Document:

EX-4.2

 Exhibit 4.2 
  

 
 ARCA biopharma, Inc., 

Computershare Inc. 
 and 

Computershare Trust Company, N.A. as 

Warrant Agent 
  

 
 Warrant Agency Agreement 

Dated as of February 3, 2014 

 WARRANT AGENCY AGREEMENT 

WARRANT AGENCY AGREEMENT, dated as of February 3, 2014 (“Agreement”), between ARCA biopharma, Inc., a Delaware corporation
(the “Company”), Computershare Inc., a Delaware corporation (“Computershare”), and its wholly-owned subsidiary, Computershare Trust Company, N.A., a federally chartered, limited purpose trust company (together with
Computershare, the “Warrant Agent”). 
 W I T N E S S E T H 

WHEREAS, pursuant to an offering by the Company of shares of common stock, par value $0.001 per share (the “Common Stock”),
and warrants to purchase Common Stock, pursuant to an effective registration statement on Form S-3, SEC File No. 333-172686 (the “Registration Statement”), the Company wishes to issue warrants (the “Warrants”)
in book entry form entitling the respective holders of the Warrants (the “Holders”, which term shall include a Holder’s transferees, successors and assigns) to purchase an aggregate of 1,279,057 shares of Common Stock upon
the terms and subject to the conditions hereinafter set forth (the “Offering”); 
 WHEREAS, the shares of Common Stock and
Warrants to be issued in connection with the Offering shall be immediately separable and will be issued separately, but will be purchased together in the Offering; and 

WHEREAS, the Company wishes the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with
the issuance, registration, transfer, exchange, exercise and replacement of the Warrants and, in the Warrant Agent’s capacity as the Company’s transfer agent, the delivery of the Warrant Shares. 

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

Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated: 

(a) “Affiliate” has the meaning ascribed to it in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). 
 (b) “Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which the New York Stock Exchange is authorized or required by law or other governmental action to close. 

(c) “Close of Business” on any given date means 5:00 p.m., New York City time, on such date; provided, however,
that if such date is not a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business Day. 
 (e)
“Person” means an individual, corporation, association, partnership, limited liability company, joint venture, trust, unincorporated organization, government or political subdivision thereof or governmental agency or other entity.

 (j) “Warrant Certificate” means a certificate in substantially the form attached as Exhibit 1 hereto,
representing such number of Warrant Shares as is indicated on the face thereof, provided that any reference to the delivery of a Warrant Certificate in this Agreement shall include delivery of notice from the Depository or a Participant (each as
defined below) of the transfer or exercise of Warrant in the form of a Book-Entry Warrant Certificate (as defined below). 
 (k)
“Warrant Shares” means the shares of Common Stock underlying the Warrants and issuable upon exercise of the Warrants. For purposes of clarity only, on the Issue Date, the number of Warrant Shares underlying each initial
Holder’s Warrant equals the number of shares of Common Stock purchased by such initial Holder in the Company’s offering pursuant to the Registration Statement multiplied by 0.25 (rounded down to the nearest whole Warrant
Share). 
 All other capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Warrant
Certificate. 
 Section 2. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the
Company in accordance with the terms and conditions hereof, and the Warrant Agent hereby accepts such appointment. The Company may from time to time appoint such Co-Warrant Agents as it may, in its sole discretion, deem necessary or desirable. 

  
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 Section 3. Book-Entry Warrant Certificates. 

(a) The Warrants shall be issuable in book entry (the “Book-Entry Warrant Certificates”). All of the Warrants shall initially
be represented by one or more Book-Entry Warrant Certificates deposited with The Depository Trust Company (the “Depository”) and registered in the name of Cede & Co., a nominee of the Depository, or as otherwise directed by
the Depository. Ownership of beneficial interests in the Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) the Depository or its nominee for each Book-Entry Warrant Certificate
or (ii) institutions that have accounts with the Depository (such institution, with respect to a Warrant in its account, a “Participant”). 

(b) If the Depository subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the
Warrant Agent regarding other arrangements for book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written
instructions to the Depository to deliver to the Warrant Agent for cancellation each Book-Entry Warrant Certificate, and the Company shall instruct the Warrant Agent to deliver to each Holder a Warrant Certificate. 

Section 4. Form of Warrant Certificates. The Warrant Certificate, together with the form of election to purchase Common Stock
(“Exercise Notice”) and the form of assignment to be printed on the reverse thereof, shall be substantially in the form of Exhibit 1 hereto. 

Section 5. Countersignature and Registration. The Warrant Certificates shall be executed on behalf of the Company by its Chief
Executive Officer, Chief Financial Officer or Vice President, either manually or by facsimile signature, and have affixed thereto the Company’s seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Warrant Certificates shall be countersigned by the Warrant Agent either manually or by facsimile signature and shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Warrant Certificates shall cease to be such officer of the Company before countersignature by the Warrant Agent and issuance and delivery by the Company, such Warrant Certificates,
nevertheless, may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person who signed such Warrant Certificate had not ceased to be such officer of the Company; and any Warrant Certificate may
be signed on behalf of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be a proper officer of the Company to sign such Warrant Certificate, although at the date of the execution of this Warrant
Agreement any such person was not such an officer. 
 The Warrant Agent will keep or cause to be kept, at one of its offices, or at the
office of one of its agents, books for registration and transfer of the Warrant Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Warrant Certificates, the number of warrants evidenced on
the face of each of such Warrant Certificate and the date of each of such Warrant Certificate. 
 The Warrant Agent will create a special
account for the issuance of Warrant Certificates. 
 Section 6. Transfer, Split Up, Combination and Exchange of Warrant
Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates. Subject to the provisions of the Warrant Certificate and the last sentence of this first paragraph of Section 6 and subject to applicable law, rules or regulations, or
any “stop transfer” instructions the Company may give to the Warrant Agent, at any time after the closing date of the Offering, and at or prior to the Close of Business on the Termination Date (as such term is hereinafter defined), any
Warrant Certificate or Warrant Certificates or Book-Entry Warrant Certificate or Book-Entry Warrant Certificates may be transferred, split up, combined or exchanged for another Warrant Certificate or Warrant Certificates or Book-Entry Warrant
Certificate or Book-Entry Warrant Certificates, entitling the Holder to purchase a like number of shares of Common Stock as the Warrant Certificate or Warrant Certificates or Book-Entry Warrant Certificate or Book-Entry Warrant Certificates
surrendered then entitled such Holder to purchase. Any Holder desiring to transfer, split up, combine or exchange any Warrant Certificate or Book-Entry Warrant Certificate shall make such request in writing delivered to the Warrant Agent, and shall
surrender the Warrant Certificate or Warrant Certificates to be transferred, split up, combined or exchanged at the principal office of the Warrant Agent, provided that no such surrender is applicable to the Holder of a Book-Entry Warrant
Certificate. Any requested transfer of Warrants, whether in book-entry form or certificate form, shall be accompanied by evidence of authority of the party making such request, which evidence shall include a signature guarantee from an eligible
guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association, and any other reasonable evidence of authority that may be required by the Warrant Agent. Thereupon the Warrant Agent shall,
subject to the last sentence of this first paragraph of Section 6, countersign and deliver to the Person entitled thereto a Warrant Certificate or Warrant Certificates, as the case may be, as so requested. The Company may

  
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require payment from the Holder of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Warrant
Certificates. The Company shall compensate the Warrant Agent per the fee schedule mutually agreed upon by the parties hereto and provided separately on the date hereof. 

Upon receipt by the Warrant Agent of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of a Warrant
Certificate, which evidence shall include an affidavit of loss, or in the case of mutilated certificates, the certificate or portion thereof remaining, and, in case of loss, theft or destruction, of indemnity or security in customary form and amount
which shall include a corporate bond of indemnity satisfactory to the Warrant Agent, and satisfaction of any other reasonable requirements established by Section 8-405 of the Uniform Commercial Code as in effect in the State of Delaware, and
reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant Agent and cancellation of the Warrant Certificate if mutilated, the Company will make and deliver a new Warrant
Certificate of like tenor to the Warrant Agent for delivery to the Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated. 

Section 7. Exercise of Warrants; Exercise Price; Termination Date. 

(a) The Warrants shall be exercisable commencing on the Issue Date. The Warrants shall cease to be exercisable and shall terminate and become
void, and all rights thereunder and under this Agreement shall cease, at or prior to the Close of Business on the Termination Date. Subject to the foregoing and to Section 7(b) below, the Holder of a Warrant may exercise the Warrant in whole or
in part upon surrender of the Warrant Certificate, if required, with the executed Exercise Notice and payment of the Exercise Price, which may be made, at the option of the holder, by wire transfer or by certified or official bank check in United
States dollars, to Computershare at the principal office of the Warrant Agent or to the office of one of its agents as may be designated by the Warrant Agent from time to time. In the case of the Holder of a Book-Entry Warrant Certificate, the
Holder shall deliver the executed Exercise Notice and the payment of the Exercise Price as described herein. The Company acknowledges that the bank accounts maintained by Computershare in connection with the services provided under this Agreement
will be in its name and that Computershare may receive investment earnings in connection with the investment at Computershare risk and for its benefit of funds held in those accounts from time to time. Neither the Company nor the Holders will
receive interest on any deposits or Exercise Price. 
 (b) Upon receipt of an Exercise Notice for a Cashless Exercise, the Warrant Agent
will promptly calculate and transmit to the Company the number of Warrant Shares issuable in connection with such Cashless Exercise and deliver a copy of the Exercise Notice to the Company, which shall approve such number of Warrant Shares issuable
in connection with such Cashless Exercise. 
 (c) Upon the Warrant Agent’s receipt of a Warrant Certificate at or prior to the Close of
Business on the Termination Date set forth in such Warrant Certificate, with the executed Exercise Notice, accompanied by payment of the Exercise Price for the shares to be purchased (other than in the case of a Cashless Exercise) and an amount
equal to any applicable tax, governmental charge or expense reimbursement referred to in Section 6 in cash, or by certified check or bank draft payable to the order of the Company (or, in the case of the holder of a Book-Entry Warrant
Certificate, the delivery of the executed Exercise Notice and the payment of the Exercise Price (other than in the case of a Cashless Exercise) and any other applicable amounts as set forth herein), the Warrant Agent shall cause the Warrant Shares
underlying such Warrant Certificate or Book-Entry Warrant Certificate to be delivered to or upon the order of the Holder of such Warrant Certificate or Book-Entry Warrant Certificate, registered in such name or names as may be designated by such
Holder, no later than the Warrant Share Delivery Date. If the Company is then a participant in the DWAC system of the Depository and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or
resale of the Warrant Shares by Holder or (B) the Warrant is being exercised via Cashless Exercise, then the certificates for Warrant Shares shall be transmitted by the Warrant Agent to the Holder by crediting the account of the Holder’s
broker with the Depository through its DWAC system. For the avoidance of doubt, if the Company becomes obligated to pay any amounts to any Holders pursuant to Section 2(d)(iv) of the Warrant Certificate, such obligation shall be solely that of
the Company and not that of the Warrant Agent. Notwithstanding anything else to the contrary in this Agreement, except in the case of a Cashless Exercise, if any Holder fails to duly deliver payment to the Warrant Agent of an amount equal to the
aggregate Exercise Price of the Warrant Shares to be purchased upon exercise of such Holder’s Warrant as set forth in Section 7(a) hereof, the Warrant Agent will not obligated to deliver certificates representing any such Warrant Shares
(via DWAC or otherwise) until following receipt of such payment, and the applicable Warrant Share Delivery Date shall be deemed extended by one day for each day (or part thereof) until such payment is delivered to the Warrant Agent. 

(d) The Warrant Agent shall deposit all funds received by it in payment of the Exercise Price for all Warrants in the account of the Company
maintained with the Warrant Agent for such purpose (or to such other account as directed by the Company in writing) and shall advise the Company via telephone at the end of each day on which funds for the exercise of any Warrant are received of the
amount so deposited to its account. The Warrant Agent shall promptly confirm such telephonic advice to the Company in writing. 

  
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 (e) In case the Holder of any Warrant Certificate shall exercise fewer than all Warrants
evidenced thereby, a new Warrant Certificate evidencing the number of Warrants equivalent to the number of Warrants remaining unexercised may be issued by the Warrant Agent to the Holder of such Warrant Certificate or to his duly authorized assigns
in accordance with Section 2(d)(ii) of the Warrant Certificate, subject to the provisions of Sections 6 and 15 hereof. 

Section 8. Cancellation and Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Warrant Agent for cancellation or in canceled form, or, if surrendered to the Warrant Agent, shall be canceled by it, and
no Warrant Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Warrant Agent for cancellation and retirement, and the Warrant Agent shall so cancel
and retire, any other Warrant Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Warrant Agent shall deliver all canceled Warrant Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Warrant Certificates, and in such case shall deliver a certificate of destruction thereof to the Company, subject to any applicable law, rule or regulation requiring the Warrant Agent to retain such canceled
certificates. 
 Section 9. Certain Representations; Reservation and Availability of Shares of Common Stock or Cash. 

(a) This Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery
hereof by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, and the Warrants have been duly authorized, executed and issued by the Company and, assuming
due authentication thereof by the Warrant Agent pursuant hereto and payment therefor by the Holders as provided in the Registration Statement, constitute valid and legally binding obligations of the Company enforceable against the Company in
accordance with their terms and entitled to the benefits hereof; in each case except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights
generally or by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law). 

(b) As of the date hereof, the authorized capital stock of the Company consists of (i) 100,000,000 shares of Common Stock, of which
15,842,812 shares of Common Stock are issued and outstanding, 1,279,057 shares of Common Stock are reserved for issuance upon exercise of the Warrants; up to 9,252,677 shares issuable upon the exercise and/or vesting of other outstanding warrants,
options and restricted stock units and 1,093,131 shares of Common Stock are reserved for issuance under the Company’s 2013 Equity Incentive Plan and (ii) 5,000,000 shares of preferred stock, $0.001 par value per share, of which 135,000 are
designated Series A Convertible Preferred Stock, no shares of which are issued and outstanding. There are no other outstanding obligations, warrants, options or other rights to subscribe for or purchase from the Company any class of capital stock of
the Company. 
 (c) The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued
shares of Common Stock or its authorized and issued shares of Common Stock held in its treasury, free from preemptive rights, the number of shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants.

 (d) The Warrant Agent will create a special account for the issuance of Common Stock upon the exercise of Warrants. 

(e) The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the original issuance or delivery of the Warrant Certificates or certificates evidencing Common Stock upon exercise of the Warrants. The Company shall not, however, be required to pay any tax or governmental charge
which may be payable in respect of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance or delivery of certificates for Common Stock in a name other than that of the Holder of the Warrant Certificate evidencing
Warrants surrendered for exercise or to issue or deliver any certificate for shares of Common Stock upon the exercise of any Warrants until any such tax or governmental charge shall have been paid (any such tax or governmental charge being payable
by the holder of such Warrant Certificate at the time of surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax or governmental charge is due. 

Section 10. Common Stock Record Date. Each Person in whose name any certificate for shares of Common Stock is issued (or to whose
broker’s account is credited shares of Common Stock through the DWAC system) upon the exercise of Warrants shall for all purposes be deemed to have become the holder of record for the Common Stock represented thereby on, and such certificate
shall be dated, the date upon which the Warrant Certificate evidencing such Warrant was duly surrendered (but only if required herein) and payment of the Exercise Price (and any applicable transfer taxes) and submission of the Exercise Notice was
made; provided, however, that if the date of such surrender (if applicable), payment and submission is a date upon which the Common Stock transfer books of the Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next succeeding day on which the Common Stock transfer books of the Company are open. 

  
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 Section 11. Adjustment of Exercise Price, Number of Shares of Common Stock or Number of
the Company Warrants. The Exercise Price, the number of shares covered by each Warrant and the number of Warrants outstanding are subject to adjustment from time to time as provided in Section 3 of the Warrant Certificate. In the event that
at any time, as a result of an adjustment made pursuant to Section 3(a) of the Warrant Certificate, the holder of any Warrant thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than shares of
Common Stock, thereafter the number of such other shares so receivable upon exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the
shares contained in Sections 3(a) and (b) of the Warrant Certificate, and the provisions of Sections 7, 9 and 13 of this Agreement with respect to the shares of Common Stock shall apply on like terms to any such other shares. All Warrants
originally issued by the Company subsequent to any adjustment made to the Exercise Price pursuant to the Warrant Certificate shall evidence the right to purchase, at the adjusted Exercise Price, the number of shares of Common Stock purchasable from
time to time hereunder upon exercise of the Warrants, all subject to further adjustment as provided herein. The Company agrees that it will not, by amendment of its Certificate of Incorporation or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act, avoid or seek to avoid the observance or performance of any of the covenants, stipulations or conditions to be observed or performed hereunder by the Company. 

Section 12. Certification of Adjusted Exercise Price or Number of Shares of Common Stock. Whenever the Exercise Price or the
number of shares of Common Stock issuable upon the exercise of each Warrant is adjusted as provided in Section 11 or 13, the Company shall (a) promptly prepare a certificate setting forth the Exercise Price of each Warrant as so adjusted,
and a brief statement of the facts accounting for such adjustment, (b) promptly file with the Warrant Agent and with each transfer agent for the Common Stock a copy of such certificate and (c) instruct the Warrant Agent to mail a brief
summary thereof to each holder of a Warrant Certificate. 
 Section 14. Fractional Shares of Common Stock. 

(a) The Company shall not issue fractions of Warrants or distribute Warrant Certificates which evidence fractional Warrants. Whenever any
fractional Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution shall reflect a rounding of such fraction to the nearest whole Warrant (rounded down). 

(b) The Company shall not issue fractions of shares of Common Stock upon exercise of Warrants or distribute stock certificates which evidence
fractional shares of Common Stock. Whenever any fraction of a share of Common Stock would otherwise be required to be issued or distributed, the actual issuance or distribution in respect thereof shall be made in accordance with Section 2(d)(v)
of the Warrant Certificate. 
 Section 15. [Reserved] 

Section 16. [Reserved] 

Section 17. [Reserved] 

Section 18. Concerning the Warrant Agent. The Company agrees to pay to the Warrant Agent, pursuant to the fee schedule mutually
agreed upon by the parties hereto and provided separately on the date hereof, for all services rendered by it hereunder and, from time to time, its reasonable expenses and counsel fees and other disbursements actually incurred in the administration
and execution of this Agreement and the exercise and performance of its duties hereunder. 
 The Company covenants and agrees to indemnify
and to hold the Warrant Agent harmless against any costs, expenses (including reasonable fees of its legal counsel), losses or damages, which may be paid, incurred or suffered by or to which it may become subject, arising from or out of, directly or
indirectly, any claims or liability resulting from its actions as Warrant Agent pursuant hereto; provided, that such covenant and agreement does not extend to, and the Warrant Agent shall not be indemnified with respect to, such costs, expenses,
losses and damages incurred or suffered by the Warrant Agent as a result of, or arising out of, its gross negligence, bad faith, or willful misconduct. 

The Warrant Agent shall be responsible for and shall indemnify and hold the Company harmless from and against any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liability arising out of or attributable to the Warrant Agent’s 

  
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refusal or failure to comply with the terms of this Agreement, or which arise out of the Warrant Agent’s gross negligence, bad faith or willful misconduct or which arise out of the breach of
any representation or warranty of the Warrant Agent hereunder, for which the Warrant Agent is not entitled to indemnification under this Agreement; provided, however, that Warrant Agent’s aggregate liability during any term of this Agreement
with respect to, arising from, or arising in connection with this Agreement, or from all services provided or omitted to be provided under this Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, the
amounts paid under this Agreement by the Company to Warrant Agent as fees and charges, but not including reimbursable expenses. 
 In order
that the indemnification provisions contained in this Section 18 shall apply, upon the assertion of a claim for which one party may be required to indemnify the other, the party seeking indemnification shall promptly notify the other party of
such assertion, and shall keep the other party advised with respect to all developments concerning such claim. The indemnifying party shall have the option to participate with the indemnified party in the defense of such claim or to defend against
said claim in its own name or the name of the indemnified party. The indemnified party shall in no case confess any claim or make any compromise in any case in which the indemnifying party may be required to indemnify it except with the indemnifying
party’s prior written consent. 
 Neither party to this Agreement shall be liable to the other party for any consequential, indirect,
special or incidental damages under any provisions of this Agreement or for any consequential, indirect, penal, special or incidental damages arising out of any act or failure to act hereunder even if that party has been advised of or has foreseen
the possibility of such damages. 
 Notwithstanding anything contained herein to the contrary, the rights and obligations of the parties set
forth in this Section 18 shall survive termination of this Agreement or the resignation or removal of the Warrant Agent. 

Section 19. Purchase or Consolidation or Change of Name of Warrant Agent. Any corporation into which the Warrant Agent or any
successor Warrant Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Warrant Agent or any successor Warrant Agent shall be party, or any corporation succeeding to the
corporate trust business of the Warrant Agent or any successor Warrant Agent, shall be the successor to the Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor Warrant Agent under the provisions of Section 21. In case at the time such successor Warrant Agent shall succeed to the agency created by this Agreement any of the
Warrant Certificates shall have been countersigned but not delivered, any such successor Warrant Agent may adopt the countersignature of the predecessor Warrant Agent and deliver such Warrant Certificates so countersigned; and in case at that time
any of the Warrant Certificates shall not have been countersigned, any successor Warrant Agent may countersign such Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all
such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement. 
 In case at any
time the name of the Warrant Agent shall be changed and at such time any of the Warrant Certificates shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver Warrant
Certificates so countersigned; and in case at that time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such Warrant Certificates either in its prior name or in its changed name; and in all such
cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement. 
 Section 20.
Duties of Warrant Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company, by its acceptance hereof, shall be bound: 

(a) The Warrant Agent may consult with legal counsel reasonably acceptable to the Company (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted by it in good faith and in accordance with such opinion. 

(b) Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chief Executive Officer, Chief Financial Officer or Vice President of the Company; and such certificate shall be full authentication to the Warrant Agent for any action taken or suffered in good faith by it
under the provisions of this Agreement in reliance upon such certificate. 

  
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 (c) Subject to the limitation set forth in Section 18, the Warrant Agent shall be liable
hereunder only for its own gross negligence, bad faith or willful misconduct, or for a breach by it of this Agreement. 
 (d) The Warrant
Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Warrant Certificates (except its countersignature thereof) by the Company or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the Company only. 
 (e) The Warrant Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Warrant Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant Certificate; nor shall it be responsible for the adjustment of the Exercise Price or the
making of any change in the number of shares of Common Stock required under the provisions of Section 11 or 13 or responsible for the manner, method or amount of any such change or the ascertaining of the existence of facts that would require
any such adjustment or change (except with respect to the exercise of Warrants evidenced by Warrant Certificates after actual notice of any adjustment of the Exercise Price); nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant Certificate or as to whether any shares of Common Stock will, when issued, be duly authorized, validly issued, fully
paid and nonassessable. 
 (f) Each party hereto agrees that it will perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the other party hereto for the carrying out or performing by any party of the provisions of this Agreement. 

(g) The Warrant Agent is hereby authorized to accept instructions with respect to the performance of its duties hereunder from the Chief
Executive Officer, Chief Financial Officer or Vice President of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable and shall be indemnified and held harmless for any action
taken or suffered to be taken by it in good faith in accordance with instructions of any such officer, provided Warrant Agent carries out such instructions without gross negligence, bad faith or willful misconduct. 

(h) The Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or
other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under
this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity. 

(i) The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorney or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof. 
 Section 21.
Change of Warrant Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing mailed to the Company and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Warrant Certificates by first-class mail. The Company may remove the Warrant Agent or any successor Warrant Agent upon 30 days’ notice in writing, mailed to the Warrant Agent or successor Warrant Agent, as the
case may be, and to each transfer agent of the Common Stock by registered or certified mail, and to the holders of the Warrant Certificates by first-class mail. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Warrant Agent or by the holder of a Warrant Certificate (who shall, with such notice, submit his Warrant Certificate for inspection by the Company), then the Holder of any Warrant Certificate may apply to any court of
competent jurisdiction for the appointment of a new Warrant Agent. Any successor Warrant Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States or of a
state thereof, in good standing, which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Warrant Agent a
combined capital and surplus of at least $50,000,000. After appointment, the successor Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent without further act or
deed; but the predecessor Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the 

  
 8 

 
effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Warrant Agent and each transfer agent of the Common Stock, and mail a notice thereof
in writing to the Holders of the Warrant Certificates. However, failure to give any notice provided for in this Section 21, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Warrant Agent or
the appointment of the successor Warrant Agent, as the case may be. 
 Section 22. Issuance of New Warrant Certificates.
Notwithstanding any of the provisions of this Agreement or of the Warrants to the contrary, the Company may, at its option, issue new Warrant Certificates evidencing Warrants in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Exercise Price per share and the number or kind or class of shares of stock or other securities or property purchasable under the several Warrant Certificates made in accordance with the provisions of this Agreement. 

Section 23. Notices. Notices or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or by the
Holder of any Warrant Certificate to or on the Company, (ii) subject to the provisions of Section 21, by the Company or by the Holder of any Warrant Certificate to or on the Warrant Agent or (iii) by the Company or the Warrant Agent
to the Holder of any Warrant Certificate, shall be deemed given (x) on the date delivered, if delivered personally, (y) on the first Business Day following the deposit thereof with Federal Express or another recognized overnight courier,
if sent by Federal Express or another recognized overnight courier, and (z) on the fourth Business Day following the mailing thereof with postage prepaid, if mailed by registered or certified mail (return receipt requested), in each case to the
parties at the following addresses (or at such other address for a party as shall be specified by like notice): 
  

	 	(a)	If to the Company, to: 

 ARCA biopharma, Inc. 

11080 CirclePoint Rd. 
 Suite
140 
 Westminster, CO 80020 

Attention: Patrick M. Wheeler, Chief Financial Officer 

Fax: (720) 208-9261 
  

	 	(b)	If to the Warrant Agent, to: 

 Computershare Trust Company, N.A. 

PO Box 43070 
 Providence, RI
02940 
 Attention: Edward Eismont 

Fax: (201) 680-4665 
 (c)
If to the Holder of any Warrant Certificate, to the address of such holder as shown on the registry books of the Company. Any notice required to be delivered by the Company to the Holder of any Warrant may be given by the Warrant Agent on behalf of
the Company. 
 Section 24. Supplements and Amendments. 

(a) The Company and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any Holders of Warrant
Certificates in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or to make any other provisions with regard to matters or questions arising
hereunder which the Company and the Warrant Agent may deem necessary or desirable and which shall not adversely affect the interests of the Holders of the Warrants Certificates. 

(b) In addition to the foregoing, with the consent of Holders of Warrants entitled, upon exercise thereof, to receive not less than a majority
of the shares of Common Stock issuable thereunder, the Company and the Warrant Agent may modify this Agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Warrant Agreement or
modifying in any manner the rights of the holders of the Warrant Certificates; provided, however, that no modification of the terms (including but not limited to the adjustments described in Section 11) upon which the Warrants are
exercisable or reducing the 

  
 9 

 
percentage required for consent to modification of this Agreement may be made without the consent of the holder of each outstanding warrant certificate affected thereby. As a condition precedent
to the Warrant Agent’s execution of any amendment, the Company shall deliver to the Warrant Agent a certificate from a duly authorized officer of the Company that states that the proposed amendment complies with the terms of this
Section 24. 
 Section 25. Successors. All covenants and provisions of this Agreement by or for the benefit of the Company
or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 
 Section 26.
Benefits of this Agreement. Nothing in this Agreement shall be construed to give any Person other than the Company, the Holders of Warrant Certificates and the Warrant Agent any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates. 

Section 27. Governing Law. This Agreement and each Warrant Certificate issued hereunder shall be governed by, and construed in
accordance with, the laws of the State of New York without giving effect to the conflicts of law principles thereof. 
 Section 28.
Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

 Section 29. Captions. The captions of the sections of this Agreement have been inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof. 
 Section 30. Information. The Company agrees to
promptly provide the Holders of the Warrants the information it is required to provide to the holders of the Common Stock. 

Section 31. Force Majeure. Notwithstanding anything to the contrary contained herein, Warrant Agent shall not be liable for any
delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or
loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest. 

  
 10 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the
day and year first above written. 
  

			
	ARCA BIOPHARMA, INC.
		
	By:	 	/s/ Patrick M. Wheeler
	Name:	 	Patrick M. Wheeler
	Title:	 	Chief Financial Officer

 
			
	
	COMPUTERSHARE INC. and COMPUTERSHARE TRUST COMPANY, N.A., collectively.
		
	By:	 	/s/ Thomas Borbely
	Name:	 	Thomas Borbely
	Title:	 	Manager, Corporate Actions

  
 11 

 Exhibit 1: Form of Warrant Certificate 

COMMON STOCK PURCHASE WARRANT 

ARCA BIOPHARMA, INC. 
  

