CAMAC Energy Inc.: Exhibit 10.1 - Filed by newsfilecorp.com
Exhibit 10.1
EXECUTION VERSION
PROMISSORY NOTE
CAMAC PETROLEUM LIMITED (the “Borrower”), a company
incorporated in the Federal Republic of Nigeria and a wholly owned subsidiary of
CAMAC Energy Inc., a Delaware corporation (the “Parent”), for value
received, promises and agrees to pay to the order of ALLIED ENERGY PLC, a
Nigerian public limited company (the “Lender”), to the Payment Account
(as such term is hereinafter defined) the aggregate principal sum of all Loans
(as such term is hereinafter defined) outstanding from time to time under this
Note, which aggregate principal sum shall not exceed the maximum amount of
TWENTY-FIVE MILLION AND NO/100 DOLLARS ($25,000,000.00), in lawful money of the
United States of America and in immediately available funds, on the dates and in
the principal amounts provided for herein, and to pay interest on the unpaid
principal amount of the Loans made by the Lender to the Borrower hereunder, to
such Payment Account, in like money and funds, for the time period commencing on
the date each Loan is made until such Loan shall be finally and indefeasibly
paid in full, at the rates per annum and on the dates provided for herein.
The Lender is hereby authorized by the Borrower to endorse on
Annex I (or a continuation thereof) attached to this Note, the principal
amount of each Loan, the date such Loan is made, the amount of any payments or
prepayments, the dates of any such payments or prepayments, and the principal
balance of the Note outstanding from time to time. The entries made by the
Lender on Annex I (or any continuation thereof) shall be prima
facie evidence of the existence and amounts of the obligations recorded
therein (absent manifest error or failure by the Lender to deliver the
corresponding principal amount of each Loan to the Borrower), provided that any
failure by the Lender to make any such endorsement shall not affect the
obligations of the Borrower under this Note in respect of the Loans or
otherwise.
By accepting this Note, the Lender agrees to comply with the
obligations of the Lender that are expressly and specifically set forth herein.
Section 1. Terms Generally; Accounting Terms; GAAP; Defined
Terms. The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words “include”, “includes” and “including” shall be deemed to be followed
by the phrase “without limitation”. The word “will” shall be construed to have
the same meaning and effect as the word “shall”. Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person’s successors and permitted assigns, (c) the
words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Note in its entirety and not to any particular
provision hereof, (d) all references herein to Sections and Annexes shall be
construed to refer to Sections of, and Annexes to, this Note and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts, crude oil and crude oil reserves.
Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower notifies the Lender
that the Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Lender
notifies the Borrower that the Lender requests an amendment to any provision
hereof for such purpose), regardless of whether any such notice is given before
or after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
As used in this Note, the following terms shall have the
meanings set forth below:
“Affiliate” means, with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
“Approved Invoices” means final, undisputed invoices
from contractors and vendors providing goods and services for the workover of
that certain deepwater oil well known as “Oyo #5” located in the deepwater oil
field known as the “Oyo Field” located offshore Nigeria.
“Availability Period” means the time period from and
including the Effective Date to but excluding the earlier of the Maturity Date
and the date of the termination of the Commitment.
“Borrower” has the meaning set forth in the first
paragraph of this Note.
“Borrowing Request” means a request by the Borrower for
a Loan in accordance with Section 3.
“Business Day” means any day that is not a Saturday,
Sunday or other day on which commercial banks in Houston, Texas are authorized
or required by law to remain closed.
“Capital Lease Obligations” of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
“Change in Control” means the acquisition by a group of
Persons or entities that are not Affiliates of the Lender and/or its Affiliates
of a majority of the Equity Interests of the Borrower, or the possession,
directly or indirectly, by such a group of the power to direct or cause the
direction of the management or policies of the Borrower.
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“Commitment” means the commitment of the Lender to make
Loans hereunder, subject to a maximum Lender Commitment amount of
$25,000,000.00.
“Control” means (a) the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ability to exercise voting power, by
contract or otherwise or (b) the ownership of at least ten percent (10%) of the
Equity Interest in such Person. “Controlling” and “Controlled”
have meanings correlative thereto.
“Default” means any event or condition which constitutes
an Event of Default or which upon notice, lapse of time or both would, unless
cured or waived, become an Event of Default.
“dollars” or “$” refers to lawful money of the
United States of America.
“Dong Fong” means Beijing Dong Fang Ya Zhou Petroleum
Technology Services Company Limited, a Chinese joint venture company 75.5% owned
by PAPE.
“Effective Date” means the date on which the conditions
specified in Section 8(a) are satisfied (or waived in accordance with Section
14).
“Equity Interests” means shares of capital stock,
partnership interests, membership interests in a limited liability company,
beneficial interests in a trust or other equity ownership interests in a Person,
and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest.
“Event of Default” has the meaning assigned to such term
in Section 12.
“GAAP” means generally accepted accounting principles in
the United States of America.
“Guaranty” means that certain Guaranty Agreement, dated
as of the date hereof, made by the Parent in favor of the Lender.
“Highest Lawful Rate” means, with respect to the Lender,
the maximum nonusurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the Loans
under laws applicable to the Lender which are presently in effect or, to the
extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws allow as of the date hereof.
