DEFA14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 4, 2020

TRANSATLANTIC PETROLEUM LTD.

(Exact name of registrant as specified in its charter)

Bermuda	001-34574		None
(State or other jurisdiction of	(Commission File Number)		(IRS Employer
incorporation)			Identification No.)
16803 Dallas Parkway, Suite 200 Addison, Texas		75001
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (214) 220-4323

(Former name or former address, if changed since last report)

_______________________________

 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☒	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Ticker Symbol	Name of each exchange on which registered
Common shares, par value $0.10	TAT	NYSE American

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 1.01Entry into a Material Definitive Agreement.

Agreement and Plan of Merger

As previously disclosed, on June 30, 2020, TransAtlantic Petroleum Ltd., a Bermuda exempted company (the “Company”), entered into a non-binding letter of intent for a potential transaction with a group of holders (the “Mitchell Group”) representing approximately 80% of the Company’s outstanding 12.0% Series A Convertible Redeemable Preferred Shares (the “Series A Preferred Shares”). The members of the Mitchell Group are Longfellow Energy, LP (“Longfellow”), Dalea Partners, LP (“Dalea”), the Alexandria Nicole Mitchell Trust 2005, the Elizabeth Lee Mitchell Trust 2005, the Noah Malone Mitchell Trust 2005, and Stevenson Briggs Mitchell. Longfellow and Dalea are affiliates of the Chairman of the Company’s Board of Directors (the “Board”) and Chief Executive Officer, N. Malone Mitchell 3rd (“Mitchell”).

On August 7, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, TAT Holdco LLC, a Texas limited liability company (“Parent”) controlled by a group of holders (the “Preferred Shareholder Group”) representing 100% of the Company’s outstanding Series A Preferred Shares, and TAT Merger Sub LLC, a Texas limited liability company and wholly-owned subsidiary of Parent (“Merger Sub”). The members of the Preferred Shareholder Group are each member of the Mitchell Group, KMF Investments Partners, LP, West Investment Holdings, LLC, Randall I. Rochman, and Betsy Rochman.

The Merger Agreement provides for, upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the Companies Act of 1981 of Bermuda, as amended (the “Companies Act”), the Texas Business Organizations Code (the “TBOC”), and a statutory merger agreement to be entered into between the Company and Merger Sub in a mutually agreed form in accordance with Bermuda law (the “Bermuda Merger Agreement”), the merger of the Company with and into the Merger Sub with the Merger Sub being the surviving entity as a wholly-owned subsidiary of Parent (the “Merger”). If the Merger is consummated, the Company’s common shares, par value $0.10 per share (“Common Shares”), will be delisted from the NYSE American Exchange and Toronto Stock Exchange and deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as practicable following the effective time of the Merger (the “Effective Time”).

A special committee comprised entirely of independent and disinterested directors of the Board (the “Special Committee”) voted unanimously to recommend to the Board that it, and thereafter the Board (other than Mitchell, Randall I. Rochman, and Jonathon T. Fite) voted unanimously to, (i) approve and declare that the Merger, the Merger Agreement, the Guaranty (as defined below) (collectively, the Merger Agreement and the Guaranty, the “Merger Documents”) and the transactions contemplated by the Merger Documents are procedurally fair to, and advisable and in the best interests of, the Company and its shareholders, including the Company’s unaffiliated shareholders, (ii) declare that the Merger Consideration (as defined below) is fair to, both from a financial point of view and otherwise, advisable and in the best interests of the Company’s shareholders, including the Company’s unaffiliated shareholders, (iii) direct that the adoption of the Merger Agreement and the Bermuda Merger Agreement be submitted to a vote at a special general meeting of the Company convened for that purpose on notice that, in compliance with section 106(2)(b) of the Companies Act, states the fair value per share of the Company as an amount equal to the Merger Consideration (as defined below), (iv) approve the entry into the Bermuda Merger Agreement (subject to approval of the Company’s shareholders) and (v) recommend to the shareholders of the Company that they vote for the adoption of the Merger Agreement and the Bermuda Merger Agreement. Seaport Gordian Energy LLC served as the financial advisor to the Special Committee in connection with the Merger and the Merger Agreement.

Concurrently with the execution and delivery of the Merger Agreement, the members of the Preferred Shareholder Group have entered into a contribution agreement with Parent pursuant to which, subject to the terms and conditions contained therein, such members of the Preferred Shareholder Group committed to transfer, contribute, and deliver all of their Series A Preferred Shares and their pro rata share of additional cash consideration to Parent in exchange for equity of Parent.

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Pursuant to the Merger Agreement, at the Effective Time, each of the Company’s issued and outstanding Common Shares (other than the Excluded Shares (as defined below) and Dissenting Shares (as defined below)) will be canceled and will be converted automatically into the right to receive $0.13 in cash, without interest (subject to any applicable withholding tax) (the “Merger Consideration”). Each (i) Common Share owned by the Company or any of its wholly-owned subsidiaries immediately prior to the Effective Time and (ii) Series A Preferred Share owned, directly or indirectly, by Parent, the equity holders of the Parent or any of Parent’s wholly-owned subsidiaries (including Merger Sub) immediately prior to the Effective Time ((i) and (ii) collectively, the “Excluded Shares”) shall be canceled automatically and shall cease to exist, and no consideration shall be paid for those Excluded Shares. “Dissenting Shares” are shares of the Company held by a shareholder who does not vote in favor of the Merger, who complies with all of the provisions of the Companies Act concerning the right of holders of Company shares to require appraisal of their Company shares pursuant to Bermuda law, and who is not satisfied that such shareholder has been offered fair value for such shareholder’s shares.

Shareholders of the Company will be asked to vote on the adoption and approval of the Merger Agreement, the Bermuda Merger Agreement, and the transactions contemplated thereby at a special meeting of the Company’s shareholders that will be held on a date to be announced. Consummation of the Merger is subject to customary conditions, including without limitation: (i) the adoption and approval of the Merger Agreement and the Bermuda Merger Agreement by (a) holders of Common Shares by at least 75% of the votes cast and (b) holders of Series A Preferred Shares with at least 75% of the votes cast, in each case at a duly convened meeting of the shareholders of the Company at which a quorum is present (the “Requisite Company Vote”); (ii) the absence of any order enjoining or prohibiting the Merger; and (iii) the receipt of certain consents, approvals, and other authorizations, in each case, required to consummate the Merger. Moreover, each party’s obligation to consummate the Merger is subject to certain other conditions, including without limitation: (x) the accuracy of the other party’s representations and warranties contained in the Merger Agreement (subject to certain material adverse effect qualifiers) and (y) the other party’s compliance with its covenants and agreements contained in the Merger Agreement in all material respects. In addition, the obligation of Parent to consummate the Merger is subject to (i) no more than ten percent (10%) of the Common Shares owned by shareholders other than the Preferred Shareholder Group being Dissenting Shares and (ii) the non-occurrence of any Company Material Adverse Effect (as defined in the Merger Agreement) from the date of the Merger Agreement to the Effective Time.

The Company has made customary representations and warranties to Parent and Merger Sub in the Merger Agreement. The Company has also entered into certain customary covenants and agreements in the Merger Agreement, including, without limitation, covenants regarding: (i) the conduct of the business of the Company prior to the consummation of the Merger; (ii) the calling and holding of the special meeting of the Company’s shareholders for the purpose of obtaining the Requisite Company Vote; and (iii) the use of its commercially reasonable efforts to cause the Merger to be consummated.

Under the Merger Agreement, the Company is subject to a restriction on its ability to solicit offers or proposals relating to an alternative acquisition proposal or to provide information to or engage in discussions or negotiations with third parties regarding an acquisition proposal. This restriction is subject to certain exceptions that allow the Company to provide information and participate in discussions with respect to an unsolicited written acquisition proposal if the Board (acting through the Special Committee) has determined, after consultation with the Company’s outside legal and financial advisors, that such acquisition proposal constitutes or is reasonably likely to lead to a Superior Proposal (as defined in the Merger Agreement ), and that not doing so would be inconsistent with its fiduciary duties.

The Merger Agreement contains certain termination rights for both the Company and Parent. For example, the Board (acting through the Special Committee) may cause the Merger Agreement to be terminated in response to a Superior Proposal (as defined in the Merger Agreement). The Merger Agreement provides that, upon termination under specified circumstances, the Company would be required to reimburse Parent for all reasonable, documented out-of-pocket fees and expenses, including reasonable attorney fees, incurred in furtherance of approval and consummation of the transactions contemplated by the Merger Agreement; provided, that in no event shall such reimbursement obligation of the Company exceed $350,000 in the aggregate.

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In no event shall the Company be deemed to have breached the interim operating covenants in the Merger Agreement unless the applicable Company action or omission is (i) effectuated by an employee of the Company or any of its subsidiaries outside such employee’s designated scope of authority in the ordinary course of business and without the actual knowledge of Mitchell, or (ii) explicitly approved by a majority of the members of the Board and such action is opposed in writing by Mitchell in his capacity as a manager of Parent. Additionally, none of the Company, Parent, or Merger Sub may rely as a basis for not consummating the Merger on the failure of certain closing conditions, as the case may be, to be satisfied if such failure was caused by (i) such party’s breach of any provision of the Merger Agreement or (ii) with respect to the Parent and Merger Sub only, unless at the specific direction of the Special Committee, actions taken (or omitted to be taken) that are directly authorized, approved, or directed by, or taken (or omitted to be taken) by a Representative (as defined in the Merger Agreement) of the Company or any of its subsidiaries with the actual knowledge of, Mitchell in his capacity as director of the Company, Chairman of the Board, or Chief Executive Officer of the Company (for the avoidance of doubt, an action taken by the Company without the actual knowledge of Mitchell shall not be deemed an action directly authorized, approved, or directed by Mitchell).

In connection with the execution of the Merger Agreement, Dalea, an affiliate of Mitchell, has provided the Company with a limited non-recourse guaranty (the “Limited Guaranty”) in favor of the Company guaranteeing certain payment and performance obligations that may be owed by Parent pursuant to the Merger Agreement.

In addition, in connection with the execution of the Merger Agreement, the members of the Preferred Shareholder Group have entered into an agreement (the “Voting Agreement”) pursuant to which such shareholders have agreed to vote in favor of the Merger and the adoption of the Merger Agreement, subject to the limitations set forth in the Voting Agreement. The Voting Agreement will terminate upon the earliest to occur of (i) the mutual written agreement of all parties thereto and (ii) March 31, 2021.

The foregoing summary of the Merger Agreement and the transactions and related agreements contemplated thereby (including the Limited Guaranty) do not purport to be a complete description of all the parties’ rights and obligations under such agreements and is qualified in its entirety by reference to the Merger Agreement and the Limited Guaranty, copies of which are filed as Exhibit 2.1 and Exhibit 10.1 hereto, respectively, and incorporated herein by reference. The Merger Agreement has been attached as an exhibit solely to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the Company, Parent, Merger Sub, or any of their respective subsidiaries, affiliates, or businesses. The representations, warranties, covenants, and agreements contained in the Merger Agreement were made only for the purposes of such agreement and as of specified dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors and security holders should not rely on the representations, warranties, covenants, and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of the Company, Parent, Merger Sub, or any of their respective subsidiaries, affiliates, or businesses. Moreover, the assertions embodied in the representations and warranties contained in the Merger Agreement are qualified by information in disclosure letters that the parties have exchanged. Accordingly, investors and security holders should not rely on the representations and warranties as characterizations of the actual state of facts of the Company, Parent, Merger Sub, or any of their respective subsidiaries, affiliates, or businesses. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

Loan and Security Agreement

As previously disclosed, on June 30, 2020, the Company entered into a non-binding letter of intent with the Mitchell Group pursuant to which Dalea Investment Group, LLC (the “Lender”), an entity controlled by

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the Preferred Shareholder Group, would provide a working capital loan to the Company on the terms set forth in a term sheet.

On August 7, 2020, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with the Lender. Pursuant to the Loan Agreement, the Lender committed to lend to the Company an aggregate principal amount of up to $8,000,000 (the “Loan”), $100,000 of which is eligible for draw by the Company upon execution of the Loan Agreement (the “Initial Advance”). Subsequent advances shall be made available by Lender and applied by the Company in accordance with a budget agreed to by the Lender and the Company (the “Budget”) and subject to the other conditions set forth in the Loan Agreement. In addition: (i) after the Initial Advance, the Company shall be entitled to further loan advances only after it has filed with the Securities and Exchange Commission (the “SEC”), the proxy statement related to the Merger, in form and substance reasonably satisfactory to Lender, and only so long as the Company has not withdrawn or ceased to diligently pursue approval thereof; and (ii) after approval of the proxy statement by the SEC, the Company shall be entitled to further loan advances only after it calls and gives notice of a shareholders meeting pursuant to Section 5.5 of the Merger Agreement and only so long as the Company has not withdrawn or ceased to diligently pursue approval of the Merger and the other transactions contemplated by the Merger Agreement pursuant to Section 5.5 of the Merger Agreement. The Company intends to use the proceeds of the Loan to finance the working capital needs of the Company and its subsidiaries in accordance with the Budget.

The outstanding borrowings under the Loan Agreement bear interest at a rate equal to 10% per annum. Principal on the Loan does not amortize and is required to be repaid in full on the maturity date of August 7, 2021. The Loan may be optionally prepaid in whole or in part from time to time without fee, premium, or penalty.

The Company’s obligations under the Loan Agreement are guaranteed by TransAtlantic Petroleum (USA) Corp., a Delaware corporation (“TransAtlantic USA”), and TransAtlantic Worldwide Ltd., a Bahamas international business corporation (“TransAtlantic Worldwide”), each a wholly-owned direct subsidiary of the Company.

The Company’s obligations under the Loan Agreement are secured by all of the Company’s present and future accounts, chattel paper, commercial tort claims, commodity accounts, commodity contracts, contracts receivable, deposit accounts, documents, financial assets, general intangibles, instruments, investment property (including all of the Company’s right, title, and interest in and to all of the capital stock of TransAtlantic USA and TransAtlantic Worldwide), letters of credit, letter of credit rights, payment intangibles, securities, notes receivable, choses of action, security accounts, and security entitlements, now or hereafter owned, held, or acquired.  

The Loan Agreement contains various affirmative and negative covenants. The negative covenants limit the Company’s ability to, among other things, incur additional indebtedness, incur additional liens, sell assets, consummate mergers, or consolidations (other than in accordance with the Merger Agreement), make investments, make distributions, or other restricted payments, and enter into, modify, or terminate material agreements. The covenants are subject to exceptions set forth in the Loan Agreement.

The Loan Agreement contains events of default, including non-payment, breach of certain covenants, termination by the Company of the Merger Agreement, invalidity of the Loan Agreement, the guarantees, or other documents entered into in connection with the Loan, cross-default, and bankruptcy; provided however, no event shall cause an event of default under the Loan Agreement (except for certain involuntary bankruptcy events not initiated or supported by Lender) if the actions taken (or omitted to be taken) are directly authorized, approved or directed by, or taken (or omitted to be taken) by an employee or representative of the Company or any of its subsidiaries with the actual knowledge of, Mitchell in his capacity as director of the Company, Chairman of the  Board, or Chief Executive Officer of the Company (for the avoidance of doubt, an action taken by the Company without the actual knowledge of Mitchell shall not be deemed an action directly authorized, approved or directed by Mitchell). The Lender may accelerate all of the indebtedness under the Loan Agreement upon the occurrence and during the continuance of any

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event of default. The terms and provisions of the Loan Agreement may be amended only with the consent of both the Lender and the Company.

The foregoing summary of the Loan Agreement and the transactions and related agreements contemplated thereby and do not purport to be a complete description of all the parties’ rights and obligations under such agreements and is qualified in its entirety by reference to the Loan Agreement, a copy of which is filed as Exhibit 10.2 hereto and incorporated herein by reference.

Farmout Agreement

On August 4, 2020, the Company entered into an agreement (the “Farmout Agreement”) with Longfellow, an affiliate of Mitchell, to farm-out a petroleum license held by TransAtlantic Exploration Mediterranean International Pty Ltd., a wholly owned subsidiary of the Company, for the exploration and production of oil and natural gas resources covering approximately 14,500 total acres in the region of Southeast Turkey (the “License”).

Under the regulatory provisions governing the License, the Company must undertake operations to restore oil production or establish new production, from lands covered by the License on or before December 1, 2020, in order to perpetuate the term of the License past that date. The Company has decided not to undertake such operations and has agreed to farmout the License to Longfellow in accordance with the Farmout Agreement.

Under the terms of the Farmout Agreement, Longfellow has the right to re-enter the Goksu 3H wellbore, sidetrack the wellbore, and deepen the well to test the Bedinan formation, or other formations as encountered. In the event the operations for the Goksu 3H well result in a dry hole, Longfellow is required to reimburse the Company for all actual costs incurred by the Company with plugging the well and restoring the surface drillsite. Thereupon, the Farmout Agreement shall terminate.

In the event the operations for the Goksu 3H ST well result in a commercial producer of oil and/or gas, (i) (x) the Company shall install the appropriate equipment/facilities needed to produce the well and make such necessary arrangements to sell the oil and/or gas produced, utilizing such production contracts as it deems most favorable to maximize the commerciality of the well, and (y) Longfellow is required to reimburse the Company for all costs incurred by the Company to conduct such operations, and (ii) Longfellow shall grant the Company an overriding royalty interest of 5% in all sales of oil and gas from such well and any other wells thereafter drilled or produced on the License. The overriding royalty interest shall bear its share of production/severance taxes, and any gathering, transportation, processing, or marketing fees/costs but none of the well costs.

If completed operations for the Goksu 3H well result in perpetuation of the License, Longfellow is entitled to an assignment of all of the Company’s rights in and to the License, and, upon earning such assignment, Longfellow shall assume all responsibility and liability from the Company as to the License.  The terms of the Farmout Agreement shall apply to any such additional well drilled pursuant thereto in all respects as if such additional well was the Goksu 3H well.  Longfellow shall have the right, at any time after a transfer has been approved pursuant to the provisions of the Farmout Agreement, and upon 30 days written notice, to take over as operator of the License from the Company.

The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Farmout Agreement, which is filed as Exhibit 10.3 to this Current Report on Form 8-K and incorporated in this Item 1.01 by reference.

Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The description of the Loan Agreement provided in Item 1.01 above is incorporated in this Item 2.03 by reference.

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Item 7.01Regulation FD Disclosure

On August 7, 2020, the Company issued a press release announcing the entry into the Merger Agreement and the Loan Agreement. This information is intended to be furnished, rather than filed. Such information, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall it be incorporated by reference into any filing made under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference to such filing.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits.

Exhibit No.	Description of Exhibit
2.1*	Agreement and Plan of Merger, dated as of August 7, 2020, by and among TAT Holdco LLC, TAT Merger Sub LLC, and TransAtlantic Petroleum Ltd.
10.1	Limited Guaranty, dated August 7, 2020, made by Dalea Partners, LP in favor of TransAtlantic Petroleum Ltd.
10.2	Loan and Security Agreement, dated August 7, 2020, by and between TransAtlantic Petroleum Ltd. and Dalea Investment Group, LLC
10.3	Farmout Agreement, dated August 4, 2020, by and between TransAtlantic Petroleum Ltd. and Longfellow Energy, LP
99.1	Press release, dated August 7, 2020, issued by TransAtlantic Petroleum Ltd.

* Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the SEC upon request.

Forward-Looking Statements

Certain statements in this report regarding the Merger Agreement and the proposed Merger constitute “forward-looking statements” under the federal securities laws. These forward-looking statements are intended to be covered by the safe harbors created by the Private Securities Litigation Reform Act of 1995. When the Company uses words such as “anticipate,” “intend,” “plan,” “believe,” “estimate,” “expect,” or similar expressions, it does so to identify forward-looking statements. Forward-looking statements are based on current expectations that involve assumptions that are difficult or impossible to predict accurately and many of which are beyond the Company’s control. Actual results may differ materially from those expressed or implied in these statements as a result of significant risks and uncertainties, including, but not limited to, the occurrence of any event, change, or other circumstances that could give rise to the termination of the Merger Agreement, the inability to obtain the requisite shareholder approval for the proposed Merger or the failure to satisfy other conditions to completion of the proposed Merger, risks that the proposed transaction disrupts current plans and operations, the ability to recognize the benefits of the Merger, and the amount of the costs, fees, and expenses and charges related to the Merger. Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those projected, is contained in the Company’s filings with the SEC, including the Company’s Annual Report on Form 10-K, the Company’s quarterly reports on Form 10-Q as well as the Schedule 13E-3 transaction statement and the proxy statement to be filed by the Company. The statements in this report speak only as of the date of hereof, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law.

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Additional Information and Where to Find It

In connection with the proposed transaction, the Company will file with the SEC a proxy statement on Schedule 14A. In addition, certain participants in the proposed transaction will prepare and file a Schedule 13E-3 transaction statement that will include the proxy statement on Schedule 14A and may file or furnish other documents with the SEC regarding the proposed transaction. This report is not a substitute for the proxy statement, the Schedule 13E-3, or any other document that the Company may file or furnish with the SEC. INVESTORS IN, AND SECURITY HOLDERS OF, THE COMPANY ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS (INCLUDING THE SCHEDULE 13E-3) THAT ARE FILED OR FURNISHED (OR WILL BE FILED OR FURNISHED WITH THE SEC), AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. When available, investors and security holders may obtain free copies of the proxy statement, the Schedule 13E-3 and other documents filed or furnished with the SEC by the Company through the web site maintained by the SEC at www.sec.gov or by contacting the Corporate Secretary at TransAtlantic Petroleum Ltd., c/o TransAtlantic Petroleum (USA) Corp., 16803 Dallas Parkway, Addison, TX 75001 or at (214) 220-4323.

Participants in the Solicitation

The Company and its directors and executive officers and other members of management and employees may, under SEC rules, be deemed to be “participants” in the solicitation of proxies from the Company’s shareholders in connection with the proposed transaction. Information regarding the persons who may be considered “participants” in the solicitation of proxies will be set forth in the proxy statement and Schedule 13E-3 transaction statement relating to the Merger when it is filed with the SEC. Information regarding directors and executive officers, including a description of their direct interests, by security holdings or otherwise, in the Company is contained in the Company’s Definitive Annual Meeting Proxy Statement filed with the SEC on April 20, 2020. You may obtain a free copy of this document as described in under the heading “Additional Information and Where to Find It” above. Investors may obtain additional information regarding the direct and indirect interests of such potential participants in the proposed transaction by reading the proxy statement, Schedule 13E-3 transaction statement, and the other relevant documents filed with the SEC when they become available.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	August 7, 2020
		TRANSATLANTIC PETROLEUM LTD.
		By:	/s/ Tabitha Bailey
			Tabitha Bailey
			Vice President, General Counsel, and Corporate Secretary

EX-2.1

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

by and among

TAT HOLDCO LLC,

TAT MERGER SUB LLC,

and

TRANSATLANTIC PETROLEUM LTD.

Dated as of August 7, 2020

TABLE OF CONTENTS

ARTICLE I	THE Merger	2
Section 1.1	The Merger; Effective Time	2
Section 1.2	Closing	3
Section 1.3	Effects of the Merger	3
Section 1.4	Surrender of Certificates; Payment of Merger Consideration	3
Section 1.5	Restricted Company Shares	5
Section 1.6	Shares of Dissenting Holders	5
ARTICLE II	The Surviving Company	6
Section 2.1	Certificate of Formation	6
Section 2.2	Managers and Officers	6
Section 2.3	Company Agreement of the Surviving Company	6
ARTICLE III	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	6
Section 3.1	Organization and Power	6
Section 3.2	Foreign Qualifications	7
Section 3.3	Corporate Authorization	7
Section 3.4	Enforceability	7
Section 3.5	Organizational Documents	7
Section 3.6	Subsidiaries	7
Section 3.7	Governmental Authorizations	8
Section 3.8	Non-Contravention	8
Section 3.9	Capitalization	9
Section 3.10	Reports and Financial Statements	10
Section 3.11	Internal Controls and Procedures	10
Section 3.12	No Undisclosed Liabilities	11
Section 3.13	Absence of Certain Changes or Events	11
Section 3.14	Compliance with Law; Permits	11
Section 3.15	Environmental Matters	12
Section 3.16	Employee Benefit Plans	13
Section 3.17	Investigations; Litigation	14
Section 3.18	Proxy Statement; Other Information	14
Section 3.19	Tax Matters	14
Section 3.20	Labor Matters	15
Section 3.21	Intellectual Property	15
Section 3.22	Real and Personal Property	15
Section 3.23	Material Contracts	16
Section 3.24	Opinions of Financial Advisors	16
Section 3.25	Finders or Brokers; Fees	16
Section 3.26	Required Vote of Company Shareholders	16
Section 3.27	Takeover Laws	16
Section 3.28	Related Party Transactions	17
Section 3.29	No Other Representations or Warranties	17

i

ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF THE PARENT PARTIES	17
Section 4.1	Organization and Power	17
Section 4.2	Authority and Approval	17
Section 4.3	Enforceability	17
Section 4.4	Organizational Documents	18
Section 4.5	Governmental Authorizations	18
Section 4.6	Non-Contravention	18
Section 4.7	Operations of Merger Sub	19
Section 4.8	Proxy Statement; Other Information	19
Section 4.9	Contribution Agreement	19
Section 4.10	Finders or Brokers	19
Section 4.11	Guaranty	20
ARTICLE V	COVENANTS AND AGREEMENTS	20
Section 5.1	Conduct of Business of the Company	20
Section 5.2	Access and Confidentiality	22
Section 5.3	Acquisition Proposals	23
Section 5.4	Proxy Statement; Schedule 13E-3	25
Section 5.5	Company Shareholders Meeting	26
Section 5.6	Consents and Approvals	27
Section 5.7	Takeover Statute	28
Section 5.8	Public Announcements	28
Section 5.9	Indemnification and Insurance	28
Section 5.10	Notification of Certain Matters; Shareholder Litigation	29
Section 5.11	Rule 16b-3	30
Section 5.12	De-Listing	30
ARTICLE VI	CONDITIONS TO THE MERGER	30
Section 6.1	Conditions to Each Party’s Obligation to Effect the Merger	30
Section 6.2	Conditions to Obligation of the Company to Effect the Merger	30
Section 6.3	Conditions to Obligations of the Parent Parties to Effect the Merger	31
Section 6.4	Frustration of Closing Conditions	32
ARTICLE VII	TERMINATION	32
Section 7.1	Termination by Mutual Consent	32
Section 7.2	Termination by Either Parent or the Company	32
Section 7.3	Termination by Parent	33
Section 7.4	Termination by the Company	33
Section 7.5	Effect of Termination	33
Section 7.6	Expenses Following Termination	34
Section 7.7	Amendment	34
Section 7.8	Extension; Waiver	34
ARTICLE VIII	MISCELLANEOUS	34
Section 8.1	No Survival of Representations and Warranties or Pre-Closing Covenants	34
Section 8.2	Expenses	34
Section 8.3	Counterparts; Effectiveness	35
Section 8.4	Governing Law; Jurisdiction	35
Section 8.5	Remedies; Specific Performance	35
Section 8.6	Notices	36

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Section 8.7	Assignment; Binding Effect	37
Section 8.8	Severability	37
Section 8.9	Entire Agreement	37
Section 8.10	Headings	37
Section 8.11	Interpretation	37
Section 8.12	Definitions	38

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Exhibit 2.1

AGREEMENT AND PLAN OF merger

This Agreement and Plan of Merger, dated as of August 7, 2020 (the “Agreement”), is by and among TAT Holdco LLC, a Texas limited liability company (“Parent”), TAT Merger Sub LLC, a Texas limited liability company and wholly-owned subsidiary of Parent (“Merger Sub” and, taken together with Parent, the “Parent Parties”), and TransAtlantic Petroleum Ltd., a Bermuda exempted company (the “Company”). Capitalized terms used but not defined elsewhere in this Agreement shall have the meanings in Section 8.12.

RECITALS

WHEREAS, it is proposed that the Company merge with and into Merger Sub (the “Merger”), and continue as a Texas limited liability company in accordance with the Companies Act of 1981 of Bermuda, as amended (the “Companies Act”) and the Texas Business Organizations Code (the “TBOC”) and otherwise on the terms and subject to the conditions set forth in this Agreement and the Bermuda Merger Agreement (as defined below);

WHEREAS, the Board of Directors of the Company (the “Company Board”) acting upon the unanimous recommendation of a committee of the Company Board consisting only of independent and disinterested directors of the Company (the “Special Committee”), acting unanimously (other than, on behalf of the Company, N. Malone Mitchell 3rd, Randall I. Rochman, and Jonathon T. Fite, each of whom recused himself from such determination and approval) has (a) determined that the Merger is in the best interests of the Company and its shareholders and constitutes fair value to its shareholders, (b) approved and adopted this Agreement (subject to the approval of the shareholders) and the transactions contemplated herein, including the Merger and recommended the adoption of this Agreement by the shareholders of the Company in accordance with the Companies Act and the TBOC, and (c) approved  entry into a statutory merger agreement between the Company and Merger Sub in a mutually agreed form in accordance with Bermuda law (the “Bermuda Merger Agreement”) (subject to the approval of the shareholders);  

WHEREAS, concurrently with the execution and delivery of this Agreement, as a condition and inducement to the willingness of Parent to enter into this Agreement, certain shareholders of the Company are entering into a Voting and Support Agreement (the “Voting Agreement”), with Parent pursuant to which, among other things, such shareholders have agreed to (a) vote the issued and outstanding Common Shares and Preferred Shares beneficially owned by such shareholders in favor of approval and adoption of this Agreement and the Bermuda Merger Agreement, (b) take other actions in furtherance of the transactions contemplated by this Agreement and the Bermuda Merger Agreement, (c) waive any appraisal rights that such holders may have and (d) not vote the issued and outstanding Common Shares and Preferred Shares beneficially owned by such shareholders in favor of certain transactions other than the Merger and the other transactions contemplated by this Agreement and the Bermuda Merger Agreement;

WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition and inducement to the Company’s willingness to enter into this Agreement, Parent and Merger Sub have delivered a Limited Guaranty (the “Guaranty”) from Dalea Partners, LP, an Oklahoma limited partnership (“Guarantor”), in favor of the Company and pursuant to which, subject to the terms and conditions contained therein, Guarantor is guaranteeing certain obligations of Parent and Merger Sub in connection with this Agreement.

WHEREAS, concurrently with the execution and delivery of this Agreement, all of the holders of Preferred Shares have entered into a Contribution Agreement with Parent and certain other Persons (the “Contribution Agreement”), pursuant to which, subject to the terms and conditions contained therein, the

holders of Preferred Sharescommitted to transfer, contribute and deliver all of their Preferred Shares and their pro rata share of US$100,000 to Parent in exchange for equity of Parent.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I
THE Merger

Section 1.1The Merger; Effective Time.

(a)At the Effective Time and subject to the terms and conditions of this Agreement, the Bermuda Merger Agreement, and the applicable provisions of the Companies Act and the TBOC, (a) the Company shall be merged with and into Merger Sub, (b) the separate corporate existence of the Company shall cease and (c) Merger Sub shall, as the surviving company in the Merger (the “Surviving Company”), continue its existence and be governed under the TBOC.  The name of the Surviving Company shall be TAT Merger Sub LLC.  The Merger shall constitute a merger pursuant to the applicable provisions of the Companies Act and the TBOC.

(b)Subject to and upon the terms and conditions of this Agreement and the Bermuda Merger Agreement, on or prior to the Closing Date, the parties shall cause (i) the Bermuda Merger Agreement to be executed and delivered, (ii) a notice of the Merger together with all matters required to be attached thereto or contained therein (the “Bermuda Merger Notice”) to be prepared, executed and delivered to the Registrar of Companies in Bermuda (the “Bermuda Registrar”) as provided under and in accordance with section 104C of the Companies Act, including a statement that the effective time of the Merger will be the date and time specified in the Bermuda Merger Agreement, the date the Texas Certificate of Merger is filed with the Texas Secretary of State or at such other subsequent date as the Company and Merger Sub may agree pursuant to the terms of the Bermuda Merger Agreement in accordance with the Companies Act and the TBOC (the “Effective Time”), and (iii) the Texas Certificate of Merger to be filed with the Texas Secretary of State in accordance with the TBOC.At any time after the Effective Time, if any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Company with full right, title and possession to all properties, rights and privileges as provided herein, the officers of the Surviving Company are fully authorized in the name of the Company or otherwise to take, and shall take, all such lawful and necessary action.

(c)At and after the Effective Time, the effect of the Merger shall be as provided in this Agreement, the Texas Certificate of Merger and the applicable provisions of the Companies Act and the TBOC. Without limitation of the foregoing, and subject thereto, at the Effective Time: (i) the merger of the Company with and into Merger Sub and the vesting of their undertaking, property and liabilities in the Surviving Company shall become effective; (ii) the property of each of the Company and Merger Sub shall become the property of the Surviving Company; (iii) the Surviving Company shall continue to be liable for the obligations and liabilities of each of the Company and Merger Sub; (iv) any existing cause of action, claim or liability to prosecution shall be unaffected; (v) a civil, criminal or administrative action or proceeding pending by or against any of the Company or Merger Sub may continue to be prosecuted by or against the Surviving Company; and (vi) a conviction against, or ruling, order or judgment in favor of or against, the Company or Merger Sub may be enforced by or against the Surviving Company.

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Section 1.2Closing. Subject to the terms and conditions of this Agreement, the closing of the Merger (the “Closing”) will take place at the offices of Foley & Lardner LLP, 2021 McKinney Avenue, Suite1600, Dallas, Texas 75201, as soon as possible, but in any event no later than the date that is five (5) Business Days after the date the conditions set forth in ‎ARTICLE VI(other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permissible, waiver of those conditions at the Closing) have been satisfied or, to the extent permissible, waived by the party or parties entitled to the benefit of such conditions, or at such other place, at such other time or on such other date as the parties may mutually agree.  The day on which the Closing takes places is referred to as the “Closing Date”.

Section 1.3Effects of the Merger.  Subject to the provisions of this Agreement, at the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or any holder of Common Shares or equity interests in Parent or Merger Sub:

(a)Merger Sub Equity.  Each limited liability company membership interest of Merger Sub issued and outstanding immediately prior to the Effective Time shall remain outstanding with full voting rights including the right to vote for the appointment of managers of the Surviving Company.

(b)Cancellation of Treasury Shares and Parent-Owned Securities.  Each (i) Common Share owned by the Company or any of its wholly-owned Subsidiaries immediately prior to the Effective Time and (ii) Preferred Share owned, directly or indirectly, by Parent, the equity holders of the Parent or any of Parent’s wholly-owned Subsidiaries (including Merger Sub) immediately prior to the Effective Time ((i) and (ii) collectively, the “Excluded Shares”) shall be canceled automatically and shall cease to exist, and no consideration shall be paid for those Excluded Shares.

(c)Conversion of Company Equity.  Each Common Share issued and outstanding immediately prior to the Effective Time (other than Dissenting Shares and Excluded Shares), including for the avoidance of doubt each Common Share subject to an RSU that will vest as of the Effective Time in accordance with Section 1.5 below, shall be converted automatically into the right to receive US$0.13 in cash (subject to any applicable withholding Tax), and without interest (the “Merger Consideration”), whereupon all such Common Shares shall be automatically canceled and shall cease to exist, and the holders of certificates which immediately prior to the Effective Time represented those shares (“Certificates”) and the holders of Common Shares registered in the register of shareholders of the Company (“Book-Entry Shares”) shall cease to have any rights with respect to those shares, other than the right to receive the Merger Consideration in accordance with Section 1.4.

Section 1.4Surrender of Certificates; Payment of Merger Consideration.

(a)Paying Agent.  Prior to the Effective Time, Parent shall (i) select a bank or trust company, reasonably satisfactory to the Company, to act as the paying agent in the Merger (the “Paying Agent”) and (ii) enter into a paying agent agreement with the Paying Agent in customary form agreed to by Parent and the Company.

(b)Payment Fund.  At or prior to the Effective Time, Parent shall (a) provide funds to the Paying Agent in amounts sufficient for the payment of the Merger Consideration payable under Section 1.3(c). Such funds provided to the Paying Agent are referred to as the “Payment Fund.”

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(c)Payment Procedures.

(i)Letter of Transmittal.  As promptly as practicable (but in no event later than three (3) Business Days) following the Effective Time, Parent shall cause the Paying Agent to mail to each holder of record of Common Shares converted pursuant to Section 1.3(c) the following: (A) a letter of transmittal in customary form agreed to by Parent and the Company (a “Letter of Transmittal”), specifying that delivery shall be effected, and risk of loss and title to such holder’s converted shares shall pass, only upon proper delivery of Certificates, or transfer of Book-Entry Shares, and a Letter of Transmittal to the Paying Agent and (B) instructions for surrendering such Certificates, if any.

(ii)Surrender of Certificates. Upon surrender of a Certificate for cancellation to the Paying Agent, together with a duly executed Letter of Transmittal and any other documents reasonably required by the Paying Agent, the holder of that Certificate shall be entitled to receive, and the Paying Agent shall pay in exchange therefor, the Merger Consideration payable in respect of the number of Common Shares evidenced by that Certificate less any required withholding of Taxes. Any Certificates so surrendered shall be canceled immediately. No interest shall accrue or be paid on any amount payable upon surrender of Certificates.

