can substitute such drilling with the acquisition and processing of a seismic program, provided that the financial effort be equivalent or higher than the Minimum Exploratory Program for the correspondent phase, and that the
CONTRACTOR informs previously in writing to ANH on the substitution he plans to carry out. • 
 5.4. Additional Exploration: THE
CONTRACTOR can carry out Exploration Operations in addition to those contained within the Minimum Exploratory Program or within the Subsequent Exploratory Program, without such Exploration Operation becoming a reason to modify the agreed term for
the performance of the Minimum Exploratory Program or the Subsequent Exploratory Program of the current phase or the following phases. IN order to exert such right, the CONTRACTOR shall previously report in writing to the ANH on the additional
Exploration Operations he wishes to accomplish. If such Exploration Operations are those defined in the following phase’s Minimum Exploratory Program, the ANH will credit such Exploration Operations to the fulfillment of exploratory commitments
agreed upon for the next phase. 
 Otherwise, if the CONTRACTOR wishes such Exploration Operations to be credited to compliance with exploratory commitments
for next phase, if there is one, he must request such credit in writing to the ANH, who will, at its sole discretion, determine whether such credit will be accepted. In case such request is accepted by ANH, it shall determine the manner in which all
or part of the additional Exploration Operations carried out within the next phase of the following Exploration Period will be credited. 
 5.5. Problems
during Exploratory Well Drilling: Should non controllable geological type problems, such as cavities, abnormal pressures, impenetrable formations, severe circulation losses, or other technical conditions arise during the drilling of an
Exploratory Well corresponding to the Minimum Exploratory Program or to the Subsequent Exploratory Program arise, which impair the continuation of the Exploratory Well drilling in spite of the CONTRACTOR’s effort in continuing with the drilling
efforts following the Oil Industry Good Practices, THE CONTRACTOR can request from ANH to accept the drilling obligation as fulfilled, by presenting a technical report in which he provides detailed description of the situation that has arisen, and
of the efforts which have been carried out in order to solve the problem. Such report must be submitted to ANH within 15 calendar Days from the appearance of the non-controllable problem mentioned above. Should ANH accept THE CONTRACTOR to terminate
the drilling operations on such well, he must abandon it or complete it to the reached depth, and the obligation regarding the Minimum Exploratory Program or the Subsequent Exploratory Program shall be understood as fulfilled. 

 CLAUSE 6 – SUBSEQUENT EXPLORATORY PROGRAM 
 6.1. Subsequent Exploratory Program: Upon termination of the Exploration Period, and provided there exists at least one Evaluation Area or one Exploitation Area
or one Discovery carried out by the CONTRACTOR in the latest phase of the Exploration Period of the Contracted Area, THE CONTRACTOR can retain fifty percent (50%) of the Contracted Area (excluding Evaluation and Exploration Areas) to carry out
a Subsequent exploratory Program within the retained area, but outside the Evaluation and Exploitation Areas. In such case, the following procedure shall be applied: 
 a) Prior to the termination date of the latest phase of the Exploration Period, THE CONTRACTOR shall notify ANH in writing on his intention to carry out a subsequent Exploration Program. 
 b) The notice shall describe the Exploration Operations constituting the Subsequent Exploration Program the CONTRACTOR commits to undertake, dividing the
Program into two phases, each of them with two (2) year scope, the first phase elapsing from the termination of the last phase of the Minimum Exploratory Program. Each one of the phases of the Subsequent Exploratory Program must contain
as a minimum, the same Exploratory Operations agreed upon for the latest phase of the Minimum Exploratory Period. 
 c) Once the obligations
of the first phase of the Subsequent Exploratory program are timely fulfilled, the CONTRACTOR might choose not to continue with the second phase, which shall require from it to return the total areas retained to such purpose, or to continue with the
second phase, which in this case requires returning only fifty percent (50%) of them, excluding the existing Evaluation and Exploitation areas. THE CONTRACTOR shall notify ANH in writing on its decision within one month from the termination of
the first phase. 
 Returning the areas as per this clause is understood not to be to the detriment of existing Evaluation and Exploitation Areas.

 6.2. Once the Subsequent Exploitation Program is finished, the Contracted Area shall remain reduced to the Evaluation and/or Exploitation Areas
currently in existence. 
 CLAUSE 7 – DISCOVERY AND EVALUATION 
 7.1. Notice on Discovery: At any time during the four (4) months following the termination of the drilling of any Exploratory Well whose results indicate a
Discovery to have been made, the CONTRACTOR must report in writing to ANH, accompanying the notification with a technical report containing the results of the tests performed, the description of geological issues, and the analyses performed on
fluids and rocks, in such manner as indicated by the Ministry of Mines or the authority operating on its behalf. 
 Notice: If the Discovery is a Non
Associated Natural Gas or Heavy Liquid Hydrocarbon Discovery, the CONTRACTOR must also submit the calculations and further support information that he might have submitted to the Ministry of mines and Energy or to the authority operating on its
behalf to its classification. 
 7.2. Presentation of the Evaluation Program: If the CONTRACTOR considers the Discovery has commercial potential it
shall submit and perform an Evaluation Program regarding such discovery, pursuant to this clause. If the discovery takes place during the Exploration Period, the CONTRACTOR shall submit the Evaluation Program within 6 months following the
termination of the drilling of the discovering Exploratory Well, and in any event, before the end of the Exploration Period. If the discovery is a result of carrying out the Subsequent Exploration Period, 

 
the CONTRACTOR shall submit the Evaluation Program within 6 months following the termination of the drilling of the discovering Exploratory Well, and in any
event, before returning the areas as per Clause 6 hereto. 
 7.3. Contents of the Evaluation Program: The Evaluation Program must contain as a
minimum: 
  

	 	a)	Evaluation Area coordinates map. 

  

	 	b)	Description and objectives of each of the Evaluation operations, and the information intended to be obtained, in order to determine whether the Discovery can be declared as a
Commercial Field. If, within the Evaluation Programs carried out during the Exploration Period the CONTRACTOR includes 

  

	 	c)	drilling Exploratory Wells, he can credit both compliance with the Minimum Exploratory Program, as well as with the corresponding Evaluation Program, by drilling of up to two
(2) exploratory wells, provided such drilling is concluded before the termination date of the term for the Evaluation Program within which they were included, or the phase of the Exploration Period to which such wells belong, whichever is
closer. 

  

	 	d)	The total budget of the Evaluation Program, specified per each year. 

  

	 	e)	The total term of the Evaluation Program, which shall not exceed two (2) years, when it includes the drilling of Exploration Wells, or one (1) year in all other cases,
which term shall elapse from the date of the submittal to the ANH and must consider all estimated times required for obtaining the permits that must be requested from other authorities. 

  

	 	f)	The timetable for the performance of Evaluation Operations within the term as per the paragraph above. 

  

	 	g)	The information on destination of Hydrocarbons and other fluids the CONTRACTOR expects to recover as a result of the Evaluation Operations. 

  

	 	h)	A proposal on the Point of Delivery to be considered by the ANH. 

 7.4. Extension of the term for the Evaluation Program Should the CONTRACTOR decide to drill Exploration Wells which were not accounted for in the initially submitted Evaluation Program, the ANH will extend the duration of the
Evaluation Program during an additional term which shall not exceed one (1) year, provided the following conditions are met: That the CONTRACTOR submits request in writing to the ANH at least two (2) months prior to the date of termination
of the initial term. 
  

	 	a)	That THE CONTRACTOR is diligently carrying out the Evaluation Operations as per the Evaluation Program. 

  

	 	b)	That the required extension is justified for the necessary term for the drilling and the tests of the additional Well or Wells, and 

 With the extension request, THE CONTRACTOR shall deliver the documents upon which he bases his request to the ANH. 
 7.5. Modifications to the Evaluation Program: At any time during the 6 months following the date of the submittal of the Evaluation Program to the ANH, the
CONTRACTOR can modify it, to which purpose he shall report promptly to the ANH, and he shall adapt its term, pursuant to number 7.3 hereto, without such modification changing the mentioned starting date. 
 7.6. Results of the Evaluation Program The CONTRACTOR shall submit the ANH a comprehensive report with the results of the Evaluation program within three
(3) months following the date of its termination. Such report shall include, as a minimum: Geological description of the Discovery and its structural configuration; the physical properties of rocks and fluids present, and the oilfields
associated with the Discovery; pressure, volume and temperature analyses of the fluids in the oilfields; production capacity (per well and for all the Discovery); and an estimate of the recoverable Hydrocarbon reserves. 

 Notice: In case the discovery consists of Non Associated Natural Gas or Heavy Liquid Hydrocarbon,
and at any time during the second half of the term of the Evaluation Program, the CONTRACTOR can request from ANH the extension of the Evaluation Program for up to two (2) additional years, to the purpose of carrying out feasibility studies for
the construction of infrastructure, studies about production methods, and / or for market development. In such cases, the request shall include, within the request, the information related to the feasibility studies the CONTRACTOR considers it is
required to carry out. At the end of the extension granted, the CONTRACTOR shall deliver to the ANH the conclusions and recommendations of the feasibility studies. 
 7.7. Only discovering Exploratory Wells drilled outside areas designated as Evaluation or Exploitation areas shall be subject to the applici2aation of this clause. Consequently, whenever the new volume of Hydrocarbons found is a part of the
same Evaluation or Exploitation area, there shall not be an allowance for an Evaluation Period. 
 CLAUSE 8 – DECLARATION OF
COMMERCIAL FEASIBILITY 
 8.1. Announcement: Within three (3) months following to the end of the stipulated term for the performance of the
Evaluation Program or upon termination of the agreed term as per the Notice on Number 7.6, on Clause 7 hereto, if applicable, the CONTRACTOR shall submit to ANH a written statement containing in a clear and precise manner his unconditional decision
to exploit such Discovery commercially or not do so. In the affirmative case, as of such statement, the Discovery shall be deemed a Commercial Field. 
 8.2
Relinquishment of rights in the negative case Should the CONTRACTOR not submit such statement to the ANH within the specified term, it shall be understood that the CONTRACTOR has concluded the Discovery is not a Commercial Field. If the
declaration is negative, or if there is no submittal of a statement, THE CONTRACTOR accepts no rights on his favor to have been generated, and consequently, he relinquishes to claim rights on the Discovery. 
 CLAUSE 9 – EXPLOITATION PLAN 
 9.1.
Presentation and Contents: Within three months following the submittal of the Commercial Feasibility Statement as per Clause 8 hereto, the CONTRACTOR shall submit to ANH the Initial Exploration Plan, which shall contain, as a minimum, the
following information: 
  

	 	a)	The map with the coordinates of the Exploration Area. 