			
	Warrant Shares: [*]	 	Issue Date: February     , 2014

 THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received,
                     (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the Issue Date and on or prior to the close of business on the five (5) year anniversary of the Issue Date (the “Termination Date”) but not thereafter, to subscribe for and
purchase from ARCA biopharma, Inc., a Delaware corporation (the “Company”), up to [*] shares (the “Warrant Shares”) of the Company’s common stock, par value $0.001 per share (“Common
Stock”). For purposes of clarity only, on the Issue Date, the number of Warrant Shares underlying this Warrant equals the number of shares of Common Stock purchased by the initial Holder in the Company’s offering pursuant to a
registration statement on Form S-3 (File No. 333-172686) multiplied by 0.25 (rounded down to the nearest whole Warrant Share). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise
Price, as defined in Section 2(b). 
 Section 1. Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Warrant Agency Agreement between the Company and Computershare Trust Company, N.A. (the “Warrant Agent”), dated as of February 3, 2014 (the “Warrant Agency
Agreement”). 
 Section 2. Exercise. 

a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part,
at any time or times on or after the Issue Date and on or before the Termination Date by delivery (whether via facsimile or otherwise) to the Company (or the Warrant Agent or such other office or agency of the Company as it may designate by notice
in writing to the registered Holder at the address of the Holder appearing on the books of the Company or the Warrant Agent) of a duly executed copy of the Notice of Exercise form annexed hereto. No ink-original Notice of Exercise shall be required,
nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required. Within two (2) Trading Days following an exercise of this Warrant as aforesaid (the “Price Delivery
Date”), the Holder shall deliver payment to the Warrant Agent or the Company of an amount equal to the aggregate Exercise Price of the Warrant Shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank
or, if available, pursuant to the Cashless Exercise procedure specified in Section 2(c) below. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company or the Warrant
Agent until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company or the Warrant Agent for cancellation within

 
three (3) Trading Days after the date the final Notice of Exercise is delivered to the Company or Warrant Agent. Partial exercises of this Warrant resulting in purchases of a portion of the
total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company
or the Warrant Agent shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company or the Warrant Agent shall deliver any objection to any Notice of Exercise form within 1 Business Day of receipt
of the applicable Notice of Exercise. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the
number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof. 

b) Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $2.125, subject to
adjustment as provided hereunder (the “Exercise Price”). 
 c) Cashless Exercise. If at the time of
exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for, the issuance of the Warrant Shares to the Holder, then this Warrant may only be exercised, in whole or in part, at
such time by means of a “cashless exercise” (a “Cashless Exercise”) in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by
(A), where: 
 (A) = the VWAP on the Trading Day immediately preceding the date on which Holder elects to exercise this Warrant by means of a
Cashless Exercise, as set forth in the applicable Notice of Exercise; 
 (B) = the Exercise Price of this Warrant, as adjusted hereunder; and

 (X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if
such exercise were by means of a cash exercise at the Exercise Price rather than a Cashless Exercise. 
 “Trading Day” means
a day on which the principal Trading Market is open for trading. 
 “Trading Market” means any of the following markets or
exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any
of the foregoing). 
 “VWAP” means, for any date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common

 
Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time), (b) if the OTC Bulletin Board is
not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and
if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the
Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and
reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company. 

  
 -14- 

 d) Mechanics of Exercise. 

i. Delivery of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the
Warrant Agent to the Holder by crediting the account of the Holder’s prime broker with The Depository Trust Company (“DTC”) through its Deposit/Withdrawal at Custodian (“DWAC”) system if the Company is then a
participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to Holder or (B) this Warrant is being exercised via Cashless Exercise, and otherwise by physical delivery
to the address specified by the Holder in the Notice of Exercise by the date that is three (3) Trading Days after the receipt by the Company or the Warrant Agent of the Notice of Exercise (provided that payment of the Exercise Price has then
been received by the Company or the Warrant Agent) (such date, the “Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised upon delivery of the Notice of Exercise and payment of the Exercise Price. The
Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised.
Notwithstanding anything else to the contrary in this Warrant, if the Holder fails to duly deliver payment to the Company or the Warrant Agent of an amount equal to the aggregate Exercise Price of the Warrant Shares to be purchased upon exercise of
this Warrant by the applicable Price Delivery Date as set forth in Section 2(a) hereof, the Company will not obligated to deliver or cause the Warrant Agent to deliver certificates representing any such Warrant Shares (via DWAC or otherwise)
until following receipt of such payment, and the applicable Warrant Share Delivery Date shall be deemed extended by one day for each day (or part thereof) that after the Price Delivery Date until such payment is delivered to the Company or the
Warrant Agent. 
 ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the
Company shall (or shall direct the Warrant Agent to), at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant
evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant. 

iii. Rescission Rights. If the Company fails to cause the Warrant Agent to transmit to the Holder a certificate or the
certificates representing the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then, the Holder will have the right to rescind such exercise. 

  
 -15- 

 iv. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon
Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Warrant Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to an exercise on or before
the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (or shall direct the Warrant Agent to), within three (3) Trading Days
after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so
purchased (the “Buy-In Price”), at which point the Company’s and the Warrant Agent’s obligation to deliver such certificate (and to issue such Warrant Shares or credit such Holder’s balance account with DTC) shall
terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Warrant Shares or credit such Holder’s balance account with DTC and pay cash to the Holder in an amount equal to the
excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the VWAP on the date of exercise. 

v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the
exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall (or shall direct the Warrant Agent to), at its election, either pay a cash adjustment in respect
of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round (up or down) to the nearest whole share. 

vi. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder
for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name
or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company or the Warrant Agent may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. 

  
 -16- 

 vii. Closing of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof. 
 e)
Holder’s Exercise Limitations. Notwithstanding anything to the contrary contained in this Warrant, this Warrant shall not be exercisable by the Holder hereof to the extent (but only to the extent) that the Holder or any of its Affiliates
would beneficially own in excess of 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant (the “Maximum
Percentage”). The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Maximum Percentage provisions of this Section 2(e), provided that the Maximum Percentage in no event exceeds 9.99% of
the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any
such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. For purposes of this Section 2(e), the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates shall include the number of Warrant Shares which are subject to the Notice of Exercise with respect to which such determination is being made, but shall exclude the number of shares of Common Stock
which are issuable upon (i) exercise of the remaining, unexercised portion of this Warrant and beneficially owned by the Holder or any of its Affiliates, and (ii) exercise or conversion of the unexercised or unconverted portion of any
other securities of the Company beneficially owned by the Holder or any of its Affiliates that are subject to a limitation on conversion or exercise similar to the limitation contained herein. To the extent the above limitation applies, the
determination of whether this Warrant shall be exercisable (vis-à-vis other convertible, exercisable or exchangeable securities owned by the Holder or any of its Affiliates) and of which such securities shall be exercisable (as among all such
securities owned by the Holder) shall, subject to such Maximum Percentage limitation, be determined by the Holder, and the Company shall have no responsibility for determining the accuracy of the Holder’s determination. No prior inability to
exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. For the purposes of this paragraph, beneficial ownership
and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. The provisions of this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the
intended Maximum Percentage beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage limitation. The limitations contained in this paragraph shall
apply to a successor Holder of this Warrant. The holders of Common Stock shall be third party beneficiaries of this paragraph and the Company may not waive this paragraph without the consent of holders of a majority of its Common Stock. For any
reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and 

  
 -17- 

 
in writing to the Holder the number of shares of Common Stock then outstanding, including by virtue of any prior conversion or exercise of convertible or exercisable securities into Common Stock,
including, without limitation, pursuant to this Warrant. 
 Section 3. Certain Adjustments. 

a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock
dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common
Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into
a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company (collectively with the actions described in (i), (ii), (iii) and (iv), a “Share
Reorganization”), then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and
of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price
of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall
become effective immediately after the effective date in the case of a subdivision, combination or re-classification, but if the Company shall legally abandon any such dividend, distribution, subdivision,
combination or reclassification prior to effecting such action, no adjustment shall be made pursuant to this Section 3(a) in respect of such action. 

b) Pro Rata Distributions. If the Company, at any time while this Warrant is outstanding, shall distribute to all
holders of Common Stock (and not to the Holders) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than a Share Reorganization, then in each such case
the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the
VWAP determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date less the then per share fair market value at such record date of the portion of such assets or evidence of indebtedness so
distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith; provided that in no event shall the Exercise Price be increased as a result of the application of this Section 3(b).
Simultaneously with any adjustment to the Exercise Price pursuant to this Section 3(b), the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately 

  
 -18- 

 
prior to such adjustment (without regard to any limitations on exercise contained herein). In either case the adjustments shall be described in a statement provided to the Holder of the portion
of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such adjustments shall be made whenever any such distribution is made and shall become effective immediately after the record
date mentioned above, but if the Company shall legally abandon any such distribution prior to effecting such distribution, no adjustments shall be made pursuant to this Section 3(b) in respect of such action. 

c) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or
indirectly, in one or more related transactions effects any merger or consolidation with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition
of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly,
in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons
making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise
of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in
Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate
Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any
limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the
Alternate Consideration it receives upon any 

  
 -19- 

 
exercise of this Warrant following such Fundamental Transaction. Any such payment of such amount of such Alternative Consideration shall be made in the same form of consideration (whether
securities, cash or property) as is given to the holders of Common Stock in such Fundamental Transaction, and if multiple forms of consideration are given, the consideration shall be paid to the Holder in the same proportion as such consideration is
paid to the holders of Common Stock. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 3(c) and
insuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. 

d) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest whole
share, as the case may be. For purposes of this Section 3, any calculation of the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall not include treasury shares, if any. Notwithstanding anything to the
contrary in this Section 3, no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in such price; provided however, that any adjustments which by reason of
the immediately preceding sentence are not required to be made shall be carried forward and taken into account in any subsequent adjustment. In any case in which this Section 3 shall require that an adjustment in the Exercise Price be made
effective as of a record date for a specified event, if Holder exercises this Warrant after such record date, the Company may elect to defer, until the occurrence of such event, the issuance of the shares of Common Stock and other capital stock of
the Company in excess of the shares of Common Stock and other capital stock of the Company, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that in such case
the Company or the Warrant Agent shall deliver to Holder a due bill or other appropriate instrument evidencing Holder’s right to receive such additional shares and/or other capital securities upon the occurrence of the event requiring such
adjustment. 
 e) Notice to Holder. 

i. Adjustment to Exercise Price. Whenever the Exercise Price or number of Warrant Shares is adjusted pursuant to any
provision of this Section 3, the Company shall (or cause the Warrant Agent to) promptly mail to the Holder a notice setting forth the Exercise Price and number of Warrant Shares after such adjustment and setting forth a brief statement of the
facts requiring such adjustment. 
 ii. Notice to Allow Exercise by Holder. After the Issue Date and on or prior to
the Termination Date, if (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock,
(C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any 

  
 -20- 

 
class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to
which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company
shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant
Register, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the
Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall
not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event
triggering such notice except as may otherwise be expressly set forth herein. 
 Section 4. Transfer of Warrant. 

a) Transferability. Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder
(including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or the Warrant Agent (or other designated agent), together with a written
assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued. 

  
 -21- 

 b) New Warrants. Subject to and in accordance with Section 6 the
Warrant Agency Agreement, this Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company or the Warrant Agent (or other designated agent), together with a written notice specifying the
names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall
execute and deliver (or cause the Warrant Agent to deliver) a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the
initial issuance date set forth on the first page of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto. 

c) Warrant Register. This Warrant shall be issuable in book entry form (the “Book-Entry Warrant
Certificate”) and shall initially be represented by one or more Book-Entry Warrant Certificates deposited with the DTC and registered in the name of Cede & Co., a nominee of the DTC, or as otherwise directed by the DTC. Ownership
of beneficial interests in this Warrant shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) the DTC or its nominee for each Book-Entry Warrant Certificate or (ii) institutions that
have accounts with the DTC (the “Warrant Register”). If the DTC subsequently ceases to make its book-entry settlement system available for this Warrant, the Company may instruct the Warrant Agent regarding other arrangements for
book-entry settlement. In the event that this Warrant is not eligible for, or it is no longer necessary to have this Warrant available in, book-entry form, the Warrant Agent shall provide written instructions to the DTC to deliver to the Warrant
Agent for cancellation each Book-Entry Warrant Certificate, and the Company shall cause the Warrant Agent to deliver to the Holder a physical certificate in the form of this Warrant and the Company or the Warrant Agent shall, thereafter, register
this Warrant, upon records to be maintained by the Company for that purpose, in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. 

Section 5. Miscellaneous. 

a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or
other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i). 
 b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company or the Warrant Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of this Warrant or any
stock certificate relating to the Warrant Shares, and in case of loss, theft or 

  
 22 

 
destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver (or
cause the Warrant Agent to deliver) a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate. 

c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day. 

d) Authorized Shares. 

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant (without regard to any limitations on exercise contained herein). The Company further covenants
that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the
Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such issue). 
 Except and to the extent as waived or
consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares
above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be,
necessary to enable the Company to perform its obligations under this Warrant. 

  
 -23- 

 Before taking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof. 
 e) Governing Law. This Warrant shall be governed by, and construed in accordance with, the
laws of the State of New York without giving effect to the conflicts of law principles thereof. 
 f) Nonwaiver and
Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies. Without limiting any other
provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or
remedies hereunder. 
 g) Notices. Any notice, request or other document required or permitted to be given or
delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Warrant Agency Agreement. 

h) Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this
Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company. 
 i) Remedies. The Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason
of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate. 

j) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced
hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from
time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares. 
 k) Amendment. This
Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder. 

  
 -24- 

 l) Severability. Wherever possible, each provision of this Warrant shall
be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant. 
 m)
Confidentiality. The Holder agrees to keep confidential any proprietary information relating to the Company delivered by the Company or the Warrant Agent hereunder; provided that nothing herein shall prevent the Holder from disclosing such
information: (i) to any holder of Warrants or Warrant Shares, (ii) to any Affiliate of any holder of Warrants or Warrant Shares or any actual or potential transferee of the rights or obligations hereunder that agrees to be bound by this
Section 5(m), (iii) upon order, subpoena, or other process of any court or administrative agency or otherwise required by law, (iv) upon the request or demand of any regulatory agency or authority having jurisdiction over such party,
(v) which has been publicly disclosed without breach of any obligation to the Company, (vi) which has been obtained from any Person that is not a party hereto or an Affiliate of any such party without any breach of any obligation to the
Company, (vii) in connection with the exercise of any remedy, or the resolution of any dispute hereunder, (viii) to the legal counsel or certified public accountants for any holder of Warrants or Warrant Shares, or (ix) as otherwise
expressly contemplated by this Warrant. Notwithstanding the foregoing, the Company shall not provide material, non-public information or confidential or proprietary information to the Holder without such Holder’s written consent. 

n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose,
be deemed a part of this Warrant. 
 ******************** 

(Signature Pages Follow) 

  
 -25- 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto
duly authorized as of the date first above indicated. 
  

			
	ARCA BIOPHARMA, INC.
		
	By:	 	  

	Name:	 	Patrick M. Wheeler
	Title:	 	Chief Financial Officer

  
 -26- 

 NOTICE OF EXERCISE 

TO: ARCA BIOPHARMA, INC. 
 (1) The undersigned
hereby elects to purchase             Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if any. 
 (2) Payment shall take the form of (check applicable box): 

[            ] in lawful money of the United States; or 

[            ] (if permitted) the cancellation of such number of Warrant Shares as
is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the Cashless Exercise procedure set forth in subsection 2(c). 

(3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is
specified below: 
  
  

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to: 

 
  

 
  

 
  

[SIGNATURE OF HOLDER] 
  

			
	Name of Investing Entity:	 	  

	Signature of Authorized Signatory of Investing Entity:	 	  

	Name of Authorized Signatory:	 	  

	Title of Authorized Signatory:	 	  

	Date:	 	  

  
 -27- 

 ASSIGNMENT FORM 

(To assign the foregoing warrant, execute 

this form and supply required information. 

Do not use this form to exercise the warrant.) 

FOR VALUE RECEIVED, [            ] all of or
[            ] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to 
  

					
	  
	 	whose address is	  	
		
	
                         
                                         
                                         
                               .
	  	
		
	
                         
                                         
                                         
                                
	  	
			
	 Dated:
	 	                          ,     	  	

  

							
		  	 Holder’s Signature:
	  	
                  
                           
	  	
				
		  	 Holder’s Address:
	  	  
	  	
				
		  		  	  
	  	

 NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without
alteration or enlargement or any change whatsoever. 

  
 -28-EX-10.1

 Exhibit 10.1 

Execution Version 
  

 
  

INVESTMENT NUMBER 33781 

Loan Agreement 
 between

 VAALCO GABON (ETAME), INC. 

and 
 INTERNATIONAL
FINANCE CORPORATION 
 Dated January 30, 2014 
  

 
  

 TABLE OF CONTENTS 

 

							
	 Article or

Section
	 	 Item
	  	 Page No.
	 
	 ARTICLE I
	  	 	1	  
		
	 DEFINITIONS AND INTERPRETATION
	  	 	1	  
	 Section 1.01. General Definitions
	  	 	1	  
	 Section 1.02. Financial Definitions
	  	 	25	  
	 Section 1.03. Financial Calculations
	  	 	36	  
	 Section 1.04. Interpretation
	  	 	36	  
	 Section 1.05. Business Day Adjustment
	  	 	37	  
		
	 ARTICLE II
	  	 	37	  
		
	 THE PROJECT, PROJECT COST AND
FINANCIAL PLAN
	  	 	37	  
	 Section 2.01. The Project
	  	 	37	  
		
	 ARTICLE III
	  	 	37	  
		
	 THE FACILITY
	  	 	37	  
	 Section 3.01. The Facility
	  	 	37	  
	 Section 3.02. Loan Procedure
	  	 	38	  
	 Section 3.03. Interest
	  	 	39	  
	 Section 3.04. Default Rate Interest
	  	 	41	  
	 Section 3.05. Repayment
	  	 	41	  
	 Section 3.06. Prepayment
	  	 	42	  
	 Section 3.07. Fees
	  	 	42	  
	 Section 3.08. Currency and Place of Payments
	  	 	43	  
	 Section 3.09. Allocation of Partial Payments
	  	 	44	  
	 Section 3.10. Increased Costs
	  	 	44	  
	 Section 3.11. Unwinding Costs
	  	 	44	  
	 Section 3.12. Suspension or Cancellation by IFC
	  	 	45	  
	 Section 3.13. Cancellation by the Borrower
	  	 	45	  
	 Section 3.14. Taxes
	  	 	46	  
	 Section 3.15. Expenses
	  	 	46	  
	 Section 3.16. Illegality of Participation
	  	 	48	  
	 Section 3.17. Subordination
	  	 	48	  
		
	 ARTICLE IV
	  	 	49	  
		
	 REPRESENTATIONS AND WARRANTIES
	  	 	49	  
	 Section 4.01. Representations and Warranties
	  	 	49	  
	 Section 4.02. IFC Reliance
	  	 	53	  
		
	 ARTICLE V
	  	 	53	  
		
	 CONDITIONS OF LOANS
	  	 	53	  
	 Section 5.01. Conditions of First Loan
	  	 	53	  

							
	 Article or

Section
	 	 Item
	  	 Page No.
	 
	 Section 5.02. Conditions of All Loans
	  	 	57	  
	 Section 5.03. Borrower’s Certification
	  	 	59	  
	 Section 5.04. Conditions for IFC Benefit
	  	 	59	  
		
	 ARTICLE VI
	  	 	60	  
		
	 PARTICULAR COVENANTS
	  	 	60	  
	 Section 6.01. Affirmative Covenants
	  	 	60	  
	 Section 6.02. Negative Covenants
	  	 	64	  
	 Section 6.03. Reporting Requirements
	  	 	67	  
	 Section 6.04. Insurance
	  	 	72	  
	 Section 6.05. IFC Base Case and Semi-Annual Redetermination Process
	  	 	74	  
		
	 ARTICLE VII
	  	 	75	  
		
	 EVENTS OF DEFAULT
	  	 	75	  
	 Section 7.01. Acceleration after Default
	  	 	75	  
	 Section 7.02. Events of Default
	  	 	75	  
	 Section 7.03. Bankruptcy
	  	 	79	  
		
	 ARTICLE VIII
	  	 	79	  
		
	 MISCELLANEOUS
	  	 	79	  
	 Section 8.01. Saving of Rights
	  	 	79	  
	 Section 8.02. Notices
	  	 	80	  
	 Section 8.03. English Language
	  	 	81	  
	 Section 8.04. Term of Agreement
	  	 	81	  
	 Section 8.05. Applicable Law and Jurisdiction
	  	 	81	  
	 Section 8.06. Disclosure of Information
	  	 	83	  
	 Section 8.07. Successors and Assignees
	  	 	83	  
	 Section 8.08. Amendments, Waivers and Consents
	  	 	83	  
	 Section 8.09. Counterparts
	  	 	84	  
	 Section 8.10. Severability
	  	 	84	  
	 Section 8.11. Rights of Third Parties
	  	 	84	  
		
	 ANNEX A
	  	 	1	  
		
	 ANTI-CORRUPTION GUIDELINES FOR IFC TRANSACTIONS
	  	 	1	  
		
	 ANNEX B
	  	 	5	  
		
	 ACTION PLAN
	  	 	5	  
		
	 ANNEX C
	  	 	6	  
		
	 BORROWER/PROJECT AUTHORIZATIONS
	  	 	6	  
		
	 ANNEX D
	  	 	7	  
		
	 INSURANCE REQUIREMENTS
	  	 	7	  
		
	 SCHEDULE 1
	  	 	13	  

  
 - ii - 

							
	 Article or

Section
	 	 Item
	  	 Page No.
	 
	 FORM OF CERTIFICATE OF INCUMBENCY AND AUTHORITY
	  	 	13	  
		
	 SCHEDULE 2
	  	 	15	  
		
	 FORM OF REQUEST FOR LOAN
	  	 	15	  
		
	 SCHEDULE 3
	  	 	18	  
		
	 FORM OF LOAN DISBURSEMENT RECEIPT
	  	 	18	  
		
	 SCHEDULE 4
	  	 	19	  
		
	 FORM OF SERVICE OF PROCESS LETTER
	  	 	19	  
		
	 SCHEDULE 5
	  	 	21	  
		
	 FORM OF LETTER TO BORROWER’S AUDITORS
	  	 	21	  
		
	 SCHEDULE 6
	  	 	23	  
		
	 INFORMATION TO BE INCLUDED IN ANNUAL REVIEW OF OPERATIONS
	  	 	23	  
		
	 SCHEDULE 7
	  	 	24	  
		
	 IFC BASE CASE ASSUMPTIONS
	  	 	24	  
		
	 SCHEDULE 8
	  	 	25	  
		
	 CONTENTS OF TECHNICAL NOTE
	  	 	25	  
		
	 SCHEDULE 9
	  	 	26	  
		
	 FACILITY AMORTIZATION SCHEDULE
	  	 	26	  
		
	 SCHEDULE 10
	  	 	27	  
		
	 AGREED FORM OF ANNUAL MONITORING REPORT
	  	 	27	  
		
	 SCHEDULE 11
	  	 	28	  
		
	 DEVELOPMENT IMPACT DATA FOR ANNUAL MONITORING REPORT FORM
	  	 	28	  
		
	 SCHEDULE 12
	  	 	30	  
		
	 MATERIAL PAYMENTS MADE TO GOVERNMENT DISCLOSURE FORM
	  	 	30	  
		
	 ANNEX A
	  			
		
	 ANTI-CORRUPTION GUIDELINES FOR IFC TRANSACTIONS
	  			
		
	 ANNEX B
	  			
		
	 ACTION PLAN
	  			

  
 - iii - 

					
	 Article or

Section
	 	 Item
	  	 Page No.

	 ANNEX C
	  	
		
	 BORROWER/PROJECT AUTHORIZATIONS
	  	
		
	 ANNEX D
	  	
		
	 INSURANCE REQUIREMENTS
	  	
		
	 SCHEDULE 1
	  	
		
	 FORM OF CERTIFICATE OF INCUMBENCY AND AUTHORITY
	  	
		
	 SCHEDULE 2
	  	
		
	 FORM OF REQUEST FOR LOAN
	  	
		
	 SCHEDULE 3
	  	
		
	 FORM OF LOAN DISBURSEMENT RECEIPT
	  	
		
	 SCHEDULE 4
	  	
		
	 FORM OF SERVICE OF PROCESS LETTER
	  	
		
	 SCHEDULE 5
	  	
		
	 FORM OF LETTER TO BORROWER’S AUDITORS
	  	
		
	 SCHEDULE 6
	  	
		
	 INFORMATION TO BE INCLUDED IN ANNUAL REVIEW OF OPERATIONS
	  	
		
	 SCHEDULE 7
	  	
		
	 IFC BASE CASE ASSUMPTIONS
	  	
		
	 SCHEDULE 8
	  	
		
	 CONTENTS OF TECHNICAL NOTE
	  	
		
	 SCHEDULE 9
	  	
		
	 FACILITY AMORTIZATION SCHEDULE
	  	
		
	 SCHEDULE 10
	  	
		
	 AGREED FORM OF ANNUAL MONITORING REPORT
	  	
		
	 SCHEDULE 11
	  	
		
	 DEVELOPMENT IMPACT DATA FOR ANNUAL MONITORING REPORT FORM
	  	
		
	 SCHEDULE 12
	  	
		
	 MATERIAL PAYMENTS MADE TO GOVERNMENT DISCLOSURE FORM
	  	

  
 - iv - 

 LOAN AGREEMENT 

AGREEMENT, dated January 30, 2014, between: 
  

	 	(1)	VAALCO GABON (ETAME), INC., a corporation organized and existing under the laws of the State of Delaware, the United States of America and operating in Gabon through its branch (the “Borrower”); and

  

	 	(2)	INTERNATIONAL FINANCE CORPORATION, an international organization established by Articles of Agreement among its member countries including the Republic of Gabon (“IFC”). 