(iii)Book-Entry Shares. Notwithstanding anything to the contrary contained in this Agreement, any holder of Book-Entry Shares shall not be required to deliver a Certificate but may, if required by the Paying Agent, be required to deliver an executed Letter of Transmittal to the Paying Agent to receive the Merger Consideration that such holder is entitled to receive pursuant to this Section 1.4(c)(iii). Each holder of record of one or more Book-Entry Shares whose Common Shares were converted into the right to receive the Merger Consideration shall automatically upon the Effective Time or following the Paying Agent’s receipt of an “agent’s message” and the applicable Letter of Transmittal (or, at any later time at which such Book-Entry Shares shall be so converted) be entitled to receive, and Parent shall cause the Paying Agent to pay and deliver as promptly as practicable after such time, the Merger Consideration to which such holder is entitled to receive pursuant to this Section 1.4(c)(iii).

(iv)Unregistered Transferees. If any Merger Consideration is to be paid to a Person other than the Person in whose name the surrendered Certificate is registered, then the Merger Consideration may be paid to such a transferee so long as (A) the surrendered Certificate is accompanied by all documents required to evidence and effect that transfer and (B) the Person requesting such payment (1) pays any applicable transfer Taxes or (2) establishes to the satisfaction of Parent and the Paying Agent that any such Taxes have already been paid or are not applicable.

(v)No Other Rights. Until surrendered in accordance with this Section 1.4(c), each Certificate or Book-Entry Share shall be deemed, from and after the Effective Time, to represent only the right to receive the applicable Merger Consideration. Any Merger Consideration paid upon the surrender of any Certificate or Book-Entry Share shall be deemed to have been paid in full satisfaction of all rights pertaining to that Certificate or Book-Entry Share and the Common Shares formerly represented by it.

(d)No Further Transfers. Immediately prior to the Effective Time, the register of shareholders of the Company shall be closed and there shall be no further registration of transfers of the Common Shares that were issued and outstanding immediately prior to the Effective Time.

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(e)Required Withholding. Parent, the Surviving Company and the Paying Agent shall be entitled to deduct and withhold from any Merger Considerationpayable under this Agreement such amounts as may be required to be deducted or withheld therefrom under (i)the Internal Revenue Code of 1986 (the “Code”), (ii) any applicable state, local or foreign Tax Laws or (iii) any other applicable Laws. To the extent that any amounts are so deducted and withheld, those amounts shall be treated as having been paid to the Person in respect of whom such deduction or withholding was made for all purposes under this Agreement.

(f)No Liability. None of Parent, the Surviving Company, the Paying Agent or any other Person shall be liable to any holder of Certificates or Book-Entry Shares for any amount properly paid to a public official under any applicable abandoned property, escheat or similar Laws.

(g)Investment of Payment Fund. The Paying Agent shall invest the Payment Fund as directed by Parent; provided, that such investments shall be in obligations of or guaranteed by the United States of America, in commercial paper obligations of issuers organized under the laws of a state of the United States of America, rated A-1 or P-1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation, respectively, or in certificates of deposit, bank repurchase agreements or bankers’ acceptances of commercial banks with capital exceeding US$3 billion. Any interest and other income resulting from such investment shall become a part of the Payment Fund, and any amounts in excess of the amounts payable under Section 1.3(c) shall be paid promptly to Parent.

(h)Termination of Payment Fund. Any portion of the Payment Fund that remains unclaimed by the holders of Certificates or Book-Entry Shares one (1) year after the Effective Time shall be delivered by the Paying Agent to Parent upon demand. Thereafter, any holder of Certificates or Book-Entry Shares who has not complied with this Section 1.4 shall look only to Parent for payment of the applicable Merger Consideration.

(i)Lost, Stolen or Destroyed Certificates. If any Certificate is lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and the posting by such Person of a bond in the form reasonably required by Parent as indemnity against any claim that may be made against Parent on account of the alleged loss, theft or destruction of such Certificate, the Paying Agent shall pay the Merger Consideration to such Person in exchange for such lost, stolen or destroyed Certificate.

Section 1.5Restricted Company Shares. As of the Effective Time, each outstanding restricted stock unit award granted under a Company Equity Plan (an “RSU”) shall fully vest and be cancelled and shall entitle the holder thereof to receive, at the Effective Time, an amount in cash equal to the product of (x) the total number of Common Shares subject to such RSU immediately prior to the Effective Time times (y) the Merger Consideration, less applicable Taxes required to be withheld with respect to such payment.

Section 1.6Shares of Dissenting Holders. All Dissenting Shares shall be cancelled and converted as of the Effective Time into the right to receive the Merger Consideration as described in Section 1.3(c), as though such Dissenting Shares were Common Shares for the purposes thereof, and any Dissenting Holder shall, in the event that the fair value of a Dissenting Share as determined by the Supreme Court of Bermuda under Section 106 of the Companies Act is greater than the Merger Consideration, be paid such difference by the Surviving Company within thirty (30) days of the final Court appraisal of the fair value of such Dissenting Shares. Additionally, in the event that a Dissenting Holder effectively withdraws or otherwise waives any right to appraisal, its Common Shares shall be cancelled and converted as of the Effective Time into the right to receive the Merger Consideration for each such Dissenting Share held by such Dissenting Holder. The Company shall give Parent (i) prompt notice of (A) any demands for appraisal

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of Dissenting Shares or withdrawals of such demands received by the Company and (B)to the extent that the Company has Knowledge, any applications to the Supreme Court of Bermuda for appraisal of the fair value of the Dissenting Shares and (ii)to the extent permitted by applicable Law, the opportunity to participate with the Company in settlement negotiations and proceedings with respect to any written demands for appraisal under the Companies Act. The Company shall not voluntarily make any payment with respect to, or settle, or offer to settle, any such demands or applications without the prior written consent of Parent.

ARTICLE II
The Surviving Company

Section 2.1Certificate of Formation.  The certificate of formation (as the equivalent corporate documents to the Company’s memorandum of continuance) of Merger Sub (the “Certificate of Formation”) in effect at the Effective Time shall be the certificate of formation of the Surviving Company until amended in accordance with applicable Law.

Section 2.2Managers and Officers. From and after the Effective Time, until successors are duly elected or appointed and qualified in accordance with applicable Law or the applicable governing documents of the Surviving Company, (i) the managers of Merger Sub at the Effective Time shall be the managers of the Surviving Company and (ii) the officers of Merger Sub at the Effective Time shall be the officers of the Surviving Company. The registered office of the Surviving Company shall be 16803 Dallas Parkway, Addison, Texas 75001.

Section 2.3Company Agreement of the Surviving Company. The company agreement (as the equivalent corporate documents to the Company’s bye-laws) of Merger Sub as in effect immediately prior to the Effective Time shall be the limited liability company agreement of the Surviving Company (the “Surviving Company Operating Agreement”), until thereafter amended as provided therein or by applicable Law.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent and Merger Sub as in this ARTICLE III; provided that such representations and warranties by the Company are qualified in their entirety by reference to the disclosure (a) in the Company SEC Documents filed or furnished with the SEC prior to the date hereof (excluding, in each case, any disclosures set forth or referenced in any risk factor section or any disclosure of risks included in any “forward-looking statements,” in each case solely to the extent they are general in nature; and provided further that nothing disclosed in such Company SEC Documents shall be deemed to be a qualification of or modification to the representations and warranties in Section 3.3 and Section 3.26), or (b) in the disclosure schedule delivered by the Company to Parent immediately prior to the execution of this Agreement (the “Company Disclosure Letter”), it being understood and agreed that each disclosure in the Company Disclosure Letter or such Company SEC Documents shall qualify or modify each of the representations and warranties in this ARTICLE III (other than Section 3.3 and Section 3.26 in the case of such Company SEC Documents) to the extent the applicability of the disclosure is reasonably apparent from the text of the disclosure made.

Section 3.1Organization and Power. Each of the Company and its Subsidiaries is a corporation, exempted company, limited liability company or other legal entity duly organized, validly existing and in good standing (if and to the extent such term is so recognized in the relevant jurisdiction) under the Laws of its jurisdiction of organization. Each of the Company and its Subsidiaries has the requisite

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corporate, limited liability company, or other organizational, as applicable, power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted.

Section 3.2Foreign Qualifications. Each of the Company and its Subsidiaries is duly qualified or licensed to do business as a foreign corporation, exempted company, limited liability company or other legal entity and is in good standing (if and to the extent such term is so recognized in the relevant jurisdiction) in each jurisdiction where the character of the assets and properties owned, leased or operated by it or the nature of its business makes such qualification or license necessary, except where failure to be so qualified or licensed or in good standing would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect.

Section 3.3Corporate Authorization.  The Company has all necessary corporate power and authority to enter into this Agreement and the Bermuda Merger Agreement and, subject to approval and adoption of this Agreement and the Bermuda Merger Agreement by the Requisite Company Vote, to consummate the transactions contemplated by this Agreement and the Bermuda Merger Agreement. The Company Board by resolution (i) determined that this Agreement and the Bermuda Merger Agreement and the transactions contemplated thereby, including the Merger, upon the terms and subject to the conditions set forth therein, are in the best interests of the Company and the Company's shareholders and constitute fair value to the Company’s shareholders; (ii) approved and declared advisable this Agreement and the Bermuda Merger Agreement, including the execution, delivery, and performance thereof, and the consummation of the transactions contemplated by this Agreement and the Bermuda Merger Agreement, including the Merger, upon the terms and subject to the conditions set forth therein; (iii) directed that this Agreement and the Bermuda Merger Agreement be submitted to a vote of the Company's shareholders for adoption at the Company Shareholder Meeting; and (iv) resolved to recommend that Company shareholders vote in favor of adoption of this Agreement, the Bermuda Merger Agreement and the transactions contemplated hereby and thereby in accordance with the Companies Act and the TBOC (the “Recommendation”). The (a) execution and delivery and performance by the Company of this Agreement and the Bermuda Merger Agreement and (b) consummation by the Company of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action on the part of the Company and no other corporate action or corporate proceeding on the part of the Company are necessary to authorize the execution and delivery of this Agreement, the Bermuda Merger Agreement, or the Merger subject to the Requisite Company Vote. The Requisite Company Vote is the only vote or consent of the holders of any class or series of the Company's capital stock necessary to approve and adopt this Agreement, the Bermuda Merger Agreement, approve the Merger, and consummate the Merger and the other transactions contemplated hereby. 

Section 3.4Enforceability.  This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement by Parent and Merger Sub, constitutes a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency (including all Laws related to fraudulent transfers), reorganization, moratorium or similar Laws affecting creditors’ rights generally and subject to the effect of general principles of equity (whether considered in a proceeding at equity or at law).

Section 3.5Organizational Documents.  The Company has made available to Parent or Representatives of Parent correct and complete copies of the memorandum of continuance and bye-laws of the Company, and the memorandum of association and bye-laws or other similar Organizational Documents in effect as of the date hereof of each of the Company’s Subsidiaries, or such documents have otherwise been filed or furnished with the Company SEC Documents (collectively, the “Company Organizational Documents”). Neither the Company nor any of its Subsidiaries is in violation of its respective Company Organizational Documents in any material respect.

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Section 3.6Subsidiaries.  Except as set forth in Section 3.6 of the Company Disclosure Letter, (a)each of the Subsidiaries of the Company is wholly-owned by the Company, directly or indirectly, and all of the outstanding shares of capital stock of, or other equity or voting interests in, each Subsidiary of the Company are free and clear of any Liens, including any restriction on the right to vote, sell, or otherwise dispose of such capital stock or other equity or voting interests except for any Liens imposed by applicable securities Laws, except where any such failure to own any such shares free and clear, is not and would not reasonably be expected to have,individually or in the aggregate, a Company Material Adverse Effect and (b)the Company does not own, directly or indirectly, any share capital of, or any other securities convertible or exchangeable into or exercisable for share capital of, any Person other than the Subsidiaries of the Company.

Section 3.7Governmental Authorizations.  The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated by this Agreement do not and will not require any consent, approval or other authorization of, or filing with or notification to, any Governmental Entity, other than:

(a)the filing of the Bermuda Merger Notice and related attachments with the Bermuda Registrar in accordance with section 104C of the Companies Act;

(b)the filing of the Texas Certificate of Merger and related attachments with the Texas Secretary of State in accordance with the TBOC;

(c)the filing of the Texas Certificate of Merger and related attachments with the Bermuda Registrar in accordance with the Companies Act;

(d)the filing with the SEC of (i) a proxy statement (the “Proxy Statement”) relating to the special meeting of the shareholders of the Company to be held to consider the approval and adoption of this Agreement and the Bermuda Merger Agreement (the “Company Shareholders Meeting”), (ii) the Schedule 13E-3 (including any amendments or supplements thereto and any other document incorporated or referenced therein) and (iii) any other filings and reports that may be required in connection with this Agreement and the transactions contemplated by this Agreement under the Securities Act or the Exchange Act;

(e)compliance with any applicable foreign or state securities or blue sky laws;

(f)compliance with the NYSE and TSX rules and regulations;

(g)compliance with all applicable competition Laws, including the HSR Act (collectively, “Competition Laws”) including all such filings as may be required under any Competition Laws (and any actions or nonactions, waivers, consents, clearances or approvals by a Governmental Entity, or expirations or terminations of waiting periods, required in connection with the foregoing);

(h)any other U.S. or Canadian regulatory filings/consents; and

(i)where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect (collectively, the consents, approvals and authorizations required under Section 3.7(a)-(i), the “Company Approvals”).

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Section 3.8Non-Contravention. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated by this Agreement do not and will not:

(a)contravene, violate or breach any provision of the Company Organizational Documents, except as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect;

(b)contravene, violate or breach any Laws or Orders applicable to the Company or any of its Subsidiaries or by which any assets of the Company or any of its Subsidiaries (“Company Assets”) are bound, assuming that all consents, approvals, authorizations, filings and notifications described in Section 3.7 have been obtained or made or, if not obtained or made, would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect;

(c)result in any violation or breach of, or constitute a default (with or without notice or lapse of time or both) under, any Contracts to which the Company or any of its Subsidiaries is a party or by which any Company Assets are bound (collectively, “Company Contracts”), other than as in Section 3.8(c) of the Company Disclosure Letter or as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect;

(d)require any consent, approval or other authorization of, or filing with or notification to, any Person under any Company Contracts, other than as in Section 3.8(d) of the Company Disclosure Letter or, if not obtained, would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect;

(e)give rise to any termination, cancellation, amendment, modification,  default or acceleration of Indebtedness under any Company Contracts (or event or condition that with the passage of time or giving of notice or both would give rise to any termination, cancellation, amendment, modification, default or acceleration of Indebtedness under any Company Contracts), other than as in Section 3.8(e) of the Company Disclosure Letter or as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect; or

(f)cause the creation or imposition of any Liens on any Company Assets, other than as in Section 3.8(f) of the Company Disclosure Letter or as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect.

Section 3.9Capitalization.

(a)As of the date of this Agreement, the Company’s authorized share capital consists solely of 200,000,000 Common Shares of par value of US$0.10 each (the “Common Shares”), 99,010,000 undesignated shares of par value US$0.01 each, and 950,000 preferred shares designated as the “12.0% Series A Convertible Redeemable Preferred Shares” par value US$0.01 each (the “Preferred Shares”). As of July 31, 2020, (i) 68,586,290 Common Shares were issued and outstanding, (ii) 368,916 Restricted Company Shares were outstanding and subject to vesting restrictions, and (iii) 950,000 Preferred Shares were issued and outstanding and are convertible into 46,466,300 Common Shares. Except as provided in this Section 3.9(a), as of the date hereof, there are no shares or securities convertible into or exchangeable for shares in the share capital of the Company.

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(b)The Company has made available to Parentor Representatives of Parent, or otherwise filed or furnished with the Company SEC Documents,correct and complete copies of all plans, including any amendments thereto, under which Restricted Company Shares and other share-based awards have been granted (the “Company Equity Plans”).

(c)Each issued and outstanding share of the share capital of each Subsidiary of the Company that is a corporation is duly authorized, validly issued, fully paid and non-assessable and not subject to any pre-emptive rights. All non-corporate equity interests (including partnership interests and limited liability company interests) of the Company’s Subsidiaries held by the Company or any other Subsidiary have been duly and validly authorized and are validly issued, fully paid and non-assessable and were not issued in violation of any preemptive or similar rights, purchase option, call or right of first refusal or similar rights.

(d)Except as in Section 3.9(d) of the Company Disclosure Letter, there are no outstanding obligations of the Company or any of its Subsidiaries (i) to repurchase, redeem or otherwise acquire any Common Shares, Preferred Shares or share capital of any Subsidiary of the Company or (ii) to make any loan to or investment in (A) any Subsidiary of the Company that is not wholly owned by the Company or (B) any other Person.

Section 3.10Reports and Financial Statements.

(a)The Company has filed or furnished all forms, documents and reports required to be filed or furnished by it with the SEC on a timely basis since January 1, 2018 (together with any documents so filed or furnished during such period on a voluntary basis, in each case as may have been amended, the “Company SEC Documents”). As of the date of filing or furnishing, in the case of Company SEC Documents filed or furnished pursuant to the Exchange Act (and to the extent such Company SEC Documents were amended, then as of the date of filing or furnishing such amendment), and as of the date of effectiveness in the case of Company SEC Documents filed pursuant to the Securities Act (and to the extent such Company SEC Documents were amended, then as of the date of effectiveness of such amendment), each of the Company SEC Documents (i) complied in all material respects with the applicable requirements of the Securities Act or the Exchange Act, as the case may be, each as in effect on the date so filed, furnished or effective, and (ii) did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading as of its filing date, furnishing date or effective date, as applicable. As of the date hereof, there are no material outstanding or unresolved comments received from the SEC with respect to any of the Company SEC Documents.

(b)The consolidated financial statements (including all related notes and schedules) of the Company included in the Company SEC Documents fairly presented in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries, as at the respective dates thereof, and the consolidated results of their operations, their consolidated cash flows and changes in shareholders’ equity for the respective periods then ended (subject, in the case of the unaudited statements, to normal year-end adjustments and to any other adjustments described therein, including the notes thereto) and were prepared in all material respects in conformity with GAAP (except, in the case of the unaudited financial statements, as permitted by the SEC) applied on a consistent basis during the periods referred to therein (except as may be indicated therein or in the notes thereto). Since January 1, 2018, subject to any applicable grace periods, the Company has been and is in compliance with the applicable provisions of the Sarbanes-Oxley Act and the applicable rules and regulations of NYSE and TSX, except for any such noncompliance that would not, individually or in the aggregate, constitute a Company Material Adverse Effect.

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Section 3.11Internal Controls and Procedures.  The Company has designed and maintained disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs(e)and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act and as necessary to permit preparation of financial statements in conformity with GAAP. The Company’s disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to the Company’s principal executive officer and its principal financial officer by others in the Company or its Subsidiaries to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. The Company has disclosed, based on its most recent evaluation prior to the date hereof, to the Company’s auditors and the audit committee of the Company Board, (i)any material weaknesses in its internal controls over financial reporting and (ii) any allegation of fraud that involves management of the Company or any other employees of the Company and its Subsidiaries who have a significant role in the Company’s internal controls over financial reporting or disclosure controls and procedures.

Section 3.12No Undisclosed Liabilities. The audited balance sheet of the Company dated as of December 31, 2019 contained in the Company SEC Documents filed prior to the date hereof is hereinafter referred to as the “Company Balance Sheet.” Neither the Company nor any of its Subsidiaries has any Liabilities of the type required to be disclosed in the liabilities column of a balance sheet prepared in accordance with GAAP, other than Liabilities that: (i) are reflected or reserved against in the Company Balance Sheet (including in the notes thereto); (ii) are reflected in the “contractual obligations” subsection of the “management’s discussion and analysis of financial condition and results of operations” section of the Company SEC Documents; (iii) were incurred since the date of the Company Balance Sheet in the ordinary course of business consistent with past practice; (iv) are for performance of obligations arising under Contracts and not arising under or resulting from any breach or non-performance of such Contract; (v) are incurred in connection with the transactions contemplated by this Agreement; or (vi) would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect.

Section 3.13Absence of Certain Changes or Events.

(a)Except as set forth on Section 3.13(a) of the Company Disclosure Letter, since January 1, 2020 through the date hereof, the Company and its Subsidiaries have conducted their businesses in the ordinary course consistent with past practice in all material respects, except in connection with this Agreement and the transactions contemplated herein.

(b)There has not been, with respect to either the Company or any of its Subsidiaries, (i) any action taken after the date of the most recent financial statements contained in the Company SEC Documents as filed with or furnished to the SEC prior to the date of this Agreement that, if taken during the period from the date of this Agreement through the Effective Time, would constitute a breach of Section 5.1(b), (d), (e), (f), (g), (h), (i), (j), (k) or (l), or (ii) except as set forth on Section 3.13(b) of the Company Disclosure Letter, since January 1, 2020, any event, occurrence, development or state of circumstances or facts that has had or would be reasonably expected, individually or in the aggregate, to have a Company Material Adverse Effect.

Section 3.14Compliance with Law; Permits.

(a)Except as would not reasonably be expected, individually or in the aggregate, to (i) have a Company Material Adverse Effect with respect to non-U.S. or non-Bermuda Laws, or (ii) have a material and adverse effect on the Company and its Subsidiaries, taken as a whole, with

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respect to U.S. and Bermuda Laws,neither the Company nor any of its Subsidiaries arein violation of any Laws to which the Company and its Subsidiaries are subject or by which any of the Company Assets are bound.  Except as would not reasonably be expected, individually or in the aggregate, to (i) have a Company Material Adverse Effect with respect to non-U.S. or non-Bermuda Laws, or (ii) have a material and adverse effect on the Company and its Subsidiaries, taken as a whole, with respect to U.S. and Bermuda Laws, since January 1, 2018through the date hereof, neither the Company nor any of its Subsidiaries has received any written notice from any Governmental Entity of, been charged by any such Governmental Entity with, or, to the Knowledge of the Company, been under investigation by any such Governmental Entity with respect to any violation of any applicable Law, or commenced any internal investigation with respect to any of the foregoing matters. Except as would not reasonably be expected, individually or in the aggregate, to (i) have a Company Material Adverse Effect with respect to non-U.S. or non-Bermuda Laws, or (ii) have a material andadverse effect on the Company and its Subsidiaries, taken as a whole, with respect to U.S. and Bermuda Laws, neither the Company, nor any of its Subsidiaries, nor, to the Knowledge of the Company, any of their respective directors, officers, employees or agents or any other Person authorized to act, and acting, on behalf of the Company or its Subsidiaries has, directly or knowingly indirectly, in connection with the business activities of the Company used any funds for unlawful contributions, gifts, bribes, rebates, payoffs, influence payments, kickbacks, entertainment, or other unlawful expenses relating to political activity to or for the benefit of any government official, candidate for public office, political party or political campaign, for the purpose of (A) influencing any act or decision of such government official, candidate, party or campaign, (B) inducing such government official, candidate, party or campaign to do or omit to do any act in violation of a lawful duty, (C) obtaining or retaining business for or with any Person, (D) expediting or securing the performance of official acts of a routine nature, or (E) otherwise securing any improper advantage, in each case in violation of the Foreign Corrupt Practices Act of 1977, 15U.S.C. §§ 78dd-1, et seq. or any other applicable Law related to anti-corruption.

(b)The Company and its Subsidiaries are in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, registrations, approvals and orders of any Governmental Entity or pursuant to any Law (the “Company Permits”) necessary for the Company and its Subsidiaries to own, lease and operate their properties and assets and to carry on their businesses as they are now being conducted, except where the failure to have any of the Company Permits would not, individually or in the aggregate, constitute a Company Material Adverse Effect. All Company Permits are in full force and effect, no default (with or without notice, lapse of time, or both) has occurred under any such Company Permit, and none of the Company or its Subsidiaries has received any written notice from any Governmental Entity threatening to suspend, revoke, withdraw or modify any such Company Permit, in each case, except as would not, individually or in the aggregate, constitute a Company Material Adverse Effect.

(c)Except as would not, individually or in the aggregate, constitute a Company Material Adverse Effect, (i) neither the Company nor any of its Subsidiaries has, during the past three (3) years, violated the Arms Export Control Act (22 U.S.C. § 2778), the International Traffic in Arms Regulations (22 C.F.R. §§ 120 et seq.), the Export Administration Regulations (15 C.F.R. §§ 730 et seq.) (collectively, “Export Control Laws”), or OFAC Rules and (ii) neither the Company nor any of its Subsidiaries has, during the past three (3) years, received any written or, to the Knowledge of the Company, other communication that alleges that the Company or any of its Subsidiaries has violated any Export Control Laws or OFAC Rules.

Section 3.15Environmental Matters.  Except as would not, individually or in the aggregate, constitute a Company Material Adverse Effect, since January 1, 2018, (a) the Company and its Subsidiaries

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have been, in compliance with all applicable Environmental Laws, (b)neither the Company nor any of its Subsidiaries has received any written notices or demand letters from any federal, state, local or foreign Governmental Entity or other Person alleging that the Company or any of its Subsidiaries is in violation of, or subject to liability under, any Environmental Law, the subject of which is unresolved, (c)there are no actions, suits or proceedings pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries arising under Environmental Law, and (d)there has been no release or, to the Knowledge of the Company, threatened releaseof any Hazardous Substance in violation of any applicable Environmental Law or as would reasonably be expected to result in material liability under any Environmental Law at or from any properties or facilities currently owned, leased or operated by the Company or any of its Subsidiaries or, as regarding properties or facilities formerly owned, leased or operated by the Company or any of its Subsidiaries, as a result of any activity of the Company or any of its Subsidiaries, or to the Knowledge of the Company, any other Person, during the time such properties or facilities were owned, leased or operated by the Company or any of its Subsidiaries.

Section 3.16Employee Benefit Plans.

(a)Except as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect, none of the Company, its Subsidiaries or any other entity that is, or at any relevant time was, required to be treated as a single employer with the Company under Section 4001(b)(1) of ERISA or Section 414(b), (c), (m) or (o) of the Code maintains, contributes to, or has any liability, whether contingent or otherwise, with respect to, and has not within the preceding six (6) years maintained, contributed to or had any liability, whether contingent or otherwise, with respect to any employee benefit plan (as defined in Section 3(3) of ERISA) that is or has been (i) subject to Title IV of ERISA or Section 412 of the Code or subject to Section 4063 or 4064 of ERISA or (ii) a Multiemployer Plan. Except as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect, no Company Benefit Plan provides medical or other welfare benefits with respect to current or former employees or directors of the Company or its Subsidiaries, or any spouse or dependent of any such person, beyond their retirement or other termination of service, other than (A) coverage mandated by applicable Law or (B) benefits under any “employee pension plan” (as such term is defined in Section 3(2) of ERISA).

(b)Except as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect or as set forth on Section 3.16(b) of the Company Disclosure Letter: (i) since January 1, 2018, each Company Benefit Plan has been maintained and administered in compliance with its terms and with applicable Law, including ERISA and the Code to the extent applicable thereto; (ii) each Company Benefit Plan intended to be “qualified” within the meaning of Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service or is entitled to rely upon a favorable opinion issued by the Internal Revenue Service; (iii) all contributions or other amounts payable by the Company or its Subsidiaries as of the date hereof with respect to each Company Benefit Plan in respect of current or prior plan years have been paid or accrued in accordance with GAAP (other than with respect to amounts not yet due); (iv) there are no pending or, to the Knowledge of the Company, threatened claims (other than claims for benefits in accordance with the terms of the Company Benefit Plans) by, on behalf of or against any of the Company Benefit Plans; and (v) there are no audits, inquiries or proceedings pending or, to the Knowledge of the Company, threatened, by the Internal Revenue Service, the Department of Labor, or other Governmental Entity with respect to any Company Benefit Plan.

(c)Except as provided in this Agreement or as required by applicable Law or as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse

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Effect, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement will, either alone or in combination with another event, (i) entitle any current or former employee, consultant or officer of the Company or any of its Subsidiaries to severance pay, unemployment compensation (other than state or federal unemployment insurance)or any other payment, (ii) accelerate the time of payment or vesting of, or increase the amount of, any benefits or compensation due to any such employee, consultant or officer or result in the forgiveness of any Indebtedness of any such individual to the Company or any of its Subsidiaries, (iii) result in any payment or benefit that will be made by the Company or its Subsidiaries that would not be deductible pursuant to Section 280G of the Code or (iv) result in any reimbursement of any excise Taxes incurred under Section 4999 of the Code.

(d)Except as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect, all Company Foreign Plans (i) have been maintained in accordance with applicable Law and (ii) that are intended to qualify for special Tax treatment meet all material requirements for such treatment.

Section 3.17Investigations; Litigation. There are no Actions pending (or, to the Knowledge of the Company, threatened) against (a) the Company or any of its Subsidiaries, or any Company Assets, or (b) any director, officer or employee of the Company or any of its Subsidiaries or other Person for whom the Company or any of its Subsidiaries may be liable, that would reasonably be expected to cause a Company Material Adverse Effect or that would otherwise interfere in any material respect with the conduct of the Company and its Subsidiaries as now being currently conducted. There are no Orders outstanding against the Company or any of its Subsidiaries, except for those that, individually or in the aggregate, are not, and would not reasonably be expected to result in, a Company Material Adverse Effect.

Section 3.18Proxy Statement; Other Information. The Proxy Statement and the Schedule 13E‑3 (including any amendments or supplements thereto and any other document incorporated or referenced therein) will not, at the time filed with the SEC, or at the time the Proxy Statement is first mailed to the shareholders of the Company or at the time of the Company Shareholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. Each of the Proxy Statement and the Schedule 13E-3 shall comply in all material respects with the requirements of the Exchange Act applicable thereto. No representation is made by the Company with respect to statements made in the Proxy Statement or the Schedule 13E-3 based on information supplied in writing by or on behalf of the Parent Parties or any of their Affiliates specifically for inclusion or incorporation by reference therein.

Section 3.19Tax Matters.  Except as set forth on Section 3.19 of the Company Disclosure Letter or as would not, individually or in the aggregate, constitute a Company Material Adverse Effect: (i) since January 1, 2018, the Company and each of its Subsidiaries have prepared and timely filed (taking into account any extension of time within which to file) all Tax Returns required to be filed by any of them and all such filed Tax Returns are true, complete and accurate; (ii) since January 1, 2018, the Company and each of its Subsidiaries have paid all Taxes required to be paid (whether or not shown on such Tax Returns); (iii) there are not pending or threatened in writing any audits, examinations, investigations or other proceedings in respect of Taxes or Tax Returns of the Company or any of its Subsidiaries; (iv) there are no Liens for Taxes upon any property of the Company or any of its Subsidiaries, except for Permitted Liens; (v) the Company has not been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date hereof that was purported or intended to be governed by Section 355 of the Code; (vi) neither the Company nor any of its Subsidiaries has entered into any “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2); (vii) neither the Company nor any of its Subsidiaries (1) has received or applied for a Tax ruling from the Internal Revenue

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Service or entered into a “closing agreement” pursuant to Section 7121 of the Code (or any predecessor provision or any similar provision of state, local or foreign Law), in each case, that will affect the Company or any of its Subsidiaries after the Closing or (2) is a party to any Tax sharing or Tax indemnity agreement, other than any such agreement (x) solely between or among any of the Company and any of its Subsidiaries or (y) not primarily relating to Taxes and entered into in the ordinary course of business; or(viii) neither the Company nor any of its Subsidiaries is liable for any Taxes of any other Person (other than the Company and its Subsidiaries) pursuant to Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, by contract or otherwise.

Section 3.20Labor Matters. Except as would not, individually or in the aggregate, constitute a Company Material Adverse Effect, (a) (i) there are no strikes or lockouts with respect to any employees of the Company or any of its Subsidiaries, (ii) there is no unfair labor practice, labor dispute (other than routine individual grievances) or labor arbitration proceeding pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries, and (iii) there is no slowdown, or work stoppage in effect or, to the Knowledge of the Company, threatened with respect to employees of the Company or any of its Subsidiaries, and (b) the Company and its Subsidiaries are in compliance with all applicable Laws respecting (i) employment and employment practices, (ii) terms and conditions of employment, and (iii) unfair labor practices.

Section 3.21Intellectual Property.

(a)Except as would not constitute, individually or in the aggregate, a Company Material Adverse Effect, the Company and its Subsidiaries either own or have a right to use such patents, trademarks, trade names, service marks, domain names, copyrights and any applications and registrations for any of the foregoing, trade secrets, know-how, technology, Software and other intangible intellectual property rights (collectively, “Intellectual Property”) as are used in the business of the Company and its Subsidiaries as currently conducted. Except as would not, individually or in the aggregate, constitute a Company Material Adverse Effect, immediately following the Closing, the Company and its Subsidiaries will continue to own or have a right to use all Intellectual Property used in the business of the Company and its Subsidiaries as conducted as of the Closing. To the Knowledge of the Company, (i) neither the Company nor any of its Subsidiaries has infringed, misappropriated or violated in any material respect any Intellectual Property of any third party in the three years prior to the date of this Agreement and (ii) as of the date hereof, no third party is infringing, misappropriating or violating any Intellectual Property owned by or exclusively licensed to the Company or any of its Subsidiaries, in each case under clauses (i) and (ii) in a manner that would have a Company Material Adverse Effect.

(b)Except as would not, individually or in the aggregate, constitute a Company Material Adverse Effect, there are no Actions pending or, to the Knowledge of the Company, threatened that (i) challenge or question the validity of or the Company’s ownership, internal transfers or assignments of, or right to use, Intellectual Property owned by the Company or any of its Subsidiaries, or (ii) assert infringement, misappropriation, or violation by the Company or any of its Subsidiaries of any Intellectual Property owned by a third party.

(c)Except as would not, individually or in the aggregate, constitute a Company Material Adverse Effect, since January 1, 2018, the Company and its Subsidiaries have taken commercially reasonable steps to comply with privacy and similar Laws and maintain the confidentiality of trade secrets, personal, sensitive, or similar customer information owned by them or in their custody.

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Section 3.22Real and Personal Property.  Except as would not, individually or in the aggregate, (i) have a material and adverse effect on the Company and its Subsidiaries, taken as a whole, the Company and its Subsidiaries have good and valid fee simple title to all of their respective material owned real property, (ii) constitute a Company Material Adverse Effect, the Company and its Subsidiaries have good and valid title to all the personal properties and assets reflected on the latest audited balance sheet included in the Company SEC Documents as being owned by the Company or one of its Subsidiaries or acquired after the date thereof which are material to the Company and its Subsidiaries taken as a whole (except for properties and assets that have been disposed of since the date thereof) and (iii) have a material and adverse effect on the Company and its Subsidiaries, taken as a whole, the Company and its Subsidiaries have valid leasehold interests in all of their respective leased real property, in each case free and clear of all Liens except for Permitted Liens.  To the Knowledge of the Company, no Company Asset is on lease or on sublease to a Sanctioned Person in violation of OFAC.

Section 3.23Material Contracts.  As of the date hereof, there are no material Contracts to which the Company or any of its Subsidiaries is a party that are required to be described in, or filed as an exhibit to, any Company SEC Reports that are not so described or filed as required by the Securities Act or the Exchange Act (collectively, the “Material Contracts”). Each Material Contract is valid and binding on the Company and each of its Subsidiaries party thereto, and, to the Knowledge of the Company, each other party thereto, and is in full force and effect, except to the extent such Material Contract has previously expired in accordance with its terms or as would not, individually or in the aggregate, constitute a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries, or, to the Knowledge of the Company, the other parties thereto, is in violation of, or default under, any provision of any Material Contract, and, to the Knowledge of the Company, no party to any Material Contract has committed or failed to perform any act under and no event has occurred which, with or without notice, lapse of time or both, would constitute a default under the provisions of such Material Contract, except in each case for such violations and failures as would not, individually or in the aggregate, constitute a Company Material Adverse Effect.

Section 3.24Opinions of Financial Advisors.  Seaport Gordian Energy LLC (the “Advisor”) has delivered to the Special Committee and the Company Board, on or prior to the date hereof, its opinion (the “Fairness Opinion”) to the effect that, as of the date of such opinion, subject to the various assumptions and qualifications set forth therein, the Merger Consideration to be received by holders of Common Shares (other than Excluded Shares) is fair, from a financial point of view, to such holders and such opinion has not been withdrawn, revoked or modified (it being understood and agreed that such written opinion is for the benefit of the Company Board and may not be relied upon by Parent or Merger Sub).  The Company has obtained the authorization of Advisor to include a copy of such opinion in the Proxy Statement.

Section 3.25Finders or Brokers; Fees.  No broker, investment banker, financial advisor or other Person, other than the Advisor (and Company has furnished to Parent Parties a true, correct and complete copy of all engagement letters with the Advisor), is entitled to any broker’s, finder’s, financial advisor’s or other fee or commission in connection with the Merger or the other transactions contemplated by this Agreement based upon arrangements made by or on behalf of Company or any of its Subsidiaries.

Section 3.26Required Vote of Company Shareholders.  The Requisite Company Vote is the only vote or consent of the holders of any class or series of the share capital of the Company or any of its Subsidiaries necessary (under the Company Organizational Documents, the Companies Act, other applicable Laws or otherwise) to approve and adopt this Agreement, the Bermuda Merger Agreement, the Merger and the other transactions contemplated thereby.