  

	 	b)	Calculation of the reserves and the accrued Hydrocarbon production, specified by type of Hydrocarbon. 

  

	 	c)	The general projected scheme for the Development of the Commercial Field, including descriptions of the development well drilling program, of the extraction methods, of the
corresponding facilities, and of the processes the extracted fluids will be subject to before the Point of Delivery. 

  

	 	d)	The yearly Hydrocarbon production forecast and its sensitivities, using the optimum rate of production which allows maximum economic recovery of the reserves.

	 	e)	Identification of critical factors in the performance of the Exploitation Plan, such as environmental, social, economic, and logistic issues, as well as the options for their
management. 

  

	 	f)	A proposal on the Point of Delivery to be considered by the ANH. 

  

	 	g)	A proposal on a mix of maximum three similar quality crude oils, in order to calculate the Rignts on High Prices as described in Clause 16 hereto. 

  

	 	h)	An abandonment program per the stipulations of Clause 30 hereto. 

 9.2.
Delivery of the Exploitation Plan: The ANH shall declare the Exploitation Plan when the CONTRACTOR delivers all the information described above. If ANH does not receive the Exploitation plan with the total information specified above within
15 calendar days following its submittal, it can require the delivery of missing information, and the CONTRACTOR shall have thirty (30) calendar days to deliver such information as of receipt of notice on the requirement. If the ANH does not
reply within fifteen (15) calendar days following the presentation of the Exploitation Plan by the CONTRACTOR, it shall be understood that it has been accepted. Should the CONTRACTOR fail to deliver the Exploitation Plan on the date established
in the preceding number, or if the ANH does not receive the missing documentation within the thirty (30) Calendar day term specified herein, a breach hereof shall be configured, which shall lead to application of Clause 28 hereto. 

9.3. Exploitation Area: The Exploitation Area shall be outlined by a preferably four-sided regular polygon, which shall comprise the Commercial Field or its
portion within the contracted Area, plus a not larger than one kilometer margin around the Commercial field, provided the Contracted Area allows it. Since the Commercial Field area contained within the Exploitation Area might vary, the Exploitation
Area shall remain unaltered, with the exception of the stipulations in the paragraph below. 
 9.4. Expansion of the Exploitation Area. If, within the
Exploitation period of an Exploitation Area, the CONTRACTOR should determine that a Commercial Field extends beyond the Exploitation Area, but within the Contracted Area, he can request from the ANH to expand such Exploitation Area, attaching the
due support documentation to his request. Once the above has been complied with to ANH’s satisfaction, it shall expand the Exploitation Area, as long as if such expansion should overlap with another Exploitation Area, the duration of the
Exploitation period which shall be applied to the total Exploitation Area would be the one of the Exploitation Area upon which commercial feasibility was declared first. 
 Notice: Whenever the Exploitation Area requested by the CONTRACTOR per number 9.4 hereto extends outside the Contracted Area, the ANH shall expand the Contracted Area, giving the requested expansion the
Evaluation Area contractual status, unless with regard to the requested area, one of the following situations should arise: 
  

	 	a)	The existence of rights granted to another person for the performance of the same or similar activities as the subject matter hereto. 

  

	 	b)	The area being in process of negotiation or contest toward granting rights by the ANH; 

  

	 	c)	Restrictions existing by decision of competent authority which prevent carrying out activities subject matter hereof. 

 9.5. Updating of the Exploitation Plan: The CONTRACTOR shall adjust and submit the Exploitation Plan for each of the Exploitation Areas existing in the contract,
within the month of February each year, subject to the procedure described in number 9.2 herein. Whenever the real Hydrocarbon production of the immediately preceding Calendar Year differs over fifteen per cent (15%), as compared to the yearly
production forecast specified in the Exploitation Plan for any Exploitation Area, the CONTRACTOR shall submit due explanations. 

 CLAUSE 10 – EXPLORATION WORKS PROGRAMS 
 10.1. Preparation and Presentation: If more than six (6) months remain before the end of the current year remain when the Exploitation Plan as per clause 9
hereto is submitted, the CONTRACTOR shall submit the first of the Exploitation Works Programs for the remainder of such Calendar Year For subsequent calendar years, the CONTRACTOR shall submit the Exploitation Works Programs for each Calendar year
in the month of November of the Calendar year immediately preceding it. 
 10.2. Contents of the Exploitation Works Program: The Exploitation Works
Program for each Exploitation Area shall contain, as a minimum: 
  

	 	a)	A detailed description of the Development and Production Operations program the CONTRACTOR expects to carry out during such year, with its schedule, detailed by each project per
Calendar Quarter, which must also contain the terms required to obtain the authorizations and permits from the competent authorities. 

  

	 	b)	A monthly production forecast for the Exploitation Area for the corresponding Calendar Year. 

  

	 	c)	An estimation of the costs (investments and expenses) for the next four (4) Calendar year, or until termination of the Exploitation Period, whichever is shorter.

  

	 	d)	The terms and conditions pursuant to which the programs in the Benefit of communities in the areas of influence of the exploitation area will be carried out.

 10.3. Performance and Adjustments The performance of Production and Development Operations of the Exploitation Works Program set
forth in number (a) above is mandatory. The CONTRACTOR shall initiate such Exploitation Operation as per the Schedule submitted. During the performance of the Exploitation Works Program, the CONTRACTOR can make adjustments to such program for
the current Calendar Year, provided such adjustments do not imply decrease in production over fifteen percent (15%) against the initial forecast. Adjustments cannot be made with under three (3) months’ frequency, unless under
emergency situations. The CONTRACTOR shall notify previously in writing any adjustment to the Exploitation Works Program. 
 CLAUSE 11
– CONDUCTION OF OPERATIONS 
 11.1. Autonomy: The CONTRACTOR shall have control of all operations and activities he might deem necessary in
order to Explore in a technical, efficient, and economical manner the Contracted Area, and for the Evaluation and Exploitation of the Hydrocarbons found within such area. THE CONTRACTOS shall plan, prepare, carry out, and control all activities by
his own means, with technical and managerial autonomy, pursuant to Colombian legislation, and observing Good Practices of the Petroleum Industry. The CONTRACTOR will conduct the activities directly or through sub-Contractors. 
 11.2. Responsibility: The CONTRACTOR shall conduct the operations subject matter hereof in a diligent, responsible, efficient, and adequate technically and
economically manner. It shall make sure all its sub-Contractors comply with the terms set forth herein and in the Colombian laws. THE CONTRACTOR shall be sole responsible for the damage and losses it might cause as a result of activities and
operations derived from this Contract, including such damages caused by its sub-Contractors, being it understood that at not time shall it be liable for criteria mistakes, or for losses or damages not resulting from gross negligence or gross fault
or deceitfulness. Whenever the CONTRACTOR should sub-contract third parties, works and services shall be performed and rendered to its name, for which reason, the CONTRACTOR shall maintain its direct liability for al obligations established herein
and derived hereof, which shall not be waived because of such sub-contracts. The ANH shall not assume any liability in such event, even as joint and several liability. 

 11.3. Obtaining permissions: The CONTRACTOR commits to obtain on its own all licenses, authorizations, permits,
and all proceeding rights pursuant to the law, in order to carry out the operations subject matter of this contract. 
 11.4. Damages and Losses of
Assets: All costs and expenses required in order to replace damages or losses of goods or equipment occurred due to FIRE, floods, storms, accidents or similar issues shall be borne by the CONTRACTOR. The CONTRACTOR shall report the ANH on losses
and damage occurred on the shortest possible notice after event. 
 CLAUSE 12 – ROYALTIES 
 12.1. Collection: The CONTRACTOR shall place at ANH’s disposal, at the Point of Delivery, the percentage of the Hydrocarbon production established in the
law, corresponding to royalties. Collection of royalties shall be made either in money or in kind, as determined by the competent authority.  
 12.2. Payment of participations: The ANH will pay the entities their corresponding participation as set forth by the law, and it shall be the sole responsible for such payments. 
 12.3. Collection in kina: Whenever the collection of royalties is made in kind, THE CONTRACTOR shall deliver the ANH the amount of Hydrocarbons, to which purpose
the Parties shall agree upon the procedure for scheduling of deliveries and remaining necessary aspects. In any event, the ANH will have a one month period to withdraw such quantity. Once this term is elapsed without the ANH withdrawing the
volume corresponding the royalties, and if there is storage capacity at the CONTRACTOR’S facilities, THE CONTRACTOR commits to store the Hydrocarbons for up to three (3) consecutive months, and the ANH shall pay a storage rate which shall
be agreed upon for each case, between the parties. Upon termination of such last term, the CONTRACTOR will be enabled to market such volume, as per the following item number.  
 Notice: Should there be no storage capacity, THE CONTRACTOR can continue producing from the field, and have the royalty volume at its disposal, crediting ANH, for
later delivery, with the volume corresponding to the royalties the ANH was entitled to withdraw, but which it did not.  
 12.4. Marketing of the
royalty volume: Whenever the ANH deems convenient, provided regulatory rules allowing, THE CONTRACTOR shall market the portion of the Hydrocarbon production corresponding to royalties, and shall deliver the ANH the funds incoming from such
sales. To such purpose, the Parties shall agree upon the particular terms of the marketing, but in any event, THE CONTRACTOR shall make its best effort to market such at the highest price in the available markets. The ANH shall
compensate THE CONTRACTOR the direct costs and a reasonable marketing margin which shall be agreed upon between the parties. 
 12.5. Collection of
money: Whenever the CONTRACTOR must pay the royalties in Money, it shall deliver the ANH the corresponding quantities within the terms established by competent authority. In case of default, THE CONTRACTOR shall pay the ANH the amount
required to cover the outstanding balance, the corresponding default interests, and the expenses incurred to obtain such payment. 
 CLAUSE 13 - MEASUREMENT 
 13.1. Measurement: The CONTRACTOR shall carry out the measurement, sampling, and quality control of
produced Hydrocarbons, and shall keep the measuring equipment or instruments calibrated, as per the accepted standards and methods, and Good Practices of the Oil Industry, laws, and regulations in effect, 
 Carrying out the required analyses, and performing the adequate corrections for the calculation of the net volumes of Hydrocarbons received and delivered at standard
conditions. The CONTRACTOR shall take all necessary actions to preserve the integrity, 

