Document:

exv10w53

DATED May 3, 2010

MI ENERGY CORPORATION

as Borrower

CITIC KA WAH BANK LIMITED

as Facility Agent

CITIC KA WAH BANK LIMITED

as Offshore Security Agent

 

SUPPLEMENTAL AGREEMENT RELATING TO

FACILITY AGREEMENT

dated 28 July 2009

 

 

 

CONTENTS

	 	 	 	 	 	 	 
	Number	 	Clause Heading	 	Page
	1.	 	Interpretation
	 	 	1	 
	2.	 	Conditions Precedent
	 	 	3	 
	3.	 	Amendments To The Facility Agreement
	 	 	6	 
	4.	 	Release of Released Security Documents
	 	 	7	 
	5.	 	Consent to Disposal
	 	 	7	 
	6.	 	Confirmations Of Security Documents
	 	 	8	 
	7.	 	Non-Completion of IPO
	 	 	8	 
	8.	 	Representations and Warranties
	 	 	9	 
	9.	 	Undertakings
	 	 	10	 
	10.	 	Fees and Expenses
	 	 	11	 
	11.	 	Waivers with respect to the Underwriting Agreement
	 	 	12	 
	12.	 	Miscellaneous
	 	 	12	 
	13.	 	Governing Law and Jurisdiction
	 	 	13	 
	 	 	 
	 	 	 	 
	Execution
	 	 	 
	 	 	 	 
	Schedules
	 	 	 
	 	 	 	 
	1.	 	Form of Confirmation
	 	 	1-1	 
	2.	 	Form of Letter of Undertaking (FEE)
	 	 	2-1	 
	3.	 	Form of New Guarantee
	 	 	3-1	 
	4.	 	Exchange Arrangements for Release Documents
	 	 	4-1	 
	5.	 	Relevant Released Documents
	 	 	5-1	 

 

 

THIS SUPPLEMENTAL AGREEMENT is made on the 5th day of May2010

BETWEEN:

	(1)	 	MI ENERGY CORPORATION, a company with limited liability incorporated under the laws of Cayman
Islands, with its registered address at c/o Maples Corporate Services Limited, P.O. Box 309,
Ugland House, Grand Cayman, KY1-1104, Cayman Islands as borrower (the “Borrower”);
	 
	(2)	 	CITIC KA WAH BANK LIMITED as facility agent for the Finance Parties referred to below (in
this capacity, the “Facility Agent”); and
	 
	(3)	 	CITIC KA WAH BANK LIMITED as offshore security agent for the Finance Parties referred to
below (in this capacity, the “Offshore Security Agent”).

WHEREAS:

	(A)	 	By a facility agreement (the “Facility Agreement”) dated 28 July 2009 made between (1) the
Borrower, (2) the banks and financial institutions listed in Schedule 1 thereto as lenders
(the “Lenders”), (3) China CITIC Bank Corporation Limited, Guangzhou Branch as onshore
security agent, (4) the Offshore Security Agent and (5) the Facility Agent, the Lenders agreed
to make available to the Borrower a loan facility of US$200,000,000 upon the terms and
conditions set out therein.
	 
	(B)	 	The obligations of the Borrower under the Facility Agreement are secured by, inter alia, (1)
a share mortgage dated 28 July 2009 in respect of 51% of the entire issued share capital of
Far East Energy executed by Zhao Jiang Wei , Zhang Rui Lin 
and Shang Zhi Guo
 (the “Share Mortgage (FEE)”) and (2) a share mortgage dated 28 July 2009 in respect of
51% of the entire issued share capital of the Corporate Shareholder executed by Far East
Energy (the “Share Mortgage (MIEH)”).
	 
	(C)	 	At the request of the Borrower, the Facility Agent and the Offshore Security Agent (each at
the instructions of and on behalf of the Lenders) have agreed to amend the terms of the
Facility Agreement and to release the security created under the Released Security Documents
(as defined below) pursuant to clause 19 of the Facility Agreement on the terms and conditions
set out herein.

NOW IT IS AGREED as follows:

	1.	 	INTERPRETATION
	 
	1.1	 	Interpretation. Unless the context otherwise requires terms and expressions defined
in the Facility Agreement have the same meanings when used in this Supplemental Agreement.
	 
	1.2	 	Definitions. In this Supplemental Agreement:

 

 

	 	 	“Amended Facility Agreement” means the Facility Agreement as amended and/or supplemented by
this Supplemental Agreement with effect from immediately before the occurrence of the
Trading;
	 
	 	 	“Anticipated Trading Date” has the meaning given to it in Clause 4.1;
	 
	 	 	“Closing” means the occurrence of both of the following events:

	 	(a)	 	the receipt by the Corporate Shareholder of the proceeds of the public
offering under the IPO; and
	 
	 	(b)	 	the release of the shares in the Corporate Shareholder subject to the public
offering under the IPO to the relevant purchaser(s);

	 	 	“Confirmation” means a confirmation of Far East Energy and the Corporate Shareholder
executed or to be executed in the form or substantially in the form set out in Schedule 1;
	 
	 	 	“Deeds of Release” has the meaning given to it in Clause 4.1;
	 
	 	 	“Escrow Release Documents” has the meaning given to it in Clause 4.1;
	 
	 	 	“IPO” means the initial public offering of the shares in the Corporate Shareholder effected
or to be effected on the New York Stock Exchange by way of American Depositary Shares;
	 
	 	 	“Letter of Undertaking (FEE)” means the letter of undertaking executed or to be executed by
Far East Energy in favour of the Facility Agent in the form or substantially in the form set
out in Schedule 2;
	 
	 	 	“New Guarantee” means the corporate guarantee executed or to be executed by the Corporate
Shareholder in favour of the Offshore Security Agent in the form or substantially in the
form set out in Schedule 3;
	 
	 	 	“Process Agent” has the meaning given to it in Clause 11.3;
	 
	 	 	“Released Security Documents” means the Share Mortgage (FEE) and the Share Mortgage (MIEH);
	 
	 	 	“Relevant Date” has the meaning ascribed thereto in Clause 7;
	 
	 	 	“Replacement Share Mortgage (FEE)” means a share mortgage in respect of 51% of the entire
issued share capital of Far East Energy executed or to be executed by Zhao Jiang Wei
, Zhang Rui Lin 
and Shang Zhi Guo  in favour of the Offshore Security
Agent on or after the date of this Supplemental Agreement, in substantially the same form as
the Share Mortgage (FEE);
	 
	 	 	“Replacement Share Mortgage (MIEH)” means a share mortgage in respect of 51% of the entire
issued share capital of the Corporate Shareholder executed or to be executed by Far East
Energy in favour of the Offshore Security Agent on or after the

2

 

	 	 	date of this Supplemental Agreement, in substantially the same form as the Share Mortgage
(MIEH);
	 
	 	 	“Replacement Share Mortgages” means the Replacement Share Mortgage (FEE) and the Replacement
Share Mortgage (MIEH);
	 
	 	 	“Supplemental Security Documents” means the Confirmation, the Letter of Undertaking (FEE),
the New Guarantee and (to the extent the same having become effective pursuant to Clause
7(a)) the Replacement Share Mortgages;
	 
	 	 	“Trading” means the commencement of the trading of the shares in the Corporate Shareholder
in the form of American Depositary Shares on the New York Stock Exchange;
	 
	 	 	“Trading Date” means the date on which the Trading occurs;
	 
	 	 	“Underwriting Agreement” means the underwriting agreement in respect of the IPO to be
entered into between, among others, Far East Energy, the Corporate Shareholder, Merrill
Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities Inc. as
representatives of the underwriters thereunder;
	 
	 	 	“Waiver Fee Letter” means the fee letter in respect of the waiver fee in respect of the
transactions contemplated under this Agreement executed or to be executed by the Borrower
and the Facility Agent, in agreed form.
	 
	1.3	 	Successors and Assigns. The expressions “Borrower”, “Lenders”, “Facility Agent” and
“Offshore Security Agent” shall where the context permits include their respective successors
and permitted assigns and any persons deriving title under them.
	 
	1.4	 	Miscellaneous. In this Supplemental Agreement, unless the context requires
otherwise, words importing the singular include the plural and vice versa and words importing
a gender include every gender; unless otherwise stated, references to Clauses and Schedules
are to clauses of and schedules to this Supplemental Agreement. Clause headings are inserted
for reference only and shall be ignored in construing this Supplemental Agreement.
	 
	2.	 	CONDITIONS PRECEDENT
	 
	2.1	 	Conditions. The Borrower shall procure the provision to the Facility Agent of:

	 	(a)	 	this Supplemental Agreement (in triplicate) duly executed by all the parties;
	 
	 	(b)	 	in relation to the Borrower:

	 	(i)	 	a certified true copy of its memorandum and articles of
association or a written confirmation from a director of the Borrower
confirming that its memorandum and articles of association have not been
amended since certified copies of the same were last produced to the Facility
Agent in connection with the Facility Agreement;

3

 

	 	(ii)	 	a certified true copy of its current business licence issued by
SAIC which evidence that it has duly passed its annual examination in 2008;
	 
	 	(iii)	 	a list of its directors;
	 
	 	(iv)	 	a copy of its certificate of good standing issued by the
Registrar of Companies of the Cayman Islands and dated no earlier than seven
(7) days prior to the date of this Supplemental Agreement;
	 
	 	(v)	 	a certified true copy of resolutions of its board of directors
authorising its entry into and performance of this Supplemental Agreement and
the Waiver Fee Letter and the transactions contemplated thereby and authorising
a person or persons to execute this Supplemental Agreement and the Waiver Fee
Letter;

	 	(c)	 	in relation to each of the Corporate Shareholder and Far East Energy:

	 	(i)	 	certified true copy of its memorandum and articles of
association, bye-laws (if any) and all other constitutional documents or a
written confirmation from its director confirming that its memorandum and
articles of association and by-laws (if any) have not been amended since
certified copies of the same were last produced to the Facility Agent in
connection with the Facility Agreement;
	 
	 	(ii)	 	(only in relation to Far East Energy) a certified true copy of
its current business registration certificate;
	 
	 	(iii)	 	(only in relation to the Corporate Shareholder) a certified
true copy of the current shareholders’ agreement in respect of the Corporate
Shareholder;
	 
	 	(iv)	 	(only in relation to the Corporate Shareholder) a copy of its
certificate of good standing issued by the Registrar of Companies of the Cayman
Islands and dated no earlier than seven (7) days prior to the date of this
Supplemental Agreement;
	 
	 	(v)	 	a list of its directors;
	 
	 	(vi)	 	a list of its shareholders and their respective shareholdings;
	 
	 	(vii)	 	certified copies of resolutions of its board of directors and
shareholders authorising its entry into and performance of, and the confirming
or extending of security under, the Supplemental Security Documents to which it
is a party and authorising a person or persons to execute the Supplemental
Security Documents to which it is a party and the specimen signatures of such
persons;

	 	(d)	 	the Confirmation (in triplicate) duly executed by Far East Energy and the
Corporate Shareholder;

4

 

	 	(e)	 	the Letter of Undertaking (FEE) (in duplicate) duly executed by Far East
Energy;
	 
	 	(f)	 	the (undated) New Guarantee (in duplicate) duly executed by the Corporate
Shareholder;
	 
	 	(g)	 	the Waiver Fee Letter (in duplicate) duly executed by the Borrower and the
Facility Agent;
	 