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“Indebtedness” of any Person means, without duplication,
(a) all obligations of such Person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such Person evidenced
by bonds, debentures, notes, loan agreements or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding accounts payable incurred in the ordinary course of business and not
past due), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all guarantees by such Person of Indebtedness of others, (h)
all Capital Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guarantee, (j) all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances, bank guaranties, surety bonds and
similar instruments and (k) all obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any Equity Interests
in such Person or any other Person or any warrants, rights or options to acquire
such Equity Interests, valued, in the case of redeemable preferred interests, at
the greater of its voluntary or involuntary liquidation preference plus accrued
and unpaid dividends. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness expressly provide that such
Person is not liable therefor. For purposes of this Note, Indebtedness shall not
include any indebtedness incurred by the Borrower from the Parent that is due
and payable to the Parent by the Borrower in connection with amounts paid by the
Parent on the Borrower’s behalf, or otherwise loaned to the Borrower by the
Parent, to pay Approved Invoices or otherwise needed for reasonable general and
administrative operating expenses of the Borrower.
“Indemnitee” has the meaning specified in Section 15(b).
“Interest Period” means, with respect to any Loan, the
period beginning on (and including) the date on which such Loan is made or on
the last day of the immediately preceding Interest Period applicable to such
Loan, as applicable, and ending on (but excluding) the numerically corresponding
day (or, if there is no numerically corresponding day, on the last day) in the
calendar month that is one month thereafter; provided, that (i) if such Interest
Period would otherwise end on a day that is not a Business Day, such Interest
Period shall end on the next following Business Day (unless such next following
Business Day is in a different calendar month, in which case such Interest
Period shall end on the next preceding Business Day) and (ii) any Interest
Period that begins on the last Business Day of a month (or on a day for which
there is no numerically corresponding day in the month at the end of such
Interest Period) shall end on the last Business Day of the month at the end of
such Interest Period.
“Lender” has the meaning specified in the first
paragraph of this Note.
“Lien” means, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or
security interest in, on or of such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a third party with
respect to such securities.
“LIBOR” means, for any Interest Period for any Loan, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal
to the rate determined by the Lender to be the offered rate that appears on a
nationally recognized service such as Dow Jones Telerate Inc. (or any successor thereto) that displays an average
British Bankers Association Interest Settlement Rate for deposits in dollars
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period.
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“Loan” means each loan made by the Lender to the
Borrower pursuant to Section 3 of this Note.
“Material Adverse Effect” means a material adverse
effect on (a) the business, assets, operations or condition, financial or
otherwise, of the Borrower and the Parent/Subsidiaries, taken as a whole, (b)
the ability of the Borrower to perform any of its obligations under this Note or
the ability of the Parent to perform any of its obligations under the Guaranty,
(c) the validity or enforceability of this Note or the Guaranty, or (d) the
rights or remedies of, or benefits available to, the Lender under this Note or
the Guaranty.
“Material Indebtedness” means Indebtedness (other than
the Loans), or obligations in respect of one or more Swap Agreements, of any one
or more of the Borrower and the Parent/Subsidiaries in an aggregate principal
amount exceeding $500,000. For purposes of determining Material Indebtedness,
the “principal amount” of the obligations of the Borrower or any
Parent/Subsidiary in respect of any Swap Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that the
Borrower or such Parent/Subsidiary would be required to pay if such Swap
Agreement were terminated at such time.
“Maturity Date” means the second yearly anniversary of
the Effective Date.
“Net Proceeds” means with respect to any sale, lease or
other disposition of any assets or properties of the Borrower or any
Parent/Subsidiary, or Indebtedness incurred thereby, the gross amount received
by the Borrower or any Parent/Subsidiary from such sale, lease or other
disposition, or incurrence of Indebtedness, minus the sum of (a) the
amount, if any, of all taxes paid or payable by the Borrower or any
Parent/Subsidiary directly resulting from such sale, lease or other disposition
or incurrence of Indebtedness (including the amount, if any, estimated by the
Borrower in good faith at the time of such sale, lease or other disposition for
taxes payable by the Borrower or any Parent/Subsidiary on or measured by net
income or gain resulting from such sale, lease or other disposition), and
(b) the reasonable and documented out-of-pocket costs and expenses incurred by
the Borrower or such Parent/Subsidiary in connection with such sale, lease or
other disposition or incurrence of Indebtedness (including reasonable and
documented brokerage fees paid to a Person other than an Affiliate of the
Borrower or an Affiliate of any Parent/Subsidiary, but excluding any fees or
expenses paid to an Affiliate of the Borrower or an Affiliate of any
Parent/Subsidiary).
“Note” means this Promissory Note, as amended,
supplemented or modified from time to time in accordance with the terms hereof.
“PAPE” means Pacific Asia Petroleum Energy Ltd., a Hong
Kong entity 70% owned by the Parent.
“Parent” has the meaning set forth in the first
paragraph of this Note.
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“Parent/Subsidiary” means the Parent and any subsidiary
of the Borrower or the Parent.
“Payment Account” has the meaning specified in Section
7.
“Payment Date” has the meaning specified in Section
4(b).
“Person” means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
governmental authority or other entity.
“subsidiary” means, with respect to any Person (the
“parent”) at any date, any corporation, limited liability company,
partnership, association or other entity the accounts of which would be
consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as
of such date, as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which securities or other
ownership interests representing more than 50% of the equity or more than 50% of
the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held,
or (b) that is, as of such date, otherwise Controlled by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.