 
dependability, and security of the facilities and auditing instruments or equipment. Furthermore, it shall keep the records of periodic calibration of such
pieces of equipment or instruments, and of the daily production measurements and consumption of Hydrocarbons and fluids in each Commercial Field, during the term established by the Code of Commerce and other pertaining laws, to be audited by the ANH
and competent authorities. The ANH shall bear the right to inspect the measuring equipment installed by the CONTRACTOR and, in general all measuring units. 
 13.2. Common Facilities: When two or more production fields use the same development facilities, these shall include a measuring system which allows determining the production originating at each such field. 
 CLAUSE 14 – AVAILABILITY OF PRODUCTION 
 14.1.
ESTABLISHMENT OF VOLUMES THE Hydrocarbons produced, with the exception of those that have been used to the benefit of the operations pursuant hereto, that are unavoidably wasted in such functions, shall be transported by the CONTRACTOR to the
Point of Delivery. The Hydrocarbons shall be measured pursuant to the procedure set forth in number 13.1 hereto, and based upon such measurement, the royalty volumes pursuant to Clause 12, and the remaining Hydrocarbons, which belong to the
CONTRACTOR, shall be determined.  
 14.2. Availability: From the Delivery Point on, and without contravening legal stipulations regulating
such matter, the CONTRACTOR shall be free to sell within the country, or to export the Hydrocarbons that correspond to it, or to make use of them in any manner. 
 CLAUSE 15 – NATURAL GAS: 
 15.1. Use: The CONTRACTOR shall commit itself to avoid waste of natural gas
extracted from a field, and pursuant to legal stipulations and regulations in effect on the matter, prior to the corresponding Point of Delivery, might use it as fuel for the operations, as energy source for maximum final recovery of Hydrocarbons,
or it might confine it within the oilfields themselves in order to use it to such purposes during the duration of the contract hereto. 
 15.2.
Utilization of Associated Natural Gas: In case the CONTRACTOR might discover one or more Commercial Fields with Associated Natural Gas, it must submit to ANH, within three (3) years after initiation of exploitation of each Commercial Field,
a project to utilize the associated Natural Gas. In case the CONTRACTOR might fail to fulfill such obligation, the ANH shall be entitled to make cost free use of the Associated Natural Gas originating in such fields, subject to legal stipulations in
effect. 
 CLAUSE 16 – ANH CONTRACTUAL ECONOMIC RIGHTS 
 16.1. Rights regarding the use of the subsoil: The use of the subsoil by the CONTRACTOR shall cause, in favor of the ANH, the following rights: 
 16.1.1. Areas under Exploration: Beginning with the second phase of the Exploration Period and for each phase, the CONTRACTOR shall pay the ANH a right, which shall amount economically, nominated in United
States of America Dollars, to the result of multiplying the number of hectares and fraction of a hectare of the Contracted area, excluding the Exploration areas, times the quantity shown in the following table: Such payment shall be made within the
Month following the beginning of the corresponding phase. 

 Amount per phase in US$ / Hectare 
  

											
	 Area size:
	  	 For the
 First
 100,000 Hs.
	  	 Each hectare in
addition to
 100,000 Hs.

	 Phase Duration
	  	 £12
 months
	  	 > 12
 months
	  	 £12
 months
	  	 >12
 months

	 Within polygons A and B
	  	0.75	  	1.0	  	1.0	  	1.5
	 Outside the Polygons
	  	0.5	  	0.75	  	0.75	  	1.0
	 Off coast areas
	  	0.25

 16.1.2. Evaluation and Exploitation Areas: The CONTRACTOR shall pay the ANH a right, which shall amount
economically, nominated in the United States of America Dollars, to the result of multiplying the production of Hydrocarbons corresponding to the CONTRACTOR pursuant to Clause 14 times ten United States of America Dollar cents (US $ 0.10) per
each barrel of Liquid Hydrocarbons. This amount shall be increased yearly as per I (n-2) defined in clause 16.2 as of January, 2006. For natural gas, this amount shall be one cent of a the United States of America Dollar (US $ 0.01), per each
one thousand cubic feet (1000 CF). Such payment shall be made per finished calendar semester, within the first month of the next semester. 
 16.2 Right
Regarding High Prices 
 For Liquid Hydrocarbons. As of the moment when the accrued production of each Exploration area, including the royalty
volume, surpasses five million Barrels of Liquid Hydrocarbons, and in the event the price of the benchmark crude West Texas Intermediate price tops the Base Price Po, THE CONTRACTOR shall pay to the ANH an amount in United States Dollars per month
in arrears, payable within the 30 calendar days following each due date. 
 For Natural Gas: Five years after the beginning of the exploitation of the
field, as recorded in the approval resolution issued by the competent authority, and in the event the price of the benchmark natural gas “US Gulf Coast Henry Hub” tops the base price Po, THE CONTRACTOR shall pay the ANH an amount nominated
in United States Dollars, per month in arrears, payable within the 30 calendar days following each due date. 
 The amount payable for such right per each
Area of Exploitation shall be the one resulting from the application of the following formula: 
 

 
  

 Where: 
 Value of
Hydrocarbons at the Point of Delivery: 
 For Liquid Hydrocarbons 
 To the effects of this formula, it shall be the reference price for the corresponding calendar month, expressed in United States of America dollars, per Barrel (USD $ /Bl), of a mix consisting of maximum three
(3) crude oils having similar quality to those coming from the Exploitation Area, as presented by the CONTRACTOR in the Exploitation plan, and agreed upon by the ANH, and adjusted to the Point of Delivery, by a previously agreed margin.

 If, once the procedure for the determination of the Value of Liquid Hydrocarbons has been applied as set forth in the paragraph above, a difference
might be found by excess or by lack, between the price of reference of the mix and the actual sale price in the Point of Delivery, of over three percent (3%) the Party considering itself affected might request a revision of the mix or of the
adjustment margin. To all effects considered herein, the actual sale price of the Liquid Hydrocarbons produced within the Exploitation Area for the corresponding month, shall be the weighted average of the sale prices agreed by the CONTRACTOR with
buyers not having an economic binding with it or a corporate affiliation of any other type, and in any case, transactions being framed within usual commercial practices, discounting the transportation and movement costs between the Point of Delivery
and the reference point of sale, as per the prices established by the Ministry of Mines or whoever acts on its behalf. 
 When the CONTRACTOR sells the
Liquid Hydrocarbons destined to refining for internal supply, the stipulation of number 16.5 hereto shall be applied. 
 For Natural Gas: 
 To the effects of this formula, it shall be the actual sale price of the Gas for the production of the corresponding
calendar month, expressed in United States of America dollars, per million British Thermal Unit BTU (USD $ /MMBTU), agreed upon by the CONTRACTOR with buyers, discounting transportation and processing costs between the Point of Delivery and the
actual point of sale. 
 The ANH is entitled to audit such price at any time. 
 CONTRACTOR’S Hydrocarbon Volume: 
 Such is the Hydrocarbon volume, expressed as Barrels for Liquid Hydrocarbons
and in British Thermal Units (BTU) for Natural Gas, which correspond to the CONTRACTOR as per Clause 14, on a specific calendar Month. 
 Po:

 For Liquid Hydrocarbons, this is the average price per barrel of West Texas Intermediate (WTI) benchmark crude oil in United States of America dollars
per Barrel (USD $ / Bl), and for Natural Gas, this is the average price for US Coast Henry Hub benchmark natural gas in United States of America Dollars per million British Thermal Units (BTU) (US $ / MMBTU). Such averages are for the corresponding
calendar month. Its specifications and quotes are published in media with renowned international prestige. 
 Po 
 For Liquid Hydrocarbons, this is the average price per barrel of West Texas Intermediate (WTI) benchmark crude oil in United States of America dollars per Barrel (USD $ /
Bl), and for Natural Gas, this is the average price for US Coast Henry Hub benchmark natural gas in United States of America Dollars per million British Thermal Units (BTU) (US $ / MMBTU) as per the table below. 

			
	 API Gravity of Produced Liquid Hydrocarbons
	  	Po (USD MI)
	 >15 y <22
	  	$28
	 >22 y <29
	  	$27
	 >29
	  	$26
	 Discoveries located over 300 meters water depth
	  	$32
		
	 Natural Gas produced exported-straight line distance between point of delivery and point of
receipt at destination country,
in kilometers
	  	 Po
 USD
 $/MMBTU

	 >0 and <500
 >500 and <1000
	  	$6
$7
	 >1000 or LNG plant
	  	$8

 For exploitation of Heavy Liquid Hydrocarbons having API gravity over ten degrees (10°), P0 shall be forty
(40) United States of America Dollars per barrel (USD$/Bl), and for Heavy Liquid Hydrocarbons having API gravity equal to or under ten degrees (10°), THE CONTRACTOR shall not pay the ANH any Right on High Prices. For Natural Gas destined to
internal consumption within the country, in case its price might be regulated by the Energy and Gas Regulation Commission (Creg), or the entity substituting it, THE CONTRACTOR shall not pay any right on High Prices; otherwise, the parties shall
agree upon the benchmark natural gas, and the Po value, and they shall sigh the corresponding agreement. 
 Such base price Pos hall be adjusted yearly, as
of January 1st, 2006, as per the formula below: 
 Po = Po(n-1) X (1+ I(n-2)) 
 Where: 
 Po(n-1): This is the Po value on
the immediately previous calendar year. 
 I(n-2): This is the yearly variation, expressed as a fraction, of the producer’s price index in the Unites Status of America during the Calendar Year, two Years prior to the one for which the
calculation is performed, as published by that Country’s the Department of Labor. 
 The aforementioned calculation shall be performed in December each
Year. 
 Notice: In case the crude oil West Texas Intermediate benchmark or the US Coast Henry Hub natural gas benchmark
(P) should lose its recognition as international benchmark, the ANH shall choose a new crude oil or natural gas benchmark to be used, and it shall modify the table, based upon the new index, keeping the equivalences with the Po values for crude
oil West Texas Intermediate or natural gas US Coast Henry Hub benchmarks. 
 The ANH shall be entitled to request in writing with no less than 3 months’
notice, that THE CONTRACTOR pay such right in kind during a period of no less than six (6) months. THE 