	 	(h)	 	(i) a copy of the consent letter dated 9 April 2010 from the Facility Agent to
the Borrower, the Corporate Shareholder, Far East Energy, Zhao Jiang Wei , Zhang
Rui Lin  and Shang Zhi Guo 
and counter-signed by the Borrower, the
Corporate Shareholder, Far East Energy, Zhao Jiang Wei , Zhang Rui Lin

and Shang Zhi Guo  and (ii) a copy of the consent letter dated 22 April 2010
from the Facility Agent to the Borrower, the Corporate Shareholder, Far East Energy,
Zhao Jiang Wei , Zhang Rui Lin 
and Shang Zhi Guo  and
counter-signed by the Borrower, the Corporate Shareholder, Far East Energy, Zhao Jiang
Wei , Zhang Rui Lin  and Shang Zhi Guo ;
	 
	 	(i)	 	evidence that all necessary filings, registrations and other formalities have
been or will be completed in order to ensure that this Supplemental Agreement and the
Supplemental Security Documents (other than the Replacement Share Mortgages) are valid
and enforceable and to procure the priority of the security created under the relevant
Supplemental Security Documents (other than the Replacement Share Mortgages);
	 
	 	(j)	 	legal opinions covering such matters of Hong Kong, the Cayman Islands and other
laws relevant to this transaction as the Facility Agent may request;
	 
	 	(k)	 	a written confirmation of acceptance of appointment from Law Debenture Services
(H.K.) Limited as process agent in Hong Kong for the Borrower and the Corporate
Shareholder in respect of this Supplemental Agreement and the relevant Supplemental
Security Documents;
	 
	 	(l)	 	a certificate issued by a director of each of the Borrower and the Corporate
Shareholder each in the form requested by the Facility Agent’s Cayman legal counsel;
	 
	 	(m)	 	a copy of the audited consolidated financial statements of the Corporate
Shareholder for its financial year ended 31 December 2009;
	 
	 	(n)	 	such other documents relating to any of the matters contemplated herein as the
Facility Agent may reasonably request.

	2.2	 	Facility Agent’s Approval. All the documents and evidence referred to in Clause 2.1
shall be in form and substance satisfactory to the Facility Agent and only one copy,

5

 

	 	 	original, certified copy or counterpart shall be supplied unless otherwise provided herein.
Copies required to be certified shall be certified in a manner satisfactory to the Facility
Agent by a director or responsible officer of the Borrower or other party concerned.
	 
	2.3	 	Notice. Upon receipt of all the documents and evidence referred to in Clause 2.1,
the Facility Agent shall give notice of that fact to the Borrower, the Offshore Security Agent
and the Lenders.
	 
	2.4	 	Escrow Arrangement for New Guarantee. The New Guarantee delivered to the Facility
Agent pursuant to Clause 2.1(f) shall be held in escrow by the Facility Agent and shall only
be dated and take effect in accordance with the arrangements set out in Schedule 4. The
Facility Agent (as instructed by the Lenders and on behalf of the Lenders) hereby waives any
breach of clause 14.2(f) of the Facility Agreement which may arise as a result of the
execution, delivery and performance of the New Guarantee by the Corporate Shareholder.
	 
	3.	 	AMENDMENTS TO THE FACILITY AGREEMENT
	 
	3.1	 	Amendments. Subject to and conditional upon the satisfaction of each of the
conditions as specified in Clause 3.2, with effect from immediately before the occurrence of
the Trading, the following clauses of the Facility Agreement shall be amended in the following
manner:

	 	(a)	 	clause 14.1(e)(i) of the Facility Agreement shall be deleted in its entirety
and replaced by the following provision:
	 
	 	 	 	“(aa) the Personal Shareholders will, jointly or individually, beneficially own not
less than fifty one per cent (51%) of the entire issued share capital of Far East
Energy free from any Encumbrances and (bb) the Personal Shareholders will, jointly
or individually, maintain the management control of Far East Energy;”
	 
	 	(b)	 	clause 14.1(e)(ii) of the Facility Agreement shall be deleted in its entirety
and replaced by the following provision:
	 
	 	 	 	“(aa) Far East Energy shall continue to be the single largest shareholder of the
Corporate Shareholder (for the avoidance of doubt, any shares in the Corporate
Shareholder held by any depositary bank as nominee of or on trust for Far East
Energy shall be deemed to be under the ownership of Far East Energy, and any
depositary bank holding shares in the Corporate Shareholder representing American
depositary shares shall not be deemed as a single shareholder for the purpose of
this Clause), (bb) Far East Energy shall maintain the management control of the
Corporate Shareholder and (cc) Far East Energy shall continue to own not less than
thirty five per cent (35%) of the entire issued share capital of the Corporate
Shareholder free from any Encumbrances;” and
	 
	 	(c)	 	in clause 15.1(m) of the Facility Agreement, the two references to “51%”
therein shall be replaced by “35%”.

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	3.2	 	Further Conditions. The amendments to the Facility Agreement, the release of the
security created under the Released Security Documents and the grant of the Facility Agent’s
consent as specified in Clause 5 in each case pursuant to this Supplemental Agreement or the
Deeds of Release shall each be subject to and conditional upon the satisfaction of each of the
following conditions:

	 	(a)	 	the Facility Agent having issued the written notice referred to in Clause 2.3
to the Borrower, the Offshore Security Agent and the Lenders; and
	 
	 	(b)	 	no Event of Default having occurred and being continuing as at the date of this
Supplemental Agreement and the Trading Date.

	3.3	 	Confirmation of the Facility Agreement. The Borrower hereby confirms that, except
for those affected by the amendments to the Facility Agreement with effect from immediately
before the occurrence of the Trading, its obligations under the Facility Agreement remain in
full force and effect and are not and will not be affected, discharged or varied by the
execution of this Supplemental Agreement and that save as amended by this Supplemental
Agreement with effect from immediately before the occurrence of the Trading, the terms of the
Facility Agreement will remain in full force and effect.
	 
	4.	 	RELEASE OF RELEASED SECURITY DOCUMENTS
	 
	4.1	 	Execution of Deeds of Release. Subject to and conditional upon the issuance of the
Facility Agent’s written notice referred to in Clause 2.3 to the Borrower, the Offshore
Security Agent and the Lenders, the Offshore Security Agent shall execute the deeds of release
(collectively the “Deeds of Release”), each in form and substance satisfactory to the Offshore
Security Agent, in respect of the Released Security Documents and deliver the duly executed
(but undated) Deeds of Release together with the documents listed in Schedule 5 (collectively
the “Escrow Release Documents”) to Baker & McKenzie, the legal counsel for the Facility Agent
and the Offshore Security Agent, on the Business Day immediately prior to the date (the
“Anticipated Trading Date”) on which the Trading is anticipated to occur as specified in the
written notice issued by the Borrower to the Facility Agent pursuant to Clause 9(a).
	 
	4.2	 	Release and Effectiveness of Deeds of Release. The Borrower agrees (and shall
procure the relevant parties to ensure) that the Deeds of Release delivered to Latham &
Watkins, the legal counsel for the Borrower, pursuant to Schedule 4 shall not be dated and
take effect except pursuant to the arrangements set out in Schedule 4. Each of the Borrower
and the Facility Agent shall procure that its legal counsel will comply with the arrangements
as specified in Schedule 4.
	 
	5.	 	CONSENT TO DISPOSAL
	 
	 	 	Subject to and conditional upon the satisfaction of each of the conditions as specified in
Clause 3.2, the Facility Agent (as instructed by the Lenders and on behalf of the

7

 

	 	 	Lenders) hereby agrees that, with effect from the occurrence of the IPO, Far East Energy may
dispose of not exceeding 7% of the entire issued share capital of the Corporate Shareholder
immediately upon the occurrence of the IPO (assuming the over-allotment option in respect of
the IPO has been exercised in full by the underwriters of the IPO), Provided that:

(a) such disposed shares either form part of the shares of the Corporate Shareholder
to be offered for public subscription under the IPO or are sold to any other third
party within one (1) year after the Trading Date; and

(b) the aggregate consideration price received or to be received by Far East Energy
in respect of all such disposal(s) shall not exceed US$65,000,000 (or its equivalent
in any other currency).

	6.	 	CONFIRMATIONS OF SECURITY DOCUMENTS
	 
	 	 	The Borrower confirms that its obligations under and the security created by the Security
Documents to which it is a party continue in full force and effect and are not and will not
be affected, discharged or varied by the execution of this Supplemental Agreement, the
amendment of the Facility Agreement on the Trading Date as contemplated in Clause 3.1, the
release of the security under the Released Security Documents or the grant of the other
consent of the Facility Agent pursuant to Clause 5 save that, with effect from immediately
before the occurrence of the Trading, references to the Facility Agreement in the Security
Documents to which it is a party shall be deemed to be references to the Amended Facility
Agreement. The Borrower further confirms that its obligations under and the security
interests created by the Security Documents to which it is a party will, with effect from
immediately before the occurrence of the Trading, extend in all respects to the Amended
Facility Agreement.
	 
	7.	 	NON-COMPLETION OF IPO
	 
	 	 	The parties to this Supplemental Agreement hereby agree that, if the Closing does not occur
within five (5) Business Days after the Trading Date (the “Relevant Date”):

	 	(a)	 	the Borrower shall deliver (or procured to be delivered) to the Lender and the
Lender shall have received on the Relevant Date the following documents:

	 	(i)	 	the Replacement Share Mortgage (FEE) duly executed by Zhao
Jiang Wei , Zhang Rui Lin 
and Shang Zhi Guo  together
with such other documents as required to be delivered thereunder;
	 
	 	(ii)	 	the Replacement Share Mortgage (MIEH) duly executed by Far East
Energy together with such other documents as required to be delivered
thereunder;
	 
	 	(iii)	 	the board (and if required, shareholders) resolutions of Far
East Energy

8

 

	 	 	 	approving the execution of the Replacement Share Mortgage (MIEH) and
authorizing a person(s) to execute such document and any other notices or
documents required in connection therewith, and the specimen signature(s) of
such person(s);
	 
	 	(iv)	 	the Hong Kong legal opinion with respect to the Replacement
Share Mortgages;

	 	(b)	 	(i) on the Relevant Date, the amendments to the Facility Agreement which have
been made pursuant to Clause 3.1 shall be deemed to have been null and void and have no
legal effect whatsoever and shall be deemed not to have been made pursuant to this
Supplemental Agreement or otherwise, and (ii) forthwith upon request by the Facility
Agent, the Borrower shall (and procure that the relevant parties shall) enter into such
other document and take such other steps as required by the Facility Agent to give
effect to the foregoing provisions of this paragraph (b); and
	 
	 	(c)	 	(i) on the Relevant Date, the consent of the Facility Agent which has been
given pursuant to Clause 5 shall be deemed to have been null and void and have no legal
effect whatsoever and shall be deemed not to have been given by the Facility Agent
pursuant to this Supplemental Agreement or otherwise, and (ii) forthwith upon request
by the Facility Agent, the Borrower shall (and procure that the relevant parties shall)
enter into such other document and take such other steps as required by the Facility
Agent to give effect to the foregoing provisions of this paragraph (c) and/or to unwind
any disposal of shares in the Corporate Shareholder effected pursuant to the aforesaid
consent.