“Swap Agreement” means any agreement with respect to any
swap, forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions.
“Zijinshan Commitments” means any exploration, operating
or other commitments made by the Borrower, or any Parent/Subsidiary, as approved
by the Board of Directors of the Parent, under or in connection with that
certain Production Sharing Contract, dated October 27, 2007, entered into by and
between China United Coalbed Methane Corp. Ltd. and Pacific Asia Petroleum Ltd.,
a wholly owned subsidiary of the Parent.
Section 2. Commitment. Subject to the terms and
conditions set forth herein, the Lender agrees to make Loans to the Borrower
from time to time during the Availability Period in an aggregate principal
amount that will not result in the aggregate principal amount of all Loans
outstanding hereunder exceeding the Commitment. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may obtain
Loans hereunder from time to time and may prepay and reborrow such Loans. Unless
previously terminated, the Commitment shall terminate on the Maturity Date.
Section 3. Requests for Loans. To request the funding of
a Loan hereunder, the Borrower shall deliver a written Borrowing Request to the
Lender not later than 11:00 a.m., Houston, Texas time, at least three
Business Days before the date of the proposed Loan. Each such written
Borrowing Request shall be irrevocable and shall be in the form attached hereto
as Annex II and signed by the Borrower. Each such written Borrowing Request
shall specify the following information:
(a) the aggregate amount of the requested Loan;
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(b) the date on which such Loan is to be made, which shall be a
Business Day; and
(c) the location and number of the Borrower’s account to which
the Loan funds are to be disbursed.
Section 4. Repayment of Loans; Interest. (a) Without in
any way limiting the Borrower’s obligation to make prepayments pursuant to
Section 5, the Borrower shall pay to the Lender the then unpaid aggregate
outstanding principal amount of all Loans on the Maturity Date.
(b) Each Loan shall accrue interest at a rate per annum during
each Interest Period applicable thereto equal to the lesser of (i) the sum of
LIBOR for such Interest Period plus 2.00% and (ii) the Highest Lawful Rate.
Accrued interest on each Loan shall be due and payable on the last day of each
calendar quarter, on any date when such Loan is prepaid hereunder on the portion
so prepaid, and on the Maturity Date (each such date, a “Payment Date”);
provided that any interest accrued pursuant to paragraph (c) of this Section
shall be payable on demand. With respect to each Payment Date, the Lender shall
provide the Borrower at least three Business Days advance notice prior to any
quarterly interest payment date and the Maturity Date, and one Business Day
advance notice prior to any prepayment date, of the amount of interest to be
paid by the Borrower on such Payment Date, subject to adjustment in the event of
error or changes in principal balance between the date of furnishing such
estimate and the Payment Date; provided, however, that any failure by the Lender
to so provide such a calculation shall not affect the validity of the Borrower’s
obligations hereunder, including the obligation of the Borrower to pay all
amounts required to be paid hereunder on such Payment Date.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any other amount payable by the Borrower hereunder is
not paid when due, whether at stated maturity, upon acceleration or otherwise,
such overdue amount shall bear interest, after as well as before judgment, at
the lesser of (i) the interest rate that is or would otherwise be applicable to
a Loan plus an additional 2.00% per annum, and (ii) the Highest Lawful Rate.
(d) All interest hereunder shall be computed on the basis of a
year of 360 days, and in each case shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
Section 5. Prepayments of the
Loans; Mandatory Prepayments. (a) The Borrower shall have the right at any
time and from time to time to prepay any Loan in whole or in part, provided that
the Borrower shall notify the Lender in writing of any prepayment hereunder not
later than 11:00 a.m. Houston, Texas time, one Business Day before the date of
the prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of the Loan or Loans to be prepaid.
Each such prepayment shall be accompanied by accrued unpaid interest on the
amount prepaid.
(b) Upon the incurrence of funded Indebtedness by the Borrower
or any Parent/Subsidiary, the Borrower shall prepay the Loans in an amount equal
to 100% of the Net Proceeds received from such funded Indebtedness.
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(c) At any time that the Borrower or any Parent/Subsidiary
receives net cash proceeds from the sale, lease, or other disposition of any of
their respective assets or properties (including, for the avoidance of doubt, as
a result of the issuance of Equity Interests, the sale of crude oil, the sale of
oil reserves, or the sale of any interest in any production sharing or other
contract), the Borrower shall prepay within five (5) Business Days after such
receipt an aggregate principal amount of the Loans equal to 100% of the Net
Proceeds thereof (including proceeds from the issuance of Equity Interests) if
an Event of Default has occurred and is continuing, or, otherwise, 100% of the
Net Proceeds thereof (including proceeds from the issuance of Equity Interests)
that, when combined with other funds of the Borrower and the
Parent/Subsidiaries, as estimated in good faith by the Borrower, immediately
prior to the receipt of such Net Proceeds, are not (i) needed to satisfy other
legal or contractual commitments of the Borrower or any Parent/Subsidiary,
including the payment of Approved Invoices and Zijinshan Commitments, or (ii)
otherwise needed for reasonable general and administrative operating expenses of
the Borrower or any Parent/Subsidiary. The Lender shall not apply to the
prepayment of the Loans amounts held by the Lender and due to the Borrower from
crude oil sales prior to receiving notice from the Borrower or the Parent of the
portion of such amounts allowed to be retained by the Borrower or the Parent
under the preceding subsections (i) and (ii).