ARTICLE I 
 Definitions
and Interpretation 
 Section 1.01. General Definitions. Wherever used in this Agreement, the following terms have
the meanings opposite them: 
  

			
	“Accounting Principles”	  	United States Generally Accepted Accounting Principles (US-GAAP) promulgated by the Financial and Accounting Standards Board, together with its pronouncements thereon from time to time, and applied on a consistent basis;
		
	“Affiliate”	  	in respect of any Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with, such Person;
		
	“Affiliate Subordinated Debt”	  	has the meaning assigned to it in the Guarantee, Subordination and Share Retention Agreement;
		
	“Annual Monitoring Report”	  	the annual monitoring report substantially in the form attached as Schedule 10 hereto setting out the specific social, environmental and developmental impact information to be provided by the Borrower in respect of the Project as
such form of Annual Monitoring Report may be amended or supplemented from time to time with IFC’s consent;

			
	“Applicable E&S Law”	  	all applicable statutes, laws, ordinances, rules and regulations of Gabon, including licenses, permits or other governmental Authorizations setting standards concerning environmental, social, labor, health and safety or security
risks of the type contemplated by the Performance Standards or imposing liability for the breach thereof;
		
	“Auditors”	  	Deloitte or such other firm that the Borrower appoints from time to time as its auditors pursuant to Section 6.01 (d) (Affirmative Covenants);
		
	“Authority”	  	any national, supranational, regional or local government or governmental, administrative, fiscal, judicial, or government-owned body, department, commission, authority, tribunal, agency or entity, or central bank (or any Person,
whether or not government owned and howsoever constituted or called, that exercises the functions of a central bank);
		
	“Authorization”	  	any consent, registration, declaration, filing, agreement, notarization, certificate, license, approval, permit, authority or exemption from, by or with any Authority, whether given by express action or deemed given by failure to
act within any specified time period and all corporate, creditors’ and stockholders’ approvals or consents;
		
	“Authorized Investments”	  	 (a)   cash in hand and/or time deposits in Dollars with the VAALCO Accounts Bank;

		
		  	 (b)   Dollar-denominated commercial paper maturing in 270 days or less from the date of issuance which at the time of
acquisition is rated A-1 or better by Standard & Poor’s Ratings Group or P-1 or better by Moody’s Investor Service, Inc.; and

		
		  	 (c)   Dollar-denominated bank instruments maturing within one year after their acquisition, issued by Eligible
Banks;

		
	“Authorized Representative”	  	any natural person who is duly authorized by the Borrower, VAALCO International or the Sponsor, as the case may be, to act on its behalf for the purposes specified in, and whose name and a specimen of whose signature appear on, the
Certificate of Incumbency and Authority most recently delivered to IFC;

  
 - 2 - 

			
	“Available Amount”	  	for either Tranche, as of any time, the Maximum Available Amount for that Tranche,
		
		  	minus:
		
		  	(1) the amount of any Loans then outstanding under that Tranche; and
		
		  	(2) in relation to any proposed Loan under that Tranche (other than a Rollover Loan), the amount of any Loans that have been requested by the Borrower and are due to be made under that Tranche on or before the date of the proposed
Loan;
		
	“Availability Period”	  	subject to the conditions set forth in Article V, the period from the date of this Agreement to the date that is one (1) month before the Final Maturity Date;
		
	“Borrower”	  	has the meaning assigned to it in the preamble of this Agreement;
		
	“Business Day”	  	a day when banks are open for business in New York, New York or, solely for the purpose of determining the Interest Rate other than pursuant to Section 3.03 (d) (ii) (Interest), London, England;
		
	“CAO”	  	the Compliance Advisor Ombudsman, an independent accountability mechanism for IFC that impartially responds to environmental and social concerns of affected communities and aims to enhance outcomes;
		
	“CEMAC”	  	the Central African Economic and Monetary Community;
		
	“CEMAC Act”	  	CEMAC act n°01/CEMAC/UMAC/CM dated 2 October 2012 as published in the gazette of the Republic of Gabon on 15 October 2013;

  
 - 3 - 

			
	“Certificate of Incumbency and Authority”	  	a certificate provided to IFC in the form of Schedule 1;
		
	“Charter”	  	with respect to the Borrower or any other Person (other than a natural Person), its articles of incorporation, bylaws, and/or such other constitutive documents of that Person, howsoever called;
		
	“Coercive Practice”	  	has the meaning assigned to it in Annex A;
		
	“Collusive Practice”	  	has the meaning assigned to it in Annex A;
		
	“Commitment”	  	for the Senior Tranche, the Senior Tranche Commitment, and for the Subordinated Tranche, the Subordinated Tranche Commitment;
		
	“Contribution Agreement”	  	the agreement to be entered into between VAALCO Gabon (Etame), Inc. and VAALCO Gabon S.A. in connection with the Conversion and associated documentation and other formalities required for the enforceability thereof (including
enforcement against third parties), all in form and substance satisfactory to IFC;
		
	“Control”	  	the power to direct the management or policies of a Person, directly or indirectly, whether through the ownership of shares or other securities, by contract or otherwise, provided that the direct or indirect ownership of fifty-one
per cent (51%) or more of the voting share capital of a Person is deemed to constitute control of that Person, and “Controlling” and “Controlled” have corresponding meanings;
		
	“Conversion”	  	has the meaning assigned to it in Section 5.01(a);
		
	“Corrupt Practice”	  	has the meaning assigned to it in Annex A;
		
	“Crude Oil Entitlement Report”	  	the monthly report prepared by the Operator that provides details regarding actual crude oil lifting;
		
	“Debenture”	  	the agreement entitled “Debenture” to be entered into between the Borrower and IFC and in form and substance satisfactory to IFC;

  
 - 4 - 

			
	“Delaware”	  	the State of Delaware, United States of America;
		
	“Derivative Transaction”	  	any swap agreement, cap agreement, collar agreement, futures contract, forward contract or similar arrangement with respect to interest rates, currencies or commodity prices;
		
	“Determination Period”	  	initially, the period from the date of this Agreement to the first Scheduled Redetermination Date, and thereafter each period of six (6) months beginning on a Redetermination Date and ending on the day immediately before the next
following Redetermination Date;
		
	“Development Plans”	  	(i) the development and production program(s) relating to the EEA for the Etame field approved by the GOG on November 8, 2001 and November 17, 2003 and any extensions or amendments thereof, (ii) the development and production
program(s) relating to the EEA for the Avouma and South Tchibala fields approved by the GOG on March 25, 2005 and any extensions or amendments thereof, and (iii) any other appraisal, development and production programs in relation to the Production
Sharing Contract for which the Borrower has received all necessary Authorizations;
		
	“Dispute”	  	has the meaning assigned to it in Section 8.05 (b);
		
	“Dollars” and “$”	  	the lawful currency of the United States of America;
		
	“E&S Action Plan”	  	the plan or plans developed by the Borrower, a copy of which is attached hereto as Annex B setting out specific social and environmental measures to be undertaken by the Borrower to enable the Project to be constructed, equipped and
operated in compliance with the Performance Standards, as such plan may be amended or supplemented from time to time with IFC’s consent;
		
	“E&S Management System”	  	the Borrower’s social and environmental management system, as defined in the E&S Action Plan, enabling it to identify, assess and manage Project risks on an ongoing
basis;

  
 - 5 - 

			
	“Ebouri Project”	  	the installation of a new platform with crude oil sweetening facilities in the Ebouri field;
		
	“Ebouri Project Authorizations”	  	the Authorizations set forth in Part 3 of Annex C;
		
	“EHS Guidelines”	  	World Bank Group’s Environmental, Health and Safety Guidelines for Offshore Oil and Gas Developments, dated April 30, 2007;
		
	“Eligible Bank”	  	a bank in England, with an office in London, having capital, surplus and undistributed profits of at least US$500,000,000 (or the equivalent thereof in any other currency) and a long-term debt rating of A or better by Standard &
Poor’s Ratings Group or A3 or better by Moody’s Investors Service, Inc.;
		
	“Environmental Impact	  	
	Assessment(s)” or “EIA(s)”	  	the environmental and social impact assessment report(s) pertaining to the Project, prepared by or on behalf of the Borrower in respect of its operations in accordance with the Applicable E&S Law;
		
	“Etame Accounts”	  	the Etame Revenue Account, the Etame Operating Account, and the Tinworth Escrow Account;
		
	“Etame Accounts Agreement”	  	the agreement entitled the “Etame Field Trustee and Paying Agent Agreement” dated 26 June 2002, and amended on November 26, 2002 and February 1, 2006, between the Borrower, the Etame Accounts Bank and the Etame Trustee and
Paying Agent, pursuant to which the Etame Accounts have been established, and are operated and maintained;
		
	“Etame Accounts Bank”	  	The Bank of New York Mellon, London Branch, with which the Etame Trustee and Paying Agent has established, operates and maintains the Etame Accounts under the Etame Accounts Agreement, or such successor entity as may be appointed
pursuant to the Etame Accounts Agreement;
		
	“Etame Block”	  	the area approximately 45 kilometers offshore of the southern coast of Gabon identified as the “Delimited Area” (Zone Délimitée) in the PSC;

  
 - 6 - 

			
	“Etame Block Field(s)”	  	the exploitation areas within the Etame Block, including the Etame field, the Avouma and South Tchibala fields, the Ebouri field, the Southeast Etame and North Tchibala fields and any other fields that contain hydrocarbon
accumulations, and in relation to which one or more EEAs shall from time to time have been granted by GOG;
		
	“Etame Block Assets”	  	the present and future assets used in connection with exploration, appraisal, development, maintenance and/or operation of the Etame Block Fields or in the Etame Block;
		
	“Etame Operating Account”	  	an interest-bearing account established and maintained by the Etame Trustee and Paying Agent with the Etame Accounts Bank, in accordance with Section 4.1 of the Etame Accounts Agreement;
		
	“Etame Revenue Account”	  	an interest bearing account established and maintained by the Etame Trustee and Paying Agent with the Etame Accounts Bank, in accordance with Section 2.1 of the Etame Accounts Agreement;
		
	“Etame Trustee and Paying Agent”	  	The Bank of New York Mellon, London Branch, which has established, operates and maintains the Etame Accounts under the Etame Accounts Agreement, or such successor entity as may be appointed pursuant to the Etame Accounts
Agreement;
		
	“Event of Default”	  	any one of the events specified in Section 7.02 (Events of Default);
		
	“Exclusive Exploitation	  	
	Authorization” or “EEA”	  	any Exclusive Exploitation License granted by the GOG to the Borrower under the PSC, including any extensions or amendments thereof, with respect to any fields in the Etame Block;
		
	“Facility”	  	has the meaning assigned to it in Section 3.01, or, where the context so requires, the amount of the Senior Tranche and Subordinated Tranche to the extent not cancelled or reduced pursuant to this
Agreement;

  
 - 7 - 

			
	 “Facility Reduction
 Commencement
Date”
	  	the Interest Payment Date in June 2016;
		
	“Facility Reduction Date”	  	the Facility Reduction Commencement Date and each Scheduled Redetermination Date thereafter, to and including the Final Maturity Date;
		
	“Field Life End Date”	  	the date (included in the IFC Base Case) which is the earlier of:
		
		  	 (a)   the anticipated date on which the operation of the Borrowing Base Assets is expected to cease, for economic reasons as
production therefrom is no longer commercially viable; and

		
		  	 (b)   the License Termination Date;

		
	“Final Maturity Date”	  	the earlier of (i) the Facility Reduction Date falling in December 2019 and (ii) the Reserve Tail Date;
		
	“First Loan”	  	the first Loan made under the Facility;
		
	“Fred.Olsen Guarantee”	  	the Contractor Parent Company Guarantee dated October 25, 2007, issued by Fred. Olsen Production ASA and Prosafe SE, jointly and severally, in favor of the Borrower guaranteeing the obligations of Tinworth Limited under the FPSO
Contract;
		
	“Fiscal Quarter”	  	any consecutive three-month period ending on March 31, June 30, September 30 and December 31, which may be changed from time to time as a result of permitted changes to the Borrower’s or Sponsor’s respective Fiscal Years,
as the case may be;
		
	“Fiscal Year”	  	the accounting year of the Borrower or the Sponsor, commencing each year on January 1 and ending on the following December 31, or such other period as the Borrower or the Sponsor, as the case may be, with IFC’s consent, from
time to time designates as its accounting year;

  
 - 8 - 

			
	“FPSO”	  	a registered floating, production, storage and offloading tanker facility and its mooring system;
		
	“FPSO Contract”	  	the Contract for the Provision and Operation of an FPSO between the Borrower and Tinworth Limited dated August 20, 2001, as amended on June 21, 2002, March 31, 2005, October 16, 2007 and January 1, 2012;
		
	“Fraudulent Practice”	  	has the meaning assigned to it in Annex A;
		
	“Gabon”	  	The Gabonese Republic;
		
	“GOG”	  	the government of the Gabonese Republic;
		
	“Guarantee, Subordination and Share	  	
	Retention Agreement”	  	the agreement entitled “Guarantee, Subordination and Share Retention Agreement” to be entered into between the Borrower, the Sponsor and IFC and in form and substance satisfactory to IFC;
		
	“Houston Account”	  	the Dollar-denominated account in Houston, Texas, United States of America, established and maintained by the Borrower with JP Morgan Chase Bank under account number 010000307181, pursuant to Section 4.8 of the JOA, including any
balance standing to the credit of such account from time to time and the interest credited thereto;
		
	“IFC”	  	has the meaning assigned to it in the preamble of this Agreement;
		
	“IFC Base Case”	  	the Initial IFC Base Case, as updated from time to time, in a form and substance satisfactory to IFC (acting in its sole discretion), and in accordance with Section 6.05(b);
		
	“IFC Base Case Assumptions”	  	the assumptions and principles, including the Agreed Oil Price and Reserves Criteria, in respect of the IFC Base Case and set forth in Schedule 7, as such assumptions and principles may be adjusted from time to time in the
determination of IFC in its sole discretion;

  
 - 9 - 

			
	“Increased Costs”	  	the amount certified in an Increased Costs Certificate to be the net incremental costs of, or reduction in return to, IFC or any Participant in connection with the making or maintaining of any Loan or Participation that result
from:
		
		  	 (i)    any change in any applicable law or regulation or directive (whether or not having force of law) or in its
interpretation or application by any Authority charged with its administration; or

		
		  	 (ii)   compliance with any request from, or requirement of, any central bank or other monetary or other
Authority;

		
		  	which, in either case, after the date of this Agreement: (A) imposes, modifies or makes applicable any reserve, special deposit or similar requirements against assets held by, or deposits with or for the account of, or loans
made by, IFC or that Participant; (B) imposes a cost on IFC as a result of IFC having made any Loan or on that Participant as a result of that participant having acquired its Participation that reduces the rate of return on the overall capital
of IFC or that Participant that it would have achieved, had IFC not made such Loan or that Participant not acquired its Participation, (C) changes the basis of taxation on payments received by IFC in respect of any Loan or by that Participant
with respect to its Participation (otherwise than by a change in taxation of the overall net income of IFC or that Participant imposed by the jurisdiction of its incorporation or in which it books its Participation or in any political subdivision of
any such jurisdiction); or (D) imposes on IFC or on that Participant any other condition regarding the making or maintaining of any Loan or that Participant’s Participation in any Loan; but excluding any incremental costs of making or
maintaining a Participation that are a direct result of that participant having its principal office in Gabon or having or maintaining a permanent office or establishment in Gabon, if and to the extent that permanent office or establishment acquires
that Participation;

  
 - 10 - 

			
	“Increased Costs Certificate”	  	a certificate provided from time to time by IFC (based on a certificate to IFC from any Participant) certifying: (i) the circumstances giving rise to the Increased Costs; (ii) that the costs of IFC or, as the case may be, that
Participant have increased or the rate of return of either of them has been reduced; (iii) that, IFC or, as the case may be, that Participant has, in its opinion, exercised reasonable efforts to minimize or eliminate the relevant increase or
reduction, and (iv) the amount of Increased Costs;
		
	“Independent Engineer”	  	Netherland Sewell and Associates, Inc. (NSAI) or other such independent reservoir engineer based in the United States of internationally recognized standing, acceptable to IFC (the fees and expenses of all of which services shall be
for the account of the Borrower);
		
	“Initial Approved Reserves”	  	the aggregate quantity of reserves that is forecast to be produced from the Borrowing Base Assets in accordance with the Reserves Criteria and the Initial IFC Base Case;
		
	“Initial IFC Base Case”	  	the cash flow forecast calculated in accordance with the financial model, based on the IFC Base Case Assumptions and using financial and technical information submitted by the Borrower, pursuant to which IFC shall in its sole
discretion determine the initial Borrowing Base Amount prior to and as a condition of making the First Loan;
		
	“Interim Redetermination Date”	  	has the meaning given to that term in Section 6.05(a);
		
	“Interest Determination Date”	  	except as otherwise provided in Section 3.03 (d) (ii) (Interest), the second Business Day before the beginning of each Interest Period;
		
	“Interest Payment Date”	  	March 31, June 30, September 30 or December 31 in any year;

  
 - 11 - 

			
	“Interest Period”	  	each period of three (3) months, in each case beginning on an Interest Payment Date and ending on the day immediately before the next following Interest Payment Date, except in the case of the first period applicable to each Loan
when it means the period beginning on the date on which that Loan is made and ending on the day immediately before the next following Interest Payment Date;
		
	“Interest Rate”	  	for any Interest Period, the rate at which interest is payable on any Loan during that Interest Period, determined in accordance with Section 3.03 (Interest);
		
	“Joint Operating Agreement” or	  	
	“JOA”	  	the Joint Operating Agreement dated April 4, 1997, between the Borrower and the other Project Partners referred to in subclause (i) of that definition, as amended on January 15, 2001, September 5, 2002 and December 31,
2004;
		
	“LIBOR”	  	interbank offered rates for deposits in Dollars, administered by the British Bankers’ Association (“BBA”) (or NYSE Euronext or any applicable successor entity), which appear on the relevant page of the Reuters Service
(currently page LIBOR01) or, if not available, on the relevant pages of any other service (such as Bloomberg Financial Markets Service) that displays such rates; provided that if the BBA (or NYSE Euronext, or any applicable successor entity) for any
reason ceases (whether permanently or temporarily) to publish interbank offered rates for deposits in Dollars, “LIBOR” shall mean the rate determined pursuant to Section 3.03 (d) (Interest);
		
	“License Termination Date”	  	the earlier of the date of expiry of:
		
		  	 (a)    the PSC; or

		
		  	 (b)    any EEA or other Authorization required for the production from the Borrowing Base Assets or the operation
of the Borrowing Base Assets;

  
 - 12 - 

			
	“Lien”	  	any mortgage, pledge, charge, assignment, hypothecation, security interest, title retention, preferential right, trust arrangement, right of set-off, counterclaim or banker’s lien, privilege or priority of any kind having the
effect of security, any designation of loss payees or beneficiaries or any similar arrangement under or with respect to any insurance policy or any preference of one creditor over another arising by operation of law;
		
	“Loan”	  	for either Tranche, the principal amount of each borrowing under that Tranche, or as the context requires, the principal amount outstanding of that borrowing; provided that for avoidance of doubt, and in accordance with Section 3.02
(b), on each Scheduled Redetermination Date all Loans (including Rollover Loans) outstanding prior to such date under that Tranche shall (to the extent not repaid and subject to the fulfillment of the conditions for the making of each Loan set forth
in Section 5.02 and 5.03) be rolled over into a single Loan under that Tranche on such date;
		
	“Market Disruption Event”	  	before the close of business in London on the Interest Determination Date for the relevant Interest Period, the cost to IFC or Participants whose Participations in the Loans represent in the aggregate 30% or more of the outstanding
principal amount of the Loans under the Senior Tranche (as notified to IFC by such Participants), if funding any Loan or such Participations (as applicable) would be in excess of LIBOR;
		
	“Marketing Contract”	  	at any time, the agreement(s) entered into by the Borrower for the marketing and transportation of the Borrower’s share of the oil produced from the Etame Block Field(s), including (for the avoidance of doubt) any Crude Oil
Sales Contract (as such term is used and defined in the Etame Accounts Agreement) so entered into by the Borrower;
		
	“Material Adverse Effect”	  	a material adverse effect on:
		
		  	 (i)     the Borrower, VAALCO International or the Sponsor or their respective assets or
properties;

  
 - 13 - 

			
		  	 (ii)   the Borrower’s, VAALCO International’s or the Sponsor’s business prospects or financial
condition;

		
		  	 (iii)  the implementation of the Project or the carrying on of the Borrower’s business or operations; or

		
		  	 (iv)  the ability of the Borrower, VAALCO International or the Sponsor to comply with their respective obligations under this
Agreement or any other Transaction Document or Material Contract;

		
	“Material Contracts”	  	each Project Document listed in clauses (a) through (i) of the definition of Project Documents and any other Project Document designated by IFC (in consultation with the Borrower) as material to the Project;
		
	“Maximum Available Amount”	  	for either Tranche, as of any time, the lesser of (i) the Commitment for that Tranche and (ii) the Borrowing Base Amount for that Tranche, in each case as then in effect;
		
	“Minimum Interest/Fees Reserve Amount”	  	has the meaning assigned to it in the VAALCO Accounts Agreement;
		
	“Minimum Aggregate Reserve Amount”	  	has the meaning assigned to it in the VAALCO Accounts Agreement;
		
	“Minimum Project CapEx Reserve Amount”	  	has the meaning assigned to it in the VAALCO Accounts Agreement;
		
	“MOF Loan Authorization”	  	the Authorization of the Minister in charge of Finance of Gabon of the financing contemplated by this Agreement, in form and substance acceptable to IFC;

  
 - 14 - 

			
	“MOH Loan Authorization”	  	the Authorization of the Minister in charge of Petroleum of Gabon of the financing contemplated by this Agreement, in form and substance acceptable to IFC;
		
	“Obstructive Practice”	  	has a meaning assigned to it in Annex A;
		
	“Officer”	  	any of the President, Chief Executive Officer, Chief Financial Officer or Chief Operating Officer (or their functional equivalents) of the Borrower, the Sponsor, or any of their respective Affiliates, as the case may be;
		
	“Official”	  	any officer of a political party or candidate for political office in Gabon or any officer or employee (i) of the GOG (including any legislative, judicial, executive or administrative department, agency or instrumentality thereof),
(ii) of any local Authority in Gabon or (iii) of a public international organization;
		
	“Operator”	  	the party designated as such pursuant to the PSC and the JOA, which, as of the date of this Agreement, is the Borrower;
		
	“Participant”	  	any Person who acquires a Participation in any Loan
		
	“Participation”	  	a participating interest in any Loan, or as the context requires, in any disbursement thereof;
		
	“Performance Standards”	  	IFC’s Performance Standards on Social & Environmental Sustainability, dated January 1, 2012, copies of which have been delivered to and receipt of which has been acknowledged by the Borrower;
		
	“Permitted Debt”	  	 (i)    the Loans;

		
		  	 (ii)   Affiliate Subordinated Debt; and

		
		  	 (iii)  any other short-term Debt for working capital purposes incurred in the ordinary course of business which, when aggregated
with all other Debt, would not result in the Debt to Equity Ratio exceeding 60:40;

  
 - 15 - 

			
	“Permitted Lien”	  	 (i)    the Security;

		
		  	 (ii)   the naming of IFC as loss payee under the Borrower’s insurance policies and/or the Borrower’s share (as
determined in accordance with the PSC and JOA) of the insurance policies related to the Etame Block Fields;

		
		  	 (iii)  the Liens created under the FPSO Contract and the Etame Accounts Agreement; and

		
		  	 (iv)  any Lien arising (x) from any tax, assessment or other governmental charge or other Lien arising by operation of law or (y)
in the ordinary course of business (and not to secure any Debt) under the JOA or the PSC in favor of other parties thereto, in each case if the obligation underlying any such Lien is not yet due or, if due, is being contested in good faith by
appropriate proceedings so long as:

		
		  	 (A)  those proceedings do not involve any substantial danger of the sale, forfeiture or loss of any part of the Project, title
thereto or any interest therein, nor interfere in any material respect with the use or disposition thereof or the implementation of the Project or the carrying on of the business of the Borrower; and

		
		  	 (B)   the Borrower has set aside adequate reserves sufficient to promptly pay in full any amounts that the Borrower may be
ordered to pay on final determination of any such proceedings;

		
	“Person”	  	any natural person, corporation, company, partnership, firm, voluntary association, joint venture, trust, unincorporated organization, Authority or any other entity whether acting in an individual, fiduciary or other
capacity;

  
 - 16 - 

			
	“Platform Construction Contract”	  	the Master Service Agreement dated January 23, 2013, between the Borrower and Gulf Island, LLC and its Affiliates (as defined therein);
		
	“Pledge of Shares”	  	the agreement entitled “Pledge of Shares Agreement” to be entered into among the Borrower, VAALCO International and IFC and in form and substance satisfactory to IFC, pursuant to which all of the issued and outstanding
shares of the Borrower are pledged to IFC as security for the Loans;
		
	“Potential Eventof Default”	  	any event or circumstance which would, with notice, lapse of time, the making of a determination or any combination thereof, become an Event of Default;
		
	“Probable Reserves”	  	in relation to the Borrowing Base Assets, those quantities of petroleum which are deemed to be recoverable from the Etame Block Fields as “Probable Reserves” in accordance with the guidelines of the US SEC Regulation S-X
Section 210.4-10(a), the FASB Accounting Standards Codification Topic 932, Extractive Activities - Oil and Gas, and the 2007 Petroleum Resources Management System approved by the Society of Petroleum Engineers, each as amended and in effect from
time to time;
		
	“Production Sharing Contract” or	  	
	“PSC”	  	the Exploration and Production Sharing Contract dated as of July 7, 1995, between Gabon and the Borrower and other parties, collectively as the Contractor, as amended by an undated agreement between Gabon and the Borrower with
retroactive effect to July 7, 2001, and by the subsequent amendments thereto dated as of April 13, 2006, November 26, 2009 and January 5, 2012 (with retroactive effect to July 17, 2011);
		
	“Project”	  	the project described in Section 2.01 (The Project);

  
 - 17 - 

			
	“Project Documents”	  	 (a)   the Production Sharing Contract;

		
		  	 (b)   the Joint Operating Agreement;

		
		  	 (c)   the FPSO Contract;

		
		  	 (d)   the Fred.Olsen Guarantee;

		
		  	 (e)   the Marketing Contracts, in effect from time to time;

		
		  	 (f)    the Etame Accounts Agreement;

		
		  	 (g)   the Exclusive Exploitation Authorizations;

		
		  	 (h)   the Platform Construction Contract;

		
		  	 (i)    the Transportation and Installation Contract; and

		
		  	 (k)   each other contract, agreement or other instrument relating to the Project;

		
	“Project Partners”	  	at any time, the Borrower and (i) the other Parties (as such term is defined in the JOA) under the JOA, which, as of the date of this Agreement, are: ADDAX Petroleum Etame, Inc., Sasol Petroleum West Africa Limited, PetroEnergy
Resources Corporation, Sojitz Etame Ltd. and Tullow Oil Gabon SA;
		
	“Proved Reserves”	  	in relation to any Borrowing Base Asset, those quantities of petroleum which are deemed to be recoverable from Etame Block Fields as “Proved Reserves” in accordance with the guidelines of the US SEC Regulation S-X Section
210.4-10(a), the FASB Accounting Standards Codification Topic 932, Extractive Activities - Oil and Gas, and the 2007 Petroleum Resources Management System approved by the Society of Petroleum Engineers, each as amended and in effect from time to
time;
		
	“Redetermination Date”	  	any Scheduled Redetermination Date or Interim Redetermination Date;

  
 - 18 - 

			
	“Reduction Date”	  	each Facility Reduction Date, and each Redetermination Date as of which it is determined, in accordance with Section 6.05(b), that there is a reduction in the Borrowing Base Amount for either Tranche;
		
	“Reinsurance Assignment Deed”	  	the agreement entitled “Reinsurance Assignment Deed” to be entered into between the Gabonese issuer(s) of the Etame Block related insurance policies, IFC and the Borrower and in form and substance satisfactory to
IFC;
		
	“Relevant Figures”	  	in respect of any Redetermination Date:
		
		  	 (i)     the Borrowing Base Amount for each Tranche;

		
		  	 (ii)    the Field-Life NPV;

		
		  	 (iii)   the Loan-Life NPV;

		
		  	 (iv)   the LLCR for each Tranche;

		
		  	 (v)    the FLCR for each Tranche;

		
		  	 (vi)   the Debt to Equity Ratio;

		
		  	 (vii)  the ratio of Net Debt to EDITDAX;

		
		  	 (viii) the Total Sources and Total Uses;

		
		  	 (ix)   Liquidity Ratio; and

		
		  	 (x) a projection of each of the above figures as at each future Redetermination Date;

		
	“Relevant Spread”	  	(i) with respect to the Senior Tranche, 3.75% per annum, and (ii) with respect to the Subordinated Tranche, 5.75% per annum;
		
	“Remaining Reserves”	  	in relation to any Determination Period, the total quantities of reserves forecast in the then-current Reserves Criteria to be produced from the Borrowing Base Assets in that Determination Period and each subsequent Determination
Period which ends on or before the Field Life End Date;

  
 - 19 - 

			
	“Reserves Certification”	  	the certification of any or all of the Etame Block Fields’ Proved Reserves and Probable Reserves prepared from time to time by the Independent Engineer, including projected capital expenditures, operating expenses, annual
production profiles and the economic life of the relevant Etame Block Fields;
		
	“Reserve Tail Date”	  	the last day of the Determination Period immediately preceding the first Determination Period in which the Remaining Reserves to be produced from the Borrowing Base Assets are projected in accordance with the IFC Base Case to be
equal to or less than 20% of the Initial Approved Reserves;
		
	“Restricted Payments”	  	all payments, including interest and principal, on Affiliate Subordinated Debt, dividends, transfers of funds and other distributions on share capital (whether in cash, shares, or in kind) and any purchase, redemption or other
acquisition of shares by the Borrower;
		
	“Restricted Payment Period”	  	has the meaning assigned to it in the VAALCO Accounts Agreement;
		
	“Rollover Loan”	  	in respect of either Tranche, a Loan made on a Scheduled Redetermination Date in the same amount, as all or a portion of an outstanding Loan or Loans maturing on such Scheduled Redetermination Date under that Tranche, and which is
applied solely in refinancing all or a portion of such maturing Loan;
		
	“Sanctionable Practice”	  	any Corrupt Practice, Fraudulent Practice, Coercive Practice, Collusive Practice, or Obstructive Practice, as those terms are defined and interpreted in accordance with the Anti-Corruption Guidelines attached to this Agreement as
Annex A;
		
	“Scheduled Redetermination Date”	  	each Interest Payment Date falling in each month of June and December commencing at least six (6) months after the date of this Agreement and before the Final Maturity
Date;

  
 - 20 - 

					
	“Security”	  	(a)	  	a first ranking security interest over any and all of the Borrower’s rights, title and interest in all Etame Block Assets;
			
		  	(b)	  	a first ranking security interest in all of the Borrower’s share (as determined in accordance with the PSC and JOA) of all proceeds and receivables relating to and from the sale of oil production from the Etame Block
Fields;
			
		  	(c)	  	a first ranking security interest in the funds (including any Authorized Investments made with such funds) held from time to time in the VAALCO Accounts;
			
		  	(d)	  	an assignment by way of security of the Borrower’s rights, title and interest in and under the Material Contracts;
			
		  	(e)	  	an assignment by way of security of all rights and claims to any compensation or other special payments in respect of the Etame Block other than those arising in the normal course of Etame Block operations which are payable to the
Borrower by the GOG or any of its agencies or by any other party and for whatever reason;
			
		  	(f)	  	assignment by way of security of all rights, title and interest in and to the Borrower’s share (as determined in accordance with the PSC and JOA) of the Etame Block related insurance policies and reinsurance policies and any
proceeds thereof; and
			
		  	(g)	  	a first ranking pledge by VAALCO International of all its shares in the Borrower;
			
		  	(h)	  	any other security interest (including a first ranking pledge of all of the shares in VAALCO Gabon S.A.) required by IFC in connection with the Conversion;

  
 - 21 - 

					
	“Security Documents”	  	the documents providing for the Security consisting of:
			
		  	(i)	  	the Debenture;
			
		  	(ii)	  	the Pledge of Shares;
			
		  	(iii)	  	a letter from the GOG consenting to the creation of the Security;
			
		  	(iv)	  	the Reinsurance Assignment Deed; and
			
		  	(v)	  	any other document designated as such in connection with the Conversion;
		
	“Senior Tranche”	  	has the meaning assigned to it in Section 3.01(a)(i) or, where the context so requires, the amount of the facility disbursed thereon to the extent not cancelled or reduced pursuant to this Agreement;
		
	“Senior Tranche Commitment”	  	at any time during a Specified Period, the amount (in Dollars) set opposite that Specified Period in the table in Part 1 of Schedule 9 to the extent not cancelled or reduced by IFC under this Agreement;
		
	“Shell Bank”	  	a bank that is incorporated in a jurisdiction in which it has no physical presence and that is not an Affiliate of a regulated bank or a regulated financial group;
		
	“Specified Period”	  	each period specified in the first column (headed “Specified Period”) of the table set out in Schedule 9;
		
	“Sponsor”	  	VAALCO Energy, Inc., a corporation organized and existing under the laws of Delaware, that has a 100% shareholding in VAALCO International;
		
	“Subordinated Tranche”	  	has the meaning assigned to it in Section 3.01(a)(ii) or, where the context so requires, the amount of the facility disbursed thereon to the extent not cancelled or reduced pursuant to this
Agreement;

  
 - 22 - 

					
	“Subordinated Tranche Commitment”	  	  
 at any time during a Specified Period, the amount (in
Dollars) set opposite that Specified Period in the table in Part 2 of Schedule 9 to the extent not cancelled or reduced by IFC under this Agreement;

		
	“Subsidiary”	  	with respect to any Person, any entity:
			
		  	(i)	  	over 50% of whose capital is owned, directly or indirectly, by that Person;
			
		  	(ii)	  	for which that Person may nominate or appoint a majority of the members of the board of directors or such other body performing similar functions; or
			
		  	(iii)	  	which is otherwise effectively Controlled by that Person;
		
	“Taxes”	  	any present or future taxes, withholding obligations, duties and other charges of whatever nature levied by any Authority;
		
	“TEG Regulations”	  	the laws and regulations implementing the provisions in the CEMAC Act in Gabon.
		