 CONTRACTOR shall agree to such request, provided commercial commitments it might have acquired must not be
affected. The volume corresponding to ANH shall be the one resulting from calculating “A” factor. 
 16.3. Production Tests: Liquid
Hydrocarbons obtained as a result of Production tests carried out by THE CONTRACTOR, shall also cause the rights set forth in the paragraphs above, provided the conditions on number 16.2 are met. 
 16.4 Participation on Production during the Exploitation Period Extension: In all cases of extension of the Period of Exploitation of an Exploitation Area, the
CONTRACTOR shall pay the ANH, as a recognition of participation right in the Production, an amount equivalent to ten percent (10%) of the value of the light Liquid Hydrocarbon production at the Point of Delivery, or to five percent (5%) in
the case of non associated to Heavy Liquid Hydrocarbons Natural Gas, which might be obtained by the CONTRACTOR as of the date of termination of the initial duration of the Period of Exploitation, and valued at the Point of Delivery, after
discounting the percentage corresponding to royalties. 
 Regarding such participation, the economic rights specified in numbers 16.1.2, and 16.2, shall not
be caused. During the extension of the Exploitation Period, the rights on use of the subsoil and high prices set forth in numbers 16.1.2, and 16.2, respectively, shall only be caused on the CONTRACTOR’S volume, after having subtracted the
participation right set forth herein. 
 16.5. Prices for Internal Supply When the CONTRACTOR sells its crude to cope with the refining needs for
internal supply, the prices shall be calculated using the international price, as set forth in Resolution No. 18-1709, on September 23, 2003, issued by the Ministry of Mines and Energy, or in any legal stipulation that modifies or
substitute it. 
 CLAUSE 17 – UNIFICATION 
 Whenever an economically exploitable oilfield extends continually to other area or areas outside the Contracted Area: The CONTRACTOR, upon agreement with the ANH and the other interested parties, shall put into effect, upon approval by the
competent authority, a co-operative exploitation plan, which shall be established as set forth in Colombian legislation. 
 CLAUSE 18
– PROPERTY OF THE ASSETS 
 18.1. PROPERTY: As set forth in Clause 4 hereto (number 4.3.4), the facilities, goods, materials, and equipment
belonging to THE CONTRACTOR, which it allocates permanently to the development of Exploitation Operations to the Point of Delivery, shall pass free of cost to be property of the ANH at the time of return of the Contracted Area, or upon termination
of this contract, when one or the other take place after eighteen (18) years of the Exploitation period, regardless of those assets staying outside the Contracted Ares. 
 18.2. Upon return of the area, or upon termination of the contract, whichever occurs after 18 years of the Exploitation Period, The CONTRACTOR shall transfer free of cost to the ANH, all rights derived
from contracts under project financing modes, such as Leasing, Exploitation and reversion of goods, BOT (Build ,Operate, and Transfer), BOMT (Build, Operate, Maintain, and Transfer), BOOT (Build, Own, Operate, and Transfer), MOT (Modernize, Operate,
and Transfer), and others similar to these, that establish the obligation to transfer the ownership of such goods, equipment, and facilities to the CONTRACTOR upon their termination, whenever such contracts might have been entered into with the
purpose of carrying out the Exploitation Period of the corresponding area. 

 Anyway, in the event, such contracts might be entered into during a term which is longer than the Exploitation Period,
they shall require previous authorization by the ANH. 
 18.3. Inventories: The CONTRACTOR shall take physical inventory of the equipment and
goods concerning the Exploitation Operations at reasonable intervals, at least every three (3) Calendar years, classifying them as property of THE CONTRACTOR or of third parties. The ANH shall bear the right to be represented whenever such
inventories are taken. To such purpose, the CONTRACTOR shall notify the ANH with no shorter than 15 Calendar days’ notice. 
 18.4. Disposal of
Assets: The CONTRACTOR is entitled to have at its disposal the goods and equipment located up to the Delivery Point, and which are not indispensable to keep current exploitation conditions. Notwithstanding the foregoing, after eighteen
(18) years of the Exploitation Period, or when an eighty percent (80%) of the proven reserves, whichever occurs first, the CONTRACTOR shall require previous approval from ANH to proceed with such dispositions. 
 CLAUSE 19 – SUPPLY OF INFORMATION AND CONFIDENTIALITY 
 19.1. Technical Information. The CONTRACTOR shall keep the ANH promptly and permanently informed on the progress and results of the operations. Consequently, in addition of documents required in other clauses hereto, the CONTRACTOR
shall deliver to the ANH, once it is obtained, and before the final date of each of the phases of the Exploration Period, and per Calendar Year during the Exploitation Period, all scientific, technical, and environmental information obtained within
the performance of this contract. Such Exploration and Exploitation information shall be delivered to the ANH as pr the Exploration and Exploitation Information Supply Manual. 
 1842.
Confidentiality of the Information: The Parties agree that all data and information which are produced, obtained, or Developed as a result of the operations per this contract, are
considered strictly confidential during the next five (5) calendar years beginning at the end of the Calendar Year in which they have been produced, obtained, or developed, or until the termination of the contract; or until the moment of
partial return of area, regarding information required on returned areas, whichever occurs first. Regarding interpretations based upon the data obtained as a result of the operations per this contract, such term shall be twenty (20) years, from
the date of the obligation of delivery to the ANH, or until termination of the contract, or upon partial return of the areas, regarding information acquired within returned areas, whichever occurs first. This stipulation shall not be applied to data
of information that the parties must disclose as set forth in legal stipulations in effect, nor to data required by their affiliates, consultants, CONTRACTORS, auditors, and legal counselors, financial entities, and competent authorities having
jurisdiction on the Parties or their affiliates, or by stipulations of any stock exchange in which the CONTRACTOR or its affiliates might be registered; nevertheless, such disclosure shall be reported to the other Party. Restrictions on disclosure
of information shall not keep the CONTRACTOR from furnishing data orinformation to companies interested in an eventual assignment of rights in relation to the Contracted Area, provided such companies sign the due confidentiality agreement which
shall enforce compliance pursuant hereto. The ANH commits not to deliver to third parties any data or information that might be obtained as a result of the operations carried out by the CONTRACTOR, unless such delivery should be necessary to comply
with a legal stipulation which is applicable to ANH, or carrying out its duties. In all other case, the ANH shall require previous authorization from the CONTRACTOR. 

 19.3. Ownership of the Information Once the confidentiality term as set forth in the previous clause has elapsed,
it is understood that the CONTRACTOR transfer all its rights on such data and their interpretations to the ANH, without the CONTRACTOR losing consequently, the right to use such information. From that moment on, the ANH shall dispose of such
information freely. 
 19.4. Informative meetings: At any time while the contract hereto remains in effect, the ANH shall be entitled to call the
CONTRACTOR to informative meetings. 19.5. Executive Report per Semester: In addition to the information required in other clauses herein, the Information Supply Manual, and the one demanded by Colombian Legislation, the CONTRACTOR shall deliver the
ANH the basic and summarized information on: prospectivity, reserves, current production and forecast, Exploration Evaluation, and Exploitation Operations carried out and projected for the following year, personnel, industrial safety, environment,
and communities, national content in contracting, among other. 
 The second semester report shall be the Yearly Operations Report, and the program to be
performed during the following Calendar year. Such reports shall be submitted within sixty (60) days from the ending of each calendar semester. 
 CLAUSE 10 – INSPECTION AND FOLLOW UP 
 20.1. Visits to Contracted Area: During the term of this contract, the ANH, at its own
risk, at any time, and following the procedures it might deem appropriate, shall be entitled to visit the Contracted Area in order to inspect and to follow up on the CONTRACTOR’s and the sub-Contractors’ activities related to this
contract, and to ensure the compliance hereof. Likewise, it shall be entitled to verify information received. Whenever the inspector might detect failures or irregularities committed by the CONTRACTOR, the inspector shall be entitled to make
remarks, which shall be responded by the CONTRACTOR in writing within a term specified by the ANH. 
 The CONTRACTOR, at its expense, shall place, at the
ANH’s representative disposal, transportation, lodging, living expenses, and other services in equal conditions to those furnished to its own personnel, in case it might be necessary. 
 20.2. Delegation: The ANH can delegate inspection and follow up on operations within the contracted area with the purpose of ensuring the CONTRACTOR is complying
with the obligations set forth herein and in the Colombian legislation. The lack of inspection and follow up activities by ANH shall by not means make the CONTRACTOR exempt from the compliance with commitments acquired by virtue of this contract,
nor shall it imply any reduction on such commitments. 
 CLAUSE 21 – INSURANCE 
 21.1. Insurance: The CONTRACTOR shall take all the insurance required by the Colombian law, and any other usual insurance, as per Good Practices of the Oil
Industry. Likewise, it shall demand that each sub-CONTRACTOR who carries out any work as required hereto, shall obtain and maintain in effect all insurance it might deem necessary. The costs demanded by contracting and keeping such insurance in
effect, shall be borne by the CONTRACTOR and they are its responsibility. 

 21.2. Policy of compliance with Labor Obligations: The CONTRACTOR shall take an insurance policy which
shall guarantee the payment of salaries, benefits, and indemnities and other labor debt due to eventual judicial decrees, which derive from claims by workers hired by the CONTRACTOR, in its condition of only and actual employer of such workers. The
term of the policy shall be over three years (3) as of the date of termination of this contract, and the insured value shall be the equivalent of ten percent of the CONTRACTOR’s payroll assigned to the fulfillment of this contract during
the year prior to its termination. 
 CLAUSE 22 – GUARANTEES 
 22.1. Object of the guarantees: The CONTRACTOR shall execute, in favor of ANH, in the form, terms, and conditions set forth herein, the guarantees which ensure the compliance and correct performance or all the
obligations of each phase of the Exploration Period and of the Subsequent Exploratory Program, in such is the case, and the remaining activities inherent to such obligations. By no jeans shall such guarantee have the status of a penalty clause.