Section 6. Taxes. Any and
all payments by or on account of any obligation of the Borrower hereunder or
under any document executed in connection herewith shall be made free and clear
of and without deduction for any taxes; provided that if the Borrower shall be
required to deduct any taxes from such payments, then (a) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Lender receives an amount equal to the sum it would have received had no
such deductions been made, (b) the Borrower shall make such deductions and (c)
the Borrower shall pay the full amount deducted to the relevant governmental
authority in accordance with applicable law and, thereafter, promptly provide
the Lender with a copy of any receipt received from the relevant governmental
authority or other proof of payment with respect to such taxes paid.
Section 7. Payments
Generally. The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, or other amounts payable hereunder)
prior to 12:00 noon, Houston, Texas time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the Lender, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the account of
the Lender notified to the Borrower in writing from time to time for such
purposes (the “Payment Account”). If any payment hereunder shall
be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension. All payments hereunder shall be made in United States dollars.
Section 8. Conditions. (a)
Conditions Precedent to Initial Loan. The obligation of the Lender to
make its initial Loan shall not become effective until the date on which each of
the following conditions is satisfied (or waived in accordance with Section 14):
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(i) the Lender shall have received this Note, duly executed and
delivered by the Borrower;
(ii) the Lender shall have received the Guaranty, duly executed
and delivered by the Parent;
(iii) the Lender shall have received certified copies of the
resolutions of the board of directors of the Borrower approving the Loans, this
Note, and all other documents executed in connection herewith, if any, to which
the Borrower is a party and evidencing corporate authorization with respect to
such documents;
(iv) the Lender shall have received certified copies of the
resolutions of the board of directors of the Parent approving the Guaranty and
all other documents executed in connection therewith, if any, to which the
Parent is a party and evidencing corporate authorization with respect to such
documents;
(v) the Lender shall have received a certificate of the
secretary or an assistant secretary of the Borrower certifying (A) the name,
title and true signature of each officer of the Borrower authorized to execute
this Note and all other documents executed in connection herewith, and (B) that
attached thereto is a true and complete copy of the certificate of incorporation
and Memorandum and Articles of Association of the Borrower, as amended to date,
and a recent letter confirming the Borrower’s good standing from the Borrower’s
Nigerian counsel;
(vi) the Lender shall have received a certificate of the
secretary or an assistant secretary of the Parent certifying (A) the name, title
and true signature of each officer of the Parent authorized to execute the
Guaranty and all other documents executed in connection therewith, and (B) that
attached thereto is a true and complete copy of the certificate of incorporation
and bylaws of the Parent, as amended to date, and a recent good standing
certificate;
(vii) since March 7, 2011, no event or condition has occurred
that has had or could reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect;
(viii) the Lender shall have received a certificate of an
authorized officer of the Borrower certifying that, on or prior to the Effective
Date, the Borrower and the Parent/Subsidiaries, collectively, have applied
$13,000,000 of their available funds to pay Approved Invoices; and
(ix) the Lender shall have received a certificate of an
authorized officer of the Borrower certifying that, during the period from March
7, 2011 through the Effective Date, the Borrower and the Parent/Subsidiaries,
collectively, applied all Net Proceeds received from the sale, lease, or other
disposition of any of their respective assets or properties (including, for the
avoidance of doubt, as a result of the issuance of Equity Interests, the sale of
crude oil, the sale of oil reserves, or the sale of any interest in any
production sharing or other contract) to pay Approved Invoices (unless such Net
Proceeds (including proceeds from the issuance of Equity Interests), when
combined with other funds of the Borrower and the Parent/Subsidiaries, as estimated in good faith by the Borrower, immediately prior to
the receipt of such Net Proceeds, were applied to satisfy other legal or
contractual commitments of the Borrower or a Parent/Subsidiary, including the
Zijinshan Commitments, or were or are otherwise needed for reasonable general
and administrative operating expenses of the Borrower or a Parent/
Subsidiary).
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(b) Conditions Precedent to Each Loan. The obligation of
the Lender to make each Loan hereunder is also subject to the satisfaction of
the following conditions:
(i) the representations and warranties of the Borrower set
forth in this Note shall be true and correct on and as of the date such Loan is
made;
(ii) at the time of and immediately after giving effect to the
making of such Loan, no Default shall have occurred and be continuing;
(iii) the proceeds of such Loan will be used only to pay
Approved Invoices that are then due and payable and, but for such Loan proceeds,
the Borrower and the Parent/Subsidiaries would not otherwise have sufficient
available funds (after satisfying other legal or contractual commitments of the
Borrower and the Parent/Subsidiaries, including the Zijinshan Commitments, and
providing for reasonable general and administrative operating expenses of the
Borrower and the Parent/ Subsidiaries, to pay such Approved Invoices;
(iv) the Approved Invoices which are the subject of such Loan
shall not have been the subject of any prior Loan; and
(v) the Lender shall have received such other documents as the
Lender may reasonably request, all in form and substance reasonably satisfactory
to the Lender.
Each borrowing of a Loan hereunder shall be deemed to
constitute a representation and warranty by the Borrower on the date that such
Loan is made as to the matters specified in the immediately preceding clauses
(i), (ii), (iii) and (iv).
Section 9. Representations and
Warranties. The Borrower represents and warrants to the Lender that:
(a) Organization; Powers. Each of the Borrower and each
Parent/Subsidiary is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and is qualified to do
business in, and is in good standing in, every jurisdiction where such
qualification is required.