	“Texas”	  	the State of Texas, United States of America;
		
	“Tinworth Escrow Account”	  	an interest-bearing account for the benefit of Tinworth Limited, which shall not have a balance of a principal amount in excess of $1,652,500, that is established, operated and maintained by the Etame Trustee and Paying
Agent with the Etame Accounts Bank, in accordance with Section 5.1 of the Etame Accounts Agreement;
		
	“Tinworth Limited”	  	Tinworth Limited, a company incorporated under the laws of Bermuda;
		
	“Tranche”	  	the Senior Tranche or the Subordinated Tranche;
			
	“Transaction Documents”	  	(i)	  	this Agreement;
			
		  	(ii)	  	the Security Documents;

  
 - 23 - 

					
		  	(iii)	  	the Guarantee, Subordination and Share Retention Agreement;
			
		  	(iv)	  	the VAALCO Accounts Agreement; and
			
		  	(v)	  	any other document entered into and designated as such in connection with the Conversion;
			
	“Transportation and Installation	  		  	
	Contract”	  	the Master Service Agreement dated June 19, 2013, by and between the Borrower and EMAS AMC, Inc.;
		
	“VAALCO Accounts”	  	the VAALCO Operating Account and the VAALCO Insurance Proceeds Account;
		
	“VAALCO Accounts Agreement”	  	the agreement entitled “VAALCO Accounts Agreement” to be entered into between IFC, the Borrower and the VAALCO Accounts Bank and in form and substance satisfactory to IFC, pursuant to which the VAALCO Accounts
will be operated and maintained;
		
	“VAALCO Accounts Bank”	  	The Bank of New York Mellon, London Branch, with which the VAALCO Accounts will be operated and maintained under the VAALCO Accounts Agreement, or such successor entity as may be appointed pursuant to the VAALCO Accounts
Agreement;
		
	“VAALCO Gabon S.A.”	  	has the meaning assigned to it in Section 5.01(a);
		
	“VAALCO Insurance Proceeds	  	
	Account”	  	an interest-bearing account designated as the “Insurance Proceeds Account” to be operated and maintained by the Borrower with the VAALCO Accounts Bank, pursuant to the VAALCO Accounts Agreement;
		
	“VAALCO International”	  	VAALCO International Inc., a corporation organized and existing under the laws of Delaware;

  
 - 24 - 

			
	“VAALCO Operating Account”	  	an interest-bearing account to be operated and maintained by the Borrower with the VAALCO Accounts Bank, into which advances of Loans are to be made and into which the Dollar proceeds of the Borrower’s share of the net proceeds
generated from the export sales of oil from the Project will be deposited, minus the payment of royalties to the GOG in accordance with the PSC and any other payments required in accordance with the Etame Accounts Agreement;
		
	“Work Program and Budget”	  	has the meaning assigned to it in the JOA.
		
	“World Bank”	  	the International Bank for Reconstruction and Development, an international organization established by Articles of Agreement among its member countries.

 Section 1.02. Financial Definitions. (a) Wherever used in this Agreement, unless the
context otherwise requires, the following terms have the meanings opposite them: 
  

			
	“Abandonment Obligation”	  	the amount of any obligation of the Borrower under the Project Documents relating to abandonment of all or any part of the Borrowing Base Assets (including any physical assets associated with the Borrowing Base Assets);
		
	“Agreed Oil Price”	  	has the meaning assigned to it in Schedule 7 of this Agreement;
		
	“Borrowing Base Amount”	  	for the Senior Tranche, the Senior Borrowing Base Amount, and for the Subordinated Tranche, the Subordinated Borrowing Base Amount;
		
	“Borrowing Base Assets”	  	the Borrower’s 28.07% working interest (as determined in accordance with the PSC and JOA) in the development areas in and surrounding the Etame Block Fields;
		
	“Debt”	  	with respect to the Borrower, the aggregate of all obligations (whether actual or contingent) of the Borrower, to pay or repay money including:

  
 - 25 - 

					
		  	(i)	  	all Indebtedness for Borrowed Money;
			
		  	(ii)	  	the aggregate amount then outstanding of all liabilities of any party to the extent the Borrower guarantees them or otherwise directly or indirectly obligates itself to pay them;
			
		  	(iii)	  	all liabilities of the Borrower (actual or contingent) under any conditional sale or a transfer with recourse or obligation to repurchase, including by way of discount or factoring of book debts or receivables;
			
		  	(iv)	  	all liabilities of the Borrower (actual or contingent) under its Charter, any resolution of its shareholders, or any agreement or other document binding on the Borrower to redeem any of its shares;
			
		  	(v)	  	all liabilities of the Borrower under the FPSO Contract; and
			
		  	(vi)	  	all Abandonment Obligations;
		
	“Debt Service”	  	in relation to any Determination Period, the aggregate amount of all principal, interest, commissions, fees and any other amounts which are due and payable, or projected to be due and payable, by the Borrower in that
Determination Period under the Transaction Documents (other than any repayment of principal which is capable of being redrawn by way of a Rollover Loan);
		
	“Debt Service Coverage Ratio” or “DSCR”	  	in relation to any Determination Period, the ratio of:
			
		  	(i)	  	Net Cash Flow plus a portion of the balance standing to the credit of the VAALCO Operating Account on the first day of that period (such portion to be determined by IFC in its sole discretion and to be not greater than the
excess of such balance over the then-current Minimum Interest/Fees Reserve Amount) to

  
 - 26 - 

					
		  	(ii)	  	Debt Service for such period;
		
	“Debt to Equity Ratio”	  	at any date of determination, the ratio of Debt to Shareholders’ Equity;
		
	“Discount Rate”	  	ten per cent (10%) per annum;
		
	“EBITDAX”	  	earnings before interest, tax, depreciation and amortization, and exploration expenses;
		
	“Exploration Expenses”	  	any expenses associated with exploration activities relating to the Etame Block;
		
	“Financial Lease”	  	any lease or hire purchase contract which would, under the Accounting Principles, be treated as a finance or capital lease;
		
	“Field Life Coverage Ratio” or	  	
	“FLCR”	  	for either Tranche, in relation to any Determination Period (or any day falling in that Determination Period), the ratio of:
			
		  	(i)	  	the Field-Life NPV for that Determination Period to
			
		  	(ii)	  	the aggregate principal amount of the Loans of outstanding under that Tranche (plus, if that Tranche is the Subordinated Tranche, the aggregated principal amount of the Loans outstanding under the Senior Tranche) or, as the case may
be, all such amounts projected to be outstanding in that Determination Period;
		
	“Field-Life NPV”	  	in relation to any Determination Period, the sum of:
			
		  	(i)	  	the present value (as at the first day of that Determination Period) at the Discount Rate of the projected Net Cash Flow up to the Field Life End Date, as certified in the then-current Reserves Certification,
and

  
 - 27 - 

					
			
		  	(ii)	  	the present value (as at the first day of that Determination Period) at the Discount Rate of the Borrower’s share (as determined in accordance with the PSC and JOA) of Gross Capital Expenditures that has been included in the
determination of the amount referred in (i) above as is projected to be incurred with respect to the Borrowing Base Assets in the Relevant Forecast Period, but only to the extent approved by IFC in its sole discretion, and provided further that IFC
is satisfied that such Gross Capital Expenditures will be funded from the Total Sources;
		
	“Gross Capital Expenditures”	  	in relation to any period, without double counting, all Project Capital Expenditures and Other Capital Expenditures to the extent paid or payable in that period;
		
	“Gross Expenditures”	  	in relation to any period, without double counting, all Gross Operating Expenditures and Gross Capital Expenditures to the extent paid or payable in that period;
		
	Gross Operating Expenditures”	  	in relation to any period, without double counting (and excluding any expenditures covered by Gross Capital Expenditures) to the extent that the same is paid or payable by any Project Partners in that period:
			
		  	(i)	  	all fixed operating and maintenance expenses relating to the Borrowing Base Assets;
			
		  	(ii)	  	all costs of producing, lifting, transporting, storing, processing and selling any hydrocarbons produced from the Borrowing Base Assets (including all FPSO expenses in accordance with the FPSO Contract and any other FPSO-related
charges accepted under the PSC);
			
		  	(iii)	  	variable operating expenses related to the relevant Etame Block Fields as per the Reserves Certification, or otherwise approved by IFC in its sole discretion;

  
 - 28 - 

					
		  	(iv)	  	all royalties payable to the GOG in accordance with the PSC;
			
		  	(v)	  	all costs of satisfying the domestic market obligation under the PSC;
			
		  	(vi)	  	non-recoverable expenses such as payments to the hydrocarbon support and training funds as required under the PSC;
			
		  	(vii)	  	all state carry fees;
			
		  	(viii)	  	all state reimbursements;
			
		  	(ix)	  	any new operating expenses which may arise as a result of changes to the ongoing oil and gas operations and production in the Etame Block;
			
		  	(x)	  	all premiums, fees and expenses relating to the insurances policies covering the Borrowing Base Assets;
			
		  	(xi)	  	any Taxes; and
			
		  	(xii)	  	any other expenditure attributable to the Borrowing Base Assets that IFC in its sole discretion agrees to designate as a “Gross Operating Expenditure”;
		
	“Gross Revenue”	  	in relation to any period, without double counting, to the extent that the same is received or receivable by any Project Partners in that period:
			
		  	(i)	  	the gross proceeds (without deductions whatsoever), in whatever currency, of any sale of any hydrocarbons produced from the Borrowing Base Assets; and
			
		  	(ii)	  	any other revenues or payments received by any Project Partner in respect of the Borrowing Base Assets that IFC in its sole discretion determines to include in “Gross
Revenue”;

  
 - 29 - 

					
	“Indebtedness for Borrowed Money”	  	with respect to the Borrower, all obligations of the Borrower to repay money including with respect to:
			
		  	(i)	  	borrowed money;
			
		  	(ii)	  	the outstanding principal amount of any bonds, debentures, notes, loan stock, commercial paper, acceptance credits, bills or promissory notes drawn, accepted, endorsed or issued by the Borrower;
			
		  	(iii)	  	any credit to the Borrower from a supplier of goods or services under any installment purchase or other similar arrangement with respect to goods or services (except trade accounts that are payable in the ordinary course of
business);
			
		  	(iv)	  	non-contingent obligations of the Borrower to reimburse any other Person with respect to amounts paid by that Person under a letter of credit or similar instrument (excluding any letter of credit or similar instrument issued for the
benefit of the Borrower with respect to trade accounts that are payable in the ordinary course of business);
			
		  	(v)	  	amounts raised under any other transaction having the financial effect of a borrowing and which would be classified as a borrowing (and not as an off-balance sheet financing) under the Accounting Principles including under leases or
similar arrangements entered into primarily as a means of financing the acquisition of the asset leased;
			
		  	(vi)	  	the amount of the Borrower’s obligations under derivative transactions entered into in connection with the protection against or benefit from fluctuation in any rate or price (but only the net amount owing by the Borrower after
marking the relevant derivative transactions to market);

  
 - 30 - 

					
		  	(vii)	  	any premium payable on a mandatory redemption or replacement of any of the foregoing obligations;
			
		  	(viii)	  	the amount of any obligation in respect of any Financial Lease; and
			
		  	(ix)	  	the amount of any obligation in respect of any guarantee or indemnity by the Borrower for any of the foregoing items incurred by any other Person;
		
	“Liquidity Event”	  	at any time, the cash flow projection then included in the IFC Base Case shows that the Liquidity Ratio is less than the Minimum Level in the Relevant Forecast Period for that cash flow projection;
		
	“Liquidity Ratio”	  	for each Relevant Forecast Period, the ratio of Total Sources to Total Uses during such period;
		
	“Loan Life Coverage Ratio” or “LLCR”	  	  
 for either Tranche, in relation to any Determination Period
(or any day falling in that Determination Period), the ratio of:

			
		  	(i)	  	the Loan-Life NPV for that Determination Period to
			
		  	(ii)	  	the aggregate principal of the Loans outstanding under that Tranche (plus, if that Tranche is the Subordinated Tranche, the aggregated principal amount of Loans outstanding under the Senior Tranche) or, as the case may be,
all such amounts projected to be outstanding in that Determination Period;
		
	“Loan-Life NPV”	  	in relation to any Determination Period, the sum of:
			
		  	(i)	  	the present value (as at the first day of that Determination Period) at the Discount Rate of the projected Net Cash Flow for that Determination Period and for each subsequent Determination Period ending on or before the Final
Maturity Date; and

  
 - 31 - 

					
		  	(ii)	  	the present value (as at the first day of that Determination Period) at the Discount Rate of the Borrower’s share (as determined in accordance with the PSC and JOA) of Gross Capital Expenditures that has been included in the
determination of the amount referred in (i) above as is projected to be incurred with respect to the Borrowing Base Assets in the Relevant Forecast Period, but only to the extent approved by IFC in its sole discretion, and provided further that IFC
is satisfied that such Gross Capital Expenditures will be funded from the Total Sources of the Borrower;
		
	“Minimum Levels”	  	 at any date, shall be:

			
		  	(i)	  	1.2:1 with respect to the DSCR;
			
		  	(ii)	  	1.4:1 with respect to the LLCR for the Senior Tranche;
			
		  	(iii)	  	1.0:1 with respect to the LLCR for the Subordinated Tranche;
			
		  	(iv)	  	1.6:1 with respect to the FLCR for the Senior Tranche;
			
		  	(v)	  	1.2:1 with respect to the FLCR for the Subordinated Tranche; and
			
		  	(vi)	  	1:1 with respect to the Liquidity Ratio;
		
	“Net Cash Flow” or “NCF”	  	 in relation to any Determination Period, the sum of:

			
		  	(i)	  	the Borrower’s share (as determined in accordance with the PSC and JOA) of the Gross Revenue projected to be received in that period;
		
		  	minus,

  
 - 32 - 

					
		  	(ii)	  	the Borrower’s share (as determined in accordance with the PSC and JOA) of the Gross Expenditures projected to be made in that period;
		
	“Net Debt”	  	at any time, the aggregate amount of Debt at that time but:
			
		  	(i)	  	excluding Affiliate Subordinated Debt;
			
		  	(ii)	  	including, in the case of Financial Leases only, their capitalized value; and
			
		  	(iii)	  	deducting a portion of the balance then standing to the credit of the VAALCO Operating Account (such portion to be determined by IFC in its sole discretion and to be not greater than the then-current Minimum Aggregate Reserve
Amount);
		
		  	and so that no amount shall be included or excluded more than once;
		
	“Other Capital Expenditures”	  	in relation to any period, without double counting, any capital expenditure attributable to the Borrowing Base Assets that (i) is provided for in the Work Program and Budget (including Exploration Expenses), (ii) is not
a Project Capital Expenditure and (iii) IFC in its sole discretion determines to include as an “Other Capital Expenditure”, to the extent that the same is paid or payable by any Project Partner in that period;
		
	“Project Capital Expenditures”	  	in relation to any period, without double counting:
			
		  	(i)	  	all capital expenditures relating to the Project,
			
		  	(ii)	  	all costs related to the Abandonment Obligations, and
			
		  	(iii)	  	any other capital expenditure attributable to the Borrowing Base Assets that IFC in its sole discretion determines to include as a “Project Capital Expenditure”;

  
 - 33 - 

					
		  	in each case to the extent that the same is paid or payable by any Project Partner in that period;
		
	“Quarter End Date”	  	the last day of each Fiscal Quarter;
		
	“Relevant Forecast Period”	  	as of each Redetermination Date (and any day falling in the Determination Period commencing on that date), in relation to any cash flow projection in the IFC Base Case that is relevant to determining (i) the Field-Life
NPV, the Loan-Life NPV or the Minimum Project CapEx Reserve Amount, the period of twelve (12) months commencing on that Redetermination Date, or (ii) the Liquidity Ratio, the period of eighteen (18) months commencing on such Redetermination
Date;
		
	“Relevant Period”	  	each period of four consecutive financial quarters ending on a Quarter End Date;
		
	“Reserves Criteria”	  	has the meaning assigned to it in Schedule 7 of this Agreement;
		
	“Senior Borrowing Base Amount”	  	at any time, in relation to a Determination Period or any day falling within such period, the amount (in Dollars) specified in the then-current IFC Base Case which is the lower of:
			
		  	(i)	  	the Loan-Life NPV divided by 1.4, and
			
		  	(ii)	  	the Field-Life NPV divided by 1.6;
		
	“Shareholders’ Equity”	  	with respect to the Borrower, the aggregate of:
			
		  	(i)	  	the amount paid up on the share capital of the Borrower; and
			
		  	(ii)	  	the amount standing to the credit of the reserves of the Borrower (including any share premium account, capital redemption reserve funds and any credit balance on the accumulated profit and loss
account);

  
 - 34 - 

					
		  	after deducting from that aggregate (A) any debit balance on the profit and loss account or impairment of the issued share capital of the Borrower (except to the extent that deduction with respect to that debit balance
or impairment has already been made), (B) amounts set aside for dividends or taxation (including deferred taxation), and (C) amounts attributable to capitalized items such as goodwill, trademarks, deferred charges, licenses, patents and other
intangible assets;
			
	“Subordinated Borrowing Base	  		  	
	Amount”	  	at any time, in relation to a Determination Period or any day falling within such period, the amount (in Dollars) specified in the then-current IFC Base Case which is the sum of:
			
		  	(i)	  	the lower of:
			
		  		  	 (A)   the Loan-Life NPV divided by 1.0, and

			
		  		  	 (B)   the Field-Life NPV divided by 1.2;

		
		  	minus,
			
		  	(ii)	  	the Senior Borrowing Base Amount;
		
	“Total Sources”	  	for each Relevant Forecast Period, the sum (without double counting) of:
			
		  	(i)	  	the Available Amount of each Tranche that is available for drawing in that period;
			
		  	(ii)	  	a portion of the balance standing to the credit of the VAALCO Operating Account on the first day of that period (such portion to be determined by IFC in its sole discretion and to be not greater than the excess of such balance over
the then-current Minimum Interest/Fees Reserve Amount);
			
		  	(iii)	  	any undrawn equity that is available for drawing in that period and committed on terms satisfactory to IFC (acting in its sole discretion) for the purposes of meeting any Total Uses in that period;
and

  
 - 35 - 

			
		  	 (iv)   the Net Cash Flow for that period;

		
	“Total Uses”	  	in relation to each Relevant Forecast Period, the Borrower’s share (as determined in accordance with the PSC and JOA) of the aggregate amount (without double counting) of the Gross Capital Expenditures that are committed on the
first day of the period or, if not committed, are projected to be paid by the Project Partners in that period including any projected discretionary amounts having regard to the projected Total Sources for the corresponding period.

 Section 1.03. Financial Calculations. (a) All financial calculations to be made under,
or for the purposes of, this Agreement and any other Transaction Document shall be determined in accordance with the Accounting Principles and, except as otherwise required to conform to any provision of this Agreement, shall be calculated from the
then most recently issued quarterly financial statements, prepared on a consolidated basis, which the Borrower is obligated to furnish to IFC under Section 6.03 (a) (Reporting Requirements). 

(b) Where quarterly financial statements are used for the purpose of making certain financial calculations and those statements are with
respect to the last quarter of a Fiscal Year then, at IFC’s option, those calculations may instead be made from the audited financial statements for the relevant Fiscal Year. 

(c) If any material adverse change in the financial condition of the Borrower, VAALCO International or the Sponsor has occurred after the end
of the period covered by the financial statements used to make the relevant financial calculations, that material adverse change shall also be taken into account in calculating the relevant figures. 

Section 1.04. Interpretation. In this Agreement, unless the context otherwise requires: 

(a) headings are for convenience only and do not affect the interpretation of this Agreement; 

(b) words importing the singular include the plural and vice versa; 

(c) a reference to an Annex, Article, party, Schedule or Section is a reference to that Article or Section of, or that Annex, party or Schedule
to, this Agreement; 

  
 - 36 - 

 (d) a reference to a document includes an amendment or supplement to, or replacement or novation
of, that document but disregarding any amendment, supplement, replacement or novation made in breach of this Agreement; and 
 (e) a
reference to a party to any document includes that party’s successors and permitted assigns (and, in the case of the Borrower after the Conversion, includes VAALCO Gabon S.A.). 

Section 1.05. Business Day Adjustment. When the day on or by which a payment is due to be made is not a Business Day, that
payment shall be made on or by (a) the next succeeding Business Day in that calendar month (if there is one) or (b) the preceding Business Day (if there is not); provided that, in the case of payments made pursuant to clause (a), interest,
fees and charges (if any) shall continue to accrue for the period from the due date that is not a Business Day to that next succeeding Business Day. 

ARTICLE II 
 The
Project, Project Cost and Financial Plan 
 Section 2.01. The Project. The project to be financed consists of:
(i) the construction of two new platforms and associated facilities in the Etame field and the South East Etame and North Tchibala fields; (ii) the drilling, completion and production of wells for the aforementioned fields; (iii) upon
receipt of the Ebouri Project Authorizations and written approval of IFC, the Ebouri Project; (iv) the costs associated with modifying the FPSO to support the new platforms, all of which are located in the Etame Block offshore of the southern
coast of Gabon; and (v) general corporate purposes related to the foregoing. 
 ARTICLE III 

The Facility 

Section 3.01. The Facility. 

(a) Subject to the provisions of this Agreement, IFC agrees to make available to the Borrower (i) a senior revolving loan facility of up
to fifty million Dollars ($50,000,000) (the “Senior Tranche”) and (ii) a subordinated revolving loan facility of up to fifteen million Dollars ($15,000,000) (the “Subordinated Tranche”, and together with the Senior Tranche,
the “Facility”). 
 (b) Each Loan under the Facility may be used solely for the Project. 

  
 - 37 - 

 Section 3.02. Loan Procedure. 

(a) The Borrower may request Loans up to the Available Amount of each Tranche during the Availability Period by delivering to IFC, at least ten
(10) Business Days prior to the proposed date of a Loan, a Loan request substantially in the form of Schedule 2, and a receipt substantially in the form of Schedule 3. 

(b) Where any Loan of either Tranche is outstanding on any Scheduled Redetermination Date, the Borrower will be conclusively deemed to have
given IFC a duly completed request (and receipt) for a Rollover Loan (of an aggregate amount equal to the outstanding amount of all Loans of that Tranche, including any Rollover Loan, which are scheduled to mature on that Scheduled Redetermination
Date) to be applied in refinancing those outstanding Loans in full (and IFC is hereby authorized by the Borrower to apply such Rollover Loan to such refinancing) unless, 
  

	 	(i)	such Scheduled Redetermination Date is a Reduction Date, in which case the amount of such Rollover Loan shall be reduced by the aggregate principal amount of the Loans of that Tranche that the Borrower is required to
repay in accordance with Section 3.05 on such Reduction Date; and/or 

  

	 	(ii)	IFC at any time notifies the Borrower that all or a portion of any Loan is not eligible to be treated as a Rollover Loan because any other conditions necessary for the making of such Rollover Loan as required pursuant
to Section 5.02 and 5.03 hereof are not fulfilled; and/or 

  

	 	(iii)	not later than thirty (30) days prior to such Scheduled Redetermination Date, the Borrower notifies IFC that it does not wish this provision to apply in respect of all or a portion of any Loan. 

(c) The Loans (other than the Rollover Loans) shall be requested and made under each Tranche in accordance with the respective Available
Amounts thereof; and each Loan (other than a Rollover Loan) shall be made in an amount of not less than five million Dollars ($5,000,000), or, if lower, in an amount that equals the maximum amount drawable of the Available Amount. 

(d) Each Loan (other than a Rollover Loan) shall be made by IFC at a bank in New York, New York for further credit to the VAALCO Operating
Account or any other place acceptable to IFC, all as specified by the Borrower in the relevant Loan request. 

  
 - 38 - 

 Section 3.03. Interest. Subject to the provisions of Section 3.04
(Default Rate Interest) and to the maximum extent permitted by applicable law, the Borrower shall pay interest on each Loan in accordance with this Section 3.03: 

(a) During each Interest Period, each Loan shall bear interest at the applicable Interest Rate for that Interest Period. 

(b) Interest on each Loan shall accrue from day to day, be prorated on the basis of a 360-day year for
the actual number of days in the relevant Interest Period and be payable in arrears on the Interest Payment Date immediately following the end of that Interest Period; provided that with respect to any Loan made less than fifteen (15) days
before an Interest Payment Date, interest on that Loan shall be payable on the second Interest Payment Date following the date of that Loan. 

(c) Subject to Section 3.03 (e) and (f), the Interest Rate for the Loans of each Tranche for any Interest Period shall be, to the
maximum extent permitted by applicable law, the rate which is the sum of: 
  

	 	(i)	the Relevant Spread; and 

  

	 	(ii)	LIBOR on the Interest Determination Date for that Interest Period for six (6) months (or, in the case of any Loan to be made on a date other than an Interest Payment Date, for one (1) month, two
(2) months, three (3) months or six (6) months, whichever period is closest to the duration of the relevant Interest Period (or, if two periods are equally close, the longer one)) rounded upward to the nearest three decimal places.

 (d) If, for any Interest Period IFC cannot determine LIBOR by reference to the Reuters Service or any other service that
displays BBA rates, IFC shall notify the Borrower and shall instead determine LIBOR: 
  

	 	(i)	on the second Business Day before the beginning of the relevant Interest Period by calculating the arithmetic mean (rounded upward to the nearest three decimal places) of the offered rates advised to IFC on or around
11:00 a.m., London time, for deposits in Dollars and otherwise in accordance with Section 3.03 (c)(ii), by any four (4) major banks active in Dollars in the London interbank market, selected by IFC; provided that if less than four
quotations are received, IFC may rely on the quotations so received if not less than two (2); or 

  
 - 39 - 

	 	(ii)	if less than two (2) quotations are received from the banks in London in accordance with subsection (i) above, on the first day of the relevant Interest Period, by calculating the arithmetic mean (rounded
upward to the nearest three decimal places) of the offered rates advised to IFC on or around 11:00 a.m. New York time, for loans in Dollars and otherwise in accordance with Section 3.03 (c)(ii), by a major bank or banks in New York, New York,
selected by IFC. 

 (e) Subject to any alternative basis agreed as contemplated by Section 3.03 (f) below, if a
Market Disruption Event occurs in relation to all or any part of any Loan of any Tranche for any Interest Period, IFC shall promptly notify the Borrower of such event and the relevant Interest Rate for such Loans for that Interest Period shall be
the rate which is the sum of: 
  

	 	(i)	the Relevant Spread; and 

  

	 	(ii)	either (A) the rate which expresses as a percentage rate per annum the cost to IFC (or the relevant Participant as notified to IFC as soon as practicable and in any event not later than the close of business on the
first day of the relevant Interest Period) of funding such Loan or such Participation (as applicable) from whatever source it may reasonably select or (B) at the option of IFC (or any such Participant, as applicable), LIBOR for the relevant
period as determined in accordance with Section 3.03 (c)(ii) above. 

  

	 	(f)      (i)	If a Market Disruption Event occurs in relation to all or any part of any Loan and the Borrower so requires, within five (5) Business Days of the notification by IFC pursuant to Section 3.03 (e), IFC and the
Borrower shall enter into good faith negotiations (for a period of not more than thirty (30) days) with a view to agreeing a substitute basis for determining the rate of interest applicable to such Loan. 

 

	 	(ii)	Any alternative basis agreed pursuant to sub-paragraph (i) above shall take effect in accordance with its terms and be binding on each party hereto. 

 

	 	(iii)	If agreement cannot be reached, the Borrower may prepay such Loan or the relevant portion of such Loan in accordance with Section 3.06 (a). 

  
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 (g) On each Interest Determination Date for any Interest Period, IFC shall determine the Interest
Rate applicable to that Interest Period for each Tranche and promptly notify the Borrower of that rate. 
 (h) The determination by IFC, from
time to time, of the Interest Rate for each Tranche shall be final and conclusive and bind the Borrower (unless the Borrower shows to IFC’s satisfaction that the determination involves manifest error). 