Section 3.27Takeover Laws.  Assuming the accuracy of the representations and warranties of the Parent Parties set forth in ARTICLE IV, to the Knowledge of the Company, as of the date of this

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Agreement, no “fair price,” “moratorium,” “control share acquisition,” “interested shareholder,” “business combination” or other form of antitakeover statute or regulation (collectively, “Takeover Statutes”) would reasonably be expected to restrict or prohibit this Agreement, the Bermuda Merger Agreement, the Merger or the other transactions contemplated hereby and thereby by reason of it being a party to this Agreement and the Bermuda Merger Agreement, performing its obligations hereunder and thereunder and consummating the Merger and the other transactions contemplated hereby and thereby.

Section 3.28Related Party Transactions.  Except as contemplated hereby or as otherwise disclosed in the Company SEC Documents, (i) since January 1, 2018, neither the Company nor any of its Subsidiaries has entered into any Contract under which the Company or any of its Subsidiaries has incurred any material liability between the Company or any of its Subsidiaries, on the one hand, and, on the other hand, any Person (other than the holders of Preferred Shares, the Company or its Subsidiaries) which owns of record or beneficially any equity interest in any Subsidiary of the Company and (ii) since January 1, 2018, other than this Agreement and the other agreements contemplated hereby, the Company has not entered into any transaction, or series of similar transactions or entered into any Contracts, nor are there any currently proposed transactions, or series of similar transactions or Contracts to which the Company or any of its Subsidiaries was or, in the case of a proposed transaction, is to be a party, that would be required to be but has not been, disclosed under Item 404 of Regulation S-K of the SEC. For purposes of this Agreement, the transactions contemplated by clauses (i) and (ii) of the preceding sentence are referred to collectively as “Related Party Transactions.”

Section 3.29No Other Representations or Warranties.  Except for the representations and warranties expressly contained in this ARTICLE III, neither the Company nor any other Person makes any other express or implied representation or warranty on behalf of the Company or any of its Affiliates and the Company and its Affiliates shall have no liability to the Parent Parties or the Surviving Company with respect to any other representation, warranty, statement, document, prediction or other piece of information, written or oral, express or implied, made or provided to the Parent Parties.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARENT PARTIES

Each of the Parent Parties represents and warrants to the Company as in this ARTICLE IV; provided that such representations and warranties by the Parent Parties are qualified in their entirety by reference to the disclosure in the disclosure schedule delivered by the Parent Parties to the Company immediately prior to the execution of this Agreement (the “Parent Disclosure Letter”), it being understood and agreed that each disclosure in the Parent Disclosure Letter shall qualify or modify each of the representations and warranties in this ARTICLE IV to the extent the applicability of the disclosure to such representation and warranty is reasonably apparent from the text of the disclosure made.

Section 4.1Organization and Power. Each of the Parent Parties is a limited liability company duly organized, validly existing and in good standing (if and to the extent such term is so recognized in the relevant jurisdiction) under the Laws of its jurisdiction of organization. Each of the Parent Parties has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted.

Section 4.2Authority and Approval.  Each of the Parent Parties has all necessary power and authority to enter into this Agreement and the Bermuda Merger Agreement and to consummate the transactions contemplated by this Agreement and the Bermuda Merger Agreement. The approval of this Agreement, the Merger, the Bermuda Merger Agreement and the transactions contemplated hereby and thereby by Parent in its capacity as the sole shareholder of the Merger Sub is the only vote or consent of

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the holders of any class or series of ordinary shares of Merger Sub necessary to approve this Agreement, the Merger, the Bermuda Merger Agreement or the transactions contemplated hereby and thereby.

Section 4.3Enforceability.  This Agreement has been duly executed and delivered by the Parent Parties and, assuming the due authorization, execution and delivery of this Agreement by the Company, constitutes a legal, valid and binding agreement of the Parent Parties, enforceable against the Parent Parties in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency (including all Laws related to fraudulent transfers), reorganization, moratorium or similar Laws affecting creditors’ rights generally and subject to the effect of general principles of equity (whether considered in a proceeding at equity or at law).

Section 4.4Organizational Documents.  The Parent has made available to the Company correct and complete copies of the Organizational Documents in effect as of the date hereof of the Parent, and the Organizational Documents in effect as of the date hereof of the Merger Sub (collectively, the “Parent Parties’ Organizational Documents”). Neither the Parent nor Merger Sub is in violation of its respective Parent Parties’ Organizational Documents in any material respect.

Section 4.5Governmental Authorizations. The execution, delivery and performance of this Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub of the transactions contemplated by this Agreement do not and will not require any consent, approval or other authorization of, or filing with or notification to, any Governmental Entity, other than:

(a)the filing of the Bermuda Merger Notice and related attachments with the Bermuda Registrar in accordance with section 104C of the Companies Act;

(b)the filing of the Texas Certificate of Merger and related attachments with the Texas Secretary of State in accordance with the TBOC;

(c)the filing of the Texas Certificate of Merger and related attachments with the Bermuda Registrar in accordance with the Companies Act;

(d)the filing with the SEC of any filings or reports that may be required in connection with this Agreement and the transactions contemplated by this Agreement under the Exchange Act or the Securities Act; and

(e)where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not reasonably be expected to have a Parent Material Adverse Effect (collectively, the consents, approvals and authorizations required under Section 4.5(a)-(e), the “Parent Approvals”).

Section 4.6Non-Contravention.  The execution, delivery and performance of this Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub of the transactions contemplated by this Agreement do not and will not:

(a)contravene or conflict with, or result in any violation or breach of, any provision of the Organizational Documents of Parent or Merger Sub, as in effect on the date of this Agreement except as would not reasonably be expected to have a Parent Material Adverse Effect;

(b)contravene or conflict with, or result in any violation or breach of, any Laws or Orders applicable to Parent or Merger Sub or by which any assets of Parent or Merger Sub (“Parent Assets”) are bound, assuming that all consents, approvals, authorizations, filings and notifications

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described in Section 4.5have been obtained or made or, if not obtained or made, would not reasonably be expected to have a Parent Material Adverse Effect;

(c)result in any violation or breach of, or constitute a default (with or without notice or lapse of time or both) under, any Contracts to which Parent or Merger Sub is a party or by which any Parent Assets are bound (collectively, “Parent Contracts”), other than as would not reasonably be expected to have a Parent Material Adverse Effect; or

(d)require any consent, approval or other authorization of, or filing with or notification to, any Person under any Parent Contracts, other than those that, if not obtained, would not reasonably be expected to have a Parent Material Adverse Effect.

Section 4.7Operations of Merger Sub. Merger Sub was formed solely for the purpose of engaging in the transactions contemplated by this Agreement and has not engaged in any business activities of any type or kind whatsoever or conducted any operations other than in connection with the transactions contemplated by this Agreement. All of the issued and outstanding ordinary shares of Merger Sub are owned directly by Parent. Except for obligations and liabilities incurred in connection with its formation, the entry into this Agreement, the Bermuda Merger Agreement, the Merger or the transactions or performances contemplated hereby and thereby, each of Parent and Merger Sub has not and will not prior to the Effective Time (x) incur, directly or indirectly, any obligations, (y) enter into any other agreements or arrangements with any Person other than a holder of Preferred Shares, their Affiliates or their financing sources with respect to the Merger, or (z) acquire any material assets or liabilities other than those in furtherance of this Agreement.

Section 4.8Proxy Statement; Other Information. None of the information supplied in writing by or on behalf of the Parent Parties or any of their Affiliates to be included in the Proxy Statement or the Schedule 13E-3 will, at the time the Proxy Statement and the Schedule 13E-3 are filed with the SEC, or at the time the Proxy Statement is first mailed to the shareholders of the Company or at the time of the Company Shareholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. No representation is made by any of the Parent Parties with respect to any other statements made in the Proxy Statement or the Schedule 13E-3.

Section 4.9Contribution Agreement.

(a)Parent, the Preferred Shareholder Investors, and the others parties thereto have executed and delivered the Contribution Agreement, pursuant to which, subject to the terms and conditions thereof, (i) the Preferred Shareholder Investors committed to transfer, contribute and deliver all of their Preferred Shares to Parent in exchange for equity of Parent and (ii) all parties thereto waived any appraisal rights arising as a result of the Merger.

(b)Parent will have cash proceeds on the Closing Date sufficient for the satisfaction of the Parent Parties’ obligations to pay the aggregate Merger Consideration and pay any fees and expenses of or payable by the Parent Parties in connection with the Merger. Assuming satisfaction of the conditions to Parent’s and Merger Sub’s obligation to consummate the Merger, immediately after giving effect to the transactions contemplated by this Agreement (including the Merger, any repayment of existing indebtedness contemplated by this Agreement, and the payment of all related fees and expenses), the Surviving Company’s financial condition shall not be materially worse than the Company’s financial condition on the date of this Agreement.  Neither Parent nor Merger Sub is entering into this Agreement with the intent to hinder, delay or defraud either present or future creditors of the Company or any of is Subsidiaries or any other Person.

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Section 4.10Finders or Brokers. The Company will not be responsible for any brokerage, finder’s or other fee or commission to any broker, finder or investment banker in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of Parent or Merger Sub.

Section 4.11Guaranty. Concurrently with the execution of this Agreement, Guarantor has delivered to the Company the duly executed Guaranty. The Guaranty is in full force and effect and constitutes a legal, valid and binding obligation of Guarantor, enforceable against it in accordance with its terms, except as such enforceability: (a) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting or relating to creditors’ rights generally; and (b) is subject to general principles of equity. No event has occurred that, with notice or lapse of time or both, would, or would reasonably be expected to, constitute a default on the part of Guarantor pursuant to the Guaranty.

ARTICLE V
COVENANTS AND AGREEMENTS

Section 5.1Conduct of Business of the Company.  From the date of this Agreement until the earlier of (a) the date upon which this Agreement is terminated in accordance with ARTICLE VII, or (b) the Effective Time, except (i) as contemplated or permitted by this Agreement, (ii) as required by applicable Law, or (iii) as contemplated by the terms of any Material Contract, without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed, the Company shall, and shall cause each of its Subsidiaries to, (A) conduct its operations only in the ordinary course of business consistent with past practice in all material respects, and (B) use its commercially reasonable efforts to maintain and preserve intact in all material respects its business organization, to retain the services of its current officers and key employees, and to preserve the good will of its customers, suppliers and other Persons with whom it has business relationships. Without limiting the generality of the foregoing, and except (a) as otherwise contemplated or permitted by this Agreement or in Section 5.1 of the Company Disclosure Letter, (b) as required by applicable Law, or (c) as contemplated by the terms of any Material Contract, from the date of this Agreement until the earlier of (i) the date upon which this Agreement is terminated in accordance with ARTICLE VII, or (ii) the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to take any of the following actions, without the prior written consent of Parent, such consent not to be unreasonably withheld, conditioned or delayed:

(a)Organization Documents. Amend any Company Organizational Documents (whether by merger, amalgamation, consolidation or otherwise);

(b)Dividends. Make, declare or pay any dividend or distribution (whether in cash, shares or property) on any shares in the capital of the Company, other than (1) any dividends paid with respect to the Preferred Shares in accordance with the terms and provisions of the Certificate of Designations of the Preferred Shares or (2) any dividend or distribution by a Subsidiary of the Company to the Company or a Subsidiary of the Company;

(c)Share Capital. Other than with respect to the Preferred Shares in accordance with the terms and provisions of the Certificate of Designations of the Preferred Shares, (1) adjust, subdivide, consolidate or reclassify its share capital or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, its shares or that of its Subsidiaries, (2) redeem, purchase or otherwise acquire, or offer to purchase, redeem or otherwise acquire, directly or indirectly, any of its shares or any securities convertible or exchangeable into or exercisable for any of its shares, (3) grant any Person any right or option to acquire any of its shares, (4) issue, deliver or sell any additional shares or any securities convertible or exchangeable into or exercisable for any of its shares or such securities (other than pursuant to the vesting of

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Restricted Company Sharesand RSUsoutstanding as of the date of this Agreement and in accordance with the terms of such Restricted Company Sharesand RSUs as of the date of this Agreement) or (5)enter into any Contract, understanding or arrangement with respect to the sale, voting, registration or repurchase of its share capital, except, in the case of each of clauses(1) through (4), as permitted under this Section 5.1(c);

(d)Acquisitions. Acquire, by merger, amalgamation, consolidation, acquisition of equity interests or assets, or otherwise, any business or any corporation, partnership, limited liability company, joint venture or other Person or division thereof, or any substantial portion thereof, except for (1) transactions between the Company and any wholly-owned Subsidiary of the Company or transactions between any such wholly-owned Subsidiaries, or (2) purchases of equipment or inventory in the ordinary course of business consistent with past practice;

(e)Dispositions. Sell, lease, license, transfer, pledge, encumber, grant, abandon, let lapse or dispose of any material Company Assets, including the share capital of Subsidiaries of the Company, (collectively, a “Disposition”), other than (1) the sale or lease of inventory in the ordinary course of business consistent with past practice or pursuant to existing Contracts, or (2) the disposition of used or excess equipment in the ordinary course of business consistent with past practice; provided, however, that no Disposition shall be permitted if it would result in an “event of default” under (and as defined in) any Contract relating to the Company Indebtedness or any other Material Contract;

(f)Contracts. Other than in the ordinary course of business consistent with past practice (1) enter into or materially modify any Material Contract or IP Contract, other than as permitted under another subsection of this Section 5.1, (2) enter into any Contract that would limit or otherwise restrict the Company or any of its Subsidiaries or any of their successors, or that would, after the Effective Time, limit or otherwise restrict Parent or any of its Subsidiaries (including the Surviving Company) or any of their successors, from engaging or competing in any line of business, in any geographic area or with any Person in any material respect, (3) enter into or modify any Contract constituting or relating to a Related Party Transaction, other than transactions between the Company and any wholly-owned Subsidiary of the Company, transactions between any such wholly-owned Subsidiaries or transactions with the Preferred Shareholder Investors, or (4) terminate, cancel or request any material change in any Material Contract;

(g)Indebtedness; Guarantees. Incur, assume, guarantee or prepay any Indebtedness, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries or enter into any “keep well” or other agreement to maintain any financial condition of another Person, other than (i) trade payables and other trade debt and (ii) Indebtedness incurred since the date of this Agreement in the ordinary course of business consistent with prior practice; provided, however, in no event shall the outstanding Indebtedness of Company and its Subsidiaries exceed the following amounts by more than a ten percent (10%) variance:

(i)Denizbank hedging liability, $3,500,000;

(ii) Denizbank term loan liability, $10,650,000 (expected to be offset by $3,000,000 cash asset);

(iii)Turkish statutory employment liability reserve, $2,400,000;

(iv)Payroll Protection Program liabilities, $650,000;

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(v)Turkish tax liabilities, $1,500,000;

(vi)Turkish accounts payable, $3,900,000; and

(vii)U.S. accounts payable, $1,000,000;

(h)Loans. (1) Make any loans, advances or capital contributions to, or investments in, any other Person, other than (x) to any Subsidiaries of the Company or (y) in the ordinary course of business consistent with past practice, or (2) make or forgive any loans (other than routine expense allowances issued in the ordinary course of business) to its directors, officers, employees or consultants;

(i)Actions. Except for claims and litigation with respect to which an insurer (but neither the Company nor any of its Subsidiaries) has the right to control the decision to settle, settle any Action, in each case made or pending against the Company or any of its Subsidiaries, or any of their officers and directors in their capacities as such, other than the settlement of Actions which, in any event (1) are solely for monetary damages for an amount not to exceed US$200,000 in the aggregate or (2) would not be reasonably expected to prohibit or restrict in any material respect the Company and its Subsidiaries from operating their business in substantially the same manner as operated on the date of this Agreement; provided, however, that the Company shall (i) promptly notify Parent of the institution of any Shareholder Litigation against the Company or any of its directors relating to this Agreement, the Merger or the transactions contemplated by this Agreement, (ii) keep Parent fully informed on a reasonably current basis regarding all material developments in any such Shareholder Litigation, (iii) provide Parent the opportunity to consult with the Company regarding the defense or settlement of any such Shareholder Litigation, and (iv) give due consideration to Parent’s advice with respect to such Shareholder Litigation;

(j)Insurance. Fail to maintain existing insurance policies or comparable replacement policies to the extent available for a reasonable cost;

(k)Waivers of Rights. Cancel any material Indebtedness or waive any claims or rights of $100,000 or more in value, in each case other than in the ordinary course of business; or

(l)Related Actions. Agree to do any of the foregoing. Notwithstanding anything contained herein to the contrary, in no event shall the Company be deemed to have breached its obligations under this Section 5.1 for any purpose under this Agreement, unless the applicable Company action or omission is (i) effectuated by an employee of the Company or any of its Subsidiaries outside such employee’s designated scope of authority in the ordinary course of business and without the actual knowledge of N. Malone Mitchell 3rd, or (ii) explicitly approved by a majority of the members of the Company Board and such action is opposed in writing by N. Malone Mitchell 3rd in his capacity as a Manager of Parent.

Section 5.2Access and Confidentiality.

(a)From the date of this Agreement until the earlier of (1) the date upon which this Agreement is terminated in accordance with ARTICLE VII, or (2) the Effective Time, the Company shall, and shall cause its Subsidiaries, to: (i) provide to Parent and its Representatives, to the extent reasonably requested, access at reasonable times upon prior notice to the officers, employees, agents, properties, books and records of the Company and its Subsidiaries; (ii) furnish promptly such information concerning the Company and its Subsidiaries as Parent or its Representatives may reasonably request; and (iii) no later than the last day of each calendar month,

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prepare and deliver to Parent and its Representatives a true, correct and complete copy of an unaudited balance sheet and an unaudited statement of income and retained earnings for the immediately preceding calendar month; provided, however, that any such access or furnishing of information shall be conducted at Parent’s expense, during normal business hours, under the supervision of Company personnel and in such a manner as not to unreasonably interfere with the normal operations of the Company and its Subsidiaries.

(b)Nothing contained in this Agreement shall give Parent, directly or indirectly, rights to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall, consistent with the terms and conditions of this Agreement, exercise complete control and supervision over the operations of the Company and its Subsidiaries.  For the avoidance of doubt, nothing contained in this Section 5.2 shall limit N. Malone Mitchell 3^rd in his capacity as director of the Company, Chairman of the Company Board or Chief Executive Officer of the Company.

(c)Nothing contained in this Agreement shall require the Company or any of its Subsidiaries to permit any access, or disclose any information, that in the reasonable, good faith judgment (after consultation with counsel, which may be in-house counsel) of the Company would reasonably be expected to result in (i) any violation of any Contract to which the Company or its Subsidiaries is a party or Law applicable to the Company or its Subsidiaries, or (ii) the potential waiver of any privilege (including attorney-client privilege) that the Company or its Subsidiaries may be entitled to assert with respect to such information.

(d)Parent and Merger Sub shall hold all documents and other information concerning the Company and its Subsidiaries furnished to Parent and Merger Sub in connection with this Agreement and the transactions contemplated hereby in confidence. Parent agrees that it shall not, and shall cause Merger Sub and its and their Affiliates and its and their Representatives not to use any information obtained pursuant to this Section 5.2 for any purposes unrelated to this Agreement and the Merger and the transactions contemplated hereby.

Section 5.3Acquisition Proposals.

(a)From the date of this Agreement until the earlier of (a) the date upon which this Agreement is terminated in accordance with ARTICLE VII, or (b) the Effective Time, except as permitted in Section 5.3(d), the Company shall not, and shall cause each of its Subsidiaries not to, and shall direct its Representatives not to, directly or indirectly:

(i)solicit, initiate or knowingly encourage or take any other action to knowingly facilitate the submission of any proposal that constitutes or is reasonably likely to lead to an Acquisition Proposal;

(ii)engage in discussions or negotiations with, or furnish or disclose any non-public information relating to the Company or any of its Subsidiaries to, any Person that has made or indicated an intention to make a proposal that constitutes or is reasonably likely to lead to an Acquisition Proposal;

(iii)withdraw, modify or amend the Recommendation in any manner adverse to Parent in any material respect;

(iv)approve, endorse or recommend any proposal that constitutes or is reasonably likely to lead to an Acquisition Proposal; or

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(v)enter into any agreement in principle, arrangement, understanding or Contract relating to a proposal that constitutes or is reasonably likely to lead to an Acquisition Proposal.

(b)The Company and its Subsidiaries shall, and the Company shall cause its and its Subsidiaries’ Representatives to, immediately cease any discussions or negotiations with any Person or group that may be ongoing as of the date of this Agreement with respect to any Acquisition Proposal.  With respect to any Person or group with whom such discussions or negotiations have been terminated, the Company shall request such Person or group to promptly return or destroy in accordance with the terms of the applicable confidentiality agreement any information furnished by or on behalf of the Company.

(c)The Company shall notify Parent promptly (and no later than within 48 hours) upon receipt of (i) any Acquisition Proposal or indication by any Person considering making any Acquisition Proposal or (ii) any request for non-public information relating to the Company or any of its Subsidiaries other than requests for information in the ordinary course of business and unrelated to an Acquisition Proposal, including the identity of such Person and a description of the material terms and conditions of such Acquisition Proposal, indication or request. The Company shall keep Parent reasonably informed on a prompt basis of the status of any such Acquisition Proposal (including any material developments or material changes thereto), indication or request, and any related communications to or by the Company or its Representatives.

(d)Notwithstanding anything contained herein to the contrary, the Company and its Representatives and the Company Board (acting through the Special Committee) shall be permitted to, at any time prior to obtaining the Requisite Company Vote, in response to a bona fide written Acquisition Proposal:

(i)engage in discussions or negotiations with the Person who has made such Acquisition Proposal (and its Representatives) regarding such Acquisition Proposal, if the Company Board determines (x) in good faith, after consultation with its financial advisor and outside counsel, that such Acquisition Proposal constitutes, or is reasonably likely to result in, a Superior Proposal and (y) after consultation with its outside counsel, that failing to engage in such discussions or negotiations would be inconsistent with the fiduciary duties of the Company Board under applicable Law;

(ii)furnish or disclose any non-public information relating to the Company or any of its Subsidiaries to the Person who has made such Acquisition Proposal (and its Representatives), if the Company Board determines (x) in good faith, after consultation with its financial advisor and outside counsel, that such Acquisition Proposal constitutes, or is reasonably likely to lead to, a Superior Proposal and (y) after consultation with its outside counsel, that failing to take such action would be inconsistent with the fiduciary duties of the Company Board under applicable Law, but only so long as the Company has caused such Person to enter into a confidentiality agreement (negotiations and discussions with respect to which are expressly permitted following the requisite Company Board determination) with the Company, provided that all such information has previously been provided to Parent or is provided to Parent prior to or substantially concurrently with the time it is provided to such Person; and

(iii)(1) withdraw, modify or amend the Recommendation in a manner adverse to Parent (an “Adverse Recommendation Change”), (2) approve, endorse or recommend such Acquisition Proposal, and (3) cause or permit the Company to terminate this

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Agreement pursuant to Section 7.4(a)solely in order to concurrently enter into an agreement regarding a Superior Proposal, if (A)the Company receives from the Person submitting such Acquisition Proposal an executed confidentiality agreement (which the Company may negotiate with the Person during the four (4) Business Day notice period described below) in a customary form and (B)the Company Board determines (x)in good faith, after consultation with its financial advisor and outside counsel, that such Acquisition Proposal constitutes, or is reasonably likely to lead to, a Superior Proposal and (y)after consultation with outside legal counsel, that failing to take such action would be inconsistent with the fiduciary duties of the Company Board under applicable Law; provided, however, that the Company Board shall not make an Adverse Recommendation Change or approve, endorse or recommend such Acquisition Proposal, and the Company may not terminate this Agreement pursuant to clause (3)above, until (I)after the fourth (4^th) Business Day following Parent’s receipt of written notice (a “Notice of Superior Proposal”) from the Company advising Parent that the Company Board intends to take such action and specifying the reasons therefor, including the material terms and conditions of any Superior Proposal that is the basis of the proposed action by the Company Board and, if applicable, a statement that the Company Board intends to terminate this Agreement pursuant to Section 7.4(a)(it being understood and agreed that any amendment to the financial terms of such Superior Proposal shall require a new Notice of Superior Proposal and a new two (2) Business Day period), (II) during such four (4) Business Day period following Parent’s receipt of a Notice of Superior Proposal, in determining whether to make an Adverse Recommendation Change, to endorse or recommend such Acquisition Proposal or to cause or permit the Company to so terminate this Agreement, (A)the Company shall have offered to negotiate with (and, if accepted, negotiated with) Parent in making such commercially reasonable adjustments to the terms and conditions of this Agreement as would enable the Company to proceed with the Mergerand the other transactions contemplated by this Agreement, and (B)the Company Board shall have determined, after considering the results of such negotiations and the revised proposals made by Parent, if any, that the Superior Proposal giving rise to such Notice of Superior Proposal continues to be a Superior Proposal.

Notwithstanding the foregoing, the Company Board shall be permitted to (i) disclose to the shareholders of the Company a position contemplated by Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation M-A under the Exchange Act and (ii) make such other public disclosure if it determines, after consultation with outside legal counsel, that failing to take such action would be inconsistent with the fiduciary duties of the Company Board under applicable Law, it being understood, however, that this clause (ii) shall not be deemed to permit the Company Board to make an Adverse Recommendation Change or take any of the actions referred to in Section 5.3(d)(iii), except to the extent permitted by this Section 5.3(d).

Section 5.4Proxy Statement; Schedule 13E-3.

(a)As promptly as reasonably practicable following the date of this Agreement, (i) the Company, with the assistance of Parent and Merger Sub, shall prepare a preliminary Proxy Statement, which shall, subject to Section 5.3, include the Recommendation, and the Company and Parent shall jointly prepare a Rule 13E-3 transaction statement on Schedule 13E-3 (the “Schedule 13E-3”) and (ii) the Parent Parties shall furnish all information concerning themselves and their Affiliates that is required to be included in the Proxy Statement and shall promptly provide such other assistance in the preparation of the Proxy Statement as may be reasonably requested by the Company from time to time. As promptly as reasonably practicable thereafter, the Company

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shall file the preliminaryProxy Statement with the SEC, and the Company and the Parent Parties shall jointly file the Schedule 13E-3 with the SEC.

(b)The Company shall promptly notify Parent upon the receipt of any comments from the SEC or its staff or any request from the SEC or its staff for amendments or supplements to the Proxy Statement, and each of the Company, on the one hand, and the Parent Parties, on the other hand, shall provide the other(s) with copies of all correspondence between it and its Representatives, on the one hand, and the SEC and its staff, on the other hand, relating to the Proxy Statement, the Schedule 13E-3 or the transactions contemplated hereby. The Company shall use its commercially reasonable efforts to respond (with the assistance of, and after consultation with, the Parent Parties as provided by this Section 5.4(b)) as promptly as practicable to any comments of the SEC with respect to the Proxy Statement, and each of the Company and the Parent Parties shall thereafter use their respective commercially reasonable efforts to respond (with the assistance of, and after consultation with, each other as provided by this Section 5.4(b) as promptly as practicable to any comments of the SEC with respect to the Schedule 13E-3. If, at any time prior to the Company Shareholders Meeting, any information relating to the Company, the Parent Parties or any of their respective Affiliates, officers or directors is discovered by the Company or the Parent Parties which should be in an amendment or supplement to the Proxy Statement or the Schedule 13E-3, so that the Proxy Statement, Schedule 13E-3 or the other filings shall not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading, the party that discovers such information shall promptly notify the other parties thereof, and an appropriate amendment or supplement describing such information shall be filed with the SEC and, to the extent required by applicable Law, disseminated to the shareholders of the Company. Notwithstanding anything to the contrary stated above, (i) prior to filing or mailing the Proxy Statement (including any amendment or supplement thereto) or responding to any comments of the SEC or its staff with respect thereto, the Company shall provide Parent with a reasonable opportunity to review and comment on such documents or responses and shall consider in good faith including, comments reasonably proposed by the Parent in such documents or responses, and (ii) prior to filing or mailing the Schedule 13E-3 (including any amendment or supplement thereto) or responding to any comments of the SEC with respect thereto, each of the Company, on the one hand, and the Parent Parties, on the other hand, shall provide the other party with a reasonable opportunity to review and comment on such documents or responses and shall include in such documents or responses comments reasonably proposed by such other party. The Company shall cause the Proxy Statement to be mailed to holders of Common Shares as of the record date established for the Company Shareholders Meeting as promptly as practicable after the date on which the SEC confirms that it has no further comments on the Proxy Statement.

Section 5.5Company Shareholders Meeting.  Subject to Section 5.3, the Company shall take all action reasonably necessary in accordance with the Companies Act and its bye-laws to duly call, give notice of, convene and hold the Company Shareholders Meeting as promptly as reasonably practicable after the Proxy Statement is cleared by the SEC for mailing to the Company’s shareholders for the purpose of voting on the approval and adoption of this Agreement, the Bermuda Merger Agreement and the transactions contemplated hereby and thereby; provided that without the written consent of Parent, the Company Shareholders Meeting shall not be held later than sixty (60) Days after the clearance of the Proxy Statement by the SEC. Subject to Section 5.3, the Company shall, through the Company Board and the Special Committee, use commercially reasonable efforts to solicit proxies in favor of the approval and adoption of this Agreement and the Bermuda Merger Agreement and take all other action reasonably necessary or advisable to secure the Requisite Company Vote. The Parent Parties and their Representatives shall have the right to solicit proxies in favor of the approval and adoption of this Agreement and the Bermuda Merger Agreement.

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Section 5.6Consents and Approvals.

(a)Subject to the terms and conditions in this Agreement, each of the parties hereto shall use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Merger and the other transactions contemplated by this Agreement as promptly as practicable, including using commercially reasonable efforts with respect to (i) the obtaining of all necessary waivers, consents, clearances, approvals, and expirations or terminations of waiting periods, including the Company Approvals and the Parent Approvals, from Governmental Entities and the making of all necessary registrations and filings and the taking of all actions as may be necessary to obtain an approval, clearance or waiver from, or to avoid an Action by, any Governmental Entity (all of the foregoing, collectively, the “Governmental Consents”), (ii) the obtaining of all other necessary consents, approvals or waivers from third parties, (iii) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Merger and the other transactions contemplated by this Agreement, and (iv) the execution and delivery of any additional instruments reasonably necessary to consummate the transactions contemplated by this Agreement; provided that no party shall be required to pay (and the Company and its Subsidiaries shall not pay or agree to pay without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed) any fee, penalty or other consideration to any third party for any consent or approval required for the consummation of the transactions contemplated by this Agreement under any Contract.

(b)Subject to applicable Law and the terms and conditions herein provided and without limiting the foregoing, the Company and Parent shall reasonably cooperate with each other in (x) determining whether any filings are required to be made with, or Governmental Consents are required to be obtained from, any Governmental Entities (including in any foreign jurisdiction in which the Company or its Subsidiaries are operating any business) and (y) to the extent not made prior to the date hereof, timely making or causing to be made all applications and filings as reasonably determined by Parent and the Company, as promptly as practicable or as required by the Law of the jurisdiction of the Governmental Entity. Each party shall supply as promptly as practicable such information, documentation, other material or testimony that may be requested by any Governmental Entity in connection with such applications and filings.  In furtherance and not in limitation of the foregoing, each of Parent and the Company shall use its commercially reasonable efforts to (i) resolve any objections that may be asserted with respect to the transactions contemplated by this Agreement under any antitrust, competition or trade regulatory Laws, (ii) avoid the entry of, or have vacated or terminated, any decree, order, or judgment that would restrain, prevent or delay the Closing, including defending any Actions, challenging this Agreement or the consummation of the transactions contemplated hereby; and (iii) execute and deliver any additional instruments necessary to consummate the transactions contemplated by this Agreement; provided, however, that in no event shall Parent or any of its Affiliates or the Company be obligated to agree, as a condition for resolving any such objections, to dispose of, divest of or hold separate any of its properties or other assets, or any of the Company Assets after the consummation of the Merger or subject itself to any restriction on the operation of its business or the business of the Company and its Subsidiaries after the consummation of the Merger that, in each case, would reasonably be expected to have a Company Material Adverse Effect. No party to this Agreement shall consent to any voluntary delay of the Closing at the behest of any Governmental Entity without the consent of the other parties to this Agreement, which consent shall not be unreasonably withheld, conditioned or delayed.

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(c)Notwithstanding anything to the contrary contained in this Agreement, the parties acknowledge and agree that the Company shall not be required or obligated to seek or obtain consents, approvals or authorizations from, or take any other action with respect to, any Governmental Entity outside of the United States, Canada, and Bermuda (collectively, the “Excluded Consents”).

Section 5.7Takeover Statute.  If any Takeover Statutes shall or may become applicable to this Agreement, the Merger or the transactions contemplated herein, each of the Company and the Parent Parties and the members of their respective Boards of Directors shall grant such approvals and take such actions as are reasonably necessary so that the transactions contemplated herein may be consummated as promptly as practicable on the terms contemplated herein and otherwise act to eliminate or, if not possible to eliminate, minimize the effects of such statute or regulation on this Agreement, the Merger and the transactions contemplated herein.

Section 5.8Public Announcements.  Neither the Company nor Parent, nor any of their respective Affiliates, shall issue or cause the publication of any press release or other announcement with respect to this Agreement, the Merger or the other transactions contemplated hereby without the prior consent of the other party, unless such party determines in good faith, after consultation with legal counsel, which may be in-house counsel, that it is required by applicable Law or by any listing agreement with or the listing rules of a national securities exchange or trading market to issue or cause the publication of any press release or other announcement with respect to this Agreement, the Merger or other the transactions contemplated hereby, in which event such party shall use its commercially reasonable efforts to provide a meaningful opportunity to the other party to review and comment upon such press release or other announcement prior to making any such press release or other announcement; provided that the Company shall not be required to provide any such review or comment to Parent in connection with the receipt and existence of an Acquisition Proposal and matters related thereto or an Adverse Recommendation Change.

Section 5.9Indemnification and Insurance.

(a)From and after the Effective Time, Parent and the Surviving Company shall cause all rights to indemnification, advancement of expenses and exculpation now existing in favor of any Person who is now, or has been or becomes at any time prior to the Effective Time,  a director, officer or employee of the Company or any of its Subsidiaries, together with such Person’s heirs, executors, trustees, fiduciaries and administrators (collectively, the “Indemnified Parties”) as provided in the Company Organizational Documents, or in agreements, copies of which have been made available to Parent or its Representatives prior to the date of this Agreement, between an Indemnified Party and the Company or one of its Subsidiaries or otherwise in effect on the date of this Agreement to survive the Merger, to be assumed by the Surviving Company and Parent in the Merger, and to continue in full force and effect for a period of not less than six (6) years after the Effective Time, or, if longer, for such period as is set forth in any applicable agreement with an Indemnified Party in effect on the date of this Agreement, copies of which have been made available to Parent or its Representatives prior to the date of this Agreement. Parent shall guarantee such performance by the Surviving Company.

(b)Without limiting any additional rights that any Indemnified Party may have under any applicable insurance policy, any employment or indemnification agreement or under the Company Organizational Documents, resolution of the Company Board or this Agreement, Parent and the Surviving Company, jointly and severally, will indemnify each Indemnified Party to the fullest extent permitted by applicable Laws from and against any and all losses, claims, damages, liabilities, costs, expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any

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thereof), with respect to all acts and omissions arising out of or relating to such Indemnified Party’s service as a director, officer or employee of the Company or its Subsidiaries or as a trustee of (or in a similar capacity with) any compensation and benefit plan of any thereof, occurring prior to or at the Effective Time. If any Indemnified Party is or becomes involved in any Action in connection with any matter occurring prior to or at the Effective Time, Parent shall cause the Surviving Companyto pay as incurred such Indemnified Party’s legal fees, costs and expenses incurred in connection with such Action, subject to the Surviving Company’s receipt of an undertaking by or on behalf of such Indemnified Party, if and only to the extent required by applicable Law, to repay such legal fees, costs and expenses if it is ultimately determined under applicable Laws that such Indemnified Party is not entitled to be indemnified under the Company’s Bye-Laws or other organizational documents.

(c)Prior to the Effective Time, Parent shall cause the Surviving Company to, obtain effective as of the Effective Time, and fully pay (which may include by premium financing) for “tail” insurance policies with a claims period of at least six (6) years after the Effective Time which obligation may be satisfied by extending the current policies of directors’ and officers’ liability insurance maintained by the Company or by providing for policies of at least the same coverage and amounts containing terms and conditions which are no less advantageous to the Indemnified Parties with respect to claims arising out of or relating to events which occurred before or at the Effective Time so long as the Surviving Company is not required to pay an aggregate premium in excess of 300% of the last annual premium paid by the Company for such insurance prior to the date of this Agreement (such 300% amount being the “Maximum Premium”). If the Surviving Company is unable to obtain the insurance described in the prior sentence for an amount less than or equal to the Maximum Premium, the Surviving Company shall instead obtain as much comparable insurance as possible for each year within such six-year period for an annual premium equal to the Maximum Premium. Following the Closing, the Surviving Company shall and shall cause its Subsidiaries to, and Parent shall cause the Surviving Company and its Subsidiaries to, maintain such policy in full force and effect, and continue to honor the obligations thereunder.

(d)The covenants contained in this Section 5.9 shall survive consummation of the Merger and will be binding on the Surviving Company and Parent, and are intended to be for the benefit of, and shall be enforceable by, each of the Indemnified Parties and their respective heirs and legal representatives and shall not be deemed exclusive of any other rights to which an Indemnified Party is entitled, whether pursuant to Law, Contract or otherwise.