(b) Authorization; Enforceability. The transactions
contemplated by this Note and the Guaranty are within the Borrower’s and the
Parent’s corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. This Note and the Guaranty and
the other documents executed in connection herewith or therewith have been duly
executed and delivered by the Borrower and the Parent, as applicable, and
constitute legal, valid and binding obligations of the Borrower and the Parent,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
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(c) Governmental Approvals; No Conflicts. The
transactions contemplated hereby and in the Guaranty (i) do not require any
consent or approval of, registration or filing with, or any other action by, any
governmental authority, except such as have been obtained or made and are in
full force and effect, (ii) will not violate any applicable law or regulation or
the certificate of formation, bylaws or other organizational documents of the
Borrower or any Parent/Subsidiary or any order of any governmental authority,
(iii) will not violate or result in a default under any indenture, agreement or
other instrument binding upon the Borrower or any Parent/Subsidiary or its
assets, or give rise to a right thereunder to require any payment to be made by
the Borrower or any Parent/Subsidiaries, and (iv) will not result in the
creation or imposition of any Lien on any asset of the Borrower or any
Parent/Subsidiary.
(d) Financial Condition. The Parent has heretofore
furnished to the Lender its (i) consolidated audited annual financial statements
for the fiscal year ended December 31, 2010, and (ii) consolidated unaudited
quarterly financial statements for the period ended March 31, 2011. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Parent and its
consolidated subsidiaries as of such dates and for such periods in accordance
with GAAP, subject, with respect to the unaudited quarterly financial
statements, to normal year-end audit adjustments and the absence of footnotes.
(e) Litigation. There are no actions, suits or
proceedings by or before any arbitrator or governmental authority pending
against or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any Parent/Subsidiary that involve this Note, the Guaranty or
the transactions contemplated hereby or thereby.
(f) Compliance with Laws and Agreements. Each of the
Borrower and each Parent/Subsidiary is in compliance with all laws, regulations
and orders of any governmental authority applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, except where the failure to so comply could not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect. No Default
has occurred and is continuing.
(g) Investment and Holding Company Status. Neither the
Borrower nor any Parent/Subsidiary is (i) an “investment company” as defined in,
or subject to regulation under, the Investment Company Act of 1940, as amended
or (ii) a “holding company” as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935, as amended.
(h) Disclosure. The Borrower has disclosed to the Lender
all agreements, instruments and corporate or other restrictions to which it or
any Parent/Subsidiary is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other written information furnished by or on behalf of the Borrower or any
Parent/Subsidiary to the Lender in connection with the negotiation of this Note
and the Guaranty or delivered hereunder or thereunder (as modified or
supplemented by other written information so furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
11
(i) Contractual Commitments. As of the date hereof, the
legal and contractual commitments of the Borrower and the Parent/Subsidiaries
known thereto for which monetary payments reasonably anticipated to equal or
exceed $100,000, singularly or in the aggregate, are or are reasonably
anticipated to become due and payable within the next 12 (twelve) months,
including with respect to the Approved Invoices and Zijinshan Commitments, but
excluding general and administrative expenses, rents, employment and consultant
salaries and expenses, and employee separation expenses, are set forth on
Schedule 9(i), together with the aggregate amount of payments due and payable
and reasonably anticipated to become due and payable with respect to each such
legal and contractual commitment.
Section 10. Affirmative
Covenants. Until the Commitment has expired or been terminated and the
principal of and interest on the Loans and all other amounts payable hereunder
have been finally and indefeasibly paid in full, the Borrower covenants and
agrees with the Lender that:
(a) Information. The Borrower will furnish to the Lender
promptly following any request therefor, such information regarding the
operations, business affairs and financial condition of the Borrower or any
Parent/Subsidiary, or compliance with the terms of this Note or the Guaranty, as
the Lender may reasonably request, including with respect to any Approved
Invoices and Zijinshan Commitments.
(b) Notice of Material Events. The Borrower will furnish
to the Lender prompt written notice of the following:
(i) the occurrence of any Default;
(ii) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or governmental authority against or
affecting the Borrower, any Parent/Subsidiary or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect; and
(iii) any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied
by a statement of an officer of the Borrower setting forth the details of the
event or development requiring such notice and any action taken or proposed to
be taken with respect thereto.
(c) Existence; Conduct of Business. The Borrower will,
and will cause each Parent/Subsidiary to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business.
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(d) Payment of Obligations. The Borrower will, and will
cause each Parent/Subsidiary to, pay its obligations, including tax liabilities,
as the same become due and payable, except where (i) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (ii) the
Borrower or such Parent/Subsidiary has established adequate reserves with
respect thereto in accordance with GAAP and (iii) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
(e) Maintenance of Properties; Insurance. The Borrower
will, and will cause each Parent/Subsidiary to, (i) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (ii) maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations.
(f) Books and Records; Inspection Rights. The Borrower
will, and will cause each Parent/Subsidiary to, keep proper books of record and
account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each Parent/Subsidiary to, permit any representatives designated by
the Lender, upon reasonable prior notice, to visit and inspect its properties,
to examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times and as often as reasonably requested.
(g) Compliance with Laws. The Borrower will, and will
cause each Parent/Subsidiary to, comply in all respects with all laws, rules,
regulations and orders of any governmental authority applicable to it or its
property, except where the failure to so comply could not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.