	8.	 	REPRESENTATIONS AND WARRANTIES
	 
	8.1	 	Representations and Warranties. The Borrower represents and warrants to the Facility
Agent that:

	 	(a)	 	the Borrower has full power, authority and legal right to enter into and engage
in the transactions contemplated by this Supplemental Agreement and the Waiver Fee
Letter and has taken or obtained all necessary corporate and other action to authorise
the execution and performance of this Supplemental Agreement and the Waiver Fee Letter
and the amendments to the Facility Agreement contemplated by this Supplemental
Agreement;
	 
	 	(b)	 	subject to Legal Reservations, this Supplemental Agreement and the Waiver Fee
Letter constitute legal, valid and binding obligations of the Borrower enforceable in
accordance with their terms;
	 
	 	(c)	 	neither the execution of this Supplemental Agreement and the Waiver Fee Letter
nor the performance by the Borrower of any of its obligations or the exercise of any of
its rights thereunder will conflict with or result in a material breach of any law,
regulation, judgment, order, authorisation, agreement or obligation applicable to it or
cause any limitation placed on it or the powers of its directors to be exceeded or
result in the creation of or oblige the Borrower

9

 

	 	 	 	to create an Encumbrance in respect of any of its property or assets;
	 
	 	(d)	 	all authorisations required from any governmental or other authority or from
any shareholders or creditors of the Borrower for or in connection with the execution,
validity and performance of this Supplemental Agreement and the Waiver Fee Letter and
the Amended Facility Agreement have been obtained and are in full force and effect or,
by the Trading Date will have been obtained and be in full force and effect;
	 
	 	(e)	 	it is not necessary in order to ensure the validity, enforceability or
admissibility in evidence in proceedings of this Supplemental Agreement, the Waiver Fee
Letter or any of the Supplemental Security Documents in Hong Kong or the Cayman Islands
that any of them or any other document be filed or registered with any authority in
Hong Kong or the Cayman Islands or that any tax be paid in respect thereof;
	 
	 	(f)	 	the Borrower is not in default under any law, regulation, judgment, order,
authorisation, agreement or obligation applicable to it or its assets or revenues, the
consequences of which default could have a Material Adverse Effect and no Event of
Default or Potential Event of Default has occurred; and
	 
	 	(g)	 	all information provided to the Finance Parties by or on behalf of the Borrower
in connection with the waiver requests contained in the consent letters referred to in
Clause 2.1(h) or Clause 11 or otherwise in connection with this Supplemental Agreement
is true and accurate in all material respects and all forecasts and projections
contained therein were arrived at after due and careful consideration on the part of
the Borrower and were, in its considered opinion, fair and reasonable when made; the
Borrower is not aware of any fact which has not been disclosed in writing to the
Facility Agent which might have a material effect on any such information, forecasts or
projections or which might affect the willingness of the Lenders or the Facility Agent
to grant the relevant consents and/or waivers and/or to enter into this Supplemental
Agreement and the transactions contemplated hereunder.

	8.2	 	Continuing Representation and Warranty. The Borrower also represents and warrants to
and undertakes with the Facility Agent that the foregoing representations and warranties will
be repeated on the date of each Advance and each Interest Payment Date and the Trading Date
with reference to the facts and circumstances subsisting as at the date on which such
representations and warranties are deemed to be made.
	 
	8.3	 	Acknowledgment of Reliance. The Borrower acknowledges that the Facility Agent on its
own behalf and on behalf of the Lenders has entered into this Supplemental Agreement in
reliance upon the representations and warranties contained in this Clause.
	 
	9.	 	UNDERTAKINGS
	 
	 	 	The Borrower hereby undertakes to the Facility Agent that:

10

 

	 	(a)	 	it shall give to the Facility Agent at least three (3) Business Days’ prior
written notice of the occurrence of the Trading;
	 
	 	(b)	 	forthwith upon the Underwriting Agreement being entered into by the parties
thereto, it shall notify the Facility Agent in writing and deliver a copy of the
executed Underwriting Agreement to the Facility Agent;
	 
	 	(c)	 	forthwith upon the occurrence of the Trading, it shall notify the Facility
Agent of the same in writing;
	 
	 	(d)	 	forthwith upon the Underwriting Agreement being amended or terminated by any of
the parties thereto, it shall notify the Facility Agent of the same in writing; and
	 
	 	(e)	 	forthwith upon the occurrence of the Closing, it shall notify the Facility
Agent of the same in writing.

	10.	 	FEES AND EXPENSES
	 
	10.1	 	Expenses. The Borrower shall forthwith on demand, and whether or not the amendments
to the Facility Agreement, the release of the security created under the Release Security
Document and/or the grant of the relevant consent of the Facility Agent, in each case,
pursuant to this Supplemental Agreement or the Deeds of Release has become effective and
whether or not any of the events specified in Clause 7 occurs, pay to or reimburse each of the
Finance Parties for its own account for all reasonable costs, charges and expenses (including
legal and other fees on a full indemnity basis and printing, translation, communication,
advertisement, travel and all other out-of-pocket expenses) incurred by it in connection with
the negotiation, preparation, execution and (where relevant) registration of this Supplemental
Agreement, the Supplemental Security Documents, the Deeds of Release and any other
documentation required hereunder and the amendment of the Facility and any inspection,
calculation or approval to be conducted, made or given by any of the Finance Parties pursuant
to any provision of this Supplemental Agreement or any Supplemental Security Document.
	 
	10.2	 	Enforcement Costs. The Borrower shall from time to time forthwith on demand, and
whether or not the amendments to the Facility Agreement, the release of the security created
under the Release Security Document and/or the grant of the relevant consent of the Facility
Agent, in each case, pursuant to this Supplemental Agreement or the Deeds of Release has
become effective, pay to or reimburse each of the Finance Parties for all costs, charges and
expenses (including legal and other fees on a full indemnity basis and all other out-of-pocket
expenses) incurred by it in exercising any of its rights or powers under this Supplemental
Agreement or any Supplemental Security Document or in suing for or seeking to recover any sums
due under this Supplemental Agreement or any Supplemental Security Document or otherwise
preserving or enforcing its rights under this Supplemental Agreement or any Supplemental
Security Document or in defending any claims brought against it in respect of this
Supplemental Agreement or any Supplemental Security Document.

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	10.3	 	Taxes. The Borrower shall pay all present and future stamp and other like duties and
taxes and all notarial, registration, recording and other like fees which may be payable in
respect of this Supplemental Agreement or any Supplemental Security Document and shall
indemnify each Finance Party against all liabilities, costs and expenses which may result from
any default in paying such duties, taxes or fees.
	 
	11.	 	WAIVERS WITH RESPECT TO THE UNDERWRITING AGREEMENT
	 
	 	 	Subject to and conditional upon the issuance of the Facility Agent’s written notice referred
to in Clause 2.3 to the Borrower:

	 	(a)	 	the Facility Agent (on behalf of the Lenders) waives any Event of Default which
may arise under clauses 15.1(b), 15.1(m) and 15.1(u) of the Facility Agreement; and
	 
	 	(b)	 	the Offshore Security Agent (on behalf of the Lenders) waives the compliance by
Far East Energy of its obligations under clauses 5.1(a) and 5.1(c) of the Share
Mortgage (MIEH),

	 	 	in each case:

	 	(i)	 	during the period from immediately prior to the entry of the Underwriting
Agreement by the parties thereto to the earlier of (aa) the date and time at which the
amendments, releases and consents contemplated in Clauses 3, 4 and 5 come into effect
pursuant to the terms of this Supplemental Agreement and (bb) the date and time at
which the Underwriting Agreement is terminated by any of the parties thereto; and
	 
	 	(ii)	 	solely as a result of (xx) the execution and delivery by Far East Energy and
the Corporate Shareholder of the Underwriting Agreement and (yy) the sale of shares of
the Corporate Shareholder by Far East Energy and the Corporate Shareholder under the
IPO pursuant to the Underwriting Agreement,

	 	 	Provided that the completion of the sale of such shares by Far East Energy shall remain
subject to the consent of the Facility Agent contemplated in Clause 5 becoming effective
pursuant to Clause 5 and such sale being conducted in compliance with the requirements of
Clause 5 and the other provisions of the Letter of Undertaking (FEE) and the other Finance
Documents. Except as expressly provided in the foregoing provisions of this Clause 11, the
Facility Agent and the other Finance Parties reserve all of their rights under the Finance
Documents in connection with any breach of any provision of any Finance Document, Event of
Default or other circumstances and the Finance Parties will have all rights and powers as
provided for under the Finance Documents in respect of any such matter.
	 
	12.	 	MISCELLANEOUS
	 
	12.1	 	Construction as One Instrument. With effect from immediately before the occurrence
of the Trading, this Supplemental Agreement shall be construed as supplementing and

12

 

	 	 	forming part of the Facility Agreement and shall be read accordingly.
	 
	12.2	 	Finance Documents. Each of this Supplemental Agreement, the Supplemental Security
Documents and the Waiver Fee Letter shall constitute a Finance Document for the purpose of the
Facility Agreement.
	 
	12.3	 	Severability. If at any time any one or more of the provisions hereof is or becomes
illegal, invalid or unenforceable in any respect under the applicable law of any jurisdiction,
neither the legality, validity or enforceability of the remaining provisions hereof nor the
legality, validity or enforceability of such provisions under the applicable law of any other
jurisdiction shall in any way be affected or impaired thereby.
	 
	12.4	 	Counterparts. This Supplemental Agreement may be executed in any number of
counterparts and by different parties on separate counterparts which when taken together shall
be deemed to constitute one agreement.
	 
	12.5	 	Capacity of Facility Agent. The Facility Agent confirms that it is executing this
Agreement on its own behalf and as facility agent for the Lenders and that it has been duly
directed and authorised to do so in accordance with clause 19 of the Facility Agreement.
	 
	13.	 	GOVERNING LAW AND JURISDICTION
	 
	13.1	 	Law. This Supplemental Agreement and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with the laws of Hong Kong.
	 
	13.2	 	Jurisdiction. The Borrower agrees that any legal action or proceeding arising out of
or relating to this Supplemental Agreement may be brought in the courts of Hong Kong and
irrevocably submits to the non-exclusive jurisdiction of such courts.
	 
	13.3	 	Process Agent. The Borrower hereby appoints Law Debenture Services (H.K.) Limited
(the “Process Agent”) to be its agent to accept on behalf of the Borrower service of process
issued by the Facility Agent in relation to this Supplemental Agreement. In the event of any
action being commenced in Hong Kong in relation to this Supplemental Agreement, the Borrower
agrees that the process by which such action is commenced shall be sufficiently served on the
Borrower, and shall be deemed to have been so served, if addressed to the Process Agent and
left at or sent by post to the following address:

Room 3105, Alexandra House

18 Chater Road, Central

Hong Kong

	 	 	or to the registered office for the time being of the Process Agent. Notice of any change
of Process Agent and/or its address for service in Hong Kong may be given to the Facility
Agent in writing by the Borrower, in which case the new details of the new Process Agent
and/or address will only apply with effect from the fifteenth (15th)

13

 

	 	 	day after receipt of such notice by the Facility Agent. If service of process on the
Process Agent is impracticable because the address for service has ceased to exist or
otherwise, the Borrower agrees that, so long as the Facility Agent has arranged for the
relevant documents to be couriered to the Borrower’s address as set out in clause 23.1 of
the Facility Agreement (whether or not the Borrower has received such documents), the
process shall be sufficiently served by inserting an advertisement of such process in an
issue of a daily newspaper in Hong Kong, whereupon service shall be deemed to have been
effected on the day of publication of such advertisement.
	 
	13.4	 	No Limitation on Right of Action. Nothing herein shall limit the right of any
Finance Party to commence any legal action against the Borrower and/or its property in any
other jurisdiction or to serve process in any manner permitted by law, and the taking of
proceedings in any jurisdiction shall not preclude the taking of proceedings in any other
jurisdiction whether concurrently or not.
	 