(e)In the event that Parent or the Surviving Company or any of their respective successors or assigns (i) consolidates with, amalgamates with or merges into any other Person and shall not be the continuing or surviving company or entity of such consolidation, amalgamation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, proper provision shall be made so that the successors or assigns of Parent or the Surviving Company or the holder of their assets, as the case may be, shall succeed to the obligations set forth in this Section 5.9.

Section 5.10Notification of Certain Matters; Shareholder Litigation.  The Company shall give prompt notice to the Parent Parties, and the Parent Parties shall give prompt notice to the Company, of (i) any notice or other communication received by such party from any Governmental Entity in connection with this Agreement or the Merger, or from any Person alleging that the consent of such Person is or may be required in connection with the Merger or the transactions contemplated by this Agreement, if the subject matter of such communication or the failure of such party to obtain such consent could be material to the Company, the Surviving Company or the Parent Parties, and (ii) any Actions commenced or, to such party’s knowledge, threatened against, relating to or involving or otherwise affecting such party which relate to the

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Merger, this Agreement or the transactions contemplated herein (each, a “Transaction Proceeding”). Without limiting the foregoing, the Company shall (a)promptly advise Parent of any Actions commenced after the date hereof against the Company or any of its officers or directors (in their capacities as such) by any shareholder of the Company (on their own behalf or on behalf of the Company) relating to this Agreement, the Merger or the other transactions contemplated hereby (each, a “Shareholder Litigation”), (b)keep Parent reasonably informed regarding any such Shareholder Litigation, (c)give Parent the opportunity to participate in such Shareholder Litigation, consult with counsel to the Special Committee and the Company regarding the defense or settlement of any such Shareholder Litigation and consider Parent’s views with respect to such Shareholder Litigation, and (d) not settle any such Shareholder Litigation without Parent’s prior written consent (which shall not be unreasonably withheld, delayed or conditioned).  Notwithstanding the foregoing, nothing contained in this Section 5.10 shall require the Company to disclose any information that in the reasonable, good faith judgment (after consultation with counsel, which may be in-house counsel) of the Company would reasonably be expected to result in a waiver of any privilege (including attorney-client privilege) that the Company or any of its Subsidiaries may be entitled to assert with respect thereto.

Section 5.11Rule 16b-3.  Prior to the Effective Time, the Company shall be permitted to take such steps as may be reasonably necessary or advisable hereto to cause dispositions of Company equity securities (including derivative securities) pursuant to the transactions contemplated by this Agreement by each individual who is a director or officer of the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.

Section 5.12De-Listing.  The Company will use its commercially reasonable efforts to cooperate with Parent to cause the Common Shares to be de-listed from the NYSE and TSX and deregistered under the Exchange Act as soon as practicable following the Effective Time.

ARTICLE VI
CONDITIONS TO THE MERGER

Section 6.1Conditions to Each Party’s Obligation to Effect the Merger. The respective obligations of each party hereto to effect the Merger and the other transactions contemplated herein shall be subject to the fulfillment (or waiver in writing by Parent and the Company, except with respect to Section 6.1(a), which shall not be waivable) at or prior to the Effective Time of the following conditions:

(a)Company Shareholder Approvals. This Agreement and the Bermuda Merger Agreement shall have been duly approved and adopted by the Requisite Company Vote.

(b)No Injunctions or Restraints. No Governmental Entity shall have enacted, issued, promulgated, enforced or entered any Laws or Orders (whether temporary, preliminary or permanent) that are in effect and restrain, enjoin or otherwise prohibit the consummation of the Merger or the other transactions contemplated by this Agreement.

(c)Consents. All consents, approvals and other authorizations, in each case, of any Governmental Entity required to consummate the Merger and the other transactions contemplated by this Agreement, other than the Excluded Consents, shall have been obtained, free of any condition that would reasonably be expected to have a Parent Material Adverse Effect or a Company Material Adverse Effect, as applicable.

Section 6.2Conditions to Obligation of the Company to Effect the Merger.  The obligation of the Company to effect the Merger and the other transactions contemplated herein is further subject to the

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fulfillment (or waiver in writing by the Company) at or prior to the Effective Time of the following conditions:

(a)Representations and Warranties. Each of the representations and warranties of the Parent Parties in ARTICLE IV shall be true and correct as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of a specified date, in which case as of such date), except where the failure of such representations and warranties to be so true and correct (without regard to any qualifications or exceptions as to materiality contained in such representations and warranties), would not, individually or in the aggregate, impair, prevent or delay in any material respect the ability of any of the Parent Parties to perform its obligations under this Agreement or otherwise result or reasonably be expected to result in a Parent Material Adverse Effect.

(b)Performance of Obligations. The Parent Parties shall have performed in all material respects all obligations and complied in all material respects with all covenants required by this Agreement to be performed or complied with by them prior to the Effective Time; provided, however, that the Parent Parties shall have performed in all respects all obligations and complied in all respects with all covenants set forth in Section 1.4(a) and Section 1.4(b) prior to the Effective Time.

(c)Officer’s Certificate. Each of the Parent Parties shall have delivered to the Company a certificate, dated as of the Closing Date and signed by an executive officer of each of the Parent Parties, certifying to the effect that the conditions in Section 6.2(a) and Section 6.2(b) have been satisfied.

(d)Fairness Opinion.  The Fairness Opinion shall not have been withdrawn, revoked or modified as of the Effective Time.

(e)Opinion of Counsel. Texas counsel to the Parent Parties shall have delivered an opinion addressed to the Company and the Bermuda government authorities, in form and substance as required by applicable Bermuda law, to the effect that the transactions contemplated hereby are permitted under Texas Law and all relevant consents and authorizations have been obtained as a matter of Texas Law.

Section 6.3Conditions to Obligations of the Parent Parties to Effect the Merger.  The obligations of the Parent Parties to effect the Merger and the other transactions contemplated herein are further subject to the fulfillment (or waiver in writing by Parent) at or prior to the Effective Time of the following conditions:

(a)Representations and Warranties. Each of the representations and warranties of the Company in ARTICLE III shall be true and correct as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except where the failure of such representations and warranties to be so true and correct (without regard to any qualifications or exceptions as to materiality contained in such representations and warranties), has not had, individually or in the aggregate, a Company Material Adverse Effect.

(b)Performance of Obligations. The Company shall have performed in all material respects all obligations and complied in all material respects with all covenants required by this Agreement to be performed or complied with by it prior to the Effective Time.

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(c)Dissenting Shares.  No more than ten percent (10%) of the Common Shares owned by shareholders other than Preferred Shareholder Investors shall be Dissenting Shares.

(d)Officer’s Certificate. The Company shall have delivered to Parent a certificate, dated as of the Closing Date and signed by an executive officer of the Company, certifying to the effect that the conditions in Section 6.3(a), Section 6.3(b), and Section 6.3(c) have been satisfied.

(e)No Company Material Adverse Effect.  Since the date of this Agreement, no Company Material Adverse Effect shall have occurred or be reasonably expected to occur.

(f)Payment of Costs and Expenses. The Company shall have paid all costs and expenses, including legal fees, incurred by the Company and arising out of or incurred in connection with the Agreement and the transactions contemplated hereby.

Section 6.4Frustration of Closing Conditions.  None of the Company or the Parent Parties may rely as a basis for not consummating the Merger on the failure of any condition in Section 6.1, Section 6.2 or Section 6.3, as the case may be, to be satisfied if such failure was caused by (a) such party’s breach of any provision of this Agreement or (b) with respect to the Parent Parties only, unless at the specific direction of the Special Committee, actions taken (or omitted to be taken) that are directly authorized, approved or directed by, or taken (or omitted to be taken) by a Representative of the Company or any of its Subsidiaries with the actual knowledge of, N. Malone Mitchell 3^rd in his capacity as director of the Company, Chairman of the Company Board or Chief Executive Officer of the Company (for the avoidance of doubt, an action taken by the Company without the actual knowledge of N. Malone Mitchell 3rd shall not be deemed an action directly authorized, approved or directed by N. Malone Mitchell 3rd).

ARTICLE VII
TERMINATION

Section 7.1Termination by Mutual Consent.  This Agreement may be terminated at any time prior to the Effective Time by mutual written consent of Parent, Merger Sub and the Company.

Section 7.2Termination by Either Parent or the Company.  This Agreement may be terminated by either Parent or the Company at any time prior to the Effective Time:

(a)if the Merger has not been consummated by February 3, 2021 (such date, the “Outside Date”); provided that the Outside Date may be extended by either Parent or the Company for up to an additional 120 days if necessary for purposes of obtaining any Governmental Consent required to consummate the Merger and the other transactions contemplated by this Agreement;

(b)if this Agreement and the Bermuda Merger Agreement has been submitted to the shareholders of the Company for approval and adoption at a duly convened Company Shareholders Meeting (or adjournment or postponement thereof) and the Requisite Company Vote is not obtained upon a vote taken thereon;

(c)if any Law prohibits consummation of the Merger; or

(d)if any Order restrains, enjoins or otherwise prohibits consummation of the Merger, and such Order has become final and nonappealable;

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provided, however, that the right to terminate this Agreement under this Section 7.2shall not be available to any party to this Agreement whose breach of any representation, warranty, covenant or agreement set forth in this Agreement has been a principal cause of, or resulted in, the failure to consummate the Merger.

Section 7.3Termination by Parent.  This Agreement may be terminated by Parent at any time prior to the Effective Time:

(a)if the Company Board makes an Adverse Recommendation Change, or publicly proposes to do so;

(b)if (i) the Company Board approves, endorses or recommends a Superior Proposal, (ii) the Company enters into a definitive Contract (other than a confidentiality agreement or similar agreement) relating to the consummation of a Superior Proposal, (iii) a tender offer or exchange offer for any issued and outstanding shares of the Company is commenced prior to obtaining the Requisite Company Vote and the Company Board fails to recommend against acceptance of such tender offer or exchange offer by its shareholders (including, for these purposes, by taking no position with respect to the acceptance of such tender offer or exchange offer by its shareholders, which shall constitute a failure to recommend against acceptance of such tender offer or exchange offer) within ten (10) Business Days after commencement, or (iv) the Company or the Company Board publicly announces its intention to do any of the foregoing; or

(c)if the Company breaches any of its representations, warranties, covenants or agreements contained in this Agreement, which breach (i) would give rise to the failure of a condition set forth in Section 6.2(a) or Section 6.3(b) and (ii) has not been cured (or is not capable of being cured) by the Company within thirty (30) days after the Company’s receipt of written notice of such breach from Parent.

Section 7.4Termination by the Company. This Agreement may be terminated by the Company at any time prior to the Effective Time:

(a)in accordance with Section 5.3(d)(iii); or

(b)if Parent breaches any of its representations, warranties, covenants or agreements contained in this Agreement, which breach (i) would give rise to the failure of a condition set forth in Section 6.3(a) or Section 6.3(b) and (ii) has not been cured (or is not capable of being cured) by Parent within thirty (30) days after Parent’s receipt of written notice of such breach from the Company.

Section 7.5Effect of Termination.

(a)In the event the Company or Parent intends to terminate this Agreement pursuant to Section 7.2, Section 7.3 or Section 7.4, the Company or Parent, as applicable, shall give written notice to the other party specifying the provision or provisions of this Agreement pursuant to which such termination is intended to be effected.  

(b)If this Agreement is terminated pursuant to this ARTICLE VII, it shall become void and of no further force and effect, with no liability on the part of any party to this Agreement (or any shareholder, director, officer, employee, agent or representative of such party), except as otherwise provided in Section 7.6 and Section 8.5(a) and except that if such termination results from (a) the pre-termination intentional and in bad faith failure of any party to perform its obligations contained in this Agreement, (b) the intentional and in bad faith breach by any party of

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its representations or warranties contained in this Agreement or (c)fraud, then, subject to Section 8.5(a), such party shall be fully liable for any liabilities incurred or suffered by the other parties as a result of such failure or breach. For purposes of this Agreement, “intentional and in bad faith” breach or failure shall mean a material breach or failure, as appropriate, that is a consequence of an omission by, or act undertaken by or caused by, the breaching party with the knowledge that the omission or taking or causing of such act would, or would reasonably be expected to, cause a breach of this Agreement. The provisions of Section 5.2(d), Section 5.8, this Section 7.5, Section 7.6and ARTICLEVIIIshall survive any termination of this Agreement.

Section 7.6Expenses Following Termination.  Except as set forth in this Section 7.6, all Expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid in accordance with the provisions of Section 8.2.  In the event of termination of this Agreement under Section 7.3(b) or Section 7.4(a), the Company shall within thirty (30) days of such termination reimburse Parent for all reasonable, documented out-of-pocket fees and expenses, including reasonable attorney fees, incurred in furtherance of approval and consummation of the transactions contemplated by this Agreement; provided, that in no event shall such reimbursement obligation of the Company exceed $350,000 in the aggregate.

Section 7.7Amendment.  This Agreement may be amended by the parties to this Agreement at any time prior to the Effective Time, whether before or after shareholder approval hereof and of the Bermuda Merger Agreement, so long as no amendment that requires further shareholder approval under applicable Laws after shareholder approval hereof shall be made without such required further approval. This Agreement may not be amended except by an instrument in writing signed by each of the parties to this Agreement.

Section 7.8Extension; Waiver. At any time prior to the Effective Time, Parent and Merger Sub, on the one hand, and the Company, on the other hand, may (a) extend the time for the performance of any of the obligations of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained in this Agreement or in any document delivered under this Agreement or, (c) subject to applicable Laws, waive compliance with any of the covenants or conditions contained in this Agreement. Any agreement on the part of a party to any extension or waiver shall be valid only if set forth in an instrument in writing signed by such party. The failure of any party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

ARTICLE VIII
MISCELLANEOUS

Section 8.1No Survival of Representations and Warranties or Pre-Closing Covenants. None of (a) the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement or (b) the covenants, agreements or obligations in this Agreement that require performance prior to the Effective Time (other than those contained in Section 1.4(a), Section 1.4(b) and Section 5.9), shall survive the Effective Time. For the avoidance of doubt, this Section 8.1 shall not limit any covenant or agreement of the parties to this Agreement which, by its terms, contemplates performance after the Effective Time.

Section 8.2Expenses. Whether or not the Merger is consummated, all costs and expenses incurred in connection with the Merger, this Agreement and the transactions contemplated herein shall be paid by the party incurring or required to incur such expenses, except that (a) all expenses incurred in connection with the printing, filing and mailing of the Proxy Statement and the Schedule 13E-3 (including applicable SEC filing fees) shall be borne by the Company, and (b) all filing fees paid in respect of any Competition Laws or other regulatory filing shall be borne by Parent.

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Section 8.3Counterparts; Effectiveness. This Agreement may be executed in two or more consecutive counterparts (including by facsimile, or “.pdf” transmission), each of which shall be deemed to be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument, and shall become effective when one or more counterparts have been signed by each of the parties and delivered (electronically or otherwise) to the other parties.

Section 8.4Governing Law; Jurisdiction.

(a)This Agreement shall be governed by and construed with regard to, in all respects, including as to validity, interpretation and effect, the Laws of the State of Delaware with respect to Contracts performed within that state; provided that any provisions of this Agreement which relate to the exercise of a director or officer’s fiduciary duties, statutory duties, obligations and/or statutory provisions, or which arise under, the laws of Bermuda (including but not limited to mergers under the Companies Act) shall be governed by and in accordance with the Laws of Bermuda.

(b)Each party irrevocably and unconditionally consents, agrees and submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over any matter, any federal court within the State of Delaware) and any appropriate appellate courts therefrom (the “Chosen Courts”), for the purposes of any litigation, action, suit or other proceeding with respect to the subject matter hereof. Each party agrees to commence any litigation, action, suit or proceeding relating hereto only in the Chosen Courts, or if such litigation, action, suit or other proceeding may not be brought in such court for reasons of subject matter jurisdiction, in the other appellate courts therefrom. Each party irrevocably and unconditionally waives any objection to the laying of venue of any litigation, action, suit or proceeding with respect to the subject matter hereof in the Chosen Courts, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. Each party further irrevocably and unconditionally consents to and grants any such court jurisdiction over the Person of such parties and, to the extent legally effective, over the subject matter of any such dispute and agrees that mailing of process or other documents in connection with any such action or proceeding in the manner provided in Section 8.2 hereof or in such other manner as may be permitted by applicable Law, shall be valid and sufficient service thereof. The parties agree that a final judgment in any such litigation, action, suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law.

Section 8.5Remedies; Specific Performance.

(a)The parties recognize and agree that if for any reason any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached or violated, immediate and irreparable harm or injury would be caused for which money damages would not be an adequate remedy under applicable Law. Accordingly, each party agrees that, in addition to all other remedies to which it may be entitled, including without limitation, bringing an Action for damages incurred, the parties are entitled to a decree of specific performance and shall further be entitled to an injunction restraining any violation or threatened violation of any of the provisions of this Agreement without the necessity of posting a bond or other form of security. In the event that any Action should be brought in equity to enforce any of the provisions of this Agreement, no party will allege, and each party hereby waives the defense, that there is an adequate remedy under applicable Law.

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(b)Each party further agrees that (i) it will not oppose the granting of an injunction, specific performance and other equitable relief as provided herein on the basis that any other party has an adequate remedy at law or an award of specific performance is not an appropriate remedy for any reason at law or equity and (ii) no other party or any other Person shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in Section 8.5(a), and each party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.

Section 8.6Notices. Any notice required to be given hereunder shall be sufficient if in writing, and sent by reliable overnight delivery service (with proof of service), hand delivery or by facsimile addressed as follows:

To the Parent Parties:

TAT Holdco LLC

16803 Dallas Parkway
Addison, Texas 75001
Attn: Michael S. Haynes
Facsimile: (972) 590-9931
Email: Michael.Haynes@riatacg.com

With a copy (which shall not constitute notice) to:

Foley & Lardner LLP

2021 McKinney Avenue, Suite 1600

Dallas, TX 75201

Attn: Robert Sarfatis

Facsimile: (214) 999-4667

Email: rsarfatis@foley.com

To the Company:

TransAtlantic Petroleum Ltd.

16803 Dallas Parkway
Addison, Texas 75001
Attn: Tabitha T. Bailey

Facsimile: (214) 265-4708

Email: tabitha.bailey@tapcor.com

With a copy (which shall not constitute notice) to:

Akin Gump Strauss Hauer & Feld LLP

2300 N. Field Street, Suite 1800

Dallas, Texas 75201

Attn: Garrett A. DeVries

Facsimile: (214) 969-4343

Email: gdevries@akingump.com

or to such other address as the party to receive such notice as provided above shall specify by written notice so given, and such notice shall be deemed to have been delivered to the receiving party as of the date so delivered upon actual receipt, if delivered personally; upon confirmation of successful transmission if sent

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by facsimile; or on the next Business Day after deposit with an overnight courier, if sent by an overnight courier. Any party to this Agreement may notify any other party of any changes to the address or any of the other details specified in this paragraph;provided that such notification shall only be effective on the date specified in such notice or two (2) Business Days after the notice is given, whichever is later. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice as of the date of such rejection, refusal or inability to deliver.

Section 8.7Assignment; Binding Effect.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties; provided that the Parent Parties may assign all of their rights, interests or obligations under this Agreement or any related documents to (i) any lender as collateral or security of a loan taken in contemplation of this Agreement, and (ii) any holder of Preferred Shares and any of their Affiliates, in each case without the consent of the other parties hereto; provided that no such assignment shall relieve the assigning party of its obligations hereunder or affect the obligations of the parties or the Guarantor pursuant to the Guaranty. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Any purported assignment not permitted under this Section 8.7 shall be null and void.

Section 8.8Severability.  Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the sole extent of such invalidity or unenforceability without rendering invalid or unenforceable the remainder of such term or provision or the remaining terms and provisions of this Agreement in any jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable; provided that the parties intend that the remedies and limitations thereon contained in ARTICLE VII and Section 8.5(a) to be construed as an integral provision of this Agreement and that such remedies and limitations shall not be severable in any manner that increases a party’s liability or obligations hereunder.

Section 8.9Entire Agreement.  This Agreement and the exhibits, annexes and schedules hereto, the Voting Agreement, and the Guaranty constitute the entire agreement, and supersede all other prior agreements and understandings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof and thereof.

Section 8.10Headings.  Headings of the Articles and Sections of this Agreement are for convenience of the parties only and shall be given no substantive or interpretive effect whatsoever. The table of contents to this Agreement is for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

Section 8.11Interpretation.  When a reference is made in this Agreement to an Article or Section, such reference shall be to an Article or Section of this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case

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of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References in this Agreement to specific laws or to specific provisions of laws shall include all rules and regulations promulgated thereunder. Each of the parties has participated in the drafting and negotiation of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement.

Section 8.12Definitions.  For purposes of this Agreement, the following terms (as capitalized below) will have the following meanings when used herein:

“Acquisition Proposal” shall mean any bona fide inquiry, proposal or offer made by any Person for, in a single transaction or a series of transactions, (i) a merger, amalgamation, reorganization, share exchange, consolidation, business combination, recapitalization, extra-ordinary dividend, share repurchase or similar transaction involving the Company or any of its Subsidiaries, (ii) the direct or indirect acquisition by any Person or group of twenty percent (20%) or more of the assets of the Company and its Subsidiaries, on a consolidated basis or assets of the Company and its Subsidiaries representing twenty percent (20%) or more of the consolidated revenues or net income (including, in each case, securities of the Company’s Subsidiaries) or (iii) the direct or indirect acquisition by any Person or group of twenty percent (20%) or more of the voting power of the outstanding Common Shares, including any tender offer or exchange offer that if consummated would result in any Person beneficially owning Common Shares with twenty percent (20%) or more of the voting power of the outstanding Common Shares

“Action” means any claim, action, demand, suit, litigation, examination, indictment, arbitration, inquiry, hearing, proceeding or investigation, whether civil, criminal, arbitral, administrative or investigative.

“Adverse Recommendation Change” is defined in Section 5.3(d)(iii).

“Advisor” is defined in Section 3.24.

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, through one or more intermediaries, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of voting securities or partnership or other ownership interests, by contract or otherwise.

“Agreement” is defined in the preamble.

“Bermuda Merger Agreement” is defined in the recitals.

“Bermuda Merger Notice” is defined in Section 1.1(b).

“Bermuda Registrar” is defined in Section 1.1(b).

“Book-Entry Shares” is defined in Section 1.3(c).

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“Business Day” means any day other than a Saturday, Sunday or a day on which the banks in New York, New York are authorized or required by Law to be closed.

“Certificate of Formation” is defined in Section 2.1.

“Certificates” is defined in Section 1.3(c).

“Chosen Courts” is defined in Section 8.4(b).

“Closing” is defined in Section 1.2.

“Closing Date” is defined in Section 1.2.

“Code” is defined in Section 1.4(e).

“Common Shares” is defined in Section 3.9(a).

“Companies Act” is defined in the recitals.

“Company” is defined in the preamble.

“Company Approvals” is defined in  Section 3.7(i).

“Company Assets” is defined in Section 3.8(b).

“Company Balance Sheet” is defined in Section 3.12.

“Company Benefit Plans” means all written employee or director compensation and/or benefit plans, programs, policies, agreements or other arrangements, including any “employee welfare plan” as defined in Section 3(1) of ERISA, any “employee pension benefit plan” as defined in Section 3(2) of ERISA (whether or not such plan is subject to ERISA), and any bonus, incentive, equity or equity-related, deferred compensation, stock purchase, stock option, stock incentive, severance, employment, change of control or fringe benefit plan, program or agreement (other than any “multiemployer plan” as defined in Section 4001(a)(3) of ERISA (a “Multiemployer Plan”) and other than any Company Foreign Plan), in each case that are sponsored, maintained or contributed to by the Company or any of its Subsidiaries for the benefit of current or former employees, directors or consultants of the Company or its Subsidiaries and in each case other than statutory plans, statutory programs and other statutory arrangements.

“Company Board” is defined in the recitals.

“Company Contracts” is defined in Section 3.8(c).

“Company Disclosure Letter” is defined in ARTICLE III.

“Company Equity Plans” is defined in Section 3.9(b).

“Company Foreign Plan” means each material written plan, program or Contract that is subject to or governed by the Laws of any jurisdiction other than the United States, and that would have been treated as a Company Benefit Plan had it been a United States plan, program or Contract.

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“Company Material Adverse Effect” means any event, circumstance, development, change or effect that, individually or in the aggregate with all other events, circumstances, developments, changes and effects, is materially adverse to the business, operations, properties, assets, condition (financial or otherwise), or liabilities of the Company and its Subsidiaries, taken as a whole, or would prevent or materially delay the consummation of the Mergerand the other transactions contemplated hereby or prevent or materially impair or delay the ability of the Company to perform its obligations hereunder; provided, however, that in no event shall any of the following, alone or in combination, be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been, or will be, a Company Material Adverse Effect: any event, circumstance, change or effect resulting from or relating to (i)a change in general economic or financial market conditions, (ii)changes affecting the industries generally in which the Company or its Subsidiaries conduct business (except to the extent such a change has had a disproportionate effect on the Company and its Subsidiaries as compared to other Persons in the industries in which the Company and its Subsidiaries conduct their businesses), (iii) any change in Law or interpretations thereof or any change in GAAP or other accounting principles or requirements, (iv) any natural disaster, epidemic, pandemic (including COVID-19), acts of terrorism or war, (v)that is demonstrated to have resulted from the announcement of the execution of this Agreement or the pendency or consummation of the Mergeror any other transactions contemplated hereby, (vi) any decline in the market price, or change in trading volume, of the Common Shares, (vii)the failure of one or more of the Company and its Subsidiaries to meet any internal or public projections, forecasts or estimates of performance, revenue or earnings,(viii) any actions (or the effects of any action) taken (or omitted to be taken) (a) upon the written request or instruction of, or with the written consent of, Parent, consistent with the terms hereof, or (b) unless taken at the specific direction of the Special Committee, actions (or the effects of any action) taken (or omitted to be taken) directly authorized, approved or directed by, or taken (or omitted to be taken) by a Representative of the Company or any of its Subsidiaries with the actual knowledge of,N. Malone Mitchell 3rd in his capacity as director of the Company, Chairman of the Company Boardor Chief Executive Officer of the Company (for the avoidance of doubt, an action taken by the Company without the actual knowledge of N. Malone Mitchell 3rd shall not be deemed an action directly authorized, approved or directed by N.Malone Mitchell 3rd), (ix) any legal proceedings commenced by or involving any current or former member, director, officer, partner, or stockholder of the Company or any of its Subsidiaries (on their own behalf or on behalf of the Company or any of its Subsidiaries) arising out of or related to this Agreement, the Merger or the other transactions contemplated hereby(including any dissenting rights asserted by a Dissenting Holder) wherein the cumulative professional fees and costs (other than amounts paid in settlement) to defend or resolve such proceedings are reasonably expected to be less than $450,000 in the aggregate, or (x)compliance with the terms of, or the taking of any action required by, this Agreement or with the prior written consent of Parent; provided, however, that the exception in clause(vi) shall not apply to the underlying cause or causes of any such decline or change or prevent any such underlying cause from being taken into account in determining whether a Company Material Adverse Effect has occurred; providedfurther, however, that any (a)adoption of additional currency controls within the country of Turkey, the aggregate effect of which is adverse to the Company and its Subsidiaries, taken as a whole, (b) increase of tax rates associated with converting Turkish Lira to U.S. Dollars or vice versa, or (c)increase of tax rates on expatriating cash out of the country of Turkey, each shall be a Company Material Adverse Effect.

“Company Organizational Documents” is defined in Section 3.5.

“Company Permits” is defined in Section 3.14(b).

“Company SEC Documents” is defined in Section 3.10(a).

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“Company Shareholders Meeting” is defined in Section 3.7(d).

“Competition Laws” is defined in Section 3.7(g).

“Contract” means any written contracts, agreements, licenses, notes, bonds, mortgages, indentures, commitments, leases or other instruments or obligations.

“Contribution Agreement” is defined in the recitals.

“Disposition” is defined in Section 5.1(e).

“Dissenting Holder” shall mean a holder of Company shares who did not vote in favor of the Merger, who complies with all of the provisions of the Companies Act concerning the right of holders of Company shares to require appraisal of their Company shares pursuant to Bermuda Law, and who is not satisfied that he has been offered fair value for his shares.

“Dissenting Shares” shall mean Company shares held by a Dissenting Holder.

“Effective Time” is defined in Section 1.1(b).

“Environmental Law” means any Law regulating (i) the protection of the environment or natural resources, or (ii) the use, storage, treatment, generation, transportation, handling, exposure to, release, threatened release or disposal of Hazardous Substances.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Excluded Consents” is defined in Section 5.6(c).

“Excluded Shares” is defined in Section 1.3(b).

“Export Control Laws” is defined in Section 3.14(c).

“Fairness Opinion” is defined in Section 3.24.

“GAAP” means United States generally accepted accounting principles.

“Governmental Consents” is defined in Section 5.6(a).

“Governmental Entity” means any federal, state, local, municipal, foreign or supranational government, any court, tribunal, administrative agency or commission or other governmental or quasi-governmental or other regulatory authority or agency, including any department, commission, board, instrumentality, political subdivision, bureau or official, whether federal, state, local, municipal, foreign or supranational, any arbitral body or the NYSE, TSX, or any self-regulatory organization.

“Guaranty” is defined in the recitals.

“Guarantor” is defined in the recitals.

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“Hazardous Substance” means any substance or material listed, defined, designated or classified as a waste, contaminant, pollutant or as hazardous or toxic or any other term of similar regulatory import under any Environmental Law or that would otherwise reasonably be expected to result in liability under any Environmental Law, including petroleum or any derivative or byproduct thereof, asbestos, and polychlorinated biphenyls.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Indebtedness” means (i) indebtedness for borrowed money, whether secured or unsecured, (ii) obligations under conditional or installment sale or other title retention Contracts relating to purchased property, (iii) capitalized lease obligations and (iv) guarantees of any of the foregoing of another Person.

“Indemnified Parties” is defined in Section 5.9(a).

“Intellectual Property” is defined in Section 3.21(a).

“Knowledge” means (i) with respect to Parent, the actual knowledge of the individuals listed on Section 1 of the Parent Disclosure Letter and (ii) with respect to the Company, the actual knowledge of the individuals listed on Section 1 of the Company Disclosure Letter.

“Law” or “Laws” means all applicable laws (including common law), statutes, constitutions, rules, regulations, codes, judgments, rulings, orders and decrees of any Governmental Entity.

“Letter of Transmittal” is defined in Section 1.4(c)(i).

“Lien” means any mortgage, pledge, option, right of first refusal, title defect, claim, charge, security interest, hypothecation, easement, right-of-way, encumbrance or lien of any kind or nature.

“Material Contracts” is defined in Section 3.23.

“Maximum Premium” is defined in Section 5.9(c).

“Merger” is defined in the recitals.

“Merger Consideration” is defined in Section 1.3(c).

“Merger Sub” is defined in the preamble.

“Multiemployer Plan” is defined in the definition of Company Benefit Plan.

“Notice of Superior Proposal” is defined in Section 5.3(d)(iii).

“NYSE” means the NYSE American exchange.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

“OFAC List” means the Specially Designated Nationals and Blocked Persons List maintained by OFAC.

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“OFAC Rules” means any Laws administered by OFAC.

“Orders” means any orders, judgments, injunctions, awards, decrees or writs handed down, adopted or imposed by any Governmental Entity.

“Organizational Documents” means, with respect to any entity, the memorandum of association or the certificate or articles of incorporation or organization and bye-laws or bylaws of such entity, or any similar organizational documents of such entity.

“Outside Date” is defined in Section 7.2(a).

“Parent” is defined in the preamble.

“Parent Approvals” is defined in Section 4.5(e).

“Parent Assets” is defined in Section 4.6(b).

“Parent Contracts” is defined in Section 4.6(c).

“Parent Disclosure Letter” is defined in ARTICLE IV.

“Parent Material Adverse Effect” means any event, circumstance, development, change or effect that, individually or in the aggregate with all other events, circumstances, developments, changes and effects, is materially adverse to the business, operations, properties, assets, condition (financial or otherwise), or liabilities of the Parent Parties (including the Merger Sub), taken as a whole, or would prevent or materially delay the consummation of the Merger and the other transactions contemplated hereby or prevent or materially impair or delay the ability of the Parent Parties to perform its obligations hereunder; provided, however, that in no event shall any of the following, alone or in combination, be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been, or will be, a Parent Material Adverse Effect: any event, circumstance, change or effect resulting from or relating to (i) a change in general economic or financial market conditions, (ii) changes affecting the industries generally in which the Parent Parties conduct business (except to the extent such a change has had a disproportionate effect on the Company and its Subsidiaries as compared to other Persons in the industries in which the Company and its Subsidiaries conduct their businesses), (iii) any change in Law or interpretations thereof or any change in GAAP or other accounting principles or requirements, (iv) any natural disaster, epidemic, pandemic (including COVID-19), acts of terrorism or war, (v) that is demonstrated to have resulted from the announcement of the execution of this Agreement or the pendency or consummation of the Merger or any other transactions contemplated hereby, (vi) any decline in the market price, or change in trading volume, of the Common Shares, (vii) the failure of one or more of the Parent or the Merger Sub to meet any internal or public projections, forecasts or estimates of performance, revenue or earnings, (viii) any actions (or the effects of any action) taken (or omitted to be taken) upon the written request or instruction of, or with the written consent of, the Parent Parties, consistent with the terms hereof, (ix) any legal proceedings commenced by or involving any current or former member, director, officer, partner, or stockholder of the Parent or Merger Sub (on their own behalf or on behalf of the Parent or the Merger Sub) arising out of or related to this Agreement, the Merger or the other transactions contemplated hereby (including any dissenting rights asserted by a Dissenting Holder) wherein the cumulative professional fees and costs (other than amounts paid in settlement) to defend or resolve such proceedings are reasonably expected to be less than $450,000 in the aggregate or (x) compliance with the terms of, or the taking of any action required by, this Agreement, the Bermuda Merger

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Agreement or with the prior written consent of Parent; provided, however, that the exception in clause (vi) shall not apply to the underlying cause or causes of any such decline or change or prevent any such underlying cause from being taken into account in determining whether a Parent Material Adverse Effect has occurred.

“Parent Parties” is defined in the preamble.

“Parent Parties’ Organizational Documents” is defined in Section 4.4.

“Paying Agent” is defined in Section 1.4(a).

“Payment Fund” is defined in Section 1.4(b).

“Permitted Lien” means (i) Lien for Taxes or governmental assessments, charges or claims of payment not yet due and delinquent, (ii) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar Liens arising in the ordinary course of business not yet due and delinquent, the amount or validity of which are being contested in good faith by appropriate proceedings and for which adequate accruals or reserves have been established in accordance with GAAP, (iii) zoning, entitlements, building codes or other land use or environmental regulations, ordinances or legal requirements imposed by any Governmental Entity, (iv) exceptions disclosed by any title insurance commitment or title insurance policy for any real property owned or leased by the Company and its Subsidiaries issued by a title company and delivered or otherwise made available to Parent, (v) statutory Liens in favor of lessors arising in connection with any property leased to the Company and its Subsidiaries, (vi) any Liens, encroachments, covenants, restrictions, state of facts which an accurate survey or inspection of the real property owned or leased by the Company and its Subsidiaries would disclose and other title imperfections, which, in each case, would not materially interfere with the present or proposed use of the properties or assets of the business of the Company and its Subsidiaries, taken as a whole and (vii) Liens that are disclosed on the most recent consolidated balance sheet of the Company or notes thereto (or securing liabilities reflected on such balance sheet).

“Person” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity, body, group (as such term is used in Section 13 of the Exchange Act) or organization, including, without limitation, a Governmental Entity, and any permitted successors and assigns of such Person.

“Preferred Shareholder Investors” means Dalea Partners, LP, Dalea Management, LLC, Deut 8, LLC, Longfellow Energy, LP, Alexandria Nicole Mitchell Trust 2005, Elizabeth Lee Mitchell Trust 2005, Noah Malone Mitchell Trust 2005, Stevenson Briggs Mitchell, KMF Investments Partners, LP, West Investment Holdings, LLC, Randall I. Rochman, and Betsy Rochman.

“Preferred Shares” is defined in Section 3.9(a).

“Proxy Statement” is defined in Section 3.7(d).

“Recommendation” is defined in Section 3.3.

“Related Party Transactions” is defined in Section 3.28.

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“Representatives” means, with respect to a Person, such Person’s directors, officers, employees, investment bankers, attorneys, accountants and other advisors and representatives.

“Requisite Company Vote” means the approval and adoption of this Agreement and the Bermuda Merger Agreement by the affirmative vote by (a) holders of Common Shares with at least 75% of the votes cast and (b) holders of Preferred Shares with at least 75% of the votes cast, in each case at a duly convened meeting of the shareholders of the Company at which a quorum is present.  A quorum shall require at least two persons in each class holding or representing by proxy more than 33.33% of the outstanding shares of each class of shares.

“Restricted Company Share” means any outstanding Common Share awarded pursuant to a Company Equity Plan that is subject to any vesting requirements that remain unsatisfied.

“RSU” is defined in Section 1.5.