(h) Use of Proceeds. The proceeds of the Loans will be
used only to pay Approved Invoices that are then due and payable, and the
Borrower hereby agrees that it will not request a Loan hereunder unless, but for
such Loan proceeds, the Borrower and the Parent/Subsidiaries would not otherwise
have sufficient available funds (after satisfying other legal or contractual
commitments of the Borrower and the Parent/Subsidiaries, including the Zijinshan
Commitments, and providing for reasonable general and administrative operating
expenses of the Borrower and the Parent/ Subsidiaries, to pay such Approved
Invoices. For the avoidance of doubt and without in any way limiting the
preceding sentence, the Borrower hereby agrees that each Loan requested
hereunder will not exceed the minimum amount necessary to pay Approved Invoices
that are then due and payable, net of any available funds of the Borrower and
the Parent/Subsidiaries (as calculated in accordance with the preceding
sentence). No part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of any federal, state or
local law, rule or regulation (including investment limitations) or any of the
regulations of the Board of Governors of the Federal Reserve System, including
Regulations T, U and X.
Section 11. Negative
Covenants. Until the Commitment has expired or been terminated and the
principal of and interest on the Loans and all other amounts payable hereunder
have been finally and indefeasibly paid in full, the Borrower covenants and
agrees with the Lender that:
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(a) Fundamental Changes. The Borrower will not, and will
not permit any Parent/Subsidiary to, engage in any business other than
businesses of the type conducted by the Borrower and such Parent/Subsidiary on
the date of execution of this Note and businesses reasonably related thereto.
(b) Restrictive Agreements. The Borrower will not, and
will not permit any Parent/Subsidiary to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon the ability of the Borrower or any
Parent/Subsidiary to (i) pay dividends or other distributions with respect to
any of its Equity Interests or (ii) repay loans to the Lender, the Borrower or
any Parent/Subsidiary, as applicable.
Section 12. Events of
Default. If any of the following events (“Events of Default”) shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan or
any interest on any Loan when and as the same shall become due and payable,
whether at the due date thereof, by acceleration or otherwise;
(b) the Borrower shall fail to pay any other amount (other than
an amount set forth in Section 12(a)) owing hereunder when and as the same shall
become due and payable, and such failure shall continue unremedied for a period
of three Business Days;
(c) the Parent shall fail to pay any amount owing under the
Guaranty when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of three Business Days;
(d) this Note after delivery hereof shall for any reason,
except to the extent permitted by the terms hereof, cease to be in full force
and effect and valid, binding and enforceable in accordance with its terms, or
this Note shall be repudiated by the Borrower;
(e) the Guaranty after delivery thereof shall for any reason,
except to the extent permitted by the terms thereof, cease to be in full force
and effect and valid, binding and enforceable in accordance with its terms, or
the Guaranty shall be repudiated by the Parent;
(f) any representation or warranty made or deemed made by or on
behalf of the Borrower or any Parent/Subsidiary in or in connection with this
Note or any amendment or modification hereof or waiver hereunder, or in any
report, certificate, financial statement or other document furnished pursuant to
or in connection with this Note or any amendment or modification hereof or
waiver hereunder, shall prove to have been incorrect in any material respect
when made or deemed made;
(g) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Sections 10(b), 10(c) (with respect to the
Borrower’s or any Parent/Subsidiary’s existence), or 10(h) or in Section 11;
(h) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Note (other than those specified in
clause (a), (b), (d) or (g) of this Section) or the Parent shall fail to observe or perform any covenant,
condition or agreement contained in the Guaranty (other than those specified in
clause (c) or (e) of this Section), and, in any such case, such failure shall
continue unremedied for a period of 30 days after the earlier to occur of (i)
notice thereof from the Lender to the Borrower or the Parent or (ii) an officer
of the Borrower or the Parent otherwise becoming aware of such default;
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(i) the Borrower or any Parent/Subsidiary shall fail to make
any payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness when and as the same shall become due and
payable, excluding Indebtedness in respect of Approved Invoices for which Loans
have not been made pursuant to this Note;
(j) any event or condition occurs that results in any Material
Indebtedness (excluding Indebtedness in respect of Approved Invoices for which
Loans have not been made pursuant to this Note) becoming due prior to its
scheduled maturity or that enables or permits (with or without the giving of
notice, the lapse of time or both) the holder or holders of any such Material
Indebtedness or any trustee or agent on its or their behalf to cause any such
Material Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
(k) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Borrower or any Parent/Subsidiary or their
respective debts, or of a substantial part of their respective assets, under any
federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or any
Parent/Subsidiary or for a substantial part of their respective assets, and, in
any such case, such proceeding or petition shall continue undismissed for 30
days or an order or decree approving or ordering any of the foregoing shall be
entered;
(l) the Borrower or any Parent/Subsidiary (excluding Dong Fang
or PAPE) shall (i) voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief under any federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in Section 12(k), (iii)
apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or such
Parent/Subsidiary or for a substantial part of their respective assets, (iv)
file an answer admitting the material allegations of a petition filed against it
in any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the
foregoing;
(m) the Borrower or any Parent/Subsidiary shall become unable,
admit in writing its inability or fail generally to pay its debts as they become
due;
(n) (i) one or more judgments for the payment of money in an
aggregate amount in excess of $100,000 shall be rendered against the Borrower,
any Parent/Subsidiary, or any combination thereof or (ii) any one or more
non-monetary judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, shall be rendered against the Borrower, any Parent/Subsidiary, or any combination
thereof, and, in either such case, the same shall remain undischarged for a
period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Borrower or any Parent/Subsidiary to enforce any
such judgment; or
15
(o) a Change in Control shall occur;
then, and in every such event (other than an event with respect
to the Borrower or any Parent/Subsidiary described in clause (k) or (l) of this
Section), and at any time thereafter during the continuance of such event, the
Lender may, by notice to the Borrower, take either or both of the following
actions, at the same time or different times: (i) terminate the Commitment, and
thereupon the Commitment shall terminate immediately, and (ii) declare the Loans
then outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all other obligations of
the Borrower accrued hereunder, shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; and in case of any event with respect to the
Borrower or any Parent/Subsidiary described in clause (k) or (l) of this
Section, the Commitment shall automatically terminate and the principal of all
Loans then outstanding, together with accrued interest thereon and all other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.