	13.5	 	Waiver; Final Judgment Conclusive. The Borrower irrevocably and unconditionally
waives any objection which it may now or hereafter have to the choice of Hong Kong as the
venue of any legal action arising out of or relating to this Supplemental Agreement. The
Borrower also agrees that a final judgment against it in any such legal action shall be final
and conclusive and may be enforced in any other jurisdiction, and that a certified or
otherwise duly authenticated copy of the judgment shall be conclusive evidence of the fact and
amount of its indebtedness.
	 
	13.6	 	Waiver of Immunity. The Borrower irrevocably waives any immunity to which it or its
property may at any time be or become entitled, whether characterised as sovereign immunity or
otherwise, from any set-off or legal action in Hong Kong or elsewhere, including immunity from
service of process, immunity from jurisdiction of any court or tribunal, and immunity of any
of its property from attachment prior to judgment or from execution of a judgment.

IN WITNESS whereof this Supplemental Agreement has been executed on the day and year first above
written.

14

 

THE BORROWER

	 	 	 	 	 	 	 

	SIGNED for and on behalf of

	 	 	)	 	 	 
	MI ENERGY CORPORATION

	 	 	)	 	 	 
	by

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	/s/ Ruilin Zhang
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	THE FACILITY AGENT
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	CITIC KA WAH BANK LIMITED

	 	 	)	 	 	 
	by

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	/s/ Citic Ka Wah Bank Limited
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	THE OFFSHORE SECURITY AGENT
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	CITIC KA WAH BANK LIMITED

	 	 	)	 	 	 
	by

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	/s/ Citic Ka Wah Bank Limited
	 	 	 	 	 	 

Supplemental Agreement — Execution Page

 

 

Schedule 1

Form of Confirmation

			
	To:	 	CITIC Ka Wah Bank Limited

as facility agent for the Finance Parties

(the “Facility Agent”)

                     2010

Dear Sirs,

Supplemental Agreement dated [   ] 2010 in relation to a Facility Agreement dated 28 July 2009

We refer to:

	(a)	 	a facility agreement (the “Facility Agreement”) dated 28 July 2009 made between (1) MI
Energy Corporation as borrower (the “Borrower”), (2) the banks and other financial
institutions listed in Schedule 1 thereto as lenders and (3) China CITIC Bank Corporation
Limited, Guangzhou Branch as onshore security agent, (4) CITIC Ka Wah Bank Limited as offshore
security agent and (5) the Facility Agent, pursuant to which the Lenders agreed to make
available to the Borrower a loan facility of US$200,000,000 upon the terms and conditions set
out therein;
	 
	(b)	 	a deed of subordination dated 28 July 2009 executed by MIE Holdings Corporation as
subordinated lender and MI Energy Corporation as borrower in favour of CITIC Ka Wah Bank
Limited as offshore security agent;
	 
	(c)	 	a guarantee executed by MIE Holdings Corporation as guarantor in favour of CITIC Ka Wah Bank
Limited as offshore security agent;
	 
	(d)	 	a letter of undertaking dated [     ] 2010 executed by Far East Energy Limited in
favour of the Facility Agent;
	 
	(e)	 	a supplemental agreement (the “Supplemental Agreement”) dated [ ] 2010 in relation to the
Facility Agreement made between the Borrower, CITIC Ka Wah Bank Limited as offshore security
agent and the Facility Agent,

(the documents listed in (b) to (d) above are collectively hereinafter referred to as the “Relevant
Security Documents”).

Terms defined in the Facility Agreement and the Supplemental Agreement shall have the same meanings
when used herein.

In consideration of the Facility Agent (as instructed by and on behalf of the Lenders) agreeing to
the amendment to the Facility Agreement, the release of the Released Security Documents and the
grant of the other relevant consent as specified in the Supplemental Agreement on the terms set out
in the Supplemental Agreement and the Deeds of Release,

1-1

 

each of us hereby confirms our respective consent to the terms of the Supplemental Agreement and to
the amendments to the Facility Agreement, the release of the Released Security Documents and the
grant of the other relevant consent as specified in the Supplemental Agreement to be effected
pursuant thereto or, as the case may be, the Deeds of Release.

Each of us hereby confirms and undertakes that our respective obligations under the Relevant
Security Documents continue in full force and effect, and are not and will not be affected,
discharged or varied by the execution of the Supplemental Agreement, or the amendment of the
Facility Agreement on the Trading Date as contemplated in clause 3.1 of the Supplemental Agreement,
the release of the Released Security Documents and the grant of the other relevant consent as
specified in the Supplemental Agreement, save that, with effect from immediately before the
occurrence of the Trading, references in each Relevant Security Document to the Facility Agreement
shall be deemed to be references to the Amended Facility Agreement. Each of us further confirms
that our respective obligations under the Relevant Security Documents shall, to the extent cover
the Facility Agreement, with effect from immediately before the occurrence of the Trading, extend
in all respects to the obligations of the Borrower under the Amended Facility Agreement.

MIE Holdings Corporation also hereby confirms that it consents to and agrees to be bound by the
escrow arrangements with respect to the New Guarantee pursuant to clause 2.4 and schedule 4 to the
Supplemental Agreement.

This letter is governed by the laws of Hong Kong and should be construed accordingly.

Yours faithfully,

for and on behalf of

	 	 	 	 	 	 	 	 	 	 	 

	THE COMMON SEAL of

	 	 	)	 	 	 	 	 	 	 
	FAR EAST ENERGY LIMITED was

	 	 	)	 	 	 	 	 	 	 
	affixed to this Deed in the

	 	 	)	 	 	 	 	 	 	 
	presence of:

	 	 	)	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Signatory	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

Witness

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	SIGNED by                      as a

	 	 	)	 	 	 	 	 	 	 
	Deed and SEALED and DELIVERED

	 	 	)	 	 	 	 	 	 	 
	as a Deed by

	 	 	 	 	 	 	 	)	 	 
	MIE HOLDINGS CORPORATION

	 	 	)	 	 	 	 	 	 	 
	in his presence

	 	 	 	 	 	                    )	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 		 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	     )

	 

	 	 	 	 	 	Signatory	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

Witness

	 	 	 	 	 	 	 	 	 	 

1-2

 

Schedule 2

Form of Letter of Undertaking (FEE)

			
	To:	 	CITIC Ka Wah Bank Limited (the “Facility Agent”)

as Facility Agent for the Finance Parties as defined in the
Facility Agreement referred to below

                     2010

Dear Sirs,

US$200,000,000 Loan Facility — Facility Agreement dated 28 July 2009

	1.	 	We refer to the following documents:

	 	(a)	 	the facility agreement (the “Facility Agreement”) dated 28 July 2009 between
(1) MI Energy Corporation as borrower (the “Borrower”), (2) the banks and financial
institutions listed in schedule 1 therein as lenders, (3) the Facility Agent, (4) China
CITIC Bank Corporation Limited, Guangzhou Branch as onshore security agent (the
“Onshore Security Agent”) and (5) CITIC Ka Wah Bank Limited as offshore security agent
(the “Offshore Security Agent”); and
	 
	 	(b)	 	a supplemental agreement (the “Supplemental Agreement”) in relation to the
Facility Agreement made or to be made between the Borrower, the Facility Agent and the
Offshore Security Agent.

	2.	 	Unless otherwise defined herein, terms defined in the Facility Agreement or the Supplemental
Agreement have the same meanings in this letter.
	 
	3.	 	This is the Letter of Undertaking (FEE) referred to in the Supplemental Agreement.

Undertakings

	4.	 	In consideration of the Facility Agent and the Offshore Security Agent agreeing to enter into
the Supplemental Agreement and the transactions contemplated thereunder, we, Far East Energy
Limited, hereby undertake to the Facility Agent (for itself and on behalf of the other Finance
Parties) that, from the date of this letter and so long as any sums remain owing under the
Finance Documents:

	 	(a)	 	(without prejudice to the obligations of the Borrower under clause 14.1(e)(ii)
of the Facility Agreement at all times) we shall beneficially own not less than forty
per cent (40%) of the entire issued share capital of the Corporate Shareholder
immediately before and immediately after the Closing;
	 
	 	(b)	 	all the proceeds received by us pursuant to the disposal or disposals of shares

2-1

 

	 	 	 	in the Corporate Shareholder as permitted under clause 5 of the Supplemental
Agreement (collectively the “Permitted FEE Disposal”) shall be deposited in to an
account (the “Account”) opened or to be opened in our name with the Hong Kong or
such other branch of the Offshore Security Agent forthwith upon receipt by us from
the relevant purchaser(s);
	 
	 	(c)	 	before any funds are withdrawn from the Account, we shall provide with the
Facility Agent a written statement certifying the purpose(s) for which such funds are
to be applied; and
	 
	 	(d)	 	we shall not dispose of any shares in the Corporate Shareholder, except
pursuant to:

	 	(i)	 	the Permitted FEE Disposal effected on the date or dates as
permitted under clause 5 of the Supplemental Agreement; or
	 
	 	(ii)	 	any other disposal with the prior written approval of the
Facility Agent (at the direction of the Majority Lenders), Provided that either
all proceeds and other monies generated from such disposal or an equivalent
amount obtained from other sources shall be used towards the prepayment of the
Facility at the time of such disposal.

Representations

	5.	 	We hereby represent and warrant to the Facility Agent that:

	 	(a)	 	we have full power, authority and legal right to enter into and engage in the
transactions contemplated by this letter and the other Supplemental Security Documents
to which we are a party and has taken or obtained all necessary corporate and other
action to authorise the execution and performance of this letter and the other
Supplemental Security Documents to which we are a party;
	 
	 	(b)	 	subject to Legal Reservations, this letter and the other Supplemental Security
Documents to which we are a party constitute our legal, valid and binding obligations
enforceable in accordance with their terms;
	 
	 	(c)	 	neither the execution of this letter and the other Supplemental Security
Documents to which we are a party nor the performance by us of any of our obligations
or the exercise of any of our rights thereunder will conflict with or result in a
material breach of any law, regulation, judgment, order, authorisation, agreement or
obligation applicable to us or cause any limitation placed on us or the powers of our
directors to be exceeded or result in the creation of or oblige us to create an
Encumbrance in respect of any of our property or assets;
	 
	 	(d)	 	all authorisations required from any governmental or other authority or from
any of our shareholders or creditors for or in connection with the execution, validity
and performance of this letter and the other Supplemental Security Documents to which
we are a party have been obtained and are in full force and effect or, by the Trading
Date will have been obtained and be in full force
and effect;

2-2

 

	 	(e)	 	it is not necessary in order to ensure the validity, enforceability or
admissibility in evidence in proceedings of this letter and the other Supplemental
Security Documents to which we are a party in Hong Kong that any of them or any other
document be filed or registered with any authority in Hong Kong or that any tax be paid
in respect thereof;
	 
	 	(f)	 	we are not in default under any law, regulation, judgment, order,
authorisation, agreement or obligation applicable to us or our assets or revenues, the
consequences of which default could have a Material Adverse Effect and no Event of
Default or Potential Event of Default has occurred;
	 
	 	(g)	 	all information provided to the Finance Parties by us or on our behalf in
connection with this letter, the other Supplemental Security Documents to which we are
a party or otherwise in connection with the Supplemental Agreement is true and accurate
in all material respects and all forecasts and projections contained therein were
arrived at after due and careful consideration on our part and were, in our considered
opinion, fair and reasonable when made; we are not aware of any fact which has not been
disclosed in writing to the Facility Agent which might have a material effect on any
such information, forecasts or projections or which might affect the willingness of the
Lenders, the Facility Agent or the Offshore Security Agent to grant the relevant
consents and/or to enter into the Deeds of Release, the Supplemental Agreement and the
Supplemental Security Documents and the transactions contemplated thereunder.