“Sanctioned Person” means, at any time, (a) any Person listed on any OFAC List or otherwise the target of any other prohibitions or restrictions imposed by any OFAC Rules or (b) any Person owned or controlled by any such Person or Persons described in the foregoing clause (a) so that such Person would be subject to the same prohibitions as applicable to such Person.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended.

“Schedule 13E-3” is defined in Section 5.4(a).

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Shareholder Litigation” is defined in Section 5.10.

“Software” means computer programs in object code and source code formats.

“Special Committee” is defined in the recitals.

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, joint venture, association, trust or other form of legal entity of which (i) more than 50% of the outstanding voting securities are directly or indirectly owned by such Person (either alone or through or together with any other Subsidiary), or (ii) such Person or any Subsidiary of such Person is a general partner (excluding partnerships in which such Person or any Subsidiary of such Person does not have a majority of the voting interests in such partnership). For purposes of this definition, “voting securities” with respect to any Subsidiary means common stock or other securities having the power to vote for the election of directors, managers or other voting members of the governing body of such Subsidiary.

“Superior Proposal” means a bona fide written Acquisition Proposal (with the percentages in clauses (ii) and (iii) of the definition of such term changed from 20% to 50% and it being understood that any transaction that would constitute an Acquisition Proposal pursuant to clause (ii) or (iii) of the definition thereof cannot constitute a Superior Proposal under clause (i) under the definition thereof unless it also constitutes a Superior Proposal pursuant to clause (ii) or (iii), as applicable, after giving effect to this parenthetical) that the Company Board has determined in its

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good faith judgment (after consultation with outside legal counsel and its financial advisor) is more favorable from a financial point of view to the Company’s shareholders than the Mergerand the other transactions contemplated by this Agreement, taking into account all of the terms and conditions of such Acquisition Proposal and this Agreement (including any changes to the terms of this Agreement committed to by Parent to the Company in writing in response to such Acquisition Proposal.

“Surviving Company” is defined in Section 1.1(a).

“Surviving Company Operating Agreement” is defined in Section 2.3.

“Takeover Statutes” is defined in Section 3.27.

“Tax Return” means any return, report or similar filing (including the attached schedules) filed or required to be filed with respect to Taxes, including any information return, claim for refund, amended return or declaration of estimated Taxes.

“Taxes” means any and all federal, state, local or foreign taxes of any kind or any other similar charge imposed by a Governmental Entity (together with any and all interest, penalties, additions thereto and additional amounts imposed with respect thereto), including income, franchise, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, unemployment, social security, workers’ compensation, net worth, excise, withholding, ad valorem and value added taxes.

“TBOC” is defined in the recitals.

“Transaction Proceeding” is defined in Section 5.10.

“TSX” means the Toronto Stock Exchange.

“Voting Agreement” is defined in the recitals.

[Remainder of this page intentionally left blank]

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

PARENT:
TAT HOLDCO LLC
By:	/s/ N. Malone Mitchell 3rd
Name:	N. Malone Mitchell 3rd
Title:	Manager
MERGER SUB:
TAT MERGER SUB LLC
By:	/s/ N. Malone Mitchell 3rd
Name:	N. Malone Mitchell 3rd
Title:	Manager of TAT Holdco LLC, its Manager
COMPANY:
TRANSATLANTIC PETROLEUM, LTD.
By:	/s/ Tabitha T. Bailey
Name:	Tabitha T. Bailey
Title:	Vice President, General Counsel, and Corporate Secretary

[Signature Page to the Agreement and Plan of Merger]

EX-10.1

Exhibit 10.1

LIMITED GUARANTY

This Limited Guaranty, dated as of August 7, 2020 (this “Limited Guaranty”), is made by Dalea Partners, LP, an Oklahoma limited partnership (the “Guarantor”), in favor of Transatlantic Petroleum Ltd., a Bermuda exempted company (the “Company”). Reference is hereby made to the Agreement and Plan of Merger, dated as of the date hereof (as the same may be amended from time to time, the “Merger Agreement”), by and among TAT Holdco LLC, a Texas limited liability company (“Parent”), TAT Merger Sub LLC, a Texas limited liability company (“Merger Sub”) and the Company. Capitalized terms used but not defined herein have the meanings ascribed to them in the Merger Agreement.

1.Limited Guaranty. To induce the Company to enter into the Merger Agreement, the Guarantor, intending to be legally bound, hereby absolutely, unconditionally and irrevocably guarantees to the Company, on the terms and conditions set forth herein, the due and punctual payment, observance, performance and discharge, when due, of Parent’s obligations under the Merger Agreement (subject to the terms and conditions of the Merger Agreement) (the “Guaranteed Obligations”); provided, that the maximum amount payable by the Guarantor hereunder shall not exceed $3,300,000.00 (the “Cap”), it being understood that the Company will not seek to enforce this Limited Guaranty for an amount in excess of the Cap. The Company hereby agrees that in no event shall the Guarantor be required to pay any amount to the Company under, in respect of, or in connection with this Limited Guaranty, the Merger Agreement or the transactions contemplated hereby and thereby other than as expressly set forth herein or therein. All payments hereunder shall be made in lawful money of the United States, in immediately available funds.  Any payments made under this Limited Guaranty shall be paid to the Company.  Notwithstanding anything contained in this Limited Guaranty to the contrary, in the event the Company is entitled to a decree of specific performance under the Merger Agreement which obligates Parent and Merger Sub to consummate the Merger, the Cap shall not apply, and the Guaranteed Obligations shall be equal to the aggregate amount of Parent’s obligations under the Merger Agreement.

2.Nature of Guaranty. The Company shall not be obligated to file any claim relating to the Guaranteed Obligations in the event that Parent or Merger Sub become subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Company to so file shall not affect the Guarantor's obligations hereunder. In the event that any payment to the Company in respect of the Guaranteed Obligations is rescinded or must otherwise be returned for any reason whatsoever, the Guarantor shall remain liable hereunder with respect to the Guaranteed Obligations as if such payment had not been made. This Limited Guaranty is an unconditional guarantee of payment and performance and not of collection.  A separate action may be brought and prosecuted against the Guarantor to enforce this Limited Guaranty, irrespective of whether any action is brought against Parent or any other Person or whether Parent or any other Person is joined in any such action.  

3.Changes in Obligations.

(a)The Guarantor agrees that the Company may at any time and from time to time, without notice to or further consent of the Guarantor, extend the time of payment of the Guaranteed Obligations, and may also make any agreement with Parent or Merger Sub

for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, without in any way impairing or affecting the Guarantor's obligations under this Limited Guaranty.

(b)The Guarantor agrees that the Guaranteed Obligations hereunder shall, to the fullest extent permitted by applicable Law, be absolute, unconditional, continuing and irrevocable and shall not be released or discharged, in whole or in part, or otherwise affected by: (i) the failure or delay of the Company, subject to Section ‎8, to assert any claim or demand or to enforce any right or remedy against Parent or Merger Sub or any other Person or collect the Guaranteed Obligations from Parent or the Guarantor; (ii) any change in the time, place or manner of payment of the Guaranteed Obligations or any rescission, waiver, compromise, consolidation or other amendment to or modification of any of the terms or provisions of the Merger Agreement made in accordance with the terms thereof or any other agreement evidencing, securing or otherwise executed in connection with any of the Guaranteed Obligations; (iii) the addition, substitution or release of any Person now or hereafter liable with respect to the Guaranteed Obligations or otherwise interested in the transactions contemplated by the Merger Agreement, to or from this Limited Guaranty, the Merger Agreement, or any related agreement or document; (iv) any change in the corporate existence, structure or ownership of Parent or Merger Sub or any other Person now or hereafter liable with respect to the Guaranteed Obligations or otherwise interested in the transactions contemplated by the Merger Agreement; (v) any insolvency, bankruptcy, reorganization or other similar proceeding affecting Parent or Merger Sub or any other Person now or hereafter liable with respect to the Guaranteed Obligations or otherwise interested in the transactions contemplated by the Merger Agreement; (vi) the existence of any claim, set-off or other right which the Guarantor may have at any time against Parent, Merger Sub or the Company, whether in connection with the Guaranteed Obligations or otherwise; or (vii) the adequacy of any other means the Company may have of obtaining payment of the Guaranteed Obligations.

4.Certain Waivers.

(a)Subject to the Cap, to the fullest extent permitted by applicable Law, the Guarantor hereby expressly and unconditionally waives any and all rights or defenses arising by reason of any law that would otherwise require any election of remedies or mitigation of damages by the Company. The Guarantor waives promptness, diligence, notice of the acceptance of this Limited Guaranty and of the Guaranteed Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and protest, notice of the incurrence of any of the Guaranteed Obligations and all other notices of any kind (other than notices expressly required to be provided to Parent or Merger Sub pursuant to Section 8.6 of the Merger Agreement), all defenses which may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any right to require the marshalling of assets of Parent or Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement, and all suretyship defenses generally (other than defenses to the payment of the Guaranteed Obligations that are available to Parent or Merger Sub under the Merger Agreement or a breach by the Company of the Limited Guaranty).

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(b)The Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Merger Agreement and that the waivers set forth in this Limited Guaranty are knowingly made in contemplation of such benefits.

5.No Waiver; Cumulative Rights. No failure on the part of the Company to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Company of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power. Each and every right, remedy and power hereby granted to the Company or allowed it by applicable Law or other agreement shall be cumulative and not exclusive of any other right, remedy or power, and may be exercised by the Company at any time or from time to time.  The Company shall not have any obligation to proceed at any time or in any manner against, or exhaust any or all of the Company’s rights against, Parent or Merger Sub prior to proceeding against the Guarantor hereunder.  

6.Representations and Warranties. The Guarantor hereby represents and warrants that:

(a)the Guarantor is a duly organized and validly existing limited partnership in good standing under the laws of the jurisdiction of its organization;

(b)the execution, delivery and performance of this Limited Guaranty (i) have been duly and validly authorized by all necessary limited partnership action and no other action or proceedings are necessary to authorize this Limited Guaranty or the consummation of the transactions contemplated hereby, and (ii) do not and will not (with or without notice or lapse of time, or both) conflict with, result in any violation of or contravene any provision of the Guarantor's charter, partnership agreement, operating agreement or similar organizational documents or any applicable Law or contractual restriction binding on the Guarantor or any of its property or assets;

(c)all consents, approvals, authorizations, permits of, filings with and notifications to, any Governmental Authority necessary for the due execution, delivery and performance of this Limited Guaranty by the Guarantor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any Governmental Authority or other Person is required in connection with the execution, delivery or performance by the Guarantor of this Limited Guaranty;

(d)this Limited Guaranty constitutes a legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws of general applicability relating to or affecting creditors' rights or general equity principles (regardless of whether considered at law or in equity);

(e)there is not any litigation, arbitration, governmental or administrative proceedings, actions, examinations, claims or demands pending, or to Guarantor's knowledge, threatened that could adversely affect performance by the Guarantor of its obligations under this Limited Guaranty; and

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(f)the Guarantor has the financial capacity to pay and perform its obligations under this Limited Guaranty, and all funds necessary for the Guarantor to fulfill its obligations under this Limited Guaranty shall be available to the Guarantor (or its permitted assignee pursuant to Section ‎7 hereof) for so long as this Limited Guaranty shall remain in effect in accordance with Section ‎8 hereof.

7.Successors and Assigns. Neither the Guarantor nor the Company may assign its rights, interests or obligations hereunder to any other Person (by operation of applicable Law or otherwise) without the prior written consent of the counterparty hereto; provided, however, that, without the prior written consent of the Company, the Guarantor may, upon reasonable advance written notice to the Company, assign all or a portion of its obligations with respect to the Guaranteed Obligations under this Limited Guaranty to one or more of its Affiliates or to an entity managed or advised by an Affiliate of the Guarantor, it being understood that any such assignment shall not, in any event, relieve the Guarantor any of its obligations under this Limited Guaranty. Any attempted assignment in violation of this section shall be null and void.

8.Continuing Guaranty; Termination.

(a)Unless terminated pursuant to this Section ‎8, this Limited Guaranty may not be revoked or terminated and shall remain in full force and effect and shall be binding on the Guarantor, its successors and permitted assigns until the complete, irrevocable and indefeasible payment and satisfaction in full of the Guaranteed Obligations, subject to the Cap. In furtherance thereof, the Guarantor hereby unconditionally and irrevocably agrees that (i) it shall not institute, and shall cause its Affiliates not to institute, any proceeding asserting that this Limited Guaranty is illegal, invalid or unenforceable in accordance with its terms, (ii) it shall maintain in full force and effect all consents of any Governmental Entity or other authority that are required to be obtained by it with respect to this Limited Guaranty and will obtain any such consents that may become necessary in the future and (iii) it will comply with all applicable Laws and Orders to which it may be subject if failure to so comply would impair its ability to perform its obligations under this Limited Guaranty.  Notwithstanding the foregoing, this Limited Guaranty shall terminate and the Guarantor shall have no further obligations under this Limited Guaranty as of the earliest to occur of:

(i)the consummation of the Closing;

(ii)the date that is ninety (90) days after the date of termination of the Merger Agreement under circumstances in which any of the Guaranteed Obligations are payable (unless the Company has made a claim under this Limited Guaranty prior to such date, in which case the relevant date shall be the date that such claim is finally settled or otherwise resolved either in a final judicial determination or by agreement of the Company and the Guarantor (or its permitted assignee) and the Guaranteed Obligations finally determined or agreed to be owed by the Guarantor are satisfied in full);

(iii)termination of the Merger Agreement in accordance with its terms under circumstances in which none of the Guaranteed Obligations are payable; and

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(iv)the time at which Guaranteed Obligations equal to the Cap have been paid in full.

(b)Notwithstanding the foregoing, in the event that the Company or any of its controlled Affiliates or their respective successors and permitted assigns asserts in any litigation or other proceeding that the provisions of Section ‎1 hereof limiting the Guarantor's liability to the Cap, or any other provisions of this Limited Guaranty, are illegal, invalid or unenforceable in whole or in part, or asserting any theory of liability against the Guarantor or any Non-Recourse Party (as defined below) with respect to the transactions contemplated by the Merger Agreement other than the Retained Claims (as defined below), then (i) the obligations of the Guarantor under this Limited Guaranty shall terminate ab initio and shall thereupon be null and void, (ii) if the Guarantor has previously made any payments under this Limited Guaranty, it shall be entitled to recover such payments from the Company, and (iii) neither the Guarantor nor any Non-Recourse Parties shall have any liability to the Company or any of its controlled Affiliates with respect to the Merger Agreement, the transactions contemplated by the Merger Agreement or under this Limited Guaranty.

9.No Recourse.

(a)The Company acknowledges and agrees that, as of the date hereof, neither Parent nor Merger Sub has any assets other than (i) their respective rights under the Merger Agreement and (ii) a de minimis amount of cash, and that no additional funds are expected to be contributed to Parent unless and until the Closing occurs.

(b)Notwithstanding anything that may be expressed or implied in this Limited Guaranty or any document or instrument delivered contemporaneously herewith, and notwithstanding the fact that the Guarantor may be a limited partnership, and by its acceptance of the benefits of this Limited Guaranty, the Company acknowledges and agrees that (i) no Person other than the Guarantor has any obligations hereunder and (ii) it has no remedy, recourse or right of recovery against, and no personal liability shall attach to, any former, current or future director, officer, employee, agent, attorney, direct or indirect equityholder, controlling person, general or limited partner, manager, member, stockholder or Affiliate (other than Parent or Merger Sub or any assignee of the Guarantor permitted in accordance with Section 7) of the Guarantor or any former, current or future director, officer, employee, agent, attorney, direct or indirect equityholder, controlling person, general or limited partner, manager, member, stockholder or Affiliate (other than Parent or Merger Sub or any assignee of the Guarantor permitted in accordance with Section 7) of any of the foregoing (each, a “Related Party”), through Parent, Merger Sub or otherwise, whether by or through attempted piercing of the corporate (or limited liability company or limited partnership) veil, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any applicable Law or otherwise, except for (x) rights to recover from Parent or Merger Sub under and to the extent expressly provided in the Merger Agreement, and (y) claims by the Company against the Guarantor (but not any Related Party) under and to the extent provided in this Limited Guaranty and subject to the Cap and other limitations described herein (“Retained Guaranty Claims”) (it being understood that nothing contained herein shall limit the ability to seek specific performance

5

of Parent’s and Merger Sub’s obligations under and pursuant to the Merger Agreement). Notwithstanding the foregoing, in the event the Guarantor (A) consolidates with or merges with any other Person and is not the continuing or surviving entity of such consolidation or merger or (B) transfers or conveys all or a substantial portion of its properties and other assets to any Person such that the sum of the Guarantor's remaining net assets plus uncalled capital is less than the Cap (less amounts paid under this Limited Guaranty prior to such event), then, and in each such case, the Company may seek recourse, whether by the enforcement of any judgment or assessment or by any legal or equitable proceeding or by virtue of any applicable Law, against such continuing or surviving entity or such Person (in either case, a “Successor Entity”), as the case may be. As used herein, unless otherwise specified, the term “Guarantor” includes the Guarantor's Successor Entity.

(c)Other than with respect to the exercise of equitable remedies under the Merger Agreement, including without limitation, specific performance of Parent’s and Merger Sub’s obligations thereunder, recourse against the Guarantor solely with respect to the Retained Guaranty Claims shall be the sole and exclusive remedy of the Company and all of its Affiliates against the Guarantor in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement or any of the other agreements contemplated thereby, or the transactions contemplated thereby, and such recourse shall be subject to the limitations described herein and therein.

10.Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section ‎10):

To the Guarantor:

Dalea Partners, LP

16803 Dallas Parkway
Addison, Texas 75001
Attn: Michael S. Haynes
Facsimile: (972) 590-9931
Email: Michael.Haynes@riatacg.com

With a copy (which shall not constitute notice) to:

Foley & Lardner LLP

2021 McKinney Avenue, Suite 1600

Dallas, TX 75201

Attn: Robert Sarfatis

Facsimile: (214) 999-4667

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Email: rsarfatis@foley.com

To the Company:

TransAtlantic Petroleum Ltd.

16803 Dallas Parkway

Addison, Texas 75001

Attn: Tabitha T. Bailey

Facsimile: (214) 265-4708

Email: tabitha.bailey@tapcor.com

With a copy (which shall not constitute notice) to:

Akin Gump Strauss Hauer & Feld LLP

2300 N. Field Street, Suite 1800

Dallas, Texas 75201

Attn: Garrett A. DeVries

Facsimile: (214) 969-4343

Email: gdevries@akingump.com

11.Governing Law. This Limited Guaranty and all disputes, claims or controversies relating to, arising out of, or in connection with this Limited Guaranty shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.

12.Submission to Jurisdiction; Venue.  Each party irrevocably and unconditionally consents, agrees and submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over any matter, any federal court within the State of Delaware) and any appropriate appellate courts therefrom (the “Chosen Courts”), for the purposes of any litigation, action, suit or other proceeding with respect to the subject matter hereof. Each party agrees to commence any litigation, action, suit or proceeding relating hereto only in the Chosen Courts, or if such litigation, action, suit or other proceeding may not be brought in such court for reasons of subject matter jurisdiction, in the other appellate courts therefrom. Each party irrevocably and unconditionally waives any objection to the laying of venue of any litigation, action, suit or proceeding with respect to the subject matter hereof in the Chosen Courts, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. Each party further irrevocably and unconditionally consents to and grants any such court jurisdiction over the Person of such parties and, to the extent legally effective, over the subject matter of any such dispute and agrees that mailing of process or other documents in connection with any such action or proceeding in the manner provided in Section 10 hereof or in such other manner as may be permitted by applicable Law, shall be valid and sufficient service thereof. The parties agree that a final judgment in any such litigation, action, suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law.

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13.Waiver of Jury Trial. Each of the parties hereto acknowledges and agrees that any controversy that may arise under this Limited Guaranty is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Limited Guaranty or the transactions contemplated hereby. Each party to this Limited Guaranty certifies and acknowledges that (a) no representative of any other party has represented, expressly or otherwise, that such other party would not seek to enforce the foregoing waiver in the event of a legal action, (b) such party has considered the implications of this waiver, (c) such party makes this waiver voluntarily, and (d) such party has been induced to enter into this Limited Guaranty by, among other things, the mutual waivers and certifications in this Section ‎13.

14.Confidentiality. This Limited Guaranty shall be treated as confidential and is being provided to the Company solely in connection with the Merger Agreement and the transactions contemplated thereby. This Limited Guaranty may not be used, circulated, quoted or otherwise referred to in any document (other than the Merger Agreement), except with the written consent of the Guarantor and the Company. The foregoing notwithstanding, this Limited Guaranty shall be provided to the Company and the Company or the undersigned may disclose the existence of this Limited Guaranty to (a) its Related Parties and (b) to the extent required by applicable Law (including in connection with any filing made with a court of competent jurisdiction with respect to a dispute under, or relating to, this Limited Guaranty), the applicable rules of any national securities exchange, in connection with any securities regulatory agency filings relating to the Merger, or if required in connection with any other regulatory filing relating to the Merger or the transactions contemplated by the Merger Agreement.

15.Entire Agreement. This Limited Guaranty and the other agreements contemplated hereby constitute the sole and entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, proposals, undertakings, understandings, agreements, representations and warranties, both written and oral, among the Guarantor or any of its Affiliates (other than the Company), on the one hand, and the Company or any of its Affiliates (other than the Guarantor), on the other hand, with respect to such subject matter.

16.Amendments and Waivers. No amendment or waiver of any provision of this Limited Guaranty will be valid and binding unless it is in writing and signed, in the case of an amendment, by the Guarantor and the Company, or in the case of a waiver, by the party against which the waiver is to be effective. No waiver by any party hereto shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver.

17.No Third-party Beneficiaries. Except for the provisions of this Limited Guaranty that reference Related Parties (each of which shall be for the benefit of and enforceable by each Related Party), the parties hereto hereby agree that their respective representations, warranties and

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covenants as set forth herein are solely for the benefit of the other parties hereto, in accordance with and subject to the terms of this Limited Guaranty, and this Limited Guaranty is not intended to, and does not, confer upon any Person other than the parties hereto and any Related Party any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein.

18.No Presumption Against Drafting Party. The parties hereto acknowledge that each party and its counsel have reviewed this Limited Guaranty and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Limited Guaranty.

19.Severability. Any term or provision of this Limited Guaranty found to be invalid, illegal or unenforceable in any jurisdiction shall be, as to such jurisdiction, ineffective solely to the extent of such prohibition or unenforceability and shall not affect any other term or provision of this Limited Guaranty or invalidate or render unenforceable such term or provision in any other jurisdiction; provided, however, that this Limited Guaranty may not be enforced without giving effect to the Cap described in Section ‎1 hereof.

20.Headings. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the interpretation of this Limited Guaranty.

21.Counterparts. This Limited Guaranty may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Limited Guaranty delivered by e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Limited Guaranty.

[signature page follows]

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IN WITNESS WHEREOF, the undersigned has executed this Limited Guaranty as of August 7, 2020.

	Dalea Partners, LP
	By: N. Malone Mitchell 3rd                                       Name: N. Malone Mitchell 3rd Title: Manager
Agreed to and accepted by: Transatlantic Petroleum Ltd.
By: Tabitha T. Bailey Name: Tabitha T. Bailey Title: Vice President, General Counsel, and Corporate Secretary

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EX-10.2

Exhibit 10.2

LOAN AND SECURITY AGREEMENT



Dated as of August 7, 2020


between


TRANSATLANTIC PETROLEUM LTD.,
as Borrower

and
DALEA INVESTMENT GROUP, LLC,
as Lender

TABLE OF CONTENTS

		Page
Article I.	DEFINITIONS; PRINCIPLES OF CONSTRUCTION		1
Section 1.1	Definitions		1
Section 1.2	Principles of Construction		8
Section 1.3	Lender’s Discretion		8
Section 1.4	Changes in GAAP		8
Article II.	THE LOAN		8
Section 2.1	The Loan		8
Section 2.2	Interest Rate		10
Section 2.3	Prepayments		12
Article III.	PLEDGE AND GRANT OF SECURITY INTEREST		12
Section 3.1	Pledge and Grant of Security Interest		12
Section 3.2	Delivery and Registration of Pledged Stocks		12
Section 3.3	Voting Rights and Distributions With Respect to Pledged Stocks		13
Section 3.4	Borrower Remains Liable		13
Article IV.	REPRESENTATIONS AND WARRANTIES		13
Section 4.1	Borrower Representations		13
Section 4.2	Survival of Representations		17
Article V.	BORROWER COVENANTS		17
Section 5.1	Borrower Affirmative Covenants		17
Section 5.2	Borrower Negative Covenants		19
Article VI.	BUDGET		22
Section 6.1	Budget		22
Section 6.2	Budget Line Items		22
Article VII.	DEFAULTS		22
Section 7.1	Events of Default		22
Section 7.2	Remedies		25
Section 7.3	Remedies Cumulative		25
Article VIII.	MISCELLANEOUS		26
Section 8.1	Successors and Assigns		26
Section 8.2	Governing Law		27
Section 8.3	Jurisdiction, Venue and Consent of Process		27
Section 8.4	Amendments		28
Section 8.5	Delay Not a Waiver		28
Section 8.6	Notices		28
Section 8.7	Trial by Jury		29
Section 8.8	Headings		29
Section 8.9	Severability		29
Section 8.10	Preferences		29

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Loan Agreement

Page | ii

Section 8.11	Waiver of Notice	30
Section 8.12	Expenses	30
Section 8.13	Indemnity	30
Section 8.14	Schedules and Exhibits Incorporated	31
Section 8.15	No Joint Venture or Partnership; No Third-Party Beneficiaries; Waiver of Consequential Damages	31
Section 8.16	Waiver of Offsets/Defenses/Counterclaims	31
Section 8.17	Conflict; Construction of Documents; Reliance	31
Section 8.18	Brokers and Financial Advisors	32
Section 8.19	Recourse	32
Section 8.20	Prior Agreements	32
Section 8.21	Time is of the Essence	32
Section 8.22	Set Off	32
Section 8.23	Records	32
Section 8.24	Counterparts; Electronic Delivery of Signature Pages	32

EXHIBITS AND SCHEDULES

Exhibit AForm of Promissory Note

Exhibit B-1Form of Guarantee of TransAtlantic Worldwide, Ltd.

Exhibit B-2Form of Form of Guarantee of TransAtlantic Petroleum (USA) Corp.

Exhibit CForm of Request for Loan Advance

Schedule 1.1Permitted Encumbrances

Schedule 2.1Loan Advance Conditions

Schedule 4.1.7(b)Filing Offices

Schedule 4.1.7(c)Pledged Stock

Schedule 5.2.6Permitted Indebtedness

Transatlantic Petroleum Ltd.

Loan Agreement

Page | iii

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT, dated as of August 7, 2020 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”), by and between DALEA INVESTMENT GROUP, LLC, a Texas limited liability company (“Lender”), having an address at 16803 Dallas Parkway, Addison, Texas 75001, and TRANSATLANTIC PETROLEUM LTD., a Bermuda limited company (“Borrower”), having its principal place of business at 16803 Dallas Parkway, Addison, Texas 75001.  All capitalized terms used herein shall have the respective meanings set forth in Article I hereof.

RECITALS:

WHEREAS, an Affiliate of Lender entered into that certain Agreement and Plan of Merger, dated as of the date hereof with Borrower (the “Merger Agreement”), pursuant to which Borrower will merge with and into a subsidiary of an Affiliate of Lender.

WHEREAS, Borrower has requested Lender to make a loan to Borrower in an aggregate principal amount of up to EIGHT MILLION AND NO/100 DOLLARS ($8,000,000.00) to finance the working capital needs of Borrower and its Subsidiaries and as otherwise permitted by this Agreement, and Lender is willing to make such loan on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the covenants set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree, represent and warrant as follows:

Article I.  DEFINITIONS; PRINCIPLES OF CONSTRUCTION

Section 1.1Definitions.

The following terms shall have the following meanings:

Accounting Rules:  with respect to Borrower, when applicable, GAAP, or such other consistently applied accounting methods requested by Borrower and consented to in writing by Lender in its reasonable discretion.

Affiliate:  as to any Person, any other Person that, directly or indirectly, owns more than ten percent (10%) of, is in Control of, is Controlled by or is under common ownership or Control with such Person or is a director or officer of such Person or of an Affiliate of such Person.

Agreement:  has the meaning set forth in the Preamble hereto.

Anti-Money Laundering Laws:  the USA PATRIOT Act and the Bank Secrecy Act and similar Laws relating to anti-money laundering or terrorist financing.

Bankruptcy Code:  Title 11 of the United States Code entitled “Bankruptcy” as amended from time to time, and any successor statute or statutes and all rules and regulations from time to

Transatlantic Petroleum Ltd.

Loan Agreement

time promulgated thereunder, and any applicable comparable foreign laws relating to bankruptcy, insolvency or creditors’ rights.

Borrower:  has the meaning set forth in the Preamble hereto.

Budget:  the working capital budget for Borrower and its Subsidiaries specifying (i) all costs and expenses of every kind and nature whatever to be incurred by Borrower and its Subsidiaries until the Maturity Date, and (ii) all sources of funds to pay such costs and expenses, as same may be amended from time to time as provided for herein.

Budget Line Item:  has the meaning set forth in Section 6.2(a) hereof.

Business Day:  any day (other than a Saturday or Sunday) on which the Federal Reserve Bank of Dallas, Texas is open.

Capital Expenditures:  for any period shall mean amounts expended by Borrower for replacements and alterations that are required to be capitalized according to GAAP.

Capital Stock:  any and all shares, interests, participations, units or other equivalents (however designated) of capital stock of a corporation, membership interests in a limited liability company, partnership interests of a limited partnership, any and all equivalent ownership interests in a Person, and in each case any and all warrants, rights or options to purchase, and all conversion or exchange rights, voting rights, calls or rights of any character with respect to, any of the foregoing.

Closing Date:  the date of this Agreement.

Code:  the U.S. Internal Revenue Code of 1986, as amended, and as it may be further amended from time to time, any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.

Collateral:  means all of Borrower’s present and future accounts, chattel paper (including electronic chattel paper), commercial tort claims, commodity accounts, commodity contracts, contracts receivable, deposit accounts, documents, financial assets, general intangibles, instruments, investment property (including the Pledged Stocks), letters of credit, letter of credit rights, payment intangibles, securities, notes receivable, choses of action, security accounts and security entitlements , now or hereafter owned, held or acquired.  The term Collateral, as used herein, shall also include all supporting obligations, products and proceeds of all of the foregoing (including without limitation, insurance payable by reason of loss or damage to the foregoing property) and any assets securities, guaranties or monies of the Borrower which may at any time come into the possession of Lender.

Collateral Documents:  the Guarantees and all other security agreements, pledge agreements, assignments, financing statements and other documents as shall from time to time secure or relate to the Debt or any part thereof.

Commitment Amount:  has the meaning set forth in Section 2.1.2 hereof.

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Commitment Termination Date:  The earliest to occur of (i) February 28, 2021, and (ii) the date on which Lender shall have made an aggregate principal amount of Loan Advances to Borrower in an amount equal to the Commitment Amount.

Control:  the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a Person, whether through occupation of board or other directing/management positions, ownership of voting securities or by contract rights with respect to such voting rights or otherwise.

Debt: the Loan together with all interest accrued and unpaid thereon and all other liabilities, obligations and sums due under each other Loan Document.

Debtor Relief Law:  the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

Default:  the occurrence of any event hereunder or under any other Loan Document which, but for the giving of notice or passage of time, or both, would be an Event of Default.

Default Rate:  with respect to the Principal Balance, a rate per annum equal to the lesser of (i) the maximum rate permitted by applicable Law, and (ii) the Interest Rate plus two percent (2%).

Disposition:  as to any Person, any sale, transfer, lease, contribution or other conveyance (including by way of merger) of, or the granting of options, warrants or other rights to, any of such Person’s or any of such Person’s Subsidiaries’ assets or properties (including Capital Stock of Subsidiaries) to any other Person in a single transaction or series of transactions.  “Dispose” shall have a correlative meaning consistent with the foregoing.

Eligible Institution:  a depository institution or trust company incorporated under the laws of the United States or any state thereof or the District of Columbia, insured by the Federal Deposit Insurance Corporation and subject to supervision and examination by federal or state banking authorities and acceptable to Lender in its reasonable discretion.

ERISA:  has the meaning set forth Section 4.1.8 hereof.

Event of Default:  has the meaning set forth in Section 7.1 hereof.

Excluded Tax:  any Tax imposed on, or with respect to, Lender or required to be withheld or deducted from a payment to Lender, as a result of Lender being organized under the laws of, or having a connection with, the jurisdiction imposing such Tax.

Fiscal Year:  each twelve (12)-month period commencing on January 1 and ending on December 31 of each year during the term of the Loan.

GAAP:  generally accepted accounting principles accepted in the United States as codified by the Financial Accounting Standards Board’s Accounting Standards Codification.

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Governmental Approvals:  collectively, all consents, licenses, and permits and all other authorizations or approvals required from any Governmental Authority for the operation of Borrower’s business.

Governmental Authority:  any court, board, agency, commission, office or authority of any nature whatsoever or any governmental or quasi-governmental unit (federal, state, county, district, municipal, city or otherwise) whether now or hereafter in existence.

Guarantees:  (a) the Guarantee of Worldwide dated as of the date hereof in favor of Lender in substantially the form of Exhibit B-1, and (b) the Guarantee of TAP (USA) dated as of the date hereof in favor of Lender in substantially the form of Exhibit B-2, each, individually, a “Guarantee.”

Guarantors:  Worldwide and TAP (USA), each, individually, a “Guarantor.”

Indebtedness:  for any Person, without duplication:  (i) all indebtedness of such Person for borrowed money, for amounts drawn under a letter of credit, or for the deferred purchase price of property for which such Person or its assets are liable, (ii) all amounts required to be paid by such Person as a guaranteed payment to holders of Capital Stock or a preferred or special dividend, including any mandatory redemption of shares or interests, (iii) all indebtedness guaranteed by such Person, directly or indirectly, (iv) all obligations under leases that constitute capital leases for which such Person is liable, and (v) all net obligations of such Person under interest rate swaps, caps, floors, collars and other interest hedge agreements, in each case whether such Person is liable contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations such Person otherwise assures a creditor against loss.

Indemnified Liabilities:  has the meaning set forth in Section 8.13 hereof.

Indemnified Party:  has the meaning set forth in Section 8.13 hereto.

Indemnified Tax:  any Tax, other than an Excluded Tax, imposed on or with respect to any payment made by or on account of any obligation of Borrower under any Loan Document.

Interest Rate:  a rate equal to ten percent (10%) per annum.

Law:  any federal, state, county, municipal and other governmental statute, law, rule, order, regulation, ordinance, judgment, decree and injunction of any Governmental Authority affecting Borrower, whether now or hereafter enacted and in force, and any permit, license and authorization and regulation relating thereto.

Lender:  has the meaning set forth in the Preamble hereof.

Lien:  any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security interest or any other encumbrance, charge or transfer of, on or affecting any property or any portion thereof, or any interest therein, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement or other similar liens and encumbrances.

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Loan:  the aggregate outstanding Loan Advances made by Lender to Borrower pursuant to this Agreement.

Loan Advance:  a disbursement of funds to Borrower pursuant to this Agreement.

Loan Documents:  collectively, this Agreement, the Note, the Collateral Documents and all other documents now or hereafter executed and/or delivered in connection with the Loan, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

Material Adverse Change:  a material adverse change or material adverse effect on (a) the financial condition, results of operations, assets, business, or properties of Borrower and its Subsidiaries, taken as a whole, (b) the ability of Borrower and its Subsidiaries, taken as a whole, to duly and punctually pay or perform their payment obligations under this Agreement and the other Loan Documents, (c) Lender’s Liens granted pursuant to the Loan Documents or the priority or perfection of any such Lien, or (d) the enforceability of Lender’s rights and remedies under this Agreement or the Loan Documents; provided that no effect on the financial condition, results of operations, assets, business, properties or prospects of Borrower and its Subsidiaries directly resulting from the Coronavirus Disease 2019 (COVID-19) (such as labor shortages, prohibitions on travel, or declines in commodity price due to decreased demand) shall constitute a Material Adverse Change hereunder.

Material Agreements:  the Merger Agreement and any agreement under which there is an obligation of Borrower to pay in excess of (x) One Million and No/100 Dollars in the aggregate or (y) Five Hundred Thousand and No/100 Dollars ($500,000.00) in any fiscal year.

Maturity Date:  the earliest of (i) August 7, 2021, and (ii) the date that the Loan becomes due and payable pursuant to Section 7.2 hereof.

Merger Agreement:  has the meaning set forth in the first Recital hereto.

Monthly Operating Expense Budgeted Amount:  the Operating Expenses set forth in the Budget incurred or to be incurred during the calendar month in which a Loan Advance is made.

Monthly Payment Date:  the first day of every calendar month, provided if such day is not a Business Day, the Monthly Payment Date shall be the next following Business Day.

Note:  has the meaning set forth in Section 2.1.4 hereof.

Notice:  has the meaning set forth in Section 8.6 hereof.

OFAC:  the Office of Foreign Asset Control, U.S. Department of the Treasury.

OFAC List:  the Specially Designated Nationals and Blocked Persons List maintained by OFAC.

OFAC Rules:  has the meaning set forth in Section 4.1.17.