Section 13. Notices. (a)
All notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by facsimile or electronic mail, as follows:
(i) if to the Borrower, to it at:
CAMAC Petroleum Limited
c/o CAMAC
Energy Inc.
Attn: Chief Financial Officer and General Counsel
1330 Post
Oak Boulevard
Suite 2575
Houston, TX 77056
Telephone: 713-797-2940
Facsimile:
713-797-2990
E-mail: [ ]
(ii) if to the Lender, to it at:
Allied Energy PLC
c/o CAMAC International Corporation
Attn: Kamoru A. Lawal
1330 Post Oak Boulevard
Suite 2200
Houston, TX 77056
Telephone: 713-965-5108
Facsimile: 713-965-0008
E-mail: kamorul@aol.com
16
(b) Any party hereto may change its address, facsimile number
or electronic mail address for notices and other communications hereunder by
notice to the other parties hereto. All notices and other communications given
to any party hereto in accordance with the provisions of this Note shall be
deemed to have been given on the date of receipt.
Section 14. Waivers;
Amendments. (a) No failure or delay by the Lender in exercising any right or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Lender hereunder are cumulative and are not exclusive of any
rights or remedies that it would otherwise have. No waiver of any provision of
this Note or consent to any departure by the Borrower therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.
(b) Neither this Note nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Lender.
Section 15. Expenses;
Indemnity; Damage Waiver. (a) The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Lender, including the reasonable fees,
charges and disbursements of counsel for the Lender, in connection with the
preparation and administration of this Note, the Guaranty or any 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
out-of-pocket expenses incurred by the Lender, including the fees, charges and
disbursements of any counsel for the Lender, in connection with the enforcement
or protection of its rights in connection with this Note or the Guaranty,
including its rights under this Section, or in connection with the Loans made
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of any Loan.
(b) The Borrower shall indemnify the Lender and its Affiliates
and the respective directors, officers, employees, agents and advisors of the
Lender and its Affiliates (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Note, the Guaranty or any
agreement or instrument contemplated hereby or thereby, or the performance by
the parties hereto or thereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) the Loans or the use of the proceeds therefrom, or (iii) any actual
or prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted solely from the gross negligence or wilful misconduct of such
Indemnitee.
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(c) To the extent permitted by applicable law, the Borrower
shall not assert, and shall cause each Parent/Subsidiary not to assert, and each
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Note, the Guaranty or any agreement or instrument contemplated hereby or
thereby, the Loans, or the use of the proceeds thereof.
(d) All amounts due under this Section shall be payable
promptly after written demand therefor containing reasonable supporting details.
Section 16. Successors and
Assigns. The provisions of this Note shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Note, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, and the
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Note. The Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Note (including all or a portion of any
Loan at the time owing to it) without the consent of the Borrower.
Section 17. Survival. All
covenants, agreements, representations and warranties made by the Borrower
herein and in the certificates or other instruments delivered in connection with
or pursuant to this Note shall be considered to have been relied upon by the
Lender and shall survive the execution and delivery of this Note and the making
of each Loan, regardless of any investigation made by the Lender or on its
behalf and notwithstanding that the Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any other amount payable
under this Note is outstanding and unpaid. The provisions of Sections 6, 15, 21
and 22 shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, or the termination of this Note or any provision hereof.
Section 18. Integration.
This Note, the Guaranty and the other instruments and agreements contemplated
hereby and thereby constitute the entire contract among the parties relating to
the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.
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Section 19. Severability.
Any provision of this Note held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.
Section 20. Right of
Setoff. If an Event of Default shall have occurred and be continuing, the
Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any
obligations at any time owing by the Lender or Affiliate to or for the credit or
the account of the Borrower against any of and all the obligations of the
Borrower now or hereafter existing under this Note, irrespective of whether or
not the Lender shall have made any demand under this Note and although such
obligations may be unmatured. The rights of the Lender under this Section are in
addition to other rights and remedies (including other rights of setoff) which
the Lender may have.
Section 21. Governing Law;
Jurisdiction; Consent to Service of Process. (a) This Note shall be
construed in accordance with and governed by the law of the State of Texas.
(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the non-exclusive jurisdiction of the
District Court of the State of Texas sitting in Harris County, Texas and of the
United States District Court of the Southern District of Texas, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Note, 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. Such Texas state court or federal court shall apply the
substantive laws of the State of Texas in interpreting and construing this Note.