	6.	 	We also hereby represent and warrant to and undertake with the Facility Agent that the
foregoing representations and warranties will be repeated on the date of each Advance and each
Interest Payment Date with reference to the facts and circumstances subsisting as at the date
on which such representations and warranties are deemed to be made.

Assignment

	7.	 	We shall not assign any of our rights hereunder.
	 
	8.	 	Any of the Facility Agent and the other Finance Parties may assign or grant participations in
all or any part of their rights under this letter and make disclosures in accordance with the
provisions of clause 22 of the Facility Agreement but as if references therein to the Borrower
were references to us.

Counterparts

	9.	 	This letter may be executed in any number of counterparts and this will have the same effect
as if the signatures on the counterparts were on a single copy of this letter.

Governing Law

	10.	 	This letter and the rights and obligations of the parties hereunder shall be governed by

2-3

 

	 	 	and construed in accordance with the laws of Hong Kong.

Jurisdiction

	11.	 	We agree that any legal action or proceeding arising out of or relating to this letter may be
brought in the courts of Hong Kong and irrevocably submits to the non-exclusive jurisdiction
of such courts.

Please acknowledge receipt and acceptance of this letter by countersigning the enclosed copy of
this letter.

Yours faithfully

For and on behalf of

	 	 	 	 	 	 	 	 	 

	THE COMMON SEAL of

	 	 	)	 	 	 	 	 
	FAR EAST ENERGY LIMITED was

	 	 	)	 	 	 	 	 
	affixed to this Deed in the

	 	 	)	 	 	 	 	 
	presence of:

	 	 	)	 	 	 

Signatory
	 	 
	 
	 	 	 	 	 	 	 	 
	 

Witness

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 

We acknowledge our receipt, and acceptance of the terms, of this letter.

For and on behalf of

CITIC KA WAH BANK LIMITED

(as Facility Agent)

	 	 	 

	 

Name:

	 	 
	Title:
	 	 

2-4

 

Schedule 3

Form of New Guarantee

See Exhibit 10.54

3-1

 

Schedule 4

Exchange Arrangements for Release Documents

	1.	 	The representative of Baker & McKenzie, the legal counsel for the Facility Agent and the
Offshore Security Agent (the “Lender Counsel”) and the representative of Latham & Watkins, the
legal counsel for the Borrower (the “Borrower Counsel”) shall conduct a meeting (the “Closing
Meeting”) at the Hong Kong office of the Lender Counsel (address: 14/F Hutchison House,
Central, Hong Kong) at 3:00 pm (Hong Kong time) on the Anticipated Trading Date.
	 
	2.	 	Upon receiving confirmation from the Facility Agent that it has received the documents and
evidence referred to in Clause 2.1 of this Supplemental Agreement, the Lender Counsel shall
deliver the Escrow Release Documents to the Borrower Counsel subject to receiving an
undertaking from the Borrower Counsel to hold the Escrow Release Documents in escrow in
accordance with paragraphs 3 to 5 below.
	 
	3.	 	The Borrower Counsel shall hold the Escrow Release Documents delivered to it by the Lender
Counsel in escrow and shall not release them to any party or date them except pursuant to
paragraph 5 below.
	 
	4.	 	If the Trading does not occur or the Escrow Release Documents are not otherwise released from
escrow by the Borrower Counsel in accordance with this Schedule 4 within one (1) day (or such
later date as may be agreed between the Borrower and the Facility Agent) after the Anticipated
Trading Date, the Borrower Counsel shall return to the Lender Counsel the Escrow Release
Documents delivered to it by the Lender Counsel forthwith upon written request from the
Facility Agent or the Lender Counsel.
	 
	5.	 	Immediately before the occurrence of the Trading on the Trading Date (the Borrower Counsel
shall so notify the Lender Counsel by email forthwith upon such occurrence) and subject to the
Borrower Counsel not having at that time received by email from the Lender Counsel or the
Facility Agent that the conditions as specified in Clause 3.2 of this Supplemental Agreement
has not been satisfied:

	 	(a)	 	the Borrower Counsel shall be entitled to date the original executed but
undated Deeds of Release delivered to it by the Lender Counsel with the Trading Date
and release the same and the other Escrow Release Documents from escrow, whereupon the
Deeds of Release shall take effect;
	 
	 	(b)	 	the Borrower Counsel shall notify the Lender Counsel by email forthwith upon
the release of the Escrow Release Documents from escrow as aforesaid.

	6.	 	Contemporaneous with the release of the Deeds of Release from escrow as specified in
paragraph 5 above, the Facility Agent shall be entitled to release the executed but undated
New Guarantee delivered to it pursuant to Clause 2.1(f) of this Supplemental Agreement from
escrow and date the same with the Trading Date, whereupon the New Guarantee shall take effect.

4-1

 

Schedule 5

Relevant Released Documents

	1.	 	the original share certificate (numbered 7) in respect of 1 ordinary share in Far East Energy
	 
	2.	 	the original share certificate (numbered 8) in respect of 510 ordinary shares in Far East
Energy
	 
	3.	 	the original share certificate (numbered 10) of 4,590 ordinary shares in Far East Energy
	 
	4.	 	original letters of undertaking and authorisation from Zhao Jiang Wei, Zhang Rui Lin and
Shang Zhi Guo dated 28 July 2009
	 
	5.	 	an original letter of undertaking by Far East Energy dated 28 July 2009
	 
	6.	 	an original appointment of corporate authorisation by Zhao Jiang Wei, Zhang Rui Lin and Shang
Zhi Guo dated 28 July 2009
	 
	7.	 	the original share certificate (numbered 7) of 6,194,332 ordinary shares in the Corporate
Shareholder
	 
	8.	 	original letters of undertaking and authorisation from Forrest Dietrich, Zhao Jiang Wei,
Zhang Rui Lin and Allen Mak dated 28 July 2009
	 
	9.	 	an original letter of undertaking by the Corporate Shareholder dated 28 July 2009
	 
	10.	 	an original appointment of corporate authorisation by Far East Energy dated 28 July 2009
	 
	11.	 	the original instruments of transfer and bought and sold notes executed in blank by Zhao
Jiang Wei, Zhang Rui Lin and Shang Zhi Guo, each as shareholders of Far East Energy
	 
	12.	 	original undated letters of resignation of Zhao Jiang Wei, Zhang Rui Lin and Shang Zhi Guo,
each as director of Far East Energy
	 
	13.	 	an original undated board resolution of Far East Energy
	 
	14.	 	an original instrument of transfer executed in blank by Far East Energy
	 
	15.	 	original undated letters of resignation of Forrest Dietrich, Zhao Jiang Wei, Zhang Rui Lin
and Allen Mak, each as director of the Corporate Shareholder
	 
	16.	 	an original undated board resolution of the Corporate Shareholder

4-2exv10w54

DATED 2010

MIE HOLDINGS CORPORATION

as Guarantor

- and -

CITIC KA WAH BANK LIMITED

as Offshore Security Agent

on its own behalf and as agent and trustee

for the Finance Parties referred to herein

 

GUARANTEE

in respect of the obligations of

MI ENERGY CORPORATION

under a facility agreement dated 28 July 2009

 

3-i

 

CONTENTS

	 	 	 	 	 	 	 
	Number	 	Clause Heading	 	Page	 
	1.
	 	Interpretation	 	 	4	 
	 
	2.
	 	Guarantee	 	 	6	 
	 
	3.
	 	Continuing Guarantee	 	 	6	 
	 
	4.
	 	Indemnity	 	 	7	 
	 
	5.
	 	Representations and Warranties	 	 	7	 
	 
	6.
	 	Undertakings	 	 	8	 
	 
	7.
	 	Claims by Guarantor	 	 	11	 
	 
	8.
	 	Taxes and Other Deductions	 	 	11	 
	 
	9.
	 	Costs, Charges, Expenses and Interest	 	 	11	 
	 
	10.
	 	Further Indemnities	 	 	12	 
	 
	11.
	 	Set-Off	 	 	12	 
	 
	12.
	 	Evidence of Debt	 	 	13	 
	 
	13.
	 	Suspense Account	 	 	13	 
	 
	14.
	 	Waiver and Severability	 	 	13	 
	 
	15.
	 	Miscellaneous	 	 	13	 
	 
	16.
	 	Assignment	 	 	16	 
	 
	17.
	 	Notices	 	 	16	 

3-ii

 

	 	 	 	 	 	 	 
	Number	 	Clause Heading	 	Page	 
	18.
	 	Governing Law and Jurisdiction	 	 	17	 
	 
	Execution	 	 	17	 

3-iii

 

THIS DEED is made on the             day of             2010

BETWEEN:

	(1)	 	MIE HOLDINGS CORPORATION, a corporation duly and validly existing under the laws of the
Cayman Islands with its registered office at c/o the offices of Maples Corporate Services
Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands (the “Guarantor”);
and
	 
	(2)	 	CITIC KA WAH BANK LIMITED, in its capacity as Offshore Security Agent as agent and trustee
for the Finance Parties (as defined in the Facility Agreement referred to below) from time to
time, and its successors (in such capacity, the “Offshore Security Agent”).

WHEREAS:

	(A)	 	By a US$200,000,000 transferable term loan and revolving credit facility agreement (the
“Facility Agreement”) dated 28 July 2009 made between (1) MI Energy Corporation as borrower
(the “Borrower”), (2) the banks and other financial institutions named therein as lenders, (3)
CITIC Ka Wah Bank Limited as facility agent (the “Facility Agent”), (4) China CITIC Bank
Corporation Limited, Guangzhou Branch as onshore security agent and (5) the Offshore Security
Agent, the Lenders (as defined in the Facility Agreement) have agreed to make available to the
Borrower a loan facility of up to two hundred million US Dollars (US$200,000,000) upon the
terms set out therein.
	 
	(B)	 	The Offshore Security Agent is acting as agent and trustee for the Finance Parties pursuant
to the Facility Agreement and as agent and trustee for the Finance Parties pursuant to this
Deed.
	 
	(C)	 	At the request of the Borrower, the Facility Agent and the Offshore Security Agent (each as
instructed by the Lenders) have agreed to enter into a supplemental agreement dated
                     2010 (the “Supplemental Agreement”) in respect of the Facility Agreement to,
inter alia, amend certain provisions of the Facility Agreement.
	 
	(D)	 	It is a condition precedent to the amendments to the Facility Agreement and the other
relevant matters contemplated under the Supplemental Agreement taking effect pursuant to the
Supplemental Agreement that the Guarantor enters into this Deed.
	 
	(E)	 	This deed is the New Guarantee referred to in the Supplemental Agreement.

NOW THIS DEED WITNESSES as follows:

	1.	 	INTERPRETATION
	 
	1.1	 	Definitions and Construction. In this Deed, unless the context requires otherwise:

 

 

	 	(a)	 	terms and expressions defined in or construed for the purposes of the Facility
Agreement or the Supplemental Agreement shall have the same meanings or be construed in
the same manner when used in this Deed;
	 
	 	(b)	 	the expression “Offshore Security Agent” shall mean the Offshore Security Agent
acting in its capacity as trustee for itself and the other Finance Parties pursuant to
the trust declared by Clause 1.2 in respect of holding or releasing the rights,
benefits and interests conferred by Clause 2.1, and the expression “Finance Parties”
shall have the meaning ascribed to it in the Facility Agreement;
	 
	 	(c)	 	“Secured Indebtedness” means all and any sums (whether principal, interest,
fees or otherwise) which are now or at any time may become payable by the Borrower
under the Facility Agreement and each of the other Finance Document to which it is a
party and all other monies hereby agreed to be paid.