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Operating Expenses:  all costs and expenses of the Borrower and its Subsidiaries relating to the operation, maintenance and management of its business, including, without limitation, oil and gas lease operating expenses, general and administrative expenses, utilities, repairs and maintenance, insurance, taxes, payroll and related taxes, equipment lease payments, management fees, professional and legal fees, but excluding (i) actual Capital Expenditures, (ii) depreciation and amortization, and (iii) interest or principal due on Indebtedness.

Ordinary Course of Business: consistent with past practice or, with respect to actions taken (or omitted to be taken) in response to Coronavirus Disease 2019 (COVID-19), consistent with past practice or industry practice.

Permitted Encumbrances:  collectively, (i) the Liens and security interests created by the Loan Documents, (ii) all Liens, encumbrances and other matters described on Schedule 1.1 hereto, (iii) Liens in respect of Taxes imposed by any Governmental Authority not yet due or delinquent, (iv) Liens that are being contested in accordance with Section 5.2.2 hereof, (v) Liens with respect to the financing or leasing of equipment entered into by Borrower or its Subsidiaries as lessee in the Ordinary Course of Business, which Liens shall encumber only the equipment that is the subject of the such financing or lease, (vi) Liens arising from precautionary Uniform Commercial Code financing statement or similar filings, (vii) Liens securing judgments for the payment of money not constituting an Event of Default hereunder, (viii) contracts, agreements, lease provisions, defects, irregularities easements, rights-of-way, restrictive covenants, licenses, restrictions (including zoning restrictions), exceptions, deficiencies or irregularities in title, encroachments, protrusions, servitudes, permits, conditions and covenants and other similar charges or encumbrances not interfering in any material respect with the business of the Borrower and its Subsidiaries, taken as a whole, (ix) Liens solely on any cash earnest money deposits made by Borrower or any of its Restricted under escrow or similar arrangements in connection with any letter of intent or purchase agreement permitted hereunder, (x) Liens to secure plugging and abandonment or environmental remedial obligations, (xi) Liens existing on the date hereof and any renewals, replacements, or extensions thereof, and (xii) Liens created in the Ordinary Course of Business.

Permitted Indebtedness:  has the meaning set forth in Section 5.2.6 hereof.

Permitted Investments:  any of the following, provided that at all times Lender has a perfected security interest in such investment, and Borrower has provided evidence of such, in form and substance satisfactory to Lender, and provided that none of the following have an “r” highlighter affixed to the applicable S&P rating (or if not rated by S&P, an analogous highlighter or reference by Moody’s, Fitch, or any other nationally-recognized statistical rating agency which has been designated by Lender):

(i) demand and time deposits, certificates of deposits, or bankers’ acceptances, in each case maturing in not more than sixty (60) days after the date of purchase issued by an Eligible Institution, all of which are fully insured by the Federal Deposit Insurance Corporation;

(ii) commercial paper having a remaining maturity of not more than sixty (60) days issued by any corporation incorporated under the laws of the United States or any state thereof

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which on the date of acquisition has been rated not less than the higher of “A 1+” by S&P or “P 1” by Moody’s; and

(iii) U.S. government obligations maturing not more than three (3) months after the date of acquisition, and repurchase agreements on U.S. government obligations maturing not more than three (3) months after the date of acquisition, provided that the unsecured obligations of the party agreeing to repurchase such obligations are at the time rated either not less than the higher of “A 1+” by S&P or “P 1” by Moody’s.

Person:  any individual, corporation, partnership, limited liability company, joint venture, estate, trust, unincorporated association, any other entity, any Governmental Authority or any fiduciary acting in such capacity on behalf of any of the foregoing.

Plan Assets Regulation:  has the meaning set forth in Section 4.1.8 hereof.

Pledged Companies:  means each of Worldwide and TAP (USA).

Pledged Stock:  means all of Borrower’s right, title and interest in and to all of the Capital Stock in each of the Pledged Companies now owned or hereafter acquired by Borrower, regardless of class or designation, including all substitutions therefor and replacements thereof, all proceeds thereof and all rights relating thereto, also including any certificates representing such Capital Stock, the right to receive any certificates representing any of such Capital Stock, and the right to receive all dividends, distributions of income, profits, surplus, or other compensation by way of income or liquidating distributions, in cash or in kind, and all cash, instruments, and other property from time to time received, receivable, or otherwise distributed in respect of or in addition to, in substitution of, on account of, or in exchange for any or all of the foregoing.

Principal Balance:  the advanced, but unpaid principal balance of the Loan outstanding from time to time.

Prohibited Person:  has the meaning set forth in Section 4.1.17 hereof.

Request for Advance:  a request for a Loan Advance in the form of Exhibit C hereto.

Restricted Payment:  as to any Person, (a) the declaration or payment of any divided on, or the making of any payment or distribution on account of, or setting apart assets for a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of, any class of Capital Stock of such Person or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or the making of any other distribution in respect thereof, either directly or indirectly whether in cash or property, (b) any payment of a management fee or other fee of a similar nature by such Person to any holder of its Capital Stock or any other Affiliate thereof, and (c) the payment or prepayment of principal of, or premium or interest on, any Indebtedness subordinate to the Debt.

Subsidiary:  as to any Person (a) any corporation more than fifty percent (50%) of whose Voting Stock having by the terms thereof power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency)

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is at the time owned by such Person directly or indirectly through Subsidiaries, and (b) any partnership, limited liability company, association, joint venture or other entity in which such Person directly or indirectly through one or more Subsidiaries has more than fifty percent (50%) of Capital Stock (measured by vote or value) at the time.  Unless otherwise expressly provided, all references to a “Subsidiary” means a direct or indirect Subsidiary of the Borrower.

TAP (USA):  TransAtlantic Petroleum (USA) Corp., a Delaware corporation.

Taxes:  all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

UCC:  the Uniform Commercial Code as in effect from time to time in the State of Texas or any other state applicable to any Collateral, as the case may be.

Unused Commitment:  at any time, the difference between the Commitment Amount and the aggregate principal amount of all Loan Advances made as of such time, whether or not repaid.

Voting Stock:  as to any Person, shares of such Person’s Capital Stock having the right to vote for the election of directors (or Persons acting in a comparable capacity) of such Person under ordinary circumstances.

Worldwide:  TransAtlantic Worldwide Ltd., a Bahamas international business company.

Section 1.2Principles of Construction.  Unless otherwise specified, (i) all references to Sections and Schedules are to those in this Agreement, (ii) the words “hereof,” “herein” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision, (iii) all definitions are equally applicable to the singular and plural forms of the terms defined, and (iv) the word “including” means “including but not limited to”.

Section 1.3Lender’s Discretion.  Whenever Lender exercises any right given to it pursuant to this Agreement to approve or disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory shall, except as is otherwise specifically provided herein, be in the reasonable discretion of Lender and shall be final and conclusive.

Section 1.4Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and Borrower or the Lender shall so request, Borrower and Lender shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) Borrower shall provide to Lender financial statements and other documents required under this Agreement setting forth a

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reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

Article II.  THE LOAN

Section 2.1The Loan.

2.1.1Agreement to Borrow and Lend.  Subject to, and upon the terms and conditions set forth in, this Agreement, including, without limitation, Borrower’s satisfaction of the conditions for the Loan Advances set forth in Schedule 2.1 or the waiver thereof pursuant to Section 8.4, Lender agrees to make (or cause to be made) Loan Advances to Borrower from time to time in an aggregate amount not to exceed the Commitment Amount.  The Loan is not a revolving credit loan, and Borrower is not entitled to reborrow any portion of the Loan that has been repaid or prepaid from time to time.

2.1.2Commitment Amount.  The maximum aggregate principal amount of the Loan (the “Commitment Amount”) shall be EIGHT MILLION AND NO/100 DOLLARS ($8,000,000.00).

2.1.3Loan Advances; Use of Proceeds.

(a)Lender agrees, upon Borrower’s compliance with, and satisfaction of, all conditions precedent set forth in Sections A and B of Schedule 2.1 or the waiver thereof pursuant to Section 8.4, to make the initial Loan Advance.

(b)Borrower agrees that the Loan and each Loan Advance shall be used solely to pay the costs and expenses set forth in the Budget (subject to permitted variances) and for no other purpose.

(c)After the initial Loan Advance, Borrower shall be entitled to receive further successive Loan Advances upon satisfaction of the conditions precedent set forth in Section B of Schedule 2.1, or the waiver thereof pursuant to Section 8.4.  Notwithstanding the foregoing or any other provision in this Agreement to the contrary, Borrower shall not be entitled to receive any Loan Advance after the Commitment Termination Date, upon which date the Unused Commitment shall terminate.  To the extent that Lender may have made a Loan Advance when Borrower had failed to satisfy any applicable condition precedent thereto, Lender shall not be deemed to have waived any such condition precedent, and Lender may at any time after making such Loan Advance require Borrower to comply with all such conditions in connection with such Loan Advance or any future Loan Advances.

(d)Lender shall make each Loan Advance available to Borrower by transferring funds in accordance with the instructions of Borrower in accordance with the terms of this Agreement.

2.1.4The Note.  The Loan shall be evidenced by a promissory note in the form of Exhibit A hereto, having a face amount equal to the Commitment Amount, executed by

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Borrower and payable to the order of Lender (as the same may hereafter be amended, supplemented, restated, increased, extended or consolidated from time to time, the “Note”) and shall be repaid in accordance with the terms thereof and of this Agreement.

Section 2.2Interest Rate.

2.2.1Interest Rate.  Unless an Event of Default shall have occurred and be continuing, interest shall accrue on the Principal Balance at a rate per annum equal to the Interest Rate.

2.2.2Default Rate.  During the continuation of an Event of Default, the Principal Balance and, to the extent permitted by Law, overdue interest in respect of the Loan, shall accrue interest at the Default Rate.

2.2.3Interest Calculation.  Interest on the Principal Balance shall be calculated by multiplying (a) the actual number of days elapsed in the period for which the calculation is being made by (b) a daily rate based on a three hundred sixty (360) day year (that is, the Interest Rate or the Default Rate, as then applicable, expressed as an annual rate divided by three hundred sixty (360)) by (c) the Principal Balance.  Borrower acknowledges this will result in a higher rate of interest than if interest were calculated based on a 365-366-day year and waives any right to object to said basis of calculation.

2.2.4Interest Payments.  Interest shall accrue with respect to each Loan Advance comprising the Loan, from the day on which such Loan Advance was made by Lender.  Commencing on the first Monthly Payment Date after the Closing Date, and on each subsequent Monthly Payment Date thereafter, Lender shall calculate interest accrued on the Principal Balance since the immediately preceding Monthly Payment Date at the Interest Rate and provide an invoice with respect thereto to Borrower.  Borrower shall pay such invoiced interest to Lender within five (5) Business Days after receipt of such invoice.

2.2.5Payment on Maturity Date.  Borrower shall repay the Loan to Lender on the Maturity Date, together with all accrued and unpaid interest and all other amounts due hereunder and under the other Loan Documents.

2.2.6Place and Application of Payments.  All payments in respect of the Loan, and of all other Debt payable by Borrower, shall be made by Borrower to Lender by no later than 12:00 p.m. (CST) on the due date thereof by ACH, wire transfer or at the office of Lender (or such other location as Lender may designate in writing to Borrower).  Any payments received after such time shall be deemed to have been received by Lender on the next following Business Day.  All such payments shall be made in U.S. Dollars, in immediately available funds, in each case without set-off or counterclaim.

If at any time insufficient funds are received by and available to Lender to fully pay the amounts then due hereunder or under the other Loan Documents, such funds shall be applied (i) first, towards payment of fees, indemnities and expense reimbursements then due hereunder, (ii) second, towards payment of interest then due hereunder, and (iii) third, towards the Principal Balance.  Notwithstanding the foregoing, during the existence of an Event of Default, Lender shall

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have the right to apply any payments received and proceeds of Collateral to the repayment of Debt in any order, in its sole discretion.

2.2.7Taxes.

(a)Payments Free of Withholding.  Any and all payments by or on account of any obligation of Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Law.  If any applicable Law requires the deduction or withholding of any Tax from any such payment, then Borrower or such paying Person shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this clause (a)), Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b)Indemnification by Borrower.  Borrower shall pay Lender, within ten (10) days after demand therefor, the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on, or attributable to, amounts payable under clause (a) above) payable or paid by Lender or required to be withheld or deducted from a payment to Lender and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to Borrower by Lender shall be conclusive evidence as to the amount of Indemnified Taxes due and owing to Lender absent manifest error.

(c)Evidence of Payments.  If Borrower pays any Taxes as described in this Section 2.2.7, it shall deliver to Lender official tax receipts evidencing such payment or certified copies thereof, if any, or such other evidence of payment reasonably satisfactory to Lender on or before the thirtieth (30^th) day after payment.

(d)Payment of Taxes by Borrower.  Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or, at the option of Lender, timely reimburse it for the payment of, any Indemnified Taxes.

(e)Status of Lender.  Lender shall deliver to Borrower on or prior to the date on which Lender becomes a Lender under this Agreement (any from time to time thereafter upon the reasonable request of Borrower), an executed original of IRS Form W-9 certifying that Lender is exempt from U.S. federal backup withholding tax.

(f)Survival.  Each party’s obligations under this Section shall survive any assignment of rights by Lender and the repayment, satisfaction or discharge of all obligations under any Loan Document.

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Section 2.3Prepayments.  Borrower shall have the right to prepay any Debt in whole or in part from time to time without fee, premium, or penalty upon not less than three (3) Business Days’ Notice, provided that no prepayment shall be in an amount less than Two Hundred Fifty Thousand Dollars ($250,000.00).

Article III.  PLEDGE AND GRANT OF SECURITY INTEREST

Section 3.1Pledge and Grant of Security Interest.  As collateral security for the prompt payment and performance in full when due of the Debt, Borrower hereby pledges to and grants to Lender a security interest in all of the Borrower’s right, title and interest in to the  Collateral.

Section 3.2Delivery and Registration of Pledged Stocks.

3.2.1Delivery of Pledged Stocks.  On the Closing Date, the Borrower shall deliver to Lender all certificates, if any, representing the Pledged Stocks accompanied by a duly executed instrument of transfer or assignment in blank, in form and substance satisfactory to Lender.  All certificates or instruments representing or evidencing the Pledged Stocks at any time acquired by Borrower shall be promptly delivered by Borrower to Lender or Lender’s designee pursuant to this Agreement at a location designated in writing by Lender and shall be held by or on behalf of Lender pursuant to this Agreement, and shall be in suitable form for transfer by delivery, or shall be accompanied by a duly executed instrument of transfer or assignment in blank, in form and substance satisfactory to Lender.

3.2.2Holder.  If, at any time and from time to time, any Pledged Stock (including any certificate or instrument representing or evidencing any Pledged Stock) is in the possession of a Person other than Lender or Borrower (a “Holder”), then Borrower shall immediately, at Lender’s option, either cause such Pledged Stock to be delivered into Lender’s possession, or cause such Holder to enter into a control agreement, in form and substance satisfactory to Lender, and take all other steps deemed necessary by Lender to perfect the security interest of Lender in such Pledged Stocks, all pursuant to Sections 9‑106 and 9-313 of the UCC or other applicable law governing the perfection of Lender’s security interest in the Pledged Stocks in the possession of such Holder.

3.2.3Pledged Stocks Received By Borrower.  Any and all Pledged Stocks (including dividends, interest and other cash distributions) at any time received or held by Borrower shall be so received or held in trust for Lender, shall be segregated from other funds and property of Borrower and shall be forthwith delivered to Lender in the same form as so received or held, with any necessary endorsements.

3.2.4Uncertificated Securities.  With respect to any Pledged Stock that consists of an uncertificated security or a security in book entry form, on or before the Closing Date, the Borrower shall cause such Pledged Stocks to be registered or entered, as the case may be, in the name of Lender, or otherwise cause Lender’s security interest thereon to be perfected in accordance with applicable law. Lender may request the applicable Pledged Company to cause such Pledged Stocks to become certificated and in the event such

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Pledged Stocks becomes certificated, to deliver such Pledged Stocks to Lender in accordance with the provisions of Section 3.2.1.

Section 3.3Voting Rights and Distributions With Respect to Pledged Stocks. So long as no Event of Default shall have occurred and be continuing, Borrower shall be entitled to exercise any and all voting and other consensual rights pertaining to the Pledged Stocks or any part thereof for any purpose not inconsistent with the terms of the Loan Documents.

Section 3.4Borrower Remains Liable.  Notwithstanding anything to the contrary contained herein, (i) Borrower shall remain liable under the contracts and agreements included in the Collateral to the extent set forth therein to perform all of Borrower’s respective duties and obligations thereunder to the same extent as if this Agreement had not been executed; (ii) the exercise by Lender of any of his rights hereunder shall not release Borrower from any of their respective duties or obligations under the contracts and agreements included in the Collateral and (iii) Lender shall not have any obligation or liability under any of the contracts and agreements included in the Collateral by reason of this Agreement, nor shall Lender be obligated to perform any of the obligations or duties of Borrower thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.  Borrower agrees and acknowledges that Lender shall not be nor be deemed to be a fiduciary of Borrower in any manner whatsoever and does not and shall not owe any duties, including any fiduciary duties, of any nature or kind to Borrower at any time in connection with the Pledged Stocks, the Collateral, the Debt, the Loan Documents, or this Agreement.

Article IV.  REPRESENTATIONS AND WARRANTIES

Section 4.1Borrower Representations.  Borrower hereby represents and warrants to Lender as follows:

4.1.1Organization.  Borrower is a limited company duly formed, validly existing and in good standing under the laws of the Bermuda, with all requisite power and authority to (i) conduct business in the in all jurisdictions where it conducts business, (ii) incur the Debt, and (iii) execute, deliver and perform this Agreement and the other Loan Documents to which it is a party.

4.1.2Business.  Borrower is in the business of international acquisition, exploration, development, and production of oil and natural gas.

4.1.3Validity of Loan Documents; Enforceability.  This Agreement and the other Loan Documents to which Borrower is a party have been duly authorized, executed and delivered by Borrower and constitute the legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with their respective terms, except as such enforcement may be limited by Debtor Relief Laws and by general principles of equity.  The Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense by Borrower, nor would the operation of any of the terms of the Loan Documents, or the exercise of any right thereunder, render the Loan Documents unenforceable (except as such enforcement may be limited by Debtor Relief Laws and by general principles of equity).

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4.1.4No Conflicts.  The execution and delivery of this Agreement and the other Loan Documents by Borrower and the performance of its obligations hereunder and thereunder will not conflict with any provision of any Law to which Borrower is subject, or conflict with, result in a breach of, or constitute a default under, any of the terms, conditions or provisions of any of Borrower’s organizational documents or any agreement or instrument to which Borrower is a party or by which it is bound, or any order or decree applicable to Borrower, or result in the creation or imposition of any Lien (other than pursuant to the Loan Documents), in each case (other than with respect to Borrower’s organizational documents) except to the extent such conflict, breach, default, or creation or imposition of a Lien, would not reasonably be expected to result in a Material Adverse Change.

4.1.5Litigation; Court Orders.  There is no action, suit, proceeding or investigation pending or threatened against Borrower, any of its Subsidiaries or any of their respective property in any court or by or before any other Governmental Authority which, if adversely determined, would reasonably be expected to result in a Material Adverse Change.  Borrower is not in default with respect to any order or decree of any court or any order, regulation or demand of any Governmental Authority, which default would reasonably be expected to result in a Material Adverse Change.

4.1.6Consents.  No consent, approval, authorization or order of any Governmental Authority or third party is required for the execution, delivery and performance by Borrower of, or compliance by Borrower with, this Agreement, any other Loan Document, or the consummation of the transactions contemplated hereby, other than those that have been obtained by Borrower.

4.1.7Security Interest; Perfection.

(a)This Agreement is effective to create in favor of Lender, a legal, valid and enforceable first-priority security interest (subject only to Permitted Encumbrances) in the Collateral.

(b)In the case of the Pledged Stock that is certificated, when stock certificates representing such Pledged Stock are delivered to Lender; and in the case of the other Collateral described herein (including uncertificated Pledged Stock), when financing statements in appropriate form are filed in the offices specified on Schedule 4.1.7(b), the Lien in Article III hereof shall constitute a fully perfected Lien on, and first-priority security interest (subject only to Permitted Encumbrances) in, all right title and interest of Borrower in the Collateral in which a security interest can be perfected by the filing of a financing statement in such offices and the proceeds thereof, as security for the Debt.

(c)(i) Except for the security interest created hereby, Borrower is and will at all times be the sole holder of record and the legal and beneficial owner, free and clear of all Liens other than Permitted Encumbrances, of the Pledged Stocks; (ii) all of the Pledged Stocks of Borrower are duly authorized, validly issued, fully paid and non-assessable and the Pledged Stocks constitute or will constitute the

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percentage of the issued and outstanding Capital Stock of the Pledged Companies of Borrower described on Schedule 4.1.7(c) as supplemented or modified by any Pledged Stocks addendum or amendment of this Agreement; (iv) Borrower has the right and requisite authority to pledge the Pledged Stocks pledged by Borrower as provided herein; and (v) all actions necessary or desirable to perfect and establish the first priority (subject only to Permitted Encumbrances) of Lender’s Liens in the Pledged Stocks, and the proceeds thereof, will have been duly taken, upon (A) the execution and delivery of this Agreement; (B) Borrower having delivered to Lender all certificates representing the Pledged Stocks owned by Borrower to the extent such Pledged Stocks are represented by certificates, and undated powers (or other documents of transfer acceptable to Lender) endorsed in blank with respect to such certificates; and (C) with respect to any Pledged Stock that consists of an uncertificated security or a security in book entry form, (D) the Pledged Stocks shall have been registered or entered, as the case may be, in the name of Lender, or otherwise perfected in favor of Lender in accordance with applicable law.  None of the Pledged Stocks owned or held by Borrower has been issued or transferred in violation of any securities registration, securities disclosure, or similar laws of any jurisdiction to which such issuance or transfer may be subject.

4.1.8No Plan Assets.  As of the Closing Date and throughout the term of the Loan (a) Borrower is not and will not be an “employee benefit plan,” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), whether or not subject to Title I of ERISA, or a “plan” as defined in Section 4975(e)(1) of the Code, whether or not subject to Section 4975 of the Code, (b) none of the assets of Borrower constitute or will constitute “plan assets” of one or more plans described in the foregoing clause (a) within the meaning of U.S. Department of Labor Regulation 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA (the “Plan Assets Regulation”), and (c) transactions by or with Borrower are not and will not be subject to any state statute regulating investments of, or fiduciary obligations with respect to, governmental plans, as defined in Section 3(32) of ERISA.

4.1.9Budget.  The amounts set forth in the Budget present (a) a full and complete itemization by category of all costs, expenses and fees which Borrower reasonably expects to pay or reasonably anticipates becoming obligated to pay in the Ordinary Course of Business through and including the Maturity Date, and (b) all sources of funds available to Borrower.  Borrower is unaware of any other such costs, expenses or fees which are material and are not set forth in the Budget.

4.1.10Financial Information.  All financial data, including, without limitation, the statements of cash flow and income and operating expense, and balance, that have been delivered to Lender in respect of Borrower (i) are true, complete and correct in all material respects, (ii) accurately represent the financial condition of Borrower, as of the date of such reports, in all material respects and (iii) have been prepared in accordance with the Accounting Rules throughout the periods covered, except as disclosed therein.  Borrower does not have any contingent liabilities, liabilities for Taxes, forward or long term commitments or unrealized or anticipated losses that are reasonably likely to result in a Material Adverse Change.  Since December 31, 2019, there has been no Material Adverse

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Change in the financial condition, operations or business of Borrower from that set forth in said financial statements.

4.1.11Taxes and Assessments.  Borrower has filed all federal, state and local tax returns required to be filed and has paid or made adequate provision for the payment of all Taxes payable by Borrower.  Borrower believes that its Tax returns (if any) properly reflect the income and Taxes of Borrower for the periods covered thereby, subject only to reasonable adjustments required by the applicable tax authority upon audit.

4.1.12Other Indebtedness.  Borrower has no Indebtedness (other than Permitted Indebtedness) that has not been heretofore repaid in full.

4.1.13Solvency.  Borrower (a) has not entered into the Loan Documents with the actual intent to hinder, delay or defraud any creditor, and (b) received reasonably equivalent value in exchange for its obligations under the Loan Documents.  As of the date of this Agreement, Borrower is solvent after giving effect to the Debt and the use of proceeds thereof.

4.1.14Investment Company Act.  Borrower is not (a) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended, or (b) out of compliance with any Law that purports to restrict or regulate its ability to borrow money (to the extent that its subject to any such Law).

4.1.15Full and Accurate Disclosure.  No information contained in this Agreement, the other Loan Documents, or any written statement furnished by or on behalf of Borrower pursuant to the terms of this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which they were made.  There is no fact or circumstance presently known to Borrower that has not been disclosed to Lender, which is reasonably likely to constitute a Material Adverse Change.

4.1.16Material Agreements.  No material breach, default or event of default has occurred or is continuing under any Material Agreement, and, no fact, circumstance, condition or event has occurred and is continuing which, with the giving of notice or passage of time or both, would constitute or result in a breach, default or event of default thereunder.  Each Material Agreement is in full force and effect and is valid and enforceable in all respects, subject to the effects of Debtor Relief Laws affecting the enforcement of creditors’ rights generally.  Borrower is not a party to, and is not bound by, any material agreement, document or instrument other than the Loan Documents, the Permitted Encumbrances, the Material Agreements, and Borrower’s organizational documents, which would reasonably be expected to constitute a Material Adverse Change if there occurred a breach thereof or a default or event of default thereunder.

4.1.17OFAC.  Borrower is not a Person (individually, a “Prohibited Person”) listed on any OFAC List or otherwise the target of any other prohibitions or restrictions imposed by any Laws administered by OFAC (collectively the “OFAC Rules”).  Borrower

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(a) is not owned or controlled by a Prohibited Person so that Borrower would be subject to the same prohibitions as applicable to such Prohibited Person, (b) is not acting for or on behalf of a Prohibited Person, and (c) is not providing any material, financial or technological support for or financial or other service to or in support of acts of terrorism for a Prohibited Person, in each of clauses (b) and (c), in violation of OFAC Rules.

Section 4.2Survival of Representations.

Borrower agrees that all of the representations and warranties set forth in Section 4.1 and elsewhere in this Agreement are true in all material respects as of the Closing Date.  It shall be a condition precedent to each Loan Advance that each of said representations and warranties is true and correct in all material respects as of the date of such Loan Advance.  Notwithstanding the foregoing, any representation and warranty which, by its express terms, is made as of a specific date shall only be deemed made as of said date.  All representations and warranties made in this Agreement or any other Loan Document or in any certificate or other document delivered to Lender pursuant to or in connection with this Agreement shall be deemed to have been relied upon by Lender notwithstanding any investigation heretofore or hereafter made by Lender or upon Lender’s behalf.

Article V.  BORROWER COVENANTS

Section 5.1Borrower Affirmative Covenants. Borrower hereby covenants and agrees with Lender that:

5.1.1Existence; Compliance with Laws.  Borrower shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its existence, all Governmental Approvals, Material Agreements and shall comply with all Laws applicable to it and its Subsidiaries the failure of which would reasonably be expected to result in a Material Adverse Change.

5.1.2Litigation.  Borrower shall give prompt actual notice to Lender (which may be verbal) of any litigation or governmental proceedings pending or threatened against Borrower or any of its Subsidiaries, which, if adversely determined, could have a material effect.

5.1.3Further Assurances.  Borrower shall, at Borrower’s sole cost and expense, execute and deliver to Lender such documents, instruments, certificates, assignments and other writings, and do such other acts necessary or desirable, to evidence, preserve and/or protect the Collateral, or to correct any defect, error or omission in any Loan Document, as Lender may reasonably require, and take all such further lawful and reasonable action, and make such conveyances and assurances for the better and more effective carrying out of the intents and purposes of this Agreement and the other Loan Documents, as Lender may reasonably require from time to time.

5.1.4Financial Reporting.

(a)Borrower shall keep and maintain, or shall cause to be kept and maintained, proper and accurate books and records, in accordance with the

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Accounting Rules, reflecting the financial affairs of Borrower and its Subsidiaries.  Lender shall have the right from time to time during normal business hours upon reasonable Notice to Borrower to examine such books and records at the office of Borrower or such other Person maintaining such books and records, and to make such copies or extracts thereof as Lender shall desire;

(b)Upon making any filing with the United States Securities and Exchange Commission, Borrower shall furnish a copy of such filing to Lender; and

(c)Borrower shall furnish to Lender, within ten (10) Business Days after request (or as soon thereafter as may be reasonably possible), such further detailed information with respect to the operation of the business and the financial affairs of Borrower or any of its Subsidiaries as Lender may reasonably request.

5.1.5Use of Proceeds: Borrower shall use the proceeds of the Loan and each Loan Advance solely as permitted by Section 2.1.3 hereof.

5.1.6Collateral.  Borrower shall use commercially reasonable efforts to warrant and defend the validity and priority of the Liens on the Collateral granted pursuant to this Agreement against the claims of all Persons whomsoever.

5.1.7Material Agreements.  To the extent (i) consistent with its Ordinary Course of Business, and (ii) commercially reasonable, Borrower shall (a) promptly give Lender actual notice (which may be verbal) of any default that has been declared by any party to any Material Agreement, and (b) promptly enforce the performance and observance of all of the material covenants and agreements required to be performed and/or observed by the other party under each Material Agreement in a commercially reasonable manner.  Borrower shall promptly perform and observe all of the material covenants and agreements required to be performed and observed by it under each Material Agreement, and use reasonable commercial efforts to preserve and to keep unimpaired its rights thereunder.

5.1.8Insurance.  Borrower shall, and shall cause its Subsidiaries, to obtain and maintain, or cause to be maintained, consistent with its Ordinary Course of Business, insurance coverage for Borrower, such Subsidiaries, and their respective property.

5.1.9Business and Operations.  Borrower shall, and shall cause its Subsidiaries to, continue to engage, in all material respects, in the business currently conducted by it.  Borrower shall, and shall cause its Subsidiaries, to qualify to do business and shall remain in good standing under the laws of each jurisdiction where Borrower or its Subsidiaries, as applicable, is currently qualified to do business and in good standing.

5.1.10OFAC and Anti-Money Laundering Laws.  Borrower shall immediately notify Lender if Borrower has knowledge that any officer, director or Subsidiary of Borrower is or becomes a Prohibited Person or is charged by indictment, criminal complaint, or similar charging instrument under any applicable Anti-Money Laundering Law, provided that such event shall be reportable only if the relevant authority has not requested the relevant entity to keep such charge confidential.  Borrower shall comply in

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all material respects with applicable OFAC Rules and applicable Anti-Money Laundering Laws.

Section 5.2Borrower Negative Covenants.  Borrower covenants and agrees with Lender that:

5.2.1Dispositions.  Without the prior written consent of Lender, Borrower shall not, and shall not permit any of its Subsidiaries to, make a Disposition, or enter into any agreement to make a Disposition, of such Person’s assets to any Person in one transaction or a series of transactions unless such Disposition is (a) in the Ordinary Couse of Business of such Person, (b) of obsolete, worn out, uneconomic, or surplus property or property not presently used in its business, (c) to the extent constituting a Disposition, any transaction permitted by Section 5.2.2, Section 5.2.3, Section 5.2.4, Section 5.2.8, and Section 5.2.11, (d) a Disposition from Borrower to any Subsidiary or from any Subsidiary to the Borrower or any other Subsidiary, (e) a Disposition of equipment to the extent that (1) such equipment is exchanged for credit against the purchase price of similar replacement equipment or (2) the proceeds thereof are promptly applied to the purchase price of such replacement equipment, (f) transfers of property subject to a casualty event or in connection with any condemnation proceeding upon receipt of the net cash proceeds of such casualty event or condemnation proceeding, and (g) a Disposition of accounts receivable in connection with the settlement, collection or compromise thereof.

5.2.2Liens.  Borrower shall not, and shall not permit any of its Subsidiaries to, do, or permit anything to be done, which would terminate or impair the Lien of Lender on a material portion of the Collateral. Borrower shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien on its property or any portion thereof except for Permitted Encumbrances, and Borrower shall, and shall cause its Subsidiaries to, pay when due all claims and demands which, if unpaid, would result in a Lien (other than a Permitted Encumbrance) on its property, even if such Lien is inferior to any or all of the Liens and security interests created by the Loan Documents; provided, however, that Borrower and any of its Subsidiaries may contest the validity of such claims and demands so long as (i) no Event of Default exists, (ii) Borrower notifies Lender in writing that it (or its Subsidiary) intends to contest such claim or demand, (iii) Borrower provides Lender with an indemnity, bond or other security satisfactory to Lender and in accordance with applicable Law to assure the discharge of Borrower’s or such Subsidiary’s obligations for such claims and demands, including interest and penalties, if any, and (iv) Borrower (or its Subsidiary) diligently contests the same by appropriate legal proceedings in good faith and at its own expense and concludes such contest prior to the earlier to occur of (A) in the case of a Lien resulting from the filing of any financing statement or other similar liens or encumbrances, the date set by applicable Law for contesting such Lien, or (B) the thirtieth (30th) day preceding the earlier to occur of (1) the Maturity Date, and (2) the date on which the property is scheduled to be sold for nonpayment of such claims or demand.  So long as such claims and demands are being contested as provided for herein, such claims or demands shall be Permitted Encumbrances.  If Borrower (or its Subsidiary) shall fail to either (i) discharge such Lien, or (ii) cause such Lien to be insured or bonded over, in either case in the manner provided above, Lender may, at its election (but shall not be required to), procure the release and

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discharge of any such claim and any judgment or decree thereon and, further, may in its sole discretion effect any settlement or compromise of the same, and any amounts so expended by Lender, including premiums paid or security furnished in connection with the issuance of any surety company bonds, shall be deemed to constitute a Loan Advance hereunder.  In settling, compromising or discharging any claims, demands or Liens, Lender shall not be required to inquire into the validity or amount of any such claim, demand or Lien.

5.2.3Investments.  Borrower shall not make or permit to remain outstanding any loans or advances to, or investments in, any Person, other than:

(a)loans, advances or investments arising or made in the Ordinary Course of Business;

(b)loans, advances, or investments existing on, or made pursuant to legally binding written commitments in existence on, the Closing Date, and any extensions, renewals, or reinvestments thereof (so long as the amount thereof is not increased pursuant to such extension, renewal, or reinvestment);

(c)loans, advances, or investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit or in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

(d)loans, advances, or investments by Borrower in any Subsidiary or by any Subsidiary in Borrower or any other Subsidiary; and

(e)Permitted Investments.

5.2.4Restricted Payments.  Borrower shall not, and shall not permit any of its Subsidiaries to, make any Restricted Payment, or make any deposit for any Restricted Payment; provided, however that:

(a)any Subsidiary of Borrower may make a Restricted Payment to Borrower or such Subsidiary’s direct parent company;

(b)Borrower may declare and pay dividends on Borrower’s 12% Series A Convertible Redeemable Preferred Shares in accordance with the terms and provisions of the Certificate of Designations of the 12.0% Series A Convertible Redeemable Preferred Shares of Borrower;

(c)to the extent constituting Restricted Payments, Borrower or any Subsidiary may make loans, advances, or investments permitted by Section 5.2.3 and Section 5.2.10; and

(d)Borrower and any Subsidiary may make other Restricted Payments in the Ordinary Course of Business.

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5.2.5Material Changes.  Borrower shall not, and shall not permit any of its Subsidiaries to, (i) change its name, jurisdiction of formation or its principal place of business from the address set forth on the first page of this Agreement without giving Lender thirty (30) days’ prior Notice (other than in connection with the Merger), (ii) permit or suffer a material amendment or modification of its organizational documents (other than in connection with the Merger), or (iii) remove N. Malone Mitchell 3rd as an officer or materially limit his authority in such office, other than for good cause.

5.2.6Additional Debt; Debt Cancellation.  Borrower shall not, and shall not permit any of its Subsidiaries to, incur any Indebtedness, other than:

(a)the Debt and the Guarantees;

(b)Indebtedness set forth on Schedule 5.2.6 hereto and any other Indebtedness incurred in the Ordinary Course of Business;

(c)Indebtedness outstanding on the Closing Date and any refinancings, refundings, renewals, or extensions thereof (so long as the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder);

(d)purchase money Indebtedness, Indebtedness of Borrower or any Subsidiary under capital lease obligations, and extensions, renewals, refinancing, and replacements of any such Indebtedness that do not increase the aggregate principal amount thereof (except by an amount equal to outstanding interest, premiums, fees and expenses incurred with regard to such Indebtedness being extended, renewed, refinanced or replaced), provided that the aggregate principal amount of Indebtedness permitted by this clause (d) shall not exceed $1,000,000  in the aggregate at any one time outstanding;

(e)Indebtedness of Borrower owed to any Subsidiary or of any Subsidiary owed to Borrower or any other Subsidiary to the extent such Indebtedness is subordinated to the Debt; and

(f)guarantees of Borrower or any Subsidiary in respect of any Indebtedness otherwise permitted hereunder (the Indebtedness described in the preceding clauses (b) through (f), the “Permitted Indebtedness”).  