 22.2. Form of the guarantees: The CONTRACTOR shall establish, at its own expense, one or more unconditional and irrevocable “stand by”
letters of credit, payable at sight, with a bank or financial institution that is legally established in Colombia, or another instrument, or another institution which has been previously accepted by the ANH. 
 22.3. Submittal of the guarantees: The CONTRACTOR shall submit to ANH the guarantees set forth in this clause, as per the essential terms of the format contained
in Appendix C hereto, with an anticipation no less than eight calendar days from the initial date of each Exploration Period or Subsequent Exploration Program, whichever might be the case. For the firs phase, the CONTRACTOR shall submit the
guarantee within fifteen (15) calendar days following the date of the execution of the contract. In case, due to duly supported reasons beyond the CONTRACTOR’s will, it might not be able to submit the guarantee to the ANH within the term
set forth above, upon request by the CONTRACTOR, the ANH might postpone the date of submittal. 
 Failure to submit the guarantees by the CONTRACTOR within
the stipulated terms, shall be deemed as breach of the contract. 
 22.4. Amount of the guarantees: The CONTRACTOR shall execute the guarantees
corresponding to each phase of the Exploration Period or the Subsequent Exploration Program whichever the case might be, to amount ten percent (10%) of the value of the budget of the phase of the Minimum Exploratory Program, or the Subsequent
Exploratory Program, whichever the case might be, nominated in United States of America dollars, and payable in Colombian pesos. 
 In no case shall the
value of the guarantee for each phase be under one hundred thousand United States of America dollars (USD /$1000,000), nor over three million United States of America dollars (USD $ 3,000,000). 
 22.5. Validity of the guarantees: Each and every one of the guarantees shall have validity during the phase whose obligations are being guaranteed, plus three
(3) additional months. In case of extensions, the guarantees shall also be extended or substituted by others having the same value, with a minimum validity equaling the term of the extension, plus three (3) additional months. 

 22.6. Rejection of the guarantees: The ANH shall reject the guarantees executed by the CONTRACTOR whenever such
guarantees might not comply with the requisites set forth herein. The ANH shall have one (1) month as of the date of receipt as per number 22.3, to notify its rejection to the CONTRACTOR and to return the guarantees submitted. As of such
notification, the CONTRACTOR shall have an eight calendar (8) day term to correct the guarantee. If they are not corrected, the rejected guarantees shall be deemed as not submitted, to the effects of the stipulations of number 22.3. 

22.7. Effectiveness of the guarantees: The ANH shall make the guarantees effective provided the CONTRACTOR is in breach in part or in whole of the guaranteed
obligations, without detriment to the compliance of the remaining obligations contracted. The payment of the stand-by letter(s) of credit shall not exonerate the CONTRACTOR from its obligation to remedy and hold harmless from damage its lack of
compliance might have caused. The ANH holds the right to resort to controversy solution mechanisms whenever the value of the guarantee might not be enough to cover the amount of the indemnities. 
 CLAUSE 23 – SUB-CONTRACTORS, PERSONNEL, AND TECHNOLOGY TRANSFER 
 23.1. Sub-Contractors.; In order to carry out the operations subject mater hereof, the CONTRACTOR shall be entitled to enter into contracts at its own will and risk, to obtain goods and services in the country
or overseas. In the sub-contracts, the CONTRACTOR shall include stipulations committing sub-Contractors to be subject to the Colombian legislation and to the stipulations in this contract. 
 23.2. Lists of contracts and sub-Contractors: 
 The CONTRACTOR shall
have an up to date log of the contracts regarding works, services, and supplies, and it shall have them at the ANH’s disposal whenever it might request so. The log must specify, at least, the name of the supplier, CONTRACTOR, or sub-CONTRACTOR,
the subject matter, the amount, and the duration of the contract. 
 23.3. National Component: The CONTRACTOR shall strive to prefer national
suppliers of goods and services of national origin, under equal competitive conditions in quality, timeliness, and price. 
 23.4. Personnel: To al
legal effects, the CONTRACTOR acts as the sole employer of the workers it hires to carry out the activities related to this contract, and consequently, it shall be liable for the labor obligations deriving from the corresponding labor relationships
or contracts, such as payment of salaries, benefits, Para fiscal contributions, affiliation, and payment of contributions regarding pensions, health, and professional hazards to the Integral Social Security System, pursuant to the law. The
CONTRACTOR shall train adequately and diligently the Colombian personnel it might require to replace foreign personnel the CONTRACTOR might deem necessary to carry out the operations hereto. In any case, the CONTRACTOR shall comply with the legal
stipulations which establish the proportion of national and foreign employees and workforce. 
 23.5. Technology Transfer: The CONTRACTOR commits
itself to sponsor or to carry out itself training programs for professionals, or by means of funding research projects designated by the ANH in areas related to this contract, during its term. Training shall be related to the petroleum industry,
such as technical, commercial, and legal areas, among others. The training can be carried out by means of integrating the professionals designated by the ANH to the workgroup the CONTRACTOR might organize for the Contracted Area, or for other
related activities. 
 All training costs, with the exception of labor costs which are caused in favor of the professionals receiving it, which take place
upon compliance of the obligations the CONTRACTOR has by virtue of this clause, shall be borne one hundred percent (100%) by 
 the CONTRACTOR. In no
case shall the CONTRACTOR assume any cost whatsoever derived from the labor relationship the beneficiaries of the training might have. In order to comply with the obligations regarding Technology Transfer as set forth in this clause, in each

 one of the phases of the Exploration Period and its extensions, the CONTRACTOR commits to carry out technology transfer
programs to a value up to twenty five percent (25%) of the amount resulting from multiplying the number of hectares and fraction of a hectare, times the value presented in the table defined in Clause 16 (number 16.1.1), and this calculation
shall be made beginning each phase, including the first phase. Regarding the Exploitation Areas, the technology transfer shall be up to ten percent (10%) of the amount of the right to use of the subsoil, as stipulated in clause 16, (number
16.1.2), per calendar year. In no case, shall demand from the CONTRACTOR be that the total value of Technology Transfer exceeds one hundred thousand United States of America dollars (US $ 100,000) per phase of per calendar year, whichever
might be the case. 
 CLAUSE 24 – OPERATOR 
 24.1. Without precluding its being entitled to carry out the operation directly, the CONTRACTOR shall be entitled to enter into a contract with a third party to act as the operator, provided the latter shows experience, proficiency,
and financial soundness. In such cases, the designation of a third party as operator shall require final approval by the ANH. 
 24.2. Should the
CONTRACTOR be conformed by two or more companies, it shall be specified which of them shall perform as the operator. 
 24.3. should more than two
different operators be required at the same time in this Contract, previous approval by the ANH shall be required. 
 24.4. Whenever the operator
decides to relinquish, it shall notify on no shorter than ninety (90) calendar days’ notice. 
 24.5. Should the operator be a third party,
and the ANH be advised it has assumed negligent or contrary to Good Practices of the Oil Industry conducts in relation with the fulfillment of the obligations hereto, it shall notify the CONTRACTOR , who shall have a ninety (90) calendar day
term, as of the requirement, to adopt the necessary corrections. If the aforementioned behavior should persist upon expiration of such term, the ANH shall demand the change of the operator from the CONTRACTOR. 
 CLAUSE 25 – ASSIGNMENT RIGHTS 
 25.1.
Rights: THE CONTRACTOR has the right to assign its interests, rights, and obligations arising from this contract in whole or in part, with previous written authorization by the ANH, to another company, joint venture, or temporary venture, which
has the financial capacity, the technical competence, the professional capabilities, and the legal capacity required to act in Colombia. 
 25.2.
Procedure: To such effect, the CONTRACTOR shall submit written request to the ANH, specifying the essential elements of the negotiation, such as the name of the possible assign, the information on its legal, financial, technical, and operational
capacities, the value of the rights and obligations to be assigned, the scope of the operation, etc. Within Sixty working days (60) from the receipt of the request submitted in complete form, the ANH shall exert its discretional faculty to
analyze the information submitted by the CONTRACTOR, after which it shall adopt its decision without it being compelled to provide an explanation. In case any of the companies making up the CONTRACTOR party should undertake fusion, division of
corporations, absorption, or corporate transformation of another type, it shall suffice with notifying timely the ANH, without exemption of the information other Colombian authorities might require. The ANH reserves the right to evaluate the new
conditions of the CONTRACTOR or any of the companies that conform it, regarding financial capacity, technical competence, professional capabilities, and legal capacity required to act, and it might require the guarantees to be granted.

 Notice: When assignments might be produced in favor of companies controlling or managing the CONTRACTOR or any of the companies which constitute it, or
its affiliates or their subsidiaries, or between companies making up the same economic group, if the ANH does not provide response within the established term, it shall be understood that the assignment has been authorized. 

 CLAUSULA 26 – FORCE MAJEURE AND ACTS OF THIRD PARTIES 
 26.1. Definitions: To the effects hereto, Force Majeure is an impossible to resist, unforeseen event, such as a law, and act of authority, a shipwreck, an
earthquake, etc; and, act of third parties is the irresistible event, legally not having to do with the Party claiming it, such as a war, a malicious act by third parties, etc. To the effects of this contract, both Force Majeure, and Acts of Third
Parties, shall be considered waiving liability, and they shall suspend the compliance with non financial obligations affected by such circumstances, as long as they constitute an external cause, and the Party receiving notification accepts the
irresistibility and the character of hindrance of the fact being claimed. 
 NOTICE: To the effects hereto, rain and environmental licensing
formalities shall not be deemed waiver on the basis of force majeure or act of third parties, regarding the obligation to drill the well, since such situations are predictable by the CONTRACTOR. 
 26.2. Suspension: The fulfillment of the obligations hereto, shall be suspended during all the time any of the Parties might be impaired to fulfill them totally
or partially, by circumstances constituting Force Majeure or Irresistible Acts of Third Parties. Whenever one of the Parties might be affected by one of such circumstances, it shall notify the other within fifteen (15) calendar days, invoking
this clause, and submitting the appropriate justifications, specifying the causes originating its impair, and the way the fulfillment of the corresponding obligation is affected, the estimated period of suspension of activities, and any other such
information that allows demonstrating the occurrence of the fact and its irresistibility. 
 26.3. Acceptance: Within fifteen (15) calendar days
as of receipt of the notification, the non-affected party shall respond in writing, accepting or not the responsibility waiving circumstance, and upon such acceptation, the terms for the fulfillment of affected obligations shall be suspended. In
such case, the suspension shall take Place as of the moment of occurrence of the fact being invoked as grounds for waiving. Should the non-affected party not provide response within such term, the acceptance of the grounds being invoked shall be
understood as accepted, and compliance with the affected obligation shall be suspended. Suspension only interrupts the requirement to fulfill affected obligations. 
 26.4. Cease of Suspension: The party being affected by the grounds of responsibility waiver, shall re-initiate the fulfillment of suspended obligations within the month following the disappearing of the fact invoked as grounds. In
such case, it shall inform the other Party within the following fifteen (15) calendar days. The party that is committed to fulfill the obligation shall make its best efforts to fulfill it within the terms and conditions agreed upon by the
Parties. 
 26.5. Effects on the terms: When the suspension impairs the fulfillment of any of the Exploration Operations contained within any of the
phases in the Minimum Exploratory Program or the Subsequent Exploratory Program, and if such impairment remains during over two (2) consecutive months, the ANH shall restore the contractual term during a period equal to that of the impairment,
without precluding the CONTRACTOR’s obligation to the extend the existing guarantee or executing a new one, as per Clause 22. 