Section 3.04. Default Rate Interest. (a) Without limiting the remedies available to IFC under this Agreement or
otherwise (and to the maximum extent permitted by applicable law), if the Borrower fails to make any payment of principal or interest (including interest payable pursuant to this Section) or any other payment provided for in Section 3.07
(Fees) when due as specified in this Agreement (whether at stated maturity or upon acceleration), the Borrower shall pay interest on the amount of that payment due and unpaid at the rate which shall be the sum of two per cent (2%) per
annum and the Interest Rate in effect from time to time determined in accordance with Section 3.03 (Interest). 
 (b) Interest at
the rate referred to in Section 3.04 (a) shall accrue from the date on which payment of the relevant overdue amount became due until the date of actual payment of that amount (as well after as before judgment), and shall be payable on
demand or, if not demanded, on each Interest Payment Date falling after any such overdue amount became due. 
 Section 3.05.
Repayment. 
 (a) Subject to Section 1.05 (Business Day Adjustment), the Borrower shall repay each Loan made to it
in full on each Scheduled Redetermination Date. 
 (b) Notwithstanding any other provision of this Agreement, 

 

	 	(i)	the Borrower shall repay such amount of the Loans of each Tranche as is required to ensure as of each Reduction Date, that the aggregate outstanding principal amount of such Loans does not exceed the Maximum Available
Amount for that Tranche determined as of such Reduction Date; and 

  

	 	(ii)	all Loans and other amounts outstanding under the Facility shall be repaid on the Final Maturity Date. 

(c) If the Borrower is required pursuant to paragraph (b)(i) above to repay any principal of any Loan on an Interim Redetermination Date, then:

  

	 	(i)	the Borrower shall simultaneously pay all accrued interest and Increased Costs (if any) on the principal amount of the Loans to be so repaid, together with all other amounts then due and payable under this Agreement,
including the amount payable under Section 3.11 (Unwinding Costs); and 

  
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	 	(ii)	if requested by IFC, the Borrower shall deliver to IFC, prior to the date of payment, evidence satisfactory to IFC that all necessary Authorizations with respect to the payment have been obtained. 

(d) Any repayments of the Loans under sub-paragraph (b)(i) above shall be applied towards such Loans as IFC (acting in consultation with the
Borrower) shall determine. 
 (e) Subject to the terms of this Agreement, any amounts repaid under this Section 3.05 may be reborrowed
to the extent permitted under Section 3.02. 
 Section 3.06. Prepayment. (a) Without prejudice to Sections 3.10
(Increased Costs), 3.03(f)(iii) (Interest) and 3.16 (Illegality of Participation), the Borrower may prepay all or any of the Loans of either Tranche, on not less than thirty (30) days’ prior notice to IFC, but only if:

  

	 	(i)	the Borrower simultaneously pays all accrued interest on the amount of each Loan to be prepaid, together with all other amounts then due and payable under this Agreement, including Increased Costs (if any) payable under
Section 3.10 (Increased Costs) and the amount payable under Section 3.11 (Unwinding Costs); 

  

	 	(ii)	for a partial prepayment, the prepayment is in an amount of not less than two million Dollars ($2,000,000); and 

  

	 	(iii)	if requested by IFC, the Borrower delivers to IFC, prior to the date of prepayment, evidence satisfactory to IFC that all necessary Authorizations with respect to the prepayment have been obtained. 

(b) Upon delivery of a notice in accordance with Section 3.06 (a), the Borrower shall make the payment in accordance with the terms of
that notice. 
 (c) Subject to the terms of this Agreement, any amounts prepaid under this Section 3.06 may be reborrowed. 

Section 3.07. Fees. (a) The Borrower shall pay to IFC a commitment fee for each Tranche computed at forty per cent
(40%) of the Relevant Spread for that Tranche on that part of the Commitment for that Tranche which from time to time has not been disbursed or cancelled. The commitment fee shall: 

  
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	 	(i)	begin to accrue on the date of this Agreement; 

  

	 	(ii)	be pro rated on the basis of a 360-day year for the actual number of days elapsed; and 

  

	 	(iii)	be payable quarterly, in arrears, on the Interest Payment Dates in each year, with the first such payment due on March 31, 2014. 

(b) The Borrower shall also pay to IFC a front-end fee of six hundred and fifty thousand dollars ($650,000), to be paid upon the earlier of
(x) the date which is thirty (30) days after the date of this Agreement and (y) the date of the First Loan. 
 (c) The
Borrower shall also pay to IFC a structuring fee of nine hundred and seventy-five thousand dollars ($975,000), to be paid upon the earlier of (x) the date which is thirty (30) days after the date of this Agreement and (y) the date of
the First Loan. 
 (d) The Borrower shall pay to IFC an annual supervision fee of fifteen thousand US Dollars ($15,000) for each Fiscal Year
during which any portion of this Facility is committed or outstanding, whether that year is complete or not, to be paid (i) with respect to the 2014 calendar year, within thirty (30) days of the date of this Agreement or on or before the
date of the First Loan, whichever is earlier, and (ii) with respect to each Fiscal Year thereafter, on January 15. 

Section 3.08. Currency and Place of Payments. (a) The Borrower shall make all payments of principal, interest, fees,
and any other amount due to IFC under this Agreement in Dollars, in same day funds, to Citibank, N.A., 111 Wall Street, New York, New York, U.S.A., ABA#021000089, for credit to IFC’s account number 36085579, or at such other bank or account in
New York as IFC from time to time designates. Payments must be received in IFC’s designated account no later than 1:00 p.m. New York time. 

(b) The tender or payment of any amount payable under this Agreement (whether or not by recovery under a judgment) in any currency other than
Dollars shall not novate, discharge or satisfy the obligation of the Borrower to pay in Dollars all amounts payable under this Agreement except to the extent that (and as of the date when) IFC actually receives funds in Dollars in the account
specified in, or pursuant to, Section 3.08 (a). 
 (c) The Borrower shall indemnify IFC against any losses resulting from a payment
being received or an order or judgment being given under this Agreement in any currency other than Dollars or any place other than the account specified in, or pursuant to, Section 3.08 (a). The Borrower shall, as a separate

  
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obligation, pay such additional amount as is necessary to enable IFC to receive, after conversion to Dollars at a market rate and transfer to that account, the full amount due to IFC under this
Agreement in Dollars and in the account specified in, or pursuant to, Section 3.08 (a). 
 (d) Notwithstanding the provisions of
Section 3.08 (a) and Section 3.08 (b), IFC may require the Borrower to pay (or reimburse IFC) for any Taxes, fees, costs, expenses and other amounts payable under Section 3.14 (a) (Taxes) and Section 3.15
(Expenses) in the currency in which they are payable, if other than Dollars. 
 Section 3.09. Allocation of Partial
Payments. If at any time IFC receives less than the full amount then due and payable to it under this Agreement, IFC may allocate and apply the amount received in any way or manner and for such purpose or purposes under this Agreement as IFC
in its sole discretion determines, notwithstanding any instruction that the Borrower may give to the contrary. 
 Section 3.10.
Increased Costs. On each Interest Payment Date, the Borrower shall pay, in addition to interest, the amount which IFC from time to time notifies to the Borrower in an Increased Costs Certificate as being the aggregate Increased Costs
of IFC and each Participant accrued and unpaid prior to that Interest Payment Date. 
 Section 3.11. Unwinding Costs.
(a) If IFC or any Participant incurs any cost, expense or loss as a result of the Borrower: 
  

	 	(i)	failing to borrow in accordance with a request for a Loan made pursuant to Section 3.02 (Loan Procedure), or to prepay in accordance with a notice of prepayment or pursuant to Section 3.06 (b);

  

	 	(ii)	prepaying all or any portion of the Loans; or 

  

	 	(iii)	after acceleration of all or any portion of the Loans, paying all or any portion of the Loans; 

 then the
Borrower shall immediately pay to IFC the amount which IFC from time to time notifies to the Borrower as being the amount of those costs, expenses and losses incurred. 

(b) For the purposes of this Section, “costs, expenses or losses” include any premium, penalty or expense incurred to liquidate or
obtain third party deposits, borrowings, hedges or swaps in order to make, maintain, fund or hedge any or all of the Loans or prepayment of any or all of the Loans, or any payment of all or any of the Loans upon acceleration. 

  
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 Section 3.12. Suspension or Cancellation by IFC. (a) IFC may, by notice
to the Borrower, suspend or cancel the right of the Borrower to the undisbursed portion of the Facility in whole or in part: 
  

	 	(i)	if the First Loan has not been made by June 30, 2014 or such other date as the parties agree; 

  

	 	(ii)	if any Event of Default has occurred and is continuing or if the Event of Default specified in Section 7.02 (f) (Events of Default) is, in the reasonable opinion of IFC, imminent; or 

 

	 	(iii)	if any event or condition has occurred and is continuing which has or can reasonably be expected to have a Material Adverse Effect. 

(b) Upon the giving of any such notice, the right of the Borrower to the undisbursed portion of the Facility shall be suspended or cancelled,
as the case may be. The exercise by IFC of its right of suspension shall not preclude IFC from exercising its right of cancellation, either for the same or any other reason specified in Section 3.12 (a). Upon any cancellation the Borrower
shall, subject to paragraph (d) of this Section 3.12, pay to IFC all fees and other amounts accrued (whether or not then due and payable) under this Agreement up to the date of that cancellation. A suspension shall not limit any other
provision of this Agreement. 
 (c) Any portion of the Facility that is cancelled under this Section 3.12 may not be reborrowed. 

(d) In the case of a partial cancellation of the Facility pursuant to paragraph (a) of this Section 3.12, or Section 3.13
(a) below, interest on the amount then outstanding of the Loans remains payable as provided in Section 3.03 (Interest). 

Section 3.13. Cancellation by the Borrower. (a) The Borrower may, by notice to IFC, irrevocably request IFC to cancel
either in whole or in part the undisbursed portion of the Facility on the date specified in that notice (which shall be a date not earlier than thirty (30) days after the date of that notice); provided that the Borrower may request any such
cancellation only once in any Fiscal Year and the amount of any such cancellation shall be applied to the Commitments of each Tranche pro rata in accordance with amounts thereof then in effect. 

(b) IFC shall, by notice to the Borrower, cancel the undisbursed portion of the Facility effective as of that specified date if, subject to
Section 3.12(d) above, IFC has received all fees and other amounts accrued (whether or not then due and payable) under this Agreement up to such specified date; and 

  
 - 45 - 

 (c) Any portion of the Facility that is cancelled under this Section 3.13 may not be
reinstated. 
 Section 3.14. Taxes. (a) The Borrower shall pay or cause to be paid all Taxes (other than taxes, if
any, payable on the overall income of IFC) on or in connection with the payment of any and all amounts due under this Agreement or any other Transaction Document that are now or in the future levied or imposed by any Authority of Gabon, the United
Kingdom or the United States of America or by any organization of which Gabon, the United Kingdom or the United States of the America is a member or any jurisdiction through or out of which a payment is made. 

(b) All payments of principal, interest, fees and other amounts due under this Agreement or any other Transaction Document shall be made
without deduction for or on account of any Taxes. 
 (c) If the Borrower is prevented by operation of law or otherwise from making or causing
to be made those payments referred to in Section 3.14 (b) without deduction, the principal or (as the case may be) interest, fees or other amounts due under this Agreement or, as the case may be, the relevant Transaction Document shall be
increased to such amount as may be necessary so that IFC receives the full amount it would have received (taking into account any Taxes payable on amounts payable by the Borrower under this subsection) had those payments been made without that
deduction. 
 (d) If Section 3.14 (c) applies and IFC so requests, the Borrower shall deliver to IFC official tax receipts
evidencing payment (or certified copies of them) within thirty (30) days of the date of that request. 
 Section 3.15.
Expenses. (a) The Borrower shall pay or, as the case may be, reimburse IFC or its assignees on demand any amount paid by them on account of, all taxes (including stamp taxes), duties, fees or other charges payable on or in
connection with the execution, issue, delivery, registration or notarization of the Transaction Documents and any other documents related to this Agreement or any other Transaction Document. 

(b) The Borrower shall pay promptly, on demand, to IFC or as IFC may direct: 

 

	 	(i)	the out-of-pocket expenses (including travel and subsistence expenses) reasonably incurred by IFC in conducting its annual supervision review of the Borrower and the Project, the preparation, administration and
implementation by IFC of the investment provided for in this Agreement, or otherwise in connection with any restructuring of the Loans or amendment, supplement, or modification to, or any waiver under, any of the Transaction Documents, payable upon
receipt of an invoice from IFC; 

  
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	 	(ii)	any fees agreed upon among the Borrower and IFC in connection with any restructuring of the Loans, or amendment, supplement, modification or waiver under, any of the Transaction Documents; 

 

	 	(iii)	the fees and expenses of IFC’s technical consultants (including the Independent Engineer), reasonable fees and expenses of other external consultants (including the independent consultant(s) hired in connection
with the requirements of Section 6.03(d)), incurred in connection with the investment by IFC provided for under this Agreement; 

  

	 	(iv)	the reasonable fees and expenses of IFC’s counsel in Gabon, France, Delaware, London, England and New York and any other relevant jurisdictions, incurred in connection with: 

 

	 	(A)	the preparation of the investment by IFC provided for under this Agreement and any other Transaction Document; 

  

	 	(B)	the preparation and/or review, execution and, where appropriate, translation and registration of the Transaction Documents and any other documents related to them; 

 

	 	(C)	the giving of any legal opinions required by IFC under this Agreement and any other Transaction Document; 

  

	 	(D)	the administration and implementation by IFC of the investment provided for in this Agreement or otherwise in connection with any amendment, supplement or modification to, or waiver under, any of the Transaction
Documents; 

  

	 	(E)	the registration (where appropriate) and the delivery of the evidences of indebtedness relating to the Loans; and 

  
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	 	(F)	the release of the Security following the repayment in full of the Loans; and 

  

	 	(v)	the costs and expenses incurred by IFC in relation to efforts to enforce or protect its rights under any Transaction Document, or the exercise of its rights or powers consequent upon or arising out of the occurrence of
any Event of Default or Potential Event of Default, including all legal and other professional consultants’ fees and expenses on a full indemnity basis. 

Section 3.16. Illegality of Participation. If IFC has sold a Participation and after the date of this Agreement, any change
made in any applicable law or regulation or official directive (or its interpretation or application by any Authority charged with its administration) (herein the “Relevant Change”) makes it unlawful for the Participant acquiring that
Participation to continue to maintain or to fund that Participation: 
 (a) the Borrower shall, upon request by IFC (but subject to any
applicable Authorization having been obtained), on the earlier of (x) the next Interest Payment Date and (y) the date that IFC advises the Borrower is the latest day permitted by the Relevant Change, prepay in full that part of the Loan
that IFC advises corresponds to that Participation; 
 (b) concurrently with the prepayment of the part of the Loan corresponding to the
Participation affected by the Relevant Change, the Borrower shall pay all accrued interest, Increased Costs (if any) on that part of the Loan (and, if that prepayment is not made on an Interest Payment Date, any amount payable in respect of the
prepayment under Section 3.11 (Unwinding Costs)); and 
 (c) the Borrower agrees to take all reasonable steps to obtain, as
quickly as possible after receipt of IFC’s request for prepayment, the Authorization referred to in Section 3.16 (a) if any such Authorization is then required. 

Section 3.17. Subordination. Upon any distribution of the assets in connection with any dissolution, winding up,
liquidation or reorganization of the Borrower or upon an assignment for the benefit of creditors of the Borrower, all amounts outstanding under the Senior Tranche (whether principal, interest, fees or other amounts) shall be paid in full before any
amount owing in respect of the Subordinated Tranche is paid. 

  
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 ARTICLE IV 

Representations and Warranties 

Section 4.01. Representations and Warranties. The Borrower represents and warrants that: 

(a) the Borrower is a company duly incorporated and validly existing under the laws of Delaware (or, after the Conversion, a
société anonyme incorporated and validly existing under the laws of Gabon), has the corporate power, and has obtained all required Authorizations, to own its assets, conduct its business as presently conducted and to enter into,
and comply with its obligations under, the Transaction Documents to which it is a party or will, in the case of any Transaction Document not executed as at the date of this Agreement, when that Transaction Document is executed, have the corporate
power to enter into, and comply with its obligations under, that Transaction Document; 
 (b) each Transaction Document to which the Borrower
is a party has been, or will be, duly authorized and executed by the Borrower and constitutes, or will, when executed constitute, a valid and legally binding obligation of the Borrower, enforceable in accordance with its terms; 

(c) neither the making of any Transaction Document to which the Borrower is a party nor (when all the Authorizations referred to in
Section 5.01(d) (Conditions of Loans) have been obtained) the compliance with its terms will conflict with or result in a breach of any of the terms, conditions or provisions of, or constitute a default or require any consent under, any
indenture, mortgage, agreement or other instrument or arrangement to which the Borrower is a party or by which it is bound, or violate any of the terms or provisions of the Borrower’s Charter or any Authorization, judgment, decree or order or
any statute, rule or regulation applicable to the Borrower; 
 (d) to the best of the Borrower’s knowledge after due inquiry: 

 

	 	(i)	the Authorizations specified in Annex C are all the Authorizations (other than Authorizations that are of a routine nature and are obtained in the ordinary course of business) needed by the Borrower to conduct its
business, carry out the Project and execute, and comply with its obligations under, this Agreement and each of the other Transaction Documents to which it is a party; 

 

	 	(ii)	all Authorizations specified in Section (1) of Annex C have been obtained and are in full force and effect; and 

  
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	 	(iii)	the Borrower has applied (or is making arrangements to apply) for all Authorizations specified in Section (2) of Annex C, and has no reason to believe that it will not obtain those Authorizations in a timely
manner; 

 (e) the Borrower’s Charter has not been amended since June 14, 1995; 

(f) the Material Contracts are all the Project Documents (other than Project Documents that are of a routine nature and are obtained in the
ordinary course of business) needed by the Borrower to conduct its business, carry out the Project and execute, and comply with its obligations under, this Agreement and each of the other Transaction Documents to which it is a party; 

(g) neither the Borrower nor any of its property enjoys any right of immunity from set-off, suit or
execution with respect to its assets or its obligations under any Transaction Document; 
 (h) since September 30, 2013, the Borrower:

  

	 	(i)	has not suffered any change that has a Material Adverse Effect or incurred any substantial loss or liability; and 

  

	 	(ii)	has not undertaken or agreed to undertake any substantial obligation, except for Permitted Debt; 

(i) the financial statements of the Borrower for the period ending on September 30, 2013: 

 

	 	(i)	have been prepared in accordance with the Accounting Principles, and present fairly the financial condition of the Borrower as of the date as of which they were prepared and the results of the Borrower’s operations
during the period then ended; and 

  

	 	(ii)	disclose all liabilities (contingent or otherwise) of the Borrower, and the reserves, if any, for such liabilities and all unrealized or anticipated liabilities and losses arising from commitments entered into by the
Borrower (whether or not such commitments have been disclosed in such financial statements); 

 (j) the Borrower is not a party
to, or committed to enter into, any contract which would or might affect the judgment of a prospective investor; 
 (k) the Borrower has no
outstanding Lien on any of its assets other than Liens arising by operation of law, and no contracts or arrangements, conditional or unconditional, exist for the creation by the Borrower of any Lien, except for Permitted Liens; 

  
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 (l) all tax and petroleum costs returns and reports of the Borrower required by law and/or the
PSC to be filed have been duly filed and all Taxes, obligations, fees and other governmental charges upon the Borrower, or its properties, or its income or assets, which are due and payable or to be withheld, have been paid or withheld, other than
those presently payable without penalty or interest; 
 (m) the Borrower is not engaged in nor, to the best of its knowledge after due
inquiry, threatened by, any litigation, arbitration or administrative proceedings, the outcome of which could reasonably be expected to have a Material Adverse Effect; 

(n) to the best of its knowledge after due inquiry, the Borrower is not in violation of any statute or regulation of any Authority; 

(o) no judgment or order has been issued which has or may reasonably be expected to have a Material Adverse Effect; 

 

	 	(p)    (i)	to the best of its knowledge after due inquiry, there are no material social or environmental risks or issues in relation to the Project other than those identified in the EIAs; and 

 

	 	(ii)	it has not received nor is aware of either (A) any existing or threatened complaint, order, directive, claim, citation or notice from any Authority or (B) any material written communication from any Person
concerning the Project’s failure to comply with any matter covered by the Performance Standards and EHS Guidelines which failure has, or could be reasonably expected to have, a Material Adverse Effect or a material adverse impact on the
implementation or operation of the Project in accordance with the Performance Standards and EHS Guidelines; 

  

	 	(q)    (i)	to the best of its knowledge after due inquiry, there are no material social or environmental risks or issues in relation to the Project other than those identified in the EIAs; and 

 

	 	(ii)	 the Borrower has not received nor is it aware of either (A) any existing or threatened complaint, order, directive, claim, citation or notice
from any Authority or (B) any material written communication from any Person concerning the Project’s failure to comply with any matter covered by the Performance Standards and EHS Guidelines

  
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which failure has, or could be reasonably expected to have, a Material Adverse Effect or a material adverse impact on the implementation or operation of the Project in accordance with the
Performance Standards and EHS Guidelines. 

 (r) neither the Borrower nor the Sponsor, nor any of their respective Affiliates,
nor any Person acting on its or their behalf, has entered into any transaction or engaged in any activity prohibited by any resolution of the United Nations Security Council under Chapter VII of the United Nations Charter; 

(s) neither the Borrower nor the Sponsor, nor any of their respective Affiliates, nor any Person acting on its or their behalf, has committed
or engaged in, with respect to the Project or any transaction contemplated by this Agreement, any Sanctionable Practice; 
 (t) it is the
Operator of the Project; 
 (u) it owns, solely in its own name, a working interest under the PSC and JOA equal to at least 30.35% during the
exploration phase and at least 28.07% during the production phase, free and clear of all Liens, except for Permitted Liens, and any other interests of any other Person; 

(v) all written information regarding the Borrower, the Sponsor, their respective Affiliates and the Project furnished to IFC prior to or
contemporaneously herewith, by or on behalf of the Borrower, was and continues to be true and accurate (other than projections and other forward looking statements that the Borrower believes to be reasonable) and does not contain any information
that is misleading in any material respect nor does it omit any information the omission of which makes the information contained in it misleading in any material respect; 

(w) it has not registered a United Kingdom establishment or place of business for the purposes of the Overseas Companies (Execution of
Documents and Registration of Charges) Regulations 2009, nor has it registered a United Kingdom establishment or place of business under any alternative or trading name under section 1048 of the Companies Act 2006, for the purposes of the
aforementioned Regulations, or otherwise; 
 (x) it is not engaged in any business activity outside the scope of the PSC; 

(y) as of the date of this Agreement, neither the GOG nor any of its Authorities or assigns has exercised the GOG’s preference rights
under Article 24 or Article 25 of the PSC and the Borrower has no reason to believe any such exercise is contemplated; 

  
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 (z) the Borrower has no partnership, profit-sharing or royalty agreement or other similar
arrangement whereby the Borrower’s income or profits might be shared with any other Person; and 
 (aa) none of the representations and
warranties in this Section 4.01 omits any matter the omission of which makes any of such representations and warranties misleading. 

Section 4.02. IFC Reliance. The Borrower acknowledges that it makes the representations and warranties in Section 4.01
(Representations and Warranties) with the intention of inducing IFC to enter into this Agreement and that IFC enters into this Agreement on the basis of, and in full reliance on, each of such representations and warranties. 

ARTICLE V 
 Conditions
of Loans 
 Section 5.01. Conditions of First Loan. The obligation of IFC to make the First Loan under either Tranche
is subject to the fulfillment prior to or concurrently with the making of that First Loan of the following conditions: 
 (a) the branch in
Gabon of VAALCO Gabon (Etame), Inc. shall have been duly converted to a société anonyme under the laws of Gabon, duly incorporated under such laws as a direct, wholly-owned Subsidiary of VAALCO Gabon (Etame), Inc. (“VAALCO
Gabon S.A.”) and: 
  

	 	(i)	the rights, obligations and other liabilities of VAALCO Gabon (Etame), Inc. under the Transaction Documents and the Material Contracts shall have been assigned to or novated in favor of VAALCO Gabon S.A. and all other
assets and liabilities of VAALCO Gabon (Etame), Inc. shall have been transferred to VAALCO Gabon S.A. in accordance with the Contribution Agreement; 

  

	 	(ii)	the obligations of VAALCO Gabon S.A. under the Transaction Documents shall have been guaranteed by VAALCO Gabon (Etame), Inc.; 

  

	 	(iii)	all the shares in VAALCO Gabon S.A. shall have been pledged in favor of IFC; 

  
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	 	(iv)	the Transaction Documents and Material Contracts shall have been amended, supplemented and/or restated to give effect to the foregoing; and 

 

	 	(v)	all corporate and GOG authorizations required for the incorporation of VAALCO Gabon S.A. and the performance of the steps set forth in sub-paragraphs (i) through (iv) above shall have been issued,

 all on terms and conditions and pursuant to documentation satisfactory to IFC (the “Conversion”), except to the extent that IFC
determines (based on the Borrower’s progress toward Conversion and such other considerations as IFC deems relevant) to waive any of the foregoing requirements pursuant to Section 5.04 (Conditions for IFC Benefit); 

(b) the following agreements, together with any amendments to such agreements entered into after the date hereof, each in form and substance
satisfactory to IFC, have been entered into by all parties to them and have become (or, as the case may be, remain) unconditional and fully effective in accordance with their respective terms (except for this Agreement having become unconditional
and fully effective, if that is a condition of any of those agreements), and IFC has received a copy of each of those agreements to which it is not a party: 
  

	 	(i)	each Transaction Document; and 

  

	 	(ii)	each Project Document, including an amendment to the Etame Accounts Agreement to include IFC as the Borrower’s Subordinated Secured Party (as defined therein) in accordance with Section 6.1(b) of the Etame
Accounts Agreement and otherwise in a form and substance satisfactory to IFC; 

 (c) the Security has been duly created and
perfected as: (i) first ranking security interests in the VAALCO Accounts and the respective funds held therein; (ii) a security interest in all of the Borrower’s rights, title and interest in the Etame Revenue Account and the Etame
Operating Account, subject to the interests of the GOG, and the Etame Trustee and Paying Agent to the extent expressly provided in the Etame Accounts Agreement; (iii) a security interest in all of the “Security Assets” (as defined in
the Debenture), (iv) a first ranking pledge by VAALCO International of all of the Borrower’s shares; and (v) an assignment by way of security of all rights, title and interest in and to the Borrower’s share of Project-related
insurance policies, reinsurance policies and any proceeds of any of them; 

  
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 (d) the Borrower has obtained, and provided to IFC copies of all Authorizations listed in Section
(1) and Section (2) of Annex C, and such other Authorizations not listed in these Sections that may become necessary for: 
  

	 	(i)	the Facility (including the MOF Loan Authorization and MOH Loan Authorization); 

  

	 	(ii)	the business of the Borrower as it is presently carried on and is contemplated to be carried on; 

  

	 	(iii)	the Project; 

  

	 	(iv)	the due execution, delivery, validity and enforceability of, and performance by the Borrower of its obligations under, this Agreement and the other Transaction Documents, the Material Contracts and any other documents
necessary or desirable to the implementation of any of those agreements or documents; and 

  

	 	(v)	the remittance to IFC or its assigns in Dollars of all monies payable with respect to the Transaction Documents; 

and all those Authorizations are in full force and effect and in form and substance satisfactory to IFC; 

(e) IFC has received a legal opinion satisfactory in form and substance to IFC, from IFC’s counsel in Gabon relating to the transactions
contemplated by this Agreement; 
 (f) IFC has received a legal opinion satisfactory in form and substance to IFC, from its counsel on
English law matters with regard to this Agreement and other Transaction Documents governed by English Law; 
 (g) IFC has received a legal
opinion satisfactory in form and substance to IFC, from its counsel on New York law matters with regard to this Agreement and other Transaction Documents; 

(h) IFC has received a legal opinion satisfactory in form and substance to IFC, from in-house counsel of the Borrower and the Sponsor on
Delaware and New York law matters with regard to this Agreement and other Transaction Documents and Material Contracts; 
 (i) IFC has
received a legal opinion satisfactory in form and substance to IFC, from counsel to the Borrower and the Sponsor on Texas and Delaware law matters with regard to this Agreement and the other Transaction Documents and the Material Contracts; 

  
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 (j) IFC has received copies of all insurance policies required to be obtained pursuant to
Section 6.04 (Insurance) and Annex D prior to the date of First Loan, and a certification of the Borrower’s insurers or insurance agents confirming that such policies are in full force and effect and all premiums then due and
payable under those policies have been paid; 
 (k) IFC has received, or has received irrevocable written instructions to deduct from the
proceeds of the First Loan, the fees specified in Section 3.07 (Fees) required to be paid before or on the date of the First Loan, as the case may be; 

(l) if IFC so requires, IFC has received the reimbursement of all invoiced fees and expenses of IFC’s counsel as provided in
Section 3.15 (b) (iv) (Expenses) or confirmation that those fees and expenses have been paid directly to that counsel; 

(m) IFC has received a copy of the authorization to the Auditors referred to in Section 6.01(e) (Affirmative Covenants); 

(n) IFC has received Certificates of Incumbency and Authority from each of the Borrower, VAALCO International and the Sponsor; 

(o) the Borrower has delivered to IFC evidence of (i) the appointment by the Borrower of an agent for service of process pursuant to
Section 8.05 (f) (Applicable Law and Jurisdiction) and substantially in the form of Schedule 4, (ii) the appointment by the Sponsor of an agent for service of process pursuant to Section 19.05(f) of the Guarantee,
Subordination and Share Retention Agreement and (iii) the appointment by VAALCO International of an agent for service of process pursuant to Section 6.04(e) of the Pledge of Shares; 

(p) The Initial IFC Base Case is in a form and substance satisfactory to IFC, and IFC has determined the initial Borrowing Base Amount for each
Tranche; 
 (q) the Borrower has delivered to IFC a letter confirming, inter alia, that (i) the Borrower is in compliance with all of
its material obligations under the Production Sharing Contract, (ii) there are no material disputes relating to the Production Sharing Contract and (iii) the Borrower has made copies of the Production Sharing Contract (including all
amendments thereto and the GOG decrees approving such amendments) available to the public on its website (in accordance with the requirements of Section 6.01 (bb)), which letter shall be in form and substance satisfactory to IFC; 

 

	 	(r)    (i)	the Borrower has delivered to IFC the EIA and the E&S Action Plan, each in form and substance acceptable to IFC; 

  
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	 	(ii)	the Borrower has committed to developing an E&S Management System in the E&S Action Plan; and 

  

	 	(iii)	the Borrower has delivered to IFC evidence of disclosure and government approval of the EIA; 

(s) the Borrower has delivered to IFC certified copies of: 
  

	 	(i)	its Charter, 

  

	 	(ii)	the Contribution Agreement, 

  

	 	(iii)	the Charter of the Sponsor, and 

  

	 	(iv)	the Charter of VAALCO International; 

 (t) the Borrower has delivered to IFC evidence confirming
that it has instructed the Etame Trustee and Paying Agent that all amounts payable to the Borrower from the Etame Revenue Account shall be transferred to the VAALCO Operating Account; 

(u) The Borrower has demonstrated to IFC’s satisfaction that the Borrower has sufficient funds to pay all Gross Capital Expenditures
included in the Work Program and Budget for Fiscal Year 2014; 
 (v) the Borrower has delivered to IFC evidence satisfactory to it that: 

 

	 	(i)	each of the VAALCO Accounts has been established in accordance with the VAALCO Accounts Agreement; and 

  

	 	(ii)	that the amount standing to the credit of the VAALCO Operating Account is not less than the Minimum Interest/Fees Reserve Amount; and 

(w) IFC has obtained an exemption from the CEMAC Act and TEG Regulations on terms satisfactory to it. 