	1.2	 	Trust. All rights, benefits and interests granted to or conferred upon the Offshore
Security Agent pursuant to Clause 2.1 and all other rights, powers and discretions granted to
or conferred upon the Offshore Security Agent under this Deed shall be held by the Offshore
Security Agent on trust for the benefit of the Finance Parties from time to time. The
Offshore Security Agent may do all acts within its powers to administer and manage the trust
constituted by this Clause including any full or partial release by deed of the rights,
benefits and interests conferred by Clause 2.1. The trust constituted by this Clause shall
come into existence on the date of this Deed and shall last for so long as any part of the
Secured Indebtedness remains unpaid or the performance of any obligation under any Finance
Document has not been performed in full Provided that, for the purposes of the rule against
perpetuities, the perpetuity period applicable to the trust constituted under this Clause and
dispositions made or to be made pursuant to this Deed and this trust, is hereby specified as a
period of eighty (80) years less one (1) day from the date of this Deed.
	 
	1.3	 	Successors and Assigns. The expressions “Guarantor”, “Borrower”, “Facility Agent”,
“Offshore Security Agent”, “Lenders” and “Finance Parties” shall where the context permits
include their respective successors, transferee and permitted assigns and any persons deriving
title under them.
	 
	1.4	 	Miscellaneous. In this Deed, unless the context requires otherwise, references to
provisions of any law or regulation shall be construed as references to those provisions as
replaced, amended, modified or re-enacted from time to time; words importing the singular
include the plural and vice versa and words importing a gender include every gender;
references to this Deed or any other Finance Document shall be construed as references to such
document as the same may be amended, supplemented or novated from time to time; unless
otherwise stated, references to Clauses are to clauses of this Deed. Clause headings are
inserted for reference only and shall be ignored in construing this Deed.

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	2.	 	GUARANTEE
	 
	2.1	 	Guarantee. In consideration of the Lenders agreeing to continue to make the Facility
available to the Borrower upon the terms and conditions of the Facility Agreement and the
Facility Agent and the Offshore Security Agent agreeing to enter into the Supplemental
Agreement and the other documents referred to therein, the Guarantor unconditionally and
irrevocably guarantees, as a continuing obligation, the due and punctual payment of the
Secured Indebtedness in the currency or respective currencies in which the same is payable
under the terms of the Facility Agreement and the due and punctual performance and observance
by the Borrower of all other obligations of the Borrower contained in any Finance Document to
which it is a party, notwithstanding any dispute between the Finance Parties and the Borrower,
and if the Borrower fails to pay any amount of the Secured Indebtedness when due, the
Guarantor shall pay such amount to the Offshore Security Agent in the required currency as
aforesaid forthwith upon receiving the Offshore Security Agent’s first written demand.
	 
	2.2	 	Demands. Demands may be made under this Deed from time to time and may be enforced
irrespective of whether any steps or proceedings are or will be taken against the Borrower or
any other person to recover the indebtedness claimed under this Deed.
	 
	2.3	 	Discharge. The Facility Agent shall, at the request and cost of the Guarantor, and in
such form as the Facility Agent shall approve, discharge this Deed on the earlier of:

	 	(a)	 	the full payment of all the Secured Indebtedness to the satisfaction of the
Lender and cancellation of the Facility; and
	 
	 	(b)	 	(if and to the extent that the Borrower has signed all such documents and taken
all such steps as are required by the Facility Agent pursuant to clause 7 of the
Supplemental Agreement (and has procured the relevant parties to do the same)) the
passage of all applicable hardening or claw back period under all applicable laws in
respect of the Replacement Share Mortgages and the security or payment granted
thereunder has not, in any way during such period, been avoided or set aside or ordered
to be surrendered, paid away, refunded or reduced by virtue of any provision, law or
enactment relating to bankruptcy, insolvency, liquidation, winding up, composition or
arrangement for the time being in force, and no Event of Default shall have occurred
and is continuing at that time.

	3.	 	CONTINUING GUARANTEE
	 
	 	 	This Deed shall be a continuing guarantee and shall remain in full force and effect until
the Secured Indebtedness has been paid in full, notwithstanding the insolvency or
liquidation or any incapacity or change in the constitution or status of the Guarantor or
any other person or any intermediate settlement of account or other matter whatsoever. This
Deed is in addition to, and independent of, any Encumbrance, guarantee or other security or
right or remedy now or at any time hereafter held by or available to any Finance Party.

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	4.	 	INDEMNITY
	 
	 	 	Without prejudice to the guarantee contained in Clause 2, the Guarantor unconditionally and
irrevocably undertakes, as a separate, additional and continuing obligation, to indemnify
each Finance Party against all losses, liabilities, damages, costs and expenses whatsoever
arising out of any failure by the Borrower to make due and punctual payment of the Secured
Indebtedness or in the due and punctual performance and observance of all other obligations
under any Finance Document to which it is a party. This indemnity shall remain in effect
notwithstanding that the guarantee under Clause 2 may cease to be valid or enforceable
against the Guarantor for any reason whatsoever.
	 
	5.	 	REPRESENTATIONS AND WARRANTIES
	 
	5.1	 	Representations and Warranties. The Guarantor represents and warrants to the Offshore
Security Agent that:

	 	(a)	 	the Guarantor has full power, authority and legal right to enter into and
engage in the transactions contemplated by this Deed and the other Supplemental
Security Documents to which it is a party and has taken or obtained all necessary
corporate and other action to authorise the execution and performance of this Deed and
the other Supplemental Security Documents to which it is a party;
	 
	 	(b)	 	subject to Legal Reservations, this Deed and the other Supplemental Security
Documents to which it is a party constitute legal, valid and binding obligations of the
Guarantor enforceable in accordance with their terms;
	 
	 	(c)	 	neither the execution of this Deed and the other Supplemental Security
Documents to which it is a party nor the performance by the Guarantor of any of its
obligations or the exercise of any of its rights thereunder will conflict with or
result in a material breach of any law, regulation, judgment, order, authorisation,
agreement or obligation applicable to it or cause any limitation placed on it or the
powers of its directors to be exceeded or result in the creation of or oblige the
Guarantor to create an Encumbrance in respect of any of its property or assets;
	 
	 	(d)	 	all authorisations required from any governmental or other authority or from
any shareholders or creditors of the Guarantor for or in connection with the execution,
validity and performance of this Deed and the other Supplemental Security Documents to
which it is a party have been obtained and are in full force and effect or, by the
Trading Date will have been obtained and be in full force and effect;
	 
	 	(e)	 	no litigation, arbitration or administrative proceeding is currently taking
place or (to the best of its knowledge and belief) pending or threatened against the
Guarantor or its assets or revenues which, if adversely determined, might
reasonably be expected to have a Material Adverse Effect;

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	 	(f)	 	it is not necessary in order to ensure the validity, enforceability or
admissibility in evidence in proceedings of this Deed or the other Supplemental
Security Documents to which it is a party in Hong Kong or the Cayman Islands that any
of them or any other document be filed or registered with any authority in Hong Kong or
the Cayman Islands or that any tax be paid in respect thereof (however, Cayman Islands
stamp duty may be payable if the original of this Deed is executed in the Cayman
Islands or is thereafter brought to the Cayman Islands);
	 
	 	(g)	 	the Guarantor is not in default under any law, regulation, judgment, order,
authorisation, agreement or obligation applicable to it or its assets or revenues, the
consequences of which default could have a Material Adverse Effect and no Event of
Default or Potential Event of Default has occurred;
	 
	 	(h)	 	all information provided to the Finance Parties by or on behalf of the
Guarantor in connection with this Deed, the Supplemental Agreement or the other
Supplemental Security Documents to which it is a party is true and accurate in all
material respects and all forecasts and projections contained therein were arrived at
after due and careful consideration on the part of the Guarantor and were, in its
considered opinion, fair and reasonable when made; the Guarantor is not aware of any
fact which has not been disclosed in writing to the Facility Agent or the Offshore
Security Agent which might have a material effect on any such information, forecasts or
projections or which might affect the willingness of the Lenders, the Facility Agent or
the Offshore Security Agent to enter into this Deed, the Deeds of Release, the
Supplemental Agreement and the other Supplemental Security Documents and the
transactions contemplated thereunder.

	5.2	 	Continuing Representation and Warranty. The Guarantor also represents and warrants to
and undertakes with the Offshore Security Agent that the foregoing representations and
warranties will be repeated on the date of each Advance and each Interest Payment Date and the
Trading Date with reference to the facts and circumstances subsisting from time to time.
	 
	5.3	 	Acknowledgement of Reliance. The Guarantor acknowledges that the Offshore Security
Agent has entered into this Deed in reliance upon the representations and warranties contained
in this Clause.
	 
	6.	 	UNDERTAKINGS
	 
	6.1	 	Affirmative Undertakings. The Guarantor undertakes and agrees with the Offshore
Security Agent throughout the continuance of this Deed and so long as the Secured Indebtedness
or any part thereof remains owing that the Guarantor will, unless the Offshore Security Agent
(acting on the instructions of the Facility Agent) otherwise agrees in writing:

	 	(a)	 	supply to the Offshore Security Agent in sufficient number for each Finance
Party:

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	 	(i)	 	as soon as they are available, but in any event within one
hundred and eighty (180) days (or such other shorter period for the public
filing of such financial statements as required by any applicable law or
regulation to which the Guarantor is subject) after the end of each financial
year of the Guarantor, certified copies of its consolidated financial
statements in respect of such financial year (including a profit and loss
account and balance sheet) audited and certified by a Designated Accounting
Firm;
	 
	 	(ii)	 	as soon as they are available, but in any event within ninety
(90) days (or such other shorter period for the public filing of such financial
statements as required by any applicable law or regulation to which the
Guarantor is subject) after the end of the first half of each financial year of
the Guarantor, certified copies of its unaudited consolidated financial
statements (including a profit and loss account and balance sheet) prepared on
a basis consistent with the audited consolidated financial statements of the
Guarantor together with a certificate signed by the principal financial officer
of the Guarantor to the effect that such financial statements are true in all
material respects and present fairly the consolidated financial position of the
Guarantor as at the end of, and the results of its operations for, such first
half-year period;
	 
	 	(iii)	 	promptly on request, such additional financial or other
information relating to the Guarantor which is in the possession of the
Guarantor or which the Guarantor is reasonably expected to be able to obtain
and to the extent not restricted by any confidentiality obligations, law or
regulation applicable to it as the Offshore Security Agent may from time to
time reasonably request;

	 	(b)	 	keep proper records and books of account in respect of its business and permit
the Offshore Security Agent and/or any professional consultants appointed by the
Offshore Security Agent during the continuance of an Event of Default or Potential
Event of Default to inspect and examine the records and books of account of the
Guarantor;
	 
	 	(c)	 	promptly inform the Offshore Security Agent of:

	 	(i)	 	the occurrence of any Event of Default or Potential Event of
Default;
	 
	 	(ii)	 	any litigation, arbitration or administrative proceeding as
referred to in Clause 5.1(e);

	 	(d)	 	maintain its corporate existence and conduct its business in a proper and
efficient manner and in compliance with all laws, regulations, authorisations,
agreements and obligations applicable to it if failure so to comply would have a
Material Adverse Effect and pay all taxes imposed on it when due except for such
payment of taxes which is being contested in good faith and adequate reserves have been
maintained for such taxes and the cost required to contest
them;

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	 	(e)	 	maintain in full force and effect all such authorisations as are referred to in
Clause 5.1(d), and take immediate steps to obtain and thereafter maintain in full force
and effect any other authorisations which may become necessary or advisable for the
purposes stated therein;
	 
	 	(f)	 	ensure that its obligations under this Deed at all times rank at least pari
passu with all other unsecured obligations of the Guarantor; and
	 
	 	(g)	 	punctually pay all sums due from it and otherwise comply with its obligations
under this Deed.