 CLAUSE 27 – SOLUTION OF DISPUTES BETWEEN THE PARTS 
 27.1. Executive Authority: Every difference or disagreement that might arise regarding the development of the contract, and related to it, shall be solved by the
officials of the parties who bear authorization to such purpose. If, within 30 calendar days’ term as of the written notice, the disagreement has not yet been solved, the issue shall be submitted to the highest executive of each of the Parties
who resides in Colombia, with the purpose of seeking a joint solution. If, within thirty (30) calendar days as of the date one of the parties requested to the other the submittal of the disagreement to the aforementioned executives, the parties
should arrive at an agreement or decision on the issue, the adopted agreement or decision shall be signed within fifteen (15) calendar days following the attainment of such agreement or decision, 
 27.2. Expert’s and Arbitration Authority If, within thirty (30) calendar days as of the date one of the parties requested to the other the submittal of
the disagreement to the aforementioned executives, the parties should not arrive at an agreement or decision on the issue, any of the Parties can resort to the mechanisms set forth in numbers 27.2.1, 27.2.2, and 27.2.4, depending on the case, as
follows: 
 27.2.1. Technical Experts’ Report Should the disagreement be a technical issue, it shall be submitted to Experts’ Report,
such experts being designated as follows: One per each Party, and the third one, by the two main experts, and in case they should not reach to an agreement, such third expert shall be named by the association of professionals on the subject on which
the dispute as arisen, or similar to it, that is a consultative body to the National Government, with its address in Bogotá. 
 Once the experts have been appointed: 
 a) The experts shall issue their concept within thirty (39) days
as of their appointment. The experts shall indicate the place and the term to receive information from the Parties. At the experts’ request, the Parties can award an extension to the original term. 
 b) The parties shall deliver all the pertinent information that the experts might deem necessary. 
 c) The parties shall focus and outline the matters that are subject to the expertise. 
 d) The costs and expenses of the technical experts shall be borne in equal shares by the Parties. 
 e) The report shall be emitted by majority, and shall be mandatory to the Parties, with the effects of a transaction. 
 27.2.2.Accounting Experts’ Report 
 Should the disagreement be on
accounting, it shall be submitted to report by experts, who should be certified public accountants, appointed as follows: One per each Party, and the third one, by the two main experts, and in case they should not reach to an agreement, such third
expert shall be named Bogotá Central Accountants’ Board. Upon appointment of the experts, procedure shall be akin to the one stipulated in numbers a-e above. 
 27.2.3. Dispute regarding nature En case of disagreement between the parties regarding the technical, accounting, or legal status of the dispute, it shall be considered legal in nature. 
 27.2.4. Arbitration: Any disagreement or controversy derived from or related to this contract, that is not a technical or accounting disagreement, shall be solved
by means of arbitration. The Arbitration Court shall be composed of three arbitrators appointed upon agreement by the Parties. 

 If the Parties should not arrive to an agreement regarding the appointment of the arbitrators, they shall be designated
by the Center of Mercantile Arbitration and Conciliation Center of the Bogotá, D.C. Chamber of Commerce, upon request submitted by any one of the Parties. In any case, the arbitrators shall have certified experience of over five
(5) years in issues within the petroleum industry. The Court shall apply the substantial Colombian legislation in effect, and its decision shall be according to the Law. The arbitration shall be conducted in Spanish language. 
 27.2.5. Exclusion: Pursuant to the stipulations in Clause 4 hereto (number 4.3.2, notice), lack of agreement between the Parties regarding the extension of the Period of
Exploitation of each Area of Exploitation, shall not provide grounds for disagreement, and it shall not be subject to the proceedings as established in this clause. 
 CLAUSE 28 – TERMINATION 
 28.1. Grounds for termination. This contract shall terminate, and the
CONTRACTOR’s right shall cease in any of the cases enunciated below: 
 a) Because of expiration of the term of the Period of
Exploration, without the CONTRACTOR having attained one Discovery. 
 b) Because of expiration of the term of the Period of Exploitation. In
such cases, the effects of the contract shall terminate, regarding the Area of Exploitation in which the Period of Exploitation might have expired. 
 c) Because of relinquishment by the CONTRACTOR during the Period of Exploitation in the cases considered in Clause 4 (number 4.2.1) 
 d) Because of relinquishment by the CONTRACTOR at any time during the Period of Exploitation. 
 e) At any time by agreement between
the Parties. 
 f) Because of declaration of breach by the CONTRACTOR. 
 g) Due to the application of any of the grounds for Unilateral Termination accounted for herein. 
 g) Due to the occurrence of any of the grounds for termination or expiration pursuant to the law. 
 In the cases set forth in letters f), g), and h), the ANH shall make effective the guarantee set forth in Clause 22, without preclusion of any resource or action it
might decide to undertake. 
 28.2. Grounds of Termination due to breach: The following are Grounds of Termination
due to breach: 
 a) Assignation of this contract in whole or in part, without complying with the stipulations in Clause 25. 
 b) Unjustified suspension of the Exploration Operations during over six (6) continuous months within the same phase. 
 c) Unjustified suspension of the Evaluation and/or Operations during a period over half the term for the Evaluation Program in an Evaluation Area, or
during six (6) consecutive months in an Area of Exploitation. In such cases, the effects of the contract shall terminate, regarding the Area of Evaluation in which the suspension of Operations might have occurred. 
 d) To Make undue use of resources and minerals that are not part of the subject matter of this contract. 
 e) The omission, within the established terms, in an unjustified manner, of the delivery of technical information, results of the Exploration Operations,
Evaluation, or Production, whose importance impairs the ANH in carrying out its functions. 
 f) Non compliance in the submission of
guarantees, pursuant to clause 22 (number 22.3) 
 g) Failure to comply, in an unjustified manner, with any other obligation committed to by
the CONTRACTOR by virtue and related to the subject matter of this contract. 

 28.3. Procedure for the Declaration of Breach: On occurrence of any of the grounds of breach, the ANH shall be
entitled to terminate this contract after sixty (60) calendar days as of having summoned the CONTRACTOR in writing, after receiving approval from the ANH Management Council, stating the grounds invoked to make such statement, provided the
CONTRACTOR should have not presented satisfactory explanations to the ANH within twenty (20) working days after receiving summons, or should have not corrected the breach in compliance with the contract within the sixty (60) day space. If,
within the aforementioned twenty (20) working day space, the CONTRACTOR presents satisfactory explanations to the ANH, and the remaining term to complete the sixty (60) calendar day term should be insufficient to comply with the
outstanding obligations, the ANH can grant an additional term to allow such compliance, without precluding its demanding necessary guarantees. If, upon expiration of such term, necessary corrections have not been made, the ANH shall declare breach
and termination of this contract It is understood that the term provided for herein for the compliance with outstanding obligations, is by no means an extension of the agreed term for the performance of the Minimum Exploratory Program of an ongoing
phase, nor does it modify the terms of the following phases of the Period of Exploitation. 
 28.4. Grounds of Unilateral Termination: The ANH can
declare this contract terminated, at any time, in the following cases: 
 a) Because of initiation of a liquidation process of the CONTRACTOR
if it is a corporation. 
 b) Due to initiation of legal seizure of the CONTRACTOR that affects materially the compliance of the obligations
hereto. 
 When the CONTRACTOR should be constituted by several corporations and / or natural persons, the grounds as per the numbers above shall apply when
such grounds affect materially the compliance of the obligations hereto. 
 NOTICE: RESOLUTORY CONDITION For each phase in
which the obligation exists to drill one or more exploratory wells, the CONTRACTOR shall initiate before the Ministry of the Environment, the due activities, to obtain the environmental licensing, within 30 calendar days as of the initiation of the
corresponding phase. Failure to comply with this obligation by the CONTRACTOR shall provide grounds for terminations of this contract. 
 28.5. Mandatory
Clauses: The ANH shall declare termination, expiration, or mandatory liquidation of this contract, on occurrence of the grounds ordered by the law, such as the ones envisaged in 1997 Law 418, which was successively extended and modified by laws
548, 1999, and 782, 2002, or in Law 40,1993, or in laws that substitute or reform these laws. 
 28.6. Subsequent Obligations: Upon termination of
this contract due to any cause, and at any time, the Parties have the obligation to comply satisfactorily with their legal obligations committed to among themselves, and with third parties, and those committed to herein. 
 This includes assuming liability for losses and damage resulting when the contract has been terminated unilaterally, and when the contract might be terminated because on
grounds attributed to the CONTRACTOR, there shall be grounds for indemnities and legal compensations. 
 CLAUSE 29 – THE ENVIRONMENT