Section 5.02. Conditions of All Loans. The obligation of IFC to make any Loan under either Tranche, including the First
Loan, and any Rollover Loan, is also subject to the conditions that: 
 (a) no Event of Default or Potential Event of Default has occurred
and is continuing or will occur on making such Loan; 

  
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 (b) in respect of any Loan which is not a Rollover Loan, the proceeds of that Loan are, at the
date of the relevant request, needed by the Borrower for the purpose of the Project, or will be needed for that purpose within six (6) months of that date or are needed to reimburse the Borrower for costs incurred in connection with the
Project; 
 (c) since the date of this Agreement, nothing has occurred and is continuing that has or can reasonably be expected to have a
Material Adverse Effect; 
 (d) since the date of its most recent financial statements, neither the Borrower nor the Sponsor, nor any of
their respective Affiliates has incurred any material loss or liability (except such liabilities as may be incurred in accordance with Section 6.02 (Negative Covenants )); 

(e) the representations and warranties made in Article IV are true and correct in all material respects on and as of the date of that Loan with
the same effect as if those representations and warranties had been made on and as of the date of that Loan (but in the case of Section 4.01 (c) (Representations and Warranties), without the words in parentheses); 

(f) the proceeds of that Loan are not in reimbursement of, or to be used for, expenditures in the territories of any country which is not a
member of the World Bank or for goods produced in or services supplied from any such country; 
 (g) IFC has received (if it so requires) a
legal opinion or opinions in form and substance satisfactory to IFC, of IFC’s counsel in Gabon, New York, New York, London, England and/or Texas, and concurred in by counsel for the Borrower in the relevant jurisdiction(s), with respect to any
matters relating to that Loan; 
 (h) after giving effect to that Loan, the Borrower would not be in violation of: 

 

	 	(i)	its Charter; 

  

	 	(ii)	any provision contained in any document to which the Borrower is a party (including this Agreement) or by which the Borrower is bound; 

 

	 	(iii)	any law, rule, regulation, Authorization or agreement or other document binding on the Borrower directly or indirectly limiting or otherwise restricting the Borrower’s borrowing power or authority or its ability to
borrow; 

  
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	 	(iv)	the Performance Standards; or 

  

	 	(v)	the EHS Guidelines; 

 (i) the representations and warranties made by the Sponsor and VAALCO
International, respectively, in Section 18.01 of the Guarantee, Subordination and Share Retention Agreement and the Pledge of Shares, respectively, are true and correct in all material respects on and as of the date of that Loan with the same
effect as if those representations and warranties had been made on and as of the date of that Loan; 
 (j) no Liquidity Event has occurred
and is continuing; and 
 (k) following the making of the Loan, including any Rollover Loan, the aggregate outstanding amount of all Loans
under that Tranche shall not exceed the Maximum Available Amount for that Tranche, and the LLCR and FLCR for that Tranche and the DSCR shall not be less than the Minimum Levels. If IFC so requires in connection with any Loan (including any Rollover
Loan), the Borrower shall provide to IFC an updated IFC Base Case confirming the above. 
 Section 5.03. Borrower’s
Certification. 
 (a) Except as provided for in Section 5.03 (b), the Borrower shall deliver to IFC with respect to each request
for Loan: 
  

	 	(i)	certifications, in the form included in Schedule 2 signed by an Authorized Representative, relating to the conditions specified in Section 5.02 (Conditions of All Loans) (other than the condition in
Section 5.02 (g)) expressed to be effective as of the date of that relevant Loan; and 

  

	 	(ii)	such evidence as IFC may reasonably request of the proposed utilization of the proceeds of that Loan or the utilization of the proceeds of any prior Loan. 

(b) In the case of any Rollover Loan, except where the Borrower makes a specific representation or where certifications or evidence is
requested by IFC pursuant to Section 5.03(a) above, the Borrower shall be deemed to have provided such certifications as of the date of such Rollover Loan. 

Section 5.04. Conditions for IFC Benefit. The conditions in Section 5.01 through Section 5.03 are for the benefit
of IFC and may be waived only by IFC in its sole discretion. 

  
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 ARTICLE VI 

Particular Covenants 

Section 6.01. Affirmative Covenants. Unless IFC otherwise agrees, the Borrower shall: 

(a) carry out the Project and conduct its business with due diligence and efficiency and in accordance with (i) good international oil
industry practices and standards; (ii) sound financial and business practices generally accepted in the international oil industry; (iii) the Development Plan(s) and approved Work Program and Budget(s); and (iv) all applicable laws
and regulations; 
 (b) cause the Loans to be applied exclusively to the Project; 

(c) maintain an accounting and control system, management information system and books of account and other records, which together adequately
present fairly the financial condition of the Borrower and the results of its operations in conformity with the Accounting Principles; 
 (d)
maintain at all times a firm of internationally recognized independent public accountants acceptable to IFC as auditors of the Borrower; 

(e) irrevocably authorize, in the form of Schedule 5, the Auditors (whose fees and expenses shall be for the account of the Borrower) to
communicate directly with IFC at any time regarding the Borrower’s accounts and operations, and provide to IFC a copy of that authorization, and, no later than thirty (30) days after any change in Auditors, issue a similar authorization to
the new Auditors and provide a copy thereof to IFC; 
 (f) upon IFC’s request, such request to be made with reasonable prior notice to
the Borrower, except if an Event of Default or Potential Event of Default is continuing or if special circumstances so require, permit representatives of IFC and CAO, during normal office hours, to: 

 

	 	(i)	visit the Project site and any of the premises where the business of the Borrower is conducted (such visit to be conducted in conformance with the Borrower’s health, safety and environment policy to the extent that
such policy does not unreasonably interfere therewith); 

  

	 	(ii)	inspect all facilities, plant and equipment comprised in the Project; 

  
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	 	(iii)	have access to the Borrower’s books of account and records; and 

  

	 	(iv)	have access to those employees, agents, contractors and subcontractors of the Borrower who have or may have knowledge of matters with respect to which IFC seeks information; 

(g) ensure that the design, construction, operation, maintenance, management and monitoring of the Project’s sites, plants, equipment,
operations and facilities are undertaken in compliance with (i) the E&S Action Plan, (ii) the applicable requirements of the Performance Standards, and (iii) the EHS Guidelines; 

(h) periodically review the form of Annual Monitoring Report and advise IFC as to whether revision of the form is necessary or appropriate in
light of changes to the Borrower’s business or operations, or in light of environmental or social risks identified by the Borrower’s E&S Management System; and revise the form as agreed with IFC; 

(i) use all reasonable efforts to ensure the continuing implementation and operation of the E&S Management System to assess and manage the
social and environmental performance of the Project in a manner consistent with the Performance Standards and the EHS Guidelines; 
 (j) from
time to time, execute, acknowledge and deliver or cause to be executed, acknowledged and delivered such further instruments as may reasonably be requested by IFC for perfecting or maintaining in full force and effect the Security or for
re-registering the Security or otherwise to enable the Borrower to comply with its obligations under the Transaction Documents; 
  

	 	(k)    (i)	obtain and maintain in force (and where appropriate, renew in a timely manner) all Authorizations (including any Authorizations from any Authority of the GOG and/or CEMAC) that are necessary for the implementation of
the Project, the carrying out of the Borrower’s business and operations generally and the compliance by the Borrower with all its obligations under the Transaction Documents and the Material Contracts; and 

 

	 	(ii)	comply with all the conditions and restrictions contained in, or imposed on the Borrower by, those Authorizations; 

(l) enter into and maintain in effect at all times a Marketing Contract relevant for the sale of production from the Etame Block Fields in a
form satisfactory to IFC, and deliver to IFC a signed copy of such Marketing Contract in effect from time to time; 

  
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 (m) pay all royalties and all Taxes including license and other fees, which are properly assessed
against it, not later than the due date therefor; 
 (n) maintain at all times, the LLCR and FLCR for each Tranche and the DCSR for the
current Determination Period (and during the last two Fiscal Quarters of any Fiscal Year, the next Determination Period as well) at or above the Minimum Level and the Debt to Equity Ratio at or below 60:40 (calculated, for the avoidance of doubt, as
a ratio and not a fraction); 
 (o) ensure that on each Quarter End Date, the ratio of Net Debt as at that Quarter End Date to EBITDAX for
the Relevant Period ending on that Quarter End Date shall be less than 3.0:1; 
 (p) ensure that (i) the funds in the VAALCO Accounts
are used only as permitted in accordance with the Transaction Documents and (ii) the funds in the Etame Accounts are used only as permitted in accordance with the Etame Accounts Agreement; 

(q) ensure that the amount standing to the credit of the VAALCO Operating Account is at all times not less than the then-current Minimum
Interest/Fees Reserve Amount. 
 (r) consult with IFC prior to the appointment by the Borrower of an expert or arbitrator pursuant to the
provisions of any Material Contract to resolve any disputes referred to in Section 6.03 (j); 
 (s) periodically review the form of the
Annual Monitoring Report and advise IFC as to whether modification of the form is necessary based on any changes in the Project, and/or revise the form as agreed with or requested by IFC; 

(t) at all times duly (i) maintain (x) its corporate existence in the State of Delaware or, after the Conversion, Gabon and
(y) maintain any qualifications for doing business in Gabon and Texas under the laws of Gabon and Texas, respectively, and comply, in a timely manner, with all the laws applicable to it, and (ii) comply with its Charter; 

(u) ensure that any interest rate of any Affiliate Subordinated Debt shall not, at any time, be higher than the interest rate specified in
respect of any Loan under this Agreement; 
 (v) contemporaneously with the execution of this Agreement, provide the Sponsor and the VAALCO
Accounts Bank with a copy of this Agreement; 

  
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 (w) in the event the GOG or any of its Authorities or assigns elects to exercise its preference
rights under Article 24 and/or Article 25 of the PSC, ensure that any payments made by the GOG and/or its Authorities or assigns, following the exercise of such rights, are paid to the Etame Revenue Account or, if required to be paid elsewhere, are
transferred promptly to the Etame Revenue Account; 
 (x) comply with all of its obligations under the Material Contracts and at all times
maintain and enforce its rights under the Material Contracts; 
 (y) other than as required under Section 35 of the PSC, export the
entire Borrower’s share (as determined in accordance with the PSC and JOA) of the oil produced from the Etame Block Fields and receive Dollar-denominated sales proceeds therefor; 

(z) ensure adequate segregation of costs including financing thereof incurred in connection with the Project and any other activity for the
purpose of the books of account and other records in conformity with applicable law, the PSC, the JOA and any other relevant agreement and in accordance with the Accounting Principles; 

(aa) prior to the election by any Project Partner to take any of its share of oil production from the Etame Block Fields in kind, ensure that
such Project Partner has (i) entered into an agreement with the Operator that provides, inter alia, that all proceeds from the sale of such oil are deposited directly into the Etame Revenue Account, such agreement to be
satisfactory in form and substance to IFC, or (ii) entered into such other arrangements with the Operator as shall be acceptable to IFC, acting reasonably, to ensure that such Project Partner is able to fulfill its direct or indirect
obligations under or in connection with any Material Contracts; 
 (bb) within 120 days of the end of each Fiscal Year, 

 

	 	(i)	procure the public disclosure of all material national, regional and local payments in respect of taxes, royalties, bonus and signature payments and all other material payments that are in the nature of taxes, profit
share, recoverable petroleum costs, production share, or for rights to access resources made in that Fiscal Year by or on behalf of the Borrower, the Sponsor and/or any of their respective Affiliates to any local, regional or national governmental
Authority in each jurisdiction in which any Borrowing Base Asset is located (including any state-owned company in each such jurisdiction); provided that, such disclosure shall be substantially in the form set out in Schedule 12 (Material Payments
Made to Government); and 

  
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	 	(ii)	publish on a webpage readily accessible to the public in the language of the contracts, the PSC (and any material amendments thereto together with the GOG decrees approving such amendments) and EEAs; provided that, such
publication shall be made prior to the date of the First Loan and maintained until all monies payable under this Agreement have been paid in full to IFC; and 

(cc) deliver to IFC, promptly following publication, a copy of all information disclosed pursuant to Section 6.01 (bb). 

Section 6.02. Negative Covenants. Unless IFC otherwise agrees, the Borrower shall not: 

(a) make any Restricted Payments: 
  

	 	(i)	other than during a Restricted Payment Period; and 

  

	 	(ii)	if, either prior to or after making such Restricted Payment: 

  

	 	(A)	an Event of Default or Potential Event of Default exists or would occur and be continuing; 

  

	 	(B)	the Debt to Equity Ratio would exceed 60:40, 

  

	 	(C)	any of the DSCR, LLCR, or FLCR for the then-current Determination Period is below the Minimum Level; or 

  

	 	(D)	the ratio of Net Debt as at the most recent Quarter End Date to EBITDAX for the Relevant Period ending on that Quarter End Date would be equal to or greater than 3.0:1; 

 

	 	(E)	a Liquidity Event exists or would occur and be continuing; or 

  

	 	(F)	the amount standing to the credit of the VAALCO Operating Account is less than the then-current Minimum Aggregate Reserve Amount (except to the extent expressly permitted under Section 4.02(c) of VAALCO Accounts
Agreement); 

  
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 provided always that if the Borrower is permitted to make any Restricted Payments pursuant to this
Section 6.02 (a), such Restricted Payments shall be made in accordance with the terms of the VAALCO Accounts Agreement; 
 (b) incur
expenditures or commitments for expenditures for fixed or other non-current assets in any Determination Period, other than those required for carrying out the Project and other expenditures included in the IFC
Base Case, unless (i) after incurring those expenditures or commitments each of the FLCR and the LLCR for each Tranche shall exceed the Minimum Levels and there shall be no Liquidity Event, and (ii) those expenditures or commitments do not
exceed an aggregate amount equivalent to two million Dollars ($2,000,000) in the relevant Determination Period; 
 (c) incur, assume or
permit to exist any Debt except for Permitted Debt; 
 (d) enter into any agreement or arrangement to lease any property or equipment of any
kind, except the FPSO Contract and leases of land/buildings and equipment, as necessary to carry on the Borrower’s business and operate the Project; 

(e) enter into any Derivative Transaction or assume the obligations of any party to any Derivative Transaction unless the Derivative
Transaction is consistent with a hedging program previously approved by IFC, which approval shall not be unreasonably withheld; 
 (f) enter
into any agreement or arrangement to guarantee or, in any way or under any condition, assume or become obligated for all or any part of any financial or other obligation of another Person except as required by the terms of the JOA; 

(g) create or permit to exist any Lien on any property, revenues or other assets, present or future, of the Borrower, except for Permitted
Liens; 
 (h) enter into any transaction except in the ordinary course of business on the basis of
arm’s-length arrangements (including transactions whereby the Borrower might pay more than the ordinary commercial price for any purchase or might receive less than the full
ex-works commercial price (subject to normal trade discounts) for its products); 
 (i) establish any
sole and exclusive purchasing or sales agency; 
 (j) enter into any partnership, profit-sharing or
royalty agreement or other similar arrangement whereby the Borrower’s income or profits are, or might be, shared with any other Person; 

  
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 (k) enter into any management contract or similar arrangement whereby its business or operations
are managed by any other Person; 
 (l) form or have any Subsidiary; 

(m) make or permit to exist loans or advances to, or deposits (except commercial bank deposits in the ordinary course of business) with, other
Persons or investments in any Person or enterprise other than as permitted by the VAALCO Accounts Agreement, the Etame Accounts Agreement and Section 4.8 of the JOA and the Accounting Procedures set forth in Exhibit “A” to the JOA;

 (n) change its Charter in any material respect; 

(o) change its Fiscal Year; 
 (p)
change in any material way the nature or scope of the Project or change the nature of its present or contemplated business or operations; 

(q) sell, transfer, lease or otherwise dispose of all or a substantial part of its assets, other than inventory, whether in a single
transaction or in a series of transactions, related or otherwise other than assets that have been worn out or are obsolete and are replaced or upgraded or that are no longer required for the purposes of carrying out the Project, in each case in the
ordinary course of business and in a manner consistent with the Transaction Documents; 
 (r) undertake or permit any merger, spin-off,
consolidation or reorganization; 
 (s) terminate, amend or grant any consent or waiver with respect to any provision of any Material
Contract; provided that the Borrower may from time to time amend or grant consents or waivers with respect to (i) provisions of a Material Contract (other than the PSC, JOA and the Etame Accounts Agreement) if necessary for the implementation
and safe and efficient operation of the Project so long as such amendments, consents or waivers have no Material Adverse Effect and do not change any material provisions such as the parties to such Material Contracts, pricing and payment and term,
etc.; and (ii) provisions of the PSC and/or the JOA solely for the purposes of effectuating a permitted transfer of interests thereunder by one of the other Project Partners but in no event by the Borrower; 

(t) use the proceeds of any Loan in the territories of any country which is not a member of the World Bank or for reimbursements of
expenditures in those territories or for goods produced in or services supplied from any such country; 

  
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 (u) engage in any business activity outside the scope of the PSC and with respect to activities
within the scope of the PSC, any business activity that might hinder the completion and normal operations of the Project or the Borrower’s ability to perform fully its obligations under the Transaction Documents and Material Contracts; 

(v) engage in (and shall not authorize or permit any Affiliate or any other Person acting on its behalf to engage in) with respect to the
Project or any transaction contemplated by this Agreement, any Sanctionable Practices. The Borrower further covenants that should IFC notify the Borrower of its concerns that there has been a violation of the provisions of this Section or of
Section 4.01 (s) of this Agreement, it shall cooperate in good faith with IFC and its representatives in determining whether such a violation has occurred, and shall respond promptly and in reasonable detail to any notice from IFC, and
shall furnish documentary support for such response upon IFC’s request; 
 (w) enter into any transaction or engage in any activity
prohibited by any resolution of the United Nations Security Council under Chapter VII of the United Nations Charter; 
 (x) conduct business
or enter into any transaction with, or transmit funds through (and shall not authorize or permit any Affiliate or any other Person acting on its behalf to conduct business, enter into any transaction with, or transmit funds through), a Shell Bank;

 (y) reduce its working interest under the PSC and JOA below 30.35% during the exploration phase and below 28.07% during the production
phase; 
 (z) create or permit to exist any Lien on the Houston Account; and 

(aa) use the proceeds of any Loan in connection with the development of the Ebouri Project prior to obtaining the Ebouri Project Authorizations
and the written approval of IFC. 
 Section 6.03. Reporting Requirements. Unless IFC otherwise agrees, the Borrower
shall: 
 (a) as soon as available but in any event within forty (40) days after the end of each Quarter End Date, deliver to IFC: 

 

	 	(i)	 two (2) copies of the Borrower’s complete financial statements for such quarter prepared in accordance with the Accounting Principles (and,
to the extent required by applicable law after the Conversion, a copy of the financial statements for such quarter prepared in accordance with the generally accepted accounting principles as in effect in

  
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Gabon, together with a description of the basis for the differences (if any) from the financial statements prepared in accordance with the Accounting Principles), certified by an Officer of the
Borrower; 

  

	 	(ii)	a report, with respect to the relevant Development Plans and Work Program and Budgets, on the progress in implementation of the Project, including any factors that have or could reasonably be expected to have a Material
Adverse Effect; 

  

	 	(iii)	a certificate from an Officer of the Borrower attaching a description of available data on monthly rates for sales, on oil, gas and water production and injection rates and other items of maintenance and improvements
and extraordinary items relating to the Project; and 

  

	 	(iv)	a statement of all transactions during that quarter between the Borrower and each of its Affiliates, if any, and a certification by an Officer of the Borrower that those transactions were on the basis of
arm’s-length arrangements; 

 (b) as soon as available but in any event within ninety (90) days after the end of each
Fiscal Year, deliver to IFC: 
  

	 	(i)	two (2) copies of its complete and audited financial statements for that Fiscal Year, which are in agreement with its books of account and prepared in accordance with the Accounting Principles (and, to the extent
required by applicable law after the Conversion, a copy of the audited financial statements for such Fiscal Year prepared in accordance with the generally accepted accounting principles as in effect in Gabon, together with a description of the basis
for the differences (if any) from the audited financial statements prepared in accordance with the Accounting Principles), together with the Auditors’ audit report on them, all in form satisfactory to IFC; 

 

	 	(ii)	a management letter and such other communication from the Auditors to the Borrower or its management commenting, with respect to that Fiscal Year, on, among other things, the adequacy of the Borrower’s financial
control procedures, accounting systems and management information system and on the deficiencies, if any, that the Auditors consider material in the Borrower’s financial accounting and other systems, management and accounts; 

  
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	 	(iii)	a report, prepared and certified by the Chief Financial Officer of the Borrower, confirming that the Borrower was in compliance with the financial ratios and financial covenants contained in Sections 6.01
(Affirmative Covenants) and 6.02 (Negative Covenants) as of the end of that Fiscal Year or, as the case may be, detailing any non-compliance; 

 

	 	(iv)	a report by the Borrower on its operations during that Fiscal Year, in the form of, and addressing the topics listed in, Schedule 6; 

 

	 	(v)	a statement by the Borrower of all transactions between the Borrower and each of its Affiliates, if any, during that Fiscal Year, and a certification by an Officer of the Borrower that those transactions were on the
basis of arm’s-length arrangements; 

  

	 	(vi)	a certification from an Officer of the Borrower that, to the best of such Officer’s knowledge after due inquiry, there exists no Event of Default or Potential Event of Default or, if such event exists, specifying
its nature, the period of its existence and what action the Borrower proposes to take with respect to it; and 

  

	 	(vii)	a report by the Borrower in the form of Schedule 11 (Development Impact Data for Annual Monitoring Report) and any other related information requested by IFC; 

(c) deliver to IFC, promptly following receipt, a copy of any management letter or other communication sent by the Auditors (or any other
accountants retained by the Borrower) to the Borrower or its management in relation to the Borrower’s financial, accounting and other systems, management or accounts, if not provided pursuant to Section 6.03 (b) (ii); 

(d) within ninety (90) days of the end of each Fiscal Year, deliver to IFC: 

 

	 	(i)	the completed Annual Monitoring Report, together with a certification from a duly qualified independent consultant or 

  
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	 	(ii)	a report from an independent monitoring group approved by IFC covering all aspects of the Annual Monitoring Report form, 

in each case, confirming compliance with the E&S Action Plan and the social and environmental covenants set forth in Section 6.01 (g), as the case
may be, identifying any non-compliance or failure and the actions being taken to remedy it; 
 (e) as soon as possible but no later than
three (3) days after its occurrence, notify IFC of any social, labor, health and safety, security or environmental incident, accident or circumstance having, or which could reasonably be expected to have, a Material Adverse Effect or a material
adverse impact on the implementation or operation of the Project in accordance with the Performance Standards and the EHS Guidelines, specifying in each case the nature of the incident, accident or circumstance and any effects resulting or likely to
result therefrom, and the measures the Borrower is taking or plans to take to address them and to prevent any future similar event; and keep IFC informed of the on-going implementation of those measures and plans; 

(f) give notice to IFC, concurrently with the Borrower’s notification to its stockholders, of any meeting of its stockholders, such notice
to include the agenda of the meeting; and, as soon as available, deliver to IFC two (2) copies of: 
  

	 	(i)	all notices, reports and other communications of the Borrower to its stockholders, whether any such communication has been made on an individual basis or by way of publication in a newspaper or other communication
medium; 

  

	 	(ii)	the minutes of all stockholders’ meetings; and 

  

	 	(iii)	any documents to be approved at such meetings, including any such documents related to the Conversion; 

(g) give notice to IFC of any meetings of the Operating Committee and the Technical Committee (as each such term is defined in the JOA) and the
Technical Consulting Committee (as such term is defined in PSC); and, as soon as available, deliver to IFC two (2) copies of: 
  

	 	(i)	all notices, reports and other communications material to the Etame Block or the Etame Block Fields distributed in connection with such meetings; 

 

	 	(ii)	the minutes of all such meetings; and 

  
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	 	(iii)	copies of any presentations given or other documents distributed at such meetings; 

 (h) deliver
copies to IFC of all Development Plans for the Etame Block or Etame Block Fields approved by the Operating Committee pursuant to the JOA and all EIA(s) in relation to the Project; 

(i) promptly notify IFC of any proposed change in the nature or scope of the Project or the business or operations of the Borrower and of any
event or condition which has or may reasonably be expected to have a Material Adverse Effect; 
 (j) promptly upon becoming aware of
(i) any litigation or administrative proceedings before any Authority or arbitral body to which the Borrower is or may become a party; (ii) any material dispute with any Authority or any other Project Partner; (iii) any technical or
other material disputes with any other third party under any Project Document; or (iv) the occurrence of any event of force majeure under any Project Document, notify IFC of that event specifying the nature of that litigation, the proceedings
or the event and the steps the Borrower is taking or proposes to take with respect thereto; 
 (k) promptly upon the occurrence of an Event
of Default or Potential Event of Default, notify IFC specifying the nature of that Event of Default or Potential Event of Default and any steps the Borrower is taking to remedy it; 

(l) provide to IFC, in a timely manner, the insurance certificates and other information referred to in Section 6.04 (d)
(Insurance); 
 (m) provide to IFC a Reserves Certification, at the Borrower’s expense, within forty-five (45) days of the
end of each Fiscal Year and, from time to time but no more than two (2) times per Fiscal Year, as otherwise reasonably requested by IFC; 

(n) promptly notify IFC if (i) the GOG or any of its Authorities or assigns notifies the Borrower that the GOG or its assigns is
exercising its preference rights under Article 24 and/or Article 25 of the PSC or (ii) the Borrower has reason to believe the GOG and/or any of its Authorities or assigns intends to exercise such rights; 

(o) promptly provide to IFC such information about the Borrower, its assets and the Project that IFC requests from time to time on behalf of
any Participant for such Participants to satisfy requirements under applicable law and regulations, including those concerning anti-money laundering and combating the financing of terrorism (AML/CFT); 

  
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 (p) as soon as available provide to IFC (i) the results of any crude marketing bidding
process undertaken in connection the Borrowing Base Assets and (ii) each Crude Oil Entitlement Report; and 
 (q) promptly provide to
IFC such other information as IFC from time to time requests about the Borrower, its assets and the Project (including evidence of the amount standing to the credit of the VAALCO Operating Account). 

Section 6.04. Insurance. 