	6.2	 	Negative Undertakings. The Guarantor undertakes and agrees with the Offshore Security
Agent throughout the continuance of this Deed and so long as the Secured Indebtedness or any
part thereof remains owing that the Guarantor will not, unless the Offshore Security Agent
otherwise agrees in writing:

	 	(a)	 	merge or consolidate with any other entity or take any step with a view to
dissolution, liquidation or winding-up, except that the Guarantor may effect a merger
or consolidation without the consent of the Facility Agent, the Offshore Security Agent
or the Lenders, provided that (i) prior written notice of such merger or consolidation
has been given to the Facility Agent at least five (5) Business Days before any
agreement is entered into in respect of such merger or consolidation, (ii) the
surviving entity of such merger or consolidation will assume the same obligations of
the Guarantor under this Deed and the other provisions in the Finance Documents
applicable to the Guarantor will apply to such surviving entity after such merger or
consolidation, (iii) the obligations of the Borrower and the Security Providers under
the Finance Documents shall remain in full force and effect and shall not be affected
or varied by such merger or consolidation and (iv) the Guarantor shall upon request of
the Facility Agent provide such information in connection with such merger or
consolidation to the Facility Agent as it may reasonably require provided further that
the Facility Agent and the Lenders shall hold such information (to the extent that such
information is not public information) confidential;
	 
	 	(b)	 	sell, transfer or otherwise assign, deal with or dispose of all or any part of
its business or (except for consideration at fair market value and at arm’s length
terms) its assets or revenues, whether by a single transaction or by a number of
transactions whether related or not.

	6.3	 	Further Undertakings. The Guarantor further undertakes throughout the continuance of
this Deed and so long as the Secured Indebtedness or any part thereof remains owing in the
terms set out in clause 14.2(f) and clause 14.2(h) of the Facility Agreement as applicable to
the Guarantor as if those clauses were set out herein and references thereto the “Corporate
Shareholder” were to the Guarantor.

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	7.	 	CLAIMS BY GUARANTOR
	 
	 	 	The Guarantor represents to and undertakes with the Offshore Security Agent that it has not
taken and will not take any security in respect of its liability under this Deed whether
from the Borrower or any other person. So long as any sum remains owing by the Borrower to
any Finance Party under the Finance Documents, the Guarantor shall not exercise any right of
subrogation, contribution or any other rights of a surety or enforce any security or other
right or claim against the Borrower (whether in respect of its liability under this Deed or
otherwise) or any other person who has guaranteed or given any security in respect of the
Secured Indebtedness or claim in the insolvency or liquidation of the Borrower or any such
other person in competition with any Finance Party. If the Guarantor receives any payment
or benefit in breach of this Clause, it shall hold the same upon trust for the Offshore
Security Agent as a continuing security for the Secured Indebtedness.
	 
	8.	 	TAXES AND OTHER DEDUCTIONS
	 
	 	 	All sums payable by the Guarantor under this Deed shall be paid in full without set-off or
counterclaim or any restriction or condition and free and clear of any tax or other
deductions or withholdings of any nature. If the Guarantor or any other person is required
by any law or regulation to make any deduction or withholding (on account of tax or
otherwise) from any payment for the account of any Finance Party, the Guarantor shall,
together with such payment, pay such additional amount as will ensure that such Finance
Party receives (free and clear of any tax or other deductions or withholdings) the full
amount which it would have received if no such deduction or withholding had been required.
The Guarantor shall promptly forward to the Offshore Security Agent copies of official
receipts or other evidence showing that the full amount of any such deduction or withholding
has been paid over to the relevant taxation or other authority.
	 
	9.	 	COSTS, CHARGES, EXPENSES AND INTEREST
	 
	9.1	 	Costs, Charges and Expenses. Subject to clause 11.7 of the Facility Agreement, the
Guarantor shall from time to time forthwith on demand pay to or reimburse each Finance Party
for:

	 	(a)	 	all reasonable costs, charges and expenses (including legal and other fees on a
full indemnity basis and all other out-of-pocket expenses, provided that any travel
expenses are incurred in relation to the economy class of the relevant type of
transportation involved) incurred by any Finance Party in connection with the
preparation and execution of this Deed and any amendment to or extension of, or the
giving of any consent or waiver in connection with, this Deed; and
	 
	 	(b)	 	all costs, charges and expenses (including legal and other fees on a full
indemnity basis and all other out-of-pocket expenses, provided that any travel expenses
are incurred in relation to the economy class of the relevant type of transportation
involved) incurred by any Finance Party in investigating any

3-11

 

	 	 	 	event which it reasonably believes is an Event of Default or Potential Event of
Default or in exercising any of its or their rights or powers hereunder or in suing
for or seeking to recover any sums due hereunder or otherwise preserving or
enforcing its or their rights hereunder or in defending any claims brought against
it or them in respect of this Deed or in releasing this Deed upon payment of the
Secured Indebtedness,

	 	 	and, until payment of the same in full, all such costs, charges and expenses shall be
secured by this Deed.
	 
	9.2	 	Interest. The Guarantor shall, with respect to all monies payable under this Deed,
pay interest from the due date to the date of payment (as well after as before any demand or
judgment and notwithstanding the liquidation of the Guarantor or the Borrower) at such rates
and in such manner as are specified in clause 16 of the Facility Agreement.
	 
	10.	 	FURTHER INDEMNITIES
	 
	10.1	 	General Indemnity. Subject to clause 11.7 of the Facility Agreement, the Guarantor
shall indemnify each Finance Party against all losses, liabilities, damages, costs and
expenses incurred by it in the execution or performance of the terms and conditions hereof and
against all actions, proceedings, claims, demands, costs, charges and expenses which may be
incurred, sustained or arise in respect of the non-performance or non-observance of any of the
undertakings and agreements on the part of the Guarantor herein contained.
	 
	10.2	 	Currency Indemnity. If an amount due to any Finance Party from the Guarantor in one
currency (the “first currency”) is received by such Finance Party in another currency (the
“second currency”), the Guarantor’s obligations to such Finance Party in respect of such
amount shall only be discharged to the extent that such Finance Party may purchase the first
currency with the second currency in accordance with normal banking procedures. If the amount
of the first currency which may be so purchased (after deducting any costs of exchange and any
other related costs) is less than the amount so due, the Guarantor shall indemnify such
Finance Party against the shortfall. This indemnity shall be an obligation of the Guarantor
independent of and in addition to its other obligations under this Deed.
	 
	10.3	 	Payment. The Offshore Security Agent may retain and pay out of any money in the
Offshore Security Agent’s hands all sums necessary to effect the indemnities contained in this
Clause and all sums payable by the Guarantor under this Clause shall form part of the monies
hereby agreed to be paid.
	 
	11.	 	SET-OFF
	 
	 	 	If an Event of Default has occurred each Finance Party shall (without prejudice to any
general or banker’s lien, right of set-off or any other right to which it may be entitled)
have the right, without notice to the Guarantor or any other person, to set off and apply
any credit balance on any account (whether subject to notice or not and whether matured or
not and in whatever currency) of the Guarantor with such Finance Party,

3-12

 

	 	 	and any other indebtedness owing by such Finance Party to the Guarantor, against the
liabilities of the Guarantor under this Deed, and each Finance Party is authorised to
purchase with the monies standing to the credit of any such account such other currencies as
may be necessary for this purpose.

	12.	 	EVIDENCE OF DEBT
	 
	 	 	Any statement of account purporting to show an amount due from the Borrower under any
Finance Document to which it is a party or from the Guarantor under this Deed and signed as
correct by a duly authorised officer of the Facility Agent shall, in the absence of manifest
error, be conclusive evidence of the amount so due.
	 
	13.	 	SUSPENSE ACCOUNT
	 
	 	 	The Offshore Security Agent may place and keep any monies received by virtue of this Deed
(whether before or after the insolvency or liquidation of the Guarantor or the Borrower) to
the credit of a suspense account for so long as the Offshore Security Agent may think fit in
order to preserve the rights of any Finance Party to sue or prove for the whole amount of
its claims against the Guarantor or the Borrower or any other person.
	 
	14.	 	WAIVER AND SEVERABILITY
	 
	 	 	No failure or delay by the Offshore Security Agent in exercising any right, power or remedy
hereunder shall impair such right, power or remedy or operate as a waiver thereof, nor shall
any single or partial exercise of the same preclude any further exercise thereof or the
exercise of any other right, power or remedy. The rights, powers and remedies herein
provided are cumulative and do not exclude any other rights, powers and remedies provided by
law. If at any time any provision of this Deed is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, the legality, validity and
enforceability of such provision under the law of any other jurisdiction, and of the
remaining provisions of this Deed, shall not be affected or impaired thereby.
	 
	15.	 	MISCELLANEOUS
	 
	15.1	 	Continuing Obligations. The liabilities and obligations of the Guarantor under this
Deed shall remain in force notwithstanding any act, omission, event or circumstance
whatsoever, until full, proper and valid payment of the Secured Indebtedness.
	 
	15.2	 	Protective Clauses. Without limiting Clause 15.1, neither the liability of the
Guarantor nor the validity or enforceability of this Deed shall be prejudiced, affected or
discharged by:

	 	(a)	 	any other Finance Document, Encumbrance, guarantee or other security or right
or remedy being or becoming held by or available to any Finance Party

3-13

 

	 	 	 	or by any of the same being or becoming wholly or partly void, voidable,
unenforceable or impaired or by any Finance Party at any time releasing, refraining
from enforcing, varying or in any other way dealing with any of the same or any
power, right or remedy any Finance Party may now or hereafter have from or against
the Guarantor or the Borrower or any other person or the granting of any time or
indulgence to the Guarantor or the Borrower or any other person;

	 	(b)	 	any variation or modification of any Finance Document or any other document
referred to therein;
	 
	 	(c)	 	the invalidity or unenforceability of any obligation or liability of the
Borrower or the Guarantor under any Finance Document to which it is a party;
	 
	 	(d)	 	the insolvency or liquidation or any incapacity, disability or limitation or
any change in the constitution or status of the Borrower or the Guarantor;
	 
	 	(e)	 	any invalidity or irregularity in the execution of this Deed or any of the
other Finance Documents or any deficiency in the powers of the Guarantor or the
Borrower to enter into or perform any of its obligations hereunder or under any of the
other Finance Documents to which it is a party or any irregularity in the exercise
thereof or any lack of authority by any person purporting to act on behalf of the
Guarantor or the Borrower;
	 
	 	(f)	 	any waiver, exercise, omission to exercise, compromise, renewal or release of
any rights against the Guarantor or the Borrower or any other person or any compromise,
arrangement or settlement with any of the same; or
	 
	 	(g)	 	any act, omission, event or circumstance which would or may but for this
provision operate to prejudice, affect or discharge this Deed or the liability of the
Guarantor hereunder.

	15.3	 	Unrestricted Right of Enforcement. This Deed may be enforced without the Finance
Parties first having recourse to any other security or rights or taking any other steps or
proceedings against the Borrower or the Guarantor or any other person or may be enforced for
any balance due after resorting to any one or more other means of obtaining payment or
discharge of the monies, obligations and liabilities hereby secured.
	 