 29.1. The CONTRACTOR shall provide particular attention to the protection of the environment and the compliance with regulations which
apply to such matters. Likewise, it shall adapt and carry out specific contingency plans in order to face emergencies and to repair damage in the most efficient and timely manner. 
 29.2. The CONTRACTOR shall submit a report each semester to the ANH on environmental issues of the operations it is carrying out, on the application of the preventive plans and the 

 contingency plans, and on the status of the formalities carried out with the competent environmental authorities,
regarding permits, authorizations, concessions, or licenses, depending on the case. 
 29.3. Whenever any activity or Exploration Operation might
require environmental permits, authorizations, concessions, or licenses, the CONTRACTOR shall refrain from carrying out such activity until such permits, authorizations, concessions, or licenses are obtained. 
 29.4. The CONTRACTOR shall not initiate Exploitation without the approval of environmental impact studies, and without environmental licenses having been issued,
or any other such requisites having been fulfilled. In any case, for such phases in which exploratory wells are to be drilled, the CONTRACTOR shall initiate the activities necessary to obtain environmental licenses, no later than one month as of the
initiation of the corresponding phase. Failure to do so, shall deem the CONTRACTOR to be in breach of the contract. 
 29.5. Lack of compliance with
any such obligation, shall be grounds for termination due to breach, as set forth in clause 28 (number 28.2, letter g). 
 CLAUSE 30 –
ABANDONMENT 
 30.1. Abandonment: Without precluding the stipulations in number 4.3.4 herein, in all cases in which there are grounds for the
return of areas, inland as well as off coast, the CONTRACTOR shall schedule and carry out all Abandonment activities, pursuant to Colombian legislation, and complying with Good Practices of the Petroleum Industry. 
 30.2. Return of the Exploitation areas and Evaluation Areas: Within 60 days following the date in which the return of Exploitation areas or Evaluation Areas must
take place, the CONTRACTOR must carry out an Abandonment program, to the ANH’s and other competent authorities’ satisfaction 
 30.3. In
Exploitation Areas: The Exploitation Program for each Exploitation Area shall include the corresponding Abandonment program. Likewise, the CONTRACTOR shall perform the adjustments required on the Abandonment program in the updates to the
Exploitation Plan, as per number 9,4 Herein. 
 30.4. Abandonment Fund 
 30.4.1. Creation: At the end of the first Calendar Year as of the Month in which the CONTRACTOR initiated commercial and regular production of Hydrocarbons in an Exploitation Area, and as of such time, the
CONTRACTOR shall carry, within its accounting, a special register called Abandonment Fund, and, in order to guarantee availability of financial resources required to carry out the aforementioned Abandonment program, the CONTRACTOR shall establish an
escrow fund, a bank guarantee or such other accepted by the ANH instrument . In either case, the terms and conditions of the agreed instrument shall be determined by the Parties within the year immediately prior to the date in which the abandonment
fund must be constituted. In case an agreement might not be reached, the CONTRACTOR shall constitute a bank guarantee as set forth in this clause. 
 30.4.2 Amount of the Abandonment Fund: The amount of the Abandonment Fund a the end of each Calendar year, shall be the result of applying the following formula: 
 AMA = (PAH ÷ RIH)2 x CAB 
 where: 

 AMA is the amount of the Abandonment Fund the CONTRACTOR must record for each Exploitation Area at the end of each Calendar year. 
 PAH is the accrued
volume of Hydrocarbons produced in each Area of Exploitation, from the beginning of its production, thru December 31st of the year for which this calculation is performed. 
 RIH ser the proven Hydrocarbon reserves at each Area of Exploitation, expressed in Liquid Hydrocarbon Barrels, as per the Exploitation Plan and its updates. Such
amount includes the accrued production (PAH), plus the remaining proven reserves. 
 CAB is the estimated
updated cost of the Abandonment operations for each Area of Exploitation. Whenever yearly readjustments are the case, the CAB shall be reduced in such amount of the Abandonment costs as these have been already performed. 
 All calculations regarding Hydrocarbon production and reserves as mentioned above (PAH and RIH), shall be made in Barrels of Liquid Hydrocarbons. To such purpose, the
parties agree that, to the effects of making the conversion: 
 Fifty seven hundred (5700) cubic feet of gas, at Standard Conditions, are equivalent to
one (1) barrel of Liquid Hydrocarbons. 
 The variables of the formula shall be revised and updated on a yearly basis by the CONTRACTOR, based upon the
actual disbursements, the Abandonment activities that have been carried out, and the Hydrocarbon production volumes and reserves. 
 NOTICE: To all effects
herein, Proven Reserves is the amount of Hydrocarbons that based upon geological and engineering analyses, the CONTRACTOR estimates with reasonable certainty that can be commercially recoverable, as of a specific date, based upon known oilfields,
and pursuant to economic conditions, operative methods, and the regulatory frame prevailing at the moment of the calculation. 
 30.5. Compliance with
the obligations set forth in this clause shall not waive the CONTRACTOR of its obligation of carrying out at its own cost and risk all Abandonment operations in each Area of Exploitation. 
 CLAUSE 31 – CONTRACTUAL ADDRESS AND APPLICABLE LAW 
 To all purposes regarding this
contract, the Parties determine the city of Bogotá, D.C., Republic of Colombia, as their legal address. This contract is governed in all of its parts by the Colombian laws, and the CONTRACTOR relinquishes to attempt diplomatic claim regarding
its rights and obligations arising from this contract, except in the case of denial of justice. It is understood that there shall be no denial of justice whenever the CONTRACTOR has had access to all resources and means of action that proceed
pursuant to Colombian laws. 
 CLAUSE 32 – SPOKESPERSON 
 Without detriment to the rights the CONTRACTOR might have derived from legal stipulations or from the covenants hereto, the ANH shall be the spokesperson for the CONTRACTOR before Colombian authorities in relation
with the activities performed by virtue hereof, at all moments it such performance might be necessary, and it shall furnish government officials and entities with all the data and reports that might be legally required. The CONTRACTOR shall be
committed to prepare and to furnish the ANH with such reports. The expenses incurred by ANH to proceed on any issue as set forth in this clause, shall be borne by the CONTRACTOR, and when such expenses should exceed Five Thousand United States of
America Dollars, (USD $ 5000) or its equivalent in Colombian currency, the CONTRACTOR’s prior approval is required. The parties hereby declare that neither the stipulations in this clause, nor elsewhere in this contract, imply bestowal of a
general power, nor that the Parties have constituted a civil or commercial partnership, or such other relationship under which either of the Parties might be considered as jointly or severally liable of acts or omissions of the other Party, or as
having authority or mandate that might commit the other party to any obligation. This contract is related to activities within the territory of the Republic of Colombia. 

 CLAUSE 33 – PAYMENTS AND CURRENCY 
 33.1. Currency: All payments the CONTRACTOR must make in favor of the ANH by virtue of this contract, shall be made in United States of America Dollars, whenever
the currency exchange regulations might so allow, or in Colombian pesos, and at the bank designated by the ANH to such purpose. The CONTRACTOR may make payments in foreign currency whenever currency Exchange regulations allow such payments, and its
being authorized by the ANH. 
 33.2. Rate of Exchange: Whenever should United Stated of America Dollars be converted to pesos, the Market
Representative Exchange Rate, which is applicable on the day of the payment, as certified by the Banking Superintendent or the entity operating as such, 
 33.3. Default interests: If the payments due by the CONTRACTOR in favor of the ANH by virtue of this contract are not made within the terms established herein, the CONTRACTOR shall pay the default interest at the highest rate legally
allowed. 
 CLAUSE 34 - TAXES 
 The CONTRACTOR shall be subject to Colombian tax legislation. CLAUSE 35 – NOTICES AND COMMUNICATIONS 
 35.1. Address
for Notices and Communications: The notices and communications between the Parties shall be sent to the representatives of the Parties, to their registered addresses for legal notifications, which to date are: 
 ANH’s: Calle 37 No. 7-43, Piso 5, Edificio Guadalupe, Bogota, D.C., Colombia. THE CONTRACTOR’S Calle 114 No. 9-01 Oficina 1001 Torre
A, Bogota, D.C., Colombia. 
 35.2. Change: Any change in the person of the representative or in the above specified address, must be reported
officially to the other Party, within five (5) days following such change. 
 35.3. Effectiveness: The communications between the Parties in
relation hereto are effective as of receipt by the Party to whom such communications were addressed, at the addresses specified above, and in any event, as of their delivery at the address for legal notifications registered at the Chamber of
Commerce. 
 CLAUSE 36 – EXTERNAL COMMUNICATIONS 
 Whenever the CONTRACTOR should require to issue public declarations, announcements, or press releases regarding this contract, regarding information that might affect the normal performance or this contract, the
CONTRACTOR shall request prior written authorization from the ANH. In any event, external communications on Discoveries attained, Discoveries declared, or close to being declared commercial, and Hydrocarbon reserves volumes must be authorized by the
ANH. 
 CLAUSE 37 – LANGUAGE 
 To all effects and acts related to this contract the language is Spanish. 
 CLAUSE 38 – PERFECTION

 This contract shall be binding upon its signature by the parties. 
 In witness thereof, it is signed in Bogotá, D.C., on December 27th, 2005, in two originals with the same validity. 

 AGENCIA NACIONAL DE HIDROCARBUROS 
 /s/ JOSE ARMANDO ZAMORA REYES 
 JOSE ARMANDO ZAMORA REYES 
 DIRECTOR GENERAL 
 HARKEN DE COLOMBIA LTD. 
 /s/ GUILLERMO SANCHEZ 
 GUILLERMO SANCHEZ 
 LAWFUL REPRESENTATIVE 

 APPENDIX A 
 CONTRACTED AREA 
 APPENDIX TO THE “CARACOLI” SECTOR, 
 EXPLORATION AND PRODUCTION CONTRACT 
 The total Area
comprised within the block described below is thirty six thousand, one hundred and ninety three (36,193) hectares, and seven thousand five hundred and forty six (7546) square meters. Cartographic information was taken from Colombia’s
political map, I-G-A-C- digital file, at a 1:1,500,000 scale. 
 CARACOLI BLOCK 
 The Area of the polygon formed by the vertexes below is thirty six thousand, one hundred and ninety three (36,193) hectares, and seven thousand five hundred and
forty six (7546) square meters, and it is located within the jurisdictions of the towns of Cúcuta, El Zulia, Santiago, and San Cayetano, in the Department of Norte de Santander Such area is described below and, as it appears in the map
attached as Appendix A, which is part of this contract, as well as the corresponding charts, the Agustín Codazzi Geographic Institute Geodetic Vertex “La CRUZ-495” having GAUSS coordinates with their origin in Bogotá as
follows, has been taken as point of reference: N- 1’361.308,03 meters, E- 1’155.324,17 meters, which correspond to the geographic coordinates 
 Latitude 7°51’49”0,724 North of the Equator, Longitude 72°40’21’0.545 West of Greenwich. 
 Point A: 
 Starting at this vertex, (LA CRUZ-495) continuing with course N 82° 35’ 41” 0,672 mil W during a 5368.949 meter
distance until arriving at point ‘A’, having coordinates N- 1362000 meters, E- 1150000 meters. 
 Point B: 
 From this point, continuing with NORTH course during a 18000 meter distance, until arriving at point ‘B’, having coordinates N- 1380000 meters, E- 1150000
meters. 
 Point C: 
 From this point, continuing with
EAST course during a 6000 meter distance, until arriving at point ‘C’, having coordinates N- 1380000 meters, E- 1156000 meters. 
 Point D:

 From this point, continuing with NORTH course during a 894 meter distance, until arriving at point ‘D’, having coordinates N- 1380894 meters,
E- 1156000 meters. 
 Point E: 
 From this point,
continuing with EAST course during a 26000 meter distance, until arriving at point ‘E’, having coordinates N- 1380894 meters, E- 1182000 meters. Line “D-E” adjoins throughout its extension with the URIBAN sector operated by
ECOPETROL Company. 
 Point F: 
 Starting at this point,
continuing with course S 21° 13’ 29” 0,204 mil W during a 7980.839 meter distance until arriving at point ‘F’, having coordinates N-1373454.523 meters, E- 1179110.715 meters. 
 Point G: 
 Starting at this point continuing with course S 79°
57’ 5.” 0,385 mil W during a 2663.647 meter distance until arriving at point ‘G’, having coordinates N-1372989.765 meters, E- 1176487.927 meters. Point H: 
 From this point, continuing with course N 0.° 0.’ 4.” 0,056 mil E during a 3712.235 meter distance until arriving at point ‘H’, having coordinates N- 1376702 meters, E- 11766488 meters.