(a) Insurance Requirements and Borrower’s Undertakings. Unless IFC otherwise agrees, the Borrower shall: 

 

	 	(i)	insure and keep insured, with financially sound and reputable insurers, all its assets and business against all insurable losses to include the insurances specified in Annex D and any insurance required by law;

  

	 	(ii)	punctually pay any premium, commission and any other amounts necessary for effecting and maintaining in force each insurance policy; 

 

	 	(iii)	promptly notify the relevant insurer of any claim by the Borrower under any policy written by that insurer and diligently pursue that claim; 

 

	 	(iv)	comply with all warranties under each policy of insurance; 

  

	 	(v)	not do or omit to do, or permit to be done or not done, anything which might prejudice the Borrower’s, or, where IFC is a loss payee or an additional named insured, IFC’s right to claim or recover under any
insurance policy; and 

  

	 	(vi)	not vary, rescind, terminate, cancel or cause a material change to any insurance policy; 

 provided always that
if at any time and for any reason any insurance required to be maintained under this Agreement shall not be in full force and effect, then IFC shall thereupon or at any time while the same is continuing be entitled (but have no such obligation) on
its own behalf to procure such insurance at the expense of the Borrower and to take all such steps to minimize hazard as IFC may consider expedient or necessary. 

(b) Policy Provisions. Each insurance policy required to be obtained pursuant to this Section 6.04 shall be in English
language, be on terms and conditions acceptable to IFC, and shall contain cut-through provisions, and assignment of reinsurance proceeds with respect to insurance governed by Gabon law, together with provisions to the effect that: 

  
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	 	(i)	no policy can expire nor can it be cancelled or suspended by the Borrower or the insurer for any reason (including failure to renew the policy or to pay the premium or any other amount) unless IFC and, in the case of
expiration or if cancellation or suspension is initiated by the insurer, the Borrower receive at least forty-five (45) days’ notice (or such lesser period as IFC may agree in respect of cancellation, suspension or termination in the event
of war and kindred peril) prior to the effective date of termination, cancellation or suspension; 

  

	 	(ii)	IFC and all contractors working at the Project site during the construction phase are named as additional named insured on all liability policies obtained by the Borrower pursuant to Annex D and, to the best of the
Borrower’s efforts, on any liability policies obtained by third parties in connection with the Project; 

  

	 	(iii)	where relevant, all its provisions (except those relating to limits of liability) shall operate as if they were a separate policy covering each insured party; and 

 

	 	(iv)	on every insurance policy on the Borrower’s assets which are the subject of the Security and for business interruption, IFC is named as loss payee for any claim of, or any series of claims arising with respect to
the same event whose aggregate amount is, the equivalent of three million Dollars ($3,000,000) or more (which amount relates to the Etame Block Assets as a whole and not just the Borrower’s working interest therein). 

 

	 	(c)	Application of Proceeds. 

  

	 	(i)	At its discretion, IFC may remit the proceeds of any insurance paid to it to the Borrower to repair or replace the relevant damaged assets or may apply such proceeds towards any amount payable to IFC under this
Agreement, including to repay or prepay all or any part of the Loan in accordance with Section 3.06 (Prepayment); provided that there shall be no minimum amount or notice period or prepayment fee for any such prepayment.

  
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	 	(ii)	The Borrower shall use any insurance proceeds it receives (whether from IFC or directly from the insurers) with respect to the Borrower’s working interest (as determined in accordance with the PSC and JOA) in the
Etame Block Assets for loss of or damage to any asset solely to replace or repair that asset consistently with good international oil and gas practices. 

(d) Reporting Requirements. Unless IFC otherwise agrees, the Borrower shall provide to IFC the following: 

 

	 	(i)	as soon as possible after its occurrence, notice of any event which entitles the Borrower to claim for an aggregate amount exceeding the equivalent of one million Dollars ($1,000,000) under any one or more insurance
policies; 

  

	 	(ii)	within thirty (30) days after any insurance policy is issued to the Borrower, a copy of that policy incorporating any loss payee provisions required under Section 6.04 (b) (iv) (unless that policy
has already been provided to IFC pursuant to Section 5.01 (j) (Conditions of First Loan)); 

  

	 	(iii)	not less than ten (10) days prior to the expiry date of any insurance policy (or, for insurance with multiple renewal dates, not less than ten (10) days prior to the expiry date of the policy on the principal
asset), a certificate of renewal from the insurer, insurance broker or agent confirming the renewal of that policy and the renewal period, the premium, the amounts insured for each asset or item and any changes in terms or conditions from the
policy’s issue date or last renewal, and confirmation from the insurer that provisions naming IFC as loss payee or additional named insured, as applicable remain in effect; 

 

	 	(iv)	such evidence of premium payment as IFC may from time to time request; and 

  

	 	(v)	any other information or documents on each insurance policy as IFC requests from time to time. 

Section 6.05. IFC Base Case and Redetermination Process. 

(a) Semi-Annual Reporting Requirements. Not later than sixty (60) days prior to (i) each Scheduled Redetermination
Date, and (ii) any other interim date specified from time to time by notice from IFC to the Borrower (any such date, an “Interim Redetermination Date”, to be not less than ninety (90) days after such notice), the Borrower shall
deliver to IFC a certificate from an Officer of the Borrower attaching: 

  
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	 	(x)	a technical note, summarizing operational and technical performance of the immediately previous, current and subsequent Determination Periods, and containing the information set forth in Schedule 8; and

  

	 	(y)	a copy of the then-current Work Program and Budget for the Etame Block or Etame Block Fields approved by the Operating Committee pursuant to the JOA. 

(b) IFC Base Case. After receipt of the information submitted by the Borrower in accordance with paragraph (a) above, the
IFC Base Case shall be updated, and the Net Cash Flow, Borrowing Base Amounts and other Relevant Figures determined, in a manner acceptable to IFC as of the relevant Redetermination Date, in each case in accordance with the IFC Base Case Assumptions
and any other information deemed relevant by IFC in its sole discretion to such determination. 
 ARTICLE VII 

Events of Default 

Section 7.01. Acceleration after Default. If any Event of Default occurs and is continuing (whether it is voluntary or
involuntary, or results from operation of law or otherwise), IFC may, by notice to the Borrower, require the Borrower to repay the Loans or such part of the Loans of each Tranche as is specified in that notice. On receipt of any such notice, the
Borrower shall immediately repay the Loans (or that part of the Loans specified in that notice) and pay all interest accrued on them, and any other amounts then payable under this Agreement. The Borrower waives any right it might have to further
notice, presentment, demand or protest with respect to that demand for immediate payment. 
 Section 7.02. Events of
Default. It shall be an Event of Default if: 
 (a) the Borrower fails (i) to pay when due any part of the principal of, or
interest on, any Loan or any fees payable in connection therewith or (ii) to comply with its obligation under Section 6.01 (q), and such failure continues for a period of five (5) days; 

(b) the Borrower or the Sponsor fails to pay when due any part of the principal of, or interest on, any loan from IFC to the Borrower other
than the Loans and any such failure continues for the relevant period of grace provided for in the agreement providing for that loan; 

  
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 (c) the Borrower or the Sponsor fails to comply with any of its obligations under this Agreement,
the Guarantee, Subordination and Share Retention Agreement or any other Transaction Document or any other agreement between it and IFC (other than as set out in subsections (a) and (b) or as expressly addressed in this Section 7.02
below), and any such failure continues for a period of thirty (30) days after the date on which IFC notifies the Borrower of that failure or, if earlier, the date on which the Borrower or the Sponsor becomes aware of such failure; 

(d) any party to a Transaction Document (other than IFC or the Borrower or the Sponsor) fails to observe or perform any of its obligations
under that Transaction Document, and any such failure continues for a period of thirty (30) days after the date on which IFC notifies the Borrower of that failure or, if earlier, the date on which the Borrower or the Sponsor becomes aware of
such failure; 
 (e) any representation or warranty made in Article IV or in connection with the execution of, or any request (including a
request for a Loan, or in respect of a Rollover Loan, a deemed request) under, this Agreement or any other Transaction Document is found to be incorrect in any material respect; 

(f) any Authority condemns, nationalizes, seizes, or otherwise expropriates all or any substantial part of the property or other assets of the
Borrower or of its capital stock, or assumes custody or control of that property or other assets or of the business or operations of the Borrower or of its capital stock, or takes any action for the dissolution or disestablishment of the Borrower or
any action that would prevent the Borrower or its officers from carrying on all or a substantial part of its business or operations; 
 (g)
the Borrower: 
  

	 	(i)	takes any step (including petition, giving notice to convene or convening a meeting) for the purpose of making, or proposes or enters into, any arrangement, assignment or composition with or for the benefit of its
creditors (including any such steps taken during or after the Conversion); 

  

	 	(ii)	ceases or threatens to cease to carry on its business or any substantial part of its business; or 

  

	 	(iii)	is unable, or admits in writing its inability to pay its debts as they fall due or otherwise becomes insolvent; 

  
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 (h) an order is made or an effective resolution passed or analogous proceedings taken for the
Borrower’s winding up, bankruptcy or dissolution or a petition is presented or analogous proceedings taken for the winding up or dissolution of the Borrower; 

(i) the beneficiary of any Lien lawfully takes possession, or a liquidator, judicial custodian, receiver, administrative receiver or trustee or
any analogous officer is appointed, of the whole or any material part of the undertaking or assets of the Borrower or any expropriation, attachment, sequestration, distress or execution (or analogous process) is levied or enforced upon or issued
against any of the assets or property of the Borrower for an amount in excess of the equivalent of one million five hundred thousand Dollars ($1,500,000) and is not discharged within thirty (30) days; 

(j) any other event occurs which under any applicable law would have an effect analogous to any of those events listed in Section 7.02
(g), Section 7.02 (h) and Section 7.02 (i); 
 (k) the Borrower fails to pay any of its Debt (other than the Loans or any
other loan from IFC to the Borrower) or to perform any of its obligations under any agreement pursuant to which there is outstanding any Debt, and any such failure continues for more than any applicable period of grace or any such Debt becomes
prematurely due and payable or is placed on demand, provided such non-payment or non-performance will not be an Event of Default if (i) such non-payment or non-performance relates to a Debt not exceeding five hundred thousand Dollars ($500,000)
and (ii) is being contested by the Borrower in good faith in a court of competent jurisdiction for reasons other than its inability to make due and punctual payment and for which the Borrower has set aside adequate reserves; 

(l) any Authorization necessary for the Borrower to perform and observe its obligations under any Transaction Document, or to carry out the
Project, is not obtained when required or is rescinded, terminated, lapses or otherwise ceases to be in full force and effect, including with respect to the remittance to IFC or its assignees, in Dollars, of any amounts payable under any Transaction
Document, and is not restored or reinstated within thirty (30) days of notice by IFC to the Borrower requiring that restoration or reinstatement; 

(m) any Security Document or any of its provisions: 
  

	 	(i)	is revoked, terminated or ceases to be in full force and effect or ceases to provide the security intended or the priority contemplated under this Agreement and/or the Guarantee, Subordination and Share Retention
Agreement, without, in each case, the prior consent of IFC; 

  
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	 	(ii)	becomes unlawful or is declared void; or 

  

	 	(iii)	is repudiated or its validity or enforceability is challenged by any Person and any such repudiation or challenge continues for a period of thirty (30) days, during which period such repudiation or challenge has no
effect; 

 (n) any Transaction Document (other than a Security Document) or any of its provisions (including the obligation to
pay any amount of interest, including default interest, at the rates determined in accordance therewith): 
  

	 	(i)	is revoked, terminated or ceases to be in full force and effect without, in each case, the prior consent of IFC, and that event, if capable of being remedied, is not remedied to the satisfaction of IFC (acting in its
sole discretion) within thirty (30) days of IFC’s notice to the Borrower; or 

  

	 	(ii)	is or becomes unlawful or is declared void; 

 (o) any Transaction Document (other than a
Security Document) is repudiated or the validity or enforceability of any of its provisions at any time is challenged by any Person and such repudiation or challenge is not withdrawn within thirty (30) days of IFC’s notice to the Borrower
requiring that withdrawal; provided that no such notice shall be required or, as the case may be, the notice period shall terminate if and when such repudiation or challenge becomes effective; 

(p) any Material Contract: 
  

	 	(i)	is breached by any party to it and that breach has or could reasonably be expected to have a Material Adverse Effect; or 

  

	 	(ii)	is revoked, terminated or ceases to be in full force and effect without the prior consent of IFC, or performance of any of the material obligations under any such agreement becomes unlawful or any such agreement is
declared to be void or is repudiated or its validity or enforceability at any time is challenged by any party to it; 

 (q) the
Borrower ceases to be the Operator of the Project and the Person designated as the Operator is not acceptable to IFC; 
 (r) the
Borrower’s right to participate in the Etame Block or the Etame Block Fields is revoked; 

  
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 (s) Control of the Borrower is transferred to any Person without the consent of IFC, provided
such consent shall not be unreasonably withheld if the proposed transferee has a proven technical record in the international oil industry, if relevant, sound financial standing and, in IFC’s reasonable judgment, a good reputation; 

(t) a final judgment, order or arbitral award for the payment of money in excess of the equivalent of one million five hundred thousand Dollars
($1,500,000) is rendered against the Borrower or any of its properties and that judgment, order or arbitral award continues to be unsatisfied for a period of thirty (30) days; 

(u) the Borrower ceases to carry on its business; or the Project is abandoned by the Borrower or, all or a significant part of the operations
of the Project or in the Etame Block is interrupted for more than 180 consecutive days; 
 (v) any of the events specified in
Section 7.02 (g) through (k) or in Section 7.02 (t) occur to the Sponsor or VAALCO International, or any of their respective properties, assets or share capital; provided that, in the case of Section 7.02 (k) and
Section 7.02 (t), such event shall only be an Event of Default if the aggregate amount of the unpaid Debt or the final judgment, order or award, as the case may be, exceeds one million five hundred thousand Dollars ($1,500,000) or its
equivalent; 
 (w) there occurs any amendment, waiver or termination of the Etame Accounts Agreement without IFC’s prior written
consent. 
 Section 7.03. Bankruptcy. If the Borrower or the Sponsor is liquidated or declared bankrupt, the Loan, all
interest accrued on it and any other amounts payable under this Agreement will become immediately due and payable without any presentment, demand, protest or notice of any kind, all of which each of the Borrower and the Sponsor waives. 

ARTICLE VIII 

Miscellaneous 

Section 8.01. Saving of Rights. (a) The rights and remedies of IFC in relation to any misrepresentation or breach of
warranty on the part of the Borrower shall not be prejudiced by any investigation by or on behalf of IFC into the affairs of the Borrower, by the execution or the performance of this Agreement or by any other act or thing by or on behalf of IFC
which might, apart from this Section, prejudice such rights or remedies. 

  
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 (b) No course of dealing or waiver by IFC in connection with any condition of any Loan under this
Agreement shall impair any right, power or remedy of IFC with respect to any other condition of any Loan, or be construed to be a waiver thereof; nor shall the action of IFC with respect to any Loan affect or impair any right, power or remedy of IFC
with respect to any other Loan. 
 (c) Unless otherwise notified to the Borrower by IFC and without prejudice to the generality of
Section 8.01 (b), the right of IFC to require compliance with any condition under this Agreement which may be waived by IFC with respect to any Loan is expressly preserved for the purposes of any subsequent or other Loan. 

(d) No course of dealing and no failure or delay by IFC in exercising, in whole or in part, any power, remedy, discretion, authority or other
right under this Agreement or any other agreement shall waive or impair, or be construed to be a waiver of or an acquiescence in, such or any other power, remedy, discretion, authority or right under this Agreement, or in any manner preclude its
additional or future exercise; nor shall the action of IFC with respect to any default, or any acquiescence by it therein, affect or impair any right, power or remedy of IFC with respect to any other default. 

Section 8.02. Notices. (a) Any notice, request or other communication to be given or made under this Agreement to IFC
or to the Borrower shall be in writing and (subject to Sections 6.03 (e), (j) and (k) (Reporting Requirements) and Section 8.05 (f) (Applicable Law and Jurisdiction)) shall be deemed to have been duly
given or made when it is delivered by hand, airmail, established courier service or facsimile to the party to which it is required or permitted to be given or made at such party’s address specified below or at such other address as such party
has from time to time designated by notice to the other party hereto, and shall be effective upon receipt. 
 For the Borrower: 

VAALCO Gabon (Etame), Inc. 
 4600
Post Oak Place 
 Suite 309 

Houston, TX 77027 
 United States
of America. 
 Facsimile: 713-623-0982 

Attention: President and Chief Executive Officer 

  
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 For IFC: 

International Finance Corporation 

2121 Pennsylvania Avenue, N.W. 

Washington, D.C. 20433 
 United
States of America 
 Facsimile: 202- 974-4307 

Attention: Director, Infrastructure and Natural Resources 

With a copy (in the case of communications relating to payments) sent to the attention of the Director, Financial Operations, at: 

Facsimile: 202-974-4318 
 (b) The
Borrower shall ensure that any notices delivered pursuant to a Material Contract that are to be provided to IFC, either directly or through the Borrower, shall be delivered by one of the methods specified in Section 8.02 (a). 

Section 8.03. English Language. All documents to be provided or communications to be given or made under this Agreement or
any other Transaction Document shall be in English and, where the original version of any such document or communication is not in English, shall be accompanied by an English translation certified by an authorized representative to be a true and
correct translation of the original. IFC may, if it so requires, obtain an English translation of any document or communication received in any other language at the cost and expense of the Borrower; and in either case IFC may deem any such
translation to be the governing version. 
 Section 8.04. Term of Agreement. This Agreement shall continue in force until
all monies payable under it have been fully paid in accordance with its provisions. 
 Section 8.05. Applicable Law and
Jurisdiction. (a) This Agreement, and all non-contractual obligations arising out of or in connection with it, is governed by and shall be construed in accordance with English law. 

(b) Subject to Section 8.05 (d), the parties agree that the courts of England shall have exclusive jurisdiction to settle any dispute
arising out of or in connection with this Agreement (including any dispute regarding non-contractual obligations and any dispute regarding the existence, validity or termination of this Agreement or the consequences of its nullity) (a
“Dispute”) and, for such purposes, irrevocably submit to the jurisdiction of such courts. Final judgment against the Borrower in any such action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction,
including Gabon, by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the judgment, or in any other manner provided by law. 

  
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 (c) For the purpose of Section 8.05 (b), the Borrower agrees that the courts of England are
the most appropriate and convenient courts to settle Disputes, and irrevocably waives any objection which it might now or hereafter have to the courts of England being nominated as the forum to hear and determine any Disputes. 

(d) Sections 8.05(b) and (c) are for the benefit of IFC only. As a result, to the extent permitted by applicable law, IFC may bring
proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by applicable law, IFC may bring concurrent proceedings in any number of jurisdictions. 

(e) The parties acknowledge and agree that no provision of this Agreement in any way constitutes or implies a waiver, termination or
modification by IFC of any privilege, immunity or exemption of IFC granted in the Articles of Agreement establishing IFC, international conventions, or applicable law. 

(f) Without prejudice to other methods of service allowed by law, any process (whether issued from the English courts or elsewhere) may be
served on the Borrower by serving that process on Bird & Bird located at 15 Fetter Lane, London EC4A 1JP (reference VAAEN.0001), England. The Borrower may by not less than ten (10) days’ notice in writing to IFC provide a
substitute address for the service of process in England. If the address for service provided for by this Section 8.05 (f), or an address substituted in accordance with this Section 8.05 (f), ceases for any reason to allow service of
process in England, IFC may by notice in writing to the Borrower appoint an agent to accept service on behalf of the Borrower, and the Borrower agrees that service on that agent will constitute valid service on it. 

(g) To the extent that the Borrower may be entitled in any jurisdiction to claim for itself or its assets immunity in respect of its
obligations under this Agreement or any other Transaction Document to which it is a party, from any suit, execution, attachment (whether provisional or final, in aid of execution, before judgment or otherwise) or other legal process or to the extent
that in any jurisdiction that immunity (whether or not claimed) may be attributed to it or its assets, the Borrower irrevocably agrees not to claim and irrevocably waives such immunity to the fullest extent permitted now or in the future by the laws
of such jurisdiction. 
 (h) The Borrower also consents with respect to any Dispute to the giving of any relief or the issue of any process
in connection with such Dispute including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be made or given in such proceedings.

  
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 (i) To the extent that the Borrower may be entitled in any proceedings relating to a Dispute or
in any proceedings arising out of or in connection with any Transaction Document (including any dispute regarding non-contractual obligations and any dispute regarding the existence, validity or termination of the Transaction Document) to which the
Borrower is a party, to apply for or to require that IFC post any security for the costs of the Borrower or for any other matter, the Borrower agrees that it will not apply or impose that requirement and, accordingly, it irrevocably waives any such
entitlement that it may otherwise have to the fullest extent permitted by applicable law. 
 Section 8.06. Disclosure of
Information. (a) IFC agrees to maintain the confidentiality of all material non-public information provided by Borrower and its Affiliates, except that, subject to confirming compliance with the provisions of this Section, IFC may
disclose any documents, records or information about the Project or the Borrower to (i) its outside counsel, auditors and rating agencies, (ii) any Person who intends to purchase a Participation, and (iii) any other Person as IFC may
deem appropriate in connection with the administration of the Loan, including for the purpose of exercising any power, remedy, right, authority, or discretion relevant to any Transaction Document, or in connection with any proposed sale, transfer,
assignment or other disposition of IFC’s rights as contemplated by Section 8.07. 
 (b) The Borrower acknowledges and agrees that,
notwithstanding the terms of any other agreement between the Borrower and IFC, a disclosure of information by IFC in the circumstances contemplated by Section 8.06 (a) does not violate any duty owed to the Borrower under this Agreement or
under any such other agreement. 
 (c) IFC acknowledges that information furnished to it pursuant to this Agreement or the Security Documents
may include material non-public information concerning the Borrower and its Affiliates and their related parties or their respective securities, and confirms that it will not use such information to deal in the securities of the Borrower, its
Affiliates or their related parties except in accordance with the federal and state securities laws of the United States. 

Section 8.07. Successors and Assignees. This Agreement binds and benefits the respective successors and assignees of the
parties. However, the Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior consent of IFC. 

Section 8.08. Amendments, Waivers and Consents. Any amendment or waiver of, or any consent given under, any provision of
this Agreement shall be in writing and, in the case of an amendment, signed by the parties. 

  
 - 83 - 

 Section 8.09. Counterparts. This Agreement may be executed in several
counterparts, each of which is an original, but all of which together constitute one and the same agreement. 
 Section 8.10.
Severability. To the fullest extent permitted by law, the invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of any other provision hereof in such
jurisdiction or of such or any other provision in any other jurisdiction. 
 Section 8.11. Rights of Third Parties. A
Person who is not a party to this Agreement has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement. 

[The remainder of this page was left blank intentionally] 

  
 - 84 - 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be signed in their respective names
as of the date first above written. 
 VAALCO GABON (ETAME), INC. 

By :/s/ W. RUSSELL SCHEIRMAN 

Name: W. Russell Scheirman 

Title : President and Chief Operating Officer 

INTERNATIONAL FINANCE CORPORATION 

By : /s/ DELANSON D. CRIST 

Name: Delanson D. Crist 

Title Senior Manager 

[Signature Page to Loan Agreement] 

 ANNEX A 

ANTI-CORRUPTION GUIDELINES FOR IFC TRANSACTIONS 

The purpose of these Guidelines is to clarify the meaning of the terms “Corrupt Practices”, “Fraudulent Practices”, “Coercive
Practices”, “Collusive Practices” and “Obstructive Practices” in the context of IFC operations. 
 1. CORRUPT
PRACTICES 
 A “Corrupt Practice” is the offering, giving, receiving or soliciting, directly or indirectly, of anything of value to
influence improperly the actions of another party. 
 INTERPRETATION 

 

	 	A.	Corrupt practices are understood as kickbacks and bribery. The conduct in question must involve the use of improper means (such as bribery) to violate or derogate a duty owed by the recipient in order for the payor to
obtain an undue advantage or to avoid an obligation. Antitrust, securities and other violations of law that are not of this nature are excluded from the definition of corrupt practices. 

 

	 	B.	It is acknowledged that foreign investment agreements, concessions and other types of contracts commonly require investors to make contributions for bona fide social development purposes or to provide funding for
infrastructure unrelated to the project. Similarly, investors are often required or expected to make contributions to bona fide local charities. These practices are not viewed as Corrupt Practices for purposes of these definitions, so long as they
are permitted under local law and fully disclosed in the payor’s books and records. Similarly, an investor will not be held liable for corrupt or fraudulent practices committed by entities that administer bona fide social development funds or
charitable contributions. 

  

	 	C.	In the context of conduct between private parties, the offering, giving, receiving or soliciting of corporate hospitality and gifts that are customary by internationally-accepted industry standards shall not constitute
corrupt practices unless the action violates applicable law. 

  
 Page 1 of 4 

 ANNEX A 
  

	 	D.	Payment by private sector persons of the reasonable travel and entertainment expenses of public officials that are consistent with existing practice under relevant law and international conventions will not be viewed as
Corrupt Practices. 

  

	 	E.	The World Bank Group does not condone facilitation payments. For the purposes of implementation, the interpretation of “Corrupt Practices” relating to facilitation payments will take into account relevant law
and international conventions pertaining to corruption. 

 2. FRAUDULENT PRACTICES 

A “Fraudulent Practice” is any action or omission, including misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a
party to obtain a financial or other benefit or to avoid an obligation. 
 INTERPRETATION 

 

	 	A.	An action, omission, or misrepresentation will be regarded as made recklessly if it is made with reckless indifference as to whether it is true or false. Mere inaccuracy in such information, committed through simple
negligence, is not enough to constitute a “Fraudulent Practice” for purposes of this Agreement. 

  

	 	B.	Fraudulent Practices are intended to cover actions or omissions that are directed to or against a World Bank Group entity. It also covers Fraudulent Practices directed to or against a World Bank Group member country in
connection with the award or implementation of a government contract or concession in a project financed by the World Bank Group. Frauds on other third parties are not condoned but are not specifically sanctioned in IFC, MIGA, or PRG operations.
Similarly, other illegal behavior is not condoned, but will not be considered as a Fraudulent Practice for purposes of this Agreement. 

 3.
COERCIVE PRACTICES 
 A “Coercive Practice” is impairing or harming, or threatening to impair or harm, directly or
indirectly, any party or the property of the party to influence improperly the actions of a party. 

  
 Page 2 of 4 

 ANNEX A 
  

 INTERPRETATION 

 

	 	A.	Coercive Practices are actions undertaken for the purpose of bid rigging or in connection with public procurement or government contracting or in furtherance of a Corrupt Practice or a Fraudulent Practice.

  

	 	B.	Coercive Practices are threatened or actual illegal actions such as personal injury or abduction, damage to property, or injury to legally recognizable interests, in order to obtain an undue advantage or to avoid an
obligation. It is not intended to cover hard bargaining, the exercise of legal or contractual remedies or litigation. 

 4.
COLLUSIVE PRACTICES 
 A “Collusive Practice” is an arrangement between two or more parties designed to achieve an
improper purpose, including to influence improperly the actions of another party. 
 INTERPRETATION 

Collusive Practices are actions undertaken for the purpose of bid rigging or in connection with public procurement or government contracting or
in furtherance of a Corrupt Practice or a Fraudulent Practice. 
 5. OBSTRUCTIVE PRACTICES 

An “Obstructive Practice” is (i) deliberately destroying, falsifying, altering or concealing of evidence material to the investigation or making
of false statements to investigators, in order to materially impede a World Bank Group investigation into allegations of a corrupt, fraudulent, coercive or collusive practice, and/or threatening, harassing or intimidating any party to prevent it
from disclosing its knowledge of matters relevant to the investigation or from pursuing the investigation, or (ii) acts intended to materially impede the exercise of IFC’s access to contractually required information in connection with a
World Bank Group investigation into allegations of a corrupt, fraudulent, coercive or collusive practice. 
 INTERPRETATION

 Any action legally or otherwise properly taken by a party to maintain or preserve its regulatory, legal or constitutional rights such as
the attorney-client privilege, regardless of whether such action had the effect of impeding an investigation, does not constitute an Obstructive Practice. 

  
 Page 3 of 4 

 ANNEX A 
  

 GENERAL INTERPRETATION 

A person should not be liable for actions taken by unrelated third parties unless the first party participated in the prohibited act in question. 

  
 Page 4 of 4 

 ANNEX B 

ACTION PLAN 
 [Attached
hereto] 

  
 Page 1 of 4 

 ANNEX C 

BORROWER/PROJECT AUTHORIZATIONS 

(See Section 6.01 (k) of the Loan Agreement) 

Part 1 Authorizations Already Obtained 
  

	 	(a)	FPSO Class Certification 

  

	 	(b)	Certificat de Conformite de L’EIE issued by the GOG for the new platform and associated facilities in the Etame field 

  

	 	(c)	Certificat de Conformite de L’EIE issued by the GOG for the new platform and associated facilities in the South East Etame and North Tchibala fields 

 

	 	(d)	Environmental Impact Assessment for the new platform and associated facilities in the Etame field (Etude d’Impact Environnemental Activité de développement Construction de la Plateforme Etame)

  

	 	(e)	Environmental Impact Assessment for the new platform and associated facilities in the South East Etame and North Tchibala fields (Etude d’Impact Environnemental Activité de développement
Construction de la Plateforme SEENT) 

  

	 	(f)	Exemption referred to in Section 5.01 (w) of this Agreement 

 Part 2 Authorizations to be
Obtained Prior to First Disbursement 
  

	 	(g)	MOH Loan Authorization 

  

	 	(h)	MOF Loan Authorization 

 Part 3 Ebouri Project Authorizations 

 

	 	(i)	Environmental Impact Assessment for the Ebouri Project 

  

	 	(j)	Certificat de Conformite de L’EIE issued by the GOG for the Ebouri Project 

  
 Page 1 of 4 

 ANNEX D 

INSURANCE REQUIREMENTS 

The Borrower shall effect and maintain the following insurance covers, at all times during the period of the Loan Agreement, under forms of
policies and with insurers and reinsurers acceptable to IFC, in the following terms: 
  

	1.	Marine Cargo Insurance, (for imported plant and equipment)  

 covering imports
(and returns if applicable) of plant, equipment, machinery and materials to the Project site; 
 Cover is to be on the basis of Institute
Cargo Clauses (A) plus War, plus Strike, Riot and Civil Commotion and should include a minimum of 60 days of storage on site. 
  