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
Note shall affect any right that the Lender may otherwise have to bring any
action or proceeding relating to this Note against the Borrower or its
properties in the courts of any jurisdiction.
(c) The Borrower 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 Note in any court referred to in
paragraph (b) of this Section. Each of the Borrower and the Lender hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) The Borrower and the Lender hereby irrevocably consent to
service of process in the manner provided for notices in Section 13. Nothing
herein will affect the right of the Borrower or the Lender to serve process in
any other manner permitted by law.
Section 22. Waiver of Jury
Trial. EACH OF THE BORROWER AND THE LENDER 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 NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH OF THE BORROWER AND THE LENDER (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE 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.
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Section 23. Interest
Rate Limitation. It is the intention of the parties hereto that the Lender
shall conform strictly to usury laws applicable to it. Accordingly, if the
transactions contemplated hereby would be usurious as to the Lender under laws
applicable to it (including the laws of the United States of America and the
State of Texas or any other jurisdiction whose laws may be mandatorily
applicable to the Lender notwithstanding the other provisions of this Note),
then, in that event, notwithstanding anything to the contrary herein, it is
agreed as follows: (a) the aggregate of all consideration which constitutes
interest under law applicable to the Lender that is contracted for, taken,
reserved, charged or received by the Lender hereunder or otherwise in connection
with the Loans shall under no circumstances exceed the maximum amount allowed by
such applicable law, and any excess shall be canceled automatically and if
theretofore paid shall be credited by the Lender on the principal amount of the
Loans (or, to the extent that the principal amount of the Loans shall have been
or would thereby be paid in full, refunded by the Lender to the Borrower); and
(b) in the event that the maturity of the Loans is accelerated by reason of an
election of the Lender resulting from any Event of Default under this Note, or
in the event of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to the Lender may never include
more than the maximum amount allowed by such applicable law, and excess
interest, if any, provided for in this Note shall be canceled automatically by
the Lender as of the date of such acceleration or prepayment and, if theretofore
paid, shall be credited by the Lender on the principal amount of the Loans (or,
to the extent that the principal amount of the Loans shall have been or would
thereby be paid in full, refunded by the Lender to the Borrower). All sums paid
or agreed to be paid to the Lender for the use, forbearance or detention of sums
due hereunder shall, to the extent permitted by law applicable to the Lender, be
amortized, prorated, allocated and spread throughout the stated term of the
Loans until payment in full so that the rate or amount of interest on account of
any Loans hereunder does not exceed the maximum amount allowed by such
applicable law. If at any time and from time to time (i) the amount of interest
payable to the Lender on any date shall be computed at the Highest Lawful Rate
applicable to the Lender and (ii) in respect of any subsequent interest
computation period the amount of interest otherwise payable to the Lender would
be less than the amount of interest payable to the Lender computed at the
Highest Lawful Rate applicable to the Lender, then the amount of interest
payable to the Lender in respect of such subsequent interest computation period
shall continue to be computed at the Highest Lawful Rate applicable to the
Lender until the total amount of interest payable to the Lender shall equal the
total amount of interest which would have been payable to the Lender if the
total amount of interest had been computed without giving effect to the Highest
Lawful Rate.
[SIGNATURE PAGE FOLLOWS]
20
IN WITNESS WHEREOF, the Borrower has executed this Promissory
Note as of the 6th day of June, 2011.
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CAMAC PETROLEUM LIMITED |
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By: /s/ Abiola L.
Lawal
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Abiola L. Lawal
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Director
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ACKNOWLEDGED AND AGREED TO BY:
ALLIED ENERGY PLC,
as Lender
By: /s/ Kamoru
Lawal
Name:
Kamoru Lawal
Title: Director
S-2
ANNEX I
Information Regarding Loans
The foregoing Note evidences Loans made by the Lender to the
Borrower, which Loans were in the principal amounts and were made and repaid or
prepaid on the dates set forth below:
Principal
Amount of Each
Loan |
Date Each Loan
was Made |
Date of
Payment or
Prepayment |
Amount Paid or
Prepaid |
Balance
Outstanding |
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ANNEX II
Form of Borrowing Request
[Date]
[Delivered by hand][Delivered by overnight courier
service][Mailed by certified mail][Mailed by registered mail][Sent by
facsimile][Sent by electronic mail]
Allied Energy PLC
c/o CAMAC International Corporation
Attn: Kamoru A. Lawal
1330 Post Oak Boulevard
Suite 2200
Houston, TX 77056
Re: Borrowing Request Under Promissory Note
Mr. Kamoru Lawal:
Notice is hereby given to Allied Energy PLC (the
“Lender”) by CAMAC Petroleum Limited (the “Borrower”) that,
pursuant to that certain Promissory Note, dated ____________, 2011 (the
“Note”), executed by the Borrower, the Borrower requests the funding of a
Loan (as defined in the Note) under the Note as follows:
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A. |
Aggregate amount of the requested
Loan:
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B. |
Date on which the Loan is to be
made:
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C. |
Location and number of the Borrower’s account to which
the Loan funds are to be disbursed: |
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Sincerely, |
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CAMAC Petroleum Limited |
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By:
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Name:
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Title:
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SCHEDULE 9(i)
CONTRACTUAL COMMITMENTS
[Borrower to complete]