	15.4	 	Discharges and Releases. Notwithstanding any discharge, release or settlement from
time to time between any Finance Party and the Guarantor, if any security, disposition or
payment granted or made to any Finance Party in respect of the Secured Indebtedness by the
Guarantor or the Borrower or any other person is avoided or set aside or ordered to be
surrendered, paid away, refunded or reduced by virtue of any provision, law or enactment
relating to bankruptcy, insolvency, liquidation, winding-up, composition or arrangement for
the time being in force or for any other reason, the Offshore Security Agent shall be entitled
hereafter to enforce this Deed as if no such discharge, release or settlement had occurred.
	 
	15.5	 	Finance Parties’ Rights Several. The rights of the Finance Parties under this Deed
are

3-14

 

	 	 	several and accordingly:

	 	(a)	 	the amount at any time due hereunder to each Finance Party shall be a separate
and independent debt and each Finance Party shall be entitled to protect and enforce
its rights arising out of this Deed; and
	 
	 	(b)	 	the failure of any Finance Party to perform its obligations under the Facility
Agreement or under this Deed shall not affect the rights of the other Finance Parties
under this Deed.

	15.6	 	Pro Rata Sharing. The Guarantor acknowledges that, if at any time any Finance Party
receives any amount from the Guarantor, the Borrower or any other person in respect of sums
due from the Borrower or the Guarantor under the Facility Agreement or under any Finance
Document (other than through the Facility Agent pursuant to the Facility Agreement) whether by
way of voluntary or involuntary payment, set-off or otherwise, it will promptly pay to the
Facility Agent the amount so received for distribution to the other Finance Parties in
accordance with the Facility Agreement. The Facility Agent shall treat such amount as if it
were a payment directly to the Facility Agent on account of sums due from the Borrower or the
Guarantor under the Facility Agreement or any Finance Document so that, as between the
Guarantor and the Finance Party who originally received the amount, the amount shall not be
treated as having been paid and such Finance Party shall retain all its rights against the
Guarantor or the Borrower or otherwise with respect to such amount (except to the extent of
any sum received by it from such distribution by the Facility Agent). Notwithstanding the
foregoing provisions of this Clause,

	 	(a)	 	in respect of any amount received by any Finance Party arising from any legal
proceeding brought against the Guarantor, the Borrower or any other person for
recovering any amount due and payable to such Finance Party under the Facility
Agreement and any Finance Document, such Finance Party is not obliged to share such
received amount with any other Finance Party who has the legal right to participate in
such legal proceeding but has not participated after obtaining a reasonable opportunity
to so participate, and has not on its own behalf commenced (and use its best endeavours
to proceed with) any enforcement of its rights against the Guarantor, the Borrower or
any other person; and
	 
	 	(b)	 	if any Finance Party is obliged to refund the Guarantor, the Borrower or any
other person any part of the amount received from the Guarantor, the Borrower or such
other person and shared according to this Clause, each other Finance Party shall
provide the Facility Agent such funds which such Finance Party is obliged to refund
(after deducting (the appropriate portion of) such amount distributed to and received
by such Finance Party by the Facility Agent).

	15.7	 	Amendment. Any amendment or waiver of any provision of this Deed and any waiver of
any default under this Deed shall only be effective if made in writing and signed by the
Offshore Security Agent and (in relation to any amendment of any provision of this Deed) the
Guarantor.

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	15.8	 	Counterparts.

	 	(a)	 	This Deed (i) may be executed in any number of counterparts, and this has the
same effect as if the signatures on the counterparts were on a single copy of this
Deed; and (ii) the executed signature pages of each party to this Deed may be collated
into and attached to any number of single copies of this Deed, pursuant to paragraph
(b) below, as if each of them had been executed by both parties in a single copy, and
this has the same effect as if this Deed had been executed in the relevant number of
single copies.
	 
	 	(b)	 	If the parties to this Deed choose to execute the same in accordance with
paragraph (a)(ii) above, each party will transmit its signed signature page(s) either
to (i) Baker & McKenzie (or such other person authorised by each party to this Deed) or
(ii) the Offshore Security Agent (or such other person authorised by the Offshore
Security Agent) (each person referred to in paragraphs (i) and (ii) above a
“Recipient”), and the Recipient shall be and shall be deemed to be authorised by each
such party, upon receipt of the executed signature pages of each party to this Deed, to
collate and attach them into single copies of this Deed (with one executed signature
page of each party being collated into and attached to one such single copy). For the
avoidance of doubt, the Recipient shall have no further duties connected with its
position as Recipient.

	15.9	 	Recovery of Costs. The parties to this Deed agree to and to be bound by the
provisions of clause 11.7 of the Facility Agreement and that such provisions shall be deemed
to be incorporated into this Deed as if they were set out in full in this Deed, mutatis
mutandis. Accordingly, to the extent that any Finance Party is entitled to make a demand for
payment against the Guarantor in accordance with clause 11.7 of the Facility Agreement, the
Guarantor shall upon such demand make the relevant payment accordingly.
	 
	16.	 	ASSIGNMENT
	 
	16.1	 	The Guarantor. The Guarantor shall not assign any of its rights hereunder.
	 
	16.2	 	The Offshore Security Agent and Finance Parties. Any of the Offshore Security Agent
and the other Finance Parties may assign or grant participations in all or any part of their
rights under this Deed and make disclosures in accordance with the provisions of clause 22 of
the Facility Agreement but as if references therein to the Borrower were references to the
Guarantor.
	 
	17.	 	NOTICES
	 
	17.1	 	Delivery. Each notice, demand or other communication to be given or made under this
Deed shall be in writing and delivered or sent to the relevant party at its address or fax
number set out below (or such other address or fax number as the addressee has by five (5)
days’ prior written notice specified to the other party):

3-16

 

	 	 	 

	To the Guarantor:

	 	MIE Holdings Corporation
	 

	 	Room 402, Block C, Yuanda Center
	 

	 	Huizhong Road, Chaoyang, Beijing
	 

	 	PRC
	 
	 	 
	 

	 	Fax Number: (8610) 5123 8866
	 

	 	Attention: Mr. Zhang Rui Lin / Mr. Forrest Dietrich / Mr. Allen Mak
	 
	 	 
	With a copy to:

	 	MI Energy Corporation
	 

	 	Room 402, Block C, Yuanda Center
	 

	 	Huizhong Road, Chaoyang, Beijing
	 

	 	PRC
	 
	 	 
	 

	 	Fax Number: (8610) 5123 8866
	 

	 	Attention: Mr. Zhang Rui Lin / Mr. Forrest
Dietrich / Mr. Allen Mak
	 
	 	 
	To the Offshore
Security Agent:

	 	CITIC Ka Wah Bank Limited
	 

	 	9/F., Lippo Centre, Tower 1
	 

	 	89 Queensway
	 

	 	Central
	 

	 	Hong Kong
	 
	 	 
	 

	 	Fax Number: (852) 3603 4398
	 

	 	Attention: Ms. Janice Sze / Ms. Windy Lau

	17.2	 	Deemed Delivery. Any notice, demand or other communication so addressed to the
relevant party shall be deemed to have been delivered (a) if given or made by letter, when
actually delivered to the relevant address and (b) if given or made by fax, when despatched
with electronic confirmation of complete and error-free transmission, Provided that, if such
day is not a working day in the place to which it is sent, such notice, demand or other
communication shall be deemed delivered on the next following working day at such place.
	 
	18.	 	GOVERNING LAW AND JURISDICTION
	 
	18.1	 	Law. This Deed and the rights and obligations of the parties hereunder shall be
governed by and construed in accordance with the laws of Hong Kong.
	 
	18.2	 	Jurisdiction. The Guarantor agrees that any legal action or proceeding arising out of
or relating to this Deed may be brought in the courts of Hong Kong and irrevocably submits to
the non-exclusive jurisdiction of such courts.
	 
	18.3	 	Process Agent. The Guarantor hereby appoints Law Debenture Services (H.K.) Limited
(the “Process Agent”) to be its agent to accept on behalf of the Guarantor service of process
issued by the Offshore Security Agent in relation to this Deed. In the event of any action
being commenced in Hong Kong in relation to this Deed, the Guarantor agrees that the process
by which such action is commenced shall be

3-17

 

	 	 	sufficiently served on the Guarantor, and shall be deemed to have been so served, if
addressed to the Process Agent and left at or sent by post to the following address:

Room 3105, Alexandra House, 18 Chater Road, Central, Hong Kong

	 	 	or to the registered office for the time being of the Process Agent. Notice of any change
of Process Agent and/or its address for service in Hong Kong may be given to the Offshore
Security Agent in writing by the Guarantor, in which case the new details of the new Process
Agent and/or address will only apply with effect from the fifteenth (15th) day after receipt
of such notice by the Offshore Security Agent. If service of process on the Process Agent
is impracticable because the address for service has ceased to exist or otherwise, the
Guarantor agrees that, so long as the Offshore Security Agent has arranged for the relevant
documents to be couriered to the Guarantor’s address as set out in Clause 17.1 (whether or
not the Guarantor has received such documents), the process shall be sufficiently served by
inserting an advertisement of such process in an issue of a daily newspaper in Hong Kong,
whereupon service shall be deemed to have been effected on the day of publication of such
advertisement.
	 
	18.4	 	No Limitation on Right of Action. Nothing herein shall limit the right of the
Finance Parties to commence any legal action against the Guarantor and/or its property in any
other jurisdiction or to serve process in any manner permitted by law, and the taking of
proceedings in any jurisdiction shall not preclude the taking of proceedings in any other
jurisdiction whether concurrently or not.
	 
	18.5	 	Waiver; Final Judgment Conclusive. The Guarantor irrevocably and unconditionally
waives any objection which it may now or hereafter have to the choice of Hong Kong as the
venue of any legal action arising out of or relating to this Deed. The Guarantor also agrees
that a final judgment against it in any such legal action shall be final and conclusive and
may be enforced in any other jurisdiction, and that a certified or otherwise duly
authenticated copy of the judgment shall be conclusive evidence of the fact and amount of its
indebtedness.
	 
	18.6	 	Waiver of Immunity. The Guarantor irrevocably waives any immunity to which it or its
property may at any time be or become entitled, whether characterised as sovereign immunity or
otherwise, from any set-off or legal action in Hong Kong or elsewhere, including immunity from
service of process, immunity from jurisdiction of any court or tribunal, and immunity of any
of its property from attachment prior to judgment or from execution of a judgment.

3-18

 

IN WITNESS whereof this Deed has been executed by the parties hereto and is intended to be and is
hereby delivered on the day and year first above written.

3-19

 

THE GUARANTOR

	 	 	 	 	 	 	 

	SIGNED by                      as a

	 	 	)	 	 	 
	Deed and SEALED and DELIVERED

	 	 	)	 	 	 
	as a Deed by

	 	 	)	 	 	 
	MIE HOLDINGS CORPORATION

	 	 	)	 	 	 
	in his presence

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	)	 	 	Signatory
	 
	 	 	 	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	)	 	 	Witness
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	THE OFFSHORE SECURITY AGENT
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	CITIC KA WAH BANK LIMITED

	 	 	)	 	 	 
	by

	 	 	)	 	 	 

3-20

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form F-1/A of our report dated April 16, 2010
relating to the consolidated financial statements of MIE Holdings Corporation, which appears in such Registration Statement.
We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ PricewaterhouseCoopers Zhong Tian CPAs Limited Company

Beijing, People’s Republic of China

May 3, 2010

3-21

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