					
	Sum Insured	  	:	 	No less than the value of all plant, equipment and supplies, plus insurance and freight (CIF).
			
	Deductibles	  	:	 	Not to exceed US$50,000 each loss.
			
	Insured	  	:	 	The Project Partners and IFC.
			
	General	  	:	 	Cover to include 50/50 Clause.

  

	2.	Construction “All Risks” (“CAR”)/ Builders’ Risk 

  

					
	Cover	  	:	 	All contract works executed and in the course of execution, materials and temporary works (exceeding project values of US$1,000,000, against “all risks” of physical loss or damage, except as may be excluded in the
policy.
			
	Sum Insured	  	:	 	An amount sufficient to pay claims on a reinstatement basis.

 ANNEX D 
  

 
							
	Deductibles	  	:	 	In respect of any one occurrence, arising during the construction and testing period:	  	
				
		  		 	 i)       from Storm, Tempest, Flood, Water Damage, Tsunami, Subsidence and Collapse
	  	 Not more than

US$500,000

				
		  		 	 ii)     from any other cause
	  	Not more than US$500,000
			
	Period of Cover	  	:	 	To cover individual works contracts from the commencement of works until hand-over of completed works or when completed works are transferred to operational insurance cover.
			
	Insured	  	:	 	The Project Partners, the Project contractors and suppliers and IFC.
			
	General	  	:	 	 a)      Cover shall include transit within
Gabon of locally procured goods and materials.
  

b)      Claims will be paid in the currency in which the cost is incurred.

 
 c)      The
insurers and reinsurers to waive all rights of subrogation against each insured party hereunder.
  

d)      Faulty Design coverage is to be included to the extent that coverage is
available. The sum insured should be on a full replacement cost basis and should include any ‘free issue’ supplied to the management contractor such as start up electricity costs etc.

 
 e)      Both Ocean
Marine and CAR covers shall carry a 50/50 hidden damage provision.

  
 Page 2 of 6 

 ANNEX D 
  

	3.	Operational Insurances: 

 A. COVERAGE: 

 

	 	Section A(i):	Platform/Pipeline Physical Damage Insurance including Removal of Debris or Wreck. 

  

	 	Section A(ii):	Removal of Debris and /or Wreck only. 

  

	 	Section B:	Operator’s Extra Expense. 

  

	 	Section C(i):	Umbrella Liabilities including liability arising from U.S. operations. 

  

	 	Section C(ii):	Excess Umbrella Liabilities including liability arising from U.S. operations. 

  

	 	Section D:	Limited Terrorist Coverage. 

 B. SUM INSURED/LIMIT OF LIABILITY 

 

	 	Section A(i):	The replacement value of the property insured, but not to exceed the scheduled value, but a separate and additional limit up to $5,000,000 any one occurrence in respect of Removal of Debris and/or Wreck, not to exceed
the scheduled value. 

  

	 	Section A(ii):	$1,000,000 any one occurrence. 

  

	 	Section B:	$25,000,000 (100%) any one occurrence, but $10,000,000 (100%) any one occurrence in respect of Onshore U.S.A. Operations, and a separate and additional $1,000,000 (100%) any one occurrence for Care,
Custody and Control. 

  

	 	Section C(i):	$5,000,000 any one accident or occurrence and in the aggregate as applicable. 

  

	 	Section C(ii):	$20,000,000 any one accident or occurrence and in the aggregate as applicable. 

  
 Page 3 of 6 

 ANNEX D 
  

	 	Section D:	As per agreed values and/or limits in the applicable sections herein. 

 C. DEDUCTIBLES AND/OR
EXCESS: 
  

	 	Section A(i):	$250,000 each loss or occurrence deductible excluding Total or Constructive Total Loss. The deductible applicable to the Nido CALM Buoy is $150,000 each loss or occurrence, excluding Total or Constructive Total Loss.

  

	 	Section A(ii):	$250,000 any one occurrence. 

  

	 	Section B:	$250,000 (100%) each loss or occurrence deductible, except $100,000 each loss or occurrence deductible in respect of Onshore U.S.A. Operations and Care, Custody, and Control which shall be subject to a $25,000
(100%) deductible each loss or occurrence. 

  

	 	Section C:	Not more than 30 days. 

  

	 	Section D(i):	Excess of underlyings as per schedule, or $100,000 self-insured retention, as applicable. 

  

	 	Section D(ii):	Excess of Section D(i). 

  

	 	Section E:	As per the deductible and/or excess in the applicable sections. 

  

	 	Section F:	To be agreed by IFC. 

  

	4.	Third Party Liability Insurance 

 For construction and operational periods, third
party liability insurances with a minimum limit of indemnity of US$10,000,000 and shall include full cross liabilities. 

  
 Page 4 of 6 

 ANNEX D 
  

	5.	Miscellaneous 

 Other insurance which, 

 

	 	a)	is customary or necessary to comply with local or other requirements, such as contractual insuring responsibility, Workers’ Compensation and Employers’ Liability insurances in relation to all workmen employed
at the Project or in connection with its operation; motor vehicle liability insurance for all vehicles owned, hired, leased, used or borrowed for use in Gabon in connection with the Project; 

 

	 	b)	is considered by the Borrower to be desirable or prudent, or required by IFC; or 

  

	 	c)	are required by local legislation or the PSC. 

  

	6.	General 

  

	 	a)	The Borrower shall procure that each policy effected pursuant to this Annex D shall comply with the requirements of Section 6.04(b), and in addition provide: 

 

	 	i)	that the protection which is granted to IFC under the policies is not to be invalidated by any act or failure to act on the part of the Borrower, the Project Partners, the FPSO operator, or other contractors or
subcontractors; and 

  

	 	ii)	that IFC is not responsible to the insurers or reinsurers for the payment of insurance premiums or any other obligations of the Borrower. 

 

	 	b)	Each policy effected pursuant to this Annex D: 

  

	 	i)	shall be in such form and substance as is consistent with the obligations of the Borrower under this Annex D, as may be approved by IFC, and 

 

	 	ii)	shall not include any provision for self-insurance, or any self-insurance retention except to the extent of the deductibles as specified in this Annex D. 

  
 Page 5 of 6 

 ANNEX D 
  

	 	c)	If IFC reasonably considers that, as a result of a material change in the identified risk exposure, any of the terms, conditions, amounts and deductibles of insurances procured pursuant to this Annex D are inadequate or
inappropriate, IFC may require that the Borrower procure such amended and/or additional insurances as may be reasonably required to cover such material change. 

  
 Page 6 of 6 

 SCHEDULE 1 

FORM OF CERTIFICATE OF INCUMBENCY AND AUTHORITY 

(See Section 1.01 and Section 5.01(n) of the Loan Agreement) 

[Letterhead] 
 [Date] 

International Finance Corporation 
 2121 Pennsylvania Avenue,
N.W. 
 Washington, D.C. 20433 
 United States of America 

Attention: Director, Infrastructure and Natural Resources 

Ladies and Gentlemen: 
 Certificate of
Incumbency and Authority 
 With reference to the Loan Agreement between us, dated January 30, 2014 (the “Loan
Agreement”), I, the undersigned [Chairman/Director] of [VAALCO Gabon (Etame), Inc. (the “Borrower”)]1 [VAALCO International Inc. (“VAALCO International”)]2 [VAALCO Energy, Inc. (the “Sponsor”)]3, duly authorized to do so, hereby certify that the following are the names, offices and true
specimen signatures of the persons [each] [any two] of whom are and will continue to be (until you receive authorized written notice from the Borrower that they, or any of them, no longer continue to be) authorized: 

(a) [to sign on behalf of the Borrower the requests for the Loans provided for in Section 3.02 of the Loan Agreement;]1 
 [(b) to sign the certifications provided for in Section 5.02 and Section 5.03
of the Loan Agreement; and]1 
  

 

	1 	Include bracketed language in Borrower’s Certificate of Incumbency and Authority. 

	2 	Include bracketed language in VAALCO International’s Certificate of Incumbency and Authority. 

	3 	Include bracketed language in Sponsor’s Certificate of Incumbency and Authority. 

  
 Page 1 of 2 

 SCHEDULE 1 
  

 [(c)]1 to take any [other]1 action required or permitted to be taken, done, signed or executed under the Loan Agreement or any other agreement to which IFC and [the
Borrower]1 [VAALCO International]2 [the Sponsor]3 may be parties. 

 

					
	 *Name
	  	 Office
	  	 Specimen Signature

		  		  	
	  
	  	  
	  	  

		  		  	
	  
	  	  
	  	  

		  		  	
	  
	  	  
	  	  

 You may assume that any such person continues to be so authorized until you receive authorized written notice
from [the Borrower]1 [VAALCO International]2 [the Sponsor]3 that they, or any of them, is
no longer so authorized. 
  

			
	 Yours truly,
  

[VAALCO GABON (ETAME), INC.]1

[VAALCO INTERNATIONAL INC.]2

[VAALCO ENERGY, INC.]3

		
	By	 	 
		 	[Chairman/Director]

  

	* 	Designations may be changed by the Borrower at any time by issuing a new Certificate of Incumbency and Authority authorized by the Board of Directors of the Borrower where applicable. 

  
 Page 2 of 2 

 SCHEDULE 2 
  

 
 FORM OF REQUEST FOR LOAN 

(See Section 3.02 and Section 5.03 of the Loan Agreement) 

[Borrower’s Letterhead] 

[Date] 
 International Finance Corporation 

2121 Pennsylvania Avenue, N.W. 
 Washington, D.C. 20433 

United States of America 
 Attention: Director, Infrastructure
and Natural Resources 
 Ladies and Gentlemen: 

Investment No. 33781 

Request for Loan No. [    ]* 

1. Please refer to the Loan Agreement (the “Loan Agreement”) dated January 30, 2014, between VAALCO Gabon (Etame), Inc. (the
“Borrower”) and International Finance Corporation (“IFC”). Terms defined in the Loan Agreement have their defined meanings whenever used in this request. 

2. The Borrower irrevocably requests that a loan be made on
                    ,             (or as soon as practicable thereafter) of the amount of
                    (                    ) under
the [Senior/Subordinated] Tranche of the Facility (the “Loan”) in accordance with the provisions of Section 3.02 of the Loan Agreement. You are requested to pay such amount to the account in [New York] of VAALCO Gabon (Etame), Inc.
[Name of correspondent Bank], Account No.                     at [Name and Address of Bank] [for further credit to the Borrower’s Account No.
                at [Name and address of Bank] in [London, England]. 

 

	* 	Each to be numbered in series. 

  
 Page 1 of 3 

 SCHEDULE 2 
  

 3. There is enclosed a signed but undated receipt for the amount of the Loan. The Borrower authorizes IFC to
date such receipt with the date of actual disbursement by IFC. 
 4. For the purpose of Section 5.02 and Section 5.03 of the Loan Agreement, the
Borrower certifies as follows: 
 (a) no Event of Default or Potential Event of Default has occurred and is continuing or will occur on the
making of the Loan; 
 (b) the proceeds of the Loan are at the date of this request needed by the Borrower for the purpose of the Project, or
will be needed for that purpose within six (6) months of such date or are needed to reimburse the Borrower for costs incurred in connection with the Project; 

(c) since the date of the Loan Agreement, nothing has occurred which has or could reasonably be expected to have a Material Adverse Effect;

 (d) since the date of its most recent financial statements, neither the Borrower nor the Sponsor, nor any of their respective Affiliates
has incurred any material loss or liability (except such liabilities as may be incurred by the Borrower in accordance with Section 6.02 of the Loan Agreement); 

(e) the representations and warranties made in Article IV of the Loan Agreement are true and correct on the date of this request and will be
true and correct in all material respects on the date of Loan with the same effect as if such representations and warranties had been made on and as of each such date; 

(f) the proceeds of the Loan are not in reimbursement of, or to be used for, expenditures in the territories of any country which is not a
member of the World Bank or for goods produced in or services supplied from any such country; 
 (g) after giving effect to the Loan, the
Borrower will not be in violation of: 
  

	 	(i)	its Charter; 

  

	 	(ii)	any provision contained in any document to which the Borrower is a party (including the Loan Agreement) or by which the Borrower is bound; 

  
 Page 2 of 3 

 SCHEDULE 2 
  

	 	(iii)	any law, rule, regulation, Authorization or agreement or other document binding on the Borrower directly or indirectly, limiting or otherwise restricting the Borrower’s borrowing power or authority or its ability
to borrow; and 

  

	 	(iv)	the Performance Standards; or 

  

	 	(v)	the EHS Guidelines; 

 (h) the Borrower’s Charter has not been amended since [insert date
of latest amendment]; 
 (i) the representations and warranties made by the Sponsor and VAALCO International, respectively, in
Section 18.01 of the Guarantee, Subordination and Share Retention Agreement and the Pledge of Shares, respectively, are true and correct on the date of this request and will be true and correct on the date of Loan with the same effect as if
such representations and warranties had been made on and as of such date; 
 (j) no Liquidity Event has occurred and is continuing; 

(k) following the making of any Loan, including any Rollover Loan, the aggregate outstanding amount of all Loans under each Tranche shall not
exceed the Maximum Available Amount for that Tranche, and the Borrower will be in compliance with the Minimum Levels in the manner required under Section 5.02 (k) of the Loan Agreement. 

The above certifications are effective as of the date of this Request for Loan and shall continue to be effective as of the date of the Loan.
If any of these certifications is no longer valid as of or prior to the date of the requested Loan, the Borrower undertakes to immediately notify IFC. 
  

			
	 Yours truly,
  

VAALCO GABON (ETAME), INC.

		
	By	 	 
		 	Authorized Representative

  

	Copy to:	Manager, Financial Operations Unit 

	 	International Finance Corporation 

  
 Page 3 of 3 

 SCHEDULE 3 
  

FORM OF LOAN DISBURSEMENT RECEIPT 

(See Section 3.02 of the Loan Agreement) 

[Borrower’s Letterhead] 
 International
Finance Corporation 
 2121 Pennsylvania Avenue, N.W. 

Washington, D.C. 20433 
 United States of America 

Attention: Manager, Financial Operations Unit 
 Ladies and
Gentlemen: 
 Investment No. 33781 

Disbursement Receipt No. [            ]* (Loan) 
 We, VAALCO Gabon (Etame), Inc., hereby acknowledge receipt on the date
hereof, of the sum of                     (        ) disbursed to us by International Finance Corporation
(“IFC”) under the Loan of                     (        ) provided for in the Loan Agreement dated
January 30, 2014 between our company and International Finance Corporation. 
  

			
	 Yours truly,
  

[NAME OF BORROWER]

		
	By	 	 
		 	Authorized Representative**

  

	* 	To correspond with number of the Loan request. See Schedule 2. 

	** 	As named in the Borrower’s Certificate of Incumbency and Authority (see Schedule 1). 

  
 Page 1 of 1 

 SCHEDULE 4 
  

FORM OF SERVICE OF PROCESS LETTER 

[Letterhead of Agent for Service of Process] 

(See Section 5.01 (o) of the Loan Agreement) 

[Date] 
 International Finance Corporation 

2121 Pennsylvania Avenue, N.W. 
 Washington, D.C. 20433 

Attention: Director, Infrastructure and Natural Resources 

Re: [Gabon/            ] 

Dear Sirs: 
 Reference is made to
Section 5.01(o) of the Loan Agreement dated January 30, 2014 (the “Loan Agreement”) between VAALCO Gabon (Etame), Inc. (the “Borrower”) and International Finance Corporation (“IFC”). Unless otherwise defined
herein, capitalized terms used herein shall have the meaning specified in the Loan Agreement. 
 Pursuant to Section 8.05 (f) of
the Loan Agreement, the Borrower has irrevocably designated and appointed the undersigned,                     with offices currently located at
                    as its authorized agent to receive for and on its behalf service of process in any legal action or proceeding with respect to the
Loan Agreement and the other Transaction Documents to which it is a party in the courts of England. 
 The undersigned hereby informs you
that it has irrevocably accepted that appointment as process agent as set forth in Section 8.05 (f) of the Loan Agreement from
                    until                     and
agrees with you that the undersigned (i) shall inform IFC promptly in writing of any change of its address in                     ,
(ii) shall perform its obligations as such process agent in accordance with the relevant provisions of Section 8.05 (f) of the Loan Agreement, and (iii) shall forward promptly to the Borrower any legal process received by the
undersigned in its capacity as process agent. 

  
 Page 1 of 2 

 SCHEDULE 4 
  

 As process agent, the undersigned and its successor or successors agree to discharge the
above-mentioned obligations and will not refuse fulfillment of such obligations as provided under Section 8.05 (f) of the Loan Agreement. 
  

			
	 Very truly yours,
  

[            ]

		
	By	 	 
		 	Title:

  

	cc:	VAALCO Gabon (Etame), Inc. 

  
 Page 2 of 2 

 SCHEDULE 5 

 

 FORM OF LETTER TO BORROWER’S AUDITORS 

(See Section 5.01(m) and Section 6.01(e) of 

the Loan Agreement) 

[Borrower’s Letterhead] 

[Date] 
 [NAME OF AUDITORS] 

[ADDRESS] 
 Ladies and Gentlemen: 

We hereby authorize and request you to give to International Finance Corporation of 2121 Pennsylvania Avenue, N.W., Washington, D.C. 20433,
United States of America (“IFC”), all such information as IFC may reasonably request with regard to the financial statements of the undersigned company, both audited and unaudited. We have agreed to supply that information and those
statements under the terms of an Loan Agreement between the undersigned company and IFC dated                     ,
            (the “Loan Agreement”). For your information we enclose a copy of the Loan Agreement. 

We authorize and request you to send two copies of the audited accounts of the undersigned company to IFC to enable us to satisfy our
obligation to IFC under Section 6.03 (b) (i) of the Loan Agreement. When submitting the same to IFC, please also send, at the same time, a copy of your full report on such accounts in a form reasonably acceptable to IFC. 

Please note that under Section 6.03 (b) (ii) and Section 6.03 (c) of the Loan Agreement, we are obliged to provide
IFC with a copy of the annual and any other management letter or other communication from you to the undersigned company or its management commenting on, among other things, the adequacy of the undersigned company’s financial control procedures
and accounting and management information system. 

  
 Page 1 of 2 

 SCHEDULE 5 
  

 Please also submit each such communication and report to IFC with the audited accounts. 

For our records, please ensure that you send to us a copy of every letter which you receive from IFC immediately upon receipt and a copy of
each reply made by you immediately upon the issue of that reply. 
  

			
	 Yours truly,
  

VAALCO GABON (ETAME), INC.

		
	By	 	 
		 	Authorized Representative

 Enclosure 
  

	cc:	Director 

	 	Infrastructure and Natural Resources 

	 	International Finance Corporation 

	 	2121 Pennsylvania Avenue, N.W. 

	 	Washington, D.C. 20433 

	 	United States of America 

  
 Page 2 of 2 

 SCHEDULE 6 

INFORMATION TO BE INCLUDED IN ANNUAL REVIEW OF OPERATIONS 

(See Section 6.03 (b) (iv) of the Loan Agreement) 
  

	(1)	Sponsors and Shareholdings. Information on any changes in share ownership of Borrower, the reasons for such changes, and the identity of new shareholders and information on a change in the identity of the other
Project Partners. 

  

	(2)	Country Conditions and Government Policy. Report on any material changes in conditions in Gabon, including government policy changes, that directly affect the Borrower (e.g. changes in government economic
strategy, taxation, foreign exchange availability, price controls, and other areas of regulation.) 

  

	(3)	Management and Technology. Information on significant changes in (i) the Borrower’s senior management or organizational structure, and (ii) technology used by the Borrower, including technical
assistance arrangements. 

  

	(4)	Corporate Strategy. Description of any changes to the Borrower’s corporate or operational strategy, including changes in products, degree of integration, and business emphasis. 

 

	(5)	Markets. Brief analysis of changes in Borrower’s market conditions (both domestic and export), with emphasis on changes in market share and degree of competition. 

 

	(6)	Operating Performance. Discussion of major factors affecting the year’s financial results (sales by value and volume, operating and financial costs, profit margins, capacity utilization, capital expenditure,
etc.). 

  

	(7)	Other Project Development Benefits. Total direct (and to the extent feasible indirect) employment generated by the Project in Gabon, training and other social benefits from the Project. 

 SCHEDULE 7 

IFC BASE CASE ASSUMPTIONS 
  

	(1)	Currency: All projections in constant US Dollars. 

  

	(2)	Agreed Oil Price: Means as of any Scheduled Redetermination Date, with respect to any Determination Period from that Scheduled Redetermination Date for the next twelve (12) months, the NYMEX Futures Brent
Oil Price, discounted at 10%, and with respect to each Determination Period occurring after such twelve (12) months, seventy Dollars ($70) per barrel or such other oil price(s) agreed by and the Borrower. 

 

	(3)	Reserves Criteria: Based on Proved Reserves and Probable Reserves as provided in most recent Reserves Certification, and risked as deemed appropriate by IFC in its sole discretion. 

 

	(4)	Production: Based on the production profile corresponding to the Reserves Criteria as provided in the most recent Reserves Certification (and for each Scheduled Redetermination Date occurring in June, as such
production forecast may be adjusted to reflect the actual production performance of the Borrowing Base Assets for the first half of the Fiscal Year), or otherwise agreed by IFC in its sole discretion. 

 

	(5)	Fiscal System: Production Sharing, Recovery of Petroleum Costs, State Participation and other relevant calculations as defined in the PSC. 

 

	(6)	Gross Revenue: As defined in the Loan Agreement, and calculated according to the Agreed Oil Price. 

  

	(7)	Gross Operating Expenses: As defined in the Loan Agreement. 

  

	(8)	Gross Capital Expenditures: As defined in the Loan Agreement and, for each Scheduled Redetermination Date occurring in June, adjusted to reflected actual expenditures incurred and progress achieved in the first
half of the Fiscal Year. 

  

	(9)	LIBOR: As defined in the Loan Agreement. 

 SCHEDULE 8 

CONTENTS OF TECHNICAL NOTE 
 The technical
note to be provided in accordance with the requirements of Section 6.05(a) should include: 
  

	(1)	For the previous Determination Period 

  

	 	(a)	Actual production 

  

	 	(b)	Realized oil price 

  

	 	(c)	Actual Gross Operating Expenditure 

  

	 	(d)	Actual Gross Capital Expenditure 

  

	 	(e)	Injection rates and other items of maintenance and improvements and extraordinary items relating to the Project 

  

	(2)	For the current Determination Period: All information relevant to calculation of the IFC Base Case Assumptions set forth in Schedule 7 

 

	(3)	For subsequent Determination Periods: All information relevant to the calculation of the IFC Base Assumptions set forth in Schedule 7 to calculation projections for each subsequent Determination Period

  

	(4)	Explanation of any variation between actual performance and assumptions provided in previous Determination Period  

  

	(5)	A worksheet containing all production history  

 The “Update Tab” in the “VAALCO
Financial Model (2013) FINAL.xlsx” Financial Model must be updated in accordance with the Technical Note 

 SCHEDULE 9 

FACILITY AMORTIZATION SCHEDULE 

Part I 
 Senior Tranche
Commitment 
  

					
	 Specified Period
	  	Commitment ($)	 
	 From signing up to and including June 30, 2016
	  	 	50,000,000	  
	 From June 30, 2016 up to and including December 31, 2016
	  	 	43,750,000	  
	 From December 31, 2016 up to and including June 30, 2017
	  	 	37,500,000	  
	 From June 30, 2017 up to and including December 31, 2017
	  	 	31,250,000	  
	 From December 31, 2017 up to and including June 30, 2018
	  	 	25,000,000	  
	 From June 30, 2018 up to and including December 31, 2018
	  	 	18,750,000	  
	 From December 31, 2018 up to and including June 30, 2019
	  	 	12,500,000	  
	 From June 30, 2019 up to and including December 31, 2019
	  	 	6,250,000	  
	 On and from the Final Maturity Date
	  	 	0	  

 Part II 

Subordinated Tranche Commitment 
  

					
	 Specified Period
	  	Commitment ($)	 
	 From signing up to and including June 30, 2016
	  	 	15,000,000	  
	 From June 30, 2016 up to and including December 31, 2016
	  	 	13,125,000	  
	 From December 31, 2016 up to and including June 30, 2017
	  	 	11,250,000	  
	 From June 30, 2017 up to and including December 31, 2017
	  	 	9,375,000	  
	 From December 31, 2017 up to and including June 30, 2018
	  	 	7,500,000	  
	 From June 30, 2018 up to and including December 31, 2018
	  	 	5,625,000	  
	 From December 31, 2018 up to and including June 30, 2019
	  	 	3,750,000	  
	 From June 30, 2019 up to and including December 31, 2019
	  	 	1,875,000	  
	 On and from the Final Maturity Date
	  	 	0	  

 SCHEDULE 10 

AGREED FORM OF ANNUAL MONITORING REPORT 

[Attached hereto] 

 SCHEDULE 11 

DEVELOPMENT IMPACT DATA FOR ANNUAL MONITORING REPORT FORM 
  

					
	 Indicator
	  	 Comment/Subsectors
	  	Actuals for the
year 20__
	 1.      Economic Performance

			
	 a)      Taxes and Other Payments to Government (US$M)
	  	All transfers to the government. Typically this includes payments to the government in the form of income or profit taxes, sales and excise taxes, and VAT receipts. Other payments collected by the government include royalties,
bonuses, dividends, management / concession fees, value of profit oil and production-sharing. Do not include government transfers made in industrialized countries; only include payments made in committed IFC investments in developing countries.	  	
			
	 b)      Employment (#): Number of direct employees, disaggregated by gender
	  	The unit of account is a permanent full-time equivalent paid job. To be treated as permanent, the job should have a life expectancy of at least one year. Include # of full-time direct employees and # of full-time direct female
employees in Gabon. Where employees hired by third party work on a de-facto regular or permanent basis, they should be counted as direct employment, but this should be clearly noted. Part-time jobs are converted to full-time equivalent jobs on a pro
rata basis with employment over 30 hours/week treated as full time. If the information is not available, the rule-of-thumb is that two part-time jobs equal a full-time job.	  	
			
	 c)      Community Development Outlay (US$)
	  	Community Development outlays correspond to any spending funded by the project either in whole or in part to help improve the affected communities. Includes contributions to social fund, training fund and community development
fund.	  	
	
	 2.      E&S Performance

			
	 a)      Gas Flaring (mmcfd)
	  	Company’s quantity of gas flared per day.	  	
			
	 b)      Occupational Injury Frequency
	  	Incidence rate of cases of occupational injury. Specify project stage (construction vs. operation if applicable) (Based on ILO Standard). Injury log from client including: total man-hours worked, numbers of new injuries (ensure
records cover employees and contractors). Calculate as: (# new cases of occupational injury during reference period/total # of hours worked by workers in the reference group during reference period) x 1000000.	  	
			
	 c)      Water Consumption and Efficiency
	  	Freshwater use per unit of production (m3/ unit of production).	  	

					
	 Indicator
	  	 Comment/Subsectors
	  	Actuals for the
year 20__
	 3.      Private Sector Development
	  	
			
	 a)      Purchases from domestic suppliers (US$M)
	  	Company’s annual purchase of goods and services from domestic suppliers (including raw materials, security, gardening, cleaning and marketing & research from domestic companies).	  	
			
	 b)      Board Composition (%) and (#) - Women/Independent Board members
	  	Includes number and percentage of independent Board Members and number and percentage of females.	  	

 SCHEDULE 12 

MATERIAL PAYMENTS MADE TO GOVERNMENT DISCLOSURE FORM 

Material Payments made to Government4 During Year Ended (Specify 

currency if not US$) 
  

							
	 Type of Payment
	  	 National Government
	  	Local Government5	  	Total
				
	Royalties	  		  		  	
				
	Bonus Payments	  		  		  	
				
	License Payments and Fees (other than routine nominal administrative fees).	  		  		  	
				
	Profits/dividends paid to Government	  		  		  	
				
	Profits/income Tax	  		  		  	
				
	Other fiscal benefits to government (specify)	  		  		  	
				
	i) [    ]	  		  		  	
				
	ii) [    ]	  		  		  	
				
	Totals	  		  		  	

  

	4 	Including for these purposes, state oil and mining companies or other agencies of national and local government for those countries where IFC money is going to be used. 

	5 	Insert further columns when more than one region/province/state are involved.

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