Borrower shall not, and shall not permit any of its Subsidiaries to make any voluntary prepayment in respect of such Permitted Indebtedness that is subordinated in right of payment to the Debt.  No Indebtedness other than the Debt may be secured by the Collateral, whether senior, subordinate or pari passu, subject to any Permitted Encumbrances.  Borrower shall not cancel or otherwise forgive or release any claim or Indebtedness owed to Borrower by any Person, except for adequate consideration and in the Ordinary Course of Business of Borrower or as otherwise permitted hereunder.

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5.2.7Material Agreements.  Borrower shall not, and shall not permit any of its Subsidiaries to, without Lender’s prior written consent (which shall not be unreasonably withheld, conditioned, or delayed):  (a) enter into, surrender or terminate any Material Agreement to which it is a party (unless the other party thereto is in material default); or (b) modify, change, supplement, alter or amend, or waive or release any of its rights and remedies under, any Material Agreement to which it is a party, in each case, in any material respect and other than in the Ordinary Course of Business.

5.2.8Sale and Leaseback.  Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into any agreement or arrangement providing for the sale or transfer by it of any property (now owned or hereafter acquired) to a Person (other than the Borrower or any Subsidiary) and the subsequent lease or rental of such property or other similar property from such Person, other than any such transactions existing on the Closing Date and any renewals, replacements, or extensions thereof.

5.2.9OFAC and Anti-Money Laundering Laws.  Borrower shall not, and shall not permit any of its Subsidiaries to, become a Prohibited Person listed on any OFAC List or otherwise become the target of the OFAC Rules.  Borrower represents and covenants that neither it, nor any of its Subsidiaries, will (a) become Controlled by a Prohibited Person so that the Borrower becomes subject to the same prohibitions as such Prohibited Person, (b) act for or on behalf of a Prohibited Person, or (c) provide any material, financial or technological support for, or financial or other service to, or in support of, acts of terrorism for a Prohibited Person, in each of clauses (b) and (c) to the extent such would be a violation of OFAC Rules.  Borrower shall not, and shall not permit any of its Subsidiaries to, permit any interest in Borrower or any of its Subsidiaries to be transferred to a Prohibited Person to the extent such transfer would be a violation of OFAC Rules.  Borrower shall not enter into any transaction or undertake any activities related to the Debt in violation of the Anti-Money Laundering Laws. Borrower shall not (A) use or permit the use of any Loan Advance in any way that will violate either the OFAC Rules or applicable Anti-Money Laundering Laws, or (B) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding or attempts to violate, any of the foregoing.

5.2.10Negative Pledge Agreements.  Borrower shall not create, incur, assume or permit to exist any written contract or agreement (other than the Loan Documents and any Permitted Encumbrances) which in any way prohibits or restricts the granting, conveying, creation or imposition of any Lien on a material portion of the Collateral, or which requires the consent of other Persons in connection therewith, in each case other than any such contract or agreement existing on the Closing Date and any renewals, replacements, or extensions thereof.

5.2.11Consolidation, Merger, etc.  Other than in accordance with the Merger Agreement, Borrower shall not, and shall not permit any of its Subsidiaries to liquidate or dissolve, undergo a division (or similar transaction), consolidate with, or merge into or with, any other Person, or purchase or otherwise acquire all or substantially all of the assets of any Person or any division of any Person.

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Article VI.  BUDGET

Section 6.1Budget.

Lender shall make Loan Advances in accordance with the Budget.  Borrower shall apply Loan Advances in accordance with the Budget (subject to permitted variances).  The Budget shall specify all costs and expenses of every kind and nature whatsoever to be incurred by Borrower in connection with the operation of Borrower in the ordinary course and shall include all sources of funds to pay such costs and expenses.  The initial Budget has been delivered to and accepted by Lender.  Borrower shall provide timely Notice to Lender of any change, noncompliance, or expected change or noncompliance, with the Budget.  Borrower and Lender shall use commercially reasonable efforts to agree to any requested modification to the Budget by Borrower.  Upon agreement, the Budget, as modified, shall be the “Budget.”  If Borrower and Lender are unable to agree to a requested modification of the Budget, the prior agreed Budget shall remain the “Budget”; provided, however, that Borrower shall be permitted line-item variances of up to ten percent (10%) and a total Loan Balance variance of up to ten percent (10%).  In no event shall the Loan exceed the Commitment Amount.

Section 6.2Budget Line Items.

(a)Borrower agrees that Loan Advances shall be used only for the line items in the Budget (“Budget Line Items”) for which such Loan Advances were made and shall not exceed the Monthly Operating Expense Budgeted Amount for the month in which such Loan Advance is made, subject to permitted variances.

(b)Borrower shall have the right to reallocate cost savings to other Budget Line Items.

Article VII.  DEFAULTS

Section 7.1Events of Default.  Each of the following events shall constitute an event of default hereunder (each, an “Event of Default”): provided that notwithstanding anything contained herein or in any other Loan Document to the contrary, in no event shall an Event of Default have occurred for any purpose under this Agreement (except in the case of clause (a)(iii) below) or any other Loan Document if the actions taken (or omitted to be taken) are directly authorized, approved or directed by, or taken (or omitted to be taken) by an employee or representative of the Borrower or any of its Subsidiaries with the actual knowledge of, N. Malone Mitchell 3rd in his capacity as director of the Borrower, Chairman of the Borrower Board or Chief Executive Officer of the Borrower (for the avoidance of doubt, an action taken by the Borrower without the actual knowledge of N. Malone Mitchell 3rd shall not be deemed an action directly authorized, approved or directed by N. Malone Mitchell 3rd):

(a)(i)Payment.  Borrower shall fail to make any payment hereunder or under any Loan Document when due whether on the scheduled due date or upon acceleration, maturity or otherwise and such default shall continue unremedied for a period of three (3) Business Days after such amount is due.

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(ii)Voluntary Bankruptcy; Appointment of Receiver, etc.  (1) Borrower commences a voluntary case under the Bankruptcy Code or other Debtor Relief Law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case or to the conversion of an involuntary case to a voluntary case under any such Law, or takes any action in furtherance of any of the foregoing, or (2) Borrower seeks or consents to the appointment of a receiver, trustee, custodian, liquidator or other officer having similar powers, for all or a substantial part of its property or any portion thereof; or (3) Borrower makes any assignment for the benefit of creditors, or takes any action in furtherance thereof; or (4) Borrower admits in writing the inability to pay, or fails to pay, its debts generally as they become due.

(iii)Involuntary Bankruptcy; Appointment of Receiver, etc.  (1) A court enters a decree or order for relief with respect to Borrower in an involuntary case under the Bankruptcy Code or other Debtor Relief Law now or hereafter in effect, which decree or order is not stayed or other similar relief is not granted under any applicable Law; or (2) the occurrence of any of the following events:  (i) an involuntary case is commenced against Borrower under the Bankruptcy Code or other Debtor Relief Law now or hereafter in effect; or (ii) a decree or order of a court for the appointment of a receiver, trustee, custodian, liquidator, or other officer having similar powers over Borrower or over all or a substantial part of its property, is entered, and Borrower either (x) admits, acquiesces in or fails to timely and diligently contest the allegations thereof, or (y) fails to have the case, petition, proceeding or other action dismissed or discharged within ninety (90) days of the commencement thereof. Notwithstanding anything herein or in any other Loan Document to the contrary, no default or Event of Default may result under this Section 7.1(a)(iii) if any event, action, or circumstance which would otherwise trigger an Event of Default under this Section 7.1(a)(iii) was initiated, approved, pursued, or supported by Lender.

(iv)Invalidity of Loan Documents.  Any of the Loan Documents, for any reason, ceases to be in full force and effect or is declared to be null and void by a court of competent jurisdiction, only if such failure or declaration results in the Lien purported to be created hereunder on the Collateral to cease being enforceable against a material portion of the Collateral, or Borrower or any Guarantor denies that it has any further liability under any Loan Document to which it is party, or gives notice to such effect.

(v)Termination or Invalidity of Merger Agreement.  Borrower terminates the Merger Agreement.

(vi)Invalidity of Lien.  Lender shall cease to have a first-priority perfected security interest in a material portion of the Collateral.

(vii)Judgments and Attachments.  Any material money judgment, writ or warrant of attachment, or similar process is entered or filed against Borrower or any Guarantor or any of their respective property and remains undischarged, unvacated, unbonded, uninsured or unstayed for a period of thirty (30) days or in any event less than five (5) days prior to the date of any proposed sale thereunder.

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(viii)Injunction.  Borrower or any Guarantor is enjoined, restrained or prevented from acting in accordance with the Loan Documents in any material respect, by any court order and such injunction, restraint or other event is not vacated within thirty (30) days.

(ix)Default Under Guarantee.  There shall be a material default by Guarantor under any material term, covenant or provision of any Guarantee beyond any applicable cure periods contained in such Guarantee.

(x)Default Under Other Indebtedness.  A default beyond any applicable cure period or at maturity by Borrower or any Guarantor in any payment of principal or interest on any material Indebtedness (other than the Debt), or in the performance of any other material obligation set forth in the documents evidencing or securing such material Indebtedness.

(xi)Breach of Certain Provisions.

(A)Borrower breaches or permits or suffers a breach of any covenant set forth in Section 5.2;

(B)Borrower fails to comply with Section 5.1.4 (Financial Reporting) and such failure continues for ten (10) days after Notice from Lender;

(C)Borrower fails to perform its obligations under Section 8.1(f) (Cooperation) and such failure continues for five (5) Business Days after Notice to Borrower from Lender.

(xii)Default Under Other Loan Documents or Material Agreements.  There shall be a material default by Borrower under any term, covenant or provision of any other Material Agreement or Loan Document that is a Material Agreement beyond any applicable cure periods contained in such Loan Document or Material Agreement.

(xiii)Other Defaults Under this Agreement.  Borrower shall continue to be in default or breach under any of the other terms, covenants or conditions of this Agreement not specified in this Section 7.1, for ten (10) days after Notice to Borrower from Lender, in the case of any Default which can be cured by the payment of a sum of money, or thirty (30) days after Notice from Lender in the case of any other Default; provided, however, that if such non-monetary Default is susceptible of cure, but cannot reasonably be cured within such thirty (30) day period and provided further that Borrower shall have commenced to cure such Default within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period shall be extended for such time as is reasonably necessary for Borrower to cure such Default; provided, however, that in no event shall such additional period exceed sixty (60) days.

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Section 7.2Remedies.

(a)When any Event of Default (other than those described in Section 7.1(a)(ii), Section 7.1(a)(iii) or Section 7.1(a)(v) with respect to Borrower) has occurred and is continuing, Lender may exercise any of the following rights and remedies:  (a) terminate the Unused Commitment and all other obligations of Lender hereunder; (b) declare the Debt to be forthwith due and payable and thereupon the Debt shall be and become immediately due and payable together with all other amounts payable under the Loan Documents without further demand, presentment, protest or notice, of any kind, (c) use and apply against the Debt, to the extent thereof and as permitted by applicable Law, all amounts on deposit in the Accounts, cash, letters of credit or other assets in which Lender has been granted a security interest pursuant to any Loan Document, or (d) any other rights and remedies afforded by this Agreement, any other Loan Document, or at Law or in equity.

(b)When any Event of Default described in Section 7.1(a)(ii), Section 7.1(a)(iii) or Section 7.1(a)(v) has occurred and is continuing, the Debt shall immediately become due and payable together with all other amounts payable under the Loan Documents without presentment, demand, protest or notice of any kind, and the Unused Commitment shall immediately terminate.

(c)When any Event of Default has occurred and is continuing, Lender shall have the right, at any time in its discretion and without notice to Borrower, to transfer to or to register on the books of the Pledged Companies (or of any other Person maintaining records with respect to the Pledged Stocks) in the name of Lender or its nominee any or all of the Pledged Stocks.  In addition, Lender shall have the right at any time to exchange certificates or instruments representing or evidencing Pledged Stocks for certificates or instruments of smaller or larger denominations.  Borrower shall have no further voting rights or the right to receive and retain cash dividends or distributions with respect to the Pledged Stocks and Lender shall have, at Lender’s option, the right but not the obligation to exercise all voting rights and all other rights associated with the Pledged Stocks and receive and retain cash dividends or distributions with respect to the Pledged Stocks.  With respect to the actions, voting rights, and other rights and powers in connection with the Pledged Stocks available to Lender at his election upon the occurrence of an Event of Default, as described above in this Section 7.2(c), Borrower irrevocably constitutes and appoints Lender as their proxy and attorney-in-fact with full power of substitution and acknowledge that the constitution and appointment of such proxy and attorney-in-fact are coupled with an interest and are irrevocable.

Section 7.3Remedies Cumulative.

The rights, powers and remedies of Lender under this Agreement shall be cumulative and not exclusive of any other right, power or remedy which Lender may have against Borrower pursuant to this Agreement or the other Loan Documents, or existing at law or in equity or otherwise.  Lender’s rights, powers and remedies may be pursued singly, concurrently or

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otherwise, at such time and in such order as Lender may determine in Lender’s sole discretion to the fullest extent permitted by law, without impairing or otherwise affecting the other rights and remedies of Lender permitted by law or as set forth herein or in any other Loan Document.  No delay or omission to exercise any remedy, right or power accruing upon an Event of Default shall impair any such remedy, right or power or shall be construed as a waiver thereof, but any such remedy, right or power may be exercised from time to time and as often as may be deemed expedient.  A waiver of one Default or Event of Default shall not be construed to be a waiver of any subsequent Default or Event of Default or impair any remedy, right or power consequent thereon.

Article VIII.  MISCELLANEOUS

Section 8.1Successors and Assigns.

(a)Successors and Assigns.  All covenants, promises and agreements in this Agreement shall inure to the benefit of the permitted successors and assigns of each party hereto. Neither Borrower nor Lender shall assign or otherwise transfer any of its rights or obligations under any Loan Document, and any such assignment shall be void.

(b)Sales and Participations.  Lender may, at any time, sell, assign or grant participations in all or any portion of Lender’s rights and obligations under the Loan Documents to any Preferred Shareholder Investor (as defined in the Merger Agreement) or Affiliate of any Preferred Shareholder Investor.  In connection with any such sale or assignment, the Loan Documents shall be sufficient evidence of the obligations of Borrower to each purchaser or assignee, and upon written request by Lender, Borrower shall enter into such amendments or modifications to the Loan Documents as may be required in order to evidence any sale or assignment, and to the extent, if any, specified in any such sale or assignment, such assignee(s) shall have the same rights and benefits with respect to the Loan Documents as such Person(s) would have if such Person(s) were Lender hereunder.  The indemnity obligations of Borrower under the Loan Documents shall also apply with respect to such purchaser, assignee or participant.

(c)Pledge by Lender.  Lender may at any time pledge or grant a security interest in all or any portion of its rights under this Agreement and the other Loan Documents to secure obligations of Lender under this Agreement or the Merger Agreement; provided that no such pledge or grant of a security interest shall release Lender from any of its obligations hereunder or substitute any such pledgee or Lender for Lender as a party hereto; provided further, however, the right of any such pledgee or grantee to further transfer all or any portion of the rights pledged or granted to it, whether by means of foreclosure or otherwise, shall be at all times subject to the terms of this Agreement.

(d)Offsets, Counterclaims and Defenses.  Any permitted assignee of Lender’s interest in and to this Agreement and the other Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated

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to such documents which Borrower may otherwise have against Lender, and no such unrelated counterclaim or defense shall be interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon such documents and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrower.

(e)Disclosure.  Lender may, in connection with any permitted assignment or participation or proposed assignment or participation, disclose to the assignee or participant or proposed assignee or participant, as the case may be, any information relating to Borrower or any of its respective Affiliates or any aspect of the Loan that has been furnished to Lender by or on behalf of Borrower or any of its respective Affiliates pursuant to this Agreement.

(f)Cooperation.  In connection with any permitted assignment or transfer of participation of the Loan or any portion thereof, Borrower shall use all reasonable efforts and cooperate fully and in good faith, with Lender and otherwise assist Lender in consummating any such assignment or transfer of participation.

Section 8.2Governing Law.  This Agreement shall be construed in accordance with and governed by the internal laws (and not the law of conflicts) of the State of Texas.

Section 8.3Jurisdiction, Venue and Consent of Process.

(a)Consent to Jurisdiction.  Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any United States federal or Texas state court sitting in Dallas, Texas, and any appellate court in such jurisdiction, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Texas state or, to the extent permitted by Law, in such federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.  Nothing in this Agreement shall affect any right that Lender may otherwise have to bring any action or proceeding relating to this Agreement against Borrower or its properties in the courts of any jurisdiction.

(b)Consent and Waiver of Objection to Venue.  Each party hereto hereby irrevocably and unconditionally agrees that the exclusive venue for any action or proceeding arising out of or relating to this Agreement shall be in any United States federal or Texas state court sitting in Dallas, Texas, and any appellate court from any thereof.  Each party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in this Section 8.3(b).  Each party hereto hereby irrevocably waives, to the fullest extent permitted by Law,

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the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.  Nothing contained in this Section 8.3(b) shall bar, prevent or prejudice Lender from commencing and maintaining any action or proceeding arising out of or relating to this Agreement in any other court or venue as applicable Law may permit or require.

Section 8.4Amendments.  Any provision of this Agreement and the other Loan Documents that Borrower is a party to may be amended, supplemented, or otherwise modified or waived if, but only if, such amendment or waiver is in writing and is signed by Lender and Borrower.

Section 8.5Delay Not a Waiver.  Neither any failure nor any delay on the part of Lender in insisting upon strict performance of any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege hereunder, or under any other Loan Document, shall operate as or constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other future exercise, or the exercise of any other right, power, remedy or privilege.  In particular, and not by way of limitation, by accepting payment after the due date of any amount payable under this Agreement or any other Loan Document, Lender shall not be deemed to have waived any right either to require prompt payment when due of all other amounts due under this Agreement or the other Loan Documents, or to consider such failure to effect prompt payment of any such other amount an Event of Default.

Section 8.6Notices.  All notices and other communications (any of the foregoing, a “Notice”) required, permitted, or desired to be given hereunder shall be in writing and sent by hand delivery, registered or certified mail, postage prepaid, return receipt requested, by nationally recognized overnight courier, or electronic mail addressed to the party to be so notified at its address hereinafter set forth, or to such other address as such party may hereafter specify in accordance with the provisions of this Section.  Any Notice shall be deemed to have been received:  (a) when delivered, if hand delivered, (b) three (3) days after the date such Notice is mailed, if sent by registered or certified mail, postage prepaid, return receipt requested, (c) on the next Business Day, if sent by an overnight commercial courier, or (d) immediately if sent by electronic mail (so long as such Notice is received the next following Business Day pursuant to another method of delivery permitted hereunder), in each case addressed to the parties as follows:

If to Lender:	Dalea Investment Group, LLC 16803 Dallas Parkway Addison, Texas 75001 Attention:  Michael S. Haynes Email:  michael.haynes@riatacg.com
with a copy to:	Foley & Lardner LLP 2021 McKinney Avenue, Suite 1600 Dallas, Texas 75201-3340 Attention:  Robert Sarfatis Email:  rsarfatis@foley.com

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If to Borrower:	TransAtlantic Petroleum Ltd. 16803 Dallas Parkway Addison, Texas 75001 Attention:  Tabitha Bailey Email:  tabitha.bailey@tapcor.com
with a copy to:	Akin Gump Strauss Hauer & Feld LLP 2300 N. Field Street, Suite 1800 Dallas, Texas 75201 Attention:  Garrett A. DeVries Email:  gdevries@akingump.com

Notwithstanding anything to the contrary herein or in any other Loan Document, any Notice required to be given to Lender hereunder or under any other Loan Document shall be deemed to have been given at any time N. Malone Mitchell 3rd becomes aware of the information or communication required to be provided by such Notice.

Section 8.7Trial by Jury.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED IN CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 8.8Headings.  The Article and/or Section headings and the Table of Contents in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

Section 8.9Severability.  Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement shall be prohibited by, or invalid under, applicable Law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement, and to that end, the provisions of this Agreement are declared to be severable.

Section 8.10Preferences.  Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all payments by Borrower to any portion of the obligations of Borrower hereunder.  To the extent Borrower makes a payment to Lender, which payment or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under the Bankruptcy Code or any Law or in equity, then, to the extent of such payment, the obligations hereunder intended to be

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satisfied shall be revived and continue in full force and effect, as if such payment had not been received by Lender.

Section 8.11Waiver of Notice.  Borrower hereby expressly waives the right to receive any Notice from Lender with respect to any matter for which this Agreement or the other Loan Documents do not specifically and expressly provide for the giving of Notice by Lender to Borrower except for matters with respect to which Lender is required by applicable Law to give notice to Borrower.

Section 8.12Expenses.  Borrower shall pay (i) up to a maximum of $50,000, all reasonable and documented out of pocket expenses incurred by Lender and its Affiliates, including the reasonable fees, charges and disbursements of one counsel for Lender, in connection with the preparation, execution and administration of this Agreement and the other Loan Documents, or any extensions, amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and (ii) all documented out-of-pocket expenses incurred by Lender, including the fees, charges and disbursements of any counsel for Lender, in connection with the enforcement or protection of its rights in connection with this Agreement and the other Loan Documents, including its rights under this Section, or in connection with the Debt, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of the Debt.

Section 8.13Indemnity.  Borrower shall indemnify, defend and hold harmless Lender, and its Affiliates, and their respective permitted successors and assigns, including the directors, officers, partners, members, shareholders, participants, employees, agents and advisors (each, an “Indemnified Party”), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the fees and disbursements of counsel for an Indemnified Party), that may be imposed on, incurred by, or asserted against any Indemnified Party (collectively, the “Indemnified Liabilities”) in any manner, relating to or arising out of, in connection with or as a result of:  (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or under any other Loan Document, or the consummation of the transactions contemplated hereby or under any other Loan Document, (ii) the Loan or the use of any Loan Advance, or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based in contract, tort or any other theory and regardless of whether any Indemnified Party is a party thereto;  provided, however, that Borrower shall not have any obligation to any Indemnified Party hereunder to the extent that such Indemnified Liabilities arose from the gross negligence or willful misconduct of such Indemnified Party, as determined by a final, non-appealable judgment of a court of competent jurisdiction.  Any amounts payable to any Indemnified Party by reason of the application of this paragraph shall be payable within five (5) days after demand therefor.  The obligations and liabilities of Borrower under this Section 8.13 shall survive the term of the Loan and the exercise by Lender of any of its rights or remedies under the Loan Documents.

Section 8.14Schedules and Exhibits Incorporated.  The Schedules and Exhibits annexed hereto are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.

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Section 8.15No Joint Venture or Partnership; No Third-Party Beneficiaries; Waiver of Consequential Damages.

Borrower and Lender intend that the relationships created hereunder and under the other Loan Documents be solely that of borrower and lender.  Nothing herein or therein is intended to create a joint venture, partnership, tenancy in common, joint tenancy or fiduciary relationship between Borrower and Lender.  Without limiting the generality of the foregoing:

Except as otherwise set forth in Section 8.1, (i) this Agreement and the other Loan Documents are solely for the benefit of Lender and nothing contained in this Agreement or the other Loan Documents shall be deemed to confer upon anyone other than Lender any right to insist upon or to enforce the performance or observance of any of the obligations contained herein or therein; and (ii) all conditions to the obligations of Lender to make the Loan hereunder are imposed solely and exclusively for the benefit of Lender and no other Person shall have standing to require satisfaction of such conditions in accordance with their terms or be entitled to assume that Lender will refuse to make any Loan Advance in the absence of strict compliance with any or all such conditions and no other Person shall under any circumstances be deemed to be a beneficiary of such conditions.

To the fullest extent permitted by applicable Law, Borrower agrees not to assert, and hereby waives, in any legal action or other proceeding, any claim against Lender, on any theory of liability, for indirect, consequential, exemplary or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, the Loan or any Loan Advance.

Section 8.16Waiver of Offsets/Defenses/Counterclaims.  Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or its agents or otherwise to offset any obligations to make the payments required by the Loan Documents.  No failure by Lender to perform any of its obligations hereunder shall be a valid defense to, or result in any offset against, any payments that Borrower is obligated to make under any of the Loan Documents.

Section 8.17Conflict; Construction of Documents; Reliance.  In the event of any conflict between the provisions of this Agreement and any of the other Loan Documents, the provisions of this Agreement shall control.  The parties hereto acknowledge that they were represented by competent counsel in connection with the negotiation, drafting and execution of the Loan Documents and that such Loan Documents shall not be subject to the principle of construing their meaning against the party that drafted same.  Borrower acknowledges that, with respect to this Agreement, it shall rely solely on its own judgment and advisors in entering into this Agreement without reliance in any manner on any statements, representations or recommendations of Lender or Affiliate of Lender.  Lender shall not be subject to any limitation whatsoever in the exercise of any rights or remedies available to it under any of the Loan Documents or any other agreements or instruments which govern the Debt and Borrower hereby

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irrevocably waives the right to raise any defense or take any action on the basis of the foregoing with respect to Lender’s exercise of any such rights or remedies.

Section 8.18Brokers and Financial Advisors.  Borrower hereby represents that it has not dealt with any financial advisors, brokers, underwriters, placement agents, agents or finders in connection with the transactions contemplated by this Agreement.  To the extent provided in Section 8.13, Borrower shall indemnify, defend and hold Lender harmless from and against any and all claims, liabilities, costs and expenses of any kind (including Lender’s attorneys’ fees and expenses) in any way relating to or arising from a claim by any Person that such Person acted on behalf of Borrower or Lender in connection with the transactions contemplated herein.  The provisions of this Section 8.18 shall survive the expiration and termination of this Agreement and the payment of the Debt.

Section 8.19Recourse.  Borrower shall be fully liable, on a recourse basis, to Lender for repayment of all amounts due hereunder and under the Loan Documents.

Section 8.20Prior Agreements.  This Agreement and the other Loan Documents contain the entire agreement of the parties hereto and thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements, understandings and negotiations among or between such parties, whether oral or written, are superseded by the terms of this Agreement and the other Loan Documents.

Section 8.21Time is of the Essence.  Time is of the essence under this Agreement.

Section 8.22Set Off.  In addition to any rights and remedies of Lender provided by this Agreement and by Law, Lender shall have the right, upon the occurrence of an Event of Default, without prior Notice to Borrower, any such Notice being expressly waived by Borrower to the extent permitted by applicable Law, to set off and appropriate and apply against such amount any and all amounts, at any time held or owing by Lender or any Affiliate thereof to or for the credit or the account of Borrower.  Lender agrees promptly to notify Borrower after any such set off and application made by Lender; provided that the failure to give such Notice shall not affect the validity of such set off and application.

Section 8.23Records.  The unpaid amount of the Debt and the amount of any other credit extended by Lender to or for the account of Borrower set forth on the books and records of Lender shall be presumptive evidence of the amount thereof owing and unpaid, but failure to record any such amount on Lender’s books and records shall not limit or affect the obligations of Borrower under the Loan Documents to make payments on the Debt when due.

Section 8.24Counterparts; Electronic Delivery of Signature Pages.  This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart.  Delivery of an executed signature page of this Agreement and the other Loan Documents by electronic means shall be effective as delivery of an original executed signature page of this Agreement and such other Loan Documents and shall be binding on the parties hereto and thereto.

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

LENDER:

DALEA INVESTMENT GROUP, LLC

a Texas limited liability company

By:/s/ N. Malone Mitchell 3^rd                   

Name: N. Malone Mitchell 3^rd

Title:   Manager

Transatlantic Petroleum Ltd.

Signature Page to Loan Agreement

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

BORROWER:

TRANSATLANTIC PETROLEUM LTD.
a Bermuda limited company

By:/s/ Tabitha T. Bailey                   

Name: Tabitha T. Bailey

Title:   Vice President, General Counsel, and Corporate Secretary

Transatlantic Petroleum Ltd.

Signature Page to Loan Agreement

EXHIBIT A

FORM OF PROMISSORY NOTE

PROMISSORY NOTE

U.S. $8,000,000.00_________ __, 2020

For Value Received, the undersigned, TRANSATLANTIC PETROLEUM LTD, a Bermuda limited company (“Borrower”), hereby promises to pay to DALEA INVESTMENT GROUP, LLC, a Texas limited liability company (“Lender”), or its successors and assigns, pursuant to that certain Loan Agreement dated as of August 7, 2020 by and between Borrower and Lender (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”), at the address of Lender at 16803 Dallas Parkway, Addison, Texas 75001 (or such other location as Lender may designate to Borrower), in immediately available funds, the principal sum of EIGHT MILLION AND NO/100 DOLLARS ($8,000,000.00) or, if less, the aggregate unpaid principal amount of the Loan, together with interest on the principal amount of each Loan Advance from time to time outstanding hereunder at the rates, and payable in the manner and on the dates, specified in the Loan Agreement.

This Note and the holder hereof are entitled to all the benefits and security provided in or pursuant to the Loan Agreement.  All defined terms used in this Note, except terms otherwise defined herein, shall have the same meaning as in the Loan Agreement.  This Note shall be governed by and construed in accordance with the internal laws of the State of Texas.

This Note may be declared due prior to the expressed maturity hereof, all in the events, on the terms and in the manner as provided for in the Loan Agreement.

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Borrower hereby waives demand, presentment, protest or notice of any kind hereunder.

TRANSATLANTIC PETROLEUM LTD. a Bermuda limited company
By:
	Name:
	Title:

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EXHIBIT B-1

GUARANTEE OF TRANSATLANTIC WORLDWIDE, LTD.

 

GUARANTEE

(TRANSATLANTIC WORLDWIDE, LTD.)

THIS GUARANTEE, dated as of August 7, 2020 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Guarantee”), is made  by TRANSATLANTIC WORLDWIDE, LTD., a Bahamas international business company (“Guarantor”) in favor of DALEA INVESTMENT GROUP, LLC, a Texas limited liability company (the “Lender”).

RECITALS:

A.Lender and TransAtlantic Petroleum Ltd., a Bermuda exempted company (“Borrower”), are parties to that certain Loan and Security Agreement dated of even date herewith (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”), pursuant to which Lender has agreed to make a loan to Borrower in an aggregate principal amount up to EIGHT MILLION AND NO/100 DOLLARS ($8,000,000.00) to finance the working capital needs of Borrower and its subsidiaries as set forth therein.

B.Guarantor is a wholly-owned subsidiary of Borrower.

C.As additional security and in order to further induce Lender to make a loan to Borrower pursuant to the Loan Agreement, Guarantor has agreed to enter this Guarantee pursuant to the terms and conditions set forth below.

D.The term “Obligations” is used herein in its most comprehensive sense and includes any and all debts, obligations, and liabilities of Borrower to Lender pursuant to the Loan Agreement, heretofore, now, or hereafter made, incurred, or created, whether voluntary or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, secured or unsecured, whether Borrower is liable individually or jointly with others, whether for principal, interest or other debts, obligations or liabilities, and whether or not any or all such debts, obligations and liabilities are or become barred by any statute of limitations or otherwise unenforceable.

COVENANTS:

IN CONSIDERATION OF these premises and any credit or financial accommodation now or hereafter granted by Lender to Borrower, it is agreed that:

1.Guarantor hereby: (a) unconditionally guarantees the full and prompt payment and performance of the Obligations when due, whether by acceleration or otherwise, or (if earlier) at the time Borrower becomes the subject of bankruptcy or other insolvency

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proceedings; (b) agrees to pay all documented out-of-pocket costs, expenses and reasonable attorneys’ fees incurred by Lender in enforcing this Guarantee and the Obligations and realizing on any collateral for either; and (c) agrees to pay to Lender the amount of any payments made to Lender or another in connection with any of the Obligations which are recovered from Lender by a trustee, receiver, Lender or other party pursuant to applicable law.

2.This is a guarantee of payment, and not of collection.  Lender shall not be obligated to:  (a) take any steps whatsoever to collect from, or to file any claim of any kind against, Borrower, any guarantor, or any other person or entity liable for payment or performance of any of the Obligations; (b) take any steps whatsoever to protect, accept, obtain, enforce, take possession of, perfect its interest in, foreclose or realize on collateral or security, if any, for the payment or performance of any of the Obligations or any guarantee of any of the Obligations; or (c) in any other respect exercise any diligence whatsoever in collecting or attempting to collect any of the Obligations by any means.

3.Guarantor’s liability for payment and performance of the Obligations shall be absolute and unconditional. Guarantor unconditionally and irrevocably waives each and every defense which, under principles of guarantee or suretyship law, would otherwise operate to impair or diminish such liability and nothing whatsoever except actual full payment and performance to Lender of the Obligations shall operate to discharge Guarantor’s liability hereunder.  Without limiting the generality of the foregoing, Lender shall have the exclusive right, which may be exercised from time to time without diminishing or impairing the liability of Guarantor in any respect, and without notice of any kind to Guarantor, to:  (a) extend any additional credit to Borrower; (b) accept any collateral, security or guarantee for any Obligations or any other credit; (c) determine how, when and what application of payments, credits and collections, if any, shall be made on the Obligations and any other credit and accept partial payments; (d) determine what, if anything, shall at any time be done with respect to any collateral or security; perfect or fail to perfect any lien or security interest; subordinate, sell, transfer, surrender, release or otherwise dispose of all or any of such collateral or security; and purchase or otherwise acquire any such collateral or security at foreclosure or otherwise; and (e) with or without consideration grant, permit or enter into any waiver, amendment, extension, modification, refinancing, indulgence, compromise, settlement, subordination, discharge or release of:  (i) any of the Obligations and any agreement relating to any of the Obligations; (ii) any obligations of any guarantor or other person or entity liable for payment or performance of any of the Obligations, and any agreement relating to such obligations; and (iii) any collateral or security or agreement relating to collateral or security for any of the foregoing.

4.Guarantor hereby unconditionally waives: (a) presentment, notice of dishonor, protest, demand for payment and all notices of any kind, including without limitation:  notice of acceptance hereof; notice of the creation of any of the Obligations; notice of nonpayment, nonperformance or other default on any of the Obligations; and notice of any action taken to collect upon or enforce any of the Obligations; (b) any subrogation to the rights of Lender against Borrower and any other claim against Borrower which arises as a result of payments made by Guarantor pursuant to this Guarantee, until the Obligations have been paid or performed in full (other than indemnification, reimbursement or contingent obligations for which no claim has been asserted); (c) any claim for contribution against any co‑guarantor, until the Obligations have been paid or performed in full (other than indemnification, reimbursement or contingent obligations for

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which no claim has been asserted); and (d) any setoffs or counterclaims against Lender which would otherwise impair Lender’s rights against Guarantor hereunder.

5.Guarantor has made an independent investigation and evaluation of the financial condition of Borrower and the value of any collateral, and has not relied (and will not rely) on any information or evaluation provided by Lender regarding such condition or value.

6.Guarantor represents and warrants that:

a. The execution, delivery and performance of this Guarantee by Guarantor are within the corporate powers of Guarantor, have been duly authorized by all necessary corporate action and do not and will not (i) require any consent or approval of the stockholders of Guarantor which has not been obtained, (ii) violate any provision of the articles of incorporation or by‑laws of Guarantor or of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award presently in effect having applicability to Guarantor, (iii) require the consent or approval of, or filing or registration with, any governmental body, agency or authority, or (iv) result in a breach of or constitute a default under, or result in the imposition of any lien, charge or encumbrance upon any property of Guarantor pursuant to, any indenture or other agreement or instrument under which Guarantor is a party or by which it or any of its properties may be bound or affected.

b. This Guarantee constitutes the legal, valid and binding obligation of Guarantor enforceable in accordance with its terms, except that such enforceability may be limited by bankruptcy or similar laws affecting the enforceability of creditors’ rights generally.

c. The financial statements of Guarantor furnished to Lender fairly present the financial condition of Guarantor for the periods shown therein, and since the dates covered by the most recent of such financial statements, there has been no Material Adverse Change (as defined in the Loan Agreement).  Except as expressly shown on such financial statements, Guarantor: owns all of its assets free and clear of all liens except for Permitted Encumbrances (as defined in the Loan Agreement); is not a party to any litigation, nor is any litigation threatened to the knowledge of Guarantor which, in each case, would, if adversely determined, be reasonably expected to result in a Material Adverse Change; and has no material delinquent tax liabilities, nor have any material tax deficiencies been proposed against it.

7.Guarantor shall provide to Lender such information regarding the financial condition of Guarantor as Lender may reasonably request from time to time.

8.Any term or provision of this Guarantee to the contrary notwithstanding, the maximum aggregate amount of the Obligations guaranteed hereunder by Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Guarantee voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar

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laws affecting the rights of creditors generally.  To effectuate the foregoing intention, the obligations of Guarantor shall be limited to such maximum amount as will, after giving effect to all other contingent and fixed liabilities of Guarantor and after giving effect to any collections from or payments made or reasonably expected to be made by or on behalf of any other guarantor of the Obligations in respect of the obligations of such other guarantor under its guarantee or pursuant to its contribution obligations, result in the obligations of Guarantor under this Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal, state or foreign law.

9.This Guarantee shall inure to the benefit of Lender and its successors and assigns, including every holder or owner of any of the Obligations, and shall be binding upon Guarantor and Guarantor’s successors and permitted assigns.  This is a continuing guarantee and shall continue in effect until all Obligations shall be paid or performed in full (other than indemnification, reimbursement or contingent obligations for which no claim has been asserted), at which time, this Guarantee and the Guarantor’s obligations hereunder shall automatically terminate.