 Line “G-H” adjoins throughout its extension with the CERRITO sector operated
by KAPPA Company. 
 Point I: 
 From this point,
continuing with course N 89° 59’ 55” 0,949 mil W during a 4480.918 meter distance until arriving at point ‘I’, having coordinates N- 1376702.088 meters E- 1172007.082 meters. Line “H-I” adjoins throughout its
extension with the CERRITO sector operated by KAPPA Company. 
 Point J: 
 Starting at this point, continuing with course S 0.° 0.’ 4.” 0,163 mil W during a 693.612 meter distance until arriving at point ‘J’, having coordinates N-1376008.476 meters, E- 1172007.068
meters. Line adjoins throughout its extension with the CERRITO sector operated by KAPPA Company. 
 Point K: 
 From this point, continuing with course N 89° 59’ 55” 0,936 mil W during a 7004.951 meter distance until arriving at point ‘K’, having coordinates
N-1376008.614 meters E- 1165002.117 meters. 
 Point L: 
 Starting at this point, continuing with course S 0. 1.’ 12” 0,672 mil W during a 6008.614 meter distance until arriving at point ‘L’, having coordinates N- 1370000 meters, E- 1165000 meters.

 Point M: 
 From this
point, continuing with SOUTH course during a 8000 meter distance, until arriving at point ‘M’, having coordinates N- 1362000 meters, E- 1165000 meters. Line “L-M” adjoins throughout its extension with the TOLEDO sector operated
by ECOPETROL Company. 
 From this point, continuing with WEST course during a 15000 meter distance, until arriving at point and closing the borders at point
‘A’, starting point. 

 NATIONAL HYDROCARBON AGENCY. 
 Calculation of Area, Courses, and Distances from Gauss Coordinates. 
 Origin:
Bogotá 
 Data and Results chart for the CARACOLI BLOCK sector. 
 Municipal jurisdictions of Cúcuta, el Zulia, Santiago, and San Cayetano in the Department of Norte de Santander 
  

													
	 Point
	  	NORTH	  	EAST	  	Distance	  	Dif. North	  	Dif. East	  	 COURSES

	 PERT
	  	1,361,308.03	  	1,155,324.17	  		  		  		  	
							
		  		  		  	5,368.95	  	691.97	  	-5,324.17	  	N 82° 35’ 41” 0,672 mil W
							
	 A
	  	1,362,000.00	  	1,150,000.00	  		  		  		  	
							
		  		  		  	18,000.00	  	18,000.00	  	0.00	  	NORTH
							
	 B
	  	1,380,000.00	  	1,150,000.00	  		  		  		  	
							
		  		  		  	6,000.00	  	0.00	  	6,000.00	  	EAST
							
	 C
	  	.1,380,000.00	  	1,156,000.00	  		  		  		  	
							
		  		  		  	894.00	  	894.00	  	0.00	  	NORTH
							
	 D
	  	1,380,894.00	  	1,156,000.00	  		  		  		  	
							
		  		  		  	26,000.00	  	0.00	  	26,000.00	  	EAST
							
	 E
	  	1,380,894.00	  	1,182,000.00	  		  		  		  	
							
		  		  		  	7,980.84	  	-7,439.48	  	-2,889.28	  	S 21° 13’ 29” 0,204 mil
							
	 F
	  	1,373,454.52	  	1,179,110.72	  		  		  		  	
							
		  		  		  	2,663.65	  	-464.76	  	-2,622.79	  	S 79° 57’ 5.” 0,385 mil
							
	 G
	  	1,372,989.77	  	1,176,487.93	  		  		  		  	
							
		  		  		  	3,712.24	  	3,712.24	  	0.07	  	N 0.0 0.’ 4.” 0,056 mil E
							
	 H
	  	1,376,702.00	  	1,176,488.00	  		  		  		  	
							
		  		  		  	4,480.92	  	0.09	  	-4,480.92	  	N 89° 59’ 55” 0,949 mil W
							
	 I
	  	1,376,702.09	  	1,172,007.08	  		  		  		  	
							
		  		  		  	693.61	  	-693.61	  	-0.01	  	S 0.0 0.’ 4.” 0,163 mil W
							
	 J
	  	1,376,008.48	  	1,172,007.07	  		  		  		  	
							
		  		  		  	7,004.95	  	0.14	  	-7,004.95	  	N 89° 59’ 55” 0,936 mil W
							
	 K
	  	1,3 76,008.61	  	1,165,002.12	  		  		  		  	
							
		  		  		  	6,008.61	  	-6,008.61	  	-2.12	  	S 0.° 1.’ 12” 0,672 mil W
							
	 L
	  	1,370,000.00	  	1,165,000.00	  		  		  		  	
							
		  		  		  	8,000.00	  	-8,000.00	  	0.00	  	SOUTH
							
	 M
	  	1,362,000.00	  	1,165,000.00	  		  		  		  	
							
		  		  		  	15,000.00	  	0.00	  	-15,000.00	  	WEST
							
	 A
	  	1,362,000.00	  	1,150,000.00	  		  		  		  	

 POLYGON AREA (Ha.): 36.193,7546 

 APPENDIX A 
 

 
  

 APPENDIX B – MINIMUM EXPLORATORY PROGRAM 
 APPENDIX TO THE “CARACOLI” SECTOR EXPLOITATION AND PRODUCTION CONTRACT 
 The CONTRACTOR commits to carry out, as a minimum, the following Exploratory program: 
 Phase 1: (Duration: 12 months): 
  

	 	•	 	Acquisition and interpretation of 90 kilometers of 2D seismics. 

  

	 	•	 	Re-processing or and re-interpretation of two hundred and then kilometers of 2D seismics. 

  

	 	•	 	Post-mortem on four (4) existing wells in the area, including petrophysical evaluation (Chibagra 1 and 2, Tasajero 1, and Santi-1). 

 Phase 2: (Duration: 12 months each): 
  

	 	•	 	Drilling of an exploratory well per phase, covering the geological column in total. 

 APPENDIX C – MODEL OF THE LETTER OF CREDIT 
 APPENDIX TO THE “CARACOLI” SECTOR EXPLOITATION AND PRODUCTION CONTRACT 
  

	LETTER	OF CREDIT No. :
                                        
                                        
                                        
             

  

	DATE	ISSUED :
                                        
                                        
                                        
                             

 DATE DUE: :_Duration of the corresponding phase plus three (3) months 
 NOMINAL AMOUNT :
                                     (US $
                ) 
 EMITTING BANK :
(                 Name of Issuing Bank                 ) 
 BENEFICIARY : Agencia Nacional de Hidrocarburos – ANH 
 ORDEROR :
(                 Name of the Company                 ) 
 NAME OF THE CONTRACT 
 This document is to
notify you by order and to the account of (            Name of the
Company                        ) hereinafter referred to as the CONTRACTOR, we have issued on your favor this irrevocable
standby letter of credit, for the sum of                          United States of America Dollars
(US$                        ), in order to guarantee the compliance with and the correct performance or any or all of the
obligations of Phase                          of the Period of Exploration, which has a
                         duration, and such other activities inherent to such obligations, pursuant to the CONTRACT OF
EXPLORATION AND PRODUCTION XXXXXXXXXXXXXXXXX XXXXXXXXXX, entered into between the CONTRACTOR, and the ANH, on
                        , hereinafter, THE CONTRACT. 
 Shall it be understood that the responsibility of (            Name of Issuing
Bank            ) derived from this standby letter of credit is limited solely to the aforementioned amount of Colombian legal tender. 
 In case of failure by the CONTRACTOR to comply with any or all of its obligations and other activities inherent to such obligations deriving from the CONTRACT, as per
the first paragraph of this stand-by letter of credit, hereinafter GUARANTEEDOBLIGATIONS, the Beneficiary shall notify such non compliance in writing to (            name of issuing
bank            ) in his offices at             , within the validity of this letter of credit. In the same date of
our receipt of such notice, we shall proceed to the unconditional payment to the order of the beneficiary of the amounts claimed by it, charged to this letter of credit, without exceeding the total guaranteed amount in any case. 
 If the aforementioned non compliance notification is not sent within the validity of this letter of credit, our responsibility derived from it shall cease. 

Communication by which notification is issued to (            name of Issuing
Bank            ) regarding non compliance of GUARANTEED OBLIGATIONS shall be a document with appropriate signature by the Lawful Representative of ANH, or whoever should replace
him, in which the non compliance by the CONTRACTOR of the GUARANTEED OBLIGATIONS is declared, and payment of this letter of credit is requested. In such communication, the number of this letter of credit shall be quoted, as well as the amount used
of it, converted to Colombian legal tender at the Market Representative Rate in effect on the date such communication is sent to us, as per certificate issued by Colombian Banking Superintendent, or the entity replacing it to such effects.

 This document shall be governed by the “Uniform Rules and Customs Related to Documental Credits” (Last Revision) published by the International
Chamber of Commerce. 
  

	
	  

	Signature of Issuing Bank Legal Representative

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