10.This Guarantee constitutes the entire agreement between Lender and Guarantor with respect to the subject matter hereof, superseding all previous communications and negotiations, and no representation, understanding, promise or condition concerning the subject matter hereof shall be binding upon Lender unless expressed herein.  

11.This Guarantee shall be governed by the internal laws (and not the law of conflicts) of the State of Texas.

12.Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any United States federal or Texas state court sitting in Dallas, Texas, and any appellate court in such jurisdiction, in any action or proceeding arising out of or relating to this Guarantee, or for recognition or enforcement of any judgment, and Guarantor hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Texas state or, to the extent permitted by law, in such federal court.  Guarantor agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Guarantee shall affect any right that Lender may otherwise have to bring any action or proceeding relating to this Guarantee against Guarantor in the courts of any jurisdiction.

13.Guarantor hereby waives any and all right to trial by jury in any action or proceeding relating to this Guarantee, or any document delivered hereunder or in connection herewith, or any transaction arising from or connected to any of the foregoing.  Guarantor represents that this waiver is knowingly, willingly and voluntarily given.

14.Guarantor hereby waives any right it may now or hereafter have to claim or recover from Lender any consequential, exemplary or punitive damages.

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IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be duly executed by their duly authorized representatives, all as of the day and year first above written.

GUARANTOR:

TRANSATLANTIC WORLDWIDE, LTD.
a Bahamas international business company

By:_______________________________

Name: Tabitha T. Bailey

Title:   Vice President and Secretary

Address:

16803 Dallas Parkway

Addison, TX 75001

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ACCEPTED AND AGREED TO:

LENDER:

DALEA INVESTMENT GROUP, LLC

a Texas limited liability company

By:_______________________________

Name: N. Malone Mitchell 3^rd

Title:   Manager

Address:

16803 Dallas Parkway

Addison, TX 75001

B-1-6

EXHIBIT B-2

GUARANTEE OF TRANSATLANTIC PETROLEUM (USA) CORP.

GUARANTEE

(TRANSATLANTIC PETROLEUM (USA) CORP.)

THIS GUARANTEE, dated as of August 7, 2020 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Guarantee”), is made  by TRANSATLANTIC PETROLEUM (USA) CORP., a Delaware corporation (“Guarantor”) in favor of DALEA INVESTMENT GROUP, LLC, a Texas limited liability company (the “Lender”).

RECITALS:

A.Lender and TransAtlantic Petroleum Ltd., a Bermuda exempted company (“Borrower”), are parties to that certain Loan and Security Agreement dated of even date herewith (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”), pursuant to which Lender has agreed to make a loan to Borrower in an aggregate principal amount up to EIGHT MILLION AND NO/100 DOLLARS ($8,000,000.00) to finance the working capital needs of Borrower and its subsidiaries as set forth therein.

B.Guarantor is a wholly-owned subsidiary of Borrower.

C.As additional security and in order to further induce Lender to make a loan to Borrower pursuant to the Loan Agreement, Guarantor has agreed to enter this Guarantee pursuant to the terms and conditions set forth below.

D.The term “Obligations” is used herein in its most comprehensive sense and includes any and all debts, obligations, and liabilities of Borrower to Lender pursuant to the Loan Agreement, heretofore, now, or hereafter made, incurred, or created, whether voluntary or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, secured or unsecured, whether Borrower is liable individually or jointly with others, whether for principal, interest or other debts, obligations or liabilities, and whether or not any or all such debts, obligations and liabilities are or become barred by any statute of limitations or otherwise unenforceable.

COVENANTS:

IN CONSIDERATION OF these premises and any credit or financial accommodation now or hereafter granted by Lender to Borrower, it is agreed that:

1.Guarantor hereby: (a) unconditionally guarantees the full and prompt payment and performance of the Obligations when due, whether by acceleration or otherwise, or (if earlier) at the time Borrower becomes the subject of bankruptcy or other insolvency proceedings; (b) agrees to pay all documented out-of-pocket costs, expenses and reasonable

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attorneys’ fees incurred by Lender in enforcing this Guarantee and the Obligations and realizing on any collateral for either; and (c) agrees to pay to Lender the amount of any payments made to Lender or another in connection with any of the Obligations which are recovered from Lender by a trustee, receiver, Lender or other party pursuant to applicable law.

2.This is a guarantee of payment, and not of collection.  Lender shall not be obligated to:  (a) take any steps whatsoever to collect from, or to file any claim of any kind against, Borrower, any guarantor, or any other person or entity liable for payment or performance of any of the Obligations; (b) take any steps whatsoever to protect, accept, obtain, enforce, take possession of, perfect its interest in, foreclose or realize on collateral or security, if any, for the payment or performance of any of the Obligations or any guarantee of any of the Obligations; or (c) in any other respect exercise any diligence whatsoever in collecting or attempting to collect any of the Obligations by any means.

3.Guarantor’s liability for payment and performance of the Obligations shall be absolute and unconditional. Guarantor unconditionally and irrevocably waives each and every defense which, under principles of guarantee or suretyship law, would otherwise operate to impair or diminish such liability and nothing whatsoever except actual full payment and performance to Lender of the Obligations shall operate to discharge Guarantor’s liability hereunder.  Without limiting the generality of the foregoing, Lender shall have the exclusive right, which may be exercised from time to time without diminishing or impairing the liability of Guarantor in any respect, and without notice of any kind to Guarantor, to:  (a) extend any additional credit to Borrower; (b) accept any collateral, security or guarantee for any Obligations or any other credit; (c) determine how, when and what application of payments, credits and collections, if any, shall be made on the Obligations and any other credit and accept partial payments; (d) determine what, if anything, shall at any time be done with respect to any collateral or security; perfect or fail to perfect any lien or security interest; subordinate, sell, transfer, surrender, release or otherwise dispose of all or any of such collateral or security; and purchase or otherwise acquire any such collateral or security at foreclosure or otherwise; and (e) with or without consideration grant, permit or enter into any waiver, amendment, extension, modification, refinancing, indulgence, compromise, settlement, subordination, discharge or release of:  (i) any of the Obligations and any agreement relating to any of the Obligations; (ii) any obligations of any guarantor or other person or entity liable for payment or performance of any of the Obligations, and any agreement relating to such obligations; and (iii) any collateral or security or agreement relating to collateral or security for any of the foregoing.

4.Guarantor hereby unconditionally waives: (a) presentment, notice of dishonor, protest, demand for payment and all notices of any kind, including without limitation:  notice of acceptance hereof; notice of the creation of any of the Obligations; notice of nonpayment, nonperformance or other default on any of the Obligations; and notice of any action taken to collect upon or enforce any of the Obligations; (b) any subrogation to the rights of Lender against Borrower and any other claim against Borrower which arises as a result of payments made by Guarantor pursuant to this Guarantee, until the Obligations have been paid or performed in full (other than indemnification, reimbursement or contingent obligations for which no claim has been asserted); (c) any claim for contribution against any co‑guarantor, until the Obligations have been paid or performed in full (other than indemnification, reimbursement or contingent obligations for

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which no claim has been asserted); and (d) any setoffs or counterclaims against Lender which would otherwise impair Lender’s rights against Guarantor hereunder.

5.Guarantor has made an independent investigation and evaluation of the financial condition of Borrower and the value of any collateral, and has not relied (and will not rely) on any information or evaluation provided by Lender regarding such condition or value.

6.Guarantor represents and warrants that:

a. The execution, delivery and performance of this Guarantee by Guarantor are within the corporate powers of Guarantor, have been duly authorized by all necessary corporate action and do not and will not (i) require any consent or approval of the stockholders of Guarantor which has not been obtained, (ii) violate any provision of the articles of incorporation or by‑laws of Guarantor or of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award presently in effect having applicability to Guarantor, (iii) require the consent or approval of, or filing or registration with, any governmental body, agency or authority, or (iv) result in a breach of or constitute a default under, or result in the imposition of any lien, charge or encumbrance upon any property of Guarantor pursuant to, any indenture or other agreement or instrument under which Guarantor is a party or by which it or any of its properties may be bound or affected.

b. This Guarantee constitutes the legal, valid and binding obligation of Guarantor enforceable in accordance with its terms, except that such enforceability may be limited by bankruptcy or similar laws affecting the enforceability of creditors’ rights generally.

c. The financial statements of Guarantor furnished to Lender fairly present the financial condition of Guarantor for the periods shown therein, and since the dates covered by the most recent of such financial statements, there has been no Material Adverse Change (as defined in the Loan Agreement).  Except as expressly shown on such financial statements, Guarantor: owns all of its assets free and clear of all liens except for Permitted Encumbrances (as defined in the Loan Agreement); is not a party to any litigation, nor is any litigation threatened to the knowledge of Guarantor which, in each case, would, if adversely determined, be reasonably expected to result in a Material Adverse Change; and has no material delinquent tax liabilities, nor have any material tax deficiencies been proposed against it.

7.Guarantor shall provide to Lender such information regarding the financial condition of Guarantor as Lender may reasonably request from time to time.

8.Any term or provision of this Guarantee to the contrary notwithstanding, the maximum aggregate amount of the Obligations guaranteed hereunder by Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Guarantee voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar

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laws affecting the rights of creditors generally.  To effectuate the foregoing intention, the obligations of Guarantor shall be limited to such maximum amount as will, after giving effect to all other contingent and fixed liabilities of Guarantor and after giving effect to any collections from or payments made or reasonably expected to be made by or on behalf of any other guarantor of the Obligations in respect of the obligations of such other guarantor under its guarantee or pursuant to its contribution obligations, result in the obligations of Guarantor under this Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal, state or foreign law.

9.This Guarantee shall inure to the benefit of Lender and its successors and assigns, including every holder or owner of any of the Obligations, and shall be binding upon Guarantor and Guarantor’s successors and permitted assigns.  This is a continuing guarantee and shall continue in effect until all Obligations shall be paid or performed in full (other than indemnification, reimbursement or contingent obligations for which no claim has been asserted), at which time, this Guarantee and the Guarantor’s obligations hereunder shall automatically terminate.

10.This Guarantee constitutes the entire agreement between Lender and Guarantor with respect to the subject matter hereof, superseding all previous communications and negotiations, and no representation, understanding, promise or condition concerning the subject matter hereof shall be binding upon Lender unless expressed herein.  

11.This Guarantee shall be governed by the internal laws (and not the law of conflicts) of the State of Texas.

12.Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any United States federal or Texas state court sitting in Dallas, Texas, and any appellate court in such jurisdiction, in any action or proceeding arising out of or relating to this Guarantee, or for recognition or enforcement of any judgment, and Guarantor hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Texas state or, to the extent permitted by law, in such federal court.  Guarantor agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Guarantee shall affect any right that Lender may otherwise have to bring any action or proceeding relating to this Guarantee against Guarantor in the courts of any jurisdiction.

13.Guarantor hereby waives any and all right to trial by jury in any action or proceeding relating to this Guarantee, or any document delivered hereunder or in connection herewith, or any transaction arising from or connected to any of the foregoing.  Guarantor represents that this waiver is knowingly, willingly and voluntarily given.

14.Guarantor hereby waives any right it may now or hereafter have to claim or recover from Lender any consequential, exemplary or punitive damages.

[NO FURTHER TEXT ON THIS PAGE]

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IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be duly executed by their duly authorized representatives, all as of the day and year first above written.

GUARANTOR:

TRANSATLANTIC PETROLEUM (USA) CORP.
a Delaware corporation

By:_______________________________

Name: Tabitha T. Bailey

Title:   Vice President and Secretary

Address:

16803 Dallas Parkway

Addison, TX 75001

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ACCEPTED AND AGREED TO:

LENDER:

DALEA INVESTMENT GROUP, LLC

a Texas limited liability company

By:_______________________________

Name: N. Malone Mitchell 3^rd

Title:   Manager

Address:

16803 Dallas Parkway

Addison, TX 75001

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EXHIBIT C

FORM OF
REQUEST FOR LOAN ADVANCE

Request No.
Date
Amount Requested (List by individual Budget Line Item and aggregate sum)	$

________________, 20__

Dalea Investment Group, LLC
16803 Dallas Parkway
Addison, Texas 75001
Attention:  Michael S. Haynes
Email:  michael.haynes@riatacg.com

Ladies and Gentlemen:

We refer to that certain Loan Agreement dated as of August 7, 2020 between Dalea Investment Group, LLC (“Lender”) and Transatlantic Petroleum Ltd. (“Borrower”) (as amended, restated or otherwise modified from time to time, the “Loan Agreement”).  Capitalized terms not otherwise defined herein shall have the respective meanings ascribed to such terms in the Loan Agreement.

This request (this “Request”) is delivered to you to request a Loan Advance in the amount of $_______________, to be made to Borrower on _______ ____, 20____, which will bring the total Principal Balance to $________________.

1. Borrower hereby represents, warrants and certifies as follows:

(a) No Material Adverse Change has occurred;

(b) No Default or Event of Default has occurred and is continuing, or will exist after the making of the Loan Advance requested hereby and the use of proceeds thereof;

(c) The Loan Advance requested does not exceed the Monthly Operating Expense Budgeted Amount (subject to permitted variances);

(d) All funds previously disbursed have been used in accordance with the Budget (subject to permitted variances) or otherwise in accordance with the provisions of the Loan Agreement;

(e) After giving effect to this Loan Advance, the Loan will not exceed the Commitment Amount;

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(f) This Loan Advance will be used solely in accordance with the Budget (subject to permitted variances)  or otherwise in accordance with the provisions of the Loan Agreement and no item(s) for which payment is requested has been the basis for any prior Loan Advance;

(g) All representations and warranties of Borrower contained in the Loan Agreement and in all other Loan Documents are true and correct in all material respects as of the date hereof;

(h) Borrower has no defenses to or offsets against the payment of any amounts due to Lender under or in connection with the Loan, or defenses, claims or counterclaims against the performance of any of its respective obligations under the Loan Documents; and

(i) Borrower understands that this certification is made for the purpose of inducing Lender to make a Loan Advance to Borrower and that, in making such Loan Advance, Lender will rely upon the accuracy of the matters stated in this certificate; and

2. Borrower certifies that the statements made in this Request and any documents submitted herewith and identified herein are true and has duly caused this Request to be signed on its behalf by the undersigned, thereunto duly authorized.

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Borrower hereby requests that the Loan Advance be disbursed as follows:

AMOUNT:  $	Wired to:
	ABA Routing No.:
	Credit:
	Account Name:
	Reference:
	BORROWER:
	TRANSATLANTIC PETROLEUM LTD.
	By:
		Name:
		Title:

C-3

SCHEDULE 1.1

PERMITTED ENCUMBRANCES

None.

Schedule 1.1-1

SCHEDULE 2.1

LOAN ADVANCE CONDITIONS

A.INITIAL LOAN ADVANCE

Lender’s obligation to make the initial Loan Advance shall be subject to Lender’s receipt, review, approval and/or confirmation or waiver pursuant to Section 8.4 of the following, at Borrower’s cost and expense, each in form and content satisfactory to Lender in its sole discretion:

1. Loan Documents.  True and correct copies of the Loan Documents executed by Borrower and each other party thereto.

2. Liens.  All Loan Documents, along with any other document (including any UCC financing statement) required to be filed, registered or recorded in order to create in favor of Lender a perfected first priority Lien on the Collateral, subject to any Permitted Encumbrances, which in each case shall be in proper form for filing, registration or recordation.

3. Consents.  Any consent, approval, authorization or order of any Governmental Authority or third party that is required for the execution, delivery and performance by Borrower of, or compliance by Borrower with, this Agreement, any other Loan Document, or the consummation of the transactions contemplated hereby.

4. Organizational Documents.  All documents evidencing the formation, organization, valid existence, good standing, and due authorization of and for Borrower and the authorization for the execution, delivery, and performance of the Loan Documents by Borrower, which organizational documents shall be consistent with Section 4.1.1 hereof.

5. Searches.  Current bankruptcy, tax lien, litigation and judgment searches of Borrower and searches of all UCC financing statements (or similar statements required to be filed to perfect a security interest in property) filed in each place such financing statements or other similar statements are to be filed hereunder, demonstrating the absence of adverse claims.

6. Financial Statements.  Current annual financial statements of Borrower and its Subsidiaries, each in form and substance acceptable to Lender and certified by an officer of Borrower other than N. Malone Mitchell 3^rd.  Borrower shall provide such other additional financial information as Lender reasonably requires.

7. Costs and Expenses.  Payment of Lender’s reasonable and documented out-of-pocket costs and expenses in underwriting, and preparing the Loan Documents, including fees and expenses of one (1) outside counsel firm; provided that Borrower shall not be obligated to pay more than Fifty Thousand Dollars ($50,000) for such costs and expenses.

8. Additional Documents.  Such other documents or items as Lender or its counsel may reasonably require.

Schedule 2.1-1

B.LOAN ADVANCE CONDITIONS

1.Conditions for each Loan Advance.

As a condition precedent to each Loan Advance (including the initial Loan Advance), in addition to satisfaction of all conditions for disbursements set forth in Section 2.1.3(a) and Section 2.1.3(c), Borrower shall furnish or cause to be furnished to Lender at least ten (10) Business Days prior to the requested date of disbursement a completed Request for Advance in form satisfactory to Lender and executed by Borrower.

The initial Loan Advance shall be $100,000, which shall be eligible for draw by Borrower upon execution of the Loan and Security Agreement.

After the initial Loan Advance, Borrower shall not be entitled to any subsequent Loan Advance until after filing with the Securities Exchange Commission (“SEC”) the Proxy Statement, in form and substance reasonably satisfactory to Lender, pursuant to Section 5.4 of the Agreement and Plan of Merger by and among TAT Holdco LLC, TAT Merger Sub LLC, and TransAtlantic Petroleum Ltd. (the “Merger Agreement”).  

After the initial Loan Advance, Borrower shall not be entitled to any subsequent Loan Advance if Borrower without Lender’s prior written consent, withdraws or ceases to diligently pursue (a) approval of the Proxy Statement by the SEC.

After the approval of the Proxy Statement by the SEC, Borrower shall not be entitled to any subsequent Loan Advance until Borrower calls and give notice of the Company Shareholders Meeting pursuant to Section 5.5 of the Merger Agreement.

After the approval of the Proxy Statement by the SEC, Borrower shall not be entitled to any subsequent Loan Advance if Borrower without Lender’s prior written consent, withdraws or ceases to diligently secure the Requisite Company Vote pursuant to Section 5.5 of the Merger Agreement.  

2.Loan Advance Disbursement.

Lender shall disburse each Loan Advance pursuant to an instruction of Borrower in accordance with the terms of this Agreement.  Borrower agrees to pay all reasonable and documented out-of-pocket fees and expenses of Lender (including one outside counsel firm) incurred in connection with any such disbursement pursuant to this Agreement.  Loan Advances shall be deemed fully made to Borrower on the date of disbursement in accordance with an instruction of Borrower.  Lender shall not make Loan Advances more frequently than monthly.

Schedule 2.1-2

SCHEDULE 4.1.7(b)

COLLATERAL FILING OFFICES

Washington, D.C. DC Office of Recorder of Deeds 1101 4th Street, SW, Suite 500W Washington, DC 20024 (202) 727-5374  

Schedule 4.1.7(b)-1

SCHEDULE 4.1.7(c)

PLEDGED STOCK

Pledged Stock	Percentage Interest
TRANSATLANTIC WORLDWIDE, LTD., a Bahamas international business company	100%
TRANSATLANTIC PETROLEUM (USA) CORP., a Delaware corporation	100%

Schedule 4.1.7(c)-1

SCHEDULE 5.2.6

PERMITTED INDEBTEDNESS

None.

Schedule 5.2.6-1

EX-10.3

Exhibit 10.3

August 4, 2020

Longfellow Energy, LP

Attn:  Michael Haynes

16803 Dallas Parkway

Addison, TX  75001

Re:  Goksu Production License

        M45-A4-1, Southeast Turkey

Gentlemen:

This letter (this “Agreement”) shall evidence the agreement between TransAtlantic Petroleum, Ltd. (“TAT”) and Longfellow Energy, LP (“LFE”) concerning certain oil and gas operations related to the referenced License.

The Parties hereby agree as follows:

1. TAT, through its wholly owned subsidiary, TransAtlantic Exploration Mediterranean International Pty Ltd (“TEMI”), is the 100% owner of the referenced Petroleum License for the exploration and production of oil and natural gas resources covering approximately 14,500 total acres in the region of Southeast Turkey (hereinafter the “License”).

2. The License has previously been in production status due to previous oil production from the Goksu 1, Goksu 2, Goksu 3H and/or Goksu 4 wells.  However, these wells no longer produce oil; the Goksu 1 and 2 wells having been converted to SWD wells, and the Goksu 3H and 4 wells being temporarily abandoned.  Under the regulatory provisions governing the License, TAT, as the holder/owner of the License, must undertake operations to restore oil production or establish new production, from lands covered by the Licenses on or before December 1, 2020, in order to perpetuate the term of the License past that date. TAT has decided not to undertake such operations and agrees to farmout the License to LFE under the provisions set forth herein.

3. LFE shall have the right, but not the obligation, pursuant to the terms set forth herein, to give written authorization to TAT, to conduct operations as contract operator to re-enter the Goksu 3H wellbore, sidetrack the wellbore and deepen the well to test the Bedinan formation, or other formations as encountered (hereinafter the “Goksu 3H ST” well).  At all times after such giving such authorization, LFE shall be responsible and liable for such operations as related to the conducting thereof, to the wellbore and to any related equipment/facilities, in all respects as if LFE was itself conducting such operations as the operator and the sole working interest owner therein.

16803 DALLAS PARKWAY   |   ADDISON, TX 75001   |   972.590.9900   |   FAX 972.590.9886

Longfellow Energy, LP

Goksu License Farmout

August 4, 2020

Page 2

4. In conducting its operations hereunder as contract operator, TAT agrees to act with due diligence and as a reasonable operator in all respects as if TAT was conducting such operations on its own behalf.  

5. In the event the operations for the Goksu 3H ST well results in a dry hole, TAT shall plug the well and restore the surface drillsite as required by the governing regulatory authorities, and 100% of the actual costs incurred by TAT to conduct such operations (including plugging and restoration) shall be reimbursed to TAT by LFE, within thirty (30) days after receipt of a joint interest billing detailing such costs.  Thereupon, the provisions of this Agreement shall terminate.

6. In the event the operations for the Goksu 3H ST well results in a commercial producer of oil and/or gas, TAT shall install the appropriate equipment/facilities needed to produce the well and make such necessary arrangements to sell the oil and/or gas produced, utilizing such production contracts as it deems most favorable to maximize the commerciality of the well.  100% of the costs incurred by TAT to conduct such operations (including the installed equipment/facilities) shall by reimbursed to TAT by LFE within thirty (30) days after receipt of a joint interest billing detailing such costs.

7. In the event the operations for the Goksu 3H ST well results in a commercial producer of oil and/or gas, and in exchange for TAT’s farmout of the Licenses hereunder, LFE shall grant TAT an overriding royalty interest as to all sales of oil and gas from such well and any other wells thereafter drilled or produced on the License, in the amount of five-percent (5%).  The overriding royalty interest shall bear its share of production/severance taxes, and any gathering, transportation, processing or marketing fees/costs, but none of the well costs (including none of the LOE costs).

8. Completion of the operations for the Goksu 3H ST well hereunder sufficient to perpetuate the License, shall earn LFE an assignment of 100% of TAT’s rights in and to the License.  In addition, upon earning such assignment, LFE shall assume all responsibility and liability from TAT as to the License, including, but not limited to, all SWD and temporarily abandoned or unplugged wells and associated equipment/facilities, and all surface locations, roads, and flowlines/pipelines related thereto.  At any time after earning such assignment, upon written request from LFE, TAT will make appropriate application to the Turkish governmental authorities for a transfer of TAT’s ownership in the License (through its subsidiary, TEMI as set forth in Paragraph 1. above) to LFE.  

9. In the event LFE has earned the assignment provided for in paragraph 8. above, but prior to the transfer of ownership in the License, LFE shall have the right to make written authorization to TAT to act as contract operator to drill an additional well or wells on the License in order to further explore or develop the License.  The terms of this Agreement shall apply to any such additional well drilled hereunder in all respects as applicable as if such additional well was the Goksu 3H ST well. LFE shall have the right, at any time after a transfer has been approved pursuant to the provisions of paragraph 8., and upon 30 days written notice, to takeover as operator of the License from TAT.

16803 DALLAS PARKWAY   |   ADDISON, TX 75001   |   972.590.9900   |   FAX 972.590.9886

Longfellow Energy, LP

Goksu License Farmout

August 4, 2020

Page 3

10. For so long as TAT is serving as contract operatoras to any well hereunder, on a monthly basis after the beginning of the sale of oil and/or gas from such well, TAT shall account for the sales revenues received from the sale of oil and/or gas from such well and make the following deductions from such revenues: first the royalties and taxes due under the applicable License agreement, second the overriding royalty interest share of such revenues and lastly the reasonable expenses incurred by TAT to produce the well, calculated in accordance with the terms contained in the form 2005 COPAS Accounting Procedure, utilizing US Petroleum Industry standard and customary rates and charges as would be used for oil/gas wells most similar to such well.  Anyamount of sales revenues remaining after said deductions shall be distributed promptly to LFE.

11. In conducting its contract operations hereunder, TAT may utilize materials/equipment out of its existing inventory with the prior written approval of LFE.  Any such materials/equipment so utilized will be priced at fair market value and included in the costs of the well incurred by TAT to be reimbursed by LFE hereunder.

12. LFE shall have the right at any time hereafter to assign its interest hereunder to an affiliated entity.  Both parties, through their respective subsidiaries or assigns, agree to execute whatever additional documents or agreements as are necessary in order to facilitate the provisions of this Agreement.  It is understood and agreed that KMF Investment Partner, LP, West Investment Holdings, LLC and Randy and Betsy Rochman will be participating with LFE in the Goksu 3H ST well to be drilled hereunder.

13. TAT SHALL RELEASE, DEFEND, INDEMNIFY, AND HOLD HARMLESS LFE AND ITS affiliates, parents, subsidiaries, co-lessees, partners, joint venturers, members, contractors (other than LFE) and entities for whom TAT is performing services and each of their respective directors, members, officers, agents, representatives, employees and invitees (“LFE GROUP”) FROM AND AGAINST ANY AND ALL LOSSES ARISING OUT OF BODILY INJURY OR DEATH OR PROPERTY DAMAGE OR LOSS (INCLUDING PATENT OR LICENSE INFRINGEMENT RESULTING FROM THE USE OF THE LFE GROUP’S PROPERTY) SUFFERED BY ANY OF THE LFE GROUP IN CONNECTION WITH THIS AGREEMENT, SAVE AND EXCEPT LOSSES CAUSED BY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF TAT.

14. LFE SHALL RELEASE, DEFEND, INDEMNIFY, AND HOLD HARMLESS TAT AND ITS affiliates, parents, subsidiaries, co-lessees, partners, joint venturers, members, contractors (other than TAT) and entities for whom LFE is performing services and each of their respective directors, members, officers, agents, representatives, employees and invitees (“TAT GROUP”) FROM AND AGAINST ANY AND ALL LOSSES ARISING OUT OF BODILY INJURY OR DEATH OR PROPERTY DAMAGE OR LOSS (INCLUDING PATENT OR LICENSE INFRINGEMENT RESULTING FROM THE USE OF THE TAT GROUP’S PROPERTY) SUFFERED BY ANY OF THE LFE GROUP IN CONNECTION WITH THIS AGREEMENT, SAVE AND EXCEPT LOSSES CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LFE.

16803 DALLAS PARKWAY   |   ADDISON, TX 75001   |   972.590.9900   |   FAX 972.590.9886

Longfellow Energy, LP

Goksu License Farmout

August 4, 2020

Page 4

15. This Agreement shall be binding upon, and inure to the benefit of, the respective successors and assigns of the parties hereto.

Please sign in the space provided below to indicate your acceptance and approval of the foregoing and return an executed copy of this Agreement to the undersigned at your earliest convenience.

Sincerely Yours,

TransAtlantic Petroleum, Ltd.

/s/ Todd C. Dutton

Todd C. Dutton

President

Accepted and Approved this 4th day of August, 2020

Longfellow Energy, LP

By: /s/ N. Malone Mitchell 3^rd

       N. Malone Mitchell 3^rd

Title: Manager of Deut 8, LLC, its general partner

16803 DALLAS PARKWAY   |   ADDISON, TX 75001   |   972.590.9900   |   FAX 972.590.9886

EX-99.1

Exhibit 99.1

TransAtlantic Petroleum Announces Entry into

Agreement and Plan of Merger and Loan and Security Agreement

Hamilton, Bermuda (August 7, 2020) -- TransAtlantic Petroleum Ltd. (TSX: TNP) (NYSE American: TAT) (the “Company” or “TransAtlantic”) today announced that the Company has entered into an Agreement and Plan of Merger and a Loan and Security Agreement.

Agreement and Plan of Merger

On August 7, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, TAT Holdco LLC, a Texas limited liability company (“Parent”) controlled by a group of holders (the “Preferred Shareholder Group”) representing 100% of the Company’s outstanding 12.0% Series A Convertible Redeemable Preferred Shares (the “Series A Preferred Shares”), and TAT Merger Sub LLC, a Texas limited liability company and wholly-owned subsidiary of Parent (“Merger Sub”), pursuant to which the Company will merge with and into Merger Sub and each of the Company’s issued and outstanding common shares, par value $0.10 per share (“Common Shares”), (other than the Excluded Shares and Dissenting Shares (each as defined in the Merger Agreement)) will be canceled and will be converted automatically into the right to receive $0.13 in cash (the “Merger Consideration”).

The members of the Preferred Shareholder Group are Longfellow Energy, LP (“Longfellow”), Dalea Partners, LP (“Dalea”), the Alexandria Nicole Mitchell Trust 2005, the Elizabeth Lee Mitchell Trust 2005, the Noah Malone Mitchell Trust 2005, Stevenson Briggs Mitchell, KMF Investments Partners, LP, West Investment Holdings, LLC, Randall I. Rochman, and Betsy Rochman. Longfellow and Dalea are affiliates of the Chairman of the Company’s Board of Directors and Chief Executive Officer, N. Malone Mitchell 3rd (“Mitchell”).

A special committee comprised entirely of independent and disinterested directors of the Company’s board of directors (the “Board”) voted unanimously to recommend to the Board that it, and thereafter the Board (other than Mitchell, Randall I. Rochman, and Jonathon T. Fite) voted unanimously to approve and declare, among other things, that (i) the merger, the Merger Agreement, a guaranty made in connection with the Merger Agreement (collectively, the “Merger Documents”) and the transactions contemplated by the Merger Documents are procedurally fair to, and advisable and in the best interests of, the Company and its shareholders, including the Company’s unaffiliated shareholders, and (ii) the Merger Consideration is fair

to, both from a financial point of view and otherwise, advisable and in the best interests of the Company’s shareholders, including the Company’s unaffiliated shareholders.Seaport Gordian Energy LLC served as the financial advisor to the special committee in connection with the merger and the Merger Agreement.

If the merger is consummated, the Company’s Common Shares will be delisted from the NYSE American Exchange and Toronto Stock Exchange and deregistered under the Securities Exchange Act of 1934, as amended, as soon as practicable following the effective time of the merger

The Merger Agreement contains representations, warranties, covenants, and termination rights provisions customary for transactions of this type.

Shareholders of the Company will be asked to vote on the adoption and approval of the Merger Agreement, a Bermuda statutory merger agreement, and the transactions contemplated thereby at a special meeting of the Company’s shareholders that will be held on a date to be announced. Consummation of the merger is subject to customary conditions, including without limitation, the adoption and approval of the Merger Agreement and the Bermuda statutory merger agreement by holders of Common Shares by at least 75% of the votes cast and holders of Series A Preferred Shares with at least 75% of the votes cast, in each case at a duly convened meeting of the shareholders of the Company at which a quorum is present (the “Requisite Company Vote”). In connection with the execution of the Merger Agreement, the members of the Preferred Shareholder Group have entered into a voting agreement pursuant to which such shareholders have agreed to vote in favor of the merger and the adoption of the Merger Agreement, subject to the limitations set forth in the voting agreement.

Loan and Security Agreement

On August 7, 2020, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Dalea Investment Group, LLC (the “Lender”), an entity controlled by the Preferred Shareholder Group. Pursuant to the Loan Agreement, the Lender has committed to lend to the Company an aggregate principal amount of up to $8,000,000 (the “Loan”). Advances shall be made available by Lender and applied by the Company in accordance with a budget agreed to by the Lender and the Company and subject to milestones set forth in the Loan Agreement. The Company intends to use the proceeds of the Loan to finance the working capital needs of the Company and its subsidiaries in accordance with the budget.

The outstanding borrowings under the Loan Agreement bear interest at a rate equal to 10% per annum. Principal on the Loan does not amortize and is required to be repaid in full on the maturity date of August 7, 2021. The Loan may be optionally prepaid in whole or in part from time to time without fee, premium, or penalty.

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The Company’s obligations under the Loan Agreement are secured by all of the Company’s present and future accounts, chattel paper, commercial tort claims, commodity accounts, commodity contracts, contracts receivable, deposit accounts, documents, financial assets, general intangibles, instruments, investment property (including all of the Company’s right, title, and interest in and to all of the capital stock of TransAtlantic Petroleum (USA) Corp.and TransAtlantic Worldwide Ltd.,each a wholly-owned direct subsidiary of the Company), letters of credit, letter of credit rights, payment intangibles, securities, notes receivable, choses of action, security accounts, and security entitlements, now or hereafter owned, held, or acquired.  

The Loan Agreement contains representations, warranties, covenants, and events of default.

About TransAtlantic

The Company is an international oil and natural gas company engaged in the acquisition, exploration, development, and production of oil and natural gas. The Company holds interests in developed and undeveloped properties in Turkey and Bulgaria.

(NO STOCK EXCHANGE, SECURITIES COMMISSION, OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.)

Forward-Looking Statements

Certain statements in this press release regarding the Merger Agreement and the proposed merger constitute “forward-looking statements” under the federal securities laws. These forward-looking statements are intended to be covered by the safe harbors created by the Private Securities Litigation Reform Act of 1995. When the Company uses words such as “anticipate,” “intend,” “plan,” “believe,” “estimate,” “expect,” or similar expressions, it does so to identify forward-looking statements. Forward-looking statements are based on current expectations that involve assumptions that are difficult or impossible to predict accurately and many of which are beyond the Company’s control. Actual results may differ materially from those expressed or implied in these statements as a result of significant risks and uncertainties, including, but not limited to, the occurrence of any event, change, or other circumstances that could give rise to the termination of the Merger Agreement, the inability to obtain the requisite shareholder approval for the proposed merger or the failure to satisfy other conditions to completion of the proposed merger, risks that the proposed transaction disrupts current plans and operations, the ability to recognize the benefits of the merger, and the amount of the costs, fees, and expenses and charges related to the merger. Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those projected, is contained in the Company’s filings with the Securities and Exchange Commission (“SEC”), including the Company’s Annual Report on Form 10-K, the Company’s quarterly reports on Form 10-Q as

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well as the Schedule 13E-3 transaction statement and the proxy statement to be filed by the Company. The statements in this press release speak only as of the date of hereof, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law.

Additional Information and Where to Find It

In connection with the proposed transaction, the Company will file with the SEC a proxy statement on Schedule 14A. In addition, certain participants in the proposed transaction will prepare and file a Schedule 13E-3 transaction statement that will include the proxy statement on Schedule 14A and may file or furnish other documents with the SEC regarding the proposed transaction. This press release is not a substitute for the proxy statement, the Schedule 13E-3, or any other document that the Company may file or furnish with the SEC. INVESTORS IN, AND SECURITY HOLDERS OF, THE COMPANY ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS (INCLUDING THE SCHEDULE 13E-3) THAT ARE FILED OR FURNISHED (OR WILL BE FILED OR FURNISHED WITH THE SEC), AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. When available, investors and security holders may obtain free copies of the proxy statement, the Schedule 13E-3 and other documents filed or furnished with the SEC by the Company through the web site maintained by the SEC at www.sec.gov or by contacting the Corporate Secretary at TransAtlantic Petroleum Ltd., c/o TransAtlantic Petroleum (USA) Corp., 16803 Dallas Parkway, Addison, TX 75001 or at (214) 220-4323.

Participants in the Solicitation

The Company and its directors and executive officers and other members of management and employees may, under SEC rules, be deemed to be “participants” in the solicitation of proxies from the Company’s shareholders in connection with the proposed transaction. Information regarding the persons who may be considered “participants” in the solicitation of proxies will be set forth in the proxy statement and Schedule 13E-3 transaction statement relating to the merger when it is filed with the SEC. Information regarding directors and executive officers, including a description of their direct interests, by security holdings or otherwise, in the Company is contained in the Company’s definitive annual meeting proxy statement filed with the SEC on April 20, 2020. You may obtain a free copy of this document as described in under the heading “Additional Information and Where to Find It” above. Investors may obtain additional information regarding the direct and indirect interests of such potential participants in the proposed transaction by reading the proxy statement, Schedule 13E-3 transaction statement, and the other relevant documents filed with the SEC when they become available.

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Contacts:       

Tabitha Bailey
Vice President, General Counsel, and Corporate Secretary
(214) 265-4708
TransAtlantic Petroleum Ltd.
16803 Dallas Parkway
Addison, Texas 75001
http://www.transatlanticpetroleum.com